Clark County's fourth quarter: Grain tussle fizzles amid slow recovery

Vancouver makes failed bid to lure Nike and Clark Public Utilities acquires new water right

By Gordon Oliver, Columbian business editor

Published:

 

TOP STORIES of the 4th QUARTER

OCTOBER

Target opens at Portland’s Jantzen Beach and Westfield Vancouver mall completes renovation as retailers prepare for the holidays

Walmart plans for a store in Battle Ground stir opposition, support

NOVEMBER

Initiatives to legalize marijuana and allow same sex marriages open new business opportunities

State approves water rights expansion for Clark Public Utilites and Ridgefield

Port of Camas-Washougal agrees to buy 13.25 acres at the former Hambleton Lumber Company site for business and recreation.

DECEMBER

Economy shows more life as unemployment settles in below 10 percent

Grain terminal talks fail to reach agreement; grain terminal workers stay on the job under new contract

Oregon Legislature’s approval of tax rate favored by Nike ends Vancouver’s efforts to lure company

Small liquor stores falter as more consumers buy in Oregon

In some ways, the biggest story in the final quarter of 2012 was one that never happened.

For months, the four operators of six grain terminals stretching from Portland to Seattle set the table for a showdown with the International Longshore and Warehouse Union. Owners of those terminals, which include the United Grain Corp. grain elevator in Vancouver, wanted more flexibility in labor rules. The unions wanted to preserve many provisions in existing contracts related to working conditions and job security.

Union members overwhelmingly rejected the owners' "final" offer just before Christmas. But by then, TEMCO -- a joint venture of Cargill Inc. and CHS Inc. that runs grain-export facilities in Portland and Tacoma -- disappeared from the owners' coalition without explanation. The three owners remaining in the coalition declared that they would implement their new contract during the holidays, over union objections.

On the day of reckoning, union members showed up to work without incident. Both sides have been silent ever since, but they're not likely to remain that way. There are reports that Cargill is meeting secretly with the ILWU on a separate agreement, driving speculation that such an agreement would put pressure on the remaining owners to negotiate further with the union. Meanwhile, Columbia Grain and Louis Dreyfus Commodities, which both operate terminals in Portland, have announced terminal expansions with a combined cost of $61 million.

At issue in the union-management jostling is a key business activity for Southwest Washington, Portland, and much of the state of Washington -- the movement of valuable agricultural commodities from U.S. farms to vast Asian markets. The lingering conflict could well play out in the current quarter.

Initiatives bring change

The year's final quarter did set the groundwork for changes that will influence Clark County's economy and businesses for years to come. Most notable was voter approval of initiatives legalizing same-sex marriage and recreational use of marijuana. Some Vancouver businesses immediately capitalized on the same-sex

marriage law, which took effect in December, hosting and catering same-sex marriages and receptions. Since Oregon does not recognize same-sex marriages, some Clark County small businesses are hoping to become a regional draw.

Likewise with the much-discussed marijuana legalization initiative, which has a longer timeline for implementation and faces a potential legal challenge because of its conflict with federal law. But if and when the law is fully implemented, the same state border issue looms large: prospective marijuana retailers see an opportunity for bistate commerce in marijuana sales.

The movement of commerce from south to north would be a change from the historic pattern of Clark County residents who typically head to Portland and its Oregon suburbs to avoid sales taxes. The last quarter offered a reminder of Portland's retail drawing power, with the opening of a new Target store at Jantzen Beach to replace an older, smaller store. The Jantzen Beach mall, directly south of downtown Vancouver, is a big reason why Vancouver's retail sector remains relatively weak.

Shopping in Oregon became more appealing last year thanks to Washington's voter-approved privatization of liquor sales. Many shoppers enjoyed the convenience of purchasing booze at Costco or other major retailers, without having to make a trip to a state-licensed liquor store. But bargain hunters descended on Oregon liquor stores in the Portland area. Few customers were left for the former Washington liquor stores, and some of the small business owners who'd purchased those stores were closing down by year's end.

Still, Clark County retail showed life during the quarter, with Westfield Vancouver mall unveiling a major renovation and Walmart revealing plans for a store in Battle Ground.

Slow recovery

As always, the health of the local economy loomed large during the quarter. The county's unemployment rate settled in below 10 percent, continuing a slow but steady improvement. Employment grew in November and December while initial unemployment claims continued to decline at a slow pace. One worrisome trend: manufacturing, which was growing early in the year, flattened out during the last half of 2012, noted state Employment Security Department regional economist Scott Bailey.

The Columbia River Economic Development Council and the city of Vancouver took one big stab at attracting new jobs during the quarter, secretly attempting to recruit Nike as the company was simultaneously pressing Oregon Gov. John Kitzhaber for tax rate guarantees as a condition of expansion in Oregon. The Oregon Legislature rushed a bill that gave Nike the tax assurances it wanted, and Nike's negotiators dropped their deliberations with economic development officials here.

But if Nike was the big one that got away, and the grain terminal dispute was the big event that never happened, then the acquisition of precious water rights was the big story that few people noticed. In November, the Washington state Department of Ecology approved a major new water right for Clark Public Utilities and a smaller one for the city of Ridgefield. The new underground water resource will enable Clark Public Utilities, which now serves about 30,000 customers, to at least double its capacity to provide water to residential and business customers in unincorporated areas across the county.

And, as the challenging year of 2012 drew to a close, that was one less thing to worry about in the future.