Tax incentives in Washington State are always somewhat limited by our State Constitution which prohibits the lending or gifting of funds to private companies.  This exclusion means the state cannot give away the farm to business, but it does not mean we cannot do more to support business growth.

The bigger challenge is that we have created a broad mix of tax incentives over the last few decades to help a wide variety of Washington industries.  Each year lawmakers tend to add a few new incentives, but rarely do legislators go back to clean up or eliminate older incentives.

It will not be easy to go back and eliminate or scale back older incentives.  Each program has a built-in constituency that will likely scream loudly if their tax breaks are threatened.  At the same time though, we must have the guts to exchange older marginal incentives for newer tools that can better impact economic development.

Other states offer effective breaks that we should consider:

• Incentives that can be monetized.  Oregon offered incentives that alternative energy companies could sell to help them fund their enterprises.  These programs helped the state become a magnet for emerging companies within this sector.  Missouri also offers incentives that translate into cash.
• Discretionary and/or negotiated incentives:  Some states like Michigan and Utah offer key growing companies incentives based on the specific firms’ tax impacts.  Tailoring incentives based on a company’s specific taxes generated provides both flexibility and accountability; And
• Worker Training funds.  Many states provide more funding and flexibility to companies that are hiring and training new employees.

At a time when we are paying new taxes on bubble gum, candy and bottled water it is obvious that lawmakers are willing to tinker with our state tax code.  In this environment I hope our legislators also have the fortitude to reopen the book on state business tax incentives.  We need to quit adding marginal tax incentives incrementally and instead develop a deeper more effective tool kit that helps our industries of the future grow and compete.

In October, New Vision staffer Lisa Smith heads to a site selector conference in Tuscon, Arizona.  She will have sales appointments with six to eight of these real estate professionals who help large companies choose new facility locations.  Maintaining and building relationships with these professionals is important.  Site selectors typically are involved in 30+ percent of all corporate expansion projects in the United States (and we thank them for bringing Wal-Mart Distribution and Whirlpool to the Yakima Valley).

After Lisa returns I make another prospecting trip with our partners from Moses Lake and Spokane.  This time our team heads up to British Columbia.  Again we expect to meet with at least five companies on this trip – perhaps more.

These are the first marketing excursions we have taken in 2010.  We purposely delayed some of these trips until later in the year because of economic uncertainty.  It seems like business is faring better now than it was at the start of 2010 so it will be interesting to see what these prospecting missions yield.  We are targeting companies whose competitive needs dovetail with our region’s strengths so hopefully our travels will help us discover some new business development opportunities.

We are excited about this new intiative and feel confident that we will identify and tangibly support several local entrepreneurs that have the potential to grow their enterprises.  New Vision is banking on these emerging companies’ potential to create jobs as well.  It may take a while for new enterprises to hire employees but we know from experience that small businesses are a key driver of payroll growth in the Yakima Valley. 

We designed the business plan contest to nurture all of our entrepreneurial contestants, whether they win our top prize or not.  The Enterprise Challenge features some tremendous educational seminars and field trips for our contestants so everyone participating should take home knowledge that should help them develop and sustain their ventures.

A couple years ago New Vision recognized that supporting entrepreneurship is a fundamental part of economic development.  Initiatives to support emerging businesses are equally important to recruiting new industry or helping existing companies expand.  Since we embraced entrepreneurship New Vision has discovered some great public and private partners that can help support emerging companies.  By working with these partners New Vision has developed a better “safety net” for small business AND we have been able to organize the Enterprise Challenge, a contest that we  feel can identify local companies with gazelle-like potential for growth. 

Stay tuned for more details about the Enterprise Challenge by visiting our entrepreneur support website, www.yakimavalley.biz   Also plan to attend our kickoff half-day workshop, MBA in a Day, on September 15^th.   I think we are at the start of an interesting and productive journey that can help us build our local economy.

“We’ve done something very unique and very special to create a bottle completely from recycled aluminum,” Andis said. “We believe that most people want to do the right thing when it comes to helping each other, our environment and providing sustainable solutions.”  Liberty Bottleworks is the only U.S. producer of bottles made completely from recycled aluminum. It has deals in place with outdoor retailer REI and grocer Whole Foods to sell its bottles nationwide. The bottles come in 24 and 32 ounce sizes and will retail for $16 to $18.

Liberty Bottleworks will employ about a dozen people initially and grow to 18 by yearend, Andis said. Workers will be a mix of accounting, sales, marketing and shipping employees, and manufacturing technicians.  Andis, who has worked in the outdoor industry for 20 years, praised the Yakima Valley business community for its support and encouragement. He moved to the area 14 years ago with his wife to be near her family and has been impressed by all the region has to offer.

Tim Andis

 “I fell in love with Yakima,” Andis said. “We have some tremendous opportunities because of a lower cost of living and close proximity to major markets. We have some really great cost efficiencies, a good workforce, lower facilities costs and easy access to shipping routes.”

Our office helped Andis secure tax credits for his company and provided advice and connections to potential sources of funding for the business.  We have put a lot more focus on growing our own companies.  Liberty Bottleworks is a great example of an emerging enterprise that has found a supportive Yakima Valley business community, bottom-line value and competitive advantages from lower business costs and work-ready employees.

Production has begun in limited quantities at Liberty Bottleworks and will ramp up over a couple months, Andis said. At full capacity, the company will make 1,200 bottles per hour.  Using a deep-drawn aluminum manufacturing process, large coils of recycled aluminum are punched, trimmed with a neck and finished with a BPA-free, food-grade powder coat. The process leaves the bottle walls with a very consistent thickness that creates a stronger, more durable container.

Our organization is excited about Liberty Bottleworks and what they bring to our community as a manufacturer and employer.  They are proof that the Yakima Valley is right place for businesses ready, willing and able to grow.

See the photos!

New Vision wants to thank our contest judges:

Ken Whitmire, Whitmire Associates;
Gordon King, Yakima Herald Republic; and
Martha Goudey, Freelance writer and photographer.

With over 40 entrants and 200 photos the judges did a great job selecting the best photos.  They ultimately awarded prizes for photos depicting scenic landscapes, culture, and arts/entertainment.

Here are the winners:

Scenic Landscapes
1^st Place – Snowmountain Ranch by Mike Dawson
2^nd Place – Clear Lake at Dawn by Mike Dawson
3^rd. Place - Naches Valley Fog by Brian Durr

Culture
1^st Place – Elijah Alfred – Cinco De Mayo Dancers
2^nd Place – Kate Green – Scottish Highlander Calf
3^rd Place – Tim Hull – Larson Building

Food/Entertainment
1^st Place – Elijah Alfred – Capitol Theatre at Night
2^nd Place – Kate Green – Bee and Peach Blossom
3^rd Place – Ron Livingston – Miner’s Drive In

Our thanks go out to everyone who participated in the contest.  If the adage that a picture is worth a thousand words is true, we have a bunch of great new stories to tell.

These large blocks of land are becoming more important, especially when other industrial properties in the Yakima urban area are being developed or rezoned for commercial development.  Union Gap’s industrial sites are being rezoned for Costco, Bud Clary Motors and others.  Yakima’s new zoning policies make it more difficult to develop light industrial facilities at the former mill site (which is the City’s largest undeveloped site).

There are other sites in Union Gap and Yakima that can support manufacturers and other businesses needing light industrial property, but they are somewhat limited.  Many sites are too small, while others are too far from public utilities or the Interstate.  Sites that can serve rail customers are almost impossible to find.

Our office knows from experience that the Yakima urban area needs to plan for and protect industrial properties.  Newer companies to the region like Graham Packaging, Macro Plastics, and Alexandria Molding were drawn to the Valley for many reasons but they all had to find suitable sites to support their plants.  Expanding companies like Ace Hardware and Pexco (formerly Bunzl Extrusion) obviously need industrial property as well.

If we can develop a new interchange on State Route 24, we are preparing new ground for industry.  Land both north and south of the proposed intersection is suitable for light industrial development but lacks access points to the highway.  Designing a new interchange is a first step, but it must then be complemented by building a road network that punches through these undeveloped sites.

Water lines must also be extended along the highway corridor before development can take hold.  Civil engineers tell me it will take several million dollars and a few years to prime development along State Route 24.  The steps we take now on this project are important.  Suitable light industrial sites underpin the region’s economic future and our preparatory steps will ultimately be rewarded when new or existing companies find the sites they need to expand.

Olsen Brothers' Blueberry Packing Facility

The new building is located within the Port of Grandview’s Wallace Way business park.  As a result of the Port’s planning and preparatory activities, the Olsen’s building was finished in 80 days.  According to New Vision’s Tammy Everts, “We do not know of any other building within our region or the state that has gone up so qucikly.  The Port secured key environmental permits for this site years ago and as a result the City is able to issue permits immediately for most projects.  In many jurisdictions a company would be just getting started on a facility like this.”

Blueberry packing line

The Olsen Brothers plan to hire 30-35 seasonal workers to pack blueberries over the summer.  The company is also considering packing other fruit at the facility once it gets up and running with blueberries.

Our congratulations go to Olsen Brothers, the Port of Grandview, the City of Grandview and Columbia River Steel (the building contractor).  This is a great project for the Yakima Valley.

JA World Facility -- Terrace Heights

The new JA World facility in Yakima compliments their existing center in Auburn.  When completed the Yakima facility will support schools and student learning throughout Central Washington .  JA World contains a mini city with public and private businesses. Each business within the center is sponsored by a real local business and displays the authentic logo and the actual marketplace appearance of the sponsor bringing the Village to life for the students. Before visiting JA World, students complete a pre-visit curriculum program where they learn basic economic principles such as how to manage their personal bank account. They also participate in job interviews, learn about their new workplace and the job they will perform. Jobs range from retail sales professionals, accountants, business managers, medical professionals to TV and newspaper reporters.

A special thanks goes to the Temple family here in Yakima.  Pat and Brig Temple donated the land for the facility and helped bring this tremendous project to fruition.

Local experts suggest that Yakima’s agriculture based economy has helped the region weather the national recession.  Long growing seasons allow farmers to grow 39 different agricultural commodities.  This diversity within the region’s farm economy helps provide stability.  “Farmers maintain their margins most reliably by growing several commodities at once”, notes New Vision’s Lisa Smith.  “This helps them spread the risk not only for themselves but for our regional economy as well.”

Over the past few years, Yakima County has also seen employment gains in its health care, retail trade and transportation sectors.

The Roadmap project clearly demonstrates that the Yakima Valley is home to enterprising people.  We received a number of applications to participate in our innovation project and are now working with several inventive people to help them commercialize technologies or move their products towards the marketplace.

Impact Washington (formerly Washington Manufacturing Services) is providing hands-on advice to our most promising entrepreneurs.  They are coaching each roadmap participant and will ultimately help three to four local innovators complete a thorough technology assessment for their products.  This evaluation, called a Merwyn Assessment, provides each participant a clear sense of their product’s market potential.  Merwyn also rates the entrepreneur’s level of readiness and expertise in terms of launching their product.

Each of our Technology Roadmap participants will use the Merwyn assessment as blueprints towards producing or growing their product lines.  Merwyn typically raises a number of issues and obstacles surrounding any innovation and we expect that our local business counseling team will be called upon to address specific challenges along the way.  By surrounding promising people with experienced business mentors we expect to increase participant’s chances that they will launch a successful product or venture.  It will take four to six weeks to complete Merwyn assessments for our Technology Roadmap participants.  Hopefully the assessments will drive entrepreneurial success and become a model for triggering local innovation and economic development.  Stay posted!