Tri-Cities Area Journal of Business -- August 2017

Page 1

August 2017

Volume 16 • Issue 8

Commercial real estate brokers expect continued growth BY JESSICA HOEFER

for Tri-Cities Area Journal of Business

Local News

Benton City label company expands to serve wine industry Page 9

Commercial Real Estate & Construction

Community First Bank, HFG Trust to move into shared building Page 15

Diversity

Certifications aim to help women-, minority-owned companies page 49

She Said It “If you’re going be a small business, give yourself every opportunity to get a hand up and not a hand out.”

Page 54

uGROWTH, Page 32

PLEASE DELIVER TO CURRENT Occupant

Tri-Cities Area Journal of Business 8919 W. Grandridge Blvd., Ste. A1 Kennewick, WA 99336

- Salina Savage, owner of Apogee Logistics

Rusty Morse has been a part of the TriCity commercial real estate scene for a quarter of a century, and while he’s seen plenty of growth in the area, he said the last five to 10 years have been phenomenal. “It just continues to grow,” said Morse, managing broker at Coldwell Banker Commercial. “I look at my production, and it’s just growing and growing every year. It’s quite amazing.” Morse said the growth reflects a long career built over time, but also is an indication of the commercial real estate activity and deals happening in the Tri-Cities right now. In the last year, Morse sold three properties in the $4 million to $5.5 million range. One was a $4 million medical office building in Kennewick, another was a three-story building with a basement in Richland that sold for almost $4.5 million. “More often than not, what I’m involved with are investors looking for property with leases in place with cash flow so they can buy that with investment opportunity,” Morse said. “And I work a lot with sellers. I tend to focus on listing properties.” Morse currently has about $20 million in listings, including 86 acres of land west of Steptoe Street in Kennewick that he plans to break into parcels that vary in sizes to meet the needs of individual businesses. He doesn’t expect his work to slow down. And while it’s impossible to predict the real estate market’s future, the Tri-Cities is inching toward the 300,000-population mark, which will lead to big changes. “For our metropolitan statistical area, once you get to 250,000, you’re literally and figuratively on the map,” Morse said. “So instead of a little black dot on the map, you have a bigger dot. And it makes a difference because a lot of large retailers and service providers, they have to have a demographic and population base before they even consider going to that metropolitan area. And we’re really close to that number. I’m sure we’ll hit it within the next five years or so.”

State sales of marijuana have topped $1.7 billion, but marijuana remains classified as an illegal Schedule I controlled substance under federal law — the highest and most serious tier. This presents tax and banking challenges for business owners. (Courtesy Michael Schroeder of AgingEnt.com)

Thriving marijuana businesses face sober financial realities BY MICHELLE DUPLER

for Tri-Cities Area Journal of Business

Marijuana retail sales were a nearly $1.7 billion business in Washington in the 2016 fiscal year, but business owners who are still technically breaking federal drug laws are left to ponder, “What do we do with the money?” For Steve Lee, owner of Finley-based Green2Go, the answer is to re-invest some of the profits from his recreational and medical pot shop back into the local community. “Really, the only strategy is sit on it and wait for the laws to change, or use cannabis money to start businesses,” said Lee, whose

Finley’s Green2Go will double capacity and add staff with its expansion.

uSee page 29. latest venture — aside from his campaign for a seat on the Kennewick City Council — is an investment in the Gourmet Grub food truck. Recreational marijuana was legalized in Washington when voters approved Initiative 502 in 2012, and medical marijuana has been legal in the state going back to the late 1990s. uMARIJUANA, Page 4

Areva continues to invest in its Richland manufacturing plant BY JEFF MORROW

for Tri-Cities Area Journal of Business

The Areva NP plant in Richland has been investing an average of $7 million a year into its nuclear fuel manufacturing company for the last decade. It’s a trend that appears to be continuing. In the past four months, the nuclear fuel manufacturing plant has announced: • Plans to build a new $12 million scrap uranium recovery facility. • The addition of $560 million in fuel contracts for four different nuclear energy facilities. • Plans to begin developing advanced nuclear fuel assemblies to allow operators more time to respond in emergencies. Ron Land, manager of the Richland

plant, might agree that the company is on a roll, but he has another opinion. “Our philosophy is to invest in the future,” he said. “We’ve not stopped investing. We continue to invest.” Areva supplies fuel and fuel-related products for commercial pressurized water reactors and boiling water reactors. Last year it manufactured more than 2,300 fuel assemblies and more than 92 million fuel pellets. Areva bought the current Richland facility in 2001. The plant has been at its Horn Rapids Road location for 45 years, but Land said Areva has upgraded the entire plant in stages since 2001. It’s among the biggest manufacturers in the Tri-Cities. “We’ve been upgrading our facility for the last 15 years,” he said. Much of it is automated. uAREVA, Page 33

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