Tri-City Area and Real Estate Blog

Economic development expert encourages branding of community’s strengths

A skilled labor force is the Tri-Cities’ ticket to the future, an economic development expert said. It potentially can lure new businesses to the area, help develop a cluster of technological industries, promote job growth, and create wealth and prosperity. But skilled labor needs to be marketed as part of a package to the right companies, Richard Bodo told more than 200 guests at the 45th annual meeting of the Tri-City Development Council.

Economic development is about highlighting a community’s resources such as the availability of inexpensive housing, transportation networks, cheap energy and a low cost of living to attract new businesses, Bodo said.

“It’s a concept that needs to be branded and repeated,” said Bodo, vice president of Area Development Magazine. “Get people to know you.”

Even during the current economic downturn, small and medium-sized businesses are looking to expand and their preference is for smaller metro areas like the Tri-Cities, Bodo said.

They like communities with cheaper housing and a relatively lower cost of living because they won’t have to pay large salaries to their workers as they would in a larger city.

Small- and medium-sized businesses are generally organized on a solid footing and often don’t go through cycles of hiring and laying off workers, Bodo said.

Often, they locate to communities where they find other similar businesses, because it eliminates worries about training workers or a distribution network, he said.

Economic development agencies must get the word out about what’s available in their communities, he said.

“Get the latest information on the website, but keep it simple.” said Bodo  He also said communities shouldn’t chase big names or focus on hot trends in recruiting businesses. “It’s a good reminder not to chase the elephant,” Pasco City Manager Cruthfield said after Bodo’s presentation.

Cruthfield said communties should target companies that are looking for the attributes a community offers. About 15 years ago, Pasco worked with the Port of Pasco and TRIDEC to develop food processing centers in a 200-acre parcel of vacant industrial land, he said.

The Tri-Cities has been a bright spot in Washington, and that needs to be highlighted, said Carl Adrian, president and CEO of TRIDEC.

The inherent strengths of the Tri-Cities’ economy will draw new businesses looking for a place to grow when the national economy gets back on track. “We must continue to market the Tri-Cities,” Adrian said.

About $5.3 million in federal stimulus money will pay for 11 transportation projects in Benton and Franklin counties.

Nearly $3 million will be going to Benton County and Richland. Richland should receive about $1.6 million to overhaul First Street in the Tri-Cities Research District near Washington State University Tri-Cities. Benton County is set to receive about $1.2 million to help fund the Webber Canyon Road project. The stimulus money should pay for a thoroughfare that runs from Webber Canyon Road, through Kiona and underneath a proposed railroad bridge.

Other large chunks of funding include $750,000 for Franklin County to reroute a section of Road 170 that was buried by a landslide in 2006; $750,000 for Pasco to pave Powerline Road between Road 68 and Broadmoor Blvd, also known as Road 100; and $500,000 for Prosser to overhaul Sheridan Avenue.

Smaller chunks of funding include $220,000 to the Port of Pasco to extend rail service several thousand feet into the Big Pasco Industrial Center; $207,000 for Benton City to pour sidewalks along a portion of Seventh Street; and $140,000 to Kennewick to put sidewalks and landscaping along the north side of Canal Street between Volland and Neel Streets.

Most of the 11 projects should begin by late spring or early summer.

Richland officials are hoping the stimulus dollars cover the price tag of a project that may breathe life into a fledgling commercial area. First Street, a deteriorating street built in the 1950′s is lined by power lines and flanked by fields of sagebrush.

Richland Public Works Director Pete Rogalsky repeatedly used the word “bleak” to describe the area. “The idea is that the street, and infrastructure for the street, set the stage for development.” he said. “The existing street is in very poor physical condition.”

In Benton County, an official said the stimulus money will go toward a project that should increase safety.  About five miles of Webber Canyon Road now is being reconstructed, and plans have been made to build an underpass that would run beneath the Burlington Northern Santa Fe railroad tracks just north of Kiona. Stimulus money would be used to build a road that would connect the reconstructed portion of Webber Canyon Road with the Benton City interchange by running through the proposed underpass.

“It deals with safety.” said Ross Dunfee, Benton County Public Works Director. “We eliminate the potential of a blend of railroad and vehicle travel.”

In 1805, Lewis and Clark camped at the confluence of the Columbia and Snake rivers in an area that 200 years later is called Sacajawea State Park in honor of their Native American guide; little did they know the surrounding area wold soon be called Pasco.

The City of Pasco is one of the fastest growing cities in Washington State today. A thriving community of more than 50,000, it is one of the leading cities for growth and development, ranking 29th in the country. Aesthetic and recreational charisma surrounded by natural beauty make this desert community rich in agriculture, a popular recreation destination. its diverse culture, stable economy, public transportation, medical facilities, and award-winning educational services, provide a diverse palette for economic and community resources.

The recreational activities are limitless with golf courses, bicycle and jogging paths, baseball and soccer fields – Pasco is an outdoor enthusiast’s dream! Location, location, location – Interstate 182, US Highway 395 and State Route 12 link Pasco to transcontinental highways, not to mention the Port of Pasco for waterways and the rail service! Pasco is a place where people put down roots and raise families in a safe, forward-thinking, active environment. For business or a place to call home, Pasco has something for everyone!

Pasco, is a “sports-minded” community! Twenty soccer fields, eight softball fields; one professional minor league baseball stadium, home to the Tri-City Dust Devils; seven baseball fields; 50 meter pool; professional indoor rodeo arena; 3.1 mile cross-country dedicated course for walkers, joggers, and runners; professional golf course with nearly year-round play; 24 public tennis courts; 15 miles of pathway overlooking the majestic Columbia River for bikers and hikers; and one multipurpose outdoor stadium with state-of-the-art field turf, and a ten-lane, all-weather running track capable of hosting state level football and track events.

If it’s a positive lifestyle you flourish in, Pasco is for you!   www.pasco-wa.gov

Source: Tri-Cities Visitor and Convention Bureau Office Guide

While the area housing market dipped and retail sales slowed in 2008, Mid-Columbia ports and economic development organizations took their tasks seriously, helping businesses grow and creating new jobs. The local ports use their tax dollars in different ways to accomplish that job creation goal. They sell bare land to companies or lease buildings. Sometimes they develop property for sale or to lease for small business development. The main goal is to create jobs and economic development.

The Port of Pasco sold land to Syngenta, which is in the midst of building a $42 million seed processing plant at the Port’s Pasco Processing Center off Highway 395. The 130,000 square foot facility will produce vegetable seeds that will be sold around the world. The seed processing plant will have about 25 full-time employees and an annual payroll of about $4 million.

Local growers will benefit from the new plant through an anticipated $12 million in contracts that will be offered by Syngenta, a Switzerland-based agribusiness. Jim Toomey, the Port’s executive director, said the development not only brings in millions of private investment dollars to the community, it creates tax revenue without putting additional stress on area schools and city services.

The Port sold 29 acres to Syngenta for the project for $1.2 million and hopes the project will spur more development at the Pasco Processing Center. Toomey said the Port spent $800,000 to improve rail infrastructure in the center to bring the 16 miles of rail line that was built in 1940′s up to today’s standards.

“Now we have the capability to handle containers and bulk rail and we’ve seen a steady increase for the bulk rail demand, especially with an increase of windmill components being shipped,” he said.

Also in 2008, the Port of Pasco began plans to develop two miles of its riverfront shoreline that is not impeded by a levy. “We are striking a development agreement with the city,” said Toomey. “And we are in the design stages of the first building on the land.” The Port hopes to create a riverfront development that includes restaurants and small shops, he said.

The Port, also operates the Tri-Cities Airport in Pasco, which is why its staff is three to four times larger than those at other are Ports and also why the Port’s operating budget is more than twice that of the Port of Benton or the Port of Kennewick.

At the Port of Kennewick, several construction projects were underway on Port property in 2008, said Larry Peterson, the port’s director of planning and development. In June, the port completed a 34,000 square-foot building at Spaulding Business Park for Vista Engineering and in August, construction was completed on an 18,000 square-foot office and warehouse at Vista Field Industrial Park for Consolidated Supply.

One of the largest projects was a 30,000 square-foot building at Vista Field where Infinia will manufacture its solar dishes. The company is expected to add up to 100 new workers at the plant. The Port also sold the land to developers for the South Ridge Village, where a 10,000 square-foot office and retail building has already been built. Peterson said the Port is continuing its $5 million redevelopment of Clover Island where its shiny new office overlooks the marina.

The Port has demolished the former Clover Island Yacht Club to make room for a new 12,000 square-foot building. The club will lease the bottom level of the two-story building and the top level will be available.

The Port is also planning the develop the Willows Trailer Court off East Columbia Drive, which it bought in 2007 for $1.5 million. During 2008, port officials negotiated to buy the old trailers on the 6.75 acre property. Once all the trailers are removed, the property may be sold to a private developer. Peterson said the goal is to create a vibrant, attractive waterfront with restaurants, condominiums and small shops.

At the Port of Benton, 2008 was a landmark year. The Port celebrated its 50th anniversary. It continued work at Prosser’s Vintner’s Village, where Milbrandt Vineyards completed its 3,000 square-foot tasting room, followed by Bunnell Family Cellar’s 3,700 square-foot tasting room next door.

The Port sold the final two lots at the wine village to brothers Bob and Roger Gamache who have started construction on a 3,000 square foot tasting room for Gamache Vineyards. Since land in the initial development had all been bought, port officials bought 17 acres adjacent to Vintner’s Village that they plan to start developing this year.

At the Prosser Airport, port officials also built a 12,000 square foot addition to the existing FruitSmart headquarters, allowing the company to expand production. And also in Prosser, Mike Hogue and Bud Mercer finished a 15,000 square-foot, 65,000-case wine production facility for Mercer Estates at the Port’s Prosser Wine and Food Park. Hogue and Mercer are also completing a 12,000 square-foot tasting room and barrel storage facility adjacent to the production building.

In Benton City, the port purchased an existing building that it is remodeling to transform into two retail store fronts for wine or wine-related businesses.

One of the Port’s proudest projects of 2008 is its new $1.5 million freight transload facility, which opened in October at Richland’s Horn Rapid Industrial Park off Kingsgate Way. Henningsen Cold Storage is operating the 7,200 square-foot temperature controlled facility and the Tri-City and Olympia Railroad pull the cars from North Richland to connect to Union Pacific or Burlington Northern Santa Fee rail lines.

The Port is also in the process of reconstruction of the runway at the Richland Airport, a project with a price tag of about $2.2 million. FAA grants paid for 95 percent of the construction. Scott Keller, the Port’s executive director, credited the port’s staff for its success in obtaining grants totaling $4.8 million during 2008.

Keller said the Port spent $9.4 million on capital projects in 2008 and collected about $3.1 million in lease and other revenue. It collected $1.8 million in taxes, which the port uses to build roads and improve infrastructure to attract new tenants to port facilities. TRIDEC, a regional economic development organization was involved in many of the area port’s larger projects, including Syngenta.

Deanna Smith, TRIDEC’s marketing director, said the organization responded to 78 businesses seeking information about the area, from what properties and services are available to demographics and worker availability. “Competition for facilities is intense,” Smith said. “Although many companies narrow the list of potential sites in a few months, some cases are managed over a much longer period of time.”

Much of TRIDEC’s business recruitment is done behind closed doors, takes hundreds of hours and can end abruptly. “This year we made the final cut on two very significant projects, however, then the economic downturn started, many nationwide projects, including those, were put on hold for the moment,” she said.

Much of TRIDEC’s focus this year went to trying to encourage Areva to build its new uranium enrichment plant in the Tri-Cities – only to have the company announce it would go to Idaho. “Losing a deal like that when it’s down to two locations is never an easy pill to swallow, but the good news is that Areva will continue being a major player in our community and our relationship with the corporation is solid,” Smith said.

Smith said TRIDEC employees attend marketing and sales trips outside the state and collaborate with the state’s Community, Trade and Economic Development office on Team Washington trips to market the state. Although a large amount of time was spent recruiting businesses to the area, TRIDEC staff also visited existing manufacturing companies in Benton and Franklin counties to determine what needs they have, future plans and how the organization might help them.

By Mary Hopkin, Journal of Business

Commercial construction throughout Benton and Franklin counties was up more than 22 percent in 2008. While commercial construction lagged in Kennewick and West Richland, large projects in Richland and Pasco resulted in impressive year-over-year commercial construction increases in those cities.

Commercial construction in the four cities was valued at more than $168 million in 2008, compared to $137 million the previous year. Battelle’s $43 million Biological and Computational Science Facilities at 3300 Stevens Drive in Richland pumped up the 2008 to $93 million, a 94 percent increase over 2007.

The two buildings, which are attached by a breezeway, encompassed about 150,000 square feet and will replace a Pacific Northwest National Laboratory labs and offices at the south end of the Hanford site. Commercial construction in Pasco was up 38 percent in 2008, propped up by industrial projects, including initial work on the $42 million Syngenta seed processing plant at the Port of Pasco.

“We had 34 industrial projects last year and this year there were 45.” said Dave McDonald, the city planner. Industrial construction in Pasco in 2008 was valued at $22 million, compared to $13.1 million during the same time last years – a 69 percent increase. Not all of the permits for the Syngenta plant have been issued, he noted.

Overall, commercial construction in Pasco during 2008 was valued at $32.2 million, compared to $23.3 million in 2007. In Kennewick, commercial construction had slowed but was still healthy, said Wes Romine, Kennewick’s development services manager.

Infinia Corp., an energy technology company built a $3 million, 30,000-square foot manufacturing building at Vista Field and Tri-Cities Orthopedic built an 18,000 square-foot medical building, also valued at about $3 million, just down the road at 6703 W Rio Grande Avenue.

The major retail development has been happening in the Southridge area of Kennewick however, where Dean Maldonado, the marketing and construction manager for South Ridge Village, 22-acre, mixed-use development in Kennewick.  Maldonado has already invested about $4.7 million into infrastructure in the area and his first retail building, valued at about $2.4 million is complete. That’s where his offices are and where the new Anelare winery tasting studio has opened. A tanning salon is also preparing to move into the building as well as a wine shop that will offer locally-produced wines.

Meadow Hills Veterinary Center plans to build a second office in the area and Maldonado is preparing to start a small, three-bay building at South Ridge Village, where a coffee shop and a specialty sandwich shop plans to open. Across Highway 395, Hapo Community Credit Union opened a new branch in December and plans are underway for a new Comfort Suites hotel to be built in the area.

In West Richland, there were 44 commercial construction projects permitted in 2008 valued at nearly $4 million, including the new Kadlec Clinic West Richland Primary Care facility, which will open in February and a convenience store on Bombing Range Road.

Over, the economic roller coaster that defined 2008, the Tri-Cities outpaced many other areas throughout that state in commercial growth. Local city planners and economic development managers said they are pleased with the growth the area had last year and optimistic about the future.

“We’re a little bit slower (than 2007), but we’re still going along at a pretty good clip,” said Ken Nelson, Kennewick’s economic development director. “We had Famous Dave’s and PF Chang’s open and we’ve got the South Ridge development going on, and the Infinia expansion, that will about about 100 employees.”

Nelson said while construction financing is getting harder to obtain, the Tri-Cities economy is being viewed as a safer investment and overall, the area is seeing positive growth during a difficult era. “You only have to look around – five years ago there were vacant big box stores all over town, and now they are full,” he said. “Starbucks closes 600 stores, but none in the Tri-Cities.”

By Amelia Veneziano – Journal of Business

The Port of Pasco is developing 75 acres for retail use at the intersection of Argent Road and 20th Avenue in Pasco. The Port of Pasco will spend $ 3 million to $4 millions to prepare the property for commercial development, said Ron Foraker, Tri-Cities Airport assistant director. The Port will build roads and extend sewer, water and electricity to the property.

The mixed-use site already includes two airplane hangars and construction on a third should begin by the end of 2008, Foraker said.  The property fronts Argent Road, across from Columbia Basin College. “It will be a mixed-use development, with some office space and some retail, as well as some facilities to perhaps support the CBC population,” said Foraker.

The nearest restaurants to CBC, aside from those in nearby hotels, are on Court Street in Pasco and the only off-campus coffee shop has limited summer seating, so the location could draw fast food or other restaurants seeking to cash in on the student population.

The Port has also redefined the Covenants, Conditions and Restrictions to the property. The regulations define the building standards, like color, height, landscaping and building profiles, as well as further defining the type of construction there. The Port of wants high-end buildings, Foraker said. The Port is working with the city to change the zoning from its industrial designation to business and commercial use, he said.

Retail and restaurants, as well as some businesses, are planned for the location. Although no businesses have signed leases for the property yet, many have expressed interest, Foraker said. He expects the CCNR’s will be complete between December and January, opening discussions with potential developers later this winter. Other commercial developments in the area include two extravagant airplane hangars, with offices in front and aircraft space in the back. Two more could be added nearby, he said.