State of the Basin, 2005

Posted: Thursday, Dec 29, 2005 - 04:46:27 pm PST
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Agriculture

In the most recent 2002 census, which is conducted every five years by the Washington Agricultural Statistics Service, Grant County was ranked number one for its agriculture output which brought in $882 million in agricultural products for the state. The top ranking harvests in the county from that harvest were potatoes and onions, followed by cattle, fruit and then hay and other crops. The Columbia Basin is one of three growing regions for the state's 165,000 acres of potatoes that are grown each year, of which 580 Cwt. were harvested per acre in Grant County alone in 2003. According to the North American Potato Market News 2005 fall production in Washington stands at 95.48 million Cwt., a 1.8 percent increase from three years ago.

Executive director with the Potato Growers of Washington, Dale Lathim, said the 2005 potato crop has been a mixed success. Lathim said the crop yield in the north Basin has been a little off with two to three tons to the acre and a five-ton increase in the south Basin due to favorable weather conditions. Across the state, Lathim reports that 2005 has been a record year for potato crop yields, carried in large part by the south Basin. 2006 yields will be dependent on prices growers get for their crop, but demand is up so it could be an excellent year Lathim added. Gov. Christine Gregoire has allocated $600,000 from the state budget to study methods for increasing irrigation to 170,000 acres of agricultural land as the Basin is at risk of losing a huge amount of its water supply. As reported in the EDC third quarter newsletter, if farmers have to start practicing dry land agriculture practices it could mean a $630 million loss to the region and eliminate 3,600 jobs.

Other unique highlights for agriculture production include the county's harvest of 73 percent of the nation's 1.6 million pounds of Spearmint oil, ranking second to Oregon. There were 22,500 acres of mint harvested in Washington and more than 9,550 acres planted every year in Grant County alone. Grant County is also Washington's largest producer of dry edible beans (13,000 tons), green peas (43,500 tons), onions (143,000 tons), and sweet corn (320,000 tons).

Housing developments

The city of Moses Lake has processed more residential building permits for 2005 than the previous year. Aho construction of Moses Lake has 170 new home starts underway near the high school/Hill-Top area. City of Moses Lake associate planner Anne Henning said her latest count from six months ago showed 500 lots being platted. The majority of those plats are located in the Crestview area south of Valley Road in Moses Lake and east of Crestview Drive as well as the lower Peninsula area. Henning said she is seeing more developers from outside the area. Henning thinks the quality of life, weather and small town atmosphere are attracting people to the area.

Job Market/employment

State minimum-wage jumps 3.8 percent or 7.63 per hour in January. 48 percent above the $5.15 per hour federal minimum-wage level most states are paying.

In the Grant County EDC 2005 quarter 1 and 2 report, economist Don Mesech with the Washington State Employment Security reported that in Grant County between May 2004 and May 2005 190 new jobs had been created. The EDC maintains that while this is not a huge growth the trend is expected to continue, with unemployment numbers improving in the last four years.

In June the EDC featured Genie Industries at its quarterly luncheon where Genie VP Matt Fearon shared that, the company expects to see employment growth in 2005-6, raising its staff in Moses Lake to over 500 by early 2006. Genie Industries expanded in Moses Lake in 2000 and started with less then 50 workers. Today they are one of the leading businesses in the county with an annual payroll of over $42,000,000.

In September, it was announced that Solar Grade Silicon, LLC, is considering an expansion, estimated at $400 million, to its Moses Lake facility. It is also considering expanding in five other locations. Renewable Energy Corporation merged with Advanced Silicon Materials LLC (ASiMI) earlier this year. Solar Grade Silicon is the joint venture of ASiMI and REC. Seventy new jobs would come from the expansion.

Business/growth outlook

Jim Hill, owner of James Chevrolet in Moses Lake said there are no plans to sell to Lithia or any other entity. Hill said 2005 has been an outstanding year for sales as James Chevrolet relocated from downtown Moses Lake to a location right off of I-90. Hill has seen business increase 50 percent from 2004.

Discovery Ford and Honda has purchased a building at 1200 South Pioneer Way where the current Ponderosa Nissan dealership is located. Discovery is expected to move into the building in 2007 where it will house its Honda car stock. Ford cars will be kept in the current building location. "We feel the business is expanding enough that we can justify what we're doing and our manufacturers like their brands to be separate," said Discovery co-owner Jacie Daschel. General manager Randy McNair said business has been fairly good for 2005. The challenge is encouraging local residents to shop locally and keep their dollars here, McNair said.

Ponderosa Nissan General Manager Dan Taylor agreed that his business's goal has been to encourage consumers to buy locally. As far as business sales Taylor has seen the same amount of traffic through his office this year as he did in 2004. Regarding the purchase of Ponderosa Nissan's building by Discovery Ford, Taylor does not know when they will be moving out of the building or where they would relocate.

Real estate has improved in 2005, with house sales moving through the market quicker according to Windermere/K-2 broker/owner Lois Kincaid. Kincaid said on average houses are on the market 80 days before a sale is made. That is down from 87 days in 2004. An average home in Moses Lake in 2005 sold for around $143,146, up from $126,568 in 2004. This year 531 homes have been sold compared to 453 in 2004, an increase of 17 percent. Kincaid said when clients come to look for homes in Moses Lake they are encouraged to buy for the amount of square footage they are able to get for a home.

That in combination with an abundance of sunshine, less traffic than western Washington and the close proximity of services is keeping people interested in the area, Kincaid added. "Their dollars just go farther here." Ralph Kincaid, also with Windermere/K-2 Real Estate, said he has noticed sales in both commercial and residential real estate in the Moses Lake area climbing. "We've heard about these markets on the West Side and it's now made it here," Ralph said.

As president of the Grant County Economic Development Council, Ralph touched on the national and international exposure the Boeing project gave to the Moses Lake area. "I think it got Moses Lake on the map," Ralph said of a state that otherwise has not been all that welcoming to business.

Mark Fancher with Tomlinson Black Ranch and Home Real Estate said he has seen a reasonable amount of interest from small franchises, noting the new strip mall going in on Stratford Road next to Wal-Mart as an example. Fancher said the strip mall is already 80 percent full. As far as big box businesses scouting the area, Fancher said Moses Lake is getting bigger but is not big enough for many of the large corporations to make definite moves here. Five or six years ago Moses Lake was not ready to have big box companies consider moving to the region and now the town is seeing enough growth where it's becoming more of a possibility, he said.

New Businesses

City of Moses Lake community development director Gilbert Alvarado named Guardian and Specialty Chemical as two companies seeking to do business in Moses Lake. Guardian is an insulation company based out of the Midwest and Specialty Chemical is located in Wenatchee and processes silicon. Specialty Chemical would provide between 35 and 50 jobs. Both business deals are still in the negotiation phase which will determine what happens in 2006, Alvarado said.

Moses Lake Ethanol, previously known as Pacific Rim Ethanol, is an agriculture resource based chemical manufacturing plant. The company could create 60 to 70 jobs in the area. Approval is expected later this year or in early 2006.

There has been significant development on the plans Walgreens has made towards coming to Moses Lake. They've tied up land on the corner of Alder and Third Ave. They have had issues with permits and right-of-ways etc. Dave Thompson, a member of the Columbia Retail Group reported in an August 2005 article in the Herald that a 2006 opening is projected. In November, Alvarado said the deal is still in the works, but the city has not heard further from developers or brokers as to what or when the next step of the project will proceed.

Next to Walgreens and to be under way early 2006 is the Auto Zone. A national auto parts chain store. They just announced in November that they have bought the old Moses Lake Able Building and Supply location.

Richards Brush Company announced in September its plans to locate a facility in Moses Lake. The 100-year-old Seattle based company manufactures brushes for the industrial sector such as food processing and direct-to-consumer products. Initial start-up is scheduled for late November or early December and will employ roughly 20 local employees. The company stated its new location in Moses Lake will help it to improve quality, increase production, reduce costs and continue a commitment to U.S. production. Owner Jim Carroll has said he intends to look for local suppliers to assist the company with their products.

Katana Industries, Inc., has plans to manufacture windmill towers for power generation on property owned by the port of Ephrata. Katana is expected to provide 40 new jobs, drawing employees mainly from the Ephrata area. Katana's lease at the port began May 1. A few of the windmill towers ordered in 2005 will be shipped to Oklahoma and Minnesota. In 2006 there are plans to build for Puget Sound Energy, at locations along the Columbia River and in Oregon.

At the end of November, it was made known that Yahoo! Inc. is considering construction of a data center in the Basin. Before that could happen Yahoo! needs a commitment from the PUD to use the utility's Zipp fiber optic network. In a Nov. 29 issue of the Herald PUD general manager Tim Culbertson said Yahoo! wants a long term commitment from the PUD and is interested in Grant County because of its low cost power. Yahoo! would require 15 to 20 megawatts of power from the PUD to operate. The new facility would employ roughly 40 employees. Yahoo! has also been in contact with Douglas County about a possible data center location.

Road projects

After the defeat of Initiative 912 in the November elections, the I90 overpass bridge at Potato Hill Road in Moses Lake can move forward. I-912 called for the repeal of a 9.5-cent gas tax increase. Those monies will be used to fund projects like the I90 overpass bridge and the widening of Highway 17 from two to four lanes, extending from I90 to Stratford Road in Moses Lake. The bridge project will raise the height of the bridge and widen it by 14 feet for pedestrian and bicycle traffic. Construction is scheduled for next spring.

Project bids for the Highway 17 project are expected to go out in the spring with construction scheduled for the summer of 2006. The Highway 17 expansions are expected to allow easier transport of materials in and around the Basin, and provide a noise barrier between Nelson Road and Wheeler Road. This barrier will protect 50 homes, a school and a park from highway noise. With 900 acres of industrial property located at the airport three miles north of the project and 350 acres of additional industrial property to the east, the expansion will reduce shipping time and improve access for freight.

Education

In early 2006 Big Bend Community College will receive two Piper Warrior III aircraft to begin replacing its entire 23 plane fleet. State monies equaling $500,000 are allocated for the purchase of the aircraft. The new planes are intended for student training and to keep up on the latest in technology. BBCC is renowned for its flight program nationally as well as internationally, said BBCC president Bill Bonaudi. The college is the only higher education institution in the state that owns its own aircraft and hires employees to instruct aviation courses rather than contracting with an outside organization. The college's flight training program is also the largest and longest running in the state.

For the second year in a row, the college has seen a decrease in enrollment. Dean of enrollment Candy Lacher reports that at the beginning of the 2005 school year 1,623 students were enrolled. In the fall of 2004 that number was at 1,729 and at the same time in 2003 enrollment was at 1,914.

BBCC administration cite increases in employment rates as one of the causes for the decrease in student enrollment. According to the U.S. Department of Labor, the unemployment rate in the state stands at 5.6 percent, which is down from six percent in 2004.

A telephone survey was conducted in the fall of 2004 to a random sample of 50 people to assess why the college was seeing a decrease in enrollment. Most of the reasons were personal reasons, said Valerie Kirkwood, director of institutional research and planning at BBCC. "We couldn't come up with something the school was doing that was causing it."

The Moses Lake School District held a planning symposium in September, bringing together 75 people from area businesses, schools, Big Bend Community College and architects with LSW Visioning out of Vancouver, Wash. Growth pressures in the next six years will mean a nearly 780 increase in student enrollment and that combined with county growth means the district needs to start planning now, said LSW educational planner Jim Parsley. In a three-day period Parsley and other architects toured MLSD facilities, taking pictures, talking with school district employees, city planners and surveying available school and land development space.

From that analysis of the district and city, Parsley estimated that in the next 20 years MLSD will see student enrollment increase by 46 percent with at least three new elementary schools needed by 2025 and the construction of a third middle school shortly after 2010. Due to a lack of significant growth currently at the high school, Parsley estimates overcrowding will be an issue by 2015. Paul Dennis with the Cascade Planning Group out of Camas, Wash., said over the next six to 10 years there will be between 1500 to 1700 housing units within the school district's service area, some of which already exist and others that have yet to be developed.

The school board set an amount for a three-year levy that will go to vote Feb. 7. The levy would replace the one approved by voters in 2004. The amount to be collected starting in 2007 is $7,646,564; $8,073,561 in 2008 and $8,565,040 in 2009. The levy provides 15 percent of the school district's budget revenues. If the levy passes, the school district will receive over $2 million in additional state money that would otherwise be lost.

PUD Rates

As of Oct. 10 the Grant County PUD finalized its industrial and agricultural food processor customers' electrical rates. The PUD is not expecting increases for its rates until 2011. "How well we perform in the wholesale arena will be a factor in our rate stability," said Jeff Atkinson, PUD manager of power planning and marketing. In October the PUD celebrated 50 years of its Federal license to build the Priest Rapids Hydroelectric Project. On Nov. 1 those contracts ended and the new ones began with a favorable outlook for Grant County. Instead of receiving 36 1/2 percent of its power from both the Priest Rapids and Wanapum Dams combined, the county now has the option to use nearly 70 percent from both Priest Rapids and Wanapum Dams. The contract provisions for Priest Rapids took effect Nov. 1 and those for Wanapum begin November 1, 2009. An additional 30 percent of the power output will be sold to utilities throughout the northwest. If needed, sales from that 30 percent can be used to purchase additional power beyond the 70 percent allocated to the county. As more power is needed, the county will be able to use sales from that 30 percent to pay for additional power. Atkinson said maintaining rate stability is a matter of managing costs of production from the two dams and ensuring financial responsibility.

Significant changes to note with the new schedule include the combining of rate schedules nine and 10 for new and existing customers, making two industrial classes. Rate schedule 14 applies to customers who use between 5,000 and 15,000 Kw. A Large Industrial schedule will be created under schedule 15 for customers exceeding 15,000 Kw. Current industrial customers will see a two- percent reduction in power costs for 2006, in comparison with 2005. Schedule 94 will incorporate terms for those customers who generate more than 10 megawatts or whose growth is expected to exceed 10 megawatts in the calendar year. Agricultural food processors formerly in schedule 80 will be assigned to rate schedule 16 at a rate equal to industrial customers in schedule 14. Agricultural food processor boiler load charges will be in schedule 85 and includes those customers who are interested in converting their boilers from gas to electricity.

International relations

In April a delegation from Grant County went to Gunpo City, South Korea which was hailed as another success for discussing community, business and economic partnerships between the county and Gunpo City. Gunpo officials are expected to make a trip to the Basin in 2006.

During a 10-day exhibit at the food show in Osaka, Japan, Grant County showcased local agricultural and food products. Grant County was the only U.S. exhibitor as well as Royal Ridge Fruits out of Royal City.

Grant County attended the Paris aerospace show in June where over 1,900 exhibitors were present and Washington Gov. Christine Gregoire came to meet with leaders in the industry. At the show Grant County displayed a promotional DVD on the county, outlining advantages to doing business

in the Basin.

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