Economy stays sour
With high unemployment in county, 2010 brought little positive change from previous year
Sunday, December 26, 2010
In last year’s roundup of top business and economic stories, we wrote that, “For many Clark County businesses, the new year can’t come soon enough.”
Twelve months have passed, and we could probably say the exact same thing about 2010 — although many businesses would rather skip ahead a few more years. The Columbian’s top 2010 business stories tell of economic problems that have lasted far longer than most of us expected, with high unemployment, an insistently stagnant housing market, and no obvious signs of a turnaround.
But not all was gloom and doom in 2010. The merger of PeaceHealth and Southwest Washington Medical Center will bring 340 jobs and a major new company headquarters to Clark County. The tech sector has boomed this year, and Clark County is sharing in the industry’s wealth. Several other growth announcements — by employers including RS Medical, FarWest Steel and BHP Billiton — did not make our Top 5 stories list, but do hint that companies should eventually start hiring again.
Rounding out our Top 5 list is a story with roots that trace back two years, to the final months of the Bank of Clark County. Before its failure, an executive tried to hide appraisals from federal regulators. After pleading guilty, he was sentenced to four months in prison.
1. Economic struggles
Talk about doldrums. Clark County’s unemployment rate — which has been above 10 percent for more than two years — now seems stuck at 13 percent.
Behind that ugly number is an ugly reality. About 8,800 local people who had jobs at the end of 2008 were out of work by the end of 2010. More than 2,000 Clark County residents have exhausted the full unemployment benefits available to them.
The layoffs started in the private sector, but by late this year cuts were looming at a growing number of government agencies as well. And though a number of businesses have promised to boost hiring, those new jobs won’t arrive until 2013 and later.
Leaders who serve the poor have had to adapt to this new reality, as they help former members of the middle class navigate the unfamiliar terrain of government services.
People who were struggling before the economy spiraled face an even bigger climb out of poverty.
“They are competing for jobs now with people who have a college degree,” Diane McWithey, executive director of nonprofit Share, said recently.
2. Hospitals merge
When Clark County’s unemployment woes finally start to turn around, PeaceHealth might be at the forefront of hiring.
The Bellevue-based hospital chain first acknowledged that it was in talks to merge with Vancouver’s Southwest Washington Medical Center back in March. After months of vetting and careful negotiation, the deal was approved Dec. 8. The deal, on its own, is significant — giving Southwest more bargaining power as it buys supplies and staffs its medical facilities — but the merger also cements a possibly bigger decision by PeaceHealth to move to Vancouver.
Including Southwest, PeaceHealth has eight hospitals, nearly $2 billion in annual revenue and roughly 15,000 employees, which will make it the largest organization to call Clark County home.
The nonprofit company must first find a location for its new headquarters, but between late 2011 and the end of 2014, it plans to move 340 jobs to Clark County. Many current PeaceHealth workers in Longview, Bellevue and Lane County, Ore., are likely to accept optional transfers to the new site, but it seems inevitable that many will choose to stay put — creating job opportunities for local seekers.
3. Housing market stagnates
For a while, it looked as though Clark County’s home-owners had something to celebrate. The median home sale price, after falling to $199,950 in late 2009, rebounded to $219,900 at the start of 2010. And though the number of closed sales was still far below peak levels, houses moved off the market more quickly than they had been. Through June, the number of homes sold was up 20 percent over 2009.
But the start-of-the-year bounce was fleeting, the consequence of a temporary tax credit. First-time homebuyers had to close on purchases by the end of June to qualify for benefits worth as much as $8,000. When the tax break evaporated, so did the signs of a housing recovery.
By the end of 2010, the median home price was bouncing between $199,000 and $210,000. The number of houses sold through November is down 8 percent from last year. And even with a temporary foreclosure moratorium by many big banks, the number of Clark County residents at risk of losing their homes climbed 27 percent in the first 11 months of the year.
4. Banker pleads guilty
Former Bank of Clark County executive David Kennelly spent four months in prison this year for hiding information from the Federal Deposit Insurance Corp.
He pleaded guilty in February to hiding appraisals on 17 properties that had lost significant value. As a result, FDIC inspectors told the bank to set aside $3.5 million in its loan-loss reserve account, instead of the $16.7 million the regulators would have required with the correct information. When the appraisals came to light, the bank’s rating was downgraded. Regulators later seized the bank.
Though Kennelly was not directly responsible for the Bank of Clark County’s January 2009 failure, he remains the only former executive to face legal consequences following its collapse.
5. Tech invests
Consumers may feel battered by years of high unemployment and other economic woes, but that hasn’t stopped them from buying cell phones, laptops and other electronic gadgets. And a projected 32.8 percent increase in sales of semiconductors — used in chips that control most electric devices these days — spurred tech companies across the region to invest in operations while other industries were cutting back.
Swiss-owned Logitech, for example, moved its audio division from the Columbia Tech Center in Vancouver to roomier offices in Camas. Less than a month after moving, it announced plans to open a new smart-phone accessory division there.
Though Intel’s $6 billion to $8 billion planned expansion will take place in Hillsboro, Ore., it is sure to be good news in Clark County, and not just because one in every 10 of the tech company’s Oregon workers commutes from this side of the river. Intel’s success is key to Clark County’s high-tech sector. Vancouver-based SEH America, which employs around 900 people, is a major Intel supplier, as are a number of smaller firms.
Columbian staff writers Cami Joner, Aaron Corvin and Libby Tucker contributed to this story.