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This article first appeared in the Journal of Business on January 14, 2021. By Patrick Jones, executive director of the Institute for Public Policy & Economic Analysis at Eastern Washington University.
Supply side said to have greater effect as listings fall short of local demand
Ever thought it’s those out-of-towners who have driven up housing prices here recently? You probably aren’t alone.
After all, the median house price for resale has climbed from approximately $284,000 to $330,000 over the past four quarters.
That $46,000 represents a 16% bump, a steep one for buyers. Spokane’s median price, while still considerably lower than the state value, cruised upward at a slightly higher pace than Washington’s median, which rose 14% over the past 12 months. (Supporting data is available on Eastern Washington University’s Spokane Trends website.)
Prices reflect many forces, both demand and supply. The key drivers of housing demand are income, financing, and population. Incomes here have moved upward in the past few years, but at a rate not too far from historical rates. For sure, mortgage rates have plummeted, leading some homeowners to consider trading up and some renters to consider buying.
Population growth, too, has surged over the past four years, relative to the past two decades. And like most western U.S. cities, Spokane’s population has expanded largely due to migration.
Local families continue to keep OB-GYNs busy, but in the larger scheme of things, it is migration that moves the population needle. For example, from April 1, 2019, to April 1, 2020, the number of heads in Spokane County rose by 7,350. Of those, 85% can be attributable to net migration.
Net migration accounts for the difference between those who move in and those who move out. Over the past five years, the number of county residents here due to net migration has been slightly more than 25,000. That’s a large jump from the prior five years.
Has it been just me who has seen more out-of-state license plates on Division Street or Interstate 90 since the pandemic struck? Observations from behind the wheel are not optimal research techniques. Thankfully, we can look at a public data series: driver’s license surrenders tracked by the Washington state Department of Licensing.
The surprise result for the first 11 months of the year: out-of-state license surrenders have dropped. From January through November the Department of Licensing reports about 7,700 new residents from outside of our state exchanging driver’s licenses. That total is down from 9,160 and 10,830 for the first eleven months of 2019 and 2018, respectively. So much for casual empiricism.
In retrospect, that shouldn’t be too surprising. The early months of the pandemic’s outbreak put a hard stop to mobility in this country.
A comparison of license surrenders in the second quarter of this year with the second quarter of 2019 is startling: 104 this year versus 2,360 last year.
Undoubtedly, the low numbers from this year are due to the closure of state offices for a good part of the quarter. Yet the third quarter, when obstacles to reregistering ostensibly were removed, didn’t compensate for the prior quarter. Licensing data show a gain of little more than 200.
In sum, the continued discovery by those from out-of-state, so strong in the recent years, shifted gears in 2020.
Yet, inflows might still be strong from movers within the state. The U.S. Census tracks annual flows from county to county in the U.S, compiled over five-year intervals. The most recent period is 2014-2018. It clearly shows the flow of Washingtonians to our county to be considerable.
Over that interval, the ratio of new residents to Spokane from Washingtonians to those outside of the state was just slightly below even. That is, a few more new residents have recently come from outside the state than from the other 38 counties in Washington.
It might be the case that the pandemic has changed that relationship, making it relatively easier for residents of Evergreen State counties to move here than those from hundreds of miles away.
In fact, among the top 10 U.S. counties contributing to in-migration here over the 2014-2018, period, seven were in Washington. Ranked by size of their flows, these were: Snohomish, King, Benton, Grant, Pierce, Stevens, and Lincoln counties.
Of the two out-of-state counties, one, not surprisingly, is neighboring Kootenai County, and the other, perhaps surprisingly, is Maricopa, Arizona. Though not a county, Asia as a whole rounded out the top 10.
Most of us have heard anecdotes about neighbors or friends of friends who have moved here from the central Puget Sound area. Many of the accounts describe the new residents as remote workers. That arrangement may well be part of the new normal for our economy and in particular for tech workers.
If so, these new neighbors symbolize a hope held by many in the economic development community: Someday Spokane will benefit from an arbitrage of labor from high-cost to lower-cost urban centers.
It is this observer’s hunch that current movement from other Washington counties has mirrored the decline of out-of-state new residents in 2020.
As a consequence, fingers can’t be pointed at Seattleites for the dramatic run-up in housing costs. Until we have data for 2020, we simply won’t know.
Attempts to explain housing prices solely to increased demand, however, miss half of the equation, perhaps the greater half. The supply side must be considered. Here, as has been widely noted, the offering of Spokane homes has been lowest on recent record.
The Washington State Real Estate Research Center, source for some of the housing data on Spokane Trends, tracks the number of listings by quarter in the county. For Q3 2020, the most recent quarter for which data are available, the count stood at 558. Compare that with 1,158 listings in Q3 2019, or 2,562 listings in Q3 2015.
Population has grown, incomes have grown, financing has gotten much more favorable, yet supply has diminished. Clearly this is a textbook case for rising prices.
The supply of homes (listings) rests on two sources: the number of local households selling their homes and the number of new homes coming onto the market. Spokane Trends doesn’t track the latter, but does follow residential building permits, typically viewed as a leading indicator. (See indicator 2.3.3.) The graph clearly shows a peak in 2016, followed by a decline of 500 permits into 2019.
The reasons behind the decline are numerous.
They include: difficulty in securing land, the cost of developing lots, a tight labor pool in the building trades, and the rising costs of construction, especially lumber. Some of these forces might see some relief relatively soon, but others will take longer to resolve.
That is, unless hundreds of current Spokanites decided to sell and move to a different place. That doesn’t seem to be in the offing now. The pandemic has kept local residents place-bound, too. Once our community reaches a safe threshold of vaccinations, I don’t expect a big outflow. Continued low supply, growing popularity from outside the region, continued low financing costs, and no significant rise in departures imply rising home prices for the foreseeable future.
this article first appeared November 5 in the Spokane Journal of Business. Written by Kevin Blocker.
Extended holiday shopping season benefits some here
Despite the fact thousands of retail storefronts across the U.S. have struggled or gone away in recent years, some Spokane-based retailers say they could be on the verge of all-time holiday sales records in 2020.
As the pandemic’s surge continues to strengthen heading into late fall, so too does consumer demand for some products as the holidays near.
At the General Store, general manager Mark McKee says he’s fully prepared for both store locations to set holiday records this season. The General Store, located at 2424 N. Division, and The General Store Outpost, at 1330 N. Argonne in Spokane Valley, last year partnered with ACE Hardware to carry its brand of tools and hardware.
The day after the region’s Oct. 23 snowstorm, the Division store set a single-day sales record, McKee says. Though he declines to disclose an actual dollar amount, he says Oct. 24’s single-store revenues were 150% above the same date in 2019.
“This year, both stores are up 45% year to date,” says McKee.
Online sales in 2020 have driven a substantial part of growth at both locations. Meanwhile, the North Division flagship store has gotten a steady facelift throughout the year.
“We’ve made the store more shoppable,” McKee says. “And something new here for us is that we’re launching a toy department on Nov. 14.”
As for in-store shopping, McKee says checkout stands will be reconfigured in an effort to create an even more socially distanced experience.
The store recently began offering curbside delivery, and for those customers with medical mask exemptions, The General Store offers full face shields for customers to use, he says.
“We want to be able to maintain full safety for customers and employees,” he says.
Chris White, the store manager at Wheel Sport cycle shop at 9501 N. Newport Highway, in North Spokane, says the company’s four stores have seen a 35.7% increase in revenue this year over 2019.
And despite the fact this time of the year is considered off-season for riding bicycles, White says bikes have been a strong holiday gift traditionally.
Wheel Sport operates four stores across the region, and all share each other’s inventory. When asked if he was concerned about the company’s ability to fulfill holiday orders, White says, “Unfortunately, yes. Very few people anticipated this.”
He advises people to shop early for Christmas gifts; the store only recently received a pair of bikes he had ordered in April.
“If you’re going to wait to start shopping after Thanksgiving, then it’s going to be too late,” he asserts.
Mark Schneider, who owns and operates Rambleraven Gear Trader, an outdoor gear and clothing store at 3220 N. Division, says he’s feeling optimistic about a strong consumer holiday shopping season.
Schneider says Rambleraven is currently “fully stocked” with outdoor gear.
Schneider says Rambleraven has picked off traffic from the closing of Mountain Gear, which occurred at the beginning of the year.
“It’s hard to predict tomorrow, but one of the shining stars through the pandemic is the outdoor economic sector,” Schneider says. “There’s been a year-long, pent-up need for people to maintain their sanity.”
The Washington, D.C.-based National Retail Federation launched its nationwide consumer education campaign encouraging people to shop earlier and safer due to the pandemic.
“We know this has been a year unlike any other,” NRF President and CEO Matthew McShay told the Associated Press in a late October interview. “And we ought to expect that the holiday season will be just as different from normal holiday seasons as the rest of this year has been from normal years.”
Despite the pandemic, the federation projects consumer spending on gifts will be on par with 2019, decreasing by only about $9 per person, while spending on other holiday items, such as decorations, will be up slightly.
“Expected spending remains significantly higher than the five-year average for both those categories. The holiday season is top of mind, with 42% of people saying they plan to start their holiday shopping by the end of October and another 41% in November,” the retail federation says.
NRF estimates the average adult consumer will spend $650 on gifts this year, up from the four-year annual average of $624 from 2016 to 2019. Consumers are expected to spend $230 on nongift holiday items, such as decorations, compared with the $217 annual average from 2016 to 2019.
The only category the retail federation anticipates seeing a decrease in consumer spending is on “other nongift purchases,” down to $117 per consumer compared with the 2016 to 2019 average of $145.
“One in five holiday shoppers say that they typically travel for the holidays but will stay home instead this year,” according to the retail federation. “Over half of those who changed their holiday travel plans said they are likely to spend more on holiday items this year, specifically because they will not be traveling.”
The retail federation says online sales have skyrocketed in 2020, and 60% of its survey respondents say they plan to purchase holiday items online.
Other top holiday shopping destinations for consumers include department stores, mentioned by 45% of respondent, discount stores (43%), and grocery stores or supermarkets (42%), NRF says.
The survey was conducted Oct. 1-Oct. 9 and sampled 7,660 total consumers, according to the retail federation.
Consumer zest for spending is still strong even though as of mid-August, a Business Insider report said retailers were expected to close more than 7,500 stores in 2020 following a record-high closing of more than 9,300 store closings in 2019.
This article first appeared on October 8, 2020 in the Journal of Business. Written by Natasha Nellis.
Company to boost sales, engineering jobs this year
Tamarack Aerospace Group Inc. is continuing its rapid expansion, having nearly tripled its space at its Sandpoint headquarters.
The company has added 3,500 square feet of office space and an additional hangar to its 14,000 square feet of space at 2021 Industrial Drive, near the southern edge of the Sandpoint Airport. The addition of a third hangar, which company President Jacob Klinginsmith estimates is about 5,600 square feet, brings the company’s total hangar space to roughly 23,000 square feet.
“The big-picture objective with the expansion is making room for R&D,” he says. “As a technology company our intent and plan is to take our game changing technology and do it on other platforms.”
The company manufactures and installs active winglets, which are designed to be attached to wingtips to boost fuel efficiency by increasing lift and reducing drag.
Currently, the winglets are designed to be installed on Cessna CitationJets, but Klinginsmith says Tamarack is exploring expanding the product to fit other types of aircraft, from the CitationJets up to Boeing airplanes.
With the addition of more research and development space, the company also plans to hire five sales and engineering employees, with the expectation of hiring an additional five engineers by year-end, according to a company press release.
Tamarack has 27 employees.
Klinginsmith declines to disclose sales figures, but says he expects this year’s sales will be up compared with last year.
“The economy has really increased the demand for charter flights,” he says. “People are looking for less contact with others, so our charter customer base is growing. People are looking at adding winglets to get more out of their aircraft.”
He adds that the increasing popularity of charter flights has bolstered the company’s sales.
Earlier this year, the company also established its first international outpost at the London-Oxford Airport. Tamarack partnered with Jet Maintenance International, an airline-based asset management company based in Alexandria, Virginia, to lease an 18,000-square-foot hangar on the airport property.
An emerging restaurant model known as “ghost kitchens” is gaining popularity in some parts of the U.S. and could find a foothold in Spokane, industry experts say.
The concept appears to be becoming more appealing as COVID-19 pandemic-related restrictions continue to batter the restaurant industry.
Ghost kitchens refer to restaurants that operate exclusively on a takeout-and-delivery model, without in-house dining. There are three types: commissary kitchens, pop-up kitchens, and pods, according to digital food-tech publication The Spoon. Commissary kitchens are shared kitchen spaces owned and operated by a third party. Popups are areas within the main kitchen of a restaurant that are dedicated to fulfilling pickup and delivery orders and typically have a distinct menu and branding from that of the established restaurant. Pod kitchens operate within shipping containers and can be placed nearly anywhere.
Adam Hegsted, owner of the Liberty Lake-based Eat Good Group LLC., says the company had planned to open a ghost kitchen space in Spokane Valley, but it’s holding off until the area’s economy stabilizes.
Hegsted says Eat Good’s partner, GVD Commercial Properties Inc., bought the former liquor store building at 5004 E. Sprague earlier this year. Hegsted planned for four companies to share the space: Incrediburger & Eggs, Taco Suave, Doughlicious Bakery, and either a fried chicken or healthy food restaurant.
Hegsted has experience dabbling in the ghost kitchen model. Eat Good Group’s cafe, located in the Meadowwood Technology Campus, in Liberty Lake, also produced orders for Incrediburger Express, a takeout- and delivery-only version of Hegsted’s hamburger restaurant. That has been suspended temporarily, partly due to the impacts of the pandemic, Hegsted says.
“The idea works great, as long as you can get enough delivery orders,” Hegsted says. “There’s a lot of savings as far as the buildout. And same with labor. You don’t have to have as many front-of-the-house people doing customer service and helping guests. You just have a cook back there to create the food, and someone getting orders ready, taking orders, and cashing people out.”
Adam Stinn, director of business solutions at Rosemont, Illinois-based national foodservice distributor US Foods Inc., says the idea was catching on in some U.S. cities before the pandemic struck, but it’s become an important way for entrepreneurs to launch their food businesses, as well as a way for existing sit-down restaurants to add another revenue stream to compensate for lost revenue due to COVID-19-related occupancy restrictions.
“We have seen growing popularity and growing interest across all segments around ghost kitchens,” says Stinn, whose company operates the Food Services of America warehouse in Spokane. “I’ve seen some numbers saying that in the next 10 years, this could be a trillion-dollar industry. There’s definitely a lot of growth potential.”
Ryan Wilcockson, owner of Spokane Salad Delivery LLC, says he chose to use a ghost kitchen model to start his salad delivery business in order to keep overhead low. Wilcockson, the sole employee of Spokane Salad Delivery, works out of the Kitchen Spokane commissary space in the Northtown Mall.
“They have all the supplies we need, all the fridge space, freezer space, and dry (ingredient) space,” Wilcockson says. “It saves a lot, and I can afford to buy fancier products for the customers.”
Kitchen Spokane is a nonprofit that offers commissary kitchens as incubators for small food businesses. Jayme Cozzetto, director of Kitchen Spokane, launched the first commissary kitchen under the Kitchen Spokane name in 2014. Since then, it’s grown to include two locations in Spokane, two in Coeur’ d’Alene, one in Ponderay, Idaho, and another in Vancouver, Washington. Most of its commissary kitchens are in malls.
Donita Humrich, kitchen manager for Kitchen Spokane, says malls are a good fit for commissary kitchens because the infrastructure already exists, and clients can access the space at all hours. Also, mall security keeps the space safe, and the mall itself is responsible for maintenance. With many malls struggling to fill spaces, it’s a partnership that works for everyone, she says.
In the early days of the pandemic’s presence in the U.S., Kitchen Spokane’s revenue dropped by about 30%, Cozzetto says. Around late April, that changed.
“We started to see something we did not expect: a rise and growth in the industry,” he says.
In the past few months, nine new businesses have signed up to use Kitchen Spokane’s spaces. That brings the total number of businesses operating through Kitchen Spokane’s locations to nearly 90.
Cozzetto says the organization is continuing to expand, with two new spaces in the Spokane Valley mall and one in Coeur d’Alene’s Silverlake Mall expected to be established within the next two months. He claims that the COVID-19 pandemic has brought rental rates for commercial spaces, especially those located in malls, down significantly.
Kitchen Spokane charges clients $15 an hour to use its space and equipment, with dry and refrigerated storage space offered at a starting rate of $3 a day.
Cozzetto says many new clients had planned to launch elsewhere but have found their options severely limited by the pandemic.
“We’re seeing people who maybe had an idea before that they were going to do, and they were going to (sell at) farmer’s markets and public festivals,” Cozzetto says. “What I’m seeing is that instead, they’re focusing their efforts online. They’re selling everything online, and they’re doing remarkably well.”
Stinn says that when Washington restaurants were forced to close their dining rooms in March, many eateries grappled with switching to takeout- and delivery-only models.
“While there was definitely revenue and continued sales there, it was clearly not what restaurants are used to, and there’s also additional costs that come with those delivery and carryout mechanisms,” Stinn says.
Some restaurants have embraced the ghost kitchen model, either by starting a second ghost kitchen restaurant that has a separate menu within their existing kitchen, or by adding a “digital franchise,” Stinn says.
In the digital franchise option, for example, a local restaurant that makes its own Mexican-inspired food could add revenue by partnering with a national pizza franchise, enabling the franchise to use part of its kitchen to produce pizzas for delivery.
“I think the most attractive thing about the model is if there’s consumer demand for a certain menu type, a lot of operators already know their fixed costs, whether it be a lease, cost of utilities, those kinds of things,” he says.
The ghost kitchen model enables restaurant operators to continue to have a sales channel, even if it means providing a different menu altogether, Stinn says, adding that it can be done with relatively low startup costs.
“You’re not starting an entirely new brick-and-mortar location,” he says. “You’re really just expanding a menu, which can be done with relatively low risk.”
However, launching an unconventional restaurant through a ghost kitchen comes with its challenges. Chief among them, Hegsted says, is brand recognition.
“If you don’t have an established name, it’s difficult to get the marketing out there, because you don’t have a physical space for people to connect with,” he says.
Spokane Salad Delivery’s Wilcockson says the technological aspects of running a delivery-only business have created an unforeseen obstacle.
“Not everyone is tech-savvy, so unfortunately for people who aren’t used to it, using the internet or their cell phone makes it complicated,” Wilcockson says.
Vying for time in the kitchen also can be challenging, he says. If another Kitchen Spokane client reserves the space for the time Wilcockson had intended to use it, he’s in a tight spot.
Despite these hurdles, Wilcockson says he believes the ghost kitchen model will stick around.
“Not only in Spokane, but nationwide, worldwide. With the whole COVID situation, it’s kind of going to have to go that way,” he says. “I think it’s going to be the way of the future, at least for a couple of years.”
Hegsted likens opening a take-out or delivery restaurant through a ghost kitchen to launching a restaurant in an unpopular neighborhood.
“In the beginning, it may be a little more difficult to get people to latch onto the idea of coming to that neighborhood,” he says. “It’s the same with people figuring out the idea that it’s delivery only. But once you get that clientele and build that loyalty, people are willing to get food delivered that they know is going to be good quality.”
Long before the era of COVID-19, Laura Kasbar was a Spokane mother who merely wanted to find a way to address her children’s autism.
Almost by chance, she noticed that video lessons would help, particularly with a child who doctors had declared would never speak.
Nine years later, in 2011, her son Max was mainstreamed, and her Gemiini Systems, still based in Spokane, has become a worldwide leader in online distance learning for people with autism, Down syndrome, dyslexia, speech delay, stroke and other issues.
Since the novel coronavirus outbreak, Gemiini has seen “an avalanche” of interest as families and school districts seek virtual solutions to real-life challenges of learning from home, Kasbar said from her home in Southern California.
The company, with about 50 employees, is run by her son Nicholas out of the Holley- Mason Building in downtown Spokane. After an initial adjustment, Gemiini has adapted to a surge in business.
Gemiini has opened its certification program to professionals and has waived the $490 fee for certification.
Gemiini is also offering schools and clinics the use of its system at no cost as long as they agree to submit the cost of the program to Medicaid.
Gemiini has proven to be a valuable solution for special education administrators, who are struggling to navigate this crisis to continue to meet the needs of special needs students and families.
For many children, “this can be the only link to therapy,” Kasbar said. “And now with COVID everyone is on that boat.
“Our team has been able to get to work immediately. Our subscription base has increased dramatically.”
Gemiini – the unique spelling is Kasbar’s tribute to her autistic twins, Max and Anastasia – was the product of Kasbar’s yearslong search for a solution.
It was in 2001 that Kasbar recalled walking into a room in her Spokane home, saw all six of her children lined up in front of the television and “couldn’t really tell which were the autistic ones.”
At that time, conventional wisdom dictated the television should be turned off if autistic children were nearby. But that experience told Kasbar video was the answer.
She and her husband Brian had noticed that young Max wouldn’t make eye contact with them but would interact with the television.
“I thought, ‘I’ve got to get my mouth on the TV,’ ” Kasbar said.
That night, they made one-minute videos of a cup and Barney, the TV dinosaur.
“It was a close-up of my mouth saying the word ‘Barney’ next to the actual Barney and then saying the word ‘cup’ next to a cup. We did three sets in a row,” Kasbar said.
That night, after watching several times from his highchair while eating, Max made his biggest breakthrough.
Kasbar held up a cup and he said “cup,” his first word – 3 years and 8 months of age.
During the next decade, and with the help of her oldest son, Nicolas – who also had been on the autism spectrum – Kasbar developed the video program.
In 2012, thanks to funding from the Spokane Angel Alliance and Inland Imaging, Gemiini was launched.
Backed by studies from four universities, Gemiini serves 30,000 clients in 40 countries.
Its use of discrete video modeling, which presents only a specific piece of audio information, was showed by a Portland State University study to be 300% more effective than standard video modeling.
Kasbar was so inspired by the success of her program that she shared her experiences in a book, “Embracing the Battle: Secrets of Victory from a Warrior Mom.”
Closer to home, Gemiini has worked with former NFL star and Spokane native Mark Rypien to develop an application to address suicide prevention.
The goal, Rypien said last fall, is to connect circles of friends of persons at risk so they can better monitor their state of mind.
Lately, the main focus has been reaching children who have been isolated by COVID-19.
“It’s been pretty easy,” said Nicolas, who runs the Spokane headquarters. “After a few headaches, we’ve been able to keep going and helping people, and we’ve updated a lot of our instructions on Facebook Live to walk people through how our lessons work.”
Jim Allen can be reached at (509) 459-5437 or by email at [email protected]
Not even the COVID-19 pandemic has been able to blunt the tide of growth the design-build construction company Verdis is experiencing.
Since becoming a member of the Small Business Administration’s 8(a) Business Development Program in 2016, Verdis has secured 99 federal projects, 19 of which are currently active, says Sandy Young, founder and principal of the Coeur d’Alene-based company.
The 8(a) program is a nine-year business development program that provides business training, counseling, marketing, and technical assistance to small businesses that have applied and then been accepted to the program.
Verdis has a greater ability to secure federal work with certifications as both a woman-owned business and an 8(a) operation. The federal government’s goal is to award at least 5% of all federal contracting dollars to small businesses and women- and minority-owned businesses.
Now doing business in 13 western states, Verdis recently secured its largest federal contract to date, an almost $4 million project in Alaska, where Young is from originally.
A 7.1-magnitude earthquake that struck south central Alaska on Nov. 30, 2018, continues to generate engineering and construction repair work through the federal pipeline.
Despite the flourishing federal work, Young says one of the requirements of 8(a) status is to maintain local work in the community. While she declines to disclose the firm’s annual revenue, she says close to a third of all income is generated by local projects.
Deemed as an essential business, Verdis anticipates annual revenue to double in 2020 over 2019. First-quarter revenue alone this year exceeded calendar year 2019, she says.
The company forecasts a nearly four-fold increase in revenue by 2022, compared with 2019 earnings, Young says.
“We’ve been able to self-perform much of our work, which is a big deal for an 8(a),” she says. “Very few firms do both engineering and construction. We seal fish ladders, rip up rails in powerhouses at dams, and restore old buildings and windows.”
With 25 employees, Verdis occupies roughly 2,000-square feet of space in a second-floor suite at Parkside Tower, located at 601 E. Front. It’s the company’s fifth location since its founding in 2007, Young says.
A vice president of construction, Colin Meehan, oversees five project superintendents and six members of a field-personnel team, constituting the firm’s largest concentration of employees.
Young, who is 64, moved to Idaho from Alaska in 1997 and spent the next decade working in Kootenai County’s community development department. Along the way, she met her late husband, Gary, who worked as the director of community development for the city of Post Falls, she says.
The two married in 2006, and the following year, Young says the couple began the process of going into business for themselves.
“He had been in business for himself for a while; he was a licensed landscape architect,” she says. “He’d say, ‘It’s not as easy you think, not every hour is billable.’ I remember sitting on a plane—we were going on a trip somewhere—and telling him, ‘Let’s do it.’’’
In the basement of a building in Post Falls, the couple set up an independent development and planning operation.
“Fortunately, because of our public-sector jobs, people knew us,” she says. “There weren’t many planners around, so we got a few clients right out of the gate.”
Young says the company steadily grew. Landscape architecture work quickly expanded, and Verdis began using subcontractors for civil engineering projects.
In 2012, Verdis was granted woman-owned business status through the SBA, but the business didn’t qualify for the 8(a) program due to the couple’s combined assets, she says.
Then, in 2014, Gary Young contracted cancer and died the following year. It was his death that allowed Verdis to qualify for 8(a) status, she says.
“On his death bed he said, ‘Get the 8(a). I want you to kill it. I don’t want to have to worry about you,’’’ Sandy Young says, fighting back tears.
Reflecting on that time, Young says the business took off as she poured herself into work as way to deal with the grief.
“That wouldn’t have happened if I would’ve had a spouse at home, right?” she asks rhetorically. “Who doesn’t want to be home at night?”
Young says she bought a new car and “hit the road” religiously in an effort to generate new business.
“Honestly, it seemed like such a longshot because you’re sitting there trying to sell your capability, and I really didn’t understand the world I was in,” she says. “We didn’t have any idea how to put a bid together, we didn’t know what we were going to do. We were designers.”
As Young tried to recruit clients, she was asked if Verdis did construction work. Upon answering no, she was met with a consistent message: Come back when you do.
“Three times I heard that. The fourth time I was asked, my answer was, ‘You bet we do,’’’ she says. “I came back and told staff we’re going to figure this out.”
A year later, Verdis secured its first federal contract, a $327,000 Kachess River Bridge project in Cle Elum, Washington, Young says.
Stephanie Blalack, a senior planner with Verdis, has a perspective about Young and the firm, unlike any other employee. She is the company’s first hire.
“I hired Steph out of college (2004) when I still worked for Kootenai County,” Young says. “When I jumped ship, I brought her with me.”
Says Blalack, “She was a phenomenal boss at the county, so when she left in 2007, I was just devastated.”
Seven months later, Young reached out to her with a job offer.
“I was 25, 26, and I’m thinking of leaving my government job? My parents were like, ‘Are you crazy?’’’ says Blalack.
“But I just had this feeling that I knew she was going to make it,” she says. “If it were anybody else, I would not have left my government job.”
Contact author at [email protected] or 509.344.1267
As the dreaded coronavirus rips across the globe, city after city has locked down, transforming urban business centers, suburban malls, and other public spaces into ghost towns. This is not the first time this has happened—since time immemorial, cities have been epicenters of communicable diseases.
No pandemic or plague or natural disaster has killed off “the city,” or humanity’s need to live and work in urban clusters. Not the Black Plagues of the 14th century, or London’s cholera epidemic in the 1850s, or even 1918’s Spanish Flu, which killed tens of millions of people worldwide. That’s because cities’ concentration of people and economic activity—which serves as the motor force for innovation and economic growth—is just too strong.
We will get through this pandemic, too. We will go back to work and school and gather in restaurants and theaters and sports stadiums again. But when we do, cities and their leaders should not simply return to business as usual. Not only does COVID-19 threaten to reappear in subsequent waves if we do not remain vigilant, but there will always be future pandemics to brace against as well.
Our mayors, governors, and community leaders must do whatever is necessary to get their cities back up and running as soon as they safely can. After, we will need plans in place to prepare for future pandemics, and any social or economic lockdowns they necessitate. The federal government must do its part too, with bold and unprecedented programs to bolster the economic situation of our states and cities as well as our workers and business, especially small business.
Getting this response right may be as important as what we are doing today. Below is a 10-point plan based on detailed tracking of the current pandemic and historical accounts of previous ones, presenting some key measures to prepare our cities, economy, and workers for the next phase of the coronavirus crisis and beyond.
- Pandemic-proof airports: Airports are a critical engine of economic development—they cannot be idled indefinitely. We need to make sure they can get up and running again quickly, and that means mobilizing like we did in the wake of the 9/11 terrorist attacks by adding temperature checks and necessary health screenings to the security measures already in place. It also means reducing crowding: Simple things like stanchions or painted lines on floors can promote social distancing in waiting areas. Airports should have large quantities of masks and hand sanitizer available, and airlines will need to reduce their passenger counts and keep middle seats open during future health crises.
- Prepare large-scale civic assets: Cities are also home to other forms of large-scale infrastructure: stadiums, arenas, convention centers, performing arts centers, etc. Because they bring together large groups of people, city leaders must pandemic-proof these assets as much as possible, too. Audience sizes may need to be reduced in theaters, with seats left open. Masks may need to be required and made available to patrons as needed, and temperature checks carried out. This will be critical for communities that are dependent on such attractions: A Brookings analysis shows that COVID-19’s economic downturn will hit tourism-driven cities such as Orlando and Las Vegas hardest. The sooner such large-scale civic infrastructure can be safely reopened, the faster our urban economies will be able to rebound in the aftermath of a pandemic.
- Modify vital infrastructure: As we’ve seen during the first phase of the COVID-19 crisis, buses, subways, and trains need emergency infusions of cash to keep the systems solvent when ridership is low or nonexistent. When they are back in service, design changes in stations and seating will be needed to prevent the spread of infectious diseases. Streets may need some retrofits too; New York Governor Andrew Cuomo has called for pedestrianizing some New York City streets to promote social distancing during COVID-19. Some of these changes should be permanent. Cities need to expand and better protect their bike lanes too, while refining bike- and scooter-sharing programs for when public transit in compromised.
- Ready key anchor institutions: Medical centers, hospitals, and universities are on the front lines of the battle against COVID-19, and many are already overtaxed. With dormitories, dining halls, and large groups of people, they will be highly vulnerable to the secondary waves of contagion. How can we ensure that they can operate safely to carry out vital research during pandemics? Just as with other large-scale civic assets, classes in these institutions can be kept small, but institutions will need to retrofit dormitories and dining halls with temperature checks and ensure adequate social distancing so they can safely function.
- Embrace telework: We are in the midst of a massive experiment in remote work. Most people will eventually go back to their offices, but some workers and companies may find remote work to be more effective. Tulsa, Okla. has leveraged this concept through its Tulsa Remote initiative, which pays remote workers a small grant to relocate there while helping them forge community and civic connections. Cities can learn from one another about how to best support the growing cadre of remote workers and make them connected, engaged, and vital parts of their communities.
- Ensure Main Street survives: The restaurants, bars, specialty shops, hardware stores, and other mom and pop shops that create jobs and lend unique character to our cities are at severe economic risk right now. Some projections suggest that as many as 75% of them may not survive the current crisis. The loss of our Main Street businesses would be irreparable, and not just for the people whose livelihoods depend on them, but for cities and communities as a whole. The places that have protected their Main Streets will have a decisive competitive advantage as we return to normalcy. Loan programs from government, foundations, and the private sector as well as support from small business and technical organizations will be essential for ensuring these businesses survive. Cities need to provide this type of assistance and advice to these vital small businesses so they can safely reopen and weather the storm of future lockdowns.
- Protect the arts and creative economy: The creative economy of art galleries, museums, theaters, and music venues—along with the artists, musicians, and actors who fuel them—is also at dire risk. Cities must partner with other levels of government, the private sector, and philanthropies to marshal the funding and expertise needed to keep their cultural scenes alive. Once they are allowed to reopen, these places will also need to make interim and long-term changes in the way they operate. Cities should provide advice and assistance on necessary procedures—from temperature screenings, better spacing for social distancing, and other safety measures—for these venues to continue as part of the urban landscape.
- Assess leading industries and clusters: It’s not individual firms but clusters of industry and talent that drive economic development. Some of those clusters are at greater risk than others: Sectors such as transportation, travel and hospitality, and the creative arts will be hit the hardest, while e-commerce and distribution or advanced manufacturing for health care and food processing may grow. Cities and economic development organizations must assess the industries and clusters that are most vulnerable in their territory, evaluate the impacts future pandemics will have for their labor markets and communities, and plan to make their economies more resilient and robust. They should pull together cluster working groups of business and non-profit representatives and local academics and experts to best assess the impact of the pandemic and pandemic-related response on key clusters and develop medium-range plans.
- Upgrade jobs for front-line service workers: Nearly half of Americans work in low-wage service jobs. A considerable percentage of them—emergency responders, health care aides, office and hospital cleaners, grocery store clerks, warehouse workers, delivery people—are on the front lines of the pandemic. They need better protection, higher pay, and more benefits. States such as Vermont and Minnesota have paved the way by designating grocery store employees as emergency workers, making them eligible for benefits including free child care. Having a well-paid cadre of front-line service workers who can keep our communities safe and functional will help protect us from future wave of this pandemic and others that may follow.
- Protect less-advantaged communities: The economic fallout of pandemics will hurt most for the least-advantaged neighborhoods and their residents, who lack adequate health coverage and access to medical care, and who are the most vulnerable to job losses. This, too, is a fundamental issue of both safety and equity. Concentrated poverty, economic inequality, and racial and economic segregation are not only morally unjust—they also provide fertile ground for pandemics to take root and spread. Economic inclusion and more equitable development are critical factors for the health, safety, and economic competitiveness of our places. Cities and local leaders can work with federal and state agencies, community development organizations and local foundations to target needed funds, support services and technical assistance ot these areas.
There is light at the end of the tunnel. In the not-too-distant future, the pandemic will end and our cities will return to something approximating normal. What we do over the next 12 to 18 months can ensure that our city and metro economies get up and running again while protecting themselves against similar scenarios in the future. This is a time when our cities and their leaders can and must show the way forward.
Professor – University of Toronto’s Rotman School of Management and School of Cities
Distinguished Visiting Fellow – New York University’s Schack Institute of Real Estate
Author – The Rise of the Creative Class and The New Urban Crisis
Professor of Practice at the Lyndon B. Johnson School of Public Affairs – University of Texas at Austin
Mark Pond received very few questions from visitors about starting a business at the reference desk when he began a career at the Spokane Public Library in 2006.
“I just sat at the downtown library at the reference desk waiting for business questions to come to me. It was complete radio silence,” said Pond, the library’s business reference librarian. “People didn’t know what the library had to offer. I didn’t know how to market what we had to offer, and the tools we had available weren’t necessarily anything close to the toolbox we have now.”
Pond jumped into action and led an effort to provide resources to entrepreneurs at the Spokane Public Library. By 2016, the library’s business offerings had expanded to include the Level Up Coworking Space at the downtown branch that provides meeting rooms, Macs with Adobe Creative software and access to a Bloomberg Terminal.
The Spokane Public Library is the second in the nation – the New York Public Library being other – with a Bloomberg Terminal, which provides access to financial news, analytics and charts.
In addition to providing one-on-one business consultations and conducting workshops on various business topics at local organizations, Pond maintains resources at spokanebusiness.org that help people research market information, find potential customers, develop business plans and take online job-training courses.
“One of the primary drivers in opening up the Level Up Coworking Space is the gig economy. It gives them tools and resources to figure out how to do their jobs,” Pond said. “Having those kinds of ongoing education and learning opportunities for the Spokane workforce can be huge in terms of business retention and expansion.”
Becoming a business research librarian
Pond, a Kettle Falls native, graduated with a master’s degree in library and information science from the University of Washington in 2000. He worked as a reference assistant at the University of Washington library while attending college. After graduation, Pond was hired as a reference librarian for the Seattle Public Library, a position he held for more than six years.
Pond said he was drawn to library work because of the opportunity to help people with a range of questions and subjects.
“One of the things that appealed to me about the library world is – if you want – you can get super specialized, but sometimes just sitting at the reference desk taking whatever questions coming your way is really fascinating,” he said.
Pond and wife, Maggie, contemplated a move back to Eastern Washington in 2006 to be closer to family and raise their two children. Within hours of discussing the potential move, Pond saw a job posting for a business research position at the Spokane Public Library.
Although Pond had some experience with business research while working at the Seattle Public Library, he was a little concerned at first that the position would be too specialized and might not be a good fit.
“But I love it,” he said, adding it’s a combination of specializing in business topics while also providing the opportunity to answer many different questions from a variety of entrepreneurs.
“At the same time, there’s some common threads in the business research world – who you are selling to and what’s your business model. So those things, (the library) can really help them,” he said. “I enjoy being able to work with a whole span of different businesses around town. I find that really fascinating.”
It took more than a decade for Pond to develop business resources for the downtown library branch. He said the idea to improve the offerings was planted when he met a man who created a device that assists with safety checks for tractor-trailers.
Pond shared with the man some of the library’s business research tools and directories, and compiled a list of trucking companies on the West Coast within seconds.
“The guy said he paid $1,800 for the exact same list two days ago,” Pond said. “So, I had a couple of interactions like that for the tools we have. They are in need and of value to the business community.”
Technology has changed how people access information at the library. More people are gravitating toward digital access to books and reference materials, Pond said.
“I realized it will be a thing of the future and thought, ‘I have to get outside of the library and meet businesses on their own terms,’ ” he said.
After Startup Spokane – a program of Greater Spokane Incorporated – launched in 2015, more entrepreneurs began seeking Pond’s assistance for market research.
About half the businesses Pond works with are startups, and he recently assisted teams of students with business research for the upcoming Northwest Entrepreneur Competition.
“Even today, people don’t realize how incredible the resources and options he’s created for startups and small businesses,” said Mark Gustafson, director of innovation and strategy at Avista Corp. and managing partner of Mind to Market LLC. “For a startup, there’s no way they would have access to this rich of a system in their company.”
Mind to Market LLC is a program by Avista that connects startups with experienced coaches to prepare them for early-stage investments.
Mind to Market participants find business resources – especially PitchBook – useful at the library, Gustafson said.
The Spokane Public Library, with Pond’s help, became the first library in the country to secure a subscription to PitchBook, a venture capital and private equity database.
“Most mom-and-pop businesses in town aren’t looking for venture capital funding, so it doesn’t address them,” Pond said. “But, for the companies that are looking for venture capital funding, it’s really helpful to have the industry standard tool available to them when they come in and consult with me.”
University of Washington’s CoMotion Labs provided grant funds to cover a one-year subscription for PitchBook, totaling more than $18,500 per year.
Pond said the Spokane market and its location in Eastern Washington and proximity to Gonzaga, Whitworth and Washington State universities appealed to PitchBook.
“The universities don’t have a subscription, but I can present it to MBA classes and when they go back to their hometowns, they are aware of PitchBook,” Pond said.
Greater Spokane Incorporated, the Health Sciences & Services Authority of Spokane County and the Spokane Angel Alliance donated more than $13,000 toward a second-year subscription for PitchBook.
“It seems like the library is really well-positioned to be a crowdsourcing hub for access to more resources, even if they might be kind of industry specific, like PitchBook,” Pond said.
A win for the economy
Although the Spokane Public Library’s downtown branch is closed for renovations, Pond is continuing to accept online and phone consultations.
Pond said during the downtown branch closure, the Bloomberg Terminal will be moved to the Spokane Academic Library at the Riverpoint campus.
Prior to Gov. Jay Inslee’s order to restrict gatherings because of the coronavirus pandemic, Pond was holding several meetings at local organizations such as small-business resource SCORE, a volunteer mentorship program, to help people with writing a business plan and other topics.
Pond aims to continue working to provide resources for Spokane businesses and entrepreneurs.
“We are spending $100,000 per year just for business research tools. There’s zero startups anywhere in the nation that are going to spend $100,000 on market research,” he said. “The library can step in and reduce that scope of risk for our local businesses. It’s a win for them and it’s a win for the Spokane economy.”
Among the databases available through the library are:
- Washington State Legal Forms, offering state and federal forms.
- Statista, with market data, market research and market studies.
- Reference USA, with market research, competitive analysis and sales lead generation.
- Microsoft Imagine Academy, with online courses for Microsoft technology.
- Demographics Now, offering demographics, consumer expenditures and interactive maps.