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A business organization focused on 'public policy that transcends partisan politics'

David Giuliani, the Seattle-area entrepreneur who launched two companies that became new-innovation success stories, has co-founded a statewide business organization named Washington Business Alliance that he hopes can help bring a new innovation to the way government makes decisions. It might be said that Giuliani, who launched and built Optiva and Clarisonic into hugely successful companies that revolutionized teeth cleaning and skin cleansing, has set his sights on building a business organization that would cleanse government of the need for ideology in its decision-making. Basically, his Washington Business Alliance is focused on bringing "a reasoned, collaborative approach to public policy that transcends partisan politics." Optiva, of course, was the maker of SoniCare, the first electronic toothbrush. After Giuliani guided Optiva into the hands of Philips Electronics, he created Pacific Bioscience Laboratories and produced the first electronic skin-cleansing device, Clarisonic, and sold it last fall to cosmetics giant L'Oréal USA. Giuliani stayed on as Clarisonic CEO, though he made clear in an interview that he will be stepping down from that role this fall to devote full-time attention to the task of chairing Washington Business Alliance, which he co-founded last year with Howard Behar. Behar's credentials are about as impressive as Giuliani's. He spent the last 21 years with Starbucks, which included serving as President of North America and as founding president of Starbucks International. Giuliani says the organization, which is seeking business members rather than individuals and has a dues structure ranging from $500 to $15,000 per year, is "committed to developing effective solutions that are not constrained by political expediency or ideology, with an emphasis on data-based solutions for long-term results." That phrase, "not constrained by political expediency or ideology," is a stop-and-reread phrase because what has struck me about the organization, and the leadership composed of successful entrepreneurs, is that it is truly seeking to look past the political to arrive at solutions in a process beyond the ideological spectrum. It seems to me that for business people who wish to depart from the process of having to first vet ideas by placing them on the ideological spectrum before we can discuss them, that focus alone merits a conversation and moves the organization's goal from the Quixotic to the possible. And Giuliani and Behar have attracted other business leaders to their leadership ranks, including Norm Levy, who has served as corporate strategy counsel for almost three decades to companies like Starbucks, Boeing and John Fluke Manufacturing, and long-time Boeing executive Debbie Gavin. With a background as financial vice president of several Boeing units, Gavin will be the association's treasurer. "The idea isn't for business to disengage from government, but to engage differently," says Roz Solomon, who was plucked from the legal consulting business with a background that includes having been an administrative law judge for Washington State, to be executive director of the organization. "Our goal is to ferret out those things that government is doing well and reinforce them," Solomon adds. "There are a lot of parts of government that are intractable, but there are also a lot that aren't." Giuliani, 66, who was Ernst & Young's manufacturing Entrepreneur of the Year nationally in 1997, explains "we're focusing on a non-political methodology, seeking to attract business people who realize that solutions to problems don't necessarily happen through political means." I asked Giuliani and Solomon during an interview whether seeking members for a non-political organization at a time of the political intensity of an election year was really a good decision. "It's important to use the political cycle as an opportunity," Giuliani replied. "There are a lot of people who are writing checks for candidates and asking themselves 'should I really be writing this check? Then why is it so dissatisfying?'" "The election process tends to intensify the frustration people feel about politics, causing many to wonder - what can I do to fix it?" Giuliani added. "There are likely to be a lot opportunities for post-election messaging for Washington Business Alliance that will resonate with the voters." And while the focus of the new organization is the state races for now, Giuliani notes that there's what he describes as "a national movement to create this type of organization in other states," which in the future could lead to initiatives relating to influence on decision making at the national level. Giuliani says his group has already had a lot of interaction with the Oregon Business Association, a group, similar in focus that has been in existence for several years. "There are a lot of people dissatisfied with what they view as a dysfunctional, polarized system," Solomon added. "It's people left with those sorts of questions about politics that we want to engage for the future."
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Seattle start-up sees underwear sales to big guys as start of large online opportunity

Dave Smith's"aha moment" about the unmet need for big-men's clothing came at a Microsoft shareholders meeting at Safeco Field a few years ago when all attendees were given embroidered shirts to mark the occasion. But there wasn't one that would fit Microsoft CEO Steve Ballmer's 3X size, Smith recalls, adding "It wasn't pretty."

 

Smith, who at the time worked for a company that provided promotional products for firms, including Microsoft, recalls that "we always had trouble finding 2X and larger products for customers."

 

Thus was born an idea for Smith, but it couldn't come to fruition until he met Doug Hill, who was making a presentation to Smith's boss at Staples Promotion and Smith recalls thinking: "this guy's a born salesman."

 

Conversations soon guided them, about four years ago, to go into the clothing business, where they both had long experience, and discussions led them to agree "big and tall (which they refer to as B and T) was wide open so we just started with it."

 

After a false start with a big-and-tall retail outlet in Seattle's Georgetown neighborhood, they launched Bentley BT, a Seattle-based online start-up that promotes its Bentley Performance Underwear with the tagline "we can CYA up to 8X."

 

Bentley BT is an 18-month-old company specializing in the design, production, and distribution of fashion underwear for big and tall consumers, a market they contend is ignored by most retailers who don't want big and talls "jamming into their dressing rooms or crowding up their aisles. So it's a big deal to these guys to be treated as something special."

 

It wasn't on a lark or for a laugh that they decided underwear would be the first product for Bentley BT, according to Hill, but rather on the basis of some market research that showed "underwear is a big problem for the big guy."

 

As for the general clothing market among big and talls, Smith says: "All you have to do is look at the statistics showing that over the past 20 years, people in the U.S. and other countries are getting bigger and taller to understand why we view this niche market as opportunity. And it's one with enormous growth and profit potential."

 

The domestic big-and-tall men's apparel business is estimated to be $16-$18 billion, and growing, with them men's underwear portion of that market estimated at more than $4.5 billion.

 

"Our target is to capture one-half of one percent of that market, which would be $24 million in sales," says Smith.

 

"We really think that we make the world's greatest underwear for our consumer so the next step would be to go right into t-shirts," Smith says. "Once we've developed trust on the part of this audience, we can do all kinds of clothing."

 

Hill started as a clothing salesman, moved to regional sales for a women's sportswear line and eventually joined what was then Seattle-based Brittania Jeans as Midwest region manager. When ex-Britannia execs started Generra Sportswear, he joined them in Los Angeles to start their West Coast Women's Division.

 

Smith and Hill first produced warmups "in very large sizes" for basketball players who were NIKE athletes and when other big-and-tall guys saw the warmups, "we were urged to offer them to a broader market," Smith recalls. "So we decided there was a niche play in providing fashion to that consumer audience."

 

In the short time they've been in business, they have distribution in about 30 specialty stores and their product has been featured on Amazon.com in the big-and-tall category. Plus Smith says they are in initial conversations with major retailers.

 

But they emphasize the importance of web sales by noting that 50 percent of all big-and-tall business is conducted on line and, says Hill, "50 percent of that is women buying for men."

 

Their average online transaction is for about $150, "so we have good margins," says Smith, who adds that "a lot of people who discover our site are afraid we won't be there next time so they order up to a dozen items."

 

And Smith, who has a 34-inch waist and says Hill has a 32 waist, emphasizes that whatever the size, from 32 to 70, "the price for the underwear is the same."

 

At this point Bentley BT is in its start-up phase, although they're already booking orders in the hundreds online.

 

Their underwear is made in China, but Smith says "we have the fabric and the sourcing to do them in Los Angeles."

 

While they'd like to zero in on athletes, they've already begun to target firemen, ," says Smith, recalling they once met a group of firemen in Chicago sitting in the summer heat as a lightning storm was going on and "once we told them we make underwear that could really help them in high heat situations, they were hooked."

"Our next offering will be to the troops," he adds. "My son was a spec ops medic and he knows firsthand what bad underwear can do when you are in the field."

 

As far as exit strategy, Smith says their marketing is aimed at "the disenfranchised customer, retailing's forgotten guy. Some company is going to say 'let's fold these guys into our operation.'"

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Buller, Elway tout a future that brings social media to essential role in decisions

John Buller and H. Stuart Elway, long-time players in the old top-down process of decision-making in Seattle and Washington State, are embarked on separate initiatives whose basic message is that things won't work that way in the future.

 

Both hope to spark new forms of civic engagement aimed at broader inclusion in charting the region's next chapter, but that "broader inclusion" may come in fits and starts, and face challenges before broad acceptance.

 

Buller, a business and civic leader for the past 30 years, summarizes it as "The Seattle Way has to be replaced by a recognition that social media has made the world flat rather than top-down so we have to make discussions about our future much more broad-based."

 
 

Or as Elway puts it, :the whole social media thing has the potential to bring us full circle to the original way Democracy got started."

But both would agree that bringing social media integrally into decision making in a manner that doesn't permit a few strident bloggers or vested-interest Internet sites to drown out the crowd ironically requires some strategy and structure.

 
 

 

Elway, whose Elway Research Inc. with its interactive polling and opinion-tracking has been a key initiator in helping shape business, policy and governmental decisions since 1975, is seeking to attract interest in what he refers to as "The Next Northwest," though his focus has really become "The Next Washington."

Buller, a member of the board of the Washington Athletic Club and the incoming chair of Seattle Seafair, is one of the Next 50 Ambassadors, a group of civic leaders seeking to promote a series of events to celebrate the 50th anniversary of the six-month run of the Seattle World's Fair.

 

But he's carried the idea into an appeal to dramatically embrace social media to gather an array of visions for the region's future, not merely input from established groups.

While Buller is focused specifically on Seattle 50 years hence and Elway's focus is geographically broader, they are both seeking to not just stir interest in discussing the future but in igniting a desire for broad-based involvement in shaping that future.

 

And both agree that social media is the factor that will negate reliance on the old top-down way of making decisions and that, in a sense, a matured social media can represent a return to the way Democracy itself was born - with all having an equal voice in the decisions.

 

Buller is a Nebraska native who came to the University of Washington in 1965 to play basketball, but injuries and illness shortened his career after he led the freshman team in scoring. He wound up as a graduate-assistant coach while he got his MBA.

 

Among his leadership positions, Buller served as senior vice president of marketing at The Bon Marche/Macy's, vice president of alumni relations at UW, head of the local organizing committee for the 1995 NCAA Final Four and CEO at Tully's Coffee.

 

Elway launched his company soon after getting his doctorate in communications from the University of Washington in 1975. His Elway Poll is the only independent, non-partisan, on-going analysis of public opinion trends in Washington state and the Northwest.

 

Buller and Elway have appeared in recent months before various town-hall and organization meetings to tout the need for the region to focus on mapping a plan for the future, each focusing on his ideas for defining the future. But both concede there hasn't been a rush to seize the initiatives they are offering.

 

Both lament the current state of discourse and suggest that the absence of broad involvement in the conversation is a key reason.

 

"We're having this great debate about the role of government and it's being conducted in the most partisan atmosphere imaginable," notes Elway, most of whose research and focus has been on policy matters and government.

 

What he is seeking to achieve with his "Next Northwest" is having a "systematic, statewide conversation about changing expectations for government and institution." Social media would ideally have a large role in those conversations.

 

Buller is even more forceful. "Journalism has turned into spinism. People tend to find the medium that supports their version of the world and they don't need to talk to anyone who disagrees."

 

"We aren't really discussing Seattle's next 50 years," Buller says, suggesting that current debate about the proposed new arena and its possible impact on the Port of Seattle's future are perfect examples of sound-bite decision-making for the near-term without extending to "long-term, do we want to be a global city or a regional city."

 

Buller, has created both a concept document and creative brief to help guide groups, formal or online, wishing to initiate discussions on "The Next 50 - Changing the Way Seattle Looks at the Future."

 

Buller's and Elway's shared vision of the need for a vision, or visions, merits broader attention, particularly in the social-media arena that they understand will be vital to any meaningful discussion.

 

That attention has thus far proved elusive. Or as Elway quipped ruefully, "I can't find the financial support to carry this out so I guess I'll have to win the Powerball to complete it."

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State wine industry's signal charitable event reaches 25 with memorable gathering slated

Bob Betz, who as one of the state's most respected winemakers is co-chairing the 25th Auction of Washington Wines, recalls with a smile the first auction. "I bought two bottles for $60, and it was the live auction. And they were bottles of Oregon wine."

 

Much has transpired for both Betz, then already an established executive with Chateau Ste. Michelle winery, and the industry itself since that launch event. What was initially, and for the first 10 years, called the Auction of Northwest Wines because it was held in partnership with the equally young Oregon wine industry, now sees live-auction items bring in an average of $10,000.

 

Betz' co-chair for the 2012 event is Stein Kruse, president and CEO of Holland America Line, whose cruise ships take Washington wines to ports of call around the world. So as Betz has perhaps the longest-term perspective on the industry he became a part of in 1976 when he joined Chateau Ste. Michelle as director of marketing, it might well be said of Kruse that his company gives Washington wines their most far-flung exposure.

 
 

Sherri Swingle, Auction of Washington Wines' executive director, says that first auction   raised $20,000 and had 47 wineries participating. By last year, the auction raised $1.55 million, swelling the total the event has raised over the years to $26 million, with uncompensated care at Seattle Children's Hospital being the key beneficiary.

 

The auction organization came into existence in 1987, the same year as the Washington Wine Commission, the state agency created by the legislature to provide a voice for both wineries and grape growers in the state. The first wine auction was held the following year.

 

In a sense, the accomplishments of both the industry organization and the auction will be highlighted and honored at the August celebration when the three days of what is billed as the state's most prestigious charity wine event, for which Swingle is now finalizing details, unfold.

 

Swingle says more than 1,700 attendees are expected to be on hand for the auction gala on August 18 with about 500 at 10 winemaker dinners around the region the previous evening and about 1,000 at the picnic and barrel auction of limited-release wines on August 15.

 

But the role and contributions of what is now Chateau Ste. Michelle Wine Estates will be especially highlighted at what has traditionally been an annual award to a vintner and a grower each year. This year the awards are being combined, at the insistence of CEO Ted Baseler, who originally had been intended for an individual honor.

 

Baseler made it clear that the honor could not single him out, but needed to honor the Chateau Ste. Michelle team, both past and present.

 

Nevertheless, Baseler's role in not just the success of Chateau Ste. Michelle, but also the industry that he has made equal in importance to the success of his own company, are bound to be noted as the company he has presided over since 2001 is honored.

 

Baseler's involvement with the industry stretches back almost as far as Betz'. He joined Chateau Ste. Michelle in 1982 but had already spent several years as an account executive for the advertising agency that handled the winery's account.

 

Today the business, acclaimed twice in the past year as "Winery of the Year," has international relationships and is among the largest and fastest-growing wine companies in the country.

 

Betz spent 28 years with Chateau Ste. Michelle in a variety of positions in communications, sales and operations, eventually as vice president for winemaking research, remaining as Baseler's right-hand man until 2003, even though he and his wife, Cathy, had opened their own winery in 1997.

 

Betz, his wife and daughters had built the Betz Family Winery over 15 years, until its sale last year, into one of the state's most successful and respected wineries. He prefers to call it a partnership with the new owners, rather than a sale, since he remains as winemaker and he and his wife will remain as part of the management team while finally having "the one thing that has eluded us - time."

 

Event co-chair Kruse says he has "a small wine collection" but added "we buy wine in large quantities for our ships around the world and feature Washington wines in the Pinnacle Grill on 15 of our ships."

 

"The growth of the industry in this state, both in the quality and value of the wines, has been amazing to watch," he said.

 

That growth Kruse refers to was pointed up in the results of an economic impact study from the Washington Wine Commission this spring, which was described as "the most comprehensive such report ever produced," that showed dramatic growth in the value of the industry since 2007 despite the woes of the economy.

 

The report indicated the value of the industry to the state has leaped from $3 billion five years ago to $8.6 billion now and that the value nationally has gone from $4.7 billion to $14.9 billion.

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Recent success for often-maligned CTI and its CEO stir global interest

Cell Therapeutics Inc., the Seattle biotech firm that has alternately raised and dashed investor hopes over the past 20 years, has scored a triple play in recent weeks, gaining European approval for a new drug, buying a phase-three cancer drug at deep discount and finding a major new investor.

 

The spate of recent news, while drawing little attention from Seattle area media, has left influential national bloggers and websites musing over why CTI's developments haven't attracted more investor interest and movement in its stock price. The stock has stayed under $1 for some weeks and is down 40 percent from a year ago.

 

Attention for CTI has peaked following late May word that the company's cancer drug Pixantrone, with the brand name Pixuvri, has received conditional marketing approval from the European Commission, following February approval from the European Medicines Agency.

 

 
 

National websites have enthused about CTI's recent successes, with the influential market blog "Seeking Alpha" a few days ago offering the intriguing headline, both promising and pointed: "Cell Therapeutics' Pixantrone - Is Hope Coming For Patients And Patient Shareholders?"

 

And the respected "24/7 Wall St. Wire" asked, in a column noting the recent successes, "Can a European Approval of Pixantrone Save Cell Therapeutics?"

 

The Pixantrone approval will allow CTI to produce revenue from the drug in a market about equal in size to the U.S. market, and will also mean that it can accumulate additional data toward FDA approval from the use of Pixantrone in patients with a rare form of non-Hodgkin lymphoma.

 

Just this week, CTI announced that it has completed the acquisition, first announced in April, of Pacritinib, a Phase III-ready drug that's part of a new class of targeting agents, known as JAK inhibitors, for treating myelofibrosis, a type of leukemia that affects bone marrow.

 

The Pacritinib purchase price of $15 million in cash and another $15 million in convertible stock was described by one national blogger as "a near steal" because, despite four competitors, CTI will be going after a piece of what the company views as a $7 billion market in the U.S. alone.

 

Finally, CTI announced a $40 million investment from New York-based Socius Capital, which analysts suggest paid about 10 percent above the CTI stock price for its passive-investment stake of just under 10 percent. That reflected, according to an analyst, "a high level of confidence" in the commercialization of Pixuvri and clinical development of Pacritinib.

 

But it's the Pixantrone success, enhancing the Pacritinib acquisition and spurring the cash infusion, that is most intriguing, particularly, since there are several sub-plots that come into play with the European announcement. Those include the politics surrounding FDA's handling of the pipeline for new potentially life-saving drugs, as well as the emerging controversy over high-priced drugs that offer only a few months of life expectancy for patients.

 

Then there's the on-going dynamic tension between CTI CEO  Dr.James Bianco and Seattle-area media, which have frequently targeted the company and Bianco for the $1.74 billion he's raised and spent without much benefit to shareholders and the wide swings in the stock price over the years, as high as $72 and as low as 88-cents. Bianco's defenders brush aside media criticisms, contending that the only reason CTI is still alive after 20 years is because of Bianco's creativity and leadership.

 

As one Bianco supporter put it, "let's just say the media and Jim Bianco don't like each other very much," the tension possibly due in part to the fact Bianco enjoys the perks that go with the CEO role and is a competitive kind of guy who doesn't shrink from a fight.

 

The latter isn't surprising given his Bronx upbringing as a second-generation Italian kid in a household shared by up to 20 relatives at a time in an environment where

"you were okay as long as you didn't leave the few square blocks of our neighborhood."

 

Then he smiled as he remembered that his bus to high school made its closest stop 10 blocks from his home. "Every day I sprinted to the bus because if you couldn't get there faster than anyone else, you were a statistic."

 

He admits he didn't do very well academically in high school, but by the time he found himself at NYU, he recalls that a major disappointment was the lone "B" he received among his "A's."

 

Medical school, internship and residency in New York led to Seattle and an opportunity at the Fred Hutchinson Cancer Institute, and eventually to the founding of CTI.

 

In addition to being high visibility in his business, he's also highly visible in fund-raising efforts for his special causes, including the Hope Heart Institute, where he and his wife, Sue, won the Wings of Hope award in 2002 and where he's helped revamp the key fund-raising event, and Gilda's Club, for whom he is planning the first capital campaign.

 

He's been involved with Gilda's Club for a dozen years, explaining that it "provides that other kind of Medicine, the kind you can't get in hospitals or clinics but that place where family, kids, friends etc have support. It's a great cause, but because they don't do research they're not sexy so funding in these times is tough. That's why I stay involved. It's in our (CTI's) DNA."

 

The manner in which the European Medicine agency's approach brought conditional approval for Pixontrone while the FDA dallied, eventually causing CTI to withdraw its application, represents another log on the fire of controversy that swirls around getting new drugs through the FDA to patients.

 

In Europe, 25 member states and five independent experts represent the review panel for an application and two-third of the 32 must give their okay. Critics of the FDA process of an office with a single final decision maker in each therapeutic category, from oncology to cardiovascular and rheumatologic, etc. call the European approach a more balanced review.

 

The critics contend that people are losing their lives while the FDA is holding things up and urge that Congress and the administration press for conditional approval as a more certain part of the FDA review process. For obvious political reasons, Bianco declines to join those criticisms, particularly since a new application to the FDA for Pixontrone is planned in a few months.

 

And since Pixontrone will cost, once the pricing is worked out with each of the European countries, somewhere between $33,000 and $38,000 to extend the lives of the target patients by less than a year, it will come to be part of the growing debate over end-of-life costs vs. benefit.

 

But over the longer term, it will be interesting to see how the developments of the past few weeks play out for Bianco and CTI, and to what extent the prediction of one of the national bloggers proves accurate: "It has been a long road for investors of CTIC, but it now looks as though the future is bright."

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Washington News Council weighs future in changing new-media era

The nation's last fully operating news council is engaged in some soul searching about its future, including whether it has one, at a time when the proliferation of social and other forms of non-traditional media may make some sort of media "watchdog" more important than ever.

 

"We're in the middle of a process with a core group that I call my 'strategic transition possee' to look at our vision, mission and whether we're sustainable," says John Hamer, co-founder and executive director of the Washington News Council (WNC), which he helped create in 1998.

 
 

Meanwhile, as the Washington News Council (WNC) goes about its introspection, it's scheduled to hold a full-blown hearing in a few days on a complaint against the oft-offending but never-repentant major Seattle television station, KIRO.

 

That scheduled hearing points up the long-term importance of an organization like the News Council as a forum for public engagement with the media. But it also indicates the key challenge that has largely been beyond WNC's ability to overcome during most of its 14 years of existence.

 

The importance of such an organization is stated compelling by Ken Hatch, a founding board member and the influential former president of KIRO in the days when it was a TV-AM-FM titan owned by Bonneville Broadcasting.

 

"This mix of journalism and mass media compulsions, basically at the whim of anyone with an uncontrolled point of view, will not create a better world without some sort of 'point-counter point' forum like WNC," Hatch said.

 

The challenge has been the reluctance of the media to help any organization, including WNC, keep an eye on its performance, a reluctance put in perspective by Blaire Thompson, whose Washington Dairy Products Commission was among the entities that have come to WNC with complaints.

 

"The media readily arrogate to themselves the freedom, indeed, the right, to hold everyone in our society accountable to their scrutiny," said Thompson. "Unfortunately, what many media are reluctant to do is to allow themselves to be held accountable for their actions. The disinclination of most media to be held accountable can express itself in hostility to anyone who tries, and this has includes the Washington News Council."

 

Part of the challenge to "sustainable" is that WNC, which has operated on a relative financial shoestring and been run by a chief executive who has stayed committed more for love than money, saw its primary funding source come to an end last year.

 

That key funding for the past three years has been a $100,000 matching grant from the Gates Foundation, guided by Bill Gates Senior who has been a strong supporter of WNC and its role.

 

The end of the Gates challenge is part of the reason Hamer has guided the News Council to assess what he characterizes as "a crucial transition year."

 

The News Council's annual Gridiron Dinner, a roast of prominent political or business figures, has become the key fund-raising event for the organization. And this year's November roast of retiring Gov. Christine Gregoire and departing Congressman Norm Dicks has Hamer and WNC supporters enthused about the fund-raising such a special roast, attracting both Democrats and Republicans, may represent.

 

The WNC forum for public engagement with media has included a formal hearing in the event no accord was reached between a media entity and the aggrieved person or organization.

 

While the accused media have mostly always responded to the complaint in some manner, they frequently have boycotted the formal hearing when one has been held.

 

That was the case a few years ago when King County Sheriff Sue Rahr complained to the News Council about the unfairness of a Seattle P-I series. After a hearing in which WNC found for Rahr, with the P-I declining to be present, the Seattle Times did devote a full page to the hearing and its outcome damning the P-I.

 

But in most instances, the accused media knows that regardless of the outcome of a WNC hearing, other media will provide little public visibility on those proceedings. That removes much of the concern about being found "guilty."

 

So it is with CBS-affiliate KIRO TV, which has thumbed its nose in two previous complaints against it for reports by the same reporter, Chris Halsey, who is described by himself and the station, but by few who see his work, as an "investigative" reporter.

 

Without going into details of the complaints, all of which brought major outpouring of support for those wronged by KIRO, including Secretary of State Sam Reed, the fact is, as Hamer puts it, "KIRO has never given us even the courtesy of a response by phone, email or letter."

 

The latest complaint is from teachers and parents at Leschi School about a piece, more accurately a job, Halsey did for KIRO on the school's custodian.

 

Hatch, the former KIRO chief, said of one of the KIRO stories that drew a complaint: "It was a hurtful and stupid example of a bad performance by a reporter who carries the mantle of public trust. The reporter failed and so did the news director who must have been asleep at the wheel."

 

WNC was patterned after the respected Minnesota News Council, whose operation was supported by basically all newspapers and prominent broadcast outlets in the state. That included financial support from the Minneapolis Star and Tribune.

 

During WNC's early days, it became the key to growth of the concept nationally, getting a $250,000 grant from the Knight Foundation to sponsor a nationwide contest to start two more news councils. California, which has since closed its doors, and New England, which still exists but has metamorphosed out of a watchdog role, were launched by WNC.

 

The Minnesota News Council recently closed its doors, due to change in leadership and the financial travails of the state's largest daily newspaper, leaving the Washington News Council as the last in this country whose scope extends all the way to full-fledged hearings.

 

 

That's why WNC's discussions about its future are important. Again, quoting Hatch: "We are seeing media and journalism destroying some of the quality parts of our free speech process. Lies and slander must be challenged by good minds and good people for this country to truly have a freedom of speech fostered by people of integrity."

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Rushworth's portraits of the prominent present career-transition success story

As then-Gov. Gary Locke's staff was weighing which artist to hire to paint his official portrait, he was on hand at Safeco Field for the unveiling of the retirement portrait of Seattle Mariner great Edgar Martinez in the fall of 2004. After Mariner CEO Howard Lincoln unveiled the portrait on the field before 40,000 appreciative fans, Locke contacted his staff and basically said "I want that artist."

 

The artist who painted Edgar was Michele Rushworth and Locke, whose eight-year tenure as governor was nearing conclusion, thus became the first public commission for the Sammamish, WA, artist. It was a noteworthy step for a woman who, with little formal training in that medium, had decided a few years earlier to make portrait painting her career.


 
The portrait of Locke, completed several months later, opened important and extensive new doors for Rushworth with governors in other states, as well as high-ranking officials, contracting with her to do their portraits.

It was in the late 1990s that Rushworth, with two toddlers she and husband, Tim Jones, had adopted from China a couple of years earlier, decided to give up her career as an office-products sales executive and turn to portrait painting fulltime.

 

When I asked her about formal training, she admitted that her art-college schooling some 20 years earlier was "avant garde video production, performance art and scrap metal welding. Not much drawing or painting at all."

 

"I've taken a few week-long workshops since then, but that was about it," she added.

 

It was really more of a "eureka moment" for Rushworth, who recalls having done portraits "rather informally" in high school and college, as she thought about what line of work to go into after the kids started full time in school.

 

She says she found a website she describes as "like a portal site for portrait artists. I remember thinking, I could do this, and saying out loud, 'this is it!'"

 

From the late '90s until the breakthrough with the Martinez portrait, much of what she did was "dozens of private family portraits, mostly children," including daughters Rachel and Emily.

 

How competitive is her business?

 

Well, it's not like Michelango or Renior lounging about waiting for a summons from the Pope or the monarch. Rather there's an entrepreneurism and business savvy that come into play to be successful, and she says her sales years "were actually a big help in knowing how to run a business and work in a professional way with people in all sorts of fields."  

 

"The business of doing portraits is very competitive," she told me. "There are probably 50 to 100 artists in the United States who do what I do and we all know each other."

 

As to how decisions are made on who to hire to do a portrait, she says "whenever someone needs a portrait done they may have a favorite artist in mind or they may look at dozens of portfolios. Quite often they'll have seen a portrait they liked and want to work with that same artist."

 

So it was with the charge to do portraits of two Nevada governors after the Nevada Arts Council saw the Locke portrait.

 

And the Nevada commission led to an unusual assignment to do several Wyoming governors after that state's legislature decided to "fill in the blanks" of 12 former governors who had never had portraits painted, and hired three artists to do the work.

 

"Some were recent governors and some were from a hundred years ago," says Rushworth, who actually did five of the 12. "For the posthumous ones I worked with archive photos, history books, family records, etc. In cases where the former governors were still living I went to meet them."

 

Rushworth recently completed official portraits of two high-ranking military officers in Washington D.C: retired Commandant of the U.S. Coast Guard, Admiral Thad Allen, and Air Force Chief of Staff General Norton Schwartz at the Pentagon.

 

Now she is engaged in a couple of special assignments, one is to do Locke's successor, Washington Gov. Christine Gregoire, whom Rushworth describes as "delightful to work with," for a portrait that will be completed near year-end as Gregoire's eight years as governor come to a close. Gregoire's portrait will then hang next to Locke's in the gallery of paintings of the former state chief executives.

 

Then there is the second portrait of Locke, contracted for by the U.S. Department of Commerce, which Locke headed before becoming ambassador to China. That portrait will be unveiled in the fall, she expects.

 

Working with the man who is now ambassador to China on the portrait may serve as reminder for Rushworth of the memories of the country to which she and Tim, at the time vice president of sales for Puget Sound Business Journal, twice traveled to adopt their daughters.

 
 

She's fond of recalling how the portrait of Martinez that really opened the door to her success could have ended in amusement rather than applause from the thousands of fans. As she put the final finishing touches on the portrait, showing Martinez at home plate in his classic batter's stance, she recalls thinking that she was finished. Then she realized that she had left out home plate from the portrait. "I quickly fixed the oversight."

 

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Ellis reflects on the dramatic events that saved Mariner franchise 20 years ago

John Ellis, who was a reluctant CEO looking forward to retirement when he was called on 20 years ago to help find local owners to save the Seattle Mariners' franchise, admits that he wasn't even a baseball fan when he undertook the almost-lost cause of saving baseball for Seattle      

              __________________  

 

        Then-Gov. Mike Lowry recalls  

        legislative solution to fund what

               became Safeco Field 

                         (See sidebar below)  

               ___________________ 

 

 

"I didn't know much about baseball and wasn't really a baseball guy," Ellis admits, reflecting back on the events of late '91, early 1992. And he didn't really understand how deeply

 
 

embroiled he would become when he undertook the role that Seattle Mayor Norm Rice, and subsequently other business leaders, urged on him, a role in which he soon found how challenging saving the franchise would be.

 

 "I'm not sure if, to this day, anyone really knows how close we were to losing this franchise," says Ellis, who eventually served as chief executive officer of the Seattle Mariners and remains, 13 years after retirement, the team's primary representative to major league baseball.

 

It's a tale that deserves to be retold at a time when, rather than preparing a celebratory anniversary event for the Mariners to applaud what was achieved two decades ago, community leaders and baseball fans seem intent on railing against the Mariners for a variety of  perceived shortcomings.

 

It was in the midst of last week's outcry over the Mariners' push back on the idea of a new arena that they legitimately pointed out could bring a couple hundred more traffic-generating events a year to the Sodo neighborhood that I visited with Ellis over lunch. It was a visit scheduled several weeks ago so the controversy itself wasn't the topic of conversation, other than a brief, frustrated reference to it by Ellis.

 

I wanted his reflections on those tense days in late 1991, early '92, when an unlikely alliance of a dramatically wealthy Japanese businessman, a group of wealthy young local tech executives and a couple of senior community leaders was cobbled together to keep major league baseball in Seattle.

 

Ellis, as CEO of Bellevue-based Puget Sound Power & Light Co., had agreed to serve as an advisory board member to Mariner owner George Argyros, then to succeeding owner Jeff Smulyan, both commitments made as a community leader rather than baseball devotee. Thus he was logical member of a special advisory group Seattle's mayor turned to when it became clear Smulyan intended to sell the team.

 

"Norm's idea was for us to go out and find someone to buy the team, which at that point was appraised at $100 million," Ellis recalled. "After poking around for awhile looking for a possible buyer, we finally told the mayor we couldn't find anyone crazy enough to put up $100 million to buy a baseball team."

 

At that point, Ellis figured he could go ahead with his plan to retire as CEO of the  region's largest investor-owned utility, get on his boat and set out on a leisurely cruise to Alaska, as he had long planned to do.

 

But over that late December of '91, Sen. Slade Gorton's own efforts on behalf of saving the Mariners uncovered, to his astonishment, in a visit with Nintendo of America President Minoru Arakawa, an interest by his father in law, Haricho Yamauchi, purported then to be the third richest man in Japan, to buy the Mariners.

 

Ellis was quickly sucked into a furious effort to figure out how to get major league baseball, whose antipathy to any foreign ownership but Japanese ownership most of all, to even consider Yamauchi's offer while averting a sale to someone else that would render meaningless any Seattle effort.

 

After an aborted effort by "a totally naïve local group, led by the most naïve guy of all (referring to himself)" to meet with commissioner of baseball, Ellis found himself summoned to a what he describes as "a secret meeting," a "cloak-and-dagger"-like, assumed-name visit in St. Petersburg, FL, with unnamed major league owners.

 

Ellis arrived at the designated hotel and checked in for a meeting that never occurred with a small group of owners whose identity he never learned. But what did occur told him how close Seattle was to having the team leave before the efforts to save the franchise could even gain traction.

 

"I looked at the hotel shop across from the front desk and saw they were selling Tampa Bay Mariners shirts and hats," he said. "That experience and a couple of others that followed made it clear that the deal to move the team to Tampa Bay was already in the works.

 

"the simple fact is that if we hadn't put this together when we did, beating Smulyan's contractual deadline to get out of his Kingdome lease, the team would have been gone," Ellis said.

 

So as the Seattle-ownership deal began to gain traction, both the group of owners who had been brought together to join Yamauchi and Arakawa, and later, major league baseball executives as their opposition eased, insisted that Ellis be a part of the leadership of the team.

 

"At the June meeting of the owners, after all their conditions for our ownership group had finally been met, they told me they had two remaining conditions," Ellis recalls. "First they said they wanted me to serve as the team's rep to major league baseball, the person each team has who is empowered to act without anyone else's approval.

 

"The other condition floored me," he said with a smile. "They said they expected the owners' rep to have a significant financial interest in the team. I replied 'can you tell me what you mean by significant?' and they all broke out laughing because they had gotten to know me and knew the extent to which I could be involved. My financial role ended up being not very substantial."

 

But his involvement as CEO, between then and his retirement at the age of 71 at the end of the '99 season, was extensive and, as he recalls, every time he thought he'd be able to hand over the reins and head out on that boat trip to Alaska, a new challenge emerged.

 

First task was finding a new manager who would represent a statement. So after convincing Chuck Armstrong to come aboard as president and retaining Woody Woodward as general manager, he asked the two of them who should be the new manager "The guy atop both their lists was Lou Pinella."

 

The events that unfolded between then and his retirement included the Kingdome roof collapsing, the players strike, the memorable end-of-season race to the league championship series in 1995, the struggle to get voter approval for a new stadium, legislative alternative when the vote failed.

 

Although he retired in 1999, the stage had been set with the players and team executives who would two years later set the American League record for victories in a season at 116.

 

Since 2000 he has been the franchise's chairman emeritus, but has remained on the executive committee of major league baseball and has continued to be the Mariners' representative to MLB and on the ownership committee.

 

He remains a one-of-a-kind in major league baseball: as the team's retired top executive who never had more than a tiny piece of ownership but who is still viewed by the other teams' owners as the most important voice of Seattle baseball.

 
             -----------------------------------------


Mike Lowry recalls '95 legislative pact that

cemented franchise with stadium funding 

 

While John Ellis gets legitimate credit for his role in saving the Seattle Mariner franchise in 1992, of equal importance was Gov. Mike Lowry's role three years later when he brought the franchise back from the edge by getting the Legislature to agree on a new-stadium funding package.


A 1995 ballot measure to impose a sales-tax increase to fund construction of a new stadium was pushed from hopeless to near passage by the miraculous late-season dramatics of the Mariners that included a memorable victory over the New York Yankees before a championship-series loss to Cleveland.
 

 

"After that sales-tax ballot issue failed by the razor-thin margin of about one-tenth of a percent, I remember Ellis calling a news conference to say the team would be put up for sale because it was losing a lot of money in the Kingdome," Lowry told me Tuesday in an e-mail exchange.

 

Lowry recalled that he was approached by his longtime friends, public-relations executive Bob Gogerty and Boeing's chief of governmental affairs, Bud Coffey, as well as the mayor and county executive, asking him to call a special legislative session to find a stadium-funding solution.

 

"I frankly wanted to do that," Lowry said, "because they had run a great campaign in their narrow sales-tax ballot loss. It was a media campaign that featured tremendous commercials that had young kids who were playing baseball morphing into the actual Mariner players, like Ken Griffey with a tag line that I think went like 'Heroes need a place to grow and become real.'"

 

Lowry says he called Ellis to ask if the owners could hold off on seeking to sell the team until he had a chance to see if he could get the lawmakers to agree to a brief special session limited to the Mariners' issue.

 

"I frankly got a positive reaction from the legislative leaders," Lowry noted. "I guess they didn't want to lose the Mariners either."

 

Thus in something that could probably have only happened in the political environment of yesterday, Lowry was able to work out a deal with key Democrats and Republicans from both houses on what he remembers as "a totally new funding package that was importantly different from the sale-tax measure."

 

"It was composed of taxes that were mostly on the users and beneficiaries of the new stadium, like admission taxes and sports bar taxes," he said. "As I recall, the only new tax in the package that was a stretch to say it was a beneficiary of the stadium was on rental cars."

 

In recalling his feelings in undertaking the legislative initiative, Lowry said "I simply did not want Seattle and the state to have the image of losing that major sports franchise. That struck me as Rust Belt."

 

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Reflections on a quarter century of Business Hall of Fame selections

When the Puget Sound Business Hall of Fame was created 25 years ago to recognize business leaders from the past who had contributed to the economic growth of the region, some quietly expressed concern that the event might soon run out of past leaders to honor.

 

A quarter century on, as Junior Achievement of Washington and Puget Sound Business Journal prepare to induct four new laureates into the Hall of Fame, it's become clear that the region had no shortage of business leaders to celebrate.

 

In fact, while the event retains the name "Puget Sound," it has grown in the past couple of years to include Eastern Washington business leaders among those eligible for selection.

 

Thus at a time when the quest for heroes in business is perhaps more important than it has ever been, the number of business leaders chosen over the years to be honored at this unique annual event passes 100 Thursday evening when the following four laureates are inducted:

 

 Jim Douglas, who created Northgate as the nation's first shopping center designed as a mall, helped launch Seafair as part of the celebration of Seattle's 100th anniversary and and became the "pitchman" for the vision that became the Space Needle, symbol of Century 21.

 

Edie Hilliard, A radio pioneer as one of the first female general managers of a major market station, who then built one of the nation's largest independent radio networks.

 

Budd Gould, founder and principal owner, and still president, of Anthony's Restaurants, who brought the essence of waterfront dining to communities from Bellingham to Spokane and Richland to Bend.

 

William Ruckelshaus, perhaps the nation's leading environmental figure of the past half century. who served two presidents as administrator of the EPA and also fashioned a career in the private sector as CEO of Browning Ferris Industries and senior vice president of Weyerhaeuser Co. He now is strategic director at Madrona Venture Group.

 

It was the late Jack Ehrig, Seattle ad-agency head and a key supporter of Junior Achievement, who in 1986 approached me, as publisher of PSBJ, about creating a local event that would parallel the national Business Hall of Fame event for which FORTUNE Magazine was the partner of JA.

 

FORTUNE chose the laureates for JA to honor in those years, producing a special insert in the magazine to introduce them to its readers and JA honored the national laureates at a prestigious annual banquet that cities competed for because it attracted some of the biggest names in business nationally.

 

In a similar manner, laureate selection became the role for PSBJ and JA produced the first banquet to honor those selected in 1987.

 

FORTUNE's rule was that honorees had to be retired from day-to-day involvement with the companies where they had built their reputations. That sounded to me like a good way to ensure there wouldn't be any lobbying on behalf of a currently active CEO so that became our rule as well. That also has changed a few years ago with the induction of Eastside business leader and developer Kemper Freeman, still very much active in his business.

 

From the outset, I populated the selection committee with people who were not only business icons in their own right, but also understood far more about business history than I did. Thus each annual selection gathering became a lesson in local business lore.

 

And it was the insight of those members of the selection committee, including from the outset longtime community and business leader Jim Ellis, who personally knew more than half a century worth of the prospects, that brought forward well-known and not-so-well-known names from the past.

 

Because of the prominence of JA Seattle in the national organization, particularly because we had built what many viewed as the best local hall of fame program in JA, it became logical for the Seattle JA leadership to seek to have the national event in Seattle.

 

That finally occurred in 1992, which happened to be the year that Steve Jobs, then between jobs since he had been edged out of Apple a few years earlier, was a laureate. But Jobs, with typical unpredictability, apparently decided he didn't care to head up to Seattle from Silicon Valley for the event and the word spread the day of the banquet that he wouldn't be there.

 

But by late afternoon, to the relief of all, it was learned that Jobs had changed his mind and would, in fact, be on hand to accept his award. Only a few insiders were aware that FORTUNE publisher Jim Hayes, a high-visibility figure at the national banquet, had telephone Jobs to advise him that if he failed to show up, his name would never again appear in the magazine.

 

The business leaders of JA Washington in 2008, led by longtime venture capital executive Woody Howse and wine-industry leader Michael Towers, began building a case for the return of the national event to Seattle.

 

But it soon became clear, as the Great Recession got its grip on the nation's financial throat, that the world had changed. National gatherings of business leaders for something like a Hall of Fame banquet, and the significant corporate financial support necessary to carry it off, soon seemed unrealistic. None has been held since then.

 

But the JA Puget Sound Business Hall of Fame remains a viable and important reminder each year of the role successful business leaders can play in representing role models for the business leaders of today and the young people of JA who will be the business leaders of tomorrow.

 

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Veteran real estate exec John Torrance unveils arena, convention center plan

John Torrance, whose vision for a retractable-roof stadium in Seattle led to the eventual construction of Safeco Field, has come up with a detailed plan for construction of a new arena and convention center on the Seattle waterfront.

 

Torrance, a senior vice president for CBRE, the commercial real estate giant, has guided creation of a plan that would turn 88 acres of Port of Seattle's Terminal 46 into a convention center and an arena, with provisions for a new cruiseship terminal and waterfront park.  The arena could house the NBA and NHL teams that Seattle covets and the convention center would be designed to catapult Seattle up the list of convention cities.

 

Torrance is unveiling his idea as an advisory panel prepares to deliver a report to Seattle City Council and King County Council on a plan by Chris Hansen, San Francisco hedge-fund manager and former Seattleite, to build an arena on property he has acquired south of Safeco Field.

 

 
 

And it also comes in the wake of word last week that the port is suffering a major loss of business to Port of Tacoma in July when three shipping lines, representing 20 percent of Port of Seattle business, relocate south.

 

Torrance suggests that the shift of major port business may help make the case that development rather than maritime represents the Seattle waterfront activity of the future. He hasn't yet discussed that with port officials or commissioners, on whom pressures to maintain the maritime focus come from longshoremen who would face the loss of jobs and traditionalists who wish to retain the working-waterfront character.

 

While Torrance's plan may seem like an eleventh-hour idea given the discussions of recent weeks about the proposal Hansen recently unveiled and has been vetting,  it's actually something he began investigating about two years ago, he says. And he's worked with architects and planners to put together detailed drawings in recent months.

 

He's already had early discussions with city and county officials and port representatives

and hopes to make contact with Hansen as well to outline the plan and seek to gather support.

 

"The Seattle area has twin needs to help ensure its long-term economic vitality. One is an arena that has the capacity to attract NBA and NHL franchises and the other is a convention center with the capacity to boost Seattle into major-league convention ranks," Torrance offered.

 

"Hansen deserves credit for coming up with a possible plan to address the arena issue but what we're hoping to do is address both arena and convention center on a potentially world-class site, without any risk of taxpayer obligation.

 

Ironically, the plan details he will be unveiling for the first time late this month before Seattle's 101 Club comes as the city prepares to celebrate the 50th anniversary of the Seattle World's Fair whose U.S. Pavilion became the arena that his father intended would be the venue to lure an NHL franchise.

 

His father, the late Torchy Torrance, knew the NHL required a 15,000-seat arena for any hoped-for franchise, and thought the new arena that would be left after Century 21 concluded would meet that requirement. But to the horror of the senior Torrance and NHL proponents, the completed facility seated 12,200.

 

It was the younger Torrance, a longtime leader in the commercial real estate industry, who first proposed a retractable-roof stadium for Seattle in the early '90s after visiting Toronto and conferring with officials there about that city's Skydome.

 

I remember when he first mentioned to me back in 1993 the idea of the retractable-roof stadium to replace the enclosed Kingdome, I was among those who muttered a quiet "good luck."

 

But Torrance is a dreamer with follow through and influence. He soon came up with the name "StarDome" for the retractable-roof concept and that helped provide a vision and thus momentum, and believers. Those included owners of the Seattle Mariners, who by the mid-90s realized the Kingdome would not be sufficient as a baseball facility into the future and began pressing elected officials for the new stadium..

 

Torrance's Terminal 46 plan may catch the interest of Seattle and King County elected officials edgy about any assurances from Hansen of taxpayer safeguards into the future. The one certainty for those public officials is that taxpayers in the county have made it clear they don't want to pay for an arena or a convention center so elected officials know not to go there.

 

While Torrance's idea for the project and in-depth discussions in Vancouver, Boston and San Diego were at his own initiative, he would undoubtedly have the resources of CBRE, a national player that is the largest commercial real estate firm in the state, to support his efforts.

 

"We hope we'd attract financing and CBE has access to a lot of clients who could wind up involved in a program to develop the site," Torrance adds.

 

Development that could create thousands of jobs and bring in millions of dollars in tourism revenue, plus open the door to two major league sports franchises, rather than continued maritime use of the pier, should be a preferred option, Torrance says.

 

While the idea for the project and in-depth discussions in Vancouver, Boston and San Diego were at his own initiative, Torrance would undoubtedly have the resources of CBRE, a national player that is the largest commercial real estate firm in the state, to support his efforts.

 

"We hope we'd attract financing and CBE has access to a lot of clients who could wind up involved in a program to develop the site," Torrance adds.

 

He says he's seeking to have conversations with Hansen, who has already invested in the site he's proposing for an arena, in the hope of "moving him over to the site we're proposing, since our development idea would add enough value to the property he's buying to allow him to recover his investment."

 

Torrance estimates that the port could generate up to $25 million annually from leasing activity and hotel developments, based on what's generated for the Port of San Diego. "That's about 10 times what the container business generates," he says.

 

As his original retractable-roof idea and the stadium that came about saved major league baseball for Seattle, his newest concept patterned after developments in Vancouver, San Diego and Boston could turn out to be the most workable plan for new hockey and basketball franchises. And along with that a dramatic new major convention facility.

 

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Early lessons helped shape Ayer's style in guiding Alaska's through turbulent times

If a company deserve to be judged by the leader it keeps and leaders by the companies they build, then Alaska Air Group and its chairman and CEO Bill Ayer should be judged well.

 

Ayer, 57, who steered the company for the past decade through an increasingly successful flight while for the rest of the "legacy" airlines the 10 years proved an image-scaring and scary ride, has announced that he is officially turning over the CEO reins to Alaska president Brad Tilden.

 
 

Ayer, who has spent more than 30 years in the industry since launching his own little start-up airline in his mid-20s, offered some reflections this week on his career from entrepreneur through leadership of the nation's seventh largest airline. And those reflections by its leader, shared in an e-mail exchange of questions and answers, indicate why Alaska has remained a favorite of investors, its customers and its communities.

 

Two of Ayer's convictions are that you learn from, rather than make fun of, your competitors and that a small-company feel makes it easier for employees to work together and be open to change, no matter how big the company.

 

The former is perhaps best exemplified by an email exchange we had several years ago after Ryanair CEO Michael O'Leary suggested his lowest-cost Irish airline (frequently also referred to as the cheapest airline) might consider charging for use of airborne restrooms.

 

I suggested to Ayer that it might be time to revive the amusing television ads from years ago that showed the travails of a passenger who needs a 25-cent fee for entry to his plane's restroom and proceeds to try to obtain the quarter for an increasingly high price from passengers on the plane.

 

"You never want to make fun of competitors' actions because you never know what steps you might be required to take yourself," he e-mailed back.

 

I asked him this week about that exchange and his reluctance to criticize competitors.

 

"Sometimes what seems like a lousy idea from a competitor turns out to be pretty

Smart," he replied. "If we have a 'we're better than you' attitude, we won't take the time to evaluate it.

 

"Our focus has been on controlling what we can control and not simply hoping that something bad happens to a competitor to improve our situation," Ayer added. "We were surprised at how controllable our business was once we started to really focus on what we could do differently."

 

The fact that Ayer was an entrepreneur, then executive of a fast-growing start-up airline before joining Alaska in 1995 as vice president of marketing and planning has undoubtedly guided his belief in the need to retain a small-company feel.

 

He was in his mid-20s, a regional manager for Piper Aircraft Co., when he launched Air Olympia, a small commuter serving several Washington cities that operated for two years.

 

He jokes that "we didn't go broke, but probably would have if we had stuck with it."

 

Instead, he was lured to close up his little carrier and join the late Milt Kuolt and his team at the fledgling Horizon in 1982, the relationship that eventually led to Ayer's role atop the parent company of both airlines. Alaska acquired Horizon in 1987, along with Ayer.

 

Bruce McCaw, a Kuolt confidante and one of his key advisors, recalls that "Milt was quite impressed with Ayer, even though he was very young at the time. He knew Bill was smart and had a lot of good ideas."

 

"I liked Bill from the moment we met and we worked well together," McCaw recalled.

 

Ayer remembers Air Olympia as "a great place to start, although it felt like a leap into the

deep end of the pool. That experience convinced me that I had a passion for

this business which I should pursue."

 

He recalls the days with Horizon as "difficult. We were always worried about having enough cash to make payroll. But (it) shaped our conservative approach."

 

The shaping of that financially conservative approach undoubtedly helped guide Ayer's decisions as he steered Alaska basically unscathed through a decade of airline-industry turbulence that saw all of its legacy competitors go through bankruptcy.

 

So now Ayer turns the reins over to Tilden, expressing the conviction that "a CEO can overstay his or her welcome" and "there should be different leaders for different times."

 

He and the Alaska board, which Ayer says he's had involved over the past couple of years in the planning of the transition to Tilden, view him as "exactly the right leader to take us to the next level." The skills that Ayer and others see in Tilden may indicate that a company is also judged by the leadership-successor it picks.

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Effort to show wine, sports make best pairing could benefit industry

Diane Karle is out to prove that, despite the seeming unbreakable bond between beer promotion and sports events, wine and sports have become the most likely - and profitable -- pairing. She's already made a believer of one National Football League team, and is in negotiations with four others.

 

The conviction about wine and sports led her to launch Wine by Design LLC, aiming to guide profits for not just NFL teams and other pro sports franchises but also for college sports activities from tailgate parties to alumni gatherings.

 
 

Karle's belief that she can promote "wine as lifestyle" for clients, keying off of sports and entertainment events, guided her to relocate from her New York-based practice in sports and entertainment marketing to California wine country.

 

Making wine a key to brand development for clients is the goal of the four-year-old company that she launched in California after being immersed in the sports and entertainment marketing business in New York for 15 years. She was vice president for business development at-sports-and-entertainment giant IMG World, leaving in 2003 to start her own sports and entertainment marketing business, before the move to Napa.

 

Karle concedes that her expertise is in marketing and events, not wine. But as she comes to understand wine and what she describes as "an industry fragmented unlike others," she has grasped that working with wine means working not just with the industry in California, but also Oregon and Washington.

 

Thus Northwest wineries stand to become beneficiaries as she seeks to develop new brand relationships among sports teams, winemakers and corporations.

 

She admits to "fits and starts" when she first opened her business before getting traction in 2010 by signing the New York Jets, opening a wine bar at the team's MetLife stadium, doing pre-game tasting and creating the team's own label.

 

Ironically, part of the process of her creating the name, packaging and design of what  became" Jets Uncorked" was having the team's executives come to Napa to go through a tasting process with various winemakers before selecting Marco DiGuilio to produce the limited release.

 

 "The decision to use the tasting visits in our hunt for the best Napa cabernet was the outgrowth of a wine choice based on Jets' fan research, the first time something like that had been done," she adds. 

 

I asked Karle if it was possible to measure the success of her project with Jets Uncorked and she pointed to the fact that the team sold 5,000 cases of their wine the first year. Plus that relationship led her to meetings at the Super Bowl and negotiations with four other NFL teams, which she logically declines to name.

 

"We're seeing a lot of teams want to be more into wine and want to have their own brand," she adds. "Wine inevitably has to come, and not just to the NFL. Teams are about generating revenue and our goal is to be the bridge to help wineries learn how to leverage that association.

 

"When you go to an Oakland Raiders' game, you see the fans all painted up but they're drinking chardonnay," Karle says. "People having a little wine and cheese isn't how you might have thought of socializing at a Raiders game."

 

She calls her company "the first lifestyle marketing agency to create business opportunities and brand loyalty through the world of wine."

 

When I asked Karle to explain "lifestyle marketing" and its importance to the bottomline success of companies, she replied: "Lifestyle is what people get involved in when they are not working. And Coca Cola is the ultimate example of how its importance is viewed by successful companies, since 80 percent of their marketing budget is tied to lifestyle commitments."

 

"WBD," she adds, "applies the same successful marketing principles and practices used for years in sports, entertainment, music and other lifestyle categories."

 

But now she's looking to move her firm beyond merely being hired by teams "for retainers and commissions," and instead transitioning into buying the sponsorship rights at various stadiums, a step for which she'll need an infusion of capital.

 

"We need the money to buy the rights," she says. "I know what the rights are worth. If  we can raise $4 million, we can get 10 venues lined up to build our own wine-tasting rooms, do signature wines and build sponsor relations as well. We are making money now, but we need the investment to grow."

 

Meanwhile, her company remains focused on its main business areas of sponsorship development, licensing deals and event consulting. And it's expanding the role of wine in existing relationships.

 

"We will continue to introduce a variety of wine-tasting options to suite holders, sponsors and fans and those introductions will absolutely include wines from Oregon and Washington," she said.

 

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Key expansion steps planned by Social Venture Partners this year

Social Venture Partners (SVP), the Seattle-based organization that describes itself as the world's largest network of engaged philanthropists, approaches its 15th anniversary with a couple of major initiatives about to unfold. One will extend the organization's international footprint and the other will enhance its impact nationally. 

 

First is an expansion into India next fall and second is creation of a "mezzanine fund" that will offer more philanthropic cooperation among member cities, allowing them to function much the way angel investors do in syndicating deals. Beneficiaries of that fund will be philanthropic organizations "with great models" who will be able to expand their reach into multiple cities.

 
 

Paul Shoemaker, who has guided SVP since 1998 when founder Paul Brainard convinced him to leave his position at Microsoft as group manager for worldwide operations to become SVP's first president, says the organization is coming off its best year for new members since its expansion year of 2000.

 

Shoemaker, now referred to on his business card and SVP website simply as Executive Connector, might suggest that the initiatives to be undertaken this year could expand the numbers dramatically.

 

The move into India, which will launch in Bangalore later this year, is driven both by the fact that "there are some basic forms of philanthropy there already" as well as by the large number of citizens from India who are drawn to the high-tech companies located in the Seattle area. Many could be attracted to SVP membership by the India initiative.

 

"There are so many connections between India and Seattle," Shoemaker observed. "And we're confident we've found the leaders there to make us confident of success, even if SVP will look different than it does here.

 

"It will undoubtedly be a different monetary level for members," he said, "and the social system in India is different but we'll bring the same core principles."

 

With respect to SVP's creation of its mezzanine fund, it will operate somewhat like syndication so that SVP cities into which a non-profit would expand will participate in the financial and personal support for that non-profit.

 

"What we are creating is a fund from cities across the system evaluating the strongest local grantees that have the interest and the best opportunity to expand into multiple cities," says Shoemaker. He explained it as "helping nonprofits with great models replicate and reach next level funding opportunities."

 

"They might now be operating in one or two cities and want to grow into three or five cities," he said.

 

The applicants for support from the mezzanine fund are currently being evaluated and those selected as grantees for the new program will be announced in the next month or so, Shoemaker said.

 

Shoemaker, who was named last August as one of the "Top 50 Most Influential People in the Non-Profit Sector" by The NonProfit Times, recalls that expansion into other cities helped spur the initial growth to what is now about 2,100 members around the country, plus Canada and Japan.

 

It was in 2000 that SVP, then only beginning to expand beyond Seattle, had its first surge of young partners. Many of them were successful techies, answering Brainard's and Shoemaker's call to get involved in a new model for philanthropic focus on creating a better non-profit sector.

 

Each agreed to donate $5,000 a year to SVP and become personally involved with one or more non-profits. The amount is now $6,000 a year.

 

The first cities into which SVP expanded were Phoenix, Vancouver and Dallas. Since then, the organization has expanded only into cities that sought to become SVP locations, but that is another thing that's changing this year.

 

"Up to this point we've been reactive, waiting until someone from a community contacted us to express interest in forming a group," Shoemaker said. "Now we're actively pursuing cities where we should be represented and most likely locations this year, in addition to Bangalore, are Austin and Raleigh/Durham."

 

There are currently 25 venture-partner cities in which SVP operates in the U.S., Canada and Japan. As of last January, the SVP network had contributed nearly $41 million in grant investments to 500 nonprofit organizations and provided tens of thousands of volunteer hours in service and counsel.

 

One of the more interesting developments in the evolution of SVP is the number of partners forsaking the private sector and stepping into leadership roles in the social and public sectors. In a large sense they are following the model established by founder and desktop publishing creator Paul Brainard and Shoemaker himself.

 

They include:

 

-- Lisa Chin, a former Amazon executive who stepped out of the private sector to become the first executive director of Year Up Seattle - helping urban young adults reach their full professional potential.

 

--Tim Schottman, who two years ago left behind a 17-year career guiding Starbucks international development to become chief global officer at Sightlife, building a network of eye banks to support corneal transplants with the lofty goal of eliminating blindness for 10 million people in the developing world.

 

--Peter Bladin, formerly of Microsoft, who headed up Grameen Foundation's technology Center for 10 years.

 

Shoemaker says "this is definitely a trend we are fostering, hopefully leading it, because it is significant for bringing people with key organization-building skills from the private sector into the non-profit world."

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Role as Harlequin heroine won't be career step for Helen McGovern

Helen McGovern, who three years ago put asidea career as elected official and prominent real estate executive to become the head of a non-profit engaged in fighting hunger in Pierce County, chuckles at the idea that a third career as Harlequin Heroine might await her.

 

While it may not actually turn into a "career" with the publishing house best known for its pervasive romance novels, McGovern and her role as what Harlequin describes as "making a positive difference in the lives of others" will be the inspiration for an ebook fictional short story.

 
 

McGovern received word a few days ago that she was one of three women voted winners in an online and Facebook competition to determine recipients of Harlequin's "More Than Words" award.

 

Seems that Harlequin, as one of the world's leading publishers of books for women, turns out more than romance novels. And the Toronto-based publishing house has as an aspect of its social corporate responsibility an annual award aimed at "celebrating the lives of women who make a positive difference in the lives of others."

 

McGovern, a woman from Ohio and another from Toronto were voted winners by Harlequin readers, 111,000 participating online and 7,800 via Facebook, and each will receive $15,000 for their cause and be "the inspiration for three fictional short stories," according to Harlequin. It was the first time in the eight years of the event that readers, rather than staff members, did the selecting.

 

The short stories on the three, written by Harlequin authors who are donating their time to talk with the women and gain inspiration to create stories based on their experiences and contributions, will be available in 2013 in ebook format and can be downloaded then at no cost.

 

As a Harlequin spokeswoman explained, when I called her in Toronto, the contest and awards "are to publicize to the women who read our books the causes of women worthy of being publicized."

 

Forsaking the corporate world and elective office for the dramatically more modest trappings as executive director of Pierce County's Emergency Food Network was a move McGovern had long anticipated as a focus on "a more purposeful life" when she made the move in April of 2009.

 

As a result of a column I did on her a year ago, McGovern was invited to speak before Seattle Rotary, which she did last week. And leading into her comments about guiding the nonprofit that distributes 1.3 million pounds of food each year to Pierce County food banks, she disclosed, with a chuckle, that she had received the Harlequin honor

 

But the jokes about being a romance-novel heroine, which is possible but not really the likely outcome of the short story she'll have written, didn't change the fact of this being an important recognition, following one a year ago with a Second Half Champions award.

 

That's was statewide award presented each year by Wells Fargo Advisors, along with ArtsFund and Seattle Community Colleges, to individuals who have "completely repurposed the second half of their lives to make significant contributions" after the age of 50.

 

It was after finishing her "most financially successful year ever" at Colliers and with her decision not to seek re-election after eight years on the Lakewood city council, including two years as deputy mayor there, that she decided the time had come for her move to a non-profit career.

 

So she learned of the opening at Emergency Food Network, set up a meeting with the board, and when she was asked if there was anything she would like them to know about her, she calls saying: "Yes. This was meant to be. I was meant to have this job."

 

And the manner in which she's fulfilling the nonprofit role she sought is obviously drawing considerable recognition.

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Stuart Anderson admits challenges in his comeback effort at age 89

Stuart Anderson, successful cattle rancher, restaurateur, author, television personality and entrepreneur, is finding that a comeback at the age of 89 is turning out to be more challenging than he had expected. It's not because of age so much as it is the economy and changes in the restaurant business.

 

The man who built Stuart Anderson's Black Angus from a single location near downtown Seattle in 1964 into a chain of 110 steakhouse restaurants across 19 states before selling the chain in the late 1980s was lured out of retirement by a shuttered Black Angus in Rancho Mirage, CA.

 

The appeal of reopening and rebranding a restaurant that he had originally opened in 1980 when his California expansion of Black Angus/Cattle Company restaurants was in full swing proved too much of a temptation, despite the protestations of his wife, Helen, who recalls saying: "Over my dead body."

 
 

 

"It was tough to see that restaurant go away, along with a crew we had come to know," Anderson says of his reaction when he learned in early 2009 that the restaurant he and his wife frequented had closed

 

"We thought we could help the economy by creating some jobs there," Anderson says. "And I thought Helen and I had the experience needed to reopen the restaurant."

 

But he concedes it has been more difficult than they had anticipated, originally convinced that "with my 60 years of experience, I felt we could overcome all the difficulties posed by this economy. But it's amazing how much you forget at the age of 89."

 

Helen, who has been Anderson's partner and spouse for almost 40 years and describes his comeback from a stroke three years ago as "miraculous," admits "we knew it would be costly, but it has been more of a financial drain than we thought it would be."

 

Anderson says "the restaurant business is more competitive and demanding than it used to be, with government regulations and additional costs we were unfamiliar with. It has been challenging," he admitted.

 

Many of those rooting for him to succeed again will be those from his home state. Not just Seattle, where the chain was headquartered as one of the most respected in America,  but also Spokane, where Black Angus number three became the most successful in the chain, and Ellensburg where his 2,400-acre ranch sprawled along Interstate 90. It was the ranch with its black angus herd, as well as the signature mustache and cowboy hat, that  made him the icon of cowboy country.

 

Over the course of nearly a quarter century, Anderson created a restaurant company with 10,000 employees and annual revenue of $260 million.

 

Shortly before Anderson's retirement in the late '80s with the sale of the company, industry publication Restaurants & Institutions, in a national survey, judged his chain the nation's best full-service restaurants three years out of four. And USA Today judged the chain best in the nation in the category of casual dinner.

 

He tried his hand as an author when he produced Here's the Beef! My Story of Beef, a book he describes as "fun and informative" that sold thousands of copies in the Black Angus restaurants. The book was a follow on to the highly popular McDonald's commercial in which an elderly lady asks: "Where's the Beef?"

 

And his stint as a television personality was as spokesperson for Seattle's Senior Housing Assistance Group's low-income senior housing developments.

 

Part of Anderson's concern for the amount of time and effort he and Helen are having to invest in their restaurateur entrepreneurial encore is that she doesn't have as much time as she'd like for her commitment to Umbrella Ministries. The Palm Springs-based national 501c3 is focused on helping mothers who have lost children.

 

The two spend "three or four nights a week" greeting customers and making the rounds of the restaurant, Anderson says. 

 

"I've seen tough times before and some of my restaurants didn't make it," says Anderson, noting the failures included the Tacoma restaurant that opened following Seattle.  

 

 

While noting his conviction that "the general economy has to change around here" and "there are too many restaurants," Anderson insists he and Helen will make Stuart's Steakhouse a success.

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Pollard predicts "bright future" for Washington Wine industry as she departs top-executive role

As Robin Pollard steps down from her role as the key executive overseeing Washington's fast-growing wine industry, she can reflect on a five-year tenure during which the size and influence of the industry have grown dramatically. And because the growth of wine has come with little of the economic downturn experienced in other markets and other sectors, she describes the future as "very bright."

 

Part of that bright future will be an expanded focus on national and international visibility in 2012 as the Washington Wine Commission marks its 25th anniversary and the Taste Washington event, designed to create a national destination attraction, will become a two-day gathering in Seattle.

 

And the commission figures it will take three or four months to find a replacement for Pollard. 

 

As executive director of the Washington Wine Commission, a state agency whose operations are funded almost entirely by the industry itself, Pollard helped guide the organization to become what she describes as "a significant marketing source" for the $4-billion-plus industry. The marketing has become increasingly important as the number of wineries has grown from about 300 when she arrived in 2004 to more than 750, a number swelled by the emergence of numerous small, boutique wineries.

 

During her time working with the 12-member commission, a large part of the focus was on the nurturing of those boutique wineries. And apparently part of the outgrowth of that close involvement was the igniting of her desire to get back to her agricultural roots.

 

Pollard, an Iowa farm girl who got her master's degree in agriculture from the University of Missouri before beginning a 30-year career in state government with the international marketing division of that state's agriculture department, is focused now on finding some acreage to create her own vineyard.

 

That acreage will most likely be in the Yakima Valley or Wahluke area. And the kinds of grapes that most appeal to her? "I love bordeaux, merlot, cab and cabernet franc."

 

Pollard  brought a nearly 20-year career in various state-government positions, initially related to assisting small business, when she accepted what she described to me then as "my dream job" with the wine commission.

 

In addition to her small-business roles, starting in 1987 with oversight of the then-new Small Business Improvement Council, Pollard served in two positions with major state impact. First she was director of the state Tourism Department.

Then Pollard was assigned by state economic-development director Martha Choe to oversee proper execution of the contract the state entered into with Boeing following passage of a legislative package of tax benefits and workforce and infrastructure elements that sealed final assembly of the 7E7 in Washington state.

 

It's the kind of attention to detail that she had to bring to the Boeing-contract oversight that has Pollard expressing her only note of caution about the boutique wineries' future,

 

The concern relates to the passage of Initiative 1183, by which voters said the state must get out of the liquor business and let larger retailers carry hard-liquor on store shelves.

 

"I honestly don't know the impact, but there's only so much shelf space in retail outlets and the product of the smaller wineries is most likely to be where the risk is as shelf-space is created for hard liquor by trimming the amount of wine on store shelves," she said.

 

The wine-industry publication Wine Spectator touts the keys to success of Washington wines as "high quality and low price." That's a benefit in the global wine competition that Pollard points to in an interview in her final week on the job.

"We've proven that we can grow extremely good grapes and have a huge base of talented wine makers to turn out world class wines and do it at a competition-winning price point," she said. "We have the ability and the acreage to produce large volumes of wine at lower prices than competitors, whether it's producing an $8 bottle or a $150 bottle.

So Pollard sets out now on an entrepreneurial encore, seeking to become, if she can find the right piece of land, part of the fast-growing industry for which she helped provide direction over the past five years.  

 

  

 

 

Revenge wine
'Revenge' in a bottle
'

'Revenge' is sweet when it  

comes in a wine bottle

 

It might be called the occasion when Washington Wine Commission Executive Director Robin Pollard learned that the sweet taste of Revenge is actually fruity, like grapes, or more specifically like cabernet sauvignon grapes.

 

It's a story that began when members of Pollard's Wine Commission staff successfully bid on a ton of cabernet sauvignon grapes from the highly regarded Champoux Vineyards at a charitable auction in 2009.

 

"We thought it would be a fun team project," Pollard explained in an interview a coiple of days before her retirement from the position she had held for the past five years. "While we all had some knowledge about the wine industry, we wanted to understand all the decision points to being a winemaker to give us a fuller appreciation for all the challenges of being in the wine business."

 

"We had crushed the grapes and filled the barrels when we learned that Paul Champoux had been bitten by a mosquito in his vineyard and contracted West Nile Virus," Pollard said. "He was in critical condition for a time and almost died.

 

To celebrate the fact he did survive, Pollard explained, "and to pay homage to the Champoux family, we bottled the wine and created a "Revenge" label, complete with a dead mosquito.".

 

As the label reads: "'Revenge' is an homage to the Champoux family and to Paul's incredible recovery. Special thanks to Chris Camarda of Andrew Will Winery, who served as wine consultant on the project."

 

With only 45 cases produced and distributed among team members, bottles of the special production, complete with the dead mosquito, may prove to be a valuable item at future wine auctions.

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Alaska Air's 'Santa One' flight for Spokane area disadvantaged kids is unique fantasy trip

Sixty disadvantaged kids and their personal elves board  Alaska Airlines' flight 1225, dubbed  "Santa One," Dec. 10 at Spokane International Airport for a Fantasy Flight to "the North Pole" on the 737 900 and a visit with Santa. It's an event that could be described as the place where the real magic dust of Christmas has been scattered, because this special trip is unique in the world.

 

The children, between the ages of 4 and 10, are selected from programs for homeless and underprivileged kids in the Spokane and Coeur d'Alene, ID, areas for this once-in-a-lifetime fantasy adventure to Santa's home.

 
 

A number of other airlines, including United and Continental, have been doing the North Pole "flights" in various cities, some for nearly 20 years. But Alaska is the only airline to actually take the kids aloft for their magical trip, in which they pull the window shades down as the flight nears its conclusion, say the magic words that allow them to land at the North Pole, and land at other side of Spokane International Airport.

 

It's there that they're greeted by Santa and Mrs. Clause and an additional host of elves.

 
 

 

"When we send out invitations to the kids, we have them give us a wish list of what they want for Christmas," explains "Bernie" the Head Elf, better known as

Steve Paul, president and CEO of Northwest North Pole Adventures, the nonprofit group that runs the event.

 

 "We take those lists and buy each of them a toy from that list. So as each child tells Santa what he or she wants, Santa can reach into his bag and pull that present out for them," adds Paul "The looks on their faces as he hands it to them is priceless."

 

To ensure that the selection is actually reaching the most deserving children, Paul's non-profit works only with the area's social agencies, which use their selection and screening processes to pull the children who desperately need to create positive Christmas holiday memories.

 

The children are picked up at the Spokane YWCA in the early afternoon and driven to the airport, where each child is given a "passport" to the North Pole and a personal "elf" catering to every need, including a backpack filled with school supplies. Then they board the plane, designated Flight 1225.

 

The flight has priority status with the FAA once it's loaded and ready to fly and "Santa One" comes up on the screen. Then the flight's own personal air traffic controller takes over, Paul said.  "It becomes just like Air Force One in that respect."

 

Paul is an out-of-work tech exec who has made the project his special commitment. As a result of his efforts, what he describes as "the 150 percent support of the community" and the Alaska involvement, the adventure for the Spokane children is brought closer to reality than in any other place.

 

He spends a number of months in preparation for the big day, lining up donations and contributions that this year amount to $150,000 of cash and in-kind, helping get the kids selected and arranging for the elves and gifts for the kids.

 

Brad Tilton, Alaska Airlines president who will be on hand with his wife for the event, says "the Fantasy Flight is an unforgettable experience for everyone involved. It's a

true delight for the children, who don't get to enjoy Christmas like most of us do and who, in many cases, have never had the chance to fly. And our employees,

who eagerly volunteer every year, get far more back than the time they put in."

 

Alaska and Horizon will have more than four dozen employees participating, from various locations on the airlines' systems. Some will be elves. Others will forego days off to work shifts for local Horizon employees so they can be elves.

 

This has been an amazingly off-the-radar-screen event, both during the eight years that United put the kids on a plane that taxied around the airport, and in the four years since Alaska Airlines came to the rescue of the event when United couldn't free up a plane with Alaska proceeding to turn it into a real airborne flight.

 

But that low visibility is changing as the list of kids registered and waiting has grown to almost 250 and media organizations have started to become aware of this special Christmas Season story. And there are some in the Alaska Airlines organization who understand the one-of-a-kind goodwill that this event represents, particularly because neither the company nor the employees has done this for the sake of visibility.

 

Horizon's Spokane customer service manager David Burris admits the visibility has been low key over the years, partly because broader visibility would only bring pressure to make the event bigger.

 

Is there an opportunity for other cities to follow suit with a special North Pole event?  Alaska officials suggest it would be difficult for the airline to take another plane and crew out of regular service during the heavy-travel holiday time. And Paul acknowledges that while he could provide the know-how to another community, he wouldn't have time to actually do another event over the Christmas season.

 

"A lot of people have said we should take this on the road," Paul notes. "I could do that if I could get people to define their non-profit or if our organization were to expand. But this is not some casual party. A lot of planning and time is involved."

 

Paul adds that he is having a movie done "that will in the future characterize the experience. We have a couple of elves who were parents of foster children involved in earlier flights who said the kids were so transformed by the experience that they had to get involved."

 

How real is this trip to the kids? As one elf put it: "If you're a little kid on your first plane ride and your ticket says North Pole, and the shades are drawn, and everyone, including the flight attendants and all the elves are saying the magic words, then who's to doubt that you have landed at the real North Pole? And then you see Santa."

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Access to growth capital could challenge state life-sciences sector's bright future

Washington State's life-sciences sector has remained, through the economic downturn, a jewel in the state's economic development crown. But the challenge of accessing capital that bedevils the industry's emerging companies, including the possible demise of the Life Sciences Discovery Fund, could hinder future growth.

 

The role biotech and biomedical companies have come to occupy as one of Washington's five largest and fastest-growing sectors, generating tens of thousands of high-wage jobs and more than $10.5 billion in economic activity, creates an important anchor for the state's economic future.

 

But as the Washington Biotech & Biomedical Association (WBBA) prepares for its annual meeting next week, in partnership with The Governor's Life Sciences Summit, there's an ongoing focus on seeking to ensure that emerging companies in the industry find the growth capital they need. And that could be increasingly challenging.

 

"With 70 percent of our companies having 50 or fewer employees, access to capital is the greatest challenge we face," said Chris Rivera, WBBA president.

 
 

 

An important part of that funding has been the Life Sciences Discovery Fund (LSDF), the program created by tobacco-settlement dollars that came into existence in 2008 and has been championed by Gov. Chris Gregoire as a key to fostering more biotech innovations and jobs in Washington.

 

But it has taken deep cuts each session as legislators grappled with yawning state budget deficits, and now could face elimination.

 

Rep. Glenn Anderson, the Eastside Republican who is one of four legislative trustees for the fund, says "it's an open question whether the fund will survive" the next session's budget cuts.

 

"The fund has done a good job of encouraging basic science and marketable, actionable, investable outcomes," Anderson said. "But I'd say there's only a 50-50 chance it will survive and if it doesn't survive, I think that would be shortsighted."

 

Rivera puts numbers on the fund's successes to provide definition to shortsightedness.

 

"LSDF awardees have been able to leverage their grants and bring in $9 for every $1 awarded," he said. "These are real dollars from out of state.  This has led directly to job creation, and great innovation in our state.

 

"I believe that LSDF has proven to be a smart investment by our state into a sector of great current economic value and future potential," he added. "Other states have poured hundreds of millions into life sciences, as they see the potential economic value of this sector and are willing to invest strategically."

 

Beyond the fund, WBBA has mounted some initiatives, as have supporting organizations, in seeking to develop alternative sources of capital, given both the now-challenged traditional lending sources and the problems facing the venture capital industry.

 

Bruce Jackson, vice president for business development at EnterpriseSeattle and ex-officio member of WBBA's board, says that despite the success of the biotech and medical-device sector, these are "clouded times" for young companies seeking to ramp up.

 

"In addition to the fact federal regulations can create a headwind for companies, access to capital for some deserving companies can be difficult," Jackson said.

 

EnterpriseSeattle's year-old partnership with the City of Federal Way in a medical-device incubator called Cascadia MedTech Association is an innovative approach to helping grow the industry, though Jackson concedes "the model hasn't been proven yet."

 

"The companies we're supporting must transition from being supported by grants to creating cashflow," Jackson added.

 

WBBA itself touts the program it created called VIP Forums, through which quality investors and strategic partners (VIP's) are invited to Seattle for a showcase of the most promising life science companies and research opportunities.

 

In addition, in spring of 2009 the association formed a non-profit angel network called WINGS, whose role is to close the early-stage funding gap to speed medical-technology innovation "from lab bench to patients."

 

The gathering of industry leaders and others for whom the industry is part of the economic hope for the future will likely hear an upbeat assessment as they review the WBBA's third annual Life Sciences Economic Impact at their gathering on November 18 at Meydenbauer Center in Bellevue.

 

Comments from the governor, who will be attending her last WBBA annual conference, and University of Washington President Michael Young, attending his first, are likely to focus on upbeat prospects for the sector's future. But both may also share concerns about the impact of funding availability on that bright future.

 

And a comment from Rivera during an interview this week could set the stage for some discussion among attendees: "I understand and know that these are difficult times, but I hope that our state leaders are strategic in where they place our precious resources, and help this state maintain its competitiveness nationally and globally."

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Mike Lowry, who created now-debated tech tax breaks, offers another side to debate

The tax breaks for high-tech companies that are now seen by some as depriving the state of millions of dollars at a time of dire budgetary challenges were a proud accomplishment of his administration, says former Gov. Mike Lowry, noting they were created to lure new business to Washington.

 

 "We were coming out of what was, at that time, the state's worst recession and we needed to attract industries that would produce good-paying jobs," Lowry recalled of the proposal he came up with and pressed through the 1994 Legislature.

 

 
 

The focus of the current criticism, and Lowry's comments during a recent interview, are what the critics refer to as "tax loopholes" and he calls "incentives" that have permitted high-tech companies to avoid paying state sales tax on new facilities, including equipment.

 

"We were absolutely correct to come up with policies to lure companies to the state that would create high-paying jobs that were basically the jobs of the future," Lowry said.

 

"We kept encountering companies that said they had looked at and then rejected this state as a place for new facilities," Lowry recalled. "The incentives allowed us to move into one of the most competitive positions among states."

 

One of the state's key competitors in the hunt for new high-teach companies was neighboring Oregon, which had and has no sales tax, and that put this state at a dramatic disadvantage.

 

Soon after enactment of the sales-tax exemption legislation, Washington State won a major victory when Taiwan Semiconductor announced it would be locating in Clark County rather than in Oregon. "The largest one-time capital investment ever in this state," Lowry said. Other wins were a Sharp Electronics facility and an Intel plant in southern Pierce County

 

A $132 million tax break for Microsoft, due primarily to its construction of data centers in Quincy in Grant Country, has raised some eyebrows among those viewing the state's list of the dollar impact of such tax preferences.

 

While he is convinced about the importance to the state of having created the sales-tax exemptions, he is equally convinced that they need to be reviewed periodically to ensure they are doing what was intended.

 

"Those tax breaks shouldn't just continue automatically," Lowry said. "Each piece of tax-incentive legislation needs to be looked at individually from time to time for possible sunset (termination). Each must be justified on the basis of expansion of jobs."

 

In fact, in the intervening period since Lowry's program in 1994, sales tax exemptions, and exemptions from the state's business & occupation tax have proliferated and been extended to logical industries like aerospace manufacturing, biotech and medical-device manufacturers.

 

Other also logical exemptions are for manufacturing in rural counties and manufacturers of timber and wood products, though some of the exemptions may cause more head-scratching, like fruit and vegetable processors, dairy and seafood processors and cold-storage warehouses.

 

The State Department of Revenue's most recent figures on the tax exemptions, for 2009, indicate 278,000 jobs were credited to the tax incentives, which cost the state $236 million, $109 million of which was claimed by high-tech firms while $80 million in reduced state and local tax receipts was for rural manufacturers.

 

Mike Fitzgerald, who was a key member of Lowry's team as director of Community, Trade and Economic Development and who has held held similar positions in three other states and may  be one of the nation's most experienced economic-development experts, reserves special praise for Lowry. Fitzgerald credits Lowry with really understanding the way the game had to be played to bring jobs to the state.

 

"He would bring his entire cabinet together and tell us that we were not to violate any environmental considerations, but otherwise we each had a role to play in working together to go after these companies," Fitzgerald recalled in a visit about a year ago. "Under Lowry, we recruited or were in competition for more big business than maybe under any other governor."

 

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Dineen's vineyards is back to roots, not entrepreneur encore, after banker career

The 80-acre vineyard and winery in the Yakima Valley where Patrick J. (Pat) Dineen focuses an increasing amount of his attention isn't an entrepreneurial encore for the retired bank executive so much as it's a return to his roots on the farm.

 

Dineen, who hasn't totally stepped aside from his 40-year banking career since he chairs the board of Bellevue-based Puget Sound Bank and is one of its original investors, grew up on a dairy farm in the Midwest. "I knew that when I retired I wanted to get back into farming," he says, admitting that the dirt called to him from time to time over the years.

 
 

This is harvest time in Wine Country and thus Dineen is spending many of his days this month at Dineen Vineyards, which sits on a hillside north of  Zillah, amid a cluster of Washington State's well-known wineries, with an impressive view looking west toward the mountains.

 

It's there that Dineen Vineyard's grapes, primarily cabernet, cabernet franc and sirah, are being harvested and winemakers from many of the 23 wineries that are his customers arrive to load up their grapes.

 

Dineen only produces about 300 cases a year for his own use, either under the Dineen Vineyards label or the Kamiakin label, a second label featuring a red blend, that came into being about five years ago. Most of the 190 tons of grapes are bought  by the other wineries.

 

One of those wineries buying his grapes is Sheridan Vineyards, in which Dineen invested in 2000 after being introduced to Sheridan's founder, Scott Greer. He soon ran across a rundown apple orchard nearby that he bought in 2002 and turned into Dineen Vineyards. TheSheridan winery is built on part of Dineen's acreage and is leased back to Greer.

 

The vineyards primarily produce the three major varietals, but a total of eight different varietals are grown, though Dineen is quick to make it clear that "the viticulture is my interest in growing the grapes rather than making the wine."

 

His ongoing process of learning about the grapes includes traveling to Europe each year to visit different grape-growing regions and says with satisfaction that "I get into prestigious wineries that I wouldn't be able to if I didn't have the winery."

 

Like a number of those involved with vineyards or wineries in Washington State, Dineen first looked for land in the Napa Valley in California, but found "it was more pricey than I wanted to get into."

 

Dineen produced his first wine under the Dineen Vineyards label in 2003, primarily for personal consumption, but about four years ago he got his commercial bond to permit him to market and sell his wine.

 

"That was primarily to promote the vineyard," he said. "My plan is not to get any bigger since I'm retired. We could get bigger but chances are we won't."

 

Dineen, discussing his decision to be in the group who put up money to launch Puget Sound Bank in 2005, says "I had a good career in banking, made good money, and wasn't looking to get back into the business. But I figured I could do this with a minimal amount of time and effort. It hasn't turned out that way."

 

Dineen says Puget Sound Bank, a $200 million, single-office bank, "has a strong balance sheet. We didn't get into problems because we avoided real estate and focused on commercial and industrialized loans."

 

Dineen started his banking career with Seafirst Bank after moving West following graduation from Marquette University and five years in the Air Force. He then joined Spokane-based Old National Bank, which was acquired by U.S. Bank, where Dineen eventually served as president for Washington before he retired.

 

Looking ahead at the industry, Dineen said "we're going to see a lot of branch closures in an era when people can do their banking from anywhere. They could care less today if your bank has a branch on the busiest corner in town."

 

He notes "there aren't many healthy banks changing hands these days because banks looking to sell find that their book value is pretty much what they're being offered today."

 

"A few years ago, selling prices for banks would have been twice book value or even better for an attractive bank," he added. "Until we get back there somehow, you're not going to see much movement among healthy banks."

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