Looking back at 2013 in Clark County business



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Clark County’s business sector wanted a bridge to bring more trade, more jobs and an easier commute by car or train.

Instead, the business community got entangled in debates over an oil transfer terminal at the Port of Vancouver and coal trains en route to Longview. The projects, with lots of transportation impacts but not many Clark County jobs, received decidedly mixed reviews.

The year, business stories on transportation for people and natural resources made The Columbian’s overall top story list. But there was no shortage of other business news. Most visibly, a lockout by United Grain Corp. of International Longshore and Warehouse Union workers led to a string of labor-management skirmishes and pickets at the Port of Vancouver and at United Grain’s Vancouver offices for much of the year. Another sore spot was a decision by PeaceHealth, one of the county’s biggest employers and a once-promising prospect for job creation, to cut hundreds of jobs to balance its budget.

Still, the overall employment picture was promising, with the county posting a healthy annualized growth rate of 2.3 percent for the 12-month period through November.

On the retail front, WalMart opened its first Clark County Neighborhood Market, a smaller-scale concept that competes head-on with local growers. It’s building another one in Vancouver and a full-scale store in Battle Ground. Meanwhile, voter approval of legalized marijuana created the promise of new, undoubtedly creative, retail opportunities in the year ahead.

It was a year when demand for housing returned, raising prices and triggering a burst of home and apartment construction. Looking to the future, the state authorized an Innovation Partnership Zone, an incentive program that local economic development officials hope will spur growth in the county’s nascent software and technology development sectors.

With all the promising signs looking forward, the business community will leave 2013 with a troubling legacy from this year’s bruising battle over the Columbia River Crossing: whether business and community leaders can reach a broad political consensus on how the county can prosper in a fast-changing economic environment. It’s a question that will loom large in the year ahead.

Here are this year’s top business stories, as selected by The Columbian’s business staff.

1. Port of Vancouver’s proposed oil transfer terminal stirs community battle.

Vancouver became a focal point in a global battle pitting renewable energy advocates against backers of fossil fuels when the Port of Vancouver approved a lease this year to build the Northwest’s largest oil-by-rail operation.

Under the proposal by Tesoro Corp. and Savage Companies, oil would be hauled to the port by train from North Dakota’s Bakken shale formation, where crude is extracted by hydraulic fracturing. The oil would be stored at a facility capable of handling as much as 380,000 barrels of crude per day and transferred to ships headed to U.S. refineries.

Backers tout the project’s projected 250 temporary construction jobs, 120 full-time jobs and an increase in local and state tax revenues. Port commissioners unanimously approved the lease — worth at least $45 million to the port over an initial 10 years — despite public testimony overwhelmingly against it. Critics raise numerous concerns, including the potential for oil spills on the Columbia River, the hazards of hauling oil by rail and climate change.

The oil facility isn’t a done deal. The Washington state Energy Facility Site Evaluation Council will examine the Tesoro-Savage proposal for at least a year before making a recommendation to Gov. Jay Inslee, who has the final say over whether the project gets built.

2. CRC debate triggers fight over economic development priorities.

The massive project is now on life support. Oregon began considering a scaled-back, $2.7 billion version of the Columbia River Crossing after Washington largely pulled out of the project in July. Such a plan would still replace the Interstate 5 Bridge and send light rail into Vancouver while relying heavily on tolls.

In Clark County, businesses reacted to the topsy-turvy nature of the project. “This is not the outcome we wanted,” John Rudi, president of Vancouver-based Thompson Metal Fab, told The Columbian in July, after the CRC was initially declared dead for lack of funding from the Washington Legislature.

His company, the West Coast’s largest metal fabrication plant, stood to win lucrative work helping to build the CRC. Having inked a mitigation agreement with the CRC, Thompson Metal Fab, along with two other major river manufacturers, would be compensated for impacts to their businesses from the CRC’s proposed bridge height.

Yet the project’s fading chances last year delighted some companies who said they wouldn’t have to deal with its seven-year construction period, viewed as a tangle of road crews and delays. “It would have had a huge impact on my ability to perform what we do every day,” said Chuck Bower, president of the downtown-based trucking company Vancouver Warehouse & Distribution Co. Inc.

3. Wal-Mart’s deep inroads restructure county retailing.

Wal-Mart Stores Inc. zeroed in on Clark County in 2013, causing local retailers and mom-and-pops alike to redouble their efforts to compete with the world’s largest retailer and its volume-discount model.

The Bentonville, Ark.-based retailer opened its first local Neighborhood Market in July in the Vancouver Plaza shopping center off state Highway 500. The store, which carries produce, meat, food items, sundries and also comes equipped with a pharmacy, will be joined in early 2014 by a second Neighborhood Market store under construction at Fourth Plain and Grand boulevards. At approximately 41,000 square feet, the smaller stores are designed to supplement the retailer’s massive Supercenter models.

The Neighborhood Market stores also compete with smaller service-oriented stores, according to Scott Kooistra, the owner of St. Johns IGA, who announced plans in November to close his longtime food store by the end of the year. He cited Wal-Mart’s nearby store as one of the main reasons for his decision to close.

Wal-Mart also is nearing completion of a 154,000-square-foot Walmart Supercenter store in Battle Ground, planned to open in 2014 at Scotton Way and state Highway 503 (Southwest 10th Avenue). It will join three full-service Walmart stores already operating in Clark County at 221 N.E. 104th Ave., 9000 N.E. Highway 99 and 430 S.E. 192nd Ave.

In November, one of the area’s smallest Walmart Supercenters opened at the Hayden Meadows shopping complex on the east side of Interstate 5, making it a convenient draw for Vancouver shoppers.

4. County employment up, unemployment down.

More often than not, there’s been little to cheer about Clark County’s recovery since the economic crash ended more than three years ago. But toward the end of 2013, the county’s recovery strengthened.

The county’s economy continued to improve in the 12 months ending in November, according to the most recent data available, adding 3,100 jobs and posting a healthy annualized growth rate of 2.3 percent. New data about Clark County’s economic performance in December, including payroll and unemployment figures, is slated to be released Jan. 28.

November’s year-ago numbers showed that all but two employment sectors gained jobs. Trade, transportation and utilities fattened payrolls by 800 jobs, construction boomed with 600 jobs, leisure and hospitality grew by 600 positions and financial services chipped in 400 jobs.On the negative side, health care shed 100 jobs. Government employment saw no change.Meanwhile, the county’s preliminary unemployment rate in November clocked in at 7 percent, according to Scott Bailey, regional labor economist for the state Employment Security Department. That’s down from 8.1 percent unemployment in November 2012.

The job growth and drop in unemployment show an economy steadily on the mend. During the Great Recession years — from February 2008 to February 2010 — Clark County hemorrhaged about 10,000 jobs. Since then, it has recovered 9,300 jobs, or about 93 percent of what was lost.

5. Strong housing industry rebound includes apartment construction boom.

The local housing market continued to show annual improvement in November, despite a month-to-month cool-down indicating the industry’s slowest time of the year has arrived.

Portland-based RMLS reported 439 closed sales in November, up by a slight 2.6 percent over the 428 houses sold in the same month a year ago, but down by 14.6 percent from October. Home prices, meanwhile, continued to rise in November, which showed the median price — half sold for more, half for less — increased by 10.6 percent to $225,000. It compared with a median of $203,500 during the same month last year. November’s median was just 2.4 percent higher than October’s median of $219,700.

The month-to-month drop in sales occurs naturally as the holidays approach, said Mike Lamb, a Vancouver real estate broker with Windermere Real Estate/ Stellar Group.

From January through November, Clark County Realtors closed a total of 5,681 home sales, a 34.4 percent increase over the same period in 2012, in which 4,227 houses were sold.

6. United Grain, Longshore dispute drags on.

After sparring for more than a year over terms of a new labor contract, Northwest union dockworkers and grain-terminal owners agreed to resume talks in October. But it’s unclear whether the revived negotiations between the International Longshore and Warehouse Union and the Pacific Northwest Grain Handlers Association will reach a resolution.

To boost their competitiveness, the grain handlers say, they want a new contract that mirrors employer-friendly terms the ILWU signed in February 2012 with Export Grain Terminal in Longview. But the union says the demands by United Grain Corp. at the Port of Vancouver, Columbia Grain in Portland and Louis Dreyfus Commodities — which operates facilities in Portland and Seattle — aim to break the union and hurt workers.

The quarrel intensified when United Grain and Columbia Grain locked out Longshore workers in February and May, respectively. The fallout from the lockout included ongoing pickets by the ILWU, the use of replacement workers at United Grain, Vancouver police responses to reported incidents, and charges and countercharges filed by the two sides with the National Labor Relations Board.

7. Coal terminal proposal in Longview brings debate over transport.

An estimated 1,000 people filed into the Clark County Event Center at the Fairgrounds in October to make their best case for or against a proposed coal export terminal in Longview.

At issue was the proposal by Millennium Bulk Terminals-Longview, owned by Ambre Energy and Arch Coal Inc., to export up to 44 million metric tons of coal annually to Asia.

Opponents decried the environmental impacts of sending coal through the Northwest and burning it overseas. Supporters touted the proposal they said would bring an economic boost to Southwest Washington.

The October gathering was part of a statewide series of “scoping” meetings held by Cowlitz County, the state Department of Ecology and the U.S. Army Corps of Engineers. The meetings aimed to help the agencies decide what should or should not be included in their examination of the Millennium proposal’s environmental impacts.

Eventually, the agencies will create draft environmental impact statements spelling out the effects the Millennium proposal will have on land, air, water and the built environment. More public input will follow, and reviews will be finalized. Regulators will consult those impartial, fact-filled reference documents as they later consider whether to grant permits to Millennium.

8. PeaceHealth lays off 500 workers systemwide, including 340 in Southwest Washington.

PeaceHealth, the Vancouver-based health care system with operations in three states, announced in August it would cut about 500 jobs across its system through a combination of layoffs, unfilled positions and reductions in employee hours as it struggles to slash its budget by more than $130 million.

About 340 of those jobs will be eliminated from PeaceHealth’s Columbia Network, which encompasses Southwest Medical Center in Vancouver and St. John Medical Center in Longview. More than half of those positions, about 177, are layoffs. And Southwest Medical Center in Vancouver will bear the brunt of those layoffs, with 124 people losing their jobs.

Driving the workforce reductions is a confluence of factors, according to PeaceHealth officials: cutbacks in reimbursement connected to federal and state health care reforms; flat or reduced patient volumes, especially in the Columbia Network, where the loss of a Kaiser Permanente contract will lead to sharply lower patient volumes; and required investments in electronic health records.

9. Voter-approved marijuana legalization opens business opportunities.

Neighborhood marijuana stores could open across Washington as early as May or June, according to state officials who in November launched the licensing process to legalize pot growers, processors and sellers in response to voter-approved Initiative 502, which passed a year earlier.

A 30-day licensing period ended on Dec. 19 with 78 potential marijuana businesses submitting applications to be one of 15 retail pot businesses allotted to Clark County. A lottery process will now decide which applicants will be allowed to open a pot-selling business as one of Washington’s 334 licensed marijuana stores.

But the retailers will be the last group to know whether they have a license, according to the Washington State Liquor Control Board, which also reviewed applications from growers and processors.

The state decided to put growers and processors through the licensing process first as part of an effort to stock the newly emerging market. The agency will allow an unlimited number of growers and processors to apply, although the three-member board established rules in September that limits marijuana production to 40 metric tons, or a little more than 88,000 pounds, for 2014.

Marijuana businesses also will have to comply with local authorities, according to state officials who plan to continue processing the applications despite moratoriums on marijuana sales in local jurisdictions, including Clark County and Vancouver.

10. Vancouver, partners win Innovative Partnership Zone designation.

Regional economic development leaders are pushing to further diversify Clark County’s business landscape into a knowledge-based economy, one studded with high-tech companies, growing research facilities and highly skilled workers.

This year, they got Washington state government’s official blessing to step up their efforts. The state Department of Commerce named portions of Vancouver and Camas as an Innovation Partnership Zone, or IPZ. It’s an important designation, in part, because it gives the region additional leverage in seeking grant dollars to help pay for projects aimed at growing digital technology industries.

The Vancouver-Camas IPZ, one of 18 such zones in the state, is called the Applied Digital Technology Accelerator. It includes Vancouver’s downtown and waterfront, as well as both sides of Southeast 192nd Avenue.

The IPZ designation opens several opportunities. One is to secure funding to install additional fiber-optic cable. Another possibility: Using the IPZ to develop incubator space for startup companies.

The designation lasts four years and can be extended. But if the state doesn’t see progress, the zone may not be renewed.

Compiled by Columbian business staff writers Aaron Corvin and Cami Joner.