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MAGAZINE SUMMER 2016 Don Eucker, General Manager, CHS NW Farmer-owned co-op merger adds $50 million clout and jumped to #7
TOP 100 PRIVATE COMPANIES
Heavy construction contractors lead the pack in a $4+ billion year
EPA uses taxpayer funds
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TABLE OF CONTENTS
LOOKING DOWN on a Lynden company where everything is looking up in terms of business growth. DariTech’s inventive manufacturing base has propelled it into Whatcom Top 100 recognition among the county’s privately-owned (six coowners) companies. (Photo courtesy of DariTech)
SMALL ADDS UP TO LARGE RETURNS AMONG TOP 100 PRIVATE COMPANIES THE TOP 100 among privately-owned companies in Whatcom County acknowledges high rollers, as always, but it’s the long line of small businesses that also catches the eye. Anywhere from half to 95% of the 100 fall into one definition or another of small business (50-500 employees), and they create more than 3,700 jobs. Read in-depth about a couple of them – DariTech’s proprietary types of dairy equipment (what, milk a cow with no hands?), and how they deliver the goods at ProPack.spa linens, tech solutions, HVAC, plumbing, and commercial refrigeration, and production of specialty custom signs. Say hello to The Comphy Company, Data-Link West, Lynden Sheet Metal, and Signs Plus.
AG ANGST: AMISH COW IMAGE, ILLEGAL FUNDING, ‘UPSTREAM’ UPROAR…ALL THE WAY TO U.S. CONGRESS
CONSTRUCTION ACTIVITY REACHES AFAR, BUT THE IMPACT COMES HOME TO ROOST
A SPECIAL-INTEREST CAMPAIGN called “What’s Upstream?” led to illegal backing by the Environmental Protection Agency (EPA) and misleading advertising depicting cows standing in a stream. That appeared on buses and a billboard in Bellingham (and elsewhere – see Todd Myers’ column). The outcry from Whatcom and state farmers and organizations reached all the way to the U.S. Congress. They’re just not havin’ it….know the industry, we know processing, and we connect them with the world….”
STUDENT HOUSING, other residential projects, and large contracts in an expanded marketplace (mostly in and around Seattle) have the bulldozers ploughing overtime for the local construction industry. If not a boom, at least a substantial flicker of hope. Even with the far reach, the important fact is that activity fuels the economy back home.
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TABLE OF CONTENTS
CLOSED JARS of cannabis samplings at 2020 Solutions are perforated to allow customers to see and smell different strains before buying (it’s illegal to smoke inside a retail marijuana store). Two years after the first stores opened in Whatcom County, we find startling discoveries in a fivepart sequence from grower to retailer to bank and even reaching out to some anonymous black market sellers. (Photo by Cheryl Stritzel McCarthy)
ENTREPRENEURIAL ENTERPRISE: A LADY WEARING 3 HATS AND A GUITAR-BUILDING DREAM DO YOU BELIEVE in an entrepreneur gene? If it’s a myth (ask your neighborhood geneticist), many individual success stories in our parts would feed the perception. For the start of a regular series, Entrepreneurial Enterprise, we delved into the matriarchal influences on explosive Teresa Taylor in Ferndale and the musical spark in luthier (look it up; we did) Andy Beech who supplied music icon Prince.
PERSONALLY SPEAKING: TURNING LOVE OF FISHING INTO COMMUNITY CARETAKING OF MARITIME LEGACY DOWNTOWN BUZZ in Bellingham often centers on the waterfront redevelopment plans. One interested group formed to work collaboratively on specific goals, Whatcom Working Waterfront Alliance, to preserve the maritime legacy that is part of the inherent fabric of Whatcom County since its creation. Jim Kyle, its president, tells of the WWWA’s mission and his life on the sea in Personally Speaking.
SLEEP, TASKS & FINANCES, UNION DUES, & BUY OR SELL? GUEST COLUMNISTS join the voices in the agricultural analysis, from policy and dairy farming viewpoints…. Others weigh in on the cost of sleep (HR), a VM tool – visual management – that keeps you from losing things in your computer (Lean)….The real meaning of a Supreme Court ruling on teachers’ union dues and right to work law (Small Business)….The difference between advisor and manager in dealing with your money (Investing)….And, is it a buyer’s or seller’s market on homes? Guess. Chances are you won’t be right (Real Estate).
For editorial comments and suggestions, please write email@example.com. Business Pulse Magazine is the publication of the Whatcom Business Alliance. The magazine is published at 2423 E. Bakerview Rd., Bellingham, WA 98226. (360) 746-0418. The yearly subscription rate is $22 (US). For a free digital subscription, go to businesspulse.com or whatcombusinessalliance.com. Entire contents copyrighted © 2016 – Business Pulse Magazine. All rights reserved. POSTMASTER: Send address changes to Business Pulse Magazine, 2423 E Bakerview Rd., Bellingham, WA 98226. 6 | BUSINESSPULSE.COM
Publisher Tony Larson Editor/Writer Mike McKenzie Feature Writers Dave Brumbaugh Sherri Huleatt Cheryl Stritzel McCarthy Mary Louise Van Dyke Guest Columns Randall Benson: Lean Jacob Deschenes: Investing Todd Myers: Environmentalism Bob Pritchett: Book Excerpt Erin Shannon: Small Business Tech Help/Big Fresh: Technology
Rose Vogel: Human Resources Mallina Wilson: Real Estate Cover Photo Patrick Downing Photography Patrick Downing Jayson Korthuis Cheryl Stritzel McCarthy Mike McKenzie Katie Scott Courtesy Photos DariTech Dawson Construction D'Haitre Guitars Exxel Pacific Jim Kyle
Moncrieff Construction Savatgy Photography Annie Vergillo/Sustainable Connections Graphic Design/Layout Patrick Downing MacKenzie Unick Ad Sales Jon Strong Patrick Downing Subscriptions Katie Scott Administration Danielle Larson
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Facilitating Business Prosperity & Community Prosperity whatcombusinessalliance.com
The Whatom Business Alliance is member organization created to enhance Whatcom Countyâ€™s quality of life through the preservation and creation of healthy businesses and good jobs. We encourage, support, facilitate, and advocate on behalf of local companies in every industry who are working to retain jobs; local companies interested in expanding their operations and startup companies interested in locating in our community.
Board Chair Jane Carten President/Director
John Huntley President/CEO
Jeff Kochman President/CEO
Doug Thomas President/CEO
Marv Tjoelker Partner/Chairman
Mills Electric, Inc.
Bellingham Cold Storage
Larson Gross PLLC
BOARD OF DIRECTORS
Ken Bell President
Pam Brady Director
Janelle Bruland President/CEO
Tyler Byrd President/CEO
Jeremy Carroll Vice President
NW Govt. and Public Affairs BP Cherry Point
Management Services NW
Red Rokk Interactive
Scott Corzine Major Accounts Executive
Andy Enfield Vice President
Sandy Keathley Founder
Tom Kenney Regional President
Ben Kinney President/CEO
Puget Sound Energy
K & K Industries
Keller Williams, NVNTD
Bob Pritchett President / CEO
Brad Rader Vice President
Becky Raney Owner/CEO
Sarah Rothenbuhler Owner/CEO
Print & Copy Factory
Jon Sitkin Partner
Billy VanZanten CEO
Josh Wright VP/Broker
Chmelik Sitkin & Davis P.S.
Western Refinery Services
Bell Anderson Insurance
Larry MacDonald General Manager The Social Live Team
Not pictured: Guy Jansen, Director Lynden Transport, Inc. 8 | BUSINESSPULSE.COM
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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.
Actions have consequences Whether we like the consequences or not
ou’ll enjoy this edition of Business Pulse. It’s packed with great content. In addition to proudly highlighting our annual list of the Top 100 Private Companies in Whatcom County, we look at student housing as a major local driver over the past year for construction. We update you on the state of the legal cannabis industry, profile some up and coming local companies, and offer a look at how the EPA allegedly helped fund an ad campaign illegally that disparaged the local and state dairy farm industry.
We share the success of the newly completed “Choose Whatcom” website developed in coordination with Team Whatcom, and we highlight the Global Leadership Summit available to Whatcom County on August 11-12, which will provide local businesses an affordable way to offer leadership training to their managers and budding leaders. Finally, you get solid insights from our usual array of outstanding guest columnists.
ACTIONS AND CONSEQUENCES We’ve always been told, and I think most of us understand at a gut 10 | BUSINESSPULSE.COM
level, that actions have consequences. That’s good for some and not so good for others, depending on the actions. When you make wise decisions and take positive action time and time again, things tend to move in a positive direction. When you make an unwise decision and follow it up with action, it might create a setback, but as long as you get back to wise decisions, and your unwise decision wasn’t life changing, your setback will likely only be temporary. People who make unwise decisions consistently, will find themselves in challenging situations. Public policy is similar. As long as we make consistently wise public policy decisions, our communities, state, and country will move in a positive direction. When we don’t, the opposite is true. Our multi-part article (pp. 50-62) update on the legal recreational cannabis industry got me thinking. Sometimes wise concepts come from the strangest places. One of the areas our reporter focused on is the impact on the black market. She interviewed three black-market operators by email, anonymously. One claimed to make between $500-$750k a year. An observation by another demonstrated a street-smart look at public policy that negatively impacts his illegal-market business: “Since prices are still so high in recreational for decent cannabis, the black market continues to flourish. If the state was smart they would lower taxes for recreational so that more people would drop out of the black market.” His business-savvy economic
observation seems to be one that policy makers either don’t understand, or have some other reason to object to. There are consequences to every policy decision. The negative consequences that come from some of these decisions are often called unintentional. The WBA strives to be an honest broker on issues of importance about
“Since prices are still so high in recreational for decent cannabis, the black market continues to flourish. If the state was smart they would lower taxes for recreational so that more people would drop out of the black market.” —Black Market Cannabis Dealer
public policy, particular those policies that affect business success and community prosperity.
WBA RESEARCH AND EDUCATION FUND As a result, the WBA board of directors has decided to get more involved in conversations about policy issues that impact local business success. We have embarked on a stra-
tegic plan that focuses on ways we can act as an honest broker on ideas of importance in the community by providing quality, unbiased research, education, and business advocacy where required. The WBA has been involved in research, education, and advocacy on several issues the last four years. On two separate occasions in Olympia we delivered the results from our Cherry Point economic impact study on behalf of the workers of Alcoa Intalco Works with the goal of getting continued tax preferences that would help the company keep their workers employed. The efforts were successful. We went to Washington, D.C. with members of the Washington Council on International Trade, including Boeing, Microsoft, Starbucks, the Ports of Seattle and Tacoma and several other statewide economic development and trade organizations to meet with the entire Congressional delegation representing our state. We discussed the importance of trade to our state and local economies, with particular focus on our local manufacturers and farmers. On another front, the WBA rallied its members to bring their perspectives to local elected officials regarding an initiative to require employer mandated sick/safe leave benefits. The effort in Bellingham was defeated – the first time that had happened anywhere in the country. Since the state did not take it up, a group of well-funded activists are attempting to bring it, along with an increase in the minimum wage, to the ballot box by referendum in November. The WBA will vet these issues as they come up by providing quality research, by educating the business community, and by engaging our members when needed. On Wednesday, Sept. 28, the WBA Presidents Club will host a special event to discuss our Step Up for Business Advocacy Campaign. Please join other leaders in discussion of these issues. Give me a call at 360-
746-0411, and we’ll add you to the dialogue.
PRIVATE TOP 100 Successful local businesses drive our community prosperity. Starting on page 12 we look at the Top 100 privately-owned companies in the county. Whether or not you own or work for one of these companies, or do business with them, their success ought to be important to you. When they are successful, the community prospers and the rising tide raises all boats.
Our community depends on these companies’ revenue to fund schools, to create new jobs, to add significantly to the tax base, and to strengthen our economic foundation. One of the many roles the Whatcom Business Alliance (WBA) plays is cheerleader for their success. If you are not already part of our growing leadership network, we hope you will join us in our efforts as a WBA member. Enjoy reading every inch of this edition.
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WHATCOM COUNTY'S TOP 100 PRIVATE COMPANIES
The Top 100 2015 PRIVATE-OWNED COMPANIES IN WHATCOM COUNTY
By Business Pulse Staff
irtually any treatise on business in America will refer to small, private businesses driven by entrepreneurial spirit as the “backbone” or “heart” of the U.S. economy. All but a smattering of companies in our 2016 list of the Top 100 companies owned by individuals or partners in Whatcom County fit into that category – depending on which definition of small business you go by.
The Small Business Administration (SBA), established by the Small Business Act signed into law by Pres. Dwight D. Eisenhower 63 years ago on July 30, defines a small business as one with 500 or fewer employees. All but five of our listings based on 2015 confirmed sales revenue and employees qualify by that criterion. (The five: Haggen with more than 2,000 employees; Alpha Group with more than 1,600; Lummi Commercial Company with 650, and Smith Gardens and LTI with about 600 each.) Under guidelines set by the Small Business division 12 | BUSINESSPULSE.COM
of the Washington Policy Center (WPC), a state government agency, any company with 50 or fewer employees is considered a small business. Our 2016 list shows 25 – or one-fourth of the list – in that category. The Whatcom Business Alliance (WBA) and Business Pulse set the employee limit at 1-99 for their annual Small Business of the Year Award, and 27 in our 2016 rankings sit in the range of 50-99. In the two smaller-range definitions, more than half of our list comprises small businesses. That lends strong supporting evidence to the WBA’s mission mantra: “Business success drives community prosperity.” The business success of this year’s Top 100 again topped $4 billion in aggregate sales and provided over 21,750 jobs. In an odd twist, the group came in about $400 million under last year’s Top 100 yet showed an increase of about 5,750 employees. Variables that could have contributed to those figures: • Fluctuating prices in sectors such as oil and gas, milk and other food products, the deflated Canadian dollar affecting cross-border trade, retail, and the travel industry. Also, some largeproducing companies dropped off the verifiable list for various reasons. We find 12 new companies listed this year. New ones
...this year’s Top 100 again topped $4 billion in aggregate sales and provided over 21,750 jobs.
enter the picture through the thorough scouring process we implement to identify companies. Previously, our list has consisted of companies with a minimum of $5 million in annual sales; we talked to a couple of entities whose sales would round up to $5 million in basic math, so we established a new minimum of $4.5 million. You can read featured articles in this edition about two of the innovative, niche-market newcomers – ProPack in Blaine, DariTech in Lynden, plus a bit about a perennially-ranked company but a new name on the list – the Whatcom Farmers Cooperative merger in Lynden now known as CHS Northwest. Other new entries: Lummi Commercial Company, MGM Solutions, Granite Precast, Louws Truss, Skeers Construction, Infusion Solutions, Chrysalis Inn & Spa, Signs Plus, and 2020 Solutions (you can read about them in a comprehensive report on the legal marijuana industry after two years in existence). As always, the eye quickly turns to the leaders of the pack, those that ring up remarkable numbers. For the third consecutive year the Alpha Group sits at No. 1 with more than $660 million in revenues during 2015 from its global enterprises based in Bellingham. Haggen, always at or near the top, no longer qualifies because Albertson’s purchased it this year and its HQ is in Boise, Idaho – but the rankings are based on 2015
sales, when Haggen still was privately-owned and based in Barkley Village. Some companies reported outstanding growth last year, from $20 million in gains and more. One sector in particular had a robust year – construction. We have an industry report in this edition that reflects why so many general contractors verified substantial gains over the previous year. Exxel Pacific landed contracts that pushed them upward by a staggering $105 million over 2014; IMCO was up $36 million, Diamond B $20 million, Dawson $10 million, and Skeers joined the list anew at $6.9 million. Others verified significant gains, as well: The merger put CHS Northwest at $50 million more than the former Whatcom Farmers Co-op, and $20 million increases were reported by Mills Electric, Grizzly Industrial, and Wilson Motors. As always, to go on the list a company must (a.) operate its headquarters in Whatcom County and (b.) under private ownership. We compile the list by contacting everybody on it the previous year, through personal contacts, discovery in reporting for Business Pulse, new members of the WBA, and public inquiry through our communications resources that includes a newsletter list in excess of 4,000. WHATCOMBUSINESSALLIANCE.COM | 13
THE TOP 100 PROFILE: PROPACK
NEW IN THE
ProPack at #60 From party tent to 345,000 square feet, growth to almost $13M and 148 employees
THE EXECUTIVE leadership team at ProPack, a rapidly-growing fulfillment enterprise thriving in Blaine on cross-border clientele: (l. to r.) Phil Snyder, VP of Operations; his brother Alex Snyder, President; Christine Cline, Controller, and her husband Scott Cline, VP of Freight Forwarding.
Article by Mary Louise Van Dyke Photos by Patrick Downing
pproaching 25 years as a business owner Alex Snyder has retained his enthusiasm for arriving to work every day, and his broad vision for his entrepreneurial venture, ProPack – a new entry into the Business Pulse Top 100 Private Companies. “I still see so much opportunity ahead of us,” Snyder said.
He is co-founder and president of ProPack, which specializes in 3PL services – third party logistics. The company manages order fulfillment, handling consumer goods (such as electronics, heating components, or 14 | BUSINESSPULSE.COM
shirts) for customers from point-of-sale to shipping. In September of 1991 Snyder and a partner, Thoai Tran, launched ProPack with a single warehouse location, and at one point they resorted to using a huge party tent to store excess products. Today the company is based in Blaine with additional warehouse locations in Ferndale, and in Utah and Tennessee – a total of 345,000 square feet of storage. “We partner with companies to help them meet their goals,” Snyder said. “We can free them up to grow their own businesses.” He began exploring the idea of founding a company while working for a mail-order company in Blaine that specialized in mailboxes and related services for customers. Snyder soon discovered his favorite part of the job was packaging and shipping out orders.
RESTORING THE HEART OF BELLINGHAM
Pictured: Bob Hall, Co-Owner, The Herald Building, and Jim Sutterﬁeld, President, Signs Plus
SUMMER 2016: Daylight Properties and Signs Plus have teamed up to perform a complete restoration on one of Bellingham’s most notable historic landmarks, the Bellingham Herald rooftop sign. The Herald sign was part of the original building construction which was completed in 1925. The sign was a stunning piece of industrial art, visible for miles around. It was originally constructed of steel and it’s 10 foot high letters were illuminated with more than 500 incandescent light bulbs. It is believed that the sign was retroﬁtted to it’s current red neon illumination in the mid 50’s. The aging sign will undergo a long list of work, including running updated electrical feeds up to the sign, preserving and painting the massive 40’ high x 40’ long steel structure, and all new replica HERALD letters constructed from aluminum to replace the rusting and deteriorated steel letters. The new letters will be ﬁtted with energy efﬁcient LED neon lighting technology that will be capable of being controlled by a smart phone app. Follow the progress and updates at www.SignsPlusNW.com
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THE TOP 100 PROFILE: PROPACK
SHAWN BUCK, seen here moving one of the hundreds upon hundreds of order fulfillment boxes that ship daily, was the company’s first employee at startup 25 years ago.
“I saw this order fulfillment being done, and I thought, ‘Wow, this is exciting! I shipped 50 packages today in a couple of hours,’” he said. Snyder thought about the possible demand for such a service, only on a larger scale for companies that ship sizable amounts of consumer products. Snyder's role at ProPack focuses on business development and quality assurance, and he takes a lead role in plotting the company's strategic directions. However, at the beginning he and Tran were a do-it-all duo – from stocking and packaging to wielding a broom to answering client inquiries, and shipping out of rented facilities. By five years in, the partners realized they needed to purchase a warehouse to keep growing forward. However, the local banks didn't share their enthusiasm. Repeatedly, banks declined to loan ProPack their muchneeded funding. “It was very frustrating, wondering what do we do?” Snyder said. The answer showed up out of the blue when a local business person offered to sell them a 4,800 square foot warehouse on a contract with the owner. Snyder said the space seemed huge when they moved in during 1997. Commodities filled just a third of the space. The empty space quickly disappeared as demand heightened for their services. Soon they needed more space – again. During the next two years the answer took the form of a huge tent of the type usually used for parties and large gatherings. Snyder and Tran developed a process of moving enough goods outside during the day to allow them to move around in the warehouse and then trun16 | BUSINESSPULSE.COM
“We partner with companies to help them meet their goals. We can free them up…. to grow the business of their dreams.” Alex Snyder, co-founder and co-owner, ProPack
dling everything back in at night. Snyder said he spent some nights on-site guarding the tent when they didn’t have enough storage space in the warehouse. In 1999 the partners purchased a second property in Blaine. Next they developed plans for a 35,000 square foot facility and for the technology needed to spur ProPack's growth in the new millennium. Shawn Buck, the company’s first employee, started out doing order fulfillment, processing packages, and handling mail and inventory control. “I had just left a highly stressful job I wasn't very happy with and I was looking for a company to grow with,” Buck said. As the quality assurance manager he leads a team at the Blaine and Utah locations. Buck said he appreciates remaining a part of ProPack and knowing that employee
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THE TOP 100 PROFILE: PROPACK input is listened to and valued. Expanding to Ferndale helped continue the growth pattern, but eventually even that space wasn't enough and the company opened warehouses in Ogden, Utah and suburban Nashville, Tenn. The Snyder and Tran partnership ended in the early 2000s when Tran decided to pursue other business interests. Snyder became the majority stockholder, sharing ownership with partners Phil Snyder, the vice president of operations, and Scott Cline, the vice president of freight forwarding. Snyder developed ProPack's technology, and Cline integrated a company he owned into the ProPack’s portfolio. Christine Cline, the company controller who is married to Scott, joined ProPack in 2000 to organize the financial side of the business. She said she appreciates the company's culture that allows employees to have opinions in what is happening. “We don't do anything without the people who work for us,” she said. “We try to make them feel valued.” The addition of the Ogden and White House (Tenn.) locations allowed ProPack to develop a centralized system for shipping. ProPack clients can offer their customers two-day shipping, keeping them closer to Amazon shipping options, Snyder said. ProPack employees ship and consolidate packages to and from Canada, around the United States, and elsewhere. The company also offers freight-forwarding pallet loads. STACEY REID busily preps orders in the packing department at ProPack where two-day shipping is the norm to compete with Amazon.
18 | BUSINESSPULSE.COM
Today's custom-designed, web-based warehouse management technology allows customers to transmit their shipping orders to ProPack and track the process start-to-finish – gathering items, packaging them, and sending the orders out the door. “Each location operates very much the same way,” Snyder said. “Our goal is to have the same service regardless of which warehouse is servicing our customer.” Clients' inventories store separately at ProPack's secure warehouses. Locally ProPack mostly is known in the Vancouver and Lower B.C. area, although they have a few clients in Whatcom County. The company hit $12.7 million of revenue in 2015 and employs 148, including 60 at the Blaine and Ferndale facilities, Christine Cline said. Snyder characterized the ProPack customized system as “a huge home run for us that really pushed us ahead of the competition.” So what does the future hold for ProPack? Snyder envisions possible expansion into Canada. However, he said no plans call for more warehouses in the U.S. The emphasis will remain on developing partnerships that free up clients from the challenges and costs of running their own order fulfillment operation, so that they can do what Snyder did. “Grow the business of their dreams,” he said.
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WHATCOM COUNTY'S TOP 100 PRIVATE COMPANIES
The Top 100 2015 PRIVATE-OWNED COMPANIES IN WHATCOM COUNTY
2014 Company Rank
Employees: Region Total
Grace Borsari/Fred Kaiser
MORE THAN $660 MILLION 1
The Alpha Group Power solutions for Broadband, Bellingham Telecommunications and renewable energy sectors MORE THAN $220 MILLION
Exxel Pacific Integrated design and construction general contractor
Haggen Supermarkets and pharmacies
$120-$150 MILLION 4
Haskell Corporation Large-scale construction $115-$150 MILLION
Lummi Commercial Company (formerly Lummi listed Silver Reef only) Reservation/ Overall, four-profit business entity of the Lummi Bellingham Nation
Grizzly Industrial Manufacture and sell woodworking and metal- Bellingham working machinery
CHS Northwest (formerly Whatcom Farmer Co-op) Convenience stores, energy/propane and agronomy sales
Dawson Construction Large-scale construction
#2 Exxel Pacific BELLINGHAM
THEY REFLECTED THE LARGEST GAIN on the list over last year – about $105M. "Our vision has never changed," Owner/CEO Kevin DeVries said. “Work very hard to make the experience of building a building fun.” Best part: “Projects in Whatcom County. It’s such a huge deal – the trickle-down from payroll wages and paying large taxes. When we’re busy, we make a big impact on the local economy.” Highlights: Build Washington Safety Grand Award (400,000 hours or more) from Assn of General Contractors. EXXEL PACIFIC PROJECT Jansen Art Center in Lynden (Courtesy photo)
#5 Lummi Commercial Company BELLINGHAM
RICHARD JEFFERSON, CEO (Staff photo)
A NEW NAME ON THE TOP 100, this Lummi Nation entity replaces the previous listing of the Silver Reef Hotel Casino Spa, which LCC operates. It also manages Fisherman’s Cove (boat launch, storage, and fuel, and convenience store – the tribe’s 1st business acquisition, 1986); Lummi Mini Mart (store, fuel pumps, fast food); delis; a tobacco & spirits store, and real estate holdings, and is one of the county’s largest employers. Looking ahead: Salish Village on Slater Road project is under way, and Gooseberry Point Marina is on the drawing board.
WHATCOMBUSINESSALLIANCE.COM | 21
WHATCOM COUNTY'S TOP 100 PRIVATE COMPANIES 2015 Rank
2014 Company Rank
Employees: Region Total
$95-$110 MILLION 9
IMCO General Construction Heavy construction
Frank Imhof/Tyler Kimberley
Samson Rope Technologies Synthetic rope manufacturer
LTI Transport of dry and liquid bulk commodities
The Markets Supermarkets (The Markets, Cost Cutter, Food Pavilion)
$65-$80 MILLION 13
Wilson Motors New and used car dealerships
Rick Wilson/Julian Greening
Peoples Bank Independant community bank, personal and commercial lending
Bornstein Seafoods Seafood sourcing, sales and distribution
EPL Feed Ag feed and nutrition
22 | BUSINESSPULSE.COM
Whatcom Farmers Co-op leapt upward $50M and 100 jobs by merging and rebranding with CSH Now CSH NW has broader coverage southward
DON EUCKER, GENERAL MANAGER, operates out of this CHS NW headquarters next door to the company store, still branded as Whatcom Farmers Co-Op. (Photo by Patrick Downing)
By Mike McKenzie
ith the board of directors looking at long-term stability, Whatcom Farmers Cooperative (WFC) in Lynden voted a year ago April to merge with the nation’s leading agriculture co-op, CHS Inc. – an otherworldly leap. The merger took place in July 2015, and WFC immediately upped its ante exponentially – leaping about $50 million and 100 new jobs in its 2015 figures above the previous year.
holders. Last fiscal year it grossed $34.6 billion; it employs over 11,000, with 10 percent of them in foreign markets, and it has more than 500 locations in 16 states and overseas locations. (Curiously, its CEO is Lynden Johnson.) The local division has now become one of the larger regional co-ops in the nation with a boost to 14 stores and 14 other locations. In a seamless merger the Whatcom County locations remain under the WFC brand, including retail (6) and convenience (3) stores, and 24-hour fuel stations (4) that offer premium unleaded, diesel, and ethanol-free options. The company continues its long-time commitment to energy (propane delivery), to crop nutrients and protection products, and to its Agronomy Center established in 2006. “Basically we remain the same in operations – farmerowned and committed to serving our regional community as we have the last 75 years. But now we have more direct purchasing possibilities, global connections, and a broader community. “This was a natural fit, because we’ve done business with CHS for over 50 years.”
THE COMPANY MERGED with another co-op and rebranded last year, adding numerous stores in a broader marketplace, 100 jobs, and $50 million-plus in additional revenue over the year before. (Photo by Patrick Downing)
“It’s been a transition year,” said Don Eucker, who remained going into his sixth year as general manager of the Lynden-based operations, and who appears on our cover as symbolic of the economic vitality of Whatcom County’s highest-producing privately-owned companies. “Our board was looking for sustainability. It made sense with this merger that added several new locations to our group that now gives us coverage from the Canadian border down to central Oregon (Tillamook).” CHS Inc., based in St. Paul, Minn., originated in 1929 and it has grown to staggering reach internationally. As a Fortune 75 company it returned almost $2 billion over the last five years to its more than 90,000 co-op owners/stake-
WHATCOMBUSINESSALLIANCE.COM | 23
IN THE â€˜HOOD: WHATCOM COUNTY'S IRONGATE/E. TOP 100 BAKERVIEW PRIVATE COMPANIES 2015 Rank
2014 Company Rank
Employees: Region Total
Diamond B Constructors Commercial and industrial contractors
Barlean's Organic Oils Creates/distributes flaxseed, Omega 3, and other supplements
Bruce Barlean/John Puckett
$50-$60 MILLION 19
Anvil Corporation Engineering and procurement solutions
Smith Gardens Wholesale producer of garden plants, nursery, and garden center supplies
Eric Smith/Mark Smith
Faithlife Corporation Bible-content computer software
Kona Bicycle Company Mountain bike manufacturer, distribution and full service center
Dan Gerhard/Jacob Heilbron
Keith Oil Co Wholesale petrolium bulk station
Mt. Baker Products Manufacturers of plywood veneer, lumber and plywood
Seafood Producers Cooperative Fishery, processor and marketer of premium seafood
www.capstonept.com (360) 752-1115 Locally Owned
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24 | BUSINESSPULSE.COM
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WHATCOM COUNTY'S TOP 100 PRIVATE COMPANIES 2015 Rank
2014 Company Rank
Employees: Region Total
Healthy Pet Pet litter, bedding & food; spill cleanup & industrial products
Hempler Foods Group Meat processor
Richard Hempler/ Stephen Bates
Mills Electric Electrical contractor
Walton Beverage PepsiCo beverage distribution
Kam-Way Transportation Full-service transportation brokerage
Hardware Sales General hardware, cabinets, office furniture, and B-to-B industrial sales
Jerry McClellan/Ty McClellan/Jo Hudson
Strider Construction Heavy civic construction
James A. Gebhardt
Family Care Network Bellingham Family practice, clinics, community connections
Dr. Marcy Hipskind
Saturna Capital Mutual funds manager and investor
Farmers Equipment Company Berry harvesters, farm & construction equipment
Superfeet Premium insole designer, manufacturer, and wholesaler
Rice Insurance Full-service insurance agency
$30-$35 MILLION 38
Western Refinery Services Industrial maintenance and construction
Tiger Construction Excavating and commercial building contractor
$25-$30 MILLION 40
Redden Marine Supply Marine and commercial fishing supplies
Dewey Griffin Subaru New and used car dealership
Wood Stone Wood-and gas-fired pizza ovens/commerical and home-cooking equipment
Cowden Gravel & Ready Mix Provider of gravel, concrete, and insulated concrete forms (ICFâ€™s)
Steve Cowden/Brent Cowden
Brooks Manufacturing Distribution crossarms and transmission framing components
26 | BUSINESSPULSE.COM
2014 Company Rank
Employees: Region Total
Sound Beverage Distributors Wholesale beer, wine, and distilled Bellingham beverage
Specified Fittings HDPE & PVC pipe fitting manufacturer
Bellingham Cold Storage Full-service public refrigerated warehousing
Cascade Dafo Design and manufacture of dynamic ankle foot orthoses (DAFOs)
Andgar Corporation Residential heating/AC, metal fabrication, architectural metal and biogas digester technology
Scholten's Equipment Agriculture and construction equipment sales
Anderson Paper & Packaging Co. Paper, boxes, supply chain, and packaging solutions
Moncrieff Construction Concrete construction
Sam Moncrieff III
NO LEA W SING
WHATCOMBUSINESSALLIANCE.COM | 27
WHATCOM COUNTY'S TOP 100 PRIVATE COMPANIES 2015 Rank
2014 Company Rank
Employees: Region Total
Diehl Ford New and used car dealership
Faber Construction General contractor
DariTech Farm equipment supplier
Dave DeWaard/Ryan DeWaard
Hoagland Pharmacy Retail pharmacy, medical equipment, and respiratory services
$15-$20 MILLION 57
Mt. Baker Imaging Radiology, image interpretation, and imaging during low-invasive surgery
Dr. Matthew Studley
Vital Choice Wild Seafood & Organics Wild Seafood Web-based wild seafood and organic products
Dealer Information Systems
ProPack Supply chain management
Corporation Producer of business info systems for ag equipment, construction equipment, and lift truck dealerships
#61 Edaleen Dairy LYNDEN MILK PRICES WENT CRAZILY through the roof in ’15, stunting sales a bit, but the company’s 4th retail store opened and is flourishing in Ferndale. “We loved starting a relationship with Ellenos Real Greek Yogurt and watching their business grow as we sell it as our product line, said GM Mitch Moorlag. "We even put in a yogurt-to-go dipping case.” Next: Store #5 at Pike Place Market in Seattle. MITCH MOORLAG (l) Edaleen GM & Rachel Dotinga, Ferndale Store Manager (Photo by Katie Scott)
28 | BUSINESSPULSE.COM
#59 Dealer Information Systems BELLINGHAM DIS SUPPORTS OVER 3,000 EQUIPMENT dealerships in North America to help track all inventory in real time. Big in 2015: Developed what CEO Randy McIntyre called â€œthe ultimate business system solution,â€? named ERP. And, a sales logistics inventory tool in iOS and Android to use QR codes. RANDY MCINTYRE, CEO (Staff photo)
2014 Company Rank
Employees: Region Total
TriVan Truck Body Truck Body Manufacturer of custom-designed, specialty commercial-use truck bodies
Cason VanDriel/Marty VanDriel
CityMac (formerly TD Curran) Apple specialists
Processing and distrubuting milk and ice cream from 2500 Holsteins, plus three retail stores
$13-$15 MILLION 64
Birch Equipment Rental & Sales Rental & Sales Equipment and tool rental
Barron Heating & Air Conditioning Heating, air conditioning, and ventilation sales and service
John Barron/Bill Pinkey
Western Forest Products Commercial distributor of lumber products
Barkley Company Developing and leasing commercial and residential properties
ALRT Corporation Logging and road construction
Roosendaal-Honcoop Construction Full-service general contractor providing construction and pre-construction services
Dickerson Distributors Wholesale distributors of beer, wine, and spirits
Kevin Dickerson WHATCOMBUSINESSALLIANCE.COM | 29
WHATCOM COUNTY'S TOP 100 PRIVATE COMPANIES
#81 WesSpur Tree Equipment BELLINGHAM TWO TOP 100S THRIVE ON ROPE PRODUCTS, Samson and WesSpur, where It’s not going out on a limb to say they sell the most treeclimbing equipment & services in the industry internationally – all online. The 2016 catalog, largest ever (180 pp.), lists 1,000s of items, and WesSpur.com has 165 dropdowns in its menu of SKUs. Next: the first-ever WesSpur Road Show this fall in Oregon, Utah, Idaho, and California, including – how cool is this? – the National Tree House Conference. RYAN AARSTOL, Owner/CEO (Staff photo)
2014 Company Rank
Employees: Region Total
Bramble Berry Soap-making supplies
Granite Precast Producer of precast concrete products
$10-$13 MILLION 73
Management Services Northwest General building maintenance, landscaping, and groundskeeping
The Woods Coffee Coffee shops and bakery
Louws Truss Wood roof and floor trusses
G.K. Knutson Drywall, cold formed metal framing
Elenbaas Company Fertilizer and horse feed supplier
Larson Gross Certified public accountants & consultants
Totally Chocolate Manufacturer of custom molded chocolate
Bellair Charters & Airporter Shuttle Bus transportation for airports and charter
30 | BUSINESSPULSE.COM
2014 Company Rank 74
WesSpur Tree Equipment
Employees: Region Total
Intn'l retail in arbor equipment (for tree climbing, rigging, cutting, safety) $8-$10 MILLION
Northwest Health Care Linen Health-care laundry management services
American Canadian Fisheries Salmon procurement, processing, shipping, & wholesale/retail
Lister Chain & Forge Manufacturer of ships anchor chain, navigational buoy chain, anchors & fittings
VanderYacht Propane Commercial and residential propane
All American Marine Builder of high-speed, passenger, aluminum catamarans, survey craft, research vessels
ECX (ecigExpress) Web based retailer of smoke products
MGM Solutions Information technology
WHATCOMBUSINESSALLIANCE.COM | 31
WHATCOM COUNTY'S TOP 100 PRIVATE COMPANIES 2015 Rank
2014 Company Rank
Employees: Region Total
Bellingham Travel & Cruise Full-service travel agency
Comphy Company Luxury linens and bedding
Erin Baker's Wholesome Baked Goods Wholesale baker and distributor
Lyndale Glass Window and door replacement and repair
Dan Haan/Dennis Bosman
Chuckanut Bay Foods
David Loeppky/Matt Roth
Skeers Construction Master plan community home building
Fat-Cat Fish Company Mfg, sales, distribution of cat food
TC Trans Specializing in cross border transportation for companies unable to enter Canada
The Chrysalis Inn & Spa Hotel and spa
Infusion Solutions Health Care
Lynden Sheet Metal HVAC and plumbing service and repair
Signs Plus Bellingham Full-service sign manufacturer, installation and maintenance
2020 Solutions Cannabas retail and supplies
Aubree & Troy Lozano
$4.5-$7.5 MILLION Gourmet cheesecake
#93 Chuckanut Bay Foods FERNDALE
“WE’VE GONE FROM 40-50 CHEESECAKES a day to a few local stores when we bought the business (2008) to pushing out 40-to-50 thousand a day of our single-serves,” Co-owner Dave Loeppky said of the 24-hour operations he manages. In the same space partner Matt Roth handles marketing/sales/purchasing. They started with two employees, and now have 45 (and up to 80 during peaks). Their product is in 35 states and western and central Canada, and in over 3,000 stores. Success key: “A great team, very invested, that treats it like owners,” Roth said. Next: A new warehouse, a 2.5x expansion to 15,000 sq. ft. on 3 purchased acres nearby. 32 | BUSINESSPULSE.COM
MATT ROTH (L) AND DAVE LOEPPKY, Co-owners (Photo by Katie Scott)
BECOME PART OF THE WHATCOM BUSINESS ALLIANCE LEADERSHIP NETWORK Learn why Whatcom County Business Owners, Presidents, CEOs, and Managers have joined the WBA in large numbers. We keep you informed of business issues, and provide you with opportunities to network with and learn from other local business leaders from virtually every industry in Whatcom County. We are a nonprofit organization that focuses on Economic Development, facilitating business success and business advocacy. We accept NO public funding.
Learn more on our website, or contact Jon Strong at 360-746-0407
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Traditional T raditional Service Ser vice M tii M d N d Meeting Modern Needs.
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Mount Vernon 360-424-4471 WHATCOMBUSINESSALLIANCE.COM | 33
TOP 100: Exceeds $4 Billion & 22,000 jobs in
Whatcom County Whatcom Business Alliance, Business Pulse Magazine and the following companies thank the Top 100 private
companies and all other businesses in Whatcom County for continuous contribution to community prosperity.
Many top 100 companies reported outstanding growth last year, from $20 million in gains and more. The following companies thank the top 100 and all other businesses in Whatcom County for continous contribution to community prosperity.
Partner with us.
NEW IN THE
Top 100 #55 DariTech: An industry leader nationally in automated dairy technology LOOK, NO HANDS! Yes, you can milk a cow in Whatcom County without human interaction by using the Lely Astronaut Robotic Milker invented and manufactured at DariTech in Lynden. The company creates unique, high-tech equipment to “replace repetitive labor” in dairy farming, such as sand separation equipment, the Acurain hose reel, composter components, and these milkers.
By Sherri Huleatt
o the outside world, dairy farming is a profession steeped in old-fashioned stereotypes— complete with rustic pitchforks, hand-milked cows, and—of course—a classic red barn.
But to the insiders, those who’ve helped make dairy farming a $5.2 billion industry in the state of Washington, the imagery of dairy farming is a lot different. In place of manual milking, and scraping and feeding chores, you’ll find a fleet of robotics and automated technology that has kept local dairy farmers in business with increased efficiency and productivity. This modern take on dairy farming is one that DariTech, headquartered in Lynden, has lived and breathed every day for the last 26 years. They manufacture, sell, and distribute state-of-the-art equipment. The company started as a one-man show – Dave DeWaard – operating out of a service van. DariTech now ranks as one of the most innovative dairy equipment
manufacturers in the U.S. Founded in 1990, DariTech has doubled in size the last seven years due to a renewed focus on innovative, yet affordable manufacturing. The company has grown to more than 50 employees, along with a product line sold all over the country. DariTech makes its first appearance on our annual “Top 100” list for 2016, verifying more than $20 million in sales last year. “I started the company out of the desire to provide better service and products to the dairy farmers of Whatcom County,” DeWaard said in an interview with Business Pulse. “I have always enjoyed serving customers.” DeWaard worked in the dairy equipment industry for 10 years before opening his own business. His son, Ryan DeWaard, joined him in 1995 after graduating from Western Washington University with a degree in electrical engineering technology. As a co-owner he oversees the company’s manufacturing. While they got their start as equipment dealers, the DeWaards saw that a good portion of the equipment they sold was simply too expensive for the average farmer. To remedy this, they set out to design and manufacture farming equipment in a new way—one that
Photos courtesy of DariTech
would decrease the cost for the average farmer while still providing a high-quality product. And their new approach to manufacturing paid off. Their customized product line now runs the gamut of dairy equipment, and DariTech sells directly out of their local facility and also through retail dealers all over the country. Manufacturing now represents 60-70 percent of the company’s revenue. Their product line includes: • Milking equipment, including milk tanks, parlors, and refrigeration; • Innovative manurehandling solutions, like their BeddingMaster that recycles manure and turns it into cow bedding; • The DT360, a unique rotary-style manure separator that is self-cleaning; • Technology that allows farmers to monitor their equipment from a tablet or mobile phone (a far cry from the farming days of yore).
THE FOREFRONT OF DAIRY INNOVATION Based on industry trends DariTech couldn’t have picked a better time to manufacture WHATCOMBUSINESSALLIANCE.COM | 37
THE TOP 100 PROFILE: DARITECH innovative, yet affordable to the table with unique dairy technology. As skill sets: the cost of dairying rises • Bensen, the dairy and milk prices fluctuate, equipment operations dairies increasingly look for manager for Whatcom products that allow them to County; do more work with less labor • Marlene Johnston, and other operating costs. the office manager “Equipment that in charge of business replaces repetitive labor is financial operations; at the forefront of change,” • Josh McCort, co-owner Brian Bensen said. manager of DariTech’s “Robotics are revolutionizeastern Washington ing the dairy industry in all THE OWNERSHIP team at DariTech in Lynden: (l. to r.) Jason Heutink, location in Sunnyside aspects of the milk-harvest- Josh McCort, Marlene Johnston, Dave DeWaard, Brian Bensen, and and he oversees the ing process. This technology Ryan DeWaard. large manure-handling allows the dairy cow to installations; be on her own schedule, • Jason Heutink, to continually work closer and allowing her to eat, drink, lie down, director of the Control closer together to produce a and get milked when she feels the Panel Shop who oversees quality product,” Bensen said, desire – without the interference of the company’s technology “while keeping the dairy cow, the direct human interaction.” This sort systems. environment, and the public in of system, Bensen explained, allows Adding these co-owners helped mind.” for happier cows that produce more elevate long-term employees into milk, with less labor investment. trusted partners, Ryan DeWaard EXPANDING THE TEAM Automatic and robotic technology said. This decision also helped add During 2013, Dave and Ryan replaces other manual and timelong-term stability to the company added four new DariTech co-owners, intensive chores, like scraping and gave Dave DeWaard an easier all long-time employees who came manure lanes and pushing up cow feed, significantly reducing human involvement. “These types of products allow tasks to be completed on a predetermined schedule, exactly the same way every time, resulting in less stress on animals and less operating costs,” Bensen said. This reliance on automated technology has forced companies like DariTech to reevaluate their business model. Not too long ago, most dairies owned just a few pieces of equipment that occasionally needed to be serviced by professionals. But with more advanced equipment, and farmers becoming more reliant on that equipment, the new trend is to cut the sale of the product and simply focus on the sale of the service. Bensen compared the new business model to getting a car lease. Farmers pay a monthly price for a certain technology and at the end of the contract they can choose to keep the product or to upgrade it. “Everyone involved will need 38 | BUSINESSPULSE.COM
RYAN DEWAARD (l) and his father, Dave DeWaard, brought four employees as partners into the ownership group at DariTech.
road to retirement. Internal stability is crucial when considering the instability of the dairy business. About every 3-4 years the price of milk drops
significantly, putting a major damper on DariTech’s business—and causing problems for the dairy industry as a whole. Just two years ago dairy farmers were getting record-high
prices for their milk; this year their price has decreased 35 percent, yet their cost of doing business remains the same. According to Johnston, DariTech tries to use these slow periods for product research-and-development. Yet even during slow times, cows keep producing milk and manure, thus the demand still continues for DariTech’s services around the clock. “We are a 24-hour, 365-day a year company,” Ryan DeWaard said. “People are on call day and night— every day of the year.” DariTech opened a second facility in Sunnyside several years ago to serve their Eastern Washington customers. The company website identifies DariTech as a top-to-bottom dairy service and supply company throughout the Pacific Northwest. The ownership team hopes to expand beyond North America in the coming years, while they continue to fully service the local community.
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ANALYSIS: AD ATTACK ON DAIRY FARMS
Smoking gun shows illegal EPA funding of farm attack Congress upset by campaign that included signs on WTA buses Compiled by Business Pulse Staff
ED BLOK, a key organizer with Whatcom Family Farmers, tends to a calf on the family dairy farm south of Lynden. (Photo by Jayson Korthuis)
40 | BUSINESSPULSE.COM
ecently 143 members of the U.S. Congress wrote a letter to Gina McCarthy, the administrator of the U.S. Environmental Protection Agency (EPA), expressing extreme concern over its funding of a political attack on farmers. The chairs of the U.S. Senate committees on Agriculture and the Environment, and of the House Committee on Agriculture also wrote similar letters.
ou read that correctly: The EPA financially backed a widespread negative campaign with the agriculture industry in the center of the bulls-eye. A grant of $3 million to the Northwest Indian Fisheries Commission illegally included $700,000 of taxpayer monies.
the exception and not the rule. In no way can you say ag is unregulated.” Throughout Whatcom County supporters quickly made their grievance known, directing it initially at the WTA. The agency responded very quickly with widespread public apologies and an explanation that the advertising violated its policies prohibiting advertising for political purposes. The fault lay with the Seattle firm that manages WTA advertising and that was insensitive to Local organizathe political nature of tions -- Save Family the ad. Farmers, Whatcom Farmers and farm Family Farmers, supporters contacted Whatcom Business local elected officials Alliance – and the and carried a strong Washington Farm united voice to KGMI’s Bureau have actively Morning Show with engaged in research Dillon Honcoop. Those and in countering an voices carried far. They EPA-backed advertisreverberated loudly ing and grass roots across the continent into campaign to besmirch the halls of Congress farming and the agriwhere almost oneculture industry. fourth of the members The story of this responded with letters of uproar that extended protestation to the EPA. to Capitol Hill in The bus advertisWashington, D.C., ing was merely the began in Whatcom tip of the iceberg. Not County. long after the WTA Fifteen Whatcom pulled the ads from Transit Authority its buses, a billboard ‘WHAT’S UPSTREAM?’ billboard displaying what turned out to be a stock (WTA) buses appeared photo labeled “Amish Cows” appeared on Guide Meridian in Whatcom appeared on the Guide on the streets and roads County (shown here) and near the capitol in Olympia caused an investigation Meridian near Horton that has found its way to the halls of the U.S. Congress. (Courtesy photo) of Whatcom County Road carrying the same on March 7 bearing headline and same a message that angered the farming image of Amish cows. “It was and is nothing community. The advertising stated An identical billboard also popped “Unregulated agriculture is putting more than a cynical effort up in Olympia, nearly within sight of our waterways at risk.” the state capitol building. to turn voters against The headline sat over a photo of Whatcom Family Farmers, a Holstein dairy cows standing in a recently-formed organization, first farmers and force an stream. Farmers’ angry concerns about became aware of the campaign environmental solution the headline became worse upon the against farmers late last year on a discovery that the photo came not that even the Washington website, WhatsUpstream.com. “I from any local farm; rather, the image was offended,” Larry Stap said in one Conservation Commission of many interviews Business Pulse was purchased online with the title “Amish Cows.” conducted for this article. says would actually Why the uproar? The agricultural A fourth-generation Lynden dairy community hereabouts felt that the farmer, Stap and his cattle-raising harm environmental characterization rang falsely and was family process and sell bottled milk protection.” misleading. First of all, farming is very under the Twin Brook Creamery heavily regulated – not unregulated, as brand. “What they said was simply not Larry Stap, Owner, Twin Brook Creamery the bus billboard declared. true.” Many regulations directly address preventing manure from entering streams and waterways. The 1998 Dairy Nutrient Management Act, for example, specifically provides for “zero discharge of manure into waterways.” John Stuhlmiller, who is chief executive officer of the Washington Farm Bureau, told Business Pulse: “We challenge the thought. There are a host of regulations covering agriculture. Certainly there have been poor examples of stewardship, but that is
WHATCOMBUSINESSALLIANCE.COM | 41
ANALYSIS: AD ATTACK ON DAIRY FARMS The movement rapidly spread beyond the Whatcom County line – in radio ads on public radio in Seattle, and in online advertising that appeared widely, including on the Bellingham Herald website. Support sprang up from all over the state. Stuhlmiller at the state Farm Bureau said, “We’re extremely concerned about What’s Upstream. We’re outraged (at them). We have hit up Congressional friends for help, and we’re sharing with our state membership to keep the pressure on.”
Digging found that an environmental activist organization based in Eugene, Ore., the Western Environmental Law Center (WELC), was one of the seven sponsors listed on the What’s Upstream website. The WELC, which has a history of involvement in suing dairy farmers, provided much of the research provided on the site. The website opens with a video sequence of a farmer spraying a field, of dirty water flowing into clean water, and then a grotesque close-up of a
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salmon that died after laying its eggs (which every salmon does). “Farmers don’t cause salmon to spawn and die,” said Gerald Baron. He serves as executive director of Save Family Farming, a new statewide farm advocacy organization set up specifically to respond to the attack on the farming industry. “That opening and the whole campaign are clearly designed to build public outrage against farmers.” Stap said, “Their purpose is clear… it was right there on their website. The ‘call to action’ button invited visitors to send a form letter that the sponsors said they would send to Washington senators ‘whose votes we hope to influence.’” The form letter called for 100-foot buffers on farmland. Stap said, “It was and is nothing more than a cynical effort to turn voters against farmers and force an environmental solution that even the Washington Conservation Commission says would actually harm environmental protection.” Along the way in responding to the campaign, someone noticed a small message at the bottom of the website: “This project has been funded wholly or in part by the United States Environmental Protection Agency under assistance agreement PA-00J32201 to the Northwest Indian Fisheries Commission. The contents of this document do not necessarily reflect the views and policies of the Environmental Protection Agency.” Alarms sounded. In mounting its opposition campaign that resounded all the way to Congress, the local, regional, and state ag industry organizations and individuals researched and found it against the law for a federal government agency or individual to use taxpayer money to run a political campaign, to lobby for laws and regulations, and to engage in almost any political activity. Whatcom Family Farmers cited on its website: “Section 718 of the Financial Services and General Government Appropriations Act, 2014 and 2015, prohibiting the use of EPA’s appropriations for (a.) unauthorized
publicity or propaganda purposes… (nor b.) indirect or grassroots lobbying in support of or opposition to pending legislation.” Further, Section 401 of the Department of Interior, Environment, and Related Agencies Appropriations Act, 2015, prohibits the use of EPA’s appropriations for grassroots lobbying. (Sources: Pub. L. Nos. 176 and 178). The group also found this: “The Department of Health and Human Services (HHS) fully supports federal restrictions on lobbying using federal funds by HHS grant recipients.” The EPA received a harsh slap late last year by the U.S. Government Accountability Office for violating federal law by using social media to lobby for their Waters of the U.S. Rule. The EPA’s activity with What’s Upstream was direct lobbying and propaganda related to specific legislation the EPA wanted to pass. When all this came to light, instigated when the bus ads and billboards spilled out, farm leaders immediately set in motion an organized effort to counter the political attack and point out the legal issues involved. “We quickly saw this was something well beyond Whatcom County,” said Rich Appel, a Ferndale dairy farmer and vice president of Whatcom Family Farmers. “This problem involved farmers throughout the state and even beyond. We needed to focus on the many issues we have to deal with right here.” In consultation with other farm leaders and organizations around the state, Save Family Farming formed to deal specifically with the threat from What’s Upstream and the ongoing attacks against farmers coming from organizations under the guise of proenvironment. The research appearing on SaveFamilyFarming.org, proved invaluable when a reporter from the Capital Press wrote an article on the EPA funding of the campaign. The outcry from farmers in Whatcom County and media reports in the Lynden Tribune and KGMI radio brought the situation to the attention of a primary West Coast agricultural industry newspaper. The first in a series of front page
Farm Bureau leader speaks out John Stuhlmiller | CEO John Stuhlmiller, the chief executive officer of the Washington Farm Bureau in Olympia, shared a few thoughts with Business Pulse about actions of the Environmental Protection Agency and other organizations that have taken actions detrimental to the agriculture industry.
HOW DO YOU PERCEIVE THE NEGATIVE ADVERTISING CAMPAIGN THAT DISPARAGED DAIRY FARMING PRACTICES? STUHLMILLER: The Farm Bureau has hit back hard on this. We have Congressional members discussing the inappropriate use of EPA dollars. We intend to keep pushing on this one and we hope to see a reduction in EPA funds because of their actions. DO YOU PERCEIVE THIS AS A WAR ON FARMERS? STUHLMILLER: The war has been waging for years, but it is definitely heating up again. Thus we are seeking to leverage our political capital to have the greatest impact. Your efforts in Whatcom County help us tell the story statewide and will help us seek political and budgetary solutions. We are facing our stiffest opposition yet. A FARMER APPLIES ORGANIC FERTILIZER (manure) to a farm field north of Lynden. This method of applying manure helps protect water by safely conveying the manure to the field and by injecting it directly in the soil. These measures help prevent runoff that can contribute to fecal coliform contamination. As a result of regulations, enforcement and significant investment by farmers beyond regulations, water contamination coming from dairy farms has been greatly reduced. (Photo by Jayson Korthuis)
WHATCOMBUSINESSALLIANCE.COM | 43
ANALYSIS: AD ATTACK ON DAIRY FARMS stories appearing in the Capital Press (March 26 edition) noted that EPA Region 10 officials approved the campaign. The EPA issued a statement: “‘Our input was focused on the question of the legality of language urging people to politically engage. Our people noted for the tribe what activities would not be permitted under the law. At a later point our attorneys reviewed revised language — what is on the website now — and determined it did not violate the law.” This statement by the EPA failed to acknowledge that they went far beyond simply reviewing the legality of the language. Official reports noted that work on the campaign was halted because of “intensive review and engagement by the EPA.” A later report noted that web content had been changed as a result of engagement by the EPA. “These reports are the smoking gun,” Baron said on behalf of Save Family Farming. “With all the pressure on them now, they are trying to back away from responsibility. They’re shifting the blame to the Northwest Indian Fisheries Commission who received the grant money. But the reports show they (the EPA) were very involved in this campaign, including the disturbing content.” Baron also pointed out that EPA Administrator McCarthy spent the better part of a day with the Swinomish tribal leaders in April of 2015 when the campaign activity was gearing up. The Swinomish tribe’s environmental director is identified as the primary manager of the EPA funds. According to these reports and the Capital Press articles, the campaign spent nearly $700,000 of taxpayer money as part of a $3 million grant to the Northwest Indian Fisheries Commission starting in early 2011. After the Capital Press reports (showing the WTA bus advertising and billboards) brought attention to this issue, Sen. Pat Roberts (R-Kan.) expressed his outrage over this EPA-funded attack. He is chair of the U.S. Senate Committee on 44 | BUSINESSPULSE.COM
Agriculture, Nutrition, and Forestry. Sen. Jim Inhofe, (R-Okla.), chair of the U.S. Senate Committee on the Environment which oversees the EPA, joined Roberts in a letter to the EPA’s Office of Inspector General (OIG) requesting an official investigation. The head of that office, Art Elkins, replied in a letter last April that the OIG was conducting an investigation and would answer all their questions. Washington state Sen. Doug Ericksen (R-42nd District, Whatcom County) expressed his outrage, too: “The idea that the federal government would pay a half-million dollars to create a phony grass-roots campaign to lobby state government ought to appall anyone who pays taxes. Meaning all of us.”
Pressure on EPA Administrator McCarthy mounted with a letter from U.S. Rep. Michael Conaway (R-Texas), who asked for a detailed explanation of actions taken by the EPA in response to the reportedly illegal activity. His letter asked if funds under this grant had been cut off, and if those receiving funds would be disqualified from receiving further federal funds? Conaway also asked that the EPA send all documents relating to this campaign to him. On April 18, Administrator McCarthy faced questions on the U.S. Senate floor from Sen. Deb Fischer (R-Neb.), who bluntly criticized McCarthy and the EPA. Fischer stated that the campaign “villainized farmers and ranchers,”
DAIRY FARMER Larry Stap, shown standing near his tractor and barn at Twin Brook Creamery north of Lynden, was outspoken about the negative ad campaign that Whatcom and state agricultural leaders took. “I was offended.” (Photo by Jayson Korthuis)
ANALYSIS: AD ATTACK ON DAIRY FARMS and “the financial assistance that your agency gave to fund this lobbying campaign (What’s Upstream) is a blatant violation of federal law.” McCarthy responded by saying the agency was “distressed” by the funding and tone of the campaign and that funding to the Northwest Indian Fisheries Commission was suspended. “We have put a halt to any reimbursements of funds,” she said. “We have told our contractor (the Northwest Indian Fisheries Commission) we need to have a full discussion and
46 | BUSINESSPULSE.COM
review before additional monies are spent.” A letter went to McCarthy signed by 145 members of Congress on April 21. Led by U.S. Representatives Dan Newhouse (R-Wash.) and Brad Ashford (D-Neb.), the letter expressed “extreme concern” over the EPA funding of this campaign and reinforced the previous requests from the chairs of the Senate and House committees. Agriculture industry news outlets around the nation started carrying
the story of the bus advertising, billboards, and the illegal political attack on farmers in Whatcom County and across the state. Stuhlmiller at the Washington Farm Bureau said, “Congressional scrutiny continues as we have already had some key brow beatings of EPA in Congress.” The Congressional attention noted that the illegal funding of a political campaign is part of a disturbing pattern in the EPA. In December 2015 the Government Accountability Office determined that the EPA had violated federal law when it engaged in lobbying on social media for the Waters of the U.S. Rule. A July 2014 report of the Office of Inspector General took EPA Region 10 to task for not properly monitoring subawards, including not determining if the funds were used for political activities. Baron said, “This particular grant was one that was pointed out in the OIG audit as not being properly monitored. Yet, when they did closely look at it, their attorney determined it was not in violation of the law.” He said that Save Famiy Farming wants to know who that attorney was and whether or not the EPA Region 10 director was part of that evaluation? Greg Ebe, one of the major seed potato farmers in Whatcom County, serves as one of 25 farmers and farm supporters across the state on the Advisory Board of Save Family Farming. He told Business Pulse, “In the past farmers just sort of kept their heads down and kept farming without paying too much attention to the voices rising against us. But that is changing. We are realizing more and more that we can’t afford to let false accusations and malicious political attacks like the What’s Upstream campaign go unchallenged.” Larry Stap agreed. “Farmers in Whatcom County united and got engaged in the public issues about farming,” he said. “Farmers in Eastern Washington have taken notice and we understand they are working to organize in a similar way. This is what it’s going to take to counter the efforts of those who, for their own purposes,
try to drive family farmers out of business.” Save Family Farming is dedicated to protecting legal rights for its constituents and making sure that media, government leaders, and voters know that not only the campaign is illegal, but also false. The group has retained James Tupper, an attorney with the Seattle firm of Tupper Mack Wells that has deep experience in water law issues. Baron said, “We want to make sure that farmers’ interests in this are protected including recognition of the damage done to farmers’ reputation through this false campaign.” He said the Office of Inspector General confirmed that if the funds were used illegally they must be reimbursed and that civil penalties of up to $100,000 per violation could apply. Beyond legal efforts, Save Family Farming also has pursued accountability with state-elected officials in their response to the EPA funding scandal. “Despite a stinging editorial in Capital Press calling our U.S. senators Murray and Cantwell to end their silence and to let us know they are helping farmers with this, they remain quiet,” Baron said. “We need to know from them if they are going to do their duty as our elected representatives and help uphold the law, or if they would support a federal agency in this kind of blatant violation.” Baron said the organization sent a letter to all federal representatives, thanking those who signed the Newhouse-Ashford letter, and asking those who did not to clarify their position on this issue. “We agree with the Capital Press editorial that made clear this is not an R-vs.-D issue, but an R-vs.-W issue – a right or wrong. It shouldn’t matter who is involved in this; what matters is when government agency leaders operate as if they are above the law. “If that is not addressed, we are in serious trouble–and not just farmers.”
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GUEST COLUMN: AD ATTACK ON DAIRY FARMS 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 receives national attention. He contributes to The Wall Street Journal.
Deceptive photo of “What’s Upstream” billboards: all hat, no cattle
re Amish cows invading our state? A close look at some recently-erected billboards around Olympia – and one of which appeared on Guide Meridian in Bellingham as drivers headed north into farm country – indicated that might be the case.
Pitting farmers against salmon, the billboards showing cattle standing in a stream have appeared in Washington state asking the question “What’s Upstream”? The billboards claimed: “Unregulated agriculture is putting our waterways at risk.” The Capitol Press discovered and focused on the fact that the billboards were funded illegally – using a grant from the EPA that doesn’t allow political advocacy. The publication noted, “A ‘What’s Upstream’ billboard in Olympia came down…and a second one in Bellingham (was) removed, a day after the Environmental Protection Agency said the media campaign was an inappropriate use of federal funds that were awarded to a tribe for public education.” Another aspect of the billboard that wasn’t emphasized: the picture (on the billboard) wasn’t in Washington state. 48 | BUSINESSPULSE.COM
The billboard featured a photo of three cows standing in a stream, implying that farms upstream are violating water quality standards and harming salmon. The billboard claimed such activity is “unregulated.” That, put simply, is false. Rigid rules govern impact to streams. Washington state has strict regulation on the impact livestock has on water for this very reason.
A photo of three cows standing in a stream (implied) that farms upstream are violating water quality standards and harming salmon….Rather than finding an actual violation, the designers found a deceptive, stock photo from Amish country (to represent) “upstream” in Washington state. As the Department of Ecology notes, “There are many laws and regulations that apply to nonpoint sources of pollution, including from livestock operations. Washington State’s Water Pollution Control Act (RCW 90.48) makes it illegal
to cause or contribute pollution to streams.” Maybe that’s why the public relations firm hired to create the billboard used a stock photo that wasn’t shot in Washington state. The photo used in the billboard is labeled “Amish Cows” on the stock photo site Bigstock. When the stock photo was compared with the image on billboards, behold: They were the same photo image. Rather than finding an actual example of a violation, the ad campaign designers found a deceptive, stock photo from Amish country (Iowa? Pennsylvania?) and passed the cows off as standing “upstream” in Washington. Salmon recovery is contentious. A good working relationship has developed among groups on the Salmon Recovery Council. Pitting farmers against salmon, however, is a losing strategy. Using phony photos divisively only makes it harder to find sustainable environmental solutions collaboratively. Sadly, this is what you get when you hire a downtown Seattle public relations firm that doesn’t understand farming and cares more about politics than the facts. One more example that some statewide environmentalists are all hat and no cattle.
Website identifies local economic influencers By Business Pulse Staff
tarting a business is no easy task. From finding the right location to hiring skilled workers to securing financing, many puzzle pieces must fit together to achieve business success. A variety of local economic development organizations work on that puzzle.
within Whatcom County as a united front. It welcomes and encourages business all the way from Sumas to Bellingham, from Cherry Point to Barkley Village, from the waterfront to the Canadian border. The tri-funders (the Port, City, and County) kickedoff the website with a launch party that included about 150 local elected officials, business professionals, and others from the community. Red Rokk, a WBA member whose owner, Tyler Byrd, serves on its board of directors, created the website and branding. The site features video profiles of successful local businesses, such as Erin Baker’s, Aslan Brewing, Transition Bikes, All American Marine, Twin Brook Creamery, and others. “Whatcom County has firmly established itself as a great place to do business,” said Rob Fix, Executive Director of the Port of Bellingham. “The Choose Whatcom website conveys a positive message while providing a tremendous resource for business professionals to find success in Whatcom County.” PICKFORD FILM CENTER played host to about 150 at a launch party for the launch of ChooseWhatcom.com recently in Bellingham. Attendees included local business leaders and elected officials. (Photo by Annie Vergillo/courtesy of Sustainable Connections)
But most of these organizations operate independently. That’s why Whatcom County, the Port of Bellingham, and City of Bellingham joined forces to fund a new, one-stop website designed to help boost local economic development by consolidating existing resources into a digital hub for county-wide economic resources. The website represents the collective efforts of 16 local economic practitioner groups, referred to as “Team Whatcom,” who meet regularly to discuss local economic development. These groups, including the Whatcom Business Alliance (WBA), wanted to create an easy way for people to find and contact them. ChooseWhatcom.com offers a central location for business professionals looking to start, grow, or relocate their businesses in Whatcom County. The site helps connect them with the specific organizations and experts best suited to provide business assistance. “In all my years at the Port, this is the first project we've seen that offers such a positive and unique approach to showcasing a community’s business resources,” said Dodd Snodgrass, a Port of Bellingham economic development specialist. “All the different economic groups came together to help promote Whatcom County as a business-friendly place." The website offers a wealth of information, including information on key industries, local incentives, infrastructure, recruiting, life style, and more. ChooseWhatcom.com is the first business website to represent all of the business-boosting organizations WHATCOMBUSINESSALLIANCE.COM | 49
INDUSTRY REPORT: RECREATIONAL MARIJUANA
Legal recreational cannabis at age 2: Billion-dollar industry, and no sign of slowingâ€¦. Series by Cheryl Stritzel McCarthy By Business Pulse Staff
50 | BUSINESSPULSE.COM
couple of years ago, when news of legal weed made headlines across the nation about Washington and Colorado making recreational cannabis legal, we had industry insiders look into a crystal ball. Their conclusion: “Green is the new gold.”
They were right. And wrong, in a way. It’s the new platinum. But, point taken. Sales have spiraled continually upward throughout our state. We sent reporter Cheryl Stritzel McCarthy wandering through your friendly neighborhood growers, sellers, bankers, and even the unfazed black market dealers to bring you up to date with the legal marijuana industry, starting with the phenomenal number$$$ that everybody involved hoped for, and more….
THAT’S DOPE, folks. Trail Blazin’ Productions – a local cannabis grower and source for this series of articles – proudly displays here its award-winning strain of Dutch 47. It earned Best Sativa in the 2015 Budtenders Cup, and second place in its category at this year’s Dope Industry Awards. (Courtesy of Savatgy Photography.) WHATCOMBUSINESSALLIANCE.COM | 51
INDUSTRY REPORT: RECREATIONAL MARIJUANA
THE GROWER T
oday’s marijuanagrowing business is oft-compared to gold rush days of old. It’s a green rush, right?
Wrong, Danielle Rosellison said. She and her husband, Juddy, and two other owner/operating managers grow and process marijuana indoors at Trail Blazin’ Productions in Bellingham’s Irongate industrial area. “No one is getting rich quick,” Danielle said. “We have the same trials and tribulations as any other small business.” Arguably more, since their industry is new, and nationally banned but state-allowed. “I spend half my time on policy work,” Danielle said. She serves on the board of the Cannabis Alliance, a nonprofit within the industry. “I’m in Seattle or Olympia two days a week educating lawmakers and helping write policy. If we don’t, someone else will, and their information won’t be as good.” Marijuana growing/processing is a startup business about like any other, but probably with more regulations. “People say, ‘You’re living the dream!’ But sometimes it’s a nightmare,” 52 | BUSINESSPULSE.COM
Danielle said. That said, today’s numbers look good. Their product – pesticide-free, hand-trimmed, sustainably-grown – fills an up-market niche, and sells accordingly at $14-$18 a gram. Gross sales at Trail Blazin’ in 2015 totaled $430,000. Revenue in 2016 is on track to double that. And next year the company projects to double again.
EARLY DAYS: "SOMETHING ELSE" The first months were a different story. Trail Blazin’ got a lease in January 2014 and began fitting out their building in April of that year. They finished in August and obtained their license. But delivery of LED lights, an eco-conscious choice for their indoor growing, was delayed. That pushed harvest back to October. Add a couple of weeks to harvest, trim, and cure, and their product was ready. But by that time so was outdoor product harvested by competitors. “Prices came down,” Danielle said. “Grams had been selling $8 to $12, (suddenly) they were $4 to $5. It was brutal.” Trail Blazin’ made its first sale to retailers in January 2015. “Our motto’s
KRISTIN KATO, assistant lead grower, tends a marijuana strain known as Grapefruit in the nursery at Trail Blazin’ Productions. (Courtesy of Savatgy Photography.)
been ‘slow and steady,’” Danielle said. “Our cost to produce is higher than outdoor growers. We went with LED lighting, the right sustainable choice, but that changes everything about how to grow.”
THE STARTUP Seven years ago Danielle was a loan officer at a mortgage company. Juddy ran a bike and ski shop in Mount Vernon. “We had a good friend who put himself through college growing and selling cannabis,” Danielle said. DANIELLE AND JUDDY Rosellison, owners and operating managers of Trail Blazin' Productions, in their office. (Photo by Cheryl Stritzel McCarthy)
“He graduated and moved on, but he thought it’d be a shame to let his (horticultural) recipe go to waste.” The Rosellisons got medical cards, and Juddy inherited four of their friend’s plants. He brought them home, shifted the washer and dryer, and started cultivating cannabis in the laundry room. In 2013 when voters approved recreational marijuana, Juddy suggested that they apply for a license. That was a year before legal recreational sales began even in the first state to make it legal, Colorado. “In 2013 landlords wouldn’t rent you space,” Danielle said. “Investors said, ‘Go away.’ We thought you had to have a location before you applied for a license. You didn’t. I put an ad on Craigslist seeking space.” That led to their location of 17,000 square feet. Trail Blazin’ started with private monies pooled by those who own the business. Two private investors chipped in. The Rosellisons refinanced the mortgage on their home and on a rental house they own. Danielle raised limits on credit cards. “Once this started we knew no one would give us credit. I told (the credit card companies) I was going to buy a car. We got the startup money. It cost way more than we thought it would.” Trail Blazin’ was the first grower to get building permits. The city initially denied their request, citing it as too close to a privately-owned recreation center. Eventually the city approved, but the deal cost the company three months’ rent with no profit.
benefits and is not psychoactive. Edibles and stronger strains help put illegal dealers out of business, but also encourage more people to take the drug, and in stronger forms, according to an editorial in The Economist. By law in Washington, product gets weighed and sealed before leaving the processing facility. Retailers
"No one is getting rich quick." Danielle Rosellison, Trail Blazin’ Productions and consumers can’t open packages in a marijuana store. “Just like you can’t open a liquor bottle in a store and start chugging,” Danielle said. “They’d escort you out real fast.”
EMPLOYMENT, AND THE FUTURE Their facility has capacity for
10,000 square feet of growing area. In the spring Trail Blazin’ was planting 4,000 of that. By end of summer they expect to have 60 percent of available space under cultivation. They have four full-time and four part-time employees, plus 15 on-call trimmers. “A trim machine would be cheaper, but employing local people is more important,” Danielle said. The company is shifting part-time employees to full-time. The Rosellisons are busy parents of two children, in kindergarten and pre-school. As the children grow up they won’t be allowed to help in this industry. No one under 21 is allowed in the building. Trail Blazin’ might franchise their techniques and name into other states. “We actively speak with other startups around the country, which carries great potential for expansion,” Danielle said. “Like in any business, it’s fun to dream about that. But make sure you’re solid at home first.”
THE PRODUCTS Trail Blazin’ sells six strains in the form of joints and flowers, also known as bud. They are working on processing marijuana into concentrates. They plan to offer those by the end of 2016. Flower product consists of 15-30 percent cannabinoids. Concentrates vary from 50-100 percent. Tetrahydrocannabinol, or THC, is the best-known cannabinoid and primary psychoactive compound. Another, cannabidiol, is known for medical
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INDUSTRY REPORT: RECREATIONAL MARIJUANA
THE retailer PRODUCT AT A 2020 Solutions cannabis retail store. (Photo by Cheryl Stritzel McCarthy)
rices down. Revenue up.
That’s the story at 2020 Solutions, a legalized marijuana retailer with two stores in Bellingham (Iron Street and Guide Meridian) and more coming. When 2020 Solutions opened in July 2014 a 3.5-gram package of cannabis sold for $95. Today, a 14-gram package sells for $70. In those heady early days legal marijuana was so expensive that a 3.5-gram package was the largest pack the store sold. Today, a 28-gram package is a common purchase. A gram costs $7-$18, depending on quality and potency, according to Aaron Nelson, the company’s senior vice president of operations. Or, a customer can go big and buy an ounce for $120-$350. Volume has pumped up revenue for marijuana retailers. Consider the numbers at 2020 Solutions: • 2014: $1.1 million in sales, with one store open six months, and the second open two months. • 2015: $4.6 million. • 2016: on track for $6 million. Those figures don’t include the 37 percent state tax that marijuana retailers pay, or the 8.7 percent sales tax that customers pay. Equilibrium in prices draws customers off the black market into 54 | BUSINESSPULSE.COM
legal establishments. Out of a $20 purchase, $6.20 goes to taxes. In store, posted prices already include the 45-plus percent tax, so customers don’t get hit with that whammy at checkout. Also, as the medical/gray market phased out this summer, consumers shifted to licensed stores.
Drive in northwest Bellingham. Also, a license in Hawaii is imminent. “Five years from now we anticipate being in several states,” Nelson said. Most retailers have stayed in business since retail began in July 2014, Nelson said. “You’ll see less successful retailers get acquired by more successful players. There’s a few down in Seattle. It’s happening.” 2020 Solutions started with 12 employees and now employs 40 locally, with four of those part-time. Mostly they all work behind the counters, serving customers as “budtenders,” with five employed at the company’s support center near the Hotel Bellwether complex. “We bring in business coaches, do product training and customer service training,” Nelson said. “We’ve worked with Jim Bergquist.” He is the consultant who took Pike Place Fish Market from bankruptcy to a popular tourist destination. “It’s been cool to provide jobs to people,” Nelson said. “They’re thriving.
STAFF AT 2020 Solutions has helped lift the company into our Top 100, pushing on a $6 pace in 2016 at two Bellingham stores, with another opening soon: (from left) Aaron Nelson, senior VP of operations; administrator Sarah Myers, and "budtenders" Tausha Feathers and Shawn Calhoun at the store on Guide Meridian. (Photo by Cheryl Stritzel McCarthy)
“It’s not the most profitable business in the world, but it’s sustainable if you run your business responsibly,” Nelson said. “We’re fortunate to be on the profitable side of things, enough to continue investing in and growing the business.” 2020 Solutions obtained a license for a third location on Pacific View
It’s satisfying to watch people grow in this new industry.” Industry growth in Whatcom County has generally been in line with expectations, Nelson said. Only its start was slow, with product shortages and corresponding high prices. 2020 Solutions’ most profitable
product is flower, also called dried bud. But the array of products is dizzying. Particularly eye-catching are the glass vessels, which include pipes, bongs, bubblers, and dab rigs. “Ninety percent of them are locally-blown glass,” said Sarah Myers, an administrator for 2020. A dab rig is similar to a bong, with a smaller mouthpiece for consumption of extracts or concentrates. It requires a blowtorch or electric nail to produce heat. The e-nail is more precise, and can heat its titanium nail to 360-420 degrees, depending on product. That hit is potent – all vapor with no carbons. Marijuana today typically is more potent than decades ago. Refined growing methods, including breeding, feeding, and lighting, mean product on shelves now contains up to 30 percent tetrahydrocannabinol, or THC, the chemical responsible for the high. Much higher THC products are expected to be available later this year. The smuggled marijuana of the ‘80s and ‘90s generally was 18
percent. Marijuana plants grown for medical use can have 1 percent THC and higher levels of the cannabinoid known as CBD, which delivers pain relief without the high.
HOW DID IT BEGIN? 2020 Solutions owners Troy and Aubree Lozano received a license to sell recreational marijuana in late 2013. Nelson calls Troy a “serial entrepreneur.” Startup funds for the company came from the Lozanos’ two existing contracting businesses in Bellingham. “No bank loans were available, or used,” Nelson said. “We are not reliant on making payments. We grow as we can pay for it.” Nelson tells the story that Troy came up with the company name while musing on his aunt’s glaucoma. Marijuana is sometimes used to manage that disease. “He had a clear vision,” Nelson said, “that we could help others with glaucoma.” Nelson, Troy and their wives met in a birthing class. “I knew they had won a license,” Nelson said. “He asked
me to join them.” Nelson had been with FedEx Kinkos as a manager for 14 years. “I took the leap,” he said. “Best decision I’ve made in my career. My wife was supportive. My mom’s first response was, ‘You’re not going to become a pothead, are you?’ But I am not a consumer of cannabis, and that hasn’t changed since getting into the business.” Back in 2012, Nelson voted against legalization, but now feels that marijuana’s positive impacts outweigh the negative. “I invite people opposed to cannabis to stop into one of our stores, and see that it’s not a smoke-filled den.” (By law, consumption is not allowed on site.) “When you’re buying cannabis from a registered channel, you know it’s clean of other substances. You know the potency. It comes down to freedom of choice. Legalization allows them to make that choice.”
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INDUSTRY REPORT: RECREATIONAL MARIJUANA
PRODUCT AT A 2020 Solutions cannabis retail store. (Photo by Cheryl Stritzel McCarthy)
THE State R
ecreational marijuana sales in Washington since legalization 2 years ago have run high and continue zooming higher. Look – if you can see through the haze – at the numbers: • • •
Legal recreational marijuana sales hit $1 billion in May of this year. Sales have exceeded state forecasts every quarter since recreational stores opened in July 2014. Over the first fiscal year the state expected to reap $37 million in marijuana taxes. It received nearly twice that – $65 million. Over the second fiscal year the state received $165 million in marijuana taxes – 2.5 times more.
On the other side of that
economic seesaw, the price of marijuana has dropped. In July 2014 a gram sold for $25-$30. Today, a gram sells for $9.70, taxes included. “Of course, there was huge demand when stores first opened,” said Brian Smith, spokesman for the Washington State Liquor and Cannabis Board. “Thousands of people showed up. A market was created that didn’t exist the day 56 | BUSINESSPULSE.COM
before. Demand was more than supply. “Today, it’s more equal. You don’t find lines out the door at marijuana stores anymore. You have a large pool of growers producing for market demand. The market will dictate when supply equals demand.” Before legalization the black market price of unregulated marijuana on the street was about $10/gram. Now, in state stores with taxes imposed, “It’s still under 10 bucks,” Smith said. In 2014 when the legal market opened, the state had hoped to be competitive at $12 to make inroads on the black market. “People are price-sensitive,” Smith said. “The advantage of using a state store is that it’s legal, there’s good selection, the product is tested, people know what they’re getting. I’ve heard news reports that cartels are looking into other drugs, that marijuana is no longer a lucrative market for those outside the law.” The tax structure changed after the first year to a 37 percent rate levied at the retail level. The state pays the tax revenues to cities and counties based on their proportion of sales. The state money acts as an incentive to cities and counties to avoid bans.
Medical marijuana stores have never been legal, though in 1998 state voters approved “home grows” and collective gardens. (Medical marijuana is not smoked, but taken by pill, tincture, or other form.) Then Initiative 502, allowing state-licensed recreational marijuana, passed on the general ballot in November 2012 with 56 percent for and 44 percent against. Storefront marijuana dispensaries were already operating. Some of those customers were medical users, according to reports, but many were recreational users who had finagled a prescription. (One Bellingham user, requesting anonymity, said that getting a prescription without medical need was easier than standing on one leg.) Either way, customers bought marijuana tax-free. “No one knew how many dispensaries there were,” Smith said. “In some places they were quashed by local government. In some places they were allowed to proliferate. They’d pop up overnight or shrink away.” One state official called the situation untenable. Then I-502 passed. Legal recreational marijuana, with taxes, loomed. Dispensaries, with no taxes, proliferated. “We saw a lot of dispensaries open after 502 passed,” Smith
said. The state legislature’s response to this gray market was to order medical and recreational markets to merge by July 1, 2016. The picture of Washington’s overall market – before the imminent merger – looks like this: The gray (medical) market holds 37 percent; state-licensed recreational stores hold 35 percent, and the black market holds 28 percent. The July merger brought expectations that the legal market would increase considerably.
GETTING A LICENSE Under I-502 would-be business owners applied for licenses through a lottery system. Many couldn’t get a license, with demand far in excess of available allotments. The state’s aim was to supply enough marijuana to meet but not exceed demand, because excess would flow out of Washington into illegal states. Now with the gray medical market merged into the statelicensed program, dispensaries are shutting down and need is rising for more licensed stores to meet market demand. The state raised the cap on the number of stores from 334 to 556, and established a new priority system for license applicants. The system works like this: To receive Priority One status, you must: 1. Be current on taxes; 2. Have applied for an I-502 license, 3. And, if you were a medical dispensary prior to I-502 passing, hold city permits for your business. By March this year 154 applicants met criteria for Priority One. And 927 applicants were Priority Three, which meets none of the criteria. Many reportedly are trying to make up back taxes so they can get a state license. “We don’t differentiate between good actors and bad actors,” Smith said. “You either meet the criteria or you don’t.” With the merger a store can
choose to get an endorsement to sell what the Department of Health decrees medical marijuana. “Most stores have chosen that route,” Smith said. “It’s additional business.”
implementing a law that’s illegal at the federal level. I can’t tell you how many obstacles that puts in your path. When we went forward, we didn’t know if the federal government would shut it down.
“We’ve been listening to the community. We’ve gone on the road extensively, to receive input. We’ve been flexible while keeping true to public safety. It’s always evolving. It’s always something new.”
How does the marijuana business today compare with expectations in 2014 when the first stores opened? “There was so much unknown,” Smith said. “There’s nothing like
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INDUSTRY REPORT: RECREATIONAL MARIJUANA
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nly a handful of financial institutions in Washington work with marijuana businesses. Salal Credit Union, based in Seattle, was one of the first. It accepted its first account within the cannabis industry in June 2014.
Salal offers loans for equipment and property to state-licensed marijuana businesses. Salal also offers savings and checking accounts, wire transfers, and armored car cash pick-up to the cannabis industry. Salal gives referrals for services such as payroll, human resources, attorneys, insurance agents, and accoun-
tants that will work with cannabis companies. Financial dealings at the credit union take place within guidelines established by a 2014 U.S. Department of Justice memo, according to Carmella Murphy
"It’s a lot of work to deal in all cash." Aaron Nelson, Senior VP for Operations, 2020 Solutions marijuana retailer Houston, vice president of Salal’s business services. Known as the Cole Memo, it guides law enforcement away from state-licensed marijuana
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businesses and toward nefarious activity, such as selling to minors, revenue flowing to criminals, product going out of state, and marijuana businesses that act as covers for illegal activity. The credit union completes monthly and quarterly monitoring reports on marijuana businesses, and files suspicious activity reports when appropriate. All these services make banking more expensive. “The cost of initial account review and ongoing monitoring is labor intensive, requiring us to charge fees accordingly,” Houston said in an email interview.
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To become a leader in an emerging market; • To advance benefits to patients suffering from health issues; • To improve public safety by preventing robbery and money laundering; • To assist legal businesses, and • It’s a profitable niche. Even with hard-to-get banking services available, legal marijuana remains a cash-only business. Bellingham marijuana retailer 2020 Solutions features an ATM in its stores. In a cash-only exchange, customers and the company both need one for convenience. Aaron Nelson, the senior vice president of operations for 2020 Solutions, said their retail operation only recently acquired bank accounts. “We can deposit only as much money as we sell in a month,” he said. “I would love to be able to accept credit cards, which would reduce the amount of cash we deal with. That would reduce costs because we wouldn’t need extra labor to handle the cash. It’s a lot of work to deal in all cash.” 2020 Solutions has several “layers of security” to handle money, including armored cars and certified security guards and transaction handlers.
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INDUSTRY REPORT: RECREATIONAL MARIJUANA
The black market
ow’s business for black market marijuana dealers since licensed recreational sales began in July 2014? In other words, what’s going on with “your guy?”
Business Pulse put questions out to a legal source, who then passed the questions to three illegal sources. The black marketers represent both genders and a range of ages. The first two live in Washington. The third lives overseas.
How long have you been in this business? Five years. My brother has been in it for 20 or so. How did you get into it? It was mostly financial. Started
60 | BUSINESSPULSE.COM
out making a few thousand extra dollars a month and then it got bigger and bigger (well, until recently at least). How has your business changed? Recreational didn't really change anything. Medical is when things
If the state was smart they would lower taxes for recreational so that more people would drop out of the black market. changed. Prices dropped when medical was legalized. Five years ago I was getting $2,800 a pound and I couldn't keep it on the shelf. Now I get $1,800-$2,000 a
pound, if it's just a pound. Prices go as low as $1,600 sometimes if the person is buying bulk. However, I make more on the black market than my friends do in their 502 businesses because taxes and regulation are so intense. Also, there is no sweating anymore now that recreational is legal. Before, I felt like a drug dealer. I don't feel that way anymore. It's legal. Now I am just avoiding taxes. How do you manage pricing now? Since prices are still so high in recreational for decent cannabis, the black market continues to flourish. If the state was smart they would lower taxes for recreational so that more people would drop out of the black market. What’s ahead for you? Do you see yourself staying in business long-term? After July 1 (when the medical/
gray market merged with licensed recreational) I began to look towards the (legal) 502 market to find a career; it's where my skill set is.
Dealer 2 How long have you been in this business? Since 1993. How did you get into it? I started getting marijuana for friends, buying an ounce with their money, and then I could get my weed for free. I was a pretty broke college kid, so purchasing (personal) cannabis was a luxury. I found the power in buying bulk (an ounce is not much, but still cheaper than individual eighths). Then I broke my leg and needed to make an income, so it became a little more serious at that point. How has your business changed since recreational became legal? OMG. It dropped 90 percent. I have two people I help out now. It's all good, though. It's never been my career, just side money. I make way more money in my real job, but (selling black-market marijuana) is just something I've done for so long and people have always relied on me; it's a comfort thing for those clients. I always had good stuff they knew they could count on, and it was never shady.
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How do you manage pricing now, considering competition from state stores? In the beginning I bought at $250 an ounce and sold it for $300. When medical came out, things changed. It was easier to get, so I dropped buying to $200 and sold at $240. Since recreational became legal hardly anyone comes over anymore, which I'm totally fine with. WHATCOMBUSINESSALLIANCE.COM | 61
INDUSTRY REPORT: RECREATIONAL MARIJUANA What’s ahead for you? Do you see yourself staying in business longterm? Or moving into some segment of the legal industry? I don't see myself doing anything except smoking and enjoying it. I'm actually looking for a nice ounce right now if you know anyone…
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Anything else? I've always had a job, so (marijuana) has never been my main source of income (except when I broke my leg). It was just a little benefit cash and free weed on the side.
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How long have you been in this business? Since 1992, international since 2010. How did you get into it? I was born into it. How has your business changed since recreational became legal? Recreational in Washington has zero effect on my business, as we deal with international logistics. How do you manage pricing now? I actually set the market price in our country. It is $333 an ounce wholesale; $472-to-$883 retail (all in U.S. dollars). What’s ahead for you? Do you see yourself staying in business longterm? Or moving into some segment of the legal industry? Currently, I manage logistics on a 100 percent profit margin, whereas my partner makes an additional 60 percent profit. All on zero overhead. I will never go legitimate as long as it is illegal here (abroad). Anything else? I make approximately $500,000-to$750,000 in U.S. dollars annually. 62 | BUSINESSPULSE.COM
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Every day an independentâ€™s day for Teresa Taylor She wears three hats: businesswomen, economic developer, politician Article & photo by Mike McKenzie 64 | BUSINESSPULSE.COM
ow appropriate that Teresa Taylor’s company ties directly to Independence Day. She grew up surrounded by woman who instilled self-reliance in her, with a strong entrepreneurial bent. Mother. Stepmother. Grandmother. Great-Grandmother.
These influencers surfaced as she recounted with Business Pulse recently about the many business-related hats she wears today: • A project manager with the Lummi Indian Business Council’s (LIBC) Department of Economic Development. • A 2015-elected city councilwoman in Ferndale. • And her entrepreneurial fireworks venture – Washington Fireworks (retail) and Northwest Pyro (wholesale). The two companies are co-owned with Steve Oliver, who now runs the wholesale distribution side. Teresa Taylor’s passion for the business evolved from her experiences in operating a renowned fireworks stand for her grandmother, the late Betty Hamerly, known far and wide as “Bargain Betty.” Betty held court for about 40 years at her stand on Haxton Way, a 2-minute drive from Slater Road on the Lummi Nation reservation through what is known as Fireworks City in late June-early July. Taylor, who hung out at Bargain Betty’s from the age of 5, stepped into the breach as the ‘90s turned into the 2000s when her grandmother became disabled by flagging health. Teresa learned the industry inside-out, and helped keep business bustling as it had been since the early ‘60s. After Betty passed away in 2003, at age 87, Teresa managed the business five years until some family legal issues developed and Bargain Betty’s property fell to her son. That led Taylor and Oliver to plunge into the fireworks industry. “My grandmother had encouraged me to learn the wholesale side of the fireworks business,” she said. “I learned how to order directly from manufacturers, and cut out the middle man.” Taylor and Oliver purchased 7.5 acres of field across the
road slightly north of Bargain Betty’s, nearly hidden by tall roadside weeds. There, they set up a retail store, the Washington Fireworks Superstore – which she now operates – and the wholesale distributorship. During 2010 the business got a running start the first year by setting up satellite wholesale distribution outlets with six contracted tribal accounts – Lummi, Swinomish, Tulalip, Puyallup, Muckleshoot, and Yakima. The businesses have burgeoned to include many more wholesale accounts to retailers across the state, both on and off of reservations, and in faraway locations around the U.S. “We’ve done business from New York to South Carolina to Alabama to Hawaii,” Taylor said. “We’ve shipped up the Mississippi River from Louisiana ports. I’ve been to Buffalo, Missouri dealing with fireworks (laugh). “My philosophy was always ‘go big or go home.’” And, after mowing the roadside weeds for clear exposure from the road, the retail store grew exponentially. Her supply of imported fireworks the first year amounted to 26 delivery truckloads – 30 containers, each holding about $35,000 of inventory investment as shipped directly from the manufacturer.
“We’ve done business from New York to South Carolina to Alabama to Hawaii.… (and) up the Mississippi River from Louisiana ports. I’ve been to Buffalo, Missouri dealing with fireworks (laugh). My philosophy was always ‘go big or go home.’” Taylor fondly recalled the experiences with her maternal side of the family. “My great-grandmother Edith (Lane) Jones owned Portage Island and sold it to Whatcom County. Edith and Vic Jones owned and donated the Stommish grounds where she helped start the annual Lummi Stommish Water Festival, a celebration honoring veterans returning home. She knew the value of hard work.” Her Grandma Betty built on that value with both her TERESA TAYLOR (far right) in action at Ferndale City Council
WHATCOMBUSINESSALLIANCE.COM | 65
ENTREPRENEURIAL ENTERPRISE SERIES business and her lifelong involvement with social services. “Betty worked for the United Indians of All Tribes in Seattle, and worked with both the homeless and foster children,” Taylor said. “The family – all of us – also worked in the seasonal fishery, operated by generations of aunties and uncles.” Taylor’s mother Arloa, an Army veteran, met and married a man in the military, and Teresa and her brother were born in Chicago when both her parents were stationed at Fort Sheridan. The family eventually moved back to this area when Teresa was a child, and they lived in the former Burger Shack on the Stommish Grounds, courtesy of her great-grandmother, until the Taylor family could settle into a home. Her mother broadcast news and held other positions with KVOS-TV when it operated in Bellingham. Her father, Tony, and his wife of 28 years, Pat, own and for many years operated the Waterfront Seafood & Bar in Bellingham. On her path to her present stations in the world of business and economics, Teresa graduated from Bellingham High School (’86), and over the years attended two community colleges and Western Washington University with a concentration on accounting. After college Teresa started working for the LIBC on the SelfGovernance Demonstration Project. “That took me all over the U.S. educating tribes about self-governance, and dealing with the Department of the Interior, Bureau of Indian Affairs, and Indian Health Service to retain some of the tribes’ federal money that was not going to them,” Taylor said. “We wanted our own full dollar. And it worked – the Self-Governance Act passed and became permanent legislation in 1993. Today over 350 of the 566 federally-recognized tribes operate with self-governance. We started with seven.” Teresa has worked for the LIBC in positions such as the executive assistant to the CEO/CFO, the chairman’s assistant, and facilities manager. 66 | BUSINESSPULSE.COM
She also worked as manager of public relations for the Ferndale smelter Alcoa Intalco Works. In recent years Teresa rejoined the LIBC on its economic development team, working on such high priorities as the projected vision for a marina development at Gooseberry Point with boating facilities, dining, and more. “We’re blowing the dust off of this. We’ve worked on it with the world’s best engineers and architects,” she said
Another favorite vision of hers is the Work Force Training & Education Project. “That’s building economic opportunities for our greatgreat-grandchildren,” she said. “Like mine did for me.” Last year Taylor decided she could serve a broader good within her community by running for public office. She earned a seat on the Ferndale City Council, where she now can deal in fireworks of a whole different nature….
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ANDY BEECH’S creative designs have become popular with many star-power guitar players and are displayed in places like Hard Rock Café and the Smithsonian. He operates one luthier business, and now is ready to launch another.
Photos courtesy of D’Haitre Guitars
68 | BUSINESSPULSE.COM
Prince, Ozzy and others benefit from the maple in Maple Falls Janus Guitars up next (with Judas Priest) for Andy Beech By Dave Brumbaugh
Beech’s custom guitars for Prince were made from mahogany and maple. Maple is particularly appropriate since Beech started crafting wood guitars when he was 13 years old in Maple Falls.
emories of Prince, the iconic singersongwriter who passed away April 21 at the age of 57, still reverberate among millions of his fans throughout the world. But a Bellingham luthier has a special connection – Andy Beech made a Symbol guitar that Prince played” during his acclaimed "Purple Rain" halftime performance at the 2007 Super Bowl.
who did Prince’s guitar work and he put in a good word for me.” In addition to the Super Bowl, Beech’s creations have been in a movie and on display at the renowned Smithsonian Institution in Washington, D.C. and multiple Hard Rock Café locations. Beech’s custom guitars for Prince were made from mahogany and maple. Maple is particularly appropriate since Beech started crafting wood guitars when he was 13 years old in Maple Falls, a hamlet about 30 miles northeast of Bellingham where the luthier was born and raised.
“The music world lost one After graduating from Mount of its most creative entertainBaker High School in 1983, ers ever,” said Beech, owner of Beech went to Hollywood lookD’Haitré Guitars. “I’m humbled ing for fame and fortune. He that one of my guitars is associwas just getting by until a chance ated with one of Prince’s most meeting with Zack Wylde, memorable performances.” who had just become a guitar Beech still is making distincplayer for Ozzy Osbourne’s band. tive, high-quality guitars and has Beech became the guitar technipartnered with another rock star, cian for Wylde when the band Richie Faulkner of Judas Priest, went on the road, leading to five to launch Janus Guitars. While years of shows from 1991-1996 at most performers are content to sold-out venues throughout the be paid by guitar companies for world. their endorsements and playing their guitars, Beech said Beech also made guitars for Faulkner was different. Beech Wylde, including The Glory. crafted one of his acclaimed Its eye-catching shape created JANUS GUITARS, a new line, plans to go into proGlory guitars for Faulkner several duction this year combining the expertise of musia buzz among fans and has been cian Richie Faulkner (left), who has played with years ago and the two stayed in praised as an addictive, standout, Judas Priest since 2011, and local designer Andy touch. beautifully crafted instrument that Beech, seen together here at a concert venue. “Richie liked the idea of ownis stunningly versatile. Beech also ing a guitar company rather than created the Steel Dragon, which being restricted by an endorsement,” Beech said. Wylde played in the movie “Rock Star.” Janus Guitars plans to start production in early 2017 However, a life in Los Angeles and on the road with a retail price around $2,500. “They’ll be ideal for wasn’t what Beech wanted forever, so he moved back to people who just love playing guitars or who play profesWhatcom County and began doing finishing work on sionally,” Beech said. high-end homes. Beech’s big break came when he was asked to make 31 But his passion is crafting guitars, so Beech opened guitars for Prince during the 1990s – four Symbols and D’Haitre’ Guitars in Bellingham, which will continue 27 Cloud guitars, which have their own unusual shape while he works with Faulkner on Janus Guitars. and an elongated top horn. As a luthier since 1980, Beech certainly has, you could “Prince knew exactly what he wanted and his crew say, picked his way to the top of his profession. sent the designs to me,” Beech said. “I knew a bass tech WHATCOMBUSINESSALLIANCE.COM | 69
INDUSTRY REPORT: CONSTRUCTION
Recovering construction industry gains strength Student housing’s the driver now
By Cheryl Stritzel McCarthy
he cranes are back: Commercial construction in Whatcom County is ticking up steadily, though it’s nothing near pre-recession levels before 2008.
As a gauge, look at employment. In 2007, the construction industry statewide employed 270,000 workers; 195,000 in 2012 and 218,000 in 2014. The industry stands at 18 percent below its pre-recession high in size of workforce, and Whatcom County feels that along with the rest of the state, according to Jeremy Carroll, vice president at Dawson Construction. Labor is tight across all trades: wood-framing carpenters, concrete-forming 70 | BUSINESSPULSE.COM
NXNW UPSCALE STUDENT HOUSING, off Lincoln Street south of the Lakeway Fred Meyer store in Bellingham, is accepting leases and will open in time for fall semester 2016. (Photo courtesy of Dawson Construction)
carpenters, roofing, drywall, plumbing, mechanical, electrical, flooring, et al. That loss of skilled labor cuts into the amount of work the commercial construction industry can take on capably. The industry
“The industry is 18 percent below its prerecession high in size of workforce.” Jeremy Carroll, vice president, Dawson Construction
feels busier, but that’s due to fewer workers rather than a lot more work. “We saw last year’s surge in
hotel-building, and the year before,” Carroll said. “That’s subsided.” Taking its place is a pent-up demand for college student housing and for public schools of K-12. Several school districts, including Bellingham, Blaine, Lynden, and Nooksack, have projects in the bidding stage this summer. Blaine’s is $29 million; Bellingham Options High School and Lynden Middle School, $15 million each. The $50 million new Sehome High School, contracted by Dawson Construction on the existing site, has advanced into the design phase. For Carver Academic Facility at Western Washington University, Dawson is working on the foundations, structural steel site concrete, and finish carpentry for general contractor Mortenson Construction
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INDUSTRY REPORT: CONSTRUCTION (office in Seattle, headquarters in Minneapolis). This year student housing seems to spring up everywhere, like mushrooms after rain. WWU recently bid a new renovation for Ridgeway Gamma Residence Hall. Another new WWU residence hall has architect selection underway now, with construction one or two years out. WWU renovated its Ridgeway Kappa Residence Hall last summer. One project nearing completion is NXNW Student Housing on Lincoln Street, south of the Fred Meyer store on Lakeway Drive. That 368,000 squarefoot project will have several buildings housing up to 648 students in 248 units. Students can already submit a lease application for occupancy this fall. More college student housing is coming on the former site of the Seventh Day Adventist Church on North Forest Street. Drivers exiting the roundabout at State Street and traveling north up Forest Street crane their necks at the massive project on the east side of the road, but most of Dawson Construction’s work there is still underground. “What you see now (mid-summer) is the below-grade parking structure,” Carroll said. You’ll eventually see four stories of student housing called Gather Bellingham, a 145-unit, 423-bed facility slated for move-in August 2017. Its 290,000 square feet includes the parking garage. Gather Bellingham’s owner is Rael Development Corporation (offices in California and Texas). Not for students, but for farm workers and their families, Catholic Housing Services is building housing on Bakerview Road scheduled to open this autumn. The 85,000 square foot project comprises 50 apart72 | BUSINESSPULSE.COM
“We’re all over the place, but the money’s coming back to Whatcom County.” Liz Evans, district manager, Associated General Contractors of Washington
ments in three buildings. “CHS always does a great job with their facilities,” Carroll said. “Good quality, and good use of space.” Nearby in the Cordata area of Bellingham a facility for dementia care also approaches completion this fall. Silverado Memory Care Community on Columbine Drive comprises 41,000 square feet and 45 units. Silverado Care (head-
Construction in oildependent Alaska has slowed considerably due to falling oil prices. Tumbling crude prices also lowers spending by Whatcom County’s refineries.
EXXEL PACIFIC PROJECT Home2 Suites by Hilton, Bellingham Airport (Courtesy photo)
quarters Irvine, Calif.) has similar facilities in Utah, and offers related services in California and Texas. The Bellingham building reflects a unique approach to dealing with dementia, featuring a sizable courtyard and other sunrooms that bring natural light inside to affect caregiving positively. Construction in oil-dependent Alaska has slowed considerably due to falling oil prices. Dawson Construction, which maintains corporate offices in Ketchikan and Juneau, feels the effect, as well as some other area contractors. Tumbling crude prices also lowers spending by Whatcom County’s refineries. A BP Economic Impact Report shows BP’s external spending on all vendors in Washington during 2013 was $290 million; but falling 43 percent the next year, $165 million, and another $5 million last year to $160 million. That includes spending on service providers, construction, material, and supply. Alaska might be cold, but tech-boom Seattle is “hot, hot, hot,” said Liz Evans, district manager of WHATCOMBUSINESSALLIANCE.COM | 73
INDUSTRY REPORT: CONSTRUCTION the Associated General Contractors of Washington (AGC) that services Whatcom County. “The big revenue is derived from the south,” Evans said. Several locally-based companies benefit from commercial construction in the Seattle area. Tiger Construction Ltd of Everson
The construction industry statewide – with a payroll of $12.4 billion – provides nearly 9 percent of Washington’s private sector workforce. Construction sales make up 16 percent of all sales. is building a new cafeteria at Marysville Pilchuck High School, to replace the one abandoned after mass shootings in 2014. Other Whatcom County contractors such as Faber, Moncrieff, Exxel Pacific, Haskell, IMCO, Diamond B, Tiger, Colacurcio Brothers, Rosendaal-Honcoop and numerous others have active projects to the south of the county – and some even further in Oregon and California, or up in Canada and Alaska. “We’re all over the place,” Evans said, “but the money’s coming back to Whatcom County.” Exxel Pacific, for example, displays THE FIRST PHASE of Fairhaven Harbor Townhomes, the developer/contractor is David Ebenal/Dominion Sustainable Development Company including nine three-story homes. (Photo by Cheryl Stritzel McCarthy) 74 | BUSINESSPULSE.COM
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INDUSTRY REPORT: CONSTRUCTION numerous projects on its website; many are local, and many show a far reach for the No. 2 private company on the Business Pulse Top 100 list, as you would expect from a business grossing nearly $280 million. “We’ve always been a company that travels and does work all over. We have projects from here to Seattle,” said Kevin DeVries, the 27-year-old company’s CEO. But he reiterated Evans’s point, saying, “It’s an important distinction that we’re still basically a local contractor. We’re proud of our many projects here at home – Lynden Christian School campus, apartment and student housing projects, and many other examples.” The general contractor construction giant among our Top 100 Private Company listings represent a massive footprint on the local economy and workforce. DeVries said, “The most significant thing is that we all live here, we work here, and we employ here and our workers travel. And, we pay a lot of taxes from our work – wherever it is – back into the city and county economy. We’re proud that we work from Bellingham, and it’s a key to our sustainability.” Advanced technology allows local companies to manage work projects remotely from home base here, but the workforce must have mobility. Workforce development remains a serious issue affecting contractors. “The new generation doesn’t seem to be as interested in this industry…not as interested in working out in the field with their hands,” Evans said. Big-box retail construction in our region typically doesn’t award to local contractors. The new Costco on West Bakerview Road went to Ferguson Construction (Bellevue). The interior remodel of Whole Foods at Lakeway Center went to J.R. Abbott Construction (Seattle). Non-local contractors usually bring in subcontractors from outside the county as well as hire 76 | BUSINESSPULSE.COM
Purpose, values and new strategy drive Moncrieff Company gambled on expansion during recession By Cheryl Stritzel McCarthy
SAM MONCRIEFF of Moncrieff Construction (Courtsey photo) In 2007 Moncrieff Construction Inc. in Lynden, which specializes in concrete construction, had 120 employees and $7 million in revenue. In 2008-‘09 the recession slammed them with a gut punch. Sam Moncrieff, the owner, took a chance. While most businesses in his niche waved caution flags, he boldly charged ahead. “I saw that things weren’t happening here. I knew if we just stayed (only) here, we would wither,” he said. Hence, during 2008, in the teeth of the recession, Moncrieff expanded by opening a satellite office in Tacoma. Moncrieff explained that he knew of other concrete contractors that had over-leveraged and thus would not survive the downturn. That meant opportunity might open up to the south, nearer the large population centers. Through 2008-’11 Moncrieff Construction hung on, surviving by plowing retained earnings back in to the company. In 2012 Moncrieff opened another office in Everett. The economy in Whatcom County was “really suffering,” he said, and the Everett metropolis to the south held what little promise that was evident. Months ticked by. Revenue began to increase. For 2013 Moncrieff Construction notched $18 million – growth of more than 2 ½ times while pushing through the recession years. In 2014 revenue dipped slightly to $14 million. Then last year the company surged more than 50 percent to a robust $22 million in revenue. Compare 2007’s size of 120 employees and $7 million in billings to 2015 with a Whatcom Top 100 slate of 130 employees and $22 million. Opening two remote offices for positioning in those markets unquestionably held the key to today’s success, Sam Moncrieff said. But more important to him were changes taking place
within the company that provided the catalyst for remarkable resilience and growth. Moncrieff Construction began to articulate and communicate company values. They started holding weekly meetings to disseminate important information throughout the company. Previously, they didn’t really have organized communication. “A couple of us would get together to look through finances and see where we could improve,” Moncrieff said, “but not much else.” Today, meetings start with discussion of the company’s purpose. Employees describe which value they engaged with in the last week, or which value they saw another employee embody. Sam Moncrieff’s purpose, personally, is to provide healthy opportunities for people. “What’s their strength? What do they enjoy?” he said. “Take a holistic view. Put them in a position where they truly find healthy opportunity, not just opportunity where they might burn out.” In 2015, the company distributed over half a million dollars in saved costs among all employees. “Superintendents beat their budgets by that amount,” Moncrieff said. He described how the new method of supervision works: “If I have a hundred sheets of plywood at $40 per sheet and you need them, I’m going to get them to you. Before, it was like, ‘This is my plywood and you’re not getting it because I won’t get it back, and I’ll have to buy plywood next time, which goes against my budget.’ They’d hoard, to make sure they were successful.” Now the superintendents participate in each other’s budgets. “If I help you, I help me,” Moncrieff said, describing the evolution of the work culture and organizational behavior. “With two guys (working together) they can beat the budget by $75,000. If they kept to themselves, they might only beat it by $10,000 each.” It took a year of communicating purpose and values before employees began to trust it, Moncrieff said. “All these guys are amazing for adopting and trusting that thinking.” Quality and safety, which they’d always tried to work on, began to improve as employees acted intentionally in line with values, he said. Professionalism improved, and with it came better relationships with customers. “We had the concrete and we provided it in a professional way, so customers could pursue more projects.” Some of the company’s current success also, paradoxically, results in turning away work. “If a job is worth under $1 million, generally it isn’t a good fit for us,” Moncrieff said. “It takes as much to manage that as a bigger one. (Flatwork, where a crew is in and out in a day, is an exception.) “It’s hard to exclude work, but necessary. You can’t be everything to everybody.”
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INDUSTRY REPORT: CONSTRUCTION locally. “They say they try (to hire locally) but typically it’s more difficult to go to work for those contractors. They have their subs that they like,” Evans said. The construction industry statewide – with a payroll of $12.4 billion – provides nearly 9 percent of Washington’s private sector workforce. Construction sales make up 16 percent of all sales. For perspective: The construction industry contributes 21 percent of total state sales tax; restaurants and bars contribute 9 percent, and auto dealers and gas stations together contribute 12 percent. For each dollar spent on new construction, an additional $1.89 is generated in Washington’s economy, as reported last year by a University of Washington study contracted by the state’s AGC. Other ongoing issues for contractors includes the everincreasing cost of health insurance, wages and benefits, and materials. On a brighter note for the construction industry, the state’s new 11-cent gas tax will phase in this summer. This is the largest gas-tax increase in state history, and the first in a decade. It designates $8.8 billion to roads, $1 billion to bike-paths, pedestrian walkways, and transit, and $1.4 billion to maintenance. A significant portion of those allocations will enrich Whatcom County. “The gas tax,” Evans said, “will bring work our way.” Overall, the business looks good, then? “Contractors never say things are good,” Evans said. “They can be good, but they know they can turn bad tomorrow. We are cautiously optimistic that this (uptick in commercial construction) will hold for another couple of years.”
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PERSONALLY SPEAKING: JIM KYLE
JIM KYLE spent much of his adult life fishing aboard his beloved old 42-foot schooner, Home Shore, which he sold to his son Ben before it headed into the 2016 fishery in Alaska. (Photo courtesy of Jim Kyle) 80 | BUSINESSPULSE.COM
Jim Kyle WITH
he City of Bellingham and the Port of Bellingham have worked collaboratively on the in-motion redevelopment of the Downtown Waterfront. Several special-interest companies, most of them located on Port property at Bellingham Bay, wanted to join the collaboration, so they formed the Working Waterfront Coalition of Whatcom County.
Interview by Mike McKenzie Photos courtesy of the City of Bellingham
Jim stepped up to lead its mission as the president elected by its founding group. He’d been fishing about half-a-century, so he knows the ins and outs of harbors and the maritime industry – the centerpieces for the coalition’s due diligence. So, instead of retiring recently as a teacher, or a lawyer, or a professional environmentalist – the ambitions of his youth – he retired from his beloved commercial fishing vessel, docked immediately off the metal steps down from Gate 4 in Squalicum Harbor. The selling of his boat to a son coincided with a small meeting of the minds about certain concerns in waterfront redevelopment. And quickly he found himself neck-deep in
the newly-minted, nonprofit, volunteer-based, community organizing initiative to help preserve maritime special interests on the Bellingham Downtown Waterfront (and other Port properties and issues). Through Jim’s leadership, the group has grown to 90 member businesses, and hundreds of their associated employees. He deems it a great start, hardly two years in, but foresees a load of work requiring several boatloads of additional volunteers to lend sweat equity to the cause. From its very start to what lies ahead, here’s Jim’s journey with the coalition recounted in a interpersonal conversation over coffee with our editor, Mike McKenzie: WHATCOMBUSINESSALLIANCE.COM | 81
PERSONALLY SPEAKING: JIM KYLE
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I was retiring and selling my boat to my son. I got to thinking about how lucky I had been to have a wonderful port and harbor to return to all these years (of commercial fishing). I was aware that harbors are threatened all over the country by gentrification, by outside developers….and I’ve always held an interest in that, and other matters of how we use our natural resources. I was actually thinking about this type of organization to work for those values when I was invited to a meeting (in 2013) called by two charter company owners. We met on a boat, and everyone there owned marine businesses of various types. I was the commercial fishing representative at that first meeting.
THE ORGANIZERS Brian Pemberton, owner of Northwest Explorations, and Roger Van Dyken, who owns San Juan Sailing, organized the meeting. They’re competitors, but they have a cooperative interest. Eight attended on Brian’s boat.
FORMING THE ORGANIZATION I didn’t know what to expect. I learned that they’d already been talking about the concerns that I was thinking about. Roger then invited participation from a wider group of business owners and representatives of all marine businesses in the county to explore the possibilities. We had attendance of 40 to 50. It became clear quickly that we all had similar concerns and shared objectives. From a list of volunteers we formed a steering committee that looked at what had to be done to organize in a thorough fashion.
FORMALIZATION Through the next couple of years we formed the organization, wrote thorough by-laws, and elected a board of directors. We’re 82 | BUSINESSPULSE.COM
still building a foundation. We’ve been successful in building a strong organization, and also in addressing issues and having some impact.
EVERYONE WANTS ROOM WITH A VIEW Part of the problem in protecting a working waterfront is that everyone wants to be on the waterfront. Even people who don’t have to be there. Developers will build condominiums or very expensive office buildings that take advantage of the shoreline views. They out-bid maritime companies that require saltwater access to function. That is the heart of the problem. And you see it play out all across the country – so many places that have lost working waterfronts because their land has been valued at such a high rate that many marine-oriented tenants can’t afford to stay.
BAD TIMES, AND BYE-BYE When the crash happened, the developer went away. And now that’s a big parking lot where they have some kind of festival in the summer, and a farmer’s market. Everett had chased away its commercial fleet, marine trades companies, and the shipyard. Some had already left along the way, but Everett basically closed the door on that whole industry.
THEIR LOSS, BELLINGHAM’S GAIN Bellingham has gained some as a result of that because the remainder of the Everett fleet has scattered among Puget Sound ports. I don’t think anyone in Bellingham wants that to happen, but it still could as personnel changes and different people get in positions to make decisions, and developers come around with new offers when times change and the real estate booms again.
RESOLUTION? Washington state has some tools. The Shoreline Management Act. The Aquatic Lands Management Act. Plus, our public ports were formed under enabling statutes that, to some extent, focus their activities on core responsibilities of transportation, including harbor facilities, airports, and economic development.
PROBLEM WITH DEVELOPERS Land owned by public ports is susceptible to gentrification through developers drawn by profitability. We have seen that affect ports not very far away. Everett is an excellent example. They had an active commercial fishing port, and just before the real estate crash (2008) the port decided to phase that fishing port out. They tore down a building that was rented for storing commercial fishing gear (through) an agreement with a developer to replace it with condominiums that would have eliminated fishermens' dock. WHATCOMBUSINESSALLIANCE.COM | 83
PERSONALLY SPEAKING: JIM KYLE PRESERVATION THE GOAL
HOW MANY INVOLVED?
If we want to keep Bellingham and Blaine as commercial working ports for marine trades, fish processing, commercial fishing, and all that goes with that, it will require some long-term protection. That’s our goal – to help preserve what we have for the citizens of Whatcom County. It’s not just the ports and harbors that provide the economic engine. It’s many, many companies that are not even at the harbors. That’s what we’re about.
We have 90 maritime companies as members. They include one-man shops and big companies like All American Marine and Bellingham Cold Storage. We’re going to recruit this year in an organized fashion that we haven’t done before, and we expect to increase by at least 20. There’s potential for more. We’re also going to recruit associate non-maritime members – any locally-based company or individual supportive of the concept. Maritime jobs are mostly above average, family wage jobs. Everyone who sells something in this county depends to some extent on the maritime sector. It shouldn’t be hard to get folks to throw in support of the Working Waterfront Coalition.
ECONOMIC INFLUENCERS A study that the Port had done by Martin & Associates shows that commercial fishing and seafood processing companies based on Port property – if you add up the employment provided by them – that number is competitive with the
AT A STAGE TO GROW
with just an administrative assistant paid a few hours a month. The burnout level could affect what we can do until we can expand the volunteer base doing the work, and until we can hire an executive director.
THE PORT’S THE KEY We have actively engaged with the Port of Bellingham. We certainly don’t rule out working with the city and the county. At least for now, probably 80 percent of what we do is in cooperation with the Port.
WE COME IN PEACE When the coalition formed, a backlog of resentment existed toward the Port going back 10 years or so. That served as part of the motivation for the formation of the Working Waterfront Coalition.
AVOIDING CONFRONTATION Those who started formed the organization consistently emphasized having a cooperative relationship and not a confrontational relationship with the Port, or anyone else we engage with. We have worked hard with the Port. And the Port staff has been very cooperative in working with us, helping us learn how we can be most effective, and actually collaborating closely on several projects.
ROUGH HISTORY WITH PORT
JIM KYLE spent much of his life for decades fishing aboard his beloved old 42-foot schooner, Home Shore, which he sold to his son going into the 2016 fishery in Alaska. (Photo courtesy of Jim Kyle)
largest employers in the County, including the hospital (PeaceHealth St. Joseph) and Western Washington University. 84 | BUSINESSPULSE.COM
We’re at a stage to grow a larger membership, but also to effectively work on issues with the membership level that we have, though we’re still a volunteer organization
Part of the long history of this whole process has been to overcome the bitterness that existed when the Port of Bellingham was focused more on real estate development, and less on the port facilities. Staff had been reacting to the Port Commission as it existed years before, and that was changing. People paying attention know that the ship has turned, and continues turning slowly toward the core functions of the Port and away from non-maritime real estate.
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PERSONALLY SPEAKING: JIM KYLE THE STATUTES Bellingham is fortunate to have enough vacant waterfront land to dedicate some to upscale development. Like the Granary project. We support that. Our real concern is that working waterfronts don’t get converted into gentrified projects.
GP SITE We have this large former Georgia Pacific site available with room for both mixed use in the
north part, and industrial use around the shipping terminal. Some think the original purchase of the land was ill-advised, but we hope the Port will facilitate the creation of living-wage jobs as development goes forward. It’s fine to say that we have the support of the Port Commission right now, but in 10 or 20 years we’ll have different people there. So now, while we can, it is important to institutionalize more lasting policies that enhance working
waterfronts. A prime example is the need to develop a written policy, instead of the current case-by-case process, that makes Port properties affordable for maritime companies. With our encouragement, policy-making is going forward. Of course this is all political, so we need to educate the public to understand the value of working waterfronts and getting involved in the political processes. We are working on that as well.
OTHER SUPPORT ACTIONS: SAILING, FISHMONGERING When Bellingham Yacht Club proposed last year to build a center for the active sailing community – Bellingham Bay is an ideal place to sail – the Coalition actively supported the proposal, and it is going ahead. Another example is an off-thefishing-boat marketing scenario, such as you see in Steveston, Washington. In the Granary Project plan, Harcourt (the developer from Ireland) is interested in having that fish-selling close to the Granary building because it’s another way of creating public traffic. There’s a synergy between working waterfronts and public access that is very important to both parties.
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HARCOURT INFLUENCE There’s space for everyone. We were already working with the Port to expand on off-the-boat direct marketing. Then all of a sudden Harcourt took an interest. We don’t know where this will go; it’s in beginning stages. We visited Steveston earlier this year with a Harcourt representative and Port Executive Director Rob Fix and others, and we toured and talked with the manager of the marketing facility there.
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PERSONALLY SPEAKING: JIM KYLE
Blaine Harbor: An example of what can go wrong After his childhood in Everett and British Columbia, Jim Kyle’s family relocated to Blaine. He reflected on the demise of the harbor and the city – with a glimmer of hope. By Jim Kyle President of the Whatcom Working Waterfront Coalition Unfortunately, the Port of Bellingham has deferred maintenance on the infrastructure at Blaine Harbor so long that it’s basically falling into the bay. Now, the Port is seriously trying to reverse that, but they've lost some state funding that is needed for two cleanup projects. So the Port is working on some temporary repairs that will keep the harbor functioning until the funding is restored.
BLAINE HARBOR reflects a working waterfront on the rebound. (Photo courtesy of City of Blaine)
Intentions are to restore that maritime industrial area. When real estate was strong, there was interest from developers who would build con88 | BUSINESSPULSE.COM
dominiums there. Fortunately, the Port did not go that route. There's not much land, so once you go down that road the commercial port is history. The shipyard and the processors would be gone sooner or later. The Port is not interested in that happening, and it’s a sign of progress. I went to high school in Blaine, and I know that in the ‘50s and ‘60s it was a great little town. We had a grocery store, a shoe store, a clothing store with everything downtown. We hardly ever went to Bellingham to shop – that was a long trip down the twolane road. What’s happened to it is painful to me. It was a great place to grow up. I haven’t talked to anybody who understands what has prevented downtown Blaine from coming back. I-5 came through, that was part of it. Then a mall was built and it took a lot of commerce away from downtown. And the Canadian traffic has ebbed and flowed over the years. We live in Van Zandt, but I had a commercial fishing boat in Blaine. When we had one there in the ‘80s, there were 30-to-40 similar sized fishing boats there and a lot of smaller ones. And as the infrastructure deteriorated and fisheries changed, Blaine lost 75 percent of its commercial fleet. It doesn’t have to be that way. I’m confident that once the Port’s rebuilding projects have been accomplished – and that may not happen right away, with the loss of funding – it should gradually rebuild Blaine with a more significant presence. Meanwhile, at least the shipyard and fish buyers are still there.
A personal mantra of mine is, “Whenever possible we’ll be a partner with the Port. And whenever necessary, we’ll be its conscience.” So far we’ve been able to exercise the partnership.
LONG-TERM? Our efforts will never be unnecessary. There’s always economic pressure that will ebb and flood, just like the tides. Like in 2008 when the developers went away because the potential wasn’t there to make a profit by building non-maritime facilities close to the water. Then when things get better again and we move toward the top of the economic cycle the pressure will return, inevitably. As long as we have a system that most of us believe in – that free enterprise is the way to go. But if you have a completely freemarket system, and no public port, you can imagine how long working waterfronts would last. Family living-wage, maritime-related jobs would be replaced by service jobs.
BUSINESS-CENTRIC The Coalition absolutely is pro business. Developers are not an enemy so much as an important element of our economy that needs some limits on what they can do. The danger lies when mixed use is allowed to usurp maritime companies on working waterfronts. We’re not anti-condominiums, for example…some are planned for the Bellingham harbor redevelopment. It’s easy to say that’s not going to happen here, because there’s a very broad resistance to that. But I’m sure that’s been said at other ports that have succumbed to the better offers that have come in.
WORKING FROM INSIDE The Coalition needs more involvement and recognition in order to fulfill its mission. For instance, we joined the Whatcom Business Alliance because we want other businesses to know who we are and what we do. Also, we need to garner more support, and we think Whatcom County businesses will believe in what we’re doing and
possibly join our mission. Even if they don’t, we need to be more a part of the business community, period.
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BRAND AWARENESS There’s a real renaissance going on at our working waterfronts. The role our coalition has played is a small part of that. Now you have two active user groups involved locally – the Commercial Fishermen’s Association, and the Working Waterfront Coalition. You have a Port Commission that is very supportive of our objectives. You have the big festival coming up, Bellingham SeaFeast (Sept. 30 and Dec. 1) that will bring thousands of visitors to our waterfront. I just see a much different atmosphere around our harbors and in the county, in terms of support, than we saw 5-10 years ago.
OBSTACLES? Specifically, the lack of MTCA funding – the Model Toxics Control Act – is a big concern of both the City and the Port. The funding loss has held up some developments that would result in protecting more (property) and increasing jobs. Everyone sees that as an obstacle. A specific hurdle for our coalition is to get big enough and gain enough momentum to reach critical mass. We need that to get enough people working on issues and in leadership positions, instead of relying on a small group of people to get all the work done.
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STAFFING A MUST Eventually, we’ll need an executive director and paid staff. That brings accountability. To remain operating 30 and 40 years from now, well, it’s hard to see that happening with an all-volunteer organization.
MAKE POSITIVE IMPACTS It is clear that the Coalition is having a positive impact, and it has to continue demonstrating that. People are seeing the value of our specific mission, and how important it is to have an organization operating on behalf of preserving a working Bellingham waterfront.
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Member Spotlight featuring the Board its 31 website-listed services in five states. MSNW has earned the BSCAI’s prestigious Safety Award and Image Award. BSCAI defines the standard of professionalism for facility service providers through education programs, new and innovative products and services, technology, and a government affairs program that influences federal legislation and regulation on issues affecting the industry.
JANELLE BRULAND (center) and two associates displayed the industry association’s Image Award for outstanding marketing – Heather Boyd (l) and Terell Weg. (Staff Photo)
The PeaceHealth St. Joseph Medical Center Foundation presented him with one of its two highest honors, Inspirational Leader of the Year. Huntley has served on the foundation’s board since 2009 and is immediate past-president (’12-’15). The award recognizes an individual “who inspires others within
Awards and national office for WBA board members By Mike McKenzie
hree of the board members recently earned distinctive recognition – two in their professional industry, and one in his philanthropic community service. The spotlight shines on board chair Jane Carten, president at Saturna Capital in Bellingham; Janelle Bruland, president/CEO at Management Services NW in Ferndale, and John Huntley, president/CEO at Mills Electric, Bellingham. JANELLE BRULAND
Building Service Contractors Association International (BSCAI) announced the 2016 Board of Directors. She is a certified building services executive (CBSE designation) with an extensive background in leadership roles. She has built a 400-employee, $12.4 million (2015) Whatcom Private 100 company in Ferndale that provides janitorial, maintenance, and landscaping among 90 | BUSINESSPULSE.COM
JOHN HUNTLEY in the lobby at Mills Electric on Pacific Highway (Staff Photo)
the PeaceHealth family through their leadership and engagement.” “It’s been an honor supporting the wonderful team of doctors, nurses, other professionals and staff,” Huntley said. “The foundation’s work is very gratifying, and it was exciting during my time as president in raising the funds and getting the new cancer center open – a worldclass facility and treatment staff.” The PeaceHealth St. Joseph Cancer Center opened in 2012. On the WBA board, Huntley heads the membership committee. Mills Electric has a history of philanthropic contributions, including an award last year from the
Member Spotlight cont'd
United Way, and Mills was the state subcontractor of the year in 2013. The award is given to an individual who inspires others within the PeaceHealth family through their leadership and engagement.
SATURNA CAPITAL CORPORATION The company earned the Sustainability Champions Award presented by Sustainable Connections to five recipients annually in Whatcom County. Jane Carten said Saturna Capital is a vocal supporter of sustainable investing. “As values-based investors and active community contributors, Saturna believes that economic and social sustainability comes from resilience,” she said.
chairman of the WBA board, he has announced his departure as president and CEO of Barkley Company to enter private business, effective July 31. Kochman was part of the Talbot family-owned Barkley Village 25 years. Stowe Talbot assumes the top executive roles, representing the third generation of Talbots to own and operate Barkley Village properties, which includes longtime fixture Bellingham Cold Storage. The Talbots hired Kochman in 1991 to help develop a few idle parcels of land on the edge of Bellingham. He successfully partnered with the Talbots to execute the vision of the late Jim Talbot of a thriving urban village with over 750,000 square feet of commercial, office, and residential space now referred to as Barkley Village. After overseeing the leadership transition, Kochman will focus on his own business activities and real estate portfolio. “We are extraordinarily grateful for Jeff ’s contributions over the years,” Stowe Talbot said in a news release. “He is a very large part of the amazing success we’ve had in the development of Barkley Village. We remain excited about the future of Barkley Company and the talented and experienced team we have in place to take us to the next level of success.” JEFF KOCHMAN (r) is leaving after 25 years at Barkley Company, per a news release from Stowe Talbot (left), part of the family ownership group who will assume the roles of president and CEO. Kochman will enter private business, and retains his seat on the executive committee of the WBA board as the immediate past chairman. (Staff Photo)
JANE CARTEN at Saturna Capital (center) accepts a sustainability award alongside (l to r) Shannon Skinner, Jim Gibson, (Carten), Patrick Drum and Stephanie Ashton. (Photo courtesy of Saturna Capital)
“And the key to resilience is strength. Strong communities, as with strong companies, are less vulnerable to risk.” Since opening in 1989 Saturna has donated at least 5 percent of its pre-tax profits to local, communitybased organizations, and last year created the Saturna Sustainable Funds that invest in environmentally and socially responsible companies. Further, Saturnais the financial sponsor of Western Washington University’s Sustainable Business Lab.
JEFF KOCHMAN An executive committee member and immediate past 92 | BUSINESSPULSE.COM
Member News Whole Foods Market Ellenos Real Greek Yogurt co-owner Bob Klein accepted a $100,000 loan from Whole Foods Market through its Local Producer Loan Program at the grand opening of the new market on Lakeway in Bellingham recently – the first of the national chain’s stores in Whatcom County. Through the loan program Whole Foods has the ability to make significant loans to companies like Ellenos to help them expand business. With the loan Ellenos planned to buy new equipment that will increase production from 7,200 containers to 36,000 a day, Klein said. This was one demonstration on Day One of the Whole Foods Market’s company values proposition of supporting as many local and regional suppliers as possible. OTTO LEUSCHEL (far right), the team leader at the new Whole Foods Market in Bellingham, had first-day customers eating out of his hand – breaking bread at the grand opening of the remodeled Lakeway location. That was the store’s fun substitute for cutting a ribbon.
North Cascades Institute JULY 17 marks the 30th anniversary of The North Cascades Institute in Sedro Woolley, a partner of the National Park Service which is celebrating its centennial. The public is invited to a free open house and barbecue at the North Cascades Environmental Learning Center – the Institute’s field campus – on the 17th. Naturalist-led activities will take place on nearby trails and Diablo Lake. The North Cascades Institute conserves and restores Northwest environments through education.
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GLOBAL LEADERSHIP CONFERENCE
THE GLOBAL Leadership Summit 2016 will simulcast at Cornwall Church Aug. 11-12. Collaborating to help market the event in its 12th year at Cornwall Church (lobby in the background leading into its 1,100-seat auditorium scene of the summit telecast and interactivity): Jim Straatman from Faithlife, Executive Pastor Jeff Shaw, Senior Pastor Bob Marvel, and Tony Larson from the Whatcom Business Alliance. (Photo by Mike McKenzie)
Cornwall Church collaborates to further servant leadership in live telecast Compiled by Faithlife Corporation and Business Pulse Staff
undreds of local leaders will gather August 11-12 at Cornwall Church in Bellingham to learn from some of the most prominent leadership experts through a telecast in real time. Since 2003 the auditorium has filled with business professionals, parents, teachers, managers, and pastors.
The Global Leadership Summit annually links leaders like John Maxwell, Melinda Gates, Alan Mulally, and Bill Hybels in live mode to more than 300 locations in North America. Organizers then translate the conference into 50 languages that broadcasts to about 350 more cities in 105 countries. The ticketed event runs from 8:30 a.m.-5 p.m. each day. Capacity is about 1,100. Cost is $209/person. Cornwall Church in its 13th pre94 | BUSINESSPULSE.COM
sentation of this event has collaborated with Bellingham businesses Faithlife and the Whatcom Business Alliance (WBA) to expand the marketing reach this year. “If you live in Whatcom County you have the ability to influence things that are happening right here in our community,” Faithlife CEO Bob Pritchett said. He and his employees have participated regularly. “The Global Leadership Summit helps you recognize your sphere of influence, and it gives you the tools to actually put that influence to use. Our team has experienced better personal and professional relationships, thanks to the summit.” When Cornwall hosted the summit, Dave Bushnell – a pastor there at the time – served as the local liaison between Cornwall and the Willow Creek Association that produces the summit telecast. Last year Bushnell stepped away as a Cornwall Church pastor to become a regional director of Illinois-based Willow Creek’s church relations field team, where he works to deliver this experience throughout the Northwest. “It’s a beautiful thing when leaders join together to meet the leadership development need of their city,”
THE GLOBAL Leadership Summit 2016 will simulcast at Cornwall Church Aug. 11-12. Collaborating to help market the event in its 12th year at Cornwall Church (lobby in the background leading into its 1,100-seat auditorium scene of the summit telecast and interactivity): Jim Straatman from Faithlife, Executive Pastor Jeff Shaw, Senior Pastor Bob Marvel, and Tony Larson from the Whatcom Business Alliance. (Photo by Mike McKenzie)
Bushnell said. “When leaders get better, what they lead gets better. When that happens enough times in a city, the entire city gets better.” This conference is more than just talk. Attendees have reported in surveys their significant changes in professional and personal relationships, such as: • 83% said they experience improved teamwork and increased job satisfaction and productivity. • 61% said their organization is more effective because of their clearer vision. • 87% feel a greater sense of significance and satisfaction. • 81% cite concrete ways their supervisor has become a better leader. The Whatcom Business Alliance has collaborated with Willow Creek, Cornwall Church and Faithlife to promote the opportunity to more local leaders and their employees. “Leadership training of this caliber is often very expensive and out of reach for many local businesses. This is an opportunity for businesses of any size to
bring their management team or budding leaders for two days of intensive, valuable leadership training,” said Tony Larson, WBA President. WBA members can go to the member center at whatcombusinessalliance. com and retrieve a special discount code to purchase tickets to the event at a discount. The 2016 summit’s speaking lineup features 13 prominent presenters with backgrounds in leadership training as CEOs, professors, best-selling authors, pastors, and more. They share insights from their successes and guide participants on applying the latest research in harnessing their leadership potential. Among the topics: • Identify and execute ideas that matter most to your organization. • Accelerate teamwork. • Effectively navigate cultural differences. • Utilize the power of emotional intelligence. • Produce successful turnarounds. • Create cultures that value efficiencies. The summit is a catalyst to gather together, explore and discuss, and envision the future of our community— wherever any given person lives and/or works. "The Leadership Summit has always delivered practical leadership tools, insights, and challenges that are applicable for leaders in every capacity,” Cornwall Senior Pastor Bob Marvel said. “That includes leaders of business, schools, nonprofits, teams, families, and, in our case, churches. “Hosting the summit here in Whatcom County has allowed hundreds of individuals locally to benefit from the inspiring and challenging insights and grow in leadership.” A core value of the summit is that every person has a sphere of influence, and every person in our community can learn how to maximize their influence within that sphere. Faithlife will provide free digital access to John C. Maxwell’s 21 Irrefutable Laws of Leadership for preparation in advance of the confer-
ence. The giveaway is designed to bring Whatcom County’s leadership community together online, using the company’s social media platform at Faithlife.com. Leading up to the conference the website will provide a group reading plan, and local leaders can share what they learn along the way. During and after the conference Faithlife will facilitate a continued active discussion of ways we can leverage collective influence to create lasting change. You don’t have to attend the con-
ference to read the book and join the discussion. To access the book, follow Global Leadership Summit, Whatcom County on Faithlife. Create your free Faithlife account and join the conversation.
Join us at the ballpark this summer! 2016 Season Runs June 7-August 3 WHATCOMBUSINESSALLIANCE.COM | 95
LIFE IN THE TECH LANE Experts at Tech Help in Bellingham, a division of Big Fresh, provide answers to the questions that are trending among clients. If you have a tech question for our experts, send an email to firstname.lastname@example.org
Beware of phishing email threat hitting local businesses
he calls and texts start pouring in. Dozens of your friends and acquaintances want you to know they’ve just received a secure email from your account regarding a document you sent them. Chances are that if your friends have received this email, you, too, have already fallen victim to the latest threat to your online security. The email looks something like this:
It looks legitimate. When you click the link you are asked to sign into your email provider account to view the attachment. If you sign into your account, the group that controls this sophisticated attack will immediately have access to your accounts with Yahoo!, Google, Hotmail, etc., and will begin to send out phishing emails to everybody you’ve emailed. The login page looks like this: The URL is not https://accounts.google.com – but many people just don’t pay attention to the address bar. One more peculiar detail is the “Click to Select Provider….” field in the login form. Once you sign in, 96 | BUSINESSPULSE.COM
the attackers use a sophisticated set of scripts to log into your account; they then send out the same exact email and begin attempting to reset passwords for other online accounts that may be tied to this email account. The last thing the attackers do is create a filter on your account which moves to your trash all emails that you receive from that point on. If you think you may have accidentally given out your account information, reset your password immediately. For best security measures, we advise you do this from another computer.
Top 5 Tech Webcasts This Week In Tech(TWiT) Available on iTunes and Youtube.
If you have time to only listen to one podcast, make it this one. Leo Laporte’s TWiT has been running for over 10 years and is widely recognized as the best tech podcast. Subscribe:iTunes | Youtube The Vergecast Available on iTunes and Youtube The Vergecast is brought to you by the awesome team at The Verge and is mostly about hearing the people behind the popular website talk about the stories and news they featured during the week. There’s often alcohol involved, proceed with caution. Subscribe:iTunes | Youtube
This Week in Google Available on iTunes and Youtube Judging by the name, you may think that this podcast is focused on Google news only, but that’s far from the truth. Every week Leo Laporte and Jeff Jarvis use this time to discuss the latest developments on the web and mobile world. Subscribe:iTunes | Youtube The WAN Show Available on iTunes and Soundcloud The WAN Show is a weekly platform to discuss the latest in tech news, with a heavier focus on new product announcements and their features than most other podcasts. Subscribe:iTunes | Soundcloud Re/code Decode Available on iTunes Kara Swisher is one of the most prominent reporters in the tech industry. In this podcast, she interviews major tech leaders and often provides a surprising behindthe-scenes look into what makes these people and companies so influential. Subscribe: iTunes
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GUEST COLUMN: VISUAL MANAGEMENT Randall Benson | Lean Operations Randall Benson is a management consultant, author, and Lean master based in Whatcom County. You can visit his blog “The Lean Heretic” at www.leanheretic.com, and his website at www.bensonconsulting.com.
Stop hiding problems in your computer T
his is a story of Visual Management, a Lean alternative, based on an amalgam of companies I’ve provided support with over the years. The example represents combined circumstances of these companies with the same central theme – invisible problems.
Once upon a time, ABC Manufacturing assiduously collected details about each day’s production by creating detailed spreadsheets in its computer system. Every day, staff entered data and analyzed how much material was lost, how much overtime was used, how many minutes of machine downtime they experienced, and many other details. Unfortunately, their actions actually hid critical problems. Day after day, factory employees struggled with problems: broken and slow running machines, pending material shortages, missing tools, product stored in the wrong place, borderline product quality, missed schedules, etc. ABC’s spreadsheets were packed 98 | BUSINESSPULSE.COM
with production data, but in the actual workplace their problems and abnormal conditions were invisible. Because they couldn’t see the problems, they couldn’t fix them. As time went by, employees suffered frustrating production disruptions due to unresolved problems. And the rate of improvement was downright glacial. By hiding problems in computers, ABC put the problems and solutions beyond the reach of anyone who could fix them. The situation was untenable for a fast-growing company. So, one day ABC Manufacturing decided to build a Visual Management (VM) system in its workplace that could instantly
The 10-Second Test A person entering a Visual Workplace should be able to understand the current situation and important abnormal conditions within 10 seconds.
reveal problems and abnormal conditions. The VM would communicate essential information using visual signs, signals and devices. These would eventually include display boards, signs and labels, floor marking, tool shadow boards, signal lights, and more. Everyone would be aware of the current situation and quickly recognize critical information and abnormal conditions. Within weeks, ABC installed their first VM boards, and those boards delivered results straightaway. Buoyed by their success, they quickly expanded and added more visual devices. Everyone then could easily see problems that were previously hidden. Visual Management made information about the current situation (flow, quality, people, safety, workplace organization, supply levels, inventory storage, process improvements, area boundaries, and key performance indicators) clearly visible. Anyone could walk into the workplace and immediately grasp the situation. For example: • Production slipping behind schedule. • Machines needing excessive cleaning and adjustment. • Packaging materials below reorder point. • Shortage of trained operators
for the packaging machines. Missing tools. Changeover times creeping up. • allets obstructing flow. • Overtime hours exceeding standards. • Failed gage on the nitrogen tank. • Overdue maintenance. Because problems became visible, they got fixed. ABC Manufacturing discovered that it was ineffective to attempt ferreting out problems after the fact by analyzing spreadsheets and databases. Visual Management made problems visible in the workplace in real time. Armed with visual information, supervisors could help staff identify and eliminate problems immediately. VM largely replaced written information and verbal instructions from supervisors. Unburdened from relaying instructions, they could ask eight magic words that transformed the workplace: “What do • •
you think?” and “How can I help?” They began engaging rather than directing the workforce. Employees loved getting involved in problem solving and enjoyed always knowing what was going
By hiding problems in computers on complex data spreadsheets, companies put problems and solutions beyond the reach of anyone who can fix them. Visual Management provided an immediate turnabout in work flow. on. Supervisors were creating more value. Inspired by the manufacturing success, some managers in nonmanufacturing departments decided
to try Visual Management. They discovered that they could make the largely hidden flows of departments like administration, service, and sales visible. Managers even applied VM to virtual teams, like IT and Sales. They employed online Kanban boards to make work flow (and thus work-flow problems) visible at a glance. Ultimately, Visual Management became a way of life. Sure, ABC still maintained detailed spreadsheets, but now those spreadsheets portrayed consistent improvement in key performance areas. They saw that problem identification and problem solving drove higher productivity, lower costs, increased responsiveness, improved product quality and, most importantly, the ability to grow the company. They chose Visual Management to reveal problems in the workplace rather than hiding problems in computers.
Opening November 2016
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GUEST COLUMN: PERSONAL INVESTING Jacob Deschenes | Owner Era Capital Management LLC Jacob is a licensed investment advisor and owns Era Capital Management LLC, a registered, fee-only investment management firm serving individuals, wealth advisors, and corporate clients throughout the United States. He uses contrarian methodology with uniquely-developed matrixex and mathematical and statistical analyses. Visit www.eracapitalmanagement.com.
Crucial difference between an advisor and a manager
s an investment professional I'm often referred to as a financial advisor, which is accurate – though only in certain ways. The term financial advisor is not my favorite and I seek to avoid using it as much as possible.
The problem is, the term is too broad and vague. Its meaning can take the shape of many different professions all wrapped up in one overly-simplified title. I am not a financial advisor by title. Rather, I’m an Investment Advisor and Portfolio Manager. That clearly defines what I specialize in. I'm clearly clarifying my services: recommend an investment strategy, and manage that portfolio directly on your behalf. Financial advisor is not that specific. Within the financial services industry a financial advisor can assume numerous roles, such as: • Stock Broker • Investment Advisor 100 | BUSINESSPULSE.COM
• • • •
Portfolio Manager Insurance Agent Wealth Manager CPA (Certified Public Accountant) See the distinctions? An investment manager doesn’t broker, or sell products, or keep the books. Constraints are built into each of these areas (all legitimate specialities, by the way – the point here does not denigrate financial advice specialties).
The catch on the term financial advisor: It is vague, misused, and can come in too many forms. Knowing your agent’s/ advisor’s niche is crucial.
Mainly, some have limitations on services offered because of regulations and licensing requirements. That’s the catch on the term finan-
cial advisor; it is vague, misused, and can come in too many forms. We live busy lives. We seek expert advice for services and products we are not familiar with. Do you know what form your financial planning needs take? Within this industry of financial management we all have a specialty. Do you know your advisor’s niche? Knowing your agent’s/advisor’s niche is crucial. As good practice I think its best that you work with specific individuals to serve specific roles. Allocate all insurance matters to an insurance agent who specializes in nothing but insurance. Hire an investment advisor that's highly skilled at investing. Use a CPA who know everything about taxes. And, have an estate attorney who can write up your wills and trusts. In today's world it's just too hard to be all things financial. An additional caution flag: Your choices could create conflicts of interest between the you and the advisor. What, for instance, if it’s in the advisor’s best interest to sell you certain specific products (insurance, by example)? Maintaining indepen-
dent relationships for each of your needs create a natural checks-andbalances system that can protect you. If you have never worked with a financial professional, it behooves you to understand right away that if someone has a license for certification it doesn't automatically mean that the person is competent or an expert. Vet us first before you sign on. As the saying goes, trust but verify. When you seek to hire any professional, you are in charge of the interview process. Ask as many questions as possible and take your time to do all the necessary homework. Avoid rushing these kinds of decisions. It's important to know that in the investment services industry no single advisor or office is the same â€“ even if the name out front is. For clear definitions on each financial advisor title, visit www.investopedia/ dictionary.
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GUEST COLUMN: SMALL BUSINESS Erin Shannon | Director, WPC for Small Business Erin Shannon became director of the Washington Policy Center for Small Business during January 2012. She has an extensive background in small business issues and public affairs. The Center improves the state’s small business climate by working with owners and policymakers toward positives solutions.
As law: a zero
What the Supreme Court ruling in Friedrichs right-to-work teachers union case really means
abor union executives excitedly declared a “major victory for organized labor” with the unsurprising 4-4 tied vote of the U.S. Supreme Court in the landmark Friedrichs v. California Teachers Association right-towork case.
Actually, the Court’s deadlock was a victory for organized labor only because it leaves the status quo in place and punts the issue to be reconsidered once the Court has a new Justice. The Friedrichs lawsuit filed by Rebecca Friedrichs and other California teachers contended that the compulsory union dues they are forced to pay are unconstitutional. The case raised the important question about whether the practice in forced-union
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states of requiring public employees to pay union dues or agency fees as a condition of employment violated the First Amendment rights of workers. Had the Court ruled in favor of the teachers, school employees would have the right to decide for themselves whether to join and support a union. The implications of the Friedrichs case went far beyond teachers in California. A ruling in favor of Friedrichs would have secured the right-to-work for all government employees in all 50 states. Presentlly, workers are protected only in 26 states. Soon after the Supreme Court heard arguments in the Friedrichs case on Jan. 11, Justice Antonin Scalia died and that instantly changed what many constitutional experts and legal pundits assumed would be a precedent-setting 5-4 decision this summer in favor of Rebecca Friedrichs and the other teachers. Nearly every media outlet covering the hearing agreed the attorneys representing unions were on the defense, as they were battered by questions from five of the Justices, including Scalia. It appeared all but certain that the union gravy train that has run for decades on forced unionism would end soon. Scalia’s sudden passing was an instant reprieve for labor unions; short one Justice, the Court’s decision was tied in a meaningless 4-4 ruling. Of course, organized labor put their public relations machine into overdrive, spinning the split decision
as an important victory. The California Teachers Association (CTA) boasted that “…the decision recognizes that stripping public employees of their collective bargaining rights in the workplace is a step in the wrong direction.” As one a columnist in National Review responded to CTA’s statement: “Ummmm, no.” The columnist summed up the situation well: “First, the case didn’t involve stripping collective-bargaining rights; it involved First Amendment rights. Had Rebecca Friedrichs won, workers would still be able to organize to bargain collectively…respecting First Amendment rights for workers would not mean an end to unions…. Union membership increased in both Indiana and Oklahoma after those
dues or fees for representation they do not want remains unresolved. From labor’s perspective, that is a victory (for unions, but not for workers). The attorneys representing Rebecca Friedrichs and other teachers plan to file a motion for rehearing so that the full Court, including its new Justice, can hear and decide the case. The timing of a rehearing depends on whether a new Justice is confirmed by the current president or his successor. So rather than a victory, the Court’s 4-4 deadlocked ruling is more
like a temporary stay of execution for forced unionism. Of course, a full pardon could still be granted, depending on who ends up replacing Justice Scalia on the Court. In the meantime, in forced unionism states, like Washington, where workers rights are not protected, unions continue business as usual.
The decision didn’t recognize anything, other than the lack of a fifth vote for either side. As a matter of law, the decision has precisely zero precedential value…. From labor’s perspective, that is a victory (for unions, but not for workers). authority in random ways. states enacted right-to-work laws, which prohibit workers from being fired for refusing to pay “fair share” fees (partial dues requiring payment by employees who choose not to join a union). “Second, the decision didn’t recognize anything, other than the lack of a fifth vote for either side. As a matter of law, the decision has precisely zero precedential value.” So the tie simply means the question of constitutional rights of public employees forced to pay union WHATCOMBUSINESSALLIANCE.COM | 103
GUEST COLUMN: HUMAN RESOURCES Rose Vogel | HR Programs for SHRM Rose Vogel is a vice-president and co-chair of the Programs Committee for the local Mt. Baker Chapter of the Society for Human Resources Management (SHRM). She is director of human resources for Anderson Paper & Packaging in Ferndale. Rose is a graduate of WWU-Fairhaven in Law, Diversity, & Justice and holds a master's from Antioch University in Conflict Analysis & Engagement.
Sleeplessness: How overnight can cost you (and your company) dearly
f you have a habit of pushing the snooze button on your alarm clock in the morning, you might not know that the habit might be costly – for both you and your company. Recent sleep studies cited in the Society of Human 104 | BUSINESSPULSE.COM
Resources Management’s HR Magazine (November 2015) showed that your sleep habits can have a strong financial bearing on your company’s success.
One survey revealed that a worker with only one hour more of sleep a week than a (tired) peer would make a difference, on average, of
about $2,350 in annual salary premium. Ever feel like you would pay just to have one more hour to snooze? Consider these enlightening discoveries about employees from a survey that showed about twothirds of them were willing to pay from $10 up to $500 or more for an extra hour of sleep. The breakdown: • 37% willing to pay less than $10. • 21% willing to pay $10 -$49. • 11% are willing to pay $50 - $99. • 20% are willing to pay $100$499. • 11% are willing to pay $500 or more. Commonly, we’re a tired nation of workers. A state-by-state survey showed the percentage of residents who said they were sleep-deprived ranged from 24-37 percent. That’s a lot of us, when you think of one out of every three or four persons
Commonly, we’re a tired nation of workers. A state-by-state survey reported in HR Magazine showed a high percentage of residents who said they were sleepdeprived. Participants said they’d pay for just one more hour. in your workplace is quite possibly performing while tired. Here’s a range of residents who
said they were sleep deprived:
HIGHEST: West Virginia 37% Kentucky 34.9% Tennessee 31.4%.
LOWEST: North Dakota 22.9% Oregon 23.6% South Dakota 23.9% More and more research keeps surfacing about sleep apnea as a major health problem. Certainly, that condition affects your rest, sleep, and work habits. Perhaps you have witnessed a co-worker falling asleep at their desk or during a meeting. In HR samplings we have found that individuals will avoid testing for sleep apnea, or avoid the recommendations if tested and found to suffer from it, because of the inconvenience and/or cost of treating and managing it. One study shows that the average cost to treat sleep apnea (before
insurance) includes: • Home sleeping device, $600. • Sleep Apnea dental device, $826. • CPAP breathing machine, $1,500. • Corrective Medical procedures, $10,219 • TOTAL $13,145. Typically, we find that employees resort to other means of seeking restful sleep. An example is purchasing a rested-development mattress. The average costs of those is $1,580 for a spring mattress, $1,610 for foam, and $2,104 for air. In this era of mobile apps and computer programs, we see a movement toward the use of sleepaiding apps, such as White Noise (free); Sleep Cycle Alarm Clock ($1.99); Relax Melodies: Sleep Zen Sounds & White Noise (free), and Vibrating Massager (99 cents). Another survey shows that about 17 percent of Americans take a sleep aid. The most common is Ambien at about $8 for a script.
Others are Restoril, Lunesta, and Halcion. Drugs, as we all know, can become costly in more ways than just the price tag on the bottle. In conclusion, if you’re a night owl in your sleeping habits you not only cost yourself in health but also in potential effectiveness, and even income, at your workplace. A study showed that over 60 percent of workers phoned in sick annually because of fatigue. The breakdown: 38% never called in sick because they are tired. 27% call in sick occasionally. 19% call in sick at least once a year. 16% call in sick just one time. If you have sleep-deprived symptoms at work, consult privately with your human resources professional to seek solutions and design a plan of action to deal with it. Before it costs you dearly.
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1402 F Street | PO Box 668 | Bellingham WA, 98227-0668 360.676.1448 | 800.865.7921 | F 360.676.1525
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wayerskizmolek.com A Professional Limited Liability Company
Personal Injury Workers’ Compensation Social Security Disability/SSI 1402 F Street | PO Box 668 | Bellingham, WA 98227-0668
Located in the historic McCue House (Built in 1884)
1402 F Street | PO Box 668 Bellingham WA, 98227-0668
Located in the historic McCue House (Built in 1884) A Professional Limited Liability Company
Personal Injury Workers’ Compensation Social Security Disability/SSI
Practice devoted exclusively to Personal Injury, Workers’ Compensation, and Social Security/SSI claims.
PO Box 668 Bellingham, WA 98227-0600
We benefit the community too, with our taxes, paying our staff good wages and donations to local charities. photo credit to Business Pulse Magazine, Fall2015-Alejandra Maria Photography: facebook.com/alejandramariaphoto
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GUEST COLUMN: REAL ESTATE Mallina Wilson | Owner International Real Estate Investments Inc. Mallina Wilson is licensed with Keller Williams Western Realty/Ben Kinney Real Estate. She is a certified international property specialist and an instructor for both the National Association Realtors and Keller Williams International, specializing in the global market (e.g., Canada, Great Britain, Costa Rica, and more) across all property types.
Hot, hot, hot real estate market – buyer’s or seller’s? Uh, both….
ost people know that real estate at any given time moves either as a buyer’s or a seller’s market. Today’s market seems to call out to both sides.
In our company we have less than six months of inventory available for the buyers; we deem that as a seller’s market, yet we’re experiencing a f lurry of buyer activity due to low interest rates. And, fueled by rumors from the federal government and banking community that the rates won’t last much longer. That makes the market, cutting both ways, hot, hotter, and triple-
hot. We now field multiple offers with highest and best (or escalation) clauses, driving up pricing above the asking prices. As Pink says in “Just Like Fire,” her latest hit song, “Oh, what’s a girl to do?” It reminds me of when I first got into the real estate business in 2005. Sellers who haven’t seen an advantage for years because they bought at the height of the market a few years back now find themselves back in the game, or a bit above the price tag where they bought in. Canadian owners are selling to take advantage of the currency exchange. Land owners are selling because new builds have entered
the picture. Investors look to purchase because of lending options available that calculate in a rent income to obtain a loan. Loans are available to cover closing costs when lacking full funds in savings. We still have zero-percent down loans. The interest rates are so low it feels like free money. Why wouldn’t you buy even if it is a seller’s market? Even if, like us, you are only measuring by months of inventory? I did. I’m pending on my third home that will now become my second rental. I bought my last home 2½ years ago at $250,000 and could easily sell it today at $300,000 without having put any money
We still have zero-percent down loans. The interest rates are so low it feels like free money. Why wouldn’t you buy even if it is a seller’s market?
into it. I lived in my last home for the time required of a home mortgage and now I’m moving into the third. I locked my interest rate and captured it before it went away. For every 1 percent increase in interest rate, you lose 10 percent in your buying power. For example if you prequalified up to $300,000 with a 4% interest 106 | BUSINESSPULSE.COM
rate, and rate increased to 5%, you would then only qualify up to $270,000 to buy your next home. That is a big difference in what you can buy, who you are competing with to buy it, and what your chances are to find what you want. This is why all the buyers are in a f lurry. Including me….
GOOD SITUATION FOR RENTERS TO BUY Why? Because I love being a landlord in Bellingham and Ferndale where such a huge need and very low vacancy rates exist. If you are looking for a rental house, or you have been displaced from one where the owner is selling, have you checked in with a lender to see if you can qualify to buy? Many renters don’t realize that they can purchase in today’s market because they can qualify with low mortgage payments brought about by low interest rates. Look for a company that will buy a home and allow persons in this situation to buy it back (instead of a rent payment) over the next five years at minimally increased cost while living there. One such company we’ve worked with came to fruition based on a realtor’s compassion while working on foreclosures when people were losing their homes. Now displaced renters are taking advantage of it, as well as those fall a bit short of obtaining a loan. We even have relocated employees using it because they aren’t set on a neighborhood or town; this way, they can pick their rental and have the option to buy it at any time during the next five years. A note of caution: This program doesn’t lock the interest rates. So if you can buy now, and you know where you want live, buy.
WHY NOT NOW? So why wouldn’t you purchase today? Why wouldn’t you sell and move up, downsize, or move out of area for your dream home? Some buyers will have their fist in the air as they read this because they have been trying to find something and/or they are getting outbid on offers. It’s a matter of tactics and expertise. Work with your realtor on an aggressive strategy that puts your offer on the top of the pile.
Sellers, do you have your fist in the air because nobody has bought your home? You are most likely priced too high (even though we live in a pricey market). If you are wondering why you haven’t taken advantage of the super-hot real estate market, know that it isn’t too late. How do you know when a market has shifted? When you are reading that news, you missed it. Don’t miss this one.
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BOOK EXCERPT: BOB PRITCHETT FROM START NEXT NOW
Start Next Now: How to Get the Life You’ve Always Wanted Step Two: Start Doing The Next Thing Now
ow that you know what you want, start moving in that direction.
It may not be possible to move directly to your goal, but you can make sure that every turn you make is
in the direction of your goal. Imagine yourself moving down a sports field with the ball; there may be a defender on the straight line between you and the goal, and you may have to zig left or zag right. What you don’t want to do is run in the opposite direction or give up territory. Keep moving, and keep turning toward the goal. When people interview with me, I ask, “What do you want to be doing five years from now?” All too often I hear that their career ambition is something completely different than what they are interviewing for. Taking the job with my company doesn’t move them toward their goal. It’s a detour. You may not be able to jump right into your dream job. If not, look for a job in the same industry, or where you’ll develop skills that will help you in your dream job. There is so much to learn in every field that you shouldn’t be wasting time acquiring completely irrelevant skills. Use your time intentionally. 108 | BUSINESSPULSE.COM
You may need to take an entry-level job to pay the bills, and that’s okay. But take an entry-level job that represents a turn toward your goal. You can apply this logic to all the ways you use your time: Choose classes that will teach you things you need to know to achieve your goal. Volunteer where you will develop skills you’ll need in the future. Always turning toward your goal not only keeps your goal in mind, but it also helps you acquire the knowledge, the connections, and even the vocabulary that will help you achieve your goal. Keep Moving Many people set their goal so far in the distance that they don’t feel like they have to do anything today. They are waiting. Waiting for permission. Waiting for a promotion. Waiting for a recruiter to call. Waiting for the timing to be right. Waiting for someone to tell them what to do next. Waiting for someone to notice they are waiting. Waiting for someone else to do something. Waiting for a change that is never going to happen on its own. Stop waiting. The space between here and your goal is not filled with time. The space between here and your goal is
Bob Pritchett, President and CEO of Faithlife in Bellingham started the company at age 19. Formerly Logos Bible Software, it has grown to more than 400 employees serving more than 3 million users worldwide. He’s a past winner of the Ernst & Young Entrepreneur of the Year award, and the Puget Sound Business Journal’s 40 Under 40. He blogs at BobPritchett.com, and publishes interviews on BellinghamWins.com. Bob Pritchett (file photo)
filled with changes. Very little happens on its own. If you are here and you want to be there, something needs to change. Being picked up by aliens or a benevolent boss or the Nobel Prize Committee and magically transported from your present state to your future goal is a low-probability event. The only likely path from here to your goal is a large number of changes. There are very few mandatory minimum time delays between changes. There are, in fact, few mandatory change steps. Everyone’s path involves a differ-
ent sequence of changes. To arrive at your goal sooner, increase your rate of change. A side effect of increasing your rate of change is that the price of each change goes down. A quick turn in the wrong direction is just as quickly corrected. When you are able to make changes quickly, you’ll be less afraid of making the wrong change.
The Whatcom Business Alliance
Employer Healthcare Plan Finally, a solution that reduces the costs of your Employer Healthcare Insurance… If you are a Whatcom County employer, with 100 or more employees on coverage, struggling like others annually with the continuing increase, year over year in your employer healthcare costs, we have a solution for you. The WBA employer healthcare options provide creative, market-based solutions to your rising healthcare costs. It focuses you on the health of your employees, incentivizes them to make good choices and saves you money. Before you renew your employer healthcare coverage, give us a call for a free consultation. You’ll learn why other employers are raving about these creative solutions. Call (360) 746-0411 WHATCOMBUSINESSALLIANCE.COM | 109
SCENE ON THE STREET
As the founding father, he filed the plat for the Town of Fairhaven on January 2, 1883. Now, 133 years later, Fairhaven District of Bellingham comprises 128 entries in its business association, including 38 eating places, 49 shops, 6 lodging establishments, and the Alaska Ferry at the cruise terminal. Dirty Dan was born in Long Island, arrived here at age 21, did business by schooner and oxen, by hook and by crook (e.g., buying and selling nails), accumulated and sold off virtually the entirety of what now is Fairhaven, and spent his last years in California. J.J. DONOVAN
The statuesque spirits of Historic Fairhaven Photo and Essay by Mike McKenzie
s you sit on a bench beside bronzed John Joseph Donovan (as we caught one young child doing recently) and Daniel Jefferson (“Dirty Dan”) Harris on, naturally, Harris Avenue, whisper a thank-you to them for what their foresight led to:
A bustling, uniquely curated community that wears the label Historic Fairhaven District. They represent a wealth of economic development. “DIRTY DAN” HARRIS
Inside the Village Green Square lined by the backs of numerous businesses, the statue of Harris (1833-1890) sits a high lob over some shops from Dirty Dan Harris Steakhouse & Seafood. By all accounts, he was a scoundrel (arrested at least four times, according to biographer Ralph Thacker; booklet available at the restaurant and Eclipse Bookstore). He got his monicker, accounts say, from his untidy appearance. Still, why memorialize a man who was dirty in so many other ways – jailed repeatedly but bailed out and never sentenced to a long term, selling illegal “spirituous liquor,” illegally selling liquor in containers marked “Honolulu Sugar,” and for inciting violence? Simple answer: 110 | BUSINESSPULSE.COM
At 11th & Harris the bronze of Donovan (1858-1937), where the child in our photo found folly, commemorates the civil engineer who arrived in 1888 and, an inscription says, “… built railroads, industries, and provided an economic boost to the community.” Brian Griffin, who rallied financial support for the statue and who put together a Whatcom Museum letter-collection exhibit on Donovan, “Treasures from the Trunk,” said in an interview with the Bellingham Herald: ““I’m sure he walked that sidewalk many times, although it was wooden at the time….” Among his business legacies: Blue Canyon coal mine and Bloedel-Donovan Lumber Mills. Donovan Avenue is named for him. His death was worthy of a story in The New York Times. DIRTY DAN HARRIS (top left) and John J. Donnovan (below) both bronzes sculpted by Robert McDermott from Blaine.
M A G A Z I N E
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ADVERTISER INDEX Anderson Paper & Packaging . . . . . . . . . . . . . . . . . 61 Archer Halliday . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Banner Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Barkley Company . . . . . . . . . . . . . . . . . . . . Back Cover Bellingham Bells Baseball Club . . . . . . . . . . . . . . . . 95 Bellingham Cold Storage . . . . . . . . . . . . . . . . . . . . . .46 BIAWC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 & 66 Birch Equipment Rental & Sales . . . . . . . . . . . . . . . 61 Capstone Health Services Inc. . . . . . . . . . . . . 24 & 55 Care Medical Group/Express Care . . . . . . . . . . . . . 82 Chmelik Sitkin & Davis . . . . . . . . . . . . . . . . . . . . . . . . 87 Chocolate Necessities . . . . . . . . . . . . . . . . . . . . . . . . . 57 Chrysalis Inn and Spa . . . . . . . . . . . . . . . . . . . . . . . . . 53 CityMac . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 DariTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Data Link West . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 DeWaard & Bode . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Faber Construction . . . . . . . . . . . . . . . . . . . . . . . . . . 101 Finestrino Film, Co. . . . . . . . . . . . . . . . . . . . . . . . . . . 103 Four Points By Sheraton Bellingham . . . . . . . . . . 25 Gateway Centre Executive Suites . . . . . . . . . . . . . . 27
Global Leadership Summit . . . . . . . . . . . . . . . . . . . . 77 Haggen Market Street Catering . . . . . . . . . . . . . . . 19 Hardware Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Hempler Foods Group . . . . . . . . . . . . . . . . . . . . . . . . 85 Heritage Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Holiday Inn Bellingham Airport . . . . . . . . . . . . . . . 99 Industrial Credit Union . . . . . . . . . . . . . . . . . . . . . . . . 82 Invent Coworking . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 Larson Gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 Laserpoint Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 Lyndale Glass . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 Lynden Incorporated . . . . . . . . . . . . . . . . . . . . . . . . . 11 Management Services Northwest . . . . . . . . . . . . . 31 Mills Electric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 Moncrieff Construction . . . . . . . . . . . . . . . . . . . . . . . 63 North Cascades Institute . . . . . . . . . . . . . . . . . . . . . . 47 Northwest Health Care Linen . . . . . . . . . . . . . . . . . 22 Northwest Propane . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 PeaceHealth St. Joseph Medical Center . . . . . . . .71 Peoples Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Perry Pallet Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89
Print & Copy Factory . . . . . . . . . . . . . . . . . . . . . . . . . 105 ReBound Physical Therapy . . . . . . . . . . . . . . . . . . . . 89 Roger Jobs Motors . . . . . . . . . . . . . . . . . . . . . . . 38 & 78 Saturna Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Savi Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 ServiceMaster of Whatcom . . . . . . . . . . . . . . . . . . . . 62 Signs Plus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Skagit Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 Skagit Valley Casino Resort . . . . . . . . . . . . . . . . . . . . 86 Spring Hill Suites . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 VSH (Varner Sytsma & Herndon) . . . . . . . . . . . . . . 78 Washington Federal . . . . . . . . . . . . . . . . . . . . . . . . . . 91 WBA Top 100 Congratulatory . . . . . . . . . . . . . . 34-36 WECU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Whatcom Women In Business . . . . . . . . . . . . . . . . 112 Whirlwind Services . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Whole Foods Market . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Wilson Motors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Yorkston Oil Company Inc. . . . . . . . . . . . . . . . . . . . . 47
WHATCOMBUSINESSALLIANCE.COM | 113
Welcome to life as you know it. At TownePlace Suites by Marriott, we want to help you feel settled in when you’re on the road. Our roomy suites with fully equipped kitchens and flexible workspaces put you in charge of your routine, and amenities like our complimentary hot breakfast and 24/7 market keep your cravings covered around the clock. Get comfy in our separate sleeping and living areas. When you’re ready to venture out, our helpful staff will give you the scoop on the best local finds just outside our doors.
Whether you’re here for a few days or a few months, we’ve got what you need to unpack, unwind and live life uninterrupted.
Sit back, relax and stay awhile.
4050 Northwest Ave Bellingham, 98226 (360) 714-9700 TownePlaceBellingham.com
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Come to Work Stay to Play
The Barkley Experience
Barkley Village blends contemporary office space with exciting entertainment and dining options to create a dynamic Bellingham experience. Personal and professional amenities include; Class-A office buildings, a full-service grocery store, an eclectic range of dining options, retail shopping, entertainment, and residential living. Barkley Village is a unique destination that artfully accommodates every need.
Shop. Dine. Work. Play. Live. barkleyvillage.com For leasing information call (360) 671-6450 ext.103