► On the Record

“When I found out we were up against nLight, I realized it was going to be a David versus Goliath fight. And then I thought, ‘Man, they do a lot of cool stuff, I hope they win.’”

– Amy O’Hara, co-owner of Vancouver’s When the Shoe Fits, on fellow finalist nLight in VBJ’s 2010 Business Growth Awards ‘Fastest Growing 6-10 Years’ category. Both companies received the award at Thursday’s BGA event.

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

BGA 2010… it’s a wrap!

In one corner, International Air and Hospitality Academy founder Arch Miller greeted colleagues. Across the floor, Chris King of Howard S. Wright Constructors and Fort Vancouver Regional Library Foundation’s Shay Shinall chatted about the new Main Library at Evergreen and “C” streets in downtown Vancouver, a project that Chris’ firm happens to be building for Shay’s employer. By the doors, Wealth Planning Management principal Jack Engle offered a business editor (who saw fit to confuse almost everyone by shaving his beard) free investment advice while comparing scars from boyhood winter sport disasters.

VBJ’s Business Growth Awards, held Thursday evening at the Hilton Vancouver Washington, was first and foremost an event to honor some of the most promising companies in the region. It was also an opportunity to get our readers, sources and event sponsors into a room that just happened to have a fully-stocked bar at one end.

Joking aside, for us at the VBJ, events like the BGA give us a chance to reconnect with Southwest Washington’s business community in a relaxed social setting – to listen to concerns, consider ideas and occasionally, lap up praise.

This year, our BGA event took on added significance as we honored 18 small, medium and large organizations that managed to grow during an incredibly challenging 2009. Through a combination of perseverance, hard work and what BGA keynote speaker Steve Sliwa of Insitu, Inc. called “luck,” these companies exceeded everyone’s expectations – including, in some cases, that of their own founders, employees and chief officers.

The VBJ would like to take the opportunity to thank everyone who made last night’s event a success, including the Vancouver chapter of SCORE, which selected our BGA winners and finalists, as well as our sponsors Bullivant Houser Bailey PC, Peterson & Associates, RSV Building Solutions, Commercial Property Success Series, Biggs Insurance Services and Women In Networking.

For those who could not attend Thursday’s event, here are the links to the winners in each BGA category, including Start-up of the Year, Innovator of the Year, Fastest Growing 1-5 Years, Fastest Growing 6-10 Years, Fastest Growing 10+ Years, and Nonprofit of the Year.

Business around the Northwest

Taxable retail sales decline 11.2% during '09, South Sound Business Examiner

Growth mode means employee investment, Kitsap Peninsula Business Journal

Recession morale: In down times, firms work to keep employees, Idaho Business Review

► On the Record

“Last year the skies over Fort Vancouver were dark. And that silence was deafening.”

-- Elson Strahan, president and CEO, Fort Vancouver National Trust, at a press conference held early Wednesday to announce plans for a revived Fourth of July celebration this year.

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

Spring on the Reserve

A sunny, spring day at the Fort Vancouver National Site will make an optimist out of anyone. So with this unalterable fact in mind, here’s my plan: instead of bussing in schoolchildren to tour the old fort, we should start a caravan of businesspeople from east to west, south and north Clark County and let these mostly office-bound folk run free in the green grass, under the giant 100-year-old oaks.

Better yet, let’s wrangle up a few loan officers to see how far a little sunshine and fresh air will go in improving their outlook.

It’s true we all could use a little lightness in what have proved to be unrelentingly stressful times in most people’s lives.

Globally, we have a growing sovereign debt crisis in Europe. Nationally, we’re dealing with two political parties that can’t seem to agree even on bad ideas, much less the good ones. At home, we’ve been officially called an economically “distressed” county by the state – a designation I’m sure the newly-branded Visit Vancouver USA – Discover the Original tourism board will be sure to leave out of its marketing brochures.

This gloomy scene has me hunting for good news wherever I can find it. Unfortunately, for my native state of New York, much of the good news for the folks in Southwest Washington lies in a side-by-side comparison with the Empire State.

Think the recently-concluded Washington state legislative session was like a bad joke that wouldn’t end? Then take a trip to my hometown of Albany, N.Y., where legislators have been sitting on their hands as the state’s government, schools and nonprofit agencies all run out of money for lack of a budget – now 28 days overdue and counting.

Scratching your head over the latest tax increases passed in Olympia this month? Well, take solace that you live in a state ranked 11th in terms of business tax burden in the U.S., according to the Tax Foundation’s 2010 State Business Tax Climate Index. New York is 49th on the list, perhaps accounting for the phenomenon of this editor running into a former high school classmate at Pioneer Place in Portland every couple of months.

But enough gloating; we don’t need to look to the East to make us feel better.

Here in our own backyard, we got word this morning of the triumphant return of the Fourth of July celebration at Fort Vancouver National Site, which should have every Southwest Washingtonian rubbing their hands together in anticipation of backyard barbecues, leisurely strolls in the park and yes, fireworks – in short, everything good in the world.

Because as spring turns to summer, it’s always easier to see the glass as half full. Just make sure you’re not looking at the price of the beer you’re pouring into it, is all.

Business around the Northwest

SBA Portland announces award winners, Portland Business Journal

Healthcare legislation brings small-business tax credit, Kitsap Peninsula Business Journal

City gives builders a break, Bellingham Business Journal

► On the Record

“Economics is extremely useful as a form of employment for economists.”

– Economist and author John Kenneth Galbraith (1908-2006).

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

Financial reform now

Yesterday, I received an email from the company that supplies my auto insurance, urging me to call my senators to oppose the implementation of the so-called Volcker Rule, named for former U.S. Federal Reserve Chairman Paul Volcker and which would limit the most-egregious speculative dealings of certain financial institutions.

Instead, I plan to do the opposite. I urge our readers to call their representatives in support of the full financial reform bill now being considered by the U.S. Senate.

While some readers may disagree, the reasons for making this call are not political. Instead, this column in support of financial reform is simply an acknowledgment of the events of the recent past.

It may be easy to forget in a time of resurgent stock prices and improved investor confidence the lessons learned from the financial meltdown. Such is the nature of the cyclical free market system, full of its ups and downs.

But for Southwest Washington business owners and workers still struggling after losing the lion’s share of their investments, their vital lines of credit and in some cases, their membership in the American middle class, there is no forgetting the loss of hard-earned capital as a result of the unchecked speculative dealings of certain financial institutions.

The bailouts of 2007-8 changed everything. There is no turning back the clock to the heady days of the 1990s and 2000s, when American ingenuity was replaced by the cannibalization of wealth, with CEOs doling out millions in bonuses while their firms dived into the red.

Common sense reform of our financial system means an end to taxpayer-funded bailouts of institutions which took irresponsible bets on the markets and lost. It means an end to the practices laid-out in the recent federal indictment against Goldman Sachs, accused of profiting from market positions taken opposite of the interests of its own clients.

Currently, lobbyists representing Wall Street interests are pushing to delay debate on the bill, a bi-partisan effort nearly two years in the making.

So I urge you to call senators Patty Murray and Maria Cantwell – two likely supporters of the legislation – to tell them you support their efforts to reintroduce the ultimately-American virtue of “fair play” back into the U.S. financial system.

Business around the Northwest

Paying off TARP gives Umpqua a loss, Portland Business Journal

Umpqua Holdings earns $9.7 million during Q1, South Sound Business Examiner

State Workers' Comp Supplemental Pension Fund bailed out, Kitsap Peninsula Business Journal

► On the Record

"The steady and consistent rise in bookings and billings shows that the industry is on a well-managed growth path.”

- Stanley Myers, president and CEO of SEMI, a global industry association serving manufacturing supply chains for the microelectronic, display and photovoltaic industries, on $1.29 billion in orders logged by firms in North America in March – up 2.7 percent from February and 423.3 percent a year ago.

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

The myth of job-killing taxes

Reporting on job creation in Clark County is a bit like tracing the story of a detective novel, one beset with twists and turns. Only in this case, it isn’t a murder or big-ticket heist that begs to be solved – rather, it’s a hunt for where the jobs are (or aren’t) in a region desperately looking for good economic news.

However, on the jobs front, good news has definitely been hard to find. In Clark County, the economy shed 200 positions in March, raising the unemployment rate to 14.8 percent, according to a labor market report released last week by the Washington State Employment Security Dept.

Virtually all sectors remain weak in terms of job growth: retail, construction – even sectors once protected from the full impact of recessions past, like professional services. The economic situation has become critical enough for the state to recently designate Clark County as “distressed,” entitling some job-creating projects to sales tax relief.

All of these negative facts and figures prompt the question, posed here in classic detective novel fashion: Who-dunnit?

According to regional economist Scott Bailey, at least one suspect can be crossed off the list of job-killing culprits. “Taxes have a relatively small impact on job growth,” Bailey told me last Friday, in a conversation on the impact of targeted tax increases recently passed by the Washington State Legislature.

That goes for tax increases elsewhere, as well. Bailey pointed to the lack of positive economic benefit to Clark County from the passage of initiatives 66 and 67 in Oregon, despite assertions to the contrary by business interests on both sides of the Columbia River (including this column, in which I panned the Beaver State ballot measures as setting a ‘dangerous regional precedent’). “If tax rates are relatively equal to other states, you are not going to see much impact,” Bailey said.

This is not to say that taxes are not important in terms of economic and job growth. But what this region really needs is an honest assessment of our weaknesses. And taxes – no matter how unpopular– aren’t one of them.

In fact, there are some local institutions deserving of more tax dollars, not less. According to Bailey, one of the region’s chief assets in the coming recovery are our solid education and skills training facilities – engines of future job growth, such as WSUV and Clark College, that deserve broad-based community support.

And despite the assertion of thousands of Tea Party protestors last week, the overall tax burden on individuals in 2009 was one the two lowest since 1955, according to the Center on Budget and Policy Priorities. The other was 2008, coincidentally the year when the Tea Party anti-tax movement began.

Make no mistake: struggling small businesses still need tax relief.

But they also need a skilled workforce, adequate infrastructure and economic development funding provided by a fair and equitable tax system.

Business around the Northwest

$150M in stimulus funds pay for 5,800 jobs, Portland Business Journal

Alternative financing provides options in wary lending climate, Bellingham Business Journal

Proposals sought for creative uses of empty storefronts, South Sound Business Examiner

► On the Record

“A true self-made man, [he] exemplified the best of the American experience, inspiring us with his business achievements and, even more, with his compassionate and generous spirit.”

-- Vancouver City Manager Pat McDonnell, regarding the passing of Ray Hickey, former owner of Vancouver-based Tidewater Barge Lines, on Wednesday. A leading Clark County philanthropist, Hickey’s good works include the Ray Hickey Hospice House and Vancouver’s Columbia River Waterfront Renaissance trail. He was 83.

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

A generation, for better and for worse

They are a rapidly disappearing group of men and women, all of a certain age, survivors of world war, a Great Depression and numerous U.S. engagements and economic downturns.

They witnessed. Many of them, in some small way, participated. And a good number, like businessman and philanthropist Ray Hickey, who passed away Wednesday, moved well beyond the years of boom-and-bust, peace and war, leaving their corner of the world a slightly-better place.

When academicians, politicians and citizens call men like Hickey part of the “Greatest Generation,” one could say the judgment of history on subsequent generations is a foregone conclusion.

Faced with our own Great Recession, our own time of economic and political turbulence, what will be our mark on history? Are men like Hickey, fellow philanthropist and recently-departed Tony Bacon and dare I say, former Vancouver Mayor Royce Pollard (who is very, very much alive), part of some last vanguard of American greatness?

It should be said that many of Hickey’s good works were ones performed later in life. But not having known Hickey, it nonetheless seems this sense of giving back to the community for riches given was an intrinsic part of his life story from the beginning.

Don’t get me wrong: there are plenty of people younger than myself who give back to their communities, whether it’s helping restore the Salmon Creek watershed or helping those less fortunate at any number of Clark County nonprofits.

But I say, let’s goad on this pioneering generation of volunteers by letting them know that their generation can also be “great” – or perhaps even the “greatest,” since time will be the ultimate judge. We should also warn that greatness doesn’t come easy, that it takes courage of conviction, intelligence and above all, lots of hard work.

2010 BGA finalists, delivered

On Wednesday, VBJ Business Manager Steve McDonagh wrote about the surprising number of BGA entries demonstrating solid growth during a tough 2009, causing more than a few Just Business readers to wonder, “Who made the cut?”

So without further ado, here’s the list of finalists (remember to scroll down the page first) for VBJ’s 6th Annual Business Growth Awards.

And for those looking to register for the event, which will be held Thursday, April 29 from 5 p.m. to 8 p.m. at the Hilton Vancouver Washington, the reservation webpage can be found here.

Business around the Northwest

Ray Hickey, businessman, philanthropist, dies, Portland Business Journal

A farewell message from retiring editor John Wolcott, Snohomish County Business Journal

College of Western Idaho sets goal for 'straight A's', Idaho Business Review

► On the Record

“Jan’s performance in 2009 was exemplary, even more so when considered in light of the tightened credit conditions that existed during the year.”

-- Brett Rogers, state director of the Washington Small Business Development Center, on certified business advisor Jan Harte. Based at Washington State University Vancouver, Harte was recently named 2009 Star Performer at the Spring Professional Development Conference in Spokane for her work with 88 small business clients.

Reporter's Notebook

Steve McDonagh can be reached at smcdonagh@vbjusa.com

State government could learn much from local Great Recession “survivors”

Well they tell us it’s over. Of course, I'm referring to the Special Session of the Washington State Legislature, which ended this week after endless wrangling between Democrats saying, “We did the best we could,” and Republicans who say, “We didn't do enough.”

There is no way to tell if what they did was enough, not enough or way too much – probably because there isn't even consensus on the status of the so-called Great Recession which put the state in this budgetary mess in the first place.

Economic indicators all seem to be pointing to the fact that the downturn is over and we are now in a period of slow recovery. However, many academics and historians who will eventually define the Great Recession in chronological terms, still say it's too early for them to make a determination as to when it officially ended (or will end?).

The one thing they can all agree on is that the worst seems to be over.

At the end of April, the VBJ will host the 6th Annual Southwest Washington Business Growth Awards. The entries this year were, as expected, far fewer in number than in past years. However, there were a surprising number of entrants who managed to expand their businesses by growing gross revenues, net income, adding employees or locations. Many of these local companies prove that, even in a downturn or tight economic times, there are opportunities for businesses to grow and to ensure their viability going forward.

Many companies “grew” revenue and/or net income by tightening the belt. Some reluctantly cut employees, others eliminated perks and put off discretionary capital expenditures. Some businesses grew by finding new sources of revenue or by diligently managing their inventory to reduce the cost of goods sitting on the shelf.

One consistent attribute of this year's finalists was that they did not “batten down the hatches” and simply try to ride the downturn out. They were pragmatic in their approach to cutting expenses, diligent in reviewing new opportunities and aggressive in acquiring and retaining customers. Several finalists increased their marketing and promotion budgets, others increased their sales force to keep pressure and a presence on the market. In the end, it seems it was a combination of several of these actions that helped steer these companies to growth in tough economic times.

All of this takes us back to the just-completed special legislative session. I haven’t had time to look at all of the effects of the resulting budget -- but it seems that the legislature could learn a lot from this year’s BGA finalists.

In business -- and running the State is a business -- cuts are sometimes necessary. But the trick is in making the cuts that will not only provide the greatest net savings, but to also avoid making the cuts that will prevent or hinder future growth and revenue.

The cuts made by the legislature to education, and in particular, higher education, is akin to a business drastically cutting their marketing and promotion budget, as well as their sales force during tough times. Our students and college graduates are our future. They need to work, start businesses, buy homes and pay taxes to provide revenue for the state. The more difficult we make it for them by limiting access and programs in education, the more we impede our ability to ensure future growth.

And as shown by our 2010 BGA finalists, growth can happen during tough economic times. During the next legislative session, I can only hope our legislators show the pragmatic, diligent and aggressive decision-making demonstrated by this year's Great Recession "survivors."

Business around the Northwest

Ore., Wash. governors name review panel for Columbia River Crossing, Oregon Daily Journal of Commerce

Washington unemployment rate rises slightly to 9.5 percent in March, Portland Business Journal

State credit unions see economic growth in proposed cap legislation, Idaho Business Review

► On the Record

“Nearly 88 percent of all businesses are small businesses. If we can’t get money, there won’t be a recovery.”

– Lonnie Chandler, owner of two Vancouver businesses, Java House and Vintage Distributing, at a meeting Thursday with Sen. Patty Murray (D-Wash.) regarding proposed federal legislation to thaw a mostly-frozen credit market for small firms. Read VBJ’s coverage of the roundtable discussion here.

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

Lessons from another bubble burst

It’s a day that does not live in infamy: March 10.

That was the day, more than 10 years ago, that saw the tech bubble burst, causing scores of what had been very profitable firms to go belly-up almost overnight. That day, the tech-heavy NASDAQ started on a precipitous decline, helping trigger a painful economic downturn that lasted more than two years. That spring, restaurants once filled with high-rolling big tippers, emptied. Unemployment rolls swelled. Questions, tinged with regret and recriminations over who was to blame, filled the air.

Sound at all familiar?

It should, since we’ve been down this road before. And if the boom-and-bust cycle intrinsic to our free-market system holds, we’ll surely be down this road again.

But I believe there are important lessons to be learned from the tech burst of 2000, which at the time was filled with a kind of “irrational discouragement,” with pundits lining up to question whether the new tech economy could ever produce profits again.

And though the NASDAQ exchange has yet to recoup all of the losses from the market’s long period of decline, those pundits could not have been more wrong. The best tech firms, one with a solid grasp of business fundamentals, emerged from the crisis better than ever before.

Locally, the tech sector continues to be one of the very few bright spots in an otherwise cloudy regional economy. Semiconductor manufacturers like SEH America, Inc. and WaferTech, which recently was awarded a SEP Formula Grant to fund what may be the state’s largest energy conservation project at its Camas plant, seem poised to emerge from the downturn before many other firms.

The resurgence of tech in the wake of its own bubble burst may provide hope for the victims of the most recent market collapse, this time in real estate.

As was the case in 2000, market pessimism reigns. Despite recent signs of home price stabilization and an expected wave of commercial property foreclosures that has yet to materialize, the outlook is still grim.

I know, you’re thinking tech apples to real estate oranges, right?

But I’ll bet real money that we’ll be here in 10 years, looking back and laughing at all of the prognostication about the real estate “apocalypse.”

And then hopefully, much like March 10, memories of our most recent collapse will be just a faint memory.

Business around the Northwest

A perversely optimistic future, Oregon Daily Journal of Commerce

CEO: Portland uniquely positioned to profit from economic recovery, Portland Business Journal

Alternative financing provides options in wary lending climate, Bellingham Business Journal

► On the Record

“Much of the momentum we have seen in the past five months seems to be dissipating to a degree.”

– Adam Roselli, a commercial real estate broker with Eric Fuller and Associates, on his Clark County Office report for March showing an 18.31 percent office vacancy rate – virtually unchanged from the previous month.

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

Good news, easily missed

Unlike the economic cataclysms that hit Clark County in the past two years (read: Bank of Clark County failure, double-digit unemployment, looming county and city budget deficits), this piece of potentially good news might be easy to miss.

For starters, it came this morning in small type, as the subject of one of around 300 emails making it through my spam filter into my Inbox everyday: “First Independent adds credit administration positions.”

“Could this be it?” I thought. “Could this be the long-awaited signal that credit, frozen for so long for small businesses in almost every economic sector across Southwest Washington, may finally be thawing (at least at First Indy)?”

I made a few calls.

“The answer is ‘yes,’” said Brett Bryant, executive vice president and chief relationship officer at the bank, before adding what has become the byword for Recovery 2010: “Cautiously.”

Bryant went on to frame this week’s hiring of Rob Davison and Gary Ehrig, banking veterans experienced in business and consumer lending in the Portland-Vancouver metro area, as part of a slow and steady expansion of its total $750 million loan portfolio, one that he said would be padded by an additional $40 million in new loans in 2010.

You heard right: Bryant said “new loans.” And while a $40 million bump in a $750 million loan portfolio might not seem like a game-changer for the regional credit market, odds are First Indy’s bullish attitude towards business lending will be contagious at other comparatively well-capitalized regional financial institutions.

However, if you’ve got a property you’d like to develop in Clark County, First Independent still does not want to hear from you. “We have no plans to grow our commercial real estate portfolio,” Bryant said. “Only manage it.”

That obvious piece of news aside, the sectors Bryant does want to hear more from represent a cross-section of Clark County’s wish list in terms of economic diversification: healthcare, professional services, technology and energy.

So with these potential job-creating sectors in mind, I’ll leave the final word in today’s Just Business to Bryant: “We are always on the lookout for good ideas … and now we have the capital to lend to them.”

Business around the Northwest

Washington SBA loan volume up significantly, South Sound Business Examiner

Bankers dig deep to prepay big premiums, Spokane Journal of Business

PremierWest Bancorp raises $14.6M, Portland Business Journal

► On the Record

“I was absolutely thrilled … It’s a step I’ve always looked to take professionally, and I’m really looking forward to it.”

– Nelson Holmberg, communications manager for the Port of Vancouver, on receiving news Wednesday night of his appointment as Port of Woodland executive director. Holmberg’s first day is April 12.

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

Beyond sleep country

In regional parlance, Vancouver often gets lumped with other so-called “bedroom” communities – a tag which consigns Washington state’s fourth-largest city largely to the realm of the unconscious.

It’s a designation that belies the wealth of commercial, cultural and civic activity that takes place on this side of the Columbia every day.

And let’s be honest, it’s a reputation made all the worse by The Amphitheater at Clark County’s choice this week for its new rebranding corporate sponsor, Sleep Country USA. (Though on hearing the news from Ridgefield, my inner rock-n-roll fan at first heard only “country” and exclaimed, “You’ve got to be kidding me!”).

So with this recent renaming development in mind, it’s gratifying to see public and private citizens continue to take steps to help shake off Vancouver’s sleepy image.

Case in point: the city’s application to be part of Google’s ultra-fast broadband network. On Feb. 12, in response to a tip by Jake Engel of Wealth Planning Management, I penned this column urging the city to put its hat in the ring, partly citing the benefits for downtown Vancouver building owners looking for ways to draw in new tenants.

On that same day, I received an email from Council member Jack Burkman, who wrote that he’d do all he could to submit the strongest application possible.

In the weeks since, the city’s Google proposal made it into Mayor Tim Leavitt’s State of the City address, and according to Burkman, Vancouver is now one of hundreds of communities across the U.S. waiting for the search giant’s decision, expected later this year.

So who are we up against? For starters, we’re competing against the likes of Topeka, which had a moment of revelation earlier this year when its City Council passed a decree temporarily renaming itself, “Google, Kansas.” As a result, the city received a hat-tip from Google – one made before an audience of millions on April Fool’s Day.

Perhaps Vancouver will have a similar moment before the national stage, one resulting not only in a chance to experience the Internet service of tomorrow, but with the power to transform the way an entire community thinks about itself.

Forget sleep country.

Instead, in regards to Vancouver’s ongoing Google bid, let’s shake things up a bit. As Engle wrote in a recent email to the City Council, urging members to have a little fun with the process: “We are way cooler than Kansas.”

Business around the Northwest

Small business owners' outlook brightens, South Sound Business Examiner

Nonresidential construction gains jobs for first time since ’08, Idaho Business Review

Ford: Portland region sales up 43 percent, Portland Business Journal