► On the Record

“We are not losing Kim, we are gaining a CEO.”

- GVCC Board Chair Don Russo, on Thursday’s news of Chamber president and CEO Kim Capeloto’s appointment as an executive at Vancouver-based Riverview Community Bank.

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

Here’s to you, Kim

Referring to the more than two intervening years since his interim appointment as head of the Greater Vancouver Chamber of Commerce, Kim Capeloto recently wrote that “either this job is very rewarding and satisfying, which prompted me to stay this long or I am simply bad at math.”

Though I can’t speak to Kim’s math skills (which as a veteran of the banking industry, I’m sure are more than sufficient), one thing is clear: GVCC and its membership have reaped the benefits from his tenure, which will formally end sometime before Sept. 15 when he joins the executive team at Riverview Community Bank.

Kim’s imminent departure from GVCC got me thinking about the first time I made his acquaintance, shortly after a speech he gave in front of a large audience in August 2009 at Pearson Air Museum in Vancouver.

At the event, held during one of those picture-perfect summer days one dreams about in the Pacific Northwest for the entire month of November, Kim seemed slightly out of breath – and for good reason. The featured guest at the Chamber event, Gov. Chris Gregoire, was more than 15 minutes late – her motorcade “stuck” because of a last-minute coffee run at Starbucks, I remember Kim joking.

Faced with the threat of a program with lots of empty space and expectant faces, there was no question about who the “go-to” guy would be – Kim. And for the most part, he had a crowd of more than 100 Clark County residents and business owners laughing, right up to the moment Gregoire made her belated appearance.

Kim’s distinctive presence at GVCC is a reminder that it’s often the less-tangible qualities that make an effective leader of an organization. For instance, a manager may have the perfect pedigree, including the right schools, work experience and connections, and yet still prove to be a poor leader.

So what does make a good leader? Well, I believe Kim would tell you that it isn’t just the decisions one makes in the boardroom that matter, it’s the amount of time you spend engaging with colleagues, customers and the community that help spell the difference between success and failure – especially in a tough economic environment.

In an increasing global and competitive economy, it’s this focus on face-to-face interaction – such as is on display at any number of GVCC events presided over by Kim – that frequently gets missed.

As an admirer of this “old-school” business virtue, I know I join many others in Clark County’s tightly-knit business community in saying that Kim will be missed. And I believe I am also not alone in hoping that GVCC’s selection committee will consider some of Kim’s strengths in their search for his successor.

Business From Around the Northwest

HP tops Dell again with $2B 3Par bid, Portland Business Journal

ReVolt chooses Portland headquarters, Oregon Daily Journal of Commerce

Private-sector job growth stayed steady in July, Kitsap Peninsula Business Journal

► On the Record

“Some analysts have predicted redefault rates as high as 75 percent but today’s report paints a brighter picture of the future.”

– Washington State Attorney General Rob McKenna, on a report released Tuesday by the State Foreclosure Prevention Working Group showing improvements in loan modification programs designed to help homeowners avoid foreclosure. The report came out the same week as the release of disappointing existing and new U.S. home sales figures for the month of July.

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

Into the retail breach, dear friends

Jan Harte at the Small Business Development Center at Washington State University Vancouver is what I would call a “go-to” source. As an advisor to business owners – many of them embarking on their first entrepreneurial journey – Jan is an invaluable spigot of information regarding business trends, attitudes and atmospherics.

Jan works in the “trenches,” offering the kind of help for small business owners that politicians always seem to promise in speeches, but hardly deliver.

And according to Jan, the number of people coming to the SBDC seeking out that assistance has held steady in recent months – all except in one area: retail. “They don’t have the luxury to work on their business,” she told me this week. “They are already working ‘in’ it.”

Which made me think of the unique circumstances facing small shop, boutique and emporium owners, how their success, failure and continual struggle seem to fall off almost everyone’s economic radar screen.

Indeed, when a locally-owned store closes, often many of us will not notice until weeks or even months afterwards, exclaiming, “Oh, no!” as we drive past a forgotten casualty of the recession on our way to the mall.

This may be understandable, since in the context of mass layoffs, rising foreclosures and shuttered factories, the decline and fall of these small stores may seem like just a drop in a very big bucket.

But even drops add up. As do the seemingly-endless wave of store closures, which create an even more challenging business climate for retailers next door, down the street and across a neighborhood. That harsh reality goes far to explain why so many business owners are going head-first into the breach, staffing their own registers, stocking their own shelves and answering questions posed by their own customers.

These retailers face some pretty stiff odds, primarily from what some observers have termed “permanent” changes in our nation’s consumer spending habits. If any of these businesses were Fortune 500 companies, based on these dire economic projections, the Senior VPs, CFOs and CEOs would have fired all their workers, liquidated their assets and made a break for the first exit.

But that’s why small businesses like these are the backbones of every local economy. They are committed; they will not give up easily; they are here to stay. They are fighters.

These store owners don’t need your pity or your sympathy.

They’ll settle for your business instead.

Business From Around the Northwest

2 real-estate strategies for the recession, Oregon Daily Journal of Commerce

Portland home prices up, sales down, Portland Business Journal

Grocers not holding back on remodeling, Sound Business Examiner

► On the Record

“There’s a bad moon on the rise…”

– A line from Credence Clearwater Revival’s hit “Bad Moon Rising,” cited by regional state economist Scott Bailey in his monthly employment report, released Monday. Clark County’s jobless rate rose nearly 1 percentage point to 13.3 percent in July.

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

Morning in Vancouver

It’s 6 a.m. and the streets of downtown Vancouver are empty, yet expectant.

Somewhere, perhaps at Java House or Cream and Sugar nearby, a coffee grinder startles itself back to life. Early bird attorneys begin to file into their office buildings. Not to be outdone, the real estate brokers and the title insurance salespeople follow, parking their cars, coffee cups in hand, ready for a new day. Then come the government workers, the mechanics, the retirees out for a morning stroll.

Nearly two years after the “death” of Vancouver’s downtown district was declared, life goes on much as it did before the crash brought a flood of vacant office space, disappearing investment capital and stalled construction projects.

Life does go on.

We in the news biz tend to focus on worst-case scenarios, reporting on business closings, mass layoffs, the real estate developments never realized – which to put it bluntly, is steady work for most of us.

However, while it’s true that thousands in Clark County remain jobless and the list of shuttered businesses grows longer, there is another part of the story.

For the majority, everyday life hasn’t changed all that much. Thousands of people still go to work every morning, drop off the kids at daycare or school and pay their bills on time. And while the value of their homes and their retirement savings plummet, rather than cry from the rooftops, many just shrug in the quiet confines of their living rooms and think, “I’m in it for the long haul.”

That private moment of courage – full of the kind of conviction which triumphs over every recession, including so-called “great” ones – occurs almost every minute of every day, though hardly any news organization will pick up on it.

It’s a sense of determination which is most apparent in the faces of those going to work at 6 a.m. in downtown Vancouver, where the streets slowly begin to fill and a new day begins.

Business From Around the Northwest

Gramor breaks ground on Vancouver development, Oregon Daily Journal of Commerce

First Independent cuts branches, Portland Business Journal

New investigation uncovers more fraud in SBA managed programs, Kitsap Peninsula Business Journal

► On the Record

“So we’ve all got a stake in helping our small businesses succeed. And because small businesses create two out of every three new jobs in this country, our economic recovery depends on it.”

– President Barack Obama, during a small business roundtable event in Seattle on Tuesday.


--Paul Leonard can be reached at pleonard@vbjusa.com


Reporter’s Notebook

Don’t think twice, it’s all right

I remember the 80s.

The long days spent playing kickball behind my school, listening to mid-80s rock anthem “We Built This City” over and over again on a “D” battery-powered boom box. The evenings spent watching Ronald Reagan talking about the Iran-Contra affair, his face covered with layers of rose-tinted makeup. And throughout, Bobby McFerrin’s ubiquitous hit single, conveying a simple message that perfectly summarized the ethos of an age defined by unapologetic greed, rampant consumerism and questionable fashion choices: ‘Don’t worry, be happy.’

Fast forward 25 years and it seems none of us are particularly happy and plenty of us are worried.

There’s no doubt that today’s business climate is one of the least optimistic in memory. Many business owners, even those experiencing a slight improvement in revenue and sales, are weary of hiring and increasing their orders because of an economy many feel can still implode at any time.

Potential homeowners, despite the lure of rock-bottom mortgage rates and government incentives, are afraid to embark on what may be the biggest purchase in their lives, either because of job insecurity or due to the knowledge that what once was thought of as a risk-free investment has proven otherwise.

Trust in our government, always precarious in American public life, has been shattered by countless scandals, profligate spending and political balkanization.

The sense of security in our financial system has bled away along with our 401Ks and disappeared along with the credit lines extended by local institutions like Bank of Clark County and Bay Bank.

It seems as if our age is a mirror reflection of the bubblegum, carefree sentiment that defined the era which saw American ingenuity triumph over communism, economic stagnation and inflation. Today, far from victorious, we are mired in wars in Iraq and Afghanistan, burdened by a sputtering economic recovery and spooked by the prospect of – you guessed it – deflation.

But just as the “Don’t worry” sentiment of the 80s era seems distant, saccharine and slightly-ridiculous, so too will our overly-pessimistic, “Sky is falling” age seem foreign to those looking back 25 years from now.

With this in mind, in an attempt to find a more relevant statement from the annals of American pop culture, I settled not on any 1980s one-hit wonder, but on Bob Dylan, who sang in his own uniquely turbulent time:

“Don’t think twice, it’s all right.”

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Business From Around the Northwest

Vancouver port's newest tenant BHP goes hostile on Potash Corp., Portland Business Journal

Businesses antsy to flee Oregon, Oregon Daily Journal of Commerce

Washington successfully leveraging Recovery Act funds, South Sound Business Examiner

► On the Record

“To say we are pleased our port has been selected as the preferred option is an understatement.”

– Larry Paulson, Port of Vancouver executive director, on news this week of a preliminary agreement with BHP Billiton for a handling, storage, dock and rail potash export facility on 30 to 40 acres of port-owned property.

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

Paradigm drift

You know things are getting tough when even politicians – normally harbingers of almost-supernatural optimism – start to get spooked about the seesawing economy.

Take Gov. Chris Gregoire for instance – a politician not known for an overabundance of “sky is falling” pronouncements.

On Thursday, Gregoire delivered remarks on the state budget, praising efforts by Washington state’s Congressional delegation to secure $208 million in emergency education and Medicare funding, while still warning of painful and deep cuts to come.

Here are some highlights of her speech:

On the economy: “In the spring we took two steps forward. Now we’re taking one step back.”

In regards to the use of the Rainy Day Fund to balance the state’s most recent budget: “This recession is unlike anything we’ve experienced – the worst in 80 years. It’s pouring down rain…”

And last, but not least, about the coming sea change in the relationship between the state and its citizens: “These reductions will obviously mean a dramatic shift in what can be expected of state government.”

Gregoire is just one of a growing number of public leaders to sound the alarm in recent weeks about the unsustainable mix of declining revenue and increased government obligations.

It’s almost as if the new “normal,” which began settling in over dining room tables across the country at the onset of the economic downturn, has finally started to drift upwards into city halls, statehouses and even into the halls of Congress.

So it is in the absence of any dramatic event or groundbreaking revelation that I thereby name this evolution of governmental priorities, a “paradigm drift.”

I say “drift” because elected leaders seem to be slowly realizing what everyone else has known all along: that it’s time to live within one’s means.

No longer can families, business owners – or, for that matter, our government – dig itself out of a budgetary hole with borrowed money. The time for postponing tough fiscal decisions has long passed.

For legislators already thinking ahead to next biennium, now is the time to come up with a truly-balanced budget and to finally catch up with thousands of penny-pinching Washington families, all of whom might be wondering one thing:

“What took you so long?”

Business around the Northwest

Port of Vancouver lands huge tenant, Portland Business Journal

Farwest Steel buys lot at Port of Vancouver, Oregon Daily Journal of Commerce

Sterling Savings completes merger with Golf Savings, Idaho Business Review

► On the Record

“He has worked tirelessly to improve the value of HP, and we greatly appreciate his efforts.”

-- Hewlett-Packard board member Robert Ryan on former CEO and president Mark Hurd, who resigned Aug. 6 amidst a swirl of sexual harassment allegations. The board appointed chief financial officer Cathie Lesjak as interim CEO until a permanent replacement for Hurd is found.

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

Bridge building

Consensus is never sexy.

That may explain why news of an agreement this week between local leaders on a scaled-down I-5 replacement bridge seemed to travel far less widely than say, one of the many disagreements on hot-button issues like tolls on the proposed Columbia River Crossing.

Especially in a fast-paced age in which attention spans seem to be getting ever shorter, people are finding it much easier to digest conflict, with its easy-to-swallow empty rhetorical flourishes, than the complex carbohydrates of accord.

Think about it for a moment. What local happenings from the past 12 months do you remember? Chances are it’s in the same vein as candidates Pollard and Leavitt trading jabs last fall over the moot issue of tolls on the CRC or last year’s phoned-in threats to Rep. Brian Baird’s office over healthcare reform.

The one constant in these widely-circulated news stories is disagreement, discord, division – a three-pronged stool of a stimulus plan for our national media, if there ever was one.

Take this top story originating in my native New York, for instance. Last December, to little fanfare, leaders of the American Society for Muslim Advancement joined an interfaith coalition including the United Jewish Federation of New York, Trinity Church and the September 11 Families for a Peaceful Tomorrow to announce the planned construction of a community center and mosque in downtown Manhattan.

Then organizers scheduled what in New York City is a happenstance hardly receiving mention on the back page of a Metro section: a community board meeting.

However, a combination of a slow summer news cycle and recently-reignited fears of terrorism in the wake of a foiled Times Square bombing had found its venue for the “perfect tempest” in the proverbial teapot. Suddenly, a community center located two blocks away from the World Trade Center site (a proximity which loses significance given the close confines of Lower Manhattan, which at any point is only a dozen-or-so blocks wide) became a “WTC Victory Mosque,” creating an atmosphere ripe for division, if not honest discourse.

Closer to home, we find the seeds of division in stories covering recent police shootings in Portland, with the usual lines being drawn between community activists and men and women in blue.

At the CRC negotiating table, the disagreement was more geographical than political, with Metro president David Bragdon and Portland Mayor Sam Adams worried about traffic bottlenecks and urban sprawl on one hand and their Clark County counterparts concerned about tolls and the near-constant delays in getting an out-of-date bridge replaced, on the other.

But in the end, there is agreement, which nine times out of ten is the end result of any discord, no matter how deep – that is, if we slow down enough from our busy lives to digest it.

Business around the Northwest

10-lane plan approved for Columbia River Crossing, Oregon Daily Journal of Commerce

Metro calls for collaboration, investment, Portland Business Journal

Bellingham develops potential transit funding mechanism, Bellingham Business Journal

► On the Record

“The data indicate that construction job losses have slowed dramatically, particularly in those segments powered by the stimulus package passed in February 2009.”

-- Anirban Basu, chief economist for American Builders and Contractors, Inc., a trade group representing contractors, subcontractors, material suppliers and related firms across the U.S., on a report indicating construction unemployment falling to 17.3 percent in July.

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

‘Mad’ Washingtonians

Like many creative types working in media, I see myself as a kindred soul to Don Draper, the brilliant, philandering, cigarette-smoking anti-hero of AMC’s hit drama, “Mad Men,” a TV series following the comings and goings at a New York advertising agency.

Viewers familiar with the show might be asking themselves, ‘Why?’ since, strictly speaking, Don Draper is not what anyone would call a ‘good guy.’

Maybe the answer lies mostly in the world Don Draper inhabits, which I believe provides an intriguing counterpoint to our own far less confident, but just as uncertain era.

In the 1960s, much of that uncertainty was in the social sphere. African-Americans, women and the working poor all clamored for a more equal and just society. The sexual revolution was beginning to take hold, transforming popular culture, politics and the American family.

In our own era, our trials and tribulations are, of course, mostly economic. However, just as in the 1960s, our decade has already been one of tremendous upheaval, a cataclysm that has already transformed industries, small companies and, indeed, thousands upon thousands of lives.

And with the continuing economic gloom, including Friday’s jobs report which showed slower than expected private sector employment growth across the U.S., the future remains just as scary a place as it was for those living through the social and political chaos of the 1960s.

In this context, here’s what I really like about the character of Don Draper: instead of being afraid of the future, Don sees the opportunities that seem to come with changing times – and that with hard work, determination and plenty of good ideas, one’s personal economic recovery could be only a week, month or another fiscal quarter away.

Until then, we have the world of Mad Men, inhabited by men and women careening towards a fate they can only hint at – while we, stuck in an uncertain economic reality, look for clues to our own.

Business around the Northwest

Post recession, developers preach caution, Oregon Daily Journal of Commerce

U.S. unemployment holds at 9.5%, Portland Business Journal

Cargo volume trending upward, South Sound Business Examiner

► On the Record

“This gives us an I-5 strategy from Portland to Seattle and all points in between.”

-- John Vance, president and CEO of Heritage Bank, which acquired the banking operations of Cowlitz Bank after its failure July 30. For more on Heritage Bank’s plans for the region, check out Friday’s edition of the VBJ.

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

Playing phone tag with the FDIC

We’ve all been there.

When she calls, I’m either on deadline, out the door or on another call. I know it’s her because my caller ID reads simply, FDIC.

That’s right, folks. I have a call out to the Federal Deposit Insurance Corp., that regulatory behemoth which has seized the assets of 107 failed financial institutions from coast to coast so far this year, including most recently, Cowlitz Bank.

And I’m still waiting to connect.

I first found the FDIC’s press contact in bolded type at the top of a release of the kind usually sent to journalists after a bank failure, with details of what has become a familiar, yet still intricate transaction between the public and private sector.

The top, as is the case for most news articles, contains the meat of the story. In the case of Cowlitz Bank that involved the following (and I paraphrase): We (the government) are closing one bank and selling its most valuable assets to the highest bidder.

The purpose of this transaction, the statement later reads, is to protect the depositor, of whom the press release is emphatic should not notice anything awry in the slightest.

People will still be able to cash their checks, use the same ATMs, visit the same newly-branded branch come Monday and talk to the same teller, the FDIC insists.

Apart for the trifling matter of signage and perhaps stationary, it’s almost like the bank never really failed, really.

It’s only at the very bottom of the release that there seems to be something which belies the suggestion that this latest bank failure is simply business-as-normal.

It reads: “The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $68.9 million.”

So I did some math. Assuming the FDIC took the exact same hit on each of the 107 financial institutions (many of which were likely in far worse shape than Cowlitz Bancorp) to fail in 2010, the potential cost to taxpayers stands at approximately $7.4 billion. That’s not counting the approximately $9.6 billion hit the FDIC took in 2009, using the same formula.

Here’s another bit of information not on last Friday’s FDIC release: as of June 2010, the Deposit Insurance Fund, or simply, “The Fund,” is in negative territory.

As in, broke.

So with all this in mind, here’s my first question for the FDIC’s flak (assuming I ever time my coffee breaks to be at my desk when she calls):

“If the FDIC fails, who will be sending out the press release?”

Business around the Northwest

Pacific Lifestyle Homes exits bankruptcy, Portland Business Journal

Private employment ticks up again, South Sound Business Examiner

GSA: Living wall is out for Portland federal building, Oregon Daily Journal of Commerce