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State offers session focusing on new tax break - Opportunity Zones

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The state Department of Commerce is convening a day-long session in Seattle next week to help an army of accountants, attorneys, developers, and investment advisors get a better grasp of the unlikely new Federal tax tool that will allow the wealthy to make money while making a difference.

That tool is the Qualified Opportunity Zone provision in the Tax Cuts and Jobs Act of 2017 that will permit those owing capital gains tax to delay, reduce or even totally avoid those taxes by investing in special funds designed to start businesses and provide other steps to help economically distressed communities.

What's referred to as the OZ act wasn't actually contained in the original major rewrite of the tax reform act that was crafted by congressional Republicans and the Trump Administration. Rather it grew out of a measure filed a year earlier called the Investing in Opportunity Act.

Sen. Tim Scott, R-South Carolina, who wrote The 2017 Investing in Opportunity Act measure that was filed and then forgotten in committee, gathered support from moderates of both parties in a true example of working together to revive the bill as an addition to the major tax bill.

Its inclusion in the Tax Act has attracted comments like "for investors who want to make money and make a difference," and "for investors who want to make money and do good in one fell swoop.'

Governors of the 50 states were brought into the implementation of the act by having the opportunity to designate census tracts where various business ventures would be eligible for the OZ benefits, through investment by Qualified Opportunity Funds.

The program pinpointed more than 8,500 eligible census tracks in the U.S., with 139 of them in this state. Most of the tracts where businesses and projects can be located to attract capital are single tracts but in one area in this state, 11 tracts were put together as a unit.

While the IRS must still announce final details, like who can legitimately invest in projects, interested investors and those who would like to attract investors have been poring over details of the legislation.

Sarah Lee, project director in the office of Economic Development and Competitiveness in the State Department of Commerce, who has been closely involved with Washington State's role implementing the act, told me "listening sessions" in Wenatchee, Spokane, Tacoma, and Clallam County led up to the Seattle session next week.

She invited the Federal Reserve Bank of San Francisco to join the Department of Commerce and the National Development Council (NDC) to plan and put on the day-long event at the Bell Harbor Conference Center.

Lt. Gov. Cyrus Habib, who with the state treasurer Duane Davidson and Commerce Director Brian Bonlender took the first pass at the census tracts to include, then forwarded the list Inslee for final determination, will welcome attendees at the Bell Harbor event, in remarks expected to tout the opportunity the act presents.

Chuck Depew, senior director and West Team Leader at the NDC, said: "In the development world, you don't often meet people with high net worth looking to be involved, but that world is now going to change."

Depew provides technical assistance in project finance, development negotiation and housing finance to communities throughout the Northwest, including Utah and Wyoming and Northern California, for the NDC, which for more than 30 years has worked with local jurisdictions on multiple housing and economic development efforts.

The challenge in the program is how can Opportunity-Zone communities, rural, urban and tribal, encourage mission-driven investors, including private, community and family foundations and social impact investors to be involved.

After Washington Gov. Jay Inslee made it clear to OZ planners in this state that the native-American tribes had to benefit from the program, five tribes participated with six communities in creating an 11-tract zone on the North Olympic Peninsula.

The tribes, along with the key communities in Clallam and Jefferson counties and two port districts, have invited the public to participate and make suggestions for projects that will address economically distressed areas in the two counties in what they have dubbed the Emerald Coast Opportunity Zone.

The project to create the Emerald Coast Opportunity Zone (ECOZ) will be on display at the Bell Harbor event next week and Lee said there is already interest from the Colville Confederates Tribe in Central Washington in looking into the planning that led to the ECOZ.

The Bell Harbor gathering will feature panels of philanthropists, social impact investors, banks and lending entities as well as what is being called a "pitch fest" at which individual entrepreneurs and project innovators will have a chance to "sell" individual projects to the attendees.

Advance billing for the event suggests that Participants "will have the opportunity to work together to engage, inform, and influence key projects in shaping the future of Washington State through investing in local communities with thoughtful leadership and empowering innovative projects.

U.S. investors currently hold an estimated $2.3 trillion in unrealized capital gains on stocks and mutual funds alone-a significant untapped resource for economic development. The QO Zone legislation allows investors to temporarily defer capital gains recognition from the sale of an appreciated asset, but only if they reinvest the gains into a QO Fund.

One analysis of the tax deferral funds suggested: The new QO Funds will "democratize" economic development by allowing a broad array of investors throughout the country to pool resources and mitigate risk. That will increase the scale of investments going to underserved areas and thereby increase the probability of neighborhood turnaround."

It occurred to me that the OZ effort could provide a new recruitment tool for state and local communities since a person owing capital gains can invest those in a qualified census tract in any part of the country.

"While the state hasn't talked about using this for recruitment of companies, it makes perfect sense," Depew said after I told him that officials in Montana told me at an outreach event to Montanans who now live in the Seattle area that they are already seeking to learn how they could make that a state growth strategy.

Thus the logical next step is for states and possibly regions of multiple states, along with businesses and developers, to develop marketing programs to reach out to those seeking to figure out how to invest their capital gains.

The act specifically prohibits any of the approved funds from investing in what the act describes as "sin" businesses, a list that specifically excludes commercial golf courses, country clubs, massage facilities, liquor stores, suntan facilities, and "race track or other facilities used for gambling."

So obviously one business that won't be permitted, particularly where the tribes are involved n an Opportunity Zone, would be a new casino.
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One-time phone company exec recalls two memorable political campaigns

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It was 50 years ago that James Elias, then a local Portland area telephone company manager, suddenly became a political giant killer when he agreed to run the U.S. Senate campaign of a popular Republican legislator and proceeded to guide the defeat of an Oregon icon known as "the tiger of the Senate."

Elias was a 33-year-old Portland district manager for the old Pacific Northwest Bell (PNB) when Robert Packwood, who had been a force in the Oregon legislature since his election in 1962, asked Elias to manage his 1968 campaign, an unlikely quest to topple one of the most respected men in the Senate, Wayne Morse.

Before continuing with the Packwood story, It's important to note the second chapter of this column is the gubernatorial campaign in Washington State four years later when Elias guided the precedent-setting re-election of Republican Dan Evans to a third term.

Ironically, both Evans' opponent in the third-term bid, former Gov. Albert D. Rosellini, and Packwood as a prominent Oregon legislator had served as consultants for Elias in speaking to PNB managers and doing some training about political issues in the two states.

But back to Packwood, whom Elias recalls wasn't even mentioned by name at first in the state's major newspaper, The Oregonian, which merely referred to him as "Morse foe."

After all, Morse was one of only two Senators who voted against the Gulf of Tonkin resolution that basically gave President Lyndon Johnson carte blanche to pursue the Vietnam War any way he wished, without again having to ask Congress. And Morse had remained one of the Senate's most vocal critics of the war.

But he had made enemies over time because of his switch of parties from Democrat, as which he was originally elected, to Independent, for which he proudly claimed for himself the role of the Senate's one-man Independent Party, and eventually to Democrat.

And in facing Packwood, he had an opponent of broad appeal. As Elias recalled: "We had thousands of young people all across the state working for what they viewed as a different sort of candidate, liberal on social and women's issues, although fiscally conservative."

"We put out position papers on any issues anyone could care about, dozens of them," Elias said. "After a while, people couldn't believe anyone was on top of so many issues."

"In the end, The Oregonian did an editorial page column saying, basically, that Packwood seemed to be 'more knowledgeable on more issues than we've ever seen,'" and they began calling him by name. Packwood kept climbing in the polls and eventually won.

Elias recalls that after Packwood's election, the new Senator wanted him to come to Washington as his administrative assistant and when he learned Elias had no interest in going to Washington, D.C., "Packwood wouldn't talk to me for six months."

Taking on the Evans third term campaign brought about one of the all-time strangest political stories when Elias hired a young Ted Bundy, who would later be found to be a serial rapist and killer of young women but was then an intelligent and personable political science student.

"I always hired 'spooks' to hang out with the competing campaign," Elias explained. "They'd pick up things the candidate said more candidly with those close to him, then I could use that information to frame questions comparing private comments with what they were saying in public."

"So Bundy was our 'spook' in the '72 campaign. He was a smart kid and I sent him to hang out in Rosellini's campaign and Al got accustomed to talking with Ted and eventually had Bundy ride along with him and talk," Elias said with a chuckle.

Elias' wife, Ann, a partner in any campaign he was involved with, did the polling research and determined that Rosellini was ahead in the polls and continued so until the two candidates debated.

"As the debate ended, the floor was opened for questions and answers and I had our people, with their prepared questions, hurry to the mike and they were the first dozen people to ask questions," Elias said. "One of them was Bundy and when Rosellini realized the kid he had trusted was actually in the Evans camp, he could only stammer and his jaw clicked in the classic 'Rosellini is upset' reaction."

It was then that Rosellini mouthed his "Danny Boy" reaction to Evans that observers said turned the campaign. Ann's polling showed that Evans climbed from that time on and he won a third term.
 
Jim and Ann Elias were stunned, as were all those who knew Bundy, when he was jailed three years later in Utah as his string of murders of young women began to unfold. 

Elias shared that Ann, his wife of 52 years, played key roles in both the Packwood and Evans campaigns.

"For Packwood, Ann managed all of the county chairmen statewide as well as all who volunteered to work in the headquarters," he said. "After Packwood was elected, he got her appointed to manage the largest 1960 census district in the country."

 "For Evans' campaign, Ann was responsible for the polling. She drew the sample of voters to interview, constructed the questionnaires and supervised the people conducting the research," Elias said.
 
Packwood served four terms in the Senate and was always in the forefront of women's issues, including being an early and ardent advocate for abortion rights and a strong supporter of the Roe vs. Wade decision of 1973.
 
 Thus it was a stunning fall from grace when the Washington Post, in 1992, published a series of articles chronicling accusations of sexual harassment against Packwood, who fought the charges. but more women came forward to make the same claims. After three years of controversy, the Senate Ethics Committee recommended his expulsion and Packwood resigned from the Senate on October 1, 1995.
 
Elias returned to his Northwest management role with the phone company, turning down opportunities to go to New York and Washington, D.C.,(again) but by the early '80s he became part of a new challenge, the breakup of AT&T and the spinoff of the local phone companies that became known as " Baby Bells."

He recalled skiing in Sun Valley when he was notified that "Mr. Smith (Andy Smith, PNB president) was sending a plane to pick him up to return to Seattle.

"Divestiture had been ordered by the Federal Court and Smith wanted Elias to handle the public relations challenge of convincing the public that "just because we were being spun out from AT&T didn't mean we were now adrift in relating to our customers."

But as AT&T sought ways to come back from the breakup, it apparently sought legislation in Congress that might have allowed it swallow its orphaned children.

Elias recalls going to Packwood to get him to kill the legislation, which he did, getting back to Elias with a comment he well remembers: "You just cut the heart out of AT&T."
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Could insider trading issue stir conflict of interest in congressional races?

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The insider-trading quagmire in which New York Congressman Chris Collins finds himself may be occurring at the perfect time, in the midst of an election season, to inject an issue of substance rather than merely another political issue into congressional races around the country. The question is the need for closer scrutiny of personal financial involvements of members of Congress.

BrianBairdBrian BairdCollins' troubles stem from charges by Federal prosecutors that he used his seat on the board of a small Australian drug company to tip off his son and others that the company had failed a critical human trial and that the thousands of dollars of stock they all held would be taking a disastrous hit.

That was the first time I knew, the naïve soul that I must be, that members of Congress could sit on boards of publicly traded companies, thinking it beyond question that someone assumedly serving the best interest of constituents who elected them couldn't also fulfill the fiduciary duties to shareholders that a board member has.

Brian Baird, the former Democratic Congressman from Washington's third district whose major impact was his leadership in achieving legislation that now requires members or Congress to abide by the same investor rules that govern the rest of us, thinks it doesn't even deserve to be elevated to the legitimacy of a question.

"Being a member of Congress is a full-time job," said Baird. "I put in 70 hours a week during my time in Congress and the idea that I could also fulfill a fiduciary obligation to shareholders is preposterous."

Thus the issue that Collins' apparent insider-trading transgressions opens up for injection into congressional races is a close scrutiny of all financial activity by incumbents, not just involvement on boards.

One problem is that while members of the Senate are prohibited from serving on corporate boards, members of the House are not, though they can't be compensated for serving in such roles. But while a member of Congress files a financial disclosure report each year, there's no central database where that information is available.

But Baird thinks there should be, and that it would be well if some government-watchdog organization could digest and disseminate it and thus provide the opportunity to evaluate the financial conflicts of those running for re-election. That could be a welcome factual issue to inject into those campaigns rather than merely political rhetoric. And perhaps it would impact some election outcomes, thus frightening others in Congress to shed inappropriate financial dealings.

It might be uncomfortable for some incumbent Republicans to come down too hard on questionable financial activity, given the track record of many members of the cabinet of President Trump who may have made it appear that unseemly financial activity was a requirement for selection.

But lest that come across as a political comment rather than a journalistic observation, I'll add that Democrats could also have a bit of discomfort if they are too critical of the current environment given that the "Queen of the Questionable" may be House Democratic leader and former House Speaker Nancy Pelosi.  

No one who saw her mishandling a question in the now famous 60 Minutes segment relating to questionable investment activities by members of Congress would possibly argue with that characterization of her relating to at least past financial involvements.

Baird spent half of his 12 years in Congress in a frustrated, and futile, effort to gather support for his legislation to make it illegal for lawmakers to engage in the kind of financial transactions that those in the real world know as Insider Trading and for which ordinary people can be sent to jail. Baird and one or two supporters offered it each session but couldn't even get a committee hearing.

Then came the 60 Minutes piece by CBS reporter Steve Croft, which amounted to merely highlighting the replies of then-House Speaker John Boehner and former Speaker Pelosi to his unexpected questions about their stock transactions. Boehner merely like someone hiding from the truth but Pelosi looked, like someone simply incompetent, stuttering ..."I don't understand your question. Um, You aren't suggesting I'd ever do anything that wasn't in the best interest of my constituents...?"

Croft's reporting exposed how members of Congress and their staff traded stocks based on nonpublic information to which they had exclusive access, the very issue Baird's ignored legislation was designed to address.

The news program sparked a public outcry and lawmakers by the dozens scurried like frightened rats to get aboard as supporters of the bill amid the public outcry, and so in April of 2012, the measure titled the STOCK Act (Stop Trading on Congressional Knowledge) was passed.

Despite the passage of the legislation he pushed, Baird said in an interview last weekend: "The whole issue of conflict of interest in Congress is something they have never addressed."

"I'd love to see a study about how often members or Congress excuse themselves from voting on something because of conflict of interest," he added.

And wouldn't it be heartening if the media focus on Collins' legal challenges over his financial activities led to the kind of public outcry, particularly during an election campaign, that could stir a congressional rush to get on board a reform effort as happened with the rush to pass the STOCK Act.

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Bellevue company gets rare patent win - suit against tech giants gets agency okay

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A small Bellevue-headquartered technology company has won a landmark ruling from a controversial patent-appeals board that executives and key shareholders of the little company suggest could lead to multi-billion-dollar patent-infringement settlements with some of the nation's largest tech companies.

David vs. Goliath is an overdone metaphor. But in the case of Voip-Pal.com Inc. (Voip-Pal), which has a suite of patents on technologies dealing with what are known as Voice Over Internet Protocol (VoIP) and that have been the focus of its legal battles with the likes of Apple, AT&T, Verizon and now Amazon, it may be an understated metaphor, particularly since there are multiple Goliaths.

Amazon is the latest tech goliath to be sued by Voip-Pal. The small company contends, in its June 15 suit filed in U.S. District Court in Nevada, that Amazon's Alexa calling and messaging services uses Voip-Pal's patented technologies to direct voice and video calls and messages.

The stage was set for the suit against Amazon, following suits against Verizon, AT&T and Twitter, by a decision from what's known as the Patent Trial and Appeal Board (PTAB), which unexpectedly tossed out the combined effort by Apple, AT&T and Verizon to have all or parts of Voip-Pal's patents ruled invalid.

Voip-Pal has now filed $9.7 billion in lawsuits against the major companies mentioned above. And about 60 companies have received "introduction letters" advising them of the VOIP patents and that the companies might be infringing on those patents, more suits are possible. However, execs say they expect that many of those companies will merely decide to license Viop-Pal products rather than face suits, given the PTAB decision.

In fact, according to Voip-Pal president Dennis Chang, "we could make an enormous amount of revenue just licensing our patents since people have been infringing for years." Chang, who joined the company in 2009, helped guide the 2013 share-purchase acquisition of Digifonica, a small private company that built the portfolio of patents now owned by Voip-Pal.

If Voip-Pal's developments were a work of fiction, it would contain most of the dramatic elements, ranging from tension and contrast to conflict, mood and symbolism, necessary to make it a spellbinder attracting substantial interest.  

But the fact that the company is real rather than fictional sets up a different set of dramatic elements of which it is playing a part, all relating to the 2011 America Invents Act that spawned the PTAB. Those elements range from unrest in the investor and entrepreneurial communities to criticism from courts all the way up to the Supreme Court as well as potential Congressional action to change the federal Act.  

And with the proposal now gathering support in Congress that would restore health to what many are referring to as "America's crippled patent system," Voip-Pal could become the leading edge of small-companies' pushback against the perceived inequities in the current "unintended consequences" of a 2011 law.  

I first learned of Voip-Pal and its unprecedented string of patent-infringement suits from Sandy Wheeler, a significant shareholder who was co-founder and key executive of fitness-equipment manufacturer Bowflex that, through acquisition of other fitness companies, became the Nautilus Group Inc.

Wheeler, an Ellensburg resident who was key in building the Bowflex brand into the second most recognized name in the world of fitness equipment. He has since founded several other companies in addition to becoming a significant Voip-Pal shareholder.

Wheeler, a longtime friend, is not a rookie when it comes to patent-infringement legal actions since four years ago he was involved with a case that went all the way to the U.S. Supreme Court, which ruled in favor of Nautilus.

After Wheeler alerted me to the Voip-Pal story, I was intrigued, as I searched for any stories about the company or its various suits against the giants of the tech and telecom industries, that I could find little in the way of coverage and certainly not in major media. That despite the fact that the company's website is rich with news releases, video interviews and YouTube pieces and other efforts to attract coverage.

Voip-Pal stock is traded Over the Counter as VPLM, last traded at .07 and over the past 52 weeks, the stock has ranged from a penny a share to 45 cents, with the high occurring late last year after the PTAB ruling. The company has a market cap of about $125 million but that obviously ebbs and flows with the stock price.  

The Voip-Pal effort to stir greater attention clearly relates to the desire by key shareholders to see the stock begin to reflect what they view as its "true value," as the suits move toward the expected outcomes.  

Emil Malak, Voip-Pal CEO, said in a telephone interview that "given the strength of the patents, and the decision of the of PTAB, I fully expect that the infringing entities will either license or acquire the Voip-Pal technology, bringing major returns to our shareholders."

Malak, a Vancouver, B.C., investor and inventor, and other company executives feel that the PTAB decision means the major tech companies may decide that it is more logical financially to pay the licensing fees to Voip-Pal rather than face the treble damages that would be an option for the company if the infringements continue.

"After the years of developing and testing, and obtaining the related patents, Voip-Pal is ready to license or offer for sale its patented technologies," said Malak.

The three-member PTAB, frequently criticized as a tool of major companies, issued a unanimous 3-0 decision in favor of Voip-Pal's position and thus its patents stay intact, as issued and granted by the U.S. Patent & Trademark Office.

The PTAB, whose image is as a pawn of big companies, made its unexpected decision on behalf of Voip-Pal with the potential consequence of threatening the traditional paternalistic legal interaction that has become the hallmark of patent and trademark infringement actions brought by small patent holders.

Malak, in explaining the suit against Amazon, said: "After investigating Amazon's Alexa platform and Echo line of products, our technical team has concluded that the calling and messaging functions infringe our patents."

"Amazon's foray into communications seems to be part of a larger trend of giant corporations battling for market dominance by offering Internet-based communication products that integrate with traditional telephony networks," said Malak,

The suits all stem from the fact that in 2004, Voip-Pal's now wholly owned Digifonica subsidiary, began developing, inventing and patenting many of what Malak contended are "the same communication methods that are now being employed by today's Internet giants."

It was a revolutionary idea at the time, three years before Steve Jobs unveiled the iPhone, when most people were making calls using landline-based phones or cell phones, with information traveling over phone lines and cellular networks.

Malak said in our telephone interview: "We had the vision that within 10 years, the Internet would become the primary means for telecommunications," adding that his team "realized that, in the future, calls, media, and messages would be primarily routed using the Internet, with a seamless transfer to cell phones, landlines, or computers wherever necessary."

"The PTAB is a 'non-appealable' court and Apple knows that and they are not going to get any traction with their request," Wheeler told me. "They simply know that their letter request delays everything...but their days are numbered."

The PTAB itself is an interesting business story that I was surprised to find hadn't received a lot of media attention, despite negative comments by federal courts all the way up to the U.S. Supreme Court, which, in one case, made reference to what it called PTAB "shenanigans" in its legal actions

The PTAB was formed in 2012 to implement the America Invents Act of 2011, a measure passed by Congress and signed by the president that critics have said transitioned the U. S. from a "first to invent" patent system to a system where priority is given to the first inventor to file a patent application, a system that tends to benefit large companies.

Part of the criticism that has been leveled at PTAB is what has been referred to frequently as "systemic problems," such as judges not having to disclose conflicts of interest when sitting to rule on patent-validity issues that could involve companies they previously worked for or in which they have an interest.

But in Voip-Pal's case, PTAB's apparent growing sensitivity about allegations of those systemic problems may have been beneficial to Voip-Pal's victory against Apple since the original three-judge panel appointed for the case was unexpectedly changed to a new trio of judges without any real explanation. Voip-Pal executives say the new panel, appointed from among the more than 100 patent judges that can be tapped for such cases, "gave fair review on all the merits" of the proceedings.

Meanwhile, bi-partisan legislation titled The Stronger Patents Act, which sponsors say would "restore patents as property rights and give startups a better chance to protect their property from entities with much greater resources," is likely to begin making its way through Congress.

Observers say the act, filed in both the House and Senate, is "designed to strengthen the United States' crippled patent system."

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There are still some things left to be said about Seattle's planned head tax

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As reactions to the head tax the Seattle City Council imposed on the city's largest businesses reverberate across the community, there are some realities that both supporters and opponents of the tax either missed or avoided but that may still be considered, particularly with a likely public vote in November looming.

Despite the extensive media and community groups' comments and response to the tax, which is aimed at raising almost $240 million over five years toward dealing with the cost of housing and services for the city's homeless, there were some issues and ideas possibly overlooked amid the heated exchanges between the two sides.

So as friends and associates and readers of the Harp pressed, mostly good-naturedly, with "don't you have any thoughts to share on this issue?" I decided I did.  

One was the ongoing realization during the back-and-forth rhetoric and eventual compromise negotiated by Mayor Jenny Durkan that brought the per-employee tax down to a little over half the $500 per head the City Council wanted to impose, there was no mention of the city income tax now awaiting Supreme Court decision.

So Durkan, who in laughable understatement, said it was "a longshot" as she announced last December that she was going ahead with the appeal of Superior Court Judge John Rule's decision that the tax was illegal, committed the city to pay attorney fees when we now know there are more pressing needs for that money.

Under the tax passed by the City Council last year then ruled illegal by Judge Rule. Seattle residents would pay a 2 percent tax on annual income above $250,000, while married residents who file their taxes jointly would pay it on income above $500,000.

I expected as I listened to the debate, that some business leaders might suggest "we'll accept the head tax if you agree not to pursue the income tax idea." Obviously, many of those business leaders would pay in the tens of thousands of dollars if the income tax were actually imposed. That is if they didn't decide to move from Seattle.  

And as remote as the city's chances of a favorable Supreme Court ruling are in this case, the fact is that at some point a Democratic governor and a legislature that has a sufficient Democrat majority is likely to enact a state income tax. That would likely remove the current legal prohibition against a city imposing an income tax.  

Negotiating an agreement in which the city would agree never to impose both an income tax and a head tax might be a protection against an even more business-challenging future.

But at this point, it's pretty obvious that business and other opponents of the head tax intend to put an initiative on the November ballot to have the electorate decide on the head tax.  

Dozens of businesses, including Amazon, Vulcan, and Starbucks, have already pledged more than $350,000 to a No Tax On Jobs campaign. Intriguingly, those putting up money include prominent Bellevue business leader Robert Wallace, although he has always played a leadership role in the Seattle business community as well.

Meanwhile, Pierce County elected officials have stepped up to announce a sort of reverse head tax. The group, representing a number of cities in the county, said the will be devising a plan to give businesses a $275 tax credit for each family wage job created in the county.

Since the City Council and others are making it clear that the city's ability to find the money to cope with the homeless crisis is a growing challenge, that realization should be accompanied by a commitment not to waste money on other things.

What immediately comes to mind in that money-wasting category is the $250,000-plus the city is paying in legal fees to defend City Council member Kshama Sawant in lawsuits resulting from her intemperate and insulting comments towards those she happens to disagree with.

It's "only" a quarter million dollars. But statistics on costs of providing homeless services would suggest that those attorney fees for Sawant would provide for maybe 25 or 30 homeless peoples' needs, including housing.

How about another initiative that would prohibit the city, which already pays for its own legal department, from hiring outside attorneys when a member of the City Council is sued, particularly when it's within the council members' power to avoid a suit by merely being careful about what comes out of their mouths?  

And when the city wastes millions of dollars on bike-lane overruns and transportation-cost foul-ups, the reaction to the City Council needs to become: "Your ineptitude just left dozens (hundreds) of people on the streets for another year."

When I called a friend of mine this week, he told me as he answered his cell phone that he had been listening to a CD on American history that at that moment was discussing the Stamp Act, which was the final straw for Colonists in their increasingly contentious relations with the King and Great Britain. It led to the revolution.

"Wouldn't it be interesting if the head tax somehow became the today equivalent of the Stamp Act tax in stirring some game-changing response to the city as the equivalent of "the king," he chuckled.

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Special honor for Stanton - guides WA's oldest, largest private bank

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When Washington Trust Chairman and CEO Peter (Pete) F. Stanton was honored last week in Spokane as a laureate of that community's Junior Achievement Business Hall of Fame, it was appropriate recognition for the fourth generation leader of the state oldest and largest privately held commercial bank.

It was appropriate in part because, with the Puget Sound Business Hall of Fame event not held this year, for the first time since it was created in 1987, the Spokane event is the only recognition of lifetime business achievement being held in the state this year.

Stanton was honored, along with Jack Heath, Washington Trust's president and chief operating officer, and local business executives Penn Fix and Debra Shultz of Dodson's Jewelers were also honored as laureates at the Spokane JA organization's 18th annual Hall of Fame.

Natalie Vega O'Neil, President & CEO of Junior Achievement of Washington, attended the Spokane event and got her first taste of Hall of Fame events.

"It was wonderful to witness the Spokane community coming together to celebrate those who have given back so much to the region," she said. 

Stanton has guided the fortunes of Washington Trust since Pere's great-grandfather bought the bank, founded in 1902, in 1919.

Stanton was 34 when in 1990 he assumed the role of president, second youngest bank president ever in Spokane, second only to his father, Philip Stanton, who had become president of the bank in 1962 at age 31.

Pete Stanton has been chairman and CEO since 2000, the year he named Heath president.

In an interview we did a few years ago, Stanton explained the success of his bank during the 2008 to 2011 period when many other banks, including three local competitors, fell into disaster.

"When something has been in your family for four generations, stewardship becomes very important," he said.

"That doesn't mean we spend our time looking in the rearview mirror," Stanton added.
"We're focused on the future, but securing that future has always led us to have concentration limits on our lending."

It was that "limit on concentration" that allowed Washington Trust to avoid the disastrous rush into real estate and construction lending that felled a large number of banks, including three of its locally based competitors, although Stanton's bank found itself eating some bad loans.

Sterling Savings Bank, publicly traded and about twice Washington Trust's size, and American West, about half its size, ran afoul of bad loans and wound up eventually being acquired, though Sterling re-emerged under new leadership and returned to successful operation before being acquired by Umpqua Bank.

During that time of financial trauma for many banks, Stanton's bank went on an acquisition and growth path that brought it to a network of branches spread across three Northwest states. including a large and growing presence in the Puget Sound area.

Stanton suggests that Washington Trust's success is built on what he refers to as "our three pillars of real strength: commercial banking, private banking, and wealth management."

Meanwhile, while there has not been any formal announcement of the fact, the Puget Sound Business Hall of Fame is not being held this year. JA's leadership transition that brought O'Neil aboard and budgetary challenges resulted in the halt to the event created in 1987 by JA and Puget Sound Business Journal.

Because the JA organization has become Junior Achievement of Washington, its statewide role has meant that business leaders from across the state need to be considered for inclusion on the Puget Sound Business Hall of Fame. Thus far only Leroy Nosbaum, the CEO of Itron, was a Spokane business leader inducted as laureate.

And that statewide role now has prompted discussion, particularly among members of the laureate selection committee, that the Hall of Fame event, if and when it re-emerges, should be rebranded as the Washington State Business Hall of Fame.

O'Neil has indicated the array of events that JA puts on each year will be evaluated over the next few months, presumably to determine which will continue.

But she did announce that a new Puget Sound Business Hall of fame display will be unveiled soon at the World Trade Center in Seattle.

As co-founder of the event, with JA, 31 years ago and part of the selection committee since then, I've been on hand each year as the business community leadership has looked on while a new class of their most admired and successful predecessors was welcomed to the laureate ranks. Thus it's difficult for me to imagine that there won't be a 2019 JA Hall of Fame banquet.

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Bastyr, Founding First President Marks 40 Years of Naturopathic Impact

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As Bastyr University celebrates its 40thanniversary and gives special recognition to the man who founded the naturopathic school and served as its president for 22 years, there will undoubtedly by some reflection on the decades-long struggle by naturopaths for recognition and acceptance by conventional medicine.

But the growing awareness of the importance of holistic healthcare, and the expectations a more health-savvy populous has come to have, and will more so in the future, accelerate the demand for integrative medicine, a phrase that means the convergence of conventional and alternative medicines.

In addition to celebrating its founding and its founder at the May 10 luncheon at the Fairmont Hotel in downtown Seattle, Bastyr will be introducing its new president, Harlan Patterson, who was chosen by the Bastyr Board of Trustees last month to guide the school after the six-year board member stepped in as interim president last July.

Dr Joseph PizzornoDr.Joseph PizzornoPatterson brings a mainstream higher-ed background to his new role, having been Vice-Chancellor for Finance and Administration at UW Tacoma, and former Executive Director of the Washington Vaccine Alliance.

Back in 1978, with Portland-based National College of Naturopathic Medicine (NCNM) deciding to close its Seattle branch and the legislature considering the elimination of the naturopathic license, Dr. Joseph Pizzorno Jr. and two other naturopathic physicians viewed the challenges to their profession as an opportunity.

Thus the three, Drs. Lee Griffith and William Mitchell Jr. and Pizzorno, all graduates of NCNM, moved to create a new naturopathic school in Seattle, a step that not only protected the licensure in Washington State but opened doors in the naturopathic field by building the school's curriculum on a science-based foundation.

Much has happened with Bastyr as it has grown in impact on the 51-acre wooded campus on the Eastside to which Pizzorno moved the school in the mid-90s, including the launch by now-retired president Dan Church in 2012 of Bastyr's San Diego campus, making it the only naturopathic college in the State of California.

Pizzorno, during his tenure, guided Bastyr to become the first accredited university of natural medicine and the first center for alternative medicine research funded by the National Institutes of Health's Office of Alternative Medicine.

The challenge of acceptance by conventional medicine that naturopaths still often face is pointed up by the absurd encyclopedic entries by Wikipedia, entries on naturopathy. Bastyr and Pizzorno that contain not information but tasteless and ridiculous putdown. Phrases like "pseudoscience and quackery" for Bastyr and, describing Pizzorno, one of the nation's most recognized and respected naturopaths, as "promoting dangerous and ineffective treatments."

Such intentional inaccuracies apparently aren't surprising to that who note that Wikipedia not only accepts but solicits large donations from organizations or individuals who may wish to have specific entries written to their liking and approval.

"Looks like the 'Quack Busters' got to write up the Bastyr Wiki," Pizzorno told me with a chuckle. "Those of us who are advancing this medicine use the number of times they go after us as a measure of success."

"There is a small posse (some NDs suggest "army" rather than "posse") of traditionalist doctors fighting the relentless march of alternative medicine into the mainstream," he added.

Pizzorno, honored numerous times over the years, travels worldwide, consulting, lecturing and promoting science-based natural medicine and collaborative health care and is obviously quick to do pushback of those who denigrate or fail to understand his approach to healthcare.

Thus he is unabashed in his summary of the struggles of naturopathic medicine, summing it up as: "The big challenge is that natural medicine and our foundational concepts have been actively suppressed by the vested conventional medicine interests for over a century. This has meant that the social and fiscal standing of NDs has always been under attack and patient access impaired through discriminatory licensing laws and blocking insurance reimbursement."

With respect to insurance coverage, former Washington State Insurance Commissioner Deborah Senn told me that while the number of states requiring insurance coverage for alternative medicine is growing, implementation and policing remains in the hands of the State Insurance Commissioner. 

After Washington lawmakers passed a law requiring insurance coverage, insurance companies went to court to challenge the requirement and Senn, an attorney and supporter of naturopathy, went to the 9thCircuit Court to uphold the law.

An increasing awareness of the importance of diet, exercise, and lifestyle on health has drawn a growing number of people, and not just millennials, to alternatives to conventional medicine and its practitioners. And for many, the search for alternatives leads to naturopathic medicine.

It was as I pursued all my options in deciding how to deal with my prostate cancer in 2011 that I visited a naturopathic physician, Dr. Eric Yarnell, on the Bastyr faculty, and learned of artemisinin, an extract derived from an ancient Chinese herb.

I had known a little about alternative medicine, but learning of artemisinin and the fact that it was being viewed as a cancer-fighting agent caused me to want to learn more both about the herb and about Bastyr, even though I finally decided, with advise from Yarnell, interestingly, that I should have a prostatectomy.

I wrote about artemisinin (search Flynn'sHarp: artemisinin) two years ago when the 85-year-old Chinese herbalist who discovered its ability to fight malaria won the Nobel prize for medicine. It's now also being viewed as a possible agent to fight, or possibly prevent, certain cancers, attracting National Institutes of Health and state funding to explore the possibility.

I've grown more focused, in recent years, on seeking the best practices and practitioners from conventional and alternative medicines for my personal healthcare, coming to understand that I make the final decisions on my healthcare and who provides it. But I have maintained a high respect and regard for my MDs, including my long-time internal medicine doc, who knows I tell people she once saved my life, and my prostate surgeon, for whom my respect has become friendship.

In addition, I look forward to regular breakfast or luncheon meetings with a couple of the most respected medical-practice leaders in the region.

But on the alternative-care side, I have an array of healthcare providers, each highly regarded in their specialties, ranging from acupuncture to high-intensity training (search Flynn's Harp: high intensity), to Reike to Feldenkrais, all attracting increasing attention from those growing ever more attuned to health issues ranging from performance enhancement to personal awareness.

I've been intrigued by the number of friends and associates who have come to take a similar approach to their own healthcare.

And in conversations about that fact, there's inevitably been a shared frustration that our conventional docs frequently put down the value of our alternative docs and we wish that they would come to understand the value each brings to healthcare, in other words, integrative medicine.

Perhaps promisingly, conventional medicine has come up with an alternative to alternative medicine. It's called Functional Medicine and some medical doctors are rushing to get certified for the new practice model that actually borrows much from the philosophy and practice of naturopathic practitioners.

Prominent physician and New York Times best-selling author Mark Hyman calls Functional Medicine "the future of conventional medicine, available now." He notes that "it seeks to identify and address the root causes of disease, and views the body as one integrated system, not a collection of independent organs divided up by medical specialties."

But back to old-reliable Wikipedia, which sums up Functional Medicine as a "collection of totally nonsensical gobbledygook."

Intriguingly, Pizzorno has been a leader of the Institute for Functional Medicine since its beginning, serving on the board since the organization was formed, including several years as chair and now as treasurer.

Pizzorno, who also is editor in chief of Integrative Medicine, a Clinician's Journal, has for decades been advancing the healing side of medicine and advancing naturopathic medicine in an array of venues.

Building on its science-based foundation, Bastyr has been the recipient of a number of multimillion-dollar research grants from NIH. 

Grants from the NIH tied to projects involving both conventional healthcare facilities and alternative ones are likely to help move the integrative medicine needle.

An interesting one, the kind that inevitably draws chuckles from some, is a grant that teams Bastyr with UW Medicine and the University of Minnesota in a $2.5 million grant to study the potential impact of Turkey Tail Mushrooms on certain types of cancer, specifically breast cancer but also prostate cancer.

Turkey Tail mushrooms are one of the most researched and highly regarded medicinal mushrooms, with a long history of curative and medicinal use in China and Japan, having a long list of medicinal properties and health benefits. But researchers prize them most as a natural source of the anti-cancer polysaccharide (PSK).

PSK is said to fight cancer and halt tumors by inhibiting the growth of cancer cells and "stimulating a host-mediated response."

One of the best tools naturopaths have toward achieving broad acceptance is the Bastyr grads who have moved into highly prominent positions that demonstrate the effectiveness of integrative medicine, though all also have Ph.D. in addition to ND after their names.

Those include:
  • Heather Greenlee, Director of Integrative Medicine at the Fred Hutchinson Cancer Research Center.
  • Patricia Herman, Senior Behavioral and Social Scientist at the RAND Corporation.
  • Wendy Weber, acting director of the National Center for Complementary and Integrative Health.
  • Laurie Mischley, whose research into Parkinson's Disease, including her exploration of the novel mechanism of introducing glutathione, the brain's primary antioxidant, to the central nervous system for Parkinson's patients, has brought her attention and respect on a global level (Flynn's Harp: Laurie Mischley).

Many NDs, in seeking to establish greater acceptance with a savvier patient population, may play to the growing public realization that quantity and quality can't be effective partners in healthcare, meaning any professional who has quotas for the number of patients can be viewed as challenged to also achieve the highest quality of service.

Pizzorno says he believes that integrative and functional medicine becoming more popular "helps validate NDs. But he adds "NDs must work politically to level the playing field."
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Arizona fatality pushes discussion on autonomous vehicles

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The unfortunate accident in Tempe, AZ, March 18 when an Uber autonomous Volvo SUV struck and killed a woman who was walking a bicycle across a darkened street has stirred a strong reaction, in this state and elsewhere, from both sides in the discussion about the national push toward a likely autonomous-vehicle future.

One the one hand, supporters who have fed the vision of that possible autonomous future point to what some see as Uber's effort to produce an autonomous fleet "on the cheap," employing too few lasers and radar sensors. They argue that the careful use of sensor-device clusters to detect objects in front of and around the autonomous vehicle is a key to the safety of the driverless cars.

On the other side are those who, for a variety of reasons, would love to slow the pace of progress of the autonomous-vehicle movement. Some are obviously concerned about safety, a group more likely to be from the older generation. But others don't want the disruption of existing transportation plans, i.e. progress on rail commute.

More than a few in the Puget Sound area, for example, are fearful that the move to autonomous vehicles could have a negative effect on their "train," the network of commuter rail lines that are part of the $54 billion ST3 transit package approved by the voters in November of 2016 as an environment-protecting alternative to increasing traffic congestion. To many of its apostles, the ST3 project is like the "Holy Rail," not merely a device to slow traffic congestion.

And thus one of the concerns among autonomous vehicle (AV) advocates is that ST3 and the Sound Transit board that oversees it will come to view autonomous vehicles as a threat to completion of the rail-based plan for the region and use its power and influence to delay or stall progress. After all, most predictions about AV's are that they could come to dominate commute-hours traffic even before ST3's projected 2041 completion date.

And in fact, national transportation officials have made it clear that if autonomous vehicles move as rapidly as anticipated toward a ubiquitous presence on streets and highways, there will be an impact on planned and existing rail-transit programs.

But at this point, Gov. Jay Inslee has put the full weight of his office behind an AV future. Inslee not only moved forcefully last summer to seek to put Washington State at the forefront of states welcoming an autonomous future and issued an executive order to allow and support testing of autonomous vehicles but reiterated that commitment last week.

Inslee told leaders of technology and business at the 20th anniversary of the Alliance of Angels investment group that "The future of transportation will be in Seattle," and he elaborated by saying the region is going to be "the autonomous vehicle center of the U.S."

Inslee seemed to be pushing back not only on those seeing the challenge for the future of autonomous travel in the Tempe fatal accident but also on an op-ed piece in that morning's Seattle Times by a think-tank "fellow" named Daniel Malarkey for an organization called Sightline Institute.


In the article, Malarkey referred to the governor's support as "ill-advised" and added, "the state gains little by allowing tech companies to test on public roads and put motorists and pedestrians at risk." He said: "The governor and state legislators should focus on developing policies to enable the rapid scaling of autonomous electric fleets as soon as we know they work."
It's frankly head-scratching to figure how Malarkey's thought process led him to his conclusions about "ill-advised."

And while I'm not a fan of putting down people you disagree with, I think the Times, in providing op-ed space for an individual to share thoughts over multiple newspaper inches, should share the background of the writer to provide reader perspective.

The Times either avoided sharing or lacked the institutional memory, to include that Malarkey's initial claim to fame in Seattle was as finance director of the ill-fated Seattle Monorail Project, from which he resigned in December of 2003 after revenues fell dramatically short of his projections and costs were underestimated. He resigned and the voters in November of 2005 said by a margin of 65 percent to 35 percent that they didn't want the project to continue.

It's from among the investment community that some of the most thoughtful support for an autonomous future for this state comes.

Madrona Venture Group, Seattle's best-recognized venture firm, issued a report last September sharing the prediction that autonomous vehicles won't merely play a major role in the region's transportation future but that AVs would come to dominate travel on I-5 between Seattle and Vancouver.

The report, issued by Madrona's founder and managing director Tom Alberg and Daniel Li, predicts that AV's will first share an HOV lane, then progress to having dedicated lanes and eventually be the sole mode of transportation on I-5 during major commute hours.

It's likely that the first formal program in the state will be in the City of SeaTac, the municipality that includes Seattle-Tacoma International Airport, where the city council will be asked next month to approve a plan that would launch autonomous mini-vans on city streets.
 
The man who conceived the SeaTac program, John Niles is executive director of an organization called Center for Advanced Transportation and Energy Solutions (CATES). He is well known in the region as an opponent of Sound Transit, which he views as spending "vast sums of taxpayer money to make mobility worse," but now he wants to help SeaTac residents gain easy access to nearby light rail stations after 8 AM when the park-and-ride lots have no more spaces.
 
Niles, who helped produce the plan that he hopes the Sea-Tac City Council will endorse, as well as seek federal funding for, may be the most believable autonomous-vehicle proponent when he insists on safety first.
 
As a seven-year-old, he was run down in a crosswalk and almost killed. Thus when he says "slow speed is the way to go right now" with autonomous vehicle projects, he is totally credible.
 
"I'm not interested in testing but in deploying something," says Niles of the Sea-Tac project, which will involve vehicles already tested elsewhere and whose travels around the city will be at relatively slow speeds and constantly monitored in what he says will be "the most cautious first step possible."
 
In fact, Niles shared the conviction that Waymo, the Google autonomous-car development company, also has remote workers watching the on-street operation of its cars.
 
Waymo was spun out of Google's parent company, Alphabet Inc., and claims to have tested its autonomous vehicles in Kirkland, but more prominently in California and most recently in metro Phoenix, Arizona where more than 600 Chrysler Pacifica vans are planned to be operating by year-end in commercial robo-cab service.

One group that might be expected to be in push-back mode over the emergence of AV technology is the insurance industry as possibly expecting to lose business, but PEMCO Insurance President Stan McNaughton says he's hopeful accidents will be reduced by the AV technology.

Meanwhile, McNaughton said the Insurance Institute for Highway Safety, on whose board he sits, "is putting a pile of money into the various systems, with the insurance industry building its own test centers, since at some point we will be rating these systems and we have to have a good understanding of them."

Autonomous-vehicle development has some powerful support in addition to the auto industry and tech companies who would benefit. One is Mothers Against Drunk Drivers, which points to another Arizona accident, this one involving a Google autonomous vehicle, as particularly relevant.

It was an accident in Chandler, AZ, in which a 25-year-old driver was arrested on suspicion of driving under the influence after he ran into the rear of the Google car, whose driver was treated for a concussion.

The national advocacy group said the Chandler accident shows why the group supports the development of autonomous vehicles.
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Shabana Khan shifts focus: Creating a western-tournament squash tour

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Shabana Khan weathered opposition from the U.S. squash establishment when she put on the Men's World Squash Championship for the first time in this country in 2015 in Bellevue. So she knows she will face a perhaps even stronger pushback when she launches West Coast Squash, designed to bring a stronger and more convenient focus on youth squash in the West.

Khan, one-time national women's squash champion and a distant cousin of the most respected squash family in the world, plans to launch her new series of western youth squash tournaments next month.

Shabana Khan and YasmineShabana Khan and YasmineKhan's YSK Events, her company that put on the Men's World Squash event and followed that with creation of a Bellevue stop on the national professional squash tour that is similar to the pro golf tour and an event to showcase the nation's top high school squash players, is becoming a 501c3 to oversee West Coast Squash.

In fact, YSK Events is hosting a US Squash Gold tournament May 18-21 and will have the West Coast College Squash showcase for top student talent that will run concurrently with the pro event.

And she has also made her events an opportunity to showcase the Boys and Girls Club in Bellevue's Hidden Valley. 

But the reality that community and sponsor support has been lacking for Khan, despite the participant enthusiasm and parental involvement, may mean she can't afford to continue either the proof high school showcase events.

That will leave her to focus on the development of West Coast Squash for which she has had interest from teams in Washington, Oregon, California, Nevada, Arizona, Texas, Colorado, Utah and Vancouver, B.C. in hosting tournaments.

 "We see a great opportunity to vastly increase participation numbers across all of these states by creating a program focused on providing a platform that allows them to thrive in Squash and school while not spending a ton of money on travel," Khan said.

Khan says West Coast Squash (WCS) is a competitive Junior Squash series that stresses education, sportsmanship, and competitiveness while offering a tournament structure that provides a limited amount of time away from school and multiple paths towards gaining a WCS ranking. 

"WCS will provide a platform for youth to achieve success in competitive Squash with a path to playing for Squash teams at top colleges around the country," she said.

"Because it is much easier to accrue points and enter large tournaments being located on the East Coast, where most of the tournaments are held, it puts kids who live in the East at a huge advantage to gain points, spend less on travel, and not miss as many school days," she added. 

"On the other hand, a family located on the West Coast is at a large disadvantage due cost of travel and school missed. We believe it is counterproductive for children to tell them that they must do well in school and a sport that requires them to miss multiple school days to play in a high-level tournament," said Khan. 

Squash, which is a racket sport similar to racketball, played by two or four players in a four-walled court (glass walls for most international events that are broadcast globally) using a small, hollow rubber ball. 

Squash for decades was a sport played mostly in New England, New York City and a handful of cities in the West with Seattle in the forefront of those. Squash players and fans represented a highly targeted and sought after demographic of men and women with median incomes of more than $300,000 and an average net worth of nearly $1,500,000.  

But in recent years the U.S. has been one of the three countries in the world where squash has been growing fastest in popularity. And that growth in interest has coincided with a decline in racketball, thus leaving the courts available for squash more numerous at YMCAs and sports clubs.

Khan has bitten off a challenge with West Coast Squash and will need some substantial help in meeting her financial goal.

"The target would be $100,000 to get us going but $500,000 is our ultimate goal to achieve our staffing and to have more clinics and offer scholarships to kids who will need assistance for travel and entry fees for a couple of years," she said.

But she has some innovative ideas, like "naming rights," naming tournaments after families for sponsorship fees, and using technology that would, for example, allow students to use an app to locate tournaments they might like to enter,

Her track record includes not just the men's world event in 2015 and the Bellevue pro and student events but the first-ever-in-the-US Women's World Championship that she and her father, Yusuf, put on in Seattle in 1999. 
   
Her father was nine-time squash champion in India before coming to this country to be head pro at the Seattle Tennis Club, soon thereafter establishing the Seattle Athletic Club and building it into one of the key squash locations in the West.

In fact, YSK Events, which she founded in 2015 to focus on squash events, is a family affair in several ways. She serves as chairman while sister Latasha, who was women's national champion when Shabana defeated her to take the crown, sits on the board.

It's also a family affair in that the "Y" in YSK stands for both her 11-year-old daughter, Yasmine, who was 14th in the country in her age group last year and her father, Yusuf. The "S" and the "K" are her initials.  

A search of the internet for squash and Khan turns up the fact that the list of champions over the decades is replete with those named Khan.

One entry notes: "The great Khans are the kings of squash with all of its greatest champions not only from one nation but from one single family in the nation--the Khans of Pakistan.

"That is where all this crazy stuff comes from for me," Shabana chuckled. "I am not scared of this effort I'm undertaking--well, maybe a little bit--but the family that I come from can't back down very easily."

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The Harp Turns 10! Reflections on a decade of notes on people, politics, and life

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A decade of harping, actually producing a weekly email column under the title "Flynn's Harp" most every week for the past 10 years, is cause for pause and reflection.

For nearly a quarter-century guiding the fortunes of Puget Sound Business Journal, my creative outlet from the business challenges was the weekly column that permitted me to share thoughts on people and issues with PSBJ's readers.

It was the spring of 2008, two years after my retirement from PSBJ, that my friend Pat Scanlon, whom I now refer to as my digital guru because of his background in digital media with national media companies, said to me: "You should have an online column." To that, I replied: "Why?" So he said: "Let me show you what I've put together" and lo, the layout, and format of both email and web versions, missing only a column title, was there on my computer, causing me to muse: "So what would I write about?"

Because it was a general-election year, I had already written a piece reflecting on the 1968 presidential campaign in which I had been fortunate enough, as a young political writer for UPI, to be immersed. The 1968 campaign was one that had high-visibility roles for four people from Washington State and I had put all of that into a piece without knowing where I would try to place the article.

When I began thinking of the "what would I write?" I realized that I could divide that 1968-campaign article into four parts, one for each of the four people I had included as key players in that long-ago campaign. Then, presto, I'd have a month's worth of columns! Then I'd be four weeks on the way to have time to think of a fifth and a sixth column, etc.

Thus then-Gov. Dan Evans, who was 1968 GOP convention keynoter, mountaineer Jim Whittaker, who became like a brother to Sen. Robert Kennedy, Egil (Bud) Krogh, a young Seattle attorney who became a Watergate figure, and author Kitty Kelly, a high school friend, became the first four profiles of the
Harp.

Since we are coming up on what, now that 2018 has dawned, the 50th anniversary of that campaign, detailed 40 years on in a reflective piece in a national magazine in 2008 on Robert Kennedy's quest for the presidency as "the last good campaign," I decided to revisit those four columns in this 10th year of The Harp.

So over the coming weeks, I will be inserting those columns into the flow of
Harps, repeating the recollections from a presidential campaign now half a century removed but one in which all four of those personalities I wrote about remain active today. But I will also during the coming months be reprising other columns that had particular and special meaning to me.

I figured the best way to get the column going as an e-mail offering back in 2008 was to send the first one to about 600 of my closest friends and contacts (some I hadn't touched base with for several years), hoping they would either read it or ignore it but not tag me as SPAM.

Over time, as I've met new people in my "retirement" activities and consulting, I've added another 1,000 names.

So it now goes weekly to about 1,600 recipients whom I describe as business leaders, mostly Washington State but 100 or so in California, Hawaii and a few other states, as well as current and former state and local elected officials, and four college presidents.

Doing the column regularly, with the personal requirement that it be original material, in other words, facts and information not yet brought to the public's awareness has provided a satisfaction.

But even more so have been the responses from many to the emails, some moving, some laudatory, some critical. I have specifically always acknowledged the latter.

I like to tell people the column has resulted in more friendships than I had as PSBJ publisher because then, business people who read my columns and editorials were merely part of a mostly faceless audience of readers. Now the "readers" are those who are kind enough to let me into their email box weekly and most proceed to open long enough to see if that particular one is interesting.

So over the course of 500 columns, I have come to know people and their successes and challenges, and issues that impact them, in ways that would never have been the case except for the column.

I have now become an evangelist for doing email columns, urging my friends and business associates to create columns, advising "not weekly!" and admonishing "if you do it, it needs to be not about yourself or your business but about the knowledge you can impart from your experience."

A couple of friends have taken me up on it, the first being Don Brunell, retired president of the Association of Washington Business, who recalled in an email to me this week the occasion for the launch of his column that now appears in a number of weekly newspapers.

"We were at the Coeur d' Alene Hotel for AWB's Executive Committee retreat and we were having a beer in the lobby bar in 1995, bemoaning how we got our butts kicked by Mike Lowry in 1993. The D's controlled Olympia and Lowry would chastise business:  'you mean to tell me you guys can't afford a latte a day to pay for health care for your workers.'"  

 "We were talking about getting our message out and you said:  'why don't you write a weekly column?'  So I gave it a try. That's now almost 23 years ago."

The other is Al Davis, a friend and former longtime client, who is a founder of Revitalization Partners, a noted Seattle-based business management and advisory firm. Early last year he packaged the columns he and business partner Bill Lawrence have written bi-weekly over the last three years into a book.

When Al and I met for me to get a copy of the book, he told me to open the cover and read what was printed on the facing page. There was a thank you to several people, and to me for convincing him he could write a column!

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Durkan faces decision on tax-ruling appeal that may help define her as mayor

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It's quite likely that Jenny Durkan won't get through her first day of business after she is sworn in tomorrow as Seattle's first woman mayor in more than 90 years before she has to make a decision that could help define how she will be perceived as Seattle's chief executive.

The issue is the ill-framed and now court-rejected Seattle city income tax and whether or not the city will appeal the decision made by King County Superior Court Judge John Ruhl late afternoon of the day before Thanksgiving, giving those involved a long weekend to think about what now with the case.  

And those thinking about "what now" undoubtedly includes Durkan, who has said she favors the income tax but is also on record, the day she announced her candidacy last May, that while she views the state's tax system as too regressive, she doubts that a city income tax is the right solution.  

But that was before the city council that she will have to work with approved the income tax measure in July, enacting a resolution supporters called a "wealth tax," amid cheers from those in attendance of "tax the rich!"  

It was actually referred to as a tax on high incomes, 2 percent of the amount above $200,000 for an individual or $500,000 for those filing jointly. Perhaps spurred by the cheers from the gallery, the amount was boosted to 2.25 percent, a move criticized by opponents as an action driven by little more than a whim.

Judge Ruhl found that the city had no authority under state law to impose the tax, in fact, was in violation of two state statutes, and rejected the city contention that what was called an income tax was actually an excise tax for the privilege of earning a living in Seattle. A cynic might suggest that if you are trying to sell a pig, and call it a stallion, it might bring a better price.

As Ruhl wrote: the City's tax, which is labeled 'Income Tax,' is exactly that. It cannot be restyled as an 'excise tax' on the ... 'privileges' of receiving revenue in Seattle or choosing to live in Seattle."

Within minutes after Judge Ruhl issued his 27-page decision, one viewed as thorough and comprehensive, and well beyond the detail that at least appellant attorneys expected, the office of Seattle City Attorney Pete Holmes said they will be appealing the decision to the state Supreme Court.  

Since there was no instant need for the city attorney's office (there was no indication that the statement came from Holmes rather than from someone in the office late day who was asked by the media, "are you going to appeal?"), it surprised many that there was no indication of intent to consult the soon-to-be mayor.

It may come as a surprise, and irritant, to members of the city council that they have no say in the decision of whether or not to appeal. That decision rests on the mayor and the city attorney, but it's impossible to envision the decision would be made without consultation between the two, and approval from the mayor.

From the time the measure was passed, there was acknowledgement that the goal was to get the issue of an income tax before a state supreme court that, proponents hope, will ignore court rules as well as its own precedents that a net income tax is unconstitutional and quickly seize this case as an opportunity to open the door for a state income tax.

So despite the fact that constitutionality of the city's income tax was not part of Judge Ruhl's deliberations and decision, the forces viewing the income tax as vital to correcting a regressive state tax system are hoping the court will decide the case offers an opportunity too good to pass up, regardless of its rules.

Durkan is universally regarded as a smart and courageous attorney. Deciding what to do about an appeal of Ruhl's decision will give her opportunity to call on both qualities.
The reality is that continuing to needlessly stoke the fuels of anger over economic distinctions that the "tax the rich" mantra has brought is of little long-term value to the city.  

Any law school graduate knows that in Washington State, among many states, a losing party can ask the supreme court to review the lower court decision, but unless some glaring error leaps out, the high court procedure is to tell an appellant "take your issue to the court of appeals."  

So since Durkan is well aware that there is little likelihood the state high court would agree to bypass the state appellate court and grant direct review, she would have to be pandering to the city council's loudest voices to seek supreme court review, at the expense of smoothing over the Seattle political divide. And perhaps enlist a broad coalition in a goal of working to change the state's tax structure, a goal that will require support across the political spectrum.

There is no doubt that Durkan will clash with the council's loudest voices, or more accurately loudest mouth, since Kshama Sawant prides herself on not having any Republican friends and Durkan has friends across the political spectrum, including a brother who is a Republican lobbyist.

Intriguingly, as it relates to any mayoral concern about smooth relations, members of the city council didn't wait for Durkan to shed her "Mayor-Elect" title before they thoughtlessly planned to cut her budget by $1 million, or 17 percent, in their search for dollars after the idea of a business head tax failed.

Fortunately, Mayor Tim Burgess, whose 71 days as interim mayor end when Durkan is sworn in, convinced the council it was unfair to the incoming mayor to cut such a chunk out of her budget, so they decided trim by about $500,000 the amount they were diverting. It's difficult not to be amused by the attack on a part of the mayor's budget given the fact the legislative branch budget is about twice the size of the mayor's but no one suggested that a portion come from both the mayor's and the council's budgets.

Oh, and it's amusing also that the amount being cut from the mayor' budget is about what the city has agreed to spend for legal expenses defending Sawant in suits for defamation over unfortunate outbursts in two separate cases.

But as to the point about Durkan helping define herself in how she decides on seeking a direct appeal, or any appeal on behalf of an obviously illegal Seattle statute.

She is likely to find broad support, including many in the business community who opposed the city tax because it was enacted despite it being obviously illegal, who would join in a legitimate campaign to change what most agree is a regressive state tax system.

But to begin such a broad-support effort she first has to move the City Council away from its goal of punishing the wealthy and instead focus on enlisting all segments of the population in creating a fair state tax structure.

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Autonomous vehicles will drive WA state's future

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There is a growing conviction among influential leaders in Washington state, ranging from the governor through local elected officials and business executives, that autonomous vehicles will play a key role in this state's transportation future.

If 2016 was the year of the train in the Puget Sound area with discussion and debate over the nation's most expensive transit ballot measure ever, the $54 billion ST-3 to build a regional rail infrastructure over the next 25 years, then 2017 could be the year of the first meaningful steps toward a future of reinvented highway vehicles.  

But the first actual, autonomous "wheels on the road" project in this state could get underway in early 2018 in the City of SeaTac, the municipality that includes Seattle-Tacoma International Airport.  

But as meaningful steps toward what I'll call - aCars, or even what's being referred to as semi-autonomous vehicles that will have a driver at the ready, begin emerging, proponents will need to develop a plan to deal with the inevitable pushback from the disruptive idea of vehicles without drivers.

Gov. Jay Inslee, whose support will be essential to overcome the objections that emerge, set the stage for a strong focus on autonomous vehicles when he issued an executive order in June to put the state behind autonomous vehicle development efforts, including allowing companies to test drive them on state roads.

A month later his office welcomed the robot vehicle from a Virginia company that was spun out from Virginia Tech after it was safely driven, as a semi-autonomous vehicle, across the country, and through Washington state without incident.

Nothing is as far along in this state as the Virginia company, called Torc Robotics, but a couple of noteworthy efforts are underway that could attract increasing attention, and not just in this state. One is in Bellevue, where a focus on autonomous vans (we can refer to them as A-vans,), paid for without public subsidy, is occurring. The other is in the City of SeaTac, which would be a project logical by the proximity of airport-related businesses and the amount of traffic they and the airport itself generate.

The focus on autonomous multi-passenger vans is the brainchild of Steve Marshall, manager of the City of Bellevue's Transportation Technology Partnership, and Charles Collins, who has been active in exploring transportation and commute issues since his days as the second director of King County Metro in the late 1970s. Collins created the King County vanpool system that has become the most successful in the country.

The transportation experience and expertise of Marshall and Collins have probably put them at the peak of the pyramid from which to envision what lies ahead for autonomous vehicles. And from that perspective, both see a van-focused future of autonomous vehicles

Before taking the Bellevue post on May 1, Marshall was executive director of the Center for Advanced Transportation and Energy Solutions (CATES). He has more than 30 years of experience working on energy and transportation issues, including serving as chief outside legal counsel to Puget Sound Power & Light as a partner at the law firm of Perkins Coie.  

It is CATES, now under the executive leadership of John Niles who replaced Marshall, that is helping guide the City of SeaTac through evaluation of a program employing driverless shuttle mini-buses or vans on City of SeaTac roads, providing supplementary service between Sea-Tac Airport and hotel locations.

Another example of what could emerge City of SeaTac activities would be small, quiet, electric shuttles connecting light rail stations and transit centers with residential neighborhoods.

Niles told me he is putting together recommendations that he calls an Action Plan that, once accepted by the staff of the SeaTac City Council, likely by the end of the year, would be available for review by citizens to make it ready for action by the council, probably in January.  

The effort by the City of SeaTac, which has charted for itself the goal of becoming a Center for Municipal Excellence, has gotten advance approval by both South Transit and Metro.

Approval by the SeaTac council would, as Niles explains it, be "steps on how to proceed on automated first-last mile small vehicle, driver-less automated transit for citizens to use to reach light rail stations, employment sites within City of SeaTac, and community centers and services."

"There will probably be a phase one pilot serving only part of the City," he added. "I am aiming for deployment of proven technology already tested elsewhere and proved to be safe."

In a comment directed at those concerned about driverless vehicles, Niles offered that the way his robotic micro-transit vehicles would work in SeaTac is with a control center keeping an eye out for trouble and dispatching help when needed."

Niles' comment addressed one of the key roadblocks to be overcome by the forces arrayed on behalf of an autonomous future, the concern of many drivers about the pervasive presence of vehicles without a driver. But other hurdles are already emerging in other states, concerns that will play out here, from forces restless about lost jobs like cab or truck drivers, auto repair and service businesses who won't have cars to repair and even insurance companies fearful of providing a product eventually not needed.

Part of the pushback could come from Sound Transit's board which is bound to see the early hints of buyers' remorse on the part of voters who approved ST-3 in King, Pierce, and Snohomish counties last November grow as new unexpected costs emerge while development of the autonomous van fleet takes hold.

By 2022, almost two decades before ST-3's rail network is completed, clues to its obsolescence will be offered as that's the year the first van test for 100 autonomous vehicles is scheduled, likely opening the way for thousands of such vehicles on area highways, without public cost.

And the betting is that those who can summon a van to take them where they want to go for a small fee will likely not opt to queue up for a train, thus further diminishing the modest passenger-use expectations of Sound Transit.

Those whose reaction to ST-3 was a "how can they vote for this? Do they really think it's required of those who care about the environment to vote to create a network of trains?" may well react with amusement to the cost of ST-3 beyond just dollars becomes clear.

The fact that was never shared with voters but will be shared as the reality sets in is that the greenhouse gas generated over the years of construction will never be paid back by people riding a train rather than driving or being conveyed in a vehicle.

An intriguing development for emerging use of autonomous vehicles is the fact that Kemper Freeman's Kemper Development Co. and its Bellevue Square expects to begin next year offering customers, many assumedly loaded with purchases, an autonomous-vehicle ride back to their cars parked on site.

Marshall offers a whimsical view of past as prologue to public acceptance of autonomous travel. One is the case of his grandfather who, after working his Palouse fields on horseback all day, tied the reins to the saddle horn and slumped over to sleep on the way home, confident his horse could "drive" itself back to the barn.

Plus he offers the example of elevators. When the years of people greeting the operator as they entered for the ride up began to give way to elevators without operators, there were some passengers who fought off discomfort. Then automatic elevators became universal, to the point when, if a person is operating it, some people may wonder "is something wrong with this elevator?"

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NOT 'some white dude' - The New Face of Biotech in Washington

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As M3 Biotechnology Inc. launches clinical trials on its therapy for Alzheimer's that is expected to halt the progression of, or even reverse, the disease, it's a satisfying development for those who have been believers in the role of the company and its CEO at the leading edge of the new field of regenerative medicine.

So when Melinda Gates lamented, before a large audience of women in computing, that the technology industry was dominated by a "sea of white dudes," one group who heard the message could be forgiven if its members, mostly men but including a couple of talented women, shared a knowing smile.  

Leen KawasLeen KawasThey knew that, despite the general accuracy of Melinda Gates comments, the CEO who has become the face of biotech in this state and even beyond is a 32-year-old woman from Jordan named Leen Kawas.  

And although several members of the group were key women investors guided in part by the fact Kawas is a woman, the male supporters seemed far more focused on their belief in her ability to get the drug to commercialization then concerned about gender.

Thus Kawas was the beneficiary of believers who came to her aid as investors, mentors, and supporters because they were convinced that she had the ability to bring to market a drug that would alter the course of neurodegenerative diseases like Alzheimer's and Parkinson's and perhaps reverse them.

The manner in which Kawas, in just under four years as president and CEO of M3 Biotechnology Inc., took the young company from the lab toward commercialization and has ascended to virtually the top of the visibility pyramid in her industry is storybook material. But it's a satisfying example to many who are convinced that no doors remain closed to those who refuse to accept rejection.

When I first met Kawas in late summer of 2013, she had yet to know anyone in Seattle and was merely the chief scientist for M3, a company still immersed in the labs at Washington State University, where its drug was undergoing animal trials to test its seeming ability to spur cellular regrowth. That fact naturally led to neurological testing since if a drug could regrow cells, its future could be assured and, before long, Kawas had her name on several of the patents for the drug.

And soon she was tapped to be CEO by the two WSU profs who then owned the majority of the company because it was still in their labs. So the second time we visited was soon after that when she was seeking help in meeting people who might invest in a promising young company and its young CEO.  

When she returned to Seattle, she shared that the other 63 were all males and her reaction in discussing that fact in an almost dismissive manner was an early indication of how committed she was to overcome the pushback and discrimination and comfortably stand up to it and seek to change it.

As we began a process over the next several months of meeting those who could either invest or introduce us to investors, I told her, partly to see how she would handle the pressure, that I would get the first meeting for her to make her presentation but it would be in her hands for people to agree to a second meeting with us.

Early on we had a meeting in Orange County, CA, with Richard Sudek, perhaps the most important angel-investment leader in Southern California at the time as chair of the largest angel investment group in the country, the five-county Tech Coast Angels. I was hopeful he would be impressed enough to offer Kawas some advice on raising money.

When she finished her presentation, he said, to my pleasant surprise: "I would be happy to be a business advisor for you."

It was in the fall of 2014 that she had her media debut with an impressive interview with Q13 anchor Marne Hughes in which those watching at the studio said she looked like she had grown up on camera.


What followed were major features in local business publications as well as major visibility in the annual report of Association of Washington Business and Life Science Washington as well as participation in an array of panels on the industry as well as membership on Gov. Jay Inslee's committee on life sciences.
 
By then she had outgrown the need for introductions, except for an occasional desire by a major investor to get a friend into the mix.
 
And some of the funds she corralled told their own story of her growing reputation, as she got two grants from the state's Life Science Discovery Fund totaling $750,000, an impressive $1.7 million from the Alzheimer's Drug Discovery Fund and a half million dollars from the Dolby Family Fund.
 
So now almost exactly four years on, M3 has raised more than $17 million from investors who represent a most impressive array of seasoned leaders, both men, and women, from a mix of the world of life science and enthused investors and some who simply have a commitment to changing the world of degenerative disease. And the company has begun initial human trials from which the future will be shaped.
 
And meanwhile, biotech giants are lurking in the wings to reach out to seek major stakes in the young company at the first sign of success.
 
As an aside, M3 is the first company to emerge from either of the state's research universities to reach clinical trials, a fact viewed by WSU as a major biotech coup.
 
So what stirred the interest of investors?

As Biotech icon Bruce Montgomery replied when I asked him why he had become a supporter of Kawas' and a key investor in M3 and a board member, he replied: "It frankly didn't occur to me to dwell on whether she was female or non-caucasian. I understood the science of what she was hoping to achieve and felt she had the ability to achieve it."

It was a sentiment echoed by investor and M3 board, chair John Fluke, no stranger to investing in startup entrepreneurs.
 
Jim Warjone, now retired from his roles as chairman and CEO of Port Blakely Companies, told me some months after deciding to invest, following one of what I refer to as an array of examples of fate helping guide Kawas on her road to success, "She's the smartest person I have ever met."
 
The touch of fate with Warjone came when Kawas was about to present to a group of which I was a member at Suncadia in August of 2015 and I went out to get some coffee, encountering Warjone, whom I hadn't seen in several years, in the lobby of the resort.
 
"What are you doing here?" he asked and when I told him, he asked if he could sit in, which he did, so he was among the half-dozen who heard her presentation, and was one of the two who decided to invest.
 
Michael Nassirian, longtime Microsoft top executive, who watched his father, a business executive in Persia, wither mentally and die of Alzheimer's, told me his goal was to do something "to change the magnitude of that disease. And when I heard Leen present and went to the M3 site and studied their successful step, I believed she and her company could provide a solution to Alzheimer's."
 
As to the women investors, who make no apologies for their financial support of Kawas because she is a female as well as talented CEO, I have found each to be amazing talents attracted to invest in the CEO and becoming her friend.
 
I asked Amber Caska, who has guided family funds for Paul Allen's Vulcan and Alphabet chair Eric Schmidt and is now president and chief operating officer of women-entrepreneur focused Portfolia in the Bay Area, why she had invested in M3.
 
"When I met her at a JPM Morgan Bio Conference dinner, I did further diligence and figured that not only was she extremely intelligent and driven, M3 was a compelling investment opportunity and backed by a very reputable science team and board. I knew that M3 was onto something incredible and I wanted to support her along the way."
 
Carol Criner, who has served as CEO and turnaround executive at an array of companies in various industries, was the second person I introduced Kawas to. When I asked her about her decision to invest, she said:
 
"I was more personally invested in supporting her as a young, female CEO.  I became a business advisor to Leen, both because of your encouragement, and that I was fueled by wanting to see Leen succeed.," Criner said.
 
"Now that she is a celebrity CEO, it's hard to imagine this all began a few short years ago," said Criner. "I witnessed her face the headwinds of giant egos and sexism with resilience. She never gave-up. Her success largely silenced a lot of vocal-doubters. I love it.  She's amazing and strong."
 
 In discussing her much smaller sector of the burgeoning tech industry in the Puget Sound area, I once overheard her compelling reply to a young entrepreneur quizzing her on why it was necessary to distinguish high tech from biotech sectors, as long as tech jobs were coming to the area in large numbers.
 
"Technology is the field that will help us build new devices to be held in the hand. Biotech will help us build a new hand," she replied. "Which would you prefer to be part of helping develop as an industry?"
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Possible Seattle bid for Amazon 2nd HQ stirs some thoughts

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UPDATE: (Bellevue is planning to submit a bid to earn the role of Amazon’s HQ2, setting the stage for the possibility that the separate but equal headquarters that Amazon said lies ahead could find executives merely going back and forth across Lake Washington rather than flying cross country. Bellevue councilmember Kevin Wallace requested that the city work on a formal proposal to attract Amazon. Other councilmembers agreed that Bellevue’s business environment, ongoing infrastructure improvements and skilled workforce, make it a viable contender. Staff will return with an update on the process in the coming weeks. Responses to Amazon’s RFP are due by Oct. 19.)

Amazon's announcement that it is planning a separate but equal second headquarters has drawn enough comment, and criticism from some expected sources, that it's difficult to find an aspect that hasn't been explored or discussed. But the decision that Seattle should go after that second-city prize provides a new opportunity for thought, and perhaps some amusement.

It's interesting, and maybe amusing, to take a close look at the idea from Bruce Harrell, Seattle City Council member and five-day mayor, that Seattle should seek to persuade Amazon to put the projected 50,000 employees that the electronic commerce and cloud computing giant says will work at HQ2 here in Seattle, along with HQ1.

"Quite candidly, if there are to be an additional 50,000 jobs, they should be for our residents," said Harrell, who briefly replaced Ed Murray after his resignation in the face of multiple child sex abuse claims. Harrell said he was directing staff to "examine the city's business retention strategy and make sure employees are considered."

First thought: does Seattle really want to solidify its growing image as "the biggest company town in America" with up to another 50,000 Amazon employees?
Second: does anyone in political leadership in Seattle recall that the city's role is as a "super-regional city" with the good of the region for which it is center meant to be a part of political considerations, not merely the good of the 600,000-plus who live within its boundaries?  

And for amusement, if Seattle actually produces a plan to be headquarters city 2, might anti-business council member Kshama Sawant be willing to be part of the group of elected officials that would present the plan personally to Bezos and his executive team, letting them know the city care about their needs? 

But her presence might remind the Amazon execs of what some have suggested as one of the reasons for the company's decision to look for a second headquarters city, just in case -- the anti-business attitude of Sawant and he followers in city government. 

If the city has a business-retention strategy, to which Harrell alluded, that would likely come as a surprise to some members of the city council as well as to Murray and his predecessor, Mike McGinn, who was heard to remark to an aide at a business breakfast early in his only term "these are not my people."

It's not known what fate awaits Harrell's executive order directing Seattle's economic development officials to respond to Amazon's request for proposals to be the site for what the company says will be a headquarters that cost $5 billion to build and operate and is expected to generate as many as 50,000 jobs.  

Soon after issuing that order, Harrell stepped aside and turned the job of mayor over to Councilman Tim Burgess, who will serve until Jenny Durkan or Cary Moon is elected in November.

Amazon's stated goal of uncovering a place for a second headquarters, and as many as 100 cities and regions around the country have indicated they will be submitting bids, is expected to inject a surge of money and population into whatever region is ultimately selected.  

The company said it has added $38 billion to Seattle's economy between 2010 and 2016 and boasts approximately 40,000 staffers in more than 8 million square feet of office space.  

With respect to the "one-company town" idea, that's a designation offered recently by one real estate expert who noted that Amazon's footprint in Seattle is estimated at 19 percent of Seattle's downtown prime office space, more than twice as large as any other company in any other big U.S. city.

Of course, Seattle has long been viewed as a one-company town, first with Boeing, whose actual physical presence was dispersed across the Puget Sound area and beyond, then Microsoft, which was actually located in Redmond.

Wouldn't it be an interesting idea if officials of the city that is supposed to understand that it is a "regional city" decided not to try to win the second-headquarters for itself but rather sell Amazon on the concept of keeping that second headquarters within the region, outside of Seattle? 

Thinking only of its residents seems to have become the sole consideration of a city elected leadership whose predecessors seemed to understand that as a super-regional city, the basis of Seattle's economy and political considerations isn't just its 650,000 residents, but the 8 million to 10 million people of the region.

Tacoma hopes to be among the cities that seek to attract Amazon to consider them, and indeed Pierce County has a lot going on that doesn't get much attention from the Seattle area. So far in 2017, the Economic Development Board of Tacoma-Pierce County has conducted 21 site searches for companies looking to relocate to or expand in Tacoma or Pierce County.  

And with respect to Bellevue, which hasn't indicated an intent to bid on any second headquarters, Amazon is already slated to occupy all 345,000 square feet of the new downtown Bellevue Center 425 Schnitzer West office tower when it is completed.    

I asked Bellevue Developer Kemper Freeman Jr. if he'd be interested in attracting Amazon.  

"Love to," he replied, "but we don't have any space right now," referring to the fact his new 400 Lincoln Square Office Tower and its 700,000 square feet of space is now basically all leased.

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Moscow entrepreneur-investor sees Seattle as ideal to find startups

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Natalia Blokhina, who helps guide a Moscow-based fund management company, has learned early in her career as an international investor that business relations almost always overcome politics.

Blokhina smiles as she responds to a question: No, she's never had an entrepreneur in whose start-up business she was offering to invest tell her "we don't want investment from Russia."

Natalia BlokhinaNatalia Blokhina"The more absurd political discussions get, the less business people pay attention to them," observes Blokhina, executive director of one of several fund management companies in the Russian capital.  


The Moscow native found from her 12 years working with British and U.S. companies and in the emerging markets of the BRICS countries in China, India, and Africa that she was "fascinated with all the entrepreneurial opportunities."

So Blokhina, 37, as a millennial entrepreneur with a degree from the TRIUM Global Executive MBA program in her impressive resume, returned home to Moscow in 2015 at a time of financial challenge for Russia "because I wanted to make a difference for my country."

And, she added, you have to "try to listen to what you would love to do."

So, as she told me, she transitioned "from someone who always thought of themselves as a corporate person who works inside the system to one who, having met successful entrepreneurs inside the business schools, thought they wanted to be one of them."

I had not been aware of TRIUM Global Executive MBA program until our conversation.  

The program is an alliance among NYU Stern School of Business, London School of Economics and Political Science, and HEC School of Management in Paris. Those accepted into the program take classes at all three institutions getting, an executive MBA and when finished, they have a global MBA from TRIUM, ranked third in the world in the 2016 Financial Times EMBA rankings and first in the 2014 rankings.  

She got her degree, jointly awarded by the three schools, in 2015 as one of the youngest of the graduates of the program. Now she pursues investment opportunities for her boutique fund management company, one of several in Moscow formed by high-net-worth individuals, bringing with her the contacts with an alum group that is global by definition rather than by chance.

Because of her NYU-alum contacts, she has invested in New York, but she said she has developed a keen interest in investment opportunities in the Pacific Northwest, having found "it is easier to do business with a smaller, more connected community that the Seattle area represents than with Silicon Valley. I didn't expect to find such a vibrant tech community here."

That perception on her part may already be creating a benefit for Seattle among young prospective entrepreneurs and investors in Europe.

"A few companies in Europe that asked me about how they should go about getting into business in the U.S. and said they were thinking about expanding to New York or Silicon Valley, and I told them to look to Seattle," she said.

But she cautions that the search for start-up investment opportunities has potential pitfalls, saying "you need to be able to diagnose the entrepreneur. Do they have what it takes? Are they self-critical enough? Do they want the company to transcend themselves?"

"I work with those for whom the answer is 'yes' to each of those questions," she said. "Work with" includes meeting with the portfolio companies usually monthly and serving on their boards.

Perhaps not surprisingly, Blokhina is a fan of women entrepreneurs, offering "women can be good founders of companies because they are practical and realize needs better and more quickly than men."

"Women have more time to look around and dream," she added. "They want to change things in ways that make things more usable and beautiful."

"But they need to work with men," she added.

Blokhina disclosed that New York alumna of the TRIUM program, with support from the TRIUM Global EMBA, are launching a new competition program for women-guided startups.

"We will engage female leaders from our global network to mentor the startups to prepare for the competition, with our goal being to have the first competition in 2018," she said, explaining that the competition will involve judges choosing the startup that will be awarded a large investment.

The panel of judges will include TRIUM alums, faculty members, and other angels, she said.

They have already begun an effort to attract angel associations and incubators to have roles as funders or sponsors of the competition.


"They seem to appreciate the idea of global diversity of the mentors and women-to-women collaboration," Blokhina said. "And the initiative creates a platform for the angel investors."

As the award and competition to win it take hold, it's quite possible that its international aspect and focus on women entrepreneurs could lead to it acquiring growing prestige among both entrepreneurs and angel investors.

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Fate dealing losing hand to Seattle income tax advocates

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Fate seems to be dealing a losing hand to proponents of a state income tax, given events that have unfolded behind the scenes with the lawsuits filed since the Seattle City Council enacted a tax on higher-income residents as a strategy to reach the State Supreme Court with the issue.

Their best hope now to achieve their goal is to be dealt a joker wild card by those on the other side who have sued to overturn the tax on the statutory grounds that the city violated the 1984 state law that specifically prohibits cities and counties from imposing a net income tax. 

The wild card could be handed to tax advocates because some of those suing the city seem tempted to turn it into a political issue that could be the key to unintentionally attracting the state's highest court.

From the outset of a campaign flatly touted by council members and their cheering supporters as an effort to "tax the rich," the goal of tax advocates has been to get the State Supreme Court to review the 84-year-old decision that a net income tax violates the state constitution.

Whether that campaign can move ahead may well be decided on November 27, the date set yesterday by King County Superior Court Judge John R. Ruhl for him to hear the motions by attorneys representing plaintiffs in three lawsuits filed against the city.

Matched by those whose rhetoric is "we need to tax the greedy rich" is the equally heated commentary of those who oppose any tax and particularly taxes on the wealthy, who feel they are already overtaxed. The anger of the latter was evident in the comment made in private by one of the attorneys that their purpose is to "kill the income tax and drive a stake through its heart so it never comes back alive."

As Matt Davis, attorney for Seattle investment advisor Michael Kunath observed: "What was supposed to be a purely legal exercise has devolved into the latest battlefield in the fight between two groups who have no hesitation about forcing their viewpoints on everyone else."

Kunath's suit was the first of the three and thus was the one assigned Judge Ruhl by lottery and it will be Davis' motion for a summary judgement against the city tax that will be heard on November 17 with the motions by attorneys for The Freedom Foundation and the Opportunity for All Coalition to also be heard then.

The first indication of the unanticipated challenges facing the city came when Kunath's suit, filed minutes after Mayor Ed Murray signed the tax into law following City Council passage, noted that the council fouled up in its maneuver to pass a tax that wouldn't be viewed as violating state law.

The council members passed what they intended to be a tax on gross income rather than net income, but they chose the amount on Line 22 on the federal tax form as the basis for each filer's taxable income and that line is described in various IRS documents as a "net" income tax line, which Davis highlighted in his suit.

The other suits included that point in their briefs against the Seattle City Council for its passage of a tax on individuals with income over $250,000 and joint-filing income of more than $500,000, They all indicate they want Judge Ruhl to merely rule that the city violated state law.

But the attorneys, including two retired State Supreme Court justices, have been told by Judge Ruhl that they must be prepared to argue the constitutionality as well as the statutory issue, although he said at the Wednesday meeting with attorneys that he intends to rule first on the statutory question. 

What that would mean is the issue of whether the income tax violates what's known as the "Uniformity Clause," a constitutional requirement that all property be taxed equally, wouldn't come up if he rules against the city.


Thus the only way the issue of the Uniformity Clause would become part of the case is if he were to find the city income tax was legal. 

Then attorneys for the three suits could use the Uniformity Clause as a backup issue and raise it for a discussion that would reach the high court.

The sense of those who want a state income tax is that a dramatically more liberal high court than the 1933 court that ruled that income was property and thus required to be taxed equally would throw out its own rules and reverse that decision, opting to throw out its own rules and eight decades of decisions by the high court supporting the 1933 decision.

The random selection of Ruhl to preside over the superior court deliberations on the case also has to be viewed as less than ideal for the city since he is considered by attorneys in this case as the best judge for them because his qualifications make it less likely he would be influenced by the political rhetoric surrounding this case. He is rated as "exceptionally well qualified" by various organizations, including the King County Bar Association.

Finally, Ruhl's decision to separate the statutory question of whether the city broke state law from the constitutional issue will make it more difficult for Seattle to get before the Supreme Court with the constitutional question.

 "Uniformity" in this case means the city's imposition of no tax on income under $250,000 and 2.25 percent for income above that.

The concern of those who fear that it's risky to turn this into a political issue rather than a statutory one are concerned about statements like that from Matt McIlwain of Madrona Venture Partners that "In defeating the city income tax, we can help maintain a system of opportunity and job creation for innovators and workers."

In addition, the complaint from the Opportunity for All Coalition of which McIlwain is a spokesman goes to great length in its suit to provide anecdotes of people being taxed on selling their homes or their businesses who are not wealthy but merely average Seattle citizens who will be injured by the tax.

Those are all political considerations.

Davis' motion makes clear at the outset that he and Kunath don't view this as a political issue but a simple statutory question. The other suits appear tempted to want to make political statements with their suits.

A long line of decisions in the decades since that 1933 decision that income is property and thus a tax on it must thus meet the constitutional requirement that property has to be taxed equally have cited that decision to reverse ideas like calling an income tax an excise tax or imposing an income tax on real estate transactions. 

And confronting those who hope the court will merely overturn that decision is the rule known as Constitutional avoidance, which says the court must make every effort to avoid interpreting the Constitution if it can deal with the statutes. But in the end, the high court can do whatever it wants.

The concern of those who don't want to tempt a Supreme Court likely to be sensitive to the views of those who want to repair an admittedly regressive tax structure with an income tax know the court will be searching for any argument that opens the door to consider the merits and wisdom of the tax.

Anyone who argues that the tax is unfair, unneeded or unreasonable is handing the Supreme Court exactly what it needs. And should the Supreme Court take up the issue and decide in favor of income-tax advocates, it's a good bet that soon thereafter, a legislature that now needs only a simple majority and no voter support because of Supreme Court action to throw out a decades-old precedent, will enact such a tax.

And history will honor or revile, depending on which segment of the population we are looking at, the organization or individual who made that come about.
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National squash event in Bellevue drew world's best

National squash event in Bellevue drew world's best

Bellevue's role as a growing center for the sport of squash was enhanced last weekend as the quest of the best players in the world for a share of the most lucrative 16-man squash tournament purse ever had the attention of the squash-world, but with unfortunately little local attention or support.

Frenchman Gregory Gaultier, currently World Number 1 in the sport, won the title and accompanying $25,000, defeating Egyptian Ali Farag in a tournament that added to the image of Shabana Khan as one of the sport's emerging star promoters. Her YSK Events put on the tournament.Shabana Khan

With $150,000 in prize money on the table, the PMI Bellevue Squash Classic was appropriately staged as a sort of coming-out party for the Boys & Girls Club Hidden Valley Field House just north of Downtown Bellevue.

When she put on the Men's World Squash Championship in late 2015, first time ever for the event on U.S. soil, Shabana charted new territory for prize money, which totaled $325,000 for the event that was held at Bellevue's Meydenbauer Center. That amount became the threshold going forward with the U.S. Open in Philadelphia next fall boasting a $350,000 purse.

I was struck by the fact that when you watch the speed, agility and athleticism of the top squash ccompetitor and reflect on the comparative talents needed for other racket sports, it's hard not to ask "why is tennis played everywhere and squash isn't?"

I posed that question to Shabana's older brother, Azam, four times a member of the U.S. Open team, and he said: "Tennis courts are everywhere and available to all while squash courts are in clubs and available only to the elite, but we intend to change that and it's one of Shabana's goals."

In fact, statistics on the sport indicate it is growing faster in this country than anywhere in the world, with the U.K. and Egypt following close behind.

For those on hand for the 2015 Men's World Championships, there was a bit of déjà vu since Gaultier defeated an Egyptian in that year's final to win his first World title after losing the in the final match three previous years.

Only a few in the inner circle of those helping Shabana with the event were aware that had it not been for the assist from Robert Greczanik, whom Asam Khan describes as "specializing in restoring injured athletes to full enhanced function," to help overcome an ankle injury that Gaultier feared would keep him out of the finals.

As an aside, Gaultier had turned to Greczanik, who runs Energetic Sports Lab in Bellevue, prior to the 2015 finals to address the fact he simply felt "all beat up with numerous injuries."

Squash players from around the world who were on hand for both events praised the Boys & Girls Club as far more appealing for players and fans, particularly for the interaction between them, than Meydenbauer, which incidentally had rejected her effort to hold this year's event there, telling her to look elsewhere.

And the community supporters of the Hidden Valley club must have been pleased to see its visibility on the global squash stage with thousands subscribing to the television coverage.

Players from 17 nations were on hand, but Shabana made it 18, using what's called a "wild card" for promoters of squash events, to let a young player from Connecticut compete to make sure the U.S. was represented.

Leading the as-yet small group of believers in what Shabana's squash initiatives are intended to mean for the Bellevue community's image and the opportunity she seeks to bring to the city's and region's young people was Dave Cutler. He is not only universally acclaimed as the key technical brain behind the Microsoft Windows NT and all the subsequent windows versions. A decade ago he was recognized as a National Medal of Technology and Innovation laureate, perhaps the most prestigious honor in the country for developers of new technology.

His support, and the fact that dozens, if not hundreds, of Microsofties who cross the street from the company's Redmond campus to play at the Pro Sports Club where Shabana, Asam and Latasha are instructors helped guide Microsoft into the Presenting sponsorship with Pro Sports as the Official sponsor.

Pacific Market International, a Seattle-based brand and product-marketing company with offices in seven cities around the world, has been a strong supporter of both this five-day event and of the 2015 Men's Championship as title sponsor.

Richard and Jackie Lange, Woodinville residents, stepped up as a family after Shabana created a national tournament for young squash players called the National Gold Tournament that attracted 175 young people from around the country to compete in groups broken down as under 11, 13, 15, 17 and 19. Shabana notes that 20 college coaches looked on for the older players' matches at the event held earlier this spring, also at the Boys & Girls Club.

The Langes, whose daughter, Kristin, played squash at Penn and was a three-time intercollegiate finalist, put up the money for five years of having the youth competition be "The Lange Showcase," sharing Shabana's vision of making squash available to young people of all ages and means.

Khan is the most famous last name in squash. Distant cousins Hasim and his son Sharif, and cousin Jahangir, dominated world squash for decades. 

Yusuf Khan 10-time all-India champion, emigrated to the U.S. in 1968 to teach tennis at the Seattle Tennis Club, bringing with him his family that then included children Asam and Shabana. Khan soon after arrival in Seattle created the Seattle Athletic Club and made it a focal point for squash in Seattle.

Shabana's younger sister, Latasha, was several time national women's champion before losing the title to Shabana, providing me the opportunity to joke in an earlier column, "best in the family is best in the county."

The looming reality for this unique local event is that Shabana and her supporting family have basically given themselves only a couple of months to decide whether it's worth the struggle (the event basically broke even this year) to attract thus-far absent support from either the City of Bellevue or local businesses.

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40 Years Fuels John Buller's 'Age of Disruption'

40 Years Fuels John Buller's 'Age of Disruption'

John Buller, whose senior executive roles have ranged from higher education to sports to retailing to non-profits to community organizations, has experienced and helped reshape an array of cultures over the years since he arrived in Seattle to play basketball for the University of Washington.

And the immersion in those disparate cultures has led him to publish his second book, "Can You Survive the Age of Disruption," more than two decades and numerous disruptive involvements since his first book. "Survival Guide for Bureaucratic Warriors."

buller johnBuller prefers to describe his latest book as "a resource guide to creating the all-in culture," which he sums up as "all about outcomes that bring interpersonal skills that are collaborative in nature," although in his book he details elements needed to bring about an all-in culture.

"I have always been interested in leadership and culture building," Buller told me. "But I believe we are now experiencing a rate of change that demands a new way to look at how organizations manage the pace of this change."

"We are at a point where there are three generations in the work force at the same time," said Buller. "And within a few years we'll have four generations, and technology has now outpaced our ability to manage the rate of change."

Buller's first cultural "all-in" was college basketball, having been recruited in 1965 to come to UW. He led the freshman team in scoring and was sixth man, starting 10 games, in his sophomore year. But a viral inflamation in the heart lining impacted the rest of his playing career.

He spent two years as a graduate assistant for the Huskies while getting his MBA, then went to work for what was the Bon Marche, later Macy's,

Over the next two years and three promotions, he became divisional merchandise manager and eventually senior advertising and brand development executive. It was at The Bon where, he says, he had his favorite job.

"I was responsible for changing the 4,000 employees from a clerk mentality to a customer service mentality and I also got to do more than 40 two day team building workshops to support this cultural transformation.," Buller recalls. 

The Bon experience led him to write "Survival Guide."

"Changing the culture at The Bon was an effort to focus on service, both to our customers and our internal attitudes toward our fellow employees," Buller explained.  "The book was about my learning the difference between a 'Soldier,' someone who takes orders, and a 'Warrior,' one who has a mission or a cause. I learned how to be a Warrior."

He took the warrior attitude, and the details of building survival skills, to roles as co-chair and director of the organizing committee for the NCAA Final Four in Seattle in 1995, executive director of the UW Alumni Association, CEO of Tully's Coffee and CEO of the Seattle Police Foundation.

His non-profit leadership roles included chairing the board of Seattle Seafair and a dozen years on both the Seattle Center Board and the board of the Washington Athletic Club, where he currently serves as executive director of the 101 Club.

Buller chuckles as he explains his often used process of creating All-In by having the marketing and the accounting teams each put together a business plan for the company.

"As you might guess, there wasn't a lot of similarity between the two plans. So I'd leave the room and say 'I'll be back in 20 minutes. Fix it while I'm gone."

Buller suggests "organizational leaders seeking to create new cultures "are tasked with an almost impossible amount of required intelligences."

"Today's Leadership needs to be proficient in understanding the 'Meyers Briggs Profile' - knowing yourself and understanding others that was the intelligence lesson of the 1980s and early 90s - then, along came 'Emotional Intelligence,' which focused on street smarts vs. book smarts," Buller explained.

 "Over the last 10 years you would have also needed to be competent in understanding the 'Social Media' explosion. Then, it helps if you have 'Ethnic Intelligence,' as well as 'Religious Intelligence', and 'Immigration Intelligence' - and now, the biggest new understanding is 'Generational Intelligence.'"

Discussion of changing culture in the workplace automatically includes focus on millennials, those in their twenties and early thirties. In addition to that generation's obviously adaptability to technology, 

Buller suggests "they have a social consciousness and they don't want to work somewhere that doesn't fit that. They think broad workplace experience, meaning horizontal movement, is better. They are looking for the perfect culture and perfect outcome."

"If you don't believe the statement that if you can't change you're dead, look at what's occurred with the Fortune 500 over four decades," Buller says. "In 1975 the average age of the companies in that index was 68, now the average age is eight." 

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Alaska's Cuba service recalls Russia Far East venture

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Normal 0 false false false EN-US X-NONE X-NONE It was logical and appropriate that the first air carrier to connect the Western United States to Cuba should be Alaska Airlines, given that carving out new frontiers and seeking new challenges has been the culture of the airline over its eight-plus decades.

“As we kick off our 85th anniversary year, the inauguration of Cuba service marks the latest in some fascinating twists and turns to our route network,” said Joe Sprague, Alaska’s senior vice president for external relations.

Indeed the Cuba service launch brought back particular memories of Alaska’s far-out decision a quarter century ago to begin regular service to the Russian Far East, seizing what was then a thawing of relations between the two countries and the emergence of the Seattle area as a key player in that relationship that was beginning to verge on friendship.

Back in 1991, Seattle had already hosted the Goodwill Games competition between the U.S. and Russia, and business relations were being pursued. So Alaska launched summer service that year to Magadan, a sister city to Anchorage, and Khabarovsk, described as a European-style interior city that was the commercial and industrial hub for Russia’s Far East.

Part of the U.S.-Russia relations that emerged prompted creation of the Foundation for Russian American Economic Cooperation FRAEC), whose then-president Carol Vipperman recalled in an email exchange this week “the Alaska flights to the Russian Far East were very meaningful to both sides.”

The challenges of some of Alaska’s early flights, eventually extending to five cities in the rugged Far East of Russia, could provide comedy-script material, but also confirmed the pioneering spirit of Alaska’s people.

The inaugural flight to Magadan, 400 miles south of the Arctic Circle, turned up the fact the airport had no de-icing service. It was reported the pilot rounded up every bottle of vodka available and sprayed it on the wings with a garden hose.

And when Alaska launched service to Petropavlovsk, the largest city on the Kamchatka Peninsula, as the inaugural flight loaded with dignitaries was about to land, ground authorities told the pilot he did not have landing rights so the Alaska jet was forced to turn around and return to Anchorage.

Alaska was forced to end the service, on which the airline insisted it made money over the nearly a decade of doing business, when the Russian economy collapsed in 1998.

Vipperman recalls being on the next-to-last flight, with long-time Secretary of State Ralph Munro and some Alaska officials.

“We had come from a bilateral meeting, and at the Kamchatka airport we were taken off the plane to meet with the governor of Kamchatka and other officials so that we could talk about the impact the closure would have on their region,” she recalled in our email exchange. “While we sipped vodka, the plane sat on the tarmac waiting for us to come back.”

“I was personally sad to see the service to the Russian Far East end,” she added.

Alaska’s innovative outreach to the Russian Far East actually went back almost two decades earlier, in the early ‘70s, when the still young carrier began charter service to the Soviet Union’s Siberia as a result of what have been described as “secret negotiations” between the airline and Soviet Authorities.

When the U.S. Department of State learned of the deal, it decided not to block the plan, indicating it didn’t want to create a negative response from the Soviet Union. It might also be assumed the agency wanted to avoid a negative response from Washington State’s two U.S. senators, Warren Magnuson and Henry Jackson, then among the Senate’s most powerful members.

I emailed Sprague for some thoughts on the service that began in the ‘90s.

“The service to the Russian Far East was really something,” said Sprague, who was then with an Anchorage-based regional airlines. “It still amazes me to look at the map and think how far away from home base we were flying our old MD-80s for that service.”

Sprague noted Alaska’s long history of connecting communities, with the Russian Far East and now Cuba as key pieces, but also including launch of service to resort cities in Mexico, Hawaii, then points to the East Coast and Midwest.

The latest, of course, being the merger with Virgin America, which will create Alaska linkage of all the major cities on the West Coast.

“Our various moves have been good for the company, but we also like to think they have been good for the communities we serve,” Sprague said.

An example of serving communities is the fact that, despite filling it planes with passengers destined for popular vacation and business destinations, the airline continues to serve a special role in the infrastructure of the state where it was born as an airline connecting remote locations.

As Sprague noted: “We are proud that we still serve 19 points within the state of Alaska, only three of which are connected to the road system.”

 

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Baseler reflects on Ste. Michelle 50th anniversary

Ted Baseler, president and CEO of Far-flung Ste. Michelle Wine Estates, guides what he proudly refers to as the winery “string of pearls” from an office in the French-style chateau that houses what may be the most visited winery in the world and reflects on the 50th anniversary of the brand.

Baseler, who joined Ste. Michelle as marketing director in 1984, marked 15 years as president and CEO last year with a couple of key accomplishments. One was the special award Ste. Michelle Wine Estates received in November in London when it was presented the trophy as 2016 “United States Wine Producer of the Year” in the International Wine & Spirits Competition.

The other was adding the first Sonoma winery, Patz & Hall, to what Baseler proudly refers to as the “string of pearls” to describe the collection of estate wineries that stretch across Washington and into Oregon and California. The string is the Ste. Michelle Wine Estates company that holds the “pearls.”

While Chateau Ste. Michelle, on its 87-acre estate, is the state’s largest winery and has revenues in 2015 of $692 million and profit of $152 million, the role Baseler and his company have played in helping build Washington’s wine industry to more than 850 wineries valued at more than $10 billion is noteworthy.

And he thinks the Ste. Michelle numbers will double in the next decade, adding that he is “bullish on Washington because of both quality and prices,” adding “it’s hard to find a quality wine in the Napa Valley for less than $100 a bottle.”

In additiom, he notes that “America os going from beer drinking to wine drinking, particularly true with millennials.

The birth of the Ste. Michelle brand provides an amusing tale of the value of competition. There was a time when only the wine produced in this state could legally be sold at retail outlets. It was possible to go to the state Liquor Control Board and order a case of wine from California, which would then arrive several days later.

Washington wines were produced by an all-but-forgotten winemaker called American Wine Growers, which produced almost entirely fortified sweet wines, sometimes affectionately referred to as “rot gut.”

Then in 1967, The California Wine Bill was introduced in the Legislature with the goal of permitting wines from California and elsewhere to be sold at retail outlets. Opponents lamented loudly that it would kill the Washington wine industry and proponents countered “let’s hope so.”

But there were others who understood that competition would benefit all and AWG, that same 1967 landmark year for the industry, began a new line of premium vinifera wines under the name Ste. Michelle and contracted with renowned wine expert Andre Tchelischeff to guide production. Within two years, the wines were receiving “good marks.”

In 1972, a group of investors headed by Wally Opdyke bought out AWG and formed a company under the name Ste. Michelle Vintners, which became successful, soon to be bought out by American Tobacco Co., which was acquired by Altria Group in 2009.

Baseler’s business strategy in guiding his company’s growth is to retain the legacy and reputation of acquired properties and allow them to continue to operate somewhat autonomously.

“We’ve observed other big wine companies that have grown and consolidated their operations, and basically destroyed what they’ve acquired as the wineries lose their flair, their personality and their legacy,” Baseler said.

Another part of Baseler’s strategy is to foster the growth of the industry in this state by viewing the hundreds of wineries as family rather than competitors, expressing at one point the conviction that Ste. Michelle Vineyards needs all the other wineries for the state to have an industry.

An example of that support was In 2004, when a rare arctic storm wiped out the grape harvest for a dozen Walla Walla wineries, Baseler stepped up to sell his grapes to keep the wineries from facing ruin. As Baseler was quoted in a profile in Seattle Business magazine a few years ago, “We could have used the grapes, but this was more important.”

It was a key example of his realizing that without the smaller players scattered across the state producing quality wines in a growing number of wine regions (known as AVAs), a Ste. Michelle standing alone would be diminished.

But Baseler’s focus has not merely been on supporting wineries in this state, but also on bringing quality wineries in other regions under the Ste. Michelle umbrella, or string.

I once remarked, somewhat apologetically, to Baseler at an event where we were discussing wines, naturally, that my favorite wine was Pinot Gris and Pinot Noir from Erath Vineyard in Oregon. He smiled and replied “That’s ok, we own Erath.”

But the relationships extend beyond this country with partnerships with two quality European vintners. A partnership with Tuscany’s Piero antinori led to creation of Col Solare, which  Baseler describes as “the most beautiful winery anywhere.” Eroica Reisling is the result of a partnership with Mosel’s Ernst Loosen, a logical relationship for Chateau Ste. Michelle’s role as the world’s leading producer of Reisling wine.

Baseler has demonstrated that his commitment as a business leader is not just to the industry but also to the state, though he laments when pressed that the state makes little financial effort to support the industry.

In 2002, Baseler was approached about establishing a scholarship fund to support high-achieving, under-represented minority undergraduates at University of Washington. The story goes that Baselder said “no.” Then after a pause, the WSU alum and Regen at the Pullman school said: “but I’ll do it for UW and WSU.”

The program expanded in 2009 to include students attending any college or university in the state. Since inception, more than 100 scholarships totaling more than $3 million have been awarded. Students in the program, which is administered by the College Success Foundation, have a graduation rate of 85-to-90 percent.

Among recent achievements, Baseler led fundraising efforts for a Wine Science Center, a 40,000-square foot, high-tech research and education facility that was opened in June of 2015. The Center, located next to the Washington State University Tri-Cities campus, was a $23 million project developed as a public-private partnership.

Baseler’s comment about the Woodinville winery being “the most visited winery in the world” is supported by the fact that visitors to the winery total more than 250,000 but when attendance at the array of concerts held on the grounds is added in, the total reach about half a million a year.

Ste. Michelle has several events planned throughout the year to celebrate the anniversary, with  large public celebration at the Chateau over the Labor Day weekend, serving as a capstone of sorts as well as a grand re-opening of a major renovation that will be undertaken this year.

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