Business Pulse magazine May | June 2020

MAY/JUNE 2020

PATH TO RECOVERY Whatcom County businesses adapt to an unprecedented health and economic crisis

Intalco Ferndale plant curtailment foreshadows bigger potential issue Contruction industry, then and now. What’s next?

How tourism will be affected this summer Disasters highlight the difficulty in preparing for the unknown

The PULSE of Whatcom County

$4.99

A shape that proves progress is rarely a straight line.

A new angle on the sport utility vehicle. Featuring a design shaped by performance, with more muscular, sharper proportions and an instantly recognizable sloping flyline. And like any Porsche, it’s best experienced while handling curves.

Experience the Cayenne Coupe.

Porsche Bellingham 2200 Iowa Street Bellingham, WA 98229 Tel: (360) 734-5230 www.porschebellingham.com Š2020 Porsche Cars North America, Inc. Porsche recommends seat belt usage and observance of traffic laws at all times.

European model shown. Some options may not be available in the U.S.

Be free of fees with Freedom Checking No minimum daily balance No monthly service charge No transaction charges* Your business is important to us and our community. With our Freedom Checking Account you get a business checking account with simplicity and efficiency. And you can say goodbye to checking account fees.* Now that’s Business Savi.

SaviBank.com *for the first 500 items processed each month

Anacortes 360.755.3436 3201 Commercial Ave

Concrete 360.853.8171 45872 Main St

Mount Vernon College Way 360.336.0102 1725 E College Way

Burlington 360.707.2272 1020 S Burlington Blvd

Freeland 360.331.3717

Oak Harbor 360.720.2202 315 NE Midway Blvd

Bellingham 360.685.0080 1910 Broadway

Mount Vernon Blackburn 360.419.0300 208 E Blackburn, Suite 100

5575 Harbor Ave, Suite 100

Sedro-Woolley 360.755.3496 203 Ball Street

FOCUS ON YOUR BUSINESS LET US FOCUS ON YOUR 401(k) PLAN Running a business is complicated enough.

Our low-cost 401(k) platform helps you cut through the jargon with customizable plans that are easy to operate.

Email, call, or click to learn more.

401k@saturna.com 1-833-STC-401K (1-833-782-4015) www.saturna.com/401k

Wide variety of investment choices Easy plan transfers Free evaluations Full service administration

Investing involves risk, including the risk that you could lose money.

PULSE B

U

S

I

N

E

S

S

VOL. 45 | NO. 3

PUBLISHER

EDITOR

CONTRIBUTING

WRITERS

GUEST

COLUMNISTS

ART DIRECTOR PHOTOGRAPHY CUSTOMER SERVICE

ADMINISTRATION

Tony Larson Matthew Anderson, PR Consulting Inc. Elisa Claassen Jeremy Lott Tammi Loucks Cheryl Stritzel McCarthy Mike McKenzie Dustin McKissen Pam Lewison Jim McKinney Dylanger McKissen Todd Myers CJ Seitz Nathan Twining Whitney Pearce Tiffany Brooks Ashley Butenschoen Danielle Larson

Create your company profile and start posting jobs TODAY! www.yeswhatcom.com Part of the WBA Youth Engagement Initiative

WBA BOARD OF DIRECTORS: BOARD CHAIR: John Huntley, President/CEO, Mills Electric, Inc. EXECUTIVE COMMITTEE: Pam Brady, Director NW Gov’t & Public Affairs, BP Cherry Point; John Huntley, President/CEO, Mills Electric, Inc. ; Tony Larson, President, Whatcom Business Alliance; Josh Turrell, Partner, Larson Gross PLLC; Josh Wright, VP/Broker, Bell-Anderson Insurance BOARD OF DIRECTORS: Tyler Byrd, CEO, Red Rokk Interactive; Andy Enfield, Vice President, Enfield Farms; Bryant Engebretson, Managing Principal, Tradewinds Capital; Jon Ensch, Commercial Banking Officer, Peoples Bank; Mitch Faber, Partner, Adelstein Sharpe & Serka; Sandy Keathley, Former Owner, K & K Industries; Laura McKinney, NW Gov’t Affairs & Public Relations, Alcoa-Intalco Works; Lynn Murphy, Senior Gov’t Affairs Rep, Puget Sound Energy; Nicole Newton, Semiahmoo Resort/Golf/Spa; Becky Raney, Former Owner, Print & Copy Factory; Andy Riddell, NW Business Banking Mgr, Wells Fargo; Sarah Rothenbuhler, Owner/CEO, Birch Equipment; Patti Rowlson, Founder/Marketing Director, PR Consulting Inc. ; Galen Smith, Operations Manager/Owner, Coldstream Farms; Doug Thomas, President/CEO, Bellingham Cold Storage; Billy VanZanten, CEO, Western Refinery Services For editorial comments and suggestions, write editor@businesspulse. com, The magazine is published bimonthly at 2423 E. Bakerview Rd. , Bellingham WA 98226. 360. 746. 0418. The yearly subscription rate is $25 (US). For a digital subscription, visit businesspulse. com. Entire contents copyrighted ©2020 Business Pulse. All rights reserved.

POSTMASTER: Send address changes to Business Pulse, 2423 E. Bakerview Rd. , Bellingham WA 98226.

3

MAY/JUN 2020 | BUSINESSPULSE.COM

IN THIS ISSUE 11

All bets are off for the future as the uncertainty of COVID-19 impacts all industries, but here’s where the local construction industry is now.

16

INNOVATIVE AGRICULTURE

19

CRUISING THE SAN JUANS

22

PANDEMIC IN WHATCOM COUNTY

11

CONSTRUCTION ON A WILD RIDE

Using financial markets and the latest technology is no longer an option; it is a must for survival.

How Drew Schmidt’s love of the sea built his business, brought his family together and provided an opportunity for others to enjoy the beauty of the San Juans.

Natural disasters highlight the difficulty in being able to prepare for the unknown.

26 JESSE CANTU’S DREAM

In the already tough food business, the restaurateur has responded quickly to bring food and drinks directly to patrons sequestered at home.

28 PERSONALLY SPEAKING

16 Look for additional content online at businesspulse. com

22

Sandy Ward, CEO of Bellingham Whatcom County Tourism, remains optimistic about the local — and very significant — tourism industry.

COLUMNS 31 Resources from the SBA to help your business regain its footing

33 Environmental

lessons from the economic downturn

35 Things to know

when the market gets a virus

37 Food production

and an ever-present drive to produce

38 Seeing the world as a financially savvy ninth grader

41 Intalco Aluminum’s closure is part of a bigger and more serious problem

Ian Crawford

VP/Relationship Manager

360-756-2641

ian.crawford@wafd.com

Building relationships from the ground up.

It’s time to build in Northern Washington and we are your “go to” team.

Contact Ian Crawford to start a conversation about Commercial Real Estate Lending and Spec Construction, or connect with Ash Palta about residential custom construction loans.

Ash Palta

Division Manager Northern Washington

360-756-2518 ash.palta@wafd.com

Isn’t it time we built something together?

All loans subject to credit approval.

wafdbank.com

Business Banking | Commercial Real Estate | Commercial & Residential Construction | Personal Banking | Mortgage Lending

BP PUBLISHER’S NOTE

Whatcom County, we got this Tony Larson

When our team at Business Pulse was first crafting the editorial plan for this May/June issue back in January, we could have never envisioned the challenges Whatcom County would face this spring. Widespread use of masks in public, closed businesses, closed schools, and concerns about overwhelmed healthcare systems would have seemed like scenes from a science fiction movie no one would want to see, much less experience in real life.

Yet, here we are. As of this writing, the State of Washington is still under a statewide stay-at-home order set to expire on May 4, although a significant number of restrictions will probably remain. Gov. Inslee said the state will conduct a multiphased reopening, similar to other states around the country. It is clear that the economic recovery will take some time, but readers of this magazine should retain some measure of hope.

Whatcom County is still one of the most beautiful places in the entire world. People all over the nation would love to call this county home. The coronavirus has not changed that. Although our community and our businesses have been punched in the gut, the coronavirus has not changed a lot of things. The coronavirus hasn’t made our community’s healthcare workers and first responders any less brave. The coronavirus hasn’t made Whatcom County’s entrepreneurs and business leaders any less talented. The coronavirus hasn’t made our workforce any less skilled. The coronavirus hasn’t made our county’s farmers any less innovative.

This experience has reminded us of the importance of face-to-face communication and of the value of personal relationships. It also reminds us of the things we can take

6

BUSINESSPULSE.COM | MAY/JUN 2020

for granted that can disappear in ways we never expect — including a thriving local economy. The recent curtailment of all activity at Alcoa’s Intalco Works smelter will be perhaps the biggest example this county has seen in at least the last 20 years of just how important hundreds of steady, high-paying jobs are to the overall economic health of our community.

As a result of these events, Whatcom Business Alliance (WBA) has launched Recovery Whatcom, a webinar series that will bring business leaders and experts together to share information, resources and innovative ideas and discuss how we can rebuild our businesses and economy as effectively as possible. I have seen this community weather crises both large and small. I have seen ever.”new normal” become, over time, a better normal. I have seen our business community face globalization, rapid technological changes, business closures and recessions only to innovate, thrive and continue to make Whatcom County one of the best communities in America.

Containing the health crisis is requiring exceptional courage from our medical providers and first responders.

Emerging from the economic crisis will require the talent and vision of a local business community that, fortunately, has an abundance of both.

Some of that talent and vision is on display in this issue of Business Pulse. We take a look at recent residential construction trends and what the future could look like for Whatcom County. We also share insight from local agriculture producers and discuss how they are keeping the county’s families fed during the coronavirus crisis. Our business profiles showcase Captain Drew Schmidt of San Juan Cruises and Jesse Cantu of Jalepeños and Luna’s Bistro. Read some local perspectives on the crisis in the

piece.”Disaster in Whatcom County” an.”Travel Won’t Likely Unravel.”

This issue also contains an infographic sharing some results of a recent WBA Business Confidence Survey and an editorial from our first middle school columnist, who discusses why he is a 14-year-old fiscal conservative. Regardless of your politics, the fact that Whatcom County is home to so many bright young minds is yet another reason to be hopeful about our future.

I am proud of our community. I am proud of our first responders, healthcare workers and frontline employees.

I am proud of our business leaders. In the coming months, this magazine will share stories about how we are banding together to face our biggest crisis since the Second World War. If I know our community like I think I do, be prepared to get inspired. And be prepared to do your part.

Stay safe, stay healthy, and enjoy this issue of Business Pulse, which, for the first time, is being published only digitally because of challenges stemming from the crisis. In the coming months we will return to physical publication of the magazine, but please click on the digital advertisements in this issue.

Local business needs our support now more than ever.

I’m stealing a line from Brendan Pape, CEO and president of local Brist Manufacturing. In a creative effort to assist businesses around America, and save his own, he captured the attention of many with a video and opportunity stemming from a simple line. “America, we got this.” He is right. Whatcom County, we got this.

JOIN US

if you believe business success is essential to community prosperity.

Start networking with Whatcom County’s business community for as little as $100/year!

To join, email info@whatcombusinessalliance.com or visit whatcombusinessalliance.com/jointhealliance

Whatcom County, we’re here for you.

When you partner with us, you can count on experts who listen, learn and get to know your business, so we can provide solutions specifically tailored to your needs.

Respect, responsiveness and commitment. That’s been our approach for more than 130 years, and it’s what you and your business deserve—now more than ever.

Let’s create tomorrow, together.

Best Bank in the Pacific Region of the U.S., Two years in a row – Money Magazine

Connect with our Whatcom Commercial Banking Team: 360-752-8205 bannerbank.com

Member FDIC

7

MAY/JUN 2020 | BUSINESSPULSE.COM

BP NEWSMAKERS

Erika Lautenbach

James Pyles

Erika Lautenbach is the new director of the Whatcom County Health Department. Lautenbach has a master’s degree in public health from the University of Washington.

This is her second stint in the county’s health department; she was assistant director of the department from 2016 to 2018.

Locally, Lautenbach has served on the Whatcom County Library System’s board of trustees and on the Whatcom County Climate Impact Advisory Committee. Nationally, she has worked for the Brookings Institution and in Congress on the United States Senate Committee on Health, Education, Labor and Pensions.

“Lautenbach has demonstrated her ability to manage people, projects and organizations and to be strategic in her approach to implementing public health initiatives,” said Whatcom County Executive Satpal Sidhu, who appointed her.”She will assume this leadership role at one of the most challenging times for our public health infrastructure.”

Ferndale’s insole maker Superfeet Worldwide and sister company Flowbuilt Manufacturing are helping fight against the COVID-19 coronavirus by using 3D printing to produce medical equipment.

“The men and women who are our first line of defense when it comes to fighting COVID-19 are facing short-

8

BUSINESSPULSE.COM | MAY/JUN 2020

Jennifer Kutcher

Peter Larsen

ages of the protective gear necessary to keep them safe. We immediately looked at our machines and our team and knew we could do more to help,” said Superfeet CEO John Rauvola.” We’ve already started the process of prototyping several pieces of medical equipment with our 3D printers and are ready to help create solutions for those in need.”

The company is asking medical professionals in need of supplies to send a request to covidresponse@superfeet.com.

James Pyles, first vice president, CFP®, and Investment Officer with the Wells Fargo Advisors Bellwether office has earned the Retirement Income Certified Professional® (RICP®) designation from The American College of Financial Services. This designation, which requires three college-level courses, proctored exams, professional experience, and continuing education, covers a broad range of retirement topics. These include Social Security claiming strategies, mitigation of risks to retirement income planning, the proper use of annuities, estate issues, health insurance, housing decisions, and income taxation.

Whatcom Educational Credit Union has launched two new crisis relief loan programs to help people and businesses that have been hurt by the coronavirus pandemic.

Matt Roetcisoender

Gabriel Twining

The consumer program offers personal loans of up to $5,000, with no payments for the first 90 days. The business program offers payment deferrals for current loans for up to 90 days, lines of credit of up to $50,000, and secured lines of credit of up to $100,000. The county’s largest credit union also has agreed to waive the usual $15 fee for its skip-a-pay option for car loans and other small loans.

“Many individuals and businesses throughout our community have been impacted by the coronavirus,” said President and CEO Jennifer Kutcher.” We hope these programs will help during this very stressful time.”

You can learn more about these programs and how to apply at www.wecu.com/crisisrelief.

Peoples Bank announced that Chad Nickisch has joined the Bellingham Real Estate Loan Center as a mortgage loan representative.

Chad joined Peoples Bank in 2017 as assistant vice president and retail branch manager of the Barkley Financial Center. He has over 20 years of retail banking and management experience and has created strong connections in the community and within the Bank. Succeeding Chad as assistant vice president and retail branch manager is Kenji Maeda.

Kenji joined Peoples Bank in 2018 as a lead relationship manager at the Cordata Office.

NEWSMAKERS BP

Lynden-based Simple Box Storage named Peter Larsen head of operations, with the task of improving efficiency. He has spent the past five years working for the Ferndale woodworking supply firm Fastcap.

Simple Box Storage deals in shipping containers for storage, moving and many other uses. It has 26 workers at seven locations in Washington, Idaho and Oregon.

“We believe we can achieve better outcomes for our customers, team and company without raising prices to pay for them,” said founder and CEO Ross Black.” We will do this by eliminating waste and improving our processes for serving, delivering and administration.”

Matt Roetcisoender was promoted to senior manager at accounting firm VSH CPAs, which has offices in Bellingham and Mount Vernon. Roetcisoender has 10 years of experience as an accountant. He came to VSH CPAs in 2017. His recent specialty as a certified valuation analyst has been helping businesses properly value their business for the purpose of planning, financing or sale. Roetcisoender holds two degrees in accounting, including a master’s degree in public accounting from Central Washington University.

“Matt has proven he has the skills, experience and passion to be an excellent next-gen leader to grow our firm,” said founding partner Bob Sytsma.

Gabriel Twining has been promoted to chief personnel officer and lead adviser at Financial Plan, Inc. , a Bellingham-based, fee-only financial planning firm. Before coming to Financial Plan, Inc. , in 2013, Twining worked in process improvement, consulting for CHI Franciscan Health

in Tacoma. He also has a psychology degree from the University of Portland.

“Gabe’s background in organizational processes and psychology made him a perfect candidate for the role of chief personnel officer,” said David Dick, the firm’s chief compliance officer.”Our company has grown by leaps and bounds over the past five years, and Gabriel’s skill set is a huge benefit to our leadership team.”

Judd & Black Appliance is celebrating its 80th anniversary in 2020 after launching at the start of World War II, surviving the upheaval of 9-11 and now facing the uncertainties of the coronavirus pandemic.

“We’re humbled by so many years of support that we’ve received from customers and employees,” said company president Bob Long, a third-generation owner of Judd & Black Appliance.

Long said the retailer will continue its philosophy of giving back to the community by donating $10 to local food banks, up to $25,000, for each appliance order at any of its locations from April 16 to May 10. The food banks are Bellingham Food Bank, Volunteers of America Everett Food Bank, Lynnwood Food Bank, Marysville

Community Food Bank and Skagit Valley Neighbors in Need.

Carolyn Gill has been named director of sales for the Best Western Plus Bellingham Airport Hotel and the nearby Fox Hall Events Center. Her hire comes after a multi-million-dollar renovation.”It’s like a new hotel,” Gill said.

Gill has worked for the past six years in the local hospitality industry, including a stint at SpringHill Suites

by Marriott. Fox Hall is one of Bellingham’s biggest venues, with 3,750 square feet and seating for up to 200 for dinners and 300 stadium seats for productions.

“I know how to take care of clients with a high level of service,” Gill said.

Bellingham-based Barron Heating, a company that has expanded from heating to air conditioning, electric, plumbing and solar installation, has launched Barron Technician School.

This vocational school offers certified training in the commercial installation of heating and air conditioning, electrical and plumbing, among other disciplines. It differs from most technical schools in that students don’t pay Barron to be trained. Rather, Barron pays them and trains them — in a classroom, in a lab and in the field.

“Some of our top wage earners here at Barron, when you look at their total compensation, are easily in the six figures,” said Brad Barron, the company’s director of operations.”Many people assume that that type of wage is associated with a four-year college degree, but we have amazing technicians — both male and female — who are able to provide for their families and earn a great living while working for a local company that allows them to grow in their career.”

9

MAY/JUN 2020 | BUSINESSPULSE.COM

Hardware Sales Equipment Rentals Because we know that investing in your project doesn’t always mean buying new tools, we’ve got what you need to get those jobs done, start to finish!

2034 James St Bellingham Exit 254 360.734.6140 M-F 7am-6pm



Genie Lifts



Nail Guns



Hedge Trimmers

Sat 7am-5:30pm



Riding Mowers



Carpet Cleaners



Dingos

HardwareSales.net



Chain Saws



Cordless Mowers



Stump Grinders



Earth Movers



Hand Tools



Trailers



Table Saws



Chop Saws



Ditch Witches



Excavators



Tables & Chairs



& Much More!

Equipment Rental

360.734.6141 Service Center 360.733.4256

10

BUSINESSPULSE.COM | MAY/JUN 2020

FEATURE BP

PHOTO: iStockphoto. com/stanescu

Building Whatcom County What’s next for our roller coaster construction industry Cheryl Stritzel McCarthy The construction industry in Whatcom County has weathered two decades of precipitous rises and wild declines. But when you look at the years as a whole, you see that the ups and downs level out to an annual growth rate of 1. 7%, which matches the growth rate of the county’s overall economy.

Like a roller coaster ride that averages to a flat line, that makes it sound a lot gentler than it has been.

Read on for a look at this industry in Whatcom County, including expectations for the near future, industry size relative to other segments, wages, housing demand and house prices.

“

From the residential side, there appears to be continuing demand.

-Anneliese Vance-Sherman, regional labor economist

What’s ahead?

After the recovery years of 2016, 2017 and 2018, the construction industry slowed in 2019 and may continue slowing in 2020.

“We had decent growth in construc-

tion in Whatcom County between 2016 and 2017, with a lot of hotel construction,” said Jim Vleming, a regional labor market economist with the Washington State Employment Security Department.

Outperforming other sectors, the construction industry saw jobs in the county increase by 1,000 between 2016 and 2017. The year 2018 was good, too, with a 5. 8% growth rate in the construction industry in the county, Vleming said, but 2019 slipped back, posting a loss of 500 of those jobs. That’s the biggest decline of any industry in the county, while service, government and other sectors are

11

MAY/JUN 2020 | BUSINESSPULSE.COM

holding steady or rising.

“Construction was booming for a short time, but now we’re returning to reality, especially with the virus and supply chain issues,” Vleming said.

The state’s employment projections for the next few years — pegged before COVID-19 — estimated annual growth in construction at 0. 88% from 2022 to 2027 in the Northwest Workforce Development Area, which comprises the counties of Whatcom, Skagit, Island and San Juan.

Construction employment in Whatcom County was looking fine for 2020, with a residence hall going up at Western Washington University and other projects, said Hart Hodges, director of WWU’s Center for Economic and Business Research. But many projects are now on hold due to COVID-19 — some because the work is considered nonessential, and others because people are waiting for the financial uncertainty to subside.

“So, I think the forecast for construction has to be lower in 2020 than 2019,” Hodges said.”I think we’ll see a large dip in employment in construction for the next three to six months, but hopefully back to pre-virus levels

by September or October. Hopefully

“

From 2010 to 2019, the median sales price for Whatcom County homes rose 60%. Bellingham homes saw a 71% rise over that time.

-Troy Muljat, managing broker, Muljat Group Realtors

we are not hit with another round of the virus in the fall.”

How big is it?

This industry matters more here than it does elsewhere. Construction is a bigger part of the economy in Whatcom County — 8. 2% of total jobs — than it is statewide (5. 9%) or nationally (4. 9%), according to 2018 figures, the most recent available from the state Employment Security Department.

Wages are higher, too; the average hourly construction wage in Whatcom County in 2018 was $29. 08, compared to $24. 01 across the country.

However, other industries in Whatcom County — such as government, transport and utilities, leisure and hospitality, and trade — are larger than construction.

“Going way back to 2000, those have always been the big players in the Whatcom County economy,” Vleming said.

Demand looks decent Even with construction here declining recently, there’s hope in the residential sector, said Anneliese Vance-Sherman, who like Vleming is a regional labor economist for the Washington State Employment Security Department. Housing permit applications in Whatcom County, especially for multifamily dwellings, are trending up. In 2018, the number of applications here reached 1,464, a number not seen since 2006, when it was 1,482.

In 2006, three-quarters of those applications were for single-family dwellings. In 2018, they were nearly equally split between single family and multifamily. In March, the Bellingham City Council further promoted multifamily housing when it passed an emergency temporary ordinance banning most single-family homes in areas zoned for

Wesley Moore, project manager, Bellingham Bay Builders Demand is high for new and remodel. I expect that to continue. The wild card is the coronavirus and mandatory restraints on our community.

We see robust demand for what we do: high-end residential new builds and remodels with emphasis on energy performance.

The construction industry is a source of revenue for contractors, subcontractors and all the support industries. Whatcom County is diver-

12

BUSINESSPULSE.COM | MAY/JUN 2020

sified, so it’s not the only horse in the race. But people will always need a place to live and to do business, so the construction industry will always play a role.

Permitting in Whatcom County is extensive, with strong incentives to preserve the natural environment. It’s highly regulated.

(Remarks have been edited. ) Compiled by Cheryl Stritzel McCarthy

Tony Moceri, vice president, Moceri Construction The construction industry in Whatcom County, with its high-paying jobs, creates an enormous amount of revenue for the local economy and the government. The money that goes to local governments when a home is built is significant, more so than if you buy a pizza and just pay sales tax.

The fact that it’s busy reflects on how in-demand our area is. If there are places for people to live, then people will keep coming, which stimulates the economy.

duplexes, townhouses and other multifamily units. The ordinance required a public hearing within 60 days.

Net in-migration, meaning all those folks moving to Whatcom County, is also rising briskly, exceeding previous peaks in the early 1990s and matching the boom years of 2006 and 2007, state figures show.

“At least from the residential side, there appears to be continuing demand,” Vance-Sherman said.

Today, people move for different reasons, Hodges said.”We used to go where we could find the best job, but migration like that has been declining for decades,” he said.”Now it is complicated by the cost of childcare and other factors. Many people can’t afford to move the way we used to.”

The fact that more affluent people (including retirees) or those with better job offers are the ones who are moving changes housing markets noticeably, he added.

Prices keep going up The median price for Whatcom County homes sold in 2019 was $400,000, a 4. 6% increase over the

It’s expensive to build here, with labor rates and material costs. Couple that with demand, and it raises the cost of new homes, and existing homes also.

If young people are looking for good-paying jobs, getting into the trades is a very good option. There’s an absolute shortage of skilled labor across the board: carpenters, electricians, plumbers.

(Remarks have been edited. ) Compiled by Cheryl Stritzel McCarthy

year before. Within Bellingham, it was $480,500, a 6. 9% increase, according to a report from Troy Muljat, managing broker at Muljat Group Realtors.

Compare that to 2010, when the median for Whatcom County homes

sold was $250,000. That’s a 60% increase over the decade. Bellingham house prices saw a 71% rise over that time. During that decade, Whatcom’s population rose 12. 2% to its current 225,685. Again, that’s due to net

Your Business Retirement Plan Solution Bryant J. Engebretson, CFP®, CLU®, AIF® Kyle B. Jackson, CFP®, CLU®, AIF® p

360.715.9000

www.tradewinds-cm.com 2211 Rimland Drive, Suite 401 Bellingham, WA 98226

13

MAY/JUN 2020 | BUSINESSPULSE.COM

in-migration — not births, which are declining.

The long view Earlier this year, low interest rates sparked .”frenzy” of purchasing and refinancing, Muljat said. At the same time, one local construction manager, even while surveying his robust schedule, hope.”my customers don’t lose all their money” in the burgeoning economic fallout from COVID-19.

Employment growth was high during the recovery of a few years ago because of pent-up demand and population influx, but it basically stabilized in 2018 and 2019, Vance-Sherman

“

Construction is a bigger part of the economy in Whatcom County than it is statewide or nationally.

-Washington State Employment Security Department

said. Seattle was similar, with a growth rate extremely high and then stabilizing. As a recovery matures, projects are

completed and new projects begin, and the workforce cycles among projects.

Construction is contract-driven and hence a challenge to chart accurately, Vance-Sherman pointed out. Employment ebbs and flows based on projects, so the government’s monthly samples might include a company that’s just finished a project and laid off workers but not include a company that’s just begun a new project. She cautions that the most recent data might not be the most accurate data.

In the construction industry, as with a roller coaster ride, it’s best to take the long view. ■

Dick Skeers, owner, and Brandon Priest, financial officer, Skeers Construction, Inc. Brandon: It appears that a primary driver of higher home prices in Bellingham has been imbalanced supply and demand. Our research indicates that Bellingham has severely undersupplied the single-family market. We estimate Bellingham would have needed 2,800 new single-family homes to meet the demand created by population growth from 2007–2017; only 1,420 single-family homes were produced in that time. This undersupply of homes in Bellingham is helping fuel housing markets in Ferndale and Lynden. From 2016 to 2018, on average, the numbers of new single-family home permits per 1,000 people were 2. 26 for Bellingham, 7. 58 for Ferndale, and 5. 39 for Lynden. Bellingham doesn’t want urban sprawl, but the building in Ferndale and Lynden is creating worse urban sprawl. It’s shortsighted.

Bend, Oregon, is about the same size as Bellingham. Our research from the past 12 months shows new homes made up 21% of all single-family home sales in Bend. New homes in Bellingham made up only 10% of all single-family home sales.

14

BUSINESSPULSE.COM | MAY/JUN 2020

Dick: Regulations have driven up our costs and diminished supply. Increased cost means we can supply a smaller part of the market. In the ’70s and ’80s, we could build houses for our employees. There’s no way they could afford to buy a house from us now. Now there are just two of us, out of 19, who own homes in Bellingham.

The new subdivision ordinance makes it difficult for clearing and grading, and it shows little awareness for unintended consequences, such as increased difficulty in controlling water runoff onto adjacent properties and increased wear and tear on city streets and sidewalks because more dirt and rocks have to be removed after streets have been constructed. The ordinance makes it likely that homesites won’t be as well benched (leveled) for the enjoyment of the future homeowner. Most important, net construction costs are less if we build on benched lots, which allow simpler foundations with significantly less concrete, steel and labor.

(Remarks have been edited. ) Compiled by Cheryl Stritzel McCarthy

BY THE NUMBERS BP

How local businesses are being impacted currently. . .

63%

Have applied for financial assistance from various programs

39% 35% 53% 23%

Have had to lay off some employees (as of April 17, 2020) Have not had to lay off any employees (as of April 17, 2020)

Have had to drastically reduce services/hours Have had to close business temporarily

36%

Believe their industry will recover within the next six months

BIGGEST CONCERN 43%

Uncertainty of potential length of closure and stay-at-home mandate

17%

Debt incurred during the lockdown

8%

Customer reluctance to venture out once they are able to

*Based on data from April 17, 2020 WBA survey of 223 local businesses

15

MAY/JUN 2020 | BUSINESSPULSE.COM

BP FEATURE

AGRICULTURE

will continue to lead Whatcom County’s farmers and ranchers have always had to adapt and innovate.

Now is no different.

Dustin McKissen

PHOTO: iStockphoto. com/moore

16

BUSINESSPULSE.COM | MAY/JUN 2020

“Twenty years ago, hard work was enough to guarantee a living,” said Galen Smith, longtime owner of Coldstream Farms, a dairy in Deming.”Today, farmers and ranchers need to be more sophisticated to survive.”

Like many Whatcom County farmers, Smith has been working for decades — long enough to see advanced financial and business strategies become increasingly important to his business. Smith’s dairy has thrived because of his team’s increased business acumen, growing the farm from 400 to more than 1,800 cows. Coldstream’s growth is the result of hard work and Smith’s ability to use financial markets to lock in ingredient prices and proj-

ect his margins. As a result, 75% of his input prices and sales are in place well ahead of time, helping his business better withstand unexpected fluctuations created by turbulent markets.

The strategic management of feed and other ingredients is one reason Smith can be relatively calm about the long-term impact COVID-19 will have on his business.

“Without a doubt, a temporary economic contraction impacts everyone, and it will impact the county’s producers,” Smith said.”However, there is risk priced into our business well ahead of unexpected events. The dairy industry has specific insurance programs for producers that come into play during moments like the one we are living through. Long-term, I do not expect COVID-19 to decrease demand for dairy products.”

The durability, resiliency and importance of agriculture are big reasons why Whatcom County should recover from the economic fallout of the virus.

The county has over 100,000 acres of productive farmland and more than 1,700 farms. It generates more than $360 million in annual revenue and is in the top 3% of the most agriculturally productive counties in the entire nation. Statewide, agriculture is the second largest industry in Washington, after aerospace.

While the industry is a staple of the Pacific Northwest and Whatcom County economies, managing a thriving operation requires more than just advanced business and financial strategies. Producers also need a sophisticated understanding of trade policy and the regulatory environment. The United States-Mexico-Canada Agreement, the trade policy adopted to improve on and replace the North American Free Trade Agreement, has allowed producers like Coldstream Farms to enter

new North American markets without having to compete against Canadian subsidies.

“The USMCA was a huge win for us and a big improvement over previous trade policy,” said Galen Smith.”We could not sell our product in Mexico when we were competing against farms subsidized by the Canadian government. The USMCA leveled the playing field for us. It allows farmers to compete on the quality of our product — and I believe when we are competing on quality, American farmers and ranchers will win, hands down, every time. Especially our Whatcom County producers.”

The impact of the regulatory environment does not end with trade policy. Zoning restrictions limit access to water rights and create uncertainty for producers. Complex permitting processes also slow down necessary

projects and improvements. The result can turn the simple construction of a hay barn into a years-long process.

Regulatory restrictions can frustrate producers, but the industry has statewide champions supporting policies that could open new markets for many Whatcom County farms and ranches. Sen. Doug Erickson, a Republican from Ferndale, recently led the effort to pass Senate Bill 6382, which would allow custom slaughterhouses to sell meat directly to consumers. The bill would let those slaughterhouses sell beef, pork, lamb and other meats by the cut to customers. Erickson believes that the legislation, which is known as the Prime Act, will eventually receive support from the state’s often-conservative agricultural producers and from liberal supporters of th.”buy local” movement. While the session ended without the bill making it to the

WAREHOUSING FOR ANY BUSINESS Flexible, managed solutions, safe and secure

Since 1946

Instantly track inventory, manage shipping, run reports, and more with WebOPTICS: BCS’s proprietary online inventory management system.

BELLCOLD.COM * INFO@BELLCOLD.COM * 360-733-1640

17

MAY/JUN 2020 | BUSINESSPULSE.COM

governor’s desk, the push to open new agricultural communities ultimately ington Policy Center Initiative on Agmarkets to Whatcom County produc- influences agricultural policy, there is riculture and a longtime family farmers and consumers is likely to contin- hope for common ground. One way to er.”Both want to see Washingtonians ue.”Sen. Ericksen’s bill buy local. Both unis an example of the derstand that envitype of legislation we ronmental concerns hope for,” said Tony play an important Larson, president of role in maintaining the Whatcom Business a sustainable agriAlliance (and publishculture industry. To er of Business Pulse).”It varying degrees, both is not partisan, it inexpress frustration creases the prosperity that many consumof local businesses ers don’t understand through innovation, the complexity and and it can unite both importance of our -Galen Smith, owner of Coldstream Farms liberals and conservafood supply chain. tives behind a common-sense idea. We find common ground is through better However, there is a struggle to find a would strongly support future efforts communication. common language.” to pass legislation like this and open “Believe it or not, the state’s urban While it is hard to identify positives our county’s producers to new local population and the rural farmers and in the coronavirus outbreak, the immarkets.” While tension between ranchers share common goals,” said portance of farmers, agriculture and the state’s urban centers and rural Pam Lewison, director of the Wash- strong local supply chains was vividly illustrated when residents of Whatcom County became concerned about food shortages. Those concerns are underThe leading bulk milk hauler standable. However, Lewison echoed in the Pacific Northwest! other producers when she said the area’s farms remained on duty, even during the crisis.

“Gov. Inslee’s decision to deem the agricultural industry essential was wise, and inevitable,” Lewison said.”I’ve spent a good portion of my life on a farm, and even in an emergency, work must go on. The pandemic challenges farmers with potential labor shortages and the need to implement appropriate human resource policies, provide protective gear, and adhere to social Every day of the week Milky Way drivers pick distancing procedures. The last of those up milk from dairy producers, using custom built state-of-the-art stainless-steel tankers. could present challenges for berry proWith terminals strategically placed throughout ducers. However, farmers and ranchers the northwest, Milky Way has the capability of will always do what they do best: see picking up milk with the highest level of safety a challenge, identify a solution and get and service. the job done.” Over the past 20 years, lynden.com | 1-888-596-3361 Whatcom County’s agriculture sector (Continued on page 40)

“I have traveled across the region,

across the country and across the world. I might be biased, but many of the best, smartest, toughest, most resilient people I have ever met live in this community.”

18

BUSINESSPULSE.COM | MAY/JUN 2020

BUSINESS PROFILE BP

PHOTO: Tiffany Brooks

Water in his DNA San Juan Cruises born from a lifelong love of the sea Tammi Loucks San Juan Cruises founder Capt.

Drew Schmidt’s love of the sea is ingrained in his DNA. Born and raised in the seaport city of Seattle, he regularly played on area beaches as a child.

As a teen, his love of boats led him to join Sea Scouts, a nautical program of the Boy Scouts of America. There, he learned crucial boating skills such as piloting, navigating, engineering and general boating safety. His passion for boating stayed strong, and as a young adult, he worked for various charter companies and eventually became a captain. You could say that from a young age, his career path in the charter industry was divined.

“So many people that I knew were in the charter boat business, and I wasn’t

smart enough to do something different,” Schmidt joked.”But as I got older, I realized I enjoyed the business side of things as much as I enjoyed being a captain.”

So, in 1987, he moved to Bellingham to start his first business venture, Gray Line Cruises, a franchise of Gray Line.

The company offered passenger ferry service between Semiahmoo Resort in Blaine and Friday Harbor in the San Juan Islands, along with wildlife cruises.

After the completion of the Alaska Ferry Terminal, the Port of Bellingham approached Schmidt about relocating to the port.

“I recognized this was a great opportunity,” he said.”so in the fall of 1991,

we moved the business to Bellingham and changed the name to San Juan Cruises.”

The move also prompted the company to expand passenger ferry service, and for many years, San Juan Cruises operated boats servicing Bellingham, the San Juan Islands and Victoria, British Columbia, Canada. For the next two decades, the business thrived.

Then came the change in passport laws.

Starting over after 20 years On June 1, 2009, the United States enacted the Western Hemisphere Travel Initiative, which established new document requirements for travel into the United States from Canada, Mexico, the Caribbean and Bermuda,

19

MAY/JUN 2020 | BUSINESSPULSE.COM

whether by land or by sea. San Juan Cruises experienced a sharp decline in business, as not all travelers had the required documentation to cross the border.

“That was our biggest challenge to overcome,” Schmidt said.”We grew a business for over 20 years, and it blew up, and we had to start over.”

It was even worse than the recession from a year earlier.

“Even the 2008 recession didn’t impact us much,” he said.”Fuel prices went up, which was a bit of a struggle, but beyond that it was OK. But the new passport laws meant we had to change the business model to add more domestic service as international travel declined.”

In 2010, Schmidt ended service to Victoria, opting instead to focus the company on cruises throughout the scenic San Juan Islands.

Expanding services yet remaining sustainable Today, San Juan Cruises operates four vessels and offers a variety of cruises, including crab dinner cruises, wine and beer tasting and bird watching cruises, whale watching trips, and private charters. As successful as San Juan Cruises is, Schmidt says he has no plans to expand the company or make any major changes for the foreseeable future. He will, however, continue to look for opportunities to add services or to improve an existing service.

“I don’t want San Juan Cruises to be a gigantic company,” he explained.”I want us to be sustainable and able to give people a great experience.”

In that vein, with the continued growth in the local microbrewery and wine industry, in recent years San Juan

20

BUSINESSPULSE.COM | MAY/JUN 2020

Cruises added two summer cruises: the Bellingham Bay Brewer’s Cruise, which features beer tastings from Boundary Bay Brewery and two additional rotating breweries from the Pacific Northwest, and th.”unWINEd on the Bay” wine tasting cruise, which features both locally produced wines and international wines.

“We have an agreement with the La

growing in popularity, the majority of business comes from the whale watching cruises, he said. San Juan Cruises is a member of the Pacific Whale Watching Association and has been practicing responsible whale watching for over 30 years. The company adheres to rules that exceed state and federal guidelines to protect whales’ well-being, both now and in the future.

“It’s a joy. I get to live in a beautiful place.

I get to work with my family and spend time with nice people, whether it’s staff or customers.

It’s a great way to spend the day.”

-Drew Schmidt

Conner Channel Lodge to use their dock,” Schmidt said.”Last year, we partnered with bus tour companies and senior centers and brought a boat down to do cruises through Deception Pass and the Swinomish Channel during the Skagit Valley Tulip Festival in April. This year, we expanded to offer the festival cruises as well as crab dinner and history cruises throughout the summer.” While the newer cruises are

Responsible whale watching means having no impact on whales, he said.

Key requirements of both state and federal laws mandate the distances a boat must maintain from various breeds of whales and set speed limits to minimize impacts from noise..”We run parallel to a pod of whales to provide a good view but to ensure we don’t get in the whales’ path,” Schmidt said.”It’s important, particularly with

the struggling resident Orcas, that we do everything in our power to help them and minimize our impact.” Currently, there are five types of whales in our waters, with the most common being orcas and humpbacks. According to Schmidt, 10 years ago it was rare to see a humpback in the Salish Sea, but today they are common. The 2019 season proved to be a phenomenal year, with whale sightings on nearly every one of the trips.”There are about 30 whale watching companies in Washington and British Columbia,” Schmidt said.”and we work together, sharing information to help ensure our customers have a great experience.

It’s pretty unique to have competitors work together. We shifted to a later departure so we could visit the areas whales were spotted earlier in the day.”

San Juan Cruises has a loyal following of customers — some who experience all of the cruises, and some who repeat the same cruise throughout the summer. Schmidt says that no matter which cruises his clients book, and no matter whether they are first-time or repeat customers, they will feel welcomed. They’ll also learn from highly experienced, local guides and have the chance to enjoy beautiful waters, pristine shorelines and incredible wildlife.

Schmidt’s passion for the sea is part of a shared DNA, as San Juan Cruises is now a family affair. Schmidt’s children work for the business, and his son is a captain. Schmidt couldn’t imagine living and working anywhere else.

“It’s a joy,” he said.”I get to live in a beautiful place. I get to work with my family and spend time with nice people, whether it’s staff or customers. It’s a great way to spend the day.” ■

Largest Fleet in the PNW Locally & Woman Owned with National Capabilities, here for all your equipment and rental needs.

Facilities throughout WA and AK, headquartered in Whatcom Co.

21

MAY/JUN 2020 | BUSINESSPULSE.COM

BP FEATURE

PHOTO: iStockphoto. com/nzphotonz

Disaster in Whatcom County COVID-19 pandemic highlights difficulty in preparing for the unknown Jeremy Lott Marty Stauffer is the owner of Lynden-based insurance brokerage Stauffer Insurance. When Business Pulse knocked on his glass door in the middle of March, it was locked.

“I’m practicing social distancing,” Stauffer said, opening the door and offering hand sanitizer and a chair about six feet from where he’d be sitting.

He had good reason to be cautious. The novel coronavirus, which first infected humans in Wuhan, the capital city of China’s Hubei province, in December 2019, was proving much more infectious than previous coronaviruses, including the one that caused SARS. It had effectively crippled entire countries at that point. In the United States, some of the earlierst cases of COVID-19 were in Washington state, where the virus struck most dramatically at a Kirkland-area nursing home. Well over 100 cases were confirmed connected to the Life Care Center, with at least 35 dead, according to the Centers for Disease Control and Prevention.

The state government had tried to slow the virus’s spread first with warnings and partial limitations and then with the mandated closure of bars and restaurants to in-person dining and drinking, the closure of entertainment and recreational facilities, and sharp limits on large gatherings.

Whatcom County followed with even more mandated

22

BUSINESSPULSE.COM | MAY/JUN 2020

closures, including the closure of salons and tattoo parlors.

With the exception of supply stores, which were getting mobbed, retail stores that managed to stay open were struggling to scratch up business. As time went on, additional measures were announced, including the extension of school closures throughout the state through the end of the 20192020 school year.

The basic message from government, medical professionals and many business leaders was straightforward, though hard to follow to the letter for many: Stay home unless absolutely necessary. This meant a total shutdown for a large chunk of the economy and, for others, a rethinking of how to conduct business. Later closures of all nonessential businesses as part of Gov. Jay Inslee’s March 2.”Stay Home, Stay Healthy” order took matters a step further.

Most people who contract COVID-19 live through it.

Though numbers are difficult to pin down, experts estimate that 1 in 100 people who get this strain of coronavirus worldwide die from it, as opposed to 1 in 1,000 for the flu.

The economic damage is more widespread.

By mid-March, when Stauffer unlocked his door for Business Pulse, the pandemic had already sickened and killed thousands, disrupted supply chains, led to the hoarding of

basic goods, shaken consumer confidence to the core, lowered the U. S. economy from close to full employment to what were assumed to be Depression-era employment numbers (though Congressional action would forestall this), slowed traffic from Canada to a trickle, tanked world stock markets, shuttered all public and private schools in Whatcom County, and made way for some of the most far-reaching government orders since World War II. What has been Whatcom County’s response to this crisis?

“Whatcom County has had pandemic plans in place since 2001,” said John Gargett, deputy director of the Whatcom County Sheriff ’s Office Division of Emergency Management.”Two events where they were used was in the H1N1 outbreak and the SARS outbreak. The same plan was used for the potential Ebola outbreak.

It has been this pre-planning that has enabled us to be as prepared as we are — which, compared to many other communities in Washington state, has put us in a relatively good position.”

A big part of that plan is something called Whatcom Unified Command, which is, in effect, a temporary drawing together of all of Whatcom’s agencies and governments (including tribal governments) to enable better communication and faster reactions to unfolding crises. Structures like this are recommended by the Federal Emergency Management Agency to help communities cope with such largescale emergencies as floods, active shooters, earthquakes and pandemics.

“This new global disease outbreak is beyond the scope of any single department to mitigate,” reads a statement on

Whatcom Unified Command’s website at whatcomcovid. com.”and we must all come together to protect our community from this dynamic threat.”

Whatcom County is doing just that, said County Executive Satpal Sidhu, who declared a county public health emergency on March 10.

“We are now under unified command and control org structure,” he said.”We have a joint information center for public information and regular updates on all situations and events. We are following well-established process and procedures of FEMA and Washington state emergency operations to coordinate response to COVID-19.”

On April 6, Whatcom Unified Command announced that the county had reached an agreement with the owners of the Motel 6 off Samish Way in Bellingham to use it as a quarantine and isolation facility. The building, which is for sale, has been vacant.

“Every action we are taking together is intended to limit the spread of COVID-19,” said Bellingham Mayor Seth Fleetwood in a press release.”This is a time-critical need. The availability of this facility — for anyone who needs it — is essential to our response to this crisis.”

Whatcom Unified Command plans to establish similar quarantine facilities throughout the county, as necessary, as part of its ongoing efforts to manage and mitigate the COVID-19 crisis.

Overall, it’s going well so far, said Sumas Mayor Kyle Christensen, a part of Whatcom Unified Command.

“We have good communication and we have regular meetings,” he said.”The county’s doing a good job communicating with the cities.”

Christensen rated his personal anxiety level in the middle of March at

PHOTO: iStockphoto. com/naturalphenomenon

Coronavirus wasn’t the only disaster to hit Whatcom County this year. There also was flooding in Sumas, Everson and Nooksack, brought on by record rains that overwhelmed creeks and rivers. The flooding caused millions of dollars in property damage.

Sumas Mayor Kyle Christensen said that 50 properties were affected in Sumas, with 25 of those having water in the house. The other 25 (including his property) had water damage in a garage or some other nonresidential part of the property.

“We had a lot of cleanup days,” he said.”People from the community volunteered to come out and haul away debris. We’re just now starting to see rebuilding — and then COVID-19 came. We didn’t have much of a break in between, but we’re holding it together.”

23

MAY/JUN 2020 | BUSINESSPULSE.COM

about a 6 out of 10. is extremely hard to control, medical PeaceHealth St. Joseph Medical “I know that a lot of it is preventa- facilities themselves can see increased Center is the county’s only hospital. In tive measures,” he said.”And I think numbers of infections. On March 22, normal times, hospitals in the Seattle we’ve done a good job of communicat- Whatcom County announced 32 con- area can supplement local need, but ing that to people in the during a widespread pancommunity.” demic such as this one, Nowhere has the they don’t necessarily have COVID-19 crisis been extra beds. And in the felt more strongly than event of an outbreak at St. in healthcare. As news Joseph, Whatcom Counfrom around the county would have to get really try and world is making creative — and quickly.

–Wally Kost, Whatcom Unified Command clear, insufficient medical Some locales, such as Seinfrastructure — on the attle and New York City, pandemic-fighting scale, anyway — is firmed cases of COVID-19 associated have created field hospitals to quickly a problem. Many locales do not have with Shuksan Healthcare Center, a fa- grow the number of beds available for enough staff, respirators, personal pro- cility that emphasizes short-term stays treating people. tective equipment, beds or supplies to to help people recuperate after hosWhatcom County, however, has so handle the huge number of infected pitalization. Those cases brought the far has been spared a worse crisis. In people COVID-19 is expected to send total infected in the county to roughly fact, it has been PeaceHealth that has to them (or is sending them already).

50 at that time; it has since grown to been supplementing need, supporting Worse, given that this coronavirus about 300 as of press time.

Shuksan Healthcare Center with ad-

“It is so heartening to see our

community stepping up to the plate in this time of need.”

“WECU isn’t just where we bank. They are a business and community partner.”

Adrienne Renz, General Manager at Community Food Co-op WECU Business Member

wecu.com | 800-525-8703 Local Understands Local

24

BUSINESSPULSE.COM | MAY/JUN 2020

Insured by NCUA

ditional workers, including registered nurses, nursing assistants and licensed practicing nurses. These nurses and assistants volunteered to work full time at Shuksan to help meet the need there. On March 23, PeaceHealth also began providing daily meal service for Shuksan, with Whatcom Transportation Authority pitching in to deliver the meals to that facility from PeaceHealth’s kitchens. Whatcom Unified Command also was working to organize cleaning support at Shuksan.

Gargett, Sidhu and Christensen all praised the ease of communication that Whatcom Unified Command facilitates. As new information is shared, county leaders are adjusting plans. For example, Christenson said, Sumas has made staffing changes and adjusted procedures.

“We’re not doing passports where you have to do direct contact and fingerprinting,” he said.”We don’t want to break that six-foot barrier.” And that’s not all. All city governments in the county have stopped doing all but the most essential things.

There are also larger responses that Whatcom Unified Command helps make happen. For example, in the middle of March, Whatcom County received $905,821 from the Washington State Department of Commerce to use for emergency housing.

This money was earmarked to create isolation and quarantine housing, create more homeless shelter capacity to accommodate social distancing, and beef up sanitation for existing housing for the homeless. Some of these funds were used to relocate the Lighthouse Mission’s Drop-In Center to the Bellingham High School building.

Whatcom Unified Command’s Border Task Force is addressing issues

arising from the closure of the border with Canada to all but essential traffic, and the Economic Impact Task Force has been marshaled to support local business needs. Whatcom Unified Command also is coordinating donations from local businesses, including BP Cherry Point refinery and Petrogas. The BP Cherry Point refinery in Ferndale donated $60,000 for software and training to help launch Whatcom Unified Command in March, and then in April it donated another $25,000 in essential resources, including much-needed personal protective equipment. That equipment included more than 3,000 Tyvek suits, 300 lab coats, 5,700 gloves, 1,500 booties and, in partnership with Northwest Solutions, 100 gallons of hand sanitizer.

“This is an ongoing and essential need for our community,” said Pam Brady, director of external affairs at BP Cherry Point refinery, in a press release.”We are glad that we could share these resources with the community.”

BP wasn’t alone. The Petrogas Ferndale Terminal has donated more than 1,000 suits of personal protective equipment and 12,000 gloves to Whatcom Unified Command for use by healthcare workers on the front lines, and it has pledged to donate more. And Axon, a company that provides protection for law enforcement, has donated gloves for use by first responders.

“There have also been several generous, anonymous donors,” said Wally Kost, a Whatcom Unified Command branch manager responsible for securing and distributing essential supplies, in a press release.”It is so heartening to see our community stepping up to the plate in this time of need.” ■

PHOTO: iStockphoto. com/farosofa

Health disruptions have not been the only casualty of COVID-19. Closures and lockdowns to prevent the spread of the disease have led to massive economic losses at both personal and business levels. Insurance deals with risk and losses, so how does Marty Stauffer advise people to insure against something like this?

“You don’t,” Stauffer said, bluntly.”It’s not something you have plans in place for.”

Is insurance going to bail out any small businesses in the county? Probably not, said Stauffer, who has reviewed many standard insurance policies, line by line, looking fo.”gray areas.”

“In reviewing these policies,” he said.”I don’t see anything in regard to airborne illness.”

There are potential loopholes for enterprising lawyers to pursue, Stauffer said, but he doesn’t expect them to prevail. To the extent that insurance companies try to help people out in regard to this coronavirus outbreak, they will do so b.”moving billing periods and waiving late fees,” he said.”They’re not going to go back and add coverage that wasn’t there to begin with.”

25

MAY/JUN 2020 | BUSINESSPULSE.COM

BP BUSINESS PROFILE

“I still have the passion.

There is a passion in creating something for the public.”

PHOTO: Tiffany Brooks

Jesse Cantu: Mexican, Italian and the American dream Elisa Claassen Jesse Cantu returned from a Florida vacation in the midst of the COVID-19 outbreak. Arriving on a Friday night with a few delays — including dropping off another couple struggling to find transportation home — Cantu immediately faced Gov. Jay Inslee’s order closing various businesses, including restaurants, as a protective measure. Ouch. Not only does Cantu own a restaurant, he owns four of them.

That includes three Jalapeños restaurant locations — in downtown Bellingham, Barkley Village and Fairhaven — and Luna’s Bistro.

Did COVID-19 take him by surprise?

“Yes, it did.”

Fortunately, he and his son Daniel Cantu, hi.”right-hand man” at work, already had been working on being more competitive prior to the COVID-19 issue.

“The food industry is changing,” Jesse Cantu said.”Most

26

BUSINESSPULSE.COM | MAY/JUN 2020

grocery stores have a restaurant inside, and there’s a lot of competition with Mexican food.”

Even eateries of other types include Mexican dishes on their menus, he said, such as tacos. Being more competitive meant investing in bringing food to people.

“It’s full speed ahead on deliveries,” he said.

He ordered two vans in December 2019, and a third is to come soon. The vehicles will allow for delivery and full-service catering offerings. Cantu announced on Facebook March 21 that they were ready to start deliveries and bring food directly to patrons sequestered at home to help prevent the spread of COVID-19. Good food still can be made and enjoyed, Cantu said, but it could be hard on profit margins since 10 of his employees are salaried, not hourly. Each purchase represents the creation of work hours.

Another result of COVID-19 has been the strong aware-

ness of the importance of his employees’ health.

“I sent a text that if anyone was sick to stay home,” Cantu said.”Everyone I know is healthy, but stay home if sick… whatever the reason.”

Cantu sent care packages — containing such perishables as milk, eggs and chicken that the restaurants had ordered — home with employees to help support their families.

When new employees are hired, Cantu likes to take part. He finds it important to be involved in the interviewing process, he said, so he can know who is working for him.

“Everyone is responsible,” he said.”I have very good managers, some of whom have been with me for over 10 years (including two brothers, Jose and Leo Doniz, and brother-in-law George), and great employees.”

Learning to shift and be nimble Cantu, raised in Mexico, found himself at age 23 having to leave college due to a lack of funds.

“I needed a job,” he said.

His sister Elvia, then married and living in Houston, made him a proposition: She would help him find a job in the food industry. He had absolutely no experience in the food industry, but he made the move and was willing to start in the kitchen, doing dishes.

Before long, he observed what was happening around him. He noticed that others were making more money, while he was working from 10 p. m. to 6 a. m. six nights a week. Within three years, he was chef in the kitchen.

He made a few moves after that — back to Mexico, north to Minnesota, and then, around 1979, to Chicago. He eventually aligned with the exclusive Country Clubs of America at a private club in Atlanta. In contrast to his first

PHOTO: Tiffany Brooks

job, this was a fine dining room located on the 49th floor. He was still learning English but went from being a bus boy to a supervisor for almost two years.

He continued to move onward and upward, from one first-class establishment to another. He moved back to Texas to another club, The Plaza Club. With a letter of introduction in hand, he became, in turn, captain of the bus boys, server, bartender and captain. After three or four years there, he shifted to the elegant Hotel Houstonian’s privately owned club and then to Houston’s first luxury hotel, then known as the Warwick Hotel (now Hotel ZaZa), managed by Wyndham Hotels. During his Texas years, he not only met President George H. W. Bush and President Bill Clinton, but the woman who would become his wife, Alicia Cantu.

Alicia had come into his office claiming to be a prospective client, Cantu said.

“I got a call from the front desk to book a party,” he said.”She was 20 at the time, introduced herself and said she actually wanted a job. She was honest and wanted to pay for school..”I gave her a job.”

Their friendship developed, and they eventually married. When Alicia was taking marine biology classes at Texas A&M University in College Station,

he was working at The San Luis Resort, Spa and Conference Center in Galveston, on the other side of Houston.

“She’s been my rock, my support,” he said.”She knows when I’m stressed, panicking. Prosperity is one thing, but the first three years were hard.”

“She’s my best friend. . . my whole life.”

Soon, Wyndham was asking for his help in Washington at the Semiahmoo Resort in Blaine. The resort needed his expertise with banquets to organize and update the systems. Alicia was thrilled to move to the Northwest.

After his five-year contract ended, Wyndham gave him a choice of where to move next.

The choice: Stay in Whatcom County “My wife was in love with the Blaine School District,” he said.”She wanted to stay. So, what to do next?”

The result was his first Jalapeños restaurant, at 501 W. Holly Street in downtown Bellingham. The opening date was March 1999. After painting and cleaning, he experienced a first.”I was working for myself.”

As in many first starts, he was working a lot — one of just two or three employees.

“It was hard,” he said.

(Continued on page 43)

27

MAY/JUN 2020 | BUSINESSPULSE.COM

BP PERSONALLY SPEAKING

PHOTO: iStockphoto. com/piepereit

Travel won’t likely unravel Sandy Ward remains busy and optimistic, even with the door slammed on her tourism team Mike McKenzie Sandy Ward puts our region on the map. Literally. And in brochures, in magazines, and to millions through the internet. Anywhere the trademarked BE (Bellingham Experience) can attract travelers, and inform them on where to eat, sleep, and be merry. Sandy, just three-plus years into her position as president/CEO of Bellingham Whatcom County tourism, has moved the organization to a seven-figure budget, attracting over $700 million in travel & rec visitation.

Cue the sound of a screeching halt.

Circumstances far beyond extraordinary drew Sandy’s professional and personal world to standstill status. When we first sat down for conversation, very early in March, the agency’s doors already were closed to public, some travel cancelled, and we bumped elbows instead of a handshake or hug in greeting. Within a week, due to virus vicissitude, all doors slammed shut. Tourism’s louder than most. Much of our content became moot points. Hence, working backward, the give-and-take with Sandy begins at the end.

28

BUSINESSPULSE.COM | MAY/JUN 2020

BP: Your industry is surreal, in slow or even no motion. What’s the trickle-down effect to the local level?

SW: Whether national, county, city, local — we’re all in the same boat. People are really not able or allowed to travel.

We’re told to shelter in place, stay home and not travel. Interestingly enough, we received an email reply from Bend, Oregon, when we requested a visitor’s packet, that said.”Your Bend vacation can wait. Stay home. When this passes, then we want you to come.”

BP: Any alternatives?

SW: No. Some cities on the Washington coast shut down their roadways because people were flocking to beaches and trails, going on hikes and not doing social distancing, which defeated the purpose. With th.”Stay Home, Stay Healthy” order, people started heeding the advice and only left home for essential reasons.

Read more with Sandy Ward online at www. businesspulse. com

BP: Are you optimistic?

SW: When recovery starts, we know Bellingham and Whatcom County will be in a good position, because we sit between two giant easy-drive markets — Seattle and Vancouver, British Columbia. That’s millions who don’t have to take an airplane. Drive markets with outdoor activities usually recover more quickly than the fly-in markets during downturns.

BP: What actions have you taken now that your office is closed?

SW: Immediately at the end of February, we rescheduled the inclusivity training for staff that was set for March 16. Also, before the mandated closures of non-essential businesses, we closed our visitor centers to the public because many of our volunteers are in the highrisk category for the virus. The only events we stage, Tastes of Tourism, are cancelled. Tastes of Tourism features restaurants that donate all the food. It puts them in a precarious position, and that’s a lot to ask of them.

Our only other event is the annual meeting of membership, now postponed from May until October, but without food.

BP: What’s your crystal ball say?

SW: All of our partners are suffering and laying off people. But here’s the interesting thing: I’ve been in this industry my entire adult life and seen recessions and other things that cause chaos, and what I know is that people will do without a lot of things.

From new carpet and drapes to foot deodorant.

But they will not do without their travel and leisure activities. All around us, major events have evaporated. Ski to Sea had been going 46 years.

BP: What exactly is the agency’s purpose?

SW: Our job is to publicize and promote to bring visitors in for all events.

We don’t produce events. We do cooperative ad buys — for example, either Alaska Beyond (airline magazine) or AAA Journey. We’re going to do one in Allegiant Airlines’ in-flight magazine, Sunseeker, in the July-August issue so that people flying to and from the West Coast, Las Vegas, Arizona and Bellingham will learn all about Bellingham SeaFeast while flying.

BP: How are you structured?

SW: We’re a 501(c)(6) nonprofit that’s been around since 1978. We have a board of directors; they’re my boss.

We have seven full-time employees and three part-time, and about 30-plus volunteers. That could change temporarily, given the current circumstances surrounding COVID-19.

BP: Where does your funding come from?

SW: We’re funded mostly with hotel/ motel taxes from City of Bellingham, from unincorporated Whatcom County — which includes Birch Bay and Lummi Island — and a bit from contracted partnerships with the Port of Bellingham, Blaine and Lynden.

We also have funding from advertising sales and membership.

BP: Can you tell us about your budget?

SW: It’s around $1. 2 million per year.

We own our building, so the bulk of our money is spent on marketing, advertising and media outreach, which includes salaries. We are about 85% funded by hotel/motel taxes and the rest from dues and ad sales (for inhouse publications).

BP: What’s your No. 1 priority?

SW: Stewardship, above all else. Sure, we need to spend wisely to replenish our funding. But mostly, we want to

make sure that the people who live here can coexist with the visitors we bring — that those visitors share our values. Example: We value the environment and the outdoors, so we want people who visit Bellingham and Whatcom County to share our commitment to protecting it. We believe in sustainability, so we want our visitors to feel the same way so we can all coexist while having a positive impact on the economy.

BP: Your role is basically marketing, then.

SW: Yes, we are a destination marketing and management organization.

That’s our whole job. A lot of people in town don’t know about what we do because we don’t advertise locally.

We want to offer visitors from far enough away plenty of fun things to do that keep them circulating around the county so they’ll spend the night.

They spend money differently than people who live here. And we want them to have so much fun that they will come back again and recommend us to others.

BP: Where do people find you?

SW: At our visitor centers. Besides our main one off of Lakeway (904 Potter St. ), we have one at Village Books, one at the cruise terminal in Fairhaven, one at Woods Coffee in downtown Bellingham’s Flatiron Building on Bay Street, one at the Bellingham airport, and one at Bellis Fair Mall.

BP: What’s your main source for recommendations?

SW: Reviews on websites such as Tripadvisor and Expedia and direct response from ad campaigns and media coverage in magazines and online. We had around a million visitors to our website last year, and we have a huge

29

MAY/JUN 2020 | BUSINESSPULSE.COM

social media presence on Instagram, Facebook, Twitter and our YouTube channel, where we are known as @BellinghamExperience. Further, we do a number of publications: a visitor guide, a hiking guide and some other collateral materials. We mailed about 10,000 visitor guides last year to potential visitors outside the area. Another 15,000 were distributed around the Puget Sound region, and the balance went to local hotels, restaurants and attractions.

read in an article more than they believe in advertising. Finally, if you want to see what people are saying about us — around the world — you can go to the www. bellingham. org media link and look for articles and coverage.

BP: How else do you spread the word?

SW: We attend a lot of trade shows meeting consumers and tour operators and wholesalers and travel agents. We have a very comprehensive media outreach program to get stories written about our area. With Annette (Bagley, director of marketing), we work on bringing in travel writers. And we know that people believe what they

We share all of our information with the state of Washington and get reports back that tell us the economic impact of the industry, including hotels/motels, retail, restaurants, gas stations, transportation, entertainment, those kinds of things.

30

BUSINESSPULSE.COM | MAY/JUN 2020

BP: How do you measure results?

SW: We measure our activity with industry research that tells us average daily rates and occupancy trends, so we know how full the hotels and shortterm rentals are.

From that annual report, we know that over $705 million was spent by visitors

in 2018. We haven’t gotten the 2019 information yet.

BP: What’s the biggest spend?

SW: Restaurants. People who come here like to eat, and restaurants were expected to be the first businesses to recover after COVID-19.

BP: Where do people come the furthest from?

SW: We see people from all over the world. India, South America, Mexico, Australia, the United Kingdom and Germany work really well for our destination because they like to hang out with locals and drink beer, for which we are famous, and they enjoy the great outdoors.

BP: All that you’re describing makes you an economic driver, doesn’t it?

SW: Yes, we’re an economic development agency, and the way we drive the economy is by bringing in outside visitors with outside money. We’re another economic development tool in the toolbox that Bellingham and Whatcom County and Port of Bellingham have, and we succeed when everybody works together. We also know that tourism is what we call the front door of economic development. A lot of times, business owners or corporations come here for vacation and they look around and they say.”Gosh, this would be a great place to live. I could bring my business here.” Many businesses came here first as a visitor — it’s really common here.

BP: Do you see light at the end of the tunnel to ramp back up?

SW: Absolutely. The flower festivals might be off, but the daffodils and tulips are still growing. Earth knows what to do — birds, the soil, flowers, plants… none of that has changed. We humans will get through this together and recover quickly once the coast is clear. ■

GUEST COLUMN BP

PHOTO: iStockphoto. com/brankospejs

A path to recovery Resources to help your business regain its footing C. J. Seitz As our battle with the novel coronavirus and its many impacts continues, we can start planning our recovery. A number of organizations in Whatcom County are part of that important effort.

In March, Whatcom Unified Command designated the Regional Economic Partnership, led by the Port of Bellingham Economic Impact Team, as the lead economic impact agency and the lead coordinating organization for Whatcom County.

The Port of Bellingham is our state-designated associate development organization, authorized and empowered to work directly with the Washington State Department of Commerce in stewarding economic development in Whatcom County.

The Port of Bellingham created the Regional Economic Partnership to deliver a coordinated, efficient and responsive development ecosystem. During the coronavirus crisis, the partnership assures that all efforts for assessing and addressing economic impacts are coordinated, helping ensure that businesses and entrepreneurs receive con-

sistent and correct information and access to resources.

The Bellingham Regional Chamber of Commerce is taking the lead on organizing and coordinating with all Whatcom County chambers responsible for networking and disseminating

daily updates on Facebook (facebook. com/BellinghamSBDC) and offers a weekly newsletter focused on getting Whatcom County back to work as this crisis subsides. Our state agencies are also working diligently to support business and have offered regulatory, remit-

“We urge you to remain hopeful, as everything we are learning points to widespread economic relief.� information among their members. The Western Washington University Small Business Development Center was assigned the lead on technical assistance for businesses, providing access to resources as they become available and acting as the business and entrepreneur resource hub for the county. The SBDC monitors emerging recovery assistance opportunities, disseminates vetted program information and provides assistance in gaining access. To more effectively fill this role, the SBDC is offering a link on the center’s home page to business continuity resources, a regularly updated selection of information about local, regional, state and national recovery resources. The SBDC also provides

tance and financial relief programs. The Washington State Employment Security Department has eliminated waiting periods, suspended job search requirements and extended standby times to help both employers and employees gain greater flexibility during this crisis.

The Paid Sick Leave program can help employees maintain income during this crisis, providing paid leave for workers to care for themselves and their families and to look after children out of school due to health-related closures. The Paid Family and Medical Leave program can provide paid leave benefits for absences due to a serious health condition or to care for a family member. The Washington State Department of Revenue is

31

MAY/JUN 2020 | BUSINESSPULSE.COM

asking all businesses to continue to file returns and renewals in a timely manner but is offering relief for payments due.

Your Western Washington University Small Business Development Center has served the Whatcom County businesses community for more than 35 years with free and confidential technical assistance to help you survive and thrive. Business owners face complex challenges every day. You and your company resources may be stretched thin. Competition may be tough, and new challenges await you at every turn.

There is much uncertainty right now, and we are all anxious to get Whatcom County back to normal. We urge you to remain hopeful, as everything we are learning points to widespread economic relief. As part of that relief, our team is here for you! While it will be some time before we can again invite you to our offices, we are pleased to continue to offer our free and confidential services online via Zoom meetings, phone calls and email correspondence. Please continue reaching out; we are committed to being here for all of you for as long as it takes.

Working with an SBDC adviser allows you to focus on what is most important to achieve your personal and business goals. They will help guide you through tough, strategic decisions to drive your business forward. You can trust your SBDC to get the most upto-date guidance on program availability, recovery planning and one-on-one assistance.

With experienced, professional advisers and talented research associates, your SBDC can serve as your recovery Sherpa, guiding you to the summit of success.

Please visit sbdc. wwu. edu to access resources specific to Whatcom County. ■CJ Seitz is the director of WWU’s Small Business Development Center. She has more than 20 years of experience in executive planning, administration, financial strategy and marketing in non-profit and private sectors.

32

BUSINESSPULSE.COM | MAY/JUN 2020

ENVIRONMENTAL OP-ED BP

Lamenting (and learning from)

lost dollars

The environmental lessons of the coronavirus and the economic downturn Todd Myers When times are good, the cost of things sometimes is of little consequence. We buy the top-shelf whiskey.

We get those fancy shoes we wanted.

We eat a nice steak.

We may pay more than we should, but in good times, paying that little bit extra can be part of the fun. Waste can be a signal to ourselves, and to others, that we are having fun.

That is the attitude many politicians and activists in our state have had for the past several years when it comes to environmental policy. Economic times were good. We could avoid hard decisions. However, the economic downturn we are now facing due to the coronavirus should be a reminder that every dollar is precious and that wasting taxpayer dollars is not only harmful to our economy but also harmful to the environment.

Climate policy is one clear example.

Rather than prioritize the most effec-

PHOTO: iStockphoto. com/kativ

tive carbon dioxide-reduction projects, some Washington legislators chose far less effective climate policies as a way to virtue signal t.”social justice” activists and other political supporters about how much they care.

“The economic downturn we are now facing due to the coronavirus should be a reminder that every dollar is precious and that wasting taxpayer dollars is not only harmful to our economy but also harmful to the environment.”

During the most recent legislative session, Gov. Jay Inslee’s top climate priority was to impose a low-carbon fuel standard designed to reduce transportation-related carbon dioxide emissions. This type of policy is already in effect in California and Oregon, so we

have a good estimate of the cost it imposes. Currently, the low-carbon fuel standard costs about $150 to reduce one metric ton of carbon dioxide in Oregon — about 27 cents per gallon of gas when the policy is fully implemented. The cost is even higher in California — about $200 per metric ton, which translates to 36 cents per gallon.

By way of comparison, anyone can spend $10 today to reduce one metric ton of carbon dioxide by investing in projects through groups like the Bonneville Environmental Foundation.

These projects are certified by independent auditors, and the state promotes them in the Clean Energy Fund. Rather than investing in effective projects, however, Washington politicians are pushing policies that spend $150 to get only $10 worth of environmental benefit.

It gets worse.

Last year, Washington state used money from the Volkswagen legal settlement to fund electric buses. According to our estimates, this costs an incredible $1,538 per metric ton

33

MAY/JUN 2020 | BUSINESSPULSE.COM

of reduced carbon dioxide. The state Legislature also adopted legislation to subsidiz.”community solar” projects that put rooftop solar (the most expensive form of energy) on roofs in Washington (one of the worst locations in the country for solar). Using data from Google and the National Renewable Energy Laboratory, we calculated that those subsidies cost $1,629 per metric ton of reduced carbon dioxide.

This problem is not limited to climate policy.

Washington state is spending $750,000 to study the impact of the Snake River dams on salmon populations. This simply echoes a more comprehensive study from the federal government and decades of research

by National Oceanic and Atmospheric

Administration Fisheries. Meanwhile, there are several unfunded salmon-recovery projects in north Puget Sound that could help salmon and orca populations in the near term. Instead, legislators chose to spend the money on yet another study.

Spending money on protecting the environment is not the problem.

Indeed, I applaud that. That is one of the wonders of economic prosperity — we have the resources to help salmon, preserve open spaces and protect the environment. I spend my own money to reduce carbon dioxide emissions and fight against plastic in the ocean.

The sin is wasting money that could have helped the environment.

Wasting opportunities to maximize environmental benefit will end up harming the environment. Now that budgets are tight, we should lament, and learn from, those lost opportunities.

I don’t know what will happen with the economy over the next year. Nobody does. But I hope the lesson we take is that it is important — in good times and bad — to get the most out of every public dollar we devote to environmental stewardship. ■ Todd Myers is the director of the Center for the Environment at Washington Policy Center. He is one of the nation’s leading experts on free-market environmental policy. Todd is an author and researcher. He formerly served on the executive team at the Washington State Department of Natural Resources.



34

BUSINESSPULSE.COM | MAY/JUN 2020





FINANCE BP

PHOTO: iStockphoto. com/wildpixel

COVID-19: the market gets a virus Building a plan, sticking with it still best course of action Nathan Twining Over the past month, global markets have seen rapid declines due to fears about the impact of the coronavirus. Almost everyone is now familiar with the origin and spread of the virus that causes COVID-19, along with the massive efforts to slow its advance. But for those invested in the stock market, the more personal questio.�How will this impact my future?� is very real.

While no one can predict the future, and while each investment situation is unique, we can at least provide a bit of historical context and real numbers that help support a case for maintaining a level head and sturdy hand when it comes to your investments.

Is this unprecedented?

Yes and no. Since 1970, there have been several epidemics with the poten-

tial to impact economies, many with a much higher mortality rate than the current pandemic. In some cases, there was a drop in markets, and in others, the market shrugged it off and continued upward. The chart below shows some of those epidemics and the returns 1, 3,

and 6-months post-epidemic.

What is unprecedented is the abruptness of this drop, as is the reaction of governments around the world. We have experienced dramatic personal restrictions, as well as some of the largest daily market movements

Note: MSCI World Index scale is reflected in the left vertical axis. Source: Charles Schwab, Factset data as of 1/21/2020. Past performance is no guarantee of future results.

35

MAY/JUN 2020 | BUSINESSPULSE.COM

in history, with double-digit percentages being almost commonplace. The market, being an efficient aggregator of current emotions, fears, risks and future possibilities, is incorporating the vast implications of the virus at a rapid clip.

Spend more time with your guests and leave the cooking to us. From convenient On-the-Go platters to Full Service event planning, Market Street Catering by Haggen can take care of all the details.

1.866.912.2233

www.marketstreetcatering.com 210 36th Street, Bellingham

36

©2019 Haggen • 190612-05

BUSINESSPULSE.COM | MAY/JUN 2020

How does this impact me?

That largely depends on how well you prepared. If you have a good financial plan (one that you can stick to) and a well-diversified portfolio, the impact to your planning goals should be minimal. Well-diversified portfolios are designed to withstand volatility and recover from it. That doesn’t mean your portfolio won’t go down in value, but it should help mitigate the more extreme drops. Your plan should already account for short-term spending and withdrawal plans during down markets. If, however, you have a concentrated portfolio of individual stocks or other asset classes and/or a poor plan (or a good plan that you choose to abandon), you will likely experience substantial losses that may never be recovered. These are the real risks of owning a concentrated portfolio of individual stocks or of selling everything during market declines. Unfortunately, this is a lesson that largely seems to resonate only after it’s too late.

No one should invest with the expectation that bear markets or volatility will never strike. You might be surprised to recall that since 2009, the S&P 500 has experienced drops of 5% or more 26 different times, with a variety of concerning headlines to go along with each. Stocks are volatile, and your plan needs to account for that.

What should I do?

The temptation to fret over the drop and impulsively sell your investments will strike early and often. Pessimism

and gloomy headlines will continue to dominate the news. While selling everything and sitting on the sideline might feel better in the short term, it is likely to devastate your long-term goals. There is no telling when the market will stop dropping, and often the largest single-day gains in markets come during the most volatile times.

Missing out on those large gains has a huge impact on your returns. Your investment plans should not hinge upon successfully timing drops or recoveries in the market, as that has been attempted innumerable times with dismal results.

Instead of retreating from a market downturn, the best course of action is to be proactive within the context of your plan: If you have lots of cash sitting on the side, now is a good opportunity to evaluate how that fits into your long-term goals. Talk with your financial adviser. Look for opportunities in tax-loss harvesting, in rebalancing your portfolio back to target allocations, or in taking advantage of Roth conversions.

Having a disciplined process on which to rely during times of market duress is invaluable. If you don’t have a plan or are feeling lost, seek out a qualified adviser to help you navigate. Build a plan and stick with it; your future is (still) bright. ■ Nathan Twining, CFP®, is a Lead Advisor and Principal with Financial Plan Inc, in Bellingham. Following his career as a civil engineer, Nathan found fulfillment planning for and serving the financial needs of clients across the country. Distilling complex plans into concise objectives is something of a professional hobby and Nathan is passionate about bringing objectivity, trust, and honesty to the Financial industry. Outside of work, Nathan can be found spending time with his wife and three daughters, golfing, reading, mountain biking or behind the drum kit. He is proud to be a member of Rotary International’s Rotary Club of Bellingham.

AGRICULTURE BP

The sow must go on

The COVID-19 pandemic complicates things, but Washington farmers and ranchers will press forward Pam Lewison Like any other business owners, farmers and ranchers are no strangers to challenges.

Whether it is a downturn in commodity prices or a global pandemic, the agricultural industry maintains an ever-present drive to produce and continue forward.

The recent emergence of COVID19 has not changed agriculture fundamentally, but it has highlighted some of the pressures farmers and ranchers in our state face annually.

As seasonal work begins to pick up in agricultural production, the need for employees increases as well. The 2020 demand for labor is the same as or greater than it was in 2019. The question that weighs heavily on the minds of agricultural employers is where their labor force will come from.

Washington state relies on the federal H-2A temporary agricultural jobs program to fill the needs of many farmers, particularly in the tree fruit industry. There had been concern in recent weeks that H-2A workers from outside the United States would not be allowed into the country due to travel restrictions. However, H-2A workers who have previously worked in the United States now will be allowed to work through the season here.

Once the workers arrive, there is an additional problem: the Adverse Effect

Wage Rate. The federally mandated H-2A wage for Washington state, currently set at $15. 80 per hour, operates as a driver for wages for the domestic and temporary work forces. When a farm hires an H-2A worker, an employer is required to pay all workers at the same rate as the H-2A worker,

habits and contract availability to how long the COVID-19 crisis lasts.

A final note during this chaotic time: farmers and ranchers have been recognized by the United States Department of Homeland Security as providing an essential service. The reason for that is simple — the production of

creating artificially high costs for all workers regardless of hiring status.

Beyond labor concerns going into the busy farming months, commodity prices and markets are currently fluctuating unpredictably. When demand in grocery stores goes up — shelves being emptied of flour, cold cases bereft of meat — there is a perception that commodity prices are on the rise. Higher market prices do not necessarily reflect a price increase at the farm gate. Market volatility is part of the agriculture industry. Whether it will last depends upon factors ranging from purchasing

healthy, affordable food is critical to all of us. Washington’s farmers and ranchers have long been an important part of this state’s economy and will continue to be as we move forward beyond the current trying times and into the next farming season. ■ Pam Lewison is a fourth-generation farmer from Eastern Washington and the agriculture research director for the Washington Policy Center. She has a master’s degree in agricultural leadership, education and communications from Texas A&M University and completed her undergraduate studies at Washington State University. You can read more of her research at www. washingtonpolicy. org.

37

MAY/JUN 2020 | BUSINESSPULSE.COM

BP NEXT GENERATION

PHOTO: iStockphoto. com/Rawpixel

14 and a fiscal conservative Seeing the world as a financially savvy ninth grader Dylanger McKissen I began paying attention to politics in 2015, when I was 9 years old. My dad would tell me about this famous businessman running for the Republican nomination and about a mostly unknown senator trying to upset a Clinton dynasty. I didn’t always understand what he or the politicians were talking about, but I knew one thing: I was going to be like them one day. I was going to make a difference.

I immediately began an intensive process of teaching myself about U. S. history, political ideologies and basic economics.

I began thinking about who I was and what I believed in.

I delved deep into the black hole that is Wikipedia. Even then, I knew that a fifth grader who sequestered himself

38

BUSINESSPULSE.COM | MAY/JUN 2020

daily to learn the ins and outs of the Ford administration or the Gulf War was unusual. This experience sparked my interest in conservative ideas, and especially in conservative economics.

Where I’m coming from My dad and I go on an annual summer road trip. In addition to driving all over the country, I’ve lived in Arizona, Florida, Missouri and Washington. From Trump country in West Virginia to the cities most friendly to Alexandria Ocasio-Cortez, I’ve seen America for what it is: a diverse group of some of the best people in the world. Sometimes those people passionately disagree with each other, but I have had amazing friends and neighbors in the conservative community we used to live in in Missouri, and amazing liberal

friends and neighbors we’ve met since we moved to Bellingham.

Seeing the effect that regulation has on the different places I’ve visited and lived has drawn me closer to the ideals of center-right economic policy.

In Missouri, my older sister started working at our neighborhood coffee shop when she was 15. She held that job for four years and learned a lot. My little sister and I used to love visiting her for hot chocolate.

There is much to love about Washington and Whatcom County, but when we moved here I started learning about our local economy and the issues affecting businesses. I know my sister would most likely not have had the same opportunity to get a job in a coffee shop at 15 if we lived in Bellingham. Having concerns about the minimum wage doesn’t mean I want anyone to be poor, hungry or struggle for a place to live. It just means there are practical implications to our policies.

And that’s what fiscal conservatism is all about: practicality.

What does being fiscally conservative mean?

From my experiences, knowledge and understanding, conservatism focuses on using one’s (or a nation’s) resources as effectively as possible while balancing all other factors as fairly as possible. It means protecting the lives of those who cannot protect themselves. It means applying to the nation the same financial logic we use in our personal lives.

It is completely possible to be pro-business and fiscally conservative while holding social ideas that don’t align with the politicians you believe have your best economic interests in mind. Supporting policies that help families pay their bills, maintain their dignity, and, if they are business owners

(like my parents), create opportunity for others, does not make you a liberal or conservative. It makes you a compassionate, reasonable person.

In my family, people disagree on politics. Let’s just say my sisters do not have the same affection for Ronald Reagan and George H. W. Bush that I do — and that’s OK. They know who I am and what’s in my heart, and I know the same about them. Disagreeing on tax policy and the minimum wage should never be a reason to demonize someone. In the end, everyone wants the same thing for themselves and for their neighbors: an economically secure life in which they can achieve their version of the American Dream.

Being a 14-year-old conservative means your friends and siblings sometimes don’t agree with you — until they hear why you believe the things you do. It helps if you can share your 35 LUXURY ROOMS

ideas with them while still respecting who they are and what they believe.

We should never believe a person is bad just because we believe their idea is bad.

And if you are 14, you should remember that sometimes economic conservatism can give you a job that you can learn from and be proud of and that can give you the skills you need to make money later in life. Wanting that job doesn’t make you a Democrat or a Republican.

It makes you the one kid in your class who has money in their pocket.

Dylanger McKissen is an eighth grader at Meridian Middle School. He will be the ninth grade associated student body vice president for the incoming class of 2024 at Meridian High School. He is involved in track and field and basketball and has many personal interests, including U. S history, politics, economics and astronomy.

MEETING ROOM

100 5th Street, Lynden, WA

360/746-8597

SHOPPING & DINING

www.innatlynden.com

39

MAY/JUN 2020 | BUSINESSPULSE.COM

and overcome any obstacle that comes their way. Even a pandemic.

“I am and always will be proud to call myself a Whatcom County farmer,” said Galen Smith.”I have traveled

challenges, but I guarantee you that the ag community will help lead us (Continued from page 18) through those challenges.”

Farming, ranching and agriculture has endured near-constant change. aren’t the most glamorous industries.

Small farms have had to develop inThey literally require novative strategies a willingness to roll just to compete. The Farmers and ranchers will always do what up your sleeves and local, regional and get your elbows a national dialogue they do best: see a challenge, identify a little dirty. They also around genetically require an ability to modified foods chalsolution and get the job done.” roll with the punchlenges producers to -Pam Lewison, director of the Washington Policy Center es and to make the communicate comInitiative on Agriculture best possible hand plex issues of food out of the cards the safety and farm productivity in a way that helps consumers across the region, across the country world deals you. No one expected or understand exactly what a genetically and across the world. I might be bi- wanted a pandemic that caused a temmodified organism actually is. Short- ased, but many of the best, smartest, porary shutdown of the local, state and comings in trade policy and the grow- toughest, most resilient people I have national economies, but farmers and ing relevance of international financial ever met live in this community. They ranchers live with the unexpected and markets are additional sources of con- are farmers and ranchers, for sure, but unwanted nearly every day. Some days, stant change. Really, the only constant they are also leaders. They are innova- they need a little sunshine, and all they in agriculture is change — but area tors. They believe in this county and its get is rain. Sometimes a deer gets into a farmers are ready to cope with change people. The months ahead will present crop. Sometimes milk prices plummet.

If the expected was all they could rely on, Whatcom County farmers would have a lot less to worry about. But that isn’t how farming works. In farming, as in life, the only thing you can count on is change.”Farmers and ranchers might be quiet leaders, but they are leaders,” Pam Lewison said.”They always will be. 2020 will differ from what we forecast for the industry. How different will it be? Time will tell. But in the long run, agriculture will continue to be one of Whatcom County’s most essential industries, and in the short run, the importance of agriculture shows just how critical some of our traditional industries are to local economies.”

In other words, the unexpected events of 2020 are a reminder of how important the basics are: an evening spent with your child, a healthy grandparent, a roof over your head and a strong local agriculture sector that will keep food on your table. ■

Agriculture

“

40

BUSINESSPULSE.COM | MAY/JUN 2020

GUEST COLUMN BP

PHOTO: iStockphoto. com/phonlamialphoto

PHOTO: iStockphoto. com/PhonlamaiPhoto

Jim McKinney First printed in the Epoch Times, April 1, 2020; updated April 22, 2020

The COVID-19 pandemic and subsequent global economic shutdown has had dramatic consequences for numerous industries. The shutdown has forced London Metal Exchange prices for aluminum below sustainable levels for U. S.-based producers.

Heavily subsidized Chinese aluminum producers will soon cost more U. S. manufacturing jobs. Today, April 22, Alcoa announced the curtailment of its Ferndale Intalco smelter, a move that will impact the local and state economies and drive the U. S. deeper under Chinese control of a critical defense-related industry.

Prior to the virus outbreak, two U. S. aluminum smelters were slated for closure due to low LME prices, primarily due to Chinese overproduction and energy subsidies.

With the COVID 19 crisis, the remaining U. S. production capacity cannot economically compete, placing access to an essential metal for U. S. industry, and U. S. sovereignty, at risk.

As the People’s Republic of China dominates world aluminum production, U. S. domestic aluminum capacity is in peril. The U. S. had only seven operational aluminum smelters as of this writing — the PRC has over 140. America will soon be down to four. All U. S. facilities are financially at risk without significant assistance. A loss of U. S. aluminum manufacturing will be a direct threat to U. S. national security, our local economy and economic independence.

The Ferndale smelter has one of the highest production capacities in the U. S. at 280,000 tons per year. If it closes, it

would take millions of dollars and possibly years to restore its capacity. It is the only operating smelter in the Western United States, and it employs over 700 skilled workers.

According to United States Geological Survey January 2020 estimates, total U. S. capacity is less than 1. 8 million tons annually. U. S. industry used 3. 4 million tons in 2019 and imports countless millions of tons of finished aluminum products, much from China. USGS estimates the PRC capacity at 44 million tons, more than 24 times U. S. capacity.

China produced over 2. 8 million tons in February 2020 alone, the International Aluminum Institute estimates.

Aluminum is used in almost every aspect of economic production and national defense infrastructure. New aircraft, missiles, armored vehicles, electronics, radars and ships depend on the lightweight, strong and recyclable metal.

F-18 and F-35 fighters use high-quality aluminum made at a single U. S. smelter in Kentucky, now operating at 40% capacity.

Aluminum is also a critical civil infrastructure commodity used in bridges, railways, buildings, machinery and transportation. It is prevalent in almost all health care equipment, from ventilators to hospital beds.

The PRC dominates global aluminum production, with as much as 60% of the world’s capacity. China has subsidized rapid expansion and saturation of the industry. The highest cost in aluminum processing is energy. The Chinese Communist Party’s economic hybrid system subsidizes power for producers.

Cheap, subsidized PRC aluminum has flooded global

41

MAY/JUN 2020 | BUSINESSPULSE.COM

and American markets since the PRC joined the World Trade Organization in 2001. As a result, the number of aluminum smelters in the U. S. fell from 23 to seven since 2001. Ten smelters were lost in Washington state alone.

The outcome has forced U. S.-based facilities to close and put countless Americans out of work.

The shutdown or curtailment of the remaining U. S. aluminum smelters will force American industry to depend on

42

BUSINESSPULSE.COM | MAY/JUN 2020

foreign imports for a critical defense and economic resource. A shutdown of Intalco, the last remaining aluminum smelter in the Pacific Northwest, will have a staggering local effect, costing 700 high-paying jobs in the Whatcom County economy. In a perilous moment in history, the local, U. S. and global future will be dependent on the CCP’s market manipulations for one of the most critical defense-related materials.

In the President’s National Security Strategy, maintaining the U. S. defense industrial base is essential. American industry depends on aluminum, the most recyclable metal on the planet. It is essential for future economic growth and defense. The U. S. cannot allow CC.”authoritarian capitalists” to dominate this critical industry.

I recommend these possible solutions: 1. Designate the domestic aluminum industry as a critical national defense priority, and create a national reserve stockpile of aluminum — the price is low, buy and hold. Purchasing a national aluminum reserve would provide immediate demand to reduce inventories and allow for a bridge through the COVID-19 pandemic.

2. In this time of crisis, establis.”Buy American Aluminum” policies for all U. S. defense and stockpile purchases. American manufacturers can and should compete in a fair market, but this market is not fair.

3. Provide loans and grants to U. S. facilities in the proposed phase IV economic stimulus infrastructure legislation for upgrades that will improve competitiveness and environmental efficiencies in order to compete with the PRC. The pandemic is causing significant damage to countless industries. Many need help, but some are core industries that the United States cannot afford to lose and still maintain sovereignty. U. S. aluminum is one of those industries, and it is teetering due to this pandemic.

In a geostrategic quest for power, the CCP could not have planned it better. ■ Lieutenant Colonel James McKinney is a retired U. S. Army Foreign Area and Intelligence Officer with over 30 years of service in strategic, tactical and special operations assignments around the globe. He is now a defense and strategy consultant and serves on the Board of Saturna Investment Trust.

Jessie Cantu’s American dream (Continued from page 27)

For the first five or six months, he didn’t have one day off.

“By afternoon, I’d let the others go early,” Cantu said.”Then I’d be the one to seat them, take the order, make their drinks, cook their food and serve them.”

As he said, it was hard.

“Sacrifice,” he said.”It’s hard work, time and sacrifice. I missed a lot of birthdays and events.”

He and Alicia mortgaged their home and had sleepless nights, but they continued. By the second year, things grew.

In year three.”It took off.”

Keys to success “It’s a formula people like.”

“My employees give attention to every person, no matter what they spend,” Cantu said.

In addition to this personal attention, the second key i.”quality control in the kitchen.”

“We use recipes I’ve created,” he said.”We cook from fresh and use good recipes.”

From scratch? Yes. Chefs make their own chips, salsas and desserts and grill the meat themselves.

Then.”We serve with a smile.” The years of working in fine dining restaurants and country clubs paid off.

“You need to care about your customer,” he said.

The money will follow, he emphasized. The customer is first.

After establishing the three Jalapeños restaurants focused on Mexican cuisine, he ventured into an Italian bistro concept in Luna’s, adjacent to Regal Cinemas in Barkley Village.

“I like both concepts,” he said.

Of his four children, three from his first marriage, one is part of the business. Daniel, who worked in restaurants during college and has training in graphic design and technology, will be Cantu’s successor. With Daniel’s know-how, they have upgraded three point-of-sale systems in-house, saving money in the process. During the COVID-19 crisis, they quickly set up a new online system to streamline orders and deliveries.

At 66, Jesse Cantu is definitely not thinking of retirement.

“I still have the passion,” he said.”There is a passion in creating something for the public.” ■

43

MAY/JUN 2020 | BUSINESSPULSE.COM

Cape Flattery

STR A

IT O

Shi Shi Beach

La Push

VICTORIA

F JU AN D

IS

BE

LLI

Whatcom Falls Park

NG

FAIRHAVEN VILLAGE

HA M

E FU

CA

Salt Creek

Marymere Falls

FORKS

N SA

AN JU

DS

N LA

Ediz Hook

PORT ANGELES

Sol Duc Falls

SEQUIM

Dungeness Bay

PORT TOWNSEND

Hoh Rainforest

Kalaloch Beach

BAINBRIDGE ISLAND SILVERDALE SEATTLE

Olympic National Forest

TACOMA Ocean Shores

OLYMPIA

Gifford Pinchot National Forest

LOCAL LOVES LOCAL Your community bank. Supporting local businesses, since 1923. www.ourfirstfed.com/business

800.800.1577

Snoqualmie Falls