Snohomish County on the Rise

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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.

The 2016 Washington Manufacturing Awards: Legacy Award

The 2016 Washington Manufacturing Awards: Legacy Award

Winner: Belshaw Adamatic Bakery Group
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Legacy Award
Belshaw Adamatic Bakery Group
Auburn › belshaw-adamatic.com
When it’s time to make doughnuts — or loaves of bread, or sheets of rolls — it could well be a Belshaw Adamatic piece of equipment that’s turning out the baked goods. From a 120,000-square-foot plant in Auburn, Belshaw Adamatic produces the ovens, fryers, conveyors and specialty equipment like jelly injectors used by wholesale and retail bakeries.
 
The firm’s two legacy companies — Belshaw started in 1923, Adamatic in 1962 — combined forces in 2007. Italy’s Ali Group North America is the parent.
 
It it takes work to maintain a legacy. A months-long strike in 2013 damaged morale and forced a leadership change. Frank Chandler was named president and CEO of Belshaw Adamatic in September 2013. The company has since strived to mend workplace relationships while also introducing a stream of new products, such as a convection oven, the BX Eco-touch, with energy saving features and steam injection that can be programmed for precise times in baking. The company energetically describes it as “an oven that saves time, reduces errors, makes an awesome product, and is fun to use and depend on every day!”
 
So far, more than 3,000 have been installed in quick-service restaurants, bakeries, cafés and supermarkets in the United States. They are the legacy of Thomas and Walter Belshaw, former builders of marine engines, who began producing patented manual and automated doughnut-making machines in Seattle 90 years ago. They sold thousands worldwide and, today, Belshaw Adamatic is the nation’s largest maker and distributor of doughnut-making equipment.