|You are viewing a trimmed-down version of the SkyscraperPage.com discussion forum. For the full version follow the link below.|
View Full Version : The Northwest economy thread
Aug 22, 2007, 7:40 AM
Someone's lease is expiring. It will be two stories, I'll let you figure out which store that could be. So out with the old and in with the new.
James Bond Agent 007
Aug 22, 2007, 7:41 AM
Hmmm. The Gap????
Crate & Barrel is also 2 stories.
Only ones I can think of.
Unless it's the Barnes & Noble. :D
Aug 22, 2007, 2:15 PM
I don't know myself. They did not mention it in the other article I read. But Barnes & Noble is building a new one in Seattle somewhere. Maybe its them. I can not imagine any one of these businesses giving up such a hot market. I would think they would have resigned, or have a clause in their lease, or a have a nearby location for a better store. It will be interesting to see who it is.
Aug 23, 2007, 3:57 AM
^ I suspect they will demo all or part of an exsiting structure for H & M. Perhaps it will be on the southern edge of the central area. They are currently rebuilding the old Kit's Camera/Honeybaked Ham area, though I'm not sure if it will be two stories. Maybe it will be where B of A is now. Does a bank generate the kind of revenue that justifies a (presumably) expensive mall location?
Aug 25, 2007, 8:52 PM
Gresham eases taxes for Boeing to expand
$4.7 million break - The abatement will help add 173 jobs at the machine plant
Thursday, August 23, 2007
CATHERINE TREVISON and ROBIN FRANZEN
GRESHAM -- A new $4.7 million tax break for Boeing's Gresham aircraft parts plant will help with one of the largest expansions in the plant's history, company executives said Wednesday.
The abatement, approved Tuesday by the Gresham City Council, will help buy cutting edge, multimillion dollar tools that machine parts for Boeing's commercial aircraft, including the new 787 Dreamliner.
By making those tools more affordable, the tax breaks will help the plant compete with Boeing suppliers around the world and meet rising airline demand for 737s, 747s, 777s and the 787, said Mike Starr, the plant's manufacturing director, and Don Hendrickson, senior manager for finance and program management.
The $80 million to $100 million expansion, under discussion for the past two years, includes hiring about 173 workers by the end of 2009, bringing total employment at the plant to about 1,500 people. It's a big jump from five years ago, when the plant laid off more than a third of its work force after the terrorist attacks of Sept. 11, 2001.
"I think everybody understands that the Boeing Co. is looking at the Portland site and investing in the site, and that helps with morale. We are building critical pieces of hardware for all the aircraft," Starr said. "I've been here for 18 years. I've weathered a few of the cycles. We are extremely excited to be part of (Dreamliner production). It's a completely different aircraft, and its success has bolstered a lot of people out there (in Gresham)."
The upswing has prompted the recall of laid-off workers, spurred recruitment of new workers and restarted the plant's apprentice training program, said Stacy C. Breunig, chief shop steward from the International Association of Machinists and Aerospace Workers, District Lodge 24.
"We've pretty much exhausted the recall list. We have brand-new-to-Boeing employees. We have new faces, which we haven't seen for a long time," Breunig said. "It's hopping."
The growth, which includes a small building expansion, also calms a longstanding fear among some workers that Boeing would someday sell the plant, at 19000 N.E. Sandy Blvd., which it has operated since 1974. "I think it's a statement," Breunig said. "Why would they invest so much in capital and site improvements to give it away to someone else?"
Starr and Hendrickson did not predict whether the expansion could continue beyond the estimated $25.8 million planned for 2007, $27.5 million in 2008 and $25 million in 2009. They did point to Boeing's most recent 20-year market forecast, which predicted strong demand for new planes based on a variety of factors, from expanding air travel to more competition among airlines.
The city council, without objection from the public, unanimously approved the abatement Tuesday, freeing Boeing of an estimated $4.7 million in taxes on new equipment and facility upgrades that would have gone to support schools and other local taxing jurisdictions between 2008 and 2014. It did so as part of Oregon's Enterprise Zone system, which offers tax incentives to companies willing to expand and create jobs in lower-income areas. There are 55 zones statewide; Gresham qualified for its zone last year.
In return, the company must hire at least 140 new workers by December 2009, or risk losing the tax breaks after three years; outline during the next two months how it will increase the amount of goods and services it buys locally; and pay at least three-quarters of the new workers at least $15.60 per hour. According to the machinists' union, about 1,160 of the employees it represents make an average wage of $27.46 per hour.
"I'm hoping it'll be two or three times 140 (new employees) before it's over," City Councilor Richard Strathern said Tuesday before voting his approval.
Investments made to the Boeing plant in 2007 would be first taxed in 2013; 2008 investments in 2014; and 2009 investments in 2015.
About $1 million of the $4.7 million tax break will be felt as a loss to the Gresham city budget, but Boeing is required to partially offset that reduction in taxes by paying the city $366,336 in "community service fees," specifically earmarked for use on local economic development projects.
Also, once Boeing's increased property value begins moving onto the tax rolls in 2013, collections from Boeing, which paid about $2.7 million in taxes on its 65-acre site in 2006-07, are expected to grow significantly. By 2013, for example, the city would collect an additional $41,432 in taxes; by 2015, as much as $107,656 more, according to city estimates.
Boeing would continue to pay taxes on its existing buildings, land and equipment.
Shannon Lopez, economic development recruitment specialist for Gresham, said that when city and business leaders made a routine business-retention visit to the Boeing plant earlier this year, they heard about efforts to ramp up aircraft production. Shortly afterward, they encouraged the company to apply for the Enterprise Zone program in the hopes it would clinch the company's decision to invest as much as $100 million in Gresham -- and not somewhere else.
Lopez can't say whether Boeing would have made the investment anyway. However, "Boeing is competing globally, and this plant is competing with other Boeing facilities," Lopez said. "The scale of this is significant for Gresham."
Catherine Trevison: 503-294-5971; firstname.lastname@example.org Robin Franzen: 503-294-5943; email@example.com
James Bond Agent 007
Aug 29, 2007, 7:38 AM
Wednesday, August 29, 2007 - Page updated at 12:04 AM
Cruise industry in Seattle growing at a fast clip
By Amy Martinez
Seattle Times business reporter
A new report by a cruise-industry trade group confirms what probably is apparent to anyone who's visited Pike Place Market or the Space Needle during a recent weekend: Cruise ships are a growing business in Seattle.
The report by the Cruise Lines International Association of Fort Lauderdale, Fla., ranks Seattle ninth nationally for cruise-ship embarkations, with 373,000 passengers last year, up 11 percent from 2005.
Cruise lines and their passengers now account for $631 million in direct spending throughout Washington state, according to the report. Counting people employed by the industry and the effect of the industry's spending, the cruise business supported 16,300 Washington jobs totaling $722 million in wages, the trade group said.
But the extent to which other Seattle businesses benefit depends on their proximity to the waterfront and their ability to cater to the unique needs of passengers.
In the world of cruising, Seattle is a departure point rather than a port of call, meaning it tends not to be the main attraction, business owners say.
Also, most cruise lines offer weeklong itineraries departing Fridays, Saturdays and Sundays, so passengers who live and work outside the state — and who have limited vacation time — often restrict their Seattle visits to just a day or two.
"The first thing they want to do is get on the boat. And when they get off the boat, they want to go home," said Brian Tracey, who owns the amphibious-tour company Ride the Ducks of Seattle.
Still, Tracey said the company sees a significant number of cruise-ship passengers who set aside a few extra days for Seattle.
Overall in the United States, cruise embarkations increased 4.5 percent to slightly more than 9 million in 2006, and the industry accounted for $18 billion in spending and nearly 154,000 jobs totaling $6 billion in wages.
The cruise-line trade group hired Business Research & Economic Advisors in Exton, Penn., to analyze spending by cruise lines, passengers and crew, as well as the need for shoreside staffing and ship maintenance and repair.
The report says beneficiaries in Washington state included travel agencies, airlines, hotels, restaurants, food processors, advertising firms and ground-transportation providers.
"Seattle has become a great staging point for the Alaska cruise market, and it appeals not just for getting on and off a cruise, but for pre- and post-cruise stays," said Bob Sharak, the association's executive vice president.
Cruising took off locally after the Sept. 11 attacks made Americans fearful about traveling overseas, prompting cruise lines to redeploy ships from Europe to Seattle for Alaska-bound voyages.
Meanwhile, cruise-ship passengers increasingly pick Alaska as a top summer destination, said Rose Abello, a spokeswoman at Seattle-based Holland America Line.
A wholly owned unit of Carnival Corp., Holland America has 13 ships, three of which operate out of Seattle for the summer, plus a sightseeing tour company, Gray Line of Seattle.
Abello said many passengers "stay before or after their cruises to enjoy the surroundings. We have guests who go up to the wineries in Woodinville or take a tour down at Mount Rainier.
"I think Seattle is one of those places that's on people's lists of where they want to go."
Dean Nelson, president and CEO of the Space Needle Corporation, said he thinks Seattle's most visible tourist attraction has experienced a "steady increase" in cruise-ship business for several years, though he doesn't track it.
At Hands of the World, a folk-art and jewelry shop at Pike Place Market, owner Cynthia Hope keeps a schedule of cruise-ship comings and goings tacked to her office wall.
"We have to staff accordingly," she said. "You can tell who the cruise-ship passengers are, because they're here bright and early in the morning before departing in the afternoon."
But Hope said passengers tend to spend small amounts of money in her store, and she worries that the large crowds deter residents who support the market's other merchants.
"If you're on a cruise ship, you're not going to be buying a flat of blueberries or artisan cheeses," she said.
Aug 29, 2007, 6:47 PM
Despite hits, state software sector grows
Employment is on the rise, and several companies report an uptick in revenue
Portland Business Journal - August 24, 2007 by Aliza EarnshawBusiness Journal staff writer
Cathy Cheney | Portland Business Journal
Instantiations, led by CEO Mike Taylor, is growing along with the rest of Oregon’s software industry.
Oregon's technology sector has taken a number of hits in recent years -- mass layoffs at Intel Corp., and the precipitous decline of several local display companies.
But at least one corner of the Silicon Forest is growing.
Employment in the software industry has grown almost 8 percent between 2005 and the end of last year, according to state government figures.
The Employment Department counted 21,147 jobs at the end of 2006 in what the Software Association of Oregon and Oregon economics firm EcoNorthwest define as the software industry. That includes companies that: create and sell software; design computer systems and provide allied services; and provide Internet service, Web site hosting, data processing, application hosting and other allied services.
Oregon's job growth outstrips the national software industry, which grew 2 percent in employment over the same period.
The Software Information Industry Association also gathers data for a narrower slice of the industry -- only companies that actually create and sell software.
By that narrower definition, Oregon did even better last year than the rest of the nation. Jobs in the state's software-publishing sector grew more than 12 percent, to 8,183 at the end of 2006.
Oregon's growth looks good partly because the state's software landscape is dominated by small companies.
Even though Oregon boasts homegrown electronics-design software company Mentor Graphics Corp., which employs more than 4,200 people worldwide, more than 70 percent of companies in the Oregon software industry employ fewer than 100 people. Sixty-five percent have fewer than 50 employees.
When the economy turns up, and companies of this size start hiring, just a few new employees can significantly bump growth figures.
Jive Software Inc., for example, has doubled in size since October last year, to 62 employees. Flush with $15 million in cash from new investor Sequoia Capital, the collaboration software company will likely double its work force again within the next 12 months, said CEO Dave Hersh.
Lunarr, a startup founded by two Japanese entrepreneurs, recently moved to Portland and is close to launching its first product. Instantiations Inc., a homegrown company founded 10 years ago, is seeing a strong uptick in sales for its software development tools.
Instantiations could hit $6.5 million in revenue next year, said CEO Mike Taylor.
A national trend
One trend that's driving the growth in Oregon is also driving growth of software sales nationally: software as a service.
Commonly known by the "camelback" acronym SaaS, and pronounced "sass," the trend is a new take on the idea of selling software on a monthly subscription basis, rather than as a package.
That idea has been around for a while. But inexpensive, faster Internet connections and more sophisticated, Web-based software development have made it feasible to deliver all kinds of software to customers over the Web.
That makes formerly expensive software packages more affordable, allowing big companies such as Oracle Corp. or SAP A.G. to sell to small er companies that can't afford million-dollar enterprise systems.
It's true even with smaller companies like WebTrends, the Portland-based Web analytics company that is Oregon's second-largest homegrown software company, after Mentor Graphics.
Customers can now buy WebTrends' technology on a monthly basis, getting detailed reports on how their Web sites are functioning straight from WebTrends itself.
While it often costs customers more overall to buy software as a service, the savings on their own internal IT operations can outweigh the additional cost, said Matt Langie, director of product marketing at WebTrends.
"SaaS has higher customer renewal and retention rates," said Langie.
Due partially to SaaS, WebTrends is growing fast. It acquired two companies over the past year, and now employs 350 people , up from 250 last year. Its annual revenue is more than $60 million.
Software as a service helps young technology companies start up by lowering startup costs, said Craig Barnes, a well-known local software entrepreneur.
Barnes founded Extensis, now owned by Celartem Technology USA Inc., and Attensa Inc., which sells a news-aggregation product.
He recently left Attensa to restart Pump Networks, a company he first started up in 2000. That company consumed $1 million of Barnes' own money and between $7 million and $8 million from investors over five years, mostly to cover hardware, software and Internet connection fees.
Those costs have dropped substantially.
"Today, I need just $250,000 to $500,000" to restart Pump, said Barnes.
firstname.lastname@example.org | 503-219-3433
Aug 30, 2007, 5:34 PM
Harbor growth stalls
BACK STORY • Waterfront firms ache to expand, but the obstacles multiply
By Lee Van Der Voo
The Portland Tribune, Aug 28, 2007 (1 Reader comment)
L.E. BASKOW / TRIBUNE PHOTOS
Sorted steel is hauled away for eventual loading onto a nearby cargo ship at Schnitzer Steel Industries’ operation on the waterfront. The metal scrap yard in St. Johns employs 160 people but without investment in future harbor development, that number’s likely to stagnate.
Boys and Girls Aid Society
For 18 1/2 years, Schnitzer Steel Industries has been good to Tire Shop Dave. The work is steady, everybody leaves you alone and you’re left to make your own decisions.
“It’s like being good neighbors,” Dave said.
Such good neighbors, in fact, that last names are for outsiders.
So instead of being Dave Roub, on the job he is Tire Shop Dave. There also are Truck Shop Dave, Yard Dave and Driver Dave – just to keep the Daves straight.
These Daves hold down four of the 160 jobs at Schnitzer’s metal scrap yard in St. Johns, where old farm equipment, cars, trains, appliances and derelict barges are chopped into bits and sent overseas on cargo ships to be recycled into new products.
With wages between $11 and $21 an hour, benefits and an education stipend, recycling metals is a good living. Metal-related industries account for a significant chunk of the 40,000 jobs in the Portland Harbor.
They are some of the best-paying jobs for the two-thirds of the Portland-area work force that doesn’t have a college degree.
Without millions of dollars in public investment in the Portland Harbor, jobs like these will see little growth in the future, even as other economic sectors surge ahead.
A recent study by the Portland Business Alliance and state agencies shows the number of goods passing through Oregon needs to double by 2030 to keep pace with population growth, globalization and expanding markets. Yet harbor development lags.
While some say harbor business is better than ever – Ann Gardner, Schnitzer’s government relations manager, says the area is as busy as it’s been in 30 years – growth is hampered by crowded roads and rail lines, a lack of land and the uncertainty of the Superfund cleanup, a costly undertaking still years away and one that clouds prospects for new business.
“We’re trying to break the deadlock on a lot of those things,” said Steve Dotterrer, principal planner in Portland’s Planning Bureau, who oversees economics for the Working Harbor Reinvestment Strategy.
Through the strategy, slated for approval by the City Council by the end of the year, the city of Portland, the Portland Development Commission and the Port of Portland will coordinate 10 years of public investment in the harbor to keep industry thriving and related businesses in step with regional growth.
At the same time, environmental groups also are asking for new programs to rebuild habitat and make business greener. The policies, expected to be implemented through new zoning in the harbor, potentially could increase costs for businesses, though no estimates have been made.
So far, the Working Harbor Reinvestment Strategy has no exclusive funding but aims to tie existing funds from the three agencies in a way that maximizes value.
Without funding, the program would be unable to facilitate needed growth opportunities for businesses in the harbor.
No one is comfortable putting a firm figure on what a failure to further develop the Portland Harbor might cost in terms of dollars or unrealized commerce.
But figures produced by the Portland Business Alliance and state groups show road and rail congestion alone, absent a public fix, could reduce business growth in the Metro region by $1 billion a year and 6,500 jobs by 2025.
Brownfields need attention
To break the planning deadlock in the Portland Harbor, economists first must find its cause. Through a series of interviews that local planners have conducted with business leaders as part of early work in the Working Harbor Reinvestment Strategy, several key issues have emerged:
• Companies on 30 sites invested an estimated $450 million in capital projects between 2004 and the end of 2006, including new and upgraded buildings and equipment, and rail and dock facilities.
Another $70 million in projects are planned, considered a low estimate, yet there is no comparable public investment in infrastructure to support growth.
• A lack of federal investment in railroads and roads is keenly felt in the harbor, where congestion has slowed production schedules, raised costs for businesses and lowered efficiency.
• Much of the harbor’s vacant land is brownfields – contaminated dry land – and Portland lags behind other cities in its ability to clean them and get them back online for business.
• There is no identified public funding source for harbor improvements. The listing of the area’s section of the Willamette River as a Superfund site in 2000 – it is contaminated with PCBs, agrochemicals, DDT and other material – lowered property values to a degree that has sapped tax money earmarked for investment in the area.
• Superfund liability is a cloud over the working harbor, where legal warfare between polluters is so likely that even new businesses appear unable to protect themselves from future litigation.
Yet in spite of its problems, the Portland Harbor remains Oregon’s gateway for international and domestic trade, the state’s link to the global market. The Columbia and Willamette rivers intersect here, along with railroads, highways and the Olympic Pipeline carrying several kinds of fuel, making the harbor a key part of the regional economy.
Some of the region’s largest industries form a cluster here, including metal industries, distribution businesses and equipment manufacturers.
Their operations span industrial districts along the rivers: Northwest, which is located along U.S. Highway 30; Swan Island/Lower Albina, lining the northeast side of the Willamette River near the University of Portland; and Rivergate, on the peninsula at the convergence of the Willamette and Columbia rivers.
Megan Doern, spokeswoman for the Portland Business Alliance, puts the area’s position in Oregon’s marketplace in this context: “Everything that somebody purchases … at some point it’s freight that has to make its way into this system.”
Cleanup guidelines could help
According to a report produced from the interviews with business leaders, Portland officials predicted in 2004 that the harbor would need 1,900 additional acres for industry growth by 2025. Much of the vacant industrial land in the harbor today is unusable.
Roughly 920 acres are potential brownfields and 1,100 acres are in the flood plain or habitat lands, considered only partly buildable. Only 143 acres of industrial land have no identified constraints.
Last week, according to Dotterrer, representatives from the National Brownfield Association toured Portland in search of ways to speed brownfield cleanup.
Dotterrer said that while brownfields are a citywide issue, industrial brownfields provide a different challenge because the land often is put to a new use after cleanup.
“Part of the struggle here is to find solutions that solve the brownfield problems but keep the industry, because the industry is vital to our economic role,” he said.
In upcoming work, the Portland Planning Bureau intends to publish a harborwide portfolio of vacant and redevelopable sites, along with suggested designs for them.
It’s likely that public funds also will help push redevelopment forward.
Dee Burch, president of Advanced American Construction Inc., said that while public funding to spur brownfield redevelopment would be welcome, it is guidance and direction that prospective buyers need most.
Advanced American provides marine construction, diving and other industrial services to businesses in the harbor. The company recently redeveloped a brownfield site under the St. Johns Bridge but struggled with the lack of process offered throughout that accompanied buying contaminated land.
“What happens is you come in and there just aren’t a lot of examples or a road map of what needs to be done to get through it,” Burch said.
He said the two-year cleanup of mostly petroleum took only six months longer than a project on clean land. But Burch said buying contaminated property was a rough game.
Unlike other real estate ventures, in which a buyer can look to recent sale prices on similar properties, brownfield redevelopment is an open – and confusing – field.
“In these situations you’ve got these unique properties with problems, and you don’t have anybody to go to to say, ‘What’s it going to cost me? How long is it going to take?’ ” Burch said.
Public money is best used, he said, in clarifying that process and developing guidelines that buyers can follow in redeveloping brownfields.
Superfund’s a sticking point
The planning bureau’s interviews show that buyers are willing to purchase brownfields and clean them up. But industrial land brokers and developers report another issue stalling redevelopment: The litigious atmosphere of the Portland Harbor is prompting some sellers to seek indemnity from future costs related to Superfund.
The federal Superfund program cleans hazardous waste from areas where it could pose a threat to people and ecosystems, but little funding for the program is available.
Instead, Superfund relies on those responsible for pollution – in this case likely more than 100 businesses, along with the city and the Port of Portland – to fund the cleanup.
Today, industrial companies are fine-tuning their practices to avoid future contamination as plans to control pollution in the Willamette River are in the works.
But litigation between companies responsible for the pollution – some of them still in business and others no longer operating – likely is a tool that will be used to spread the burden of cleanup costs.
Developers told planners that while companies responsible for the Superfund cleanup remain poised to sue one another, any site with potential contamination is a liability they won’t risk.
One manufacturer told planners: “I had to sign a nondisclosure agreement to even come close to seeing what the conditions were on one site. It was a great building that didn’t hold any risk for my employees, but I consulted the best lawyers in town and they said I couldn’t necessarily protect myself from future liability.
“It was a very sobering experience – here we were trying to bring in all of these jobs, and it was so difficult to find a clean property.”
Some business leaders interviewed for the Working Harbor Reinvestment Strategy suggested Portland should exert political pressure to speed the Superfund cleanup.
Others said the city should subsidize insurance for people who want to lease or own a site so they can avoid liability for past pollution.
Roads and rail pose problems
Environmental issues aside, when asked to prioritize public spending in the harbor, a majority of businesses interviewed for the Working Harbor Reinvestment Strategy pointed to transportation.
From developers, property owners and manufacturers to marine terminals, ports, railroads and trucking operations, all want improved rail and roads.
“This is such a good location for us because it’s served by water, it’s served by highway and rail,” Gardner from Schnitzer Steel said.
But when it comes to reaching other areas of the state and region – Schnitzer Steel employs 3,500 in 33 states – Gardner said there are struggles.
“We receive metal from all over the state, and I don’t think there’s a day that goes by when we don’t get a call from one of our dealers … telling us that they’re stuck in traffic,” she said.
Traffic delays increase the company’s gas costs and hold its scales open longer at the scrap yard. While Schnitzer Steel used to run three trucks a day to its steel mill in McMinnville, today it runs only two on the route because of traffic congestion.
Though the company is built to use rail, rail costs are increasing as railroads price out small customers to make way for more lucrative accounts: customers with longer trains.
“The problem for our region is so many of the shippers are small,” said Monica Isbell of Starboard Alliance, a consulting firm based in Portland that recently studied rail issues affecting Willamette Valley businesses.
As the Class 1 railroads that serve the harbor area change their business model – Class 1 railroads are those with more than $319 million in operating revenues – Isbell said they want customers who can assemble their own long trains rather than customers with one or two rail cars that require frequent stops.
The change in the business model is part of a recent shift in policy at the nation’s largest railroads, Isbell said, meant to steer increased profits toward maintaining existing railroad tracks and making limited improvements while federal resources dwindle.
According to the city’s report, the roughly 55 harbor businesses that rely on rail are mostly small. Officials at the PDC and the city of Portland say luring a short-line railroad to the area would involve negotiations with both Class 1 and short-line railroads because local agencies lack authority over railroads, which are regulated by the federal government.
Absent federal investment in rail, Isbell said local governments could assume some influence in the field by subsidizing related investments or handling needed negotiations.
Harbor rail customers say the inability to plan on rail delivery has shut down some plants in the short term and made it tough for manufacturers to schedule production.
Alan Sprott, vice president of Vigor Industrial at the shipyards on Swan Island, said rail problems are affecting the shipyards’ ability to lure tenants, including a lucrative barge-to-rail transfer facility.
The transfer facility deal fell through when the tenant couldn’t assemble the long trains that railroad operators wanted. Even Vigor’s own barge-building company U.S. Barge, a partnership with Oregon Iron Works, now moves steel by truck.
“It makes it more cost-effective to go by truck even though your truck is probably costing you more than it should because of the gas prices and the time it takes you to get up and down I-5,” he said.
Without a change in transportation access, Isbell said, “it will lead us as shippers to have to build more time on the supply chain and be less efficient. And prices to consumers are going to go up.”
Marion Haynes, government relations director for the Portland Business Alliance and the agency’s expert on congestion problems, said businesses as far south as Medford rely on raw materials from the harbor to generate their products.
“The working harbor on the marine side provides access to the global market,” she said, pointing to companies such as Les Schwab and Harry and David as two that depend on goods from the harbor.
She cautions Oregon’s economy could suffer a hit if the distribution network doesn’t improve.
“Those industries don’t need to locate here. We could see businesses relocate or be unable to grow here because they are unable to stay competitive,” she said.
A lot will flow from River Plan
The Working Harbor Reinvestment Strategy is part of the River Plan, a three-pronged project underway at Portland’s Planning Bureau.
The River Plan targets the south, central and north reach of the Willamette River in stages and aims to comply with a handful of state and regional goals to protect sensitive lands.
It also draws from the city’s River Renaissance Vision, a look at community priorities and environmental goals, in crafting new land-use rules for the Lower Willamette River.
Plans for trails, permits, health issues, recreation, conservation and industrial zoning are part of the project.
The reinvestment strategy is in the hands of economists from the Portland Development Commission, Planning Bureau and the Port of Portland. It is expected to outline ways the three entities can share limited funds to promote industrial growth over the next 10 years.
The Portland City Council is tentatively set to adopt the River Plan for industrial area of the Willamette River – including the reinvestment strategy – by next summer.
Aug 30, 2007, 5:37 PM
New company gets a barge out of it
Portland Business Journal - August 24, 2007
by Matthew Kish
Business Journal staff writer
Cathy Cheney | Portland Business Journal
U.S. Barge is preparing to launch its first vessel, a 3,500 ton barge, next month.
U.S. Barge LLC will cap a spectacular first year of business when its first vessel, a more than 3,500 ton oceangoing barge, splashes down in the Willamette River next month.
Portland-based Vigor Industrial LLC and Clackamas-based Oregon Iron Works Inc. formed the company last year in hopes of capturing a sliver of the nation's booming barge business.
Thanks to a robust market, the company has orders for five barges, including a contract to build a crane barge for the Oakland Bay Bridge project. The company declined to share revenue data, but such barges can cost anywhere from $8 million to $15 million each.
Employment has also exceeded expectations. The company expected to hire 100 workers. It's on the verge of hiring its 200th.
"It's a perfect storm," said Chandra Brown, an Oregon Iron Works vice president. "There's huge demand."
Record-high fuel prices have driven many companies to explore barge shipping as a cheaper alternative to rail and highway transit. Federal regulations that require the phaseout of single-hulled barges have also beefed up the market.
Same with the fierce 2005 hurricane season, which knocked barge production off-line in the gulf and shifted business to companies like U.S. Barge and Portland's other barge builders: The Greenbrier Cos.' Gunderson Marine division and Zidell Marine.
Business could get even better.
Cargo volumes are expected to double at U.S. container ports by 2020, according to the U.S. Department of Transportation. As a result, the agency has asked Congress for additional funding for improving the nation's "marine highway" as a relief valve.
"It's a good market right now," said Allen Walker, president of Shipbuilders Council of America. "And Portland is a small hotbed of barge construction."
U.S. Barge has been able to capitalize on several unique assets, including the Portland Shipyard, which Vigor, through its subsidiary Cascade General, purchased from the Port of Portland in 2001 for $30.8 million. The 57-acre site is in an ideal location for barge construction because of its location on the tip of Swan Island.
"We had the infrastructure in place," said Alan Sprott, a Vigor vice president.
Both Vigor and Oregon Iron Works had significant experience in marine construction. Workers have been repairing and refurbishing military vessels and ferries at the shipyard for decades. Vigor's subsidiaries include Cascade General, Washington Marine Repair and Vigor Marine and employ more than 500.
The 400-employee Oregon Iron Works is also an experienced marine contractor that has designed and built boats for the military.
The new company spent roughly $8 million on equipment to get the venture off the ground, including a 600-ton gantry crane. It also spent $1 million on three World War II-era dry docks that will be used to launch the completed barges.
Some may remember the controversy around the sale of the shipyard. It suffered through a string of losses before the sale, making a profit only three times in the decade before it changed hands.
Shortly after the sale, Vigor sold Dry Dock 4, the shipyard's largest dry dock, for more than $25 million to a shipyard in the Bahamas, leaving the new owner with 57 prime waterfront acres for a little more than $6 million.
Many Portlanders bemoaned the sale, saying the dry dock created thousands of well-paying jobs. Vigor CEO Frank Foti defended the sale at the time, saying it would allow the company to stay afloat by paying off creditors.
email@example.com | 503-219-3414
Aug 30, 2007, 5:40 PM
(another Integra article--interesting to read about the industry and future propsects)
Telecom bust survivor bulking up
Acquisition - Portland-based Integra will buy a Minnesota phone company and is looking at an IPO within two years
Tuesday, August 28, 2007
Integra Telecom Inc., survivor of an industry bust that all but destroyed the Portland area's telecommunications sector, has engineered nearly $1 billion in acquisitions in the past two years and stands to emerge this week as one of Oregon's largest privately held companies.
Perched in a Lloyd District high-rise above Interstate 84, Integra plans to close Friday on a $710 million deal for a Minneapolis phone company it had long courted. Swept up in a flurry of its own making, Integra is already planning future deals and looking to a possible public stock offering -- maybe within two years.
"We're not done. We will continue growing," said Dudley Slater, Integra's co-founder and chief executive.
Both Integra and the company it's buying this week, Eschelon Telecom Inc., provide phone, Internet and other telecom services to small and midsize businesses. The combined company will reach from Portland across the West to the banks of the Mississippi, competing primarily with regional carrier Qwest Communications International Inc.
Integra thinks that big phone companies such as Qwest emphasize large corporate clients, leaving the Portland company an opening to serve regional businesses and mom-and-pop operations that seek personalized service from their phone company.
The market for business phone services has become increasingly competitive, though, with even cable television operators edging in. Intense merger activity underscores the high stakes.
Of 52 competitive phone companies tracked by research firm New Paradigm Resources Group, 24 were involved in acquisitions during 2006.
"These are companies that are buying with the intention of tying together a broader footprint," said Joe Kestel, director of consulting and industry analysis for Chicago-based New Paradigm. "The Eschelon-Integra deal falls right in line with the others."
As large competitors fight back, Kestel said phone companies such as Integra need to increase their scale to wring more revenue out of their expensive telecom networks and to fight off deep-pocketed rivals.
"These smaller and midsized companies are getting squeezed from the top," Kestel said. "They're foreseeing that the status quo is going to leave them on the outside."
Founded in 1996, as federal law moved to open telecommunications to competition, Integra was among a handful of small companies in Portland and Vancouver that hoped to grab a big share of that business.
But the markets proved less open than companies expected, and huge debt racked up by the upstarts as they built networks triggered a wave of bankruptcies. The survivors were sold for pennies on the dollar.
Integra, which initially grew more slowly than its peers, ultimately benefited because it didn't overcommit financially during that brief telecom boom. Last year Integra bought Vancouver-based Electric Lightwave, which spent more than $1 billion during the '90s building a fiber-optic telecom network that spans the West Coast, for less than $250 million -- a price that included Electric Lightwave's business and customers.
Although many investors in the telecom craze lost a bundle, Integra loyalists have been rewarded, said Tony Bolland, managing director of Boston Ventures. He wouldn't say how much his firm invested in Integra, but Bolland said he now estimates the firm's stake is worth three or four times what Boston Ventures put into it starting seven years ago.
Underscoring investors' faith, New York investment firm Warburg Pincus announced this month that it would spend $245 million to acquire an unspecified stake in Integra from prior backers. Recent acquisitions of companies in Integra's market suggest the Portland company's total value, including debt, likely exceeds $2 billion.
Integra forecasts $450 million in revenue for 2007, including four months of Eschelon's sales beginning when the sale closes on Friday. That's up 84 percent over 2006, and triple its 2005 total.
Had Integra and Eschelon been a single company for the whole year, Integra says the combined business would have generated $700 million altogether. Only a handful of privately held Oregon companies are that large.
For Integra, the challenge now is managing its increasingly rapid growth as it incorporates the clients and employees of newly acquired companies. Borrowing heavily to finance its acquisitions, Integra expects a rapid return as it works to attract customers.
"There is a break point, I think, as far as the pace of these integrations," said John Nee, Integra's vice president of corporate communications. "We just need to be sure that we grow at the right pace."
Integra says loans arranged in March for its Eschelon purchase survived the mortgage industry meltdown now roiling the financial markets, and the deal will close Friday as scheduled. But the financing became more expensive in the past few weeks, so CEO Slater said the company will be looking to restructure its balance sheet.
One way to do that, he said, would be an initial public offering -- a sale of stock to the public. An IPO within two years is likely, Slater said, in part because it would also offer a mechanism for Integra's private investors to cash out their stake.
But with mergers continuing apace in Integra's telecom sector, it's also possible that Integra itself could be an acquisition candidate.
"These things are very fluid," Slater said. "If I had to rank the two, I would say that the likelihood of an IPO is significantly higher."
Ultimately, though, Slater said the decision will be up to Integra's owners.
"We are backed by private equity investors, and they will seek an exit," he said. "We will provide an avenue that gives them the best return."
Mike Rogoway: 503-294-7699; firstname.lastname@example.org; blog.oregonlive.com/siliconforest/
©2007 The Oregonian
Sep 5, 2007, 2:20 PM
EPTEMBER 2007: FEATURE, HIGH TECHNOLOGY
Is there any fertile ground left in Silicon Forest?
"It’s a very difficult environment. You’ve always had to have big ideas. Right now you have to have a very, very big idea." — JAY EISENLOHR, AMBRIC
Jay Eisenlohr, Ambric
Photo by Michael G. Halle
BY CHRISTINA WILLIAMS
Jay Eisenlohr figures he’s got a shot at the whole megillah this time and with two previous startups under his belt, he has a base of experience to speak from.
“This is the first company that I’ve started that has the potential to do an IPO and stand alone,” he says. “It has the potential for thousands of people and a campus.”
It’s a lofty goal for a 60-person startup that’s going up against the biggest names in the semiconductor industry. Of course, Eisenlohr also will acknowledge that the chance that Beaverton-based Ambric will even be alive in five years is no better than one in 10.
Nodding in agreement is Christian Prusia, the founder of Enuclia, a semiconductor company that aimed at the digital display market from its Beaverton headquarters, but fell short of the goal.
Enuclia dropped behind on its production schedule and was forced to close this summer when one of its key investors balked, spooking the others. With no money to finish its first product, there was no other choice but to pull the plug.
When Enuclia went down, it prompted some to declare the region’s storied display cluster all but dead. After all, projector company InFocus has gone through multiple layoffs and is up for sale by the board, Pixelworks has dramatically scaled back its operations and founding CEO Alan Alley left the business to work in the governor’s office. Even Planar Systems, the sector’s stalwart that acquired Clarity Visual Systems last year, has missed revenue targets and watched its stock price slump.
“[Enuclia] was the last great hope for the video processing silicon sector here in Portland,” says Eric Rosenfeld, managing partner at Portland-based Capybara Ventures, a seed investor in Enuclia. “They were so close with so many of their customers.”
Rosenfeld is quick to say Enuclia’s fall doesn’t signal a looming clear cut of Silicon Forest, but the thinning does point out some of the region’s oft-mentioned competitive disadvantages, namely: the lack of a research-oriented university, the lack of experienced high-tech managers, the lack of a critical mass of companies that attracts said managers, the lack of high-tech investors and the lack of je ne sais quoi — the rabid drive for success that is present in other high-tech meccas with a 24/7 work culture. That’s absent, many say, in Oregon where warm summer days and ready access to the great outdoors sometimes eclipse the desire to stay inside and pound out code under the fluorescent lights.
Yet it may be too soon to recite the epitaph for Silicon Forest. For all the well-known shortcomings, there are still strengths. It’s home to the world’s largest concentration of Intel employees, and the fact that Intel cut just over 1,000 jobs last year is good news for the startup world as top-trained talent becomes available. And even before Intel was a force, there was Tektronix, and Tektronix begat Mentor Graphics begat Planar begat InFocus begat Pixelworks and Enuclia. Silicon Forest talent runs deep.
And, with Ambric as exhibit A, the startup drive hasn’t diminished. By the end of the year Ambric, with Intel alum Howard Bubb as its CEO, will be in production on a chip that makes it easy to synchronize multiple computers. It has applications for high-end video and medical imaging, among others. Ambric has raised just south of $20 million in venture capital from OVP Venture Partners and others. Eisenlohr says the company will raise more before the year is out and will hire more engineers and programmers as it expands to other markets.
Finding the people is the least of his worries. As Eisenlohr puts it: “This is one of the truly ripe places for raw talent.”
ALAS, TALENT ISN’T ALL IT TAKES. Even the triple threat of talent, money and a killer technology wasn’t enough for Enuclia, which raised $18 million from top-shelf VCs who wouldn’t have placed a bet without the chance at a hearty payoff.
Prusia attributes Enculia’s failure to a lack of two things: speed and communication.
“Any company in Oregon is going to face this: How do you innovate locally and efficiently tap into your customers who are in Asia?” Prusia says.
Enuclia was developing a chip to be used in high-end televisions, which are universally manufactured overseas. And in addition to being far away, the TV-makers are updating their technology at an ever more rapid clip. “It used to be a 18-month design cycle. It’s nine months now. At the end of the day it all comes down to that speed issue.”
In addition to keeping close counsel with customers, Prusia also learned too late that it’s imperative to nip hairy interpersonal issues right away. “If a team’s not firing on all cylinders it’s not going to execute,” he says.
But Gary Feather, VP, consumer systems and technology at Sharp Laboratories of America in Camas, Wash., cautions that one should view the stumbles of companies like Enuclia, Pixelworks and InFocus, in context with the wider market, one that’s getting tougher by the day as high-end digital displays become more of a commodity.
“As the prices decline and the competition grows, margins decline,” says Feather. “As the commoditization emerges and the barriers to enter decline, business gets tougher no matter where a company is located.”
Feather makes the differentiation between companies that have leading technologies and those that are leading markets, the latter being the more difficult maneuver to pull off.
“It’s great to have the first initial idea,” Feather says. “We have great people to do that. The sustainable execution is more difficult.”
Still, market-leading companies, such as Intel, are seeing talent here and staking their claim on it. In the last year, Santa Clara, Calif.-based Nvidia, a leader in graphics processing chips, doubled the size of its design presence in Oregon in part because last summer it had the chance to hire a talented development team en masse. The reason? The team’s startup failed and they were on the market.
VENTURE CAPITAL RISING?
The money that backs Silicon Forest seedlings appears to be on the rise again.
*The first half of 2007 looks strong at $812.8 million raised by companies in the Northwest, according to data collected by PricewaterhouseCoopers and the National Venture Capital Association. But that doesn’t stop some entrepreneurs from complaining that venture capital is hard to find in Oregon.
Stexar, formed by a tribe of former Intel engineers in 2005, toiled in secrecy for about a year before folding. Jonah Alben, vice president of engineering for Nvidia, says his company jumped at the chance to hire a talented team and is still adding to its 65-employee Beaverton-based design shop. “We’re finding good people to hire,” Alben says. “It’s the right thing to do. We can’t just say we are a Silicon Valley company, we have to go where the great talent is.”
One could make the argument that, despite their ultimate failure, the fact that companies like Enuclia and Stexar are able to get off the ground and hire a great team in the first place is illustrative of the region’s strength. Prusia says everyone from his team who wanted to stay in Oregon has found another job — either with employers such as Nvidia or with less established companies.
“Those who wanted a job here have found one,” Prusia says. “Depending on their desire for risk, some even went to another startup.”
APPARENTLY THERE ARE PLENTY of risk junkies in Silicon Forest. In addition to Ambric, there are a handful of other display-related silicon startups getting ready to elbow their way into the market and try their luck.
“Consumers will see our product in 2008,” says Patrick Hauke, CEO and founder of Hillsboro-based Audio Mojo.
Hauke, one of Intel’s first Oregon employees in the ’70s, assembled a team of close to 30 people and developed a silicon-based wireless audio system for high-end digital television setups. Hauke says he’s had good luck finding people — he hired his entire marketing team from Pixelworks — but less luck with funding. “I am greatly disappointed in Oregon’s ability to fund startups,” says Hauke, who traversed both coasts talking to investors.
Avnera, a secretive Beaverton semiconductor company led by Manpreet Khaira, the founder of Mobillian (which sold to Intel in 2003), has lined up an impressive list of investors including Intel Capital, Bessemer Venture Partners and Best Buy. Rumored to also be making a play on the audio side of the business, 2-year-old Avnera is making a formal launch later this month.
Capybara’s Rosenfeld compares Avnera to Enuclia — a company with great potential to grow quickly once its chips are designed into products. “It’s the kind of company, a fabless semiconductor company, that is well-suited to Oregon,” Rosenfeld says. Capybara made a small ($100,000) investment in Avnera’s most recent round of funding.
All of these startups face the same stakes: One misstep is all it takes to fall flat in this market. But optimism runs high at this stage.
“We want to restore the luster to the cluster,” chants Sam Blackman, the 31-year-old CEO of Elemental Technologies, an eight-person startup in Portland started by former Pixelworks engineers.
Blackman is busily lining up customers for Elemental’s software, which runs on standard computer components but can handle high-volume video, appealing to professional users who want to save money as well as regular folk who want more sophisticated tools. “We’re getting a lot of interest,” Blackman says. “And once we have customers lined up we’ll have a better story to tell investors.”
As with any startup, investors will judge Elemental on the basis of its product and the potential for customers. But once the bets are placed, the odds say that many will fail.
“It’s a very difficult environment,” says Ambric’s Eisenlohr. “You’ve always had to have big ideas. Right now you have to have a very, very big idea.”
But perhaps the silver lining for the region is just this: It’s tough everywhere. And in Silicon Forest, there’s still room to put down roots — and, eventually, maybe even thrive.
Have an opinion? E-mail email@example.com
Sep 11, 2007, 1:08 AM
SSP is back!!!!! Just in time - I was almost desparate enough to post on SSC. :yuck:
Sep 11, 2007, 2:43 AM
^^^:haha: I was going crazy there for a few days without my daily ssp fix
Sep 11, 2007, 5:11 AM
It was nerve wracking not having everyones input on what is going on. It was like the clock stopped ala the Twilight Zone...........
Sep 13, 2007, 3:29 AM
Small Canadian biotech to move headquarters here
By Seattle Times staff
Biomira, a small biotechnology company based in Edmonton, Alberta, plans to reincorporate in the United States and move its headquarters to the Seattle area, officials said today.
The developer of cancer therapies believes relocating its executive offices to "a major biotechnology center" will raise its profile among potential investors and employees, President and CEO Robert Kirkman said on a conference call today. "We have a great story to tell, and we want to tell it from a higher pulpit," he said.
Biomira's lead product candidate is Stimuvax, a cancer vaccine currently in a Phase 3 clinical trial for non-small-cell lung cancer.
The company, which already trades on Nasdaq under the symbol BIOM, has a market capitalization of about $109 million at current prices. It posted a loss of US$36.4 million last year and has never been profitable.
It shares fell 15 cents, or 13.9 percent, to $0.93 cents today after it announced the relocation plan.
The reincorporation, and a planned 6-to-1 reverse split of the company's stock, require shareholder approval.
The company had 82 employees as of Aug. 31, according to a regulatory filing, and Kirkman said the planned move doesn't mean any disruption to its current Canadian work force.
But he added that "we have historically experienced substantial difficulty in attracting key management and scientific talent to Edmonton. ... As we build out our clinical development team," especially small molecule drugs, "we intend to do that in the Seattle area."
The company has a one-year lease on office space in Bellevue at 110 110th Ave. N.E., according to a regulatory filing.
Sep 19, 2007, 3:04 AM
Unemployment rate falls in August
The state's unemployment rate fell to 4.6 percent last month from July's 4.9 percent rate.
State officials said they're not seeing any slowdown that other parts of the country may be experiencing. The national unemployment rate is also 4.6 percent.
I am running out of ways to say 'the news is good.' Washington's unemployment rate has remained at historic lows since the beginning of the year," said Gov. Chris Gregoire, in a statement. Officials estimate there are 148,300 people without jobs and looking for work in the state.
In the Seattle-Bellevue-Everett area, the unemployment rate fell to 3.8 percent from July's 3.9 percent. King County's unemployment rate is 3.5 percent.
James Bond Agent 007
Sep 19, 2007, 3:54 AM
I've been wondering for a while what the fate of this thing would be.
Last updated September 18, 2007 3:03 p.m. PT
Governor approves 65 Kittitas wind turbines
By LISA STIFFLER
A controversial project to build 65 wind turbines in Kittitas County was given the go-ahead by Gov. Chris Gregoire Tuesday.
Local landowners in the area near Cle Elum and Ellensburg fought the plan to build structures up to 410 feet tall to capture energy from the wind. They said it would destroy views and reduce the property value, create noise and flickering shadows, and kill birds.
The project, which has been in the works for five years and is being proposed by Portuguese-owned Horizon Wind Energy, was scaled back from plans for 150 turbines.
Kittitas County commissioners last year rejected the proposed wind farm as being incompatible with local zoning rules. The state Energy Facility Site Evaluation Council reversed that decision. Gregoire asked the siting council to reconsider the project and the council in August recommended it with revisions that could put the turbines 2,500 feet away from homes.
The siting council and Horizon now must work out the particulars on the size and location of the turbines.
In her letter to EFSEC Chairman Jim Luce on Tuesday approving the project, Gregoire said it would provide jobs, millions of dollars of investment, more taxes for the county to spend on schools and "these benefits are being secured without contributing to climate change."
There is growing interest in renewable power, in part because of voter-approved Initiative 937 requiring larger utilities to get a fraction of their power from "green" sources.
Sep 19, 2007, 4:08 PM
Building helps lift jobs tally in Oregon
Work - Construction adds 2,600 in August and overall employment dips to 5.4 percent from July's 5.5
Tuesday, September 18, 2007
Oregon continues to buck the national trend toward a worsening economy and posted another solid month in its job numbers, including the construction industry, which added 2,600 jobs in August -- 700 more than state economists expected.
The seasonally adjusted unemployment rate in August dropped a tick, to 5.4 percent, from July's 5.5 percent.
The rate, which represents 99,024 unemployed Oregonians, is close to what it's been for 20 months and is relatively low historically. In the 31 years since 1976, about 30 monthly unemployment rates out of the total 372 months have dipped below the current level, said Art Ayre, state employment economist.
The state's payroll employment grew by 5,000 jobs, up from the 1,100 it grew in July. Five of the major industry groups gained from 700 to 1,700 jobs and none showed a substantial loss. Two of the minor losers were in the mortgage and real estate brokerage businesses, which have lost a combined 1,000 jobs in the past year.
But construction defied the gloomy national housing picture. Seasonally adjusted construction employment has ranged from 100,000 to 104,000 jobs since early 2006: In August, 103,300 Oregonians earned their keep from construction.
The professional, retail and tourist sectors also showed substantial job growth in August. Professional and business services added 2,500 jobs, rebounding from an earlier drop but still down 1,300 jobs in the last year.
Retail added 2,100 jobs in August, spurred by a surge of new store openings. Employment Department economist David Cooke cited Keizer Station, a development off Interstate 5 north of Salem, as an example of national retail chains that are adding locations in Oregon.
Tourism has been the largest grower of jobs in Oregon in the past 12 months. It added 900 jobs in August and is up 6,700 or 4 percent in the past year.
Manufacturing -- again -- was the bugaboo in the numbers. Jobs there dropped another 800 in August for a 12-month decline of 8,100, or 3.8 percent, more than twice the national rate. The bulk of the loss comes from the state's withering wood products industry.
Despite the disappearing, and high-paying, manufacturing jobs, the state's economy has stayed relatively healthy and jobs overall have grown by 3 percent a year.
"We are worse off in manufacturing (than the U.S. average) but population growth is shoring us up," Ayre said.
"We're seeing the most rapid rate of in-migration since 1997," Ayre said, based on his examination of drivers license issuance. The newcomers need products and services, and that demand creates jobs, he added.
Oregon's August job gain of 5,000 contrasts with a loss of 4,000 jobs nationally for the same month. But the seasonally adjusted national unemployment rate was lower, at 4.6 percent compared with Oregon's 5.4 percent.
Julie Tripp: 503-221-8208; firstname.lastname@example.org
Sep 19, 2007, 6:23 PM
is it just me or is the news worrying?
superficially, seattle and portland are still 'bucking the trend' but what that really means is that we're just behind. the northwest is always the last to go and the longest and hardest to fall (other than the rest belt.)
Sep 19, 2007, 6:49 PM
Seattle fell hard after the dotcom bust. I did not live here then, but many of my friends who did, informed me of just how bad it was. I don't think it's going to get that bad, but yes, a slowdown is imminent.
Sep 19, 2007, 10:53 PM
Bellevue Collection's goal: become fashion central
It's billed as nine days of fashion bliss for the Northwest's well-heeled, well-dressed crowd. But behind the scenes, Bellevue developer Kemper Freeman calls it pre-emptive marketing.
Freeman said his Kemper Development company is spending about $500,000 to put on the second annual Fashion Week today through Sept. 22 at the Bellevue Collection. "If someone wants to do a better fashion show than this, they're going to have to be pretty sober," Freeman said shortly after a dress rehearsal Thursday morning. Although it's timed to New York's Fashion Week, it spotlights what's in stores now rather than next spring and summer. (Women: Think fur-trimmed jackets, leather riding boots and bold accessories.) The purpose, Freeman said, is to brand Bellevue Collection as the Northwest's fashion headquarters, "something we frankly should have done 20 years ago. We're lucky someone already hasn't done this."
Bellevue Collection is made up of Kemper Development's Bellevue Square, Bellevue Place and Lincoln Square. Competition for well-to-do shoppers is heating up as Dallas-based Neiman Marcus prepares to open at the Bravern project in downtown Bellevue in 2009. Also, Seattle's Northgate Mall and Southcenter in Tukwila are undergoing major renovations.
Many Fashion Week events — which include runway shows, makeovers and private shopping parties — require tickets ranging from $20 to $50. VIP tickets cost up to $100.
But the events aren't meant as moneymakers, unless you count the sales boosts that merchants get from them, Freeman said. He noted that retailer David Lawrence sold a handful of $5,000 men's jackets after one show last year.
Ticket proceeds go to charity (the Puget Sound chapter of Susan G. Komen for the Cure) and to offset costs. At Saturday's "Posh Party," for example, a $50 entrance fee buys attendees finger foods, swag bags filled with giveaways such as T-shirts, cosmetics and coupons, and a $20 gift certificate to the Bellevue Collection.
Bellevue Square, itself undergoing a major renovation, has a tenant roster that includes Nordstrom, Tiffany and BCBG Maxazria. Soon to join the roster: Threads, a baby-apparel store being launched by Pottery Barn; and Aritzia, a hip women's fashion retailer based in Vancouver, B.C.
Both are expected to open this fall near Bellevue Square's Center Court, said Jennifer Leavitt, marketing director at Kemper Development. Also, Lacoste plans to enter Bellevue Square in mid-2008, she said.
— Amy Martinez
Wall Street is abuzz over rumors that Nordstrom is close to picking a site for its first Manhattan store. The New York Sun and Crain's New York Business speculated this week that Nordstrom is in serious talks for the lower floors at what was once the Drake Hotel on Park Avenue. Tim Bueneman, who follows Nordstrom for McAdams Wright Ragen in Seattle, calls it a dynamite site, yet very expensive. "Nordstrom's not famous for paying up a lot of money for real estate, but in New York, it may be different," he said. Spokesman Michael Boyd said Nordstrom continues to look in Manhattan, though he declined to comment on the rumors. A Manhattan store could boost Nordstrom's stock, which has been doing well on its own. Shares rose $1.53 Thursday to $48.47. — AM
Vintage Wine Trust , a Marin County-based real-estate investment trust focused solely on the wine and vineyard industry, has bought the Den Hoed family's Grandview Vineyards in the Yakima Valley for $12.4 million. Grandview Vineyards has about 700 acres on four properties, including 568 acres of vineyard grapes and 84 acres of apples. The properties are Desert Hills Vineyard, Andrew Den Hoed Farms, Foothill Vineyard and Rattlesnake Vineyard. Most of the grapes are under contract to Ste. Michelle Wine Estates. The property will be leased back to the Den Hoed family with an initial lease running through 2011. — MA
Next weekend's Oktoberfest in Fremont will have a racy component: the new Buxom Beer Garden, a grown-up space featuring mugs of beer and "comely gals in Bavarian garb," according to a festival news release. "It's been our experience that a lot of people who come to Oktoberfest are more offended by the oompah bands than the female form," festival organizer Phil Megenhardt said in the release. — MA
Gene Juarez Salons & Spas plans to open at Seattle's University Village. Work on its 8,500-square-foot space next to Crate & Barrel is expected to begin in February, with completion set for August 2008. Gene Juarez already has eight locations in the Seattle area. — AM
United Airlines renewed its exclusive contract with Starbucks, with which it has partnered for more than a decade. It is the only major U.S. airline that serves Starbucks brand coffee. — MA
Nordstrom Rack opens today at Southcenter Square at 17200 Southcenter Parkway in Tukwila. It's Nordstrom Rack's fifth Seattle-area store. — AM
Rental rates for retailers in the Seattle area are expected to rise over the next six months, says a new report by commercial real-estate brokerage GVA Kidder Mathews. Rents now range from $35 to $75 a square foot annually in the Seattle central business district. (They're between $20 and $40 a square foot at suburban centers anchored by grocery stores.) The brokerage says large retailers are targeting the area for expansion, due to solid job growth and personal-health levels that rank among the nation's highest, driving down vacancies. But relief for retailers might be on the way: More than 5 million square feet of retail space is under construction in King, Snohomish and Pierce counties, according to GVA Kidder Mathews. —
James Bond Agent 007
Sep 19, 2007, 11:13 PM
Boeing says China is a $340B market
Puget Sound Business Journal (Seattle) - 9:03 AM PDT Wednesday, September 19, 2007
Boeing Co. says that China is the world's fastest-growing market for new aircraft and the country will need 3,400 new airplanes worth $340 billion in the next 20 years.
China will be the largest market outside of the U.S. for new planes, according to Boeing's updated annual forecast. After the 2008 Olympic Games in Beijing, the Chinese market will grow fivefold, becoming larger than today's North American market, Boeing added.
By the end of 2026, China will have nearly 4,460 airplanes.
Officials at Chicago-based Boeing (NYSE: BA) said air travel between China and North America will more than double in the next 20 years.
"China domestic frequencies have increased more than sixteen-fold since 1990 while airplane sizes have remained about the same. The Chinese domestic market's projected average growth is almost 9 percent," said Randy Tinseth, Boeing Commercial Airplanes vice president, marketing, in a statement.
In the next 20 years, Boeing said, the world demand for new airplanes will be 28,600 new aircraft, costing $2.8 trillion.
Sep 20, 2007, 7:29 AM
is it just me or is the news worrying?
superficially, seattle and portland are still 'bucking the trend' but what that really means is that we're just behind. the northwest is always the last to go and the longest and hardest to fall (other than the rest belt.)
Enjoy the good news while it lasts....:banana:
Sep 21, 2007, 2:02 AM
exactly and when we come back we come back with a vengance!!! :D
Sep 21, 2007, 2:42 AM
State incomes rising second fastest in nation
Personal income in Washington grew at the second-fastest rate in the nation in the second quarter -- buoyed by higher wages in the manufacturing, information and professional sectors.
Those gains were able to offset areas where Washington income fell, including in the real estate, farm, forestry and fishing, and educational services sectors, according to data released Thursday by the U.S. Bureau of Economic Analysis.
"Basically what happened is we had good employment growth," said Evelina Tainer, chief economist for the state's Department of Employment Security. "When you have good employment growth, typically people are earning money and it helps boost personal income."
Nationwide, the personal income growth rate slowed, while Washington's remained the same at nearly 1.8 percent -- meaning that this state kept a steady growth pace while other states fell away.
Personal income is the sum of all income of all people from whatever source, Tainer said. It also includes unemployment insurance and Social Security.
Washington's performance is notable compared with the rest of the country, Tainer said. Plus, a 1.2 percent increase in wages and salaries contributed the largest portion to the state's growth.
"That's quite exceptional," she said.
Washingtonians brought in $258 billion in the second quarter, about 7.2 percent more money than people earned the same time last year.
The inflation rate was 1 percent from the first to second quarter, as calculated by the personal consumption expenditure deflator, which Tainer says is one of the better measures of inflation.
Because buying power is increasing, folks with padded pockets are able to buy more retail goods, she said.
U.S. personal income grew at 1.2 percent, compared with 2.5 percent in the first quarter. The first quarter boost came from bonuses received late last year in the finance industry, the bureau reported. Despite the slowdown, U.S. personal income was 6.4 percent higher in the second quarter of 2007 compared with the year before.
Utah had the highest growth rate at 2 percent, thanks to professional services, construction and manufacturing, the bureau reported.
New York brought up the rear as the only state where personal income declined. Connecticut and North Dakota also did poorly, though personal income inched up a tiny bit at 0.3 percent and 0.4 percent, respectively.
P-I reporter Andrea James can be reached at 206-448-8124 or email@example.com.
Soundoff (0 comments)
Sep 21, 2007, 6:18 AM
Front page on Yahoo today:
No housing woes in booming Washington state By Jim Christie
Thu Sep 20, 11:31 AM ET
SAN FRANCISCO (Reuters) - While California suffers in the housing crisis, the economy of nearby Washington state is flourishing with strong job growth and some of the highest appreciation in home prices in the nation.
The outlook for Washington's economy is bright because so many people are moving there in response to help-wanted advertisements. Seattle, the state's biggest city, is an especially hot job market, boosting confidence of sustained growth.
Microsoft co-founder Paul Allen's Vulcan Inc., for instance, sees few obstacles to turning Seattle's South Lake Union area into a thriving residential neighborhood, given Washington state's economic strength.
Lori Mason Curran, market research manager at Vulcan Real Estate, expects 135,000 people will move into the Seattle market over the next five years, propelling demand for housing that Vulcan's property unit is building in South Lake Union.
Vulcan Real Estate's foray into building office property in the industrial and warehouse area "on spec," or without guarantees of leases, will also pay off because of healthy population and job growth, she predicts.
"Seattle is really, really strong on both fronts," she told Reuters during a telephone interview on Tuesday.
Brisk hiring, especially by manufacturers, builders and software companies, is propelling that growth, said Victor Moore, the state's budget director.
"It's the high-paying industries ... There's been a steady demand from employers," Moore said.
Their growth is helping Washington, unlike California and some other states, put aside concerns about a housing slump, at least for the near term, added state Treasurer Michael Murphy.
"With employment really strong, there is less likelihood of having defaults on mortgages," he said, noting Washington's housing sector is avoiding contagion from mortgage market turmoil arising from "subprime" borrowers unable to make their loan payments.
In contrast, the foreclosure rate in nearby California, whose motto is the Golden State, surged to the second highest in the nation in August, according to a report released on Tuesday by RealtyTrac, a leading real estate data provider.
U.S. residential construction fell to a 12-year low in August, according to a government report showing a 2.6 percent drop in housing starts. The data was released on Wednesday before Wall Street's opening bell. In the Northeast, housing starts slid 37.7 percent in August, while in the West, housing starts fell 18.4 percent, the Commerce Department said.
STRENGTH ACROSS THE STATE
While growing payrolls keep Washington's housing market intact, they are also swelling state coffers.
ChangMook Sohn, chief economist for Washington's Economic and Revenue Forecast Council, projects $281.5 million more than initially expected for the state's 2005-2007 and 2007-2009 budget periods -- raising the state surplus to more than $1.5 billion -- thanks to continued strength in housing from strong payroll growth across the state.
"This is the third year of achieving about 3 percent job increases," Sohn said, adding that Seattle-area payrolls are growing at a torrid annual rate of 3.8 percent.
Major area employers such as Boeing Co. and Microsoft Corp. are expanding payrolls, as well as companies involved in international trade, as exports gain momentum on the dollar's weakness.
"Everyone expects more containers to come," said Port of Seattle spokesman David Schaefer, noting port officials are putting together plans to double the number of shipping containers the port handles from about 2 million annually.
With demand and prices for agricultural products up, farm-rich eastern Washington is also fueling the state's good times.
"In the Spokane and Pullman areas, economists are saying they're seeing glory days," Sohn said.
HOT TIMES ON THE HOME FRONT
Washington's varied strengths make the Puget Sound region centered on Seattle a top market for Costco Wholesale Corp. and an obvious region for expansion, said Jim Sinegal, the company's president and chief executive.
The Issaquah, Washington, warehouse club operator plans to open another store in the Puget Sound market this fall and has four more "on the charts" for the region because of its growth prospects and confident consumers, Sinegal said.
"Full employment and good wages make it desirable to have a 50-inch (television) set," Sinegal said.
Washington's broad economic strength is underscored by housing markets across the state, said Keitaro Matsuda, an economist with Union Bank of California. He noted that Wenatchee, Washington, notched the nation's best annual home-price appreciation in the second quarter among local markets -- up 23.5 percent -- and four other Washington markets, including Seattle and Spokane, made the top 20 list.
"When you look at its numbers, there aren't too many things that are going wrong with Washington's economy," Matsuda said.
Fitch Ratings revised the state's rating outlook to "positive" from "stable" on September 4, citing its robust economy and resilient housing market -- a contrast to California, whose economy is slowing amid tumbling home sales.
"They don't have the real estate issues California has," said Richard Raphael, a Fitch executive managing director.
Sep 24, 2007, 8:49 AM
Any reports on how the Portland market is faring? It appears to be doing well, the company I'm doing work under is hiring nearly 400 people in various capacities and that's just one business.
James Bond Agent 007
Oct 10, 2007, 11:20 PM
Wednesday, October 10, 2007 - 2:09 PM PDT
Washington 11th best in U.S. for taxes, says study
Puget Sound Business Journal (Seattle)
The state of Washington has the 11th best tax climate in the country, according to a study released by the Tax Foundation of Washington, D.C.
According to the foundation's State Business Tax Climate Index for fiscal 2008, Wyoming, South Dakota and Nevada had the nation's best tax climates while Rhode Island, New Jersey and New York had the worst. According to the foundation, the index considers a state's corporate tax rate, individual income tax, sales tax, unemployment insurance tax and property tax.
Washington, without a state income tax, scored the highest in the country for the individual income tax rank, along with other states that don't have individual state income tax, such as Wyoming. Wyoming also scored the highest in the corporate tax ranking since it doesn't have a state corporate tax.
"States with the best tax systems will be most competitive in attracting new businesses and be the most effective at generating economic and employment growth," wrote the study's authors.
James Bond Agent 007
Oct 12, 2007, 7:43 AM
Thursday, October 11, 2007 - 10:07 AM PDT
Greenbrier gets order for 11,900 railcars
Portland Business Journal
The Greenbrier Cos. Inc. announced an order for 11,900 new railcars Wednesday.
Lake Oswego-based Greenbrier (NYSE: GBX) will manufacture the cars over the next eight years for GE Rail Services.
The majority of the railcars will be tank cars, Greenbrier's first efforts to build such cars, which are used for transporting liquids.
Delivery of the first 3,400 railcars is expected to begin in the third quarter of 2008. The final railcars should be delivered in the first half of 2011.
GE Rail Services is the largest operating lessor of railcars in North America. It's a division of GE Equipment Service, which is owned by Fairfield, Conn.-based General Electric Co.
Greenbrier builds new railroad freight cars in its three manufacturing facilities in the United States and Mexico. It builds marine barges at its U.S. facility.
It also repairs and refurbishes freight cars and provides wheels and railcar parts at 35 locations across North America.
James Bond Agent 007
Oct 17, 2007, 1:50 AM
Tuesday, October 16, 2007
State's jobless rate edges up in September
By Drew DeSilver
Seattle Times business reporter
Washington state's jobless rate ticked up last month, but unemployment remained close to its historic lows and well within the range seen since the beginning of this year.
The statewide unemployment rate, adjusted for seasonal variations in the labor force, was 4.8 percent in September, up from 4.6 percent recorded in August, according to the state Employment Security Department. The Seattle metro area's seasonally adjusted jobless rate held steady at 3.8 percent.
Since February, the state jobless rate has bounced between 4.4 percent and 4.9 percent. The 4.4 percent reported in April was the state's lowest unemployment rate since the current series of statistics began more than 30 years ago.
However, state labor economist Evelina Tainer noted that both the number of people who reported entering the workforce last month and who said they found jobs "were outsized relative to the past few years," and said the figures should be viewed with caution.
The unemployment rate is determined by a monthly survey that asks if people have jobs, or if not whether they're actively looking for work. It is not, as is sometimes thought, based on how many people collect state unemployment benefits.
Without seasonal adjustments, King County posted a 3.9 percent unemployment rate for September; Snohomish and Kitsap counties both were at 4.2 percent, while Pierce County landed at 4.6 percent.
Statewide, San Juan County had the lowest unadjusted rate at 3.1 percent; Cowlitz, Lewis and Grays Harbor counties were tied for the highest unadjusted rate, 6.2 percent.
Nationally, unemployment rose slightly last month, to 4.7 percent compared with 4.6 percent in August. On Monday, Oregon reported September unemployment at 5.3 percent, compared with 5.4 percent in August.
Typically, Washington state's unemployment report is accompanied by a report on nonfarm payroll jobs, which offers greater insight into the dynamics of the state and local economies. But that report has been delayed a week for some statistical fine-tuning.
James Bond Agent 007
Nov 13, 2007, 9:48 PM
Last updated November 13, 2007 1:16 p.m. PT
Unemployment rate steady in October
By DAN RICHMAN
Washington's unemployment rate remained unchanged in October, at 4.8 percent, compared with the prior month. In October, employers added more than 7,000 seasonally adjusted non-agricultural jobs.
U.S. unemployment in October was 4.7 percent. Seattle's unemployment was 4.0 percent.
October's statewide numbers "continue the healthy job-growth trend we have enjoyed for the past three years," said Karen Lee, commissioner of the state's Employment Security Department, in a prepared statement.
In October, Washington industries with the largest job growth were government, with 2,900 new jobs; construction, up 900; and manufacturing, up 900. Industries with growth declines were "other services," down 200, and transportation, warehousing and utilities, down 100.
All those job numbers are seasonally adjusted. Seasonally adjusted numbers account for normal recurrent patterns. Smoothing out those fluctuations makes it possible to see unusual changes in employment levels.
An estimated 145,900 people (not seasonally adjusted) currently are unemployed and seeking work in Washington.
James Bond Agent 007
Nov 22, 2007, 12:33 AM
Boeing Orders Break Record for Third-Straight Year
By James Gunsalus
Nov. 21 (Bloomberg) -- Boeing Co., the world's second- biggest commercial-airplane maker, said orders this year have reached 1,047, setting a third straight annual record.
With more than a month left in the year, Boeing added 71 orders for 737s and 777s from unidentified customers and one 737 order from AMR Corp.'s American Airlines, according to the Chicago-based company's Web site.
Both Boeing and top commercial plane maker Airbus SAS are benefiting from a jump in sales to Asia, where growing economies are spurring demand from first-time air travelers. Demand has also increased in the Persian Gulf, where oil-rich states are using their wealth to establish tourist and travel hubs. Both companies expect orders to peak this year and decline next year.
``It's amazing,'' said Paul Nisbet, an aerospace analyst at JSA Research in Newport, Rhode Island. ``It seems we have a very protracted cycle compared with what we've had previously. Three big years in succession is unprecedented.'' He has a ``buy'' rating on Boeing shares.
Boeing ended 2006 with 1,044 orders, topping Airbus in orders for the first time in five years and beating a prior record of 1,002. Toulouse, France-based Airbus is the world's biggest commercial plane maker by deliveries.
Airbus, which had 1,021 orders through October, continued to win more contracts at the Dubai air show earlier this month, surpassing its 2005 record of 1,055 planes.
Airbus's order tally is based on gross orders for the year and don't include orders that may have been canceled. Boeing's gross orders now stand at 1,057, up from 1,050 last year.
The 71 unidentified orders are for 56 of Boeing's most popular airliner, the 737, and for 15 777s, one of the company's most lucrative models.
Boeing, whose commercial order backlog was valued at $224 billion at the end of last quarter, fell 45 cents to $87.41 at 4:16 p.m. in New York Stock Exchange composite trading. The shares have slipped 4.1 percent in the past 12 months.
James Bond Agent 007
Dec 4, 2007, 10:58 PM
I want one!
Tuesday, December 4, 2007 - 9:18 AM PST
Cray wins $8.8M Danish supercomputer order
Puget Sound Business Journal (Seattle)
Cray Inc. said the Danish Meteorological Institute (DMI) is buying a Cray XT5 supercomputer system for about $8.8 million.
Officials at Seattle-based Cray (NASDAQ: CRAY) introduced its new XT5 supercomputer system last month.
DMI is a branch of the Danish Ministry of Climate and Energy and provides weather forecasting for the Danish Defence and civil aviation, as well as climate change assessment.
"Our goal for the new high-performance computing system is to enhance our ability to produce highly reliable numerical weather forecasts and develop and run numerical models of the ocean and atmosphere for climate assessment," said Peter Aakjaer, director general of DMI, in a statement.
James Bond Agent 007
Dec 5, 2007, 4:10 AM
Last updated December 4, 2007 7:34 p.m. PT
New owner to invest $50 million in former Icos facility
By JOSEPH TARTAKOFF
The remaining up-and-running part of Bothell's former Icos Corp. -- a facility that manufactures therapeutic proteins for clinical trials -- will undergo a significant expansion under its new owner.
In January, Eli Lilly & Co. of Indianapolis bought Icos, best known for its Cialis erectile dysfunction drug, and closed the company's Washington operations, except for the manufacturing facility, which it put up for sale.
Late Monday, a Danish company, CMC Biopharmaceuticals, said it had bought the facility and would retain the 127 workers. It was bittersweet news, since Icos once employed almost 700.
Over the next several years, CMC Biopharmaceuticals will invest about $50 million to expand the facility's manufacturing capability, Chief Executive Mads Laustsen said in an interview Tuesday. The work force at the newly renamed CMC Icos Biologics will gradually grow.
The acquisition ends a time of uncertainty at the manufacturing site. Laustsen said that a number of the facility's customers had been in a "waiting position" while the site was for sale because they were uncertain whether a drug company would purchase the facility and then use it for in-house manufacturing.
"I'm sure we will get customers back," he said.
Laustsen said that the facility will be reconfigured in 2008 so that it can manufacture not only therapeutic proteins for pre-clinical and early stage clinical trials but also proteins for later-stage studies and even for the marketplace.
Therefore, if CMC Icos Biologics had been developing a product for a client's later-stage clinical trials, the facility could continue to manufacture the product when it's approved for market use.
By 2010, Laustsen said, CMC Icos Biologics also will expand into an adjacent building in Bothell so that it will be able to triple its cell culture production capacity.
While the company's facility in Copenhagen is about evenly split between microbial and cell culture development, the CMC Icos Biologics site will focus primarily on products developed from cell culture production systems.
For CMC Biopharmaceuticals, the acquisition will allow it to expand rapidly into the United States. The company has grown quickly in recent years. According to the company's Web site, CMC Biopharmaceuticals was started in 2001 by six employees who used to work for two Danish life sciences companies, Novo Nordisk and Novozymes. By 2002, the company had 20 employees and had announced plans to hire an additional 100 workers by 2004. Currently, the company employs about 210 people in Copenhagen.
Since the production of protein therapeutics is complicated and takes significant experience, the Bothell acquisition is particularly valuable, Laustsen said.
"It's not easy just to expand capacity," he said. "You need to have lots of expertise."He said that although the market for protein therapeutics was cyclical and fluctuated with the financial market, "there will always be a significant amount" of business since companies need to "get new drugs into the pipeline."
Financial terms of the deal were not disclosed.
James Bond Agent 007
Dec 10, 2007, 9:31 AM
Update on all that stuff about natural gas in eastern Washington.
December 06, 2007
Columbia Basin natural-gas drilling cools down for now
EnCana’s wells ‘indicated presence of gas;’ Delta plans to drill in 2008
By Richard Ripley
Washington’s Columbia Basin, where the first drilling projects in decades raised hopes last year for a natural-gas strike, has yet to become the site of a producing well, though some drillers still believe the basin has potential to yield large reserves.
EnCana Corp., of Calgary, Alberta, said in October that its U.S. subsidiary had concluded its exploration program in the basin after drilling three wells there.
“Each well indicated the presence of natural gas,” EnCana said in its third-quarter earnings report. “Although commercial flow rates were not established in these wells, there remains potential for large natural gas accumulations in the basin, which has only partially been tested.”
EnCana, which has numerous exploration properties elsewhere, said that because its wells in the Columbia Basin weren’t a core part of its exploration efforts, it expected any future drilling on its sites there “likely would be funded by third-party capital.
As a result, EnCana has no immediate plans for additional drilling.”
Delta Petroleum Corp., of Denver, plans to drill what’s being called the Gray 31-23 well next year in its 35,000-acre Bronco prospect, which is part of a huge swath of land in the lower central part of the state that industry geologists believe could be “overpressured” with natural gas deep beneath the earth.
“We will not drill that well until we have a partner; we’re hoping to have some news on that by the end of the year,” says Andrea Brown, manager of investor resources for Delta. While Delta also has plans for a second well in the basin, Brown says she expects the company will drill just one well next year and will evaluate the results from it before drilling a second well. She adds that drilling in the basin is expensive, in part because cracking through thick layers of basalt that overlay gas-bearing sands is difficult. It costs $15 million to drill a well there, she says.
Industry officials say that if commercial extraction ever is done in the Columbia Basin, revenue would flow into state coffers, and many goods and services would be purchased in communities in the region.
On Nov. 8, Delta, which has about 450,000 acres of land under lease in the basin, said in its quarterly earnings release that, “The company’s primary objectives in the Columbia River Basin are the ‘tight’ gas sands of the Roslyn formation, which is approximately 4,500 feet thick.” In tight, or hard, sands, gas doesn’t flow as readily as it does through loose, beach-like sand, and developing gas fields in tight sands can require drilling numerous wells.
Delta said that based on its geologic interpretation and analyses, two of EnCana’s three wells either didn’t reach the Roslyn formation or encountered only a few hundred feet of it. Delta said it believes that to test the Roslyn formation fully, a well should be drilled completely through the formation.
It said that Shell Oil Co., of Houston, drilled in the 1980s a well known as the BN 1-9 that produced about 5 million cubic feet per day of natural gas even though it only went through two of some 33 layers of sand in the Roslyn formation.
“The company remains optimistic as to the potential of the basin,” Delta said.
In August, Exxel Energy Corp., of Houston, announced it had raised $14.5 million (Cdn.) in a private-placement financing and had bought an interest in leases in the basin that cover 390,000 acres. The $13.8 million (U.S.) acquisition included an interest in the Brown 7-24 well, near Mattawa, Wash., that was one of EnCana’s three wells, Exxel said. Exxel also said it had entered into an acquisition exploration agreement with EnCana’s U.S. subsidiary and two other parties that covers certain areas there.
“We remain very encouraged with the progress made in the basin to date and are excited about what we believe is world-class potential,” Exxel CEO Cliff Adams said.
Exxel has hired William S. Lingley Jr., who was chief geologist of the Washington state Department of Natural Resources when the department auctioned drilling leases in Eastern Washington in October 2006, producing what Lingley called “spectacular results.” Bidders paid an average of $62.14 an acre for leases, compared with $2 an acre paid by some bidders in 1998.
“We’re very keen on the basin and are moving ahead in anticipation of staking several positions” for additional drilling, Lingley, who is Exxel’s vice president of exploration in its western division, now says.
“We don’t interpret EnCana’s results as being particularly negative,” Lingley says. “The results do support our approach to exploration in the basin.”
Nonetheless, skepticism remains.
Eric Nuttall, a research analyst with Sprott Asset Management Inc., of Toronto, says Delta has searched for months for a partner to participate in its drilling project, but hasn’t found one yet.
“There seems to be a difference of opinion as to what the true ‘prospectivity’ in the Columbia Basin is,” Nuttall says. “One side, EnCana, believes the gas isn’t there. The other side believes the gas is there, but EnCana didn’t truly prospect” the area where the gas is most heavily concentrated.
Nuttall, who last year called one of EnCana’s wells the most watched well in the entire oil and gas industry, now says the Columbia Basin has been “a bit of a disappointment.”
With natural-gas prices realized by producers having fallen to as low as $3 to $5 per 1,000 cubic feet, from $11 to $14 in late 2005, and with inventories of stored gas at high levels, industry doesn’t have much incentive to drill exploratory wells in the basin, where costs are high, Nuttall says.
Yet, Lingley says the drilling industry is only “in a brief holding pattern” in the basin “while the companies digest the results from the wells that have been drilled so far. There’s a tremendous amount of work that needs to be done. There’s gigabytes of information that must be looked at.”
Exxel decided to become the operator of the Brown 7-24 well near Mattawa because some data gathered from that well still needs to be evaluated, says Lingley. He doesn’t expect that any more drilling will occur for another four months, because drill sites would need to be permitted, environmental reviews would have to be wrapped up, and drilling rigs would need to be contracted for and moved into place.
Still, while Exxel has other projects in the Rocky Mountains and Nevada, “I think the Columbia Basin remains our marquee play,” Lingley says.
“Every geologist from every company that has worked in the basin continues to believe in it,” he says. He adds that it would be rewarding to be a member of the exploration team that unlocks the basin’s potential.
“I love prospecting,” he says. “The basin is very exciting.”
Unlocking the basin’s potential won’t be easy. To reach the sandstone where the gas lays, drillers must drill deep, in addition to penetrating basalt.
EnCana, for example, planned to drill 14,000 feet down with its three wells, and “all three were at or near their target depth,” says Ron Teissere, the state’s oil and gas supervisor.
He adds that the “reservoir rocks” deep in the basin are “of moderate to poor quality,” being not very permeable, which would keep gas from moving through the rock readily, and not very porous, which means there’s little room in the rock for gas to accumulate.
EnCana caught the drilling industry’s eye with its projects because it did “completion” activities with its wells. That means a driller, after sinking a shaft, has seen enough encouraging signs to go to the added expense of putting casing in a well and performing tests to see if the well will be a commercial producer.
At its well near Mattawa, EnCana set off carefully targeted explosions to perforate the well’s casing in a couple of places and begin to form channels into the sandstone formation, Teissere says. EnCana also did fracturing, in which a driller pumps hydraulic fluid or sand and hydraulic fluid into those channels under great pressure, fracturing rock—sometimes for hundreds or even thousands of feet—and creating pathways for gas to flow into the well’s bore hole. Teissere says the results were either “negative” or “not particularly encouraging.”
At EnCana’s Anderson 11-5 well, near Sunnyside, Wash., the company did some work while drilling, including opening up the drill stem by taking off the blowout preventer to see if gas would flow upward, Teissere says. The results were, “as far as I know, not particularly exciting,” he says. “They did perforate it in one zone, but it didn’t look to me like they got very much.”
EnCana since has moved the drilling rig off of that well site, he says. “If you think you’ll have more activity, you probably wouldn’t do that” because it costs a lot to move a rig, Teissere says.
EnCana’s wells haven’t been closed properly, which involves plugging them with cement and then with a mixture of a gel and drilling mud, Teissere says. Other than Delta’s well, no other drilling projects are planned currently that Teissere knows of, and he adds that the state isn’t seeing a lot of demand for leases, although a lot of land was leased in the October 2006 auction, and much of it remains to be explored.
James Bond Agent 007
Dec 10, 2007, 11:52 PM
Last updated December 10, 2007 1:54 p.m. PT
WaMu to cut more than 3,000 jobs
By BILL VIRGIN
Washington Mutual Inc. said Monday that it is slashing its dividend and cutting more than 3,000 jobs in an effort to cope with the continuing deterioration of the national housing and mortgage market.
The Seattle-based consumer bank and mortgage lender said it will report a loss for the fourth quarter as it takes charges against earnings due to downsizing, as well as a larger provision for loan loss reserves.
WaMu said it will close 190 of 336 home loan centers and sales offices and nine home loan processing and call centers. It will eliminate 2,600 jobs, or about 22 percent of the staff in that division. It also plans to cut 550 corporate and other support positions.
In addition, WaMu will cut its dividend from the current 56 cents a share to 15 cents a share.
WaMu said it plans to sell $2.5 billion of convertible preferred stock to boost capital.
RealNetworks cuts 100 employees
Thanks to the tipster who let us know about the layoffs at RealNetworks last week.
Here's the report from the P-I's Dan Richman.
Seattle's RealNetworks Inc. last week laid off roughly 100 employees, about 35 of them in Seattle and the rest in Asia and Europe, said spokesman Bill Hankes.
The cuts were made across the board to reduce "redundancies" built up as a result of six acquisitions made by RealNetworks over the past two years, said Hankes.
They are the first layoffs the company has made since those purchases, he said.
RealNetworks had about 1,800 workers worldwide before the cuts, Hankes said, adding that no further layoffs are planned.
James Bond Agent 007
Dec 18, 2007, 10:43 PM
Tuesday, December 18, 2007 - 10:19 AM PST
State unemployment rate dips in November
Puget Sound Business Journal (Seattle)
The state's unemployment rate fell to 4.7 percent last month from October's 4.8 percent level.
The national unemployment rate stayed the same at 4.7 percent in November.
There are 3.48 million people in the state's work force, according to the Employment Security Department, with 162,000 people unemployed. The current Washington employment picture pleased state officials.
"We already had the lowest unemployment rate in the current history of our state and we are creating even more jobs in Washington," said Gov. Chris Gregoire, in a statement.
Locally, the Seattle unemployment rate fell to 3.7 percent last month, which compares with 4 percent a month earlier and 4.3 percent a year earlier.
James Bond Agent 007
Jan 15, 2008, 7:55 PM
Last updated January 15, 2008 10:25 a.m. PT
Washington's unemployment rate climbs slightly
By DAN RICHMAN
Washington's unemployment rate in December climbed slightly, to 4.8 percent, from 4.7 percent in November. The state's Employment Security Department said that despite the storm disaster in early December, Washington employers still added more than 72,000 new non-agricultural, seasonally adjusted jobs during the month.
Professional and business services surged, gaining 3,100 jobs. Other industries with large growth in December were leisure and hospitality, up 1,600; transportation, warehousing and utilities, up 1,300; and manufacturing, up 1,000.
The weakest major industry sectors were retail trade, down 1,700; and financial activities, down 600.
Seasonally adjusted numbers account for normal patterns that recur year after year, such as strong seasonal hiring in retail trade around the holidays. Smoothing out the large, regular fluctuations makes it possible to see unusual changes in employment levels.
For all of 2007, the unemployment rate averaged 4.7 percent, giving last year the state's lowest annual jobless rate since data collection began in 1976.
the urban politician
Feb 3, 2008, 3:59 AM
Hey! Boeing news belongs in the Chicago Economy Thread. How dare you!! ;)
BJB, you've got 2 economy threads going. How do you remain so prolific? You're like the Brett Favre of Economy Threads :cool:
James Bond Agent 007
Feb 20, 2008, 6:20 AM
Tuesday, February 19, 2008 - 9:42 AM PST
Boeing announces $5.4B in 737, 777 orders
Puget Sound Business Journal (Seattle)
Two Indonesia-based airlines announced more than $5.4 billion in orders for Boeing 737 and 777 airplanes at the Singapore Air Show.
Chicago-based Boeing Co. (NYSE: BA) said Lion Air announced an order for 54 extended-range 737-900 airplanes valued at more than $4.4 billion at list prices. The Jakarta-based airline also acquired purchase rights for an additional 50 737-900 planes, which are built in Renton.
Boeing also said that Garuda Indonesia of Jakarta ordered four 777-300 extended-range airplanes valued at $1 billion at list prices. Garuda also confirmed a previous order for seven 737-800 planes placed in 2007. The airline converted 18 of its existing 737-700s on order to 737-800s and six of its Everett-built 777-200 extended-range planes on order to 777-300 extended-range models.
James Bond Agent 007
Feb 20, 2008, 6:22 AM
This is the same XT5 supercomputer as the one above.
Tuesday, February 19, 2008 - 10:44 AM PST
Cray gets $30M U.S. military supercomputer order
Puget Sound Business Journal (Seattle)
Cray Inc. said it's been awarded four contracts from the U.S. Department of Defense totaled at more than $30 million.
The $30 million contract is "one of the largest ever" that the Defense Department has awarded for its high performance computing modernization program, according to officials at Seattle-based supercomputer maker Cray (NASDAQ: CRAY).
Cray will provide its XT5 supercomputer to military research centers including the Army Research Laboratory in Maryland, the Naval Oceanographic Office in south Mississippi, and the Arctic Region Supercomputing Center in Fairbanks, Alaska.
"It's an incredible honor to play such a significant role in helping to ensure the continued strength of the military's research and development efforts," said Peter Ungaro, president and CEO of Cray, in a statement.
James Bond Agent 007
Feb 22, 2008, 2:39 AM
Thursday, February 21, 2008 - Page updated at 01:50 PM
Starbucks cutting 600 positions, many in Seattle
By Melissa Allison
Seattle Times business reporter
Starbucks said today it is cutting about 600 positions, some through attrition and about 220 through layoffs. No in-store employees were laid off, and the cuts are separate from Starbucks' plan to close about 100 underperforming U.S. stores this year.
Many of the lost jobs, including about a third of the layoffs, are at Starbucks' Seattle headquarters.
The moves are part of Howard Schultz's effort to turn around the company, whose U.S. operations and stock price have suffered over the past year. Starbucks' board ousted former chief executive Jim Donald last month and reinstated Schultz as the company's top boss.
Since then, he has decided to retrain in-store employees, offer free Wi-Fi to certain customers and stop selling warmed breakfast sandwiches.
In a memo to Starbucks' 170,000-plus employees today, Schultz wrote that an organizational analysis over the past several weeks was at times emotional and stressful.
"I know that I am responsible for ensuring the success of the company for the long term, which means that difficult decisions must be made," he wrote.
He also announced a restructuring of Starbucks' U.S. business, including expanding from two to four geographic regions to improve support for employees. Functions like finance, human resources and marketing are being reorganized or consolidated.
More changes will be announced at the company's annual meeting on March 19.
Starbucks shares fell 43 cents to $17.83 today. Over the past year, the stock has traded between $17.66 and $33.14.
"I like to see action taking place, but it will be a year before we decide if these changes are significant enough to be positive for the business," said James Walsh, an analyst with Coldstream Capital Management in Bellevue, which owns Starbucks shares as part of $1.1 billion it manages for wealthy individuals.
James Bond Agent 007
Feb 27, 2008, 1:11 AM
Tuesday, February 26, 2008 - Page updated at 10:57 AM
State jobless rate edges down in January
By Drew DeSilver
Seattle Times business reporter
Washington's unemployment rate dipped slightly in January, but newly revised figures show that 2007 job growth was considerably less robust than first reported.
The state's seasonally adjusted jobless rate last month stood at 4.5 percent, down a tenth of a percentage point from December's rate, according to the state Employment Security Department's monthly report. Washington added 5,800 nonfarm payroll jobs in January, versus a downwardly revised gain of 2,900 jobs in December.
However, the revised payroll data showed that the state gained 62,300 jobs in 2007, compared with the 77,200-job gain reported last month. The biggest drop was in the construction sector, which added just 6,600 jobs last year, rather than the 13,700 jobs previously reported.
The payroll numbers are derived from a monthly survey of employers. The Employment Security Department revises those survey-based estimates four times a year, to make sure they reflect the actual makeup of the state's workforce as determined by wage records.
The revision also cut the reported 2007 job gains in the professional and business services sector, from 12,100 to 10,800. Financial activities swung from a 1,200-job gain to a 1,400-job loss.
On the other hand, aerospace manufacturing gained 400 more jobs than initially reported, for a 6,200-job gain. The gain in education and health services also was revised higher by 400 jobs, for a total gain of 11,500 jobs.
In the Seattle metro area, unemployment ticked up to 3.7 percent last month from 3.6 percent in December, though that's still below both the statewide rate and the 4 percent rate posted a year earlier.
James Bond Agent 007
Mar 14, 2008, 7:02 AM
Last updated March 13, 2008 8:32 p.m. PT
MySpace expands in Seattle
By JOHN COOK
MySpace, which operates the largest social network with 110 million unique visitors per month, plans to significantly expand its presence in downtown Seattle after opening a development center last year.
MySpace, with 60 local employees, plans to double its Seattle work force in the next 12 months after making the city the first remote development office for the Beverly Hills, Calif., company. MySpace also has facilities in San Francisco, London, Korea and Australia.
"We chose Seattle because it is a hotbed for innovation and disruptive ideas," said MySpace Chief Technology Officer Aber Whitcomb, adding that it served as a blueprint for its decentralized technology efforts. "It was a natural next step for our strategy of opening offices around the world."
MySpace employs about 1,200, including 480 in the development/engineering group. Seattle has been one of the fastest-growing offices for the company. The Seattle area is an adopted home of tech giants Yahoo Inc. and Google Inc., which have established branch offices.
MySpace chose downtown over the suburbs because Whitcomb said the company wanted to attract developers who were "tired of going to the Eastside."
Whitcomb and MySpace co-founder Chris DeWolfe hail from the Pacific Northwest, Whitcomb coming from Bellingham and DeWolfe from Portland. And they both attended the University of Washington, an institution they routinely tap for software development talent.
In the Seattle office, Whitcomb said developers work on core parts of the social networking offering -- ranging from messaging to sign up. They also have been instrumental in creating the MySpace Developer Platform, which allows third parties to create applications for the larger community.
That offering -- similar to Facebook's open platform initiative -- was turned on for the larger MySpace community Thursday. That means MySpace users will be able to turn on the new applications and share them with friends.
Though Facebook has attracted plenty of attention for its open platform, Whitcomb doesn't believe that MySpace is lagging behind.
"Really, people have been developing on MySpace since the beginning. This is just a natural extension and we are formalizing the process by explaining to developers what is available to them and what isn't," he said.
To promote the new offering, MySpace is hosting an invite-only party called DevJam at its offices Saturday. The idea is to recruit Seattle developers who may want to develop applications on the social network.
James Bond Agent 007
Mar 21, 2008, 8:11 PM
Looks like the Columbia Basin natural gas thing isn't dead after all.
March 06, 2008
Gas drilling planned
Leah Beth Ward
Denver-based Delta Petroleum will begin drilling an exploratory well for natural gas this summer on private land southeast of Bickleton in Klickitat County.
The well will be Delta's first exploration in the Columbia Basin, but the company has leased mineral rights on about 400,000 acres in the region. State geologists say the Columbia Basin is the largest unexplored natural gas region in the United States.
The company announced its plans last week during the release of its fourth-quarter earnings.
The geology at Delta's site is less complex than the Swiss-cheese layered basalt around Sunnyside and Mattawa, where another Denver company -- EnCana Corp. -- drilled two exploratory wells a few years ago. Results from those wells are proprietary and have not been released by EnCana.
Delta spokesman Dave Donegan said Wednesday that the friendlier basalt in eastern Klickitat County means the company can use standard drilling technology.
"Our plan is to drill the entire well with conventional rotary drilling," he said.
In contrast, EnCana began its drilling with a conventional rig but soon switched to a more expensive air-drill rig in order to gather the seismic data it needed to evaluate the well's production potential. A Delta corporate presentation estimates the company will drill to 15,000 feet.
Hiram White, an oil and gas consultant and longtime observer of exploration activities in the basin, said Delta's move to drill in the flatter blocks of basalt will be watched with great interest.
"It's nice to have someone drilling in different geology. It should be easier drilling," said White, who is also a farmer in the West Valley.
Delta has also received approval from the state Department of Natural Resources for another well in the same area but hasn't yet announced plans for the site.
James Bond Agent 007
Mar 21, 2008, 11:57 PM
Some info from Delta Petroleum:
Screen shots from pages 16-18.
Would be neat to get an energy industry in eastern Washington (aside from the wind farms).
James Bond Agent 007
Mar 29, 2008, 6:13 AM
The issue dated March 20, 2008
$5 billion power line proposed
Project might tie California, B.C., provide Avista a link
By Richard Ripley
Avista Utilities is studying ways to link with and gain benefits from a $5 billion power line that a California utility has proposed to build between Northern California and British Columbia by late 2015.
The California utility, Pacific Gas and Electric Co., of San Francisco, says it wants to transmit renewable energy from the Pacific Northwest, British Columbia, and Alberta to Northern California over the new line.
PG&E says it has identified “significant” new renewable generating capacity that’s being developed in those areas.
Don Kopczynski, vice president of operations for Avista Utilities, says Avista holds a federal permit to build a power line between Spokane and Selkirk, British Columbia, and PG&E would like to take advantage of the right of way Avista has under that permit to build its line.
“It’s a good project, well-funded,” Kopczynski says of the proposed line. “It will use our right of way. It will go right through our area. It will give us an ability to interconnect with one of our substations. It can help with electrical stability in our whole area.”
If the transmission line is built, Avista likely would upgrade substantially its Devil’s Gap substation in the Reardan, Wash., area, about 20 miles west of Spokane, so it could serve as an interconnection between its own 230-kv transmission grid and one of two 500-kilovolt transmission lines PG&E would build, Kopczynski says. The substation provides a 115-kv connection now.
Avista isn’t a direct participant in PG&E’s project thus far, but is on the project steering team along with PG&E, Portland General Electric Co. (PGE), Portland-based PacifiCorp, and the British Columbia Transmission Co.
PG&E posted an update on the project on its Web site Feb. 22, saying, “The project continues to move forward on schedule.”
Yet, the power line, which would be the first so-called inter-tie with Canada in Eastern Washington, is just one of seven proposed major transmission projects that would link points both within the Inland Northwest and outside the region, Kopczynski says. PG&E, Kopczynski, executives with three other utilities, and the Bonneville Power Administration (BPA) proposed in a Dec. 21 letter that the Western Electricity Coordinating Council, of Salt Lake City, coordinate for all seven of the projects “transmission planning studies that are a critical first step in developing a reliable and integrated transmission grid for the 21st century.”
The WECC has its roots in a similar organization founded in 1967 by 40 electric power systems and merged in 2002 with regional transmission systems from the West and Southwest. It coordinates and promotes electric system reliability in 14 Western states, British Columbia, Alberta, and the northern part of Baja California, Mexico.
“Generally, nothing gets built in the Western U.S. without their approval,” Kopczynski says.
The seven proposed major transmission projects snake across most of the Northwest, including big chunks of the Inland Northwest. The Dec. 21 letter and a map of the project developed two weeks ago say that:
•Idaho Power Co., of Boise, and several other utilities are seeking approval to build a 500-kv line from Boardman, Ore., where several coal-fired generating plants operate, to the Hemingway substation, near Melba, Idaho.
•PacifiCorp, which is controlled by legendary investor Warren Buffett, is proposing a 500-kv line roughly between the Captain Jack substation near the California-Oregon border and the Hemingway substation. PacifiCorp also is proposing a 230-kv line between Boardman and Walla Walla, although that isn’t one of the seven projects.
•The BPA has proposed three 500-kv transmissions lines in two projects to increase capacity across multiple congested north-south transmission paths, to serve requests along multiple east-west paths, to integrate additional wind generation into the regional system, and to increase system reliability.
•Portland General Electric has proposed a 500-kv line to integrate generating plants in the Boardman area and additional proposed wind generation into the system.
•Avista is looking at an interconnection at Devil’s Gap, which also would involve building two 230-kv lines from the substation to the company’s Spokane-area transmission system.
Also, Kopczynski says, Northern Lights Transmission, of Calgary, Alberta, still is interested in building a 1,000-mile transmission line from the oil sands in northern Alberta to Celilo, Ore., on the Oregon-California border. That line, for which the Canadian company already has one of the required permits on the U.S. side of the border, would carry sizable loads of excess power that would be cogenerated if huge amounts of natural gas were burned to create steam to inject into the ground to extract crude from deep within the oil sands.
If all eight of the projects were built, they would add up to about $15 billion worth of new construction—and because states have put so many requirements on utilities to meet part of their load with renewable energy, it’s “pretty likely” all of the lines will be built, Kopczynski says.
The eight projects don’t take into account a power line PGE has discussed with Avista to serve as a link to Avista’s Coyote Springs coal-fired plant near Boardman. They also don’t take into account 11 requests that Avista has received to construct smaller power lines in its own service area to link developers’ proposed wind-generation plants into its transmission system.
“Potential resources are wind resources located in various locations on the Avista system, including but not limited to wind farms near Spokane, Othello, Lewiston, and Clarkston, Wash., as well as Grangeville, Idaho,” an Avista report says. “ … up to three additional (requests) that may soon be in the queue.” Avista spokesman Hugh Imhof says none of those projects is the wind farm that Avista has said it plans to develop itself, for which it’s seeking a site.
PG&E, PacificCorp, BPA, and the Idaho Power-led group all have both a need for the big transmission lines they’ve proposed and the ability to finance them, Kopczynski says. That leaves Northern Lights’ project as the only one that’s reliant on investments by others. Northern Lights has said it might build its transmission line if natural-gas fields were developed in the Mackenzie River Delta in Canada’s Northwest Territories, and an 800-mile pipeline—estimated four years ago to cost $5 billion—were constructed to carry the gas south to the oil sands.
For years, Kopczynski says, the utility industry didn’t pay much attention to building new transmission facilities. Parts of the industry were being deregulated, and there was talk of forcing utilities to sell off either their power-generating or power-transmitting divisions, so they didn’t know whether investments in transmission would pay off, he says.
“You’ve gone from having a whole bunch of people who didn’t know whether they needed to rebuild their transmission system to having a whole bunch of people who know that they do,” he says. “Transmission has been like Rip Van Winkle; it has kind of been asleep.”
PG&E’s line, which would continue south to Boardman en route to California, would give Avista a new pathway to move to its own service territory power generated at its Coyote Springs plant, which is near Boardman, Kopczynski says. It’s paying others to transmit that power now. Also, its interconnection at Devil’s Gap could give Avista access to other renewable power sources in the Northwest and Canada and enable it to import cheaper power when “economy energy” is available, Avista’s report says.
PG&E is so big that in some years, it must add as much power to its system as Avista supplies to its entire customer base, Kopczynski says. He says PG&E, like Avista and many other utilities, is under pressure from state mandates to increase the amount of renewable power it distributes.
Because the wind doesn’t blow all the time, Kopczynski says, utilities must have a backup power supply when they either build wind-powered generating plants or contract to buy wind-generated electricity. Yet, so much wind power is being developed in the Northwest that much of the capacity of the region’s extensive hydropower system, which serves well as a backup to wind power, already has been pledged for that purpose.
Nonetheless, Kopczynski says, utilities could pledge hydropower from British Columbia’s plentiful supply to back up additional wind power if PG&E’s proposed transmission line were built to Canada.
“Our hydro system is pretty well used up; so, you use somebody else’s hydro system to back up wind,” he says. “British Columbia has a pretty big hydro system. We can use that to balance things out down here.”
Issues could develop regarding whether the people of British Columbia want renewable power that’s generated in their province to be exported to the U.S. Yet, Kopczynski says, “The governor of California has been up there talking with them” about the availability of renewable kilowatts.
PG&E’s transmission line could have bidirectional capacity to move as much as 3,000 megawatts of power, and Avista would like to string its own 115-kv line on the giant towers that would carry PG&E’s 500-kv lines, Kopczynski says.
Still, a lot of water must flow under the bridge before final decisions are made on the slew of major transmission-line programs that has begun to emerge. The WECC will look at the PG&E line to determine if it’s sound, will work electrically, and won’t cause disruption elsewhere in the region, Kopczynski says.
The WECC’s first-phase study of the line should be done in August, and it will be followed by two additional phases of study, Kopczynski says. PG&E, meanwhile, would be responsible for performing environmental studies and for obtaining permits.
Power-generating costs already have risen sharply in recent years, and with the big volume of power-line projects that’s planned, “the same thing is going to happen with the transmission,” Kopczynski says. “It’s bad, but it’s inevitable. It has to be done, or the region won’t survive.”
vBulletin® v3.8.7, Copyright ©2000-2013, vBulletin Solutions, Inc.