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updated 2:54 PM CDT, Jul 28, 2018

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Cable & Howse was major factor in growth of key industries in the Pacific Northwest

Whether it was fate or serendipity that brought Elwood (Woody) Howse and Tom Cable into business together after a decade of crossing paths, the fact is that the firm they finally created became a major factor in the creation and growth of the technology, biotech and medical-device industries in the Pacific Northwest.

 

It was actually at the urging of their wives that Cable and Howse decided, in 1977, to leave the Seattle securities firm Foster & Marshall and launch Cable & Howse Ventures. But it took two years and almost 200 calls on potential investors before they raised the $9 million to fund the first limited partnership to launch the firm.

 

Tom Cable
Tom Cable

The business quickly grew into the largest venture capital firm in the Northwest, eventually raising more than $160 million for five Cable & Howse funds that helped finance more than 100 companies, about two dozen of which they took public. More than half of those 100 were outside the Northwest.

 

Now they've been selected as 2013 laureates of the Puget Sound Business Hall of Fame. They, along with retired Alaska Air chairman and CEO Bill Ayer and Gary Oakland, who built Boeing Employees Credit Union into the nation's fourth largest, will be honored as this year's crop of laureates March 21 at the annual banquet put on by Junior Achievement and Puget Sound Business Journal.

 

Woody
Woody Howse

Cable and Howse first met and became friends at U.S. Navy nuclear submarine school at New London, CN, following which they parted to serve stints as officers aboard nuclear subs. Next they each wound up in graduate school at Stanford, where Howse got his undergraduate degree, although Cable had been gone a year when Howse arrived.

 

Finally, they took different routes to get from the Bay Area, where they both had jobs in the investment industry, to Seattle to join Foster & Marshall.

 

Cable & Howse was a different breed than VC firms of today in that the five partners in the firm acted as a private investment banking firm, working with early stage companies to help them find funding and then immersing themselves in the start-up companies.

 

Howse recalls that "in those days, no one knew how to put together a thorough business plan and business models, so we worked closely with the managements to get the plans pulled together to staff the companies, and to build selling presentations for investors."

 

"A large proportion of our companies were absolutely seed startups when we invested," Howse added. "Today virtually no local VC funds do seed investing. Individual angel investors, family and friends are the provider of that class of capital now."

 

Along the way, they also helped shape the software industry that was starting to emerge in the Northwest in the early '80s, putting up the money to allow the presidents of some small software companies to start the Washington Software Alliance, which became the industry's dominant trade organization.

 

I asked each of them what they viewed as their best investment, as well as their most interesting and most satisfying. Both agreed that Immunex Corp. was the answer to all three but Cable added that the company, one of the Northwest's earliest and most successful biotech companies, was also perhaps the most frustrating.

 

 

 

The frustration was that by then Cable & Howse, guided by a long-languishing share price as Immunex was impacted by a general investor turnoff on biotech through the middle 1990s, distributed all of its Immunex stock before the picture improvd dramatically.

 

The Immunex involvement was one of a number of investments Cable & Howse made in the medical arena where, as Howse put it, "we always felt the products were aimed at the betterment of mankind, which always made us feel like we were doing something of value."

 

Both, in what some might suggest are their "retirement" years, remain closely involved with medical-related companies. Cable's last board position is with Omeros, a Seattle-based clinical-stage biopharmaceutical company.

 

"I think Omeros will emerge, over the next few years, as the dominant biotech company in the Northwest," Cable offered.

 

Howse is still a member of four corporate boards, two of which he describes as "rank startups: Stella Therapeutics, focused on a technology targeting an orphan disease that is the worst of the brain tumors, and BeneSol, focused on an interesting technology concerning Vitamin D."

 

Both Cable and Howse also were in agreement when I asked them if they recalled their worst investment.

 

In what Howse refers to as "the low point of naivete for us as investors" and Cable recalls only as an investment "with no logical reason," they bought Inside Sports from Newsweek Magazine. Since the advertising staff at Inside Sports had sought a share of ownership, which they didn't get, all the ad people quit.

 

"We stopped funding after two months of having to print the magazine with no ad revenues coming in," says Howse. "We originally thought of it as a road to success but instead it was a black hole."

 

In 1996, after they proved unable to convince institutional investors of the viability of the Northwest as a place where sufficient new investment opportunities would emerge, Cable & Howse liquidated the partners with an IPO for Applied Microsystem and its distribution.

 

It's been 17 years since Cable & Howse closed its doors, but to this day the mark that Woody Howse and Tom Cable made on start-ups in the technology, biotech and medical-device industries remain as visible impacts on the region's economy.

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WSU's long-time role in distance learning paves way to top ranking for online MBA

To those who have watched the leading role Washington State University has played in distance education for nearly a quarter century, word that WSU's online MBA programs have been ranked No. 1 in the nation by U.S. News & World Report will seem like appropriate recognition.

 

But the honor isn't viewed by College of Business Dean Eric Spangenberg, or WSU President Elson Floyd, as the culmination of a chase for rankings. Rather, as Floyd put it, "Our goals are to increase access, improve quality and push the envelope of educational innovation. We have and will continue to experiment with the most promising approaches to digital instruction for connecting students to WSU."

Eric
Dean Eric Spangenberg

  

Indeed the success of Spangenberg and his team in being chosen as at the forefront of online MBA programs nationally is far beyond the early distance learning WSU established when a microwave-tower relay system brought higher ed to new branch campuses in Vancouver and the Tri-Cities.

 

But the early '90s commitment to distance learning that had WSU staff sometimes out in snow storms straightening up

 

the towers so the offerings of faculty on the Pullman mother campus could reach students at the new campuses was no less vital than the initiatives evident today.

 

In the view of Sam Smith, who as WSU president at the time oversaw launch of the branch campuses and was the key college president involved in development in the late '90s of Western Governors University (WGU), the WSU honor is a key indicator of this state's leadership in on-line education.

 

Smith was instrumental in getting legislative approval two years ago for the launch of WGU-Washington to provide online baccalaureate degrees. And he suggests:"Watch our state's two-year colleges because they are on the forefront of one of the next real stages of this evolution."

 

"It has long been predicted that America' system of higher education must evolve new and more creative models of institutions to meet the needs of our students and our country," Smith said. "The state of Washington, with WSU's leadership, is doing just that and if you combine it with the online, competency based WGU-Washington, we are truly leading this evolution.".

 

Janis Machala, long involved in coaching entrepreneurs and now guiding online programs at Bellevue College, picks up on Smith's comments by noting she "fell in love with the role of the community colleges" because of their ability "to be more flexible and entrepreneurial in meeting employer needs and because of the focus on employable job skills versus theoretical education."

 

While there's more than a little challenge to bringing those getting their degrees and MBAs online into the normal university experience, the social media evolution is enhancing the opportunity to do that, says Cheryl Oliver, director of graduate business programs at WSU.

 

Oliver, whom Spangenberg credits with being the person largely responsible for putting the WSU MBA programs in place, says "We don't want to just be pushing information out. These online students are WSU students, Cougars, and it's important for us to find ways to engage them so they have the same circle of experiences as other students, trying to make sure we are using best practices to keep them engaged."

 

"I think one of the biggest challenges we have had in entering the online arena is a public misunderstanding," Oliver noted. "People tend to believe that going online means boxing up a brick and mortar program and trying to replicate a traditional classroom online. While we do offer the same core material (course topics, etc...) online education is a class unto itself."

 

Spangenberg, who praises Floyd for being "instrumental in encouraging us to pursue excellence in this learning space" and for "allowing us to pursue our own destiny" in this online development, views online offerings as a global opportunity.

 

"Online programs are the most effective and efficient mechanism by which we can positively influence communities around the globe," he says."While the education of many communities is prohibitively expensive on both sides of the equation for face-to-face programs, they are readily and economically reachable through online access."

  

 

 

Smith, the emeritus president of WSU, carries a lifetime conviction about the importance of higher education's broad accessibility.

 

As a youngster, Smith was a crop picker in the fields of the Salinas Valley until an academic scholarship to University of California-Berkeley proved to be his ticket to higher education, a career in academia and eventually to a college presidency. He maintains a strong belief that "our higher education system must evolve and once again be accessible to the average person," an accessibility he calls "the key to our country's future."

  

 

 

 

 

  (Editor's Note: I have been a member of the national advisory board of the WSU College of Business for nine years)
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Business Alliance hopes to get Inslee to adopt strategic-planning process

The Washington Business Alliance is hopeful it can help Jay Inslee, sworn in this week as Washington's 22nd governor, put in place a strategic-planning process for state government similar to what successful businesses employ. Perhaps aiding their cause is that neighboring Oregon is well down the road on that kind of approach to governing.

 

The attentions of a new governor are inevitably sought by an array of pressure groups and for a Democratic governor, those pressure groups are less likely to represent business interests.

 

But the Business Alliance, created by successful entrepreneurs David Giuliani and Howard Behar to bring "a reasoned, collaborative approach to public policy that transcends partisan politics," seems optimistic that Inslee will respond positively to the idea of strategic planning for Washington State.

 

WaBA gained visibility and respect during the recent gubernatorial campaign with its even-handed approach to the two candidates, including several "debates" that were more like interviews with Inslee and GOP candidate Rob McKenna. The organization takes no political positions and does no endorsements, since politics isn't what it's about.

 

Now WaBA wants Inslee to look no further for a good strategic-planning model than south across the Columbia River at what fellow Democratic chief executive John Kitzhaber has embraced, including creating the business-sounding role of chief operating officer.

 

While the WaBA's effort is to transcend partisanship, there's likely little doubt that it should be easier to convince Inslee to emulate a respected governor from his own party then if, for example, the model were New Jersey's Chris Christie. New Jersey was, in fact, one of four states where WaBA, in a 50-state assessment of where best practices were occurring, found efforts under way to institutionalize strategic planning.

 

The four were New Jersey, Indiana and Colorado, where Republican governors were in place, and Oregon, where Kitzhaber is a year into his second stint as state chief executive.

 

Strategic planning is the process by which an organization defines its strategy and makes decisions and allocates resources based on pursuing the preferred outcomes of that strategy, ideally over a long term.

 

It's a process that often eludes government because decisions at the local, state and national levels are usually driven by the most high-visibility needs and allocation of resources by the most influential special-interest groups.

 

Norm
Norm Levy

.WaBA board member Norm Levy, who has guided corporate strategy for major Washington companies for nearly 30 years, said what the 50-state assessment turned up was that coordinated business involvement had helped establish best practices in several states.

 

Levy, who had been head of strategic planning for the former Seafirst Bank and who got involved with WaBA because both Behar and Giuliani were clients, said "the states where long-term goals with specific outcomes were being put in place had collaboration of all key stakeholders."

 

"The accountability that is necessary to carry out a strategic plan has to be at the top level," Levy said. "And that leads to a position like Oregon's COO because someone has to be responsible for oversight of all the agencies in state government and the critical issue is that all those need to be aligned across silos."

 

The framework for strategic planning in Oregon is called the Oregon Business Plan, conceived a decade ago as a forum for collaboration on improving Oregon's economy and championed by Oregon's two U.S. senators in the absence of support from Gov. Ted Kulongoski, the Democrat who replaced Kitzhaber in 2003.

 

Early on, the plan was unable to garner the support of Oregon's various business organizations. But that gradually came about as influential business leaders embraced it and it has endured, becoming an effective tool for cooperation and collaboration.

 

And Kitzhaber, re-elected in 2011 after sitting out for either years after his constitutionally limited two terms ended in 2003, has fully embraced the concept and its strategic-planning underpinning.

 

In fact, in his State of the State speech this week, Kitzhaber invoked the Oregon Business Plan and its goals of, by 2020, raising per-capita income, creating 25,000 new jobs per year and significantly reducing the poverty rate.

 

Kitzhaber is proposing an ambitious state strategic plan called the 10-Year Plan for Oregon, which will include his proposal for a 10-year budget to support identified goals.

 

Washington Business Alliance, some of whose members have been at work with Inslee's transition team, express confidence that the new governor may adopt the Oregon Business Plan approach to governing.

 

New Jersey's Christie, as one of the models for success that turned up in the Business Alliance's 50-state examination, began strategic planning by applying it to commercial land development, after the state had discovered it had been planning for large industrial complexes in which businesses had no interest.

 

The initiative was successful, and strategic planning spread to other functions. Christie then brought to bear the interesting hammer of requiring strategic planning within each branch of state, regional and local governments in order to obtain funding.

 

 

Ironically, the Business Alliance may face a larger challenge in getting all of the varied business organizations in the state on board with creating a Washington version of the Oregon Business Plan than winning over the new Democratic governor.
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'Basque entrepreneur' Aspiri is more pleased by jobs created than fortune made

In the course of launching or growing a dozen companies over a half century, first as an entrepreneur then as an investor in entrepreneurs, Ray Aspiri expresses more pleasure at the jobs he's helped create than at the business success he's achieved.

 

And he's brought an unusual business philosophy, gained from his Basque roots, of avoiding what he refers to as the "perverse incentive" of excessive CEO pay.

 

Born John Ramon Azpiri in Boise, he wears his Basque heritage like a badge of honor. And he is particularly proud of being referred to as "the Basque entrepreneur from Seattle" when he is called upon to speak on entrepreneurism and his philosophy of leadership here, and several times in Europe.

 

Ray Aspiri
Ray Aspiri 

While Aspiri has largely avoiding the limelight in his business involvements, though those seeking his backing and the business partners he accumulated knew where to find him, he agreed to an interview following the recent sale of one of the companies he built and guided.

 

Houston-based Oil States International is acquiring Kent-based Tempress Technologies, which Aspiri and four partners had founded 15 years ago and where he was chairman and former CEO. Oil States, a publicly traded, diversified oilfield services company, paid $52.5 million for Tempress, which has an array of specialized drilling products for the oil and gas industries.

 

Aspiri's entrepreneurial career began when, at age 24 in 1961, as a Boeing employee who had dropped out of Seattle University, he co-founding Credco, which provided data credit reports for the mortgage lending and banking industries.

 

Over the next decade, with his initial partners, he launched and guided Color Control, a company that did photo-lithography for major retailers and mail-order catalogue companies, and Precision Automotive, an engine-rebuild firm in the aviation industry.

 

Aspiri was still top executive at Credco and Color Control when he got involved financially in the medical-instrument business that would occupy much of his focus in the coming years.

 

He recalls that Bill Gates Sr. called him in 1967 to tout him on an opportunity to invest in Redmond-based Physio, then on its way to being a world leader in heart defibrillators. He remembers that investor involvement as "one with which I made a lot of money, but I got 1,000 times more value" out of the leadership skills he learned from watching Physio's iconic CEO Hunter Simpson.

 

Credco, Color Control and Precision Automotive were all sold in 1978 and Aspiri spent the following two years reviewing 400 companies to determine where he wanted to next focus his attention. That turned out to be twin ventures: the predecessor of Tempress Technologies and his second investment in the medical-instruments industry that has been a high-visibility part of Seattle's technology successes.

 

In 1980 he became a major investor and board member at Quinton Medical, the Woodinville company where founder and leader Wayne Quinton was guiding what became the largest U.S. provider of cardiac stress testing systems and cardiac rehabilitation equipment.

 

Aspiri has been an investor in and has served since 1995 on the board of publicly traded Omeros, a clinical-stage biopharmaceutical company focused on discovering, developing and commercializing products for inflammation, "coagulopathies" and disorders of the central nervous system.

 

I asked Aspiri if, scattered among his array of investor involvements, were any that had failed and he quickly ticked off several.

 

Interestingly, one of his less successful investments was in a business that nevertheless turned out successful.

 

He and three partners funded the launch of Flexcar, a concept he says his wife, Edith, "Loved," which helped guide his decision to invest.

 

"We probably got about 12 cents on the dollar back from the investment, but we helped establish a concept that has taken off" he said of the idea that eventually became part of Zipcar, which was just purchased by Avis for about $500 million.

 

Aspiri wanted to focus, during our interview, on the importance of encouraging entrepreneurism and on his compensation philosophy, which he calls the "Mondragon concept of employee ownership," gleaned from one of Spain's most successful companies based in that country's Basque region.

 

At Mondragon, a federation of worker cooperatives that is Spain's seventh largest company with 84,000 employees in 256 companies and named after the town where it was founded, the CEO can't make more than six times the salary of the average employee, Aspiri explained.

 

"I'm a real advocate of that concept, which largely eliminates the perverse incentives that contribute to many of the problems of governance found in organizations with more traditional management structures," he said. "In all my years, I haven't exceeded that ratio."

 

Aspiri's investments extend to his community involvement where he was one of three business leaders who helped found the Catholic Fund to sponsor scholarships for private Catholic education in Western Washington, raising more than $25 million for scholarships from 1986 to 2002. His partners in that initiative were Seattle attorney Joh Hempelman and Jack McMillan, then Nordstrom president.

 

A $3 million contribution from the fund in 2002 launched what is now the Fulcrum Foundation, which annually raises funds for Catholic schools from K-12 through university for the Seattle archdiocese.

 

As to what lies ahead, Aspiri says he intends "to make selective investments in the future that can improve the quality of life for people," and and also plans to work with both University of Washington's Foster School of Business and Seattle U's School of Entrepreneurship.  

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New leadership could bring key changes to entrepreneur icon Kauffman Foundation

As a new year brings new leadership at the Ewing Marion Kauffman Foundation, the long-rumored internal struggle over whether the focus of the nation's largest and most influential resource for entrepreneurs should be far flung or local may soon play out.

 

Thomas A. McDonnell, longtime Kauffman Foundation board member and chair since 2006, assumed the role of president and CEO as of January 1, filling the position left vacant since exactly a year ago when Carl Schramm was forced out. McDonnell hasn't indicated yet whether or not he will guide a change of focus.

 

But given the pre-eminent role the Kansas City-based foundation has played in fostering entrepreneurism, the issue of whether Kauffman's focus should be more local than broad-based could have implications for angel-investor groups and entrepreneurs in every region of the country.

 

However, there are some longtime entrepreneur supporters and investors who suggest that the emergence of other foundationsinvesting in entrepreneurial activity and of serial entrepreneurs now actively impacting entrepreneurship mean Kauffman could refocus without negative impact.

 

Despite the substantial amount of time since the departure of Schramm, the architect of Kauffman's dramatically expanded presence in entrepreneurial activity, there's been little national visibility or blogger discussions about the struggle over Kauffman direction or of the real story of Schramm's departure. Nor has there been a lot of discussion about what might lie ahead for the $1.8 billion foundation.

 

During his 10 years as president, Schramm turned the foundation's focus dramatically toward national focus, then a global presence, becoming the largest and most influential resource available to foster technology innovation through entrepreneurial startups.

 

Schramm was asked to leave, though the official announcement was that he had decided to resign to return to academia. Both his departure, and the sudden availability of McDonnell for the top role, may yet provide fodder for discussion.

 

McDonnell's sudden decision in September to retire at 2012 year-end as CEO of publicly traded DST Systems, and the fact that the company's board virtually that same day put a new CEO in place, could provide a new batch of rumors surrounding Kauffman leadership.

 

One Kauffman change that's certain to occur is its involvement with venture-capital and private-equity investing, given its own dramatic report last spring that spelled out the sad experience the foundation has had in its 20 years of such investments. The in-depth report, titled "We have met the enemy...and he is us," amounted to an analytical revisitation what it describes as its "large (almost $250 million) and (largely) underperforming VC portfolio" and a promise to make dramatic changes in such investing.

 

Because of the clout Kauffman has with academia, the angel-investment community and others with financial roles in start-up companies and entrepreneurism, there's a perhaps not illogical reluctance on the part of many in the industry to speak out about the Foundation's apparent internal struggle.

 

But the fact Schramm's departure was the outgrowth of the conflict over Kauffman direction is pointed up by a couple of comments in e-mails to me for this piece.

 

As a friend close to Schramm said in an e-mail, "it was always a fight between Carl's vision of becoming a global leader in entrepreneurship and being a mainstay in Kansas City."

 

Added an angel-investment leader who declined to have his name tied to the comment: "I can tell you that the divergence on direction is based on the interpretation of the donor's (Mr. Kauffman's) intent. After all, it was his money. Far be it for us to determine what is the best use of his money."

 

"I do believe Carl went too far afield and walked away from the original donor intent, including spending vast sums of money outside the U.S.," said retired Kansas City business leader Ritchie Slaughter said in a telephone interview.

 

Slaughter had worked for Kauffman, the owner of the Kansas City Royals major league baseball team who created the foundation in the mid-1960s, before his death in 1993. Slaughter left the board in 2003, a year after Schramm's arrival.

 

"He was very willing to have people come here (to Kansas City) from around the world but did not want to spend money outside the United States," Slaughter said. "It is Mr. Kauffman's money and needs be spent the way he wanted."

 

"The new guy is likely to have community pressure to give more focus to and have more board members from Kansas City, but he's been chairman of the board for six years so I'd be surprised if he's backing away from national involvement," Slaughter said. "Kauffman specifically wanted a national footprint in entrepreneurship and a local footprint in youth development."

 

Among those who suggest a Kauffman refocus would likely not be detrimental to entrepreneurial activity at this point is San Diego angel-investor Michael Elconin, a long-time leader in the five-county Southern California Tech Coast Angels.

 

"Kaufmann was instrumental, to say the least, in the formation and growth of the Angel Capital Association (ACA), enabling the dissemination of best practices, and promoting efforts to bridge the gap between university research and startups," said Elconin, past chair of the San Diego TCA chapter. "I would say that in all three of these areas, the institutions and momentum Kaufmann created will, to Kaufmann's credit, allow them to continue without further Kaufmann support."

 

Janis Machala, one of the founders of the Seattle women's angel-investor group Seraph Capital and now dean of continuing education at Bellevue College north campus, agreed.

 

"Kauffman has done so much and was working in entrepreneurship when no one was focusing on that area," she said.

 

"Now there are many foundations investing in entrepreneurship and many successful serial entrepreneurs now actively impacting the fabric of entrepreneurship and all this activity and money means that Kauffman can refocus to their roots and not lose all that was done," Machala added.

 

Susan Preston, also a founder of the Seraph angel group who then became a Kauffman Entrepreneur-in-Residence and most recently has guided California's CalCEF Clean Energy Angel Fund, isn't quite as certain.

 

"We will feel an impact on programs if the Foundation focuses solely on Kansas City," Preston said. "But I have faith and belief that new leadership will recognize Kauffman's instrumental role in advancing entrepreneurship on a national basis, where the programs created and grants made in a number of areas, including for women eptrepreneurs, have helped change the landscape for the good."

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Holiday Greeting 2012

This offering of holiday art as once generated by wire-service teletype machines has become my annual way of sharing Christmas and holiday greetings to those who have been kind enough over the past almost five years to allow this weekly Flynn's Harp column into their e-mail 'bag'.

(this column will be taking a holiday next Wednesday, resuming on January 2)

 

-0-

 

Holiday teletype art: gift from communications era past

 
In the years-ago time, the wire service teletype machines clacked away in newspaper and broadcast newsrooms bringing the news of the region and the world.
 
But in the quiet of the Christmas holiday in the offices of AP and United Press International, the teletype paper coming from the printers would be graced with holiday art.
 
For those of us who at an early stage in our careers had a turn with the lonely Christmas Eve or overnight vigil in the UPI bureaus around the country, as older writers got to spend time with their families, the holiday art created and transmitted by teletype operators is one of the special memories of working for that now-dead company. The x's, o's, etc. appeared a line at a time on the teletype paper until images of Christmas trees, Santa Claus, holly wreaths, etc., took shape.
 

The art stirred memories for those among the recipients of this weekly missive who once worked in newspaper or broadcast news rooms and recalled watching those creations emerge onto the rolls of teletype paper.

 

It also served as a reminder of earlier days for those in other industries who once used teletype machines for transmission of information, including one who recalled the occasional flawed keystrokes that occurred when creation of the art followed holiday parties.

 

Since each year brings new names to the list of those receiving Flynn's Harp, there are some who haven't previously seen the art. For that reason, and because fond memories are served by repetition, here is a the annual reminder of this Christmas art.

    

Happy Holidays!

 

  

 

                                                +
1                                               "X"                                       
                                              "XXX"
                                            "XXXXX"
                                          "GOD JUL"
                                       "BUON ANNO"
                                        "FELIZ NATAL"
                                      "JOYEUX   NOEL"
                                   "VESELE   VANOCE"
                                  "MELE   KALIKIMAKA"
                                "NODLAG  SONA  DHUIT"
                             "BLWYDDYN  NEWYDD  DDA"
                                """""""BOAS FESTAS"""""""
                                       "FELIZ NAVIDAD"
                                  "MERRY CHRISTMAS"
                                " KALA CHRISTOUGENA"
                                 "VROLIJK  KERSTFEEST"
                   "FROHLICHE WEIHNACHTEN"
                              "BUON  NATALE-GODT NYTAR"
                              "HUAN YING SHENG TAN CHIEH"
                           "WESOLYCH SWIAT-SRETAN BOZIC"
                         "MOADIM LESIMHA-LINKSMU KALEDU"
                        "HAUSKAA JOULUA-AID SAID MOUBARK"
              """""""'N  PRETTIG  KERSTMIS"""""""
                              "ONNZLLISTA UUTTA VUOTTA"
                           "Z ROZHDESTYOM  KHRYSTOVYM"
                          "NADOLIG LLAWEN-GOTT NYTTSAR"
                         "FELIC NADAL-GOJAN KRISTNASKON"
                        "S  NOVYM  GODOM-FELIZ ANO NUEVO"
                        "GLEDILEG JOL-NOELINIZ KUTLU OLSUM"
                     "EEN GELUKKIG NIEUWJAAR-SRETAN BOSIC"
                    "KRIHSTLINDJA GEZUAR-KALA CHRISTOUGENA"
                     SELAMAT HARI NATAL - LAHNINGU NAJU METU"
                    """""""SARBATORI FERICITE-BUON  ANNO"""""""
                          "ZORIONEKO GABON-HRISTOS SE RODI"
                      "BOLDOG KARACSONNY-VESELE  VIANOCE "
                     "MERRY CHRISTMAS  AND  HAPPY NEW YEAR"
                      ROOMSAID JOULU PUHI -KUNG HO SHENG TEN"
                      FELICES PASUAS -  EIN GLUCKICHES NEUJAHR"
                  PRIECIGUS ZIEMAN SVETKUS  SARBATORI VESLLE"
              BONNE  ANNEBLWYDDYN  NEWYDD DDADRFELIZ  NATAL"
                          """""""""""""""""""""""""""""""""""""""""""""""""
                                                    XXXXX
                                                    XXXXX
                                                    XXXXX
                                            XXXXXXXXXXXXX


 

 

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Scott Jarvis merits retention in role as state's chief regulator of financial firms

As Governor-elect Jay Inslee puts his administration's leadership team in place over the coming weeks, the state's community bankers hope to persuade him to retain the man who oversaw the state's regulation of financial institutions during their unprecedented turmoil.

 

If Inslee asks outgoing Gov. Chris Gregoire about Scott Jarvis, whom she appointed director of the State Department of Financial Institutions (DFI) at the outset of her tenure in March of 1985, she'd undoubtedly give an unqualified endorsement.

 

Scott Jarvis
Scott Jarvis 

Brad Tower, president and executive director of the Community Bankers of Washington (CBW) will be suggesting to his members that they urge Jarvis' reappointment. The state-chartered community banks around the state may represent the most economically important sector of industries that fall under Jarvis' oversight.

 

Part of what Inslee must weigh is the fact that Jarvis, during an almost unprecedentedly challenging time for banks, credit unions and other financial companies, created a firm but caring state regulatory environment. What he created was important not just to the industry he oversaw but also to the economy of the state.

 

The state's banks and savings and loans were awash in profits when Gregoire plucked James (Scott) Jarvis from the office of the state insurance commissioner, where he was Deputy Commissioner for Consumer Protection, to head the agency that oversees all financial-transaction businesses.

 

It wasn't long into his tenure that Jarvis, an attorney, came to realize that what he recalls as "extremely high concentrations of lending in land acquisition and real estate development was going to be a problem for community banks if the economy took a turn for the worse."

 

But he was frustrated by the fact that, as he puts it, "there were no tools in the regulator's tool box to impose enforceable concentration limits nor to compel a profitable and healthy institution to reduce its exposure to a line of lending."

 

Thus as Jarvis came to know personally many of the bankers who ran institutions he regulated, "I knew who among them was struggling and whose banks, absent infusions of hard-to-come-by capital or an acquisition, would not survive."

 

"To watch these decent individuals keep a stiff upper lip and act as if all was well when they were among their peers and competitors was difficult," he said, in a comment bespeaking a regulator with a human side. "And it became all the more difficult as time for failure drew near." In the end, 17 state-chartered banks failed.

 

"I believe that over the last seven years, the environment he has created and people he has surrounded himself with has been one of the greatest assets for community banking in our state, and actually nationally," said CBW executive Tower in a telephone interview.

 

"While he has been a tough regulator, he's been fair and supportive and has been willing to push back on federal regulators when they were failing to be sensitive to local conditions," noted Tower, whose CBW is viewed as the pre-eminent voice of the state's 60 independent community banks. "Scott has been directly involved in slowing the knee-jerk reaction of the feds to close first and ask questions later."

 

That ability to work with federal regulators stems in part, likely, from Jarvis' role as legislative committee chair for the national organization of state regulators, where one of his duties is to coordinate the legislative positions of the organization at the federal level.

 

Pat Fahey, one of the state's most respected bank CEOs, recalls that as he sought to turn around failing Frontier Bank, "Scott was very supportive, even meeting with the governor to see how she might get involved, in seeking to convince the feds to accept a deal we had put together to save the bank."

 

In the end, fed ineptitude caused investors who sought to put together a deal with Fahey that would have saved Frontier Bank and its parent Frontier Financial Corp. to back away and the bank was shuttered and its assets sold to California's Union Bank.

 

Fahey is now at the helm of First Sound Bank as chairman, president and CEO seeking to turn it around. 

 

Patrick Patrick, like Fahey, a turnaround banker now involved in bringing back Seattle Bank, where he is CEO, says Jarvis "was the man the state needed in a very difficult time for Washington. He represented the interests of the regulatory system as well as the communities whose banks he oversaw."

 

Patrick credits Jarvis with "making certain, where possible, that people who had given back to their communities had a chance to continue to do so with their banks."

 

It's interesting, as well as telling, that Jarvis views his role as DFI director to be fostering policies that not only provide a healthy and predictable regulatory environment, but also promote economic vitality. It's clear he understands that what his agency website describes as "a fair and dynamic lending environment that results from viable state-chartered banks and credit unions" is important to capital formation for small business.

 

Jarvis' agency, in addition to regulating state chartered banks and credit unions, also regulates a variety of non-bank financial services providers, including mortgage lenders and payday lenders, as well as our state's securities industry.

 

Tellingly, CBW's Tower notes that "The FDIC has ramped up hiring and paid outrageous amounts to get good people. Scott can't pay market rates for his people so the only way he can keep good people is to create a good working, even a mentorship, environment."

 

Looking down the road for the industry he's come to understand as well as anyone, Jarvis thinks that as the economy improves "we can expect to see entrepreneurs looking to the state bank charter as the vehicle to create and grow new local community banks."

 

But he adds that for now, "and perhaps a bit beyond, consolidation remains the more likely path as the economic environment strives to sort itself out and attractive returns on investment remain challenging."

 

"Though not in the numbers seen in the past, well capitalized proposals, with strong management and sound business plans, will have a place in the Washington community banking environment in the years ahead and should receive federal approval," Jarvis said.

 

In addition, Jarvis notes, "a number of Washington institutions have recently switched from a federal to a state charter and several more are giving serious consideration to doing so."

 

"I would like to think that our efforts to be perceived as a fair, competent and knowledgeable regulator and our performance during these almost unprecedented times has something to do with that," he added.

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Spokane's 'North Pole' flight for poor kids attracting attention from other cities

The annual Fantasy Flight to the "North Pole" that Alaska Airlines makes possible each year for 60 disadvantaged Spokane-area kids and their personal elves is now attracting the attention of other cities who might like to create similar events, possibly in partnership with Alaska.

 

The children, selected from programs for homeless and underprivileged kids in the Spokane and Coeur d'Alene areas, board Alaska Airlines "flight 1225," designated "Santa One," Saturday at Spokane International Airport.

 

This is the fifth year Alaska has operated the flight in Spokane for Northwest North Pole Adventures (NNPA), a 501c3 created and overseen by Steve Paul, president, CEO and executive director. He's a software executive who spends much of the year preparing for, agonizing over funding for,and carrying off the event, where at trip time he's better known as "Bernie" the Head Elf.

 

Steve's headshot
Steve Paul, event creator as 
head elf "Bernie" 

Alaska made the flight unique when it took over from United Airlines after that airline was unable to make a jetliner available in December of 2008. Though a number of airlines around the country, actually around the world, have been engaged in such Christmas Season flights since even before Alaska got involved, it was Alaska employees who asked: "why can't we take the kids up in the air?"

 

Thus it was that Alaska was the first to actually fly away, taking the kids to "the North Pole."

Brad Tilden
 Brad Tilden, Alaska Air CEO 

United now has North Pole adventures, for children with serious illnesses, that take to the air from both Los Angeles and San Francisco for flights around California that land back at the airport from which they departed. Other airlines doing "flights" that mostly involve taxiing around the airport with window shades down are Continental, American and Southwest.

 

Elsewhere in the world, kids are carried aloft by British Airways in Scotland and Aerolineas Argentinas, which conducts fantasy flights between Buenos Aires' two main airports.

 

Recognition for the Spokane event got broader last year thanks to coverage by Seattle's KCPQ-TV, which actually also did a program on it for CNN as well as its own regular news coverage. That greater visibility is providing both relief and opportunity for Paul.

 

"This is the first that I am not panicking about funding as the event nears," he said in an interview. He's attracted a number of local sponsors at various levels and has a cash-and-in-kind budget this year of just under $200,000.

kids in plane
Kids awaiting takeoff for 'North Pole'

The key in-kind, of course, is Alaska's participation, a role that has been low key from the outset in 2008.

 

"Alaska has never pressed for any visibility," Paul noted. "They are just happy to be great philanthropists for this project, though many of Alaska's employees consider this a high point of their year." As many as 30 Alaska and Horizon Air employees will participate this year, though more sought to volunteer.

 

"Alaska wants to do things for the right reasons and visibility is typically not high on the list of right reasons," says Alaska's new chairman and CEO, Brad Tilden. "But it's not that we need to be secretive about something we're very proud of supporting the event and many others who are involved, including many of our employees."

 

And as a new CEO, he brings his own sense of expanding upon this event by being open to seeing something similar develop in other Alaska cities.

 

"We'd be happy to help in other cities," Tilden told me in an email exchange. "I think Steve and his team put in an unbelievable amount of work to bring this event alive, and we'd have to make sure we have a group in another city that is onboard with all of this."

 

"But again, I'm very open to the idea," he added.

 

"Seattle would like to have a similar Fantasy Flight for kids but the challenge is how to scale it," Paul notes. "They'd need a facility, sponsors and community support behind the idea."

 

"We could easily do a Seattle one, bringing kids from there to Spokane to have the same experience our kids do, then fly back home.," he adds.

 

"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."

 

Among the Alaska-served cities where such Fantasy Flights don't yet occur, in addition to Seattle and Portland, are San Diego, Orange County and the Palm Springs area.

 

The Spokane 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."

 

"When we send out invitations to the kids, we have them give us a wish list of what they want for Christmas," Paul explained to me in an interview for a column on him I did a year ago.  

 

"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. The looks on their faces as he hands it to them is priceless."

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Columbia Hospitality views Salish products as part of corporate brand enhancement

Most of the two dozen properties Seattle's Columbia Hospitality manages across five Western states are destinations well-recognized by hotel and resort guests, but less recognized is the brand of the fast-growing hospitality management and consulting company itself.

Now founder and CEO John Oppenheimer hopes a new retail-products unit that will market food items served at the iconic Salish Lodge will help bring broader exposure not just for the hotels and resorts themselves but also for the Columbia Hospitality brand.

 

John Oppenheimer
John Oppenheimer

A number of food products served at the nearly century-old hotel perched on the bluff above Snoqualmie Falls east of Seattle went on sale last week at a holiday-season kiosk at downtown Seattle's Pacific Place. Columbia Hospitality manages Salish under a 20-year agreement with the Muckleshoot Indian Tribe, which bought the hotel five years ago for $42 million and 50 acres across the road for another $20 million.

 

"We're the first of our kind as a boutique hotel creating a product arm," said Sasha Nosecchi, whom Oppenheimer brought aboard in July with the title of Retail Innovations Director. The title indicates the extent of creative freedom he has given the former Starbucks and Chateau Ste. Michelle executive.

 

Oppemheimer says the products from Salish, which Columbia Hospitality manages under a 20-year agreement with the Muckleshoot Indian Tribe, which bought the hotel five years ago, range from biscuit powder to pancake mix, to the on-site-produced honey, to candles and tea.

 

"The products are all well known by those who have been guests at the lodge," says Nosecchi, who adds that another product is a honey ale produced for Salish in partnership with a local brewery.

 

"Everyone who has been there has a story about Salish," he adds. "Everyone has a memory of this place, and that's what the products are meant to take advantage of."

 

"Honey on biscuits, drizzled from on high, has been a tradition so we decided to begin making our own honey, with bees on site, with our own beekeeper," Oppenheimer says.

 

And the way Columbia Hospitality's other properties may be promoted to buyers of Salish food products is through special deals tied to the Salish items, like perhaps a special rate at Friday Harbor House in the San Juan Islands with the purchase.

 

"We think we can create great exposure for the hotels and resorts,"Oppenheimer said. "My hope is that someday people will say they want to stay at a Columbia Hospitality-managed property."

 

In fact, the company's strategy for building its brand includes a brochure in every guest room at Columbia Hospitality's various properties that list the collective properties. And the company has a newsletter that goes out regularly to its mailing list.

 

"Guests tell us they are beginning to visit the properties simply because they are Columbia Hospitality managed, which equates to luxury, incredible service, and distinct destinations," says Oppenheimer. "So yes, we are building a brand."

 

A more readily recognizable brand for the company would be only the latest innovation for the fast-growing hospitality management and consulting company that Oppenheimer founded in 1995 after his consulting company was hired by the Port of Seattle to manage its new Bell Harbor Conference Center.

 

The port had hired Oppenheimer's Columbia Resource Group (CRG), which had done events around the world, to provide consulting services on selecting a management firm for the new facility. But when the original management firm fell short of port expectations, Oppenheimer decided to bid on the management role itself.

 

How he eventually got the management contract for Bell Harbor with no experience managing such a facility was an example of Oppenheimer's bold business approach.

 

"Our bid was based on the premise that while we had no experience operating a conference center, no one understood the customer like we did and we said 'we'll make this the most customer friendly place that exists on the planet.'"

 

Columbia Hospitality was created out of CRG to operate Bell Harbor, which was able to pay its way from year one without the subsidy the port had assumed it would have to provide for a time.

 

A growing number of hotels and resorts, and other conference centers soon came Columbia Hospitality's way, including now two in Montana resort areas, one in Sonoma, CA., and the bulk in Washington, Oregon and Idaho. In addition, the company has a half dozen of what it calls "limited service hotels" that Columbia Hospitality operates, but not under its brand.

 

Oppenheimer explains those hotels come and go because our clients are principally banks who assume the hotel and retain us to manage it until it is sold.

 

Oppenheimer admits that at one point, when Salish Lodge was available, he thought about putting together an ownership group to buy it. But when it became clear the Muckleshoots intended to buy it outright, he opted instead for the long-term management agreement.

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Tiny charity has large impact on lives of kids, families in small Yakima Valley town

When Joan Wallace reflects on her decision on a Thanksgiving nine years ago to create a grassroots charity to address the needs of the mostly poverty-level Hispanic families in a small Yakima Valley community, she says "it seemed like pie in the sky."

 

In fact, the manner in which the organization Wallace created, Friends of Granger, has done its annual fund raising through a single e-mail she sends each Thanksgiving week to friends and family might seem to some like an annual revisiting of that description.

 

"How else than that description to explain the expectation that a small group of caring individuals could adopt an entire village and make a difference in the lives of needy children - not just for today, but for their future," mused Wallace, principal and retired president of Bellevue-based Wallace Properties.

 

But the on-going impact Friends of Granger has on the community, which U.S. Census figures indicate is 85 percent Hispanic or Latino, suggests that the charity Wallace launched with her sister in law, Janet Wheaton, on Thanksgiving Day of 2003 has indeed made a difference.

 

Wheaton was then principal at Granger high school but is now federal programs director of the Granger School District, where she told me she now has "the privilege of serving all the families of our school district and community."

 

More than 300 people receive Wallace's e-mail each year, an outreach that represents the only source of fund-raising for the non-profit's tiny $50,000 annual budget, a fund-raising effort that Wallace concedes usually raises closer to $35,000.

 

But because the little 501c3 that was incorporated in early 2004 has no overhead, with all the clerical support and services donated, all the money goes to the families, touching as many as 150 families in the Granger community.

 

"A lot of kids are part of large families, so they come to school in hand-me-downs, jackets with the zippers not working, and no gloves," notes Wallace, now president of the 501c3 while Wheaton is treasurer. "If the teacher decides a kid is in need of a new coat, they're sent to the office and the secretary takes them down to the stock room where they get to pick out a new coat."

 

"There are 60 to 80 kids a year who wind up needing coats, so we have to buy them in all sizes, which we do at the end of a season and have them in stock for the next year," she adds.

 

The incentive during the conversation that first year between Wallace and Wheaton was a concern that without some assistance, children in dozens of families (social workers later identified the number as 160 families) would be going hungry without the two subsidized meals they had each day.

 

The $100 grocery gift cards that were purchased from Fiesta Foods, the local Hispanic grocery, which chipped in by providing holiday meal baskets at wholesale cost, were sent anonymously to the families of the poorest children.

 

But Because Wallace has difficulty thinking small, what was born that Christmas season as a food gift soon grew into programs throughout the year to not just feed and clothe but to enrich those poorest kids.

 

Thus came discounted purchase of book bags from Costco, a month long summer day camp, and Ready! For Kindergarten, focusing on early learning and parenting skills. Then the annual purchase of coats and mittens, which Wheaton oversees.

 

The ask each year is composed fresh from the heart rather than recycled and this year's details what the donated dollars achieve, noting that Wheaton has identified "150 families that will need our help this year. Our objective is to allocate $125.00 per family."

 

Though one year she closed with a quote from Mother Theresa ("We cannot all do great things, but we can all do small things with great love"), the ask is generally a soft one, like this year's: "If you could see your way clear to support Friends of Granger with a gift this year it would be wonderful."

 

The Fund is reachable at:

Friends of Granger

C/o Joan Wallace, PO Box 4184, Bellevue, WA. 98009

 

 

Happy Thanksgiving!

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Patient advocates represent a growing trend in healthcare system evolution

As dramatic changes in the healthcare system unfold, an emerging piece of those changes is the growing role being played by advocates who become in-person navigators of the system for patients and their families.

 

It's a healthcare innovation that won't mean the eventual end of one-on-one doctor-patient interactions, but proponents of the advocate role suggest it will lead to far larger percentage of physician visits in which a patient is accompanied by his or her "team."

 

Scott Forslund, director of strategic communications for Premera Blue Cross of Washington, suggests that "One benefit of a patient advocate model is that it may provide a fiduciary responsibility by allowing for focus on only the one patient that the advocate is serving."

 

Forslund adds that "The escalating cost of care and the complexity and fragmentation of the healthcare delivery system are hugely driving the need for better coordination of care and greater economic engagement by consumers and advocacy on their behalf."

 

It's that "advocacy on their behalf" that is driving the new trend on behalf of patients. And it is attracting a growing number of entrepreneurs who are parlaying their years of experience in the healthcare industry into new companies that they hope will grow as the field becomes more broadly known.

 

Three of those businesses, created by entrepreneurs who have picked different pieces of the advocacy picture, are in the Seattle area. One is a health advocacy company, another is focused on home healthcare and the third is seeking to create a personal heathcare guide for patients and their advocates.

 

Robin Shapiro
Robin Shapiro,
Allied Health Advocates 

Allied Health Advocates (AHA) is a health advocacy company focused on providing in-person assistance to patients and their families who are navigating the health care system, "whether facing a new diagnosis, an immediate health care issue or managing a chronic and complicated medical condition."

 

Robin Shapiro, president and COO of AHA, which she co-founded in 2008 with partner Beth Droppert, says the advocate industry is forming around the idea that patients want to get more engaged in the healthcare experience, but lack the background to be really involved.

 

"Patients don't understand the pressures on doctors, so we act as navigators and as a sounding board, bringing good communications to the process so doctors can be more efficient with patients," Shapiro says.

 

She admits it's a field too new for a lot of doctors "to even know about the role we play." But she adds that "the doctors we have worked with have been very supportive, cooperative and at times grateful that we work with the patient and the health care team."

 

Virginia Kenyon
Virginia Kenyon
Kenyon HomeCare 

Virginia Kenyon, whose Seattle-based Kenyon HomeCare Consulting provides consulting services for a variety of home health hospice and home care agencies, views the advocate role as "critical in this day and age of complex medications and procedures and the options now available to all of us."

 

At this point the advocate role is not covered by insurance or Medicare.   

  

But Kenyon, who started her business in 1999, suggests that if insurance companies could see that the advocate role would reduce costs and improve health and care, they might be willing to pay for it.

 

"Right now they probably would view it as costing them more because the advocates would push for coverage that companies currently will deny," Kenyon added.

 

Kenyon recalls that early in her career as a nurse, in the 1970s, "nurses used to be required to advocate for their patients, which sometimes was very difficult because it could out you at odds with the physician."

  

She notes that a settlement in a recent federal suit against Medicare for its requirement that home healthcare agencies had to close cases of patients who weren't showing progress will also serve to reduce healthcare costs.


 "Keeping people at home and keeping them stable, even if they are no longer making progress or improvement, will keep people at home and stable rather than being in the hospital," she said. 

 

Trini Evans
Trini Evans
StrataLife Solutions 

StrataLife Solutions LLC was founded two years ago by Trini Evans, who brings a 25- year healthcare background in nursing and home healthcare roles to her effort to launch her publication-focused business.

 

The Health Advocate Guide, the launch product for her business, is designed to be a personal medical communication system that is taken by the patient or a "team" member to each physician visit. The three-ring binder (which also has a patient's information on line), contains forms and legal documents, such as healthcare directive and durable power of attorney for healthcare, as well as pages to guide the collection and retention of doctor-visit records.

 

One of the pages in the guide advises patients on "gathering your team," suggesting that one team member would accompany the patient to doctor visits, thus serving as advocate to take notes, ask questions and ensure accuracy in dealings between patient and medical professional.

 

"It's designed to give a patient the ability to be a participant in their care, rather than an observer of it," she says.

 

Some involved in the healthcare industry suggest there is a latent pressure building for advocates who will help patients navigate the array of procedures for various diseases and conditions, balancing benefits with costs, and actually slowing, or bringing down, healthcare cost

 

Thus part of the effort to get control of the escalating costs of healthcare might find advocates, for example, helping a patient with a particular cancer weigh the relative benefits of an array of similar procedures to address the cancer that, in Seattle, can range in cost from $800 to $57,000, depending on where the procedure is done.

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SEC's struggle with rules for start-up fundraising troubles some angel investors

The federal JOBS Act aimed at opening the door for entrepreneurs to reach out to crowds of potential investors on the internet appears, ironically, to be hung up at the Securities and Exchange Commission (SEC) on the issue of tighter restrictions on entrepreneurs who seek more sophisticated investors.

 

In fact, angel-investor leaders are concerned that the SEC's deliberations may produce rules that make it harder for entrepreneurs to raise money from those wealthier individuals, referred to as "accredited" investors. 

 

Liz Marchi
Liz Marchi

The reason is that Congress decided that entrepreneurs would have to validate investor accreditation, rather than being able to take the word of investors that they were "accredited," as has been the case until now. But the lawmakers left it to the SEC to figure out how to impose rules for such "validation."

 

"I don't think anyone in Congress was thinking about the actual impact the change would have on accredited-investor rules," said Liz Marchi, whose Frontier Angel Fund, Montana's first angel fund, has become one of the nation's most successful angel-investor groups. "That's why I think you see basically nothing being done at the SEC."

 

The legislation, officially the Jumpstart Our Business Startups Act, was passed by Congress in April and was designed to be a job creator by making it easier for entrepreneurs to raise capital and thus launch companies and create jobs. The first part of the bill would ease raising start-up capital through "crowdfunding" on the Internet and the second part to eliminate the prohibition against advertising and soliciting traditional "accredited" investors.

 

The SEC was given until yearend to determine the rules that would govern operation of crowd-funding efforts. But the portion dealing with accredited investors called for the SEC to figure out by July 4 how to implement rules to eliminate the prohibition against general solicitation and advertising in securities offerings.

 

The regulatory body missed that deadline but SEC chairman Mary Shapiro told Congress the agency would have the rules in place by end of summer. That target has now become year end, and the betting is that it'll be sometime in the new year before the rules are put forth.

 

The Angel Capital Association and angel investors like Seattle's Dan Rosen, who are closely involved in following the SEC deliberations and seeking to influence them, are hoping to get final SEC rules simple enough that entrepreneurs "don't have to jump through enormous hoops to prove investor accreditation."

 

The phrase angel leaders are using to indicate what's needed for those entrepreneurs seeking accredited investors is "safe harbor," meaning a safeguard for entrepreneurs that they have actually done some due diligence on the investors.

 

Rosen, a leader of Seattle's Alliance of Angels, says "we've been working with the SEC to come up with a compromise that will ensure there is a safe harbor. But if they come out with a rule that is not acceptable, we will go back to Congress and seek changes there."

 

What's causing much of the teeth-gnashing for entrepreneurs and those like ACA and Rosen looking out for their interests is the apparent difficulty the SEC is having figuring out just what are the "reasonable steps," that will be required of entrepreneurs.

 

The irony of, in essence, tightening the screws on entrepreneurs seeking funds from qualified investors is that those entrepreneurs, rather than the ones seeking limited amounts of money from crowds of small investors, are the ones most likely to be job creators.

 

Bill Payne, viewed by many as the dean of angel investors and a member of Marchi's Kalispell-based Frontier Angels, is critical of how Congress packaged the JOBS Act.

 

"The legislation does not appear to have been well thought-out and seems to be our Congress simply finding something upon which they could agree," said Payne, who was Entrepreneur in Residence at the Kauffman Foundation and was named angel investor of the year in both the U.S. and New Zealand.

 

In fact, the JOBS Act brought the best example of bipartisan support evidenced by Congress in the past four years.

 

"Congress was motivated on this legislation because the lawmakers finally figured out that entrepreneurs are at the heart of this country's future and there were few tools by which Congress could feel like it was playing a role in the country's economic future," said Marchi.

 

Marchi's angel fund has been proving recently that angel investing can be profitable for the angels as well as important for jobs and the economy.

 

Two of the fund's investments, Coeur d'Alene-based Pacinian, a maker of wafer-thin keyboards, and Bozeman-based LigoCyte Pharmateuticals Inc., were acquired by major companies in the past few months. Frontier had substantial stakes in both and thus got substantial rewards.

 

Pacinian, which represented 10 percent of Frontier's total fund, was sold to Silicon Valley tech firm Synaptics this summer for an initial $15 million plus a substantial additional amount in the future based on various factors.

 

And a substantial bridge-round investment Frontier made about four years ago in LigoCyte Pharmateuticals Inc. paid off big last month with the announcement that Japan's Takeda Pharmaceuticals' wholly-owned U. S. subsidiary was buying the Montana vaccine maker. The agreement provided for an upfront payment of $60 million and "future contingent considerations" for LigoCyte, whose lead product, a vaccine to prevent norovirus gastroenteritis, is in clinical development.

 

Marchi declined to discuss specifics of Frontier's multiples from the two sales. But she noted that the two exits will have returned the original investment capital to her members, "and perhaps even some profit. So every one of our other 10 investments can produce profits."

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Recalling a home's 40 years of memories

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For four decades, it was the place where three children grew to adulthood and where their laughter and tears, and those of eight grandchildren, echoed from walls and windows that were always decorated by Betsy (mom and grandma) for the appropriate holidays.

But the big old four-bedroom colonial in Seattle's desirable Mount Baker neighborhood had become too large for a now-aging couple, so the time to find a retirement apartment had arrived.

The attraction of moving into inviting new downtown-view quarters at Horizon House, one of Seattle's more sought-after facilities for retirees (and those not yet retired), eased the challenges of the move, particularly since familiar faces from Seattle's business community appeared around each corner.

But with the unfolding challenge of rapidly, and not easily, downsizing to take 40 years of accumulated items from 2,500 square feet plus basement into a place half that size, the memories surrounding the rooms, and many of the items, hung in the air.

In one bedroom, there was the bitter-sweet memory of the arrival of the daughter, born a year after our arrival back in Seattle from the Los Angeles area, who too briefly slept in her crib there.

Sarah Elizabeth, born four days before Christmas in 1973, gave a special meaning to that holiday season. Her brother and sister would sit on the couch and push as close as possible, looking on with smiling fascination while mom held or fed the baby.

Two months to the day later, we found Sarah dead in her crib, a victim of Sudden Infant Death Syndrome (SIDS). In an effort to bring meaning from her death, Betsy and I became involved in the state SIDS organization, first taking support in our pain, then eventually giving back by supporting other SIDS parents who needed help coming to grips with their loss. We learned you take, give back, then move on, once the realization comes that painful memory is replaced by loving memory.

The pain of Sarah's loss found a counterpoint two years later with the excitement of the arrival of Eileen, who bore the burden of being the "subsequent child," a description hung by psychologists on children born following the death of a sibling.

I made a point of being the one to check the sleeping Eileen each night as she lay in the same crib, though different bedroom, so that if she too had died, I'd be the one to discover it this time. As she passed the "at-risk" first year, the fatherly fears passed. But she retained, as the years passed, a special place in the family.

An enduring image for me was of the nightly routine we had when the children were young, of my singing them songs after they had been tucked into bed. I can still hear: "One more song please, daddy!" and Betsy admonishing: "You're being taken advantage of."

Those songs of childhood became part of our family culture, particularly when Michael grew into a young man and learned to play the guitar. As he would be sitting in the living room, in the final years before he married and began raising his own family, he'd be playing and singing to himself and dad would walk in and say: "play me a song, Michael."

Inevitably, it would be one of those songs I sang to Meagan, Eileen and him.

But sometimes it was Dan Fogelberg's "Leader of the Band," which Michael had learned to sing and play. And since it was one of his father's favorite songs, we'd sing it together. And again.

Then there was the room where Meagan and her Brownie troop gathered for their Monday afternoon activities under the guidance of her father, who turned out to have been the first male Brownie leader in the state.

That came about because when Meagan and a couple of friends found there were no Brownie groups they could join, her father said "let's see if this equal opportunity thing flows both ways. Is a man acceptable to lead a troop of girls?"

When I volunteered, the Brownie moms, to Betsy's amusement, called my bluff, welcomed me to the Brownie leaders' team, gave me the largest group of girls. But the moms were constantly supportive and available for questions from the rookie leader who was frequently panicked about creating projects and keeping a dozen second-grade girls focused. And Michael became a member of the group, possibly the first male Brownie in the state.

The empty spot by the front French doors after movers had cleared the area made it harder to picture the Christmas tree that occupied the spot each holiday season, to be surrounded by excited children, or grandchildren and their parents. And the absence of the sofa and chairs made it difficult to recall the candy-filled plastic Easter eggs that were inevitably hidden in and around them.

As we returned in recent days to check out the now-empty house, with its unfamiliar echoes as we moved through each room, an important reality for us, and for all those making large life changes, became clear. The memories don't remain behind in the place where they were made. Rather they travel with us, an essential part of the experiences we gather and carry through the years. Memories to be recalled and savored. Forever young.

 

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Reflections on memories made, but not left behind, in family home of four decades

 

For four decades, it was the place where three children grew to adulthood and where their laughter and tears, and those of eight grandchildren, echoed from walls and windows that were always decorated by Betsy (mom and grandma) for the appropriate holidays.

 

But the big old four-bedroom colonial in Seattle's desirable Mount Baker neighborhood had become too large for a now-aging couple, so the time to find a retirement apartment had arrived.

 

The attraction of moving into inviting new downtown-view quarters at Horizon House, one of Seattle's more sought-after facilities for retirees (and those not yet retired), eased the challenges of the move, particularly since familiar faces from Seattle's business community appeared around each corner.

 

But with the unfolding challenge of rapidly, and not easily, downsizing to take 40 years of accumulated items from 2,500 square feet plus basement into a place half that size, the memories surrounding the rooms, and many of the items, hung in the air.

 

In one bedroom, there was the bitter-sweet memory of the arrival of the daughter, born a year after our arrival back in Seattle from the Los Angeles area, who too briefly slept in her crib there.

 

Sarah Elizabeth, born four days before Christmas in 1973, gave a special meaning to that holiday season. Her brother and sister would sit on the couch and push as close as possible, looking on with smiling fascination while mom held or fed the baby.

 

Two months to the day later, we found Sarah dead in her crib, a victim of Sudden Infant Death Syndrome (SIDS). In an effort to bring meaning from her death, Betsy and I became involved in the state SIDS organization, first taking support in our pain, then eventually giving back by supporting other SIDS parents who needed help coming to grips with their loss. We learned you take, give back, then move on, once the realization comes that painful memory is replaced by loving memory.

 

The pain of Sarah's loss found a counterpoint two years later with the excitement of the arrival of Eileen, who bore the burden of being the "subsequent child," a description hung by psychologists on children born following the death of a sibling.

 

I made a point of being the one to check the sleeping Eileen each night as she lay in the same crib, though different bedroom, so that if she too had died, I'd be the one to discover it this time. As she passed the "at-risk" first year, the fatherly fears passed. But she retained, as the years passed, a special place in the family.

 

An enduring image for me was of the nightly routine we had when the children were young, of my singing them songs after they had been tucked into bed. I can still hear: "One more song please, daddy!" and Betsy admonishing: "You're being taken advantage of."

 

Those songs of childhood became part of our family culture, particularly when Michael grew into a young man and learned to play the guitar. As he would be sitting in the living room, in the final years before he married and began raising his own family, he'd be playing and singing to himself and dad would walk in and say: "play me a song, Michael."

 

Inevitably, it would be one of those songs I sang to Meagan, Eileen and him.

 

But sometimes it was Dan Fogelberg's "Leader of the Band," which Michael had learned to sing and play. And since it was one of his father's favorite songs, we'd sing it together. And again.

 

Then there was the room where Meagan and her Brownie troop gathered for their Monday afternoon activities under the guidance of her father, who turned out to have been the first male Brownie leader in the state.

 

That came about because when Meagan and a couple of friends found there were no Brownie groups they could join, her father said "let's see if this equal opportunity thing flows both ways. Is a man acceptable to lead a troop of girls?"

 

When I volunteered, the Brownie moms, to Betsy's amusement, called my bluff, welcomed me to the Brownie leaders' team, gave me the largest group of girls. But the moms were constantly supportive and available for questions from the rookie leader who was frequently panicked about creating projects and keeping a dozen second-grade girls focused. And Michael became a member of the group, possibly the first male Brownie in the state.

 

The empty spot by the front French doors after movers had cleared the area made it harder to picture the Christmas tree that occupied the spot each holiday season, to be surrounded by excited children, or grandchildren and their parents. And the absence of the sofa and chairs made it difficult to recall the candy-filled plastic Easter eggs that were inevitably hidden in and around them.

 

As we returned in recent days to check out the now-empty house, with its unfamiliar echoes as we moved through each room, an important reality for us, and for all those making large life changes, became clear. The memories don't remain behind in the place where they were made. Rather they travel with us, an essential part of the experiences we gather and carry through the years. Memories to be recalled and savored. Forever young.

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For fourth-generation Stanton, stewardship trumps profits at Washington Trust Bank

"When something has been in your family for four generations, stewardship becomes more important than a focus on profits," says Peter F. Stanton, chairman and CEO of Spokane-based Washington Trust Bank, in explaining how his company escaped most of the banking turmoil of the past four years.

 

Peter F. Stanton
Peter F. Stanton

"That doesn't mean we spend our time looking in the rearview mirror," added Stanton, who was named president in 1990 to become the fourth-generation head of the bank that is now the oldest and largest privately owned commercial bank in the Northwest.

 

"We're focused on the future, but securing that future has always led us to have concentration limits on our lending," adds Stanton, whose great grandfather bought the bank, founded in 1902, in 1919.

 

Pete Stanton was 34 when he assumed the role of president, second youngest bank president ever in Spokane, second only to his father, Philip Stanton, who had become president of the bank in 1962 at age 31. As Phil Stanton turned the reins over to his son, he remained as chairman for most of the decade of the '90s.

 

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

 

At their worst, Washington Trust's non-performing assets "were in the high 4's," concedes Stanton, almost four times the current level of 1.24 percent. "But at its worst, we were about half of what most of our competitors were."

 

It was the soaring number of non-performing loans from zealous construction and real estate lending that brought competitors to their knees.

 

Sterling Savings Bank, publicly traded and about twice the size of Washington Trust, was faced with staggering totals of soured loans and was forced by the FDIC and state regulators to oust its top two executives, bring in new leadership and raise $300 million. It accomplished that and more and emerged from under the thumb of regulators to begin anew under aggressive and acquisition-minded fresh leadership.

 

American West, about half WTB's size, actually sought bankruptcy protection to avoid a takeover by regulators and re-emerged under the new ownership of SKBHC Holdings, LLC, a bank holding company backed by private equity groups.

 

And Bank of Whitman, although headquartered in Colfax and with assets of only about $580 million, but with a major presence in Spokane, became one of the state's failed banks when it was closed by state regulators in August of 2011. Its deposits and liabilities were assumed by Tacoma-based Columbia Bank.

 

Washington Trust actually took advantage of the turmoil other banks found themselves in when, in February of 2009, it acquired tiny Pinnacle Bank of Beaverton, which had been closed by Oregon bank regulators, to expand the Spokane bank's role in the Portland area.

 

Despite the re-emergence of its pre-crisis competitors under new leadership and financing, Washington Trust has held its own, seeing its net income, loan volume and lending in targeted sectors advance dramatically in the past two years.

 

And Stanton enthuses that "2012 is going to be a great year for us," noting that net income after two quarters was $11.9 million, compared with $16 million for all of 2011, which was up dramatically from the $9.1 million in all of 2010.

 

Yet caution remains the watchword for the bank, which boasts $4 billion in assets and a $3 billion loan portfolio generated from 40 offices and financial centers spread across parts of three states.

 

Stanton points out that "our loan loss reserve, compared to nonperforming loans, is 200 percent, while most banks have a reserve level under 100 percent."

 

"That's another of those things that comes about when you're private." He adds. "You have more interest in a fortress balance sheet than trying to bring everything possible to the bottom line."

 

"My dad was fond of saying that telling a bank it has too much capital is a little like telling a pilot he has too much runway," Joked Stanton.

 

I asked Stanton if Washington Trust was likely to be an acquirer as consolidation occurs, or become an acquisition.

 

"There for certain will be consolidation because of overcapacity," he replied. "And I think we're likely to be on the acquiring side of that for several reasons. One is because we've decided we wouldn't make very good hired help."

 

In fact, an acquisition binge wouldn't be the first time that has happened for Washington Trust, since in the '80s and '90s, its expansion came about largely through acquisition of successful banks in Central Washington and Northern Idaho. Plus Stanton created a private banking and commercial loan presence in Western Washington, where about a third of the bank's business is now done.

 

I asked him if there's a fifth generation waiting in the wings and he replied: "We have a couple of fifth generation kids working at the bank, but in a large complicated business there are no promises."

 

"We have never said that as a family we need to have a family member at the top, he said, adding, "There has been several times when we have had a non-family member running things," including current president and COO Jack Heath. But a Stanton has always been the chairman.

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Two years on, Leiweke remains admirer of Seattle sports teams and their fans

Although it's been more than two years since Tod Leiweke was lured to Tampa to turn around that city's hockey fortunes the way he restored the luster of the Seattle Seahawks, he remains an ardent admirer of the Seattle sports scene and its fans. He also sings the praises of his current community-minded owner, Jeff Vinik, the way he touted the community focus of his Seattle boss, Paul Allen.

 

While now far distant in terms of miles, he remains an up-close booster of the Seahawks, whose fortunes he turned around, and the MLS Seattle Sounders, whose franchise he helped create, during the seven years he set down roots in the Seattle area.

 

Tod Leiweke
Tod Leiweke

"I love the idea of the Sounders playing before more than 60,000 fans," Leiweke enthused about the MLS team's recent contest. "But think about the fact that in the space of five days, the Seattle area turned out 170,000 fans for the Sounders, Seahawks and the (University of Washington) Huskies. That's unbelievable for any region."

 

But Leiweke, a self-described "eternal optimist," declined to involve himself in the controversy over the proposed new sports arena in Seattle's SoDo District south of downtown, other than to praise Seattle-raised investor Chris Hansen who wants to build the facility on land he now owns.

 

I asked him, in a recent telephone conversation, whether Hansen's dream of attracting both NHL and NBA franchises for Seattle to play in his planned but not-yet-approved arena, was realistic.

 

"It could work, yes," he replied. "But for the market to absorb two teams won't be easy."

 

Almost from the day in early 2010 that Boston financier Jeffrey Vinik bought the NHL Tampa Bay Lightning and the sports and entertainment facility since renamed the Tampa Bay Times Forum and moved his family to Tampa, he went Leiweke hunting. He was rebuffed at first in his efforts to have Leiweke forsake Seattle and come to Florida as CEO the team and the entertainment arena.

 

But by the time Leiweke announced in July of 2010 that he had accepted the position as CEO of Vinik's Tampa Bay Sports & Entertainment, as well as its subsidiaries the Lightning and what was then the St. Pete Times Forum, he acknowledged that an ownership stake in the parent company had closed the deal.

 

The Lightning needed to rebuild a brand battered by three years without a postseason appearance and two years of mismanagement by the previous owners.

 

Coming to Tampa and the Lightning was a return for Leiweke to his first love, hockey. He had been president of the Minnesota Wild, which he built into a major NHL success, and before that was with the Vancouver Canucks, prior to his hiring to turn around the Seahawks.

 

When Allen had coaxed Leiweke then 50, to Seattle to turn around the fortunes of a once-proud franchise, the team was believed losing money, but in fact, no one knew for sure because until Leiweke arrived to bring business acumen and marketing savvy, there apparently were no budgets. As Leiweke once confided, "when they ran out of funds they just asked Paul for more."

 

When Leiweke arrived in Seattle in 2003, the season-ticket total was 30,000 and his first game as CEO wasn't a sellout. But by the time the Seahawks reached their only Super Bowl two seasons later, every game was a sellout and season-ticket holders now top 60,000.

 

This year was to bring two big visibility opportunities for Tampa Bay Sports & Entertainment. But storm clouds threatened both. A major renovation of Tampa Bay Times Forum was carried out to make it ready to host the Republican National Convention, which was threatened with cancellation but in the end was only delayed by Hurricane Isaac.

 

But since the bulk of convention week took place, the facility, ranked the nation's fourth busiest, got good visibility as backdrop for the political gathering.

 

"The arena wasn't ready when the new ownership arrived and so we funded a $50 million renovation of a publicly owned building," Leiweke said. "The building looks almost new now."

 

The other big visibility opportunity was for the Lightning, plans to mark the franchise's 20th anniversary, described by one observer this way: :The 2012-13 season was supposed to be marketing gold, with the celebration of Tampa Bay's 20th to be the thread that tied together an expected on-resurgence."

 

"This has to be frustrating, even for a self-described 'eternal optimist,'" I suggested to Leiweke.

 

"I don't really feel that way," he replied. "If you look up Jeff Vinik, you see a guy who is committed world class and getting a right-sized collective bargaining agreement is part of us getting that done."

"I have always believed that no one follows a pessimist," he added. "Optimistic leadership is the key to leading."

 

"We have all the stuff for the 20th planned," Leiweke said. "If we have to compress it, we will. The best thing we can do for this franchise is put it on a trajectory for the next 20 years."

 

In talking about Vinik's role in community, Leiweke is overboard in his enthusiasm for a unique charitable program the owner put in place for the Lightning. Vinik and his  wife honored a Community Hero at each of the Lightning's 41 regular season games, and awarded a $50,000 check to a non-profit charity of his or her choice, a total of more than $2 million year.  

 

"Even though we're in a work stoppage, he announced he's going to make the same $50,000 donations," Leiweke said. "I've been lucky to work for two pretty good owners."

 

Our first telephone conversation took place just after Leiweke had returned from a 90-minute outing on his paddleboard off Anna Maria Island, where the Leiweke family has a retreat about 60 miles from Tampa.

 

"I love it out there," Leiweke said of his paddleboarding, a sport he fell in love with after moving to Tampa Bay. "But something big was just surfacing and I told myself 'time to get home.'" That's the kind of challenge that doesn't occur when he pursues his other entertainment of "beer-league" hockey. 

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Mike Luis' book offers perspectives on Seattle's global role today, and tomorrow

Michael Luis, then in his early 30s and a vice president with the Greater Seattle Chamber of Commerce, recalls two incidents in the early 1990s that brought home to him that Seattle's star was rising rapidly on the national business stage.

.

The first was 20 years ago this month when he walked past the office of legendary Chamber President George Duff and saw a "huge blow-up of a Fortune magazine cover with the headline 'Best Cities for Business.'"

 

Mike Luis
Mike Luis

There was the Seattle skyline behind Boeing CEO Frank Shrontz, Microsoft CEO Bill Gates and Minoru Arakawa of Ninetendo of America, all pictured with then-Mayor Norm Rice. "I had glimpsed the holy grail for a public affairs staffer at a chamber of commerce," as Luis characterized it in is just-published Century 21 City.

 

The second incident, which he describes as "the only time in my life I felt like a rock star," was at a 1994 gathering of chambers of commerce staff members in Ft. Worth when "colleagues from around the country knew all about Seattle and more than a few of them asked me if I could find them a job there."

 

It's long past being news that, as the 20th Century wound down and this century began to unfold, Seattle had become a place where entrepreneurial success and innovation had put the region's stamp on the economy of not just the nation, but also the world.

 

But Luis, with his background of long-time involvement in public-policy from government to housing issues, has written a book that puts some interesting perspective on the evolution of the Seattle area's image. He delves into issues like why has Seattle been successful and what questions that haven't been asked might be important as the 21st century goes forward.

 

And in describing Seattle's evolution, he provides a detailed look at the larger question of how metropolitan areas turn themselves into the essential building blocks of the global economy.

 

Luis, a third-generation Seattle resident who resides with his wife and three children in the same Medina home where he and his father both grew up, has been involved for the past 25 years with the issues and leadership efforts that have impacted the growth and development of the Seattle area economy.

 

Elected this year to the Medina city council and now serving as Medina mayor, Luis has also been involved in projects with other cities in this country and Europe and has engaged in economic research involving regions around the world.

 

There's no shortage of books about Seattle since nearly two dozen titles relating to the city can be found on Amazon's site. They range from Bill Speidel's irreverent look at Seattle's founding wealth, Sons of the Profits, to Murray Morgan's Skid Road, Emmett Watsons' Digressions of a Native Son and Walt Crowley's look at Seattle in the '60s,Rites of Passage to works on architecture, hikes and history and trees and parks.

 

But Luis' focus on how Seattle became home to world-leading companies and a magnet for talent from every continent, along with a future spin on what that means, presents an economic look at Seattle's rise and emergence as a global city.

 

Luis, in a visit over lattes at his neighborhood coffee shop, suggested that this region needs to develop some data on why some smart people come here and stay, but also why some opt not to come here.

 

"Although we grow some of our own smart people for the global companies here, the hiring for those companies is global," he notes. "So getting people to want to come here in the future is a key and we are missing any notion of why people stay here."

 

"And we don't know why some who were sought by these global companies decided either not to come here, or not to stay here once they did come, and learning those things could be important to this region's continued competition against other superstar cities," he added. "A successful business will have a strategy to learn by contacting former customers to ask why they left and some similar concern about star talent that we either failed to get, or lost, might well be of value."

 

Luis argues in his book, as he has in policy studies and other discussions, that "in-migration of highly skilled people from elsewhere in the U.S. and abroad constitutes the single most important factor that will determine the future success of the Seattle economy."

 

Luis has allowed himself the luxury of wandering across a wide array of growth, globalization and why-here discussion points. But perhaps his most interesting discussion centered on the economic implications of climate change.

 

In noting that coastal areas, like Seattle, Portland and the Bay Area, "offer a climate-friendly alternative" with lower individual carbon footprint because of mild weather in both summer and winter, Luis sets the stage for some interesting future discussions.

 

"If West Coast metropolitan areas begin absorbing a larger share of the nation's growth, more Americans could lower their household carbon footprint while minimizing the impact on their lifestyles," Luis writes.

 

"I realize I will not win friends by suggesting that Seattle should invite more development and growth, but the truth is the Pacific Coast does offer a climate-friendly alternative" for future growth and development, adds Luis, who for 10 years ran The Housing Partnership, a think tank that explored market-rate housing affordability. "Yet West Coast areas have among the nation's most restrictive policies on housing development."

 

Offering a thought over latte that both of us realized isn't likely to find much traction in national political policies, Luis observed "Nationally, we should be encouraging people to live on the West Coast rather than the Sun Belt. To pat ourselves on the back about all our environmental virtues but, at the same time, restrict growth and push it to the Sun Belt smacks of hypocrisy."

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Washington lieutenant governor post once seen as an easy road into statewide office

The fact that the role of lieutenant governor in Washington was basically envisioned in the state constitution as a part-time position made it historically a job coveted by those who first made a name outside of politics, then sought an easy road into statewide office.

 

William Jennings (Wee) Coyle, a former football star and decorated war hero, started it all in 1920 when he parlayed his name familiarity into a landslide victory in the race for the state's second-highest elective office, hoping to become governor four years later.

 

Coyle was only 32, a handsome former UW star quarterback just back from the World War I battlefields when he strategized to use the lieutenant governor role to position himself to run for governor, a race he ran in 1924, but lost.

 

For most of the next seven decades, the office was held by those who had first risen to prominence beyond the political sphere.

 

That's now merely a part of political history in Washington since current Lt. Gov. Brad Owen, a Democrat and former state legislator from Shelton, has brought importance to the position beyond the constitutional ones of filling in for the governor and serving as presiding officer of the State Senate.

 

During the four terms since he was elected in 1996, Owen, who is running for re-election this year, has created for the office the role of a goodwill ambassador for the state in international trade and promotion of Washington products overseas. Plus he has led trade missions in parts of the world where the title "lieutenant governor" opens doors.

 

But the history of the position, next in line for the state's top elective office if anything happens to the governor, has provided some interesting political lore.

 

The fact the lieutenant governor is often described as "a heartbeat away from the governor's chair" has seemed to hold little importance for Washington voters, despite the fact that three of the first six lieutenant governors rose to the top state office because of the deaths of the governors.

 

Colorful Victor A. Meyers, a mustachioed maestro who earned a reputation as a big-name band leader, decided to seek the office as a Democrat in 1932. He won and was re-elected four times before being defeated in 1952 by Emmett Anderson, who had gained fame as the "Grand Exalted Ruler" of the Elks.

 

But Anderson made an unsuccessful run for governor in 1956 and John A. Cherberg, a failed football coach at the University of Washington, ran for the job as a Democrat and won, commencing a 32-year stand in the job that made him the longest tenured lieutenant governor ever in the nation.

 

The most interesting effort to boost a non-politician into the job came in 1968 when then-Gov. Dan Evans and his state Republican chairman, C. Montgomery (Gummie) Johnson, hatched a plan to oust Cherberg from the office, which by then he had held for 12 years.

 

They were seeking to boost the fortunes of Art Fletcher, a black city councilman from Pasco who had gathered some national prominence for development of a self-help program in the East Pasco ghetto.

 

Johnson knew that if a candidate like Fletcher, the state's first African-American to be touted for statewide office, was to have a chance, he had to first prove that he could beat a name candidate.

 

So Johnson talked popular and prominent hydroplane driver Bill Muncey into running for the post, once confiding off the record that Muncey had wanted to know what a lieutenant governor did. "Not a lot," Johnson had replied, with some honesty.

 

The political ploy worked to the extent that Fletcher, who a year later would earn a position in the Nixon Administration, won the GOP primary, but failed to dislodge Cherberg in the general election.

 

By the time he retired in 1988, Cherberg had built a reputation for integrity and even-handedness in his role as the State Senate's presiding officer. And with the election of Joel Pritchard, a respected Republican congressman and former legislator, the job took on a legitimacy and importance that Owen has continued to build on during his 16 years in the office.

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Clean-energy angel leader sees greater challenges ahead for cleantech investing

As the California Clean Energy Angel Fund that she launched five years ago winds down, Susan Preston's analysis of the opportunity to create a second "cleantech" fund has guided her to conclude "the bloom is off the rose of clean-energy investing."

 

"We have done a great deal of analysis into raising a second fund, and unfortunately, market timing is quite bad," said Preston, the former Seattle attorney who formed the first-of-its-kind angel fund for seed and start-up stage clean energy companies in August of 2007 and became its general partner. "The public and private markets are down on clean energy and the venture model itself is being questioned."

sue preston
Susan Preston CalCEF 

Byron McCann, co-chairman of the Northwest Energy Angels, agrees with Preston's assessment to the extent that "there isn't the excitement in the market that there was. All the fervor and bluster have faded to the point where we do deals that make sense on their own."

 

But McCann, whose angel group focuses on young "cleantech" companies in the Pacific Northwest, disagrees to the extent that he says he has seen "a robust deal flow, increased membership and angels interested in the clean-tech space."

Byron McCann
Byron McCann
Energy Angels 

In fact, his angel group, formed in 2006, had its best first half this year, by July investing more than $1 million in six companies, with the investments focused on energy efficiency, green-building technology and biomass power

 

Preston and McCann will be together on a panel Friday in Seattle at the Northwest Energy Angels Leadership Breakfast, where the topic of discussion will be Portland author Ron Pernick's new book, "Clean Tech Nation."

 

Pernick indicated his sense that "without a concerted energy policy, pieces of the energy puzzle may be in trouble," but added "states and cities are pushing for" clean-energy initiatives.

 

Pernick, Preston and McCann all agreed, in separate telephone conversations, that the erosion of venture-capital interest in clean-tech investments this year has brought challenges to the angel side of investing in the sector. Statistics indicate that venture funding in the clean-tech sector is off about 30 percent this year.

 

"Venture's turn off means venture funding no longer represents second-round financing for young companies, and IPOs are not likely, so that limits the exits and that limits the interest," Pernick said.

 

"Venture interest is down, but hasn't disappeared," said McCann. "A venture investment usually takes more money than investors anticipated and that's even more of a challenge in clean tech, which takes more money and more time, making it more complicated than what a lot of us are used to."

 

"So it's a challenge for angels, who have to decide what kind of a deal is this? Am I bridging to a venture round or is this an angel deal where we're going to grow the company," McCann said.

 

Preston, in her typically direct fashion, said "a lot of the cleantech companies were walking dead and VC's kept putting money into the walking dead. We all have these walking dead or zombies that we keep piling money into looking for some turnaround and instead the outcome is a turnoff."

 

Early this year, I had Preston keynote a gathering at the Coachella Valley Economic Partnership in Palm Desert and she was bullish about the sector and about the prospects for a new fund.

 

But what she found in the months that followed was the erosion of venture-capital interest and waning interest on the part of major institutional investors.

 

"All the individual investors wanted to do another fund and we had positive feedback from all the limited partners," Preston explained. "But the institutional investors were going to funds focused on later-stage investing and fewer were looking at cleantech."

 

I asked her if there was any cleantech area for which she was still bullish and she said "I see a lot of opportunity in energy efficiency," noting that one company in which her fund invested is Berkeley-based Alphabet Energy, which captures waste heat and turns it into energy.

 

Preston helped form the Seattle women's angel network, Seraph, in the late '90s and was a Kauffman Foundation entrepreneur in residence in Seattle. She was retained by the non-profit California Clean Energy Fund (CalCEF) six years ago to develop the model for a seed-stage clean energy fund.

 

She moved to the Bay Area to manage the $11 million boutique fund, in which the non-profit CalCEF was the key funding source, supported by a group of individual investors.

 

Preston, McCann and Pernick all agreed that the predictability that attracts investors requires a national energy policy.

 

"This country has a choice to make relating to energy and right now clean-energy has been villanized by partisan politics," said Pernick. "All energy industries from oil, coal and nuclear to renewable and clean require government support, both regulatory and financial."

 

McCann scored "the vaguery of energy policies" and Preston suggested that "what would really help is a clean-energy act," noting that "regulation is essential in our industry." But she added, "My hope of federal legislation is very low."

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While Dems have had lock on governor's office, GOP has longer hold on Sec. of State

The GOP lament in Washington State about the fact it's been 32 years since a Republican was elected governor pales somewhat compared to how long Democrats in the state have watched a string of Republicans hold the post of secretary of state.

 

For Rob McKenna, the two-term state attorney general who is the Republican nominee in the governor's race, the long Democratic tenure in the governor's mansion, longest rule in the nation by either party, has provided the opportunity to tell voters "we haven't refreshed this place in a generation." 

 

sam reed
Sam Reed

But in the race for secretary of state, the post from which Sam Reed is retiring after three terms, Democrats will be seeking to reverse their almost half-century absence from the office that oversees state and local elections, corporate and non-profit filings and records and is supervisor of the State Archives.

 

A Republican has held the post since A. Ludlow Kramer, a young Seattle city councilman, ousted incumbent Victor A. Meyers in 1964. So it's been 52 years since Meyer's 1960 victory as the last Democrat elected to the position. The secretary of state is second, behind the lieutenant governor, in the line of succession to the office of governor.

 

It was in 1964 that Dan Evans defeated Democratic incumbent Albert D. Rosellini, who was seeking a third term. The two Seattle Republicans, Evans and Kramer, thus both beat incumbent Democrats despite the fact that Lyndon Johnson carried the state overwhelmingly in the presidential vote, suggesting that Washington voters can sometimes make independent judgements about state and national races.

 

Washington's history with secretaries of state is in marked contrast to the background of the office in Oregon, where it has long been viewed as a stepping stone to the governor's office.

 

In Washington State, it's been the office of attorney general that has been seen as the stepping stone, with the last three, including outgoing Gov. Christine Gregoire and now-GOP candidate McKenna, looking to occupy the governor's mansion.

 

Two of Oregon's best-known and respected political figures made stops at the secretary of state post en route to larger roles. Mark Hatfield was elected to the position in 1956 and two years later won the governor's race while Tom McCall was elected in 1964 and two years later won the first of his two terms as governor. Hatfield went on to the U.S. Senate, where he served for 30 years and was even briefly considered for the vice presidential spot with Richard Nixon in 1968.

 

If the Democrats in Washington think they've been shut out of the secretary of state post for a long time, consider that Barbara Roberts, in 1991, became not only the first woman to hold the position in Oregon but also the first Democrat elected to the post in more than 100 years.

 

Six of the last eight Oregon secretaries of state ran for governor, with Hatfield, McCall and Roberts being elected and three others losing in the general election.

 

I asked Reed why he thought the Washington secretary of state position hadn't also produced gubernatorial aspirants.

 

He admitted that he had been urged to run for governor in 2004 as the GOP sought a candidate to oppose then-Atty. Gen. Christine Gregoire in seeking the position being vacated by Gary Locke, who decided against seeking a third term. State Sen. Dino Rossi eventually was the GOP candidate, losing by a handful of votes.

 

"I thought seriously about it but decided that I enjoyed the responsibilities of secretary of state, so I passed," he said. "It was a matter of thinking, 'why let the ego trip of running for governor interfere with doing what you like to do.'"

 

So he ran and was re-elected twice more to the office he had actually prepped for over a period of decades, working first with Kramer in the late '60s and with Bruce Chapman, who held the office in the late '70s. Then he spent 20 years as Thurston County auditor, a local-level version of the responsibilities handled by the secretary of state at the state level. He was elected to the county post in1980 and re-elected four times.

 

And Ralph Munro, Reed's predecessor who served five terms as secretary of state, said having worked in the governor's office for a number of years under Evans left him with "no desire to be governor."

 

He admitted to me that he had been lobbied to run but that "I never saw the office as a stepping stone. I really enjoyed being secretary of state."

 

Republican candidate Kim Wyman, who followed Reed into the Thurston County auditor's office in 2000, faces former state Sen. Kathleen Drew, a Democrat to see who replaces Reed. Thus no matter which one wins next month, the next secretary of state will be a woman.

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