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New University of Washington and Nevada Las Vegas presidents face very different challenges

Len Jessup, who honed his higher-education administrative leadership skills at Washington State University, was ready when the right opportunity for a university presidency came knocking a year ago for University of Nevada, Las Vegas. For new University of Washington President Ana Marie Cauce, the knock came after 29 years of preparation at the same university.

Len Jessup 
Ana Mari Cauce 




  

 
 
 
    I returned from a personal visit with Jessup in Las Vegas, where he assumed the presidency of UNLV on January 5 of this year, to learn that Cauce, 59, who had since February been interim president of UW, where she arrived in 1986 as a faculty member and rose to become provost then executive vice president, had been named president. 

Thus Jessup and Cauce wind up sharing the focus of this column to highlight the very different challenges faced by the West's two newest major-university presidents, one just settling in and the other just named. 

Jessup's challenge is to grow the impact and image of a university whose major claim to fame when he arrived was that it was the nation's second most diverse university, although that it would soon add a medical school, no longer leaving Las Vegas as the largest population center in the country without one. Cauce's challenge is to ensure that the global high rankings coming UW's way in an array of academic areas continue to grow and expand. 
Jessup, on whose national advisory board I served when he was dean of the WSU College of Business before he stepped up to be vice president of development and then president of the WSU Foundation prior to moving to the University of Arizona to be dean of the Eller College of Management, was chosen a year ago to guide UNLV.

We sat down last week on the UNLV campus to visit about the pace he's been maintaining since then, moving forward with the planned launch of UNLV's new medical school and overseeing planning for the last presidential debate a year from now at his university, enjoying the fact he was able to engineer that coup in his first months on the job.

Intriguingly, Jessup and Cauce share similar humble backgrounds. She is originally from Havana, which her family fled to come to the U.S. in 1959 after the revolution. Her parents had to start over from working in Cuba's government to sweeping floors and making shoes in this country.

Jessup was born and raised in San Francisco with both parents of Italian descent. His father was a fireman. He was the first member of his family to graduate from college. He says he has "devoted my life to service in higher ed because of the opportunities it has given me and also to pay back my ancestors for the sacrifices they made in coming to America to make a better life possible."

Jessup's selection was the result of a national search by the board of UNLV. So was Cauce's selection, except that the search committee decided, in part because of the support she had generated on the board of regents and the campus, that it didn't need to follow prior presidential searches that inevitably tapped someone afar.

Cauce takes the reins at a university that is one of the oldest in the West and academically at the top of its game, ranked this month by U.S. News & World Report as now number 11 (third among public universities) in the Global University Rankings, while Reuters last month named UW the most innovative public university in the world.

UNLV, only four years old when UW celebrated its Centennial in 1961, tapped Jessup, who is 54 but looks more like he's 34, to bring growth in quality and visibility to the campus located less than two miles from the Las Vegas Strip.

"The regents understood that UNLV needed to evolve and grow into being a top tier research university so that it could be a driver of the Valley's, and thus the State of Nevada's, growth and evolution," Jessup said.

He has fervently sought ways to bring the public spotlight onto UNLV and he has already achieved that in a couple of ways.

The first was a news conference, an hour prior to our coffee visit at the campus Starbucks, at which details of a partnership with Tesla Motors were unveiled. The pact will allow for UNLV to help Tesla develop and implement battery-manufacturing technologies for the Gigafactory near Reno where the car company hopes to produce a mass-market electric car.

"The neat thing about the Tesla partnership is that it opens the door for further work with them, but also with other innovative companies," said Jessup.

"Just in the past few months we've launched several other powerful partnerships, including an $11 million grant from the National Institutes of Health together with the Cleveland Clinic Lou Ruvo Center for Brain Health in Las Vegas to tackle Alzheimer's and Parkinson's diseases," Jessup added. The grant will fund a Center for Biomedical Research, the first ever such grant in Southern Nevada.

But perhaps most flashy, and pretty much Jessup's own coup, was landing the final presidential debate at the end of next October, days before the 2016 general election.

I asked Jessup to explain how that came about and he shared that he was approved some months ago by the Commission on Presidential Debates with an inquiry that had also gone to other universities, seeking interest.

Jessup was advised that the entry fee to land the debate was $2 million in cash directly to the debates commission upon selection of the university where the final debate would be held. So he quickly huddled with the Las Vegas Convention & Visitors Authority and other business leaders to put together a partnership that involved the LVCVA board approving sending the $2 million and agreeing to help UNLV with the estimated additional $2 million in out-of-pocket costs to prepare Las Vegas to hold the event.

Thus next October, the nation will be looking in on UNLV's Thomas & Mack Center, and likely the rest of the campus and the lights of Vegas when the two candidates for president appear in the final debate.

The business community of The Entertainment Capital of the World is already giving Jessup high marks for his ability to market his university. To come will be the challenges of advancing it academically among research universities.
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This Book of Mormon has two real-life heroes who impacted me, and society

You might call this column my personal version of the Book of Mormon, a tale with two heroes, like the musical satire of that name making the rounds of theaters across the country. But this is the story of two real-life heroes whose separate impacts on society, driven in large part by their Mormon faith, should make them each the subject for their own book or movie.

Jon Huntsman Sr. and Karen 
And both have left an impact on me. One, Gary Neeleman, is a lifelong friend who received unique recognition last week in his beloved Brazil for his life of focus on that nation and its citizens.

The other, Jon Huntsman Sr., whom I have never met but who has touched me for more than a decade, has again this year drawn me to the gathering of senior athletes that was his vision 
29 years ago when he began 
Gary and Rose Neeleman 
the World Senior Games as the globe's most impressive annual gathering of senior athletes. It will be my third trip to St. George, UT, to compete in the 100 meters.

I have previously written about both Neeleman and Huntsman, both longtime residents of Salt Lake City, who know each other, with Neeleman actually a close friend of Huntsman's son, Jon, who was Utah governor and for a brief time a GOP presidental hopeful.

So this column is somewhat a revisting of people long-time readers have met before. But I never apologize for repeat sharing of special people who have done special things.

Both men made major contributions to society, Neeleman to inter-American relations and Huntsman to medical science. 

It was as a result of his experience covering the 1963 Pan American Games and watching U.S. athletes play the role of "ugly Americans" in their treatment of Latin American teams they defeated, that he promised himself to someday do something about that. So when UPI sent him back home, he worked with Utah's coaches to create a college all-stars post-season tour of Latin America.
That tour, with Neeleman acting as scheduler, accommodations arranger and bag-boy for the basketball stars who relished the chance to participate, became an NCAA post-season fixture and Neeleman became a regular luncheon speaker at the NCAA tournament for years.

And for Huntsman, it was after his surgery for prostate cancer almost 20 years ago that prompted him to establish a world-class cancer research and treatment center, a dream realized with the Huntsman Cancer Institute and Hospital in Salt Lake City.

The Huntsman family continues to serve as principal benefactors and fundraisers for the Huntsman Cancer Institute with what he describes as "the ultimate goal" of eradicating the most challenging forms of cancer.
So now to their roles in this column. First regarding Neeleman, who was honored last week at the main hall of the City of Sao Paulo as the fourth recipient of the Sao Paulo Citizen award, following the Pope, the Dalai Lahma and the founder of the Mormon Church in Brazil as the only other recipients of the honor. 
Neeleman's wife, Rose, and sons, David and Mark and a total of 14 family members including wives, grandkids and great grandkids were among those on hand for the ceremony. Neeleman recalled stories of his 61-year relationship with Brazil, more like a love affair with a nation and its people, beginning in 1954 when he arrived as a 20-year-old Mormon missionary.

It resumed in the early '60s when he brought his then new bride, Rose, with him as he arrived to be Brazil's manager for United Press International and has continued since then, including his three books that chronicle previously little-known aspects of the relations between what he refers to as "the two giants of the western hemisphere."

Three of his seven children were born in Brazil, including David, founder of Jet Blue now the founder and CEO of Azul, Brazil's second largest and fastest growing airline. Neeleman told the assembly that all of his children, 35 grandchildren and 20 great-grandchildren "were either born here, or are Brazilians at heart and are all proud to have Brazilian passports."

Gary and Rose travel to Brazil about three times a year and when they're not traveling on personal or client business, or traveling to the Brazilian back country as part of their research for his books, he's doing Brazil's business as honorary counsel in Salt Lake City.
My friendship with Neeleman, 81, extends back more than 40 years, beginning with our more than a decade as executives at UPI. And my children still recall his dramatic reading of "Horton the Elephant" one evening years ago as they were tucking into bed.
Now to Huntsman, 78, about whom I will be having good thoughts next week and would love to meet, when he and Karen will be on hand for the opening of the two-week gathering where nearly 10,000 seniors will compete in everything from track and field to badminton, pickleball, lawn bowling, volleyball, square dancing and even bridge. Some of the participants are in their 90s.

Huntsman's vision back in 1987 was that an event called the World Senior Games, even if held in a then-remote corner of Southwest Utah, would eventually draw thousands of what some might dismiss as "the elderly" who come for the chance for recreation and to compete with their peers.

While the Huntsmans' close ties to the games remain, he turned over the CEO role a few years ago to Kyle Case, whose career involvement with the Senior Games extends back to when he served as an intern while a student at Southern Utah University.

I've been drawn to the games because of the "world" name since I first heard of them in 2003 and made up my mind to compete in the 100 and 200 meters in my age group once I learned that they weren't really games that required world-class talent. That means some competitors really were world class while others like me, who weren't, could still compete, and that's always been the magic draw.

In that 2003 event, as a 63 year old competing in the 60-64 age group, I managed to finish sixth in both the 100 and 200 out of fields of 24 in each event. But the reality was that those at the front of the pack in both events were, in fact, world class and thus it was satisfying just to be in the same race in which I could see them in the distance.

I returned in 2011 to prove to myself I could come back from the surgery for colon cancer that I underwent in late May that year.
The goal wasn't merely to prove that a 71-year-old guy can come back from major surgery and resume normal activity, even if the "normal" activity seems like a stretch to the sedentary of any age. It was also to acknowledge successful recovery from cancer while various friends are battling the Big-C, or have lost their battles.
Performing well at those 2011 anniversary games had become a single-minded focus that August and September following a required two-month recovery period without strenuous exercise. And so I proudly displayed, on my return, the Bronze medal I won for finishing third in my race.
So having turned 75, the appeal to return to St. George again to see how I can fare in the 75-79 group won out.

I closed a column three years ago on that 2011 experience thusly: Life is a race to be appreciated for the joy of participation, and whether world class, or a bit slower, making in to the finish line while leaving behind cancer, or any other physical or mental obstacle, is really the sweetest race to win.
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O'Toole turnaround of Seattle police community interaction drawing attention

 

As the president of China departs Thursday morning after a visit that represented a high-visibility recognition for the Seattle area's growing role on the global economic stage, U.S. Atty. Gen. Loretta Lynch arrives for a less visible visit to discuss Seattle's progress on police reforms that are drawing attention on the law enforcement stage.

Kathleen O'Toole 
In fact, part of the discussion will be about Seattle's progress in implementing reforms mandated by the Justice Department and may touch on Seattle's growing role as a trend-setter, under Police Chief Kathleen O'Toole, in implementing new procedures for police-community relations.

Lynch's visit is part of a multi-city community policing tour and, while she is here, she will get a close-up look at how Seattle's police chief has done in leading a turnaround of the department where she took the reins 18 months ago in the face of a Justice Department-ordered revamping of policing procedures.

O'Toole was sworn in as Chief of the Seattle Police Department on June 23rd, 2014, selected after a highly visible national search for the person who could turn around a challenged department in which the Seattle community had largely lost trust.

Coincidental with this week's visit by Lynch, along with Vanita Gupta, Principal Deputy Assistant Atty. Gen. for Civil Rights and COPS Director Ronald L. Davis, was a breakfast-audience conversations last Friday at the Columbia Tower Club.

O'Toole, a career police officer as well as a lawyer, had earned an international reputation for her leadership and ability to shape reform strategy, including a six-year term as chief inspector of the Irish oversight body responsible for bringing reforms to the 17,000 member Irish national police service.

At the Tower Club interview, she remarked that when she first got to Ireland, she was asked if among other changes she would introduce the use of weapons, since police officers in Ireland, England and the United Kingdom don't carry weapons. She said she had no intention of doing that.

In fact, O'Toole told the breakfast audience, "many people get their impressions of policing from the gun fights and car chases they see on television.  They think it's all about enforcement.  In reality, most police work involves service."

"The department is actually doing more service-oriented business than law enforcement," she said, and noted as an example that the department "is on track to assist 10,000 people a year in crisis," meaning people on the street in activity that prompts a call to police.

What she sees as the positive impact about the real nature of police work that comes about from getting a close inside look is pointed up by a recent experience of a group of inner-city young people the department hired for summer jobs as part of Mayor Ed Murray's effort to increase city hiring of young people.

O'Toole chuckled that when the youngsters first learned they were being offered jobs with the police department, there was general reluctance.

She explained that her department hired 20 inner-city youth, "mostly young people of color" and after the summer employment ended, she said she met with them.

"They spoke very fondly of their experience and noted that police work was very different than they expected," she said. "They established friendships with many officers, and some are now considering careers with the SPD - something they never imagined doing prior to this experience." 

O'Toole, who before her stint in Ireland served in key police management roles in Massachusetts and Boston, first in 1994 as Massachusetts Secretary of Public Safety and 10 years later as Boston Police Commissioner, says the changing nature of police work is going to require recruitment changes.

She specifically referred to targeting more minorities and immigrants for policing careers.

She thinks some of the changes are occurring as a result of the events in Ferguson, MO, and elsewhere that "have created a ripple effect around the country."

Ferguson and similar events generated vigorous debate about the relationship between law enforcement and African-Americans, and the concept of use of force in policing.

"When I assumed this role in June of 2014, I knew it would be a challenging job, but never anticipated the series of national events that have deeply affected relations between police and community, incidents that have caused many police agencies to contemplate reform," O'Toole said.

"Fortunately, the Seattle Police Department was moving full speed ahead with reform prior to these developments," she added. " We still have work to do, but I'm pleased we can share our early experience with others, since in recent months, many police departments have visited us to learn about our new policies and training related to important issues, including Use of Force, Crisis Intervention and de-escalation."

She listed police departments in New York, Baltimore, Dallas, Milwaukee and, Portland among the visitor and said more departments are scheduled to visit in the coming months.

It would be Pollyannaish to think that all members of a police force singled out by the Justice Department for court-ordered turnaround are all in lockstep with the changes O'Toole is guiding. Some refer in conversation about the changes, particularly the rules on the use of force, to "rules of engagement being written by a Justice Department attorney."

  On a current local topic, O'Toole was asked whether any challenges have emerged for police since the legalization of marijuana in this state.

"It's fairly early for any trends to have emerged," she replied. "Except for the competing drug dealers who set up business across the street from the legal shops and sell it for less illegally."
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Sanjay Kumar waging campaign to expand acceptance of reusable water

Sanjay Kumar, who learned growing up in Mumbai how a lack of sufficient access to clean water can impact lives, has become an evangelical messenger about the importance of developing alternative sources of water in anticipation of the water-availability crisis that the former tech executive sees looming ahead.

Sanjay Kumar 
And Kumar, 49, who quietly made a mark as one of the Seattle area's most successful tech entrepreneurs, is likely to bring an increasingly visible presence to his current undertaking of spreading the message about the importance that recycled water will have in helping address future water shortages.

Kumar, who had key roles at Microsoft, and Teledesic before founding his own telecom services company after coming to the U.S. from his native India in 1983, points to an agreement this month between Kirkland and King County's Wastewater Treatment Division as a model that cities everywhere will eventually need to pursue.

The first-of-its-kind agreement between a city and the county will bring a drought-proof source of water to the Eastside city in the form of high-quality recycled water from the county's Brightwater Treatment Plant.

But Kumar, who pressed for the landmark arrangement, laments that "no other city is contemplating anything like this, largely due to King County being in no hurry and realizing it is a heavy lift so they want to wait and see with Kirkland. "

Kumar makes no apology for being the doomsayer about the water crisis he sees awaiting not just the water-starved regions of the west, but areas like the seemingly water-plentiful Northwest as well. The current efforts in the Puget Sound area to curtail water use suggest that Kumar is right on.

His advocacy, research and consulting organization, reuseH20, promotes the use of recycled/reclaimed water (which is known as "purple pipe" because it is delivered through a system of purple pipes) and has a goal of helping municipalities, industry, developers and communities "de-risk" their access to water.

"We help organizations understand the current and future cost of water, explore the available options to recycle water on site or access reclaimed water from a municipal or 3rd party source and ensure that each solution has long term financial and sustainability benefits," is the way he explains it.

He points to the water crisis playing out in California as "really a microcosm of all the problems." That state's reliance on its two water sources of mountains snow melt and groundwater, with both depleting, "is not sustainable for more than a couple of decades."

In fact, he makes the attention-grabbing comment that "the time will come when it will be less expensive to relocate a California resident to somewhere else in the country than to pay for them to continue getting water."
Kumar suggests: "It will be a different country when the water situation reaches the point where people are told 'no you can't move to that part of the country. Pick somewhere else.'"

His Twitter and LinkedIn sites carry regular messages on the topic, like "Reuse is a necessary and scalable concept including rainwater harvesting, stormwater capture and municipal reclamation." And he offers updates on developments, like reporting that a residential recycling water fill station had been opened in Sonoma by the area's sanitation district for residents to use to water their lawns, gardens and landscape areas.

A key part of Kumar's campaign is to paint municipal utilities as not just a key part of the problem, but as committed to a course contrary to what's best for the desired long-term outcome.

He makes the point, for which general awareness has not yet emerged, that the revenue model of utilities in Seattle and elsewhere is based on their ability to sell water and thus there is a built-in reluctance to embrace any program focused on reusable water, which as a less-expensive alternative would negatively impact the revenue model.

"Reclaimed water is the only workable answer since, if done with the right technology, it produces both clean water and energy," Kumar says.

Kumar came to the U.S. in 1983 at the age of 17 to study computer engineering at Carnegie Melon University and joined Microsoft in 1991 after getting his PhD at the University of Pennsylvania. At Microsoft he worked first in the multimedia group helping develop video for Windows, then in the Advanced Technology group alongside Intellectual Ventures co-founder Nathan Myhrvold.

Then Kumar founded and grew VCustomer into one of the nation's fastest-growing private companies before three years ago selling the telecom outsourcing company, which had grown to more than 4,000 employees with call centers in India and three other countries.

Kumar first learned of the potential for reclaimed water when he invested in a water-cleaning technology company.

Now he is seeking investment opportunities in water reuse as a member of Element8, originally the Northwest Energy Angels, the first angel group in the nation to focus exclusively on clean technology and sustainability.
Kumar points to the restrictions on reclaimed water, and perhaps more absurd on rainwater as examples of the hold municipal entities have in protecting the revenue they derive from water sales.

"Those seeking to ban the collection of rainwater say it js a potential health hazard or that it's needed in their watershed," Kumar notes, then adds with an amused look "I need an exemption or a permit to collect rainwater and, most absurdly, you even need a special permit to use rainwater in your toilet."

But in what he views as an upside, there is ever-increasing pressure from the Environmental Protection Agency on urban communities to make their water cleaner before dumping it, "creating standards so high that it could well be reusable water."

"In this state, no matter how clean it has become, reclaimed water is not legally potable but in many states, there is no such absolute restriction," Kumar notes.
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Voters, rather than the High Court or lawmakers, should decide school funding

What the Washington State Supreme Court seems to have done, with its ruling last week that charter schools violate the state constitution, is to reinforce its message to the governor and the legislature: "you are not in charge in this state. We are."

And anyone who agrees with the assessment that the state highest court's two education-funding cases amount to unsettling steps into the separation-of-powers arena could also agree that the constitutional question the court is thus raising is one that merits a focused public discussion.

The question of whether the Supreme Court has embarked on an undesirable drift away from the principal of three equal branches of government can be put into discussion by conversation on social media and analysis and commentary from traditional media.

But closure to that question in the form of "a ruling" by the state's citizens, the ultimate court to which all three branches of government answer, can only come in a meaningful way with the kind of debate that occurs during election season when the judges actually have to face public scrutiny.

Meaning the three Supreme Court judges up for re-election a year from now, three of whom were in the majority in the 6-3 ruling, including Chief Justice Barbara Madsen who wrote the majority opinion, should face opponents who feel the court has encroached inappropriately on the essential separation of powers.

The value of competition in next year's election for those three justices, Charles Wiggins and James Johnson in addition to Madsen, isn't to seek to punish them for their views but rather to ensure a sufficient airing of public attitudes on the issue of whether they are endangering the proper separation of powers.

Certainly the role of the Supreme Court is to have the last word, passing judgement on laws passed by the legislature and signed by the governor. But what troubles concerned legal observers is that in the two education-funding decisions, the court has assumed for itself the first word, telling the governor and the legislature what they WILL do rather than passing judgment on what they did.

If the sitting judges are voted out, it will amount to an affirmation of the view that the court has gone too far and the remaining six judges can then ignore that at their peril.

Now for a review of the court decisions that lead to the questions about limitation of the powers of the court and the possible abandonment of the tradition that the high court imposes those constraints on itself.

The court's most recent ruling held that charter schools are unconstitutional, ultimately because they are governed by appointed rather than elected boards and that the constitution requires that the boards that oversee common schools must be elected.

The state constitution merely requires adequate support for common schools. So in decreeing that elected boards must govern common schools, the court has basically usurped the legislative and gubernatorial right to decide in the future the manner in which the constitutional funding requirement can be best carried out. That means the lawmakers might want to decide whether funding oversight is best served by elected or appointed boards, perhaps at the state level.

Budget leaders in both houses and both parties have suggested that the state take a larger role in oversight, as in setting pay, for example. And some lawmakers are even convinced that they have to do that, since the lawmakers, just as they are answerable to students to provide a good education, are answerable to state taxpayers to ensure that those school dollars the court has ordered them to increase are being spent as wisely as possible.

They realize they need to step into the management role in ways that could elude locally elected school boards.

In the first education-funding decision, known as the "McCleary decision," the court ordered the legislature to spend more money on education, then followed up by holding the lawmakers in contempt for failing to provide enough additional funding. And in the past few weeks the court actually imposed a $100,000-a-day fine on the lawmakers to failing to "sufficiently" fund education.

In that McCleary ruling, the court said common schools funding needed to be 'ample" but also "uniform" and "stable."

Now the court's sole position is spend more money, focusing only on "ample" while saying it has "no opinion" on the "stable" or "uniform" points.

Some court observers have described as curious the fact that the high court backed off from two of the three central points on education funding, leaving only the edict of spend more money.

And since in the constitution, common schools specifically excluded high schools and "normal schools," (which became the state's Eastern, Central and Western state universities) the court may have cast doubt on the constitutionality other programs not overseen by elected boards, like Running Start, a program by which high school students can gain college credit.

All represent more than enough reason for deliberation beyond the legislators, governor and the courts to include the public in decisions about where the state should go with education funding and the process by which that should occur. 
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Rural economic development and young people

 

If Global Entrepreneurship Week, the annual worldwide celebration of innovators and job creators, had been a competition among nations, states and regions, Washington State could have laid claim to being the hands-down winner. And that would be appropriate recognition for the man who has guided much of this state's effort to advance entrepreneurship, particularly in rural areas and particularly with young people, for 25 years.

https://mlsvc01-prod.s3.amazonaws.com/f9d31d49001/30a3ef8d-4001-4795-971c-0da1ede61b9e.jpg

Maury Forman

Maury Forman, senior manager for the Washington State Department of Commerce, is proud of the fact that in this state, GEW 2015 was actually Global Entrepreneurship Month and extended to every corner of the state with activities in all 39 counties. Four years ago, when Forman plugged the state into GEW activities, three counties participated.

Forman says "we are changing the way communities look at economic development." That's an outgrowth of his effort, over much of his quarter century overseeing key economic-development sectors, to develop a culture of entrepreneurism in rural areas.

Global Entrepreneurship week was founded in 2008 by the Kauffman Foundation, the Kansas City-based 501c3 that is the nation's pre-eminent entrepreneur-focused organization, to create an annual celebration of innovators and job creators who launch the start-ups that drive economic growth.

Forman, who joined what was then the Department of Trade and Economic Development in 1991 in a career transition from healthcare at the age of 40, says "No other state can claim that every part of the state had at least one event that celebrated entrepreneurship."

"One of the exciting aspects of this year's celebration of entrepreneurship was the number of high school programs being held throughout the state," Forman said. "In many cases, college isn't the natural next step it was once for high school students so these programs expose them to the idea of starting their own business once they graduate. Or if they do go on to college, they can focus their education on skills that will allow them to start a business in the years to come."

Forman says he has kept his primary focus on rural economies because "they need the assistance much more than urban communities," as well as because he has become convinced that the strategies for growth of many rural areas that has been focused on recruiting companies from out of state is outdated.

"That has to change if rural communities are to survive," Forman said. "Communities have to be shingle ready and not just shovel ready."  

In a recent article in Governing, a national magazine covering state and local government news, Forman wrote about Washington's three-year-old program called Startup Washington that focuses on building local economies "organically" by serving the needs of local startups and entrepreneurs.  

Forman is likely among the national leaders in the conviction that programs to enhance local economic development "must nurture the belief that young people who grow up in rural communities can be guided to start businesses in their own community rather than moving to urban centers."

"Just as young people are looking at new ways to enter the work force other than working for someone else, so too are communities looking for ways other than recruitment of businesses from elsewhere to grow their economies," Forman said.

One of the ways he is seeking to do that "is by matching those students that are serious about being entrepreneurs with mentors, especially in rural communities."

Indeed matching students who hope to be entrepreneurs with mentors is becoming the model for successful communities, particularly rural ones, to pursue.

Some communities have long been employing that model, as chronicled in the oft-quoted book written by Jack Schultz, founder and CEO of Agracel, a firm based in Effingham, IL, that specializes in industrial development in small towns.

It was in pondering why some small towns succeed where others fail that Schultz set out on the backroads to rural America to find out as he became the nation's guru of rural economic development and wrote of his travels in Boomtown USA: the 7 ½ keys to Big Success in Small Towns.

I emailed Schultz about entrepreneurism's role in small town success and a possibly emerging role for mentor programs.

"Embracing entrepreneurism in communities has been a key factor that differentiated great communities from also-rans," he emailed back. "Increasingly, we are seeing those great communities taking it a step up by tying their local entrepreneurs up with their young people, educating them on both entrepreneurship and also the great things happening in the private sector of their towns."

Schultz' successes in believing in small-town entrepreneurs and small-business lending is partly responsible for the fact the Effingham-based bank he helped found and now chairs the board, has grown eight fold to $2.9 billion in assets and gone public.

"At Midland States Bank, we have very much focused on small business lending and it has been a major factor in our growth over the last several years," Schultz said.

In an unusual and innovative commitment to the dozens of communities it serves, the bank has funded a not-for-profit institute to expand an entrepreneurship class that was started in Effingham eight years ago and has now expanded to 27 other towns.

Forman seemed intrigued by the details Schultz provided:  The class meets each day during the school year from 7:30 to 9 am; meets in local businesses; is totally funded by local businesses with a maximum contribution of $1,000 per business or individual.  Each class has a business and each student must also start a business.  

Meanwhile, Forman approaches his 25th anniversary with the department on January 1 having collected numerous regional and national awards for his work and successes. Those include last year winning the international Economic Development Leadership Award and recognitionby the Teens in Public Service Foundation with the Unsung Hero Award for his work with at risk kids.   

He has authored 14 books related to economic development, and has also designed and developed creative "game show' learning tools, including Economic Development Jeopardy, Economic Development Feud and two board games for the profession.

Forman credits the directors who have guided the department over his time there for allowing him "to be intrapreneurial," meaning behaving like an entrepreneur while working in a large organization, noting "not many government agencies allow the freedom to take risks in an effort to solve a given problem."

 

 

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Chelan wildfires devastation prompts mother-daughter fund-raising response

"When millennials join with boomers, better results happen," is how Deanna Oppenheimer sums up the success she and her daughter, 27-year-old Jenifer, had when, as part-time residents of Chelan, they were moved by the devastation they witnessed from the wildfires in the area to launch a local fund-raising effort for victims.

Oppenheimer, a leader in international finance while working in London from 2005 to 2012 as one of Barclay's key executives before returning to Seattle, and Jeni, who is heading off to get her MBA in the UK after three years with Global Impact in Washington, D.C., launched the fund the weekend after lightning strikes on August 13 started what became massive fires.

Deanna and Jeni Oppenheimer 

As of this week, the fires, which started, then converged into one around Lake Chelan and are now referred to as "the Chelan fire complex," have burned more than 92,000 acres and destroyed 21 residences and has actually been dramatically surpassed in impact by fires in Okanogan County.

"The passion came when Jeni and I went to Chelan to check on things. Seeing cabins burned to the ground in our favorite ski cove, seeing the ducks slick with oil from the burned boats, walking down empty streets and talking with the farmers at the Wednesday market that had lost everything, moved us to tears....and then action," Deanna said.

Deanna explained that they set a modest initial goal of $5,000 with the funds to go to a local effort focused solely on fire relief, meaning small-scale capability to allocate the funds and thus they didn't want to set a large goal that would raise significantly more than the local organization could raise on its own.

Jeni interviewed the head of the local organization called Give Naked, a giving organization that operates under the umbrella of the 501c3 Chelan Valley Hope while Deanna spoke with community leaders in Chelan and Manson before unveiling their campaign.

The plea for support went out to family and friends by way of a site called Crowdrise, a for-profit website that uses crowdsourcing to raise charitable donations for things like medical bills, volunteer trips and what it promotes as 1.5 million charities, touting the ability to create a site in 42 seconds.

The original goal of $5,000 quickly became $10,000, noted Jeni, who chose the Crowdrise approach to the fundraising.

And of course among the first to make donations were Jeni's brother, James, 23, and John Oppenheimer, Columbia Hospitality founder and CEO, who merely looked on with presumed satisfaction while his wife and daughter went about their fund raising.

Having known John and Deanna for a long time, the focus and zeal that Deanna and Jeni brought to their cause was no surprise.

"Now we are just under $20,000 and not even halfway to our target date of September 14," Jeni advised me this morning.

"What overwhelmed us was the incredible generosity of those we asked and the power of the social media network," said Deanna, who founded the consumer-focused boutique advisory firm CameoWorks after returning to Seattle. "We raised the $5,000 in 25 HOURS not days, and decided to double the goal to $10,000."

 

Deanna, who has had a social media hand in publicizing their effort with a lengthy post on LinkedIn, sums up their success as "old school networking meets new school technology in the area of charitable fundraising."

"The combination of a passionate cause, crowdfunding technology and good old personal networking taught me a lot about the new way to raise awareness," she added.

 

"The campaign has been a lot of fun to work on together but it's been exactly that....a lot of work," Deanna said. "As a result, we are not planning on broadening to support other geographic areas.  However, our campaign is a great model for someone connected to those areas to follow if they are interested."

And the model is one that could spur groups in other smaller communities that have been dramatically impacted by the wildfires, particularly those in Okanogan CountyGo to link  

.

Deanna describes the model for their success:  "Multi-generational teams that combine disruptive thinking and youthful energy with seasoned expertise and lessons-learned experience are more successful than monolithic group think."


But Jeni puts it in a more personal vein. "This is something we wanted to do together." 
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How new state cancer-research fund came about in the 2015 Legislature

 

The tale of how Sen. Andy Hill, a near-miraculous survivor of lung cancer and the powerful Republican overseer of writing the Senate's budget, helped guide funding to create a new state cancer-research fund might have been the story of a legislator's personal cause and vision brought to reality.

Instead, what has begun to emerge is a tale of more typical legislative ineptitude, because most observers aren't really sure what the Hill-guided budget inclusion of a Cancer Research Endowment Fund brought about or why it was carried out with the intrigue and confrontational politics that occurred.

One certainty is that Hill was a key architect of a Republican conviction that funding needed to end for the decade-old Life Science Discovery Fund, which provided grants to an array of emerging life science and biopharma companies and some viewed as a logical administrator of a new cancer-research fund.

So in the end the Legislature's 2015 final budget compromise killed funding for LSDF but did not put the organization itself out of business.

Meanwhile, the legislation creating the new cancer fund, referred to as CARE, was approved with a $5 million matching grant this year and a $10 million matching grant next fiscal year and thereafter to fund cancer research in this state. Maybe.

But before any of the grants can be made, there must first be "proof of non-state match," meaning there is no certainty that any of those state dollars will actually be spent without the emergence of entities seeking to match the grants.

For reasons many outside of the political arena couldn't quite understand, Republicans, with Hill as a leader of the viewpoint, didn't like the concept of funding startups while Democrats were strong supporters of LSDF and the potential jobs grant-recipient companies might create.

But Hill apparently, on more than one occasion, suggested that the administrative structure and staff of LSDF, including its well-regarded Executive Director John DesRosier, could become the overseeing entity for the new cancer-research fund. So perhaps Hill will explore that possibility.

Someone might have explained to Hill, a former Microsoft manager, that cancer research is a life science discovery activity and that rather than forcing the elimination of LSDF's funding in a bitter and controversial battle with Democrats who supported LSDF, he could have forced cancer research to be its new focus.

In fact, a proposed initiative, backed by organizations like the Fred Hutchinson Cancer Research Center, that failed to gain enough signatures to make the ballot last year would have created a large pool of dollars, funded by tobacco-tax increases, a fund that would have been administrated by LSDF as an added responsibility.

And Rep. Ross Hunter, the Democrat who chairs the House Ways and Means Committee and also a cancer survivor, had led an effort in the 2015 session on behalf of a bill with a similar goal of establishing a cancer-research fund with dollars from an increase in the tobacco tax, but the bill never got through the committee challenges.

Hill's 2009 conquest of stage 3 lung cancer, including a pronouncement at one point that it was terminal before his treatment with a new targeted therapy left him cancer free in a matter of weeks, is a remarkable story that would have made his support for a meaningful step to fund cancer research laudable and a cause for broad support.

Hill made it clear that one of the reasons he ran for office in the fall of 2010 was to "advocate for continued scientific research and development of life saving and life altering therapies."

In the end the relatively small amount that the CARE fund provides isn't in the same ball game that commitments like the $200 million lawmakers in neighboring Oregon approved to support a $1 billion public-private effort to bring the nation's top cancer researchers to Oregon.

And Oregon is only one of the states that have made such major commitments to cancer research.

One of my friends long involved in watching legislative machinations offered an analysis of what occurred: "You kill LSDF which uses OPM (other people's money, i.e., the tobacco settlement), and then appropriate precious few taxpayer dollars and create a new entity to do close to the same thing LSDF does, or did. 

"Why not have kept LSDF and directed that $5 million or $10 million of its existing funds be focused on cancer research specifically?" 

The kind of money the Legislature approved is a relative pin prick being thrown at cancer research at random, to be run by an entity that doesn't even exist yet, but will require some overhead to become operational.

What the Legislature created may have been the only potential state expenditure that could have gotten through a group of lawmakers whose Republican members were adamant about not spending anything that would mean new taxes, and that would presumably include funding cancer research.

Thus what Hill was able to get support for winds up as a pale shadow of the potential $1 billion that Initiative 1356, which failed to gain the signatures needed to make the 2014 ballot, would have raised for cancer research through a dramatic increase in the tax on cigarettes and other tobacco products, as well as marijuana.

If what really is only a gesture toward cancer research by the state at this point proves successful by any measure, it's possible that future legislative sessions may find the courage to step up to greater commitment in legislative support for the world-class cancer research and care that has developed in this state.
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Celebration of Life honors WSU president Elson Floyd's contributions

While Elson Floyd's legacy at Washington State University will likely be the tangible results of his ability to dream big dreams and then guide others to achieve those dreams, his most enduring memory may be the intangible of his remarkable ability to convey a personal connection with all he met.

The WSU family and friends will gather on campus August 26 for a Celebration of Life, honoring the WSU president who lost the private battle he waged with cancer even as he pursued and achieved what may have been his biggest dream, a WSU medical school.

Following the celebration, a more intimate group has been invited by interim WSU President Dan Bernardo to gather to share memories of the man whose eight years guiding the Pullman school transformed its role as Washington's land grant university into something far broader.

There won't be time, at Bernardo's reception, for everyone to share memories but some selected will, and I share a few here.

When the national advisory board of what is now the Carson College of Business (named for former Boeing Commercial President and alum Scott Carson) and of which I was a member welcomed Floyd soon after his arrival on campus in 2007, he impressed most of us with his understanding of the job-creating mission of higher education.

"We need to communicate with the Legislature and policymakers that we understand that we are about creating jobs, about economic development," Floyd said at his first meeting with the advisory board.

Understanding the economic development role for higher education guided Floyd to create the positions of vice president for economic development both at WSU and, before that, at the University of Missouri system. That put him at the national forefront of college leaders in understanding that the role of universities in economic development was destined to become the issue it has become in most states.

Referring to Floyd's gift of connecting, Lisa brown, chancellor of WSU's Spokane campus, said "Elson made everyone he met feel like they had a special relationship with him," adding "He had a command of a room so that everyone wanted to hear what he had to say."

John Gardner, Vice President for Development and CEO of the WSU Foundation whom Floyd brought with him from Missouri when he left the presidency of the University of Missouri system to come to WSU, agreed that Floyd "had the ability to convey a personal connection to all those he met."

But Gardner added that Floyd, who tapped him to be one of the first vice presidents for research and economic development in the country soon after they met on the Columbia, MO, campus in 2002, added that Floyd had not only an ability to befriend others quickly, but also "to size up a situation, a person, a deal very quickly."

"He had, In Malcolm Gladwell's terminology, an ability to take a 'thin slice' and inform himself immediately of his next step," said Gardner, whom Floyd once described to me as "like a brother to me" as we discussed Gardner's departure for a time a couple of years ago for another opportunity.

"He took a thinner slice than anyone I know and was right an unbelievably high percentage of the time," added Gardner. "This intuition served him very well and, as a result, he wasted little time on opportunities that weren't destined for a high yield."

Discussing Floyd's philosophy about WSU's land grant status, Gardner said "he became enamored with the land grant role and scope in discovering its power while at Missouri (also a land grant institution). He immediately embraced its connection to the economy (thus economic development) as well as its commitment to access."

All now know that getting the 2015 Legislature to approve creation of a new medical school at WSU was his crowning achievement as he worked tirelessly, testifying for hours on front of committees and engaging lawmakers in one-on-one meetings, even as he battled cancer that proved terminal.

Less high-visibility than his achieving the medical school, which WSU Regents have said they intend to name the Elson S. Floyd School of Medicine, have been his steps to spread WSU's educational presence across the state. Those include creation of WSU North Puget Sound, on the Everett Community College campus, where classes will be taught not only by resident faculty but also interactively from other WSU campuses, and recent steps toward a similar arrangement with Bellevue College.

And Lawrence Pintak, founding dean of the Edward R. Murrow College of Communication, recalled in a message to his faculty, staff and students that Floyd's vision for the Murrow School came even before his selection as president.

"While still a candidate for the presidency, Dr. Floyd asked a member of the presidential search committee (a Murrow alum) why the then-Murrow School was hidden in the then-College of Liberal Arts," Pintak recalled. "'Murrow needs to be a college!' he declared. And he made that happen."

"Dr. Floyd recognized that the Murrow program was, and often said publicly, a 'crown jewel' of Washington State and he understood the value of Edward R. Murrow's legacy in leveraging WSU's influence in the media industry and academia on the national level," Pintak added.

A couple of years ago, after attending a breakfast interview with Floyd, I told him, "I don't know your party, but you should run for governor or senator as your next career stop." He merely smiled.

Bernardo referred to Floyd's ability to teach others how to dream big, then act to realize the dreams, as "transformational for WSU," shifting from the school's long-accepted role as the state's "ag school" to a leadership role in addressing the needs of the whole state.

Bernardo said that Floyd took WSU's "quiet humility" and just kind of stepped up and said we can be something bigger. He led us there. That transformation will be the most important to WSU."

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Life Science Discovery Fund, defunded by Legislature, will exit with last hurrah

 

The Life Science Discovery Fund (LSDF), created a decade ago from the state's share of tobacco-settlement millions to promote the growth and competitiveness of the life science industry in Washington but defunded by the 2015 Legislature, has found a way to go out in style after all.

In what amounts to an unusual but fitting last hurrah, LSDF announced today that it is launching a six-month competition for what might be described as a "legacy" or "ecosystem" grant of almost $2 million to one or more organizations that can stimulate momentum within the life sciences commercialization sector.

The LSDF was established by then-Gov. Christine Gregoire and the legislature with the vision of using Washington's multi-million-dollar share of the Tobacco funds from the 1998 settlement to promote life sciences competitiveness, improve health and healthcare and help shape that industry's future.

But perhaps proving that vision can't be passed on, the 2015 Legislature defunded LSDF, with Democrats in the House and the Statehouse eventually acquiescing to the demand of Senate Republicans that funding for LSDF end.

In writing about that final legislative action, I said that LSDF went out "not with a bang but a whimper," given that strong support for the organization from Gov. Jay Inslee and House Democrats evaporated in the final days of legislative give and take on what would be included in the budget.

Wrong about going out with a whimper! LSDF will be going out with a bang after all, but not one the Legislature intended, or knew was possible.

In defunding LSDF. the Legislature specified that the $11 million in the organization's treasury balance be shifted to the state general fund.  

Except that in Addition to the $11 million that was to be LSDF's operating funds for the next year, and the nearly $12 million in the LSDF treasury to manage the stable of 46 grants already awarded by the fund, there was almost $2 million left in the treasury. Unallocated and not ordered sent to the general fund.

So the LSDF board last week approved the idea of turning that nearly $2 million remainder into what Executive Director John DesRosier refers to as " a life science ecosystem grant" and LSDF took the first step today by announcing the request for proposals with a pre-proposal deadline of September 21.

Full proposals will be due by January 6 with awards (possibly more than one) to be announced February 8 as an appropriate denouement for LSDF, which since it first began making grants in 2007 has awarded nearly $106 million to non-profit and for-profit life science businesses.

DesRosier said the grant o grants could be awarded to either a non-profit or for-profit entity that might already exist or come into existence "to stimulate momentum within the life science commercialization sector."

DesRosier views LSDF's eight years of funding activity, largely to startups for whom the grants often served to allow entrepreneurs to bridge the early funding challenges referred to as "the valley of death" for startups, as "creating a momentum for the life science industry's emerging companies.

And for all the lamenting from those focused on how this state stacks up against competing states and the message they fear that LSDF's demise sends to entrepreneurs in other states, it needs to be remembered that LSDF's legacy is in the life science startups it funded and that are now growing and creating jobs.

"So now the question is how do we keep this momentum going," he asked. "We think one way is to create programs that support entrepreneurs in their endeavors, not with individual grants but in a less prescriptive way."

It's clear that the LSDF board wants to be flexible in determining what type of organization or groups might best contribute to the life sciences ecosystem they seek to foster. "We want to keep as much flexibility as possible, depending on the scope of the proposals we receive," DesRosier said.

LSDF will be downsizing its staff by the time the board awards the grant, or grants. But DesRosier avoids referring to the end of the organization, saying "we're not using words like dissolving."

It's worth remembering that the legislature only denied LSDF future funding, it didn't strike the organization from existence.

"We're actually downsizing the staff by the end of February and we may or may not be in or current physicial space (LADF has been housed in the headquarters of the Washington Biotech & Biomedical Association)," he said. "But whether or not the organization continues to exists still up in the air, as well as the question of whether we will continue to oversee the existing grants."

"We're still quite flexible if something interesting comes up between now and then," said DesRosier.

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Startup BeneSol hopes to capture Vitamin D fans with new, safer fast-dose kiosks

A Seattle-based start-up guided by a serial entrepreneur and supported by a couple of prominent businessmen with investment-success pedigrees is seeking to capitalize on the growing concern about the health impact of Vitamin D deficiency by producing a sit-down kiosk that would deliver large doses of Vitamin D in a safe manner.

 

The company is BeneSol Inc., which is completing an initial funding round to build and begin putting in place self-service kiosks designed to be a novel approach to address what the company's executive summary characterizes as "a worldwide vitamin D-deficiency epidemic."

 

Rick Hennessey 

BenSol CEO Rick Hennessey is an entrepreneur who has built and successfully exited five companies, including most recently Cequint, a Seattle wireless service provider that he sold to TNS, Inc. for over $100 million in 2010.

 

Hennessey explained that the machines, which will cost about $20,000 each, are not intended to be sold but rather to be placed into clinics and other healthcare facilities and for BeneSol to be paid for their use.

 

His ambitious goal is to put 10,000 of the machines into the marketplace in six years, which he estimates will produce up to $1.5 billion in revenue. His vision is that use of the kiosks, which he says will "take about two minutes and involve no more risk than standing in the sun for 60 seconds," will "become like brushing your teeth."

 

He and BeneSol founder Alex Moffat, whose background is in software development, have attracted a couple of experienced investors in Woody Howse, co-founder of Cable and Howse Ventures, one of Northwest's original venture firms, and Chris Ackerley, a founder of Ackerley Partners.

 

In addition, the latest addition to the company's board is Ralph Pascualy, M.D., CEO of Swedish Medical Services.

 

Although a large majority of people in this sun-starved area are Vitamin D deficient, (Hennessey says estimates are about 80 percent in Canada and about 77 percent in the Northwest), not everyone who might decide to use the kiosks is deficient. So I asked if they are going to suggest users get blood tests to verify deficiency.

 

Hennessey noted that new blood-test machines "are hitting Walgreens and other pharmacies and that will bring blood tests into the consumer space at a very low cost."

 

"We also have developed an algorithm that will predict D level accurately and will incentivize people to take a blood test as part of the process," he added.

 

It was Howse, through a friends and family connection, who met Moffat and began making key introductions and spreading the word about Moffat's personal involvement in working with manufacturers in developing a new light source.

  

Howse noted that the current fund-raising round will allow the company to go through a beta test using the device for treatment of psoriasis, which he described as "the most prevalent immune-deficiency disease in the world."

 

Howse soon went on the board of BeneSol, which was founed in 2009, and became an investor.

 

So BeneSol executives are aware they will be viewed merely as another early technology in a sector where an array of businesses are providing "The Sunshine vitamin" in one form or another in substitute for available sunshine.

 

One competing technology has already basically eliminated itself from the field, tanning devices. A unit of the World Health Organization has added ultraviolet radiation-emitting tanning beds and lamps to the list of the most dangerous forms of cancer-causing radiation.

 

Another competitor, Vitamin D supplements are taken by almost half of older adults. But a little over a year, Fortune Magazine columnist Steve Salzberg zeroed in on Vitamin D supplements in his Fighting Pseudosciencecolumn.

 

He cited two studies that he said "show that most of those people taking Vitamin D supplements are wasting their money."

 

Then there are the UVB light source devices and lamps, including those manufactured by competitors like Philips, which could become an acquirer as BeneSol moves forward, if the startup's growth approximates the investors' hopes.

 

Referring to the light-source competitors, Hennessey said "We have to complete FDA, but our initial testing and the long-established science tells us that we are far safer, require less time and are more effective then their technology."

 

I asked Hennessey about the importance of those using the kiosks maximizing skin exposure, meaning was disrobing an issue that needed to be dealt with.

 

"The more skin exposure the better, but you don't have to get naked," Hennessey replied.

 

"When we run focus groups with women, we ask the question of whether or not they would undress in our unit," he added. "Not a single woman in our focus group had an issue.  They made comments like, 'I change in dressing rooms, and many don't even have locks or often doors.' Our machine is a secure kiosk with door that locks."

 

FDA approval is still on the futures list so that becomes a cautionary note as they explain their expectations.

 

"We anticipate being the first device to go through FDA so that we can claim safe and effective production of vitamin D," he added. "Like most early technologies, there are some alternative options that will compete for the dollar, but, nothing like what we are doing."

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Washington's only local elected official born in China sees major relationship opportunity

 

Bellevue City Councilman Conrad Lee, the only local elected official in Washington State who was born in China, is convinced the U.S. and China are "on the verge of a relationship opportunity that needs to be seized now to create a partnership that will provide long-term benefits for both nations."

And Lee, 76, a member of the Bellevue council since 1994 and mayor from 2012 to 2014, thinks the establishment of the Global Innovation Exchange (GIX) in Bellevue will make the Eastside "a world center for innovation that will enhance the relations between the two countries in a way that will influence the rest of the world."

Conrad Lee

"China and the U.S., with similar geography and populations that have similar personalities, have been friends for 100 years," Lee said. "We are the two biggest economies of the world, the biggest pools of talent and the biggest markets."

He thinks the Global Innovation Exchange (GIX), a partnership between University of Washington and Tsinghua University, which has been described as the MIT of China, with the $40 million funding from Microsoft, will be a key to the relationship he hopes to see emerge between the two nations.

"The GIX, as the beginning of a commitment on the part of the two vitally important universities and a world-leading company, will help provide a deeper relationship and the exchange of ideas between the U.S. and China and spur economic opportunities across the innovation ecosystem," Lee suggests.

But he cautions that it's important for the U.S. to move rapidly to seize the opportunity to create a special relationship while the current leadership of China is in power and open to that possibility.

And he is concerned that " bureaucrats of both sides are running around talking policy and don't know how to get beyond that to real communication," adding "China doesn't yet have a cadre of people who can understand and communicate with us and the same is true from our side."

"But we are both pushing to find the right connections," Lee added.

"If we are friends in the future, the world will benefit, but if we are enemies, the world won't sleep well at night," added Lee, who was born in Kunming in Southwest China into a family in which his father was founder of a bank and his mother was a high school graduate at a time when few women even attended high school.

Lee was eight years old when his father, who was an entrepreneur and the founder of The Bank of Kunming, died when his plane was lost at sea while he was on a flight from Shanghai to Hong Kong. Lee recalls that "two years later, as Communists were heading for our region, we left for Hong Kong where we had connections because of my father's had business there."

Lee was schooled in Hong Kong, came to the U.S. in 1958 to attend school at Seattle Pacific, but transferred to the University of Michigan to get his engineering degree and received his MBA from University of Washington.

He became a U.S. citizen in 1971. He worked at Boeing where, as an engineer, he was on the team that developed the 747, then worked for Seattle Solid Waste Utility as a project manager on the team that transformed garbage disposal to solid waste management to make Seattle one of the first cities to recycle and compost its garbage.

He was appointed Regional Administrator of the SBA by President George W. Bush, then ran for the Bellevue City Council. He is mid-way through his sixth term, a tenure twice as long as any other member of the council.

Lee sums up the potential that sets the stage for a U.S.-China close relationship noting, "We need their money and they want our creativity and innovation. We have a nation with a culture of creativity whereas China is very structured, which is the opposite of fostering innovation."

"But the Global Innovation Exchange may help turn that around," he added.

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Confederate 'stars and bars' remains honored in Brazil where southerns migrated after war

As the battle rages over the future visibility role, if any, for the flag of the confederacy, one place the stars and bars will remain honored and celebrated is in Brazil, where Confederates created colonies after the Civil War at the invitation of the Brazilian emperor and proceeded to make a lasting mark on that nation's culture.  

That little-known Civil War chapter is the subject of a book by one of my closest friends, Gary Neeleman, that is to be published in Brazil in Portuguese before year end and negotiations are proceeding to have it published soon thereafter in English in the United States.

When published in English, the book could be a timely addition to the current discussion, including both the legitimate effort to minimize future display of the Confederate battle flag and the less logical disparagement of Confederate heroes like Robert E. Lee and anything relating to the citizens of the Confederacy.

Neeleman's

Gary and Rose Neeleman

research over the past 40 years through aged documents, old letters and newspaper clips brings him to conclude that history not racial hatred, pride not prejudice, were the driving force for those who migrated to Brazil rather than again become part of the United States.

 

My friendship with Neeleman, 81, extends back more than 40 years, beginning with our more than a decade as executives at United Press International. And I've been struck by his perpetual zeal to evangelize "the spiritual link between the United States and Brazil."

 

While a focus of this column is on Neeleman's book on the Confederate migration, because of its timeliness, the column is really more about the journalist who built a lifelong love affair with Brazil and its people and has left his imprint on the nation, where his contributions will be honored in a few weeks in San Paulo.

But to first finish the story of the Confederates, obviously, no slaves accompanied the some 7,000 "Confederado" families in the 1866 migration, in which they were personally greeted by Emperor Dom Pedro II upon their arrival in their new home. But interestingly, the southerners avoided acquiring slaves in Brazil, a country where slaves were more common at that time than in virtually any country in the world.  

Neeleman notes that when leaders of the more than 20,000 southerners who founded two communities in Brazil were asked about the fact they didn't have slaves, they replied that they no longer wanted to own people but preferred to employ them "so we can fire them if they don't do their job."

The southerners, many of them from the most important and prominent families in the southern part of the United States, established the cities of Americana and Santa Barbara do Este.

And, as Neeleman notes, for 150 years the descendants of those Confederate communities have gathered annually to celebrate their heritage at the Cemetario de Campo, the old cemetery where about 2,000 Confederate soldiers and their families have been buried. And the Stars and Bars that were the Confederate Battle Flag were and have remained highly visible there, some Confederates actually being buried wrapped in the flag. 

He recalls the year he was asked to help arrange for former President Jimmy Carter and his wife, Rosalynn, as well as aide Jody Powell to attend the Confederate picnic at the cemetery and how "they sat at the cemetery, sang Dixie and all three had tears streaming down their faces."

 

"That portion of American history and the stories of the 'Confederadoes' are lost in a linguistic tomb because Portuguese is a barrier to entry for those seeking to explore history," explains Neeleman. who hopes those stories in English will bring a closer look in this country at that history.

 

Neeleman routinely refers to "the two giants of the Western Hemisphere" and his research on Brazil and its people has actually resulted in not just a book on the Confederate but also two other books that emphasize the ties between the two nations.

 

One already published, "Tracks in the Amazon," details the construction of a railroad through the jungle, at a cost of thousands of lives, to bring goods from Bolivia, down the Amazon to the coast. The other book tells the also little-known story of how Brazilian rubber saved the allied war effort in World War II after Japanese victories in the South Pacific captured the Indonesian rubber fields that represented about 98 percent of the world's rubber production at that time. Restoring brazilian rubber production  was vital to the Allied success. 

 

It was in the early '60s that UPI plucked Neeleman, as a young reporter from Salt Lake City, and sent him to Brazil, where he had learned Portuguese as a young Mormon missionary. His regard for Brazil and Brazilians developed quickly and three of his seven children were born there, including David, whose launch of Azul as his third airline, following Morris Air and Jet Blue, has resulted in the fastest-growing carrier in Brazil.

 

During the 1963 Pan American Games in San Paulo, Neeleman recalled being struck by the conduct of U.S. athletes who played what he described as "the Ugly Americans," overwhelmingly defeating their South American opponents and treating them with disdain following the competition.

 

"I made up my mind right there that I would someday do something about that attitude," Neeleman told me. And so he did when, after returning to Salt lake City, he called upon the close-knit Utah coaches to help him put together a college basketball post-season tour of South America.  

 

That tour, with Neeleman acting as scheduler, accommodations arranger and bag-boy, became an NCAA post-season fixture and Neeleman became a regular luncheon speaker each year at the NCAA tournament.

 

Gary and Rose travel to Brazil about three times a year and when they're not traveling on personal or client business, or traveling to the Brazilian back country as part of their research for his books, he's doing Brazil's business as honorary counsel in Salt Lake City.

 

His next trip will be in September, when Neeleman will receive an unusual honor as the fourth recipient of an award whose English translation is Citizen of San Paulo. Others who preceded him as recipients of the honor named for the State of San Paulo were the Pope, the Dalai Lama and the founder of the Mormon Church in Brazil. Add Neeleman to the list.

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Lawmakers bring Life Science Discovery Fund to an end, not with a bang but a whimper

The fund established a decade ago by then-Gov. Christine Gregoire and the legislature with the lofty goal of supporting innovative research in this state to promote life sciences competitiveness, enhance economic vitality and improve health and health care has been terminated by the Legislature. And an oft-quoted line of poetry may best sum up the outcome: "not with a bang but a whimper."

The Life Science Discovery Fund (LSDF) was defunded by the Legislature at the insistence of the Republican Senate and at the eventual acquiescence of both the Democratic House and Democratic governor who had touted its importance to the state's future. In the rush to final budget passage, the fate of LSDF drew little attention except from the disappointingly few who understood its to the future of the state's economy.

Those who recognize the quote in the lead paragraph above as from T.S. Eliot's "The Hollow Men" should be forgiven for a quick sense of how appropriate the description "Hollow men" might be for the members of the Legislature.

And how appropriate also for that body might be the poem's line, "headpiece filled with straw."

The "whimper" is in the still unexplained rollover by both Democrats in the House and the governor himself after they had fought fiercely for LSDF funding and owned the vision space as it related to the importance of biotech and biopharma start-ups to the state's future.

The final budget was passed by the Legislature and signed by Gov. Jay Inslee last week after a conference committee had hammered out the details of issues in conflict, including the future of LSDF.  

In the end, House Democrats gave in and allowed a GOP-demanded shift of LSDF's treasury balance of $11 million to the state general fund and the stripping it of any revenue from any source over the coming biennium.  

I confidently (and obviously misguidedly) told friends and business associates the governor would use his line-item veto power to eliminate those LSDF death-knell provisions and turn GOP opposition to state support of entrepreneurs and biotech startups into campaign issues for Democrats next year.

Didn't happen. For reasons yet unexplained, the governor failed last week to employ the veto power he used a year ago to save the fund and thus become the political darling of those who saw LSDF as this state's message to the life sciences world about Washington's commitment to its future role in economic development in this state.

But for all the lamenting from those focused on how this state stacks up against competing states and the message LSDF's demise sends to entrepreneurs in other states, it needs to be remembered that LSDF's legacy is in the life science startups it funded and that are now growing and creating jobs.

And appropriately, one of the grant recipients, Seattle-based Omeros Corp., could possibly become a springboard for biopharma startups in the future because of its unusual program funded with a $5 million LSDF grant and, in an leading-edge partnership, $20 million from Paul Allen's Vulcan Capital in 2010.

Those potential spinouts could come from Omeros' G-protein coupled receptor (GPCR) program, a potentially lucrative focus in what is viewed as one of the most valuable families of drug targets.

GPCR's relate to key physiological processes in the body in which molecules bind to the receptors. GPCR relates to drugs that act on brain-cell receptors, unlocking them to drug development with such drugs representing 30 to 40 percent of marketed pharmaceuticals. Examples of the wide range of GPCR-drugs are antihistamines, opioids, alpha and beta blockers, serotonergics and dopaminergics.

 

The Omeros focus is on what are known as orphan GPCRs, those whose brain-cell receptors lack a certain DNA factor. There is a broad range of indications linked to orphan GPCRs, including cardiovascular disease, asthma, diabetes, pain, obesity, Alzheimer's disease, Parkinson's disease, multiple sclerosis, schizophrenia, learning and cognitive disorders, autism, osteoporosis, osteoarthritis and several forms of cancer.

 

A key Vulcan executive said at the time of the partnership announcement that the Omeros GPCR focus could accelerate new pipeline development across a broad range of highly attractive drug targets and can make a significant impact on the pharmaceutical industry.

 

Dr. Greg Demopulos, CEO of publicly traded Omeros, says the GPCR focus of his company is designed to promote the life science industry in this state in a way that is provided by other states that are spending millions to move life science to the fore in their economic development focuses.

 

But if the Omeros effort is successful in turning out startups to focus on various diseases that could relate to and be impacted by the GPCR research, the result would be a private-sector successor to, or funder of life science discovery since Vulcan Capital and LSDF have a right to receive a percentage of net proceeds generated by the GPCR program.

 

Meanwhile, the legislature, in head scratching fashion, didn't strike the Life Science Discovery Fund from existence, merely left it without resources to survivc.

 

But as a friend who has surveyed the legislative process for decades, and been closely involved with the lawmakers, explained: "This is how the legislature operates. They don't outright kill things.  They just turn off the money spigot because that's the way it's handled in the secretive budget process, which is gutless."

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Like Sinatra, Seattle developer Martin Selig's defining song could be 'I did it my way'

Frank Sinatra's defining song "I did it my way" would be equally appropriate for Seattle developer Martin Selig, except that Selig, at the age of 77, continues to do it his way.

 

"His way" includes buying or constructing buildings on his own (meaning no partners) at a relentless pace, taking far-flung solo trips on his Harley Davidson motorcycle (he recently returned from circling Switzerland) and turning out paintings that demand a high price when he donates one to a charity auction.

At a recent question-and-answer session at the Columbia Tower Club as part of the 30th anniversary activities of the club Selig founded atop the 76-story building that is his signature project, which is also marking 30 years, he reflected on his decades impacting the face of Seattle-area development.  

Selig bought his first building and founded Martin Selig real estate in 1958 while still a college student and recalled at the q and a session that he put $2,000 down on what was a $50,000 building on the edge of University Village, which came into existence later on.

That first purchase began a process of acquisition and development which today has Martin Selig Real Estate having developed more than 7.7 million square feet of first-class mid- to high-rise office space, representing about a third of the downtown Seattle office market.

Selig first got involved in shopping centers, building them then bringing in occupants before selling them.

He used the proceeds from sale of the shopping center to buy his first building, a one-story structure in the Lower Queen Anne area that in 1969 led to the development of his first commercial office building, which was a five-story, 60,000-square foot project.  

That began a process in which Selig developed a building a year over the next two decades, including the Columbia Center, which he explained to the audience was "merely like building eight buildings at a one time."

Once part of a group of local CEOs who donned leathers and rode off together on their Harleys to become known as "Hell's Rotarians," Selig has seen the group mostly retire and put away their bikes, leaving his trips to be solo ventures.

He told the audience at the Tower Club interview that he is sending one of his bikes to Rhode Island for the Newport Jazz Festival, after which he plans to travel home across Canada.

Asked what he worries about, Selig replied "I don't worry about anything."  

That despite the fact that as he remade Seattle's skyline, he was no stranger to what others might view as treading on the financial brink during several economic downturns, surviving by selling off some of his key properties including in the late '80s the Columbia Center where we were doing the interview.

 

But as a well-known Seattle real estate broker once joked, "he's been the cat with nine lives."

 

Referring to his riding, painting and other personal activities, Selig summed up "as long as you can do whatever you want to do, it makes what you have to do at work easy."

Asked about his succession plan, Selig said: "I leave the future to Goldman Sachs," noting he has no particular thought of guiding his real estate company into the hands of his kids. The answer was in response to a question about his thoughts on media mogul Rupert Murdoch's unabashed and high-profile effort to put his children into ascendant roles in his company.

"They come and go in the business," Selig said of his three children, noting that Lauren, the oldest of two daughters, is now a producer with several movies at the Venice Film Festival, and that his son, who has been living in Israel, is returning to Seattle to enroll in real estate at the UW.Youngest daughter, Jordan, still in her 20s, has been acquiring, fixing up and leasing residential properties in Germany.

 

Meanwhile, his pace of development activity shows little sign of slowing with planned future buildings sharing space with his paintings on his office walls.

I asked Selig about the total absence of partners in his years in the business and he replied that while partnerships may start out well, inevitably a disagreement will arise and that diverts attention from the business focus.

Selig is a close watcher of politics and at one point in our interview said to me: "I thought you might have some political questions."

"So if I were to ask you a political question, what would it be?" I responded.

"Who is going to win the Republican presidential nomination?' he replied. So I bit and asked that question.

"It will be a brokered Republican convention, with none of the numerous candidates having enough delegates from the primaries to capture the nomination," he predicted. "Then the convention, which won't be able to agree on any of the candidates who have been competing bitterly through the primaries, will settle on Mitt Romney."

Considering that if Selig buildings, past and present, were color coded on a perspective photo of Seattle, they would dominate the picture, he actually is less visible than people might expect, making little effort to grab the limelight.

Thus, as Mike Kunath, founder and principal at the investment advisory firm Kunath, Karne, Rinne and Atkin, and a friend of Selig's for a quarter century or more put it: "Selig's contributions and his legacy are understood or appreciated by maybe 10 percent of people here."

Putting those contributions in perspective may not happen until Selig finally slows down.

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Elson Floyd name on new WSU medical school would ensure support for future

Just as it was WSU President Elson Floyd's personal presence in the legislative halls that overrode doubt and opposition to bring about creation of a new medical school for his university, naming the medical school after him would ensure that his spirit and memory provide the support for the school to weather challenges ahead.

Elson Floyd

As the awareness spread in the days following his death from cancer last week that Floyd was waging an eventually losing battle with the disease while he waged the legislative struggle to fulfill his vision of a new medical school for WSU, the idea of putting his name on the school has logically surfaced.  

There are apparently a number of bills making the rounds in the Legislature to name the medical school after Floyd, who died last week in Pullman at the age of 59 after the colon cancer he had been battling for months suddenly worsened and claimed his life.

And a move on social media emerged yesterday urging that the medical school be named for Floyd, since his personal immersion in the struggle to convince the Legislature that the state needed more than one approach to training doctors and that WSU could make the difference won the day with lawmakers.

Floyd had spent hours in Olympia early this year testifying before committees, meeting one on one with legislators and building WSU's case for why a second medical school made sense, even while UW lobbyists were saying it didn't. In the end the legislation that will allow WSU to create a second medical school in this state passed by an overwhelming margin. It was signed into law by Gov. Jay Inslee the first week of April.

"A lot of legislators knew of his battle with cancer," said John Gardner, vice president for development and CEO of the WSU Foundation. "But he handled his personal health like he handled every other issue he confronted in life, never using the challenges to advance a cause."

"His privacy was something Elson was consistent about, never wanting his burden to become someone else's burden," said Gardner, whom Floyd brought with him to Pullman from the University of Missouri when Floyd took the WSU job in 2007 and was one of Floyd's closest friends.  

While it's logical that the lawmakers who came to know and respect Floyd, and were saddened by his death would seek to put the final mark of his name on his medical school, the Legislature may not be the right forum for that decision.

The established university processes may deserve to be served in Floyd's case in particular, and the forum for a decision on naming the WSU medical school after him should remain the province of the WSU Board of Regents.

And since it seems more than likely that the school will eventually carry his name, that will virtually ensure that future legislative battles over funding to produce doctors from both UW and WSU will unfold with lawmakers sensitive to whose name is on the WSU medical school.  

Just as there was legitimate and understandable opposition to a WSU medical school from supporters and fans of the UW medical school that is one of the finest in the nation, that opposition will surface in coming legislative sessions over the appropriations necessary to provide sufficient funding for now two medical schools.

Elson's name on the school is the most certain way for WSU to weather those certain legislative funding storms, first for the focus on the initial class of 40 medical doctorate candidates who are to be welcomed in the fall of 2017, then for the funding challenges that await through 2024 when the first graduates will complete their residencies.

If that naming decision comes from the lawmakers themselves, it would likely assure that each issue is weighed on the basis of a legislative reaction that "we named this place for Elson."

But the reality is that the decision belongs in the hands of the regents of the university where he left many imprints, one of which was his vision for a WSU medical school.

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A small example of government caring can do much to alleviate broad public cynicism

At a time when cynicism about government, and elected officials in particular, is at its zenith, there's some satisfaction in encountering those occasions when government has a more caring demeanor.

Seattle City Councilman Tim Burgess' announcement that he is seeking re-election reminded me of one of those occasions because he was a player in what to most people would be a minor incident but was one that had a larger import for me because it grew out of a column I had done.

The point of the column, which I think has increasing relevance, was that "elected officials need to weigh the implications of anger that constituents feel toward government in certain situations and consider how to bring private-sector principles of customer-friendliness into their thinking."

To many friends and those who read the column, there was an amusing, and some said typical, overreaction on my part to two traffic-related citations, one for $42 for parking wrong against a building and the other a $124 ticket for rolling through a stop sign in my neighborhood at 6:46 one morning.

The point of the column was that it may be at government's peril when citizens, particularly in tough economic times, find serious financial impact from traffic-related brushes with the law and are angered out of a sense that the penalty exceeded what was just or even moral.

 

I wrote that I would go to court on the two tickets and make the point to the magistrate that the cost of the minor moving violation had come during Christmas season and for some in Seattle, that $124 could have a serious financial impact on their holiday.

 

I said I would suggest to the magistrate that since "customer friendliness" was important to government's relations with its "constituents," I was going to ask permission to make a donation equal to the ticket amount to charity rather than pay it to the city. That would make me feel better about the citations, I said.

 

A number of those who received the column urged a follow-up column once I had met with the magistrate.

 

When I arrived in court and handed Seattle Municipal Court Magistrate Lisa M. Leone the column and explained why I was in front of her to discuss the tickets, she said "there is certainly a lot controversy about this issue, and a lot of angry people," then added: "And a lot of poor people are involved."

 

I could perceive that she cared about that fact and was sensitive to my suggestion that since charitable organizations are squeezed as never before, I'd write a check for the amount owed to any charity she designated. But she noted she lacked the power to issue that sort of order.

 

I explained my point about it being in her hands and the hands of her peers to be the instruments of customer friendliness that so often seems lacking, especially in cases where merely the law and not a moral issue is involved, though admittedly some might debate me over a beer about breaking the law basically being a moral issue.

 

To my surprise, she said she was going to change the parking ticket to a warning, then offered me the opportunity to do community service from a list of approved non-profits, for a number of hours equal to the $124 citation amount.

 

She said she lacked the authority to tell me to make a check out to the charity for that amount but was accepting of my statement that I felt compelled to do that.

 

It was clear that while she logically wouldn't share the information with me, there obviously were a number of citizens for whom the traffic-incident costs would pose a serious hardship who found themselves fortunate enough to be in the hands of a magistrate who fit the image of "justice."

 

So I wrote a follow-on column about what happened, with the lead: "It turns out that Justice does have a smile on her face, even when challenged to defend the workings of government against accusations of possible heavy-handedness."

Councilman Burgess comes into the picture because perhaps a year later, following a parking-ticket incident (I always go to court if I think I was treated unfairly) I went to court again and wound up again before the same Magistrate Leone.

 

I asked her if she remembered we had met earlier and that I had done a column on our encounter and she said she did. And she told me that after the column came out, Burgess, who had also seen the column, spent the bulk of a couple of days sitting in her office as those seeking relief from their traffic-infraction costs appeared before her.

 

"I think he genuinely wanted to get an understanding of those who came to appeal their tickets," she told me.

 

Now any politician seeking re-election wants to have good things said about them. But even Burgess might chuckle at the idea that relating this court incident could help his re-election.

 

But I've carried a respect for him since then because little things that are unpublicized tell much about the person.

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LSDF's comparatively tiny budget should be easy to fund, given its role in the state's future

Don Brunell, retired president of the Association of Washington Business, summed it up best as we were discussing the perilous state of the fund whose purpose has for a decade been to promote the state's life sciences competitiveness.

"A $19 million expenditure in a $40 billion biennial budget is too small a percentage to even try to calculate," said Brunell, who as longtime president of the state's largest business association guided business's side of negotiations through four governors and two dozen legislatures.

"If it's a really important issue, as it seems the Life Sciences Discovery Fund (LSDF) should be viewed, you just take the $20 million out of a major-funded item," Brunell said, "particularly at a time when the state is experiencing an unexpected surge in revenue. It's not that difficult."

Brunell's comment, borne of years of playing the game of helping lawmakers reach budget goals while finding a way to save the most important business items in the final budget, is an important comment, since it's a thought that may still occur to the small group of legislators deliberating the final form of the state budget for the coming biennium.  

To be sure, there are a lot of smaller programs whose supporters are seeking to pressure lawmakers to safeguard in the final budget."Molehills vs. the 'mountain' of holding off new taxes," as one prominent business friend of mine, whom I respect but disagree with on this, put it in referring to those various programs.

That current LSDF funding of $19 million a biennium is the small remainder of the $400 million tobacco-settlement money from which LSDF was established in 2005 by the Governor and Washington's Legislature. The goal of the fund was to support innovative research in this state to promote life sciences competitiveness, enhance economic vitality, and improve health and health care.

The challenge for LSDF at this point is that while the money to sustain its funding for another biennium is in the House (Democrat) budget, and strongly supported by the governor, there is nothing for the agency in the Senate (GOP) budget, and there apparently is even Senate talk of taking back some of the money already granted.

Word leaked out earlier this week that the four budget negotiators (a Democrat and a Republican from each house) had reached a tentative deal on the total size of the budget. That's the first step before lawmakers begin tinkering with details, hammering out individual items (like the funding for LSDF's survival) and, of course, reaching some compromises before the hard deadline at the end this month when the biennium itself ends.

There is some belated talk, but probably not nearly enough of it, from business leaders about hammering the Senate with the reality that Republicans can't abdicate the image of supporters of entrepreneurs and innovation to a Democratic governor and Democratic House members.

Brunell was one of a half dozen major business-community figures I had talked within the past week to get a sense of the depth of understanding of and interest in the LSDF and its purpose. And Brunell admitted, as others have, that he was only vaguely aware of LSDF's role (which is visible mainly to the biotech industry and its supporters) or that it was in danger of disappearing, assuming that if it was an important business issue, Republicans would be watching out for it.

 

Brunell, who in his retirement now produces a regular column that appears in several dozen newspapers, seemed struck by the lack of visibility on what he agreed seemed vital to future of an emerging industry in this state.

Noting that there are a number of issues whose backers are bombarding supporters to press their legislators, Brunell said "I am pummeled with emails and contacts from wildlife and recreation and the folks wanting a carbon tax, but besides you I am not hearing from LSDF advocates. But supporting LSDF seems like a no-brainer."

It's important to share that my belief in the importance of LSDF comes, as is usually the case, from personal involvement and commitment. I had only been generally aware, as a journalist, of LSDF and its background and role.

Then I became involved in actively supporting an emerging biopharma company named M3 Biotechnology, believing in its potential dramatic impact if it gains FDA approval for a drug that would reverse neurodegenerative diseases, and in the CEO, Leen Kawas, who has been guiding the company's successful growth.  

As one whose wife suffers from Parkinson's Disease and with a father who died of it, and relatives and friends who have Alzheimer's, the company was a natural one.

It was as a result of involvement with the company that I learned the importance of LSDF, since the then just-launching M3 received grants from LSDF that allowed it to bridge what's referred to as the funding "Valley of Death," the financially challenging period from birth of a company to the successful initial funding round.

 

I also researched what states are doing to attract biotech, which this state's sound and fund has largely substituted for commitment, and learned that others are spending millions of dollars to attract and grow what they realize will be a key economic pillar in the future.

"M3 isn't the only company that needed the LSDF funding to survive until finding conventional funding," said Chris Rivera, CEO and President of the Washington Biotechnology and biomedical Association.

"Legislators tell me 'if we give LSDF $19 million, we'll have to take it away from somewhere else," Rivera said. "And I reply, 'if LSDF goes away, and the industry begins fading and the economy is being impacted in this state a result, you'll be doing a lot more looking somewhere else to make the cuts that will be necessary.'"

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Could proposed capital-gains tax be vehicle for Supreme Court re-look at income tax?

The proposed capital gains tax that the Democratic controlled House of Representatives insists must be a part of the final legislative budget package likely stirs the inevitable liberal hopes and conservative fears about it being the vehicle to bring the issue of state income tax before the state Supreme Court.

Democrats are routinely hopeful of finding an opportunity to pass a tax measure that would cause the state's highest court to re-look at the constitutionality of a Washington income tax while Republicans are pretty much always on guard against that happening.

Thus the seemingly illogical positions of Democrats wanting a tax measure the Legislature passed over GOP opposition to be challenged to the Supreme Court and Republicans not wanting a measure they opposed to be appealed.  

Hugh Spitzer 

But the real logic is in understanding realities. Proponents of adding some sort of a tax on income to the tax structure in Washington have become convinced that the state Supreme Court, given the opportunity, would reverse the longstanding precedent that an income tax is unconstitutional in this state. And many opponents of an income tax apprehensively agree with that analysis.

  

It's been 82 years since Washington's Supreme Court, in a 5-to-4 decision, held that a graduated net income tax would violate the state constitution's uniformity provision because 'income' was 'property' and property was to be taxed uniformly.

Washington is one of only seven states with no income tax, but by almost any measure, it is the most progressive of the states with no tax on either personal or corporate income.  

The 1933 ruling on the unconstitutionality of an income tax has meant that it would require a two- thirds vote of the legislature and the voters to amend the constitution to impose an income tax. And despite repeated efforts to get the voters, since that supreme court ruling, to approve an income tax, no proposal has come close to approval.

But Seattle attorney Hugh Spitzer, an expert on the state constitution and long an advocate of a state income tax, agrees that the state high court, given the opportunity, would overturn the precedent case. But he says the proposed capital-gains tax, which Gov. Jay Inslee and Democrats pitch as targeting the investment income of the super wealthy, isn't likely to be the vehicle to get the issue before the court.

"Although I wish that this legislation, if enacted, would provide an opportunity to re-look at the constitutionality of a Washington income tax, I'm not sure that it would necessarily provide that opportunity," Spitzer emailed me when I posed the question to him this week.

"The state capital gains tax proposal has been carefully drafted to stay comfortably within the definitional parameters of an excise tax," Spitzer said, adding "I helped with the drafting of early versions of the proposed capital gains tax, and the language I worked with is still there."

"It's a one-time tax on a transaction rather than a periodic (i.e., yearly) tax on property.  The tax can be easily avoided by not selling the asset giving rise to the capital gains tax-this is an indicator of an excise tax rather than a property tax," he explained. "Property taxes can't be avoided by means of a voluntary action (like refraining from a purchase or a sale)." 

But likely stirring the emotions of liberal hope and conservative fear about a new supreme court decision, Spitzer, now acting professor at the University of Washington Law School, argues that the current State Supreme Court would accept an income tax as constitutional.  

"Fundamentally, the cases they relied on in 1933 all tied back to three United States Supreme Court cases which have been reversed or, in one case, wiped out by a U.S. Constitutional amendment. The background law no longer exists." Not to mention that this Supreme Court is dramatically more liberal in its makeup than the court in 1933.

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Spokane firm seeks to bring new model to green-card-for-investment program

The EB-5 program that gives foreigners their green cards for a $500,000 investment in a U.S. business has seen a Seattle company, American Life Inc., become a national model for success of the program. Now Spokane entrepreneur Peter Chase is seeking to create what he calls a "true economic development tool" with EB-5, focused on funding new businesses across Washington State rather than just real estate.

 

Peter Chase

Both American Life's success, visible in the form of new buildings in Seattle's Sodo District and in other cities where it operates with a focus on real estate development, and Chase's initiative come at a time when Congress is mulling changes in the EB-5 program that could affect both.  

 

EB-5, officially the Immigrant Investment Program, was created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by up to 10,000 foreigners a year who must show their investment created or saved at least 10 jobs in order to earn permanent U.S. residence.

 

The law, and a key modification in 1992 to allow creation of Regional Centers to pool EB-5 capital and administer the investment projects and track results, has funneled billions of dollars into the U.S. economy though only in the past couple of years has the 10,000-investor target been reached.  

 

EB-5 turns 25 this fall and Congress must renew, change or eliminate the program. There is virtually no chance Congress would end the program but some of the changes being discussed, and advocated, including dramatic increase in the amount of investment a foreigner would be required to make, could have a serious impact on American Life's success and Chase's aspirations.

 

Chase has launched Columbia International Finance, LLC, which he intends to operate as one of those Regional Centers that are government-approved firms which administer the investment projects that seek to attract the foreign capital.

 

American Life was founded in 1996 by real estate and immigration attorney Henry Liebman, the firm's chairman and CEO, and now operates nine of the nation's 652 Regional Centers, including five in this state.

 

. It is viewed as one of the most successful and longest continuously operating regional center management companies, operating centers from Miami to Southern California, plus the Pacific Northwest.The focus of American Life, as with most of the regional centers, has been real estate development projects. 

But Chase, who founded and for more than a dozen years served as CEO of Spokane Valley-based Purcell Systems, a maker of outdoor telecommunications cabinets that grew to $140 million before it was sold last year, has a different model in mind.

 

"We plan to target projects that deliver true economic impact for communities," Chase said. "We have no intention to build hotels and we are not developers. There are just a handful of centers doing what we consider to be what the original intent of the EB-5 program was, meaning  true, ongoing economic development."

 

Chase points to the centers operated by the City of Dallas and an industrial development entity in Philadelphia as fulfilling that original mission of creating jobs and thinks he could do that in Washington State in cooperation with economic development entities.  

In fact he thinks port districts in this state could partner with his new firm as well as potential projects in Spokane's University District with the ports or organizations like the University District Development Association receiving the EB-5 funds, through Chase's firm, for projects those economic development entities need to find funding sources.

 

Chase's new company, for which he has spent the last eight months developing contacts in foreign countries who will help guide EB-5 investment hopefuls in his direction, will generate revenue through origination fees on the financing and a margin of the interest. Investors also will pay a fee for Columbia's guidance through the process.

 

Chase says the vast majority of foreign investors are from China, but Columbia International Finance will seek investors from other parts of Asia, as well as the rest of the world.  

 

The first project for Chase's firm is expected to be construction of a new Ronald McDonald House in downtown Spokane where the $26 million facility will be constructed with roughly 60 percent of the funding coming from EB-5 investors.  

He has also had discussion toward a possible involvement that would bring EB-5 money through his firm to the proposed research and development campus on the site of the old Northern State Hospital in Sedro Woolley. The proposed project would provide up to 1,000 technical jobs on what would be a revitalized campus to support Janicki Bioenergy and complementary uses.

Chase sees both projects as legitimately fitting in the Targeted Employment Area (TEA) that is the designation of a project's acceptability for the $500,000 foreign-investment rather than $1 million. The TEA designation, assigned in Washington by the State Department of Employment Security, means an EB-5 project is being located in either a rural area or a location that has high unemployment.  

Chase isn't the only one thinking of using EB-5 to help finance new businesses. The day after first talking with Chase about his project, I had a breakfast meeting in San Diego with a friend there who is using a mix of EB-5 and conventional investor funding to launch a new company.

David Jacobs is a partner with a North San Diego County law firm. His new company, Stellar Innovations, has already raised $1 million of private funds with $2.5 million in EB-5 money to come for a new business that will be located in a TEA area somewhere in the job-challenged convergence of San Diego, Riverside and Orange Counties.

The business itself will be appealing to investors of both kinds, and likely grow quickly to other metropolitan markets because, as Jacobs explained to me, "its proprietary technology can eliminate billions of pounds of nylon carpet waste bound for landfills each year."  After the initial facility in Southern California is completed,Stellar plans to rely heavily on EB-5 funding to help rapidly expand its services to other areas of the country.

The issue on the table relating to the congressional decision on EB-5 in September appears to be not whether it will be renewed, but what changes Congress will make to the program. Politicians from both major parties support the renewal of the program, but for some, only with changes.

Presidential hopeful Jeb Bush, for example, has publicly voiced his opinion that Targeted Employment Area designation should be eliminated entirely, leaving the EB-5 investment amount at $1 million. Part of the rational of Bush and others who want to eliminate TEAs is that many of the large-scale EB-5 Regional center projects are found in affluent urban areas like Manhattan, Los Angeles, and Miami, with census tracts are often manipulated to allow for a TEA designation.

Others want a cost-of-living adjustment to the two-decade-old $500,000 figure, which, if TEAs were eliminated and $1 million became the only factor, could make the cost to a foreign investor substantially greater, up to as much as $1.8 million, and would make similar programs in other countries more attractive to those seeking to buy citizenship.

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