MARCH/APRIL 2020
2020 What’s next–
Can the $1 billion Green Apple project be saved?
P66’s Jolie Rhinehart speaks out on what the project loss means for Whatcom County’s future
MEET THE 2020 FINALISTS: Business Person of the Year Start-Up of the Year Small Business of the Year Lifetime Achievement Award
The charge forward for electric cars in Whatcom County Is there relief in sight for Ferndale’s growing pains?
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Dave Brumbaugh Sherri Huleatt Jeremy Lott Cheryl Stritzel McCarthy Mike McKenzie Mary Louise Van Dyke
GUEST Don Brunell
COLUMNISTS Jim McKinney Dan Van Beek
ART DIRECTOR Whitney Pearce
PHOTOGRAPHY Tiffany Brooks ACCOUNT EXECUTIVE Ashley Butenschoen ADMINISTRATION Danielle Larson Cover Photo by Tiffany Brooks WBA BOARD OF DIRECTORS: BOARD CHAIR: John Huntley, President/CEO, Mills Electric, Inc. EXECUTIVE COMMITTEE: Pam Brady, Director NW Gov’t & Public Affairs, BP Cherry Point; John Huntley, President/CEO, Mills Electric, Inc.; Tony Larson, President, Whatcom Business Alliance; Josh Turrell, Partner, Larson Gross PLLC; Josh Wright, VP/Broker, Bell-Anderson Insurance BOARD OF DIRECTORS: Tyler Byrd, CEO, Red Rokk Interactive; Andy Enfield, Vice President, Enfield Farms; Bryant Engebretson, Managing Principal, Tradewinds Capital; Jon Ensch, Commercial Banking Officer, Peoples Bank; Mitch Faber, Partner, Adelstein Sharpe & Serka; Sandy Keathley, Former Owner, K & K Industries; Laura McKinney, NW Gov’t Affairs & Public Relations, Alcoa-Intalco Works; Lynn Murphy, Senior Gov’t Affairs Rep, Puget Sound Energy; Nicole Newton, Semiahmoo Resort/Golf/Spa; Becky Raney, Former Owner, Print & Copy Factory; Andy Riddell, NW Business Banking Mgr, Wells Fargo; Sarah Rothenbuhler, Owner/CEO, Birch Equipment; Patti Rowlson, Founder/Marketing Director, PR Consulting Inc.; Galen Smith, Operations Manager/Owner, Coldstream Farms; Doug Thomas, President/CEO, Bellingham Cold Storage; Billy VanZanten, CEO, Western Refinery Services For editorial comments and suggestions, write editor@businesspulse.com, The magazine is published bimonthly at 2423 E. Bakerview Rd., Bellingham WA 98226. 360.746.0418. The yearly subscription rate is $25 (US). For a digital subscription, visit businesspulse.com. Entire contents copyrighted ©2020 Business Pulse. All rights reserved. POSTMASTER: Send address changes to Business Pulse, 2423 E. Bakerview Rd., Bellingham WA 98226.
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IN THIS ISSUE 13
GREEN APPLE (OR)DEAL SOURS
The looming question hanging in the air now is, Will Whatcom County come to its consensus?
16
FILL ‘ER UP...BUT JUST ‘TIL 2035? E-cars: Bellingham plan for ICE ban is grand— 30-to-40 grand or more for one plug-in vehicle. And if you’re a 2-3 car family…ouch.
21
13
Renewable diesel production in Whatcom County? A pipedream?
FERNDALE: WHEN IT PAINS, IT POURS Business continues to flourish, especially downtown, though traffic and consumer utility bills and parking, even, make for attendant grumpiness.
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PERSONALLY SPEAKING Ferndale Mayor Greg Hansen inherited a full pallet of high-dollar projects—most that he influenced on City Council. As a local ‘oldtimer’ himself, can he quell a madding crowd?
26 BUSINESS PERSON OF THE YEAR 2020 FINALISTS 28 ........ Start-Up of the Year 36 ........ Small Business of the Year 44........ Business Person of the Year 52 ........ Lifetime Achievement Award
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ELECTRIC CARS
GROWING PAINS
Try keeping up with this current event. It might just shock you.
The painful growth may have an end in sight...but not for a few years.
COLUMNS 56 Boeing must restore reputation (again) 58 Why you need to understand your audience
60 Bridging the workforce gap 62 New business income deduction 64 Natural gas ban too expensive Look for additional content online at businesspulse.com
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MAR/APR 2020 | BUSINESSPULSE.COM
BP PUBLISHER’S NOTE
Where there’s a will there’s a way Why don’t we have the will? Tony Larson One year ago, on March 19, the Whatcom Business Alliance hosted an event for more than 300 local business and community leaders. We unveiled our recently updated Cherry Point Economic Impact study. We funded the study update with the Center for Economic and Business Research at Western Washington University to make sure that as the Whatcom County Council made their decision on the future of industrial development at Cherry Point, both they and the community understood the past, current and potential future economic benefits of a healthy industrial base in Whatcom County. We had an eight-person panel that included James McCafferty, an economist from WWU; Executive Director Rachel Vasak from The Nooksack Salmon Enhancement Association; Troy Muljat of The Muljat Group Realtors; (then) County Assessor Keith Willnauer; Phillips 66 Plant Manager Jolie Rhinehart; the plant managers from BP Cherry Point Refinery and Alcoa Intalco Works; and Economic Development Director Don Goldberg from the Port of Bellingham—a very
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BUSINESSPULSE.COM | MAR/APR 2020
serious and thoughtful group. We wanted to address every aspect of the potential at Cherry Point. The extraordinary positive economic and community impact of Cherry Point industry is indisputable. But the remarkable part of this conversation en masse came in the excitement associated with Whatcom County becoming a world leader in renewable energy production. We learned that BP had already invested in making diesel fuel from biomass-based feedstocks in Ferndale and their company was committed to investing $500 million annually in renewable fuels. Phillips 66 Ferndale Refinery had partnered with Renewable Energy Group on the Green Apple Project designed to construct a large-scale plant adjacent to the P66 refinery and produce renewable diesel fuel using REG’s proprietary BioSynfining technology. This announcement excited me because it was exactly the type of project the county had said they wanted to encourage. A project that reasonable people in the local environmental community would support. A project with significant short- and long-term economic and environmental benefit. A project of a $1 billion investment in the local economy. The Green Apple Project would create about 650 high-paying local
construction jobs, then 100 full-time jobs once completed. Green Apple could produce 250 million gallons of fully renewable fuel annually. That would offset emissions equivalent to five times of all Whatcom County cars every year, which would have resulted in a 60%-80% reduction in greenhouse gas emissions. In short, the perfect local project. On the cover of this issue you see Plant Manager Jolie Rhinehart of the Phillips 66 Ferndale Refinery. On Jan. 21 this year, after they invested nearly $20 million, the companies announced their decision to scrap Green Apple. Why? “Permitting delays and uncertainties.” I tip my hat to these companies for investing the first $20 million without a reasonable expectation of success. Why would any company invest beyond that with no predictable pathway to success and in a political environment where the Whatcom County Council wants to add a requirement of a “conditional use permit” for every major project at Cherry Point? Even if all the existing local, state, federal and tribal requirements are met (already unpredictably difficult, costly and time consuming) the county can add more unpredictable conditions at a later date—related to or unrelated to current requirements.
Rhinehart expressed concern about proposed changes to the Whatcom County Comprehensive Plan regarding Cherry Point. She wrote to the County Council, “The proposed changes would effectively make operation of the Phillips 66 Ferndale Refinery (as well as the other major industrial sites in the county) non-conforming uses. This would foreclose the possibility of expanding operations and seriously undermine the ability of the refinery to adapt to changing market conditions and make it difficult to even maintain the existing infrastructure as well as meet state and federal mandates.” Where there’s a will, there’s always a way. If the Whatcom County executive and the majority on the Whatcom County Council were motivated to get this project moving forward successfully, they could. And should. All it would take is leadership and a collaborative will to engage the community and bring the project to a successful conclusion. They could work to expedite the local processes, eliminate the redundancies, and advocate for the state and federal governments to do the same. I’m not holding my breath, but my hope is this doesn’t become an example of how desirable projects in Whatcom County get thwarted by elected officials who just don’t seem to get it. Why don’t we have the will? *** In this issue: Read about the Green Apple Project and how the project loss will affect Whatcom County, where Bellingham stands in its review on eliminating the internal combustion engine in passenger vehicles within city limits by 2035 and also, how Ferndale keeps growing and what officials are doing about it. Plus, a lot more. This issue is also my favorite part of the year—recognizing the final-
ists in a number of different business categories for awards they will receive Thursday, March 26, at the Inn at Semiahmoo. This is the 34th time we’ve recognized businesses and business leaders for their positive impact on our community. Check out the profiles of our finalists for Whatcom County Start-Up Business of the Year, Small
Business of the Year, and Business Person of the Year. Finally, we’re honoring Marty Maberry of Maberry Packing as the 2020 Whatcom County Lifetime Business Achievement recipient. By the time you read this, the event probably will be sold out. But give us a try anyway if you’d like to attend. Hope to see you there. Enjoy this issue. ■
If you and your business do not participate in the shaping of public policy, you will be governed by those who do.
The WBA Policy Center was created to be the eyes, ears, and voice for Whatcom County businesses. There are thousands of rules and regulations being created at the federal, state, and local levels that may harm local business. The WBA Policy Center provides both influence and credibility in the community by engaging in fact-based research, education, communication, and advocacy for its members on issues important to business. It also works proactively to advance policy issues that support business success, while advocating against those harmful to local business. We hope you will consider supporting the WBA Policy Center — there is strength in numbers and your support will have an impact.
Be Informed...Get Engaged...Make a Difference! How You Can Help • Contact us about issues that may be impacting your business or industry at wbapolicycenter.org/about-contact/. • Become part of the solution by making your contribution to the WBA Policy Center’s Step Up Fund. Your support makes it possible for WBA to proactively engage on issues on your behalf before they negatively impact your business.
START TODAY! Support the WBA Policy Center with a contribution at www.wbapolicycenter.org.
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MAR/APR 2020 | BUSINESSPULSE.COM
BP NEWSMAKERS
Michael Tilley
Eva Schulte
Bellingham’s Minuteman Press has acquired Print and Copy Factory. The move allows for doubling of staff and equipment to offer more goods and services to customers, said Michael Tilley, owner of Minuteman Press. Minuteman Press, which has been located at 1616 Cornwall Avenue for more than 27 years, will move to 4025 Iron Gate Road in Bellingham, the former Print and Copy Factory building. Other than the location, few things will change. Prices will remain the same, and all staff members—both from Minuteman Press and Print and Copy Factory—will be retained. “Larry and Becky Raney have done a terrific job at Print and Copy Factory, and we are very happy that we get to serve their current customers,” Tilley said. “We are enthusiastic that we will be able to offer additional services, such as web development, optimization and maintenance.”
Larry and Becky Raney
Superfeet Worldwide, Inc. is now producing footwear insoles for New Balance. The Ferndale-based company recently announced that it has secured the New Balance license agreement for insoles in North America and parts of Asia. The new line of New Balance insoles from Superfeet features three purpose-built collections: Casual, Running
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BUSINESSPULSE.COM | MAR/APR 2020
Selah Walker
Shiraz Balolia
and Sport. In addition, New Balance will offer custom insoles that feature 3D-printed caps manufactured and assembled at Superfeet’s Flowbuilt Manufacturing facility in Ferndale. “New Balance is known around the world for delivering unsurpassed comfort to their customers. We are honored to have been selected by New Balance as the company who will help build that legacy into the future,” said John Rauvola, CEO and president of Superfeet. Christine Madigan, New Balance’s vice president of accessories and licensing, said companies representing the brand must be as committed to serving athletes as New Balance is. “Superfeet’s deep knowledge of the run category and more than 40-year track record in bringing innovative, high-quality products to market has earned trust from athletes of all abilities,” Madigan said, “making them the perfect accessory for New Balance.” The new line of insoles is available now at New Balance stores, online and in select retailers. Three individuals from RE/MAX Whatcom County were among those recognized at the Whatcom County Association of Realtors’ 2020 Installation and Awards Dinner. Laura Rehberger was nominated for the Rookie of the Year award, which recognizes service and the potential for future success. Rehberger demonstrated both business advances and work in her local community, particularly within the education realm. Sommer Cronck received the Community Service award, which acknowledges
Robert McCoy
Patrick Briggs
outstanding contributions to the community and involvement as a professional member of the association. Cronck, who is active in her community of Sudden Valley, has increased operational funding for the community’s facilities and created a fully stocked food bank. She won the Rookie of the Year award in 2017. Brad Hanks received the Realtor Achievement award, which recognizes those actively involved in civic, community or business affairs and who have demonstrated commitment to education, professionalism and ethical business practices in the past five years. Hanks, who serves as the chair of government affairs for WCAR, had a flag flown over the State Capitol in Olympia in recognition of his service.
Sommer Cronck, Brad Hanks, Laura Rehberger
Eva Schulte is the new executive director for institutional advancement at Whatcom Community College. Previously, Schulte was vice president for economic opportunity at Travois in Kansas City, where she led impact investing with indigenous communities, and was president and CEO of Kansas City nonprofit Communities Creating Opportunity. “Eva has dedicated her life’s work to bringing capital and equity to underserved communities,” said Kathi Hiyane-Brown,
NEWSMAKERS BP
WCC’s president. “The college is extremely fortunate to have her, and I look forward to the partnerships she will develop and relationships she will strengthen for WCC.” Gabe Epperson is the new executive director of Whatcom Land Trust, having succeeded the retired Rich Bowers. Epperson was formerly the organization’s conservation director. Prior to joining Whatcom Land Trust, he was the planning director for Envision Utah. In past years, Epperson has led acquisition efforts at WLT and protected more than 4,000 acres of Whatcom County parkland, wildlife habitat and farms. WLT’s board conducted a nationwide search for Bowers’ replacement before deciding on Epperson. “Through the search process, Gabe rose to the top as the one person who fit the Land Trust’s needs best,” said board president Chris Moench. “The board is very excited to bring Gabe in as our new executive director, and we are eager to see the Land Trust continue to flourish under his leadership.” Shiraz Balolia, founder of Bellinghambased Grizzly Industrial, is taking on the role of the company’s chairman and CEO, while Robert McCoy, who has been with the company since 1989, was promoted to president. “Shiraz is a consummate businessman who operates with fairness and integrity for his employees, vendors and customers,” McCoy said. “His legacy is one of hard work, dedication and innovation, and he created opportunities for countless individuals and families through his business ventures.” Balolia started Grizzly Industrial in the spring of 1983. In those early years, he did it all—accounting, marketing, cleaning the floors, even delivering machines in person to customers—in his Volkswagen van. Over the next 37 years, Balolia successfully built Grizzly from a one-employee operation to a business with nine-figure sales, employing more than 300 people
in the United States, Taiwan and China. Grizzly now has the largest selection of woodworking and metalworking machinery under one brand in the world and remains the only direct-to-consumer industrial machinery company in the United States. Selah Walker has joined the Ferndale office of Sterling Real Estate Group. After studying real estate in both California and Washington, Walker chose to grow her real estate career in Whatcom County. She has lived outside of Washington and even abroad in China, but now has returned to Ferndale, where she was born and raised. She is a member of the Ferndale Heritage Society, where she serves to preserve such historical aspects of Ferndale as Pioneer Park’s collection of original log cabins.
2020 Solutions
Aaron Nelson, director of actualization at 2020 Solutions, has announced that the recreational cannabis store on Pacific Highway in Bellingham has moved to a larger location on the same street. As a 2014 startup, 2020 Solutions also offers stores at 2018 Iron St. in downtown Bellingham and 5655 Guide Meridian, several miles north of Bellingham. “We’re now able to offer more products, better selection and plenty of free parking,” Nelson said of the new location, at 4770 Pacific Highway. With its three stores, 2020 Solutions is the leading retail cannabis brand in Whatcom County, having totalled more than $7.1 million in sales in 2019. The Bellingham Regional Chamber of Commerce
named 2020 Solutions its 2019 Small Business of the Year. Whatcom Women in Business has elected its new executive board. Shu-Ling Hergenhahn-Zhao, capital campaign chair at the Sylvia Center for the Arts, has been elected president. Emily O’Connor, executive director of Lydia Place, will serve as past president. Jamie Smeall, HR/administrator at Avenue Bread, will chair the banquet committee. Brenda Bringhurst, real estate officer at Heritage Bank, has been elected treasurer. Renee Aase, operations manager and retail operations lead at Bank of the Pacific, has been elected secretary. Other appointments also were made. Lisa Chovil, senior sales director of Mary Kay/Fairhaven Beauty Bar, will be the membership chair. Jamia Burns, attorney at law, will chair the scholarship committee. Natalie Ransom, owner of Pozie by Natalie, has been elected speaker series coordinator. Andi Dyer, real estate agent with Sterling Real Estate Group, has been elected publicity chair. Carolyn Saletto, president of Gym Star Sports Center, will chair the Professional Woman of the Year program. Suzannah Gusukuma, artist at Lightning Tree Designs, will serve as charity committee chair. Peoples Bank has named Patrick Briggs its new director of wealth management for Peoples Investments. Briggs, who is based at the Barkley Financial Center, brings with him more than 20 years of experience in the financial services industry. Prior to joining Peoples Bank, Briggs held senior management positions at a variety of financial institutions. He will oversee financial and investment services at all 23 Peoples Bank branches in Washington. Briggs earned his undergraduate degree in applied economics and business management from Cornell University and a Juris Doctor degree from the University of Tennessee College of Law.
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MAR/APR 2020 | BUSINESSPULSE.COM
BP BY THE NUMBERS
What the withdrawal of the renewable diesel project means to Whatcom County up to
100
full-time family wage jobs lost
would have offset emissions equivalent to over
5X
the vehicles in Whatcom County2
loss of
250 Million gallons renewable fuels per year in production
60%-80% reduction in greenhouse gas emissions1 not realized
up to
650 construction jobs lost
1.Based on registered California LCFS carbon intensity values for renewable diesel production. 2.Whatcom County drivers average 860 million miles driven annually. Green Apple Renewable Fuels could potentially offset approximately 2 million metric tons of carbon dioxide annually compared to traditional fuels. Values are estimates, using the proposed Facility design and projected feedstock mix.
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SPECIAL REPORT BP
PHOTO: Jerad Hicks, Western Refinery Services
Green Apple deal goes bad Can the $1 billion renewable energy plant be saved? Jeremy Lott All crude oil that is extracted with drills and derricks was once biological material that got trapped under a sediment layer, pressed and heated for millions of years. That process slowly changed the former living material into today’s super fuel. Tomorrow’s fuel may not take quite so long. Scientists are working with more recent organic material to jumpstart that oil creation process aboveground, in laboratories, in a few hours. Among their goals is finding better ways to power engines by cutting down on waste and carbon emissions. One promising result of these new oil creation efforts is “renewable diesel.” Renewable diesel is not simply
biodiesel (diesel fuel made from currently organic material such as fats, greases and feedstock) but rather is a further refinement of the process. In terms of video games, it might be seen as the next level up: harder but also more rewarding. Joe Thompson, retired production specialist for the University of Idaho’s National Biodiesel Education Program, said that while biodiesel is much easier to make than renewable diesel, renewable diesel yields much higher energy content by refining oxygen out of the mix through a complex process. Higher energy yields make renewable diesel promising for commercial purposes. Many companies that deal in
fossil fuels are jumping on the renewable diesel bandwagon. In 2018, oil company Phillips 66, in partnership with Renewable Energy Group, proposed the construction of a new $1 billion renewable diesel facility in Whatcom County’s Cherry Point industrial district, which already hosts existing oil refineries owned by Phillips 66 and BP. The proposed Green Apple renewable diesel refinery promised to add upwards of 650 construction jobs to the county and 100 permanent jobs after that, for workers who have to keep the facility going and for many contracting jobs of various types. The plant’s expected full capacity was 250
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PHOTO: Tiffany Brooks
million gallons per year, making it the West Coast’s largest renewable diesel refinery. This construction would have meant considerable sums of money for local contractors. John Huntley, owner of Mills Electric in Bellingham, said that Green Apple “would have been worth between $50 and $70 million worth of work for our guys.” He estimated it would have been worth between $400 and $500 million total for all local contractors. Kyle Zender is construction manager for Western Refinery Services. He created what he called a “very rough estimate” of what the project would have been worth to his company for the work they would have been responsible for. It clocked in at between $75 and $100 million, with jobs for 150 to 200 workers for 18 to 24 months. Phillips 66 and Green Apple appeared committed to the project since its announcement. They jointly invested “upwards of $20 million, in addition to Phillips 66 purchasing property for the project wetlands mitigation,” said
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BUSINESSPULSE.COM | MAR/APR 2020
Phillips 66 Cherry Point manager Jolie Rhinehart, who was helping to spearhead the new facility. And yet, the companies announced on Jan. 21 that they had decided to scrap Green Apple “due to permitting delays and uncertainties.” The fallout—the cost ($75-$100 million), the jobs (150-200), and the time frame (18-24 months)—of this project’s cancellation has been considerable. New Whatcom County Executive Satpal Sidhu told Business Pulse that he was surprised by the announcement and not at all happy about it. “[These] kind of projects are needed in our county and the nation to transition to renewable fuels,” Sidhu said. “I believe this project had several tangible benefits to our community and the whole region, like economic boost and high-wage jobs, a pathway to transition to renewable fuels, and substantial capital investment in our county.” Sidhu said that he and his staff had reached out to both energy companies to see whether the county can do anything to resolve the uncertainties.
State Sen. Doug Ericksen is the ranking Republican member of the Senate Environment, Energy and Technology Committee in Olympia. In a statement, Ferndale’s Ericksen called the project “of vital importance to Whatcom County and the working families of Northwest Washington.” “We are working very hard to restart the Green Apple project,” the statement read. “We are working with the governor’s office and reaching out to other interested parties to establish a pathway forward. We will leave no stone unturned.” That message was released on Jan. 23, two days after the cancellation announcement. A week later, Erik Smith, senior public information officer for the Senate Republican Caucus, told Business Pulse that they haven’t found much under those stones yet. “I don’t think there have been any developments in the last several days,” Smith said. Mills Electric’s Huntley spoke of frustration over the delays that have put the project in jeopardy. “It’s ridiculous not to get this approved and on its way,” he said. “It’s exactly what everybody’s been asking for. We need to lower our carbon footprint and use renewable products.” A renewable diesel plant holds out the promise of doing good and doing well all at once. Both environmentalists and business owners agree that it’s a good thing, or at least better than the existing alternatives. One fact sheet for the project advertised a reduction in greenhouse gas emissions of 60%-80% and gave locals a more concrete way of thinking about those numbers: “Offsets emissions equivalent to 5X the vehicles in
Whatcom County.” The real sticking point keeping the project from happening is something called an Environmental Impact Statement, and whether or not the Green Apple project needed one. “Whatcom County process has not changed over the last decade for such large-scale projects,” Sidhu told Business Pulse. “There are other entities, like Department of Ecology, Army Corps of Engineers, tribal governments and other organizations, who also have their part in the permitting process.”
In this, the Whatcom County executive was echoing the influential environmental organization RE Sources for Sustainable Communities. RE Sources’ local manager Eddy Ury told the Bellingham Herald that the companies’ decision “doesn’t add up.” In a statement, RE Sources said that state reviews are expected for projects like this one. “Phillips 66 began this project with Renewable Energy Group in 2018 with full awareness that major projects like this are always required to go through the standard state review process,” the statement read.
However, there’s a big difference between going through a review process and waiting for an EIS, which can tack additional years onto a project. “In the history of the Phillips 66 Ferndale Refinery, this is the first project that had ever been deemed ‘significant’ requiring the Environmental Impact Statement,” said Phillips 66’s Rhinehart. Rhinehart explained that Phillips 66 and Renewable Energy Group “have spent the last 24-plus months completing the engineering and envi-
planned renewable diesel plants. “Both Marathon and Valero have renewable diesel projects that started engineering around the same time as ours, but they decided to build in the Gulf Coast,” Rhinehart said. “They have both already received permits.” She added that there was “no certainty that even with an approved permit, the project could successfully move forward without a lengthy appeal process,” because “every industrial project in this region similar to the magnitude of Green Apple has yet to complete an EIS and resolve the potential legal challenges so that the project could be constructed.” Could the project be resuscitated? Yes, said Rhinehart, before adding a few big ifs. “We need both certainty that our base business will not be compromised and an improvement in timing. This project was premised upon starting production in late 2022,” she said. Any more than a few months later than that, she said, and the deal is still off. Can Whatcom County and Olympia together speed up the regulatory process on this project to allow Green ronmental evaluation to be certain we Apple to be built in time for it to be understood the environmental impact competitive? Mills Electric’s Huntley and mitigation options.” Their aim was sure hopes so. “It makes no sense at all to take so to “build the cleanest, most efficient renewable diesel facility in the world,” long in the permitting process,” he said. Yet unless things change significantly, Rhinehart said. the Green Apple renewable diesel reHad they known that an EIS was required, they would have acted differ- finery simply won’t happen. Whatcom County will be out a billion-dollar ently, Rhinehart said. “We would have initiated it early last project, and the proposed shrinking of year and been within 12 months of our the carbon footprint will have to haporiginal schedule,” Rhinehart said. But pen somewhere else. “We’re not giving up. We’re going to since that did not happen, she said, the fight to make this work,” Sen. Ericksen project is at risk of not being online pledged. “This is too important for us to until at least 2024, which is a problem for its competitiveness with other let it go.” ■
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BP FEATURE
PHOTO: iStockphoto.com/baona
Is this the last gasp for gas? Task force recommends banning gas vehicles from city by 2035 Cheryl Stritzel McCarthy Could Bellingham be devoid of gasoline-powered passenger vehicles by 2035? How would that affect our mobility, our pocketbooks, our environment? Bellingham’s City Council asked in 2018 what would be needed to eliminate carbon emissions from transportation by 2035. That question led to a task force that’s recommending a ban on internal combustion engine passenger vehicles within city limits within 15 years. Unrealistic, say local car dealers. The city asked, says the task force, and we answered. “Everybody needs to assess these recommendations in the context charged by the council,” said Clare Fogelsong, Bellingham’s natural resources policy manager and a member of the Climate Action Task Force. “In that context of ‘Can we do it?’ it makes sense.” “The only way to achieve carbon-free transportation is to eliminate internal combustion use in the city,” Fogelsong
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said. “The task force therefore included a limited application of that restriction, one that focuses on passenger vehicles.” That’s quite a lofty goal, said Travis Graddon, manager at Roger Jobs Motors Porsche-Audi and Volkswagen in Bellingham. “As the reality comes closer, those aggressive ideals may become more moderate.” The biggest challenge is cost, Graddon said. Batterypowered vehicles are expensive compared to their counterparts with internal combustion engines. “Yes, we sell electric vehicles, and yes, they’re great, but the reality is not everyone can afford one,” Graddon said. “It’s not about profit, it’s about the cost of manufacturing electric vehicles.” Julian Greening, general manager of Bellingham Ford Lincoln, agreed that the task force’s recommendation is unrealistic, calling it “a pretty big leap.” Greening pointed out the average car in Whatcom
What does the task force recommend?
County is 12 years old. “If you say, ‘Got to get rid of that and buy a new EV,’ that costs $30,000 to $40,000 at a minimum,” he said. For a two-car household, double it. “How in the world is the average family in Whatcom County going to drop a hundred grand to satisfy these requirements?” Greening said he does get the reasoning behind EVs. “I understand the philosophy to protect the environment; it’s extremely important,” he said.
Cheryl Stritzel McCarthy What needs to happen to make Bellingham electric and carbonfree in transportation by 2035? Transportation is the largest source of greenhouse gas emissions in Bellingham, making up 32% of all community emissions. Here’s what the city’s Climate Action Task Force says: 1. Ban internal combustion engine passenger vehicles within city limits by 2035. Do this via ICE-free zones enlarged over time or by making ICE vehicles in the city pay at first and then eventually banning them. 2. Encourage a statewide ban on the sale of ICE vehicles by 2030.
“The only way to achieve carbon-free transportation is to eliminate internal combustion use in the city.”
3. Impose a moratorium on the approval of new gas stations within city limits. 4. Have all public transport vehicles—whether publicly or privately owned—within the city be electric by 2035. 5. Implement electric vehicle (EV) group buys for vehicles twice a year between now and 2030. Do the same for electric bikes. 6. Require new commercial and multifamily residential buildings to install one EV charging station for every five parking stalls.
Clare Fogelsong, Bellingham’s natural resource policy manager and a member of the Climate Action Task Force
8. Incentivize transport-on-demand vehicles and companies (such as Lyft and Uber) to transition to EV, such as by installing charging stations just for them. 9. Fast-track the completion of the Bike Master Plan network by 2030. 10. Prioritize physical bike lane separation. (Recommendations edited for brevity.)
PHOTO: iStockphoto.com/tifonimages
But what hasn’t been addressed is how additional electricity to charge all these vehicles will be generated. Electric power comes from coal, hydro, solar, wind, and nuclear power stations, Greening said, all of which come with their own environmental damage. Graddon said that creating infrastructure for electric vehicles takes time, and 10-15 years is not enough. “It’s taken us a hundred years to get to electric vehicles,” Graddon said. “Now, suddenly, we’re going to ban internal combustion engines within 15 years? I’m not sure that’s a goal that benefits all consumers.” Infrastructure improvements must be the top priority, Graddon said. “Put that ahead of rules and regula-
7. Incentivize existing multifamily residential buildings to install EV charging stations.
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Just over 50% of Americans would even consider buying an EV, compared to 77% in France and 94% in China. – OC&C Strategy Consultants tions, and we’ll have greater success,” he said. “Infrastructure for bicycles, for new homes... We need to ascertain the power company has enough supply to accommodate that in the future.” The environment isn’t the only factor to consider, Graddon said. “This isn’t about loving or hating the environment,” he said. “This is about giving the people of Whatcom County mobility. These two things—mobility and the environment—have to work together. Moderation, tolerance and patience is what’s called for.” Thanks to the government and to private-sector companies such as Tesla, the number of available charging stations in the area is increasing, to about two dozen now within a 10-mile radius of Bellingham, according to ChargeHub, a website and app that helps EV drivers find stations. The city has sited charging stations for its municipal vehicles and has supported additions to the I-5 network. “As demand grows, the market will respond with vehicles competitively priced,” Fogelsong said. “Impacts to dealers will be minimal; the auto manufacturing industry will adjust.” Dealers are indeed spending on infrastructure and staff. In the past two years, Roger Jobs Motors has sent numerous employees to training sessions for Audi and Porsche EVs, and conducted onsite training in electric sales and repair. The dealership began investing in infrastructure in 2015 by adding two basic 220-volt charging stations.
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“Last year, we invested tens of thousands in Level 3 chargers,” Graddon said. “We’ve looked at ‘super chargers.’ Initial estimates were over $250,000 for chargers, and another $200,000 for infrastructure modification.”
“The only way to achieve carbon-free transportation is to eliminate internal combustion use in the city.” Clare Fogelsong, Bellingham’s natural resources policy manager and a member of the Climate Action Task Force
Fogelsong agreed that the path toward realization of a carbon-free Bellingham is littered with questions. Will consumers accept EVs? Will they like the available models? What’s their understanding of climate change? Will the cost of EVs move toward parity with gas-powered vehicles? How long will batteries last, and what about disposing of them? Today in the United States, the models of EVs available for consumer purchase, counting several models of Tesla as one (see accompanying story “What’s cool? What’s hot? Bellinghamsters like Teslas”), range in price from $30,000 to $200,000 and up. Global research organization Ipsos reports that the primary barrier to EVs is
price, because the cost of batteries is so high. An Ipsos study shows consumers are willing to pay 10% more for an EV over a similar gas version of the vehicle, and when that price exceeds 20%, consideration of EVs drops significantly. Americans are much less likely to consider an EV than consumers elsewhere, mainly because of access to charging stations away from home, according to London-based OC&C Strategy Consultants. Just over half of Americans would even consider buying an EV, compared to 77% in France and 94% in China, according to OC&C. OC&C found government incentives are key to getting consumers to buy electric. In California, which offers strong financial incentives, consumers buy nearly half of all EVs sold in the United States. Car ownership of any sort remains important to most Americans, with 84% saying their own car is essential—the highest percentage among the five industrialized countries studied. The world’s fleet of EVs passed 5 million in 2018 and is forecast to be between 130-250 million by 2030, according to the International Energy Agency. The IEA reiterates that government policy will continue to be the linchpin for EV adoption. And what of Bellingham and its ability to eliminate gas-powered cars within the city? We’ll have to wait and find out, Graddon said. “Wait and see how these proposals will be adopted by local government.” ■
What’s cool? What’s hot? Bellinghamsters like Tesla Cheryl Stritzel McCarthy
The market share of passenger electric vehicles on the road in the United States hit a record high of 2.1% of all passenger vehicles in 2018, the most recent figures available. Compare that to Norway, where 10% of cars are electric—the highest percentage in the world. Tesla was the EV sales leader in the United States by a wide margin during the first half of 2019, with the Chevrolet Bolt second and the Nissan Leaf third. Worldwide, the Leaf is the bestseller, with the Tesla Model S in second. Experts expect that may flip-flop this year. And Volkswagen is gunning to become the world’s leading maker of electric cars by sales by 2025.
In Bellingham and Whatcom County, Tesla holds 21.8% of the luxury-car market, according to vehicle registrations, compared to 10.3% of that market nationally. Tesla demand seems to be tied to temperate climates with high-tech populations, said Travis Graddon, manager at Roger Jobs Motors in Bellingham. Right now in the United States, 12 fully electric vehicles are available to consumers (more if you count various models), according to cnet.com/ roadshow: • Audi e-tron • BMW i3 • Chevrolet Bolt • Honda Clarity Electric
• Hyundai Ioniq Electric • Hyundai Kona EV • Jaguar I-PACE • Kia Niro EV • Nissan Leaf • Porsche Taycan • Tesla • Volkswagen e-Golf What’s the coolest EV going? “The most sought after is the Porsche Taycan,” said Graddon. “This purely electric one in Turbo S format can sprint from 0 to 60 in less than 3 seconds!” Audi is seeing success with the e-tron quattro (Audi’s name for allwheel drive), Graddon said. Coming soon is the Audi e-tron GT, plus other models, while Volkswagen is investing heavily at their Chattanooga facility to build electric models currently named Buzz, vision and Cross.
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BP FEATURE
PHOTO: iStockphoto.com/Canetti
End in sight for Ferndale’s g-r-o-w-i-n-g pains Jeremy Lott
From the many new housing developments being built every year to the afternoon stop-and-go traffic on Main Street, it is apparent that Ferndale is bursting at the seams with growth. According to some in the city, that growth is not without growing pains. That may help explain what happened in November’s elections, with Ferndale mayor John Mutchler losing reelection to Ferndale City Council member Greg Hansen as part of a sea change in Ferndale politics. “The real tsunami was all the council members,” said Riley Sweeney, communications officer for the city, when I met him for lunch in downtown Ferndale in early January.
With Hansen running for mayor and other members retiring or moving out of the city, six of the seven nonpartisan council seats were up for grabs. One of the races, between council member Teresa Taylor and challenger Paul Shuey, went to a state-mandated hand recount and then, when the recount showed them tied, to a coin toss. It was a good year to bet against incumbents; Shuey won the toss. I asked longtime resident and businessman Bob Porter a question: “Is Ferndale open for business?” Porter is an artist and the inventor of Bob’s All Purpose Dang Tasty Grub Duster spice mix. He and his wife, Connie, sell this mix—along
with many other items—as street vendors. The answer to my question, Porter wrote via email, “is dependent upon what kind of a service you want to find.” For instance, he wrote, “If you are looking for a pharmacy, then most emphatically, yes! Ferndale is a pharmacy mecca,” with Walgreens, RiteAid and Haggen along Main Street and the new Custom RX Shoppe along Portal Way. Porter mused that if, for some reason, “you want to drink beer while you learn how to throw an axe, Ferndale has three places to learn that particular skill set.” The city also has a good supply of banks, he said, in addition
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A third of the people in town just got here.
fic bottlenecks so much is that many of the people who live up on the hill (sometimes called Church Hill) don’t have a good way to get to and from Interstate 5 except by going through downtown. That will change, because the previous government committed to “a growing number of multifamily to building an overpass at Thornton housing developments popping up Street. everywhere,” though he said he sees This overpass will connect Thornthe developments as a mixed blessing, ton Street with I-5, over the railroad at best. tracks. It is expected to be the most That growth “adds to a 3 o’clock to 6 expensive public works project in the o’clock traffic nightmare, which rivals city’s history, with roughly $21 million the Guide Meridian on a Canadian set aside for the project, and take two holiday,” Porter said, noting also that and a half to three years to complete. parking “is at a premium” in Ferndale’s The last council hiked property taxes downtown. and utilities to help pay for this projSweeney’s message on behalf of the ect—and for another project, bringing city was that help is on the way, but it a new deep-water well online, that is won’t get there overnight. Growth has almost completed. indeed been rapid, at least by smallThe reason it will take so long to town standards. As of 2018 figures build the overpass is that part of the from the U.S. Census, Ferndale had a route will be built over river silt. population of 14,564. That’s up sever“River silt squishes,” Sweeney al thousand over the previous decade. explained. “A third of the people in town just The contractor will have to comgot here,” Sweeney explained. press it again and again until it’s On its current growth trajectory, compact enough to lay a foundation some expect it to overtake Lynden in on top of it. I-5 will not be affected the next five years. by this construction, he said, because While the city has itself a new that piece of it has already been built council and new mayor, they may find with the western turnaround on Porthemselves playing second fiddle, in tal Way. Sweeney can’t make the same some ways, to their predecessors.“The no-disruptions promise further into outgoing council and mayor made a lot town. He even hinted that the traffic of really big decisions,” said Sweeney. around Vista Middle School could be Those decisions will reshape the city a nightmare. over the next several years, and beyond. There’s also the Downtown CatThe most costly decision has to do alyst Project. At the same time as with traffic. One of the reasons traf- they wanted to ease traffic through
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downtown, the former mayor and City Council wanted to find a way to revitalize it. Their solution is a very Ferndale one: build more housing. In this case, not single-family houses, but mixed-use projects with many units. A state program allows for a fee waiver and the elimination of property taxes for eight years for developers who agree to build something big downtown that the city deems desirable. The city has greenlit three construction projects that are required to break ground this year. Where the public fountain currently stands, there will be a 55-unit tower with shops and a restaurant at the top, overlooking the Nooksack River. A building with 30 housing units will sprout up across the street from city hall. And the quirky Ferndale clock tower will find itself adjacent to a 100-unit development. “The silver bullet in terms of sparking your downtown is having people live there,” Sweeney said. While he and the city may be right about that, the construction is only likely to add to the current traffic problem until the Thornton overpass is finished in 2023. The traffic pressures and tax and utility hikes are not making it any easier for existing downtown businesses. “Nobody likes to have their taxes raised,” Sweeney said, but he pitched the recent utility rate and property tax hikes as being relatively modest. The average single-family household, he said, pays only $15 a month more for utilities and $87 more a year for a home valued at $300,000.
Business owners, too, have noted growth-related struggles. Dora Ruiz is owner of the New Mexico Tamale Company in downtown Ferndale, just off of Main Street. It was just ranked as one of the 100 best places to eat in the entire United States in 2020 by review aggregator Yelp. Because the production of her popular New Mexico-style tamales is water intensive, that utility hike is going to cost her a lot more than $15 a month. When I reached her by phone in January, Ruiz mentioned an additional concern. She tried to get the city government to move on the parking problem and “got no support. They said they didn’t have the manpower.” Many parking spots in downtown
are supposed to be vacated after two hours but “there never is any kind of enforcement at all,” Ruiz said. She’s not advocating an army of meter enforcers like in downtown Bellingham. Ruiz said she thinks that the city ought to remind businesses periodically that workers should park elsewhere, because open spots mean more business. She also said she thinks that some businesses should be deputized to put city-approved warnings on flagrant violators’ windshields that their manner of parking is technically against the law and bad for business. As for the afternoon gridlock, Ruiz said, “Traffic is crazy. It is beyond ridiculous.” Her frustrations with the government and the gridlock, coupled with
a recent large rent hike by a new landlord, are prompting her to consider all of her options. One of those is to take her restaurant elsewhere. Commercial property owners in Bellingham have asked her if she’d consider relocating there. “I don’t want to move,” she told me. Then, after a moment’s pause, she added, “but I think that’s the direction I may have to take.” Ruiz may have been venting. It’s always a gamble to relocate a business, even a popular one. But the frustrations of growth are real to her and to other business owners in Ferndale. Though things may be better in the near future, they may get worse in the meantime. ■
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BP PERSONALLY SPEAKING
New Ferndale mayor sees the city moving back to the future Mike McKenzie
Greg Hansen personifies both the Old Guard and the New Wave of Ferndale, a little town where he grew up in berry and hay fields. It’s now a large, little town full of expansive business he’s administering to as freshly elected mayor and has been for the previous four years from a seat on the City Council. Here’s his view from the top... BP: What’s the No. 1 issue on your front burner? GH: Growth. We are a growing community, and that’s a controversial place to be. Some in Ferndale don’t want the community to grow at all, believing that they will have to pay for a growing population when they’ve been here all along. Some are on fixed incomes and really can’t afford to pay more. Some don’t want downtown to get crowded. I want to work to see that we grow in a responsible way. BP: What’s the first step? GH: Building a $27 million water treatment plant, because the city outgrew the existing one. It may seem like simple government business, but dealing with somebody’s water bill is not a simple issue. It was a difficult battle we fought in the face of angry emails and phone calls and comments on social media. We had to make a tough decision and take the heat for it and a secure financial plan that will provide for our water infrastructure for the next 20 years. BP: How would you describe Ferndale’s profile? GH: A common perception is that Ferndale is all about the two oil refineries and the aluminum smelter at Cherry Point and farming. But we also make stuff. We have numerous small-scale manufacturers. Take Samson Rope, for example. It’s a large company with worldwide reach and even has its product on the surface of Mars. BP: Is manufacturing a point of emphasis going forward? GH: We have an outstanding manufacturing, blue-collar community—and there’s still plenty of opportunities for others to join that club. We just have to create the synergy
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for it. We need to leverage our partnerships with the Port of Bellingham, with the Lummi Indian Business Council, and also have a more countywide perspective. Promoting economic development of industry is a full-time job for our city. BP: Any mitigation for the notorious traffic in town? GH: We have awarded the $16.5 million contract to Strider Construction for the Thornton Street overpass. The preload work will start this spring, and projections have the overpass opening in 2023. Most growth in the last decade has been west of the city, and this project will relieve the pressure off of I-5 to avoid the downtown traffic. BP: We hear a lot of buzz about a downtown makeover... GH: To create a fresh village feel, we recognized that we must revitalize downtown. Our city government is relatively tax poor. We don’t have what most communities do; we scratch for every dime. We have floodplain issues. It’s expensive to build downtown. We haven’t seen anything really happen there in 25 years or more. That’s why we passed the Catalyst Program. BP: How’d that work? GH: Great. The Catalyst Program required a minimum of 15 housing units and 5,000 square feet of commercial space with parking on-site. If (applicants’) proposals met the requirements and brought innovation to our downtown, the city would waive their fees. Thankfully, we got several good proposals, and in the end, we’ve awarded three. When you add the competitive aspect, it brings us a better project of benefit to the public. Getting
those going will provide a catalyst for the renewal of downtown.
ty tax bill you wind up paying, it’s the best deal in town.
BP: Is it underway or still on the drawing board? GH: We’re finding a way to get it moving. At the end of December 2019, we approved a project for 119 housing units and 16,000 square feet of commercial space on the ground floor. Just over the bridge, going west, on the left where River Walk Park is. We’ll have an ‘L’ building double the size of the existing plaza, providing a beautiful public space, too.
BP: Do you have a timeline? GH: We’re doing all we can to fasttrack the project. The Ferndale School District brought on board the architect and contractor at same time, for instance. They can work on the site plan and the building plan in collaboration, rather than in separate silos. My daughter is a freshman, and I’m hopeful that she might get to attend maybe a few weeks in the new school.
BP: You mentioned three contracts. GH: Boulos Twin Towers will consist of a 40-unit condominium complex, with 24,000 square feet of commercial space, sitting just west of the library. And across from City Hall on Main, we’ll have 24 housing units and 9,000 square feet of commercial. BP: All this meets expectations? GH: Originally, we thought we’d have 45 housing units, and we got almost 200. We required 15,000 square feet of commercial total and got almost 50,000. Wow. Way more than we thought we’d get. Think about it: 200 housing units in downtown core. A true urban village feel. The overall result is a walkable downtown core. That makes the microbrewery, the restaurants downtown, the shops all more viable. BP: Talk about the new high school plans. GH: As an educator, a child of teachers and a graduate of Ferndale High School, I’ve always been somebody who believes you do whatever it takes to provide the best education. It’s the most valuable investment you can make in a community. Spending millions on a new high school, what a bargain. In terms of what it means to the people, it’s worth 10 times whatever it costs. Whatever the increase in proper-
BP: Any obstacles to all this progress? GH: Mainly, other than finances— how do we calm the old-timers? The people I grew up with. People who wonder if this is the Ferndale we really want. I believe we’re headed in the right direction. These projects—the catalyst, the new school, the Thornton overpass—will bring new life into our community. Those old-timers will once
again be able to shop and eat downtown. It’s really bringing back the self-sufficient Ferndale of the ’70s that they miss. BP: What was that like? GH: Mine was a typical Ferndale, smalltown upbringing—mostly working on farms picking berries, pitching hay. BP: Any favorite memories? GH: Back-to-school shopping with mom. We’d go to Jarvie’s department store, get some jeans. Then down to the next block to Larson’s Shoes. If I was good, my mom would give me a quarter and let me go next door to McKay’s to buy some candy and gum. Those days are just gone. But there’s no reason we can’t have something else similar to that in a beautiful, modern version. ■ Read the entire interview at businesspulse.com
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Business Pulse magazine, Whatcom Business Alliance and the following companies congratulate our Business Person of the Year finalists and thank them for their contributions to our community prosperity.
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SMALL BUSINESS OF THE YEAR
BUSINESS PERSON OF THE YEAR
LIFETIME ACHIEVEMENT AWARD
Lost Giants Cider
Ecotech Solar
Stephen Bates
Marty Maberry
Pawzlove Pro Shop USA SixSigmaTV.net
Simple Box Storage Containers Tidal Vision VanderYacht Propane
Hempler Foods Group
Maberry Packing
Dr. Eddie Hansen Natural Way Chiropractic
Jennifer Kutcher WECU
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Business awards bring out the best of Whatcom County —both in honorees and in a packed ballroom at The Inn at Semiahmoo. Business Pulse’s 34th presentation spotlights four categories: Start-Up, Small Business, and Business Person of the Year, plus the crowning Lifetime Achievement Award that goes to berry-farm magnate Marty Maberry. The chosen few finalists comprise eight companies and four individuals. Their fields of expertise range across a spectrum of banking finance, health and wellness, meats and ciders, tech in manufacturing, love of pets, outside-the-box coaching, marketing inside the box, fuel by propane or solar, and sea-biz of—get this—chitosan and surimi. The event lathers special attention on outstanding busi-
ness successes that also provide invaluable philanthropic servitude to Whatcom County. In climactic moments, all the finalists step forward for recognition yet not knowing the outcome determined by an expert panel of businesssavvy selectors. In carrying out the legacy of Maberry Packing, Marty is the third-generation patriarch since his grandfather left Missouri to grow berries near Lynden. And now fostering a succession plan for the fourth (a son and daughter have become co-owners). Beyond the farm conglomerate, Marty has stepped to the podium for all causes—water rights, regulatory entanglements, and more—on behalf of all of this region’s agriculture.
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Chris Noskoff Owner, Operations Manager
Abraham Ebert Owner, Head Cider Maker
Brad Wilske Owner, Tap Room & Brand Manager
START-UP OF THE
YEAR
Lost Giants Cider Company
The recipe for success? Collaboration + Creativity Tamara Loucks A desire to collaborate with friends and be active, contributing members of Bellingham’s close-knit craft brewing community prompted co-owners Chris Noskoff, Abraham Ebert and Brad Wilske to launch Lost Giants Cider Company in 2018. In this labor of love, the trio tapped into every ounce of physical, mental, emotional and financial resources they could muster. In their mission—to create high-quality cider in a positive, fun and collaborative environment—they aim to empower people and showcase
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their creativity. It’s part of what makes the company unique, and it’s why the young cidery has been so successful. From hops to apples The three developed a friendship during their tenure at Kulshan Brewing Company, where they honed their skills in brewing and operations. That experience, along with Ebert’s dabbling in cider-making as a hobby, helped set the stage for their new venture. “Procedures and plant architecture for a cidery are similar to that of a
brewery,” said Noskoff, the company’s operations manager. “Plumbing, electrical, tanks, pumps, valves and hoses— all tools shared between the two industries. Working at Kulshan helped us understand the necessary essentials for buildout and production.” Confident in their skills, they boldly jumped in and built a cidery with full production and packaging capabilities. They spent significant time during the year-long planning and buildout process to formulate and test their recipes. “We felt comfortable taking the big
bite,” Noskoff said, “though we kept our goals achievable.” Infusing fun into the mix At Lost Giants Cider Company, the infusion of fun extends beyond the production floor and into the artful creation of unique cider styles that showcase Washington’s abundant agriculture industry. Each week, cider is infused with Northwest Washington’s seasonal fruits, herbs, spices and/or vegetables. A combination that proves to be popular on the tasting room floor, such as the Cucumber Jalapeño cider, gets produced on a larger scale. “Cider has evolved in the past 100 years,” Noskoff said. “Cider drinkers of the past did not experience the types of ciders you have today, and we want to capture the movement to provide what passionate cider drinkers want within our processes.” Building on their success Currently, Lost Giants Cider Company distributes its ciders primarily throughout Whatcom, Skagit and Island counties. Plans include growing at a responsible pace and expanding distribution throughout the state and region. Noskoff says they have learned many valuable lessons on their journey, and he advises budding entrepreneurs to always think positively and to be flexible with their plans. “I believe what we think is going to happen to us is what’s most likely going to happen for us,” he explained. “Be kind, be generous and always give yourself and others grace. Starting a business of any kind is stressful, and it demands that you work with other people, so it is good to remain calm and show others respect, even if you don’t see eye to eye on certain details.” ■
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Paul Van Metre President
START-UP OF THE
YEAR
ProShop USA
From machine shop management tool to revolutionary software Tamara Loucks In 1997, a group of students from Western Washington University’s Vehicle Research Institute started a machine shop called Pro CNC. They were passionate about machining and wanted to continue to work as a team, building “cool stuff ” beyond college. There was no way they could foresee that nearly 20 years later, their business would morph into something else entirely. Today, ProShop USA is revolutionizing software systems for manufacturing enterprise resource planning (ERP) and providing information to help businesses make the best and most profitable decisions. “ProShop wasn’t created out of a
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desire to start a software business,” said Paul Van Metre, the company’s president, “but instead was created to fulfill a need and want from the manufacturing market. It’s what makes the company unique.” In 2019, its first year in operation, ProShop USA expanded to 11 employees and reached $1.25 million in sales, far from its simple beginnings as a program designed solely to help manage one machine shop. When what you need doesn’t exist, build it Because the software of the era lacked the requirements to manage
Pro CNC operations, in 2000 the founders started developing their own shop management software. Over the next 10 years, they continued to develop ProShop, utilizing it to manage scheduling, shop floor control, quality management, computerized maintenance management systems (CMMS), equipment calibration and more. The software help facilitated rapid growth, earning Pro CNC many awards. ProShop was never intended for commercialization, but customers, vendors and auditors proclaimed it to be the most complete shop management software they’d ever seen. Over the years, several businesses inquired
about buying ProShop. The partners realized what they built met a need in the market, so they sold Pro CNC in 2014 and established parent company Adion Systems in Vancouver, British Columbia, Canada. Then, in 2019, they opened ProShop USA in Bellingham. Meeting the demands of the digital age Today, ProShop is a comprehensive, web-based and totally paperless shop management system for small-tomedium-sized manufacturing companies. It allows companies to dramatically improve their operations, profitability and performance for their customers. “ProShop is ideal for companies that perform complex manufacturing processes and need to have tight controls on their business,” Van Metre said, “specifically companies doing discrete, work order-based processes with multiple complex steps.” According to Van Metre, it’s of utmost importance for a business to have a robust system to help maintain well-defined processes, which helps to ensure a business can provide excellent and repeatable service to its clients. While ProShop USA’s clients are primarily based in the United States, the company also serves customers in Canada, Australia, Germany and Turkey. The company’s goal is to provide the most widely used manufacturing software of its type on the market. “We are tiny compared to our incumbent competitors,” Van Metre said, “but we have a much better product, a deep understanding of our clients’ problems, and the desire to help them by making our product better every day. We are growing quickly and will one day overtake the competition, and in doing so, lift up thousands of businesses around the world to improve their companies, hire more employees and help their communities thrive.” ■
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START-UP OF THE
YEAR
Pawzlove
Company’s software makes life better for pet owners and businesses Dave Brumbaugh Some pet owners are amazingly in tune with their dogs, cats and other beloved animals, able to understand their needs and communicate with them accurately and efficiently. Businesses want the same kind of relationships with their customers, but the challenge increases when you’re talking about thousands of clients rather than a few dogs. Pawzlove, doing business as Paw Partner, is introducing technology ideally suited for pet-service providers, including groomers, trainers, walkers and
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boarding and day-care facilities. “We connect pet businesses with their customers and pet parents with each other,” said Kim Singh, Pawzlove’s chief financial officer. “We bring to market a mobile reservation system for customers (B2C) along with an operations management system for a full-service pet business (B2B) paired with social media in one easy-to-use, fully integrated software platform.” It’s a one-stop shop for pet technology, Singh said.
“We’re your tech connect for all things pet. We are Facebook meets Expedia meets operational software platform—all for pets.” The pet industry certainly has potential. Quoting research firm Mintel, Singh said that in 2019, people in the United States spent $86.7 billion on their pets. Ten years ago, the industry was at $44.6 billion. In 2019, there were 91 million dogs and 94 million cats in the United States, with a forecasted growth of 10% in the next three
“Our goal is to become the premier software platform in the pet industry and to have worldwide brand recognition.”
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- Kim Singh years, according to Mintel. Singh is one of three founders of Pawzlove, along with Mike Thelen and Austin Thelen. The Whatcom County company has seven employees but plans to need many more. “Our goal is to become the premier software platform in the pet industry and to have worldwide brand recognition,” Singh said. The consumer component is a key part of the Paw Partner branding strategy. The Paw Partner mobile app, available on Android and iOS devices, is designed with fun features and practical functions. Customers also may use desktop computers and tablets to connect to the website. Either platform allows users to make reservations, receive appointment reminders, manage vaccine schedules and post photos of their pets. While they grow, the founders of Pawzlove are learning lessons they’re willing to share with others. “It always takes longer than you think,” Singh said. “And network like crazy—every second and everyone counts. Somebody knows someone who can give amazing advice.” ■
It’s all about you. As it should be. When you partner with us, you can count on experts who listen, learn and get to know your business, so we can provide solutions specifically tailored to your needs. Respect, responsiveness and commitment. That’s been our approach in Whatcom County for more than 60 years, and it’s what you and your business deserve. Let’s create tomorrow, together. Best Bank in the Pacific Region of the U.S., Two years in a row – Money Magazine (2018 & 2019)
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MAR/APR 2020 | BUSINESSPULSE.COM
Mason Gray Jeff Gray
COO
CEO
START-UP OF THE
YEAR
SixSigmaTV.net
Lean Six Sigma firm helps companies become efficient Dave Brumbaugh Can you implement at your business the recommendations you give to clients? That was the challenge facing Jeff Gray and Mason Gray when they launched SixSigmaTV.Net in Whatcom County in September 2018. SixSigmaTV.Net is a Lean Six Sigma training and consulting organization that focuses on helping companies streamline and optimize end-toend business processes.
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When Jeff Gray was ready to launch the company, he developed a lean operating business model that included Jeff and his son, Mason, as the only full-time employees running the daily internal operations. “Our business model employs certified freelance Lean Six Sigma contractors as needed to meet the ebbs and flows of the professional training and consulting industry,” Gray said. The company also has a group of
contract professionals for administrative support, website maintenance, app development, marketing/social media communications, research and development, and the production of video training segments. “It is a unique model that works for us to keep operating costs low and the quality of our operation high,” Gray said. “This model allows us to be flexible to meet customer needs and demands.”
It’s also been a productive model. SixSigmaTV.Net had revenue of approximately $1 million in 2019, its first full year in Whatcom County.
“Lean and Six Sigma are foundational business optimization methodologies, ensuring efficiency and sustainability of business,” CEO Jeff
“We are a firm that is able to adapt, work with and improve any industry or business model.” -Jeff Gray Gray spent more than 20 years in corporate America working with many large organizations developing his Lean Six Sigma skills. He trained and mentored teams and led enterprisewide projects around the world, working with Boeing, Microsoft, Chase, U.S. Navy, Capital One and many others.
Gray said. “SixSigmaTV.Net offers high-impact, affordable solutions on a scalable basis, allowing for rapid results and a legacy of continuous improvement within any industry.” SixSigmaTV.Net offers a variety of Lean Six Sigma services for clients, including training leadership or en-
tire teams; developing applications to make implementing Lean easier and more efficient; and providing videos, blogs and online workshops. Lean Six Sigma methodology and tools can be applied to any process within any global organization or industry, Gray said. He added that SixSigmaTV.Net trainers and consultants have successfully partnered with clients in aerospace, technology, energy, healthcare, commercial real estate, transportation, commercial food processing, apparel, wildlife and fisheries, environment, education, finance, government, security, hospitality and manufacturing. “We are a firm that is able to adapt, work with and improve any industry or business model,” Gray said. “We are process focused. It’s not about what you do, it’s about how you do it.” ■
“WECU isn’t just where we bank. They are a business and community partner.” Adrienne Renz, General Manager at Community Food Co-op WECU Business Member
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Dana Brandt Founder, President
SMALL BUSINESS OF THE
YEAR
EcotechSolar Solar EcoTech
‘Solarcoaster’ no match for Ecotech Mary Louise Van Dyke Ecotech Solar wrapped up 2019 having installed enough equipment to produce more than 1 million watts of solar energy. The Bellingham-based company designs and installs solar electric systems for homes and businesses in Whatcom, Skagit and Island counties and participates in projects around the globe. Founded in 2004, Ecotech was Whatcom County’s first solar contractor, said Dana Brandt, the company’s president and founder. Since that time, the company has faced what he called a “solarcoaster” of regulations and incentives as support for clean energy
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resources shift. “[Last year] marked a notable victory for us in staying profitable and keeping our entire staff working,” Brandt said, “even in light of losing a very generous state incentive.” Brandt launched Ecotech after completing an electrical engineering degree in Seattle and a master’s degree in renewable energy in Europe. His initial plan featured a multi-pronged approach to renewable energy resources, featuring wind power and hydro energies. Brandt was his own boss and the company’s only employee in the early years, installing solar systems while educating the community about solar power’s ef-
fectiveness for the environment. He discovered the challenges of persuading area residents and businesses to install solar for powering their electrical systems. “We all feel like solar shouldn’t work here,” Brandt said. The solution is in the number of sunny hours available to fuel solar systems. Dreary winter days are shorter, but summer—with its long stretches of daylight—allows systems to generate more electricity and store up credits to use in the winter. Ecotech’s current projects include the installation of a large ground-mounted system for the Guemes Island General
Store, dozens of residential projects (including some with Tesla Powerwall backup systems) and various commercial projects in Whatcom County. Brandt has been involved in renewable energy projects in 11 countries on
We genuinely care about people. Each member of
us to excellence in everything we do for our clients—from the details of the design and installation to the way we communicate with and support them.” Brandt also serves as president of Solar Installers of Washington, a professional trade association that educates legislators and regulators while promoting public understanding about the impacts of policies related to solar energy in the state, according to the as-
sociation’s website. Brandt confidently expects the future to bring more and better, even with the challenges of the solarcoaster. Costs of solar panels have decreased since 2004, for example, making solar installation more viable, Brandt said.“Solar is going to continue to become more prevalent,” he predicted, “and Ecotech is going to continue to lead the way.” ■
the team is motivated to make the world a better place by caring for the people around them.” - Dana Brandt
five continents. Connections through a Lynden nonprofit allowed Ecotech to install a solar system for an orphanage in Haiti in 2014. Giving back is core to Ecotech, Brandt said. “In 2017, we flew to Indonesia to support a project that brought power to over 1,000 homes that never had power before.” Brandt recently spent time on the phone with a Kenyan schoolmaster, troubleshooting deficiencies in the school’s solar power system. Closer to home, the company is working with Habitat for Humanity to provide solar for their new housing project on Telegraph Road in Bellingham. This past year, the company installed a system for the Maple Alley Inn that prevents the greenhouse ventilation system from overheating and killing plants. “We genuinely care about people. Each member of the team is motivated to make the world a better place by caring for the people around them,” Brandt said. “That motivation drives
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Ross Black Founder, CEO Dave Black Owner/Business Development
SMALL BUSINESS OF THE
YEAR
Simple Box Storage Solutions
Charitable giving ingrained in company DNA Tamara Loucks
Grow Wisely and Give Generously — a key component of Simple Box Storage Containers’ company mission.
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Thanks to the leadership of founder and CEO Ross Black, Simple Box has flourished into a $6.5 million company with six locations throughout Washington, Oregon and Idaho. The company’s success has provided the means to make a difference—and not just at home, but in communities worldwide. “We’ve been given so much opportunity, from our first bank loan to time from our team members, trust from our customers, training by mentors and
the list goes on and on, so giving back is important to me,” Black said. “We may not always have money to give, but we have time, equipment boxes to loan—there’s always stuff that can be done.” Today Simple Box Storage Containers offers convenient, secure and cost-effective storage space by providing portable storage containers to homes and jobsites. The company offers options for customers to rent, buy, move and even modify their container to fit their
specific needs. The company’s efforts earned it the The initial concept started as Black’s 2014 Community-minded Small Busisenior class project in high school. ness Award for Washington from the “My senior project was originally to U.S. Small Business Administration. build a large mini-storage warehouse,” Black volunteers his time as a teacher
Black said, “but when I went for a loan, and tutor for freshman students at the I was denied several times. A local Mid Whatcom County Classical Conbanker encouraged me to figure out a versations homeschool community. He way to break my grand plan into several smaller parts and to sell my Mustang in order to fund the first phase. The portable storage business was the third phase of the business.” Plans include expanding to serve the entire states of Oregon and Hawaii, with a total of 12 locations conveniently located between major metro areas and the suburbs. As a business, Simple Box is actively involved in local chambers of commerce and trade organizations. It supports Habitat for Humanity and community events, such as Bellingham’s Ski to Sea and the Bellingham Bay Marathon. The company also provides containers and supplies for global and national disaster relief. However, the primary goal is to sponsor orphans and widows in need—one for each of the company’s team members. “These folks are vulnerable, forgotten and sometimes taken advantage of,” Black said.
also coaches soccer and basketball with Lynden Youth Sports and the YMCA, and he volunteers with the children’s ministry at his church. His professional accomplishments and charitable efforts contributed to his receiving the 2019 Washington State Small Business Person of the Year Award from the U.S. Small Business Administration. The company’s generosity extends beyond its support of community and charitable organizations. The company also is looking inward to emphasize continuous improvement and the elimination of waste, which will allow for an increase in team member salaries and time off without having to raise prices. “In the end,” Black said, “we believe a truly great business is measured more by the difference it makes than the profit it generates.” ■
Congratulations to the 2020 Finalists!
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Craig Kasberg Co-founder, CEO
Zach Wilkinson Co-founder
SMALL BUSINESS OF THE
YEAR
Tidal Vision
Tidal Vision produces valuable product from seafood waste Chitosan is a 100% biodegradable product used in a variety of industries Dave Brumbaugh Craig Kasberg and Zach Wilkinson co-founded Tidal Vision in 2015. Kasberg previously was a commercial fisherman in Alaska, where he saw more than 2 billion pounds of seafood byproducts being discarded annually and thought there must be a better way for the industry he grew up in to utilize seafood byproducts. The pair teamed up with chemist advisers and started developing their high-performing chi-
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tosan liquid solutions and production processes, then looked for a place to call home. “The Port of Bellingham, (and) especially John Michener there, have been huge advocates for us during our period of relocating to Whatcom County in 2018,” Kasberg said. Michener is the port’s economic development project manager. “We’re proud of the seafood byprod-
ucts that we have upcycled from Pacific Northwest sustainable fisheries into high-performance chitosan solutions,” Kasberg said, “and the positive environmental impact our products have in removing toxins in water treatment, replacing toxic antimicrobials in textiles and reducing synthetic pesticide use in agriculture.” The cherry on top is that chitosan products have a wide range of uses.
Tidal Vision’s chitosan solutions are distributed widely across North America for such industries as stormwater, wastewater, textile manufacturing, agriculture crop production and food processing and preservation, Kasberg said. Tidal Vision revenues soared 250% in 2019, and the company is ramping up for more growth. Tidal Vision currently produces more than 150 metric tons of its liquid chitosan solutions per month in Whatcom County and ships its products everywhere from British Columbia to Guatemala. Tidal Vision has three locations in Whatcom County, with the newest being a 50,000-square-foot facility in Bellingham that will allow the company to increase production capacity by five times over the next 12-18 months, Kasberg said. The company also is
building its fourth warehouse location, in South Carolina.
“We’re proud of the seafood byproducts that we have upcycled from Pacific Northwest sustainable fisheries into high-performance chitosan solutions.” - Craig Kasberg “It will be supplied with the chitosan we produce in Whatcom County but will allow us to better serve the U.S.
textile industry,” Kasberg said. “Our chitosan solutions are being used in the textile industry as a green antimicrobial, which replaces several toxic antimicrobial treatments such as silver nanoparticles. Additionally, we have been developing a chitosan-based fire retardant with distribution lined up for our product to treat more than 30 million pounds of textiles in 2020.” In addition to its own environmental achievements, Tidal Vision has been a financial supporter of 1% for the Planet and Salmon Beyond Borders, and a recent sponsor of Bellingham SeaFeast. “Tidal Vision plans on continuing to be involved in local community events that bring attention to the importance of our seafood industry and its sustainability,” Kasberg said. ■
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Denver VanderYacht Sales & Marketing Manager
Bryan VanderYacht Mary VanderYacht
Co-Founder
Drake VanderYacht Driver
Co-Founder
SMALL BUSINESS OF THE
VanderYacht Propane
YEAR
Focus on customers fuels growth in propane company Dave Brumbaugh It was a modest start for Bryan and Mary VanderYacht. When they launched VanderYacht Propane in 1989, they were only filling and delivering barbecue cylinders in local trailer parks. But the Lynden couple found that the “power of compounding” applies to business as well as investments. As they gained customers, they reinvested in their company, leading to more growth.
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Thirty-one years later, VanderYacht Propane continues to achieve strong growth: Company revenue increased in 2019 by 10.4% to $11.8 million. The number of active residential and business customers surpassed 10,000 for the first time this past year, rising 14.1% to 10,462. Bryan and Mary VanderYacht have a few helpers now: 36 employees.
Nowadays VanderYacht Propane does much more than fill barbecue cylinders. The company delivers propane to residents and businesses across Whatcom, Skagit, Snohomish and Island counties, said Denver VanderYacht, the company’s sales and marketing manager. And not only that, but the company services propane distribution systems and sets propane tanks.
and its sale helped with a major expansion in 2016. Storage tanks were added that year in Ferndale, Maple Falls, Anacortes and Arlington. With population growth in eastern Skagit and Snohomish counties, storage tanks were installed in Hamilton in 2018 and Monroe this past year. The company plans to continue expanding to new locations farther down
“VanderYacht Propane is also in the wholesale market of propane as well,” he said. “We supply our own fuel and haul it directly from the local refineries, keeping our prices low. We also wholesale propane throughout the Pacific Northwest and into Alaska, with four transports maintaining that demand.” Propane gas is ideal for many customers who can’t hook up to a nearby natural gas line. Propane can be compressed into a liquid form and either sold in portable canisters or delivered via truck to a permanent storage tank on their property. The VanderYachts made their first major company investment in 1992 by buying property at 6811 Guide Meridian, several miles south of Lynden. They installed a 30,000-gallon propane storage tank there in 1994 and moved their company office to the property in 1997. Storage tanks give a propane company the capacity to serve more customers. After adding more tanks in Lynden, VanderYacht Propane installed a 60,000-gallon storage tank in Burlington in 2002 for expansion into Skagit and Island counties. A San Juan Island branch of the company operated from 2004 to 2015,
the coast and farther inland, Denver VanderYacht said. “However, VanderYacht Propane’s goals and expectations moving forward are to stick to their handshake morals,” he added. “Never stray away from the customer when the going gets tough, and always take care of their employees—because they are not only employees, they are family.” ■ Largest Fleet in the PNW Locally & Woman Owned with National Capabilities, here for all your equipment and rental needs. Facilities throughout WA and AK, headquartered in Whatcom Co.
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BUSINESS P E R S O N
Stephen Bates CEO, Hempler Foods Group
OF THE
YEAR
Hempler Foods Group continues strong growth in revenue, employees Mary Louise Van Dyke Stephen Bates, president of Hempler Foods Group, takes pride in the company’s progress over the last decade— and in new projects, such as the stateof-the-art water treatment facility at the company’s Ferndale production plant. “I think the proudest achievement would have to be the growth of our business, not just in revenue but in the number of people we employ,” he said. “It was always of utmost importance to
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Mr. (Dick) Hempler, who passed away last year, that we treat our employees like family, and I am proud to carry on that tradition.” In 2004, Dick Hempler asked Bates to join the company as vice president and general manager. Their friendship took root in 1980, when Hempler’s was located on F Street in Bellingham. Their rapport “would have a big impact on my life for the next 40 years,” Bates said.
Bates was no neophyte in the food industry; his first job involved bagging groceries and stocking shelves at the Lynnwood Haggen store. He later worked for Hygrade Foods, Hempler’s and as president of Fletcher’s Fine Foods. The company produced its first sausages and bacon in 1934 with Dick’s German immigrant father, Hans Hempler, at the helm alongside Otto Hahnel.
The little store and production facility had a loyal following for the bacon, sausage and specialty smoked meats that were based on Hempler family recipes (shhh, they’re a secret), Bates said. The highest demand was for Hempler’s gourmet Thanksgiving and Christmas hams. That robust following “helped to cultivate a common dream between myself and Dick for what would someday be the future of Hempler’s,” Bates said. In 2007, the company partnered with Premium Brands Holding Corporation and constructed a production facility in Ferndale. That partnership provided the catalyst for growth that brought Hempler’s to where it is now and will be in the future,” Bates said. The company also acquired two other iconic companies/brands: Isernio’s Sausage Company in Kent and Fletcher’s Fine Foods in Algona. Dick Hempler passed away April 4, 2019. His daughter, Kestin Hempler Liberato, and son-in-law, Marc Liberato, remain involved in the day-to-day operations of Hempler Foods. The company’s mission and passion are to produce and distribute the highest quality foods and to develop an extended family of employees dedicated to accomplishing the mission, Bates said. The company employs 150 full-time in Whatcom County and an additional 79 at other locations. Other accomplishments include production facility expansions and the purchase of adjacent land in Ferndale for future growth, not to mention being named the 2017 Large Business of the Year by the Bellingham Regional Chamber of Commerce. And then there’s the enduring popularity of the company’s foods. “Hempler’s original stack pack bacon is the No. 1 selling bacon in the North-
west,” Bates said. One of the company’s main objectives is to become better social and environmental stewards and focus on partnering with other companies that share their concerns about sustainability and humane animal treatment. “Today we all face challenges to our resources and communities in which we live and work,” Bates said. “It’s not uncommon to have disagreements as to solutions or priorities. But as we come together in the endeavor to provide wonderful jobs in Whatcom County, we must be good stewards of our environment and socially responsible first.” The company supported various organizations in 2019, such as Northwest Harvest, Make-A-Wish Foundation, Kent Little League and others. Bates said the company plans to continue supporting those organizations and others, such as the Kent Community Outreach, to supply meals and food for
shelter pantries. “We are also empowering our employees to be more involved in the community,” he said, adding that the company is working on a new policy that will give paid days off to team members who volunteer with causes important to them in the local community. Bates and his wife, Rachael, both believe strongly in supporting worthy causes, especially those that support children’s needs. Bates said he’s privileged to have been a part of three Washington-based companies that are relatively small and have become nearly $100 million brands, experiencing both amazing successes and difficult times throughout his career. “The important part to share is that I had the right teams that weathered the storms with me,” he said. “In that kind of environment, even if you feel alone, you never are—there’s always someone there who has your back.” ■
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BUSINESS P E R S O N OF THE
YEAR
Dr. Eddie Hansen Co-owner/CEO, Natural Way Chiropractic
Chiropractor focuses on growing and giving back Dave Brumbaugh
Eddie Hansen has not forgotten one of the most important kindergarten lessons: Sharing is caring. It’s guided the Bellingham chiropractor in both his practice and community involvement. Hansen founded Natural Way Chiropractic & Massage because he was inspired by how a chiropractor had helped him. Hansen, who was born and raised in
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BUSINESSPULSE.COM | MAR/APR 2020
Bellingham, had a bad back as a child. His parents took him to a chiropractor, he said, and the visit changed his life. He decided to go to college to become a chiropractor, but the journey was tougher for him than most students. “I had dyslexia, but back then we didn’t understand what was wrong,” Hansen said. After college, he came back to Bell-
ingham and opened an office in May 1995. Hansen then developed a proprietary advanced healing system with two other chiropractors on his staff, Brian Covey and Allen Sheen.“We’re talking about a highly skilled chiropractor, using advanced technology, in a team environment, to correctly diagnose the source of the pain—then creating an effective, individual healing plan to get Natural Way patients back
to a pain-free life,” Hansen said. “We want to raise the standards for chiropractic and massage while taking care of every patient like they are family.”
past year. Revenue rose to $6 million in 2019, and plans are being made to launch two more offices between Mount Vernon and Everett.
Covey and Sheen joined Hansen as partners, facilitating the growth of Natural Way Chiropractic & Massage. They steadily opened new offices: Ferndale in 2006, Lynden in 2009, Mount Vernon in 2012 and Anacortes and Everett in 2015. A fourth partner, Tom Foskolos, led to the opening of a Vancouver, Washington, office this
But Hansen’s roots are in Bellingham, and he recently spearheaded a successful effort to increase safe water access for youth. Hansen knows that Bloedel Donovan Park is teeming with children and teenagers swimming and playing in Lake Whatcom during summer months. But the City of Bellingham ended
funding for lifeguards there in 2004 in a budget-cutting move, and the old “H” swimming dock was removed. Children eventually began the dangerous (and prohibited) practice of jumping off the Lake Whatcom Boulevard bridge. With Hansen leading the way, Bellingham Bay Rotary Club launched a drive five years ago to raise $500,000 for a new dock. (To support the effort, visit https://www.docksforkids.org.) This past year, the Bellingham City Council voted to accept the club’s gift of a dock and agreed to staff it with lifeguards during the warm months, starting this summer. “I believe everyone should give back to their community,” Hansen said. “I was just raised that way. If you have more, then you should give more.” ■
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BUSINESS P E R S O N OF THE
YEAR
Jennifer Kutcher CEO, WECU
From intern to CEO
At WECU, Jennifer Kutcher is dedicated to helping others succeed Mary Louise Van Dyke Jennifer Kutcher grew up adoring math. As a youngster, she rushed home after school, eager to plunge into her math homework. Playing with friends only occurred after the last problem was solved. That passion for figures, equations and calculations continued as she grew up. There was a challenge, though. “Although I loved math,” she said, “I didn’t know what I wanted to do with it.” There was no magic formula that predicted Kutcher would become
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president and chief executive officer of Whatcom Educational Credit Union. While serving an internship at WECU during her final year at Western Washington University, Kutcher began figuring out how to translate that love of numbers into a career. “Looking back,” she said, “I realize how important it was that I showed up to work every day on time, applied myself by working hard, and always asked, ‘What more can I do to help?’” The unpaid internship opened doors for her after she graduated from Western in 1996 with a degree in fi-
nance. Two years later, Kutcher was offered a job at WECU as an accounting analyst. Several months after that, she was asked to lead the accounting department, a job that segued into becoming responsible for WECU’s asset/ liability management and strategic planning. She fulfilled her first career goal in 2007 with a promotion to chief financial officer. Her success didn’t stop there. Kutcher was asked if she wanted to participate in a five-year CEO succession program in 2009. The president/ chief executive officer was preparing
for retirement, and three in-house candidates, including Kutcher, participated in rotations among the chief financial officer, operations officer and lending officer positions. “I learned a lot from these experiences and grew professionally,” she said, “pushing myself into new areas of responsibility where I was not the expert.” In 2014, she was selected as WECU’s next president and CEO, following Wayne Langei, who’d been at the helm for 41 years. Becoming WECU’s lead official was “truly a privilege and a humbling experience,” Kutcher said. “One that plays such a vital role in serving and supporting the people of Whatcom County.” She focused on the transition and on ensuring stability for the organization during her first year as CEO. The next steps involved setting WECU’s future strategic vision and plan. “Much of the work you see today is a result of this 10-year vision,” Kutcher said. In 2020, WECU leverages technology to improve member experiences with online/mobile banking access, branches, new accounts, lending and ATMs. That’s a far cry from the first meeting in 1936 of the Bellingham Teacher’s Credit Union with deposits kept in a shoe box, as described on WECU’s website. “We are excited to officially launch a new suite of business banking products and services to our membership in 2020, including cash management and payroll services,” Kutcher said. WECU is a member-owned financial cooperative that holds more than $1.7 billion in assets. It employs 413 and serves about 130,000 members. Features include digital banking, a local contact center, 11 retail branches, a home-loan center and businessloan center—all located in Whatcom
County. She is actively involved in strategic and advisory committees that serve the credit union industry and as a guest speaker with her alma mater, Western Washington University, she meets with
“We are committed to doing all we can to respond to and help our members and our community in tackling any challenges that come our way—together.” -Jennifer Kutcher
student groups and serves on WWU’s foundation. Kutcher also said she is a “huge supporter of the United Way of Whatcom County.” As part of the credit union’s community involvement, WECU created a new giving program, Kutcher said. The Education First Grant Program supports local groups working to ad-
vance education in Whatcom County. The credit union awarded four organizations—Whatcom Dream, BAAY, Lummi Youth Academy and the Opportunity Council—a total of $110,000 in 2019. “The Education First Grants help us live out our guiding principle objectives of being socially responsible and community-minded,” Kutcher said. In 2019, WECU provided financial support to 213 nonprofit groups, donating more than $425,000 and leading 110 financial education lessons for 1,888 students. WECU also partnered with the foundations at Western Washington University, Whatcom Community College, Bellingham Technical College and Northwest Indian College to provide $76,000 in scholarships. The credit union is truly a local institution, Kutcher said, with most of the employees living, working and worshipping in the same communities as the members. “With this shared geography comes an understanding of the unique needs of our members,” Kutcher said. “We are committed to doing all we can to respond to and help our members and our community in tackling any challenges that come our way—together.” ■
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LEADERS OF INDUSTRY I S S U E S
F O R U M
W H A T C O M
C O U N T Y
National and State Policy Outlook 2020...and Beyond A Look at Policies Impacting Your Business and Our Economy
THURSDAY, MAY 14
3:30pm | Northwood Hall 3240 Northwest Ave, Bellingham, WA 98225
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BUSINESS P E R S O N OF THE
Murry Park President, Trans-Ocean Products
YEAR
Trans-Ocean Products leader presides over soaring growth Dave Brumbaugh Unless you work there or drive a freight truck, you probably aren’t too familiar with one business hiding in plain sight in Bellingham. But your attention may grow when you learn Trans-Ocean Products recorded about $70 million in revenue in 2019, primarily from producing surimi seafood products for sale to North American retail markets. It’s one of the largest private employers in Whatcom County, with 214 full-time-equivalent employees, all but six of them in the county.
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Since Murry Park became company president in 2014, Trans-Ocean Products has soared. “Both revenue and volume have grown by over 50% in the past five years, strengthening our market position as leader for our category in U.S. retail,” Park said. “We’ve created a gluten-free production facility and are developing innovative new products in alignment with emerging consumer preferences.” Park said Trans-Ocean Products, a member company of the Maruha
Nichiro North American Group, relies on two philosophies: developing a sense of team and becoming a quality supplier. How does one build a team? “Treat others with uncompromising truth,” Park said. “Lavish trust on your associates. Mentor unselfishly. Be receptive to new ideas, regardless of their origin. Give credit where it is due.” When Park talks about quality, his view is broader than Alaska pollock, which is caught in the cold waters of the Bering Sea and the Gulf of Alas-
ka and is the prime ingredient of the company’s surimi. “(We want to) become the recognized leader in every market we serve, selling only best quality products which help our customers (retailers) succeed,” Park said. “To attract the best talent and operate at the speed of business. Provide our employees with a safe and inclusive place to work. Being innovative with process improvement and driving new product development. (Achieve) a financial performance which consistently rewards both our owners and employees.” Park said he also wants TransOcean Products recognized as a great community member for its social, ecological and sustainability efforts. Toward that end, the company supports employees’ efforts to participate in the community activities they desire. It also makes charitable donations to
“Lavish trust on your associates. Mentor unselfishly. Be receptive to new ideas, regardless of their origin. Give credit where it is due.” -Murry Park community organizations and for two years was a sponsoring member of Bellingham SeaFeast. After attending Western Washington University and gaining a bachelor’s degree in Manufacturing Engineering Technology, Park spent decades outside of Whatcom County. He left in 1975 to join the U.S. Army, then spent nearly 20 years with a consumer electronics supplier and a capital equipment fabrication and machining
supplier before entering the seafood industry. He joined Trans-Ocean Products in 2012. In the midst of all that, Park found time to launch a consulting company in 2004 to help small- to mediumsized manufacturing companies work through difficult issues. He also teaches proven lean techniques from other industries at the Alaskan Seafood Processing Leadership Institute. ■
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LIFETIME ACHIEVEMENT
AWARD
Marty Maberry, Maberry Packing
What’s in a name?
It’s a sum of many grand parts in this success story: MaBERRY Mike McKenzie Life has grown berry, berry, berry fruitful and exceptional at Maberry farm fields near Lynden over the last 76 years—as in strawberry, raspberry and blueberry. Those crops include the largest raspberry farm in Whatcom County—lo, many ambitious iterations beyond the smallish strawberry field where it all started in 1944. The soil near Lynden was the magnet that drew Leonard and Blanche Maberry and their children, Jake and Janet, from rural Carter County in southeast Missouri. Jake and his wife, Money, founded Maberry
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Packing in 1955. Today, four generations in, Marty Maberry stands as its co-owner (with two of his children) and chairman of the board. Given his strong presence in the expansion of Maberry Packing and within the agriculture industry, he’s worthy of the 34th annual Lifetime Achievement Award from Business Pulse. Reticent about public praise and shying from the spotlight, Marty nonetheless commands both. He has overseen the steady growth of the company that morphed into one of the most productive red raspberry entities
in northwest Washington’s red raspberry hotbed. Getting him to talk about himself and his achievements is akin to the age-old analogy of pulling teeth. For example, when asked, “How did you get to where you are today?” he responded: “One decision at a time. Wonderful wife. Great employees. And parents who instilled the passion and desire to do the best you can, always caring for people.” Outside the borders of the multiple Maberry Packing growing fields
The Maberry family (L to R): David Maberry, Cora Gunst, Kyle Gunst, Jamie Gunst (Maberry), Marty Maberry, Debbie Maberry, Steven Markham, Kai Johnston, Lisa Maberry, Phoebe Markham, Haedyn Maberry, Bree Maberry (Brandt), Marty “Blake” Maberry, Jon Maberry, Riley Maberry. Photo courtesy of the Maberry family.
(which his son Jon oversees) and the processing and marketing operations, Marty has assumed the leadership mantle in the contentious arenas of water rights and other regulatory issues throughout Whatcom County. He has served as lead spokesman for the county’s Ag Water Board and the Whatcom Family Farmers alliance. Marty also was instrumental in developing the county Watershed Improvements Districts, a politically delicate hot potato that required collaborative efforts on many levels.
“It’s important to bring all of agriculture together,” Marty said, “to speak with one voice on the many difficult issues that we deal with, both locally and statewide.” His CEO, Jon Olson, took it a step further: “Marty has a vast knowledge of state water law, rights and regulations,” he said. “He spends a lot of time and resources in resolving water issues. He’s been a long-term steward of our natural resources, and he understands that our actions affect the community.” Community service and 130 full-
I liked the idea of working for and contributing to a successful family-owned business. I felt my experience would complement Marty’s desire to grow the business. He cares deeply about the employees who work for him and he has a hands-on approach. He’s sensitive to their needs and takes a personal interest in them. Marty has always made me feel valuable and appreciated.
MOS SA DA MS.COM
SUCCESS RISES IN THE WEST
He has a common-sense business approach, is conservative and fiscally responsible, and he’s always fair and honest in his dealings. He is customer-driven and business-minded. That develops and fosters longterm relationships.
When you go above and beyond, the sun rises on limitless opportunity. We applaud your achievements—and the possibilities they inspire.
Marty has a great sense of humor, and he’s very social. Integrity—honor our commitments and take responsibility for our actions…grounded in his Christian beliefs and striving to live to a biblical standard.
Congratulations to Marty Maberry for his well-deserved Lifetime Achievement Award and to the 2019 WBA nominees for Business and Business Person of the Year.
RISE WITH THE WEST.
JON OLSON CEO, Maberry Packing
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I’ve worked for the company forever. I started berry picking on the farm when I was 3 years old, and I’m 31 now. I remember always wanting to impress my dad. I’d see truck coming—it was fire-engine red, you couldn’t miss it—and he’d ask someone, ‘How’s she doing?’ And I was eager to give it my all to get a full basket. When I was 7 or 8 I got promoted! I got to start in the raspberry field. That was a big deal. I then got to work on an hourly basis (instead of by the bucketful), and I could not have been prouder.
JAMIE (MABERRY) GUNST Daughter, Co-owner VP for HR Maberry Packing
time employees sit at the heart of the outreach credo that Maberry Packing preaches and practices. Logically, the company lends strong support to the National FFA Organization and is neck-deep in support of the annual Northwest Raspberry Festival in Lynden, among many causes. High school basketball is a centerpiece of the Maberry family’s local support. “The Jake”—Lynden High School’s Jake Maberry Gym—is named after Marty’s father, the company founder who died three years ago at age 86. Jake coached LHS to 16 conference, nine district and four state championships in his 26 years there and was inducted into the Washington Coaches Hall of Fame in 1992. Olson, a 21-year Whatcom County resident who has worked 12 years at Maberry Packing, said Marty remains a huge booster. “He loves to talk about the history of Washington high school basketball— teams and players from the 1960s to the present,” Olson said. Hoops is not the only love and passion in Marty’s personal and work DNA derived from his father. Faith, family and farming rule. Among the numerous family members, work associates and peers who talked to Business Pulse about Marty (vital to the award and this article because he doesn’t say much about himself ), a constant common theme surfaced: high value
and premium treatment of employees, whose numbers swell by three and four times during harvesting seasons. Marty spoke not only a lot about that topic, but also with obvious pride. “I’m proud of the advancement and promotion from within our existing employment base,” he said. “We have a high number of employees who have gone from seasonal to full-time work. We have a policy of promotion from within. With our growth, it’s gratifying to see how many lives have been improved over the years.” The company’s growth has been good for many families, he said. “I love how many local kids have gotten their first jobs in our family business, through many generations,” he said. “Many of our full-time and seasonal employees’ parents used to work for us.” Jamie Gunst, one of Marty’s two daughters and a company co-owner, manages the human resources arm of Maberry Packing. The records there indicate that many employees have been on board for 30 or more years. “We know we’re only as good as our team,” said Olson, who was the chief financial officer before becoming CEO. “We value the hard, results-oriented work of our team...and treating them with the respect we want of ourselves.” A constant theme, he said, is “fostering a positive, healthy environment and opportunity for advancement.”
“I love how many local kids that have gotten their first jobs in our family business, through many generations—many of our fulltime and seasonal employees’ parents used to work for us.” – Marty Maberry
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I was out there picking and pruning and sorting berries
Photo courtesy of the Maberry family.
since I was 7. (He’s 32 now.) There are so many things I can attribute my dad’s success to, but the main one would be how passionate he is about the Photo courtesy of the Maberry family.
whole industry. He lives and
Top photos: Marty’s kids working during harvest. Bottom photos: Marty on the family farm.
breathes it, from his faith to his
The total farm operation dates to Jake and Money Maberry’s strawberry fields in 1944. About 10 years or so later, they began farming the red raspberry, which today makes up about 65% of the company’s production. In 1980, another step took place that brought Maberry Packing into its primo size, production and reputation: the addition of the blueberry (Today, blueberries account for about 25% of the business, with strawberries accounting for the other 10%). The tri-berry commitment quickly led to the decision to expand into fruit processing. Soon thereafter came the addition of individual quick freeze air blast tunnels. And soon after that came the marketing initiative, a joint effort with another Maberry family farm. In listing the company’s most notable accomplishments, Marty Maberry wrote: “The decision to expand from just the farming operation to the fruit processing and marketing” and “The deci sion to expand to the IQF (Individual Quick Freeze) consumer market.” He
inspiring to us employees and
also mentioned: “The diverse customer base and the reputation for quality that exists for our company within the industry,” “Implementing the values passed down to all of us by our family, both immediate and extended—that of quality and integrity in doing business” and “Holding the business as family-owned, owing to so many contributions from not only my family, but extended family as well.” That’s a reference to Curt Maberry Farms, founded and operated by Marty’s cousin. Together, to further enhance their marketing needs, they formed Maberry & Maberry Berry Associates in 1980 to expand the reach of both operations. Today, sales stretch across the United States, to Canada and into Asia. In a region ideally suited for farming, the Maberrys aim to be—and have been—among the best at growing, producing, packing and selling delicious berries. Marty Maberry now represents that lofty position with the lofty 2020 Lifetime Achievement Award. ■
family to the workforce. He’s always all-in for us to succeed. All four of us (siblings, two girls and two boys) were involved in the company up through college. Jamie and I have stayed in it, and our younger sister and brother have their own careers elsewhere. JON MABERRY Son, Co-owner VP of Farming Maberry Packing
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PHOTO: iStockphoto.com/Robert Michaud
Boeing needs strong tailwinds Don C. Brunell As we launch into 2020 and the ensuing decade, Boeing faces strong headwinds that are major concerns for many of us living in the Pacific Northwest. In early 2019, I wrote that Boeing was poised to have its best year ever. It had strong tailwinds propelling it. It would build upon a successful 2018. Its 737 Max was selling like hotcakes to hungry airlines, and plans were in the works to expand production at the Renton assembly plant. The new composite-wing 777X would fly its maiden test flight and go into service in 2020. Things are vastly different now. Today, Boeing is halting (temporarily, one would hope) its 737 production. It has delayed flight testing of its 777X and has a new CEO, Dave Calhoun. Until the Federal Aviation Admin-
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istration and other government regulators around the world approve Boeing’s safety modifications, the aircraft will not return to service. About 500 737 Max jets are grounded worldwide, Bloomberg has noted, and roughly 400 undelivered aircraft sit in storage. The company’s financials are stretched. For the airplane’s manufacturer, it’s all getting very, very, very expensive. In the third quarter of 2019, according to an earnings report on Oct. 23, the plane’s continued grounding cost Boeing $900 million, bringing the total to $9.2 billion, Quartz reports. “Even if no employees are laid off at Boeing,” reports FOX 4 News in Dallas, “ceasing production will still cut into the nation’s economic output because of Boeing’s huge footprint in the manufacturing sector. Through October, the U.S. aerospace industry’s factory output has fallen 17% compared with the same period last year, to $106.4 bil-
lion, in part due to previous 737 Max production cuts.” The 737 Max crisis has helped Boeing’s main competitor, Europe’s Airbus, which saw deliveries surge 28% during the first half of the year. Boeing deliveries fell 37% despite strong 787 sales and production. For Washington, a healthy and vibrant Boeing is vital to our state’s economy. In a global study of aerospace manufacturing attractiveness, Pricewaterhouse Coopers found that the United States is top-rated (see Figure 1). Within our country, Washington is the best. “Washington’s economy and industry size are heavily tied to Boeing’s commercial aircraft business,” the study reads. While the parent company is located in Chicago, Boeing Commercial Airplane Co. is based in Renton. PricewaterhouseCoopers pointed out that Washington also is home to 1,400 aerospace-related businesses and has
the highest concentration of aerospace jobs in the country. Washington topped the state rankings in categories of industry, infrastructure and economy. Texas, with its strong economy and favorable tax policy, finished second. It has a more diverse aerospace manufacturing base than Washington, with Airbus, Lockheed Martin, Boeing, Bell Helicopters, Textron and Gulfstream located there. Boeing has mammoth manufacturing facilities in the Puget Sound region that are unlike any other in the world. The 66,000 workers assemble every Boeing jet used by airlines. Only Charleston, South Carolina, shares 787 production. Once the 737 Max is back in service, airlines and their pilots must be confident the aircraft is safe to fly and convince passengers to fly in it. Boeing has queried thousands of travelers around the globe four times
Top 5 State Rankings for Aerospace Attractiveness OVERALL RANK
COST
LABOR
INFRASTRUCTURE
INDUSTRY
ECONOMY
TAX POLICY
Washington
1
35
11
1
1
5
26
Georgia
2
8
20
15
7
10
5
California
3
49
13
3
2
2
22
Michigan
4
23
28
23
14
3
1
Illinois
5
40
12
4
11
4
31
STATE
Figure 1. 2019. Graph from PriceWaterhouseCoopers. https://www.pwc.com/us/en/industries/industrial-products/library/aerospace-manufacturing-attractiveness-rankings.html
since May, finding that skepticism surrounds the Max. Among U.S. travelers, just 52% said they would be willing to fly on the plane. Boeing CEO Calhoun’s top priority is to convince regulators, airline customers, the flying public and even Boeing employees that he has things back under control. “It will be difficult, and any missteps could send Boeing’s stock plummeting,”
Barron’s reports. “The risks outweigh the rewards for investors.” Boeing must restore its reputation by weathering the storms and finding strong tailwinds. Failure is not an option. ■ Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver, Washington.
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PHOTO: iStockphoto.com/Jirsak
Understand your audience Why it’s important and how to do it Sherri Huleatt An all-English lecture spoken to an all-Spanish-speaking audience. A marriage proposal to a shy person in a public place. A series of jokes delivered to a group who just attended a funeral. All of these cringeworthy moments have one thing in common: The person delivering the message didn’t consider to whom the message was being delivered. The same goes for marketing. Even the most expertly crafted message falls flat if it’s not geared toward the right audience. Just think of a retirement home trying to recruit tenants through Snapchat—yes, there are a lot of active Snapchat users, but no, most of them are not retirees. Understanding your target market equips you to speak your customers’ language and engage them when and where they’re most interested. Beyond this, knowing your audience helps you think outside of yourself and go beyond subjective opinions. For example, in many cases, you are not your target audience, so even though you might not care for a photo, message or social media platform—it’s not about you, it’s about your audience. For some of you, this is Marketing 101. But, even if you don’t need a reminder of how important understanding
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your audience is, you might want a refresher on the myriad ways you can capture audience information. Gone are the days when brands relied on in-person surveys, focus groups and in-store exit interviews (all of which can be expensive and time-consuming). Today, you can capture both quantitative and qualitative audience data quickly, affordably and sometimes (creepily) without them ever knowing. Here are some of the top ways: 1. Google Analytics and Social Media Metrics: Demographics and Online Behavior
Both Google Analytics and social media platforms, like Facebook, Instagram and Twitter, allow you to collect massive amounts of consumer data; with these platforms, you can see: Demographics: Access your audience’s age, gender, interests, locations and languages. Digital habits: With Google Analytics, you can see how many of your users are navigating your website on a desktop, tablet or mobile device. Then, you can dig further to see which operating system, browser and browser version they’re
using. With social media, you can also see which days and times your users are most active, so you know when to post content.
likely are you to recommend [X] brand to others?”), brand performance (e.g. “When you think of brand [X], what words come to mind?”), etc.
Content preferences: With Google Analytics, you can see which pages (including product pages) get the most traffic and engagement, which helps you gauge what content your audience is most interested in. With social media, you can also track which types of posts—questions, photos, videos, etc. —get the most engagement, so you can document your audience’s content preferences.
Here’s how to get your surveys in front of the right people: • If you already have an audience contact list and/or online presence, share links to your survey through email, social media and your website. • If you don’t have audience contacts or want to reach consumers outside of your existing contact list or online presence, you’ll need to spend a little more money to collect data, but it’s worth it. Both Google Surveys and SurveyMonkey have survey sharing and targeting options that distribute your survey to groups of anonymous survey takers who meet your audience criteria. This includes targeting based on geographic location, income level, education, marital status, career, political affiliation, entertainment habits, etc., allowing you to capture actionable data from a new and/or wider audience group. ■
2. Online Surveys: Brand, Audience, and Marketplace Feedback
Beyond measurable, quantitative data, some of the most important and action-worthy information you can collect from your audience is qualitative data—that is, candid responses to open-ended questions. This type of data, in addition to quantitative data not found elsewhere, can be captured with online surveys. There are a significant amount of online survey tools you can use, including SurveyMonkey (most popular), SurveyGizmo, Google Surveys, Qualtrics (for enterprise-level marketing) and others. When building your survey(s), include questions about how your audience spends their time (e.g., “What events do you go to?”), content consumption habits (e.g., “What brands do you follow online?”), brand recall/ awareness (e.g., “When you think of [X], what brands/products come to mind?”), brand loyalty (e.g., “How
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Bridging the gap
With increasing homelessness, rising costs of living and housing shortages, Whatcom County needs jobs and opportunities. Our businesses need a prepared workforce. Jim McKinney Workforce development is the critical nexus between employees, employers and economic success. In the 2018 and 2019 annual business surveys, Whatcom Business Alliance members ranked finding qualified help as a top concern for growth. In response, the WBA established the Youth Engagement Initiative to find solutions and meet our members’ needs. The likelihood of a major company moving to Whatcom County without a viable labor pipeline is small. Unfortunately, the county lacks a comprehensive workforce development program. According to Don Goldberg, the Port of Bellingham’s economic devel-
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opment director, one of the first questions a large business seeking to move to Whatcom County asks is, “Do you have a trained, available workforce?” The Youth Engagement Initiative was created to help fill the gap. Students, parents, young adults and career counselors are unaware of many local career opportunities, required skills for these jobs, or existing career exploration programs. This information gap leaves many without direction and leaves our businesses without skilled employees. When a business does find a new hire, younger candidates often lack basic skills. “New hires often lack understanding of business, soft skills and work ethic,” said Laura McKinney, HR talent man-
ager for Alcoa Intalco Works. “Some even have a hard time with basic issues, like showing up on time or for a full work week.” This creates unwanted turnover at major manufacturers, despite that full benefits and good starting wages are offered. These challenges, combined with the high percentage of students (more than 60%) who do not complete post-secondary education, hamper local economic development. The WBA’s Youth Engagement Initiative is designed to bridge this gap. The program works to help young people better understand business needs and to help businesses find better-prepared employees. The ultimate goal for the initiative
is to be a key driver for improved economic development in the region. This will lead to living-wage jobs and professional career opportunities right here in Whatcom County. It was launched in 2018 with an initial $50,000 grant from the WBA board of directors and $20,000 in charitable contributions from its nearly 300 local business members. The team developed a comprehensive strategy, established a 501(c)(3) nonprofit and successfully engaged with Junior Achievement to bring the Job Shadow curriculum to Whatcom County high schools. In 2019, the Youth Engagement Initiative launched the YES Whatcom website, located at https://yeswhatcom.com. The website lists local job openings and local companies’ profiles, and it provides information for job seekers, employers and influencers. The team has developed partnerships with local career and technical education directors and has engaged Whatcom County superintendents. For 2020, the initiative is working with groups such as the Skagit STEM Network and Career Connect Washington to bring existing programming to Whatcom County, and it continues to engage with such valuable partners as the Aerospace Joint Apprenticeship Committee to connect students and the business community with valuable resources. The team also is exploring workforce and economic development effort ideas with the Port of Bellingham. A healthy economy creates opportunity, and opportunity contributes greatly to a healthy community. Disadvantaged and financially limited youth need guidance toward a prosperous
future. With increasing homelessness, rising costs of living and housing shortages, Whatcom County needs jobs and opportunities. Our businesses need a prepared workforce.
As business leaders, we need to take action to make opportunity. Bridging the gaps among economic policymakers, businesses, educators, students and parents will go a long way toward providing a dynamic, productive and sustainable workforce for future prosperity.
The Whatcom Business Alliance, through the Youth Engagement Initiative, aims to give information, direction and hope. It is an investment in the future. Go to https:// yeswhatcom.com, put your business on the site, and support the 501(c) (3) nonprofit with a charitable contribution. Email us at yeswhatcom@ whatcombusinessalliance.com. ■ Jim McKinney is a retired US Army foreign area officer, small business owner and defense consultant. He serves on the boards of Saturna Investment Trust, the Healthy Youth Coalition, and volunteers for the WBA’s Youth Engagement Initiative.
Create your company profile and start posting jobs TODAY! www.yeswhatcom.com Part of the WBA Youth Engagement Initiative
Thanks to these companies for their support of workforce development in Whatcom County:
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Take advantage of 20% savings
How to make use of the new business income deduction Dan Van Beek It’s been more than two years since the Tax Cuts and Jobs Act, the most significant and sweeping tax reform we’d seen in 30 years, was signed into law. And while it may feel like a distant memory now, it’s undeniable that the act left a lot in its path for businesses to sort through. Even now, final regulations and Internal Revenue Service guidance slowly trickle in, forcing taxpayers to continue navigating the complex tax bill and its effects. Arguably the most substantial and complex change for businesses is the Qualified Business Income Deduction. In its simplest form, this is a 20% deduction on the combined qualified business income allowed to taxpayers
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(except C-Corporations). Determining who qualifies, what qualifies and if the deduction is limited becomes a maze of legislation and interpretation to navigate. For income to qualify, it must be generated by a U.S. trade or business. Surprisingly, “trade or business” is not something that has been clearly defined by the IRS. For example, some rental activities may qualify as a trade or business, while others may not. There are limitations of the deduction on income from specific industries, needing enough wages paid to support the full deduction, investing in enough property from real estate rental activities, and the list goes on. While the calculation is nuanced and complex, one thing is clear — the Qualified Business Income Deduction has changed the way we’ve traditionally thought about deductions, profit-
ability and tax advantages. Historically, a common approach has been to spend strategically in an effort to lower overall income levels and accelerate potential tax deductions to spread income evenly over a number of years. However, this deduction presents us with a mentality we aren’t as familiar with—the greater your income, the greater deduction you generate. It’s not often that taxpayers are awarded a deduction for something they did not pay for. This should make taxpayers and advisers pause when considering a strategy that includes lowering one’s overall profits. Are you spending yourself out of a 20% deduction? Many provisions of the Tax Cuts and Jobs Act are set to expire after 2025, including the Qualified Business Income Deduction. While there’s always a chance this time frame could change, business owners should act now to ap-
propriately plan and utilize the lowest rates we’ve seen on business income in decades. By not utilizing this window to appropriately plan, you could find yourself inflating a balloon of income that may pop at much higher tax rates if the tax act—and with it the favorable rates and deductions—disappears sooner than expected. Because every taxpayer’s situation is unique, careful planning should be considered to avoid pitfalls that may potentially limit your deduction opportunity. Additionally, there are several facets of your tax scenario and business operations that should be considered when taking full advantage of the deduction. For example, if you’re considering selling your business in the next five years, there are varying deduction implications depending on the time of your sale. Business succession planning should be discussed now, with the Qualified Business Income
imize this tax deduction; these should be discussed with your adviser. A year ago, it felt like the wild, Wild West of the Tax Cuts and Jobs Act as advisers, business owners and even the IRS were striving to interpret a law that created substantial changes to the tax system. Today, we’re refining our knowledge and approach, allowing taxpayers across a wide spectrum—from those who own a single-family rental to those who operate a multi-million-dollar business—to take advantage of this unique tax opportunity. ■ Deduction in mind, to ensure you’re taking full advantage of the tax cuts that are available to you. Budget and cash flow projections, ownership structure reorganization, lease agreements and business operating agreements also all play critical roles when you consider how to max-
Dan Van Beek is a CPA and senior manager at Larson Gross CPAs & Consultants. He specializes in serving owner-operated businesses. While his primary expertise is in taxation, Dan also assists businesses and individuals with proactive tax planning, profitability analyses, ownership transition and various other types of strategic business planning.
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BP ENVIRONMENTAL OP-ED
Natural gas ban is unnaturally expensive and ineffective A climate in crisis needs sensible solutions Todd Myers In the clever British TV comedy “Yes, Prime Minister,” one character explains what he calls “politician’s logic”: Something must be done, this is something, and therefore we must do it. The gag came to mind when I heard about the proposal to ban natural gas heating for homes in Bellingham and other cities in our state. Its boosters say the proposal will reduce carbon dioxide emissions. Residential natural gas accounts for just 4.2% of Washington’s greenhouse gases. Washington’s electricity, by way of comparison, is largely carbon dioxide-free. By switching from natural gas to electric heating, they argue, Washington could reduce its carbon dioxide emissions. There is a problem, however: The plan is very expensive. To understand how expensive, let’s look at another local effort to reduce carbon dioxide emissions. The Alcoa Intalco Works aluminum plant in Ferndale received a state grant of $2.3 million to reduce greenhouse gas emissions by 127,000 metric tons annually. The grant only sped up projects Intalco was implementing anyway. Still, the cost to the state to reduce one metric ton of carbon dioxide is $18.11. If the grant accelerates projects by five years, the cost goes down to $3.62 per met-
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BUSINESSPULSE.COM | MAR/APR 2020
ric ton of carbon dioxide, because the state would essentially have bought five years of reduced greenhouse gas emissions. Even for those skeptical of climate change, we should at least want the state to get the most bang for the buck. If you believe climate change is a crisis, then maximizing the amount of carbon dioxide reduction for every dollar spent should be critical. Every dollar wasted is a lost opportunity to help the planet. By this metric, forcing homeowners to switch from natural gas to electricity is a bad idea. The average home in Bellingham emits about 4 metric tons of carbon dioxide annually. Even using the highest price of $18.11 for a metric ton of carbon dioxide from the Intalco project, that is worth about $72 a year. The cost of using electricity rather than natural gas is far more expensive. Cascade Natural Gas, which serves Bellingham, estimated in 2015 that it cost about $694 to heat a home with natural gas. By way of comparison, it cost from $1,020 to $1,760 to use electricity. Even using the low end, it costs about $326 more a year to use electricity. Rather than the cost of $18.11 to reduce carbon dioxide by one metric ton, as with Intalco, this plan would cost $81.50 to reduce one metric ton of carbon dioxide. The people of Bellingham would pay $4 to get $1 worth of carbon dioxide reduction. The reality is worse. Seattle City
“If climate change is important, then we should choose policies that are effective.” Light invests in projects that reduce carbon dioxide for only $7 per metric ton of carbon dioxide. Spending $81 to get $7 worth of carbon dioxide reduction wastes 92% of the money spent. If the time to act is now, we should avoid the “politician’s logic” and act wisely. Instead, politics have overwhelmed the math and science of environmental policy. In 2005, the city of Bellingham signed the U.S. Conference of Mayors Climate Protection Agreement, promising to meet the targets of the Kyoto Protocol by 2012. The city failed miserably. Washington will badly miss all its self-imposed climate targets for 2020. The reason we keep missing our goals so badly is that politicians refuse to choose policies based on effectiveness, deciding instead to grab headlines with bad ideas that are wasteful and ineffective. Until that changes, Bellingham, Seattle and Washington will continue to fail. ■ Todd Myers is the director of the Center for the Environment at Washington Policy Center. He is one of the nation’s leading experts on free-market environmental policy. Todd is an author and researcher. He formerly served on the executive team at the Washington State Department of Natural Resources.
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