Discussions of Washington’s tax structure often include accusations that it is one of the most regressive in the nation. While some tax experts dispute that claim, another part of the conversation is what changes should be made to fix it.

Proposed operating budgets in recent years have included a capital gains income tax to make up for lost revenue from reducing the tax burden elsewhere. During this year’s session, the House operating budget would have imposed a seven percent capital gains, while reducing the property tax rate for seniors and veterans.

However, the absence of this tax has been a selling point for Washington state officials trying to attract new businesses. That’s according to Allison Clark, managing director for Business Development with the state Department of Commerce.

During a Sept. 19 panel at the Association of Washington Business Policy Summit, she said the lack of a capital gains income tax “is great marketing for us. If that’s taken off the table, that’s just going to be one less tool that we have in our economic development tool box that we are able to utilize and put to work in the state’s favor.”

Aside from that – and the debate over its constitutionality – real estate industry members warn that a capital gains income tax could have an adverse effect not only on potential property sales by retirees, but also on the state’s appeal to out-of-state investors who might have offset some damage to home values during the Great Recession.

Most of the real estate growth in Washington state has occurred in the Seattle metro area. After an extended period as the hottest market in the nation, median prices are beginning to cool.

However, Washington Realtors Association Government Affairs Director Nathan Gorton told Lens that “it’s important to note that it’s going from a white-hot market to maybe merely a hot market. While it’s softening, it’s softening from probably an historically all-time high.

“It’s still not a bad time to be a seller,” he added. “It’s certainly better for buyers, but it’s still  considered a seller’s market.”

Redfin Senior Economist Taylor Marr told Lens the slowed price increase is perhaps a sign that “people are increasingly looking elsewhere outside of Seattle” for homes. It’s indicative that prices really did get too high. These (capital gains) taxes would have a similar impact of people wanting to look elsewhere.”

Last year Seattle metro experienced net migration – more people coming to the area than leaving, according to a Redfin report. That changed at the end of 2017, when more people began to leave.

The Seattle-based company’s report also observed that the migration patterns were heavily influenced by state tax policy. While there is a federal capital gains tax, Washington is one of the few states without a personal or capital gains income tax – all states with capital gains income taxes include them as part of an individual income tax return.

Marr said that “an income tax, regardless of rate, does impact where people decide to locate to. People overwhelming for the last five or so years are moving to places that are favorable for tax burdens. We’ve been getting a lot of migrations from northern California and even Oregon.”

Efforts by the City Council notwithstanding, the report notes “the fact that Seattle residents don’t pay state income taxes may be one reason Seattle had a net inflow, despite its staggering home price growth, up 58 percent in the past five years. Another reason is the thriving tech sector, with Amazon, Google, Facebook and others continuing to grow and attract new hires to the region.”

Determining the effect of a capital gains tax requires a bit of nuance. Under the IRS tax code, single filers can exempt up to $250,000 of capital gains on real estate, and up to $500,000 for married couples. The exemption doesn’t account for inflation.

State capital gains income tax proposals have also listed exemptions on house sales if it’s the primary residence, which means someone who bought a house in Seattle when prices were much lower wouldn’t be affected.

However, the tax burden would fall on investors who can help stem the bleeding in property values during a recession, Gorton said. During the Great Recession, “it was really outside real estate investors who came in and bought up a lot of the foreclosure properties. Sure, they weren’t doing it out of the goodness of their heart, but they came in, they cleaned out the house, they maintained and then eventually they sold them. In doing so they kept up the value of the other homes in the neighborhood.”

A capital gains tax might dissuade them from doing business in Washington, he added. “These investors are looking for opportunities nationwide if not international opportunities.”

The other problem is that although recent state legislation for a capital gains income tax exempts 401ks, most Americans don’t have that type of retirement fund. Many Washington residents buy rental properties and plan to retire off the sales, Gorton said.

“Exempting retirement accounts is a very Seattle-centric way to look at the world,” he said. “That just isn’t the case for a lot of people who live and work in Washington, especially rural Washington. Some of them (legislative proposals) have recognized that and exempted investment properties and some haven’t. We’re just going to keep making that point to legislators.”

Washington Policy Center Government Reform Director Jason Mercier notes that the lack of a capital gains income tax was touted as part of a Puget Sound proposal for Amazon’s HQ2.

The post No capital gains tax “selling point” for Washington appeared first on Lens.

King County’s future tourism prospects took a hit when the county council elected to divert some of the lodging tax funding which was planned for local tourism to instead go to affordable housing and SafeCo Field maintenance.

Now several county councilmembers and local tourism agencies are speaking out about the move taking from a vital – and already struggling – industry which was planning to use the extra revenue to better market the county to both national and international markets.

On Sept. 17, the King County Council voted 5-4 to approve a proposal sponsored by Councilmembers Joe McDermott and Claudia Balducci to redirect $135 million in lodging tax revenue to pay for the maintenance of Safeco Field as specified in the Seattle Mariners’ new lease terms. The decision also shifted $661 million to affordable housing, as well as other portions to cultural efforts.

However, the tourism sector’s portion was significantly reduced from $109.4 million over eight years in King County Executive Dow Constantine’s original proposal to just $8 million. That total also must be divided up between tourism-related organizations including Visit Seattle and Seattle Southside.

The dissenting councilmembers found fault with the redistribution of taxpayer funds to further the profits made by Mariners leadership.

Councilmembers Jeanne Kohl-Wells, Rod Dembowski and Larry Gossett voted against the plan and said in a joint statement that it would be “ironic” for the city of Seattle to “ratify a $700 million renovation deal for Key Arena paid primarily by private funding” and now have the King  County Council “give away $135 million in public funds to a stadium occupied by a sole corporate tenant worth over $1 billion.”

The remaining “no” voter was Councilmember Dave Upthegrove who wrote: “The Mariners are a very profitable private business that can and should pay their own expenses… (now) the people lose $135 million that could have been spent on tourism promotion, housing, or other critical public services.”

Although the money had never been used for the tourism sector before, Visit Seattle President and CEO Tom Norwalk said local tourism agencies were counting on using the new revenue stream to further the reach of King County’s marketing efforts to better compete with other U.S. cities.

“I think any time that there is a tax revenue stream that potentially could become available to an industry that never had access to that stream is exciting and something we were looking forward to,” he told Lens.

The lodging tax came into the existence in the 1960’s and was commonly known as the “Kingdome tax,” as the funds went toward building the facility. Over the years the money was still collected and paid for a portion of Century Link Field. Ten years ago, the legislature decided that a portion of the tax would be available for tourism, housing, arts and culture in 2021.

Norwalk said the King County Council’s decision was disappointing because the tourism industry is the one that is generating the tax to begin with and is not getting money back to invest in its economic engine.

“I think that was a really disheartening thing to go through to see that it is not valued…having future dollars and keeping the industry robust and competitive is always one of our number one jobs,” said Norwalk, adding that the organization must now go back to the drawing board.

The reality that tourism will receive just $8 million out of $1.3 billion is tough to swallow, he added.

That amount of money may not be large enough to fund what the industry planned for 2021 and beyond. The Washington State Convention Center recently broke ground on its new “Summit” convention center which will open in 2022.

“It’s always been our understanding that some of the tax money would be available to us,” said Norwalk. “We were counting on that from a sales and convention acquisition standpoint between now and then, certainly.”

Visit Seattle also planned to use part of the funding to grow its international and overseas efforts to bring in more visitors, especially as the county prepares for the expanded International Arrivals Facility at Sea-Tac Airport.

There will not be any short-term effects of the relocation of tax funds, however Visit Seattle did plan on growing the number of visitor’s centers which now may not be as feasible with a shortage of funds.

There is the possibility of a grassroots effort coming forward to file a referendum to get signatures to put the issue up to a public vote, however Visit Seattle is not endorsing that action.

“It is pretty much done, and I think we are going to have to take King County Executive Dow Constantine on his word that he wants to figure out ways to be a part of this process and looking at how to develop more money for tourism marketing…I wish we would have had that conversation many years ago.”

He added that the choice not to reinvest in the vitality of the tourism industry was “short sighted,” especially taking into account that it is Seattle’s fourth largest industry at $7.4 billion.

The post King County tourism rocked by council plan appeared first on Lens.

Lens attended the 2nd annual Vancouver Tech Tour which highlighted tech job openings at several businesses within the city as well as how the sector flourished as more companies moved to Vancouver.

The post Lens Video: Promoting tech businesses in Vancouver appeared first on Lens.

The Seattle City Council has unanimously approved a $700 million KeyArena renovation plan, paving the way for more music and sports events which city leadership and locals say will strengthen local businesses and boost the local economy.

Some say the vote timing is fortuitous, as city investors are meeting with National Hockey League (NHL) leadership on Oct. 2 to make a bid for a Seattle franchise expansion.

In December, Seattle leadership approved a memorandum of understanding (MOU) with Los Angeles-based Oak View Group (OVG) to refurbish the arena in hopes of attracting both National Hockey League (NHL) and National Basketball Association (NBA) teams.

On Sept. 14, the council’s Select Committee on Civic Arenas made a unanimous recommendation to pass the renovation plan as amended. The plan was then approved during a Sept. 24 full council meeting in a 8-0 vote.

During the council’s vote, Councilmember Rob Johnson praised the work done by the council and those involved in the project to move forward and quickly obtain new sports teams which will benefit the city and its residents for decades to come.

“We’ve got an agreement where we all share in some risks and some rewards, but we are going to build a world-class venue that is going to be home to some world-class teams and ideally one of those will be a basketball team on the men’s side to join the great basketball team we have on the women’s side,” he said.

Johnson added that the agreement includes a $2.5 million commitment for the city’s mandatory housing affordability program, $20 million in charitable giving including a $10 million commitment to homeless youth program YouthCare and $3.5 million to public art.

“It’s going to be part of a community in Seattle Center where we have internally set up a lot of really incredible arts and cultural institutions, and it’s going to respect and work with those…”

In response to the council’s 8-0 vote, Seattle Mayor Jenny Durkan said in an online statement that the city had two goals for the negotiation process and those were to get the best deal for Seattle and its taxpayers as well as create a world-class sports and music facility for the next 50 years.

“This agreement ensures that the much-needed redevelopment of KeyArena will create good, family-wage jobs, make critical investments in transportation, and protect taxpayers…” Durkan said. “Now the next generation will have an incredible arena that’s home to the country’s best sports teams, along with the music and entertainment Seattle Center is known for.”

Director of Seattle Center Robert Nellams told Lens he was “ecstatic” about the council’s decision, as it paves the way for another 50 years of viability for the Center and its attractions.

“I think all in all the negotiations went as smoothly as you could expect,” he said. “At the end there was nothing but hugs for everyone after diligent and difficult negations to make sure both sides got the things they needed and must have accomplished.”

Currently, KeyArena hosts between 100 and 120 events per year. Securing a hockey team would guarantee 40 additional dates at the new arena.  After renovations, Nellams said he expects 100 more events per year which includes more sporting events and KeyArena’s partnership with Live Nation for music shows.

“It’s a huge shot in the arm to the businesses, to Seattle Center and to the economic viability of our town because you are getting thousands of people coming more than half of the year to the building,” he said.

Investors are meeting to bid for a Seattle hockey franchise on Oct. 2. The NHL Board of Governors are then expected to vote in December whether to approve the expansion franchise for the 2020-2021 season.

Nellams said Seattle will have a strong case to argue for an NHL team because of the council’s unanimous support and locals’ interest in season tickets.

“You walk into the meeting next week and say all of our ducks are in a row, and the only thing we need now is your approval and we are full speed ahead,” he said.

If Seattle is to acquire both an NHL team and a men’s NBA team somewhere down the line, Nellams said the community is likely to embrace them as they have with Seahawks number 12 or the Mariners and their 1995 season.

“Those emotional connections are how communities are intertwined…that is the power of sports,” said Nellams. “If done right, this organization coming here has all the best people to do this right.”

While renovations are scheduled to start this December and finish October 2020 in time for the start of the 2020-2021 hockey season, demolition will not begin until there is a team deal in place.

The post City council approves KeyArena renovations appeared first on Lens.

As far as Washington state coffers are concerned, the good times keep on rolling. A new report from the Office of Financial Management (OFM) shows that the state revenue projections for the 2019-2021 biennium is $443 million higher than originally estimated, in addition to $348 million in surplus revenue for the current biennium (2017-19).

On top of that, the state’s unemployment rate is 4.5 percent; although higher than the national average, that’s the lowest it’s been since 1976 when the first Rocky film was released. Its 2017 gross domestic product was $507 billion, the 13^th largest in the country. GDP also grew by 4.4 percent, the most of any state – as well as beating the national average of 2.2 percent for the sixth year in a row. A new report by the state Economic and Revenue Forecast Council (ERFC) showed that aside from manufacturing, Washington employment growth outpaced the nation in every industry.

It’s a similar situation nationwide, with a 4.1 percent GDP growth report the second quarter of this year. One Forbes writer argues that the U.S. is “in the second longest period of economic growth since World War II.” For that same quarter, the Federal Reserve Bank of St. Louis reports that U.S. household net worth as a percentage of disposable income reached an all-time high of $107 trillion.

Last month, the NFIB Small Business Economic Trends reported the highest level of small business optimism in 35 years, while consumer confidence has hit an 18-year high.

At ERFC’s Sept. 26 revenue review meeting, Executive Director Steve Lerch told members that for “some households…their financial picture has improved a lot, and that undoubtably shows up in those stronger consumer confidence numbers.”

As with ERFC and other government agencies, tariffs remain a significant concern both for the nation and Washington. It’s one of three major policy issues D.A. Davidson Companies Chief Investment Officer Ed Crotty says is affecting the economy. At the Association of Washington Business’ (AWB) Policy Summit on Sept. 19 in central Washington, he argued that recent federal tax reform has positively impacted corporate earnings and wages growth, leading to increased discretionary spending.

That perhaps explains the 6.5 percent annual growth in retail sales and a “resurgence” in brick-and-mortar stores.

At the same time, Lerch cautioned at ERFC’s Sept. 26 meeting that when adjusted for inflation, wage growth remains weak “despite how robust the labor market is.”

Yet the ongoing trade war between the U.S. and China raising the price of products such as iPhones isn’t going to interrupt the holiday season, according to Brent Williams, research analyst with D.A. Davidson Companies.

At the Sept. 19 AWB Summit, he told Washington Retail Association President Mark Johnson that “to quote the Target CEO…it’s going to be the best Christmas shopping season in at least 2,000 years. I think it’s going to be a really strong holiday season.”

Meanwhile, the small business confidence could be due to deregulation, Williams said. “Why is it important? Small business drives nearly half the output of the U.S. economy. They’re not really the most tangible items, but they’re really important.”

He added that tariffs could undermine the positive effects of deregulation and tax reform, though the harm could be “manageable.”

“To us, it’s like driving one foot on the gas and one on the brakes: a bit counterproductive,” he said. “I’m often asked ‘What are the impacts?’ as we try to imagine what’s the full impact of these tariffs, and it’s still playing out, so it’s kind of too early to say for sure.”

The greater context of the trade war is a transition from the last 75 years of globalization closely linked to the U.S., he said. “The potential for more outcomes is there.”

In addition, the national economy is shifting from an inflationary period marked by “quantitative easing” by the Federal Reserve to a renewed focus on fiscal policies and higher interest rates – something ERFC anticipated in its latest economic forecast.

“I think that while things look good, there are always things to worry about,” Lerch said at the Sept. 26 meeting.

The post While economy booms, forecasters strike measured tone appeared first on Lens.

Representatives from Washington state’s trade and agricultural sectors are praising the new United States-Mexico-Canada Agreement (USMCA). The trade deal would govern trade relations among the United States’ neighboring trade markets, remove a significant obstacle for U.S. dairy products entering Canada and would give American dairy farmers a slightly larger slice of the Canadian dairy market.

On Oct. 1, the U.S., Canada and Mexico reached the new trade agreement which is expected to be signed next month and put to a vote by Congress within 60 days of its signing. In addition to the changes related to Canada’s dairy market, the deal would specify that cars entering North American markets must contain at least 75 percent American, Canadian or Mexican parts to be exempt from tariffs. The agreement also contains a sunset clause to expire or renew after 16 years.

Jay Gordon, Policy Director for the Washington State Dairy Federation (WSDF) told Lens the trade deal would remove uncertainty for dairy farmers when it comes to the price of their products.

“It makes it very hard to do business on the buyer and seller side when it is not under their control,” said Gordon.

A Mexican company may be trying to buy milk powder from a Washington seller, added Gordon, but neither party will know how the product’s price will be affected by tariffs. In May, a pound of bagged milk could cost one dollar but might be $1.25 per pound a month or two later.

As part of the USMCA deal, Canada said it would agree to dismantle the “class 7″ pricing program, which covered milk ingredients including skim milk, milk powder and protein concentrates.

Under that pricing scheme, the Canadian government would look at the world market price for powered milk and set the Canadian price paid to dairy farmers at around 35 percent below the world price each month, explained Gordon.

“It built an assurance that Canadian powdered milk would be the cheapest on the world market,” he said, adding that this action distorted an otherwise cheap product.

“It’s charging the Canadian consumer a lot for the butter and giving that to dairy farmers, but pricing the powder very low has meant the Canadian consumer has paid the price…and we also have to because we are having to compete.”

The USMCA agreement would also slightly open the Canadian market for U.S. dairy products. Currently, the U.S. has access to 3.2 percent of the Canadian dairy market, and USMCA would increase access to 3.6 percent. The combination of this access, along with the removal of the class 7 pricing scheme, will be a step in the right direction for American dairy farmers, added Gordon.

Gordon said he expects both the national and state levels of the dairy sector to have a vested interest in the trade agreement. WSDF will be preparing questions to ask the congressional delegation regarding how Canada is going to dismantle the class 7 pricing, what is being done with the surplus milk, how the agreement is structured and what is included in the increased Canadian market access.

Darigold President and CEO Stan Ryan said in a statement that the new agreement would preserve and expand the partnership with Mexico while also enhancing access to the Canadian market.

“Looking north, dairy trade with Canada was one of the most difficult and contentious negotiating issues to solve in the entire USMCA deal,” said Ryan.

He added that the class 7 pricing system “essentially dumped milk proteins on world markets” and caused American dairy processing and farming jobs to move to Canada.

Although the U.S. was able to stop the current pricing scheme from expanding, the trade agreement expands on that progress even further.

“The dairy aspects of USMCA were some of the most fiercely contested and divisive issues. We are grateful for the Administration’s and the U.S. Trade Representative’s stern and ardent support of the U.S. dairy industry,” said Ryan.

“Big picture, it’s a fantastic move forward,” said John Stuhlmiller, CEO of the Washington Farm Bureau (WFB). “It’s a very bright spot. We’re the most trade-dependent state in the nation, so it’s great to have this with our two closest trading partners.

“There’s a lot of gains, a lot of neutrals, and there are some significant improvements for dairy,” he added. “Will that result in financial gains? We don’t know that yet, but there are market gains, so that is promising. We are delighted with what has been delivered in this agreement.”

Lori Otto Punke, President of the Washington Council on International Trade (WCIT), had this to say about the new NAFTA replacement: “An integrated North American market, which this new USMCA continues, is critical to Washington state businesses, farmers, ranchers and workers.”

Since NAFTA began, Washington’s exports into Mexico and Canada have increased 700 and 200 percent, respectively. The agreement also created 330,000 jobs for Washingtonians.

“We look forward to learning more about the new USMCA and its new potential for Washington State’s role in global trade,” she added.

The post Washington dairy and the USMCA appeared first on Lens.

Condos are returning to Seattle and Bellevue on a large scale for the first time since 2010. Representatives from the housing sector say new condos will add variety for prospective buyers, however the high price tag will do little to address housing affordability.

Since 2000, condo construction in both cities peaked in 2007 with 1,590 builds but eventually tapered off without any completed condo projects between 2011 and 2014. Starting in 2019, there will be between 1,000 and 2,200 condos planned each year, as reported by the Seattle Times.

Marco Lowe, Director of Government Affairs for the Master Builders Association of King and Snohomish Counties (MBAKS), told Lens that condos have not been built in the past several years due to litigation issues related to condo defects. Recently, the appreciation of condo prices has attracted the eye of some developers.

“They are a critical step in housing,” said Lowe. “For many people, condos are the first home they purchase after renting. The equity in condos can help buy a next home or some may live their adult lives in a condo and pass it on to the next generation.”

It’s an essential tool for the middle-class, he added.

Condos are typically an affordable way to bring more homes to the market. They also serve populations who want to walk to work or have a shorter commute, and condos tend to be less expensive than single-family home alternatives. However, the ones in development now won’t be a good fit for all.

“The units being built are very expensive, and that is not serving the more affordable ends of the market,” said Lowe.

He added that MBAKS is lobbying for corrections to the condominium law in the next legislative session which would help strike a balance between consumer protections and affordable housing, and hopefully encourage more developers to consider building more condos in the future.

Washington Realtors Association Government Affairs Director Nathan Gorton told Lens that the slight uptick in condos being built is due in large part to vacancies in apartment buildings and the fact that the region’s developers have primarily built apartments for the last 10 years.

“What we are seeing right now are high-end condos being built,” said Gorton. “These are builders who built high-end apartments and are now turning to condos.”

Big builders typically self-insure, and the high-end condos make them enough money to take on the risk, he continued. Until the dangers are minimized, developers will likely only focus on high-end condos.

“We need to see developers building condos in areas like Shoreline, Everett and Tacoma where the land costs are less…that would absolutely help on the housing affordability side. Until then, we will see high-end condos being built.”

The biggest challenge for condos is the fact that there is no exact definition for what a condo defect is. Just over 10 years ago, the state legislature tried to fix the legal issues with condo defects, however it wasn’t as successful as lawmakers hoped.

“What builders want is certainty,” said Gorton. “Whatever the standard is would be great but give us a standard.”

Gorton said he is glad to see condos making a comeback, however they are unlikely to help too much with housing challenges when pricing starts at $600,000.

Jessie Culbert, a Redfin agent who primarily focuses on condo sellers in the downtown area, told Lens that Seattle has been in a building binge with apartments since the heels of the recession, and now the city can expand to other options.

“It was not as financially appealing to build condos for developers, and there was all this new demand with the massive migration to Seattle with the jobs being created,” she said.

Since working at Redfin, Culbert said she has noticed an increase in the number of housing choices that potential buyers will view before making their decision which means they take longer to sign, and they are getting homes for below market price.

Seattle has built more apartments in the last five years than in the prior 50 years combined. The city has more competition among apartments which is causing rents to stabilize at last, however it left little room for condo growth in the resale market, added Culbert.

“If you are a developer, at this point you are thinking about where the next place you can build …and how you will be profitable.”

The challenge with the new condos in development is that $1000 or $1200 per square foot will put many of the new builds out of the price range for first-time or younger buyers.

Culbert said that condos are great for adding density in places that can support it.

“I think the city has been working to address the issues caused by this increase in population… adding density in neighborhoods that are already dense living places makes a lot of sense and is probably where Seattle is heading and needs to head.”

Culbert said while she would love to say more affordable condos are on the horizon, developers have to deal with expensive labor, material and permitting costs first.

The post Condos stage comeback in Seattle, Bellevue appeared first on Lens.

Washington’s wine harvest is well underway, and representatives from the wine industry are expecting a large harvest with low disease risk. Grape growers say they are thankful that the fall’s dry conditions have set the stage for a successful yield.

Washington state’s wine industry has grown rapidly over the past several years, with just 19 wineries in 1981 to over 950 today. In King County alone, wineries produced over 2.2 million cases of wine and $357.6 million in revenue in 2013, mostly from Woodinville. Just outside of Seattle, Woodinville has become a hub for wine-related tourism, with 795,000 wine visitors each year.

Washington Wine Growers predict that this year’s harvest will be an estimated 17 percent larger than last year’s, with an estimated 268,255 ton yield.

Brenton Roy is a wine grape grower for Benton County-based Oasis Farms. He told Lens that grape growers and winemakers typically will pull representative fruit samples from the vineyard a few weeks in advance of the harvest to get laboratory analytics done to determine the grape’s “brix,” the sugar level of the fruit used to measure the potential alcohol content, as well as the potential hydrogen (Ph) and acidity. Those statistics are then used to track the ripeness of the grapes, so that winemakers can determine when the harvest should begin.

“It’s a very unique type of wine they are trying to make, and there are many nuances to wine style,” said Roy. “They use the numbers to get close and make the final call with palate determination.”

Growers oversee the operational logistics of the grapes which includes deciding how the crew moves around the farm to harvest correctly while also taking steps to combat weather concerns such as rain which can increase the risk of disease.

Luckily, the dry fall has kept disease pressure low for the current harvest, according to Roy. Preliminary testing indicates that the harvest will result in a fair yield with a good, clean crop.

When it is time for harvest the grower will use both machinery and workers who handpick the grapes. Timing is important for certain varietals­—growers try to harvest whites at night when they are cool and reds in the daytime when they are warm. After picking, growers aim to deliver grapes to destination wineries within a few hours.

The winery then processes the grapes. For reds, the skin is typically left on to help with the coloring, and whites have their skins taken off. The grapes are then fermented for between a few months to years.

Washington state is unique from other competitive winemaking regions in the world, Roy added.

“We are growing in an irrigated desert with very dry, cool nights and warm days with many hours of sunshine,” said Roy. “From vintage to vintage, Washington is really consistent, and we can always produce the same variants from season to season.”

Also, Washington’s winemaking regions experience drier falls than many other popular wine grape-growing locations, he continued.

Rob Mercer is also a grower and owns the Mercer Winery located in Prosser and within the Horse Heaven Hills American Viticultural Area (AVA).

“It seems to be another stellar year from what we’ve seen so far,” he told Lens. “The fruit is coming in, and we’ve seen some nice acidity and great flavors and aromas. The summer was warm and dry, and it should call for another consistent and high-quality vintage.”

Wine growers hire workers from the local community to help during harvest. However, winemakers are preferring mechanical harvesting rather than handpicking. The machines can eliminate stems and debris, so the fruit is ready once it reaches the winery.

“It really helps inside the wineries to keep the products going into the winemaking process as pure as we can,” he said.

Mercer said at this point in the harvest his farm is beginning to pick the Cabernet.

“We’ve got some clear skies in front of us, and it looks like it will be a great harvest,” he added.

The post Grape growers expect great harvest appeared first on Lens.

If the Puget Sound region wants to continue its success as a leader in trade, then it must continue to make early investments in rail infrastructure projects. That is one key takeaway from the Seattle Community Rail Briefing co-hosted by Keep Washington Competitive (KWC) and the Washington Council on International Trade (WCIT) this week.

Two representatives from the rail and shipping industries spoke about increasing the efficiency of infrastructure and the need to ensure that local, state and federal governments are able to work with maritime and rail representatives to identify the best opportunities to strengthen the state’s trade gateways.

Mike Moore, Vice President of the Pacific Merchant Shipping Association (PMSA), told attendees that the 13,000 bridges in Washington state require significant maintenance, repair and scheduling to not disrupt trade.

In addition to that infrastructure work, Moore said “We’ve got to do the same thing throughout the rest of the system, whether it’s on terminals or to shift vessel calls from one terminal to another. What we don’t want to see is the shifting of calls out of the Northwest Seaport Alliance somewhere else.”

In the mid-2000s, the Canadian government looked to offset infrastructure costs via the Asia-Pacific Gateway and Corridor Initiative. Launch in 2006, the program used $514.6 million to “identify potential areas for investment and to fund infrastructure projects to support Asia-Pacific trade,” according to the initiative’s audit.

Moore said the success of the Canadian initiative set the standard for Washington state’s efforts. Unlike Canada, Washington does not have local, state or federal governments on the same page with port authorities on how to invest in trade corridors, and that one “big glare” in the system relates to railroads and permitting issues.

“One of the reasons we need to focus on supporting railroads as they go through their permitting processes and their projects is to keep that system improving and building,” said Moore.

Another issue with Washington’s infrastructure is the lack of regulatory certainty, such as with the Port of Seattle’s $200-300 million Terminal 5 upgrade.

“If there is a lack of certainty from the political world and the regulatory world…and if that uncertainty cloud gets too big, then the dollars that you would need to invest and partner in an infrastructure investment like that will go away,” he continued.

Additionally, Washington should be investing in infrastructure locally to position itself to handle increased container volume over time, added Moore, rather than settling for containers being sent to Tacoma.

“Those in the maritime community are pushing back and saying we’ve got to have a footprint here with rail building capacity…to serve here and to not just shove it to Vancouver and Tacoma.”

Courtney Wallace, Director of Public Affairs for BNSF Railway, spoke to the investments the company has made to ensure that rail infrastructure is current and remains open and efficient for moving goods.

In 2014 and 2015, the company allocated $5.8 billion and $5.5 billion for capital investments, respectively, in double- and triple-track rail projects across the norther tier of the U.S. and in states including Minnesota, South Dakota and North Dakota.

“While those may be several states away, that great northern corridor is a critical link for the Pacific northwest,” said Wallace. “We have choke points, and we are making those investments in those states…to make sure that those trains are moving efficiently and are not being held up.”

This year, the company is investing $2.4 billion in network maintenance which include 13,000 miles of track resurfacing, 500 miles of rail replacement and nearly 3 million track ties which need to be replaced.

Wallace said there are two major projects for rail infrastructure in development for the region which would ensure goods can continue moving efficiently.

The first is a proposal to build a second bridge over Lake Pend Oreille in Sandpoint, Idaho. Currently, there is a single-track bridge allowing only one train at a time.

“If someone is going across that bridge you are going to have trains on either side holding, and that has a ripple effect…it’s going to go into eastern Washington, go into Montana…that means goods are not getting to where they need to be.”

BNSF is also in the early stages of proposing a replacement for the Ballard bridge by the locks. The bridge was built in the early 1900’s and became stuck in the “up” position for six months in 1948. At the time, the railway was able to use an alternate route now used as a bike path.

The same problem is beginning to happen again, however the railway will not have the same temporary solution.

“By making these investments now and replacing this bridge, it will be helpful for us because we are not going to be stuck in an ‘up’ position where we aren’t going to be able to run trains or stuck in the ‘down’ position which affects mariners, both recreational and commercial,” said Wallace.

BNSF is currently asking for feedback from the maritime community on what the replacement should be. Wallace said the goal is to start early and to do the permit application right the first time – and as efficiently as possible.

The project is expected to cost an upwards of $200 million of BNSF investment without using taxpayer money. She added that the permit application will be submitted next year, and the permitting process should take two years. The project itself is expected to take three years to finish building.

“Washington state’s rail system is one of the most robust systems in the country, but other states and our neighbors up in Vancouver are taking steps to bolster their trade infrastructure in order to compete with us,” said Wallace. “This year, we will have invested more than $160 million here in Washington to ensure we continue to operate in a safe and reliable network.”

The post The need for rail infrastructure investment appeared first on Lens.

Lens attended the Seattle Community Rail Briefing to hear why investing in rail infrastructure is important for Washington state trade.

The post Lens Video: Promoting rail infrastructure investments appeared first on Lens.

Expedia Group’s decision to move its headquarters from Bellevue across Lake Washington to Seattle at the 40-acre former Amgen waterfront campus may further solidify the city’s status as a major tech hub.

However, as a company that uses technology to help solve destination challenges, Expedia Group also sees it as an opportunity to build a workplace that will not only accommodate their large workforce, but will also act as a destination for their employees.

“As a technology company, finding this campus overlooking Elliot Bay (with) beautiful views of the mountains, beautiful views of the water – it’s a destination unto itself,” Expedia Group Spokesperson Maureen Thon said. “Seattle is really the foundation for the future of Expedia.”

With a nearby rail line, a nearby port terminal and a public beach overlooking the bay, the hope is that the environment will help inspire ways to solve travel-related issues.

“We want people that are obsessed with problem-solving travel, that have a passion for travel, that have a passion for people,” Thon said. “Our base is here in the Pacific Northwest, which allows for a very tech-centric way to solve problems.”

Formed in 1996 originally as a division within Microsoft, the company recently morphed into Expedia Group to account for additional products that now include CheapTickets, Expedia Local Expert, Orbitz and Travelocity. In 2015, company leaders announced plans to move from the Bellevue headquarters in response to a growing workforce that is now over 22,000.

“Ultimately it comes down to space,” Thon said.

Yet the move also places them close to the corporate headquarters of Fortune 500 companies such as Amazon, Starbucks, Nordstrom and Alaska Airlines.

“Seattle is an epicenter of tech talent, aerospace talent, life sciences talent,” she said. “It’s at the center of so much tech innovation, and I think that is a huge draw for us. We want to be touch with and in tune with attracting talent.”

Thon added that in addition to space issues with the current 19-story headquarters, it didn’t allow for the kind of internal teamwork they hope will be achieved at the former Amgen site – a location that features several shorter buildings.

“The Seattle campus that we found hit on all the major criteria,” she said. “The location is a huge draw for us. It’s set up in a much more collaborative way. It’s invaluable to have people in the same room together having one-to-one conversations.”

The campus design will include amenities, such as an amphitheater, “that really speak to this idea of destination and speak to this idea: what elements of your favorite destination do you want to go back to?” Thon said.

In keeping with the company’s product services, much of their new campus focuses on expanded transportation options. In addition to the existing nearby bike paths, the campus will have a 400-space bike garage, new bike pathways within the public park space and a free Expedia commuter shuttle. Thon says they also plan to take advantage of local transit and light rail opportunities with free Orca passes.

“As wonderful as the many telecommunicating opportunities are, they can’t really replace the value of in-person collaboration,” Thon said. “Location still matters, and office-wise we’re intentionally designing a place where our employees want to go. Think about your favorite destination; think of the things that you really love about that place.”

The company plans to move in next year after renovation work is done on the existing buildings, with plans for further future expansion.

The post Expedia’s ‘have job, will travel’ workplace appeared first on Lens.

Half of southwest Washington’s manufacturing 14,000-strong workforce is 45 or older, and regional employers and educators want to ensure there’s a steady supply of incoming labor as they retire by better connecting youth with those job opportunities.

Along with internships and entry-level positions, a major component of the effort to replenish the workforce is simply making young people aware that the jobs exist. That was one of the objectives of an Oct. 9 Manufacturing Day event hosted by Clark College and as part of a collaboration among the college, Workforce Southwest Washington and Partners in Careers.

“One potential cause for the skilled labor shortage is that young people aren’t entering the manufacturing and construction fields at the rates they once did,” said Darcy Hoffman, Business Services Director at Workforce Southwest Washington. “We’re working to change that.”

Fortunately for employers, a 2016 report examining the region’s population found “even in rural areas, the absolute number of young adults has risen, resulting in a pool of potential workers to fill the pipeline for in-demand advanced manufacturing jobs.”

WSW previously hosted a Youth Employment Summit event in April involving more than 40 companies and 600 students. Founded in 2002, the organization helps lead the local workforce development system in Clark, Cowlitz and Wahkiakum counties and has invested more than $82.3 million in the region.

For employers such as Silicon Forest Electronics, the events are opportunities to expose 11-12^th graders to their field while dispelling common misconceptions about industry job growth. Executive Vice President General Manager Jay Schmidt told Lens that “there’s a negative stereotype around electronic manufacturing that this kind of work is not done in the U.S. The type of work that is going on is advanced manufacturing, things that are high complexity, and that work will continue to stay here and continue to grow.”

He added: “Students know what they know – what they see on the internet and what they hear through their friends and what they hear through their parents. So how do you mitigate that?”

Graphic Packaging International Human Resources Manager Katie Muldoon told Lens that in contrast to the perception of job uncertainty, the type of manufacturing jobs with her company have long-term stability. Two thirds of the employees at their Portland plant have worked there for 25 years, she added.

“People can have good careers,” she said. “It’s really nice that we have this huge number of people employed with good jobs, with the ability to grow, and they’re making products in the good old USA.”

While Schmidt’s company doesn’t have trouble attracting engineers, thanks to an internship program with nearby universities, “we’ve tried to develop pathways for youth, particularly at risk or disadvantage youth who may be needing career pathways to not just get a job but develop a work study pathway that works with their higher education.” One way to do that is through Partners in Careers, a nonprofit that helps employers create internships for post-high school graduates.

“If they (the graduate) desire to go to higher ed and take college classes, now they’ve got a current work study pathway,” Schmidt said.

There’s apparently plenty of potential employees. A 2018 report by the Columbia-Willamette Workforce Collaborative (CWWC) found that approximately 10,039 young adults ages 16-24 living in southwest Washington are neither in school nor employed. Many of the internship jobs are entry-level, but they give students a chance to build “soft skills” while deciding if it’s a career they want to further develop, Muldoon said.

“They really don’t need any training coming in,” she added. “We provide all the training that’s needed. We are really looking for people who have a mechanical mindset. Obviously, we train them on all of the specifics, but not everybody has that kind of mechanical orientation.”

Along with high school students, Schmidt said companies such as his are asked to even discuss manufacturing with middle school students.

“The theory right now is that it does help them to plug in early and be aware of the careers out there,” Toni Wise said. She is the College, Career and Technical Education Business Outreach Coordinator at Evergreen Public Schools.

“When I go out and talk to a business, they immediately understand the value of having students explore early and even get some experience in high school, so when they come out they can go into their direction and fill that (labor) gap,” she added. “We’re trying to connect with businesses who understand that we need to keep our curriculum relevant. In order to do that we need to have career-connected opportunities with business that are connected to the career pathways our students are pursuing.…They may start out wanting to be architect or a doctor or work in manufacturing, but they may not know all the ways they can plug their passions into something. That’s so valuable to them.

“The sooner they start that exploration the more prepared they are to make those decisions post high school,” she added.

The post Manufacturing a new skilled workforce appeared first on Lens.

Amidst ongoing trade negotiations and retaliatory tariffs, the Washington State Department of Agriculture (WSDA) is putting forward a proposal to assist state growers who have struggled to find new avenues for their products due to uncertain foreign market prospects.

This week, the Washington State Department of Agriculture (WSDA) has made a $6 million appropriations request to the state legislature to expand the state’s international market program for agricultural products, create a state market access program and better brand and promote Washington farm goods locally.

Chris McGann, spokesman for WSDA, told Lens: “In general, we are looking at some pretty big changes in global trade policy, and a lot of uncertainty and disruption, especially with some of our long-term trade relationships.

“When we see these foreign partners looking for new relationships with U.S. competitors, we feel like we need to do what we can.”

He added that an estimated $1 billion of state agricultural products are potential targets of retaliatory tariffs, which makes up an important portion of the state’s economy.

McGann said that the proposal takes a multi-pronged approach. If the department is able to secure the funds, the appropriations would go towards expanding the existing international marketing program and providing funds for more in-and out-bound trade missions.

Washington is one of five states that does not have a promotion program for state agricultural products. Other states’ programs include “Fresh from Florida,” “Kentucky Proud” and “California Grown.”

“These are indicators for consumers to say this is a regional product we want to support, or we identify as being high quality,” said McGann. “A brand program would help…expand markets for our producers and strengthen their position.

The funding would also go towards the small farm direct marketing program which helps small farmers sell their products and navigate food assistance programs such as food banks or farm-to-school lunch programs.

“The idea is if there is a restriction in our ability to sell to existing customers in foreign markets, then we…help look for markets and customers and then keep these programs going…” said McGann.

State tree fruit growers have already reported large detrimental effects from tariffs, at approximately $86 million in losses for cherries and $129 million for apples across Oregon, Washington and Idaho. Some buyers purchased goods ahead of time knowing the tariffs would be implemented, so the full impact on those products are yet to be seen.

Jon Devaney, President of the Washington State Tree Fruit Association (WSTFA), told Lens that investing in market access for the tree fruit industry is especially important because one-third of that sector’s products are exported overseas.

DeVaney told Lens that WSTFA had a conversation with WSDA Director Derek Sandison to talk about the department’s proposal before its release. He added that the request followed industry input from members within the agricultural community in talks with Governor Jay Inslee on the effects of the retaliatory tariffs.

“As trade disputes are fought over, agricultural producers are suffering and are making rapid changes to respond to fluctuations in overseas markets…they are facing significant headwinds from the tariffs,” said DeVaney.

He added that although the U.S. Department of Agriculture (USDA) is looking into direct payments for farmers, WSDA is proposing to take existing state dollars to assist those producers with removing trade barriers, increasing the ability for growers to promote their products oversea and helping find and expand alternate markets.

“It certainly will be helpful to have additional resources to work to open and expand markets and…offset some of the impacts in affected markets to do additional consumer promotion,” said DeVaney, adding that the success of these changes would likely depend on how trade negotiations proceed, as well as how receptive consumers are to promotions.

Washington state consumers tend to be near the forefront of some of these food trends, he continued, and so local interest in buying state-grown products could indicate additional gains could be made at the local level. However, that would do little to affect apple producers, as about 97 percent of Washington apples are sold outside the state.

“We can’t absorb all the volume of fruit in the state, but every little bit helps; especially for growers who see that their traditional customers in foreign markets will be harder to access in the short or medium term,” said DeVaney, adding that WSTFA appreciates WSDA looking for ways to “use some of its existing authority to try and help the industry in this uncertain time.”

WSDA Director Sandison said it will be “difficult to gauge reaction to the proposed request” since the legislature is not currently in session.

The post State Ag Dept: Funding needed to offset tariffs appeared first on Lens.

Before business growth or new developments can occur in a city, port or county, the conditions on the ground have to be right. To facilitate that needed development, local governments can turn to a variety of options including public-private partnerships, exemptions from land use requirements and state financing programs.

In addition to ongoing transportation infrastructure investments, some local and regional officials say the legislature can also help them make areas viable for development by deferring their share of tax revenue. One potential location to implement that kind of plan is Lakepointe, a proposed mixed-use development in the city of Kenmore. The site has been looked at since 1989 but faces challenges due to soil conditions.

At a Oct. 22 work session of the House Local Government Committee, City Manager Rob Karlinsey told panel members that while the development would boost local and regional tax revenue, “this project is not going to get off the ground without some sort of public assistance.”

Kenmore is proposing a “landfill recovery zone” around the site that would allow the city to collect the state’s share of new sales tax, particularly construction tax revenue from the development.

Karlinsey added that ultimately the state would benefit the most, because it would eventually receive new revenue in the form of the property tax, real estate excise and sales tax that the site currently isn’t generating.

A similar comment was made earlier in the work session by David Duvall, legislative and external affairs liaison for the state Department of Revenue.

A relatively new city incorporated in 1998, Kenmore has previously used collaboration with private stakeholders to help attract new business. Its downtown core was created after the city obtained 10 acres and then sold it to developers with certain conditions attached.

“We actually feel like we have a downtown now or the makings of a downtown,” Karlinsey said. “It’s a work in progress, but we’re definitely excited about what’s come of this land assembly tool we were able to use.”

The city also used a pilot project eliminating parking space requirements and local impact fees to help create “brew row,” a series of microbreweries along the Burke-Gilman Trail.

The city’s latest proposal is similar to the Gig Harbor Hospital Benefit Zone, currently the only one of its kind in Washington. The benefit zone falls under a variety of tax increment financing (TIF) programs available for some jurisdictions to encourage either infrastructure expansion or job growth. The legislature’s initial version of TIF was the 1982 Community Development Refinancing Act, but it was struck down by the State Supreme Court in 1995 in Spokane v. Leonard. In 2001, the legislature approved the Community Revitalization Financing allowing certain cities to set up TIFs that invest new tax revenue in the area that generates it.

Another tool used by local governments are grants from the Community Economic Revitalization Board (CERB). Several years ago, the Port of Sunnyside received a $1 million CERB grant to pay for greater infrastructure capacity that led to Darigold investing $22 million in its Sunnyside plant. Last year, the port obtained a $700,000 CERB grant to modify a building that houses the Varietal Brewing Company.

CERB’s investments have also helped to expand rural broadband access throughout the state. The Port of Skagit received a $1 million loan/grant combination to $500,000 loan and $500,000 grant to pay for its Skagit Community Fiber Optic Backbone consisting of six segments and 22 miles of fiber optic cable, connecting the towns of Hamilton and Concrete. The project boosted internet speed from 25 to 100 megabits per second. Advocates have emphasized the need for broadband in rural areas to aid further economic development.

Another public-private option is a public facility district, which has local governments expand infrastructure to allow for private development on the condition that the employer invest in public amenities. One of the two existing districts are between the city of Redmond and Microsoft that had the software company build a bike lane.

The post How the state can invest in local growth appeared first on Lens.

Housing prices have begun to stabilize in the Puget Sound region, however the trend will not last long if homebuilders and developers are unable to build enough housing to meet the projected inflow of new residents and jobs.

That is one takeaway from the Master Builders Association of King and Snohomish Counties’ (MBAKS) Housing Solutions Breakfast hosted this week. Housing experts and policymakers weighed in on solutions to increase the supply of housing, address the housing affordability crisis and generally what can be done to improve the housing climate in the coming years.

Kat Sims, Executive Director of MBAKS, told attendees that some homebuyers are taking a brief pause, which has contributed to the bump in the number of the homes on the market and has caused rents to stabilize.

“While we are just starting to see the signs of a shift from more of a sellers’ market to a balanced market, it’s not the time to break into celebration yet,” she said.

The Puget Sound Regional Council is forecasting 1.8 million more residents and 1.2 million more jobs by 2050 in King, Snohomish, Pierce and Kitsap Counties.

“To me, these numbers more than any other are a constant reminder of how much work we have yet to do,” said Sims. “Even though housing price growth has slowed, and job growth continues to be robust, there is a strong likelihood that prices will pick up again unless more housing is brought to market.

Sims unveiled MBAKS’ 2019 Action Plan For Housing, which details the association’s top housing priorities for the upcoming legislative session. They include:

• addressing condo liability reform so more affordable condos can be built;
• creating a new planning grants program which would allow local jurisdictions to “eliminate unnecessary and costly hurdles to home construction,” according to Sims;
• changing the urban standard for short subdivisions, also referred to as short plats, to save builders time and expenses while going through the State Environmental Protection Act (SEPA) process; and
• streamlining the Local Project Review Act to save an estimated 18 days of unnecessary time within the permitting process.

“The theme of our legislative agenda is to find practical ways to streamline processes, eliminate redundant regulations and bring more housing at all price points to the market efficiently,” said Sims.

Matthew Gardner, Chief Economist at Windermere Real Estate, spoke to housing challenges and trends within the region, as well as why developers should place a bigger emphasis on building affordable condos.

“Are we building enough? No, we are not,” said Gardner, referring the issuances of single-family building permits.

In 2005, King, Pierce and Snohomish counties had 17,794 single-family building permits granted. The number of permits issued by the end of this year is unlikely to pass last year’s figure of 9,997 permits issued.

According to Gardner, the four corners of housing development are all remarkedly expensive for the Puget Sound region: land, labor, materials and regulation.

“We are running out of land…forcing land prices to go up,” he said.

During the recession, thousands of construction workers left the industry, causing a worker shortage. Not enough people are going to vocational school to become homebuilders, either, he added.

Another barrier within the housing sector are increased material costs. Tariffs on Canadian soft wood lumber and steel have driven up prices for builders. Gardner added that regulations make up a significant portion of building costs.

He added: “24 cents out of every dollar it takes to build a house in America goes to regulation…that’s a huge, huge number. It makes it remarkably expensive for us to build anything.”

The pricing challenges left many developers to focus on building apartments- so they could remain profitable. Although condos are making a return in Seattle and Bellevue, the high price tag will do little to address housing affordability concerns.

“We need to make some substantive changes to prevailing zoning relative to condominiums,” said Gardner. “You could, say, put everyone in 600-foot-tall high-rises, but it doesn’t make sense.”

With current costs, those units would be priced at close to $1000 per square foot for developers to make a profit, he continued. While there will be demand for high-rise condos, these expensive units will not meet the aggregate demand.

“We need to make some very tangible…steps to make adjustment to zoning and to land use to offset litigation that will be occurring if we want to continue to grow as a region,” said Gardner. “We are at an inflection point—unless these issues are addressed, I will argue that we will see a fairly substantial slowdown in our economic growth.”

Apart from changing the focus of homebuilder projects to address affordability and inventory issues, members from the state legislature are also working to expand on and improve progress made within housing.

State Sen. Guy Palumbo (D-1) told Lens there will be a whole slate of housing bills during this upcoming legislative session, including bills addressing condo liability reform, minimum density and a greater allowance for short plats within Urban Growth Areas (UGAs).

“What is percolating right now is an infrastructure package,” said Palumbo. “We really need to think about investing another package in the gas tax…there are just too many areas of the state that were left out…my district is one of them.”

He added that a large population of people getting priced out of Seattle have moved further north into his district.

“I think the need for an infrastructure package is now rather than waiting another 10 years which is traditionally what we do in the state. That is simply not going to work with the growth problems that we have.”

The post Stakeholders brainstorm housing solutions appeared first on Lens.

Lens attended the Master Builders Association of King and Snohomish Counties (MBAKS) Housing Solutions Breakfast on Oct. 24.

The post Lens Video: Bolstering housing efforts to prepare for the future appeared first on Lens.

Costco Wholesale has received the green light to proceed with a 1.2 million square foot expansion to double its office space in its worldwide headquarters in Issaquah. City staff is praising the move as way to bolster the local economy and provide family-wage jobs for residents.

Costco this month received its land use approval from the City of Issaquah for the proposed campus expansion. The company chose architectural firm MG2 to design the new facilities.

“It’s an exciting time for our team as we work on another expansion for our key client,” MG2 President Russ Hazzard told the Registry. “It’s another rewarding relationship marker as we continue to do transformative work together.”

Issaquah is home to approximately 28,000 jobs, and the average annual wage was $78,816 in 2017. There are approximately 5,000 employees working at the Issaquah headquarters.

According to Costco and MG2’s memo to the city, the company has made Issaquah its home for over 25 years, however the business has felt limited in the past to expand due to transportation issues.

“To accommodate their corporate growth, they have been buying and leasing space in the surrounding neighborhood,” wrote MG2. “However, their desire is to consolidate their entire corporate population back onto their Pickering Place campus…things are now in place to realize that dream.”

In 2014, the company signed a 30-year development agreement with the City of Issaquah which allowed for a campus expansion, and specified that Costco would help contribute to local infrastructure improvements through traffic mitigation fees.

The expansion would add two new buildings at its headquarters. The additions will be nine stories tall and 620,000 square feet, and 10 stories and 685,000 square feet, respectively. The taller building will feature 35,000 square space on the ground level for showcasing products and vendor exhibits, as well as housing an employee fitness area. The new facilities will be able to hold 4,000 employees.

“This massive expansion is needed to accommodate bringing a large number of current employees back (roughly 2,000) on the main campus, while also providing some additional capacity for the future,” wrote MG2, adding that construction is scheduled to begin in the third quarter of next year and should be completed in 2020.

Keith Niven, City of Issaquah Economic Development and Development Services Director, told Lens that the City of Issaquah enjoys its strong and collaborative partnership with Costco.

“Aside from the new building, Costco is working on tenant improvements to a new office building they have recently leased; they are expanding their tire center; and, they have a number of permits in review with the City to make improvements to the buildings they currently own.”

Costco is Issaquah’s largest employer, added Niven, and assisting the business in its growth and development, as well as keeping its headquarters within the city, was the primary focus of the Issaquah’s Economic Development Department.

“Not only does Costco represent our largest employer, but there are a number of other businesses located in Issaquah solely because of the presence of Costco,” he said.

Once Costco completes construction on its new building and parking garage, the city’s development agreement will allow the business to build another 900,000 square foot office over the next 27 years.

“One of the City’s economic development goals is to allow people the opportunity to live and work within the City,” said Niven. “Given the cost of housing in Issaquah, achieving this goal means we need to grow the number of professional jobs and higher paying jobs within the City. “

Lens reached out to Costco’s corporate office for comment but did not hear back prior to publication.

The post Costco to expand Issaquah headquarters appeared first on Lens.

The Future of Work Task Force convened this week to discuss areas of focus in Washington’s educational system in need of change to better prepare the state’s youth for their careers. Representatives from academia, labor and the legislature agree that the state should better work with students to identify what skills they need for different career paths, as well as to promote opportunities outside of a traditional four-year college plan.

The task force was established this past legislative session under SB 6544 to collaborate with the Workforce Training and Education Coordinating Board (WTECB). The body is tasked with analyzing drivers of change and trends within industries and the workforce, as well as making policy recommendations to help businesses, workers and communities succeed as they adapt to changes in the marketplace and job environment.

This week, the task force met for the second time since its creation at Highline College in Des Moines.

WTECB Executive Director Eleni Papadakis said the task force’s first meeting examined the broader issue of the future of work, however the group has yet to pull apart what the specific problems are within the education system.

“I think folks are very interested in the incumbent workforce, data and data sharing…industry partnerships…about figuring out what we mean by high-quality jobs, by the jobs we want to support through public policy,” said Papadakis.

She said that one successful strategy will involve having business and labor members work together with the public sector to identify solutions for a better future for the state’s youth.

Papadakis said one area in need of attention is the state’s focus on career guidance. Originally, counselors helped students look to the future and work options but has since transformed into helping young people find their way to four-year institutions and understanding those prerequisites.

She added that the state should instead provide better information to guidance counselors and teachers to better inform youth about how work is transforming and then focus on building students’ skills, so they are more equipped to enter the workforce.

Papadakis said that Washington’s academic faculty should instead help students manage their financial and career portfolios, as well as helping them understand their learning styles to best succeed in school and a future job. This same focus should be given in the K-12 system and higher education.

Joe Wilcox, Future of Work Policy and Research Manager at WTECB, said he agreed that counselors should take a more proactive stance when looking at potential jobs, skills sets and opportunities, and that the task force should take a more forward-looking approach when predicting what skills and needed.

Stam Sorscher, a labor representative for the task force, said that employers are looking for people with a certain amount of technical competence, problem solving skills, communication and critical thinking. He finds fault, however, with the over-emphasis on Science, Technology, Engineering and Mathematics (STEM) learning.

“When you think about it…what fraction of the workforce actually wants to do that? You are just jamming a square peg into a round hole, I don’t get that. There is a lot of value and lots of other jobs for different approaches to careers.”

State Rep. Vandana Slatter (D-48) said that although STEM shouldn’t be the only path offered, it holds a special place in Washington state where there is a significant portion of careers that need those skills.

She shared her experience of meeting a state robotics team in Mount Vernon where most of the members were not aware of the opportunities within STEM prior to joining the team or felt that engineering was boring – or didn’t apply to their future jobs. However, having the hands-on experience and encouragement to continue within the team changed their disposition.

“…there is a lot of focus on STEM and a lot of money that goes into STEM because we have a lot of workers and businesses in STEM in this state, and we don’t have a lot of kids that come out of high school that know how to get those jobs,” she said.

Other areas of concern identified by the task force include credential attainment, filling in-demand jobs such as those in construction and a greater and earlier emphasis on career and technical education (CTE) to inspire student achievement.

The post Stakeholders examine future of work appeared first on Lens.

Leadership representing trade and business agree that tariffs create a long-term hindering effect on Washington state industries and impede the effectiveness of trade until trade agreements can be reached.  They say the trickledown effect ends up harming the state economy, causing a loss of customers for companies navigating trade barriers and also driving consumer prices up when companies lose the ability to absorb cost increases.

To that end, a recent International Monetary Fund (IMF)’s study analyzed tariff changes across five decades and determined that the escalation of tariffs have negative effects related to productivity and employment.

Key takeaways from the study include:

• Increased tariffs cause lower output and productivity and lead to more unemployment;
• Tariffs cause rerouting of products to ineffective producers to avoid the extra costs; and
• Levies result in a “deadweight loss,” where consumers lose more than producers gain.

The authors conclude the study by saying that the research strengthens the case for free trade in lieu of protectionism.

Lori Otto Punke, President of the Washington Council on International Trade (WCIT), told Lens that the impacts of a trade war are especially consequential for Washington state, as 40 percent of jobs are related to trade.

“When there is a decline in cargo traffic coming in and out of Washington ports, that definitely impacts transportation-related industries and could have major repercussions for this economy,” she said.

As costs of production increase, fewer investments will be made on jobs and businesses having to cut back on costs could also result in a cut to labor, added Punke.

“We are very concerned about what that would like for Washington jobs and how quick of a decline you could see as a result of lingering and reciprocal tariffs.”

Another concern is the difficulty of repairing supply chains and trade relationships disrupted by the implementation of tariffs, which often are difficult to repair once the levies are no longer in effect, she said.

Consumers also lose out during trade wars. Punke said she has talked with company heads who say they are holding off on passing the cost on to consumers, but they cannot do that indefinitely as the trade war continues.

“It’s not just the cost of services and goods, but the cost of day-to-day needs like food starts to increase and takes away from the economic food chain…tariff increases lead to consumers buying less.”

Although WCIT understands that trade issues must be resolved, Punke added that tariffs may not be the best way to remedy those issues. “We are eager to find a quick resolution to this to suspend tariffs and make sure there is a more level playing field for Washington businesses in markets abroad.”

Amy Anderson, Government Affairs Director for the Association of Washington Business (AWB), told Lens that although tariffs may help domestic industries in the long run, they also have lingering long-term effects that harm key industries within the state.

“Our local ag folks and farmers are looking to reduce their profit to combat tariff prices to keep their customers,” she said.

For the short term, members of the agricultural community must trudge through any challenges, according to Anderson. The long-term positive aspect of trade negotiations will be having a level playing field, and they are asking for change to fix market inequities. One example is Washington’s tart cherry market which continuously imports fruit from Turkey while there remains a surplus of tart cherries produced by state growers.

Anderson agrees that there is a danger in losing trading partners, citing the port shutdown which caused the state’s apple and Christmas tree businesses to lose market share when customers looked elsewhere. Even if those customers did decide buy Washington products again, it took time and effort.

Tariffs can also have positive effects on local industries, according to Anderson. Steel manufacturers experienced a short-term increase to their bottom line because a perceived shortage of domestically produced steel caused artificial price inflation. However, Washington manufacturers purchasing materials domestically still pay high prices because of that artificial price increase.

Anderson praised work being done involving the United States’ neighboring trading partners as part of the United States-Mexico-Canada Agreement (USMCA) which will replace the North American Free Trade Agreement (NAFTA).The new agreement would remove obstacles for American dairy farmers trying to sell their products in Canadian markets, for example.

“The ability to have trade relationships with other countries is going to bolster the Washington state economy significantly, but we need to have agreements in place that are fair and equitable to all parties concerned,” said Anderson, adding that state industries cannot operate on a consistent deficit with other countries.

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A new agreement will allow the Port of Bellingham to handle more cargo shipments—a move which members of the port and the labor community say will strengthen the local economy and provide sustainable work for existing longshoremen and those in training.

The Port of Bellingham this month reached a three-year service contract with Ports America which will allow the port to start regularly accepting international cargo at its Bellingham Shipping Terminal.

“There is a great deal favoring the Bellingham Shipping Terminal,” said Ports America Director of Breakbulk and Project Cargo Bart Goedhard in the press release. “In addition to abundant berth space, warehouse and laydown space, the terminal is near major cities, has a dedicated truck corridor to I-5 and has close proximity to rail.”

The contract includes the option to extend for up to six additional years and specifies that Ports America will have the loading, unloading and other dock-related rights for products including certain steel types, inbound forest products and metal and aluminum ingots.

Chris Clark, Marine Terminals Business Development Manager for the Port of Bellingham, told Lens that the port was interested in the contract because port management has wanted to better utilize the shipping terminal for more cargo activity.  

“It will accelerate the younger generation of longshoremen that might be starting out or have part-time jobs to have full-time employment here,” said Clark. “One of the best features of this contract is that we will be able to put people into the workforce on a full-time basis. Once that happens, it does percolate into the local economy.”

By making this agreement, Ports America staff said they will do their best to bring their members, which include ship owners and cargo interests, to Bellingham.

In preparation, the port has made physical improvement to the terminal’s warehouse including new roofing and improved lighting. The port also purchased equipment that will be used to handle cargo.

Although shipments are being imported and exported out of ports along the west coast and British Columbia, the Port of Bellingham does not have the capacity for container ships to compete with the Port of Seattle, according to Clark. Instead, the port handles specialized cargo including steel coils or pipe.

He added that some ships must wait for a week or longer before they can get into the dock because of the congestion and lack of storage space. The Port of Bellingham has the benefit of being geographically closer to the users of some of the cargo, as well as being able to make space for those carriers.

“We can give them the reassurance and peace of mind that they can come in here and unload and that it will all go to plan, so they can go on to their next cargo.”

Brett Frost, Second Assistant Dispatcher for International Longshore and Warehouse Union (ILWU) Local 7, told Lens that the contract will provide additional opportunities for labor.

“We haven’t had a substantial amount of work here in the port for the last 20 years, and this will increase our manpower and hours here,” he said.

He added that the new contract will provide a steady employment rate for his union. For non-registered members, also referred to as casual workers, the additional work provides the opportunity to accumulate hours which could potentially lead to their registration to the industry to advance the union’s workforce.

The agreement will also work to solve the problem of many workers traveling long distances to find work, said Frost. He added that although people may be able to find work here and there, it isn’t enough to make a decent living.

“Once we get the initial trial shipment…we can address who needs to be trained on what, and then we will bring that to our employer and go from there,” said Frost.

Port management said they are optimistic that increased cargo shipments can start arriving by the end of the year.

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