Snohomish County on the Rise

| FROM THE PRINT EDITION |
 
 

Snohomish County, which sweeps across the region north of Seattle from the water-kissed shores of Puget Sound to the craggy slopes of the Cascade Mountains, has seen its economy transformed in recent decades from one based on farming, logging and paper to one centered on aerospace and national defense.

Now, thanks to a burgeoning, well-heeled population, a diversifying manufacturing sector, and reenergized retail and entertainment destinations, the county is developing its own regional identity, increasingly independent of the powerful magnetic pull of Seattle and the towering presence of the Boeing Company and the U.S. Navy. To top it off, the county airport at Paine Field could soon begin offering commercial airline service, helping to attract even more new businesses to the region.

“There is a real sense of optimism,” says Troy McClelland, CEO of Economic Alliance Snohomish County, a consortium of the Everett Area Chamber of Commerce, the South Snohomish County Chamber of Commerce and the Economic Development Council of Snohomish County. “We are a vitally separate entity that’s fueling the state’s future.”

It is a far cry from how things looked just a few years ago. In the recent recession, a collapse in the housing, banking and construction sectors hit the region particularly hard, pushing unemployment to 10.6 percent in 2010. Nearly half of the county’s independent banks disappeared, including Everett’s Frontier Bank and City Bank of Lynnwood. Then, when it looked as if things couldn’t get any worse, Kimberly-Clark Corporation announced in 2011 the shuttering of its Everett paper pulp plant, a move that led to the loss of as many as 900 jobs.

But Snohomish County is rising again, with its unemployment rate now down to 6.7 percent and its banks much healthier. Total population reached about 722,000 last year, up from 606,000 in 2000. By 2025, the number of county residents is expected to surpass 900,000.

Boeing’s Everett plant remains the backbone of the Snohomish County economy, and its presence has played a strong role in the county’s recent recovery. More than half of the 11,000 direct and indirect jobs the aerospace giant created in Washington state in 2011 were in Snohomish County. And the company continues to create at least 5,000 direct aerospace jobs a year, according to Snohomish County Executive Aaron Reardon. Strong sales of the Boeing 777 keep assembly lines humming, and expectations are high for increased production of the 787 Dreamliner in Everett, irrespective of its nagging assembly and safety issues. Also, Everett expects to reap a substantial number of the 11,000 jobs that are anticipated from Boeing’s success in winning an Air Force contract to supply a new-generation air tanker.

“The fact that our state is such an enormous player [in aerospace] is good news,” says McClelland. Those high-paying manufacturing jobs, he adds, have helped boost median personal income in the county to $62,000, up by $10,000 in the past decade and among the strongest increases in the United States.

Similarly, Naval Station Everett has been a mainstay of the local economy for a generation, with about 6,000 sailors and civilians assigned to commands there and creating a sprawling growth footprint among suburban communities. But the county’s economy has grown more complex and diversified in recent years, providing what County Executive Reardon calls “opportunities for personal and professional growth.”

Take manufacturing, which extends far beyond aerospace to include biotech firms like CMC Biologics and Philips, instrumentation companies like Fluke Corporation and Intermec, heavy machinery companies like Advanced Rail Concepts and exciting green startups like Microgreen Polymers.

The large pool of higher-income households is supporting broader, more diverse sectors in business services, retail, hospitality and entertainment. Marysville, the second-largest city in Snohomish County, has added restaurants, retailers, auto dealers and, more recently, a new hotel and clinic, says Mayor Jon Nehring. The city now has a population of 60,000, 10 times its size just 20 years ago. It has set aside 1,000 acres for a master planned site where it hopes to attract manufacturers. “We are a bedroom community now,” says Nehring. “We need to attract manufacturing to provide jobs that keep people here.”

Still, Nehring is pleased that many Marysville residents don’t have to leave the county for most of their needs. With the Comcast Arena at Everett, the retail center in Lynnwood and the Tulalip Tribe’s popular outlet mall and casino—all along the Interstate 5 corridor—Nehring says, “Snohomish County has become a huge entertainment center. Our citizens don’t have to go outside Snohomish County to get entertainment. In fact, we have people coming here.”

To make Everett an even more attractive destination, the Port of Everett plans to spend roughly $90 million in the next five years to redevelop Everett’s industrial waterfront. It will include a new marina for boating and commercial shipping, mixed-use housing and a “village heart” that features hotels, restaurants, retail shops and community spaces. Environmental cleanup in the area has already started and the port anticipates development of parts of the waterfront within the next 18 months.

Snohomish County has also developed a unified economic plan and has become more strategic about promoting its interests with state government in Olympia. The Economic Alliance Snohomish County put forward a plan last year that calls for training more workers for manufacturing and aerospace (see page 30), improving the overloaded roadway infrastructure with new construction and attracting new businesses to the region.

One development that could play a significant role in helping draw new business is the potential emergence of Paine Field in Everett as a regional airport. Alaska Air has asked for permission to schedule regular flights from Paine Field to Maui, Honolulu, Portland and Las Vegas starting next year. If the county builds a terminal at Paine Field and those flights begin, other airlines are likely to follow.

Local executives say Paine Field could be a significant boost to the region. “I recall one day when a CEO and his relocation team were scheduled to meet me at a building in Everett,” recalls Tom Hoban, CEO of the Coast Group of Companies, an Everett-based commercial real estate sales, leasing, management and investment firm. “They flew into Sea-Tac and it took them three hours to get here in midday traffic.” Having a more convenient airport, says Hoban, would make Snohomish County a far more desirable place in which to operate a business.

Although some communities, including Mukilteo, are opposed to commercial aviation at Paine Field, with the Federal Aviation Administration threatening to cut off millions of dollars in subsidies to Paine Field if the county does not allow such flights, and with three good-sized runways at the airfield because it is used by Boeing, it seems likely that Paine Field will ultimately emerge as an important alternative to SeaTac Airport for the 1.4 million residents who live within a 45-minute drive of Paine Field.

That scenario could take some time to work out. But in the short term, real estate, which contributed to the sharp economic downturn in the recent recession, could soon contribute to economic growth. Glenn Crellin, a researcher with the Runstad Center for Real Estate Studies at the University of Washington, says real estate in Snohomish County was stronger in 2012 than the market statewide. Sales of single-family homes, for example, rose 15 percent last year. Median prices were up 7 percent, compared to just 4.5 percent statewide.

Reardon credits “smart growth management” for that success. By keeping permitting and development costs low vis-à-vis surrounding counties, by not collecting impact fees until the end of a project and by holding property taxes the lowest of any county in the state, Reardon says Snohomish County has attracted more lower-cost commercial and residential construction.

With population and greater wealth comes increased demand for medical services. Providence, the region’s largest health care provider, recently completed the biggest investment in its 155-year history when it spent $580 million on a 680,000-square-foot medical tower in Everett. Providence is also building a new $22 million center in Monroe.

“From a business standpoint, it is keeping care local and being able to provide care as efficiently as possible to drive low costs,” says Preston Simmons, interim director of Providence Regional Medical Center in Everett.

By keeping things local with local manufacturing, a local airport and local entertainment, Snohomish may well be on its way to creating a thriving community with greater control over its own destiny.

 

TECH SUPPORT

One of Snohomish County’s most successful economic development efforts has been the promotion of workforce training. The county already has the state’s second-largest technical workforce, comprising 63,000 workers, second only to King County’s 250,000 technical workers. With manufacturers demanding even more skilled workers who possess a broader range of skills, the county has moved rapidly to upgrade its workforce.

Everett Community College added a composite manufacturing and maintenance program and Washington State University in Everett is building up its engineering program. Edmonds Community College teamed up with Snohomish County and Kent-based Aerospace Futures Alliance, an industry advocacy group, to build and fund a training center focused specifically on generating an educated workforce to fill family-wage jobs. The center opened in 2010 with 19 students in its first class. Now, with a mix of current high school graduates and adults looking for new careers, the program enrolls about 180 people a month and has graduated nearly 500 students. Its job placement success rate is 90 percent.

By training a strong technical workforce, says Economic Alliance CEO Troy McClelland, the county manufacturers will have access to the workers they need to broaden their portfolio beyond aerospace. “The aerospace parts providers don’t want to get locked into just one industry,” he notes. Many of the 200 or so aerospace suppliers in the region have already reduced their dependence on Boeing by serving other clients. And across the region in Arlington, Monroe and Bothell, vibrant manufacturing regions are popping up. — T.N.

 

HEALTHY SIGNS

The Bothell Biomedical Manufacturing Corridor may not have the catchiest name, but it has become a magnet for biotech and medical instrument companies. Whether they’re developing methods for diagnosing and treating diseases or researching and creating new products, this grouping of medical device manufacturers close to major research and educational institutions has given Snohomish County yet another important growth sector.

Last year, the medical devices sector in Snohomish County saw sales increase 18 percent from the year before, and Bothell’s Innovation Partnership Zone (IPZ) is now home to 22 percent of all the state’s biotech and biomedical companies. Designated in 2007, the IPZ involves putting university researchers close to private-sector partners to help develop prototypes, incubate startups and develop training programs, all while luring and keeping top talent.

Two of the biggest employers in the area are Philips and SonoSite. Philips came to the state in 1998 and has since acquired three companies here, moving its global sales and service operation to Bothell, where it employs 1,900, and manufactures ultrasound and automated external defibrillator devices that are shipped around the globe. SonoSite, launched in Bothell in 1998 with fewer than 50 employees, has become a worldwide ultrasound manufacturer that employs roughly 1,000 in Snohomish County.

The company, bought by Fuji Film in 2012, specializes in bedside and point-of-care ultrasound machines.“This is a really large growth area and the entire sector is buoyed by the strength of these two companies,” says Economic Alliance CEO Troy McClelland. “There are very favorable signals coming out of the medical device sector.” — T.N.

Paine Field Ready for Takeoff

Paine Field Ready for Takeoff

Opposition continues, but Paine Field inches closer to commercial operations.
 
 

When Paine Field was built in 1936, nearly a decade before Seattle-Tacoma International Airport was completed, the 604-acre, fog-free unpopulated site 23 miles north of Seattle was envisioned as being one of 10 commercial “super airports” around the country. Originally called Snohomish County Airport — its name was changed to Paine Field in 1941 — the airport was a Works Progress Administration project designed as part of the New Deal to create jobs, drive economic growth in the Pacific Northwest and support a nascent aviation sector.

Shortly after opening, the airport was diverted for military operations during World War II, and again later for the Korean War. Snohomish County took over full management of the site and opened it for new commercial development in the mid-1960s, leading Boeing to establish a production facility for the 747 jetliner in 1966. By then, Sea-Tac had emerged as the region’s primary airport.

Now, 80 years after construction began, Paine Field is about to fulfill its original purpose as a commercial airport. Last year, Snohomish County approved plans for a commercial air terminal to be operated by Propeller Airports, a 5-year-old subsidiary of Propeller Investments, a private equity firm that invests exclusively in the aerospace and transportation sectors. When completed, the two-gate passenger terminal will be the first privately operated commercial air terminal in the country.

“This is a win for residents and businesses in Everett and Snohomish County,” says Everett Mayor Ray Stephanson. “Bringing a terminal of this quality to our community as a public-private partnership saves precious taxpayer dollars and offers considerable economic benefits.” He says the county looks forward to “helping travelers avoid hours of traffic and headaches.”

Initial operations will be limited to two dozen flights a day. Any expansion beyond that, which will require Federal Aviation Administration approval, will likely be vigorously fought in court by community groups in nearby areas like Mukilteo and Edmonds concerned about traffic, noise and property values.

Mukilteo’s mayor, Jennifer Gregerson, is pushing for a county charter amendment to create an airport commission to oversee Paine Field. While Mukilteo, whose eastern border abuts the airport, has no legal authority to stop passenger service, Gregerson wrote recently in a blog post, “We will use every tool at our disposal to ensure that the full impacts to our community are heard and addressed. We will not stop in that mission, and the fight is not over.”

In that regard, the Port of Seattle’s effort to build a third runway at Sea-Tac is a cautionary tale. First proposed in 1992, it faced opposition from cities and communities neighboring the airport and encountered long delays and rising costs. The third runway finally opened in November 2008 and cost $1 billion, more than four times the original estimate.

But the forces arrayed in support of Paine Field are building. The FAA concluded in 2012 that commercial airplanes could use Paine Field without significantly affecting the neighborhood. Jet engines are much quieter today than they were two generations ago, and Paine Field officials say the noise level meets federal guidelines within the footprint of the airport itself. In fact, the noisier aircraft tend to be private planes that use the only runway that takes them over Mukilteo. An opposition group, Save Our Communities, and two individuals filed suit to block commercial service on environmental grounds, but a Ninth Circuit Court of Appeals ruling in March rejected the argument.

As Sea-Tac struggles to handle rapid growth (see story, page 41) and as vehicle traffic through Seattle faces gridlock much of the day, pressure to develop a second major airport in Washington state will continue to grow. Boeing Field — officially King County International Airport — is not a candidate as a relief airport because of conflict with the flight pattern into Sea-Tac. McChord Field, a military airport near Tacoma, is also mentioned as a possible option — Colorado Springs Airport south of Denver, for example, has combined military and commercial operations. But McChord is a key component of Joint Base Lewis-McChord and there are no plans or initiatives afoot to use McChord for commercial flights.

Besides, since Sea-Tac is already situated between Seattle and Tacoma, Paine Field is far better positioned to serve the growing number of residents who live in Seattle and to the north. The state Office of Financial Management estimates that, by 2025, the population of Snohomish County alone will grow to 1 million, up from 870,000 today.  About 4,700 travelers a day from Snohomish County depart from Sea-Tac, according to Port of Seattle passenger data from 2014 and 2015. Most presumably have to travel by highway through the center of Seattle to get there. 

 

A Long Runway
1. A WPA project, Paine Field was one of 10 “super airports” intended to spur economic growth during the Great Depression.

2. The site required tree clearing and leveling to ready it for runways in 1936.

3. Shortly after it opened, the airport was used by the military during World War II.

4. Alaska Airlines had a maintenance hangar at Paine Field in the late 1940s

It’s also difficult for communities in north Puget Sound to argue persuasively that Paine Field’s growth should be limited when the airport was there before most of the communities were established, and when the region’s economy has benefitted greatly from aerospace development around Paine Field.

It is now one of the largest manufacturing and service centers in the state, encompassing about 50,000 jobs. Boeing builds its largest planes at a Paine Field facility that is the largest building in the world. Other companies like Aviation Technical Services, which employs 1,500 workers doing commercial aircraft maintenance, also call Paine Field home and use its runways for their operations.

Although commercial flights will initially be limited to about 24 a day, Paine Field is already a busy airport. It handles roughly 300 flights daily, including large jetliners from the Boeing factory and small planes flown by private aircraft owners. The modern, FAA-operated control tower was built in 2003, more than doubling the size of the old tower, and it has the most advanced aviation technology in the industry. 

Propeller Airports is moving ahead — it has submitted its application to comply with Washington’s State Environmental Policy Act — and hopes to break ground on the new terminal by the end of this year. Flights could begin in late 2017.  

With commercial operations an apparent certainty, the issue now is growth. Asked to discuss the future, Propeller CEO Brett Smith is careful in his response. He says the company is “building its business model around a two-gate terminal, and beyond that, who knows?”

Opponents doubt Propeller’s ability to operate a terminal, given its lack of a track record, but Smith insists Propeller will create a “world-class facility worthy of this airport.” 

Propeller expects to make a profit from parking, concession, service and airline facility fees. 

Tom Hoban, CEO of the Coast Group of Companies, an Everett-based commercial real-estate and investment firm, is often described as the “father” of the effort to bring commercial service to Paine. He sees the two-gate operation as adequate for now. But, he adds, “If you think of the things the community could do to drive economic diversity and provide jobs for our kids, there is no better option than leveraging a public asset like Paine Field.”

If Seattle-based Alaska Airlines is one of the airlines that operates from Paine, Hoban says the community could not have a better partner.

He also disagrees with residents of communities opposing commercialization, predicting commercial operations at Paine Field will likely increase property values. He says commercial flights will provide businesses the ability to function in Snohomish County, attracting more demand. “The model is there,” he notes. “San Jose to SFO [San Francisco], John Wayne to LAX [Los Angeles]. It’s the low-hanging fruit.”

Propeller’s Smith agrees. “Is it going to be Sea-Tac north?” he asks. “No.”

But he believes the operation will provide a new and welcome experience for passengers tired of the Sea-Tac hassle. Propeller’s terminal will have a fireplace and comfortable seating areas. The nearby parking lot will offer valet service; arriving passengers will be able to send text messages to the lot and have their cars waiting in front of the terminal building.

Smith says Propeller will leverage what he calls “the incredible aviation infrastructure at Paine Field” to encourage further economic development and provide local travelers an airport option.

Snohomish County Executive Dave Somers says having a private company operate the airport not only provides substantial income for the county — the lease agreement calls for annual payments of about $450,000 — but also eliminates the risk of a publicly operated terminal. Under the 30-year lease, Propeller is responsible for building and maintaining a state-of-the-art, two-gate terminal, which would revert to county ownership at the end of the lease. 

Although neighbors have expressed concern about airplane noise, Paine Field Airport Director Arif Ghouse says it should not be a concern. “We have shown that the noise level is contained within the airport itself,” he says, meaning that noise levels above 65 decibels are not heard in neighboring communities. He notes that Paine Field already has many large commercial airplanes taking off each day as new planes come from the Boeing plant. The only difference between them and commercial flights, Ghouse says, is that “they’re just empty.” 

Future Destination
Propeller Airports, a private developer, is buldigna two-gate commercial terminal to serve Paien Field. It could open late next year. 

There is room for expansion at Paine. The airport already has about 80 acres north of the main runway targeted for development. The aim is to market the land to “aerospace” uses, Ghouse says. Expanded airline operations would certainly qualify as an aerospace use. 

Road access to the airport may be a more serious concern. There are two general access routes to Paine Field on crowded surface streets. Motorists trying to exit to Interstate 5 run into long lines when Boeing shifts end. Paine Field is scheduled to be on the Sound Transit 3 light rail expansion. An updated version announced in May indicates light rail would serve the airport (and Everett) by 2036.  

No airline has publicly announced flights from Paine Field, but two have shown strong interest. Bobbie Egan, an Alaska Airlines spokeswoman, says there is a need for another commercial airport in the region. Asked about Propeller’s lease and plans, Egan says, “If there is an airport built there, we would take a strong look at service there.” In a 2013 proposal to the FAA, Alaska suggested operating 98 flights a week from Paine Field to Portland, Honolulu, Los Angeles, Las Vegas and other West Coast destinations. 

Las Vegas-based Allegiant Air, which operates flights from Bellingham to Oakland, Los Angeles, Palm Springs, Las Vegas and Phoenix, has also expressed interest with the FAA but says it has no immediate plan to fly from Paine Field. 

Paine field has three runways, the longest more than 9,000 feet and used mostly by Boeing for its large, wide-body jets. The runway length means it can handle almost any size aircraft; the longest runway at Sea-Tac is about 12,000 feet. A second runway at Paine is much shorter, about 3,000 feet, and is used mostly by small private aircraft — about 650 private planes are based there. The third runway, 4,500 feet long, is used as a taxiway and for Boeing to park unsold aircraft.

Paine Field also is a major tourist destination. The Future of Flight Aviation Center and the associated Boeing factory tour attract 350,000 people a year. The Museum of Flight Restoration Center and Reserve Collection also call the airport home, along with Paul Allen’s Flying Heritage Collection. Two community colleges operate facilities there, training students for jobs in aviation.

The question that’s still hard to answer is how Paine Field can grow fast enough to help shoulder part of Sea-Tac’s increasing load. “As part of our master planning, we have always recognized the region is going to eventually need a reliever airport,” says Sea-Tac spokesman Perry Cooper. But 24 flights a day at Paine won’t do much to relieve congestion at Sea-Tac, which currently averages more than 1,000 flights a day.

One pressing issue is the real challenge faced by the Port of Seattle at Sea-Tac. If it stumbles even slightly in its plan to enlarge the airport, the resulting bottleneck would affect the region’s economic growth and send business elsewhere. 

Another major regional airport would provide the answer. In 1936, Paine Field was envisioned as a “super airport” serving the region. It now seems as if fulfilling that vision is the only practical alternative to serving the area’s growing transportation needs.

Who Was 'Top' Paine?
Paine Field is named for Topliff O. “Top” Paine, who was born in Ohio in 1893 and moved with his family to Everett in 1903. A graduate of Everett High School and the University of Washington, Paine was a ranger with the U.S. Forest Service when he joined the Army in 1917 upon the United States’ entry into World War I. He was commissioned a second lieutenant in 1918 after completing flight school. He was discharged in 1919 and became a commercial pilot in California and Mexico. In 1920, he joined the Post Office Department’s new Air Mail Service, becoming one of the top pilots in its Western Division. He died in 1922 when his revolver accidentally discharged. The Earl Faulkner Post of the American Legion suggested Snohomish County Airport be named in Paine’s honor in April 1941.