Kitsap Peninsula Business Journal - August 2016

Kitsap Peninsula

Business Journal An edition of the Kitsap Sun

KPBJ.COM

August 2016 | Vol. 29, No. 8

airbnb at sea Charter sailboat operators welcome guests aboard, but some marinas have issues Page 4

Kitsap’s airbnb options include unique places for visitors to stay | 6 Clearwater Casino Resort draws new crowds to its concert venues | 7

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| August 2016 |

Sailboat owners say ahoy to Airbnb guests ■ On-board lodging is popular with

tourists; with marinas not so much

By Tim Kelly

tim.kelly@kitsapsun.com 360-792-3359

Vacationers love overnight stays on a sailboat, but some marinas are not so keen on having a floating Airbnb site moored at their waterfronts.

That doesn’t deter Ben Doerr from offering his 44-foot boat for the night to guests who book a trip with his charter sailing business on Bainbridge Island. He anchors the Ketut overnight out in Eagle Harbor, instead of dockside at Harbour Marina, where he has long-term moorage for the boat.

“We’re able to operate our charter business out of there,” Doerr said, but he didn’t even ask about hosting Airbnb guests at the marina when he started booking sailing trips this spring.

“I already knew most of the marina associations were starting to fuss about it,” he said.

Last year, Doerr had a busy summer booking Airbnb stays aboard a smaller sailboat moored at Winslow Wharf Marina.

“We had incredible success with that,” he said. “We rented it for $90 a night, and it more than paid for the value of the boat … in a single summer.”

That’s why it was so disappointing when the marina decided it would no longer allow Airbnb operations there.

“My wife and I are both selfemployed, so to be able to have an income source that enabled us to have a boat, it was a really sweet deal,” said Doerr, a 34-year-old musician who plays in an indie folk band called St. Paul de Vence.

His friend and sailing mentor, Harry Pattison, runs a charter business called Dreamboat Adventure Sailing based at Winslow Wharf Marina. Pattison, who’s been a licensed captain for 25 years, also offers lodging aboard his 44-foot sailing yacht Oh Joy II, but he’ll only be allowed to continue that at the marina until the end of this year.

“I’m looking at other options,” said Pattison, who bought his

boat in 2005 while living in Oregon, and moved to Bainbridge after doing sailing trips for a few years on the Pacific Coast. “I’m also looking at the possibility of easing out of doing Airbnb-type rentals and sticking more with the charter sailing.”

WE DEFINITELY HAVE an international presence. We get a lot of Australians, and apparently we’re very popular in Korea.”

— Harry Pattison, charter sailing captain and Airbnb host

Two other Bainbridge sailboats moored at Eagle Harbor Marina have been listed on Airbnb. One is a newer listing that has no reviews posted yet. The other is operated by Tami Allen, who is the harbormaster for the City of Bainbridge Island. She did not want to be interviewed for this article and apparently pulled her listing off Airbnb recently. However, her boat Lille Danser is described on Facebook as “a dock-side boat and breakfast as well as a local day sail charter,” and it is still listed on other online lodging sites.

Eagle Harbor Marina was purchased earlier this year by a partnership headed by island resident Bob Wise, who owns two other Puget Sound marinas and is a marina marketing consultant for the Port of Bremerton. Contacted by the Kitsap Peninsula Business Journal about allowing boats at the marina to be used for rental lodging, he sent a statement saying the marina is “reviewing our options in regards to Airbnb

MEEGAN M. REID

Harry Pattison and his wife, Joy Archer, aboard their boat Oh Joy II moored at Winslow Wharf Marina on Bainbridge Island.

TRAVIS WALS PHOTO COURTESY OF SAIL BAINBRIDGE

Ben Doerr sails the Ketut, the boat he uses in his charter sailing business on Bainbridge Island and also offers as an overnight lodging option to guests who book through Airbnb.

businesses” before making a decision. “We are in discussions with other marinas, ports and harbormasters regarding these kinds of

arrangements and gathering information,” he said.

Pattison and Doerr both said charter trips are their main busi-

ness, but lodging aboard their boats is a nice add-on.

“In order to kind of flesh out the season, especially on shoulder areas in the spring and fall, I do take lot of Airbnb bookings,” said Pattison, whose boat rents for $160 a night and can accommodate four guests. “In summer it’s probably about 20 percent of my business, but in spring and fall it’s probably 75 percent.”

Guests can stay overnight on the Oh Joy II, when it’s available, without booking a sailing trip.

His Airbnb listing offers guests a three-hour sailing trip for $325.

Other excursions are available through Dreamboat Adventure Sailing, including a variety of day trips as well as overnight cruises to destinations such as Port Townsend and Gig Harbor.

When people book his boat for lodging on a visit to Bainbridge, “I try to talk them into a sail, and I would say about 50 percent want to do a sail,” Pattison said. “And practically everybody who comes and doesn’t do a sail, claims they See SAILBOATS, 16

| August 2016 |

The rooftop of the Island Gateway building next to the Bainbridge Island Museum of Art is becoming a popular venue for holding special events.

PHOTO COURTESY ELMQUIST REAL ESTATE SERVICES

rental program for the space, showing it off to potential clients and serving

as an on-site contact for events. BIMA’s Bistro helps to cater some of the events.

“Instead of (Cheryle) just handing the keys over to somebody to kind of make the event their own, we have professional planners here that can talk with the clients, talk through the details, make sure there aren’t

any surprises,” Cleveland said.

Location and accessibility are the main draws, she noted — the rooftop is only a short walk from the ferry terminal.

“The ferry ride adds a nice element to the start of an event, everybody having a good time on the ferry to-

gether,” Cleveland said.

Client demographics vary but consist mostly of locals from Bainbridge or visitors from Seattle who can make the short ferry trip over.

Elmquist, who is the president of the Bainbridge See ROOF, 11

Up on the roof ■ Appealing open-air venue

draws locals, Seattle visitors to Bainbridge for events held atop Island Gateway building

By Christian Vosler

christian.vosler@kitsapsun.com 360-792-9207

While several businesses set up shop in the Island Gateway Complex on Bainbridge Island left vacant by Avalara’s move in late 2015, the rooftop space of the adjacent Eagle Harbor Market building has been quietly drawing crowds.

The venue, opened in June 2014, crowns the twostory building next to the Bainbridge Island Museum of Art. It overlooks Winslow Way, with wide views of Eagle Harbor and Seattle in the distance.

Elmquist Real Estate Services manages the Island Gateway property, and Cheryle Elmquist says the rooftop venue has been successful at pulling people from Bainbridge, the Kitsap Peninsula and Seattle who

want to hold events there.

“It’s very versatile, it’s got heat, and the view,” she said.

In addition, the rooftop space has elevator access, a small catering kitchen, a fixed open-air tent canopy and a fireplace. The venue can feasibly be used between March and November, according to Elmquist.

She estimates there have been 20 events held there so far this year — everything from from wedding receptions and birthday parties to baby christenings and corporate team outings. Her goal, eventually, is to have the venue booked through October, running three to four events a week.

Marissa Cleveland, an event planner for the Bainbridge Island Museum of Art, started working with Elmquist earlier this year.

Cleveland oversees the

Serving Our Community for 108 Years August 8th marks our 108th year as your community bank. We are proud to give back to the communities we serve by supporting over 100 non-profits annually, and giving back over $1.5 million in the past five years alone.

Find out more about the organizations we support at www.kitsapbank.com/community-partnerships

Stop in the week of August 8-12 to help us celebrate our anniversary!

www.kitsapbank.com • 800-283-5537

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| August 2016 |

Hosts enjoy connecting with Airbnb travelers ■ Locals supplement their incomes by renting out a diverse array of spaces

By Terri Gleich KPBJ contributor

When Michael Goodnow started using Airbnb to rent out the guest room in his beautifully appointed Bremerton house, he had lost his job, his roommate had moved out and he needed money.

Eighteen months later, he has hosted visitors from Japan and Australia, earned 37 glowing reviews and grown to love playing concierge. He’s also found a lucrative supplement to his income as a nonprofit leader and consultant.

“It worked out really well. I can have someone here half the nights and get the same income as a fulltime roommate,” he said.

It’s unclear how many Kitsap Peninsula homeowners are following Goodnow’s example, but those who are have joined a revolution that’s reshaping travel and hospitality around the world. According to a 2015 company report, the number of Airbnb guests jumped from 47,000 during the summer of 2010 to 17 million during the same period in 2015.

Airbnb’s website claims to offer 2 million listings in 191 countries, including 1,400 castles. In Kitsap, accommodations include backyard tents, boats, garage apartments and even a treehouse overlooking Hood Canal.

Nancy and Bob Fortner have one of the more unusual local listings, a summer “glamping” experience at their Bainbridge Island farm. For around $175 a night plus taxes and fees, the couple rents out a 20-foot-tall tipi furnished with a queen-size bed, rocking chairs, electricity and a mini-fridge. An openair bath hut nearby has hot water, Turkish cotton tow-

PHOTOS BY MEEGAN M. REID

Sweetlife Farm owners Nancy and Bob Gartner relax on the lawn with their tipi in the background.

Sweetlife Farm owners Nancy and Bob Gartner book his spacious, comfortably outfitted tipi on Bainbridge Island through lodging website Airbnb.

THE WHOLE IDEA of having it as extra space and interacting with people that way was very appealing to us.”

— Nancy Fortner, Airbnb host

els and a composting toilet.

The Fortners also provide a breakfast of granola, yogurt and French-press coffee.

“It’s an extension of who

we are in a lot of ways,” said Nancy Fortner. The duo already runs a business at their farm, making and selling soaps, jams, smoked oils, seasonings and more. They also have a long-time interest in Native American art. Building a tipi and renting it through Airbnb seemed to complement both interests.

“The whole idea of having it as extra space and interacting with people that way was very appealing to us,” she said. “We like interacting with the public and this is a way to continue without having to go to the farmers market every week or having a business where you have to be available seven days a week.”

Guests have included honeymooners and couples celebrating special anniversaries. Fortner said the space attracts people who love the outdoors, especially those from other parts of the country, who are delighted by the natural setting surrounded by evergreens.

At the other end of the camping spectrum, Marie Pineau of Bremerton uses Airbnb to market up to three tents in her backyard near Evergreen Park.

They rent for $30 a night and have attracted guests from all over the world.

Pineau first heard about the peer-to-peer hospitality site when she was touring Oregon and thought it was a great idea.

See AIRBNB, 12

| August 2016 |

7

Matching harbor homes with vacationers ■ Renting out their own home to travelers led to couple starting rental management business ence, worked as a crime scene investigator with the King County medical examiner’s office.)

By Rodika Tollefson KPBJ contributor

As homeowners are becoming more comfortable with the idea of renting their homes for short stays, websites such as airbnb. com are making it easier to earn a little supplemental income. But even as these online services help facilitate transactions — and offer some degree of protection — it could still take a lot of work for those not used to the hospitality business.

Harbor Home Vacation Rentals, a family business based in Gig Harbor, will happily take over — taking the logistics off the homeowners’ hands and handling everything from booking to cleaning.

“There’s a lot of need out there (for vacation rentals),” says Krista Philbrick, who owns Harbor Home Vacation Rentals (harborhomerentals.com) with her husband, Ryan. “But it’s a lot of work. And you only have a few days to make a guest happy.”

Their inventory includes about 20 homes, including three of their own properties, mostly in the Gig Harbor and Tacoma areas. Some are waterfront homes with gorgeous views while others are located in typical neighborhoods.

The variety — and the range of prices, $150 to $600 per night on average — means they can offer options for smaller budgets.

“The options are nice for people who aren’t looking to spend a ton of money,” says Ariel Gustanski, who is the assistant property manager.

Gustanski says that part of the job is about matchmaking. It’s not unusual for prospective renters to inquire about one home but end up with another, better suited for their needs.

But the bulk of the work is logistical. For example, one day could have multiple checkouts, which means several professional cleaning crews need to be coordinated.

The crews may only have a few hours to get the home ready for the next guests — and there’s no knowing what kind of condition

Harbor Home Vacation Rentals owner Krista Philbrick, left, and assistant property manager Ariel Gustanski say they see a growing need for short-term rentals, as well as more interest from homeowners in renting their properties.

RODIKA TOLLEFSON PHOTO

Growing popularity of vacation rental homes An estimated 22 percent of leisure travelers have stayed in a vacation home during the past two years, compared with 11 percent in 2008, according to statistics compiled by the Vacation Rental Managers Association. An even larger number — 49 percent of leisure travelers — are interested in vacation home rentals as an alternative to a hotel or a resort. the home will be in after checkout.

“The home is flipped just like a hotel, and it’s different from cleaning your house,” Gustanski says.

That includes everything from changing the linens and taking out the garbage, to watering plants and cleaning out the refrigerator.

The job can be 24/7. In addition to communicating with potential customers, the property managers are on call should anything go wrong.

“We want a certain type of experience for our guests,” Philbrick says. “We also want to be good

neighbors so we try to be on top of things.”

Despite its around-the-clock nature, the business is structured around the Philbricks family — the couple has three young children.

That’s why Philbrick tries not to use the phone to communicate with customers or even with Gustanski. Instead, the two use mostly email and texting, which allows them to respond faster and to synchronize communications.

Harbor Home Vacation Rentals relies largely on airbnb.com and VRBO.com (Vacation Rentals By Owner) for marketing the properties. But prospective

customers can also contact the business directly. In fact, doing so saves the renters a little money (they don’t have to pay fees to the online service) and can also save time since they don’t have to do their own search.

Regardless of how the customers come to Harbor Home Vacation Rentals, leases are required. As are deposits, which are only refunded after the home is inspected for damages upon check-out.

Plus, Philbrick says, “We have secret ways to screen people.”

(Which may be a bit of a nod to her former profession; Philbrick, who has a degree in forensic sci-

A business born out of personal need Ryan Philbrick, who hails from Sun Valley, Idaho, has been fishing since he was 15. The couple own two boats for commercial fishing in Alaska, where he spends about six weeks every year.

When a bad fishing season in 2010 left the couple with a need for extra income, they decided to rent their Gig Harbor home on VRBO.com during weekends and holidays. When the home was booked, the family would live in North Mason in an RV, parked on her parents’ property.

Philbrick originally resisted the idea — for the same reason her clients do, at first, she says.

After all, it was her “stuff” that people would have access to. But for her husband, it was an easy choice, as vacation rentals were common in Sun Valley.

Encouraged by a friend, Philbrick gave it a try. The rental idea was such a hit, the couple soon bought a second home for the sole purpose of renting it.

“Because the other house did well, we knew there was a market to do it full-time,” Philbrick says.

Built in 1927, their second house had once served as a barn for buses taking commuters to the local ferry, and was later converted to a volunteer fire station. Located in downtown Gig Harbor, it overlooks both the scenic harbor and the busy Finholm District.

When the Philbricks purchased it in 2013, the home had been foreclosed and required various repairs. Most of the fixtures are original, and some of the vintage décor is a tribute to the days of yesteryear. The couple turned the first-floor bay into a suite, so the home can sleep nine people.

Thesuccessofthesecondhome — and her previous experience working in commercial real estate — inspired Philbrick to think bigger. Although she had turned See HARBOR, 15

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| August 2016 |

Northwest’s many beer festivals keep breweries hopping ■ Events are good marketing for craft breweries, but staffing them is challenging

By Tad Sooter tad.sooter@kitsapsun.com 360-475-3783

The fans kept coming and the beer kept flowing at Silver City Brewery’s booth at Bremerton Summer BrewFest.

By the time the last keg was tapped at the two-day July festival, Silver City staff had poured more than 2,000 samples. That kind of exposure is tough to beat, said Kurt Larson, director of sales and marketing for the Bremerton brewery.

Which is one reason why Silver City booths will appear at about 25 Washington festivals this year.

“It’s a great opportunity for people to try the beer,” Larson said.

The number of brewfests in Washington has swelled in recent years, keeping pace with the exponential increase in small breweries. For breweries, the farflung festivals are a chance tap into new markets, and educate drinkers about craft beer. The events also serve a double purpose as a marketing tool for the regions that host them, attracting crowds of eager beer enthusiasts to places such as Bremerton and Gig Harbor.

“I love the brew festival because it’s definitely introducing the region to population that likes to go places and be outdoors,” Visit Kitsap Peninsula executive director Patty Graf Hoke said. “It’s a demographic that enjoys getting out and having fun.”

EXPOSURE FOR BREWERIES

Some breweries travel far to promote their brands.

From its headquarters in

LARRY STEAGALL / KITSAP SUN FILE

Cash Brewing Company brewmaster Bill Poss hands a beer to a customer on the Harborside boardwalk during the Bremerton Summer Brewfest on July 15. On the left is volunteer helper Bob Koch.

last year to promote his brews at craft beer festival in Japan.

Hood said exposure is the main goal.

“Festivals are mostly about brand recognition and getting samples in our customers hands,” Hood said in an email.

The marketing comes at a cost. Staffing and supplying festival booths is resource-intensive, particularly for LARRY STEAGALL / KITSAP SUN FILE craft breweries Silver City Brewery was one of numerous local with a small numcraft breweries with booths on the Harborside boardwalk for the Bremerton Summer Brewfest, ber of employees one of about 25 such festivals Silver City will and regular beer participate in this year. production to keep up with at Poulsbo, Sound Brewery home. Some festivals, inwill visit more than a dozen cluding those organized festivals this year, traveling by the Washington Beer as far as British Colum- Commission, pay brewers bia and Oregon. General wholesale prices for beer manager Mark Hood even sold at the events. Others crossed the Pacific Ocean expect brewers to donate

beer.

Breweries are generally happy if they can recoup their costs.

“If we break even, it’s great,” Larson said. “It’s marketing.”

As the number of beer festivals increases, both event organizers and breweries are having to become more selective. Some festivals now hold lotteries to determine which breweries can participate. And breweries like Silver City, which distributes across the state, has to limit the number of brewfests it attends each year, to keep from spreading staff too thin.

The festival schedule

gets frenetic at times, Larson said, but it’s still fun introduce good beer to new customers.

“If you get up in the morning and can’t get excited about selling beer, you’re not doing your business right,” he said.

EXPOSURE FOR TOWNS

Bremerton Summer BrewFest, held July 15 and 16 this year, drew about 3,000 people to the picturesque Bremerton waterfront, where they sampled beer from more than 30 breweries, grabbed food from vendors and stuck around to listen to live bands.

While it comes in the heart of summer festival season, BrewFest isn’t put on by a local civic organization.

Instead the event is one of seven across the state hosted by the Washington Beer Commission, which uses the proceeds to fund See FESTIVALS, 15

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| August 2016 |

9

Tourism marketing for Kitsap extends its reach experience and expansion happening in and around the Seattle market.

One of our most important visitor segments are outdoor recreation enthusiasts and the reality is that a majority of people in that category work in the high-tech sector, including science and biotech information technology, online gaming, telecommunications and those businesses are located in the greater

Kitsap Peninsula Business Journal

For an assessment of the state oftourism intheKitsap Peninsularegion,wesetupa Q-and-AwithPatriciaGrafHoke, executive director of VisitKitsapPeninsula.VKP is an economic development organizationresponsible for promoting the region to attract and educate travelers and travel planners. It is also a state-registered Destination Marketing Organization (DMO) and recognized as the official agency responsible for providing information about the Kitsap Peninsula.

1. The Kitsap Peninsula has been posting record increases in lodging demand and revenue for the past 18 months.

Do you expect that to continue and, if so, how long?

Yes, we do expect the trend to continue for a couple of reasons. One, the significant increase and continued growth of leisure travelers visiting the region, and two, the consistent, upward increase in the average room rates hoteliers are able to charge.

Historically, local hoteliers have relied on a fairly high percentage of governmentrelated travelers to fill rooms, which was acceptable when the per-diem rate was higher. But in 2011, the GSA delisted Kitsap as a designated area and moved it into the standard rate of $77. The drop in per-diem rate ultimately provided a compelling incentive to local hoteliers who realized it was time to look seriously at the leisure travel market and diversify their sales channels.

Today, many hoteliers report annual sales projections that are much less reliant on government-related bookings to achieve sales goals. The challenge will be how to keep the momentum in play.

Puget Sound region. They may have to work in Seattle but our mission is to let them know that in no time, they can be playing, and sipping microbrews, on the Kitsap Peninsula.

The designation by the U.S. Department of Interior to add the Kitsap Peninsula Water Trails to the National Water Trails System has deďŹ nitely boosted Kitsapâ&#x20AC;&#x2122;s image as a major destination for outdoor recreation.

Weâ&#x20AC;&#x2122;re in the process of doing the same thing for Kitsapâ&#x20AC;&#x2122;s image as a mecca for cycling with the production of a new Bike Guide & Map that is being distributed by REI stores in Seattle, Tacoma and Silverdale.

4. Thereâ&#x20AC;&#x2122;s a lot of buzz about attracting international travelers to Seattle and the region.

See TOURISM, 27

PHOTO COURTESY VISIT KITSAP PENINSULA

Ian Murray, editor of the Southampton Daily, a newspaper in England, is shown with Liberty Bay Books owner Suzanne Droppert in Poulsbo during a visit last summer for a travel article he wrote about the Kitsap and Olympic peninsulas.

Murray visited the area as a result of Visit Kitsap Peninsulaâ&#x20AC;&#x2122;s partnership with the Port of Seattle for tourism marketing.

2. Do you expect any new hotels to be built on the peninsula in the next few years, in addition to the one the Port Gamble Sâ&#x20AC;&#x2122;Klallam tribe is getting ready to open later this year at The Point Casino near Kingston?

We understand that developers in Bremerton are looking at a few options, but donâ&#x20AC;&#x2122;t believe that anything has been conďŹ rmed.

We recently learned that the proposed construction of a new Best Western in Poulsbo wonâ&#x20AC;&#x2122;t happen as planned. The new hotel at The Point Casino initially will create competition for some of the Poulsbo hotels, but what weâ&#x20AC;&#x2122;ve seen with the expansion of the Clearwater Casino Resort and conference center is an increase in leisure travelers visiting the area to attend concerts and meetings at Clearwater. The overďŹ&#x201A;ow has been beneďŹ cial for both Poulsbo and Bainbridge Island hoteliers.

Based on informal reports from hoteliers in Silverdale and Bremerton, it appears there is still sufďŹ cient supply in the system to meet the current demand among business and leisure

guests that include independent travelers, families, participants/attendees at sporting and private events.

The addition of a high-end boutique hotel that offers ďŹ ne dining, rooftop lounge, special event space and ďŹ rst-class amenities would be an welcome addition to the region, and would help to attract more upscale and seasoned travelers that have higher expectations.

3. Visit Kitsap Peninsula has focused on promoting the region as a destination for outdoor recreation. How do you differentiateKitsapfrom other places in Washington and the PaciďŹ c Northwest that offer similar experiences?

As a native of Seattle, a commuter to downtown Seattle for many years and resident of Kitsap since 1981, I still believe the regionâ&#x20AC;&#x2122;s two biggest points of difference are 1) Kitsap is close and easily accessible to the Seattle/Bellevue/ Tacoma market; and 2) the dramatically stark contrast between Kitsapâ&#x20AC;&#x2122;s natural, outdoor-friendly environment juxtaposed with the increasingly intense urban

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| August 2016 |

Suquamish Clearwater Casino Resort is becoming known as a live entertainment venue and broadening its appeal beyond casino gaming. This photo shows the large crowd at a rooftop Fourth of July concert last year by hip hip trio Naughty by Nature. This yearâ&#x20AC;&#x2122;s July 4 concert was held in the new Clearwater Event Center and featured a sold-out show by Bone Thugs-NHarmony.

PHOTO COURTESY OF CLEARWATER CASINO RESORT

Clearwater entertaining more than casino crowds â&#x2013; Concerts and other live shows in Beach Rock lounge

and event center broaden resortâ&#x20AC;&#x2122;s appeal and draw new people

By Tim Kelly

tim.kelly@kitsapsun.com 360-792-3359

The hip hop sceneâ&#x20AC;&#x2122;s not on the roof anymore at Suquamish Clearwater Casino Resort; the partyâ&#x20AC;&#x2122;s moved to the Beach and beyond.

The resort hosted Fourth of July rooftop concerts featuring â&#x20AC;&#x2DC;90s rap star Coolio in 2014 and the hip hip trio Naughty by Nature last year, but those were before Clearwaterâ&#x20AC;&#x2122;s major expansion added two new concert venues where the weatherâ&#x20AC;&#x2122;s no worry and shows can be booked year-round.

One is the sleek Beach Rock sports bar and lounge, where hip hop artist Warren G performed a sold-out concert in May. That was followed by the biggest crowd ever for a ticketed concert at the resort, when Bone Thugs-

n-Harmony headlined the â&#x20AC;&#x153;Red, White and Boomâ&#x20AC;? hip hop party July 4 in the Clearwater Event Center.

The show sold out a month in advance.

The casino with some 1,200 slot machines is still going strong, but the resort is broadening its appeal with live entertainment thatâ&#x20AC;&#x2122;s drawing new visitors â&#x20AC;&#x201D; many from the Seattle area where the concerts are promoted on radio stations such as Hot 103.7 FM that target urban millennials. â&#x20AC;&#x153;We wanted to be more than just gaming, and to give a more entertaining experience to people who might not necessarily want to go to a slot machine or a blackjack table but still want to be entertained,â&#x20AC;? said Curtis Patnode, Clearwaterâ&#x20AC;&#x2122;s gaming marketing manager who also oversees booking and promoting shows. â&#x20AC;&#x153;So we built two

venues that we can do that in now; we have our entertainment center and we also have our state-of-theart Beach Rock Lounge.â&#x20AC;?

The resort has hosted a popular summer music series since 2006 with free weekly shows outdoors on the lawn, and the occasional rooftop concerts were staged on the seventh ďŹ&#x201A;oor of the new parking garage built in the ďŹ rst phase of Clearwaterâ&#x20AC;&#x2122;s expansion.

But the Beach Rock lounge, with its raised performance stage enhanced by high-tech visual displays, has become Clearwaterâ&#x20AC;&#x2122;s entertainment showcase. Since the lounge opened last fall, the resort has presented a variety of musical acts â&#x20AC;&#x201D; a Christmas season concert by country singer Pam Tillis; youngcountry duo Brothers Osborne; â&#x20AC;&#x2122;90s rock bands Candlebox, Eve Six and Lit,

as well as Van Halen tribute band Atomic Punks; a two-night variety show

by Hawaii-based veterans Society of Seven; and a burlesque show by The Lalas, who will make a return appearance in October. â&#x20AC;&#x153;I would say our go-to genre right now is â&#x20AC;&#x2DC;90s

throwback bands, and young country,â&#x20AC;? Patnode said.

The Beach Rock has regional bands playing on weekends with no cover charge, and the ticketed concerts are mostly on Thursday nights. â&#x20AC;&#x153;We can sell up to about 400 tickets, which can give us a pretty good price range forthetalentthatwecanput in there,â&#x20AC;? he said. â&#x20AC;&#x153;Whatâ&#x20AC;&#x2122;s nice is we donâ&#x20AC;&#x2122;t have to pay for a stage or sound or lighting if I have shows in the Beach Rock because itâ&#x20AC;&#x2122;s already in there.â&#x20AC;?

And whatâ&#x20AC;&#x2122;s in there is impressive, particularly the huge HDTV monitor with 640,000 pixels thatâ&#x20AC;&#x2122;s a backdrop for the stage.

It provides a dazzling display for a bandâ&#x20AC;&#x2122;s videos during a performance, not to mention it makes the bar a prime spot for watching Seahawks games or other

sporting events. â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s really nothing like that anywhere on this peninsula,â&#x20AC;? Patnode said. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;d say that would be our competitive advantage over anybody, is that Beach Rock Lounge.â&#x20AC;?

Concerts are typically $20-30 for a ticket or $99 for a VIP meet-and-greet package. The lounge also hosts free comedy nights twice a month, and occasional viewing nights for closed-circuit telecasts of Ultimate Fighting Championship bouts.

The ticketed shows at Beach Rock will resume after the summer lawn concerts, and apparently music fans will keep coming.

More than three-fourths of the available tickets already have been sold for a Sept. 1 show featuring Ginuwine, an R&B singer/songwriter who had a string of lateâ&#x20AC;&#x2122;90s hits and gained renewed popularity with his successful 2009 album A Manâ&#x20AC;&#x2122;s Thoughts. â&#x20AC;&#x153;To be honest, we didnâ&#x20AC;&#x2122;t have the foresight to see the lounge was going to have that type of impact,â&#x20AC;? said Russell Steele, CEO of Port Madison Enterprises, the Suquamish Tribeâ&#x20AC;&#x2122;s business division. â&#x20AC;&#x153;It allows us to do things we couldnâ&#x20AC;&#x2122;t do previously.â&#x20AC;?

Clearwaterâ&#x20AC;&#x2122;s expanded entertainment offerings â&#x20AC;&#x153;are certainly attracting See CONCERTS, 13

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| August 2016 |

(on Bainbridge),â&#x20AC;? Cleveland said. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve seen a lot of people come over here and experience Bainbridge Island that would not have had it not been for the event.â&#x20AC;?

When considering the impact of the open-air rooftop space on tourism on Bainbridge, itâ&#x20AC;&#x2122;s difficult to assess the venue separatele

The rooftop of the two-story Eagle Harbor Market building in the Island Gateway complex has a view of the harbor and is a booked as a venue for special events.

from its surroundings, Elmquist said. The Kids Discovery Museum, BIMA and the event center all add to the appeal of Bainbridge as a tourist destination.

The complex at the corner of Highway 305 and Winslow Way offers a mix of culture, education and class that Elmquist is sure

brings newcomers to the island. â&#x20AC;&#x153;I donâ&#x20AC;&#x2122;t have specific data, but it is deďŹ nitely pulling people onto the island and giving people perspective of the island,â&#x20AC;? she said. â&#x20AC;&#x153;I donâ&#x20AC;&#x2122;t think thereâ&#x20AC;&#x2122;s about any other place on the island that can do that.â&#x20AC;?

PHOTO COURTESY ELMQUIST REAL ESTATE SERVICES

Roof from 5

Island Downtown Association board of directors, is currently marketing the venue via print advertising and email lists. The biggest struggle, she said, is reaching out across the water to connect with would-be event holders in Seattle. To

do that, Elmquist plans to reach out to Seattle Visitors Bureau, while working with the local chamber of commerce and the downtown association to expand recognition on the island. â&#x20AC;&#x153;We just need to sit down and do a little more strategizing on how we reach the target market,â&#x20AC;? she said.

For a potential client, weekday rental of the

space will cost $750. The price jumps to $1,250 for Friday or Sunday events, and $1,500 on Saturdays.

Cleveland said the venue creates a unique and affordable experience for people who donâ&#x20AC;&#x2122;t want to drive out of the Seattle area. â&#x20AC;&#x153;As Seattle is growing, and the prices are higher â&#x20AC;Ś the venues can deďŹ nitely be a lot more affordable

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| August 2016 |

13

Concerts from 10

IT’S A DIFFERENT AUDIENCE, a younger crowd, and like everybody in this industry we’re trying to figure out how to get the under-35s interested in our business.”

people out of the Seattle market,” he added. “It’s a different audience, a younger crowd, and like everybody in this industry we’re trying to figure out how to get the under-35s interested in our type of business.”

‘People want to be entertained” Lisa Rodriguez, a millennial herself who is Clearwater’s public relations and media coordinator, said a younger crowd drawn to a lively entertainment venue might change their perception of casinos.

“You talk about it from a generation standpoint, a lot of people are talking about how to market to millennials, and that’s the biggest thing is people want to be entertained,” she said. “They want an experience, they want to travel. And so those are the things that we’re implementing.

“We’re not changing gaming, because the other generations still like gaming,” and the resort hopes millennials eventually will too.

The concertgoers generally don’t spend a lot of time in the casinos, Patnode said, and when they do they’re attracted more to the social interaction of table games rather than playing slot machines.

But gamblers or not, a lot of the visitors are having pre-show dinner and drinks at Clearwater’s restaurants, and what’s even better for the resort is the increased hotel bookings on concert nights.

“At 400 seats (in the Beach Rock), if we can sell 40 rooms, that’s great,” Patnode said. “To have the hotel sell out on a Thursday night is pretty remarkable, and we don’t usually do that unless we do have music.”

Clearwater has 186 rooms with the new hotel tower that was built as part of the expansion, and having them all filled on concert nights is “a big deal to the bottom line,” Patnode said, “and it also helps my case about bringing in national acts because people are going to stay more.”

The next big-name concert in the Clearwater Event Center will be an Oct. 15 show by Home Free, the a capella country group that won “The Sing-Off” in the

— Russell Steele, CEO of Port Madison Enterprises

PHOTOS BY LISA RODRIGUEZ COURTESY OF CLEARWATER CASINO RESORT

Above: This year’s July 4 concert by Bone Thugs-N-Harmony drew a packed house of 850 people in the Clearwater Event Center.

Below: The Beach Rock sports bar and lounge, shown here during a concert by Warren G in May, has become the showcase for live entertainment at Clearwater since it opened last fall.

NBC show’s fourth season in 2013. Patnode thinks their show might draw nearly as well as Bone Thugs did in the center, which has a standing-room-only capacity of about 850 people, though the room will be set up with tables when Home Free performs and will have a max of about 750.

The versatile 10,000-square-

foot event center — which is used for meetings and conferences during the week and can be subdivided into separate rooms — can go fancy for wedding receptions, and it’s also been packed for less formal events ... like cage fights.

“We do live MMA fights in there,” Patnode said, and the next one is Sept. 3. “We used to do it

twice a year, now we’re doing it once a quarter because we’ve had three sold-out events in a row.

And that’s 850 people.”

As Clearwater is becoming known as a live entertainment venue, Patnode said concert promoters are pitching more acts they’d like to book in either the Beach Rock or the event center.

In fact, he anticipates that at some point the resort will hire a fulltime entertainment manager.

For the fourth quarter of this year, the Beach Rock may have a show booked every week instead of twice a month, and the offerings might include dueling pianos and a performance by an illusionist.

“We’ve got such a wide group of customers; we want to appeal to all of them,” Patnode said. “We want to retain the ones who are already here, but then you gotta do acts like Bone Thugs to get people who have never been here before.”

He said the ultimate goal is to establish Clearwater as a regional draw for live entertainment, and hopefully build a larger entertainment center with a fully outfitted stage where they could book bigname acts in a 1,200-seat venue.

Steele said he’s on board with that vision, although completion of the final phase of the resort’s multi-year expansion plan has been “kind of tabled for now,” to give everyone at Clearwater a respite from construction that’s been going on since 2013.

“The long-term plans call for phase 4 ... with an additional 15,000 square feet of meeting space,” the CEO said. “If we build that it will probably have a stage on it.

“When we book entertainment in the event center, we have to set up sound and lights, an it’s not inexpensive. So if we do build phase 4 — and at some date we will do that — we’ll build a stage in there.”

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| August 2016 |

Festivals from 8

marketing campaigns for local breweries.

Beer Commission executive director Eric Radovich said the group organized the Bremerton festival six years ago at the request of civic boosters. The first BrewFest was held at a time when new breweries were popping up across the county.

“It was great to have an opportunity to showcase those breweries and get people on the peninsula interested in craft beer,” Radovich said.

The arrangement works well for

Harbor from 7

down requests to manage other people’s vacation rentals, she got her husband’s enthusiasticendorsementtofinallygiveitatry.

But turning it into a full-fledged business meant she needed a full-time assistant. And a full-time assistant meant she needed a lot more homes.

Enter Gustanski, who had recently graduated from college and had already worked for the couple as a nanny and a cleaner for the homes.

Gustanski, who grew up in Gig Harbor since elementary school, is credited with bringing in many of the managed properties. And she is enjoying her job so much, she’s considering a real estate license.

In addition to the Gig Harbor property, the Philbricks own a vacation rental in Tacoma and another in the Mason Lake area. Philbrick says making the leap to a full-time business was easier because the commercial fishing business taught her about cash flow, while commercial real estate gave her a background in marketing and other aspects.

“Real estate gave me the confidence it can be done because I learned a lot about making deals and how to work with clients,” she says. “(The new business) was risky but I feel empowered by working for myself and doing the job I want to do.”

Catering to growing demand Whether technology or a cultural shift is responsible — perhaps a combination of the two — interest in vacation rentals has been growing.

An estimated 22 percent of leisure travelers have stayed in a vacation home during the past two years, compared with 11 percent in 2008, according to statistics compiled by the Vacation Rental Managers Association. An even larger number — 49 percent of leisure travelers — are interested in vacation home rentals as an alternative to a hotel or a resort.

Airbnb alone saw 17 million guests in

Bremerton, which benefits from the Beer Commission’s robust online marketing tools, and good standing among brewers.

Other Washington communities have sought help from the commission or started beer festivals of their own to highlight both their breweries and their region.

Graf-Hoke with Visit Kitsap Peninsula said beer festivals attract a younger crowd than many other community events. And that’s an important demographic to reach for a region that markets itself as a mecca for outdoor recreation.

“It’s a great way to introduce people to the area,” Graf-Hoke said. “And they may come back.”

191 countries last summer (compared with 47,000 people five years before). Harbor Home Rentals reflects that international mix — visitors have come from places as distant as Europe, China, Bangladesh and Saudi Arabia.

Perhapssurprisingly,however,mostHarbor Home renters are not tourists. They’re more likely to be traveling executives, family members coming for weddings or other gatherings, and people who are in between homes or moving to the area.

Those who are visiting for pleasure are attracted to Gig Harbor’s atmosphere, Gustanski says.

“They come to visit Seattle but want a small town atmosphere to experience the Pacific Northwest,” she says.

Staying at a home creates the feeling of home away from home, Philbrick adds. It’s exactly what the recent Airbnb commercial was compelling tourists to do, declaring, “Don’t go there, live there.”

Philbrick says she is definitely seeing a cultural shift as vacation rentals has “become a thing.” Gig Harbor got a taste of this culture during the U.S. Open golf tournament last year. Although many homeowners lamented they couldn’t rent their homes (potentially because some asked for very high fees), Harbor Home Vacation Rentals did well in renting its properties to the golf enthusiasts.

“In Gig Harbor, the mindset (about vacation rentals) changed after the U.S. Open — people became interested in it and became more open because they saw it happen in their own community,” Gustanski says.

Philbrick sees the demand continue to grow for homes that don’t require longterm leases. She not only wants to expand the number of properties they manage (including moving into Kitsap), but she and her husband are also remodeling other people’s homes and turning them into rentals.

“I like the construction part,” she says.

“It’s been rewarding to fix up homes for clients, totally redoing them and then renting them, and then seeing people stay there and love it.”

Don’t let politics drive your investments.

Teresa Bryant

Denette Chu, AAMS

Schelley Dyess

Downtown Bremerton 360-373-1263

Port Orchard 360-876-4709

Port Orchard 360-876-3835

Debi Tanner

Todd Tidball

Glenn Anderson, AAMS

Kingston 360-297-8677

Poulsbo 360-778-6123

Poulsbo 360-779-7894

Jeff Thomsen, AAMS

David Hawley, AAMS

Jim Thatcher, AAMS

Bremerton 360-475-0683

Belfair 360-275-7177

Bremerton 360-373-6939

Edward A. Finholm

Patty Perez

Kingston 360-297-8664

Bainbridge Island 206-842-1255

Robert Morgan

Calvin Christensen

Jay Seaton, AAMS

Silverdale 360-698-6092

Port Orchard 360-876-7538

Mary Beslagic

Jessie Nino

Manchester 360-871-0998

Poulsbo 360-779-6450

Poulsbo 360-598-3750

Michael F. Allen, AAMS Silverdale 360-308-9514

Angela Sell, AAMS Silverdale 360-698-7408

www.edwardjones.com MEMBER SIPC

15

16

| August 2016 |

SAILBOATS from 4

are going to come back and do one.”

Since he still can do dockside lodging this year, Pattison offers guests that option so they’ll have easy access to Winslow’s restaurants and shops, or staying on the boat anchored out in the harbor.

He said it’s a pretty even split on what guests choose.

Doerr runs things a little differently at the charter sailing

business he started in May, after getting his Coast Guard license and outfitting the 1965 Pearson Countess ketch he bought last year after selling his other boat.

Guests can book a one-night stay ($225-$275 for up to four people) on the elegant vessel only if they book a two-hour sailing excursion for $275.

And while many popular lodging spots require a multiple-night stay during the busy summer season, Doerr’s guests are limited to a one-night stay. That’s so he can maximize use of his boat for tak-

ing non-overnight visitors out during the day or on a sunset sail.

“A lot of what Airbnb has brought is not necessarily people who are looking to go sailing,” Doerr said, “though obviously they’re drawn to the sailboat, and requiring a two-hour sail (with the booking) hasn’t bothered them.”

For the boat’s overnight guests who’d like a post-sail evening visit to town, Doerr will ferry them to the waterfront and back. But he said a lot of visitors prefer being out away from the dock surround-

ed by water.

For guests who want a longer stay, Doerr and his wife, Deb Henderson, also use Airbnb to rent out their two-bedroom house near the waterfront and a small cabintype unit they built on their lot.

It keeps the couple and their two young children hopscotching between the house, cabin and boat.

“We stay wherever is not booked,” Doerr said. “Though I will admit this summer there have been some nights we are triple-booked and we have to stay with family or friends.”

Both he and Pattison have hosted a lot of international visitors on their sailboats. Doerr recently had a Canadian family from Edmonton who came to Seattle for a youth soccer tournament.

“We definitely have an international presence,” Pattison said, noting that he gets bookings through his charter sailing website, Airbnb and Homeway, another global online service that was bought by Expedia last year.

“We get a lot of Australians, and apparently we are very popular in Korea.”

Other boats available for overnight lodging

By Tim Kelly tim.kelly@kitsapsun.com 360-792-3359

Outside of Bainbridge Island, there are a couple other Airbnb options on vessels other than sailboats. One is a 39-footer moored at the Port Orchard Yacht Club; the $195 nightly rate includes a cruise and full breakfast.

The other is Kris Day’s boat at the Bremerton Marina owned by the Port of Bremerton, another place where there’s uncertainty about the presence of Airbnb operations. Day’s boat, which accommodates two people, stays

docked and she does not take guests on cruises.

She said one of many benefits of working with Airbnb is that users are vetted before they’re allowed to book through the site, and she’s never had any problems with her guests — who also contribute to the local economy during their stays on the Bremerton waterfront, she noted. Day hopes she’ll be able to continue hosting Airbnb guests on her boat, which she’s had for 25 years and moved from Bainbridge to Bremerton a couple years ago.

Port of Bremerton CEO Jim Rothlin said there is not a policy

for the marinas that specifically addressesrentallodgingsonboats, but there is a policy requiring approval from the port for any commercial use of marina facilities.

“I’ve never had anything come up yet about that kind of request” for an Airbnb-type operation, Rothlin said, adding that the main concern would be the security of marina tenants.

“We have people who are liveaboards who rent slips from us in a secure area,” he said. “When you start handing out key cards to people who don’t have ownership in that boat, I could really see an issue.”

TIM KELLY

Kris Day on her boat moored at the Bremerton Marina. She has booked her boat as an Airbnb lodging site, but it’s uncertain whether the Port of Bremerton will allow such uses.

Navy move to block pit-to-pier upheld

By Ed Friedrich efriedrich@kitsapsun.com 360-475-3792

A state appeals court decision has supported the Navy’s efforts to block a pit-to-pier project and other structures it believes are incompatible with its mission in Hood Canal.

The Navy operates a ballistic missile submarine base and testing ranges there. Hood Canal Sand and Gravel owns waterfront where it planned to build a 1,000foot pier where barges would be loaded. The Navy claimed the pier would disturb acoustic and magnetic testing. It purchased a 50-year easement in July 2014 from the Department of Natural Resources for 4,804 acres of bedlands on the west side of the canal that prevents the building

of wharves, piers and docks. The gravel company needed a lease from DNR to construct a pier from its property.

The company sued in Jefferson County Superior Court in August 2014, claiming, among other things, that the state didn’t have the authority to grant the easement to the Navy and didn’t get market value for it. DNR filed a cross motion to dismiss all of Hood Canal Sand and Gravel’s claims, which the court did. The company appealed to the state appeals court, which ruled Tuesday that the superior court acted properly.

Hood Canal Sand and Gravel has 30 days to petition the state Supreme Court to take the case, spokesman Dan Baskins said. It has other avenues he didn’t disclose.

“I’m not at liberty to speak about it,” he said. “We’ll take our time to review our options and move forward. We have a month or two to determine what we’re going to do next.”

The establishment of market value for the easement aroused suspicions. An initial appraisal valued it at $1.7 million. The Navy told DNR it wasn’t authorized to acquire land costing more than $750,000 under the program it was using. The Navy recalculated a value of $720,000, which it paid.

Court documents explain what occurred. In arriving at the higher figure, the appraiser estimated the easement would reduce the bedlands’ value by 70 percent, the midpoint of six case studies. The Navy would have to pay the state for the lost value.

The Navy determined the most

similar case study was one that resulted in a 30 percent decrease in value, which pencils out to a much lower cost to the Navy. It said the bedlands are best used for geoduck harvesting and other low-intensity uses, not the types of development that the easement would prohibit. Bedlands are the area from 18 feet below the average low tide to 70 feet down.

“To the extent there were suggestions of impropriety, the court decisions vindicate the state and the Navy,” said Navy Region Northwest spokeswoman Sheila Murray.

Hood Canal Sand and Gravel argued that as a waterfront property owner, it should have priority rights to lease the bedlands.

The three-person appeals panel determined that the Legislature has granted DNR the author-

ity to grant easements to lease the bedlands and that the gravel company was eligible for a lease but not for preferential treatment.

State law “permits DNR to lease bedlands to the abutting owners, but it does not require DNR to do so,” the decision states.

A federal lawsuit challenging the easement was dismissed in September.

The Navy in August 2013 applied for a similar restricted easement on the east side of Hood Canal, from the floating bridge south to about Holly.

It suspended the application until the lawsuit about the west side was settled.

“Although there is no specific timeline, the Navy does intend to move forward with its application for a similar easement on the east side of Hood Canal,” Murray said.

The Navy will consult DNR to determine when to resume processing the east-side easement application.”

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Tappero from 19

with PTO policies will have to redefine how they handle paid time off — specifically carving out sick days. Other benefits, such as bonuses or incentive pay, may have to be adjusted in order for a business to afford to pay for increased wages and leave benefits.

As I wrote in last month’s article, the Department of Labor’s rules raising the salary threshold for overtime exemption are due to go into effect on Dec. 1. You can share this information with your employees and let them know what some of the impacts on your business may be. Keep in mind, however, that the National Labor Relations Act protects their right to discuss their working conditions with each other. You cannot prevent them from discussing their compensation with their co-workers, or advocating for improvement in their wages and benefits.

We all know that the success of our business depends on the quality of our employees. We’ll attract and retain the best people when we treat them with respect and compensate them well. No matter where you stand on the issue of government-mandated pay and benefits, doing right by our employees in the end just makes good business sense.

• Julie Tappero is president and owner of West Sound Workforce, a professional staffing and recruiting company based in Poulsbo and Gig Harbor. She can be reached at julie@westsoundworkforce.com.

| August 2016 |

Employers differ on how I-1433 would impact them ■ If it passes, ballot measure will raise state’s

minimum wage to $13.50 an hour, phased in by 2020

By Tim Kelly

tim.kelly@kitsapsun.com 360-792-3359

If Washington voters approve Initiative 1433 in the November election, it will raise the minimum wage statewide incrementally to $13.50 by 2020. The first step would push the wage from the current $9.47 to $11 starting in January, but some area businesses have already reached that threshold.

For example, all employees of Port Madison Enterprises, the business division of the Suquamish Tribe, make at least $11 an hour, even though the tribe is subject only to federal wage law that requires paying workers a minimum of $7.25 an hour — a rate that hasn’t changed since 2009.

“I think we all have to be realistic about this,” Port Madison CEO Russell Steele said. “The marketplace kind of dictates wages.”

PME is one of Kitsap County’s largest private-sector employers, and the majority of its workers have jobs at Suquamish Clearwater Casino Resort, which has increased staff as the resort has undergone a major expansion the

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last three years.

“We’re up to 960 jobs, and I’ve got to close to 100 jobs open right now,” Steele said. “During the recession, at its height in 2008 or ‘09, I only had about 18-20 jobs open. As the economy started getting better, the first sign was the number of jobs I had open.”

The Kitsap Peninsula Business Journal sent some area businesses — mostly ones related to tourism in the region — a survey on the potential impacts if I-1433 passes.

Most are remaining neutral on the ballot measure, but several in addition to Clearwater are paying most employees more than the current minimum wage, and have many workers already at the $11 an hour rate that could be required by law next year.

That includes The Coffee Oasis, a nonprofit that operates four cafés in Bremerton, Poulsbo and Port Orchard to help fund its programs for homeless and at-risk youth.

Executive director Dave Frederick said out of 59 Coffee Oasis employees, 17 of them earn between $10 and $11 and hour, and none are at minimum wage.

“Our intention, regardless of

I-1433, is to move all of our employees to a minimum wage of $11/hour by January 2017, which may impact prices, though I do not see it reducing hours or employees,” Frederick said in his response. “We are committed to blessing our employees the best we can.”

Other business owners responding to the survey also talked about providing fair compensation and making their employees feel valued.

Sean Pickard has a staff of 13 at his popular Grub Hut drive-in in Kingston, and that includes only two people making $10 an hour, which is the starting wage for his employees. Most are making more than $11, and employees share a tip pool on each shift.

“I am very much for trying to put more money in the pockets of service industry workers,” he said, “as I feel they do some of the most underappreciated and/or overlooked work in our society.”

However, Pickard said the proposed minimum wage law could “potentially cause a cascade effect that may raise the prices of everything. So at the end of the day I’m not sure the net effect will be more

UNFORTUNATELY, I-433 is proposing a one-size-fits-all wage rate.”

— Wade Perrow, owner of The Inn at Gig Harbr

money in the pockets of the people the initiative is intending to help.”

Another simple way he helps his workers is feeding them while they’re on the job. “Food is also one of the major expenses for our employees,” Pickard noted, “and this is a way for us to help save them some money without adding to the actual payroll.”

In another area of the hospitality industry, hotels, there are more minimum-wage employees in the workforce, and at least one respondent expects a higher minimum wage would lead to staff reductions.

“We would definitely need to reduce the hours of workers as well as some of the amenities/ services offered,” Baymont Inn and Suites general manager Jack Edwards wrote in his response to the survey. The Bremerton hotel has 21 employees making either minimum wage or less than the $11 an hour that I-1433 would require.

“It’s hard for hotels to raise prices to offset the minimum wage increase, since we are in an area that primarily gets a good share of revenue from government travelers that only pay the government per

diem rate,” Edwards said. “Hotel rates are also determined by supply and demand.”

Edwards is currently neutral on I-1433, but unlike other businesses he said he “may consider taking a stance opposing the measure in which we would be talking to the state representatives and state senators that represent our district.”

Another hotel owner thinks the state Legislature should have been out in front of this issue.

“As a business we are frustrated by the lack of action by our legislature in addressing the matter of living wages,” wrote Wade Perrow, who has a construction company and also is owner of the Inn at Gig Harbor.

He said the inn has proactively implemented “a wage structure that addressed much of what is proposed in I-1433.” About threefourths of employees make over the current minimum wage, and he said most of those earning minimum wage benefit from gratuities.

Perrow also raised a concern echoed by other business owners, which is that some minimum-wage earners are “first-job employees that are learning how to enter the workforce.”

That’s true for Kim Campbell and Erik Kleiva at their Port Gamble General Store & Café, which has 30 employees. They said they support the idea of a living wage for workers, but they also favor the concept of a lower wage during an initial training period of perhaps three months.

“A lot of times, I don’t think it’s worth paying someone who’s

AP PHOTO/RACHEL LA CORTE

Supporters gather to talk to the media before turning in signed petitions in support of a ballot measure to raise Washington state’s minimum wage, on Wednesday, July 6, 2016, in Olympia, Wash. Initiative 1433 seeks to incrementally increase the state’s rate over the next four years to $13.50 an hour and to provide paid sick leave to employees who don’t currently have it.

never worked before, like a high school kid, $11 an hour; I think that’s pretty ridiculous,” Campbell said.

Kleiva noted that they hire some young people whose first job is working as a dishwasher or busser. “So we’re supposed to pay them $13.50 an hour, and we not only have to teach them how to do the job we’ve hired them to do, but also how to have a job,” he said.

Campbell said a minimum wage that steadily increases to $13.50 over the next few years would have the most impact on small businesses like their restaurant.

“We anticipate it affecting our bottom line. We know that we will, one, have to raise prices, and two, probably cut staff,” she said,

noting that they’ll also have factor in providing sick leave for employees as required by I-1433.

“If I don’t do this (raise prices), I’m going out of business,” she said.

That’s not the case for larger companies. The CEO of Central Markets, which operates six grocery stores including Central Market in Poulsbo and Town & Country Market on Bainbridge Island, did not respond to the survey questions but sent a statement on I-1433, saying the company is not supporting nor opposing the measure.

“It impacts a very small number of our employees because we are a union business and therefore already pay higher wages,” CEO

Bill Weymer said. “If this initiative passes, we do not anticipate making any changes to our operations or increasing prices to offset increased labor costs. We operate one Seattle store that is already subject to that city’s increased minimum wage, and it has not impacted operations or pricing.”

Steele of Port Madison Enterprises also doesn’t think the proposed wage law would have an extreme effect, and said business owners in cities that already have higher minimum wages are making adjustments to how they operate.

He views raising the minimum wage as a cost-of-living increase.

“Rising rents are a concern for a lot of my employees,” said Steele,

21

who recalled his own days working low-wage restaurant jobs after college so he could spend a winter skiing at Sun Valley, Idaho. “Especially on the West Coast, this (minimum-wage increase) is a relevant issue when you look at cost-of-living issues.”

Frederick of Coffee Oasis said rising wages will necessitate price increases, but he also expects it will improve employee retention.

“Obviously, it impacts the organization as a whole because you can’t raise minimum wage and not raise staff all the way up the ladder,” he said, “thus impacting not only business prices but the need for stronger donations, as a nonprofit.”

Perrow, the Gig Harbor hotel owner, noted how some hospitality businesses in the city of SeaTac dealt with a mandated minimum wage of $15 an hour — by raising prices and itemizing a “Living Wage Cost Adjustment” on customers’ bills.

He also noted the tiered wage system implemented in Oregon, setting the minimum wage at different levels in urban and rural areas.

“Unfortunately I-1433 is proposing a one-size-fits-all wage rate,” said Perrow, who contrasted that with his past experience serving an apprenticeship to become a union carpenter, which “required four years of participating in the workforce before my wage was equal to that of the journeyman.”

Come January, though, all business owners will face higher payroll costs if voters approve I-1433.

“I’d be surprised,” Kim Campbell said, “if it doesn’t pass.”

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Kitsap Building Association • www.kitsapbuilds.com

President, 2016

Time to Leverage our Strengths Most of us are familiar with the famous line from the movie Field of Dreams “If you build it they will come”. I am not referring to a new baseball stadium but rather Kitsap’s unique position at this time as it relates to our region’s booming housing market. If we plan carefully I believe that the residents of Kitsap can benefit greatly for years to come.

As a home owner and also an owner of undeveloped residential lots I know firsthand how precious these are and never take for granted how fortunate I am. For those of us who have lived in Kitsap for many years we have seen development provide us with new infrastructure, centers for shopping, beautiful home developments in and around our urban cities. For many we also enjoy the rural lifestyle that no longer is available for many outside of Kitsap County without commuting for hours each day.

Recently the Port of Bremerton hosted a meeting called “Housing as an Economic Strategy” to discuss ways to leverage the demand for affordable single family homes in our region. Port of Bremerton Commissioner Cary Bozeman invited Lennox Scott of John L. Scott Real Estate to attend and provide insight as to how to use the demand for housing to our advantage in attracting new companies and employees to our area. For many outside of Kitsap in King County for instance, the low inventory of single family homes and soaring home prices have forced them to live further away from the companies that are supporting them.

For those of us in the Building Industry we know firsthand the impact housing demand and construction activity has in our local communities. Our KBA Membership base includes Architects, Engineers, Developers, Home Builders, Remodelers, Commercial Contractors, Plumbers, Electricians, Painters, Flooring Contractors, Financial Institutions and others. By supporting our membership companies and letting others know the advantages there are to membership we can continue to provide the best products to our communities and clients.

So how can we attract businesses to our area that in turn will allow for their employees to have reasonable commutes and better quality of life? We need to continue to invest in our communities and infrastructure to make them as attractive to others as they are to us. Get involved with the process and realize that we have a great opportunity to get this right and build on what makes Kitsap such a great place to live and work.

Teresa Osinski CGP Executive Vice President Lot Aggregation Forces Property Owners to Lose Investment Kitsap County is required to plan land use under the requirements of the Growth Management Act. In the simplest of terms, the Act requires local jurisdictions to create land use plans that encourage ever increasing urban density and reduce rural sprawl. The premise is that government has to provide public services and those services can be provided more efficiently when people are packed in tightly together.

Under the Act jurisdictions must reach certain percentages of urban development.

This is done by showing an ever decreasing amount of rural development and an increasing amount of urban. This is often called the urban v rural split. This is measured in many ways and managed by using land use controls like zoning restrictions, or in the alternative incentives.

Last month I wrote about the Reasonable Measures effort the County took up at the very last days of their most recent Comprehensive Planning process. Among several poorly crafted ideas included a proposal to make it so anyone with a lot, anywhere outside the UGA, that was substandard in size (smaller than today’s zoning code would allow to be built on) to be no longer able to build on it. There were exceptions of course, and this is bit of an oversimplification for sure. But that was the general idea. The estimated number of lots impacted by this proposal was between 13,000 and 17,000.

In a meeting hosted by the KBA, including the Suquamish Tribe and Jerry Harless (parties to past litigation on the comprehensive plan) it was agreed that the proposed Reasonable Measure regarding these substandard lots (Legacy Lots) was a red herring No one believed this strong-arm approach, this “takings”, was going to result in a shift of development. All agreed the negative impact to thousands of individual property owners was too great. Unfair. Unnecessary.

The County has now delivered their proposed Reasonable Measures to the Growth Management Hearings Board and in it they included several incentivebased ideas generated by the KBA, the Tribe and Mr. Harless. Unfortunately, the County has chosen to move forward with their attack on private property owners and deem the small parcels of land held by families throughout Kitsap to be detrimental to the future of the county’s public services. The new proposal will impact a smaller number of properties but will penalize those property owners that own adjoining, sub standard lots. If you own one of these Legacy Lots outside the UGA, you are encouraged to read what the County is proposing.

If the original, more aggressive, broader, approach was expected to have no measurable benefit on the rural v urban split percentage (as discussed above), this newer, more specific example certainly won’t result in significant shifts to the split.

This policy is discriminatory, ill-conceived, and meritless. Further, the County has proposed it without any data indicating how many owners are affected, how many similar lots have been built on in the past 5 years, or how this direct attack on property rights is anticipated to buoy society in its fight against government waste and inefficiency.

You can find the full description at http://compplan.kitsapgov.com/Pages/ Reasonable-Measures.aspx. Please Consider attending the Open House on August 8 from 3:30pm – 5:30pm at the County Administration Building in the Commissioners Chambers on the 3rd floor.

KBA NEWSLETTER KBA NEWSL

EWSLETTER KBA NEWSLETTER

Kevin Ryan Tim Ryan Construction

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Kitsap Building Association • www.kitsapbuilds.com

THANK YOU RENEWING MEMBERS 37 Years MAP LTD 26 Years PRO-Build of Bainbridge Island 25 Years The Reijnen Company Dahl Glass Dansons Landscaping Inc. Over 20 Years Cook Construction Inc. (23) Hutch-Con Construction Inc.

Over 10 Years Pristine Homes LLC (14) The BJC Group (14) JCM Property Management LLC (14) Sonny Beez Landscape Quasa Enterprises Inc. Over 1 Year O.L.D. Land Development Inc. Darrel Emel’s Tree Service Inc. Gary Lindsey Royal Valley, LLC

20 Years Kitsap Credit Union Over 15 Years Eagle Home Mortgage Sound View Construction

UPCOMING CLASSES – The KBA — Your source for education!

KBA classes are affordable, local, and on topics important to your business. All professionals are welcome to register and attend our classes.

Oct 26 – Construction Management – 8am Nov 2- Estimating for Builders & Remodelers – 8am We have filled over 150 seats for education in 2016! Are you accessing all the education we have to offer? Are your competitors? Don’t miss out! Register today for the classes listed above.

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If you have questions regarding the Building Industry Insurance Program, contact BIAW Special Projects Coordinator Karen Hall at 800-228-4229, ext. 137.

GUEST COLUMN Elliot Eisenberg, Ph.D., GraphsandLaughs, LLC The Economic Forecast for the Second Half of 2016: Decent but Nothing Remarkable Despite GDP again slowing in Q1, as has been the case for the past few years, the economic recovery that began in July 2009 remains intact. The poor performance of the US economy from January through March was almost expected, and the incoming employment, housing, and service sector data all point to a modest economic pickup.

GDP growth the rest of the year should average 2.2%, with growth in Q2 closer to 2.75% as the economy rebounds from a tough Q1. The combination of continued wage growth and increased residential construction activity suggests that 2016 will probably improve as it progresses.

Despite weak energy prices, a continued strong dollar that has hurt manufacturing by making US exports costly and imports cheaper, and a struggling agricultural sector, the rest of the economy is OK. As long as the service sector and construction continue to expand and wages rise, the US economy will continue to grow despite the headwinds it faces. Importantly, the labor market continues to strengthen, voluntary quit rates are rising and are almost back to where they were before the Great Recession, the number of involuntary terminations keeps falling, and job creation, while down from last year, remains strong. At this rate, there will be little slack in the labor market 12 months from today. Lastly, passage of the FY 2016 budget package has boosted economic activity as it extended some tax breaks and eased spending caps on domestic and military spending, making fiscal policy pleasantly expansionary.

A definite economic bright spot in 2016 has been housing, and that is due to rising household formation. After averaging well over 1.2 million annually from 1983 through 2006, household formation plummeted to just 600,000 in 2014. Since then, it has been rising by about 1.2 million a year. Add to this slightly improved access to credit, and housing starts should reach an annualized average rate of 1.19 million during the second half of 2016, their best level since late 2007, with new single-family construction contributing at a pace of 810,000 units and multifamily adding 380,000. Despite being severely constrained by a lack of inventory, pending home sales are strengthening and existing home sales should rise by 3% annually, while home prices should rise by 5% annually.

As for inflation, it remains benign but shows signs of slowly rising from its current level. The dollar is likely to strengthen slightly in the latter part of the year and oil prices appear to be rising, thus the two trends that have exerted strong deflationary pressures on imports and energy respectively should dissipate. Moreover, as the unemployment rate continues falling, labor shortages are becoming increasingly widespread. This pushes up wage growth, which is definitely rising, albeit modestly, and thereby boosts household spending. However, rising prices and wages will push the Fed to raise short-term rates by one-quarter-of-one percent as early as July, and certainly by November or December.

Long-term rates have bottomed and 10-yr Treasuries will end the year at close to 2% as the economy strengthens.

In short, the economy continues to grow modestly. Short-term interest rates are likely to start rising, wages are rising, and residential construction activity looks to continue to slowly strengthen as we go into 2017. Most critically, continued solid job creation will keep consumer spending up and the likelihood of a recession during the next six months, close to zero.

Elliot Eisenberg, Ph.D. is President of GraphsandLaughs, LLC and can be reached at Elliot@graphsandlaughs.net. His daily 70 word economics and policy blog can be seen at www.econ70.com. You can subscribe to have the blog delivered directly to your email by visiting the website or by texting the word “BOWTIE” to 22828.

KBA NEWSLETTER KBA NEWSL

EWSLETTER KBA NEWSLETTER

50 Years!

Puget Sound Energy

| August 2016 |

27

Kitsap growth rate up slightly Owner’s proposal would ■ Carrier’s move likely one cause

By Tad Sooter tad.sooter@kitsapsun.com 360-475-3783

Population growth in Kitsap accelerated in the past year, as more than 3,400 people moved to the county.

Kitsap’s population now stands at 262,590, marking a 1.7 percent increase from 2015, according to estimates released recently by the state Office of Financial Management. The county’s population hadn’t grown by more than 1 percent since 2011.

Kitsap led other West Sound counties in percent population increase, but still trailed King, Snohomish, Pierce and Thurston.

The state’s population increased by 1.73 percent, the largest jump since 2007. The Office of Financial Management’s estimates are used to determine how some state

Tourism from 9

KitsapPeninsulaparticipating in marketing efforts aimed at international tourists? What results is that marketing yielding?

We decided to expand our focus on the international tourism market because we knew they were a big market for the Olympic Peninsula, and we wanted to tap into the fact they nearly all had to travel through Kitsap before crossing the Hood Canal bridge.

We were also hearing from local hoteliers that they were seeing an increase in international visitors and decided to find a way to get them to make the Kitsap Peninsula part of their itinerary.

The Port of Seattle plays a major role in promoting Seattle and the Puget Sound as part of its international tourism development department and we decided to look for an opportunity to create a partnership.

In May 2015 we joined Visit Seattle, Olympic Peninsula and other Puget Sound tourism organizations as a member of the Port of Seattle’s sales mission

revenues are divvied up among counties and cities.

Migration continued to be the primary driver for population growth in Washington and in Kitsap. Net migration (more people moving to the county than moving away) accounted for nearly 80 percent of Kitsap’s 4,390 new residents. The rest came from natural increase (more births than deaths).

State Demographer Yi Zhao said Kitsap is growing more slowly than counties on the east side of Puget Sound because it hasn’t seen as much spillover from the booming Seattle area. More people are spreading out north and south along the I-5 corridor he said. Plus Kitsap hasn’t seen a big upswing in jobs, housing units, or other key economic indicators.

“There’s not a significant change there,” Zhao said.

In fact, one of the biggest factors in Kitsap’s population uptick may have been the Navy’s decision to station the USS Nimitz and its crew of nearly 3,000 in Bremerton. Military personnel are included in the state’s estimates.

The Nimitz contributed to a 2.8 percent population increase in Bremerton, which now boasts an estimated 40,500 residents.

Poulsbo grew by 2.6 percent, topping 10,000 residents for the first time. Bainbridge Island (23,760 residents) and Port Orchard (13,810) grew more gradually.

New residents were evenly split between the county’s cities and unincorporated areas, though cities experienced a larger percentage increase in population.

For more information, go to www.ofm.wa.gov.

to the United Kingdom to meet with major travel agency and tour operators. We used the mission to establish the fact that the Kitsap Peninsula region is its own unique destination. The sales mission has resulted in the publication of an international travel article featuring several Kitsap communities, an invitation to submit a seven-day itinerary to UK Travel Planner, hosting international travel writers, and making one-on-one sales presentations about the Kitsap Peninsula at private events hosted by the Port of Seattle.

Most recently, the port awarded VKP a $10,000 matching grant to develop an information online portal on the VKP website to assist international travelers visiting the Kitsap Peninsula. The port has also offered to include the Kitsap Peninsula region as part of its recommended “sidestop” destinations along with Bellevue and Mt. Rainier. We suggested to them that we can be their destination to enjoy a ride aboard the world-famous Washington State Ferries.

Local hoteliers and businesses continue to report they are seeing more and more international

change Liberty Bay Auto site to shops, homes

A Poulsbo property owner is considering a plan to redevelop a car dealership property at the head of Liberty Bay with a mix of shops and homes.

The city received a pre-application submittal in June for a project called Liberty Bay Village, which would replace Liberty Bay Auto and a neighboring commercial building with a mixed-use development.

In a project narrative attached to the submittal, architect Charlie Wenzlau said the project was designed to complement a planned extension to the city’s waterfront boardwalk. Wenzlau submitted the pre-application package on behalf of Dean Church, who owns the Liberty Bay Auto dealership, the 1.8-acre

Liberty Bay Auto property and a 1.6-acre parcel to the south, which is home to a dance studio and auto glass shop.

A pre-application conference with city staff was scheduled for July 19. The pre-application process allows developers to get feedback on the feasibility of a project before filing a formal permit application.

In an email, Church said he would not be available to comment until later but stressed it was a long-range vision for the property.

According to the pre-application submittal, Liberty Bay Village would incorporate a landscape buffer along the boardwalk,

travelers who love to spend money eating, drinking and shopping.

Clearly, Kitsap is definitely no longer viewed by domestic or international travelers as just a gateway to someplace else.

during their visits.

Airbnb and VRBO are subject to the same lodging tax requirements and contribute to funds used for tourism marketing and related activities.

5. There seems to be a growing demand for alternative lodging experiences, as evidenced by the growth of internet booking sites,such as VRBO and Airbnb. What effect is that having locally?

Airbnb and VRBO are going right along with other similar independent services like Homeaway.com and UBER. Some view these emerging new tourism services as competition to traditional hotel establishments, but we view them as offering visitors more lodging and visitor options and experiences, similar to staying in a B&B or at a campground.

They also offer additional lodging capacity during the peak tourism season, and VRBOs have the potential to attract planners looking for accessible corporate retreats for Seattle/Bellevue-based businesses. While VRBOs have kitchens, visitors shop locally to stock up on supplies, dine out and make the rounds of local shops

6. What do you see for the future of tourism on the Kitsap Peninsula?

There is no question that there isenormousopportunityforfuture growth, especially considering what has already been achieved by dedicated tourism stakeholders throughout the region. The VKP in partnership with Kitsap County, Olympic Outdoor Center, National Parks Service staff and others worked together to create theKitsapPeninsulaNationalWater Trails and is viewed as a mecca for paddling and other outdoor recreation activities. The city of Bremerton is host of one of only seven official Washington State Beer Commission annual events, the Bremerton Brewfest. The Port of Bremerton will host the prestigious Association of Owners & Pilots Association (AOPA) annual meeting in August that will put the region on the national stage.

We have a growing agri-tourism sector, thriving arts community

and internationally recognized gardens, museum, cultural and Native American centers ready to welcome visitors from around the world.

The VKP hosts one of the most popular websites in the region that features every city, community and stop along the way in the Kitsap Peninsula region. It has carefully invested in a regionwide tourism marketing program that benefits all tourism stakeholders and promotes “the Natural Side of Puget Sound” from Hansville to Olalla and all points in between.

We have made great progress repositioning the Kitsap region from a gateway to someplace else to a destination we can all be proud of.

But the competition is fierce. If the KitsapPeninsula region is going to compete with other destinations, most with much larger marketing budgets, it will take a commitment by stakeholders to collaborate and capitalize on the shared economic potential and benefits thatKitsap’s growing tourism sector offers today and in the future.

See PROPOSAL, 32

• Patricia Graf-Hoke and Visit Kitsap Peninsula can be reached at 360-908-0088 or www.visitktisap.com.

28

| August 2016 |

Work begins on VA clinic

Work has begun on the interior of this former Rite Aid on Kitsap Way in Bremerton to become a new veterans clinic.

LARRY STEAGALL / KITSAP SUN FILE

■ Bremerton location

quality care,” he said. “I’m impatient, and I want this to get done because veterans

will add to services

By Ed Friedrich efriedrich@kitsapsun.com 360-475-3792

Work began in July on a new, larger veterans clinic.

A recent meeting among the National Contracting Office, VA Puget Sound Health Care System engineering staff and building lessor Golden Oyster Bay LLC resulted in a limited notice to proceed, VA spokesman Chad Hutson said Friday. The action allows the lessor to begin preliminary work.

The clinic will be at 4205 Kitsap Way in the Oyster Bay Shopping Center, in a space that had housed a Rite Aid pharmacy.

County Commissioner Ed Wolfe said he visited the facility recently and workers were demolishing the interior.

During the demolition,

Kitsap Aerospace and Defense Alliance to hold annual meeting The Kitsap Aerospace and Defense Alliance will hold its annual meeting Aug. 23 from 3-6 p.m. in the

Billboards from 22

Engley. The city had to process Engley’s applications, which were grandfathered in despite the ban, the judge said.

Litigation in Engley’s

the National Contracting Office will continue to work with the building owner on final, minor changes to the design so a full notice to proceed can be issued, which is expected soon, Hutson said. Once the final notice is issued, a timeline for completion will be developed and an opening date set.

Hutson said in June that if negotiations on allocation of costs could be worked out quickly, the VA was hoping to open the clinic in the fall.

The site was selected in October from three candidates. The other two sites weren’t identified.

The new location is less than a half-mile from the existing clinic at 925 Adele Ave., which opened in 2001.

At 14,000 square feet, the new clinic will nearly triple the size. The larger facility

will allow the staff to grow from 22 to more than 30.

The additional staff will allow for expanding primary care and home-base primary care services, and add physical therapy.

The VA provides health care to military members who were honorably discharged and fall under certain income levels. Community-based outpatient clinics such as Bremerton’s provide the most common health and wellness services without vets having to visit a larger medical center in Seattle or Tacoma.

U.S. Rep. Derek Kilmer, D-Gig Harbor, said the clinic can’t open soon enough after being delayed for years.

“For too long, veterans in Bremerton have dealt with inadequate and overcrowded facilities that have led to difficulty in accessing

second-floor meeting room of the Avian Flight Center at Bremerton National Airport.

The meeting will include a review of 2016 activities including the Farnborough Air Show, and the keynote speaker will be John Thornquist, director

of the Washington Office of Aerospace. Jeff Marcell, a senior partner at TIP Strategies, also will speak at the meeting, which is open to the public.

This is a free event but preregistration is required by noon on Aug. 15 at http:// kada2016.bpt.me/.

second suit was long and tortuous. In 2016, Settle granted concessions to both parties, which McMahon said created “uncertainties” about the outcome of the case, leading to the settlement agreement.

“This was definitely a unique and uncommon ex-

perience,” said Engley, who has owned or leased billboards in Nevada, Oregon and Washington. “I think there might have been a lot of ways we could have resolved this.”

Mayor Rob Putaansuu said he is not at liberty to discuss the case at this time.

www.KPBJ.com

deserve better. That’s why I’ve been pushing the VA and will continue to push until the new clinic opens its doors. I’ll continue my work with local leaders to see this through so veterans can get the care they’ve earned.

Decision Makers II: Exploring International Trade & Foreign Direct Investment October 12th, 3-6:00 pm Suquamish Clearwater Casino Resort & Conference Center Hosted appetizer buffet, wine and beer social hour from 5-6:00pm

Register at http://kedaDM2.bpt.me/

REGISTER NOW FOR EARLY BIRD SAVINGS!

Program Highlights: • Selling your products & services in international markets • Leveraging proximity to Seattle - a center of global commerce • Identify new sources of investment capital to grow your enterprise • Access new resources that can assist you in going global The KEDA is a strategic partner in the Global Cities Initiative, a joint project of Brookings and JP Morgan Chase, aimed at assisting businesses throughout the region in pursuing new opportunities for growth via exporting products and services, and importing foreign direct investment.

This event is sponsored by JPMorgan Chase, Puget Sound Energy and the Clearwater Casino Resort. Call 360-377-9499 for more information.

| August 2016 |

Bremerton cracks down on parking ■ City Council increases budget for enforcement downtown

By Josh Farley

jfarley@kitsapsun.com 360-792-9227

Parking enforcement is getting beefed up in Bremerton.

The City Council on Wednesday voted to increase the budget of its contracted enforcer, Imperial Parking, so that it can staff up efforts to penalize parking scofflaws.

KITSAP SUN FILE Mayor Patty Lent said The city of Bremerton is increasing its budget for parkthe goal isn’t to be more ing enforcement, particularly in the downtown area. draconian but rather target commuters who are abusing street parking and blocking tourists and locals under its contract with Impefrom frequenting businesses, par- rial Parking, or Impark, by 130 ticularly downtown. hours, for a total of 580 hours “We really do want to change of enforcement each month. their habits,” Lent said.

Shannon Corin, the city’s clerk In a 5-2 vote, the council ap- who also manages Bremerton’s proved the bolstering of staff parking contract, called Impark

“overwhelmed” at present. The company has one patroller of parking at a time. The additional staffing would allow for two during “peak” hours during the week and hire a part-time office staff member to do clerical work.

The council’s decision extends Impark’s contract three years, along with the increased enforcement, which starts Aug. 1.

Council members Greg Wheeler and Leslie Daugs voted against the move, with Wheeler saying it comes when the city is trying to get a snapshot of parking for its upcoming $112,000 parking study. The analysis will determine parking capacity in many parts of the city, who is filling up the spots and size up the city’s parking needs. Wheeler doesn’t want to change the enforcement as the study begins.

“I’m afraid it will skew the data,” he said.

He’d prefer to keep the status quo through the end of the study in February so officials get an accurate picture of parking uses and needs.

Lent disagreed, saying the time is now to make a fix given the demands on parking here, particularly during the tourist season.

“We need to take care of today, while we find out what the needs are for tomorrow,” she said.

Boosting the contract will take Impark’s enforcement bill to the city from about $14,000 to $19,000 per month. But Corin said that the move coincides with the city’s completion of paying off 29 electronic parking pay stations around the city. That saves about $5,000 a month that can be used for more enforcement, she said.

Diamond Parking handled parking enforcement for nearly four decades in the city. Impark took over the city contract in

2011, and Lent called for a “softened” approach to enforcement.

Whereas Diamond Parking wrote about 16,000 parking tickets in 2009, Impark’s numbers fell to 5,500 in 2015.

Corin doesn’t believe the increased enforcement will hearken back to those Diamond days, because of changes city officials made in 2013. At that time, the council passed reforms that gave Impark more enforcement teeth against frequent violators, now the priority for city officials.

Among them: A vehicle could be declared a “public nuisance” and towed if its owner accumulated six or more parking tickets in 90 days; if three or more are unpaid, the city can tow the vehicle in 45 days.

A violator receives a $25 ticket for an initial infraction of violating street parking; it escalates to $50 on the second; $100 on the third. But at the beginning of each month, the ticket drops back to $25 regardless of how many tickets the driver has received, Corin said.

286 Fourth Street, Bremerton WA 98337 l 360.479.3579 l bremertonchamber.org

Platinum Members

Welcome New Members

August Chamber Events

Harrison Medical Center

Dylan Fabrics 408 Pacific Avenue, Bremerton (808) 227-1034

August 9 - 7:30 - 9:00 a.m.

Kitsap Business Forum Business Trends: What Is Changing That You Should Know?

Best Western Plus Silverdale Beach Hotel 3073 Bucklin Hill Rd, Silverdale

Haselwood Auto Group

Gold Members

Future Nails 4213 Wheaton Way, Suite D, Bremerton (360) 377-2677

Kitsap Sun

Olive Branch Events 2544 Trenton Avenue, Bremerton Puget Sound Naval Shipyard & Intermediate (360) 535-9061 Land Title of Kitsap County

Maintenance Facility Tim Ryan Construction, Inc.

Treetop Village Early Learning Center 4175 Wheaton Way, Bremerton (360) 373-5437

29

August 16 - 11:30 a.m. - 1:00 p.m.

Membership Luncheon John Clauson, Executive Director, Kitsap Transit Passenger Only Ferry Tax Measure McCloud’s Grill House 2901 Perry Avenue, Bremerton August 25 - 5:30 - 7:00 p.m.

Chamber After-Hours Networking Social Better Properties of Western WA and AAA Washington 5700 Kitsap Way

30 | August 2016 |

Walls set to fall at Poulsbo’s old City Hall

■ A mixed-used development with apartments and commercial space will be built on the site

By Christian Vosler

christian.vosler@kitsapsun.com 360-792-9207

After 70 years, the old Poulsbo City Hall is finally coming down.

Demolition of the former City Hall on Jensen Way began in late July with asbestos abatement in the building, and the process is expected to be completed by mid-August, according to project manager Peter Battuello.

The building was originally built in 1941 and featured office space, a parking bay for firetrucks, a library and a fire hose drying tower. It was remodeled and expanded in 1969, and served as City Hall until 2010 when the Moe Street building opened.

Since then, the Jensen Way site has stood empty. The city put the property up for bid during the recession, but it was difficult to find an interested buyer, Mayor Becky Erickson said.

Demolition will open the old site to development. Bainbridge Island resident Michael Burns — who purchased the site in 2014 for $1.2 million — also has developed several properties on Bainbridge,

MEEGAN M. REID / KITSAP SUN

The old Poulsbo City Hall on Jensen Way is being demolished, and a new mixed-use development with apartments and commercial spaced will be built on the downtown site.

including the Madison Cottages in Winslow. Burns and real estate broker Jim Laughlin were

unavailable for comment on any changes to the proposed development.

The current site plan for the proposed three-story mixed-use building was approved in April.

Community YMCA study reviewed ■ Interest high in possible Olhava Way option in Poulsbo

By Christian Vosler

christian.vosler@kitsapsun.com 360-792-9207

Poulsbo is one step closer to a potential YMCA facility on Olhava Way. City Council members listened to a report on the feasibility of a fitness center at its meeting Wednesday night. The study, commissioned in April and conducted by Triangle2 Solutions, aimed to examine the market for a YMCA at the College Market Place. Triangle2 CEO and market researcher Lori Swann presented the report and called the results “very positive.”

“Your particular study wasn’t

unusual in the way that it was presented, but it was unusual in how excited people got about talking to us on the phone about it,” Swann said.

The study included interviews with more than 600 area residents, with around 400 identifying themselves as current YMCA members.

Respondents were separated by whether they lived within the city limits and were questioned about preferred services, locations and funding sources for the potential facility.

Swann reported that 45 percent of respondents said that if the potential YMCA had everything they wanted, they would be “very

likely” to join.

In total, Triangle2 projected 4,416 membership units, or households, would regularly participate and pay dues at a YMCA in Poulsbo.

Those surveyed highlighted cardio and weightlifting equipment and aquatic classes as top priorities for fitness. Theater, dance and art classes, as well as classes for seniors and diet and nutritional information also received positive responses from the community.

Council members asked for clarification about the role of the facility in the community — whether it would act more like a university student center or a

traditional YMCA — in addition to possible partners. The report found that 70 percent of respondents would be very likely to support the venture if the city partnered with Western Washington University or Olympic College.

Almost a third said they would support a municipal bond to help fund the project.

For some council members, additional context is needed before they proceed.

“What I’m missing right now are comparatives,” Councilman David Musgrove said.

“I see numbers, and they look like they’re probably positive, but I have no comparatives to know if they really are.”

Planning documents show a mix of commercial space and studio and one-bedroom apartments with one level of underground parking.

Poulso City Councilman Ed Stern praised the development, noting more residential space would help keep the downtown area busy outside of tourist season.

“The more residential population downtown, the better for everybody,” he said.

Erickson noted that another development — more residential and commercial spaces at the site of the old Poulsbo police station at Front and Hallmark streets — combined with the Jensen Way project will result in the addition of more than 80 apartments.

“It’s going to be a real revenue generator for the downtown core,” she said.

While the building might hold memories for some, for others it was time to go.

“It’s hard to feel nostalgic (about the old City Hall) unless you have a cinder block fetish,” Stern said.

Swann, senior planner Karla Boughton and Planning & Economic Development Director Barry Berezowsky acknowledged that despite the positive results of the study, the project still is in its infancy.

“What we’re hearing here is there’s a foundation, a base level of support that’s fairly positive, and we have to decide if that’s enough for the parties to agree to move forward,” Berezowsky said. Boughton said that the next step is for the city to meet with the YMCA Leadership team to discuss options.

“I’m very optimistic about this, I think it’s going to take us more than a couple of years to put his together, but I see real possibilities here,” Mayor Becky Erickson said.

| August 2016 |

31

Silverdale clinic joins CHI Franciscan Health ■ WestSound Orthopaedics to keep name

By Tad Sooter 360.475.3783 tad.sooter@kitsapsun.com

CHI Franciscan Health announced an affiliation agreement Wednesday with Silverdale-based WestSound Orthopaedics.

CHI Franciscan, parent company of Harrison Medical Center, is acquiring the orthopedic group’s assets and leasing its Silverdale location, according to a news release. WestSound Orthopaedics will continue to operate under its current name as part of Franciscan Medical Group. The agreement took effect July 1.

WestSound Orthopaedics President Dr. Gregory Duff said he and his partners determined affiliation was necessary to maintain

the quality of care provided by the group. He said transformations in the health care industry are making it harder for small medical organizations to go it alone.

“Everything we fought so hard to provide to the community, our quality, was getting increasingly more difficult to ensure very passing year,” Duff said Wednesday.

Duff added he was confident CHI Franciscan would fully support WestSound Orthopaedics’ work.

“They’ve been exceptional,” he said. “I think they’re dedicated to the cause.”

Franciscan Medical Group Chief Operating Office Peter O’Connor said the addition of WestSound Orthopaedics was a natural

fit as CHI Franciscan continues to expand services on the peninsula.

“They have the best orthopedic group in the area,” O’Connor said.

Founded in 2005, WestSound Orthopaedics grew rapidly in recent years, adding staff and satellite locations. The group’s providers already work regularly in Harrison facilities, including the orthopedic hospital in Silverdale.

Seven orthopedic doctors practice with WestSound Orthopaedics, alongside physicians assistants, physical therapists and other health care professionals. O’Connor said Franciscan plans to hire a spinal surgeon to augment WestSound’s staff.

“We’ll be expanding

LARRY STEAGALL / KITSAP SUN

WestSound Orthopaedics, on Anderson Hill Road in Silverdale, has been acquired by CHI Franciscan Health, parent company of Harrison Medical Center. WestSound Orthopaedics president Dr. Gregory Duff said he and his partners determined affiliation was necessary to maintain the quality of care provided by the group. Founded in 2005, WestSound Orthopaedics grew rapidly in recent years, adding staff and satellite locations.

their offerings,” he said.

WestSound Orthopaedics patients will notice few

changes from the affiliation — staff, providers and locations will remain the same.

O’Connor said the group will be moving to the Epic medical record system.

EVENTS CALENDAR AUG 2nd

Business U: Sales Tracking 5:30 - 6:30 pm at Poulsbo Chamber of Commerce

AUG 5th

Poulsbo Uncorked!

Enjoy local food, wine, and beer. Tickets are $20 per person and available for purchase at poulsbochamber.com/uncorked - event is 21+ 4:00 - 7:00 pm at Hudson Auto on Viking Ave.

AUG 10th August Luncheon: Derek Kilmer & the Annual Luau!

Derek Kilmer currently serves as U.S. Representative for the residents of Washington’s 6th Congressional District. Join us to get an update on the state of things, and the chance to ask your congressman questions. August is also our annual Luau theme, wear your Hawaiian shirt and eat some delicious luau style treats!

Monthly Networking Luncheon Speaker: U.S. Representative Derek Kilmer, Annual Luau!

11:30 - 1:00 pm at Gateway Fellowship

AUG 11th

Ribbon Cutting: West Sound Treatment Center 5:15 p.m. at 19351 8th Ave Ste 204

JOIN NOW! Interested in becoming a member of the Poulsbo Chamber of Commerce?

Call us today at (360) 779-4999 or visit www.PoulsboChamber.com

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| August 2016 |

Port Orchard takes aim at affordable housing â&#x2013; City mulls tax break on some projects

By Chris Henry

chenry@kitsapsun.com 360-792-9219

The cityâ&#x20AC;&#x2122;s development department is ďŹ&#x201A;oating a proposal to offer developers property tax exemptions for certain multifamily housing projects in Port Orchard.

The provision, allowed under RCW 84.14, is meant to stimulate development and provide affordable housing, especially in depressed areas of the city, including downtown and Mile Hill Drive, Mayor Rob Putaansuu said. â&#x20AC;&#x153;We have some areas of our town that need help to create some activity,â&#x20AC;? he said. â&#x20AC;&#x153;I think we need to put some incentives in place to encourage development in those areas.â&#x20AC;?

The Port Orchard City Council held a public hearing on the proposal last month.

Bremerton is the only city on the Kitsap Peninsula that has a multifamily property tax exemption.

Bainbridge Island might consider the exemption during its upcoming comprehensive plan update, spokeswoman Kellie Stickney said.

If Port Orchardâ&#x20AC;&#x2122;s council approves the code change, developers would get a temporary delay in value-based property tax increases for new, renovated or converted housing projects of at least 10 units within certain areas of the city.

The value of improvements would be exempted from property taxes for either eight or 12 years. Only property owners who commit to selling or renting at least 20 percent of units at

prices accessible to low- or moderate-income households would be eligible for the 12-year exemption.

The exemption does not apply to the value of land, existing improvements or nonresidential improvements. Property taxes on these assets would remain in place during the exemption period.

Areas of eligibility identiďŹ ed in the proposal include much of Bay Street, most of Bethel Avenue and parts of Mile Hill Drive, including the old Kmart shopping center.

The vacant Kmart building is a prime example of property ripe for redevelopment under the tax exemption provision, said Putaansuu, who campaigned in November on a platform of revitalizing the city by courting development.

Adopting the exemption would make Port Orchard more competitive in attracting development within the region, said Mike Eliason, of the Kitsap County Association of Realtors, in a letter to the city.

Both Tacoma and Seattle offer the tax incentive.

Bremerton established its multifamily tax incentive in 2006, and through amendments in 2007, 2010, 2014 and 2016 expanded areas of eligibility to all urban centers identiďŹ ed in the cityâ&#x20AC;&#x2122;s comprehensive plan.

These include downtown, the Wheaton-Riddell district, Wheaton-Sheridan district, Eastside Employment Center, the Charleston District and the Bay Vista Center.

Four projects in Bremerton have been granted the tax exemption: the 606 apartments (71 units, com-

www.KPBJ.com

pleted), Evergreen Pointe (109 units proposed, tax exemption conditionally approved), Spyglass Hill (80 units, under construction) and Inhabit Burwell (48 units proposed, tax exemption conditionally approved). All but Spyglass have the 12-year exemption for affordable housing, the need for which has increased sharply throughout Western Washington since the economyâ&#x20AC;&#x2122;s rebound.

Kelli Lambert, the Bremerton planner in chargeofthetax-exemption program, has heard from developers who say their projects wouldnâ&#x20AC;&#x2122;t â&#x20AC;&#x153;pencil outâ&#x20AC;? without the tax break.

The ďŹ scal impact of the program to the city is hard to quantify, according to a staff report to the City Council in May, when the most recent expansion was proposed. Although property tax revenue is lost, other sources, such as sales and real estate excise taxes, might balance the reduction. Then thereâ&#x20AC;&#x2122;s the tangible and intangible value of drawing more residents to urban cores, with the potential to increase spending at local businesses.

Bremertonâ&#x20AC;&#x2122;s share of property taxes is small compared to the portion going to Kitsap County, the memo notes. And once the exemption expires, the improved housing likely is to remain for several decades.

Under Bremertonâ&#x20AC;&#x2122;s ordinance, renovation projects that qualify for the property tax exemption must not displace tenants.

Mixed-use projects â&#x20AC;&#x201D; retail and residential â&#x20AC;&#x201D; are eligible in Bremerton if at least 50 percent of the area is devoted to living space.

Silverdale The Heartbeat of Kitsap Peninsula!

3100 NW Bucklin Hill Rd. Suite 100 Silverdale, WA 98383 â&#x20AC;˘ 360.692.6800 SilverdaleChamber.com

WELCOME THESE NEW MEMBERS DEF Productions 303 NE Plover Ct. Poulsbo, WA 98370 360-598-2030 def-productions.com Hudson Auto Center of Bremerton/Poulsbo

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9414, Ridgetop Boulvard NW Silverdale, WA 98383 haircutmensilverdalewa.com/

Bremerton Historic Ships Association Corner Bakery Cafe, LLC

20081 Viking Ave NW Poulsbo, WA 98370 360-779-0393 hudsonautocenter.com

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Bremerton, WA 98337 Silverdale, WA 98383 360-792-2457 360-689-2947 ussturnerjoy.org cornerbakerycafe.com

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206-465-5015 nutritionworld.ww@gmail.com

8753 State Hwy 303 NE # 101 Bremerton, WA 98311 360-286-2426 Worksource Kitsap County discoverchampions.com 1300 Sylvan Way iLoveKickboxing Bremerton, WA 98310 10516 Silverdale Way, Suite 130 360-337-4727 Silverdale, WA 98383 360-633-3632 Westsound Wellness lovekickboxingsilverdalewa.com 3100 Bucklin Hill RD Suite 105 Silverdale, WA 98383 360-830-6596 westsoundwellness.com

The Art of Chiropractic Nutrition & Functional Medicine 9220 Ridgetop Blvd NW, Ste 100 Silverdale, WA 98383 360-981-4325 theartofchiro.com

Waterstone Mortgage 2819 NW Kitsap Place, Ste 204 Silverdale, WA 98383 360-519-7567 waterstonemortgage.com

UPCOMING EVENTS

For more details SEE: silverdalechamber.com/events Aug 2,16,30 Good Morning Kitsap 7:30-9am, Hop Jackâ&#x20AC;&#x2122;s, 3171 Bucklin Hill Rd, Silverdale Aug 4 10th Annual All Chamber Networking Event, Suquamish Clearwater Casino Resort Aug 9 Kitsap Business Forum, BestWestern Silverdale Beach Hotel, 3073 NW Bucklin Hill Rd, Silverdale Aug 11 Business After Hours, Ted Brown Music, Block Party, 3276 NW Plaza Rd, Silverdale Aug 23 Your Business Academy, 7:30-9am, Hop Jackâ&#x20AC;&#x2122;s, 3171 Bucklin Hill Rd, Silverdale Aug 31 General Membership Luncheon 11:30AM-1PM McCloudâ&#x20AC;&#x2122;s 2901 Perry Ave, Bremerton

33

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| August 2016 |

35

FINANCIAL PLANNING | EDWARD JONES

How should investors respond to â&#x20AC;&#x2DC;Brexit?â&#x20AC;&#x2122; Article provided by Edward Jones for use by ďŹ nancial advisor Calvin Christensen of Silverdale.

A

s you know by now, the United Kingdom (U.K.) has voted to leave the European Union. The â&#x20AC;&#x153;Brexitâ&#x20AC;? vote is expected to have major implications for Britainâ&#x20AC;&#x2122;s trade and economic relationships â&#x20AC;&#x201C; but how might it affect you, as an individual investor?

At ďŹ rst glance, you might be worried. After all, right after the results came in, we saw a sharp decline in stock markets around the world, including here in the United States. And we may well see more volatility in the near term. But by taking a step back and looking at the big picture, you might see that the outlook for investors is nowhere near as

gloomy as you may have thought.

Here are some suggestions for maintaining your perspective: Be patient. Despite the Brexit vote, itâ&#x20AC;&#x2122;s not so simple for the U.K. to just pack its bags and bid â&#x20AC;&#x153;adieuâ&#x20AC;? to the European Union.

In fact, it may take three or more years before the U.K. actually departs. This extended time period can give ďŹ nancial markets a chance to absorb the new reality â&#x20AC;&#x201C; while giving investors time to ponder their long-term strategy.

Donâ&#x20AC;&#x2122;t forget about the â&#x20AC;&#x153;fundamentals.â&#x20AC;? Financial markets dislike uncertainty, which is why they fell so sharply after Brexit.

But the markets move much faster than the fundamentals that actually drive stock prices â&#x20AC;&#x201C; and, despite Brexit, these fundamentals remain generally positive. In the U.S., economic growth is expect-

ed to continue in the 2 percent to 2.5 percent range, and the prospects of a recession remain small.

U.S. companies will continue to operate in Britain as before, and British companies will still participate in the global economy.

Review your investment portfolio â&#x20AC;&#x201C; and look for opportunities.

If youâ&#x20AC;&#x2122;ve done a good job of building a diversiďŹ ed portfolio thatâ&#x20AC;&#x2122;s based on your individual needs, goals, risk tolerance and time horizon, you may not need to take any action in the immediate aftermath of Brexit. DiversiďŹ cation is especially important, because itâ&#x20AC;&#x2122;s possible that some ďŹ nancial assets may be more negatively affected by Brexit than others; you can blunt this impact by owning a wide range of investments. (Keep in mind, though, that while diversiďŹ cation can ease the effects of volatility, it canâ&#x20AC;&#x2122;t guarantee profits or protect against all losses.)

As you review your holdings, you may even want to consider adding international and U.S. See BREXIT, 36

Investing: Itâ&#x20AC;&#x2122;s a marathon, not a sprint Article provided by Edward Jones for use by ďŹ nancial advisor Teresa Bryant of Bremerton.

N

ext week, the 2016 Summer Olympics begin in Rio de Janeiro. One of the most compelling events is the marathon, a 26.2-mile endurance contest with roots dating back to ancient Greece. It may be that weâ&#x20AC;&#x2122;ve kept our interest in the marathon because it can teach us much about life â&#x20AC;&#x201C; and it certainly has lessons for investors.

In fact, if you were to compare investing to an Olympic sport, it would be much closer to a marathon than a sprint. Hereâ&#x20AC;&#x2122;s why: Long-term perspective â&#x20AC;&#x201C; Sprinters are unquestionably great athletes, and they work hard to get better. Yet their events are over with quickly. But marathon-

Pr i g B si ss d E c r gi g C i i S Ki s p

ers know they have a long way to go before their race is done, so they have to visualize the end point. And successful investors, too, know that investing is a longterm endeavor, and that they must picture their end results â&#x20AC;&#x201C; such as a comfortable retirement â&#x20AC;&#x201C; to keep themselves motivated.

Steady pacing â&#x20AC;&#x201C; Sprinters go all out, every second and every stride. But marathoners have to pace themselves â&#x20AC;&#x201C; too many spurts of speed could tire them out and doom their performance.

As an investor, you, too, should strive for steady, consistent progress. Rather than attempting to rush success and achieve big gains by chasing after supposedly â&#x20AC;&#x153;hotâ&#x20AC;? stocks â&#x20AC;&#x201C; which may already have cooled off by the time you See MARATHON, 36

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36

| August 2016 |

BUSINESS STRATEGY | DAN WEEDIN

Family Matters, Part 1: The corporate conundrum

T

his is the first of a threepart series on running a family business profitably and equitably. Over the past 27 years, I’ve worked with hundreds of family businesses.

Even though the industries differ, the challenges surrounding them are very common. In the next three columns, I will draw attention to the three most critical topics that all family businesses need to address for both profitability and family bliss.

Corporations use boardrooms to create initiatives, develop strategies and settle disputes (among other things). Family businesses frequently use kitchen tables, backyard decks and hospital waiting rooms to do all of those, including determining perpetuation and ownership. The biggest problem I’ve encountered in working with countless family businesses — regardless of success level — is that they don’t treat themselves as a corporation, but rather an amalgamation of family members that all have an interest (and often an agenda) for the family business. Without a

process and culture of a corporation, at its best it’s adequate, but not as efficient as it could be. At its worst, it’s a dreadful comedy of errors that merges the Corleone family and Modern Family.

Family businesses are typically founded by someone with skill and passion around a service product and the courage of entrepreneurship. At certain points in the life cycle of the business, spouses, children, siblings and in-laws are inserted into the mix.

Frankly, that’s one of the ways that this country has grown and prospered. The problem is that, unlike major corporations that require it, the process of developing and implementing “rules of engagement” around succession, company shares, employment, and individual rights gets tossed to the back of the priority list. They tend to rear their ugly heads at the worst possible moments, leaving the family members scratching theirs.

So without belaboring this issue any further, allow me to dive into ways that any family business can rapidly improve the easily fragile dynamics of their business. It simply falls under the heading of “going corporate.”

Far too many family business-

es treat the business — and each other — like family. That’s fine for the Thanksgiving gathering but not for the non-family member employees, the customers, and the partners. Here are my Seven Simple Rules for Converting From Family to Company: 1.

The CEO rules. In any corporation, there is a boss: the CEO. Your family business requires a boss. It’s where the proverbial “buck stops.” It’s the final say; the vision; the voice. It might also be the father, brother, sister, son or daughter. Everyone must disengage the familial relationship and respect the position and person in charge.

2.

Family members must get a job. The best dynamics I’ve seen are when family members must get a job outside before being eligible to join the family business. This improves diversity of thinking; reduces entitlement; accelerates skill development; and improves profitability.

3.

Create a clear path for perpetuation. This is all about “inheritance.” There must be clarity around succession. Having this conversation in the midst of a crisis hurts the entire company. Because this can often be an emotional and difficult conversa-

Brexit

focus on your long-term financial goals, which have not changed.

By staying focused on the “far horizon,” so to speak, you’ll be less tempted to make short-term moves that may not be in your best interest.

The Brexit vote may not be a positive development for the global economy. But we’ve gotten past bigger events in the past, including wars and other political crises, and we’ll get through this one, too. As the British themselves famously posted on their walls during World War II, “Keep Calm and Carry On.” That’s good advice for investors, too.

Marathon

from 35

stocks, if appropriate for your situation, to take advantage of the drop in price of many quality companies. As always, of course, be aware that the value of your shares will fluctuate and you may lose principal. Also, international investing does carry some special risks, mostly related to currency fluctuations and foreign political and economic events.

Keep your focus on the long term. If Brexit-inspired volatility does go on for a while, keep your

www.KPBJ.com

from 35

you hear about them – try to follow a long-term strategy that emphasizes diversification among many different investments.

(Keep in mind, though, that while diversification can reduce the impact of market downturns that primarily affect one type of asset, it can’t guarantee success or prevent all losses.)

Ability to overcome obstacles – When sprinters stumble or fall, they are finished for the race; there’s simply not enough time to recover, so they typically just stop. But over 26 miles, a marathoner can fall and – providing

tion, I recommend hiring a facilitator to help with the process.

4.

Never talk about the family outside of the family. Don Corleone made this clear in his family business; you should, too.

None of the employees care about the family dynamics. In fact, it makes them uncomfortable.

Someone should be able to walk into a business and not be able to identify that it has multiple family members.

5.

No perks allowed. My wife worked for a family-owned bank 30 years ago. She recalled to me the founder/chairman’s wife being incensed when her adult son was properly charged overdraft fees, and then insisted they be waived. I’m pretty sure that advocacy was never passed on to the other customers. While this example sounds extreme, what seemingly unobtrusive perks are taken in a family business that can lead to discontent from employees or customers?

6.

Preparation for the separation. Ever see the founder “retire” but keep coming back and giving “suggestions?” The irony is often the successor to the patriarch takes the company to greater heights! There must be corporate rules about interference from retired family members, regardless of what their role was. The company must prepare and set policy on this and then communicate it.

7.

Perfect the balancing act. As much as “going corporate” relates directly to the business environment, likewise it pertains

to family time. There should be a clear delineation and rules about what is appropriate in family gatherings. Just like employees don’t want to hear about your family issues, family members not involved in the business don’t care to hear about the business. In addition, everyone needs a break from the business to secure a strong life balance. Employees get to do it; so should you.

Bonus: You can still enjoy a “family atmosphere” by acting like a corporation. In fact, it’s more likely to be achieved that way!

It doesn’t matter if you’re five or 50 employees in a family business.

Do yourself, your employees and your profitability a favor by acting like a corporation. You might be amazed at the results of reduced drama, increased engagement, less strife, improved employee morale, and more enjoyable family gatherings. Owning a family business is a wonderful thing as long as its shadow doesn’t own you.

he or she is not injured – get up again, compete and possibly even win. When you’re investing for the long term, you have time to overcome “mishaps” in the form of market volatility. So instead of dropping out of the “race” and heading to the investment sidelines, stay invested in all types of markets. As you near retirement, and you have less time to recover from market downturns, you may need to adjust your portfolio to lower your risk level – but even then, you don’t need to call it quits as an investor.

Proper fueling – Sprinters have to watch what they eat. But world-class marathoners have to be ultra-diligent about their diets, especially in the period immedi-

ately preceding a race. Because they must maximize the oxygen their bodies can use while running, they need a high percentage of their calories to come from carbohydrates, so they “carbo-load” when needed. When you invest, you also need to periodically “refuel” your portfolio so it has the energy and stamina needed to keep you moving forward toward your goals. And that means you must add dollars to those areas of your portfolio that need beefing up. Regular reviews with a financial professional can reveal where these gaps exist.

As an investor, you can learn a lot from Olympic marathoners – so put this knowledge to good use.

Next month: Family Matters, Part 2: Why you hate your boss • Dan Weedin is a strategist, speaker, author and executive coach.He helps small business and middle market business leaders and entrepreneurs to grow more profitably and create a better life.

You can reach Dan at 360-6971058; e-mail at dan@danweedin. com or visit his website at www.

DanWeedin.com.

| August 2016 |

BUSINESS CONSULTING | KELLY DEIS

The key to being different and 10 ways to do it

T

he odds are that there are a lot of other businesses in your market providing similar products or services. After all, the world cannot survive on just one pizza joint, accounting firm, beverage wholesaler or equipment manufacturer. So what is compelling about your firm that sets you apart from your competition and entices potential customers to buy from you?

Many business owners will answer with the “soft” differentiators, such as reputation, good service and high quality. These are all great characteristics (and absolutely necessary), but do they really and truly set you apart? I’ll bet that if you ask your competition what sets them apart, you will get similar answers.

The fact is that highly differentiated firms are generally more profitable than their counterparts. Yes, their overall market may be smaller than a firm with a broader strategy, but they have more of it (the proverbial big fish in little pond). And, they most likely charge more and spend less on advertising and marketing.

Here are a couple of things to consider as you ponder what truly sets you apart from others in the market.

1. Is the differentiator true?

2. Can you prove it?

3. Is it important to your customer or client?

Developing a differentiation strategy doesn’t just happen (although many business owners wish that it would!). It requires a conscious decision on how you want to showcase your firm followed by management decisions that support and further the strategy.

A differentiation strategy can be based on opportunities you’ve identified after assessing the marketplace and competition.

It can also be based on strengths or attributes that your firm already has. It’s possible you are already well differentiated, but just haven’t capitalized on the benefits of a differentiation strategy.

If you are thinking of ways to differentiate, here are some ideas. But remember, to be worth pursuing they must be true, supportable and important to your customers.

1. Focus on understanding a particular target audience.

Many brands define themselves by the markets they target, be it retiring baby boomers, nature-loving millennials, or

women entrepreneurs.

2. Specialize in an industry.

This is often a successful differentiator as customers generally value working with specialists in their industry, such as the accountant focused on dental practices or the pump manufacturer specializing in the oil and gas industry.

3. Specialize in customers that share a common characteristic.

Many companies focus on customers that share a common characteristic, such as nonprofits, high-growth companies, or start-ups. It is presumed that these firms face similar challenges.

4. Specialize in customers of a certain size.

This is another common differentiator for those providing goods and services to businesses. Perhaps you work best with large corporations. Contrast that with those serving mid-market companies, small businesses or solo-preneurs.

5. Have a specific geographic focus.

Again, a very traditional differentiator. This can be important where local knowledge or face-to-face interaction with customers is important. It can also be important if you are reaching out to a traditionally underserved market.

6. Promote a social value.

Promoting a social value that is important to you can be a good differentiator, be it the use of environmentally friendly products, using suppliers with fair employment standards, or selling “Made in America” products. These values can differentiate your firm and attract a like-minded customer base.

7. Do business with a distinctive level of service.

In most cases, good customer service is a given. Without it, you won’t survive in today’s market. So for this to become a differentiator, it must truly be extraordinary, such as a physician making house calls or customer service answering within two minutes.

8. Offer unique pricing.

If everyone in your business bills by the hour or by service call, then consider offering a fixed fee or charging only after a successful outcome. Consider bundling products or services for a one-time charge or subscription-based pricing.

9. Offer a unique product or service.

Offer a unique set of services that are hard to find. Services might be combined See DEIS, 38

Their achievements are impressive

TOGETHER,

They represent our area’s promising future.

NOW ACCEPTING NOMINATIONS FOR THE CLASS OF 2016

Nominate an emerging leader today!

The Kitsap Peninsula is home to promising individuals whose records of achievement in the workplace and community make them our emerging leaders of tomorrow. The most accomplished of those will be honored at a special event in November.

It starts with a nomination, and if you know someone under 40* whose professional and personal excellence stand out, nominate that person today. To be nominated is meaningful and rewarding. From among all nominations received by September 22, an independent judges panel will determine the twenty to be named in November as our area’s Class of 2016 20 Under 40 Honorees.

Nominate that accomplished, emerging leader today. *For further criteria, information and to nominate someone, please visit KitsapSun.com/20under40.

Sponsored by

For sponsorship opportunities and information, contact: Mike Stevens, 360-792-3350 or michael.stevens@kitsapsun.com

37

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Visit and Tour Today!

You’ll see why The Lodge is the best choice for you and your family!

• Full campus offering Cottages, Independent Living, Assisted Living and Memory Care Neighborhood • Month-to-month rental • Amazing amenities including cinema, fitness center, library, game room, beauty and barber salon, and spa area • Outstanding Life Enrichment program • Scheduled transportation • Exceptional dining available 7 a.m. to 6:30 p.m.

• Outdoor patio and social areas • Beautiful setting next to the Adam Tallman Nature Trail • Monthly rent includes: Restaurant-style meals in our beautiful dining room, weekly housekeeping, water, sewer, garbage, electricity, scheduled transportation, Life Enrichment activities and maintenance services

Visit and tour today! (253) 203-1526

Premier Retirement, Assisted Living & Memory Care Community

7083 Wagner Way | Gig Harbor, WA 98335 www.thelodge-gigharbor.com

Triple clean by 2020 Puget Sound Energy has been steadily expanding the Northwest’s supply of renewable power. Today, we are the nation’s second-largest utility producer of wind power.

We expect to triple our region’s existing supply of renewable energy by 2020, using wind and other cost-effective sources of renewable power, including solar, geothermal and biomass energy.

Learn more at pse.com.