NW Business Expo: Thursday, October 18
M A G A Z I N E Troy Muljat
Building Businesses and Family
Port Commissioners: McAuley, Walker, and Jorgensen
help or hurt?
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TABLE OF CONTENTS
Longshoreman Darren Williams (photo) joins four other informed ‘voices’ who, in their own words, speak of issues and importance of the November vote to determine the size of the Bellingham Port Commission. Called to question is whether five would serve public interest better than three as the Port of Bellingham moves ahead on a downtown waterfront plan, more airport expansion, hiring an executive director, and defining its mission.
The fastest-growing westernmost airport, Bellingham International, has flourished on vacation routes and Canadian travelers to become one of the region’s best businessgrowth stories. And, a Scotty Browns “Socialhouse” (p. 22) behind security lines adds a groundbreaking ‘buzziness’ success tale as part of airport expansion.
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Troy Muljat selfconsciously, but in the spirit of sharing lessons learned, talks about a range of business and technology ideas upon which he has structured the professional life he always wanted: working for himself, using tech toys. And his poignant story of adopting in Ethiopia and China, well, break out a hanky.
Throwing a “Tantrum” at the power-tools industry, electric screwdriver inventor and former robot-builder Joel Townsan dropped out of college, tended bar (and other side jobs), and fueled his dream of start-up Flip-Out Screwdrivers, LLC. He’s headed to market with a tool that works 168 ways from 17 angles, and he tells you about another perfect screwdriver, too.
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TABLE OF CONTENTS
BARKLEY REGAL CINEPLEX 16!
TD Curran has blossomed as one of the fastestgrowing businesses around – almost 400 percent growth to a $15m market share – guided by a husband-wife team in a consumer market that makes the company the Apple of today’s redhot iWorld….Boys & Girls Clubs of Whatcom County and good-neighbor businesses create support beyond just writing a check, with innovative ways to lead 11,000 kids (page 66)…. Life in the Tech Lane: Windows 8 and Phishing (page 40).
Big deal in the community – anticipation built over a two-year wait. Big deal in the economy –$25 million in construction, 100s of jobs. Big deal in The Barkley Company – its largest and most vast project ever. Opening in December, a sight for IMAX, RPX, and 3-D eyes and ‘best movie screens you’ve ever heard’…. (Photo courtesy of The Barkley Company)
From lessons learned from a contestant on Shark Tank to answering the phone at work (pages 56-7), the science of bag ban (page 72), Medicare facts (page 74), a concerned look by a county official at proposed subsidized housing and its effects on downtown merchants (page 76-7), and train trauma (page 78): Our lineup of guest columnists give you a multi-course meal for thought.
In an issue jam-packed with high-tech stories, as our giant NW Business Expo & Technology Showcase draws night (Oct. 18, page xx), one demonstrates how a survivor kept up in an industry gone topsy-turvy – photography, from film to digital imaging. Quicksilver Photo Lab in Bellingham remained resilient and saw the big picture.
English Crackers, pumpkins, and a new distillery Gary Stonedahl turned a British holiday tradition into a dominant U.S. market share with Olde English Crackers (p. 58), turning heartbreak into good cheer with his family. From Halloween to New Year’s, the pumpkin reigns (p. 62). And BelleWood is no longer all about apples (p. 71)
In the Summer issue we printed the following erroneously: --The names of Brad Rader’s family in the Board of Directors bio section (p. 70): Spouse, Kari; daughters, Arianna, 9, and Sofia, 7, and his alma mater, Oregon State University (BA). --Henk Berends’ first name in a feature story about TriVan Truck Body (p. 19). Regretfully, we apologize sincerely for the mistakes
M A G A Z I N E The Publication of The Whatcom Business Alliance
Managing Editor: Mike McKenzie
Debbie Granger Allysun Kirkham, Intern
Graphic Designer: Jason Rinne
Special Contributors: Laura Bostrom Don Brunell Tony Larson Ken Mann Todd Myers Bob Pritchett Roger Stark Big Fresh Media
Subscriptions: Janel Ernster Administration: Danielle Larson Feature Writers: Frances Badgett Michael Barrett Dave Brumbaugh John D’Onofrio
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Cover Photo: Courtesy of the Port of Bellingham Photography: John D’Onofrio Mike McKenzie Some Photos Courtesy Of: The Barkley Company Muljat Group and Muljat Family Olde English Crackers Port of Bellingham Harriet Spanell Stoney Ridge Farm Wild Squirrel Nut Butter
For editorial comments and suggestions, please write editor@ businesspulse.com Business Pulse Magazine is the publication of the Whatcom Business Alliance. It is published at 2423 E. Bakerview Rd., Bellingham, WA 98226. (360) 671-3933. Fax (360) 671-3934. The yearly subscription rate is $20 in the USA, $48 in Canada. For a free digital subscription, go to businesspulse.com or whatcombusinessalliance.com. Entire contents copyrighted © 2012 – Business Pulse Magazine. All rights reserved. POSTMASTER: Send address changes to Business Pulse Magazine, 2423 E Bakerview Rd., Bellingham, WA 98226.
WHATCOMBUSINESSALLIANCE.COM | 7
Dave Adams, President Emergency Reporting
Randi Axelsson, Sales Manager Silver Reef Hotel, Casino & Spa
Janelle Bruland, President / CEO Management Services NW
Kevin DeVries CEO Exxel Pacific, Inc.
Greg Ebe President / CEO Ebe Farms
Andy Enfield Vice President Enfield Farms
Brian Gentry, Manager Community & Business Services Puget Sound Energy
John Huntley President / CEO Mills Electric, Inc.
Sandy Keathley Previous Owner K & K Industries
Paul Kenner Executive VP SSK Insurance
Becky Raney Owner Print & Copy Factory
Jon Sitkin Partner Chmelik Sitkin & Davis P.S.
Doug Thomas President / CEO Bellingham Cold Storage
Kathy Varner CEO VSH, Certified Public Accountants
Karen Winger Senior VP, Commercial Banking Wells Fargo Bank
Not Pictured: Guy Jansen, Director Lynden Transport, Inc.
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WBA, 2423 E. Bakerview Rd, Bellingham, WA 98226 â&#x20AC;˘ 360.671.3933
WHATCOMBUSINESSALLIANCE.COM | 9
LEADING OFF Tony Larson | President, Whatcom Business Alliance The Whatcom Business Alliance is a member organization made up of businesses of every size and shape, from every industry. The WBA enhances the quality of life throughout Whatcom County by promoting a healthy business climate that preserves and creates good jobs.
Port Commission: Facing major decisions influencing business, future of waterfront and the entire region
’d like to thank each of you for the momentum you’ve created for the Whatcom Business Alliance. We’re adding new members every day, and we are working on a number of initiatives to facilitate business success and community prosperity. Please join us as we host an event Thursday, Oct. 18, at 4 p.m. at the Sportsplex in Bellingham.
The Port of Bellingham
We anticipate a sellout of this event, which is part of the free Northwest Business Expo. But you must pre-register to attend the WBA event. Call our program director, Shannon Funk, right away at 360.746.0418. Recently, our board of directors and several members participated in a tour to learn more about the timber industry. The tour was very informative and valuable. Our board has decided it regularly will host company and industry tours as a benefit to our members. We’ll do this not only as a way to meet and network with other business leaders, but to learn more about other businesses and industries, what issues they face, and how they succeed and grow in a very competitive and challenging business environment.
The Port of Bellingham represents an important economic driver in our community. Last April they officially assumed the role as the state-designated Associate Development Organization (ADO) for Whatcom County. Additionally, they operate the Squalicum and Blaine marinas, the passenger terminal in Fairhaven that serves the Alaska Marine Highway System, and a shipping terminal in Bellingham. The Port has significant real estate holdings all over the county under its management and it operates the fastest-growing airport on the West Coast (see feature story on page 18). While the Port is quasi-governmental, often finding itself in the middle of heated political controversies, it operates with a seasoned
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Business Pulse Magazine is one of many ways the WBA will share information about successful companies and individuals, what they do, and how they do it. We’ll discuss issues from a business perspective and keep you informed about the people, trends, issues, and news that impact business success and community prosperity. All WBA members receive the printed and digital versions of Business Pulse Magazine free. You can subscribe at www.businesspulse.com.
and competent staff and must continue to operate effectively as a significant business interest. The Port is governed by a board of commissioners. It is vitally important that these commissioners bring a business perspective to their role. A controversy at the Port this year centers on the departure of the previous executive director last spring. What resulted was a call for and subsequent ballot measure to increase the Port commission from three to five members. Some advocates also pressed for electing the two additional members as at-large positions, rather than representing specific geographical districts. Resistance came from those who believed this was an attempt to crowd out county participation and load the commission with a Bellingham-only perspective, and to turn the Port into an environmental protection agency rather than an economic development organization. Proponents argued that three commissioners were not enough to tackle complicated issues facing the Port. In this issue, we provide the pros and cons from several perspectives (starting on page 26).
Northwest Business Expo On Thursday, October 18, I personally invite you to join us for the 27th Northwest Business Expo
and Technology Showcase, the and using his success to leverage budding local entrepreneurs. One longest-running expo of its kind. community prosperity, but he is of their clients, Joel Townsan, a It takes place at the Sportsplex in also an amazing father and family young entrepreneur who invented Bellingham and begins at 11 a.m. man. the next innovation in electronic By the time this magazine reaches The Boys & Girls Clubs of screwdriver technology is featured you, exhibitor booths could be Whatcom County positively impact in this issue as well. sold out, but feel free to call thousands of kids and families You’ll also learn more about TD 360.746.0411. in our community, but could not Curran, Scotty Browns, Quicksilver More than 70 business exhibido so without the generous supPhoto, Olde English Crackers, tors will participate, and the new Regal and the event feaCinema movie mulitures three outstandplex under developing opportunities to ment in the Barkley brush with experts. Village. • Whatcom County A new merchant chapter of the group in downtown Technology Bellingham has Alliance Group formed as a result (TAG) will host of concern about a a CEO roundsubsidized housing table discussion at project proposed by 11:30 a.m. Catholic Housing • The Washington Services. The City Policy Center of Bellingham will host a Small bought the buildBusiness Forum at ing with parking 2 p.m. funds, then sold it • Whatcom to CHS below cost Business Alliance without input from will host its first taxpayers and votPresident’s Club ers or downtown Speaker Series businesses. The event at 4 p.m. merchants are conNew gate areas serve steady flow of travelers at Bellingham International, the busiest airport over the last few years on the West Coast. (Photo courtesy of Then, starting at cerned that the projPort of Bellingham. Thank you.) 5:30 p.m. the WBA ect will be bad for will host Business business. Whatcom After Hours, the County Councilman port that comes from the many largest business networking event Ken Mann took heavy criticism businesses and volunteers who of the year in Whatcom County. from constituents for expressing step up to make it happen. Learn You’ll enjoy the food and drinks his concerns. In this issue, as one more about the five county clubs’ from some of our leading local of our several thought-provoking programs, especially a unique eateries. Read all the details on guest columnists, he provides his write-your-own grant program pages 38-39. thoughts about the project (see initiated by Doug Thomas, CEO of page 78). In this issue Bellingham Cold Storage. We’ve brought you a number Have you ever seen the televiof other columns and features in In this issue, enjoy getting to sion show Shark Tank? Shopping this issue. If you have suggestions know more about the chairman at Barkley Haggen, Laura Bostrom regarding business news, successof the WBA board of directors, from the Northwest Innovation ful businesses, people, issues or Troy Muljat, in our Personally Resource Center ran across a conindustries that you’d like to see Speaking feature. With great testant from the ABC-TV hit show. covered, please drop us a note at success comes great responsibilShe discussed how the program firstname.lastname@example.org Your ity. Muljat personifies the kind of works from the inside. The Shark suggestions are always valued and businessperson we should model. Tank focuses on investment fundappreciated. A self-described “serial entrepreing, and Laura’s guest column Enjoy the issue! neur” who is involved not only in explains what the IRC can do for building businesses, volunteering,
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Personally Speaking ... with
Serial Entrepreneur: Builder of businesses and family The managing broker of commercial real estate at Muljat Group and co-founding partner in three business startups, he addresses working for self, the technology advantage, and his remarkable three-nationality family of 8.
roy sat on one side of a table begrudgingly responding to questions inside The Muljat Group offices in Bellingham. Not begrudgingly like a curmudgeon, or uncooperatively, or anything other than cordial and readily conversational. Begrudgingly as in, “I hate that this article is about me. I’d rather it be about somebody else. My achievements are more about others. Donate the page, and send money to a children’s adoption fund….” Still, Troy wove a compelling story about both business and a family wrapped around good-will church mission trips. During a couple of hours of conversation, topics ran, literally, all over the world – from a vicarious dip into sports journalism, to the selfdescribed “nerd at heart” who 12 | BUSINESSPULSE.COM
has succeeded spectacularly and failed spectacularly with Internet start-ups, and to the heartwarming “long trips across oceans” that created Troy and wife Heather’s personal Eight is Enough at their Lynden household.
WHAT MIGHT HAVE BEEN: Like many kids I thought I was going to be a professional baseball player. I loved pitching. In college I was in the business school majoring in marketing, but didn’t have a lot in mind about a career yet. I became sports editor of the school paper because I loved sports and I could go to college and pro games in Seattle free.
PURSE SEINE FISHING … My grandfather, Frank, and my father, Frank Jr., were commercial fishermen, in both this area and in Alaska. I fished with them all my early life around here. They operated three purse seiners. The impact of the Boldt Decision changed their life (in 1974 and ’79, see explanation below), and mine. I knew I wasn’t going to do that for a living. My father quit fishing and went into real estate, and I have worked in that field ever since high school, essentially. I’ve dreamt about it many times, but never regretted not fishing.
The BOLDT DECISION Federal Judge George H. Boldt ruled on Feb. 12, 1974, that some Indian tribes in Washington had salmon fishing rights by treaty. The historic ruling basically divided the fishing harvest equally, cutting the non-tribal fisheries’ catch by half, forever changing the commercial salmon fishing industry in Washington. In 1975 the 9th Circuit Court upheld the ruling, and on July 2, 1979 the Supreme Court also affirmed it.
The Muljat family (l. to r.): Bryce, Chloe, Cameron, Luke, Troy, Sadie, Heather, and Marissa (Photo courtesy of Troy and Heather Muljat)
… AND MICROSOFT: In 1991 during college I interviewed with Microsoft at a job fair. I called my dad and told him they offered me a job. He told me there was no way I was going to leave school. One time I looked up
the value of the average option package on that Microsoft job, and it was $950,000 – just on the options! I just didn’t have the kahunas to go against my dad’s wishes. Dang it….(laughter)
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Working out is part of my life, and regular exercise is a priority. BAC keeps me moving.
WHATCOMBUSINESSALLIANCE.COM | 13
Pictured here on Wall Street in NYC: Troy Muljat is bullish on business adventure throughout the E-universe. (Photo courtesy of The Muljat Group.)
‘E’ IS FOR ENTREPRENEUR: My first actual job I sold crayfish door-to-door—I’d catch them, and go sell them. But, I’ve never really had a job. Creating your own way has always been my way. I remember in college going to a job fair. Representatives were there telling us students about this benefit and that benefit their businesses offered, and I was thinking, ‘I want to be that guy giving out those benefits.’
WORKING FOR SELF I always knew I wanted to do something in business of my own accord, work for myself, and use technology. I still love to fish, and I believe in playing hard as well as working hard. I’ve never known what 8-to-5 means.
AN $PU LESSON LEARNED– $ELLING V. (no $)PORTSWRITING: My junior year I switched to the business ad manager’s position because I noticed something. As sports editor my pay was less than the student body president, and I could make 10 percent commission on ad sales and still have a press pass to games because I 14 | BUSINESSPULSE.COM
was training the new sports editor. I sold my quota of ads for the whole school year in half the year, so they increased my commission rate to 25 percent. As sports editor I’d been up all night every Tuesday putting out the pages. As ad man, I’d go to the game and then be gone.
the appraisal position in 1994 and went into a venture with a couple of buddies that we called the Computer Wave. We started a newspaper on a computer, and we were marketing this thing back when Internet was not a household name. It flopped. From that failed online venture I had caught my buddy’s vision (electronic publishing), and went to work for a startup called fine.com. The owner and I pitched the owners of Windermere Real Estate and we designed and created windermere. com. I’d never had a computer programming course. To the best of my knowledge we were the first real estate company that published a website, and we got written up in the Seattle newspapers in 1995. It was a huge deal. Burnt out in Seattle, I married my high school sweetheart, Heather, and we moved back here (Whatcom County) in the fall of ’95. I went into the family business. My dad had started the Muljat Group in 1988. I went to work there, selling and appraising. That’s when I began using the business technology.
‘E’ IS FOR ELECTRONICS
“I always knew I wanted to do something in business of my own accord, work for myself, and use technology.” CAREER TRACK OF REAL ESTATE ACTIVITIES: Encouraged by my father, I had my real estate license by the time I was 19. At first after college I went into commercial appraisal work as an apprentice with PGP Valuations in Seattle (the largest appraisal firm on the West Coast). That taught me a lot. After a couple of years I left
I’m a techie at heart, a nerd really, ever since I was about 12. I remember having my first computer, a Commodore 64 and my buddy Paul and I got so excited when we sent something across a 300-baud modem. To help pay for school as a sophomore and junior I was running the back-end of a giant computer system, about half the size of the building. Now I use all Mac products— IPad, iPhone, MacBook. Evernote (app) stores all my notes digitally. All my files store and share in Dropbox. Gmail is key for email and calendar sharing across all devices. I use Gqueues (a gmail plug in) for task management. Each device is sync’d so I never have to worry about where each file is. I try to “live in the cloud.”
Technology is great, if you really use the tools. But nothing beats a face to face meeting, or a phone call instead of an email.
THREE AREAS OF HIS BUSINESS OPERATIONS: One is the Muljat Group that my father owns, running the commercial real estate department. It involves in investment sales, leasing, appraisals, brokerage. We have helped investors buy and sell more than $250 million in investment property and appraised over $1 billion in property. Two, Andre Molnar and I bought Remax Property Management in 2002. It’s now Landmark Property Management Professionals since 2007. After adding another partner (Brian Finnegan) and another company acquisition (Property Management Professionals) it has grown significantly, about 15 times the gross revenue of the first year. We man-
age about 1,500 units totaling half a million square feet throughout Skagit, Island, Snohomish, and Whatcom Counties. About 80 percent of our holdings are in Whatcom County, and we’re the largest property management company north of Everett.
“Technology is great, if you really use the tools. But nothing beats a face to face meeting, or a phone call instead of an email.” Three, working in the development side of real estate with Andre Molnar and Kent Thomas, we wanted to our own commercial real estate holdings. We basically put partnerships together and have built projects like Harris Square,
McKenzie Square, and Ferndale Station, and purchased projects like the Bellwether Hotel. We put together projects with more than 200,000 square feet for multifamily housing, another 60,000 square feet of retail in Oak Harbor, and 45,000 of retail in Ferndale. It’s an investor-developer business in which we sell, broker, appraise, and lease through the Muljat Group.
….AND THE NEWEST VENTURE: NVNTD—a word play on ‘invented’—is an idea formed from a concept with partners Ben Kinney (real estate background), Mark Lee and Doug DeVries (Big Fresh Media, web and app developers). We are currently in development on a national real estate portal and tools online we call Blosser. We have several supplemental products like Live City Guides, Real Launch, and Investment Property Valuator.
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TROY MUJLAT IVP is an app that Big Fresh and I developed for cash flow analysis in my industry. NVNTD is a startup we’re very excited about, combining real estate and the Web again. Stay tuned….
Luke had. We had the Health Department practically living in our house for six months instructing us on what to do to get him healthy. Because of a law preventing children from leaving their country after age 2, we rushed down there five days before he turned 2 and brought him home.
met some friends on a mission trip in Ethiopia, and we learned about 140 million orphans. Compare that to 400-to-600,000 kids in America in foster homes. Through this process we have founded an adoption fund called “Families of Hope.” CONTINUING TO EXPLORE THE Our goal is to reduce the burden E-NIVERSE: for Whatcom County families that want to adopt. I love to keep the At the time, it ideas going, and always was scary – you go remain flexible. That’s through a lot of emopart of the curse. tions. People would Where’s the next job in say, “You’re crazy, why hiding? We talk about would you ruin your that at national semilife?” You wonder if nars (as part of a comyou’ll love them the mittee with the National same as much as your Association of Realtors.) own daughters and You miss 100 percent sons? Typical fears. of the shots you never Think about this, we take. Life is filled with had legally adopted risks – you get them, Luke and we went to you take them, and it’s Ethiopia to meet this okay to be afraid, and child, he’s 2, and he’s to fail. It’s important in not happy one bit to business that you surleave with you. Look— round yourself with the (showing photo of Luke right people and develcrying at the exchange) op great relationships. he bawled when we ADOPTING TWO took him. You learn to FARAWAY ORPHANS: love unconditionally, and that sounds easy For Heather and I, but you don’t know if it’s always family first. you can until you’re in We had four children High-rise offices and condominiums in Fairhaven stand among Muljat’s the moment. – Cameron is 15, Chloe commercial real estate holdings and management properties. When we went to get (Photo courtesy of The Muljat Group.) 13, Marissa 11, and Sadie we were in China Bryce 8. One day seven three weeks – she is years ago Heather came We actually had started the profrom Fenyi County of the Jiangxi to me and said, “I think we’re cess for adoption in China first. Province – and we took our two being called to adopt.” I thought But God changed that and we got daughters to meet their sister. The to myself, “You’re crazy.” the message, ‘I’ve got this little boys met her online in this age of But through an educational black boy for you to take into Skype. process, a long story, in 2008 we your home.’ We learned a lot through the adopted Luke Mamush Muljat Sadie came to us with a hole in process, and we’ve grown so from Ethiopia, and in 2009 we her heart, and we knew she ran much. We feel so blessed. Here adopted Sadie Zhixia Muljat from the risk of possibly needing openwe are with a multi-racial family. China. Mamush means ‘little boy’ heart surgery. She did not require That’s a challenge, different but in Ethiopia and he is 5; Sadie is 4. the surgery, and both of them are a good kind of different. It’s been Luke had been abandoned, and healthy, active little children. fun coming together with othhe had been treated for and surThis all started through Sunlight ers who have adopted from other vived tuberculosis. The mortality Church and Hope 1.27 when we countries. We have Bible studies in rate for children in Ethiopia is 20 moved to Lynden. In the process our homes, and social gatherings. percent by age 5. We also received we learned about Sadie, and then I never thought of myself as a note telling of other ailments 16 | BUSINESSPULSE.COM
an advocate for adoption, yet I consider myself adopted. As a Christian, we’re all adopted.
OTHER MISSION TRIPS: We’ve gone to some of the poorest parts of the world. I have been to several parts of Mexico. Down there we witnessed people living in a garbage dump. I can actually say I have been to a jail in Tequila, Mexico. In Indonesia we worked among the largest Muslim population in the world, and mostly fundamental radicals. At a cemetery we went to in Indonesia, there were 40 orphans living in a small leanto on site. I don’t think I will ever forget their faces. There was a 10-lane freeway interchange where 400 people lived in boxes under it. Kids were living next to open sewage, and they were happy you were there. They had, maybe, one hot meal a day, yet they offered us their
food and sang us songs. We were laughing and crying—really crying. All surreal experiences. Hey, maybe I should gripe and moan more about the size of my home or boat….
“I hope to see businesses work together to help mentor and incubate young business owners and entrepreneurship.” A LESSON FOR THE ASPIRING: I tell the young entrepreneurs they should spend a week, two weeks, even a month doing something totally unselfish. A mission trip, or a project of some kind. Try serving someone else. Get way out of their comfort zone. So many I meet don’t get out of the four cor-
ners of Whatcom County, let alone Seattle or the state of Washington. I think it’s important to do that.
LEADING THE NEW WHATCOM BUSINESS ALLIANCE AS CHAIRMAN OF THE BOARD: I hope to see businesses work together to help mentor and incubate young business owners and entrepreneurship. We have amazing resources with Western Washington University, Whatcom County Community College, Charter College, Trinity Western University, and the Bellingham Technical College all educating students daily to reach their dreams and goals. I would like to see businesses partner with those institutions and students.
Edited from an exclusive one-toone interview with Mike McKenzie, Managing Editor, ©Business Pulse Magazine, 2012. Photos courtesy of Troy and Heather Muljat and the Muljat Group.
2233 James St. Bellingham, WA 98225 1-800-244-1324
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Airport soars into economic spotlight New routes, Canadian travelers, make BLI the fastest growing airport Compiled by Special Correspondents and Business Pulse Staff
onstant change and continuing growth have become constants at the Bellingham International Airport that have turned it into perhaps the strongest economic-impact business story of the last decade in Whatcom County. During 2004 when a small airline, Allegiant Air, “discovered the Bellingham market” – as Aviation Director Daniel Zenk put it—that became the tipping point, of sorts.
Rapid and radical change, basically in the form of expansion, and a 25 percent average growth rate became the routine thereafter. Making that combination of and sweeping change and controlled growth, two seemingly opposite forces, work for the benefit of Whatcom County has required steady direction from the Port of Bellingham staff and elected commissioners. With no slowdown foreseen, the next round of that management lies in an Airport Master Plan due for first drafting by December and for adoption by early Spring 2013. This next, giant step raises questions: Will it be forward, backward, sideways, or in place? More quick-paced growth as airlines keep finding routes that travelers love into our gateway to the San Juan Island and British Columbia? “The growth rate (in passengers) slowed a bit this year,” Zenk said, “to between 12-15 percent. But we’re still the fastest-growing airport west of the Mississippi River, especially along the West Coast.” Managing the wildfire growth as a publicly-owned asset includes targeting investments so that they provide the highest benefit, and then balancing these investments against the risk that future usage rates could change. “We’ve successfully operated off of return on investment, rather than bonding and raising taxes,” Port Commissioner Scott Walker said. All the while, staff and commissioners must consider both the positive and negative impacts of a growing airport. But first the facts. 18 | BUSINESSPULSE.COM
Choices of bookings out of Bellingham International this year ranged among 10 different nonstop destinations, including Hawaii (both Honolulu and Maui), Denver, Portland and others. Four commercial airlines operate out of Bellingham: Allegiant Air, Horizon Air, Alaska Air, Allegiant Air and (seasonally) Frontier Airlines. After the Sept. 11, 2001, terrorist attacks and the subsequent departure of United Airlines from Bellingham, the number of flights and passengers flying locally dropped dramatically. During 2000, about 94,000 outbound passengers flew. By 2003, that number had dropped to 63,800. Slowly, then, travelers returned to the skies and Bellingham Airport counted itself among the fortunate small airports in the country because it still had commercial air service with Horizon Air flights to Sea-Tac Airport. Many small airports began offering subsidies to attract commercial airlines, such as guaranteeing ticket sales, greatly reducing fees to airlines, and more. The Bellingham Port Commissioner considered those ideas, but rejected most of them because they believed that airlines that were attracted by subsidies likely would leave town once the subsidy ended. Meanwhile, Bellingham Airport had kept its fees reasonable, comparatively, and and didn’t have to lower them. The commission set the policy of not spending any property tax dollars on airport service. Their direction was to market the Bellingham location, offer some help with advertising costs, and make measured improvements to the airport. Allegiant Air began offering Las Vegas flights from Bellingham, and this start-up vacation airline quickly discovered that the Bellingham market was a jackpot: first Las Vegas, and later Phoenix, Los Angeles, San Francisco/Oakland, San Diego, and Palm Springs. Alaska Air began offering direct
flights to Las Vegas and Honolulu, then added Maui. Allegiant Air started selling flights to Honolulu and Maui for this fall. This year Horizon Air offered Many planes at BLI during summer 2012 filled to over 90 percent seasonal sercapacity (Photo courtesy of Port of Bellingham. Thank you.) vice from out of their local Canadian airport. Bellingham to Portland, and The Council estimated that saved Bellingham newcomer Frontier Canadians about $428 average each Airlines offered seasonal non-stop round trip. service to Denver. The Port has made steady investSteadily, passenger numbers rose ments in the airport to meet the and last year more than 511,000 demands of the growth. Back in flew out of the Bellingham Airport 2000, the airport commercial termion commercial airlines. With all the nal stood 28,000 square feet with new destinations this year, Zenk an open-air baggage claim. By the estimated the numbers to top out end of 2011, the Port had almost around 570,000. About 60 percent, doubled the terminal to 52,000 he said, come down from Canada, square feet. A major expansion this choosing to avoid high Canadian year will result in a 100,000-squaretaxes and fees and saving hundreds foot terminal with two baggage of dollars on each ticket. carousels and a much higherThat’s a chapter of the airport performing ticketing, security clearbusiness success story outside of its ance, and gate area. Along with gates and runways. Canadian travthese improvements, the Port has elers spend significant amounts in been building additional parking Whatcom County, and sheer volume areas and making ramp and runway allows the diversity of destinations improvements. to become economically feasible In 2009 the Port completed a for our community. Last year, $2.5 million airport fire station. In according to the Canadian Airports 2010, a $26 million runway repair Council, 4.8 million Canadians and improvement project that drove to a U.S. airport—mainly here required closure of the runway for and Buffalo, N.Y.—rather than flying Local Knowledge & Service with National Strength 88th Largest Rental Company in the Nation
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AIRPORT one month. Between 2011-2013, a Aviation-related businesses also easier to get to the San Juans now $38 million, two-phase terminal have expanded with skilled aviathan going through Sea-Tac.” expansion. tion professionals finding work at A statewide airport ecoThe first phase – a passengerBellingham businesses. Flight nomic analysis conducted for the gate holding area—was completed schools, aviation fuelers, mechanWashington State Department of in 2011 and it includes a full resics, an aviation museum, and more Transportation this year found taurant and bar, seating for 733 have thrived with about 200 localthat the Bellingham International people, and improved gate areas. ly-based private planes, increasing Airport is responsible for $3.8 milEach of these projects translated commercial aircraft, and visiting lion in visitor spending, 620 on-site into hundreds of skilled labor jobs corporate and pleasure aircraft. jobs and another 1,610 direct jobs that thereby resulted in substantial Island Air at Friday Harbor on in Whatcom County. An indepeninvestment in the comdent economic analysis munity. in 2010 (when there were When the Port com400,000 passengers, nearmissioners authorized ly one-third fewer) found borrowing to finance the that the Bellingham terminal expansion, they Airport contributed over held firm to their direc$13 million in taxes, over tion that airport revenue $11 million in local busihad to pay for airport ness purchases, and over costs – avoiding property $35 million in wages. tax subsidy for this major “The airport has operation. Repayment will been quite an economic be made with revenue engine,” Zenk said. “I’m generated by airline pasnot sure the general senger fees. public really realizes the While the local impact it’s made. We had economy welcomed the one study that said it construction jobs, espeproduced $160 million in cially during the recesrelated businesses—hospision, the overall economic tality, parking, transporengine found within the tation, etc.—during 2010.” Bellingham Airport also With the second revved up. Local hotels phase of terminal expanbooked full more routinesion underway, the Port ly, and more hotel conCommission comes faceAviation Director Daniel Zenk observes passengers in the airline struction is underway. The ticket check-in area (Staff Photo) to-face with the future of Port hears from many busithe Bellingham Airport. nesses choosing to relocate, “It’s not an exact science, start up, or expand in Whatcom San Juan Island illustrates how it’s more of an art,” Zenk said. The County because it has strong comfar-reaching the residual benlast version of the Airport Master mercial air service. efits of Bellingham International Plan was adopted in 2004 and An early example was Wood Airport’s remarkable growth extend. so much has changed since then. Stone Ovens, which located its Jackie Hamilton has flown into As part this analysis, the Port is manufacturing facility on the road Bellingham for 20 years as an air working with the Federal Aviation to the airport so that its worldwide ambulance service. Her husband Administration (FAA) to forecast customers could fly in and do busiWill said by telephone recently, how much growth might occur in ness. Another is Pacific Cataract “Bellingham’s airport expansion the next five years and to determine and Laser Institute (PCLI) which has made it an essential public what major capital projects might built a surgical facility on airport facility. Jackie and I can remember be needed. The study also looks at property to match its business when the air traffic control was the impacts the airport has on the model of flying its specialized surin a trailer. Now, we have fueling environment, the community, and geons directly to the 10 clinics they capabilities we didn’t have before, the economy. serve. TEK Construction has its own a place to wait that’s heated with Airport neighbors have attended hangar and flies crews all over the a roof over our head, and with the master planning meetings and subNorthwest. growth of commercial traffic it’s mitted many comments, especially 20 | BUSINESSPULSE.COM
noting the increased noise and asking that the Commission restrict future growth and the volume of air traffic. The Port commissioned a countywide opinion poll in 2010 that found strong community support for a commercial airport with a wide variety of service destinations, as well as concern about airport noise. Mel Hanson, former long-time band director at Ferndale High School, serves on the Airport Advisory Committee. He said that the noise factor keeps his group and the Port commission conscious of concerns. “Some folks would like us to adopt some restrictions and shut (the engines) down,” he said. “That’s not going to happen. So we have to work with the Port and with the neighborhoods and communities to make things work.” The Port has launched a pilot education program aimed at directing pilots to follow the established approach and departure flight pattern that somewhat reduces the noise impacts on neighborhoods. And the Port worked directly with local businesses that were impacted by the sound of engine run-ups to move that noisy procedure farther away from their businesses. During the 1980s and ‘90s, the Port purchased significant acreage in the Marine Drive neighborhood to compensate property owners impacted by aircraft noise. The airlines are moving toward quieter engines, too, to help alleviate the situation. What’s next for the Bellingham Airport? For one thing, Zenk said, the successful capacity rates on new routes, such as Denver, resounds clearly with other major airlines; expect some to step into the market soon. Also, Alaska Air, after drawing back a bit after Labor Day on flights to Hawaii, already laid plans for eight flights a week there from November through early April. “We’re hopeful that Frontier will be back,” Zenk said. “They’re mothballing equipment with us, and they’re reassessing. They were 93.5
percent full in July on the Denver routes, and 97 percent in August. They’ve leased with us until May 2013, with auto-renewal and a termination fee built into the agreement. That type of success doesn’t usually go unnoticed.” Hanson expanded on those thoughts about his dream of seeing Horizon Air expand into more regional routes, such as Spokane and Portland. “I believe we’ll see continued growth and we hope with
quieter aircraft,” he said. “As long as the airport is successful, several other businesses will pop up and benefit from it.” The business community will chime in on our local businesses targeting aviation niches, Canadian customers, in-bound tourists, and other transportation benefits so that Whatcom County can gain the most community economic benefits from the fastest-growing sector in our business community – aviation.
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WOOD PRODUCTS INDUSTRY
Scotty Browns Takes Flight And so do its customers in new concept at the airport By Michael Barrett
22 | BUSINESSPULSE.COM
ocialize. That’s what Scotty Browns wants patrons to do in its two Bellingham restaurants—at Barkley Village, and at the smaller, yet still-lively new venue at the Bellingham International Airport. “We call Scotty Browns a Socialhouse for a reason,” Jason Cooper said, pointing out its brand. “It’s definitely high energy.” Cooper is managing partner among investors who developed the first Scotty Browns franchises in the U.S. The parent company in Canada, Browns Restaurant Group, operates 14 Browns Socialhouse restaurants and has 11 more in the works. The three partners in Bellingham found the name “Socialhouse” already trademarked in the U.S., so they use it as a tagline. At 3 o’clock on a recent Friday afternoon, with a flight about to leave for Las Vegas and another for Hawaii from gates directly across from Scotty Browns, socialize was too weak a word to describe the bustling restaurant scene. Football games blared from multiple TV sets, news from some others, and passengers created a boisterous buzz as they awaited their flights. “This is typical of most days,” Mark Leutwiler, manager of the Bellingham airport, said to a visitor observing this first for the Port of Bellingham – a full-service restaurant behind the Transportation Security Administration (TSA) screening area, unavailable to the general public. This also broke new ground for the Scotty Browns group, though
the concept is not new among many airports across the country offering familiar chain or local restaurants inside security lines. Cooper said during one-to-one telephone interviews, “We’ve put a lot of thought behind (the social concept). It’s an upscale place where people can get together and have a good experience.” At the Bellingham airport, that’s only people holding airline tickets or airport credentials. “There’s no letup,” Cooper said of the restrictedarea Socialhouse one-fourth the size (1,450 square feet) of the main Bellingham location in Barkley Village. “In fact, often it’s even more social than our other one,” he said. “Think about it – we have a captive
“Often it’s even more social….we have a captive audience who’s going on vacation to destinations like Vegas, Hawaii, Arizona…they’re upbeat and happy.”
Airport Manager Mark Leutwiler (l.) and Aviation Director Daniel Zenk said the crowds at Scotty Browns behind security always buzz with passenger activity. (Staff Photo)
and bar. That makes it somewhat different than most limited-access traditional standalone restaurants, Cooper said. “Most post-security
places are concessionary with limited menus,” such as the airport Scotty Browns express counter that prepares takeout sandwiches, wraps,
Jason Cooper, Scotty Browns Managing Partner
audience who’s going on vacation to destinations like Vegas, Hawaii, Arizona…they’re upbeat and happy.” The airport experiment appealed to the investors in part because of the growing number of Canadian travelers who come and go through Bellingham. According to the Port of Bellingham, this amounts to nearly two-thirds of the total passengers. Canadians have familiarity with the Browns Socialhouses, making Bellingham airport an immediate hit. “The airport is exceeding all expectations (in) sales,” Cooper said, “despite the (congestion) of the new ticketing area.” Though tightly-contained, the airport Scotty Browns serves as a full-service restaurant
WHATCOMBUSINESSALLIANCE.COM | 23
Hannah Conahan manages quick to-go orders for passengers to take on the plane from the new Scotty Browns Express at BLI. (Photo courtesy of Port of Bellingham. Thank you.)
and such for passengers to carry onto the plane. Otherwise, Cooper said, “The airport has a smaller, compressed version of the larger location’s menu, but with the same items. We serve strictly restaurant portions, dine in or out … Everything is made from scratch in our kitchen.”
The first Scotty Browns opened in Bellingham a few years ago, and the airport Socialhouse opened last May. Both are dark-wood paneled, booth-laden, open-kitchen, and the owners plan to add another 500 square feet once the airport renovations are over. It opens out onto the concourse for views of the taxi-
ways and gates. The décor consists of television, wall art, and photos, including one of Elvis Presley. Tim Creelman’s Cattail Construction in nearby Custer served as the contractor at the airport facility. The airport restaurant created 25 new jobs, pushing the Scotty Browns total to 80 employees. “We’ve experienced strong upward trends in our business,” Cooper said. “Month-over-month, year-over-year we’ve had good growth.” It’s been enough to encourage the investment team to seek other locations in Washington. Barkley Village has become an especially popular business lunch and happy hour draw, and the airport maintains a steady flow of outbound and arriving travelers. “The airport is a great extension of our Canadian restaurant business, yet locally-owned,” Cooper said, “and a fantastic opportunity to serve customers of all ages in a non-traditional, yet up-market location.”
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Reserve Your Booth Now for the 2012
Thursday, October 18, 2012 11am-7pm @ the Sportsplex in Bellingham
The Expo will include: • TAG Round Table of CEOs • Lunch with WBA Expo premium vendors • Washington Policy Center Small Business Forum • WBA Business After Hours • Over 70 Business Exhibitors • Food and Beverage From Leading Local Vendors • Prize Giveaways All Day Long • Biggest Business Networking Event Of The Year
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PORT OF BELLINGHAM
Port of Bellingham: at a crossroad Vital decisions lie ahead for governance and business success By Mike McKenzie, Business Pulse Managing Editor
he Port of Bellingham, first and foremost, is a big business. It operated this year on an approximate $24 million budget with about 100 employees, and last year generated about $45.2 million in revenue.
And the Port drives business. “The vitality of the economic scene for the waterfront is essential,” said Mike Granat, founder of the Maritime Museum and a waterfront business owner. Harriet Spanell, a former state senator representing Whatcom County’s district, expressed concern about an imbalance in the Port’s approach to its mission. “Ever since the Port district formed it’s essentially been an economic arm of the County,” she said. “But we have to keep in mind that the Commission is elected by the public to deal with public money, and the public’s best interest includes taking good care of the waterfront environment.” 26 | BUSINESSPULSE.COM
That’s the line drawn in the sand on a ballot item during the November 2012 county election that will determine whether to expand the Port Commission from three to five. One lifelong resident, longshoreman Darren Williams, said in an interview about the choice: “It comes down to aesthetic values vs. economic values.” Commissioner Scott Walker, who has served in the role more than two decades, referred to the ballot issue as an upshot of the departure of the executive director, Charlie Sheldon, some months ago. Walker characterized the management change as “not controversial at all” but that it was used as a catalyst by special-interest groups to stir the ballot-boxing match. “They made it clear in brochures they handed out,” he said. The main points that surface on either side of the ballot issue are cost ($150,000 to add two commissioners), transparency because three cannot have covert meetings (two is a quorum and therefore subject to public disclosure laws)
but five would offer more diverse viewpoints, and politics. On the latter point, proponents believe more representation lessens the political clout of the group, and opponents say it increases the odds of back-door dealing and too much power for the executive director overriding good commission governance. County Auditor Debbie Adelstein, who administers the November balloting, pointed out that the main thing for voters to understand is that it is a countywide issue and not just city-wide. “It affects every taxpayer in every county community,” she said. “The Port manages the harbor in Blaine, and multiple businesses feel the impact of Port governance, both on and off the waterfront.” Walker, a Port commissioner for the last 21 years, spoke to the Business Pulse by telephone for an assessment of the vital importance of the November vote to the taxpayers of Whatcom County. “Over the years we’ve moved toward the Port operating off of ROI (return on investment), such as
borrowing for the airport expansion rather than going with tax revenue through bonds,” Walker said. “We’ve also fostered a rise in waterfront parks. We sponsor community events. We have a lot of public outreach.” Enough? Too much? Need more? What do you think? Here’s what five persons close to the issues believe….
DARREN WILLIAMS, LONGSHOREMAN The first, immediate comment by Williams upon sitting down to discuss his position was that he spoke NOT as an elected official of the local longshoreman’s union; rather, he said, he was speaking as a lifelong resident of Bellingham and Whatcom County (51 years). He is author of the position statement for the “NO” vote in the November 2012 ballot booklet distributed to voters.
DARREN WILLIAMS “What do we need most, an individual’s right to launch a kayak…to supercede the rights of business on the waterway?”
For me this is more than a union stance; it’s about what’s good for the community I grew up in and the residents of Whatcom County. It’s my passion, and what we need for the future. And 197
words (in the ballot booklet) don’t do the issue justice. Out of 70-plus port districts in the state, only five have five commissioners – Seattle, Tacoma, and a few of the smaller ones … Edmonds, Orcas, and Anacortes. We’re about the same population-wise as Everett, Olympia, Grace Harbor, Vancouver, Port Angeles, and Longview, to name a few that have both an airport and marina —and we all have three commissioners. Others, the river ports, are very, very small. There are strong reasons, such as continuity, for the middle group of ports we’re in to go with three. Because of sheer size and the dynamics of politics and economics, Seattle and Tacoma need five. Five allows back-room alliances to build to the detriment of public involvement. That outweighs the inconvenience of two not being able to talk to each other. Three insures full disclosure. Proponents say that five makes things more transparent. In fact, it makes it less transparent. One (of five) with an agenda can surreptitiously build a case behind closed doors, and not on the public floor. The more people you add to the commission, the more politics there are in dealings. The commission is not a legislative body; they’re a group vested with the authority of oversight. You go to five only if you want a legislative body. I’m most concerned about the discretionary power in the executive director position. It’s a necessary evil to some degree, because in business you have to have action taken decisively. (Editor’s Note: Williams’ position paper reads, “For residents wanting to meet with the Commission, scheduling time with three commissioners is difficult; scheduling time with five would be nearly impossible. Because of the difficulty in getting a large commission to act expeditiously on matters requiring prompt
action, a five-member commission would most likely need to increase the discretionary authority of the Port’s executive director.”) You exacerbate that authority problem with five commissioners. With three meeting publicly every two or three weeks, they have the ability to make decisions. You slow that process down with five. I believe in my grandfather who was a firm believer that diversity breeds strength in a fiscal environment. The Port of Bellingham enhances the economic growth of the entire county – this isn’t just a Bellingham issue. I grew up in Fairhaven, and I know what’s going on with those groups in Fairhaven and the Columbian District. They have an adversarial viewpoint. Their train is always running, and they jump in and push the lever – like they’re now jumping on the train with the firing of Charlie Sheldon (former Port of Bellingham executive director). With five commissioners, the politics of the day would supercede the commission’s duties. In the 1890s there was a concern that private capital would consume waterfront properties, and port districts formed to protect the public assets. Ironically, the tables have turned and private citizens now inhibit the ability for capital to work for them. It comes down to aesthetic values vs. economic values, and that puts the Port in a backward position. What do we need most, an individual’s right to launch a kayak on the waterway to supercede the rights of business—capital—to conduct business on the waterway? We need businesses that provide (the county) capital through taxes, and provide jobs for people to make a living, and then we can build a nice place somewhere appropriate to launch a kayak and other things so we can enjoy the waterfront. I’ve been dissatisfied many WHATCOMBUSINESSALLIANCE.COM | 27
PORT OF BELLINGHAM times about things that happen with the Port and the commission, but that doesn’t justify changing its structure. The answer is electing well-qualified commissioners.
HARRIETT SPANELL Sen. Spanell served as a Washington state senator representing the 40th Legislative District (Dem.), which covers Whatcom and Skagit Counties. She was co-author of the position statement for the “YES” vote in the November 2012 ballot booklet distributed to voters. (Her coauthor was Ken Hertz, formerly mayor of Bellingham, director of parks, and now a downtown businessman as co-owner with his wife Kathy of Blossom Management.)
HARRIET SPANELL “More commissioners would provide better representation of the public…we need to make sure the Port is doing other things for the public than just business.”
The size of the county has increased tremendously, and a five-person commission would give it a lot more representation for its significant economic development opportunities and responsibilities. More commissioners would provide better representation of the public in the Port’s 28 | BUSINESSPULSE.COM
vision and mission for what to do. It would have more people involved. Other government bodies, such as county and city councils, have far more than three people handling revenue decisions. The broader representation is important because we’re managing one of the busiest airports in the state, a marina, and working with the City of Bellingham on waterfront development. Five commissioners would provide the possibility for more transparency. This is not just a Bellingham issue. My contacts are mostly in the city, and a lot of people in Bellingham have spoken out in support of expanding the commission. These people seem much more aware of the issues than county-wide. But economic development is an issue in the county as well. When I was in the state senate I introduced legislation 20 years ago about port commissions. The original bill asked for all ports to have five commissioners with four-year terms, and it got passed. But later it was modified. Some still have five. We need to make sure the Port is doing other things for the public than just business. We have to insure how the waterfront is used. Marine Park in Fairhaven in 1968 when we moved here (from Iowa) had no access to the water. The Port led the way to it becoming the first beach on the water. The Port is a public entity, using tax dollars, and the commission is elected by the people. The commission must be sure it is protecting the public’s best interests in all facets of its duties, not just business development. I didn’t have a problem with the proposal to elect two new commissioners at large, like some people did. My own state senate experience was in a district where very few people know me. Scott Walker didn’t live in his district
for a long time. Jim Jorgensen doesn’t. In a general election you don’t represent a particular area, you represent the whole county. Whether there were three commissioners or five, I hope they would all feel that way.
SCOTT WALKER Elected to the Port Commission in 1991, Walker also serves as president of the Washington Public Works Association. He has the longest view of the inner workings of a three-person commission, and his first comment, after offering a brief history of predominantly three-person port commissions, went straight to the heart of the issue – a business proposition: “It would cost $150,000 to add two.”
SCOTT WALKER “I see all sides….with five I could talk to other commissioners legally. (But) If we expanded would we make better business decisions, have a more qualified commission and staff? I don’t think so….If it’s not broken, what are we fixing?
Not that the salary would be so high, but the health insurance, other benefits, travel, and intangible costs like staffing to take time to brief the whole committee and the public. Would it lead to better decisions? Basically, for another $150,000 you’d add more
politicians to the payroll. My point is that it works just fine the way it is. A few of the 75 port districts in the state elected five commissioners. Only Seattle did among the super ports. The vast majority has stayed with three. In its most recent election, Port of Everett tried to go to five and it was defeated. I see all sides. The specific purpose of the Port is to make business decisions fairly quickly. Most commissioners don’t see a need for five. Some think it would offer greater representation. We represent three districts; if it expanded we’d represent five geographic districts. That’s better than at-large representation. With five, I could talk to other commissioners legally. Oddly, our state legislature is not subject to the open meetings law and they have a lot of secret meetings, but we cannot. With five, any one could meet with any other, and one after another. It happens all the time, lining up votes. Decisions get politicized, and with all the jockeying around they take longer to get to. Also, the more commissioners you have, the more dimension of authority the executive director has. Personally, I think the issue we had last spring – replacing the executive director – was used as a vehicle to move toward five commissioners. In reality, it was not much of a controversy; it’s routinely done. But some people politicized it and pushed an agenda. When it was first proposed to the Port (to go to five) by people thinking we were not doing our job as expected, there was a lot of yelling and commotion at the meeting and we voted 2-1 against it. I voted no. It was clear what was happening. It was right there who it was, in print in a brochure, a Fairhaven-based special inter-
est group trying to beat the June deadline for the August ballot, which is the best time to shove something through because there are far fewer voters and it’s easier to get a majority. The small town mayors realized what was happening, too. The push was to elect the extra two commissioners at large (v. geographical district). The small town mayors I’ve talked to think it would be a mistake to go to five. Many people were angry. We were ‘bad people.’ Actually, we were protecting the best interest of the county as a whole. In Anacortes they went to five commissioners, and it became a laughing stock. Arguments, negative blogs sites, meetings that go on and on. My bias is that it’s worked fine a lot of years with five or six combinations of commissions getting amazing things done. The City of Bellingham owns the waterfront and leases it out to foster economic development and opportunities for businesses. Look at Bellingham Cold Storage, they built it around fishing and fish processing, and it spawned a business with more than 1,000 people associated with it. Look at the Bellwether vision. Not much had been built down there for waterfront development, just some small businesses operating. A couple of buildings later, $40-50 million in private investments, 500 jobs…. We borrowed to expand the airport instead of public bonds, and now we pay for it with return on investment instead of tax dollars. I’ve talked to a lot of people and I know their reasons (for expanding the commission). They say build more parks. We’ve fostered a rise in waterfront parks. We sponsor community events. We have a lot of public outreach. They think we should do everything for everybody. If we expanded, would we make
better business decisions, have a more qualified commission and staff? I don’t think so. We’d basically have the financial impact of spending another $150,000 of the taxpayers’ money for more politics, and create more taxes. We are much more reliant on ROI now so we’re not having to make up the difference in our budget with taxes. Let’s just keep going forward. It’s a mistake to make the commission less accessible. It’s worked the way it is for 90 years with a perception of improvement. If it’s not broken, what are we fixing?
MIKE GRANAT As a waterfront businessman (owner of Envirotech, a manufacturer of geophysical products at the wharf) with a passion for preserving rich history through the Maritime Museum, also on the waterfront, Granat presented the most balanced viewpoint. He could roll with it either way and, in fact, said that under certain circumstances if the commission expanded he would consider running for a position. In the end, business is the Port’s business from where he sits.
MIKE GRANAT “Three have functioned well over the years….It is likely that increasing the number to five will slow down the (government) process. The quality of the commissioners, not the numbers, will determine the efficacy of the organization.” WHATCOMBUSINESSALLIANCE.COM | 29
PORT OF BELLINGHAM One of the main missions of the museum is to serve as an outspoken advocate of the working waterfront in Bellingham. The seaport community – boat and ship builders, fisheries, etc.—made it what it is. During the 1850s no one came by car, or train, or plane. They came here, the gateway to the San Juans, by boat to fish. We have a direct responsibility to remember those people and their history and culture of the working waterfront. So much of the Port economy is reliant upon the marine industry – suppliers, manufacturers, consumers, ships paying fat fees to park, tugs. The vitality of the economic scene for the waterfront is essential, and we work on it through the prism of the museum in partnership with the Port and with NOAA (National Oceanic and Atmospheric Association). I have a desire for the Port to be in a strong leadership position. All communications must go into the public meeting and, by law, the commissioners haven’t sat down all together and discussed anything. That means all communications take place in 3-1/2, maybe four hours a month. The ability of commissioners to freely communicate and discuss important issues among themselves is severely restricted. Any sort of communication—written, oral, or by intermediary—is forbidden. The Port is a business, and no one would expect any business to function effectively by banning top management from freely communicating with each other. Under a five-commissioner system, two commissioners could meet over a cup of coffee and fully dissect issues, compare notes and opinions, and each would benefit from a full exchange of ideas. On the same two-on-two basis, all commissioners could speak with each other at any convenient time to identify problems 30 | BUSINESSPULSE.COM
and work on finding the best soluelectoral population dynamics of tions for their constituents. Whatcom County and incorporated Three have functioned well over areas is that if the ballot meathe years and there is no doubt sure proposing an increase to five that it will continue to. In theory, commissioners passes, then most and often in practice, limiting the likely the composition of the comnumber of voices tends to have mission will continue to reflect the positive effect of speeding up the same values and attitudes as the process of government. It is seen in the current three-person possible, even likely, that increascommission. Whatcom County is ing the number to five will slow about 60-40 conservative, but it down the process, as every comshouldn’t matter because the commissioner will take time to delibmissioner’s role is supposed to be erate and then explain his or her non-partisan. view of each issue. Economic development is the It would cost about $150,000 most important mission of the to expand, and that would cause Port of Bellingham. The Port, as the budget to grind down. It seems an institution, has the ability to always better and preferable to see do a tremendous amount of good. decreases in tax rates, although it I believe it will exercise an everis possible that the relatively small stronger leadership role in this increases in personnel costs for area going forward, whether with additional, part time commissiona three- or five-person commisers could probably be found by sion—so long as the commissionsavings elsewhere in the budget. ers themselves are qualified and In my experience, three is a dedicated. good number. Five would be better DOUG SMITH entirely due to better communications among top Port manageLast December the Washington ment. After that it is all downhill. Public Ports Association awarded Additional numbers such as seven, Smith its Outstanding Service nine, or more are counterproducAward honoring his 16 years as a tive to decision-making and simPort of Bellingham commissioner ply bog down the process. (1994-2010). He participated in On the other hand, too many expansion of waterfront, aviation, on the Commission paralyzes it. Other Ports range from five to seven. It becomes a communications issue. Two is not a quorum, so any two can sit down over coffee for an hour and gain an understanding of what the other’s position might be on any given issue. As is always the case, it is the quality of the individual commissioners, not the DOUG SMITH numbers, which will “I see the move to expand to five as a way to destroy determine the efficacy the Port….doing things with public funds in private. of the organization. Expanding would be gerrymandering the law. It would be My sense of the the death knell of the Port Commission.”
and Squalicum and Blaine marinas, plus job creation and worker training in partnership with area colleges. Com-Steel, the manufacturer of commercial buildings he founded, was instrumental in the growth of the Irongate industrial park. His view of 5 commissioners: “gerrymandering the law”— and “a death knell.” The Port commissioner’s duty is more of an economic concern than social matters. It’s about managing assets. I’m concerned that one of the three (current commissioners) doesn’t understand that. If you went to five commissioners, that individual could influence two others that the Port should be more about social issues than economic. The same people pushing for five commissioners instead of three are the ones trying to drive the last nail in the coffin of the wood products industry in Whatcom County. It’s a large political group of carpetbaggers who have moved to the south side of Bellingham, and now they’re infiltrating Lynden…. The majority of Whatcom County won’t put up with this gerrymandering. The Port manages public assets. Scott Walker understands business. He’s retired from ARCO. I worked for Mobil, and 16 years with Anvil Corporation, and in my own business 16 years. I’ve been in business in this community 42 years, and my family came here in 1800s, in farming and manufacturing…. If the commission expanded to five, it would enable them to work in a manner that presently is not lawful. With three, there is no opportunity to have broadranging conversations in private. Everything has to be public. They cannot operate outside of the public domain. If five, two of the five could have some scheme and discuss it in private. They could discuss
finance, personnel, anything they chose to, and it would be legal. Once they reached conclusions and had chosen a course of action, they could solicit one of the other three and get buy-in, fair or foul – all in private. Those three could decide a course of action, bring it to the Commission meeting, and push it through. If the commission did that now, if they got caught discussing something in private – a contract,
a salary, with any business or political issue, whatever it dealt with—essentially they would go to jail. I see the move to expand to five as a way to destroy the Port. Going to five makes the commission ripe for wrongful action… doing things with public funds in private. Expanding to five would be gerrymandering the law. It would be the death knell of the Port Commission.
WHATCOMBUSINESSALLIANCE.COM | 31
of Resiliency Jeff Daffron outside Quicksilver Photo Lab on Cornwall Avenue in Bellingham
Quicksilver Photo Lab navigates change while Daffron stays on leading edge of industry transformation into digital imaging Story and Photos by John D’Onofrio
32 | BUSINESSPULSE.COM
Along with inspiration and perspiration, resilience is a key attribute for business owners who want to stick around for a while. Everaccelerating change within the business landscape makes resilience an ever more important component of business success...and survival. Bellingham’s Jeff Daffron understands this well. Daffron is a survivor. The owner of Quicksilver Photo Lab, near the Bellingham waterfront, has spent the better part of his life indulging his passion for photography and the photographic process . “My introduction to photography came in junior high school (Mukilteo),” Daffron said in a personal interview. “I had won a nifty, baby-blue ‘620’ box camera at the Washington State Fair, and I fixed up an area under the basement stairs as a temporary darkroom.” As a student at Western Washington University, Daffron found parttime work taking pictures of houses for the local Multiple Listing Service. “I would get a list once a week of the new properties, and drive around the county with a Speed Graflex camera taking a photo of each new house for sale. I would develop the four-by-five-inch negatives in the darkroom in the basement.” He left school in 1972 to start Wonderland Teas. He sold that business in 1978 to concentrate on photography. Word had spread about Daffron’s deft touch with the camera, as well as his prowess in the darkroom, and soon he found himself in demand as both a photographer and a darkroom maestro. In response, he opened Quicksilver Photo Lab in 1984 in a downtown Bellingham storefront at the corner of Bay and Holly. He financed the start-up by selling a building that he inherited from his grandfather.
ADVANCING EDUCATION INCOME AND HEALTH
The new business, which proreinvented itself. In one of the vided darkroom services and most rapid technical shifts in hiscontract photography, was an tory, film gave way to digital immediate success—thanks to imaging. The Dycam Model 1 Daffron’s passion for all things became the first consumer-level photographic. As the business digital camera available in the grew, he relocated to Chestnut United States during 1988. When Street and increased space from digital cameras began appearing 900 to 1,200 commonly dursquare feet. The ing the 1990s, staff grew and few could have “Most of my employees predicted the cramped space again became or rate of stay with me until they scale a problem, so change from film move out of town or die.” cameras. 16 years ago he moved again and During 2000 Jeff Daffron, Owner, doubled the work while film camQuicksilver Photo Lab area on Cornwall eras still were Avenue. found in over 90 Quicksilver percent of U.S. had established itself firmly as a households, according to a study Mecca for northwest Washington’s by InfoTrends Research Group photographers, offering a variety sales of digital cameras grew at of products and services with an a rate of about $1.9 billion for established reputation for product the year, surpassing sales of film knowledge and technical expertise. cameras for the first time—by a But as business grew, the phoprojected 10 percent. (Source: tography industry fundamentally InfoTrends, May 4, 2000) By 2005
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WHATCOMBUSINESSALLIANCE.COM | 33
Photoshop guru Alan Sanders deploys a digital stylus to put the finishing touches on a customer’s photograph
digital photography had become ubiquitous, and at the turn of this decade film had become a rare commodity in an almost-wholly digital industry. Thousands of photography labs went out of business. “I saw digital coming,” Daffron said, “but didn’t grasp just how
huge the change would be. Neither did all the other labs that are now gone. The first digital labs were very expensive, so I decided to stay with custom black-and-white only. When black-and-white work started to level off, I added processing for color prints and color slides to the mix, as well as resto-
ration work and large-format digital printing.” About four years ago Daffron purchased a digital minilab. “The main problem with digital is that it changes so fast,” he added. “The old analog (chemical) system had aged to a nice mellowness that only had small tweaks from year to year, but the digital world changes every month.” It was obvious to Daffron that, despite the uncomfortably rapid rate of change, the company needed to embrace it. “With digital we all had to learn a new language and try to keep ahead of the curve…and nobody knew which way it was going to curve. “Everything was in flux. There was new, expensive equipment
“We constantly have customers coming in telling us the people at the box stores just don’t know anything, and they’re so glad that Bellingham still has a real camera store.” Jeff Daffron, Owner, Quicksilver Photo Lab
coming out and the software was constantly being updated. We went from 5.25-inch floppies to 3.5-inch disks to zip drives to CDs to DVDs. Film basically hadn’t changed for decades.” Fortunately, his employees, many who have been with him for many years, also were passionate about photography. And they were willing to learn the new skills necessary to master the new technology. A perfect example: Alan Sanders, an employee with Quicksilver since 1996, immersed himself in Adobe’s Photoshop digital processing software, taking workshops, reading, and avail34 | BUSINESSPULSE.COM
ing himself of on-line videos. He became an expert and now teaches Photoshop classes at Whatcom Community College. Quicksilver’s long and wellestablished ties within the industry have also proved valuable. The company belongs to various professional associations in photo marketing and digital imaging. According to Daffron, “These organizations help keep all of the employees up to speed in a quickly-changing field.
“No one can match the depth of our photographic skills.” Jeff Daffron, Owner, Quicksilver Photo Lab
“Having an understanding of film photography has given us a better understanding of how to produce the best digital world. In fact, I insist that new employees must have a knowledge of film photography. Even with digital, photography’s still about managing light.” One thing that hasn’t changed for Daffron is his belief that a successful business in a technical field is dependent on attracting—and retaining—knowledgeable employees. “Most of my employees stay with me until they move out of town or die,” he said. A few have been with Quicksilver 20 years. The workplace atmosphere is casual, and centers on friendly and cooperative customer service. “Most small business owners feel that their employees are like family, Daffron said. “We truly enjoy working with each other and helping the public.” Yet, despite the track record of success, he said he sometimes has yearned to do something different. “My life plan when I started
Wonderland Teas in 1972 was to try something new every five to 10 years, to not get bogged down and bored doing the same kind of thing every day. That plan worked out OK until I started Quicksilver.” Previously, he had started Wonderland Teas, published the Northwest Almanac for a couple of years, sold real estate, and published The Whatcom County Renters Guide for a couple of years. “With Quicksilver,” he continued, “a couple of things happened. The business grew steadily, and then employees had to get hired. Once I had employees, I had additional responsibili-
Employee Rose Anne Featherston examines a customer’s negatives.
WHATCOMBUSINESSALLIANCE.COM | 35
Long-time Quicksilver employee Rose Anne Featherston created this tongue-in-cheek “historical” photo of Quicksilver staff. (L-R) Michael Latimer, Jennifer Fryer, owner Jeff Daffron and Alan Sanders. Featherston herself appears on computer monitor.
ties to keep everything going. I couldn’t just close up and change jobs.” Diversification is another business strategy that has contributed to Quicksilver’s success. According to the owner, the business is about
36 | BUSINESSPULSE.COM
a 50-50 mix of service and retail. On the retail side, the store offers a wide range of photo products ranging from point-and-shoot cameras and accessories to film and ink and paper. Even chemicals for home darkrooms.
On the service side they restore old photos, scan slides, negatives and prints, reproduce art work, and develop and print film. They also do some on-line business, service some wholesale accounts for developing film and restoration, and “…find a home for old cameras by reselling them or seeing that they get used for parts.” As Daffron sees it, the keys to Quicksilver success always have been, and always will be, knowledge and customer service. “No one can match the depth of our photographic skills,” he said. “We constantly have customers coming in telling us the people at the box stores just don’t know anything, and they’re so glad that Bellingham still has a real camera store.” This reputation for expertise has served the company well, and has helped Quicksilver expand its market reach during a time in which the vast majority of competitors have fallen by the wayside . “It’s not unusual to get orders from customers who have moved away from Bellingham and can’t find the service they need in their new location,” Daffron said. “So we get work from other states, and wholesale accounts in Alaska as well as Mount Vernon and Everett.” Daffron said Quicksilver still does plenty of the work that launched the enterprise all those decades ago. “The industry was built on rolls of 36 four-by-six prints,” he said. “Digital knocked the bottom out of that. But we still do a great deal of film work,” he said, smiling. “A customer in Fairhaven recently brought in 180 rolls of film for processing. Folks will find rolls in a drawer, or when they’re clearing out an estate. Many other stores have dropped their film processing, so we are getting more.” It’s one of the benefits of being a survivor. Resilience. It makes a world of difference.
WHATCOMBUSINESSALLIANCE.COM | 37
Thursday, October 18, 2012
11am-7pm @ the Sportsplex in Bellingham
ust when we think it can’t get any bigger and badder, the Whatcom County crown jewel of business showcases exceeds our expectations once more.
Presented by the Whatcom Business Alliance (WBA), the 26th annual Northwest Business Expo & Technology Showcase takes the spotlight Thursday, October 18, from 11 a.m.-7 p.m. at the Bellingham Sportsplex. This is the longest-running event of its kind, and draws throngs of the business decision-makers from across Whatcom County, and beyond, to discover what’s new in more than 70 vendor booths. WBA’s board of directors elected to roll out the first in its new Saturna Capital Presidents Club Speaker Series. The inspiration of keynote speaker Barry Long will highlight the event. You will meet the board of directors, one of the highest-achieving groups you’ll ever come in contact with and perfect for leading a new leading-edge business organization. Learn about the vision of the WBA as your voice of influence in the Whatcom County business environment. Find out how you can become a part of this dynamic mission for fostering business success and community prosperity. This year’s entire program will make it hard for anybody to not take the full day, with three powerful 1 ½-hour forums to choose from: 1. 11:30 a.m. – The local chapter of Technology Alliance Group (TAG) stages a panel round table, moderated by Matthew Dunn from Say It Visually which has offices on both coasts. Panelists for this special event are Paul Grey with Qualnetics, Andy Anderson with Index Sensors & Controls, Drew Zogby with Alpha Technologies, and Scott Renne with Blue Sea Systems. 38 | BUSINESSPULSE.COM
Listen to successful tech industry leaders and learn about their career development, their insights into survival, and what’s on the horizon. 2. 2 p.m. – Washington Policy Center, a non-partisan think tank in Olympia that delves into every aspect of business, opens up to you with one of its biennial small business forums. The WPC is asking for your voice. Policy experts and business leaders from the community will join together and listen to your input on critical issues facing businesses, such as health care reform, regulation and workers’ compensation, and solutions for challenges coming up with a new governor and legislature in 2013. 3. 4 p.m. – Barry Long remains an extreme sports participant and intrepid explorer. This, despite having survived a motorcycle crash at age 22 that fractured his back and destroyed his spinal cord. You simply will not believe the things he’s done after dealing with the reality of never again walking. His talk, sprinkled with humor and heavily into accomplishing goals through attitude, determination, positive energy, and leveraging opportunities, will make the day. The WBA is anticipating a sellout of the tables Barry Long, President Talk & Roll Enterprises for this event. Call Shannon Funk, program director, for a reservation at 360.746.0418. A few tables remained at press time for the Expo; call
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360.746.0411 for details on how to place your brand and message in front of the largest expo turnout of this and any year. The Expo always ends with Business After Hours, immediately after the event booths close down. Join Business Pulse Magazine, the WBA, and numerous local companies at the largest networking event of the year in the exhibitor area of the Sportsplex. During this social get-to-knowyou hour you’ll experience outstanding food and drink samplings from an array of the county’s finest in the business of brewing, making wine, and cooking food and chocolate. Three live radio remote broadcasts will take place during the Expo and the WBA and other vendors will give away more than 100 prizes in drawings.
WHATCOMBUSINESSALLIANCE.COM | 39
Life in the Tech Lane Should you look into the new Microsoft window? Avoid a phishing expedition Windows 8 and Your Business: The Yea and Nay With the release of the new Microsoft operating system (Oct 26, 2012), some reasons for you to consider Windows 8 and some reasons you might want to postpone implementation.
Reasons to consider Windows 8: 1. Security: Windows 8 was designed to be secure for businesses. Microsoft added several capabilities to keep you and your data safe, including: a. AppLocker – This feature helps prevent issues by restricting the files and apps that users or groups are allowed to run. b. Secure Boot - Windows 8 boot process is signed and measured, helping to protect your PC or other device from malware and viruses. 2. Mobility: Synchronization across devices is seamless. When installing Windows 8, you can choose to create a local account, but the operating system (OS) becomes more useful when you use a Microsoft account. Doing so allows you to synchronize Windows 8 settings. Then when you log in to any other Windows 8 machine with that account, your data will sync, including background settings, other accounts like Facebook, 40 | BUSINESSPULSE.COM
Twitter, email, and instant messaging. • We recommend a wait of 3-to-6 months for businesses considering an upgrade to Windows 8. The provides time to verify compatibility with existing hardware and to discuss compatibility issues with software vendors for their business applications.
Reasons to postpone implementation of Windows 8: 1. The Interface: The new Windows 8 interface has a similar layout to Windows-based smart phones, featuring tiles and interactive “apps” to download and use. This new interface will prove to be a bit frustrating for users familiar with Windows XP, Vista, or Windows 7 operating systems where you have a standard “desktop” view of your computer. While the new Metrostyle applications run full screen and show the new design philosophy, older applications still have the traditional Windows look and they run in a separate desktop area. This interface is such a revolutionary change it may require a lot of training. 2. Hardware and Software Compatibility: With your current business hardware and software, you may find that Windows 8 is not yet fully compatible. This is typical with most new Microsoft OS releases; some devices just don’t function correctly. It can
take months before compatibility issues are resolved.
Phishing for Information Data security is very important to individuals and businesses alike. One of the greatest tools a cybercriminal uses to steal information is called phishing. It occurs two ways. One is a scam, usually in the form of an email, and will look like it’s from a reputable company such as Facebook, Chase Bank, or Comcast. The attacks have become very sophisticated and you need to protect your and your company’s data. Two simple things can protect your from attack: 1. Be Skeptical If you receive an email and you are not 100 percent sure that it is legitimate, assume it is not. Never supply your username, password, account number, or any other personal or confidential information by email, and never reply directly to the email in question. 2. Pick up the phone If you receive an email from your bank, credit card company, or any other company, that says your account will be locked, suspended, or services disconnected unless you log into their site and update your information – don’t. Call them instead. Explain to the customer service rep the email you received; the rep almost certainly will tell you
they never sent it. A newer type of phishing has surfaced – browser pop-ups. These pop-ups appear as sites saying your computer has potential viruses or malware, and that you should complete the scanning to ensure that your computer is properly secured. If you click these links, you will be redirected to potentially harmful sites that can install malware or viruses and infect your computer. An updated antivirus program is the best way to protect your computer from these malicious sites and programs.
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WHATCOMBUSINESSALLIANCE.COM | 41
Cori & Troy Curran ride the i-Wave as the region’s only full-service Apple dealer Story by Dave Brumbaugh Photos by Mike McKenzie
usinesses along Bellingham’s Squalicum Harbor primarily consist of marine industry, with some professional offices, restaurants, a hotel, and lightindustrial facilities providing variety. It’s an unusual spot for a technology retailer, but Apple hasn’t been constrained by conventional wisdom and neither is TD Curran, Northwest Washington’s Apple Specialist.
Owners Troy and Cori Curran moved their primary TD Curran store last March to Roeder Avenue on a site of a former boating retailer. Set far apart from any of Bellingham’s saturated retail areas, TD Curran continues to thrive. After recording revenue of $4.3 million in 2009, TD Curran’s sales more than doubled to $8.4 million in 2010, and then soared to $12.9 million in 2011. Assessing his company that has cornered the Apple full-service market in this region, Troy Curran estimated that this year’s sales will hit $15 million – all during an economic period when many computer and technology retailers have either closed or seen their sales fall steadily. This extraordinary success also has been achieved despite an unusual rival. “Online Apple is our toughest competitor,” Troy Curran said, referring 42 | BUSINESSPULSE.COM
to the manufacturer’s vast capability to sell directly to consumers. However, Curran said that many customers still want to see and feel products in person rather than just viewing them on a computer screen. And TD Curran has plenty on display for hands-on dem-
“If you buy it from us, you’ll have a great experience.” Troy Curran, co-Owner, TD Curran
onstrations in its spacious, airy, and brightly-lit 9,000-square-foot facility. The store displays more than 1,000 available products. For popularity, the I’s have it. “The iPhone is our top seller,” Curran said, “and the item we get most in the service department, too.” Other gear that is all
Troy Curran and Ben Charlier-Matthews stand behind full-service department which handles more iPhones than any other product.
the rage includes the well-known iPads, iPods, and iMacs, and computing industry leaders MacPros
and MacBooks. The consumer inventory extends to numerous headphones, carrying cases, and
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Left to right: Patrick Holm, Josh McCudden, Mike Yeend, Sigrid Schumacher, Joyce Eschliman, Mike Cromer, Kevin Bedlington.
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WHATCOMBUSINESSALLIANCE.COM | 43
TD CURRAN countless other accessories. Abbotsford, B.C. The couple owned designation as an Apple specialTD Curran’s training classes, cusa sailboat, and they sailed up to ist. With three locations—two in tomer service, and warranty work the Semiahmoo Marina in Blaine Bellingham (and a third on the appeal to both individuals and busito begin living on their boat while way), and one in Everett), the comnesses, especially those seeking to Curran commuted along a slow pany is the only Apple specialist integrate various Apple products traffic crawl 25-30 miles to his job north of Lynnwood (on the north into their technology solutions. A across the border. side of Seattle) and handles all popular feature enables TD Curran Two years later he then Apple service warranty and noncustomers to attend one class a launched his own business, focuswarranty work for customers in week for one year, plus get expediting on sales of memory and hard northwest Washington. ed repairs and responses Targeting more corto technical questions, porate clients, TD Curran for $99. added its sales-only locaTo enhance serving tion in Everett in 2008. and training customers, “I wanted a place to TD Curran’s employees service the Seattle marundergo extensive trainket,” Curran said. About ing. They spend about a year ago he established an hour every work a part-time presence day to learn about new inside Village Books in products, technical speciFairhaven District, helpfications, policies, and ing customers who want procedures. As a result to buy e-books locally the staff’s ability to assist but need assistance customers expertly condownloading them to tributes to TD Curran’s their iPads and other high level of sales to products. repeat customers. The most recent “If you buy it from us, and largest expanyou’ll have a great expesion occurred this year. rience,” Curran said. He With an over-crowded has established his busi1,000-square-foot retail ness and service model store on Meridian Street on 25 years of backacross from Costco and a ground in the industry, 3,500-square-foot waremore than 20 of it with house in the county, TD Apple products. Curran had outgrown Curran, 46, was born its facilities. Curran said in New York, but his that he had looked at family soon moved expanding the Guide to California where Meridian facility but met he studied economics with many difficulties, Cori and Troy Curran, co-owners of TD Curran in Bellingham, at the iPad demo table at Long Beach State and he had become frusUniversity. He started in trated over the prospects. corporate sales with Computerland drives for Macintosh computers to Suddenly, piqued by the famin 1986, when volume in a preuniversities and secondary schools ily’s passion for sailing, he learned Internet era was far different from throughout the country. At that about the Squalicum Harbor site today. “You could sell three compoint, 100 percent of his sales and its two-story building and puters (in a year) and make a livwere to educational clients; now spacious parking lot that could ing,” Curran said, chuckling at the the breakdown is 20 percent to accommodate large numbers of recollection. educational institutions, 40 percent retail customers, and Apple users When Cori became pregnant to businesses, and 40 percent to who signed up for training classes. with twins and did not want to retail customers, Curran said. Curran negotiated a lease with raise them in the Los Angeles TD Curran took a significant the Port of Bellingham for the area, Curran accepted a job in step in 2001, acquiring Alpha property the building sits on, then 1990 selling Apple computers in Technologies and earning the purchased the building from a bank 44 | BUSINESSPULSE.COM
that held it in foreclosure after the boat company closed its doors. Using construction contractors on both the East Coast and West Coast, he then directed renovation of the building. They installed 14,000 pounds of tile and poured 7,000 pounds of concrete just for the main counter. Unique features also included the main mast from the renowned schooner Zodiac; the mast broke about 15 feet from the deck when the popular tall ship returned from a sailing trip in the San Juan Islands during 2010. Builders used the largest portion of the broken mast for the main column of TD Curran’s new building, and smaller portions became bases
ing security. • Enables companies and medical facilities to comply with the Health Insurance Portability and Accountability Act (HIPAA) regulations on the security and privacy of health data, and to enforce security policies and compliance. • AirWatch software facilitates corporate customers in locking and wiping managed devices remotely.
TD Curran’s plan focused on installation, training, and content management for corporate and institutional users of iPhone and iPads. “AirWatch is going the change the face of our company,” Curran said, speaking of his vision for sailing into the business’s future. “I think in two years we’ll be managing 10,000 phones (for corporate clients).”
“AirWatch is going to change the face of our company…we’ll be managing 10,000 phones.” Troy Curran, co-Owner, TD Curran
for display tables. The renovated building sprawls with retail area, plus plenty of room for the 20 employees dedicated to sales, customer service, training, repairs and software installation. Curran never knows exactly what new products and innovations might come from Apple, or when. He doesn’t receive any more notice about them than the general public. But he’s not sitting still. TD Curran is partnering with AirWatch to provide mobile device management solutions for Apple corporate clients. TD Curran recently became an AirWatch software reseller, and rolled out its program in September. Mobile device management provides three strong benefits: • Allows companies to give employees access to corporate resources without compromis-
WHATCOMBUSINESSALLIANCE.COM | 45
INNOVATION / ENTREPRENEURSHIP
Inventor Joel Townsan A Screwdriver Called Tantrum From drop-out to Flip-Out, following a power-tool passion, he’s on track with a big business plan Photos & Story By Mike McKenzie
oel Townsan’s arrival to here and now and next with Flip-Out Screwdrivers, LLC traces back to two beginnings. 1. Second grade, blue ribbon, science fair, and a robot named Gizmo. 2. One day, pick a day, that kind of day, about 10 years ago when a speaker in the door of his car needed a quick fix-it. 46 | BUSINESSPULSE.COM
Jump inside the car first, and quite possibly experience some been-there. It was cold and snowy in Seattle. Townsan, a student at the University of Washington at the time, had a Black-and-Decker power screwdriver to work with. After an hour and a half he was still tinkering, trying to get it to fit into the tight space in the door to unloose a screw, and, he said, “Couldn’t move it.” And here we are, with a budding inventor, college dropout, rising
entrepreneur, start-up businessman, bartender/steakhouse server to support it all, and still creating a gizmo – but this one’s named Tantrum. And it’s a screwdriver, not a robot, but probably a robot, too, in a roundabout way. (Its head turns roundabout 168 different ways from 17 different angles.) Tantrum, small and versatile, transforms to fit into the tightest of spaces. Townsan has definitive, researched plans for taking it to the widest of places, starting com-
mercially with the annual boat show in Seattle early in 2013. [We plan to follow him along the trail.] Townsan developed Tantrum, a light, cordless, electric (Lithium battery), adjustable-head screwdriver, through several prototypes this year, and it is but one of the products on the drawing board for the Flip-Out brand (www.flipoutproducts.com). Other tools, after Tantrum is launched at a Seattle trade show in January and sales build, include a smaller model of it called Hissy-Fit. “It hisses. It fits. It has infomercial written all over it,” Townsan said. Each is trademarked.
“We’re going to take 10 percent of that market by our third year … ” Joel Townsan, Founder/Owner, Flip-Out Screwdrivers
The names stemmed from his emotions felt while he was trying to repair that car-door stereo speaker. “All of our products have their own attitude problem that corresponds to their screw-driving ability,” he said. “They all ‘flip out’ in their own way.” Somewhere down the road he will invent a multispeed screwdriver/drill combination, and an impact wrench. He explained how he worded the patents carefully so that his gearing system could be incorporated into different tools, not just screwdrivers. He envisions a “family of power tools” for tight spaces. “We want to bring a whole new level of versatility to the table.” Research tells Townsan that the market for electric screwdrivers projects for 2013 to reach $400 million in sales. “We’re going to take 10 percent of that market,” he said, “by our third year in
operation.” Now, for a moment, jump back to second grade. Another beenthere. But most likely not where Townsan’s been, there. He created Gizmo, mostly out of cardboard, with a geared winch inside that powered a robotic arm with a gripper. “It had red LED (light-emitting diode) eyes and a rubberband powered rocket launcher on its left shoulder inspired by Johnny 5 (a robot in the 1986 movie Short Circuit),” Townsan said. “It wasn’t very strong, but it would pick up an empty pop can, and that was good enough for me.” Good enough for the judges, too, who awarded him his first blue ribbon. Oh, p.s.: he installed a mouse trap on the bottom of it to prevent anyone from tampering with it. In sixth grade he put a switch on a motor attached to the miniblinds in his bedroom to automatically open and shut them. Then he built another robot, Trashmaster 5000. The inventor’s description: “An aluminum track went across my ceiling, and this shoebox contraption would travel back and forth with a trap door that would open when it was directly
Getting into tight spots from difficult angles – that’s the Flip-Out “Tantrum” way
THE PERFECT SCREWDRIVER Inventor Joel Townsan, creator of the perfect little power screwdriver for tight spaces. Its main ingredients are plastic, intricate gearing, and versatility with a 168-way head. He also is former bar back and bartender Joel Townsan. So how would he create the perfect screwdriver for night spaces, one that would turn your head every which way? Like this: A shot of Grey Goose vodka in a mixing tin A dash of triple sec (Curacao liqueur) A muddle of fresh-sliced orange 2 oz. fresh orange juice Shake to perfection – ‘til the tin is frosted Pour over ice or strain into a martini glass
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INNOVATION / ENTREPRENEURSHIP
Townsan patented the gear mechanism at the heart of his revolutionary, 168-way electric screwdriver
over the trash can.” Talk about your energy savings. “I’m not sure it saved that much effort,” he said, “but at the time I thought it was the coolest thing ever. I called about getting a patent, and somebody said it would cost me $7,000. A year later I read about the 10 best inventions, and one was electric blinds. I swore that would never happen again.” Jump ahead to college, freshman year at the University of Washington, studying pre-engineering, and Townsan is part of a new robotics team. “We built a robot for a national competition,” he said, describing how teams across the country built robots that competed in a challenging arena-style competition in handling obstacles.
“(UW) flew us out to San Jose and to Orlando, and we did very well in both competitions,” he said. “We had access to a full machine shop, and had help from some industry professionals, but we did all the designing ourselves.” That was Rainmaker One, and UW gave the team an award for creating it. All these were building blocks. Along the way Townsan also became self-taught in computerautomated design (CAD). He learned to lathe (“set up a metal shop in my apartment”) while working for a boat company, using their machine shop. He said that without computer training, “I thought at first it would be impossible, intimidating, but really it was pretty easy. It’s visual, spatial.” From conception through development, Townsan worked at various places with flexible enough night-time hours (and good tips) to leave days open for Tantrum tinkering. He was a bar back at Queen City Grill,
COLLABORATIVE CONTRIBUTIONS gave him not one, but 10 or so. In his carefully-conceived and precisely-organized plan of He is a client of NW Innovation Resource Center (NWIRC). action to take his invention, the Tantrum electric screwdriver, He recently started a cooperative effort with Bellingham to market Joel Townsan has solicited and benefited from Technical College. He will enlist the support of Kickstarter.com numerous supportive resources. As an entrepreneur with a start-up business, Flip-Out Screwdrivers, LLC, he can attest for investment funds. “Several Bellingham companies, groups, to the value of collaborating and individuals have contributed businesses willing to assist or to or are currently contributing provide materials. to the success of the Tantrum,” One of the best he said. The list: • Bellingham Technical College examples is when he visited (the CNC, or Computer a production facility in Numerical Control lab) Issaquah, Wash., where the Phillips Corporation • Hansra Intellectual Property manufactures Sonicare Law (patent attorney) electric toothbrushes. • NWIRC Townsan had discovered that (client for support, guidance, Blue plastic Sonicare electric toothbrush encasement a plastic carrying case for mentoring, etc.) traveling with that product was an excellent body encasement • KK Industries (laser precision-cut metal) for the gearing on his electric screwdriver. • Nylatech Inc. in Everson (production plastic) He drove there from Port Townsend to buy one or two, and • Pro CNC Inc. (machining) when he told them what he needed them for the company
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a front-end cashier at Whole Foods Market in Seattle, a boat tech at Gold Star Marine in Port Townsend. These nights he is a server at the steakhouse and formerly tended bar at the Silver Reef in Ferndale. After the year on the robotics team, Townsan said, “I was ready for a new project, and I really wanted to be a successful inventor.” He dropped out, worked the odd jobs to pay bills so he could devote full-time to the Tantrum, and took it through several prototype stages to get it smaller and user-friendly. “I filed for a patent in 2005, it was issued in 2007, and now I’m ready for production.” Which brings us to here and now. And next. Using the Kickstarter entrepreneur program – “a funding program for creative projects,” its website declares—he’ll manufacture and roll Tantrum out at the Seattle Boat Show in January and take pre-orders.
The pages of entrepreneurial, start-up invention: a U.S. Patent, and voluminous notes and sketches of the prototypes of ‘Tantrum’ battery-powered screwdriver.
“Our initial marketing strategy,” he said, “will be focused towards professional users. They account for more than 60 percent of all power tool sales, and they’re more likely to find a need for this tool
on a regular basis. In addition we hope to make our products attractive to the ever-growing DIY (doit-yourself) market as well.”
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ENTREPRENEUR/START-UP TIPS Laura Bostrom | Accelerator Program Manager, NW Innovation Resource Center The NW Innovation Resource Center provides services so entrepreneurs can create economic opportunities and jobs through innovation. A nonprofit organization based in Whatcom County, the NWIRC accelerates early-stage startup companies and their rate of success through mentorship, resources, and accountability.
Shark Tank ABC TV’s hit show bears lessons for ‘wantrepreneurs’
he five investors are imposing, lined up in identical chairs. All five are self-made, wealthy business owners, including two billionaires. As the cameras roll, aspiring entrepreneurs enter the room and ask for a cash investment in exchange for a percentage of their business. The ABC-TV reality show Shark Tank, entering its fourth season and nominated for an Emmy award, definitely entertains.
Squirrel Nut Butter in Oregon. She was in town promoting the company’s products, Honey Pretzel peanut butter and Vanilla Espresso almond butter, new items on Haggen shelves. Erika and I later spoke by phone about her busi-
and it has run twice. At the time their episode first aired, the young women were selling their product just to friends, family, and farmers markets around Portland. The two made for great television—students at the University of Oregon who started their nut butter company in their college apartment in Eugene. Erika and Keeley spent a lot of time studying and prepping to appear on Shark Tank, and Erika said they felt prepared for the sharks’ questions. “The sharks know what they’re talking about,” she said. During their segment on the show they received an investment offer from one of the sharks, Barbara Corcoran. Erika said But how realistic is the sharks’ posiit? Let’s see, from the tive reception was a inside. huge validation for We are Shark Tank Keeley Tillotson (l.) and Erika Welsh created nut butters and sought backing their business idea. on the ABC-TV hit show Shark Tank. (Photo courtesy of Wild Squirrel Nut fans at our house, Shark Tank was Butter. Thank you.) so I was pleasantly not the only invessurprised to see a tor experience for familiar face while I went grocery ness and her appearance on Shark Wild Squirrel. Months later, after shopping at the Barkley Haggen in Tank. filming the show, the women Bellingham recently, Erika Welsh. Erika and her business partpresented at Angel Oregon, an She is a Shark Tank alum and one ner, Keeley Tillotson, videotaped investment conference and comof the two co-founders of Wild the Shark Tank during Fall 2011 petition sponsored by the Oregon 50 | BUSINESSPULSE.COM
Entrepreneurs Network. Though they did not win the $250,000 investment, they were voted Audience Favorite and received a $7,500 market research package. Erika said parts of the Shark Tank experience were similar to the Angel Oregon experience. The questions from the television sharks and from the angel investors covered the same ground. “A lot of what they ask, about us, our idea, the numbers, the ROI (return-on-investment)–all of that is the same,” Erika said. “We were much more prepared because of Shark Tank.” Some local investors and business people that our center works with point out that Shark Tank doesn’t fully capture the nature of a traditional deal scenario. You will not find an eager panel of investors ready to open their checkbooks and make an immediate decision. Typical investors are more respectful than the flamboyant personalities displayed on the show, such as ascerbic and self-proclaimed “Mr. Wonderful,” Kevin O’Leary, and the controversial owner of the Dallas Mavericks pro basketball team, Mark Cuban. Further, the show does not illustrate all the normal steps and processes required to craft a deal between an entrepreneur seeking funding and an angel investor. There’s no time for all those steps in 60 minutes of reality TV featuring several participants. But some basics do remain the same. Just like in real time, the deals don’t always work out. In the case of Wild Squirrel, the team ultimately did not strike the deal with the shark tank investor. However, their business has grown with funding from friends and family. Wild Squirrel nut butters come in five varieties (three peanut butter, two almond) and can be purchased in about 150 retailer locations all along the West Coast, plus online – all accomplished in less than a year.
At the NWIRC we work with entrepreneurs just like Erika and Keeley and assist them in obtaining sources for funding for their new businesses. An important lesson taken from Shark Tank is that entrepreneurs seeking funding, whether it comes from family and friends or from television billionaires, must anticipate and know the answers to their potential investor’s questions. To attain financial back-
ing, entrepreneurs must clearly understand their business model, and must clearly demonstrate to investors that they are capable of delivering on what they propose to accomplish.
Who is your favorite Shark in the Tank? Vote in our poll at www.BusinessPulse.com.
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Photos courtesy of the Barkley Company. Thank you.
Giant screens light up Barkley ‘This is the largest and most complex project we’ve ever undertaken’ By Michael Barrett
oming soon to Barkley Village in Bellingham!
That’s been the buzz for two years. Registering high on the community excitement meter – both for moviegoers, and for economic impact—since announcements first surfaced about it: A new Regal Entertainment highest-tech, futuristic digital cinema complex consisting of 16 large screens displaying “the best picture you’ve ever heard,” according to press releases. The first new Bellingham movie theater excitement in 20 years 52 | BUSINESSPULSE.COM
since the opening of the six-screen Regal corner of Bellis Fair Mall is the showcase for a Barkley Company/Talbot Real Estate development that’s even larger at Barkley Square in Bellingham. “This is the largest and most complex project we’ve ever undertaken,” said Jeff Kochman, the chief executive officer of Barkley Company, as he conducted a recent tour of the theater building and surrounding grounds and two other buildings constructed for food-and-drink retail businesses. Russ Nunley, vice president for marketing and communications
with Regal in Knoxville, Tenn., said by telephone, “Barkley’s is an amazing development. We’ve been looking at Bellingham for years and we fell in love with the Barkley development. It’s very central. It’s an entertainment destination.” The movie complex includes an outsized IMAX-dedicated theater, two others for Regal Premium Experience (RPX) that is similar to IMAX with its surround-sound, outsized screen, and state-ofthe-art digital projection system. Seven 3-D screens and six “regular” screens round out the
during the construction phase that began last year. The theater operation itself will create about 120 jobs. “Regal Entertainment asked about it years ago. At the time we said no, but we started to work with Regal (again) in 2007,” Kochman said. “We’re really pleased.” Expansive parking is part of the layout. “People will be able to park off Woburn Street in the theater parking lot and safely walk across
complex which was scheduled for a mid-December grand opening. The screens cost about $1 million each, according to the National Association of Theater Owners The entire site plan, due west of Haggen Foods across Woburn Street, consists of the movie house and two separate buildings, each with two tenants. A fifth tenant can occupy space inside a glassed front part of the cinema structure. Heading into October, The Woods Coffee’s latest café was the first sealed deal, and the others remained in the negotiation stage. Overall, Kochman estimated the project at about $20 million on construction spending, and it supported between 200-250 jobs
“You might come here to see a sporting event on the big screen, or an opera…. We fell in love with the Barkley development. It’s very central. It’s an entertainment destination.” Russ Nunley, VP, Marketing and Communications, Regal Entertainment
to the restaurants and back to the theater,” Kochman said, referring to several eateries available in the Haggen quad. Food businesses will create a draw to the area on top of the anticipated crush of movie lovers. Preliminary exploratory talk centered on a café, a yogurt shop, and a single-use restaurant, Kochman said. “Retail is tough,” he said, as
BARKLEY REGAL REPLACES TWO THEATERS The obvious question that arose as soon as the word spread about a cinema multiplex with 16 screens was what would happen to Bellingham’s other three Regalmanaged properties? The Regal theater at Sunset Square 6 will go away and the Sehome 3, south of Sehome Village, will be sold. Sehome Village went on the market in September. Regal’s VP for marketing and communications, Russ Nunley, reported this in a phone interview from Regal headquarters in Knoxville, Tenn. Regal will continue to operate the Bellis Fair 6 group of screens in Bellingham’s mall. Regal Entertainment’s website states that it is “…the largest and most geographically diverse theater circuit in the United States, consisting of 6,566 screens in 520 theaters in 37 states and the District of Columbia.”
he spoke of amenities built into the complex designed to attract customers. “On the south side (of the theater) there is a pond and it will be lit at night,” Kochman said. “On the Woburn side near the entry to
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REGAL THEATER and luxurious seats with highback headrests, a giant immersive screen illuminated by high-quality digital projectors, and completed with a state-of-the-art (surround) sound system.” Characterizing Regal’s proprietary brand, Nunley said, “We’ve made a significant investment.” He also discussed the theater’s food plan. “We don’t have a set menu yet, but the options are expanding beyond just popcorn, candy and drinks.”
Jeff Kochman, CEO of the Barkley Company, described the scope of ‘largest-ever’ project in front of Regal 16-screen Cineplex under construction. (Staff Photo)
THE WOODS COFFEE SET FOR ‘NEW’ COFFEE CONCEPT When the Regal Barkley theater opens, The Woods will be a short walk away and it has been designed to accommodate folks waiting to go to a movie, or coming out of a movie seeking refreshment. “We designed a little different, a little bigger than some of our other locations (Ferndale, Boulevard Park near Fairhaven) with privacy built in,” Wes Herman said. He is the founder and owner of The Woods Coffee. “We’ll have a semi-private room like at the Flatiron Building downtown that groups can use, and a mezzanine level for special activities. It will be scenic and really comfortable for lounging before and after a movie, with two fireplaces and soft seating.” This store also will introduce what Herman termed “a new delivery system” for coffee and other products. He would not talk about details because the system was undergoing test runs before finalizing the processes. In the company’s 11th year, this will be its 14th coffee shop.
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the theater we’ll have a nice sidewalk and landscaping.” A constant flow to the theater is anticipated to make the entire complex successful. Nunley said their research indicates that people more than ever love the theater experience, despite the rise of DVDs bought or rented for home use, subscription home entertainment sources such as Netflix, and rising ticket prices. He revealed that net revenues at Regal complexes nationwide are up from $34.8 million in the second quarter of 2011 to $37.2 million during the same span this year. The 23-year-old company has capitalized on the popularity of the stadium concept installed at Barkley Square in which seating is tiered steeply, IMAX fashion, to avoid any blocked sight lines while viewing the giant screen. The RPX system also has gained popularity even though it costs a little more to enjoy it, Nunley said. According to a website quoting Regal, RPX delievers “a custom-built premium environment featuring elegant
“You might come here to see a sporting event on the big screen, or an opera…. We fell in love with the Barkley development. It’s very central. It’s an entertainment destination.” Russ Nunley, VP, Marketing and Communications, Regal Entertainment
Nunley said that movies aren’t the only entertainment attendees will find at the Regal 16 Barkley. “You might come here to see a sporting event on the big screen, or an opera,” he said. It took some time and a little arm twisting, but the Regal at Barkley’s southwest quad stood ready to light up its marquee in time for the holiday movie rush, traditionally a time for the release of strong family fare and Christmas-themed films. “We’ve been very eager in the Bellingham area, eager to bring in a modern, multiplex theater like this with all the bells and whistles,” Nunley said. “So the stars were in alignment and we felt Barkley was the right place and this was the right time to make all this happen.”
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H.R. PROTOCOL Bob Pritchett | President/CEO, Logos Bible Software Bob Pritchett co-founded Logos Research Systems, Inc. (now renamed for its niche-market product, Bible software) in 1992, and the business perennially has made fastest-growing companies lists regionally and nationally. He is on the executive committee of the Whatcom Business Alliance board of directors.
Put Your Fingerprints All Over Your Business
our hands should be wrapped around the heart of your business. But don’t forget to put your fingerprints all over the rest of the business too. If you don’t care, who will? Every aspect of the business and its operations reflects on you. You are responsible not only for yourself, but for all of your employees and their actions on behalf of the company. This is much more than making sure they do not make promises or sign contracts you do not approve of. It is making sure you are happy with the way your offices look, the way your phone is answered, the way your receivables are collected, and the way employees decorate their e-mail signatures. I am not suggesting you micromanage every part of your company. I am suggesting that you do not consider any part of the company off-limits to micromanagement. By regularly reviewing and tweaking details throughout the business you keep yourself up-todate on operations and ensure that your business reflects you. “Over my dead body.” Everyone running a business should have a few nonnegotiable positions. I am not talking about issues of right and wrong, like, “We do not 56 | BUSINESSPULSE.COM
pay bribes to win contracts.” I am talking about points of personal preference—like, “We will never have fewer than 25 chocolate chips in each of our cookies,”—that you designate as issues of right and wrong. Or, better yet, life and death.
“If a computer answers your call to Logos…you will know I’m dead.” Bob Pritchett, CEO, Logos Bible Software
Once you have chosen your nonnegotiable positions you should make it a point to bring them up regularly and demonstrate your utter devotion to them. Rant and rave if you must. Hold fast against every appeal to reason or emotion. Your intractability on these points serves to illustrate that no matter how much authority has been delegated in your organization, you are still ultimately in charge of even the tiniest details. And if your points are well chosen to reinforce your vision of the organization they will help communicate that vision to your employees and customers. • Apple Computer’s Steve Jobs is infamous for his insistence on
a one-button mouse (to promote his vision of simplicity) in a world where the average computer mouse has two to five buttons and a wheel. • The mustachioed Walt Disney enforced his vision of amusement-park-friendly personal grooming by prohibiting Disney employees from wearing mustaches, a ban which lasted years after his death. • Sam Walton, founder of WalMart, believed that working in a retail business meant working Saturdays, and so he regularly held meetings on Saturdays, even for headquarters-based executives. At my company I insist on having a person, not a machine, answer the phone. No sales pitches for “automated call distribution” or appeals based on call volume can sway me from my position that great customer service means answering customer calls in person. If a computer answers your call to Logos Bible Software, you will know I’m dead. [Reprinted by permission from: Fire Someone Today, Bob Pritchett (2006), Thomas Nelson Inc., Nashville, Tennessee. All rights reserved.”]
ALIVE, BUT CAN’T ANSWER YOUR PHONE? Go phone-tree with a virtual receptionist… By Allysun Kirkham When you encounter a pre-recorded ‘receptionist’ when calling a business does it frustrate you, and maybe even elicit a groan of agony over not reaching another living, breathing human being? Take a deep breath. Phone trees are saviors of both organizations and you, the general public, and many businesses have jumped onto this virtual bandwagon for, among many, two of the most understandable and most common reasons: • Staffing. • Budget. Businesses employ the use of a recorded receptionist to deal with dwindling resources in a recessed economy. With a pre-recorded track, organizations cut down the expense of having a hired receptionist answer their calls. Using this method is also effective in acquiring more time with face-to-face interactions and callers to the business are quickly directed to the right person with which they hope to speak to. As a caller you have no confusion on the receiving end; you simply listen as the automated voice guides you through your options like a company phone directory or ways to reach specific departments by number (“please press 1….”). “Call-‘Em-All,” a Bellingham company, markets phone trees to other companies and provides jobs to 11 staff members. By the end of this year they expect to grow to 15. Adam Arnold, the director of business development, said, “Voice broadcast cannot replace the value of a live conversation. But when communicating a repetitive message to a large group, automated messaging is a far more effective means of informing people. “What takes a group of people hours, days, or longer to manually dial can be accomplished in a matter of minutes.” According to Adam, “Call-’Em-All” is used on the municipal government level and the professional level about equally. We live in a time of constant change and technological advances. Virtual receptionists may not be as personal as live receptionists, but in managing time the recorded voices are useful at all levels to all organizations that use them, as well as callers who encounter them. Businesses in a trying fiscal and changing atmosphere can rely on phone trees to handle their incoming calls at a lower cost than a live receptionist while not sacrificing the service that their callers depend on. Ms Kirkham was a summer intern at Business Pulse who entered her senior year in the journalism program at the University of Oregon during Fall 2012.
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Local businessman turns British tradition into bustling business By Debbie Granger Product photos courtesy of Olde English Crackers
In a search for an off-beat, holiday gift business, Business Pulse learned about a remarkable success story: How Gary Stonedahl turned a personal mission of becoming the best father possible, gave up a burgeoning international career in the study of insects, and Americanized a long-standing British holiday tradition into an extraordinary e-commerce venture. Operating out of a nondescript, small office/warehouse in a little business center on Hannegan Road in Bellingham (on-line, but customers welcome!), sales in 15 years have swelled 85 times more than Year 1. Season’s greetings from Olde English Crackers….
hatcom County’s gone crackers. Not edible crackers. English Christmas crackers—as in, they make a loud “crack” and reveal treats, piñata style. A holiday tradition dating to the 1840s in Great Britain, these decorative party favors enliven celebrations not only at Christmas, but at a variety of special occasions such as birthdays, weddings, and any party atmosphere.
Right here in our Northwest corridor, a far reach from England, a company produces an upscale line of crackers, custom-designed, manufactured, and then marketed throughout the United States. Olde English Crackers is the leading producer of this unusual product in the nation. A sudden, tragic family transformation led to the company’s 1996 start-up. Gary Stonedahl, founder, owner and manager of Olde English Crackers, graduated from Bellingham High School in 1972. After majoring in biology at Western Washington University and earning a doctor58 | BUSINESSPULSE.COM
ate from Oregon State University in entomology, he secured a tenure track position in 1988 as the lead entomologist for the esteemed Natural History Museum in downtown London. His wife, Julie, died in June ’96 while they were in England, leaving him with a 4-month old daughter, Rachel, and a 3-year-old son, Danny. Stonedahl returned to Bellingham shortly thereafter to draw from the support of family. He felt his career track drying up, too. “Suddenly, with funding tight, everyone was fighting for research dollars and adequate income,” he said. So, after eight years abroad he abandoned the field of ento-
The 19th Century holiday tradition of English crackers provides shelves of fun for U.S. customers through Stonedahl’s e-commerce model
“Gap, Inc. launched a holiday showcase of Olde English Crackers décor in its Banana Republic, Old Navy, and The Gap stores. Annual sales have risen from $5,000 to $425,000.” mology and began pursuing what he termed “a seed idea to fall back on” as an independent business venture allowing more time at home with his children. A memory had stuck with Stonedahl, and turned into inspiration. “Probably the first Christmas party we went to after arriving in England, the hosts had English crackers,” he recalled. He enjoyed the light-hearted whimsy the cracker experience offered. Realizing during visits home that the delightful pull-apart bonbons could not be found in the U.S., he followed a hunch that Americans would enjoy these favors; he would attend gift trade shows— Seattle, San Francisco—during trips stateside. After a few months of trade-
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OLD ENGLISH CRACKERS show research he launched Olde with helpful information about accordingly. For example, music English Crackers in 1996. Sales the crackers, plus custom-ordering lovers can select the “Concerto” of $5,000 during that first year options. Each box of crackers product line, and the magic-andgrew steadily to sales of more includes a complete set of direcjokes package is tailored for the than $425,000 in 2011, with about tions to ensure successful use and aspiring magician. 90 percent of the business from a satisfying “crack” when opened. Additionally, buyers have the within the U.S. in both retail and To grow the business duroption of either sending their wholesale. Last year, the company ing 2005 Stonedahl traveled to personally-selected gifts and motcreated the décor for all of the Manchester, England and met tos for assembling in Bellingham, Banana Republic stores throughwith Julian Reed, the owner of a or the having the product shipped out California. company selling crackers termed in craft kit form to complete at Each cracker is home. hand-assembled in Co-merchandising Whatcom County. A opportunities cracker is two inches abound. Stonedahl in diameter and teams with Kevin 8-to-12 inches long. Buck, owner and Products include a full lead chocolatier of variety of high-qualChocolate Necessities ity, theme-decorated in Bellingham, to wrapping paper, tiny insert small, speimported gifts, and cialty British-themed mottos researched Belgian chocolates as and produced by the gift item in a preStonedahl. His attenmium cracker. tion to quality and At a trade show detail distinguishes in 2011 Stonedahl Olde English Crackers connected with the from less-expensive corporate marketversions. He packers from Gap, Inc. ages the crackers in (Banana Republic, Old attractive acetateNavy, and The Gap), covered boxes sets and they launched a of six, eight, and 12. holiday showcase of Prices range from $15 Olde English Crackers to $30 a dozen, with in several stores savings available for with decorations and bulk orders of 50 or merchandising. The Mary Carol Moore and Gary Stonedahl enjoy popping an Olde English more crackers. Banana Republic flagCracker. (Staff Photo) Mary Carol Moore ship store in downserves as office manager, town San Francisco and the company employs two “cheap and cheerful.” Stonedahl featured a grand three-story at-home workers year-round to since has become the leading dischandelier constructed entirely assemble the crackers, and hires tributor of Reed’s less-expensive of crimson foil-wrapped English 10 extra people near the end line of crackers. crackers hanging in the interior of October to meet the holiday In addition to the ready-made staircase atrium, and placed proddemand. versions of Olde English Crackers, uct for sale. Stonedahl credits the rise of the buyers can select from a menu What qualities enable a man internet as a critical component of wrappings, gifts, personalized to transition from a leading of the company’s poppin’ growth. mottos, and package labels. Olde research scientist to a successful Internet sales comprise 95 percent English Crackers are suitable for entrepreneur? Stonedahl readily of sales, even though customers other major holidays, birthday admitted that when he launched are welcome at the warehouse/ parties, weddings, anniversaries, Olde English Crackers he had no workshop store. Olde English company functions, and advertisbusiness training or experience. Crackers’ website, a secure fulling campaigns. Rather, he credits his ability to service site, provides customers The company designs themes talk comfortably with anyone as 60 | BUSINESSPULSE.COM
the primary quality leading to his success. This sincerity, backed with a 100 percent product satisfaction guarantee, underscores his strong desire that customers thoroughly enjoy their Olde English Crackers experience. Also, because of his comfort with using math in his science
How English Crackers work They resemble a large brightly-colored Tootsie Roll, and hosts for dinners and parties place them as decoration and party favor at individual place settings. Guests, each receiving one, open them just before a meal is served. Two persons pair up, and each pulls on one end of the cracker using steady pressure and a gentle twist. (Note the illustration by Olde English Crackers founder Gary Stonedahl and company office manager Mary Carol Moore.) The pulling tears the cracker in the middle and activates the “cracker-snap,” producing a startling noise and a small splay of colorful confetti. In addition to the snapping mechanism, each cracker includes three treasures: 1. A piece of brightly-colored tissue paper that unfolds into a crown-shaped hat; 2. A small gift (candy or a charm); 3. A motto – a folded piece of paper revealing a riddle or inspirational message. The opening and popping of the crackers continues until everyone has their own goodies. Guests don the tissue paper crown, read the mottos aloud, and show off the miniature gifts – all creating a relaxed and festive atmosphere.
background, he crunches the numbers to determine if various expansion strategies actually “pencil out,” he said. Stonedahl envisions the opportunity to expand the personalized and customized applications for his party favor business into specialty events. Because party crackers are still a bit mysterious to Americans, he sees incorporating the intrigue and unique surprise of English crackers into family and
corporate gatherings as unlimited marketing potential. Olde English Crackers welcomes locals to visit the shop at 4071 Hannegan Road, Suite S, but the staff encourages calling ahead (360-715-2972) because office hours are unscheduled until November when they open daily during the holiday peak season (9-to-5). Seems, and sounds, like a good place to pop by.
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County’s largest pumpkin patch Stoney Ridge Farm draws almost 40,000 people in 3-week window By Allysun Kirkham, Senior, University of Oregon Journalism School
EDITOR’S NOTE: We suspected that pumpkin patches are big business this time of year. We sent summer intern Allysun around to find out. She discovered a fun and fertile world at one farm in Whatcom County, and learned about a couple of others. Nationally, the commercial pumpkin industry last year produced about $113 million, according to the National Agriculture Stats Service (NASS) in its annual vegetable survey. Locally, it’s more about whimsy, fun, and baking than economic impact. Excitement and fun run high and pies stack high, though, as the Pumpkin rules from Halloween through New Year’s. Starting with Jack ‘o Lanterns and running through all manner of baked goods for Thanksgiving and the December holiday season, the pumpkin is but a small fraction of the agriculture production in Whatcom County. But Allysun found a place that rides the wave.
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ave you ever seen a pumpkin so twisted and contorted you’ve done a double take? Or two pumpkins growing together as one? Expect it, if you visit a pumpkin patch. October’s in the air and pumpkins are growing plentifully. Contorting and twisting are a normal sight in a pumpkin patch, though maybe not on peoples’ porches at Halloween. Hourglass-shaped pumpkins turn up, or even pumpkins that have conjoined and grown together – not ideal for carving. Many odd pumpkins can be plucked from the patch. Hourglass-shaped to conjoined, perfectly smooth to warty, they all lie under the large green leaves waiting to be taken home, gutted, and left smiling on the porch or baked in a pie or bread. Many varieties of pumpkin litter the landscape, varying in size, shape and the most curious of names. Large, round pumpkins are known as “Fat Jacks,” while warty pumpkins are referred to as “Knucklehead.” Small pumpkins usually designated for visiting school children are known as “Field Trippers,” but my personal favorites are those known as “Hannibal.” Derek and Deborah Gavette, along with their five children,
know pretty much everything there is to know about the pumpkin and the secrets it holds. What started as a small family pumpkin plot in their backyard grew into the largest pumpkin patch in Whatcom County at eight acres, enjoyed by approximately 35,000 pumpkin pickers over a 12-day stretch and about 4,000 youngsters on field trips in a short eight-day span.
Welcome to Stoney Ridge Farm Standing at the top of the hill overlooking the pumpkin patch presents a rush of excitement as families cast their eyes over a sea of orange. Amidst such a colorful tide, more than 100 scarecrows stand watching the hunched backs of the visitors yearning to find the perfect pumpkin to plant on the porch. The average pumpkin is usually 80-100 pounds. Stoney Ridge has been home to pumpkins in the 200-300-pound range. According to Deborah Gavette, “Most visitors like an oval-shaped pumpkin of a little less than average size, usually 50 to 80 pounds. But some people, they just can’t find one big enough.” Deborah likes to take pumpkins from the patch and decorate her porch for a festive orange look. However, visitors to the farm snatch these pumpkins up the quickest and she said that every week she must return to the patch to replenish the porch decor. “I think that because I’m the pumpkin lady, they think I know where the best pumpkins are and those are the ones that I put on my porch,” Deborah said. “Really, I just take a wheelbarrow out and choose them at random.” Stoney Ridge Farm, Bellewood Acres, and Boxx Berry Farm are the only substantial U-Pick and We-Pick pumpkin patches in Whatcom County. Boxx Berry Farm works six acres of pump-
Derek and Deborah Gavette stand out in their field at Stoney Ridge Farm in Everson. (Photos courtesy of Stoney Ridge Farm.)
kins, and Bellewood recently opened four acres for this fall season. Weather here isn’t conducive to the perfect pumpkin patch. Pumpkins need more heat
to grow. Our Moisture-ridden air also creates the perfect conditions for the pumpkin’s worst enemy: powdery mildew. This creeping
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The pumpkin patches fill wagons, porches, and Halloween needs at Stoney Ridge Farm
substance latches onto leaves and has the capability of spreading from pumpkin to pumpkin in a matter of days and killing the pumpkins within a week. Pesticides are futile. Mildew resistant strains and overhead watering techniques are the farmers’ only hopes in preventing the pumpkin mildew. What happens to extra pumpkins that don’t get picked and carved by the visitors to Stoney Ridge, or
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eaten up by the deadly mildew? Deborah said that cows are receptors of such leftovers and they thoroughly enjoy every orange, stringy part of pumpkins. Stoney Ridge also donates some pumpkins to youth groups who come visit and, of course, many a pumpkin is transformed into baked goodies. Though pumpkins may not be a cash crop in Whatcom County, during the fall season you will be hard-pressed not to see a grinning orange face flickering at you from someone’s porch, or the scent of pumpkin treats clinging to the crisp fall breeze.
TIPS ABOUT THE PUMPKIN 1. How to make your Jack ‘o Lantern last a week or so longer: mummify it. Sterilize it with bleach, give it a coat of petroleum jelly, and voila! – it’s embalmed. Now, keep it out of direct sunlight, preferably in a cool spot. 2. Secret to a perfect pie, courtesy of Andi Vann, owner and baker at Pure Bliss Desserts in Bellingham: “Make it only with the best quality fresh pumpkin you can find. We source an organic sugar pumpkin. Then scoop out the pumpkin and roast it before making the pie.” 3. The pumpkin is the centerpiece for the 2nd largest commercial holiday in the world, Halloween – a $2 billion retail industry. 4. 90 percent of the commercial pumpkins in the U.S. grow within a 90-mile radius of Peoria, Ill. Nearby Morton is known as Pumpkin Capital of the World, and is home to Libby’s, a Nestle Food subsidiary that is the largest producer of canned pumpkin
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Terri Salstrom, President of Industrial Credit Union and WCBGC Board (Staff Photo)
Businesses think about philanthropy in a whole new way BCS teaches kids valuable business & life skills By Frances Badgett
hat do Denzel Washington, Jennifer Lopez, Martin Sheen, Cuba Gooding Jr., and Courtney B. Vance have in common? Well, yes, they’re all wellknown entertainers. Not as commonly well-known— they were all active in the Boys & Girls Clubs of America. 66 | BUSINESSPULSE.COM
Founded in 1860 in Hartford, Conn., the BGCA’s influence has spread nationwide and internationally and benefits greatly from some of its alumni star power. Washington, for example, is a national spokesperson for the organization. Vance serves as good will ambassador for its Alumni Hall of Fame, which has 151 inductees that include a chief justice, several former high-ranking government and military figures, and athletes such as two of this year’s new members,
baseball pitcher C.C. Sabathia and Olympic gold-medial swimmer Anthony Lee Ervin. Five branch clubs operate in Whatcom County – Bellingham, Blaine, Lynden, Ferndale, and Lummi Island – and serve more than 11,000 children through club activities and outreach programs. It’s not surprising that on the local level, many successful local business leaders feel strongly about supporting the Boys & Girls Clubs of Whatcom County. Business lead-
ers understand well the importance of building leadership through training and skills, bolstering kids’ self-esteem through sports and education, and shaping a great future for our community. The BGCWC has been in operation since 1946 and thrives today as probably the largest civic group for young people in the region. The mission of the national organization remains fairly close to the original: To give kids a place to go during the summer, after school, or while their parents are working— a place other than the mall, the streets, or the couch in front of the television. Offering leadership training, creative pursuits, physical recreation, and life skills, the Boys & Girls Clubs provide a multipurpose, one-stop shop for entertainment, socializing, education, and personal growth. With all of those children to serve, the Boys & Girls Clubs rely on memberships, grants, the pro-
President-elect Terri Salstrom (l.) and Branch Director Linda Tyler examine monitor for new security system at the renovated Bellingham downtown Boys & Girls Club (Staff Photo)
ceeds from events, and the generous philanthropy of local businesses. But corporate giving doesn’t always just mean writing a check. Christine Destry, the Whatcom County clubs’ director of organi-
zational advancement in charge of fund-raising, said, “We want businesses to think about philanthropy in a whole new way. Writing a check is great, of course. But there are so many ways to support us.”
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Bounty at the Bus: Donations plentiful from the clubs’ back-to-school drive. (Staff Photo)
She said that Bellingham Cold Storage has a unique way. There’s the regular, outstanding mentoring, tutoring, and coaching from multiple sources, all highly-
ERIN BAKER ADDRESSING BGCWC POWER BREAKFAST Fittingly, the founder of a breakfast products company in Bellingham, Erin Baker, is scheduled as keynote speaker for the Boys & Girls Clubs of Whatcom County’s largest single-event fund-raiser in November. The 13th annual breakfast presented by Wells Fargo takes place Nov. 13, 7-8:30 a.m. at the Ferndale Events Center off I-5 Exit 262. Emmy Award winner John Curley was scheduled as master of ceremonies. Curley hosted KING 5 TV’s “Evening Magazine” for 14 years and it was one of the locallyproduced television shows with the highest ratings in the nation. For information, visit www. whatcomclubs.org, or call 360.738.3808 and ask for Katherine Freimund.
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valuable and valued. Bellingham Cold Storage (BCS) stands apart with grant sponsorships. The grant program is for junior staff and older kids at the BGCWC. Every spring, the young adults create a program and write a grant application for their proposed program. One or two winners get
“Many kids do not have the ‘breaks’ in life so many of us take for granted— breakfast, computers, being able to play sports after school, help with their homework, and positive caring adults in their lives.” Mimi Ferlin of Brooks Manufacturing
selected, and the staff announces winners at a breakfast sponsored by Bellingham Cold Storage during which all of the participants receive feedback on their grants. BCS President and CEO Doug Thomas started the grant program. “We give them a template,” he said. “They
have to keep their proposals brief and succinct. They create the budget, but they also have skin in the game. They have to raise some of the funds themselves.” The grant proposals undergo review by Thomas and others at BCS, as well as Dave Gallagher, the business writer for the Bellingham Herald. The applicants then administer their programs throughout the summer, working within their grant budgets, and they receive visits from Thomas at the end of the summer for a final review. Thomas said, “There are three criteria we look for: The project has to serve Whatcom County youth; the kids involved have to learn life skills from the program; and they have to raise some of the funds themselves.” Destry said she had never heard of this type of involvement before, anywhere. One of the grant programs this year was a litter collection project on local trails. Another was a recipe project in which the kids had to collect recipes, prepare and cook all of them, and put together a cookbook. Though BCS has been a supporter of the BGCWC for 65 years, but Thomas created the grant program in recent years to give in the spirit of the clubs’ mission. Echoing
Destry, he said, “We’re happy to write a check to support a cause, but I wanted us to create something more meaningful that incorporates the kind of life skills and training
“We’re happy to write a check to support a cause, but I wanted us to create something more meaningful that incorporates the kind of life skills and training the (clubs are) all about.” Doug Thomas, President and CEO of Bellingham Cold Storage
the BGCWC is all about. I want the kids to learn about responsibility and leadership, making a great future for our whole community. Having skin in the game gives them something at stake.”
Each club features youths of the month, as displayed here at the downtown Bellingham branch. (Staff Photo)
One of the attractions of the BGCWC is the broad appeal and affordability of the clubs’ programs. Jim Campell of McDonald’s Northwest serves on the Board of Governors for the BGCWC. He said, “The most appealing aspect to me of supporting the Boys & Girls Clubs is the wide range of sports programs for kids at such
a reasonable cost for participation.” McDonald’s sponsors the “Spreading Smiles” campaign every December that annually raises $20,000 for the BGCWC. Campbell said, “My employees really get behind it.” Though McDonald’s was a sports sponsor for many years, Campbell said, “We’ve been much more involved
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As person in charge of organizational advancement, Christine Destry oversees seeks more than checks with imaginative coalitions with regional businesses. (Staff Photo)
in the past five years.” That kind of ramping up of financial support from corporate sponsors helped with the successful reconstruction of the Ferndale Club after it burned. Mimi and John Ferlin of Brooks Manufacturing have been supporters of the BGCWC for many years. Brooks has donated money, sponsored events and athletic teams, and donated wood for club projects. Mimi Ferlin said, “Bellingham is our community. It has been for three generations, and hopefully will be for many more. All the kids in this community are the future. Some need more community support than others. We think it is our responsibility and privilege to help with that. “We support BGCWC for the kids. Many kids do not have the breaks in life so many of us take for granted—breakfast, computers, being able to play sports after school, help with their homework, positive caring adults in their lives. This is how we try to help them and build a better community.” Terri Salstrom, the president and CEO of the Industrial Credit Union, 70 | BUSINESSPULSE.COM
is another long-time supporter of the Boys & Girls Clubs of Whatcom County. She is the Vice President of Resource Development, and starting
“ ... If it had not been for the guidance provided by the staff at a Boys Club in Chicago, I might not be here today. I want to be a part of making that kind of difference in the life of a child today.” Terri Salstrom, President and CEO of the Industrial Credit Union
in January 2013 she will become the president of the board of directors for the BGCWC. She and her husband give year-round, and they have even made the BGCWC a beneficiary in their wills. Salstom’s connection to BGCA runs deep and personally. “Having been a child in a broken home, I
can see how having a club in our area would have been beneficial to me growing up,” she said. She told of attending a family reunion with her father during which he showed her the neighborhood he grew up in. “He pointed out the Boys’ Club he was a member of when he was young.,” she said. “He told me how much they helped him survive some very difficult times. His recognition of the impact the club had on his life made me realize that if it had not been for the guidance provided by the staff at a Boys Club in Chicago, I might not be here today. I want to be a part of making that kind of difference in the life of a child today.” The Boys & Girls Club mission statement reads: “To enable all young people, especially those who need us most, to reach their full potential as productive, caring, responsible citizens.” The local club headquarters has sayings displayed on its walls and the building entryway stating, “Great Futures Start Here,” and its bus bears the message, “The POSITIVE Place for Kids.” BGCWC carries out its programming in five areas: character and leadership; education and career; health and life skills; the arts, and fitness and recreation. Lummi Island’s tiny club of 80 or so members has designed such programs as French lessons, cooking and photography classes, and road safety monitoring. These are but a few of the programs that take place with the generous help of local businesses leaders. Supported by the staff at the Boys & Girls Clubs of Whatcom County, and the amazing kids who work diligently and play hard, that lofty mission is a reality. The odds of them becoming movie or TV stars may be slim, but the odds favor them for high achievements built on the lessons learned through their community support at the Boys & Girls Clubs.
NEW ERA at BELLE WOOD ACRES Distilled spirits, bistro, bakery, and pumpkin patch Bellewood Acres, which built its brand around all things apple over the last 16 years, entered a new era this fall with the opening of its second location. On the Guide Meridian in Lynden, owners Dorie and John Belisle introduced BelleWood Distilling, BelleWood Bistro & Bakery, and also installed a gallery spotlighting local artists and Dorie’s gift shop. Bolstered by new state liquor laws that opened up more directdistribution marketing, BelleWood Distilling delved into its privateformula vodka, an immediate sellout, and other spirits. The location manager, Jake Fowler, is seen here with the brass pot still that produces gin, brandy, and a special apple-based, non-aged brandy called Eau de Vie. “Everything in the Bistro and bakery is made from scratch,” Dorie Belisle said, listing breads, soups, and salads “with apples in them, of course.” For the barista side of the café, the company had BelleWood Blend created by local Hammerhead Coffee Roasters. Of course. But also new this year, joining apples in the BelleWood U-pick market – pumpkins. “Four acres,” she said, “and we grow extra for Halloween.” The U-pick season runs through October. Farm tours remain popular at BelleWood Acres riding “trains” on wheels through acres of apple orchards.
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THE ENVIRONMENT Todd Myers | Environmental Director, Washington Policy Center The Washington Policy Center is an independent, non-partisan think tank promoting sound public policy based on free-market solutions. Todd Myers is one of the nation’s leading experts on free-market environmental policy and is the author of the 2011 landmark book Eco-Fads: How the Rise of Trendy Environmentalism is Harming the Environment. His in-depth research on the failure of the state’s 2005 “green” building mandate continues to receive national attention. Myers holds a Master’s degree from the University of Washington.
The plastic bag ban: Does it really help the environment?
rom Bellingham to Seattle to Issaquah, Washington cities are joining the latest environmental trend – banning plastic grocery bags. Concerned about the amount of plastic that reaches our oceans and its impact on wildlife, communities have decided that banning the bags is a simple and environmentally responsible approach.
But is it? What does the science say? Banning the bags may actually be a net negative for the environment, yielding little environmental benefit while increasing carbon emissions and other impacts. Advocates of the ban cite the bags’ effect on marine life and mammals. Unfortunately, their claims are often false or misleading. For example, the Shoreline city council was told “the ecological impacts of this plastic include over a million sea-birds and 100,000 marine mammals killed by either plastic ingestions or entanglement.” In fact, this assertion has nothing to do with plastic bags. NOAA corrected the claim saying, “We are so far unable to find a 72 | BUSINESSPULSE.COM
scientific reference for this figure.” The only study NOAA can find does not deal with plastic bags or even marine debris, but “active fishing gear bycatch,” in other words, fishing nets that are used at sea, not discarded plastic bags. A Greenpeace biologist quoted in the Times of London agreed, saying, “It’s very unlikely that many animals are killed by plastic bags. The evidence shows just the opposite. We are not going to solve the problem of waste by focusing on plastic bags.” Others claim plastic bags have created a “Pacific Garbage Patch,” twice the size of Texas. This is simply false. Oregon State University reports that the actual amount is less than one percent the size of Texas. Oceanography professor Angel White sent out a release last year saying, “There is no doubt that the amount of plastic in the world’s oceans is troubling, but this kind of exaggeration undermines the credibility of scientists.” Additionally, the Wood’s Hole Oceanographic Institute found the amount of plastic in the Atlantic Ocean hasn’t increased since the 1980s. This doesn’t mean plastic bags have no impact. When determining the environmental costs and benefits, however, we need to be honest about the science. Indeed, there are
environmental risks from banning plastic grocery bags. The most significant risk is the increase in energy use. Plastic bags are the most energy-efficient form of grocery bag. The U.K. Environment Agency compared energy use for plastic, paper and re-usable bags. It found the “global warming potential” of plastic grocery bags is one-fourth that of paper bags and 1/173rd that of a reusable cotton bag. In other words, consumers would have to use a cotton bag 173 times, or once a week for more than three years, before it matched the energy savings of plastic bags. Ironically, many of the cities leading the charge against plastic bags are signatories to the U.S. Conference of Mayors Climate Protection Agreement. Yet, few of these cities even attempt to assess the climate impact of switching from the least energy-intensive grocery bag to those requiring far more energy to produce. It should also be noted that the benefit of banning plastic bags is mitigated by the fact that half of the bags are reused for other purposes, like garbage or picking up after pets. Grocery shoppers will still have to buy other bags, likely plastic, for those purposes. Those who worry about trash reaching landfills are doing little by ban-
ning plastic bags. In the end, communities need to sincerely weigh these various environmental costs. Unfortunately, few public officials do any analysis because the political symbolism of banning the bags is powerful. It is often easier to ignore the science that indicates such bans may actually harm the environment than make an honest effort to weigh these difficult issues. Put simply, plastic bag bans have become more about the latest environmental fad than about environmental benefit.
PLASTIC BAG BAN By Allysun Kirkham As of August 1, 2012, Bellingham made the switch from plastic to paper and cloth for shopping bags. By law, grocers, drugstores, department stores, gift shops, et al, had to start charging a nickel for paper bags. A shopper is hard-pressed to find a store without a five-cent bag fee, and those stores welcomed customers bringing their own reusable bags. Business Pulse surveyed some retailers in Bellingham to see how the transition was going. • Hardware Sales introduced mesh bags into their store for their customers. Many purchases there are larger, heavier items, and the standard reusable bag hasn’t proven durable enough. Jo Hudson, a manager at Hardware Sales, said the only difficulty they encountered was security. People bringing in empty mesh bags and then leaving with items presented a problem, but the staff dealt with it accordingly and no major theft issues occurred early on.
• Haggen of Barkley Village found a way around the security problem by requiring that reusable bags entering the store are folded. One manager, George F. (on the company website all managers are listed only with first name and last initial), said that shoppers quickly began shopping with their own reusable bags rather than opting for the five-cent surcharge for paper. Barkley Haggen eliminated its self-checkout lines, reportedly related to the nickel surcharge, but a manager clarified that difficulties with ringing up produce had more to do with that move. • A store director at Fred Meyer on Bakerview also reported a smooth transition to reusable bags. • All merchants reminded shoppers to wash reusable cloth bags, a necessity in preventing the spread of germs and sickness. Haggen offers a washable, antibacterial polypropylene bag to customers that prevent the spread of food-borne illnesses.
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HEALTH CARE INDUSTRY Roger Stark | MD, FACS Dr. Roger Stark is the author of “The Patient-Centered Solution: Our Health Care Crisis, How It Happened, and How We Can Fix It.” He is a retired heart surgeon and a health care policy analyst with Washington Policy Center, a nonpartisan think tank in Washington state. For more information, visit washingtonpolicy.org.
The facts on the Medicare debate T
he future of Medicare sparked debate by the 2012 presidential and vicepresidential candidates. A lot of charges and countercharges have been thrown about, but the American public deserves to know the facts. Medicare began in 1965 as a taxpayer-funded health insurance program for people ages 65 and older. The program covers virtually all medical tests and procedures. Seniors have variable out-of-pocket expenses. As an entitlement, Medicare costs have exploded. By 1990, Medicare was seven times over budget, and this year the program showed an unfunded obligation of $40 trillion. If the cuts to Medicare enacted in the Affordable Care Act (ACA)—the new national health care law—do not occur, the unfunded liability will reach $89 trillion. There are 47 million people in the program and, as Baby-Boomers age, this number will rise to 80 million in 20 years. If seniors elect to drop out of Medicare, they will lose their Social Security benefits. Ever-increasing Medicare spending must be brought under control soon, or it literally will 74 | BUSINESSPULSE.COM
bankrupt our country. Both Democrats and Republicans propose reforms to Medicare to reign in escalating costs. Democrats support the ACA, which will cut over $700 billion from the program over the next 10 years. These cuts are on the provider side and will reduce payments to hospitals and doctors. Medicare currently pays providers approximately 70 percent of what private insurance pays.
“Medicare, and our health care system in general, must be changed to allow the free market to flourish. Seniors are locked into a bankrupt program that is rapidly becoming unsustainable.” Consequently many doctors and hospitals today have a problem paying their overhead with what Medicare reimburses. The ACA national health care law’s cuts make this situation worse, and it will become increasingly difficult for seniors to find a doctor who will accept Medicare’s low payments.
Under the ACA, overall Medicare costs will be controlled by an unelected board that will begin to ration care. The $700 billion cut will not be true savings, but instead will cover the costs of the new government programs in the ACA. In contrast, the Republican plan would not begin for 10 years. Like the Democrat plan, it would cap overall Medicare spending at the percent increase in gross domestic product plus 0.5 percent. Also like the Democrat plan, it would cut $700 billion from the program over the first 10 year budget. The program would be based on an insurance premium support payment to seniors and new state insurance exchanges, or brokerages, where seniors would select from a menu of private and government plans. The $700 billion savings would potentially come from price competition in the exchanges. The Republicans propose means testing, tort reform, and raising the age eligibility for Medicare to 67 by 2034. The rising costs in Medicare are unsustainable and are caused by the violation of an economic law. When a third party—in this case taxpayers—pays for a service or product, people will consume as much of that service or product as they possibly can.
Regardless of whether a person believes health care is a right, virtually everyone can agree that health care is a necessity of life. Food, shelter, and clothing are also necessities of life. And we obtain them in a free market, where competition, not rationing, controls price and quality, with a government safety net for those truly in need. Medicare, and our health care system in general, must be changed to allow the free market to flourish. Seniors are locked into a bankrupt program that is rapidly becoming unsustainable. Medicare needs meaningful reform now. • People who have already paid into the program should have the option of receiving vouchers to help purchase insurance in the private market. • People should have the option of leaving Medicare without losing their Social Security. • Medicare should be meanstested and a safety-net program should exist for poor seniors. • People with large medical needs should have high-risk pools or re-insurance available. When seniors, as consumers in a free market, control their own health care dollars and decisions, only then will costs truly reflect health care supply-and-patient demands for that care.
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Dr. Roger Stark is the author of “The Patient-Centered Solution: Our Health Care Crisis, How It Happened, and How We Can Fix It.” He is a retired heart surgeon and a health care policy analyst with Washington Policy Center, a nonpartisan think tank in Washington state. For more information, visit washingtonpolicy.org Please socialize with us on Facebook at both the Business Pulse Magazine page and the Whatcom Business Alliance page.
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DOWNTOWN HOUSING Ken Mann | Whatcom County Councilman Ken Mann is a member of the Whatcom County Council and serves as Chair of the Finance Committee. Ken has a background in finance and civil engineering. Ken and his wife, Amy, have a real estate development company that restores commercial and residential buildings.
Housing project raises serious questions about vision for downtown D
owntown Bellingham is cited frequently as a target for commercial revitalization and residential density. Politicians and the populace eagerly embrace visions of bustling sidewalks, thriving local businesses, a vibrant arts and culture scene, and a safe family-friendly environment. As a Bellingham resident, downtown property owner, and friend of many small businesses, I share those visions.
In the last few years some highdensity residential developments have sprung up downtown. Some of them have been market-rate apartments and some of them have been publicly-subsidized housing. Recently, I questioned the wisdom of placing another public housing project downtown – this time for “chronic public inebriates.” Catholic Housing Services (CHS) proposed a complex of more than 100 units on Cornwall Avenue between Chestnut and Maple. On this block, 75 units of subsidized housing already exist. The complex behind Kulshan Cycles and Boundary Bay Brewery will include 76 | BUSINESSPULSE.COM
40 units designated for “chronic public inebriates,” or “chronically homeless.” The remaining units would be for low- and very-lowincome tenants. The multi-million-dollar project would be funded 100 percent by governments with cash and tax credits. The County Council was asked to contribute $550,000 total from the mental health sales tax fund and the Economic Development Investment (EDI) fund. A government’s investment in housing for these populations reduces the burden on crisis and emergency services (police, jails, and medical emergency rooms, etc.). As a council member, I have fought for Food Bank funding and the Women, Infants, and Children (WIC) program at the Health Department. I sit on the board of the Opportunity Council and the Domestic Violence and Sexual Assault Services (DVSAS). I know how desperate the needs are, and I support the moral and humane objectives of the facility. This emphatically is not a referendum on poor, addicted, abused, or mentally-ill people. However, having compassion or sympathy does not mean we blindly approve every altruistic project that comes along. My two central concerns: 1. Is Catholic Housing Services capable of managing this project?
2. Does the vision for downtown assume unlimited capacity for behavior-challenged folks? First, the track record of CHS with its Kateri Court project on Chestnut Street raises a red flag. For years the neighbors and residents of Kateri Court have described numerous disturbing episodes - child abuse, drug use, loitering, littering, spitting, drugdealing, blocking sidewalk, smoking, trespassing, and on and on. Not all of those behaviors require emergency responses; hence, not a lot of 911 calls. They do, however, reduce the welcoming atmosphere for businesses of all kinds. The CHS response to these complaints has been painfully inadequate and dismissive. Their new proposal is even more demanding than Kateri Court or any other local CHS facility. Without trust or confidence in CHS to manage its clients, I view doubling their responsibility and concentrating it on one block as imprudent. Second, the original proposal had language promoting “mixeduse” development alongside the 40 units for chronic public inebriates. I appreciated that “mixed-use” component, expecting low-income and market-rate housing, along with offices and retail businesses. But, in CHS’ proposal, every unit in the complex would be subsidized housing— a “mixed-use” of chronic public inebriates and low-
to-very-low-income residents, with the street frontage comprising service agencies. Those are very different visions. It may not be politically correct, but we need to discuss the emerging trend to populate downtown with a majority of governmentsubsidized housing. Some citizens appear to believe that tax-paying business owners and their customers are less important than free housing for the mentally-ill, drugaddicted, or otherwise behaviorchallenged population. Even Seattle’s Comprehensive Plan targets only 20 percent as “affordable housing” and recommends geographically-dispersed housing that is publicly subsidized. During a recent public meeting in Bellingham, a city employee estimated that subsidized housing comprises 50 percent of city-center residences. Is that a healthy recipe for a vibrant downtown? Should our EDI funds pay for this project? I expect the proposed CHS project will be built – they own the property, and zoning allows it. The City Council has endorsed it and contributed financing. CHS has said they have the capability to develop the site without County contributions. It does not take a property owner, council member, or rocket scientist to know that CHS needs to improve supervision of its neediest Kateri Court clients. As governments and funders we must be vigilant about operational performance and accountability from CHS. As for the larger vision for downtown Bellingham, I hope the City Council and CHS will engage with the business community to balance the priorities of helping the neediest and of supporting business owners. It just is not fair to ask local businesses to generate the tax dollars for these projects AND to manage the impacts.
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ANALYSIS: NATURAL RESOURCES Don C. Brunell | President, AWB Don Brunell is the president of the Association of Washington Business, the state’s oldest and largest business association with more than 7,800 members representing 700,000 employees as both the state’s chamber of commerce and the manufacturing and technology association. About 90 percent of members employ fewer than 100 people. More than half employ fewer than 10. For more about AWB, visit www.awb.org.
Are we getting railroaded? M
atthew Rose, the chief executive officer of BNSF Railway (Burlington Northern Santa Fe), visited media editorial boards in Vancouver, Spokane, Seattle, and Bellingham recently to talk about issues related to increased train traffic. The 800-pound gorilla in the room was not train traffic. Rather, it was the commodity those trains would carry: coal. In Washington, trains have shipped coal for decades. About 3-4 coal trains pass through Clark County daily. Rose said it’s hard to predict specifics at this point, but if proposed export cargo terminals at Longview and Cherry Point receive approval it could mean an additional 12-20 train trips a day. Activists predict terrible consequences for local communities as a result, including traffic snarls, blocked emergency vehicles, derailments, and pollution from coal dust. Interestingly, there’s little indication that activists ever voiced similar concerns about trains that don’t carry coal. Before the recent anti-coal campaigns (editor’s note: including strong activity in Bellingham and other parts of Whatcom County), BNSF reported not a single complaint about coal dust from the coal trains that have been traveling through the Puget Sound region for decades. That’s because coal dust wasn’t a 78 | BUSINESSPULSE.COM
problem anywhere the trains traveled except near the loading docks at the mines, more than 1,000 miles away. In fact, BNSF conducted extensive testing on 1,633 coal trains and found that sealants sprayed on loaded coal cars dramatically reduced coal dust — in some cases to zero. BNSF now requires all coal shippers to use those treatments. Ironically, in attacking trains the Sierra Club and others are going after one of the most efficient ways to move cargo and people. Trains have proven to become one of the most environmentally-responsible ways to move goods. One train can move a ton of freight almost 500 miles on a single gallon of diesel. A single freight train removes 280 trucks from the highway — the equivalent of 1,100 cars — reducing congestion and pollution and saving energy. The Sierra Club has also raised questions about particulate emissions from diesel locomotives. But the state Department of Ecology ranks locomotives as one of the smallest contributors of such emissions among the 19 sources it tracks. Rose says BNSF plans to spend $1.1 billion on energyefficient locomotives expected to further reduce emissions by 60 to 70 percent. The real issue for protesters isn’t train traffic or diesel emissions. It’s coal. Even though coal produces nearly half the electricity used in the U.S. and the world, the Sierra Club wants to eliminate it, oppos-
ing any and every coal plant—even those designed to reduce emissions to zero. Asia, particularly China, is hungry for coal. They prefer Powder River Basin coal from Wyoming and Montana because of low sulfur content and fewer pollutants. Building the new export terminals that would ship that coal to China will create hundreds of jobs and produce millions in tax revenues for schools, colleges, social services, and police and fire protection. If the Sierra Club and other activists succeed in pressuring elected officials to block the proposed export terminals, China will simply buy dirtier coal from somewhere else. The problem compounds because those air pollutants will make their way back to the West Coast. China plans to transition to natural gas over the next 25 years, but until then U.S. coal is projected to retain the largest share of China’s electricity generation mix. In the end, Laura Stevens, a Portland-based representative of the Sierra Club, admitted to The Columbian (Vancouver and Clark County, Wash.) that trains are not the real focus of their efforts. The railroads, she said, “…are something of a middleman….” in the coal export issue. Unfortunately, we are all caught in the middle — the middle of the Sierra Club’s and activists’ and citizens’ war on coal — a war that, if successful, will cause severe collateral damage to America’s families, jobs, and our fragile economy.
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SCENE ON THE STREET
SCENE ON THE STREET The Hulk and the Magic behind his Cosmic door Driving along Cornwall Avenue in Bellingham, across the street from Bellingham High School campus, The Incredible Hulk is seen on the street most days towering over traffic along a sidewalk outside of a small shop. Our curiosity about him and Canon Shot opened the door to a couple of remarkable business ventures that you will read about in our next issue: Cosmic Comics deals in comic book collectibles, plus board games, and action figures, Hulk you very much. About half the business, they told us, comes from disc golf. And then there’s Friday Night Magic. Here’s how the conversation went about that: “We hold Magic tournaments every Friday night.” “You mean if we performed the best Magic trick, we’d win the tournament?” “No, it’s a card game….” And that opened up a whole new world, with emphasis on the word world. Magic: The Gathering started in 1996 as a collectible card game, and spread rapidly into the second-fastest growing game in the world behind Trivial Pursuit. Competition came next, fierce competition, we’re told. More than 12 million participated last year, according to news releases. As this story unfolded, we ran across a familiar local name, Deb Slater – she, of past radio renown hereabouts, and recognizable still on occasional voiceover spots. Ms. Slater travels the earth for the corporate giant behind Magic fever, producing live tournament action on streaming video and DVDs of world championships. You’ll read her story, the story of Magic, and the Hulk’s little corner of all this, Cosmic Comics, in the Winter edition of Business Pulse. Seen any unusual scenes on your streets? Please let us know so we can send our camer-eye to it: email@example.com
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ADVERTISER INDEX Archer Halliday . . . . . . . . . . . . . . . . . . . 21 Bank of the Pacific . . . . . . . . . . . . . . . . 31 Barkley Company . . . . . . . . . . . . . . . . . 84 Bellingham Athletic Club . . . . . . . . . . 13 Benchmark . . . . . . . . . . . . . . . . . . . . . . 81 Best Western Lakeway Inn . . . . . . . . . 83 Big Fresh Media . . . . . . . . . . . . . . . . . . . 5 Birch Equipment . . . . . . . . . . . . . . . . . 19 Cornwall Chroma . . . . . . . . . . . . . . . . . 36 Data Link West . . . . . . . . . . . . . . . . . . . 64 Exact Scientific . . . . . . . . . . . . . . . . . . . 34 Gateway Centre . . . . . . . . . . . . . . . . . . 59 Hilltop Restaurant . . . . . . . . . . . . . . . . 37 Innotech Metal Designs . . . . . . . . . . . 23 Innovations . . . . . . . . . . . . . . . . . . . . . . 17 Key Bank . . . . . . . . . . . . . . . . . . . . . . . . 77 Laser Point Awards . . . . . . . . . . . . . . . 39 Little Caesars Pizza . . . . . . . . . . . . . . . 75 Mills Electric . . . . . . . . . . . . . . . . . . . . . 61 Morgan Stanley . . . . . . . . . . . . . . . . . . 15 Northwest Business EXPO . . . . . . 25, 65 Northwest Propane . . . . . . . . . . . . . . . 55 Oltman Insurance . . . . . . . . . . . . . . . . 55 Port of Bellingham . . . . . . . . . . . . . . . . 71 Print & Copy Factory . . . . . . . . . . . . . . 49 Saturna Capital . . . . . . . . . . . . . . . . . . . . 2 Scotty Browns . . . . . . . . . . . . . . . . . . . 69 Second Time Around Computers . . . 67 Silver Reef Casino & Soa . . . . . . . . . . 82 Skagit State Bank . . . . . . . . . . . . . . . . . 79 Sterling Savings Bank . . . . . . . . . . . . . 24 TAG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Transgroup . . . . . . . . . . . . . . . . . . . . . . 41 The United Way of Whatcom . . . . . . 33 The Unity Group . . . . . . . . . . . . . . . . . . 57 US Bank . . . . . . . . . . . . . . . . . . . . . . . . . 43 Vincent Buys . . . . . . . . . . . . . . . . . . . . . 75 VSH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Washington Policy Center . . . . . . 45, 51 WECU . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Whatcom Business Alliance . . . . . 35, 41 Whidbey Island Bank . . . . . . . . . . . . . . . 3 Whirlwind Services . . . . . . . . . . . . . . . 63
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