Log in
updated 2:54 PM CDT, Jul 28, 2018

FlynnsHarp logo 042016

Wireless icons Stanton, Thomsen focus on baseball

John Stanton and Mikal Thomsen were in their late 20s when they teamed up at McCaw Cellular to become part of the birthing of a fledgling communications technology whose growth globally they helped guide through several major companies over the next 20 years, becoming iconic figures in the wireless industry.

Now just into their 60s, both have parlayed their business success into owning and guiding professional baseball teams, what they might well agree is a passion that rivals their business focus.

A business focus remains, however, as they continue to manage their Bellevue-based wireless venture and investment firm, Trilogy Equity Partners, formed by a collection of long-time wireless partners after the sale of their Western Wireless to Alltel Corp. in 2005.

Thomsen once told me that the opportunity six years ago to create the ownership team that bought the Tacoma Rainiers was like his “dream come true.” He would be owning his hometown team that he had grown up rooting for from the time his dad took him to his first game at age three. That was the year that the then-Tacoma Giants returned after a 55-year absence.

Stanton, who will soon assume the role of CEO of the Seattle Mariners after the ownership group he leads completes its purchase of the team from Nintendo of America, also recalls attending the games of his hometown team with his father. That was in 1969 when, as a teenager he became a fan of the Seattle Pilots in their first and only year of existence and recalls crying when they left town for Milwaukee.

Thomsen would undoubtedly echo Stanton’s “I am first and foremost a baseball fan” comment  that he made to the media gathering at Safeco Field when he was introduced as the leader of a 17 member local group that would become 90 percent owner of the team and he become the CEO, once Major League Baseball owners bless the deal.

Thomsen and his wife, Lynn, and Stanton and his wife, Terry Gillespie, are all alums of McCaw Cellular in the ‘80s and are now on the team of co-owners of the Tacoma Rainiers, though the oversight of the franchise, including attending many games and spending about 10 hours a week in the office during the season, falls to Thomsen.

The owners are fortunate that the baseball team acquisition included Aaron Artman as club president, a former Microsoft executive who oversaw the $30 million renovation of Cheney Stadium and remained with the new owners in the role of president.

Stanton’s and Thomsen’s baseball involvement extends across the state and all the way down to the West Coast League, an amateur collegiate summer league, where they are among owners of both the Walla Sweets and the Yakima Valley Pippins.

But it was when Thomsen had the opportunity to put together the purchase of the Tacoma Rainiers in 2011 that he turned to Stanton and his wife, an avid baseball fan herself, to become part of the ownership group.

Thomsen has immersed himself in his hometown baseball team and has enthusiastically committed to its increasing success, despite being the smallest market in far-flung Pacific Coast League and being the closest Triple-A team to a major league city.

In fact, the Seattle Mariners and the Rainiers are not only geographically close, which Thomsen admits may sometimes cost the Rainiers attendance of fans heading for Seattle, but close in that the Rainiers are the Mariners’ triple-A farm team.

As Thomsen puts it: “Most of the Rainiers fans are Mariners fans who enjoy keeping up with both teams and hearing about the players they saw in Tacoma performing with the major league club. I think the nearness of the M’s cuts both ways.”

In addition, the relationship is good for the Rainiers’ bottomline since the Tacoma roster is determined by and players’ salaries paid by the Mariners.

A lot of the changes brought about since Thomson’s group bought the team relate to community things, but he is pleased about what has happened in the stands and on the field.

At this point, atop PCL pack, the Rainiers seem headed for their first playoff appearance since Thomsen’s group bought the team, though Thomsen cautions that “it’s a long way from certain. We are only three games up on Fresno.” Plus the team appear on the way to another franchise attendance record, though beating the 352,000 attendance mark of last season is well behind the nearly 680,000 of the Sacramento River Cats.

In addition, Thomsen notes that the decision by the ownership group three years ago to build a new set of stands in left field “has been a stunning success,” adding that he celebrated his 60th birthday there in early May this year “with a couple hundred friends.”

He says the change of the team’s logo two years ago to “the now somewhat iconic ‘R’” has helped drive merchandise sales “through the roof.”

In terms of community involvement, he says the Rainiers “teamed this past off season with Tacoma Parks, the Cheney Foundation and Mary Bridge Hospital to add a playground behind the right field berm that includes a whiffle ball stadium,

“It is packed for most games and open as a public park when games are not going on in the stadium,” he adds.

“The community views this as a partnership and we go out of our way to be great partners,” Thomsen says with obvious pride.

 

Continue reading
  1800 Hits
  0 Comments
1800 Hits
0 Comments

Alaska Airlines begins wooing process for Virgin America fans

Alaska Airlines’ goal of winning friends and influencing people in the Bay Area, whose hometown airline is about to be absorbed by the Seattle-based carrier, began in earnest Tuesday night in San Francisco as Alaska executives and board members hosted a gathering for local leaders.

Some 250 business, political and community leaders were on hand at the Four Seasons Hotel in San Francisco for an event whose theme was “Flying Better Together.” The goal of the gathering of Bay Area who’s who was for them to meet and begin to get to know the leadership of the airline that is buying Virgin America, the Richard Branson-founded carrier that began service as San Francisco’s hometown low-cost airline nine years ago this month.

During that nearly a decade of service, Virgin built what many in the Bay Area have described as “almost a cult following,”with many regular flyers enthusing that they “love Virgin.”

Aware of that challenge, Alaska CEO Brad Tilden and his executive team have sought to express sensitivity to the cultural issues and the initial backlash from Virgin fans. That awareness was pointed up a few weeks ago when Tilden told the Wings Club, a group of aviation professionals in New York, that he was thinking of running the Alaska and Virgin as separate airlines within Alaska Air Group.

Such an outcome may or may not still be a possibility, but when I asked Joseph Sprague, Alaska senior vice president, after the Tuesday event, about Virgin continuing to function as a third carrier, he said: “ Initially it will be a third airline but by 2018 it will be merged into Alaska.”

But Alaska leadership is playing up a cultural fit they see existing between Alaska and Virgin, rather than addressing the different styles.

Sprague said “a lot of the integration pre-planning work has revealed an encouraging number of similarities from which we can build.” 

He noted that Tilden, in his comments to the group Tuesday, pointed out three such similarities: “both have an obsessive focus on the customer, we both want companies that are employee-driven and we both have a strong leaning towards innovation around the customer experience.”

Alaska’s San Francisco community gathering came exactly s week after shareholders of Virgin America approved the acquisition by Alaska Air Group, with Virgin’s chairman announcing the voting results at a brief shareholders meeting on July 26.

That Virgin shareholder approval was the next-to-last major hurdle for the takeover, with the remaining step being U.S. Justice Department approval. Closing by October is expected for the $4 billion deal ($2.6 billion in cash and the rest in assumed debt and other costs) that Alaska had to put together to beat out Jet Blue.

It’s quite possible that the shadow of Delta Airlines’ seeming predator pursuit of Alaska that left key Alaska supporters concerned Delta was seeking to force a takeover played a role in Alaska’s decision to acquire Virgin America for a very large premium.

But in addition to likely ending concern about Delta coveting a takeover, Alaska also gets Virgin’s lucrative California routes as well as keeping Jet Blue, the losing suitor in the Virgin bidding contest, from acquiring the routes.

In fact, it’s perhaps amusing to consider the community response if Delta, after a hostile takeover of Alaska, held a reach-out event with the theme “get to know us.” They’d have faced a ferociously hostile audience in Seattle.

But obviously Alaska, which has been successfully serving the Bay Area from three airport for years, isn’t perceived as a bad guy, more just a carrier that locals don’t know a lot about other than it has an excellent record in all the areas airlines get rated.

In fact, as Phyllis Campbell, Alaska board member and Pacific Northwest chairman of JP Morgan Chase, put it after the event: ‘I think it is emblematic of Alaska Airlines to reach out to the community in a spirit of collaboration and collegiality. Having dinners like this send the message that we want to be the best airline going forward for the Region and also the best citizen in terms of community partnership.”

In fact, the event was apparently successful enough from Alaska’s perspective that Sprague said “we will likely do additional events, both of our own and sponsoring others.”

Still there are Virgin supporters whose love affair with the airline was partly due to the fact it was the Bay Area’s hometown airline. And the takeover will mean not just the end of Virgin’s “hometown” ties, but also that California will no longer have an airline based in a state that has served as home to a variety of important carriers over the years.

As Mary Huss, publisher of Puget Sound Business Times, summed up when I asked her about it: “I think people were very proud that Virgin chose to locate and start up here when it did.”

But while Jet Blue lost the bidding to Alaska, it is seeking to woo Virgin fans away before Alaska can convert them by looking for ways to exploit what it senses as uncertainty of flyers about the transition. It has been touting giveaway deals to potential frequent users of Jet Blue’s longhaul service from New York to San Francisco and Los Angeles, including its tongue-in-cheek wooing of Jet Blue “virgins,” those who haven’t previously tried Jet Blue.

Continue reading
  1797 Hits
  0 Comments
1797 Hits
0 Comments

Stephen Vella: turns around airlines, creates flying mansions

Stephen Vella, a congenial Brit who spent his career building airlines before turning his attention to creating flying mansions for the global elite, is the man whose Kestrel Aviation Management oversaw creation of the first VIP interior on a 787-8 Dreamliner.

The first VVIP outfitted BBJ, as its officially referred to, has gotten global visibility for those who partnered with Vella’s company, which had turnkey responsibility for the project from purchase of the plane to planning and design of the special interior to meet the requirements of the Asian client who will operate the aircraft. The partners included Greenpoint Technologies of Kirkland and Pierrejean Design Studio of Paris.

The specially outfitted Dreamliner is back in Moses Lake, where the work to install the unique interior was done, as it awaits final signoff by the FAA and final closing of the sale to an undisclosed owner.

“Undisclosed owner” is the usual description of individuals, countries or companies who decide they wish to own a castle in the sky and contract with Vella and Kestrel to manage the purchase, design and delivery of the aircraft. Nohl Martin, Vella’s vice president for business development and communications, says outfitting the special interiors can cost as much as the airplane itself with the finished product, once the widebody is aloft, sometimes described by buyers as airborne oases of peace.

But these are oases that are reserved for the elite, both in stature and resources, and the fact they seek out Vella has made him a valued relationship for Boeing, but also for Airbus, since the contract for design and implementation of one of these widebody interiors begins with the purchase of the plane itself.

I had an opportunity recently to interview Vella while he his partner Martin, a longtime friend of mine, were on a visit to Kirkland, where she has family.

The Dreamliner, representing the first conversion of a composite and nearly all-electric aircraft to incorporate a high-end cabin and thus requiring virtually the entire focus of the Kestrel team for the past two years, is the 11th widebody conversion that Vella’s team has managed from purchase through entry into service. The company has also done 10 narrowbody VVIP cabin conversions.

But as communications vice president Martin points out: “Sadly it is a sector that rarely allows us to publicize our work -- until this 787 project.”

Visibility was not a problem for Vella when he was turning around airlines, particularly the nearly 15 years he spent helping turn Qatar Airways from a struggling, five-plane regional airline into one of the handful of the world’s Five Star airlines.

When Akbar Al Baker, Qatar’s group chief executive, was tapped by the Qatar government in  1997 to take over the failing airline, he contracted with Vella, who functioned for the next 15 years as basically the airline’s COO, doing the long-term planning, fleet management, overseeing brand development as well as mergers and acquisitions.

By early this decade, Qatar Airways was operating 150 planes with another 200 on order, producing billions of dollars in sales for Boeing, but also for Airbus since the fleet, Vella estimates, is about half from each manufacturer.

Vella, 62, is a native of Gibraltar, the British Overseas Territory at the southern end of the Iberian Peninsula, and he explains that, despite being a citizen of the United Kingdom, Spanish is his first language.

His upbringing in Gibraltar and his fluency in Spanish, along with a healthy dose of self confidence, allowed him to build his reputation in the airline-turnaround business early.

He recalls that he was still in college when he took time off to visit with an official the prime minister back in Gibraltar and convinced him to grant Vella a Masters scholarship in return for assisting the City architect in redesigning the airport terminal.

After graduation, he approached executives of British Caledonia and pitched that the fact he was bilingual would allow him to launch the airline’s Latin America routes.

He recalled with a chuckle that the pitch allowed him to land a job at a time when there were no jobs to be had and while he worked for peanuts, he was able to see the world.

By his early 30s he had become general manager of British Caledonia’s fleet management division, but at that point left to start his aviation consulting firm and early on helped Richard Branson acquire his first 747.

Vella has turned around eight airlines, including Qatar and the Spanish airline Air Nostrum, a Iberia affiliate, which is now the largest regional carrier in Europe, and started several airplane leasing companies, including one for Rupert Murdoch.

I asked Vella to give me a sense of what he thinks the future holds for the industry and he offered a couple of predictions. One, Asia is a fertile field for new airlines to come into existence. And he suggests that in this county we’ll see consolidation bring the industry down to four large airlines. He declined to name those he thinks will compose the final field of four.

 

Continue reading
  2041 Hits
  0 Comments
2041 Hits
0 Comments

Oregon ballot measure would dramatically boost business taxes

Just as the races for state and national offices in the November General Election may demonstrate that anger can trump reason, voters in Oregon will be faced with deciding a ballot measure that will test whether anger at big business over things like soaring executive compensation exceeds logic.

At issue is IP28 (Initiative Petition), which targets Oregon's biggest corporations — roughly 1,000 by the state's estimates, or about 4 percent of businesses. Those with $25 million in Oregon sales would pay a minimum $30,000 tax, plus 2.5 percent on anything above that threshold.

In essence, it would be a tax on gross receipts, like Washington’s business & occupation tax, generating an estimated $6 billion in new revenue. Except in Oregon it would be in addition to the tax on personal and corporate income and would boost corporate tax collections more than five-fold.

As my friend Don Brunell put it in his latest column, which alerted me to the fact the measure had been cleared for the November ballot by collecting the required 130,000 signatures, “Washington’s next economic development plan may be written by Oregon voters next November.”

His point was that “Oregon voters need to remember that Washington and California have heavy concentrations of large businesses and stand to benefit from passage of IP28 and that while all parts of Washington would gain, the corridor between Vancouver and Longview could be the biggest winner.”

Brunell, retired president of Association of Washington Business, in his more than a quarter century at the helm of the state’s largest business association saw all the off-the-wall ideas for taxing business. But it’s as a longtime observer that he shakes his head at this proposal, noting the tax scheme “would transform Oregon from one of the nation’s lowest business-tax-burden states to one of the nation’s highest.”

Organizations that purchase products and services from those major businesses would undoubtedly see their costs increase and thus would need to increase their price for items resold to Oregon consumers. In response to this, businesses purchasing goods in Oregon may opt to leave the state or relocate some or all of their facilities to avoid the increased cost of doing business in that state.

IP28 is sponsored by Better Oregon, a labor union coalition led by the Oregon Education Association, and targets “big business”.  Proponents claim it would tap a tiny portion of Oregon businesses while bringing a huge revenue boost to cash-strapped public education, health care and senior services.

The non-partisan Legislative Revenue Office, in evaluating similar proposals to IP28, has forecast job losses should a gross receipt tax pass.

Former Washington Gov. Mike Lowry, who despite being perhaps Washington’s most liberal governor carried an understanding of the importance of nurturing big businesses as the creators of better-paying jobs, offered his classic belly laugh when I called him for his thoughts on the initiative.

“We always looked to Oregon for progressive ideas but this would represent the total opposite,” Lowry said. “The gross-receipts tax is about the worst tax there is.”

Amusingly, Lowry understood how to use the tax as a whip. In his first year in office he sought to have the Democrat-controlled legislature extend Washington’s sales tax to service businesses like law and accounting firms, which used their lobbying clout to beat back the effort.

But they paid a price by having the lawmakers impose the highest b&o tax rate on services, a payback in the form of a 2.5 percent rate, which though now reduced to 1.5 percent remains the state’s highest rate, reserved for service businesses and professional gambling.

Most gross receipts tax rates around the country are relatively low when compared with the Oregon proposal’s 2.5 percent rate. In Washington, it ranges from 0.138 percent to the aforementioned 1.5 percent. Thus if the measure were to pass, the tax burden of operating in Oregon would increase dramatically when compared with other states.

Proponents argue that “IP28 would modestly raise the effective tax rate of large corporations and use the added revenue to fund Oregon's crippled public school system, provide services to seniors, and extend health care coverage to 18,000-plus children.”

Problem is if it comes to be marketed to voters as “the big-business tax,” the result could be that anger overrides common sense for voters, among whom would be many that would face loss of their jobs if the analysis of business reaction proves true.

The ballot proposal comes as raising taxes on wealthy individuals and large corporations is at the forefront of a national debate — especially among Democratic progressives, including much of Oregon's electorate— about how to close the gap of economic disparities between rich and poor in the post-Great Recession era.

And if there is a doubt that anger at big business underlies the measure, and leaves concern about the logic voters will bring when they mark their ballots, supporters point to the current difference between growth in corporate profits vs. growth in family income in Oregon. They say it’s time big business takes on its fair share of the tax burden to help pay for education and social services.

Business people in Southwest Washington are not only looking to gain business if the measure is approved, they are having some amusement thinking about it.

When I talked with longtime Vancouver businessman Michael Worthy about it, he chuckled and offered that the two-state effort to agree on financing a new I-5 bridge across the Columbia could be solved by letting firms that would want to move operations out of Oregon might want to pay for improved transportation they’d need.

And when I asked Brunell why he thinks intelligent voters would go for a tax that would likely impact them, and perhaps their jobs, he replied: “I suspect, knowing Oregon a little better by living down here in Vancouver, there is a reason for the bumper sticker: ‘Keep Portland Weird.’” 

Continue reading
  1825 Hits
  0 Comments
1825 Hits
0 Comments

Seattle investor friends focus on 'The Holy Grail of Energy' train project

The six-year-long commitment by two successful Seattle-area businessmen to sustain the alternative-energy breakthrough technology that one of them describes as "the holy grail of energy" is close to paying off. The story of their commitment to develop the technology owned by their company named Advanced Rail Energy Storage LLC (ARES) is as intriguing as that of the business itself.

ARES' launch project is a rock-laden train of special electric cars that would run up and down a long hill in the Nevada desert near Pahrump, 60 miles west of Las Vegas, to demonstrate on-demand delivery of electricity. The $55 million, 50 megawatt project is gathering interest from utilities across the county as it moves into final funding phase, fulfilling the vision of investor friends Art Harrigan, a respected attorney, and Spike Anderson, successful businessman who describes himself as a serial investor.

The two have partnered since 2010 to provide the majority of the funding for planning and preparation for ARES and its ARES Nevada project's launch, which is planned for spring of 2017 with completion expected by spring or early summer of 2018.

Now they are in the final fund-raising push for the last $15 million of equity and $15 million of debt necessary to cap the $25 million already committed and begin construction on a six-mile long track with 7.5 percent grade on 43 leased acres of BLM land

ARES Nevada will be the prototype for future projects elsewhere in the country. The Nevada project is smaller (able to fully discharge for a period of 15 minutes at 50 megawatts) than future projects are likely to be, though William Peitzke, the company's director of technology development, notes it will be "the largest energy regulation management project ever in the West."

As word of the planned Nevada project has spread, a number of utilities have reached out to the leaders of ARES, who invited about 30 representatives of utilities and the Electric Power Research Institute (EPRI) to a March 1 demonstration of a functioning scale model.

The gathering at the quarter-scale, proof-of-concept project in Tehachapi, in the mountains east of Bakersfield, CA. prompted EPRI representatives to announce to the assembled utilities people that they would develop an EPRI demonstration project and seek funding from member companies.

Since then, the ARES project has attracted media attention from the likes of Forbes and Fortune and, in recent days, from a newspaper in Finland.

Part of the interest generated in ARES, which is a company headquartered in Santa Barbara with its initial project incorporated as ARES Nevada, is due partly to the quality of the management team Anderson and Harrigan have attracted. The CEO is James Kelly, who for almost four decades was a key executive at Southern California Edison, and the executive vice president is Steve Sullivan, who worked with Kelly at Southern Cal Edison and guided many of his projects there.

But given that the two principal funders of ARES have not sought to put themselves in the limelight on this project, despite the fact they were largely responsible for generating the $15 million necessary to reach this point and attract this management team, ARES has not gotten the extended visibility it might need for the closing rush to funding.

But that will likely change as media, both nationally and locally in Washington State, begin to focus on the principal investors because their past successes in business amount, in the minds of many potential investors, to an imprimatur of likely success of their projects.

I've written recently about Harrigan, who is chairman of the ARES board, relating to his legal involvement setting the stage for Seattle's two major league sports teams to be saved and brought under local ownership. But he was also closely involved with Craig McCaw's Eagle River, formed after the sale of McCaw Cellular to AT&T. And he provided the legal guidance that gave birth to Nextel Partners, one of the nation/s largest cellular companies in the late 1990s, was involved in setting up Nextel's IPO and served on its board.

Anderson, whose career in sales and marketing included building one of the most successful reps firms on the West Coast then co-owning and eventually merging his firm, by then Anderson-Daymon, and building Costco's largest supplier of goods and services. Recently he founded, is funding and acting aa CEO for Clean Global Energy, a Bakersfield-based firm developing a process its website describes as "redefining oil separation in a better, cleaner way."

Part of the emerging visibility for Harrigan and Anderson was a letter Anderson recently sent to prospective investors explaining the project in detail and soliciting investors for the final $15 million of equity needed to get ARES Nevada project underway.

Anderson explained, in the extensive narrative on the project to the audience of more-than-qualified investors, that he would take the investing lead in the project with $10 million of the amount needed to complete it.

"We believe we can raise $15 million in debt, and will offer the remaining balance on the exact terms of my personal investment," Anderson explained, adding that "we believe that we can achieve close to a 25 per cent return on equity with ARES Nevada over the next few years "

"By running a train up and down a hill, ARES can help utilities add and subtract power from their grid on demand," Anderson explained in his letter. "A 19th century solution for a 21st century problem, assisted by that abundant natural resource called gravity."

And inevitably, the image of a train loaded with boulders running up a hill has spurred the metaphor of Sisyphus, the king from Greek mythology who was punished by the gods by being forced to roll an immense boulder up a hill, only to watch it roll back down, repeating this action for eternity.

Of course the Sisyphus image is flawed because the boulder being forced back downhill highlighted Sisyphus's forever failure whereas the trains loaded with boulders imbedded in sand rolling down the hill will exemplify the success of the ARES project.

Anderson explained that Shuttle trains, referred to as modules that are each made up of two electric locomotives and multiple weighted cars, will go up or down the track to either take electricity off the grid on the ascent or supply electricity to the grid by descending.

An example of the fact the Nevada project is on the small side of possible ARES projects, Harrigan and Anderson note that ARES can scale up to 3,000 megawatt, which would be a project as big as some hydroelectric projects. And Anderson noted that "the scope of the Nevada permit also allows for construction of a much larger system for an energy storage facility as well, essentially expanding the 50 MW system to add a 300 MW storage."

Said Anderson is his letter to prospective investors: The real problem we are addressing is providing an answer to the question of how do we generate more power since we can't build more dams, states are not permitting for fossil-fuel power generation and nuclear is enormously expensive."

Kelly suggests that a large part of the likely ARES appeal to investors and potential utility customers is that "ARES can be deployed at around half the cost of other available storage technologies and produces no emissions, burns no fuel, requires no water, does not use environmentally troubling materials. And it sits lightly on the land."

e ...

Continue reading
  3123 Hits
  0 Comments
3123 Hits
0 Comments

Stuart Anderson, cowboy-country icon, dies at 93

.

Stuart Anderson, with his 2,400-acre cattle ranch abutting the freeway in Central Washington and his signature mustache and cowboy hat, was the icon of cowboy country as he built what was regarded, in the 1980s, as the nation's most successful chain of affordable steakhouses. (It was actually dinner house chains but probably doesn't matter.)

Anderson, 93, passed away peacefully Monday at his Rancho Mirage home., surrounded by his family, including his beloved wife Helen, who was his partner for more than 40 years. He had been a diabetic for years but it was lung cancer that caused his death, though he had quit smoking in 1980.

Stuart Anderson founded his Black Angus/Cattle Company Restaurants chain in Seattle in the 1960s and from its corporate headquarters there he grew it into a chain of 122 restaurants spread across 19 states, with more than 10,000 employees and $230 million in annual revenue.

I felt compelled to come and talk to Stuart about his knowing he was in the final stages of life and that he was reconciled to that fact because he had led such a special life. It was filled with family, success, travel and, as Helen said, "lots of love." He had agreed to have me come down on Saturday to his home and work on his obituary together but that was not to be.

That became clear with the email Monday from Helen: "My wonderful, sweet, best friend Stuart has gone to that Mansion in the sky. He will be missed more than words can tell. He was larger than life and loved by so many. He was so pleased with the 93 wonderful years he had but said he was ready to go. Thanks for all the prayers and good wishes."

I first met Stuart four years ago when Betsy and I were vacationing in the desert. I had contracted with the Coachella Valley Economic Partnership to arrange a wine-and-cheese gathering of Northwest snowbirds to learn some business facts about their second home. The local Palm Springs Desert Sun publicized the event and as people visited, someone pointed out to me "there's Stuart Anderson," to which I responded: "I don't think so. I thought he was long gone."

So I went over to introduce myself to Stuart and Helen and learned that the guy with a weathered face and wearing a cowboy hat was much alive and provided an enjoyable get-to-know visit.

A couple of days later, I learned that he was actually going back into the restaurant business, reopening one of his first Black Angus restaurants, located in Rancho Mirage, (that had been forced to close and go out of business during the downturn) This is not really true. Someone came along to buy our lease which we gladly sold because of the downturn of the economy at that time. We were not forced to close.

So I produced a column about Helen and Stuart re-opening and running the restaurant, both of them visiting with customers and making the rounds each day for a number of months before it became clear that the challenge was too much for a man then nearly 90 who had been out of the business too long so gladly sold the lease.

I visited again four months ago with the Andersons at their Rancho Mirage condo, and found Stuart, who was speaking softly and slowly but retained the firm gaze he usually offered from beneath his cowboy hat. He wanted to talk about the book and the challenge of selling copies, compared to his first book. It is the story of how he built the restaurant empire that became a best-recognized national company. The book actually has a longer official title: "Corporate Cowboy. Stuart Anderson: How a maverick entrepreneur built Black Angus, America's #1 restaurant chain of the 1980s."

He first tried his hand as an author when in 1997 he produced "Here's the Beef! My Story of Beef," a book he described to me as "fun and informative," but most importantly to him, thousands of copies were sold in the Black Angus restaurants. The book was meant to be an answer to the highly popular Wendy's commercial of the time in which an elderly lady asks: "Where's the Beef?"

At that point it had been a decade since he had retired after five consecutive years of his restaurants being named the top steakhouse chain in the nation by USA Today in a poll by industry publication Restaurants & Institutions. He admitted candidly, in an interview we did a few years ago, that he decided to retire because the new owners took the fun out of his job.

At the time of his first book, he was still well-remembered, in Washington State in particular. He was often seen as a spokesperson for a series of television commercials he did in the Seattle area for a senior housing organization.

After retiring, he and Helen enjoyed their (You mentioned this in the 1st paragraph: 2,400 acre) ranch sprawled along Interstate 90 west of Ellensburg. He had bought the ranch in 1966 with the intent of raising the Black Angus cattle that would be served at his restaurants. But it turned out to be too great a challenge, for various reasons, so he continued to raise the cattle while buying his beef elsewhere, until he sold the ranch to Taiwanese interests, though to many travelers going past, it remains the Stuart Anderson ranch.

A private family gathering is being planned in Seattle but the celebration of life will be held in Rancho Mirage in November, which would have been his 94th birthday.

Continue reading
  2026 Hits
  0 Comments
2026 Hits
0 Comments

Entrepreneur of the Year event has become community entrepreneurship celebration

In the quarter century since national accounting firm Ernst & Young (now rebranded as EY) brought its Entrepreneur of the Year event to Seattle and the Northwest, the annual black tie gala has represented a community celebration of entrepreneurship. And with that has come a growing awareness of the importance of recognition for those struggling to build businesses and create jobs.

That increased awareness of the role visibility plays has brought with it an array of events, created by firms, organizations and media entities who want to own a piece of visibility value of their own for creating visibility for and thus developing relationships with young companies and the entrepreneurs who guide them.

Indeed all of those other recognition events have brought value to the startup and entrepreneurial ecosystem by allowing individual firms to attract the attention of potential investors and potential new talent.

But the EY event has remained the most prestigious gathering for entrepreneurs, as this year's select group of honorees preparing for the June 17 event at the Sheraton Hotel are coming to learn. Among other things, Northwest winner get to move forward to compete for recognition at the EoY national and world events later in the year with winning entrepreneurs from the 145 cities and 60 countries in which the EoY event is held.

As Dan Smith, managing partner of the Seattle EY office, put it:"We've recognized many remarkable leaders who have disrupted industries, created new product categories, and successfully brought new innovation and technology to traditional industries."

In fact three winners in the local event have gone on to win at the national level. They are David Giuliani, who as founder and CEO of Optiva, won in the manufacturing category in 1997; Zillow Group CEO Spencer Rascoff, who won in the "services" category in 2013, and Zulily CEO Darrell Cavens, who won in the "emerging" category in 2014.

Smith notes that this year's finalists include 21 entrepreneurs from the life sciences, retail and technology industries, adding "we've definitely seen a lot of growth in these sectors compared to 30 years ago when the program started."

This annual Entrepreneur of the Year event has held a special attraction for me because of personal involvement, both before and since the event came to Seattle five years after Ernst & Young launched it in 1986 in Milwaukee.

Part of my regard for the event is having close connection to entrepreneurial honorees for this special recognition. The first was Kathryn Kelly, the president of a young Seattle firm ­­­called Environmental Toxicology, who was among those honored as finalists at the second event in Seattle in 1992.

Then came Pete Chase, CEO of Spokane-based Purcell Systems, who won in the communications category in 2006 and became a judge in the following three years, before guiding the sale or his company and launching a new company, Columbia International Finance, for whom I am doing some consulting.

And Leen Kawas, Ph.D., president and CEO of the promising young life science company M3 Biotechnology Inc., is a 30-year-old Jordanian woman who is among this year's honorees and whom I tout as changing the face of life sciences in this state. I have had the satisfaction of being an investor and providing introductions and visibility since she arrived at the helm of the fast-growing company in January of 2014.

The impact of the honor on the entrepreneurs nominated was evidenced by Kelly's reaction back then when I expressed my regret, having nominated her, for the fact she had been one of three finalists but had not won in her category.

"You have to be kidding! Just being here (including the video vignettes of each finalist shown before the envelope is opened and the winner disclosed) was the satisfaction of a lifetime," she said.

There is also a bit of amusement for me when I think of the Entrepreneur of the Year event in that as publisher of the Business Journal I was involved in two entrepreneur of the year events before Ernst & Young brought its event to Seattle.

That came about because Woody Howse, then a partner in the venture capital firm Cable & Howse Ventures, approached me about partnering in an event we named Entrepreneur of the Year, which we promoted and held in the mid-'80s to honor a single entrepreneur each year. It would be hard to top either of our honorees.

The first was W. Hunter Simpson, who had taken over defibrillator-manufacturer Physio-Control 20 years earlier and guided it into a global-leadership role in its industry. The next year we honored Microsoft founder and CEO Bill Gates, whose company was just then gathering momentum, having gone public a year earlier.

Cable & Howse, then the area's premier vemture capital, had a vested interest in creating visibility for entrepreneurs, as did the Business Journal. We were among many organizations then casting about to determine how best to serve those individuals who held the keys to our future.

In fact, some edginess on the part of the Ernst & Young Seattle leadership would have been appropriate at our having pre-empted Simpson and Gates as the two most impressive names in the local entrepreneur community at the time.

PSBJ and Cable & Howse partnered for several years thereafter with another accounting firm to stage a High Tech Entrepreneur of the Year event, before Ernst & Young Managing Partner Karl Guelich called me to let me know our party was over because the real thing was coming to Seattle.

Guelich had allowed us to go ahead without comment with a Seattle event using the E&Y copyrighted name, partly out of friendship and partly because he likely figured, as it turned out accurately, that our event might even lay visibility groundwork for the arrival of the official awards event of that name.

For perhaps a decade, the Business Journal was part of a process that represented a win for the firm, for the newspaper, and for the entrepreneurs as well. Ermst & Young always scheduled its event for a Thursday evening and provided all the advance detail needed for PSBJ to produce a special supplement with stories on the event and all the honorees, passed out to all attendees as a keepsake as they left the event and then it was inserted in the PSBJ copies that arrived in subscribers' mail the following day.

Since then some of the biggest names among regional entrepreneurs have been in the winners' limelight at the Northwest EoY. They included Mark Britton of Avvo, Jim Weber of Brooks Sports, Inc., Dara Khosrowshahi of Expedia, Inc., Gertrude and Timothy P. Boyle of Columbia Sportswear Company, Jeffrey P. Bezos of Amazon.com, Inc. and Howard Schultz of Starbucks Coffee Company.

So perhaps I'm prejudiced, but it seems clear that EY Managing partner Smith is accurate in suggesting that "the award has acquired a great deal of prestige, and is recognized around the world as an emblem of entrepreneurial success."

text here .

Continue reading
  1799 Hits
  0 Comments
1799 Hits
0 Comments

Art Harrigan played legal role that helped save Seattle Mariners, Seahawks

..

The community thank you last week to former Sen. Slade Gorton for his instrumental role in saving major league baseball in Seattle was an appropriate reminder of his signal accomplishment for the community. But without detracting from Gorton's role, it may also be appropriate at some point to recognize the Seattle attorney whose legal victory set the stage for the search for a local owner.

That would seem particularly appropriate since the Seattle attorney, Arthur Harrigan Jr., had key legal roles in saving two of the Seattle professional sports franchises

Art Harrigan not only succeeded in forcing Mariners owner Jeff Smulyan to give business and community leaders four months to find a local buyer, but five years later he paved the way for a local sale of the Seattle Seahawks by preventing owner Ken Behring from moving the team to Los Angeles.

The legal confrontations with the owners of two of Seattle's professional sports teams came about because Harrigan's law firm, Calfo Harrigan Leyh & Eakes, long represented King County on an array of issues. And both owners came into conflict with the county because they sought to abandon the county-owned Kingdome and their leases there.

The venue for resolving the future of the Seattle Mariners franchise was what amounted to an arbitration hearing before Arthur Andersen, the national accounting firm agreed to by both sides to decide some key issues relating to the lease.

Since it wasn't a court process, which would have gotten large visibility for the battle between attorneys, Harrigan's maneuvering over the meaning of wording in Smulyan's contract regarding an attendance clause that was key to the final outcome was little noted, thus little remembered.

Harrigan's argued interpretation of the lease-requirement wording was accepted by the Andersen firm, so Smulyan was required to give an opportunity for a local buyer to be sought.

Of perhaps equal importance, Harrigan successfully argued that there should be a local value lower than the open-market value. The accounting firm agreed and set a "stay-in-Seattle" valuation at $100 million, rather than the national open-market value of $135 million that it had determined.

That created the opportunity for Gorton and others leading the effort to keep the team in Seattle to find a local buyer for $100 million, rather than $135 million, within four months.

No one knows if, at $135 million, Ninetendo's owner would have opted to pick up the cost of saving the Mariners for Seattle.

With respect to the effort to block the Seahawks' move, King County hired Harrigan's firm to keep Behring from fulfilling his widely publicized intent in the winter of 1996 to leave Seattle and move the team to Los Angeles.

Behring made the argument, after some tiles had fallen from the Kingdome roof, that he had concerns about seismic security of the facility as he announced that he was moving the team to Los Angeles.

Harrigan recalled the February meeting at the Woodmark Hotel at Carillon point at which he, King County Executive Gary Locke, Gary Locke, his assistant, and chief civil deputy Dick Holmquist with Behring's attorney, Ron Olson (who he noted was also Warren Buffet's attorney).

"Olson read from a yellow pad, explaining that the team, fearing earthquakes might impact the Kingdome, had to be moved to the comparative safety of Southern California and the Rose Bowl," Harrigan said. "Holmqust and I were trying not to laugh."

"We were poised to file a temporary restraining order the moment the trucks began rolling up to the team's offices in Kirkland," Harrigan said.

"So when Behring and Olson left the room, I made the call and the restraining order was filed," he added. "Had that not happened, we would have had to go to California and ask a California judge to send them back."

Behring had quickly, after the restraining order, filed suit in Kittitas County, so as part of the legal process, Harrigan also had to get the state Supreme Court to toss out that suit.

A few weeks later he and Behring attorneys met with NFL owners who were considering whether to allow the team to move, in the event Behring could escape the Kingdome lease, and made their presentations.

"I had brought Jon Magnusson and two other renowned structural engineers with West Coast seismic design expertise who explained that the idea that Southern California was safer than the Kingdome in case of earthquake was ludicrous," Harrigan said.

The legal maneuvering all came to an end when it was announced that Paul Allen had purchased the Seahawks.

While Harrigan, 72, is ranked as Seattle's top commercial trial lawyer by Chambers & Partners, which ranks the world's best lawyers and law firms, his legal activities have ranged well beyond the courtroom.

He worked with Craig McCaw in his early Eagle River Investments days, helped create the wireless company Nextel, which became a $7 billion public company, is a member of the boards of several public companies. His is chair, and was a principal fund raiser, for an interesting new company that will generate energy by storing electricity on trains.

Harrigan, a Harvard graduate with his law degree from Columbia, served as Senior Counsel to the U.S. Senate Select Committee on Intelligence, worked on an investigation of CIA intelligence activities related to Vietnam.

Most intriguingly, and perhaps as important as his later pro sports involvements in Seattle, he headed the committee's investigation of IRS intelligence operations, discovering that the agency was giving individuals' tax returns, under the claim of national security, to other intelligence agencies who were then misusing the information in sting operations.

.

Continue reading
  2262 Hits
  0 Comments
2262 Hits
0 Comments

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. 

One of those trips was last September when he received 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.

Continue reading
  2400 Hits
  0 Comments
2400 Hits
0 Comments

Attracting investors to Montana's Big Sky Country and its entrepreneurs

.

Those who have watched or experienced Liz Marchi's commitment to provide funding for Montana entrepreneurs and startups for a decade might suggest that the term "angel investor" was coined specifically to describe her.

It was 2003 that Marchi, who had arrived in Montana with three daughters and her then husband and settled in the Flathead Valley, decided to create the state's first angel fund, Frontier Angel Fund I. The fund closed in 2006 at $1.7 million, $300,000 more than she had hoped.

She eventually guided the Kalispell-based fund, which had attracted investors from around the country who were either fans of or summer residents in the Big Sky Country, to lead three deals and gather a total of 12 active investments and was soon also overseeing angel groups that had sprung up in Missoula and Bozeman.

Because she successfully syndicated her deals with a number of other angel groups outside the state, she jokes that she has become "the grandmother of crowd funding." She's not referring to the formal definition of crowd funding but rather the syndication efforts she initiated that attracted a crowd of angels from numerous groups making small investments.

Now Marchi, who grew up near Jackson Hole, WY, but who had never been to Montana when she arrived here in 2000, says she is looking forward to making the investor-leader handoff to Will Price, whose roots in the state brought him back from Silicon Valley to create Next Frontier Capital, at $20 million the largest venture fund ever raised in the state.

Price, on the board of or a key executive with a number of Bay Area tech companies, did his due diligence on the attitudes of national venture and mergers & acquisitions firms toward Montana before making the move to Bozeman.

Price's fund, which closed last April a year following his decision to bring his family to the state where his father, Kent Price, is well known as Montana's first Rhodes Scholar and University of Montana board member, has already made two investments.

I've kidded Liz and her husband, Jon, who in 1978 founded Glacier Venture fund as the first venture fund in Montana and presided over it for 29 years, about being "Mr. and Mrs. Montana Money." To which she once responded: "We are more like Mr. and Mrs. Montana risk capital since we share a very high risk tolerance...and often share the consequences."

Although Marchi talks about making a handoff to Price, as well as "the next generation of angels, including some members of Fund II in their '30s, who slay me in terms of their abilities," she was completing the formation in August of $2.7 million Frontier Fund II, which has already invested $900,000 with syndication adding $300,000 for a total of $1.2 million already invested.

"We have 48 investors in 10 states and meet physically in Bozeman and the Flathead, alternating with a WebEx option," Marchi said, noting that investors met in Bozeman today, with investors from two continents and four states, including Montana investors from Bozeman and Kalispell to review three Bozeman companies.

That sounds less like "handing off" for the 62-year-old Marchi than welcoming the potential follow-on investment opportunity that venture capital can represent for angel. And she hopes Price's fund will provide.

She says she does have an agreement with Fund II to be the key administrator only for the next two years, but could opt to remain longer. And she is down to business cards representing her current five involvements.

But Marchi is genuinely pleased at the implications of the arrival in Montana of Price, who did his homework before deciding a venture fund could work in Montana.

Price shared with me the research he did with and his thoughts about how "changing values" will benefit Montana's ability to attract capital.

Montana was often dismissed as a "fly-over" state, meaning that the most viable potential investors on the east and west coasts usually just fly over on their way to the other coast.

But Price's SurveyMonkey sampling of both venture and merger & acquisitions firms and found that the appeal of the big sky to many increasingly disenchanted with urban challenges was strong but that direct air access is a challenge Montana must come to grips with.

Fully 70 percent of responding M&A firms said they would consider buying a company in Montana, even though 80 percent said they had never been to the state. And a third of the venture firms said they would consider doing a deal in Montana, although 47 percent said they had never been there.

The import of improved air access to a state that has no direct flights currently to the major markets was dramatically indicated with the response of M&A firms, 90 percent of whom said it was "important" or "Moderately important" to have direct air access to the market of their investment.

"That's something the state is going to have to address," Price said. "But I think it will be addressed."

Among venture firms, almost two thirds sad the quality of the local syndicate partner would determine their involvement.

Although Marchi herself has attracted investors from around the country, she observes that "Being away from the noise of the coasts keeps us grounded in an important way.

"The entire conversation and perception needs to move about rural America, what is going on here and its role in making our economy and our country work better," she said, expressing the principle that has guided her commitment to Montana entrepreneurs.

Continue reading
  1550 Hits
  0 Comments
1550 Hits
0 Comments

Montana's 'angel' investor sees changing values boosting state's investor appeal

Those who have watched or experienced Liz Marchi's commitment to provide funding for Montana entrepreneurs and startups for a decade might suggest that the term "angel investor" was coined specifically to describe her.

Liz Marchi
Liz Marchi 
It was 2003 that Marchi, who had arrived in Montana with three daughters and her then husband and settled in the Flathead Valley, decided to create the state's first angel fund, Frontier Angel Fund I. The fund closed in 2006 at $1.7 million, $300,000 more than she had hoped.   
     
She eventually guided the Kalispell-based fund, which had attracted investors from around the country who were either fans of or summer residents in the Big Sky Country, to lead three deals and gather a total of 12 active investments and was soon also overseeing angel groups that had sprung up in Missoula and Bozeman.

Because she successfully syndicated her deals with a number of other angel groups outside the state, she jokes that she has become "the grandmother of crowd funding." She's not referring to the formal definition of crowd funding but rather the syndication efforts she initiated that attracted a crowd of angels from numerous groups making small investments.

Now Marchi, who grew up near Jackson Hole, WY, but who had never been to Montana when she arrived here in 2000, says she is looking forward to making the investor-leader handoff to Will Price, whose roots in the state brought him back from Silicon Valley to create Next Frontier Capital, at $20 million the largest venture fund ever raised in the state.

Price, on the board of or a key executive with a number of Bay Area tech companies, did his due diligence on the attitudes of national venture and mergers & acquisitions firms toward Montana before making the move to Bozeman.

Price's fund, which closed last April a year following his decision to bring his family to the state where his father, Kent Price, is well known as Montana's first Rhodes Scholar and University of Montana board member, has already made two investments.

I've kidded Liz and her husband, Jon, who in 1978 founded Glacier Venture fund as the first venture fund in Montana and presided over it for 29 years, about being "Mr. and Mrs. Montana Money." To which she once responded: "We are more like Mr. and Mrs. Montana risk capital since we share a very high risk tolerance...and often share the consequences."

Although Marchi talks about making a handoff to Price, as well as "the next generation of angels, including some members of Fund II in their '30s, who slay me in terms of their abilities," she was completing the formation in August of $2.7 million Frontier Fund II, which has already invested $900,000 with syndication adding $300,000 for a total of $1.2 million already invested.

"We have 48 investors in 10 states and meet physically in Bozeman and the Flathead, alternating with a WebEx option," Marchi said, noting that investors met in Bozeman today, with investors from two continents and four states, including Montana investors from Bozeman and Kalispell to review three Bozeman companies.

That sounds less like "handing off" for the 62-year-old Marchi than welcoming the potential follow-on investment opportunity that venture capital can represent for angel. And she hopes Price's fund will provide.

She says she does have an agreement with Fund II to be the key administrator only for the next two years, but could opt to remain longer. And she is down to business cards representing her current five involvements.

But Marchi is genuinely pleased at the implications of the arrival in Montana of Price, who did his homework before deciding a venture fund could work in Montana.
Price shared with me the research he did with and his thoughts about how "changing values" will benefit Montana's ability to attract capital.

Montana was often dismissed as a "fly-over" state, meaning that the most viable potential investors on the east and west coasts usually just fly over on their way to the other coast.

But Price's SurveyMonkey sampling of both venture and merger & acquisitions firms and found that the appeal of the big sky to many increasingly disenchanted with urban challenges was strong but that direct air access is a challenge Montana must come to grips with.

Fully 70 percent of responding M&A firms said they would consider buying a company in Montana, even though 80 percent said they had never been to the state. And a third of the venture firms said they would consider doing a deal in Montana, although 47 percent said they had never been there.

The import of improved air access to a state that has no direct flights currently to the major markets was dramatically indicated with the response of M&A firms, 90 percent of whom said it was "important" or "Moderately important" to have direct air access to the market of their investment.

"That's something the state is going to have to address," Price said. "But I think it will be addressed."

Among venture firms, almost two thirds sad the quality of the local syndicate partner would determine their involvement.

Although Marchi herself has attracted investors from around the country, she observes that "Being away from the noise of the coasts keeps us grounded in an important way.

"The entire conversation and perception needs to move about rural America, what is going on here and its role in making our economy and our country work better," she said, expressing the principle that has guided her commitment to Montana entrepreneurs.
Continue reading
  1538 Hits
  0 Comments
1538 Hits
0 Comments

Gil Folleher, who built strong business-leader support for JA, remembered for his legacy

Junior Achievement, as an organization focused on enhancing young people's understanding of business and finances, has had a natural appeal to business executives and their companies. But Gil Folleher, who died over the weekend at the Eisenhower Medical Center in Palm Springs at the age of 75, brought business-leader support for JA in the Seattle area to a near-evangelical level over his years guiding JA locally.

folleher
Gil Folleher 
Most importantly, perhaps, in the words of PEMCO CEO Stan McNaughton, he "left a legacy of footprints that will be followed for a long time. He was a king-maker-and the kids were the kings (and queens)."

The JA footprints in Washington state have left larger marks than the organization's impact in other states and that has been due to Folleher guiding involvement by executives at the highest levels of their companies.

In fact, he set a model for other non-profits to aspire to with a pattern from the late '80s through his retirement in 1998 of presidents or CEOs chairing, and being actively involved on, JA's board.

There are many important non-profit causes in this region, ranging from the needs of children or the sick or elderly to arts groups and causes to advance the community. And the most successful ones are blessed to have business executives supporting with time and dollars to help point them in successful directions.

And this is a time of the year when business people and others of means should pause to remember the cause or causes that are fortunate enough to have their attention and even affection.

But few organizations have been more successful over the years than JA in keeping focused on its cause: helping guide the understanding of the free enterprise system among young people and, recently even more vital in the view of many JA supporters, teach the importance of financial literacy.

Folleher, who moved from his Seattle leadership position to a role with the national JA organization in 1998 before retiring to Palm Springs, is being remembered by both active and retired business leaders who were closely involved with JA and who thus knew him best for the value he brought to the economic education of young people.

Folleher's strategy of creating close relationships among his board members included the Puget Sound JA chapter sending the largest delegation each year to the National Business Hall of Fame, an experience that he understood would contribute to the bonding strategy. Thus he made the trips an important part of each year's JA activities.

During his second tenure with JA in Seattle the number of students impacted by JA programs quadrupled to more than 60,000, deficits became surpluses and the annual budget grew to more than $2.4 million.

And in the manner of the best of non-profit executives, he groomed his successor well and thus David Moore, JA President for what has grown to be JA oversight for all of Washington state, says of Folleher, "he was my mentor, friend and inspiration." 

Under Moore, who spent a decade as Folleher's marketing director before succeeding him in 1998, JA programs have grown and come to reach a dramatically expanding number of students around the state each year. 
 
It was through involvement with JA as publisher of Puget Sound Business Journal to create a local Business Hall of Fame in a partnership between the newspaper and his organization that I came to be close friends with Folleher and eventually served as chair of the JA board.

Ken Kirkpatrick, retired president of U.S. Bank of Washington, knew Folleher the longest because it was Kirkpatrick, along with his future wife SaSa, who met Folleher at the airport when he arrived in Seattle in 1972 for for his first stint guiding JA's Seattle operations.

Kirkpatrick recalls that he was only 17 at the time, but was serving as JA's temporary executive director, "along with my janitor job there. He treated me like a king and he gave me my first ever Christmas gift from an employer-a very fancy shoeshine kit that I used just last week."

Woody Howse, then guiding Cable & Howse Ventures and now described as "the grandfather of Seattle's venture-capital community" was incoming board chair when Folleher arrived in 1987, returning to Seattle after serving as JA's Senior Vice President in charge of programs and marketing nationally. 

"Folleher's network through all of JA was unparalleled and as a result we got the benefit in Seattle of a world-class sponger of Best Practices," Howse said.

Lasting friendships was true for me, and this column is an unabashed good-memories reflection on a man who not only became a good friend, but who was responsible for many of my closest friendships formed over the mutual connection to JA and the work we all did together to build and promote the organization and its cause.
 
Scott Harrison, retired president of Barclay-Dean Interiors, who also served a term as JA board chair, praised Folleher for guiding board members to "embrace the vision that Gil and his team had for JA."

And John Fluke, of Fluke Venture Partners (another top executive who took his turn as JA board chair) and the son of the man described as "The Father of JA" in this region, said "I know Gil would want all of us to do our part to advance JA's mission to bring economic and personal financial literacy to all K-12 students."

Rather than merely recall Folleher after his death, friends from around the country were able to be on hand in Palm Springs last January for his 75th birthday celebration where, as Moore recalls with a smile, "we partied for three days."

Now those who were close to Folleher will gather again, despite his insisting there be no service or memorial, for a toast and sharing of memories January 13 at 5:30 p.m. at the Waterfront Marriott.
 
In what amounted to an appropriate summing up, Moore noted: "I have always said we are warming by a fire we did not build since what JA is today is a legacy for Folleher's passion and leadership."'
Continue reading
  1312 Hits
  0 Comments
1312 Hits
0 Comments

A rural economic development strategy focused on entrepreneurs

 

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.

 

 

 

 

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."

 

 

 

 

Continue reading
  0 Hits
  0 Comments
0 Hits
0 Comments

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."

 

 

Continue reading
  1229 Hits
  0 Comments
1229 Hits
0 Comments

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.


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."

 

 

 

Continue reading
  1536 Hits
  0 Comments
1536 Hits
0 Comments

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."

Continue reading
  1666 Hits
  0 Comments
1666 Hits
0 Comments

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.

Continue reading
  1520 Hits
  0 Comments
1520 Hits
0 Comments

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.'"

Continue reading
  1202 Hits
  0 Comments
1202 Hits
0 Comments

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.

Continue reading
  1497 Hits
  0 Comments
1497 Hits
0 Comments

Deal-maker Joe Schocken committed to making sure an Alaska-Delta deal never comes about

The walls of Joe Schocken's office at Broadmark Capital are filled with the financial "tombstones" of deals his firm has done over the years, but he is in the forefront of business-community efforts to make sure one deal doesn't come about. The deal that is anathema to Schocken would be the one-day disappearance of Alaska Air Group into the covetous arms of Delta Airlines.

When Schocken and I first discussed what has become Alaska's David-and-Goliath struggle with Atlanta-based, 10-times-larger Delta, he forcefully said "this community needs an anti-Delta campaign!"

We concluded the conversation that afternoon in the office at his financial-services firm with his reluctantly agreeing with me that we needed to help drive a positive campaign for Alaska because "anti" campaigns don't sell well in Seattle.

But in light of recent events, as Schocken and I visited again yesterday, I found myself saying "You may have been right the first time, Joe, given what has been unfolding of late."

The issue, of course, is growing concern within the business community in Seattle and Spokane that Delta is bent on driving Alaska, through tactical use of its dramatically greater income as one of the world's two largest air carriers, into a merger or acquisition.

But jumping ahead of the battle for passenger dollars at this stage of their competition, the current point of contention between the two airlines is the question of construction of a new international-arrivals facility at Seattle-Tacoma International Airport.

And a step that should be key to an "anti-Delta" mood in this community is Delta's blatant effort to insert one of its own onto the Port Commission that governs Sea-Tac operations, getting Des Moines resident Ken Rogers, a Delta pilot who has been on Delta's board for eight years, to seek election to the commission in the upcoming election.

Shocken shook his head as he discussed the logic for that "arrogant action, trying to directly control government decisions for Seattle from Atlanta" to instill anger in this community.

He notes that the projected cost of the international facility, which would benefit Delta more than any other airline but be paid for primarily by travelers on domestic flights of Alaska and other carriers, "isn't money for a new terminal but basically just a sky bridge to a concourse, being positioned as an international-arrival building."

How that eventually plays out, with Delta urging the Port Commission to approve the plan that has doubled in cost to an estimated $608 million with much more cost likely to come as a plan actually begins to be drawn up, is still to be decided by the commission.

  

Alaska's contention is that it's unfair that fees attached to domestic tickets would be used to benefit passengers on international flights and that the airport should go back to the drawing board to devise a less costly plan.

The commissioners are undecided on how the cost share should be parceled out, something Delta would like to influence with its own commission member.  

"Another angle that I think Alaska Airlines executives should be pointing out is how would you like to be an Alaska businessman envisioning a possible Delta takeover," Schocken observed. "As big a problem as it would be for Seattle to lose Alaska as its hometown-focused airline it would be a much bigger problem for the state for which Alaska Airlines is the lifeline and understands the needs of the state. They've grown up together."

"I doubt if the people in Atlanta even know where Alaska is," he chuckled.

"It isn't just trying to own a seat on the Seattle Port Commission that should upset people who are fans of Alaska," Schocken said. "What you have is a series of things coming together, including Delta beginning non-stop service to Sitka. There is no international traffic and little growth coming out of Sitka, thus undermining Alaska is the only purpose behind that flight."

"Finally there's the issue of June 1 reauthorization or the Export-Import Bank, something very important to our region's economy for which Delta's Dick Anderson is the key opponent, claiming it subsidizes its competitors," Schocken said. "Meanwhile Delta is buying planes from Canadian and Brazilian manufacturers and receiving subsidies from their governments. That makes Delta hypocritical, not mention anti-Boeing, but that's another subject."

Schocken emphasized, as he says he does when it makes his Alaska-Delta points in conversation he routinely has at business meetings or cocktail gatherings, to what he says are reactions of tremendous support for Alaska, that he's not hoping to see Delta lose a battle with Alaska. Rather he wants to see Seattle and the Northwest served by two successful airlines.

But in any event, he says "we're only in the first or second inning of a likely long game."

Meanwhile, Alaska keeps its focus on the goal of remaining the nation's most respected domestic carrier, last week being singled out for the J.D. Power customer-satisfaction award for the eighth consecutive year.

It was USA Today, not an Alaska press release, that noted "Alaska Airlines and Jet Blue continued their stranglehold atop the annual J.D. Power customer service satisfaction survey of North American carriers."

Alaska CEO Brad Tilden has avoided negatives about Delta in speeches he's given in recent months.

But he is the guest at next week's Business Journal Live q and a event where he will be interviewed by PSBJ Publisher Gordon Prouty, an environment where he could strategically refer to comments he's heard made by Alaska fans about Delta without saying those things himself.

Continue reading
  1608 Hits
  0 Comments
1608 Hits
0 Comments

52°F

Seattle

Mostly Cloudy

Humidity: 63%

Wind: 14 mph

  • 24 Mar 2016 52°F 42°F
  • 25 Mar 2016 54°F 40°F
Banner 468 x 60 px