IDAHO
Winners and Losers How Sandpoint kept a growing company in its city — by evicting small businesses BY DANIEL WALTERS
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ver since Chris Tate got the letter from the city of Sandpoint two weeks ago, he’s been on the phone with his brother, trying to save the company they founded. For the past six years, the Tates have run a premium cereal company called Lifestyle Granolas out of the Bonner Business Center. For 22 years, the Center had been an “incubator,” intended to serve as an inexpensive startup location allowing businesses to share resources as they grew. Run by the city of Sandpoint, the center was equipped with a commercial kitchen for food manufacturers and multiple loading bays for distribution. But the letter, signed by Jeremy Grimm, Sandpoint’s planning and community development director, informed him that he would be evicted in 45 days. With one exception, every tenant in the Center, including more than a dozen commercial kitchen users, is being kicked out. The six tenants and kitchen users have until Sept.
30 to leave. Before then, the Tates need to find a new commercial kitchen, deal with $8,000 worth of raw inventory, find a way to ship their product and decide whether their business can continue, or whether they’ll have to lay off their two employees Chris Tate of Lifestyle Granolas and shut down. “We’re basically at a standstill,” Tate says. “We might have to close our doors.” But to Grimm, the planning director, there was a very good reason for the city’s decision. “It’s a story of how, in the fiercely competitive national market, a small community was able to scrimp and fight and keep [a major] company here,” Grimm says.
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ead-Lok, an international manufacturer of medical devices like electrocardiogram electrodes, was one of the original tenants in the Center, and perhaps the most successful. Earlier this year, it was purchased by the much larger, New York-based Graphic Controls. “Graphic Controls was for us the best choice because they’re committed to leaving the company here in Sandpoint,” Lead-Lok CEO Chris Healy told the Bonner County Daily Bee in April. In fact, that commitment was anything but guaranteed. The only way Sandpoint could stop Graphic Controls from moving Lead-Lok was to evict the rest of the Center’s tenants, Grimm says, giving Lead-Lok room to expand. Increasingly, states and cities find themselves locked in bidding wars, not just to attract new businesses, but to stop existing businesses from being seduced away. As businesses demand special incentives, even small cities like Sandpoint are asked to choose which businesses succeed, at the cost of others. For Sandpoint, the stakes have been particularly high: “Fear and despair for the future hang heavy over the community with every sector of our local economy bracing for the eventual fallout,” Grimm wrote in his eviction letter to the tenants. He was referring to the bankruptcy in April of clothing retailer Coldwater Creek, the area’s largest private employer. It cost the region more than 600 direct and indirect jobs, and threatened to cost a lot more. ...continued on next page
The Bonner Business Center is ending its run as a smallbusiness incubator.
SEPTEMBER 4, 2014 INLANDER 13