April 2015 Vol. 28 No. 4
Est. 1988
An edition of the K i t sa p Su n
Urban living Apartments are on the rise in downtown areas and other growth spots in Kitsap Page 4
County issues buildable lands report | Page 4 Business has a stake in comp plan update | Page 5
Return service requested The Kitsap Peninsula Business Journal Post Office Box 259 Bremerton, WA 98337
Kent, WA PERMIT NO. 71
PAID
Prsrt Std U.S. POSTAGE
2 |APRIL 2015
WWW.KPBJ.COM
Business Calendar April 7, 21 and 28 Good Morning Kitsap County Hear from a different business professional each week, followed up by a Q&A. Where: Hop Jack’s, Silverdale When: 7:30-9 a.m. Info: silverdalechamber.com April 7, 14, 21 and 28 Tuesdays@noon Workshops 90-minute workshops following themes of marketing, finance, business software and cloud computing. Where: OfficeXpats, 403 Madison Ave N, Suite 240, Bainbridge Island When: noon-1:30 p.m. Info: officexpats.com April 8 Marketing to the Government The class will provide an overview of how various governments buy goods and services. Please RSVP. Where: Kitsap EDA, 4312 Kitsap Way, Bremerton When: 9-11 a.m. Info: kitsapeda.org April 14 Kitsap Business Forum This month will focus on “Lessons from those that last: Innovation and relevance in an ever changing market.” The discussion will cover money, people and execution. Please RSVP. Where: Kitsap Conference Center, Bremerton
When: 7:30-9 a.m. Info: kitsapbusinessforum.com April 14 BNI presents Rachel Straight Personal trainer and coach will present “The Core of the Matter.” Please RSVP. Where: Kitsap Golf and Country Club When: noon-1:30 p.m. Info: 360-471-3300 April 15 Refresh Leadership Live Simulcast This leadership training will feature a live simulcast with Dan Aykroyd, Daymond John and Liz Murray. All proceeds go to benefit House of Hope here in the county. Where: Kitsap Conference Center, Bremerton. Cost: $45 Info: 360-479-4756, kristal. baker@expresspros.com refreshleadership.com/live April 16 Power Lunch Kitsap Richard Berg of Terrapin Architecture will speak on “Passive Houses and Radical Residence Energy Efficiency.” This is a speaker presentation series on renewable energy and local sustainability for citizens, businesses and policy makers. Where: Rice Fergus Miller Architecture and Planning, Bremerton When: 12:30-1:30 p.m. Info: 360-643-3080
Mold prevention service offered to builders Jose Technologies, Inc. is now offering a range of mold prevention and remediation services to architects, contractors, remodelers and builders. The indoor air quality company, owned and operated by Paul Jose, utilizes a proven treatment to prevent mold growth, which is backed up with efficacy studies and numerous homes and facilities that have been treated and continue to have no mold growth. The treatment establishes a barrier that physically disrupts the membrane of microbial cells, resulting in a significantly reduced ability to survive and reproduce on the treated surface. Jose Technologies uses a proprietary application system that allows its unique protectant to be applied quickly to all surfaces. The service is ideal for new and renovated facilities that are prone to mold growth in the Northwest climate. In addition to applying the treatment during construction, the company offers a complete training package for applying the mold prevention treatment. For more information, contact Jose Technologies, Inc. at 360-689-2352 or paul@josetech.com.
April 18
marketing.com
Social Media Workshop Tory Felkey of All Media Internet Marketing will present a workshop on social media for business. Where: OfficeXpats, 403 Madison Ave N, Suite 240, Bainbridge Island When: 11 a.m.-4 p.m. Info: allmediainternet
April 21 Grant Seeking Basics Workshop This month will cover proposal writing basics. The workshop is designed to help nonprofit organizations seeking grants from private groups. Registration required.
When: 2-3:30 p.m. Info: 360-779-29165, pbranaman@krl.org April 22 Overhead Pricing — Contracting Workshop Class providing a basic understanding of direct versus overhead costs, expense pools and
allocation of overhead costs. Registration required. Where: Kitsap EDA, 4312 Kitsap Way, Bremerton When: 9-11 a.m. Info: kitsapeda.org
WWW.KPBJ.COM
APRIL 2015 | 3
introduction | david nelson
Don’t blame me, I voted on the Comp Plan
A
t the end of March a roomful of newspaper editors and publishers gathered in the John A. Cherberg Building on the state capitol campus. It was the annual legislative meeting for the Allied Daily Newspapers of Washington, our industry’s special interest lobby, so to speak. Rowland Thompson, executive director of the organization, is a staunch defender for open government and that’s the primary mission of the annual meeting in Olympia. He gathers journalists to discuss legislation that could limit the right to know of the press — and the public — along with any other legislation that may impact our business. There are thankfully few bills that are still alive in the Legislature with changes that would restrict open government. Also, thankfully, there appears to be resolution on extending a tax preference specifically carved for print newspapers a few
The Kitsap Peninsula Business Journal is published by the Kitsap Sun the first week of every month, and distributed to business addresses through Kitsap County, North Mason and Gig Harbor. Brent Morris, Publisher brent.morris@kitsapsun.com David Nelson, Editorial Director david.nelson@kitsapsun.com Tim Kelly, Managing Editor tim.kelly@kitsapsun.com editor@kpbj.com
Mike Stevens, Marketing Director mstevens@kitsapsun.com Jeremy Judd, Digital Director jeremy.judd@kitsapsun.com For inquires to receive the Kitsap Peninsula Business Journal at your business, contact Circulation Sales Director Hugh Hirata at 360-7925247 or hugh.hirata@kitsapsun.com. To advertise in the Kitsap Peninsula Business Journal, contact Michael Stevens at 360-7923350. TO SUBMIT NEWS: Tim Kelly, Managing Editor tim.kelly@kitsapsun.com 360.377-3711, ext. 5359 Standard mail postage to be paid at Bremerton, WA POSTMASTER: Send address changes to Kitsap Sun, PO Box 259, Bremerton, WA 98337-1413 © 2015 Kitsap Peninsula Business Journal / Kitsap Sun ISSN 1050-3692 VOLUME 28, NO. 4
years ago. That’s right — among those 650 or so exemptions to stimulate our state’s economy, one is for us. Essentially, the preference provides for a slightly lower B&O tax rate for newspapers, provided more than half of our revenue comes from print operations. It’s helpful to our industry, and us, though it isn’t exactly $9 billion for Boeing. The speaker that followed Rowland that morning was Rep. Reuven Carlyle, a Seattle Democrat who’s outspoken about discussing major changes to our state’s tax policy. He used our industry to highlight what legislators and voters wrestle with — it makes a great campaign stump to talk about balancing the budget by eliminating “wasteful” tax exemptions, but it’s nearly impossible to accurately compare one business to another in terms of how the lower rate impacts the overall economy, let alone transparently decide who has to lose theirs. Tax reform must tackle a system that has been built piecemeal over decades and isn’t easy to unravel, or even accurately judge. I’m not saying it’s a bad idea — but it’s incredibly more complex, and uncomfortable, than a sound bite. Often, the same thinking may be applied to land use regulation and commercial permitting for building or expansion. If
the Kitsap Sun put a nickel in the bank every time a local candidate promised to fix the red tape in Port Orchard, we may not need the small B&O break we’re offered. I’m exaggerating, but you business owners know what I mean. Even with streamlining in the Kitsap County Department of Community Development under current boss Larry Keeton, there’s inevitably going to be an owner who feels the system is too slow, too restrictive or too confusing when he or she is looking to grow. That’s why we invited Keeton to issue a call in this edition of the Kitsap Peninsula Business Journal, focused in April on construction and development. The county’s Comprehensive Plan is up for review, so what better time to ask businesses to add voices to the process and potentially preempt some frustration in the coming years. It’s like the old political saw about not blaming me because I voted for the other guy — that is, don’t blame me, I let my commissioner know what is needed for my business to flourish in the future. That may mean better fiber-optic infrastructure, more density in areas where developers see interest from homebuyers, or improving access to shorelines to attract employees interested in our county’s way of life. We’re raising the issue now so you can
make your voice heard this spring, and hopefully gain more understanding of why that’s important before county commissioners approve the plan in 2016. Read Keeton’s column inside, as well as Tad Sooter’s look at the Kitsap County draft Buildable Lands Report, which is an essential part of that Comp Plan revision process. Also, visit compplan.kitsapgov. com to learn more about the “Kitsap 2035” project or answer questions that will be used to guide the plan. There’s always going to be complexity in planning modern communities, whether to tweak the economy for the better, forecast population growth or protect critical environmental areas. Don’t miss your chance to be included in that process. • David Nelson is the editorial director of the Kitsap Peninsula Business Journal and editor of the Kitsap Sun. Contact him at david.nelson@kitsapsun.com.
on the cover The downtown Bremerton skyline is changing as The 606 apartment complex rises next to Burwell Street. There will be 71 units in the four-story structure being built on top of the three-level parking garage that was built along with the SeeFilm Cinema in 2012. Kitsap is seeing a surge in apartment construction. Story, page 6 Tim Kelly photo
4 |APRIL 2015
WWW.KPBJ.COM
construction and real estate
Matching available land with projected job growth By Tad Sooter KPBJ contributor Nearly 50,000 more people are expected to be working in Kitsap County by 2035. Strategic plans being drafted now will help determine where those workers ply their trades. Kitsap County and its cities are beginning the process of updating their comprehensive plans to guide growth over the next 20 years. As it does with population projections, Kitsap has adopted targets for job creation within the county to meet the objectives of the state’s Growth Management Act and Puget Sound Regional Council. The targets put a priority on encouraging growth in urban areas that are slated to receive the highest-density development. Development requires land, of course, so while adopting growth allocations, the county and cities analyze what land is available and how many jobs the areas could support. “Then we compare the two,” said Katrina Knutson, a senior planner for Kitsap County. The comparison, made available in the county’s draft 2014 Buildable Lands Report, reveals strategic priorities don’t al-
MEEGAN M. REID
Construction is progressing at the site of The Trails at Silverdale mall.
ways mesh with the reality on the ground. Some areas of the county have more land than they need to support jobs allocated to them, others don’t have enough (see graphic). By far the largest block of jobs — 39 percent — expected over the next 20 years is
allocated to Bremerton, the county’s only city classified as “metro” by the Puget Sound Regional Council. Bremerton, happily, has an abundance of land, enough to accommodate those jobs and about 1,000 more. The second-largest block of jobs — about 20 percent — is allocated to the Silverdale area, where land is scarcer. Under existing zoning, property in Silverdale would support about 90 percent of the jobs allocated to it. The shortage means the county may need to alter or expand zoning in Silverdale to allow for more commercial growth and job creation, Knutson said. The largest discrepancy between job targets and land supply exists in South
Kitsap. Property in the city of Port Orchard and its surrounding urban growth area can accommodate nearly double the number of jobs allocated for there. Rapid growth in Port Orchard accounts for this discrepancy. In recent years, the city used annexations to rope in large swaths of land, extending its borders south of Sedgwick Road. For the purposes of strategic planning, Port Orchard is classified alongside Poulsbo as a “small city,” and is slated to receive about 7 percent of jobs, far fewer than its available property could support. “What is says now is that we don’t have to take additional measures to accommodate this growth,” Port Orchard planning director Nick Bond said.
Kitsap real estate market has major inventory shortage By Rodika Tollefson KPBJ contributor
tim kelly | KPBJ
Kitsap County’s real estate market has been recovering for the past year, showing an increase in the number of homes sold as well as the median price. According to numbers provided by the Kitsap County Association of Realtors, 3,850 units sold in Kitsap in 2014 at a median price of $242,000, compared with 3,542 units and median price of $240,725 the year before. Closed sales totaled $1.124 billion in 2014, compared to $1.013 billion in 2013 — a difference of about $100 million. But a shortage of inventory is still keeping the market unbalanced, skewed more toward sellers. Realtors consider five to six months’ worth of inventory to be more of a balanced market. Kitsap has about two to three months of inventory. In February, the county’s 1,178 active listings represented a drop of 29.5 percent from February 2014. And by the last week of March, that inventory was down even
more, to 891 active listings. Rhonda Edwards, a broker/owner of RE/ MAX Town and Country in Port Orchard, said the shortage is actually a good thing for market recovery. “Fewer homes on the market creates appreciation (in values). We didn’t see appreciation for some time,” she said. Rhonda Without appreciation in Edwards values, many homes were “underwater,” a term used to describe properties whose mortgage exceeded property value. As a result, many people who wanted to sell could not without opting for a “short sale.” “By having less inventory and more people on the market, it’s created a bit of a bump in price and more people can sell because they’re not underwater anymore,” Edwards said. She noted that at the bottom of the market, as many as 50 to 70 percent of homes
in Kitsap were distressed sales, meaning they were either short sales or bankowned properties. As of March 25, that number was closer to 16 percent — of 891 active listings, 89 were bank-owned and 56 were short sales. “It’s a huge swing in the market,” she said. Frank Wilson, Kitsap disFrank trict manager and Poulsbo Wilson branch managing broker for John L. Scott Real Estate, said secondhome owners are returning to the market, creating an increased demand for waterfront homes. “Kitsap waterfront homes are some of the best buys in Puget Sound because they’re just starting to budge in the right direction,” he said. Overall, he said what’s bringing many buyers back is the better availability of loans. see real estate | 7
WWW.KPBJ.COM
APRIL 2015 | 5
Kitsap County planning | larry keeton
Comprehensive planning: Why business needs to get involved
I
n the film “Patton” there is a scene where the American army is preparing for German Field Marshal Erwin Rommel’s armored attack. Gen. George S. Patton’s forces are in their defensive positions. The Germans advance. The Americans open fire, raining steel on their foe and forcing a German retreat. Referring to Rommel’s book “Attacks,” Patton (George C. Scott) shouts, “You magnificent bastard, I read your book!” In the Kitsap County 2006 Comprehensive Plan, it states that banks, retail stores and businesses and other commercial activities should be located in commercial zones. Makes sense, yet the adopted zoning code required these same activities to seek land-use approval before they could apply for a building permit. Does this make sense? No. Seeing this inconsistency, the Department of Community Development engaged with the Home Builders Association and severNow is the time al other developers to change the zonto influence the ing use table. When it was finished, over direction of the 80 commercial uscounty in terms es were changed to “permitted outright,” of economic or lowered land-use review requirements development, from a Conditional Use (hearing reworkforce quired) to an Admindevelopment, and istrative Conditional Use (department recreating a quality viewed). This change did not alleviate perof life that will mit requirements attract new skilled such as parking, but it did eliminate the unemployees, but necessary step of obtaining land-use apalso help retain the provals, thus speedworkforce you have. ing up project times, and putting people to work. What has been the result? Businesses operating in facilities smaller than 25,000 square feet are permitted outright. Recent examples include Kitsap Bank, Hop Jack’s, IHOP and others. The examples provided show the significance of the county’s Comprehensive Plan. We’re required to update the plan every eight years to demonstrate how future growth will be managed. Our current planning window is 2016-2035 and the population is projected to grow by approximately 80,000 people. How and where will they live? How will transportation, sewers, water, electrical, broadband and other public facilities manage their capital projects to accommodate this growth? How will we protect the natural environment while the population increases? What parks will we need? How will our communities remain/become healthier? And, what are the economic development goals, to include training a future workforce? At the recent KEDA Decision Makers Breakfast hosted at the Kitsap Conference Center, the question was asked of the numerous business members present: How many participated in the preparation of the current Economic Element of the county’s Comprehensive Plan? Out of a room of 200-plus people, three people raised their hands. What is wrong with this picture? If businesses want to influence the future growth of the county, you must make your voices heard. Now is the
time to participate. Now is the time to voice your views, issues and concerns. Now is the time to influence the direction of the county in terms of economic development, workforce development, and creating a quality of life that will attract new skilled employees, but also help retain the workforce you have. How do you participate? The Kitsap Economic Development Alliance (KEDA) is the county’s agent for economic development. KEDA staff are deeply engaged in this process to ensure the econom-
ic development chapter of the plan reflects reality as we know it today. They have identified the following 10 goals. When they are posted online for comment, or you’re at a meeting and attendees are asked for input, provide it. Commenting is simple. Sign up for notifications or make your views known regarding the Comprehensive Plan at compplan.kitsapgov.com. But don’t limit yourself to just this area. Go online and participate. Provide comsee comp plan | 16
ments on areas of interest to you and that you believe
6 |APRIL 2015
WWW.KPBJ.COM
Apartment projects meet demand for rental housing By Tim Kelly KPBJ editor While plans and prospects for revitalizing Port Orchard’s downtown waterfront often get the most attention, the city’s hot spot for growth the past couple years is on the opposite side of town. That’s where the Rush Cos. of Gig Harbor recently completed construction of its second apartment complex near the intersection of Sedgwick and Sidney roads, just west of Highway 16. The two developments on opposite sides of Sedgwick have a combined total of 231 units. In Bremerton, it’s the downtown area that is seeing a surge in multi-family housing construction, with two prominent apartment projects taking shape and more likely on the horizon. Sound West Group, the developer of the Spyglass Hill project in Bremerton, also is negotiating with the city of Poulsbo to purchase the old police station near downtown as another site to build apartments. Poulsbo’s old city hall property just off Front Street is slated for redevelopment as apartments as well. Developers say they’re meeting a growing demand for multi-family housing in Kitsap. “I think that specifically in the Port Orchard area, that market was underserved, as far as having a lack of new product on market,” said Matt Smith, president of Rush. “We felt there was demand there.” The Sidney was the first apartment community Rush built in Port Orchard and nearly all of its 105 apartments are leased. The recently completed 126-unit Sinclair development is still in its initial leasing period, but Smith said it has reached an occupancy rate of 75 percent. He said Rush doesn’t currently have plans to build more apartments in the area, but will focus on developing more retail on land adjacent to the complexes to provide more services for residents. Along Bremerton’s busy Burwell Street across from the north side of the Naval shipyard, The 606 project is becoming a highly visible feature of the city’s downtown skyline. Construction was delayed more than a year past the original timeframe, but the $9 million, four-story development is now being built above the threelevel parking garage that was built in 2012 l a n d | f rom 4
director Nick Bond said. Knutson said it’s possible designations and job allocations could be tweaked if local elected officials want to lobby for changes. While counties need employment targets for planning, projecting job creation is far from an exact science. Kitsap County last updated its comprehensive plan in 2006, during a time of economic growth. Job creation more or less
The area outlined in red in this aerial photo is the 37-acre Glenmora Woods property that is being marketed for development as a 342-unit apartment complex near the interchange of Highway 16 and Sedgwick Road in Port Orchard. Photo courtesy Lars Kvinsland, Peninsula Brokers Real Estate
between Burwell and Fourth Street. Lorax Partners of Seattle is the developer of The 606, which will have 71 upscale apartments expected to be ready this fall. It will complete the Park Avenue Plaza development includes the city-owned parking garage, the adjacent SeeFilm Cinema at the corner of Fourth Street and Park Avenue, and Jimmy John’s sandwich shop at Fourth and Burwell. Bremerton’s other large apartment development, the 80-unit Spyglass Hill, is under construction above Washington Avenue by the Manette Bridge. The $15 million project is expected to be finished early next year. Wes Larson, a prinicipal in Sound West Group, said his company also is working on plans for other multi-family housing developments, including at the old Poulsbo police station site. “Our goal is to build apartments there,” Larson said. “I see that as a similar situation to Spyglass, a sloped site with a view out over the marina.” He said it would be a sizable project, though not as many units as Spyglass. In Bremerton, Sound West is developing plans for potential construction of about 50 units at Sixth Street and Broadway within a couple years. A sale of the old city hall property in downtown Poulsbo has been in the works for some time to developer Michael Burns of Bainbridge Island, who originally planned to build a hotel on the site. Those met the county’s targets until 2009, when the onset of the recession rendered any previous projections moot. Kitsap shed jobs through 2012. Employment in the county has begun to rebound, but hasn’t fully recovered. Knutson said planners hope steadier growth will help the county meet its job targets in the years to come. • Tad Sooter is a business reporter for the Kitsap Sun and contributes to the Kitsap Peninsula Business Journal.
plans changed, and Burns and his architect have been working with city staff in recent months to finalize a design for a three-story apartment building. Larson expects demand to remain fairly strong for new apartment housing in Kitsap, partly related to “incredible growth in the rental market” in the Seattle area, where he is a partner in a 50-unit development being built at South Lake Union. “I think in time, with what’s happening in Seattle … Bremerton could have more appeal in the future as a bedroom com-
munity for Seattle,” he said. A market report prepared last year by the O’Connor Consulting Group for Sound West on the Spyglass development noted a forecast of “positive job growth over the next three years in Kitsap County, resulting in an increase in apartment demand.” Larson said there was a substantial conversion of single-family homes in Bremerton to rental use over the past decade or so. But the consultant’s report found that see apartments | 7
segment has been absorbed into the rent-
WWW.KPBJ.COM a pa rtm en ts | f rom 6
But the consultant’s report found that segment has been absorbed into the rental market, and noted that Bremerton “is reasonably well poised to capture future and pentup demand for new apartment housing.” “We’d like to do more apartments,” Larson said. “I think that’s an area Sound West Group is going to focus on going forward, given the right opportunities.” Two other potential developments would be
r e a l e state | f rom 4
“We have a stabilizing economy and the market is starting to free up so there’s more money to loan, and sellers can afford to sell because they’re not underwater,” Wilson said. Mike Eliason, CEO of Kitsap County Association of Realtors, said one factor i mpac t i n g the market is Depar tment of Defense Mike patterns. Eliason R e c e n t l y, there have been more ships coming than leaving at Naval Base Kitsap. To compound the problem, the recession had put a hold on new construction activity. There were few new developments or short plats in Kitsap during the past couple of years, Edwards said. While there are more land sales and new homes being built now, it will take some time for that activity to have a big impact on the market. But a larger trend is the overall job and population growth in Washington state, according to Eliason. He noted that the state saw a 17 percent increase in population between 2000 and 2012 — adding more than 1 million new residents. Between July 2011 and July 2012 — the last year with available numbers —Washington was one of
APRIL 2015 | 7 much larger than any of those recently built or currently under construction in Kitsap. One is the socalled Edward Rose project first proposed several years ago in Poulsbo, although there has been little progress since 2011 when the city approved a master plan that included more than 500 residential units, a senior housing center and some commercial space. A newer development in the preliminary planning stage in Port Orchard is Glenmora Woods, envisioned on a 37-acre unde-
12 states in the country with an increase in population, ranking ninth in net domestic migration and 13th in international. “There are not enough housing starts to accommodate the growth, and it puts more pressure on resales,” Eliason said. Since King County is a major employment area for Washington, the population and job growth creates a real estate market there that not only has a shortage of homes but also less affordable prices. In turn, that impacts the Kitsap market, Wilson said, because buyers start to look north, south and east. But with those markets now tight as well, they’re “finally looking west.” Edwards estimates that Kitsap will see a 15 to 20 percent growth in sales this year, and an appreciation in values of as much as 10 percent or even more — good news for sellers. For buyers, recent changes in regulations will complicate transactions and closing paperwork even further, Wilson said, especially as buyers are already struggling to jump through underwriting hoops. “From the sellers’ perspective, it will be awesome because the values will go up,” he said. “From the buyers’ perspective, it’s a double whammy because interest rates will go up too. It’s putting downward pressure on affordability.”
veloped property next to Highway 16 by the Sedgwick Road interchange. A commercial real estate website lists the property for just under $2 million, describing it as a “multifamily development site for 342 garden style units.” Lars Kvinsland with Peninsula Brokers Real Estate in Port Orchard is one of the landowners in the Glenmora site and has been working on a sale of the property to a housing
developer. He started the application process last fall with the city on behalf of a potential buyer. “They’re from out of the area; a real experienced, well known developer,” Kvinsland said. “They were looking to do something in the Kitsap area, particularly Port Orchard, even before we took this to them.” The property, which is adjacent to a retail cluster off Sedgwick Road, goes
up onto a wooded hillside next to the highway, so site development costs are an issue. Development opportunities are good now, Kvinsland said, because “vacancies are pretty low, and rents are fairly strong. He also noted that no new apartment complexes had been built in the area for a long time before Rush developed their projects. “When Rush came in and did what they did, I think it
proved the market is pretty strong,” Kvinsland said. “I think (potential developments) have to be fairly large to attract the people with money. The market’s gotten to the point where some of these are starting to pencil out and make sense for them.”
8 |APRIL 2015
WWW.KPBJ.COM
construction and real estate
Incentives for solar power at stake in energy debate Legislature considering extension of incentives for home-generated power
speaking for the governor. Other issues to be decided by lawmakers — with a promise for expanding solar installations — include extending the incentive program to encompass leasing companies, electric utilities and larger commercial solar operations.
By Christopher Dunagan InvestigateWest
Gov. Jay Inslee and Washington solar advocates are pushing to rescue a state program that provides cash payments to homeowners who install solar equipment. With an end to the program looming, Inslee says action is needed now. But a legislative remedy is languishing in a House committee where the chairman is struggling to gain consensus from a variety of interests — including electric utilities that have been wielding their massive political clout. At issue is whether — and how much — state taxpayers should continue to subsidize adoption of solar that is currently costing taxpayers $4.2 million a year. Solar industry officials in Washington see this as a moment of opportunity. The cost of solar is lower than ever. They hope business will take off if the state payments are extended. But representatives of outof-state leasing companies criticize the House bill for failing to ensure that utilities will keep paying market rates for solar power generated by home-based systems. Lobbyists for electric utilities also see opportunity. And they have considerable lobbying clout. Long leery of solar’s potential impact on their business model, some utilities are seeking changes. They want to levy a new charge on solar customers to offset the cost of maintaining power lines and related equipment used to move power to and from their homes. In a legislative session headlined by climate change debate, a failure to reach consensus on the solar legislation would mark yet another failed legislative effort to deal with the threat. State payments to homeowners and others who install rooftop solar are not scheduled to end until 2020, but officials fear that as fewer and fewer years of assured payments are available, consumers will be less and less likely to go solar. “From the governor’s perspective, this is the year to get something done,” said Keith Phillips, who advises Inslee on climate and energy issues. “We have been working on this a long time.” Even before getting out of committee, the legislation by Rep. Jeff Morris, D-Mount Vernon, has stirred fierce opposition, with one national solar activist claiming the bill would make Washington the “most anti-solar state in the country.” The legislation’s sponsor is aware of the strong emotions in play. “I was joking the other day,” Morris said, “and I called it the solar wars.”
Utilities want electrical grid payments
Photo courtesy Sunergy Systems/KPBJ file
Kim Leonard stands on her roof by an array of solar panels installed in 2012 on her home in the Southworth area.
Washington lags in solar
Despite offering some of the most generous incentives in the nation to install rooftop solar, Washington has never become a solar leader. Seattle, unlike Portland, doesn’t even make the list of the nation’s top 20 solar cities. A huge impediment has been upfront costs. State law prohibits incentives to homeowners who lease solar equipment. Now the Legislature is poised to allow leasing companies to enter the market, as they have in California and other states, and to grant them incentives as well. Under current law, if a homeowner buys solar equipment this year, the owner will receive only five years of state reimbursements before the program expires in 2020. That compares to 15 years of payments for a purchaser who started in 2005, when the incentive program began. However, prices were higher then: the cost for a typical 4-kilowatt system installed today is about $12,000, compared to about $28,000 in 2008, said Jeremy Smithson of Solar Installers of Washington, a statewide trade association. The reimbursements, calculated on the number of kilowatt hours generated each year, can be up to $5,000 per year for large systems. Some 5,600 solar units in Washington state are enrolled in the incentive program. In 2013 alone, solar electric generation increased by 54 percent, according to Washington State University Energy Program. But this growth of solar has been taking a bite out of the state budget, with incentive payouts of $99,000 in fiscal year 2008 rising to $4.2 million in 2014. Some legislators would like to end the incentive program, keeping the money raised through a state utility tax for other
programs. The governor and many other legislators would like to see more cleanenergy installations but with fewer state dollars going to each one. “It’s also time to modernize this program, but we don’t have a particular prescription at this point,” Phillips said,
Some electric utilities are pushing back against what could become a massive expansion in solar energy. Utilities in Washington and across the country, especially smaller ones, fear that when solar energy becomes a significant contributor of electricity, it could cause power fluctuations on the electrical grid. These fluctuations, which can damage sensitive electronic equipment, would be most noticeable during sunrise and sunset and during sudden changes in weather. Advocates of solar power say such concerns about disruptions of the power grid are largely a myth, since solar power can actually help balance the load in many cases. Where problems do occur, however, technical solutions are available, they say. The wrath of many utilities has been particularly focused on net metering, a popular incentive program approved in Washington and most other states
WWW.KPBJ.COM
APRIL 2015 | 9
“This is the gateway for (utilities) to get to other methodologies to manage for solar before it comes online.” State Rep. Jeff Morris D-Mount Vernon, sponsor of bill extending solar energy incentives popular incentive program approved in Washington and most other states that can make harder for utilities to recover the cost of maintaining power lines and related equipment. Net metering essentially allows consumers with solar power installations to sell excess power back to the grid at retail prices. In a true net-metering installation, the homeowner can watch the electric meter run backward when the system is producing more energy than what is needed to serve the home at any given instant. If the meter runs backward more than forward over the course of a year, then the system has produced more energy than has been consumed. Consequently, the homeowner pays nothing for electricity. In addition to lower utility bills, Washington solar consumers also get cash payments through their utility company from the state. To qualify for Washington state’s cash incentive program, most solar homes have separate production and consumption meters, since the incentive paid is based on the power actually produced. Most utilities have a base fee that everyone pays plus a consumption fee for electricity used. Typically, the base fee does not pay the full cost of maintaining power lines and substations, utility officials argue. So when a customer with solar comes out with a “net zero” bill, he or she is not paying enough for a system that works like a near-perfect battery, said Dave Warren, director of energy services for the Washington Public Utility District Association. Everyone agrees that a few solar installations generating power for a fullsize utility makes little difference, Warren said, but
at some point solar energy can become a disruptive force, creating additional costs for the system. In California, he said, General Electric has been forced to redesign some gas turbines to respond more quickly to load changes resulting from shifts in the contribution from solar energy. Morris, one of the original advocates of net metering, said he remains committed to the concept in his bill this year. Because of utilities’ initial fears, current law allows a utility to stop offering net metering to new customers when the total generation from solar power reaches 0.5 percent of the utility’s peak demand, as recorded in 1996. “Some of the most credible studies show that you won’t see a huge impact on the distribution system until it gets up around 10 percent,” Morris said. “I just tell people that because the whole system is so complex, it is easy to oversimplify. The cost-shifting issue is a myth, because the way people pay for electricity has a tremendous amount of cost-shifting built into it.” Morris opposes a proposal from some utilities to charge solar users a flat fee. Morris’ bill would offer lower annual cash incentives than what solar users receive under the current law, but it would extend the payment period out 10 years from the date of installation. As in the current law, it would provide additional financial incentives for equipment manufactured in Washington state. Final numbers are being worked out. Unless extended by future legislation, equipment installed after 2020 would not be eligible for the 10 years of incentives. The bill would also call on utilities to plan 10 or 20 see solar | 14
Lunch lecture series starts with solar power talk By Tim Kelly KPBJ editor The Rice Fergus Miller architecture firm launched a monthly lecture series called Power Lunch Kitsap with a solar power presentation on March 19. The sessions, scheduled for the third Thursday of each month through June, will be held from 12:30-1:30 p.m. at Rice Fergus Miller’s LEED platinum-certified building at 275 Fifth St. in downtown Bremerton. The first session drew about 35 people for a presentation by Jake Wade, net metering program manager at Puget Sound Energy, who reviewed the currently available state and federal incentives for solar energy systems, and gave an overview of the net metering operation within PSE’s service area in Washington. Of the more than 2,500 solar systems tied to PSE’s electrical grid, 91.6 percent are residential installations, with the rest divided between commercial and government sites. Those systems produced 9.4 million
tim kelly
The first event in the Power Lunch Kitsap lecture series drew about 35 people to the forum space at the Rice Fergus Miller building in downtown Bremerton. kilowatt hours in the 12-month period ending June 30, 2014. Wade explained that commercial
users tend to want a quicker payback on their investment, while residential customers are more amenable to a typical seven-year payback on installing a rooftop solar array. Net metering occurs when a PSE customer’s solar photovoltaic (PV) system produces more power than is used in the home. The surplus power goes into the grid and the customer gets a credit for it, reducing the household’s electric bill. Under a separate incentive offered in Washington state, utilities such as PSE pay homeowners annually for all the power generated by their solar energy systems, regardless of the net metering amount. Notable in 2014, Wade said, was that 80 percent of the PV modules installed in PSE’s service area were made by Itek, a manufacturer in Bellingham. Solar installations using components made in Washington qualify for a higher payment rate (54 cents per kilowatt hour) from PSE for power generation. Other incentives for solar installations include a federal tax credit for 30 percent of the system’s cost, and a state sales tax exemption. However, all those incentives could expire or be reduced within the next few years unless they are extended (see related story, page 8). The Net Metering Threshhold is the amount of power produced by see lecture | 18
10 |APRIL 2015
WWW.KPBJ.COM
technology | charles keating
High-tech tools transforming design and construction
I
have a fair number of clients in the construction industry, and I tend to stay on top of developments in this sector. Some are general contractors, others work in specific areas such as architecture and design, providing the underground work, plumbing, heating and cooling, you name it. Working with them is a constant buzz of changes. More recent
technologies are combining with others around a long time and together are transforming the industry. The future looks awesome. For everyone, leveraging the new cloud-based tools has been a boon. More than email and desktops — it’s the information everywhere laptops, phones, tablets — all paired with cloud-based services that allow contractors, on the go, at job sites or in client offices to access drawings, proposals, bills of materials, change orders and more. The mobile and cloud platforms allow them to coordinate staff, outside contractors and customers like never before. For both designers and the builders implementing their visions, the greatest improvements are due to better planning. It started with Computer Aided Design (CAD). Around since the 1980s, it’s now just hitting its stride and moving
out from the architect’s office to the builders and the subcontractors. More time is spent in creating a plan. Clients can explore a virtual environment, and with 3D printing can produce a physical model inexpensively. When changes inevitably occur, such as moving a doorway so a workspace can flow better, the interactive designs adjust and identify any issues with lighting, plumbing, electrical — all updated before the first hammer hits a nail, which saves tremendous costs later on. The investment in planning has shifted the entire building process toward design and prefabrication. Fewer tradespeople are actually required to build it, which works out because fewer are around now. Since the last downturn many left the workforce or found other work. Another factor came to light as a client quipped that some workers realize they would rather be creating or tweaking the design in a nice warm office environment than actually out in the weather building it. With that in mind, the future may be something else entirely. Technologies have already been demonstrated for 3D printing of entire houses in California and in China. They can construct a building shell in a fraction of the time it would take to construct traditionally. Much would still need to be added to create a finished living space, but these demonstrations show great promise. Over time, testing and improvements will show which designs are safe, how materials hold up in an earthquake or fire, how they can insulate to save energy, total impact on the environment, and many other
considerations. Google recently unveiled plans even more radical, with flexible, re-configurable spaces under a canopy-like cover, a flowing design integrating inside and outside living experiences. The revolution in building will be driven for-
ward not only by desire for smarter and more modern spaces, but also affordability, an urgent need worldwide. Designers and builders, regulators, title companies, inspectors, insurers, and end users — all will need to adapt as changes occur. I welcome
the process and look forward to helping it along. • Charles Keating is president of Keating Consulting Service, Inc. (www.kcsco.com), an IT consulting firm serving global clients since 1983. He is also a partner in K2 Strate-
gic Solutions (www.k2strategic.com) and Professional Options (www.professionaloptions.com), and current president and cofounding member of West Sound Technology Association (www.westsoundtechnology.org).
WWW.KPBJ.COM
APRIL 2015 | 11
kitsap ptac | mona carlson
Change is inevitable: Avoiding pitfalls in government contracting
I
n 1995 the price of gas was $1.15 a gallon and the median household income was $37,076. No surprise — change is to be expected. However, I was recently surprised by what hasn’t changed — governmentcontractors struggling with change-order work on contracts. While preparing for a panel discussion for the recent 2015 AllianceNW Conference sponsored by the Washington State Procurement Technical Assistance Center (PTAC), one of the panelists forwarded a copy of an article written in 1995 for the Daily Journal of Commerce that related to our upcoming presentation. The article was “10 Stupid Things Contractors Do To Mess Up Federal Contracts,” written by Scott Wakefield, president of PSW Electric (then with Baird Electric). Wakefield detailed his experience with otherwise successful projects that turned into financial losers as a result of seemingly innocent acts by the contractors during the course of performance. He identified the most common mistakes as: • Contractors try to solve the government’s problems • Contractors proceed on change orders before entitlement is settled and a cost is agreed to • Contractors fail to track costs for extra work separately • Contractors assume the government will explain their rights to them when settling changes • Contractors assume the government’s interpretation of the contract documents is correct • Contractors fail to notify the government of changes, impacts and delays as they occur • Contractors finance the performance of changes for the government
• Contractors fail to understand what costs they are entitled to recover when changes occur • Contractors allow the government to intimidate them when negotiating changes • Contractors fail to administer changes like a separate job As a veteran government contracting officer, I could not dispute his observations and had I not known differently would have assumed the article was recently written. It begs the question “why?” The average construction contract contains hundreds of pages of contract data/regulations, 800-plus pages of technical specifications, 100-plus drawings, hundreds of references, and incorporates by reference the contractor’s technical proposal of 60 pages. All of which, of course, is governed by the Federal Acquisition Regulation (FAR) — 2,100 pages; the Defense Federal Acquisition Regulation (DFARS) — 1,500 pages; and the Naval Facilities Acquisition Supplement (NFAS) — 100 pages. It would seem illogical that a contractor would accept a change to said contract without, wait ... a piece of paper. And yet contractors continue to trip themselves up when they assume that standard business practices, a gentlemen’s agreement and handshake can be done on a federal contract. As much as we would like to believe differently, working with the government is, and will always be, at arm’s length. Any work, including changed work, requires written modification to the contract before work can commence. And changes, unforeseen conditions, delays and a number of other circumstances will happen on a government contract. That much is for certain. But for most contractors it seems impractical to slow or stop construction that should otherwise be mov-
ing expeditiously to “get out of the ground” or “buttoned up” before the weather changes, or to minimize equipment and crew down time for what seems like the most logical revision or
correction. Even government employees have been known to give the “wink” or nod that the “money/ approval is coming” to try and keep the project moving — all parties knowing full well that a modification is required before the work can be done. And yet over and over again, contractors perform “changed” work without it. These contractors move forward with the work with the best intentions of settling up later.
Final settlement can takes months and yes, in some cases, years. Here are two words of advice. Stop it. Like it or not, the government has a process and procedures upheld by those thousands of pages of regulations and based on years in court that must be followed. Failing to respect the process puts contractors in harm’s way when the costs are not remitted or are not sufficient to cover the chang-
es. While it seems contrary to their business practices, contractors must wait for the modification. If you find yourself in this situation (again) here are two additional words of advice. Get help. Understand the process. Understand your client. Understand what resources you need to employ and at the same level prior to award to ensure the business end see ptac | 14
of your contract does not
12 |APRIL 2015
WWW.KPBJ.COM
financial focus | eDward jones
Be prepared for those RMDs Article provided by Edward Jones for use by financial advisor Jeff Thomsen of Bremerton.
Y
ou might not think that 70½ represents any particular milestone. But when you do reach this age, you will have to make some decisions that affect an important aspect of your life — your retirement income. Here’s the background: Once you turn 70½, you will need to start taking withdrawals from your 401(k) or similar employer-sponsored retirement plan and from your traditional IRA (but not your Roth IRA). Actually, you will need to begin these withdrawals — known as “required minimum distributions” (RMDs) — by April 1 of the following year and continue taking them by Dec. 31 each year after that. These RMDs are calculated by dividing your account balance at the end of the previous year by your life expectancy, as determined by IRS mortality tables. If your spouse is your sole beneficiary and is more than 10 years younger than you, you’d use a separate table. Don’t worry too much about the number crunching, though — your financial advisor generally can do the calculations for you.
What you should concern yourself with, however, are the first two words of RMD: “required” and “minimum.” These words mean what they say. If you don’t take withdrawals, or if you withdraw less than you should, you could face a 50 percent penalty tax on the difference between what you withdrew and what you should have withdrawn — and then you’ll still have to take out the required amount and pay taxes on the taxable portions of those withdrawals. So it’s a very good idea to take your withdrawals on time — and without “shortchanging” yourself. Of course, you can certainly take more than the required minimum amount — but should you? The answer depends on whether you need the money. But even if you have to take larger-than-minimum withdrawals, you’ll want to be careful not to take out more than you need — because if you “over-withdraw” year after year, you run the risk of outliving your resources. That’s why it’s so important, during the early years of your retirement, to establish a sustainable withdrawal rate for your retirement accounts. Your withdrawal rate will depend on a variety of factors, such as your other sources of income — Social Security, earnings from employment, savings, etc.— your lifestyle choices, your estimated longevity, and so on. In any case, once you have arrived at an appropriate withdrawal rate, you’ll need to stick to that rate unless your circumstances change. see rmds | 13
Time for some financial ‘spring cleaning’ Article provided by Edward Jones for use by financial advisor Jay Seaton of Port Orchard.
W
e’ve just about arrived at spring, the time when many people spruce up their homes, yards and other parts of their surroundings. This year, why not extend that practice a little further and give your financial and investment environment a good “spring cleaning”? Here are a few suggestions for doing just that: • Reduce duplication. If you’ve ever worked to “de-clutter” your home, you may have discovered a lot of extraneous items. Did you really need three blenders? Did you have more remote control devices than you did televisions? As you look through your investment portfolio, you might also find some duplication, perhaps in the form of multiple stocks of companies in the same industry. You might want to consider whether you’d be better off by reducing this concentration and using the proceeds to broaden
your investment mix to create new potential for growth, income or a combination of both. • Repair your “roof.” As part of your exterior spring-cleaning efforts, you might examine your roof to determine if you need to repair or replace any torn or missing shingles. After all, a strong roof is essential to protecting your home. And your financial foundation needs protection, too — so, review your life and disability insurance to ensure they are still adequate to meet your family’s needs. You also might want to consult with a financial professional for ways of dealing with the potentially devastating costs of an extended nursing home stay or another type of long-term care. • Plant some “seeds.” Spring is a good time for reseeding parts of your lawn that may be bare. Once you’ve planted the seeds, of course, you’ll need to water and fertilize them to encourage growth. As you look over your financial landscape, you may also find areas that are somewhat barren. For example, you might be adequately funding your own retirement goals through your employer-sponsored retirement plan and other investments, but are you putting away enough money for your children’s college education? If not, you might need to “plant some seeds” for potential growth by investing in a college savings account, such as a 529 plan. And you may need see spring | 13
WWW.KPBJ.COM
APRIL 2015 | 13
human resources | julie tappero
Is unlimited vacation time a viable perk to offer?
A
s one of our co-workers returned from her 10-day vacation in Hawaii, we attached a ball and chain to her desk chair and told her she could never leave us again. Obviously we were kidding, but the sentiment was real. No more vacation for her! After all, the United States is supposed to be the “no vacation nation.” Watching the news, you might think that the reason employees don’t take time off is that they don’t get paid. Surprisingly, the Bureau of Labor Statistics says paid leave is the most common employee benefit offered by private-sector employers. Many employers have combined sick days and vacation days into a paid leave account, or Paid Time Off (PTO). Over the last 20 years, according to the BLS, fewer workers received straight paid vacation time, and instead have PTO accounts to draw from. Research
from the Society for Human Resource Management (SHRM) revealed that by 2014, 58 percent of companies were offering a PTO plan to their employees. While an employee may not have paid vacation in and of itself, a PTO account provides paid time off for whatever the employee chooses to use it for. An interesting new twist is now on the horizon in the form of unlimited vacation time. This concept, which is particularly popular in tech startups and companies such as Netflix and Virgin America, turns the concept of our no-vacation nation upside down. Although this concept hasn’t spread far and wide yet, a study by SHRM showed that about 3 percent of businesses in the United States now offer it as a benefit. The idea of unlimited vacation is that employees may take as much paid time off as they would like, as long as they get their work done. After all, what’s really important is job duty performance and productivity, not that someone
is physically present, right? Sounds great. At least in an ideal world. Imagine what a great recruiting tool unlimited vacation could be. Surely that would attract the best and most motivated employees. What would you need to think about before implementing such a policy? First you want to consider whether there are any laws (local, state or federal) that regulate leave. As of this moment in time, we don’t have any laws that regulate paid vacation here in Washington. However, there is a trend on the local, state and federal level to regulate paid leave. While the effort is more focused now on paid sick leave, House Bill 2238 was introduced in Olympia this legislative session. It would require private-sector employers to provide paid vacation for employees working 20 or more hours per week. Although the bill hasn’t moved forward as of the time this article was written, it’s a movement that has started on the federal level as well. Some states also regu-
r m ds | f rom 1 2
ment mix of these individual IRAs, you may find it beneficial to take the money from one account and leave the others intact, to potentially grow further. (If you have multiple 401(k)s, though, you will likely need to calculate and withdraw the separate RMDs for each plan.)
Other issues are also involved with RMDs, so, when the time approaches, consult with your tax and financial advisors. By studying all your options before you begin taking these withdrawals, you should be able to maximize their benefits.
dren who have struck out on their own, so you might want to make new uses for old rooms. And maybe your old “stuff” just isn’t as comfortable as it was before, or the layout of your furniture isn’t as efficient. Whatever the case, it may well be time to update your environment. And the same thing can happen with your financial “house.” To reflect changes in your family situation,
employment, economic circumstances, retirement goals and other factors, you will need to periodically review your financial strategy and your investment portfolio, and make adjustments as needed. Tidying up your living space may help improve your overall outlook on life. The same might be said of a financial spring cleaning — and you won’t even need a mop.
If you have multiple IRAs, you’ll also face another decision, because, once you’ve calculated your total RMDs for the year, from all your IRAs, you can take that amount from one or more of them. Depending on the investspr i ng | f rom 1 2
to continually “nourish” your plan by contributing money each year. • Update your “furnishings.” When you bought and arranged your home’s furnishings, they might have been perfectly suited for your needs. But now, many years later, your situation may be quite different. Perhaps you’ve said goodbye to grown chil-
late how businesses apply “use it or lose it” policies to paid-leave benefits. In these states, earned leave is considered to be the same as earned compensation and must be paid to employees upon termination. Washington state does not currently regulate either paid vacation or paid sick leave as earned compensation. However, businesses should keep their eye on what happens locally, in Olympia and in D.C. to be sure their paid leave policies are in compliance with regulations. A fear with unlimited vacation benefits is that employees will take advantage of the policy’s generosity and take far more vacation than is reasonable. However, many businesses have found the opposite to be true. When employees aren’t sure how much vacation time they have available to take, the uncertainty can make them less likely to take vacation, out of fear that they’ll take more than is acceptable to their boss. Peer pressure plays into the equation as well. When someone’s off on vacation, others pick up
the slack. Taking too much time off and overburdening co-workers can affect morale and relationships in the workplace. A 2014 survey by Harris revealed that the average worker used only 51 percent of available paid vacation time anyway. With that in mind, would offering unlimited time off just sound like a great perk without impacting the company’s bottom line? Should you choose to make this culture paradigm shift, there are some aspects you’ll want to think about. Consider how it will affect employees who see vacation accrual as a benefit of their longevity with the company. Do you currently allow employees to cash out accrued unused vacation? If so, will the loss of this benefit affect their morale? How will you compensate employees for the vacation days they have already accrued when the policy goes into effect? Will employees be required to get permission in advance? Can their time off be denied, and if so, for what reasons? What will you do
if too many people take time off at the same time? How will you deal with an employee who abuses the policy? Will the policy only apply to exempt employees? What will you do about employees who never take vacation? Whether you give your workers one paid week off, or unlimited paid time off, it’s important they step away from the job at some time to clear their heads, relax, rejuvenate and reinvigorate. Even if we do have our co-worker chained to her desk now, she’s working with a smiling tan face since her Hawaii vacation. And another thing is for sure. Everyone here appreciates her all that much more after having to take up the slack in her absence. • Julie Tappero is president and owner of West Sound Workforce, a professional staffing and recruiting company based in Poulsbo and Gig Harbor. She can be reached at julie@westsoundworkforce. com.
14 |APRIL 2015
WWW.KPBJ.COM
Long-delayed Kingston Community Center construction starts By Rachel Anne Seymour KPBJ contributor Construction of the Kingston Community Center will begin mid-April on the 13-acre Village Green Park on West Kingston Road. The center is scheduled to be finished in February 2016, said Dan Ryan, president of Tim Ryan Construction Inc., which has been selected to work on it. The single-story, 22,900-square-foot center will contain a 5,000-square-foot library, a senior center, Boys & Girls Club, meeting rooms and a commercial-grade kitchen. The overall Village Green site plan includes a senior housing complex that was completed in fall 2013, a community garden and trails, along with a picnic shelter and playground that have been completed. The current 8,000-square-foot com-
munity center is home to a senior center in the basement that is not ADA-accessible and a one-room library that is 1,260 square feet. The building isn’t earthquake-secure and the wiring is old and “problematic,” said Jeff Brody, director of community relations for Kitsap Regional Library. When fundraising was behind last spring, plans for the center to be completed this month were postponed, said Bobbie Moore, a commissioner with the Village Green Metropolitan Park District, which will manage the center when it is finished. “Although we are moving forward we are not quite done with fundraising,” she said. “What we have done is secure some interim financing that will allow us to go forward so that we do not experience cost escalations. We want to finish the fund-
p tac | f rom 11
sol a r | f rom 9
need to employ and at the same level prior to award to ensure the business end of your contract does not result in an unsuccessful experience with the government. Just recently the Kitsap PTAC office updated their class offerings to address these issues. New classes include: Understanding Overheads; Change Orders; Overhead Pricing; and FAR Rights and Remedies. Visit the PTAC website at kitsapeda. org/ptac for a complete list of upcoming classes and additional resources. PTAC classes and services are provided at no charge. Understanding the government’s processes not only keeps you right financially, it makes you a better contractor for the government.
years ahead and figure out how they will manage the growth of alternative energy. If they do the planning, the bill outlines options other than net metering that would be open to them. “This is the gateway for them to get to other methodologies to manage for solar before it comes online,” he said. “They don’t need to wait until they reach one-half percent. If they do this, they will see that they can leave net metering the way it is.” Morris said utilities need to embrace solar power and make it work on localized grids to reduce the cost of massive transmission lines. If they respond, they can survive the changing energy market. If they don’t, their customers might look for ways to get off the grid. New battery technology, for example, could leave electrical utilities following in the footsteps of hard-wired phone companies. The bill would also open the door to state-funded cash incentives for utilities and businesses that install solar equipment. Leasing companies al-
• Mona Carlson has over 30 years’ experience in government contracting, recently working as a supervisory contracting officer for NAVFAC NW (Naval Facilities Engineering Command, NW). In addition to being a PTAC counselor, she also works as a government contracting consultant with Blue Ink Consultants. To learn about the PTAC program, contact Kathy Cocus at KEDA at cocus@kitsapeda.org.
raising at the same time the building is being done.” The foundation has raised $6.5 million of its $8.7 million goal, which has increased during the years because building costs have grown in construction and square footage was added to the center, said Daniel Johnson, executive director of the Village Green Foundation, which is responsible for raising money. If the foundation decided not to move forward with construction this year, it risked adding to construction costs as prices rise, while also placing some funding in jeopardy because of required deadlines. “It became clear that we needed to build with the momentum,” Johnson said. The county owns the current community center and doesn’t have a set plan for the building once the new center is finished. In the short term, the building like-
so would be allowed to claim an incentive, according to Morris, but it might be just half as much as equipment owned by a homeowner. His rationale is that leasing companies have access to federal tax credits and special financing arrangements because of their size. “Rooftop solar leasing is the best way to go solar,” declared Bryan Miller, co-chair of The Alliance for Solar Choice, which represents some of the largest leasing firms in the country. “It is not even a close decision for most people.” In California, which far outpaces every other state in solar energy, leasing has been the dominant method of getting solar up on the rooftops. Miller insists that leasing companies are not likely to operate in Washington state as long as net metering remains on the chopping block. “We are not focused on the incentives,” he said, suggesting that a long-term commitment for net metering is the key to leasing arrangements. Miller’s solar alliance is leading a letter-writing campaign in opposition to Morris’ bill, say-
ly will be shuttered and secured, County Commissioner Rob Gelder said. It’s fate will be determined by the realignment of Highway 104 in downtown Kingston and a street study that is under way, because the building sits between the divided Highway 104 lanes near downtown Kingston. Plans for an improved Kingston Community Center started more than 15 years ago when a group of residents formed the Kingston Community Center Foundation, which become the Village Green Foundation. “It’s been such a long time coming,” Gelder said. “It’ll be wonderful to see ground being broken and have a brandnew community center emerge.” • Rachel Anne Seymour is a Kitsap Sun reporter and contributes articles for the Kitsap Peninsula Business Journal.
ing it would end net metering and deprive Washington of a strong clean-energy market. An online petition connected to the campaign asserts that Morris’s bill “would eliminate a homeowner’s right to produce clean energy, making Washington the most anti-solar state in the country.” The bill does not eliminate a homeowner’s right to produce solar power, but it would change how the owner is reimbursed. Morris disputes the leasing companies’ assertions. He says leasing companies will enter the Washington market, and some may even be formed by investor-owned utilities operating in this state. Other utilities might outright own and operate equipment on people’s homes and pay them for the privilege, he said. At the request of the governor, Rep. Jake Fey, D-Tacoma, who works as director of the Washington State University Energy Program, met with a variety of people involved in solar energy through the summer and fall. From those discussions, Fey submitted legislation early in the session. Since then, the Fey
bill has gone nowhere. Morris, who chairs the key House Technology and Economic Development Committee, has kept the focus on his own bill as he struggles to gain consensus among representatives of public and private utilities, solar installation companies and clean-energy advocates. Morris said he hopes to move his bill out of committee soon. Even if his bill gets through the House, it could be killed in the Republican-controlled Senate if utilities are largely opposed, he acknowledged. “We are in constant negotiations,” Morris said. “We have to get 80 percent of the stakeholders on board, and it is so easy for people to confuse the issues. Unless we get 80 percent, we can’t get this through the Legislature.” • InvestigateWest is a nonprofit newsroom for the Northwest. This story is part of a crowdfunded series on environmental issues in Olympia. Follow the series and become a backer at www.invw.org/olympia.
16 |APRIL 2015
WWW.KPBJ.COM
Retiring CEO brought stability to The Doctors Clinic By Rodika Tollefson KPBJ contributor After 16 years at the helm of The Doctors Clinic, executive director Linda Brown will retire April 10. Brown is credited with shepherding the physician-owned organization through a financial turnaround and major growth. Before she was hired, The Doctors Clinic had four executive directors in five years. The organization was in financial trouble. “It was a really dark time because we didn’t think we had the smarts or administrative strengths to be on our own,” said Dr. Brian Wicks, who was president of The Doctors Clinic at the time and for 13 years of Brown’s tenure. TDC was considering selling its operations to a practice-management company, which recruited Brown. The Doctors Clinic decided against the move, but Brown’s contract allowed her to remain on board. “It was happenstance that Linda agreed to stay with us and that was key,” Wicks said. “We had someone with management background who could look at the business.” For Brown, serving as the CEO was an advancement of her career. She had been
working as the executive director for a smaller physicians group in Ogden, Utah. Her daughter was studying at the University of Washington. “It was a good time for a Linda Brown career change,” Brown said. Initial changes including closing clinics in Belfair and West Bremerton that were not “well located,” restructuring staffing, renegotiating contracts with health plans, and recruiting high-quality physicians. Brown saw an opportunity to expand services. “I could see a great group of physicians who had a clinic for 50 years but there had not been opportunities or leadership to develop ancillary services to provide a broader range of services for patients,” Brown said. During her tenure, TDC grew from 45 health care professionals to more than 80, as well as more than 450 employees and nine locations. Services such as ambulatory surgery, physical therapy and imaging were added as well. Brown said her biggest achievement was helping The Doctors Clinic relocate to the
com p pl a n | f rom 5
to just this area. Go online and participate. Provide comments on areas of interest to you and that you believe the county commissioners should consider and address. If bike paths and trails are important, let your thoughts be known. Make the comment meaningful. Please be specific. Stating “I want bike trails” is like making a wish. Saying “I want bike trails in a specific area and this is how their construction can be achieved” is meaty and provides a strategy to consider. Just as in business, local government can’t pull out the printing presses to make more money. What we receive in taxes has to fund many things. And some things are higher priorities than others. How will your comments be assessed? They are all considered, but not all are adopted or implemented in the plan as presented. Meaningful comments that state a good case have a better chance of being included if they meet state law and are financially feasible. w eedi n | f rom 10
purpose; and then gear up because the next race will be ahead of you. You may not know what it looks like yet, so be ready. You never know when it might be your most important. • Dan Weedin is a strat-
egist, speaker, author and executive coach. He helps business leaders and executives to become stronger leaders, grow their businesses, and enrich their lives. You can reach him at 360-697-1058; e-mail at dan@danweedin.com or visit his web site at www. DanWeedin.com.
WWW.KPBJ.COM Check it out!
center of the county — Silverdale — and upgrading the quality of its facilities. That included the move of TDC headquarters to Silverdale. Jay Burghart, chief financial officer and chief operating officer for 15 years who will replace Brown, credits her with expanding TDC to serve patients countywide instead of focusing primarily on Bremerton. “Her biggest contribution, first of all, was stability,” he said. Wicks said Brown developed a business culture that the organization didn’t have before. “As reimbursements were declining, it became more important to watch our nickels and dimes and trim waste from our operations without compromising quality,” Wicks said. “She was able to guide us and keep us from stepping on landmines.” The health care industry and health care delivery have changed tremendously during Brown’s career. Five or six years ago, about 60 percent of physicians were independent, and now that number is down to 40 percent, she said. Much of that is due to the increased complexity of the industry and extensive regulations.
As a final point, the plan under development today is different. First, unlike many previous efforts, the county’s staff and some consultants are developing the plan. Previously, it was heavily consultant-based and developed. Second, we’re trying to write goals and policies that are actionable. Often these plans use the word “encourage” without identifying who is doing the encouragement. In this effort, we’re using action verbs and identify the responsible agencies, offices or private-sector groups to make it happen. Third, this plan will have strategies to achieve the goals. This is why when you comment, your ideas of how to achieve it can go a long way to making the
“It’s difficult for physicians in small groups to manage all that,” she said. “One of the advantages for The Doctors Clinic is that we’re large enough to have a professional manager.” As she retires from her job, Brown sees further opportunities for TDC to grow. With the county population projected to increase, she says the community will especially need more primary care and family physicians. “Our intention is to remain independent while building a stronger relationship with Harrison Hospital and Franciscan Health System to jointly bring services to the community that make it unnecessary to go to Seattle for care,” she said. Brown, 62, has made many civic contributions since moving to Kitsap County. She will continue to live in Suquamish and be involved with several local organizations, including the Bremerton Rotary. With three grandchildren, including two in Europe, she plans to spend more time with her family and pursue her other interests, such as photography and sailing. “I deeply appreciate the opportunity I had to make a contribution to the community,” she said.
plan implementable versus sitting on the shelf only to be opened and dusted off in the next Comprehensive Plan update. Help us keep the plan alive and not buried on some dusty shelf. Participate, make your comments known at Compplan.kitsapgov.com and heard! Thanks for reading. • Larry Keeton is director of the Kitsap County Department of Community Development.
18 |APRIL 2015
WWW.KPBJ.COM
Lots more Mora will be scooped soon Artisan ice cream maker expanding with production facility in Poulsbo to supply planned franchise stores By Tim Kelly KPBJ editor “Ice cream,” Jerry Perez says, “is a product that everybody knows.” However, the mission of Mora Iced Creamery — the company he and his wife, Ana Orselli, started in 2004 on Bainbridge Island — is to serve up an experience that transcends the ordinary. Mora has only three stores (Bainbridge, Poulsbo and a seasonal shop in Kingston), but its artisanal ice cream made with real fruit and natural ingredients has garnered raves in travel and lifestyle magazines, websites and blogs around the Seattle area. The model in the Northwest for a company that made a commonplace product into a transcendent experience, of course, is Starbucks. Perez doesn’t shy away from drawing parallels with the iconic global coffee giant that started in Seattle, as his small business prepares to open a new, larger production facility and expand with franchises. “(Starbucks) elevated Americans’ ability to appreciate coffee,” he said. The Mora owners, who moved here from Argentina, think their mom-and-pop business can start doing the same for ice cream. l ect u r e | f rom 9
customer-installed systems that a utility must allow in its grid. “PSE’s Net Metering Threshhold is 22.4 megawatts. We will hit that by year’s end and blow past it,” Wade said, adding that PSE estimates more than 1,000 new solar energy systems will be installed this year in its service area, which covers 10 counties and includes more than 1 million electric customers. Through 2014, there were 366 systems in Kitsap County, with 58 of those in Bremerton. The mission of the Power Lunch Kitsap series, which is co-sponsored by solar energy firm Power Trip Energy of Port Townsend, is to present information from expert speakers on various energy and sustainability topics, and to bring together interested parties from within the community. Organizers hope to provide an education and networking opportunity by bringing together environmen-
MEEGAN M. REID
Mora Iced Creamery owner Jerry Perez in the company’s new production facility under construction in Poulsbo. “Over time we’ve grown, and we got to the point we decided it would make a lot of sense to replicate the Mora experience to other areas,” Perez said. He said they could do that “by opening one store at a time with our own capital — and grow basically around this area,”
tal and economic development-focused individuals to find common ground, possibly resulting in projects that accomplish both goals. The series organizer is Shawn Dinkuhn, a senior associate and project coordinator who’s worked at Rice Fergus Miller for 11 years. She also was active in a group called Sustainable Bremerton for several years, and Power Trip Energy founder Andy Cochrane asked her about starting a series at RFM. “This forum space is meant for public gatherings,” Dinkuhn said. “This is in line with our mission and seems like a good use of the space.” The next event on April 16 will feature a talk on passive house design by Richard Berg, an architect who founded Terrapin Design in Port Townsend. “We just planned for four (lectures), to go through June and we’ll see what the turnout’s like,” to determine whether to continue the series in the fall, Dinkuhn said.
but decided instead to launch a franchising program and expand their production capacity to supply new stores as the Mora brand spreads. Perez and Anelli, the company’s CEO and chief brand officer, respectively, had always envisioned their business grow-
ing beyond a few stores in their community (they actually opened their first one in 2004 in Bellevue Square mall, but it closed in 2007.) They announced plans to open franchise stores in 2011, but Perez said it turned out see mor a | 32
Fire equipment business makes short move to new Poulsbo location By Tim Kelly KPBJ editor Peninsula Fire Extinguisher Sales & Service is the latest Poulsbo business to make a short move across Viking Avenue from a leased site to one the business owns. Owner Ray Bertsch bought the building at 371 NW Lindvig Way for $375,000 and moved his operation in there in February. The small building — which sits on the lot at the busy corner of Lindvig and Viking Avenue — was the longtime home of ADA Engineering, but partners Pete DeGroot and Herb Armstrong retired in 2013. Mike Dunphy and Tim Cartwright, who worked for ADA as surveyors, stayed to run their business, DC Surveying, in one of three spaces in the building. “It worked out well, because they want to stay as tenants,” Bertsch said. Peninsula Fire now occupies another part of the building that had been vacant, and a third space is being remodeled for a hair salon that Bertsch’s daughter plans to open soon.
Bertsch said he passed on an opportunity to buy the building at 20373 Viking Ave. where his business had leased a unit for more than a decade. “I liked the location, but that building left a lot to be desired,” he said. “It needs such extensive repairs that I wasn’t interested. “Over here I’m actually going to pay a little less than what the rent was, and I’m going to own it.” Bertsch, 54, has owned Peninsula Fire Extinguisher Sales & Service since 1996, when he bought it from his father, who started it in 1970 as a home-based business. Although his new location is by one of the busiest intersections in Poulsbo, the nondescript onestory building sits back from street and part of the lot is used for a Kitsap Transit park-and-ride. It’s not as visible as where I was,” Bertsch said, “especially with all the trees and landscaping in front by the Viking statue.” One of the first upgrades he made, however, was to install new LED canopy lights on the outside of his building to increase its visibility.
WWW.KPBJ.COM
APRIL 2015 | 23
Haggen brand goes on first Kitsap stores By Tad Sooter KPBJ contributor Nick Waldbillig felt an understandable surge of anxiety in December when he learned the Safeway store he managed was being bought out by a small, regional rival. “It was a little scary for the first five minutes,” he said. “After that five minutes passed, it was exciting.” Three months later, Waldbillig is managing one of Kitsap’s first Haggen stores. The change was abrupt, he said, but positive. The Bellinghambased grocery chain kept his staff of 90 intact and has given him more local control over buying. “Haggen came in and took care of everyone,” he said. While store workers get used to the new ownership, residents also are adjusting to Haggen’s unexpected entry into the Kitsap market. The former Bethel Road Safeway in Port Orchard and a Bucklin Hill Road Albertsons in Silverdale were converted to the Haggen brand March 7. An Albertsons in East Bremerton will become a Haggen in June. The three locations are among 146 stores Haggen acquired as part of a divestiture required for the recent merger of Albertsons and Safeway. As it races to roll out the new stores this spring, Haggen is working to raise its profile in the dozens of towns it suddenly serves. The grocery chain is hosting public gatherings in each community it enters. More than 100 people attended a meetand-greet Haggen held March 19 at the Port Orchard Pavilion. Company representatives used the meeting to court local nonprofit groups and food producers and to ask the public for patience as the stores transition. Haggen director of marketing Todd McGiverin said the acquisition had been in the works for months but wasn’t confirmed by the Federal Trade Commission until December. Once approved, Haggen was given 120 days to convert all 146 stores, spread across five Western states. That meant the grocery chain, which had just 18 locations, would need to convert former Albertsons and Safeway stores at a rate of more than one per day for four months. The overhauls in Port Orchard and Sil-
Above: Seafood manager Kathy Sturman, right, talks with customer Becky Irby of McCormick Woods at the Port Orchard Haggen store, which had been a Safeway. Left: The rebranded Haggen store on Bucklin Hill Road in Silverdale was formerly an Albertsons. photos by LARRY STEAGALL
ers at the stores and fielded questions from farmers about how they could land their produce on Haggen shelves. Even tiny producers are welcome if they can meet Haggen’s basic requirements, he said. “We want to hear about all the products you have to offer,” McGiverin said. “Let us worry about how many stores you can go in.” That sounded good to Bremerton jam maker Stevena Labadie of The Badies Strange Preserves. She produced 2,300 jars of jam last year, using fruit mostly picked within the county. Labadie sells her creatively flavored preserves in a few local shops. Haggen would be a big step up. “This could be just the foot in the door I need to make my small business not so small,” she said. • Tad Sooter is a business reporter for the Kitsap Sun and contributes to the Kitsap Peninsula Business Journal.
verdale were hasty by necessity, McGiverin said. Signs were changed and new inventory was brought in, but the stores still feel sparsely appointed. “We’ve had a lot of customers who say, ‘This isn’t a Haggen, it’s only Haggen in name and sign,’” McGiverin said at the Port Orchard meeting. “That’s probably a little cruel,” he added, drawing laughter from the crowd, “but I do see the point. I understand it’s not at the level our other stores are at. We will try to get there soon.” Prices have been a concern among shoppers at the converted stores. Haggen’s reputation as a higher-end grocer preceded it to Kitsap. McGiverin said the chain is trying to keep prices consistent with what Albertsons and Safeway were offering. There have been inconsistencies as the stores convert, he said, promising those would even out over time. Haggen isn’t waiting to warm up to Kitsap charities and food producers. McGiverin highlighted upcoming fundrais-
Like Kitsap Peninsula Business Journal on Facebook
24 |APRIL 2015
WWW.KPBJ.COM
People in business New manager hired for Gig Harbor farmers market
New Kitsap Bank executive will be based in Gig Harbor
The Gig Harbor Downtown Waterfront Alliance announced the hiring of Kathleen Rose as manager for the new community-based Waterfront Farmers Market that will be held in Skansie Brothers Park. With a mission to create a vibrant forum that connects community residents and food producers, and a Kathleen vision to return the “farm” Rose to the farmers market, the alliance is excited about the opportunity to support local agriculture and provide access to fresh food. “With the Waterfront Farmers Market being held in conjunction with our Thursday Night Out event, we are helping to create great synergy and even more reasons to come to the downtown waterfront and shop local,” said Pat Schmidt, board president of the Downtown Waterfront Alliance. She said Rose is “deeply passionate about agriculture, sustainability and community. She is a perfect fit for our organization and will help us in our efforts to promote shopping locally.” Rose and her husband have many years of experience as farmers market vendors, producers for the Fresh Food Revolution Co-op on the Key Peninsula, and coordinators of outreach programs in local schools and at their farm. Rose, who also has experience in sales in the health care industry, is a certified Master Gardener and is active in local and national agriculture advocacy programs and legislation, including the American Farmland Trust and Sustainable Agriculture Coalition. The new Waterfront Farmers Market is scheduled to open in June and will operate weekly in conjunction with Thursday Night Out from 3-7 p.m. through the summer months. For information about becoming a vendor, contact Rose at 253-3550603 or roseorchards@comcast.net.
Kitsap Bank announced that Paul Scheer has joined the bank as vice president and commercial relationship manager, and will be based out of the Point Fosdick branch in Gig Harbor. Scheer comes to Port Orchard-based Kitsap Bank with nearly 18 years of experience in commercial and business lending. He Paul Scheer has spent his entire career in the Tacoma/Pierce County business community, most recently as senior commercial relationship manager at BECU. He is a graduate of Seattle University with a bachelor’s degree in business administration. “Paul brings a wealth of experience in commercial lending,” Kitsap Bank executive vice president and chief lending officer Steve Maxwell said. “He shares our strong commitment to providing the personalized customer service that is Kitsap Bank’s hallmark, and we are very pleased to welcome him to the team.”
New staffer joins Liberty Bay Bank in Poulsbo Cybele Gonzalez of Silverdale has joined the staff at Liberty Bay Bank in Poulsbo. Gonzalez has more than 20 years of experience in banking sales, management and general banking operations, and she has held previous positions in branch management for several West Sound area banks. Liberty Bay Bank is a Cybele full-service community Gonzalez bank headquartered in Poulsbo. More information is available at www.libertybaybank.com or by calling 360-779-4567.
Business briefs Pope Resources sells building lots in Harbor Hill to Quadrant Homes Poulsbo-based Pope Resources announced a $4.8 million sale to Quadrant Homes of 33 single-family lots located at the north end of the partnership’s Harbor Hill project in Gig Harbor. Harbor Hill is a planned mixed-use community consisting of residential, business park and commercial properties. “This is the first of several residential sales we expect to close this year in Harbor Hill,” Pope Resources president and
CEO Thomas M. Ringo said. “Quadrant will be introducing its high-end home models on these lots, and we anticipate these products will be well-received by the Gig Harbor market. Home sales have been brisk in Harbor Hill of late, which should lead to continued strong lot sales to builders in the foreseeable future.” Pope Resources (www.poperesources.com) is a publicly traded limited partnership and its subsidiaries Olympic Resource Management and Olympic Property Group own or manage 193,000 acres of timberland and development property in Washington, Oregon, and California.
26 |APRIL 2015
WWW.KPBJ.COM
People in business Kitsap Sun hires digital sales manager Cecilie Burleson has joined the Kitsap Sun as digital sales manager, bringing digital media expertise to benefit the company’s business customers and ad sales department. Burleson most recently was digital sales director for West Hawaii Today in Kona, Hawaii. Joining the Kitsap Sun, which owns the Kitsap Peninsula Business Journal, represents a return to the Pacific Northwest for Burleson, who previously worked for PinnaCecelie cle Marketing Group in Vancouver, Wash. Burleson Burleson (cecilie.burleson@kitsapsun. com, 360-792-3341) said she will focus on connecting with the Kitsap Sun’s digital advertisers and the general business community.
Marketing vet joins Children of Nations Silverdale-based nonprofit Children of the Nations (COTN) announced the recent hiring of Mark W. Costa as its national director of marketing for the United States. In this capacity, Costa will oversee all elements of internal and external marketing communications, community media relations, and strategic event planning. “The COTN organization has blossomed and is rapidly growing,” CEO Elisa Goodwin said. “The need to provide quality Mark Costa support is greater today than ever before. As a result, it was essential that we source a trailblazer in the marketing genre. Mark’s unique skillset will afford Children of the Nations the opportunity to take a forward step in developing and implementing a strategic marketing and communications plan while being mindful of brand development.”
During his career, Costa has held senior management positions within the nonprofit, tourism and hospitality sectors. Most recently he served as chief marketing officer for the Gateway organization, including Gateway Christian Schools and Gateway Fellowship in Poulsbo. Costa, who lives on Bainbridge Island, is the 2015 Greater Poulsbo Chamber of Commerce president and director of youth services for the Rotary Club of Bainbridge Island. Children of the Nations is a nonprofit organization that currently operates in Sierra Leone, Malawi, Uganda, the Dominican Republic and Haiti, providing care for orphaned and destitute children. For more information, visit cotni.org.
Reiki practitioner adds N. Kitsap office Jenny Jo Allen, a self-described “clairvoyant Reiki master and psychic medium,” is now serving Kitsap County and Bainbridge Island clients. She has been healing with Reiki for 15 years, and will be seeing clients at her new office in Poulsbo at 225 NW Lindvig Way. Allen also offers occasional sessions and events at Dayaalu Center (www.dayaalucenter.com) on Bainbridge Island. Allen also teaches classes and operates a Jenny Jo healing practice in Port Townsend, where Allen she lives. For information or to schedule an appointment, call 360-643-1712 or visit www.JennyClairvoyant.com.
Rice Fergus Miller announces new hires Rice Fergus Miller, a 40-person architecture, interior design and planning firm in downtown Bremerton, has added four employees. Architect Michael Saito has worked in all aspects of
WWW.KPBJ.COM
the architectural field for over 20 years and has a focus in large senior living projects. Dean Kelly joined Rice Fergus Miller as a project designer, with a focus in construction technology, sustainability and multi-family housing. He joins the firm’s senior living studio. Ivi Gabales, who joined the marketing staff, has a degree in architecture from the University of the Philipines and more than 20 years of design, construction and marketing experience. Angelica Sierra Deaton was hired as an administrative assistant. She came to Rice Fergus Miller from West Sound Workforce where she was a marketing and administrative assistant. She also serves on the Olympic College Business/Technology Advisory Committee.
28 |APRIL 2015
WWW.KPBJ.COM
Slaughter County boosting its production and profile Port Orchard brewpub working to get its craft beers on tap at more places By Tim Kelly KPBJ editor As the Kitsap Peninsula’s craft beer scene has flourished the last few years, the only brewery in South Kitsap hasn’t been in the limelight as much as others in the brewing fraternity. Slaughter County Brewing Co. owner Scott Kirwan is working to raise the profile of his operation, by increasing his small brewery’s production and getting his beers on tap at more bars and restaurants. “We got our production up to 200 barrels last year,” which equates to roughly 50,000 pints of beer, Kirwan said. “We sold almost all of that in house, so we’re pushing this year to start wholesaling. It’s a lot of work, it’s practically like starting a whole new business.” He opened the Port Orchard brewpub (“South Kitsap’s first brewery in over 80 years,” the history buff notes) in 2012 in Westbay Center on Bay Street. The location looks out on Sinclair Inlet, and the city’s pedestrian pathway along the waterfront goes past the pub’s windows and outdoor patio. “We’re exactly midway between the Annapolis and Port Orchard passenger ferry docks,” Kirwan said, so he touts his pub being “a half-mile walk from Seattle” for ferry riders. Just a few blocks away is one of the local establishments now serving Slaughter County beers on tap — the Bay Street Bistro. Owner and chef John Strasinger says customer response has been very positive to the local brewery’s Oatmeal Stout — and corned beef simmered in the stout was the bistro’s St. Patrick’s Day dinner. “This keg of Oatmeal Stout is one of the best I’ve had so far — complex, with notes of toffee and smoke — if they can keep (their beers) up to that standard they’ll be a huge success,” Strasinger said. “It’s
LARRY STEAGALL
Scott Kirvan, owner of Slaughter County Brewing Co., pours in yeast while making a batch of beer at his Port Orchard brewpub. great to see a local business stepping up.” Kirwan’s also got kegs tapped at places outside Kitsap, such as Parkway Tavern in Tacoma, Beveridge Place Pub in West Seattle, and at one of his former Seattle haunts. “I’ve got a beer on down at Pioneer Square Saloon,” he said. “I used to live in downtown Seattle, right in Pioneer Square, and that was my hangout.” Kirwan moved to Manchester several years ago, and was in “semi-retirement” after he sold his software company. The longtime home brewer decided his next career move would be to make his livelihood from beer. He first got into craft beer when he was a college rugby player in his native Minnesota. “A friend taught me how to brew, and within two weeks I talked a buddy of mine into going in with me to buy a home brew kit,” Kirwan recalled. Some of his early recipes have endured;
business briefs InHealth Imaging opens new center in Port Orchard InHealth Imaging has opened a new women’s screening center in Port Orchard at 463 Tremont St. W, Suite 130. InHealth Imaging’s board-certified radiologists and team of technologists will be providing digital x-rays, low-radiation 3D mammograms and, beginning in April, bone density testing in the Port Orchard office. “We are dedicated to providing our patients with individualized service and offer a full spectrum of imaging services at
our three office locations in Port Orchard, Silverdale and Poulsbo,” said Dr. Manfred Henne, radiologist and owner of InHealth Imaging. Henne was the first to bring 3D mammography to the Pacific Northwest and he recently installed the only 3T MRI on the West Sound in his Poulsbo office. For additional information or to make an appointment, call 360-598-3141. The InHealth Imaging Port Orchard office direct line is 360-876-3141 and office hours are Monday through Friday from 8:30 a.m. to 4:30 p.m. Walk-in appointments are available.
“I’m kind of under the radar, for the most part.” Scott Kirwan, Slaughter County Brewing Co. owner notably one that evolved into a Slaughter County standard — Ol’ One Eye IPA. “It’s an English style, but it uses Northwest hops,” he said. “It’s a darker, more malty IPA.” Slaughter County increased its production from 78 barrels in 2013 to about 200 last year, when a fourth fermentor and an aging tank were added to the mini-
mal brewing equipment in the pub’s “lowtech” three-barrel system. Kirwan hopes to at least double his production in 2015, and plans to start bottling some beers for the first time. “By the end of this summer I’m hoping to have brought in the extra equipment and one or two extra brewery employees,” he said. The current brewing setup is in a cramped space next to the kitchen, so Kirwan may convert some of the seating area in his 4,000-square-foot leased space to use for brewing. “Reverse expansion,” he calls it. “Make the restaurant smaller and the brewery bigger.” That might require removing some of the comfy, eclectic furniture Kirwan collected from craigslist when he opened his brewpub, but there will still be ample seating for customers and room for bands that play in the bar on weekends. The brewer said he’ll probably do some crowdfunding to acquire additional brewing equipment, and he’s looking for a possible partner or investor as he works to expand the business. “I’m kind of under the radar, for the most part,” Kirwan acknowledged. But as Slaughter County brews more and its tap handles start showing up in more watering holes around Puget Sound, the exposure might lead to some financing options. Current brewing capacity is enough maintain three primary beers — stout, IPA and a pilsner — on tap consistently in the pub, supplemented by an assortment of other intermittently available options. “I’d like to have four or five year-round beers, plus our seasonals,” when the brewery expands, he said. Craft brewers love to experiment, and the pub’s seasonals include a pumpsee slaughter | 34
kin beer Kirwan’s especially partial to; a
30 |APRIL 2015
WWW.KPBJ.COM
Storyville Coffee to sell empty Winslow space By Tad Sooter KPBJ contributor Storyville Coffee is selling its Winslow Way storefront, laying to rest years of speculation it would open a shop there. The Bainbridge-based coffee company’s space at 240 Winslow Way was listed for sale Monday for $1,885,000. Storyville still maintains its roastery in the Coppertop Park, where it operates a tasting room. A marketing manager, who asked his name not be used, said Storyville shifted focus to starting stores in Seattle, and decided against opening on Winslow Way. Storyville has three Seattle shops, including one on Pike Place. The marketing manager declined to comment on whether a Storyville still has plans for a shop in downtown Winlsow. The 6,350-square-foot 240 Winslow
Way building was long home to the town’s hardware store. Winslow Hardware closed its doors in 2005 and was replaced by Port Madison Home, which shut down in 2011. Storyville bought the property in November 2011 for $1.55 million, according to assessor’s documents. The coffee company put signs in the windows and held “pop-up” shops there, but the cafe many islanders were expecting never materialized. Storyville recently took a beating from local media outlets for reported connections between its ownership and recently disbanded Mars Hill Church. The marketing manager said there are no connections between the coffee company and defunct church, and said the media reports played no role in its deci-
Storyville Coffee has put the downtown Bainbridge Island building at 240 Winslow Way up for sale. Storyville, which has a coffee roasting facility in a Bainbridge business park, purchased the property in 2011 after Port Madison Home closed, and had planned to open a café there. tim kelly/kpbj file
sion not to open a shop on Winslow Way. “We love Bainbridge Island and welcome everyone,” he said. • Tad Sooter is a Kitsap Sun business re-
Help Desk Cavalry acquires Pro-Action IT Help Desk Cavalry, an IT managed solutions provider based in Bremerton, has acquired a small Bainbridge Island firm called Pro-Action IT. In a news release, Help Desk Cavalry said the acquisition strengthens its regional support for clients across Kitsap County. “It’s a big step into the future for our company,” said Steve Treanor, owner and CEO of Help Desk, which has been in business for two years. “Bringing these great technical teams together will accelerate Help Desk Cavalry’s ability to provide clients with the best service in the
region.” Pro-Action IT owner Matt Hadlock, who started his company in 2010, and his two employees are now part of the 13-person Help Desk Staff. “The team from Pro-Action IT brings proven capability and talent in critical areas such as proactive maintenance, user support, and network architecture,” Treanor said. Help Desk Cavalry, which moved into the former D4 building in downtown Bremerton in early 2014, will maintain a satellite office Pro-Action had set up in Poulsbo to provide faster onsite support
for North Kitsap clientele. Treanor said Help Desk focuses primarily on helping small businesses that have up to 100 users on their IT systems. “In our industry specifically, the key thing is a small business always had to be their own IT director, and basically call in a guy they knew to help support the company with its needs,” he said. “We are no longer reactive, we are proactive; we have technology installed on work stations and servers, and we’re able to monitor and update systems on a regular basis. “We’ve become the inter-
nal IT department on an outsourced basis.” Holt said merging his business into Help Desk Cavalry will be a good
porter who contributes articles to the Kitsap Peninsula Business Journal. This article originally was published on his “Minding Your Business” blog.
move. “I’m excited to entrust my clients and employees to a firm with a solid reputation for great service, integrity, streamlined processes, and plans for continued local growth,” Hadlock said.
To contact Help Desk Cavalry, call 360-930-6990 or visit the company’s website: www.helpdeskcavlary.com.
32 |APRIL 2015 mor a | f rom 18
their existing creamery on Bainbridge Island couldn’t accommodate an expansion of their production capacity. So the franchising plan was put on hold and they started looking for a site to build a larger plant. Now they’re about ready to open Mora’s new production facility in a 10,000-squarefoot building on a light industrial site near the north end of Viking Avenue in Poulsbo. Some of the plant’s custom machinery will arrive soon from Italy, and the facility should be fully operational by the end of May. Eagle Harbor Properties of Bainbridge Island built the structure to lease to Mora, and Perez said his company has an
WWW.KPBJ.COM
“Typically artisan means producing on a very small scale, but we’re going to scale it up and still make the best ice cream we can make from scratch.” Jerry Perez, Mora Iced Creamery owner option to expand into a second building on the site should they need additional production space in the future. If Mora meets its ambitious goals, the fu-
MEEGAN M. REID
Morgan Chesmore serves up a waffle cone to a customer at Mora Iced Creamery in downtown Poulsbo, one of three Mora ice cream shops in the area. ture could see the new creamery making and shipping truckloads of ice cream to dozens of franchises from coast to coast. “Our goal is to have 40 to 50 new franchised locations within the next four or five years,” Perez said. “It depends on how fast franchisees can open their own locations, but we’re going to go nationwide. We’re focusing on California, Texas and Florida first.” The company hired Jim Rowell in November as director of franchising, and Perez said documents should be ready to share with prospective franchisees by the end of April. He expects to have the first signed franchise agreements this year, but it will probably be early 2016 before any new store is ready to serve the first scoop of Mora’s gianduja (Italian chocolate with roasted hazelnuts), pink grapefruit sorbet or any of its 48 flavors. When fully ramped up, the new creamery will be able to produce 20 times as much ice cream per hour as Mora’s Bainbridge facility, which will be closed when the company completes the transition to the Poulsbo location. Mora currently has 20 to 45 employees seasonally, and the Poulsbo operation will have a staff of about 10 to start, though that could grow to 15-20 if the company adds a second pro-
duction shift. Besides supplying franchises, the increased production will allow Mora to start selling its ice cream wholesale to stores and restaurants. “We are doing no wholesale now,” Perez said. “We are maxed out; in summers we don’t have capacity for more than us,” at the three local shops. “This is going be an extraordinary plant for us, because it will allow us to continue to produce artisanal ice cream on a larger scale,” added Perez, who enjoys describing how Mora uses Northwest-grown blackberries (“mora” is the Spanish word for blackberry) and fresh-squeezed citrus fruits, as well as real pineapples, cantaloupes and watermelons that are peeled and cored on site. “Typically artisan means producing on a very small scale,” he said, “but we’re going to scale it up and still make the best ice cream we can make from scratch.” Perez, who earned an MBA in Argentina and owned a couple companies there before moving to the U.S., humbly says that not even a premium ice cream brand such as Ben & Jerry’s is the equal of Mora. “They do very good industrial ice cream,” he said. “We do artisanal ice cream.”
Like Kitsap Peninsula Business Journal on Facebook.
34 |APRIL 2015
WWW.KPBJ.COM
government contRacting | steve shapro
Mason County businesses ideally located to seek federal contract opportunities
I
n Kitsap County, hundreds of millions of dollars in government contracts are awarded to accomplish work in support of local Navy bases and federal agencies. Much of the work is done by local businesses that successfully compete for the contracts. As a result, $172 million in prime contracts were awarded to Kitsap County firms last year alone. Additionally, many local businesses are suppliers and subcontractors to the major prime contractors. There’s no question that the Navy’s presence is a tremendous driver of the county’s economy. It’s not so clear, however, that businesses in nearby Mason County are taking full advantage of their proximity to federal contracting opportunities. There are no military bases or large federal facilities in Mason County comparable to what’s in Kitsap County. As a result, there
are fewer requirements to build facilities, repair equipment or perform many of the services the government requires to support its infrastructure. This is reflected in the contracts awarded for work done in Mason County. Last year, all government agencies combined awarded $ 2.1 million in federal contracts for performance in the county. Included in this total was an $810,000 Federal Highway Administration contract for work on roads in Olympic National Forest. The Forest Service awarded an additional $625,000 in small projects in Olympic National Forest, while the Veterans Administration awarded $265,000 in contracts for counseling and nursing home services. About 60 percent of the $2.1 million in work performed in the county was awarded to local businesses. Since Mason County is adjacent to both Pierce and Kitsap counties, it is not too distant from the large military bases in the area. These include Joint Base Lewis-McChord and Naval
Base Kitsap with the shipyard at Bremerton and the submarine base at Bangor. It seems that the location of Mason County businesses would make them ideally suited for pursuing defense contracts on the bases. Few Mason County businesses, however, have been successful pursuing federal work in the adjacent counties. Last year, Freitas Construction Corp. of Allyn was awarded $2.5 million in contracts for small construction projects on West Sound Navy Bases. North Mason Fiber of Belfair was awarded a $316,000 contract to recycle organic material and wood debris from local Navy. Another $223,000 in contracts was awarded to a Shelton firm for sewer and sanitation work at the Indian Health Service facility in Bremerton. Two Mason County businesses have supplied parts and services farther afield. Piezo-Metrics Inc. of Shelton was awarded $175,000 for control system work by the NASA office in Huntsville, Alabama. O’Donnell Batteries of
Shelton supplied a few thousand dollars’ worth of replacement batteries to the Army in Fort Riley, Kansas. Altogether, only $3.324 million was awarded to Mason County businesses for performance outside the county. With close to $1 billion dollars in contracts being performed at bases in nearby Kitsap and Pierce County, fewer than 10 Mason County firms are taking advantage of the federal contract opportunities in the adjacent counties. In Kitsap County, there are a number of small suppliers that have set up shop in their homes. Taking advantage of federal preferences for small businesses, they are sourcing millions of dollars of parts and equipment for the Navy and Defense Logistics Agency. Given the ability to have an online presence, there’s no reason that these businesses couldn’t operate from Mason County, too. There are two areas in Mason County that are designated as Historically Underutilized Business Zones (HUBZones) by the federal government. One is near Shelton, and the other is on Skokomish tribal lands. Firms that meet the Small Business Administration’s HUBZone requirements are able to compete for contracts that are set aside for only HUBZone small businesses. Also, when HUBZone
slaughter | f rom 2 8
the pub’s seasonals include a pumpkin beer Kirwan’s especially partial to; a brown ale boasting a rich, nutty flavor; and Blackberry Wit, a Belgian white beer spiced up with anise and black pepper. Slaughter County’s also been doing more business in growler sales since Kirwan had an “aha” moment at the grocery store. He noticed three guys in front of him in the checkout line, “all buying six-packs of good beer” (microbrews, naturally), and he thought beer lovers like them might go for a half-gallon growler instead if the price was about the same. “I thought let’s do a growler club, and make Evening light streams through the waterfront windows at Slaughter County Brewing Co. in Port Orchard as Regina Ruiz draws a beer from one of the brewpub’s taps. Larry steagall
small businesses compete for contracts, they are often given a price advantage relative to other firms submitting offers. Mason County firms in these areas could take advantage of this program to seek federal contract opportunities. Given the county’s central location relative to the large bases in adjacent counties, Mason County businesses are ideally located to take advantage of contracting opportunities. Firms interested in learning more about how the Navy, Army and federal agencies buy supplies and services should contact the Washington State Procurement Technical Assistance Center (www.washingtonptac.org). PTAC is funded partially by the Defense Department, and partially by local governments to help small businesses participate in the government marketplace. • Former Navy contracting officer Steve Shapro recently founded Seabeck Research, a consulting firm providing information and analysis to companies interested in government contracting work. He is a former Deputy for Small Business for the Navy, promoting small business participation and supplier diversity efforts in support of Navy contracts. His website is www.seabeckresearch. com.
it real cheap to join,” he said. “So now we fill a growler for $8.50, instead of $12, which is more like our wholesale price.” Like most any new business, the first couple years have been challenging at Slaughter County. But Kirwan said he’s enjoyed the experience of opening his pirate-themed brewpub, which bears the county’s original name and sits on the opposite side of Blackjack Creek from the site of the town’s first brewery, which opened soon after the repeal of Prohibition. “Silver Springs Brewery, right there where the Ford dealership is,” he said. “It was the tallest building on the Peninsula for years.” Slaughter County’s pirate theme stems from Kirwan’s affiliation with the Southworth Buccaneers, a bunch who occasionally go carousing in pirate garb for singing and philanthropy. “My heritage is Irish, so I wanted to do an Irish pub,” the brewer said. “It’s like an Irish pub overrun by pirates.”
WWW.KPBJ.COM
APRIL 2015 | 35
business strategy | dan weedin
There is no finish line, just the ‘next race’ to run
I
admit it. I was wrong. Well … sort of. For many of you faithful readers, you might recall that I’ve written before about “finishing strong” and how success is not about how you start, but how you finish. While the concept of running hard through the finish line is a sound business analogy (you know, the whole “winning by a nose” thing), I think there is a bigger and better concept to consider. This is the concept that there is actually no finish line at all. Finish lines imply the end of the race. Usain Bolt is considered the fastest person in the world because he can almost fly over a 100-meter track. An Olympic Games 100-meter race has a tangible conclusion, along with winners and losers. On the other hand, your business, your career and your life don’t. And yes, I acknowledge we are not immortal and will eventually die. That’s a finish line of a different sort; so let’s focus our attention on the rest of the races! We have many “starts and stops” in our lives. They can occur regularly within the course of even one day. The truth is that if we just stop after running hard through one finish line, then we may just miss an
all-important “next race.” A couple of years ago, I received a frantic call from an insurance agents association in Montana. It turned out that one of their instructors for a new professional designation course took ill and had to cancel on them. This left the association with a full class of 40 people and nobody to teach. They were given my name as the next nearest qualified instructor. Fortunately, there was no conflict and I was able to fly to Billings the following week and teach the workshop. The conclusion of the class might have denoted the “finish line.” I’m glad I didn’t stop “running.” Before I left, I asked about other opportunities for the association to have me come speak. As it turned out, my contact was very interested and in charge of conferences and events. Through additional conversations, this “race” has been extended to speaking at two conferences over successive years and teaching another continuing education workshop. From a business standpoint, the revenue and contacts far exceeded that initial project. Had I simply packed up my bags after that first “race,” I would have missed a tremendous opportunity to grow my business and brand. Now it’s your turn. What opportunities have you missed because you stopped running? Have you given up because an an-
swer was “no?” Did you not consider possibilities of extending projects or relationships because they were assumed to be completed? Did you just forget to follow up as promised? My guess is that the answers to these questions are “yes.” I am as guilty as anyone and now I intentionally commit to sustaining the race as long as possible. A “race” is a mindset. “Finish lines” are simply a metaphor indicating the work is done; that it’s over. This might be a client engagement or an event. It also applies to your ongoing professional development. I’ve encountered many people that thought they “knew it all.” There was no need of further learning or challenging themselves. Unfortunately, this thinking can also pervade our personal lives, thus thwarting change and growth as individual people. One important note to remember — If there is no finish line, there are no losers. We may try and fail constantly, and this is expected. Those who don’t have many failures are usually those who are afraid of trying for fear of it. We run many races and some have natural conclusions, yet lead right to the starting blocks of another important contest. Competition isn’t reserved for athletes. Certainly you have competition in business, yet I think too many people don’t think of it the correct way. Competition is viewed as one com-
batant against another dueling it out until there is a winner and loser. Real competition is internal. It’s about striving to do your best in that race, that moment, that day. When you compete internally, you won’t lose as long as you did the best you could. All too often, I hear from people I coach that they aren’t satisfied with their best effort. This is an insidious mental cramp that will keep you from being able to run your races well. You can only do your best with what you have. When that’s not good enough for one race, you simply move the next one. There is no finish line. Your career and life are a series of races run not only simultaneously but also concurrently. This means you have to be an “athlete.” That requires agility, concentration, desire, focus, persistence, strength, flexibility and power. You start at least one new race as soon as you are done reading this column. Run hard and fast and with purpose; and then gear up because the next race will be ahead of you. You may not know what it looks like yet, so be ready. You never know when it might be your most important. • Dan Weedin is a strategist, speaker, author and executive coach. He helps business leaders and executives to become stronger leaders, grow their businesses, and enrich their lives. You can reach him at 360-697-1058; e-mail at dan@danweedin.com or visit his web site at www.DanWeedin.com.
36 |APRIL 2015
WWW.KPBJ.COM
Starbucks with drive-thru coming to Silverdale By Tad Sooter KPBJ contributor Construction began in March on a Starbucks coffee shop and drive-thru in Silverdale at Bucklin Hill Road and Silverdale Way. That’s what permits indicate the building will be, anyway. The Seattle coffee giant is mum on the topic. A Starbucks spokeswoman said the company is “focused on serving customers” at
its existing Silverdale locations and has no plans for a new store opening. She declined to address the permits issued for the project. Property owner and developer Andrew Barber, of Redmond, was not available to provide additional details on the project. Plans approved by the county in February show a 2,400-square-foot coffee shop with a drive-thru window positioned along the north side of Bucklin Hill just east of Silverdale Way. The Starbucks would be the fourth in Silverdale, and the
third with a Bucklin Hill address. Starbucks didn’t directly apply for the development permit for the building itself but was the applicant for other permits issued for the property. County Department of Community Development deputy director Jeff Rowe confirmed a Starbucks was planned for the location. According to county documents, Barber bought the corner property in October for $938,000. He already owned several adjoining retail properties near the intersection.
The new Silverdale Starbucks isn’t the only coffee shop Barber has planned for Kitsap this year. He also recently submitted a site development permit application to the county for a retail building with coffee shop and drive-thru, near Miller Bay Road and Highway 104 in Kingston. The proposal would create a one-story, 4,000-square-foot building to be constructed just east of the Rite Aid on Highway 104. About 2,200 square feet would be dedicated to retail, while 1,800 square feet would house a coffee shop with drive-thru window and patio. No prospective tenants were named in the permit application.
business briefs Business networking organization to hold events in Bremerton, Poulsbo
To RSVP or for more information, go to www.allianceofwomenownedbusinesses.com.
Local professionals from all business industries and trades in the Kitsap community are invited to come network with fellow professionals at the upcoming Visitors Day events hosted by local BNI (Business Network International) chapters. The BNI Sound Referrals, Peninsula Business Partners, Success By Referrals, and Referral Net-Works Chapters are holding Visitors Days on April 21, April 23, May 7 and May 12 in Bremerton. The BNI Waterfront Professionals Chapter is holding a Visitors Day on April 22 in Poulsbo. Members of Kitsap County’s business community are invited to attend, and visitors are encouraged to bring business cards as they will meet local business representatives with whom they can form mutually beneficial relationships. These events are opportunities for local professionals to increase visibility and awareness surrounding their business within the larger community. “Each year the organization helps small business owners across the globe to build their business by referral and thrive despite economic fluctuations,” says BNI Pacific Northwest executive director Micki Peak. To reserve a spot or for more information, call Peak at 360-649-6589 or register online at www.bnipnw.com/ events.php. The fee to attend ranges from $10 to $18 and includes a meal.
Kitsap Business Forum topic will be innovation to stay relevant
Coaching firm founder will be speaker at Alliance of Women Owned Businesses The April Power Series event presented by the Alliance of Women Owned Businesses (AWOB) will feature a presentation by Mary Bicknell on Wednesday, April 8 at 5:30 p.m. at The Inn at Gig Harbor. Bicknell is a noted speaker, author and coach, and she is the CEO and founder of Mary Bicknell.com, an international coaching company. She combines her years of experience as a psychotherapist with her extensive knowledge of sales and business to support female business owners and entrepreneurs. “I am passionate about helping women get out of their mediocre mindset and put their proven systems into action so they can design the life and business they want, guilt-free,” Bicknell says. Her presentation is “How to Find Your Big, Bold Life & Biz Plan.” The AWOB Power Series is a monthly program offering dynamic speakers, roundtable discussions and panel presenters that educate, inform and inspire. It is free to members and first time guests, and $25 for returning guests. The program is followed by a no-host dinner in The Inn’s Heritage Restaurant.
The next Kitsap Business Forum on April 14 will feature a presentation on “Lessons from Those That Last — Innovation and Relevance in an Ever Changing Market.” What keeps business leaders and owners counting sheep at night? The big three reasons for insomnia relate to: • Money — Do I have enough to cover payroll? • People — Are we working on the right things? • Execution — Can I follow through on my strategy? A local panel of innovators will share their challenges and provide valuable lessons that will help businesses remain relevant to thrive in an ever changing market. The panelists will be Anna Reyes-Potts of Trulife, Bruce MacDonald of Applied Technical Systems, Jill Jean of Kitsap Regional Library, Larry Nakata of Town & Country Markets, and Shannon Bruce of Excell Puget Sound Kitsap. Join the forum to hear the unique stories of these organizations and discover insight that will challenge your assumptions and offer best practices you can apply immediately. The forum is held from 7:30-9:30 a.m. in the third-floor meeting room at the Kitsap Conference Center in Bremerton. Parking is free for the event on the Blue level. Anyone who would like to attend should RSVP at KitsapBusinessForum.com.
WWU adds professional development courses at OC’s Poulsbo campus Western Washington University on the Peninsulas will offer professional development courses in its new Continuing Education program this spring. The courses will take place at Olympic College’s Poulsbo campus. The five Continuing Education courses highlight important topics for working professionals in supervisory or managerial roles, offering tips and techniques for marketing, hiring new employees and more.
The first course, Employment Law and Business: What You Don’t Know CAN Hurt You, will begin April 9 and is taught by employment law attorney James McCanna. Interested participants are encouraged to attend McCanna’s Western Lecture Series event, titled “Marijuana Law and Its Impact on Employers,” as a preview of his Continuing Education course. The free lecture will be held at 6 p.m. Thursday, April 2, in Olympic College Poulsbo Room 105. Performance Management: How to Help Your Employees and Your Business be Successful will begin April 17 and is taught by human resources specialist Paula Willems. Multiple Generations in the Workplace: Working Together Effectively will begin April 24 and is also taught by Willems. Marketing to Compound Your Results: ‘What Next’ Thinking will begin on April 7 and will be taught by Dave Mitchell. He will also be the instructor for From Hire to Hero: Training Employees to Become Superstars, that will begin on May 5. In partnership with Olympic College, Western on the Peninsulas offers four-year degrees, free educational lectures, local literature book groups and Continuing Education courses. For more information on the courses listed above, visit wwu.edu/Poulsbo, call 360-94-2733 or e-mail Western. Peninsulas@wwu.edu.
WWW.KPBJ.COM
APRIL 2015 | 37
Regional economy | john powers
Positioned for prosperity and growing stronger
O
n March 19, KEDA hosted the 32nd Annual Meeting of the Kitsap Economic Development Alliance, with approximately 120 business and community leaders in attendance. KEDA board of directors chair Steve Politakis reviewed our 2014 performance, and received approval of our strategic plan for 2015. The meeting also provided an opportunity to recognize and thank outgoing board members, and to confirm new and renewing directors to the board. I personally want to extend my thanks and appreciation for the leadership, vision and energy of outgoing director Jon Rose, president of the Olympic Property Group who is terming out. Jon’s position is being filled by Mark Walsh, who is the VP of real estate investment for the Olympic Property Group. I also had the distinct honor of recognizing the service of Linda Brown, CEO of The Doctors Clinic and KEDA board member since 2008. Linda recently announced her retirement from The Doctors Clinic and is setting out on new adven-
tures. It was my pleasure to present the Economic Development Lifetime Achievement Award to Linda in recognition of her service, and for elevating the standard of health care in Kitsap County and enhancing the overall quality of life and economic opportunities for Kitsap residents. Thank you Linda, and smooth sailing! As I reviewed the preceding year I noted that our alliance and partner/investors have much to celebrate. Together we reached new heights in serving clients, promoting Kitsap opportunities, and strengthening our organization, and 2015 promises to be even better. I encourage you take a look at our 2014 Annual Report and 2015 Work Plan which are available on our website www.kitsapeda.org. Last year KEDA delivered business retention, expansion and attraction services to over 200 business clients, contributing to millions of dollars in new investment in local business operations and hundreds of new jobs. This was accomplished through the dedicated efforts of our outstanding team of economic development professionals: Kathy Cocus, business development director; Theresa Mangrum, marketing manager; Susan Veach, contract
accountant and PTAC instructor; Mary Jo Juarez, PTAC procurement consultant; and Mona Carlson, the newest member of our team – volunteer extraordinaire and PTAC counselor. Kitsap’s 2014 economic development milestones include: the highest local employment levels in nearly a decade; private-sector enterprises we are proud to call clients moved forward with dozens of new capital projects totaling over $500 million; PTAC clients, including Olympic College, garnered over $62 million in government contract work; and, Olympic College and Western Washington University took their partnership to new levels, expanding business baccalaureate programs here in Kitsap. It was also a banner year in our efforts to tell and sell Kitsap’s economic development story. KEDA’s new website attracted more than 27,000 unique visits. And our multimedia marketing campaign, featuring the Kitsap Connected portfolio of videos, was recognized as among the best in the business by the International Economic Development Council (IEDC) at its annual meeting in Fort Worth, Texas, last October. This past year also saw our alliance begin to play an integral role in working with Kitsap County and local municipalities as they embarked on updating their respective comprehensive plans aimed at effectively welcoming and serving an additional 80,000-plus residents that will call Kitsap home by 2035. Our board membership continues to be
comprised of the most senior business and community leaders from throughout Kitsap — our board is truly our alliance’s No. 1 Asset. I want to share a special note of thanks to the members of our board’s executive committee who contribute countless hours of service to our 33-year-old public-private partnership. They are: board chair Steve Politakis, CEO of Kitsap Bank; vice-chair Ben Anderson, CEO of Art Anderson Associates; treasurer Bob Guyt, principal with Rice Fergus Miller; immediate past chair Julie Tappero, president of West Sound Workforce; Silvia Klatman, PAO – Naval Base Kitsap; Kitsap County Commissioner Charlotte Garrido; Bremerton Mayor Patty Lent; and Poulsbo City Council member Ed Stern. Our board members’ collective efforts to champion economic opportunities in Kitsap really do make a difference in the vibrancy of our local communities and economy. On behalf of our staff, I thank each of you for all you do for our community, and ask for your continued support of our essential work. Together we will seize the opportunities that lie ahead to shape and advance an ever more vibrant economy and prosperous community throughout Kitsap and across our region for generations to come. We look forward to working with you to make 2015 our best year ever. • John Powers is executive director of the Kitsap Economic Development Alliance.
38 |APRIL 2015
WWW.KPBJ.COM
car Review | mazda6
Flagship Mazda6 sedan upgraded for 2016 By Lary Coppola For KPBJ
M
azda’s sporty flagship sedan, the Mazda6, has been refreshed for the 2016 model year. The energetic five-passenger, four-door midsize sedan debuted at the Los Angeles Auto Show in November, and is hitting showrooms right about now. Starting MSRP is $21,495. Carried over from the previous generation is Mazda’s Skyactiv direct injected, 2.5-liter inline-4 that delivers 184 horses and 185 pound-feet of torque. Transmission choices remain either a 6-speed automatic or 6-speed manual, with a choice of driving modes. New safety features on the 2016 Mazda6 include blind spot monitoring, rear crosstraffic alert and what Mazda dubs Smart Brake Support, a system that automatically engages the vehicle’s brakes if a collision is deemed imminent. Model Lineup: The 2014 Mazda6 comes in three trim levels: Sport, Touring and Grand Touring. All come with the same 2.5-liter engine as previous models, and all but the entry-level Sport come standard with a 6-speed automatic. It features the 6-speed manual — the automatic is optional.
2016 Mazda6 Standard on all models are daytime running lights, LED rear combination lights, ABS with EBD and Brake Assist, Dynamic Stability Control with traction control, Hill Launch Assist, tire pressure monitoring system, SYACTIV-Body, and SKYACTIV-Chassis. Also standard are 60/40 split folding rear seat, tilt/telescoping steering wheel, steering wheel-mounted controls, A/C, power door locks, folding power mir-
rors with turn signal lamps, power windows (with one-touch auto up/down lighted switches on all windows), auto-dimming mirror, remote keyless entry, pushbutton start, cruise, trip computer, AM/ FM/Satellite/CD/MP3/Auxiliary 6-speaker audio with USB port, Mazda’s Connect Infotainment system, Bluetooth connectivity, HD radio, a 7-inch color touchscreen display and a rearview camera.
business commentary | don brunell
Fossil fuels aren’t going away soon
F
olks in the Pacific Northwest may not like what Matt Ridley has to say, but we should consider his points about energy. Ridley, a British journalist and author of several popular books on science, the environment and the economy, is a businessman and member of the House of Lords. He is often shunned because he owns land where coal is mined. Recently, Ridley wrote in The Wall Street Journal that while oil, gas and coal have problems, their benefits are beyond dispute. He advances three reasons for not giving up on fossil fuels. First, they’re plentiful. That may surprise some, since opponents constantly warn that we’re running out. In 1922, a U.S. presidential commission claimed that, “Already the output of gas has begun to wane. Production of oil cannot long maintain its present rate.” In 1977, President Jimmy Carter warned, “We could use up all the proven reserves of oil in the entire world by the end of the next decade.” But with new discoveries and new technology, America is becoming the world’s
top producer of oil and natural gas. We also are blessed with the world’s largest supply of low-sulfur coal in Montana and Wyoming. Ridley says that, when the shale revolution goes global, oil and gas will provide ample power for decades, if not centuries. Waiting in the wings is methane hydrate, a seafloor source of energy larger than all the world’s coal, oil and gas combined. Second, despite billions in subsidies, alternative fuels have trouble competing. On a global level, the growth of renewable energy has merely made up for a decline in nuclear power. In 2013, about 87 percent of the world’s energy came from fossil fuels, a figure virtually unchanged in the last decade. While the overall volume of fossil fuel use has increased, CO2 emissions per unit of energy have declined. The biggest reason is the switch from coal to natural gas for electricity generation, even though opponents still block lower-emission LNG (Liquid Natural Gas) plants like the one planned in Coos Bay, Oregon. Other problems with renewable energy are space and cost. To run the U.S. economy on wind would require a wind farm the size of Texas, California and New Mexico combined. And because wind and solar are intermittent,
Americans have the ingenuity to export energy and technology if we set our minds to it. Why not encourage research and development of cleaner fossil fuels, along with solar and wind? we would still need coal and natural gas to provide backup power. The cost of subsidized renewable energy is coming down, especially solar. But even if solar panels were free, the power they produce has trouble competing with fossil fuel. For example, in sunny Hawaii where electricity is very expensive, solar is growing and LNG is being substituted for oil-fired electricity. The third issue for fossil fuel is carbon emissions. In Mississippi and China, coal gasification plants are being developed which dramatically reduce greenhouse
Safety features on all models include advanced dual-stage front-impact airbags, front side-impact airbags, front and rear side air curtains, antilock brakes with electronic brake-force distribution and brake assist, dynamic stability control, traction control, tire pressure monitor, LATCH child safety seat anchors and hill hold assist. A rearview camera is standard on all models except for the Sport with the 6-speed manual Walkaround: With many styling cues originally derived directly from the radical-looking Shinari concept car unveiled several years ago, the 2016 Mazda6 conveys an evolutionary presence that includes a more dynamic, athletic look featuring a new front grille and signature wing design combined with bold new LED headlamps. The combination creates an impression of elegance in a midsize sedan that differentiates itself from the crowd with striking good looks that aren’t overdone like some competitors. From the side, the prominent nose looks almost shark-like. The athletic look carries forward with wraparound headlamps, and LED foglamps with flared, geometric housings. The Shinari influence is seen in the deep flowing creases over the front fender that slide into the front doors. The shortened rear deck curves outward, with wraparound LED taillamps. Sporty-looking twin exhaust pipes reside beneath the lower plastic bumper, and an integrated see mazda6 | 39
gases while generating plentiful power on just a few acres. But rather than invest in these technologies, we’re closing coal plants. Living in relative comfort, American critics have the luxury to recoil at the thought of fossil fuels. Meanwhile, more than 1 billion people in other parts of the world have no access to electricity. They burn wood for heat and cooking, but indoor air pollution from wood fires kills 4 million people a year. Americans have the ingenuity to export energy and technology if we set our minds to it. Why not encourage research and development of cleaner fossil fuels, along with solar and wind? Whether one agrees with Ridley is not the question. What matters is, are we willing to look at opportunities rather than blindly reject options we don’t like? • Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business, and now lives in Vancouver. He can be contacted at theBrunells@msn.com.
WWW.KPBJ.COM Check it out!
WWW.KPBJ.COM
APRIL 2015 | 39
car Review | kia soul
Kia Soul EV is electric fun By Lary Coppola For KPBJ
A
lthough totally electric cars make up a minuscule percentage of U.S. auto sales, just about every mainstream auto manufacturer now offers an electric vehicle (EV) thanks to increasingly tough EPA fuel economy standards. That includes Korean automaker Kia, which recently debuted an EV version of its popular, albeit offbeat but hip, Soul crossover. This is Kia’s first pure electric offering in the U.S. The basic specs for the electrified Soul are typical of most contemporary EVs, with Kia claiming an operating range of 93 miles between charges — second only to the Tesla Model S. The Soul EV has three charging ports, including Level 1 and Level 2 ports for AC charging, as well as a 480-volt DC fastcharging port — the standard for public charging systems, which are steadily becoming more widespread. Using a 240-volt, 50-kW quick charger, full charging takes five hours, but will bring the batteries to 80 percent in as little as 33 minutes. The 480-volt public systems will totally recharge fully depleted batteries in about 30 minutes or less, while it takes around 24 hours using standard 120-volt household current. An optional 240-volt home charger can be purchased through your local Kia dealer. Dealers who sell Soul EVs will also offer free recharging to their customers. Walkaround: The Soul totally nailed that ultra-cute 5-door box-on-wheels design pioneered by the Honda Element and Nissan Cube — both of which are now history. The Soul EV looks a lot like the gaspowered Soul, with the differences being very subtle — for example, a larger, tiger nose sliding grille hides the charging ports. The Soul EV comes in four color choices: Caribbean Blue with Clear White roof, m a zda 6 | f rom 3 8
lip spoiler is added on the Grand Touring version. Chrome is used subtly, highlighting without overwhelming. Interior: The driver-centric cockpit and interior underwent significant changes, including redesigned front and rear seats, and parchment leather, replacing the almond leather on the Grand Touring model. There’s also new instrumentation, including a head-up display, a redesigned center console, new armrests, and a new electronic parking brake replaces the hand brake on previous models. Mazda has also addressed interior fit and finish issues resulting in a more upscale look. According to Mazda, cabin noise has been reduced 10 percent on rough roads and 25 percent on highways thanks to re-engineered sound dampening and insulation.
Shadow Black with Inferno Red roof, Titanium Gray and Clear White. The signature two-tone theme is exclusive to the EV, while other unique exterior design features include color accent trim in the front and rear fascias, projector headlights, LED positioning lamps, and LED tail lights. “Eco Electric” badging replaces the “Soul” fender trim found on the gas-powered version, and the EV gets its own distinctive 16-inch alloy wheels rolling on specially engineered Super Low Rolling Resistance tires that help improve range. Interior: The latest version of the gasoline-powered Soul made tremendous strides with improved cabin materials, ride and noise levels. Since there is no internal combustion engine noise, the EV is even quieter — exceptionally so for a vehicle this size, with only slight traces of road and wind noise. Setting the interior apart from its gasoline-powered sibling is the use of recycled materials and extensive use of bio-based organic materials — 52.7 pounds worth in the interior plastic alone — along with BTX-free paint on the audio system surround, vent bezel and floor console. Biobased plastics derived from cellulose and sugarcane include the door panels, headliner, seat trim, roof pillars and carpeting. Organic, bio-based materials are used in 19 different interior locations. Another differentiation from the gaspowered Soul is bright white accent trim on the center console, instrument panel and door panels, adding a light, spacious feel to the passenger space. The seats are quite comfortable and the EV-only digital instrumentation is crisp and easy to read. Kia’s newest version of its UVO infotainment system makes controlling media and other functions easy via the standard 8-inch capacitive-touch navigation screen. It includes downloadable apps, such as Yelp, iHeartRadio and Sound Hound. To combat range anxiety, there’s also an app Like other newly redesigned Mazda vehicles, the 2016 Mazda6 also gets the Mazda Connect infotainment system, which allows users to access various features and apps via a paired compatible smartphone. The new center stack is clean, with easily identifiable buttons and knobs within easy reach of the driver, although many of the same functions are duplicated on the smaller steering wheel. The 5.8-inch color touchscreen has been upgraded to a 7-incher that sits front and center on the instrument panel. The 11-speaker Bose audio system kicks butt. Visibility is good all around, with adequate head and legroom. The rear seats can accommodate 6-foot passengers without any knee cramping or head bumping. At 14.8 cubic feet, trunk space is slightly less than some competitors in its class,
The new Kia Soul all-electric vehicle. that pinpoints recharging stations. Under The Hood: The Soul EV is powered by a liquid-cooled AC synchronous permanent magnet electric motor rated at 109 horses and 210 pound-feet of torque. The motor sends power to the front wheels via a single-speed constant ratio transmission. Located beneath the floor, a 360-volt, 192-cell, 27kWh, air-cooled, 200 watthour/kg, lithium-ion polymer, gel-electrolyte battery pack feeds the motor. Rear seat legroom is reduced by just over 3 inches from the gas model, while the standard 120-volt charger, which stows under the cargo floor, takes a 5.1 cu. ft. bite out of luggage capacity, reducing it to 19.1. Behind The Wheel: We had an opportunity to drive the Soul EV in the coastal California environs around toney Dana Point. In spite of the Soul’s added weight due to the batteries, like all EVs, the instant torque delivered by an electric motor means quick acceleration — so chirping the tires from a dead stop is easy. While the 0-60 drill isn’t a record-setter, the initial eruption of power off the line is enough to make simple cruising around town fun. Kia enhanced the Soul’s structure to ac-
commodate the battery weight, adding torsional rigidity. Because of the battery location, the center of gravity is lower than the gas model, so the EV handles a bit better. The Soul isn’t really meant for aggressive driving, but we drove it hard and came away impressed with its handling. The electric power steering is a little heavy, but responsive to quick maneuvers. Like all EVs and hybrids, coasting and regenerative braking are important to stretching battery life. The Soul has two Eco-operating presets with Drive and Brake modes for both. According to Kia, Brake mode in the Eco On setting can add as much as 12 percent recovery — which translates into battery replenishment. Whines: The initial rollout for the Soul EV is limited to California, Oregon, New York, New Jersey and Maryland. Bottom Line: EVs have progressed tremendously in recent years, but unless you live in the city, and never take road trips, an EV probably won’t be your primary vehicle. However, for a commuter, or someone who just wants a green grocery-getter, the Kia Soul EV is a genuinely solid vehicle that’s sensible, sustainable, and downright fun to drive.
but the long, deep layout accommodates plenty of luggage. Under The Hood: The Mazda6 features the same aforementioned 184-horse, 2.5-liter, inline 4-banger as previous models. While the standard gearbox on the base Sport model is a 6-speed manual, it comes standard with a hill-hold feature. EPA estimates are 25/37/29 mpg city/highway/ combined for the manual and 26/38/30 with the automatic. Behind The Wheel: Thanks to MacPherson struts in front and a multi-link setup in the rear, the Mazda6 delivers a ride that’s sporty, firm and compliant, with minimal body roll around sharp curves. The all-electric power steering is surprisingly responsive, keeping the driver connected to the road without that overly heavy feeling. As with all smaller displacement en-
gines, the lack of power is obvious in demanding situations, such as climbing and/ or passing on steep hills. But on a couple of runs to the Olympic Peninsula and back, along with a jaunt to Portland, the inline-4 handled passing situations and moderate grades with surprising power and agility. Put the pedal to the metal and you’ll get where you want to go just fine. Whines: Although the larger touchscreen is clear and easy to read, we found some navigation functions — such as setting, changing or canceling a destination — annoyingly non-intuitive. Bottom Line: With an upgraded, stylish design, pleasing driving dynamics with an added fun factor, and respectable fuel economy, the refreshed Mazda6 offers a pleasurable alternative to the usual boring, look-alike suspects in the crowded midsize sedan segment. It’s worth a look.