Washington has been more attuned than most states to the reality that creating successful economies in rural communities results from helping them grow and nurture what they have rather than merely trying to attract businesses from elsewhere to relocate.
Recruitment and retention, generally in that order, have been the key words that guided the programs of economic development organizations in smaller communities across the country for years, usually with marginal success. But retention has been a generally amorphous patchwork.
But for a quarter century as senior manager in the Washington State Department of Commerce and head of the Office of Economic Development and Competitiveness, Forman has kept his focus on enhancing the success of rural communities by emphasizing the words nurture and growth.
Forman, who has served under five governors, a similar number of department heads and in an agency that has occasionally changed names to connote sometimes different emphasis, is retiring from the role he stepped into in 1991 and soon thereafter began crafting a rural-support image for the state.
And his vision for rural enhancement has grown over the years, coming to emphasize the importance of entrepreneurs and more recently the importance of young people to their communities.
He once shared with me the view that if programs are to enhance local economic development they "must nurture the belief that young people who grow up in rural communities can be guided to start businesses in their own community rather than moving to urban centers."
"Just as young people are looking at new ways to enter the work force other than working for someone else, so too are communities looking for ways other than recruitment of businesses from elsewhere to grow their economies," Forman told me in an interview last year.
Now Forman is turning over the role of guiding rural communities on successful economic development paths to Anne Nelson, who has started several businesses and worked as a community and economic developer before becoming an instructor at Walla Walla Community College in business, entrepreneurship and marketing.
In an example of Forman's typical sense of humor, he says "she will essentially be serving those rural areas as Executive Innovator and Enlightener of Ideas Officer (or EIEIO as we say on the farm)."
In fact, Nelson shared with me an incident in the Eastern Washington community of Dayton that she thinks may serve as a model for what she hopes will emerge as urban-rural mentoring.
Seems a much-loved bakery in Dayton was closing because the owner was retiring. Nelson heard discussion about it at a local restaurant, was aware of a young woman who was hoping to someday own a restaurant and created a contact with retired Seattle restaurant owner Paul MacKay. The founder of El Gaucho and a chain of other restaurants had retired with his wife a few years ago to Walla Walla to a 100-acre spread to grow wheat and grapes.
But once he learned of the Dayton bakery situation, MacKay soon got the young woman set up as owner manager of the bakery.
"I see the support for that young, aspiring bakery owner from Paul MacKay as a model we can see more and more of across this state," Nelson said. "The key is that rural entrepreneurs are clear about their sense that mentoring is even more important than capital."
The program, called Startup365, has been running for about a year under the management of Greater Spokane Inc., the region's chamber of commerce, aimed at connecting Spokane area business people as mentors for entrepreneurs and small businesses in Asotin and Whitman counties.
But Nelson says Startup 365, created by the legislature, is aimed at retaining the intellectual wealth and economic vitality of rural areas by focusing on entrepreneurship and small business growth. "That will help communities flourish organically and will be a priority program that I can spend more time on, functioning a large part of my time in Walla Walla."
"I do believe that urban-rural mentorship will be a key piece in building rural businesses, especially as I see the urban entrepreneurs being more in touch with the technologies and tools that help businesses be successful," said Nelson.
One of those technology tools, Skype, she hopes will be employed at least once a week in connecting rural entrepreneurs with their urban mentors. The Spokane program is being supported by Avista, the Spokane-based utility that has a long track record of supporting business development in the region.
But before Nelson gets to focus on developing the urban-rural mentorship idea, her first order of business will be overseeing in November the fifth annual Global Entrepreneurship Week activities in all 39 counties.
Although in Washington, the annual celebration of innovators and job creators involving 88 countries last year became Global Entrepreneurship Month. Nowhere is GEW, or GEM in this state, treated as a bigger deal than what Forman put in place in Washington, which is the only state with events in all counties.
Jack Schultz, whose focus on assisting rural economic growth helped him come to be known as the guru of rural economic development as keynoter at more than 400 conferences around the country and author of "Boomtown USA: The 7 ½ Keys to Big Success in Small Towns," credits entrepreneurial support as a key to rural success.
Schultz, of Effingham, IL., whose Agracel Inc. is the largest industrial development company focused on developing projects and creating jobs in rural towns, told me he had not heard of a mentorship program like Startup 365.
But Schultz, who said he has long been an admirer of Forman's, said "I think it makes a lot of sense and is something very innovative."
Referring to findings from his visits to hundreds of small towns to gather information for his book, Schultz said in an email: "Embracing entrepreneurism in communities was a key factor which differentiated great communities from also-rans. Increasingly, we are seeing those great communities taking it a step up by tying their local entrepreneurs up with their young people, educating them on both entrepreneurship and also the great things happening in the private sector of their towns."
As legislators and their paid consultants struggle with how to answer the State Supreme Court’s latest education-funding question about determining “competitive market rates” for educators, a couple of thoughts press themselves to the fore as the drama moves toward a final act.
First, there’s an unfortunate sense that, in the press by the justices to make it clear to legislators which branch of government is ultimately in charge, what’s emerged is an effort to ensure that financial support of educators becomes the answer to education quality woes. No consideration is given to support for education in a broader sense.
Second, the well-worn phrase “You can’t just throw money at a problem” is one that seems to have eluded the state high court in its on-going education-funding struggle with the legislature over how much is enough.
At issue is the court’s January 2012 ruling, in what is now known as the McCleary case, that the legislature violated the state constitution by failing to amply fund basic education. Since then the court has found the lawmakers in contempt for not providing sufficient funding and has even threatened to take over the budgeting process (presenting what would seem to an amazing cartoonists’ opportunity).
Now the court has told the lawmakers to determine “competitive market rates” in terms of teacher salaries across the state and a final report on that point is due from a legislative consultant in November.
After that, lawmakers will try to find common ground on the sum of money required for salaries and where it is going to come from. The Legislature is supposed to take votes in 2017, or in the view of lawmakers in 2018, to put those final pieces in place in what has come to be known as the McCleary case.
Comes now the observation of Donald Nielsen, whom I best describe as an education “change agent,” whose views are dramatically suspect and irritating to those who disagree with him because he has no hidden agenda. He’s merely a business executive who made his fortune and decided nearly a quarter century ago to spend his time and money in the next phase of life seeking to make basic education better.
Nielsen is not an educator. But he is someone who is passionate about public education and has focused much of his attention on it since the early ‘90s, first traveling the country in search of education ideas that are working, then serving eight years on the Seattle School Board and a final year as president. His book, “Every School,” has brought his thoughts on education reform to the fore over the past couple of years in radio talk shows and newspaper interviews around the country.
“Schools do not have a funding problem, they have a regulatory problem,” Nielsen suggests. “If school administrators could spend their existing money as they believe is needed, they would spend it quite differently, and we would get better results.”
His most in-your-face message is that “teachers are not underpaid, they are underemployed. This is not a compensation issue, it’s an employment issues.”
“The average teacher in Seattle, in 2013, was making $70,000 a year, employed for 1320 hours,” he said. “All normal jobs employ people for 2080 hours a year so If that same teacher were employed for a normal year, his or her compensation would $110,300 a year on that 2080 basis.”
“Even beginning teachers who start at $40,000 a year are being paid the equivalent of $63,000 year,” he added. “In both cases, the teacher gets a benefit package that no private employer could afford to replicate.”
Neither of these compensations is low,” Nielsen added. “They are very competitive, and in rural areas, teachers are already among the best paid people in the community.”
Discussion by the justices has never touched on suggesting the lawmakers focus on how the money is being spent, only how much is being spent, which makes another suggestion from Nielsen the kind of thing that at least might be in the discussion hopper.
“We need are variable contracts for teachers: A nine month contract, a ten month contract and an eleven month contract, meaning the latter would make the $110,000 and the former would make the $70,000,” he said. “Let the teachers decide what contract they want and let the district decide who gets each type of contract,” suggesting that approach could allow for some education options for different students.
Unfortunately, it’s still uncertain whether the final act in this drama will be played out on the judicial or legislative stages since the nine justices of the state’s highest court have pressed the lawmakers, including with a contempt funding, to spend more dollars on education. At issue is the state’s constitutional mandate for adequate funding of basic education.
The justices, as far as I can tell, have never mentioned that lawmakers should also consider how the education dollars are being spent and could better education result from more insightful use of the dollars the lawmakers appropriate.
Maybe there’s still time, as the lines for the final act are just now being written in Olympia, for the idea of quality of expenditure rather than just quantity of expenditure to be raised.
In a case replete with issues relating to powerful education forces focused only on dollars, it might be worth combatants who finally seem hopeful of averting a real constitutional crisis to be aware of an unsettling statistic that Nielsen has included in his book.
In summing up the details of the chart in his book, Nielsen notes: “We now spend three times as much per child in inflation-adjusted dollars as we did in 1970 and we also have four times as many adults in our schools with only eight percent more children. And we’ve had no measurable improvement in academic achievement.”
They are called "Ayahuasca Circles." And in with-it places like New York, Washington, Chicago, Silicon Valley, Los Angeles and, yes, Seattle, the in-crowds are being drawn to evening gatherings to share a tea made from a natural drug with ancient Amazon ties that takes them on group "trips" where spiritual revelations occur.
(As the 15th anniversary of 9/11 nears, a compelling question to ponder is whether the global regard for us that existed then, as evidenced by the outpouring of grief that came that day in our behalf, remains our national treasure or whether it is merely a squandered legacy.
On the 10th anniversary, I shared a piece written a few days after that tragic 2011 September day by a former, now late, United Press International colleague, Al Webb, who did a wrap-up of the grief that citizens of every country shared on our behalf. Webb's article, written then from his post in London, captured that display of shared pain in a way that deserves, or rather requires, remembering. So I share it here again.)
By Al Webb
LONDON (UPI) -- A small girl with a Cockney accent shyly waved a tiny American flag, and a queen brushed away a tear. In a Scottish town that has known its own tragedy, a lone church bell tolled. On a German river, foghorns sounded a low moan.
Across countries and continents, waves of sympathy for a nation in anguish rolled on. A young woman in a Kenyan park wept over the sad headlines in newspapers spread on the ground. A one-time terrorist donated blood for the victims. Hundreds stood in line in cities from Dublin to Moscow to sign books of condolences.
And over the outpouring of grief and mourning for the lives lost in the boiling flames and rubble of the World Trade Center towers and a wing of the Pentagon, time and again came the strains of "The Star-Spangled Banner," sometimes in places where it had never been sung before.
In a gesture reminiscent of John F. Kennedy's "Ich bin ein Berliner," symbolizing his solidarity with another troubled people a half century ago, the Paris newspaper Le Monde perhaps summed it up best: "We are all Americans."
In London, where the little girl with the funny accent and her American flag pressed her damp face against the gates, the band performing the traditional Changing of the Guard at Buckingham Palace suddenly did something it had never done before -- it struck up "The Star-Spangled Banner."
For 45 minutes, the Mall in front of the palace became a little piece of America for hundreds of its citizens who were there because there were no planes to take them home. And the band of the Coldstream Guards played on.
As tear-stained faces lifted and sang along, as Americans and British and other nationals waved Old Glory, the marches rolled -- "The Liberty Bell" after the national anthem, followed by "The Washington Post March" and "Semper Fidelis" and finally, heart-rendingly, "When Johnny Comes Marching Home."
What the Coldstream Guards had triggered was the greatest mass demonstration of grief in Britain since Princess Diana was killed in a car crash four years ago. And as with Diana's death, a carpet of flowers, children's toys, poems, letters, all illuminated by tiny candles, built up this time at the fortress-like U.S. Embassy in London.
Amid the hundreds of bouquets, a single American flag was wrapped around a tree. One woman pressed her tear-dampened lips to its fringe in a soft kiss.
The sweeping tide of mourning reached its crescendo at 11 o'clock Friday morning when Britain, France, Germany and scores of other countries in Europe, Africa and Asia went silent for three minutes, in honor of the innocent dead in America.
In Paris, the elevator at the Eiffel Tower stopped halfway to the top. Buses, trams and cars halted in their tracks across the continent.
In Spain, more than 650 city and town halls became gathering centers for tens of thousands who bent their heads in silent prayer -- and then, at the end of the three minutes, they lifted their eyes and applauded in that people's traditional tribute to the victims of terrorism.
On the River Elbe leading into Hamburg, ships flew their flags at half-mast. The minutes of silence crept by -- and at the end were broken by the sound of a thousand foghorns rolling across the water into the city's very heart.
In Lockerbie, Scotland, there was no applause, no singing, no bands, only the ringing of a single church bell and the flutter of flags at half-mast. This is a town with singular links to America, forged in a terrorist attack in the skies 13 years ago.
In all, according to an estimate by The Daily Telegraph newspaper in London, some 800 million people across Europe joined in the three minutes of silence.
At Berlin's Brandenburg Gate, once part of a dividing line between freedom and tyranny, a crowd of some 200,000 -- among them Germans whose relatives had died in terrorist attacks -- gathered beneath a black banner bearing the words, "We Mourn With You."
In Paris, crowds jammed the Place de la Concorde, itself a symbol of reconciliation, while church bells rang for five minutes before the silence.
In the government's Elysee Palace, "The Star-Spangled Banner" rang out, while over the French air waves, radio stations played John Lennon's "Imagine."
The bankers of Switzerland are not noted for their sentimentality, so they dealt in their own currency. At the end of the three minutes of silence, they announced they were donating more than $500,000 to the families of the victims of the atrocities in America.
Lloyd's of London, the insurance market based in the British capital and one of several insurers of the World Trade Center, rang its Lutine bell and observed a minute of silence in memory of the dead in America -- some of them in the several broker offices Lloyd's has -- had -- in the WTC.
In Belfast, the bullets and bombs of Northern Ireland's own form of terrorism, known as sectarian violence, went silent as tens of thousands from both sides of the divide -- Roman Catholic and Protestant - gathered in front of a makeshift stage at City Hall, to stand in silent tribute.
It is a city that knows the heartache of terrorism. "We have suffered for 33 years," said Betty McLearon. "People here have to be admired for the way they can cope with it. It will take the people in New York a long time to get over this."
In Moscow, the Russians observed a minute's silence as they laid wreaths and floral tributes outside the U.S. Embassy, once a symbol of the Cold War. Thousands of Muscovites lined up patiently to sign books of condolences.
In turbulent Israel, a nurse gently inserted a needle into the right arm of Yasser Arafat, himself a one-time terrorist who is now head of the Palestinian Authority. In a demonstration of support, he was donating blood to help the American injured.
Back in London, the minutes of silence were followed by a service of remembrance in the capital's majestic St. Paul's Cathedral, led by Queen Elizabeth II herself. In the audience of 2,400 inside, Americans hoisted the Stars and Stripes for the rest of the world to see via television.
Outside the cathedral, the tens of thousands who could not get in waved their own tiny flags and listened over the loudspeakers that carried the words and music for blocks around. The cathedral's huge organ rumbled into life, to open the service, appropriately, with the American national anthem.
Then something happened that has never happened before, certainly not in public and doubtless not even in private. Softly, the queen began to sing "The Star-Spangled Banner."
Now, the British monarch does not "sing" national anthems. When they are played, she never even opens her mouth. Until now.
But Queen Elizabeth sang it all, this song whose words were written 187 years ago during Britain's last war with her lost American colonies, through the final words, "O'er the land of the free, and the home of the brave." With the last note, the queen gently brushed away a tear.
That said it all.
(Note: Al Webb, who died in February of 2015 at the age of 79, spent most of his career -- 28 years -- with UPI, separated by a few years in the 1980s for a stint with U.S. News and World Report. His reporting ranged from the civil rights struggles to the battlefields of Vietnam to the Houston Space Center covering the conquest of space.
Webb, along with Joseph L. Galloway, another UPI colleague, were two of only four civilian journalists who were decorated for their battlefield heroism, in Webb’s case for evacuating under fire a wounded marine during the Tet Offensive in 1968.)
A half a century is a long time. But boy does it pass swiftly.
Betsy and Mike
Betsy and I met in math class at Gonzaga 52 years ago when, as a super senior having to fulfill a freshman math requirement, I came to the first day of class, spotted the blond young sophomore and took the seat behind her. We celebrate 50 years of marriage this week. And we'll take time to remember all that has transpired over five decades.
"All that has transpired" includes the son and two daughters, as well as eight grandchildren, who will all join us over Labor Day weekend for a family celebration of our anniversary. One daughter is no longer with us but she will be in Betsy and my thoughts as we mark 50 years.
Amusingly, it was a statistics class that I chose to pick up those math-requirement hours so I've often wondered: what are the odds that the coed I sat behind would turn out to be "the one." We were engaged three months after we completed that class, and married a year later in August of 1966.
One of my early romantic outreaches was one I've shared with readers of the Harp. It was my love affair with a '55 T-Bird, a sleek aqua and white machine then almost 10 years old in which I taught Betsy how to drive a stick shift. I mused in the column that she was so excited sitting behind the wheel that I wasn't certain even now if she first fell in love with the car or the guy.
A marriage gets stronger when a couple shares pain as well as pleasure and so it was when the pleasure of the birth of our third child turned to the pain of her being taken by Sudden Infant Death Syndrome.
Sarah Elizabeth, born four days before Christmas in 1973, gave a special meaning to that holiday season. As I wrote about Sarah in an earlier Harp, 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 he dead in her crib.
The loss of our baby to "crib death" came to be a bonding thing both during and after the pain. After drawing support from the SIDS medical and family community, we gave back as active in the SIDS Foundation, which I served as state president while Betsy did most of the work of our involvement helping new SIDS parents work through their grief.
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.
Over the coming years, three children grew through teen-age years to adulthood and headed off to college or marriage.
It was four years ago that it came time to move from the house that, over the four decades it was home, had been where three children grew to adulthood and where their laughter and tears, and those of their children, echoed from walls and windows that were always decorated by Betsy for the appropriate holidays.
And so it was that as we watched, the house was emptied of the furnishings, the closets emptied of decorations and toys our voices began to echo through the empty rooms.
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, then in addition by their children. 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 for a final check of the now-empty house, with its unfamiliar echoes as we moved through each room, an important reality for us emerged that I noted in a Harp I wrote son thereafter about the house.
It was that for us, and for all those making large life changes, it was and is important to remember that 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, as is the memory of each new experience, now and in years to come.
John Stanton and Mikal Thomsen were in their late 20s when they teamed up at McCaw Cellular to become part of the birthing of a fledgling communications technology whose growth globally they helped guide through several major companies over the next 20 years, becoming iconic figures in the wireless industry.
Now just into their 60s, both have parlayed their business success into owning and guiding professional baseball teams, what they might well agree is a passion that rivals their business focus.
A business focus remains, however, as they continue to manage their Bellevue-based wireless venture and investment firm, Trilogy Equity Partners, formed by a collection of long-time wireless partners after the sale of their Western Wireless to Alltel Corp. in 2005.
Thomsen once told me that the opportunity six years ago to create the ownership team that bought the Tacoma Rainiers was like his “dream come true.” He would be owning his hometown team that he had grown up rooting for from the time his dad took him to his first game at age three. That was the year that the then-Tacoma Giants returned after a 55-year absence.
Stanton, who will soon assume the role of CEO of the Seattle Mariners after the ownership group he leads completes its purchase of the team from Nintendo of America, also recalls attending the games of his hometown team with his father. That was in 1969 when, as a teenager he became a fan of the Seattle Pilots in their first and only year of existence and recalls crying when they left town for Milwaukee.
Thomsen would undoubtedly echo Stanton’s “I am first and foremost a baseball fan” comment that he made to the media gathering at Safeco Field when he was introduced as the leader of a 17 member local group that would become 90 percent owner of the team and he become the CEO, once Major League Baseball owners bless the deal.
Thomsen and his wife, Lynn, and Stanton and his wife, Terry Gillespie, are all alums of McCaw Cellular in the ‘80s and are now on the team of co-owners of the Tacoma Rainiers, though the oversight of the franchise, including attending many games and spending about 10 hours a week in the office during the season, falls to Thomsen.
The owners are fortunate that the baseball team acquisition included Aaron Artman as club president, a former Microsoft executive who oversaw the $30 million renovation of Cheney Stadium and remained with the new owners in the role of president.
Stanton’s and Thomsen’s baseball involvement extends across the state and all the way down to the West Coast League, an amateur collegiate summer league, where they are among owners of both the Walla Sweets and the Yakima Valley Pippins.
But it was when Thomsen had the opportunity to put together the purchase of the Tacoma Rainiers in 2011 that he turned to Stanton and his wife, an avid baseball fan herself, to become part of the ownership group.
Thomsen has immersed himself in his hometown baseball team and has enthusiastically committed to its increasing success, despite being the smallest market in far-flung Pacific Coast League and being the closest Triple-A team to a major league city.
In fact, the Seattle Mariners and the Rainiers are not only geographically close, which Thomsen admits may sometimes cost the Rainiers attendance of fans heading for Seattle, but close in that the Rainiers are the Mariners’ triple-A farm team.
As Thomsen puts it: “Most of the Rainiers fans are Mariners fans who enjoy keeping up with both teams and hearing about the players they saw in Tacoma performing with the major league club. I think the nearness of the M’s cuts both ways.”
In addition, the relationship is good for the Rainiers’ bottomline since the Tacoma roster is determined by and players’ salaries paid by the Mariners.
A lot of the changes brought about since Thomson’s group bought the team relate to community things, but he is pleased about what has happened in the stands and on the field.
At this point, atop PCL pack, the Rainiers seem headed for their first playoff appearance since Thomsen’s group bought the team, though Thomsen cautions that “it’s a long way from certain. We are only three games up on Fresno.” Plus the team appear on the way to another franchise attendance record, though beating the 352,000 attendance mark of last season is well behind the nearly 680,000 of the Sacramento River Cats.
In addition, Thomsen notes that the decision by the ownership group three years ago to build a new set of stands in left field “has been a stunning success,” adding that he celebrated his 60th birthday there in early May this year “with a couple hundred friends.”
He says the change of the team’s logo two years ago to “the now somewhat iconic ‘R’” has helped drive merchandise sales “through the roof.”
In terms of community involvement, he says the Rainiers “teamed this past off season with Tacoma Parks, the Cheney Foundation and Mary Bridge Hospital to add a playground behind the right field berm that includes a whiffle ball stadium,
“It is packed for most games and open as a public park when games are not going on in the stadium,” he adds.
“The community views this as a partnership and we go out of our way to be great partners,” Thomsen says with obvious pride.
Alaska Airlines’ goal of winning friends and influencing people in the Bay Area, whose hometown airline is about to be absorbed by the Seattle-based carrier, began in earnest Tuesday night in San Francisco as Alaska executives and board members hosted a gathering for local leaders.
Some 250 business, political and community leaders were on hand at the Four Seasons Hotel in San Francisco for an event whose theme was “Flying Better Together.” The goal of the gathering of Bay Area who’s who was for them to meet and begin to get to know the leadership of the airline that is buying Virgin America, the Richard Branson-founded carrier that began service as San Francisco’s hometown low-cost airline nine years ago this month.
During that nearly a decade of service, Virgin built what many in the Bay Area have described as “almost a cult following,”with many regular flyers enthusing that they “love Virgin.”
Aware of that challenge, Alaska CEO Brad Tilden and his executive team have sought to express sensitivity to the cultural issues and the initial backlash from Virgin fans. That awareness was pointed up a few weeks ago when Tilden told the Wings Club, a group of aviation professionals in New York, that he was thinking of running the Alaska and Virgin as separate airlines within Alaska Air Group.
Such an outcome may or may not still be a possibility, but when I asked Joseph Sprague, Alaska senior vice president, after the Tuesday event, about Virgin continuing to function as a third carrier, he said: “ Initially it will be a third airline but by 2018 it will be merged into Alaska.”
But Alaska leadership is playing up a cultural fit they see existing between Alaska and Virgin, rather than addressing the different styles.
Sprague said “a lot of the integration pre-planning work has revealed an encouraging number of similarities from which we can build.”
He noted that Tilden, in his comments to the group Tuesday, pointed out three such similarities: “both have an obsessive focus on the customer, we both want companies that are employee-driven and we both have a strong leaning towards innovation around the customer experience.”
Alaska’s San Francisco community gathering came exactly s week after shareholders of Virgin America approved the acquisition by Alaska Air Group, with Virgin’s chairman announcing the voting results at a brief shareholders meeting on July 26.
That Virgin shareholder approval was the next-to-last major hurdle for the takeover, with the remaining step being U.S. Justice Department approval. Closing by October is expected for the $4 billion deal ($2.6 billion in cash and the rest in assumed debt and other costs) that Alaska had to put together to beat out Jet Blue.
It’s quite possible that the shadow of Delta Airlines’ seeming predator pursuit of Alaska that left key Alaska supporters concerned Delta was seeking to force a takeover played a role in Alaska’s decision to acquire Virgin America for a very large premium.
But in addition to likely ending concern about Delta coveting a takeover, Alaska also gets Virgin’s lucrative California routes as well as keeping Jet Blue, the losing suitor in the Virgin bidding contest, from acquiring the routes.
In fact, it’s perhaps amusing to consider the community response if Delta, after a hostile takeover of Alaska, held a reach-out event with the theme “get to know us.” They’d have faced a ferociously hostile audience in Seattle.
But obviously Alaska, which has been successfully serving the Bay Area from three airport for years, isn’t perceived as a bad guy, more just a carrier that locals don’t know a lot about other than it has an excellent record in all the areas airlines get rated.
In fact, as Phyllis Campbell, Alaska board member and Pacific Northwest chairman of JP Morgan Chase, put it after the event: ‘I think it is emblematic of Alaska Airlines to reach out to the community in a spirit of collaboration and collegiality. Having dinners like this send the message that we want to be the best airline going forward for the Region and also the best citizen in terms of community partnership.”
In fact, the event was apparently successful enough from Alaska’s perspective that Sprague said “we will likely do additional events, both of our own and sponsoring others.”
Still there are Virgin supporters whose love affair with the airline was partly due to the fact it was the Bay Area’s hometown airline. And the takeover will mean not just the end of Virgin’s “hometown” ties, but also that California will no longer have an airline based in a state that has served as home to a variety of important carriers over the years.
As Mary Huss, publisher of Puget Sound Business Times, summed up when I asked her about it: “I think people were very proud that Virgin chose to locate and start up here when it did.”
But while Jet Blue lost the bidding to Alaska, it is seeking to woo Virgin fans away before Alaska can convert them by looking for ways to exploit what it senses as uncertainty of flyers about the transition. It has been touting giveaway deals to potential frequent users of Jet Blue’s longhaul service from New York to San Francisco and Los Angeles, including its tongue-in-cheek wooing of Jet Blue “virgins,” those who haven’t previously tried Jet Blue.
Stephen Vella, a congenial Brit who spent his career building airlines before turning his attention to creating flying mansions for the global elite, is the man whose Kestrel Aviation Management oversaw creation of the first VIP interior on a 787-8 Dreamliner.
The first VVIP outfitted BBJ, as its officially referred to, has gotten global visibility for those who partnered with Vella’s company, which had turnkey responsibility for the project from purchase of the plane to planning and design of the special interior to meet the requirements of the Asian client who will operate the aircraft. The partners included Greenpoint Technologies of Kirkland and Pierrejean Design Studio of Paris.
The specially outfitted Dreamliner is back in Moses Lake, where the work to install the unique interior was done, as it awaits final signoff by the FAA and final closing of the sale to an undisclosed owner.
“Undisclosed owner” is the usual description of individuals, countries or companies who decide they wish to own a castle in the sky and contract with Vella and Kestrel to manage the purchase, design and delivery of the aircraft. Nohl Martin, Vella’s vice president for business development and communications, says outfitting the special interiors can cost as much as the airplane itself with the finished product, once the widebody is aloft, sometimes described by buyers as airborne oases of peace.
But these are oases that are reserved for the elite, both in stature and resources, and the fact they seek out Vella has made him a valued relationship for Boeing, but also for Airbus, since the contract for design and implementation of one of these widebody interiors begins with the purchase of the plane itself.
I had an opportunity recently to interview Vella while he his partner Martin, a longtime friend of mine, were on a visit to Kirkland, where she has family.
The Dreamliner, representing the first conversion of a composite and nearly all-electric aircraft to incorporate a high-end cabin and thus requiring virtually the entire focus of the Kestrel team for the past two years, is the 11th widebody conversion that Vella’s team has managed from purchase through entry into service. The company has also done 10 narrowbody VVIP cabin conversions.
But as communications vice president Martin points out: “Sadly it is a sector that rarely allows us to publicize our work -- until this 787 project.”
Visibility was not a problem for Vella when he was turning around airlines, particularly the nearly 15 years he spent helping turn Qatar Airways from a struggling, five-plane regional airline into one of the handful of the world’s Five Star airlines.
When Akbar Al Baker, Qatar’s group chief executive, was tapped by the Qatar government in 1997 to take over the failing airline, he contracted with Vella, who functioned for the next 15 years as basically the airline’s COO, doing the long-term planning, fleet management, overseeing brand development as well as mergers and acquisitions.
By early this decade, Qatar Airways was operating 150 planes with another 200 on order, producing billions of dollars in sales for Boeing, but also for Airbus since the fleet, Vella estimates, is about half from each manufacturer.
Vella, 62, is a native of Gibraltar, the British Overseas Territory at the southern end of the Iberian Peninsula, and he explains that, despite being a citizen of the United Kingdom, Spanish is his first language.
His upbringing in Gibraltar and his fluency in Spanish, along with a healthy dose of self confidence, allowed him to build his reputation in the airline-turnaround business early.
He recalls that he was still in college when he took time off to visit with an official the prime minister back in Gibraltar and convinced him to grant Vella a Masters scholarship in return for assisting the City architect in redesigning the airport terminal.
After graduation, he approached executives of British Caledonia and pitched that the fact he was bilingual would allow him to launch the airline’s Latin America routes.
He recalled with a chuckle that the pitch allowed him to land a job at a time when there were no jobs to be had and while he worked for peanuts, he was able to see the world.
By his early 30s he had become general manager of British Caledonia’s fleet management division, but at that point left to start his aviation consulting firm and early on helped Richard Branson acquire his first 747.
Vella has turned around eight airlines, including Qatar and the Spanish airline Air Nostrum, a Iberia affiliate, which is now the largest regional carrier in Europe, and started several airplane leasing companies, including one for Rupert Murdoch.
I asked Vella to give me a sense of what he thinks the future holds for the industry and he offered a couple of predictions. One, Asia is a fertile field for new airlines to come into existence. And he suggests that in this county we’ll see consolidation bring the industry down to four large airlines. He declined to name those he thinks will compose the final field of four.
Jon Huntsman Sr.’s vision of creating an event that would attract hundreds of seniors to Southern Utah annually to engage in competition with each other in what he named the World Senior Games has become, over three decades, likely the most successful event of its kind in …well…the world.
Fulfillment of the prominent Utah businessman-philanthropist’s conviction that seniors could be lured to a remote but appealing corner of the West to demonstrate that their competitiveness remained strong despite advancing years will be played out again this fall for the 30th time.
Thus the City of St. George, along with officials and volunteers of the event itself, prepare to entertain almost 11,000 seniors during the first two weeks of October with athletes from every state and many nations. In fact, as Michelle Graves, Director of Sponsor Relations for the Games, emailed me: “Our goal this year is to host 10,950 athletes, which is the number of days in 30 years,” a goal only 400 ahead of the participant total for last year. “We also hope to host 30 nations, one for each year.”
I am registered again this October to be among the competitor in the 100 meters, against other “old guys” of my age (competition in all events is on the basis of five-year increments, as in 50-54 on up). But in addition to track and field, others of the thousands on hand will be participating in events ranging from archery, badminton and basketball to cycling, tennis, swimming and softballr.
The appellation “World” that Huntsman’s marketing acumen attached to the games’ name has, without doubt, been a key attraction for seniors willing to travel to a spot that you don’t get to easily so they can have the satisfaction of competing with the best of peers of their age.
I don’t know whether the intent of Huntsman and his wife, Karen, in their commitment to these games was because of the goodwill it has obviously fostered or economic development for the picturesque region known as “Color Country,” or “Red Rock Country.”
But the fact is both have occurred. The population of St. George was about 25,000 when the games were first held and has now grown to more than three times that at just over 80,000.
As long-time readers of the Harp are likely aware, participating in these games has held an appeal for me since I first learned of them in 2002, wanted to be a part of something called “World” games, and came to run in the 100 meters and 200 meter events a year later, to my surprise finishing sixth in the 100.
It’s what attracted me back in 2011 after colon cancer surgery, needing to prove something to myself, and was amazed to finish third in the 100 meters in the 70-74 group. And again last year, when I finished second in 75-79 100-meter runners.
These games are a success story that Huntsman himself, now 79, probably couldn’t have envisioned. And except for those aware of Huntsman’s life of giving and caring, people might well be surprised that a multibillionaire who was in the process of building the world’s largest chemical company of its kind and developing a noted cancer hospital in Salt Lake City would have the time or interest to worry about it.
This Harp is, in fact, as much about a regard I have for Huntsman, whom I have never met, as the regard I have held for more than a dozen years for the annual gathering of senior athletes he has been committed to fostering and supporting, making it possible for me and others to test ourselves in peer competition.
A person like Huntsman is particularly important at a time when anger and hostility seem to have become what too many people bring to interactions with each other, rather than goodwill and regard.
Huntsman, a leader in his Mormon church, is a two-time cancer survivor who founded an institute with the goal of curing the disease and dispenses his substantial wealth to an array of causes, in addition to having taken the Giving Pledge, the promise taken by the world’s richest people to give away more than half of their wealth.
Huntsman’s philanthropic giving now exceeds $1.2 billion but he suggests he has a long way to go since his stated intent is to give all his wealth away.
Huntsman is wont to sum up his view of the non-giving wealthy thusly: "The people I particularly dislike are those who say 'I'm going to leave it in my will.' What they're really saying is 'If I could live forever, I wouldn't give any of it away.'
Laurie Mischley is a naturopathic physician at Bastyr University whose years-long research seeking to change the course of Parkinson’s Disease has quietly attracted both national and internatonal interest.
And now the results of two recent research projects relating to her focus on the relationship of glutathione(GSH) to the disease and her intranasal approach to treatment are likely to mean interest in her work will extend beyond academia and foundations into mainstream awareness.
The most recent was publication this week of her research findings from a project funded with a grant from Michael J. fox Foundation that, in essence, glutathione provides a “marker” for Parkinson’s Disease.
The study results showed that the lower the blood glutathione the worse the Parkinson’s, meaning, meaning that testing for low blood GSM might be a signal for the presence of Parkinson’s Disease.
“In essence, we can say now that the absence of glutathione leaves the brain on fire and it will be consumed unless the GSH is restored,” she said. “Wouldn’t it be nice to have a marker, not unlike cholesterol level and heart disease, that we could modulate rather than simply watching the disease progress?”
The other recent development was a team project, with Mischley as lead investigator working with scientists from Washington State University, that determined, through use of magnetic resonance spectroscopy (MRS), that glutathione had reached the brain and how to measure it.
Glutathione, called by some “the mother of all antioxidants” and “the master detoxifier,” prevents damage to important cellular components. The body makes its own but its depletion is known to relate to an array of neuro/pshyche diseases like Parkinson’s and Alzheimer’s
“People have been suggesting for more than three decades that glutathione deficiency plays a role in diseases of the brain and central nervous system that finding a way to augment it might be a good idea,” Mischley said. “What we just demonstrated is that squirting it up your nose works to raise brain levels of GSH.”
Explaining the study, Mischley said it showed a boost of almost 250 percent in the glutathione in the brain after 45-to-60 minutes.
”Our results showed that all groups improved over the three months of use, including placebo, enough to warrant further study of glutathione for both symptom management and disease modification,” Mischley said.
Left for a follow-up study, which she said “ideally will be off the ground by the end of the year,” is determining issues like whether the glutathione level continue to rise? How long before it peaks? What happens following multiple doses?
Mischley returned at the end of June from the 20th International Congress of Parkinson’s Disease & Movement Disorders in Berlin where her research into the intranasal delivery of glutathione for Parkinson’s patients was given high visibility.
The challenge Mischley talks about candidly is frustration about making the glutathione therapy, intranasal injections of it on a regular basis, available to PD patients, “the formula and delivery need to be improved and partnerships with industry forged.”
“If we had a company to accelerate the research, I sincerely believe we could have the first disease-modifying therapy for PD available in 3-5 years, if cards are played correctly,” Mischley said.
“I came into this years ago to cure Parkinson’s,” she said. “I ndver thought of starting a pharma company, “But the fact is the way I need to proceed if I am to serve my patients and prospective patients is to start one.”
Mischley, 42, was in pre-med studies at Penn State University in the mid-‘90s, assuming that medical school lay ahead when she decided to switch her major to nutrition.
“I was told nutrition is not a science,” she said. “That was my reality check in what I was up against. It was like I was more interested in being a detective trying to solve a mystery and conventional medicine knowing what it is and hiding it.”
Her focus on nutritional medicine and now on Parkinson’s Disease is in line with her philosophy that “if people don’t wonder, they can’t learn. You have to be able to incite curiosity.”
In seeking out a place to study nutritional medicine, she says she found Bastyr had d the only nutritional medicine program, so she came to the campus of what has become the Harvard of naturopathic medicine and got her degree as a naturopathic doctor, and subsequently a PhD and masters of public health at University of Washington.
In 2010 she was awarded a five-year, $500,000 grant from the National Institutes of Health, one of three researchers in the country to receive what was described as a career-transition award, explaining “they thought it was a good idea to train individuals with a clinical doctorate in complementary/ alternative medicine to do research.”
Her research with glutathione and intranasal delivery is helping spur the growing focus on intranasal delivery of drugs destined to address neurological disorders from Alzheimer’s and Parkinson’s to chronic pain and migraine.
In fact, that increasing medical interest in intranasal delivery for drugs focused on disorders of the brain and central nervous system is attracting key angel-investor interest to a rapidly growing Seattle company that makes intranasal devices.
Impel NeuroPharma, which Mischley describes as being “at the top of the food chain” for manufacture of intranasal devices, has already raised millions and scould be key to creating a new biotech category, maybe called drug delivery technology, for which this area could be at the forefront.
Thus Impel and its co-founder and CEO, Michael Hite, will be the focus of next week’s Flynn’s Harp.
It was well over a year ago that my brother, a retired Spokane small-business owner, began telling me, in support of the Donald Trump phenomenon, “Mike, you don’t understand, the silent majority is roaring.” My response was always, “I hear the roar, but it’s a minority made up of those unsettled by the murky mix of terrorism and immigration policies and angered by their lack of influence, or even contact, with the establishment.”
Then came last week’s Brexit vote, where the English version of folks I described turned out to be the majority, leaving establishment leaders of both major parties in this country to ponder whether what’s at stake is a desire to throw out the system rather than merely overturn particular politicians or policies. And what that means come November.
Or for the future. Thus perhaps an appropriate time to ponder questions as Independence Day approaches
Now a week following the blow to the U.K. comes a decision by the U.S. Supreme Court almost certain to fuel anger at the established order, the court making it harder to prosecute public officials for corruption by basically saying it’s ok for “the system” to include paying elected officials to influence their decisions.
At issue was the case of former Virginia governor Bob McDonnell, who was convicted by a lower court of using his office to help a businessman who had provided McDonnell and his wife with luxury products, loans and vacations worth more than $175,000 when Mr. McDonnell was governor.
Chief Justice John G. Roberts Jr., writing for the court, narrowed the definition of what sort of conduct can serve as the basis of a corruption prosecution. He wrote that “routine political courtesies like arranging meetings or urging underlings to consider a matter generally, even when the people seeking those favors give the public officials gifts or money,” do not represent corruption.
The alternative to the new limits, Roberts wrote, would be to criminalize routine political behavior. “Conscientious public officials arrange meetings for constituents, contact other officials on their behalf and include them in events all the time,” he wrote. All the time! Isn’t that the problem?
By now readers of this column have likely concluded that the usual focus on people, companies and issues that relate the Northwest is being upstaged to Harp about some personal thoughts on an issue that impacts us in this region, but that transcends us.
Fodder for thought following Brexit, for those who care to think, is offered by The Los Angeles Times‘ Vincent Bevins: “Since the 1980s the elites in rich countries have overplayed their hand, taking all the gains for themselves and just covering their ears when anyone else talks, and now they are watching in horror as voters revolt.”
It has to be hoped that the revolt is aimed at reconstructing rather than destructing the Democratic process. But that may not be certain.
A quote from author and MSNBC commentator Chris Hayes is getting attention on social media in the wake of the Brexit vote.
“The mechanism that western citizens are expected to use to express and rectify dissatisfaction – elections – has largely ceased to serve any correction function. When Democracy is preserved only in form, structured to change little to nothing about power distribution, people naturally seek alternatives for the redress of their grievances, particularly when they suffer.”
Coincident with the post-Brexit analysis have come a couple of group emails in which I was included, both suggesting that the idea of change by the ballot isn’t being totally abandoned. Both related to a focus on the 28th amendment to the U.S. constitution and both widely popular but not yet widely promoted.
The first relates to ongoing discussion about an amendment to overturn Citizens United, the U.S. Supreme Court decision that held political expenditures by corporations could not be limited.
Polls show the efforts for a 28th Amendment to overturn Citizens United is supported by more than 75 percent of Republicans, Democrats, and Independents and sixteen states have enacted 28th Amendment resolutions.
The other idea gathering support as a proposed 28th amendment: "Congress shall make no law that applies to the citizens of the United States that does not apply equally to the Senators and/or Representatives; and, Congress shall make no law that applies to the Senators and/or Representatives that does not apply equally to the citizens of the United States."
It strikes me that this idea could generate some positive action from voters by, between now and the November General Election, insisting every member of Congress on the ballot, as well as every state legislator, commit to voting in favor of the constitutional change next year. Or bite the bullet as voters and vote for the opponent, regardless of ideological compatability.
There are examples of the manner in which a fed-up public can bring a positive focus to their anger and bring about beneficial change within the system.
One such example was actually the result of an idea of someone from inside “the system,” then-Washington congressman Brian Baird, who during the last three of his six terms as the representative from the state’s third district sought to gather support in Congress for what he called the “Stock Act.”
Baird sought to prevent members of Congress from doing stock transactions in areas they regulate, in essence, prohibiting their investing in a manner that those in the real world call Insider Trading.
I wrote about it in a November, 2011, column after a program on CBS’ “60 Minutes” brought national attention to Baird’s idea with a program titled “Honest graft.”
For ordinary citizens, reaction to Baird's proposal would be a laughable "well, of course." But in a place whose mantra is "the rules we make for you don't apply to us," seeking to force action by the lawmakers on one small, self-imposed ethical constraint could become a rallying point for a fed-up public.
The thrust of the CBS segment was that lawmakers often made stock purchases and trades in the very fields they regulate. While ordinary citizens could be jailed for engaging in the kind of investment shenanigans that those in Congress involve themselves in, there's wasn’t even an ethical concern among lawmakers.
Reporter Steve Croft questioned then-House Speaker John Boehner and former Speaker Nancy Pelosi at their respective news conferences. And the ineptitude with which both Boehner and Pelosi tried to answer Croft's questions about whether their investment practices were at least conflicts of interest, the thought that had to occur was "Who elects these people?" The answer, unfortunately, is people like us elect them. And both have continued to be elected. Shame on us. And so maybe a revolt wouldn’t be that bad.
As a result of the outcry following the program and You Tube pieces on the congressional leaders’ confused responses, the Stock Act was passed overwhelmingly in the spring of 2012 with what observers described as “vulnerable congressmen” at the forefront of supporters. So now Members of Congress and employees of Congress are prohibited from using private information derived from their official positions for personal benefit, and for other purposes.
Baird had already retired by then, having decided not to seek a seventh term, thus exemplifying one of the concerns about the future of the Democracy as currently operating: The Nancy Pelosis remain in office and the Brian Bairds decide to leave.
Just as the races for state and national offices in the November General Election may demonstrate that anger can trump reason, voters in Oregon will be faced with deciding a ballot measure that will test whether anger at big business over things like soaring executive compensation exceeds logic.
At issue is IP28 (Initiative Petition), which targets Oregon's biggest corporations — roughly 1,000 by the state's estimates, or about 4 percent of businesses. Those with $25 million in Oregon sales would pay a minimum $30,000 tax, plus 2.5 percent on anything above that threshold.
In essence, it would be a tax on gross receipts, like Washington’s business & occupation tax, generating an estimated $6 billion in new revenue. Except in Oregon it would be in addition to the tax on personal and corporate income and would boost corporate tax collections more than five-fold.
As my friend Don Brunell put it in his latest column, which alerted me to the fact the measure had been cleared for the November ballot by collecting the required 130,000 signatures, “Washington’s next economic development plan may be written by Oregon voters next November.”
His point was that “Oregon voters need to remember that Washington and California have heavy concentrations of large businesses and stand to benefit from passage of IP28 and that while all parts of Washington would gain, the corridor between Vancouver and Longview could be the biggest winner.”
Brunell, retired president of Association of Washington Business, in his more than a quarter century at the helm of the state’s largest business association saw all the off-the-wall ideas for taxing business. But it’s as a longtime observer that he shakes his head at this proposal, noting the tax scheme “would transform Oregon from one of the nation’s lowest business-tax-burden states to one of the nation’s highest.”
Organizations that purchase products and services from those major businesses would undoubtedly see their costs increase and thus would need to increase their price for items resold to Oregon consumers. In response to this, businesses purchasing goods in Oregon may opt to leave the state or relocate some or all of their facilities to avoid the increased cost of doing business in that state.
IP28 is sponsored by Better Oregon, a labor union coalition led by the Oregon Education Association, and targets “big business”. Proponents claim it would tap a tiny portion of Oregon businesses while bringing a huge revenue boost to cash-strapped public education, health care and senior services.
The non-partisan Legislative Revenue Office, in evaluating similar proposals to IP28, has forecast job losses should a gross receipt tax pass.
Former Washington Gov. Mike Lowry, who despite being perhaps Washington’s most liberal governor carried an understanding of the importance of nurturing big businesses as the creators of better-paying jobs, offered his classic belly laugh when I called him for his thoughts on the initiative.
“We always looked to Oregon for progressive ideas but this would represent the total opposite,” Lowry said. “The gross-receipts tax is about the worst tax there is.”
Amusingly, Lowry understood how to use the tax as a whip. In his first year in office he sought to have the Democrat-controlled legislature extend Washington’s sales tax to service businesses like law and accounting firms, which used their lobbying clout to beat back the effort.
But they paid a price by having the lawmakers impose the highest b&o tax rate on services, a payback in the form of a 2.5 percent rate, which though now reduced to 1.5 percent remains the state’s highest rate, reserved for service businesses and professional gambling.
Most gross receipts tax rates around the country are relatively low when compared with the Oregon proposal’s 2.5 percent rate. In Washington, it ranges from 0.138 percent to the aforementioned 1.5 percent. Thus if the measure were to pass, the tax burden of operating in Oregon would increase dramatically when compared with other states.
Proponents argue that “IP28 would modestly raise the effective tax rate of large corporations and use the added revenue to fund Oregon's crippled public school system, provide services to seniors, and extend health care coverage to 18,000-plus children.”
Problem is if it comes to be marketed to voters as “the big-business tax,” the result could be that anger overrides common sense for voters, among whom would be many that would face loss of their jobs if the analysis of business reaction proves true.
The ballot proposal comes as raising taxes on wealthy individuals and large corporations is at the forefront of a national debate — especially among Democratic progressives, including much of Oregon's electorate— about how to close the gap of economic disparities between rich and poor in the post-Great Recession era.
And if there is a doubt that anger at big business underlies the measure, and leaves concern about the logic voters will bring when they mark their ballots, supporters point to the current difference between growth in corporate profits vs. growth in family income in Oregon. They say it’s time big business takes on its fair share of the tax burden to help pay for education and social services.
Business people in Southwest Washington are not only looking to gain business if the measure is approved, they are having some amusement thinking about it.
When I talked with longtime Vancouver businessman Michael Worthy about it, he chuckled and offered that the two-state effort to agree on financing a new I-5 bridge across the Columbia could be solved by letting firms that would want to move operations out of Oregon might want to pay for improved transportation they’d need.
And when I asked Brunell why he thinks intelligent voters would go for a tax that would likely impact them, and perhaps their jobs, he replied: “I suspect, knowing Oregon a little better by living down here in Vancouver, there is a reason for the bumper sticker: ‘Keep Portland Weird.’”
The two have partnered since 2010 to provide the majority of the funding for planning and preparation for ARES and its ARES Nevada project's launch, which is planned for spring of 2017 with completion expected by spring or early summer of 2018.
Now they are in the final fund-raising push for the last $15 million of equity and $15 million of debt necessary to cap the $25 million already committed and begin construction on a six-mile long track with 7.5 percent grade on 43 leased acres of BLM land
ARES Nevada will be the prototype for future projects elsewhere in the country. The Nevada project is smaller (able to fully discharge for a period of 15 minutes at 50 megawatts) than future projects are likely to be, though William Peitzke, the company's director of technology development, notes it will be "the largest energy regulation management project ever in the West."
As word of the planned Nevada project has spread, a number of utilities have reached out to the leaders of ARES, who invited about 30 representatives of utilities and the Electric Power Research Institute (EPRI) to a March 1 demonstration of a functioning scale model.
The gathering at the quarter-scale, proof-of-concept project in Tehachapi, in the mountains east of Bakersfield, CA. prompted EPRI representatives to announce to the assembled utilities people that they would develop an EPRI demonstration project and seek funding from member companies.
Since then, the ARES project has attracted media attention from the likes of Forbes and Fortune and, in recent days, from a newspaper in Finland.
Part of the interest generated in ARES, which is a company headquartered in Santa Barbara with its initial project incorporated as ARES Nevada, is due partly to the quality of the management team Anderson and Harrigan have attracted. The CEO is James Kelly, who for almost four decades was a key executive at Southern California Edison, and the executive vice president is Steve Sullivan, who worked with Kelly at Southern Cal Edison and guided many of his projects there.
But given that the two principal funders of ARES have not sought to put themselves in the limelight on this project, despite the fact they were largely responsible for generating the $15 million necessary to reach this point and attract this management team, ARES has not gotten the extended visibility it might need for the closing rush to funding.
But that will likely change as media, both nationally and locally in Washington State, begin to focus on the principal investors because their past successes in business amount, in the minds of many potential investors, to an imprimatur of likely success of their projects.
I've written recently about Harrigan, who is chairman of the ARES board, relating to his legal involvement setting the stage for Seattle's two major league sports teams to be saved and brought under local ownership. But he was also closely involved with Craig McCaw's Eagle River, formed after the sale of McCaw Cellular to AT&T. And he provided the legal guidance that gave birth to Nextel Partners, one of the nation/s largest cellular companies in the late 1990s, was involved in setting up Nextel's IPO and served on its board.
Anderson, whose career in sales and marketing included building one of the most successful reps firms on the West Coast then co-owning and eventually merging his firm, by then Anderson-Daymon, and building Costco's largest supplier of goods and services. Recently he founded, is funding and acting aa CEO for Clean Global Energy, a Bakersfield-based firm developing a process its website describes as "redefining oil separation in a better, cleaner way."
Part of the emerging visibility for Harrigan and Anderson was a letter Anderson recently sent to prospective investors explaining the project in detail and soliciting investors for the final $15 million of equity needed to get ARES Nevada project underway.
Anderson explained, in the extensive narrative on the project to the audience of more-than-qualified investors, that he would take the investing lead in the project with $10 million of the amount needed to complete it.
"We believe we can raise $15 million in debt, and will offer the remaining balance on the exact terms of my personal investment," Anderson explained, adding that "we believe that we can achieve close to a 25 per cent return on equity with ARES Nevada over the next few years "
"By running a train up and down a hill, ARES can help utilities add and subtract power from their grid on demand," Anderson explained in his letter. "A 19th century solution for a 21st century problem, assisted by that abundant natural resource called gravity."
And inevitably, the image of a train loaded with boulders running up a hill has spurred the metaphor of Sisyphus, the king from Greek mythology who was punished by the gods by being forced to roll an immense boulder up a hill, only to watch it roll back down, repeating this action for eternity.
Of course the Sisyphus image is flawed because the boulder being forced back downhill highlighted Sisyphus's forever failure whereas the trains loaded with boulders imbedded in sand rolling down the hill will exemplify the success of the ARES project.
Anderson explained that Shuttle trains, referred to as modules that are each made up of two electric locomotives and multiple weighted cars, will go up or down the track to either take electricity off the grid on the ascent or supply electricity to the grid by descending.
An example of the fact the Nevada project is on the small side of possible ARES projects, Harrigan and Anderson note that ARES can scale up to 3,000 megawatt, which would be a project as big as some hydroelectric projects. And Anderson noted that "the scope of the Nevada permit also allows for construction of a much larger system for an energy storage facility as well, essentially expanding the 50 MW system to add a 300 MW storage."
Said Anderson is his letter to prospective investors: The real problem we are addressing is providing an answer to the question of how do we generate more power since we can't build more dams, states are not permitting for fossil-fuel power generation and nuclear is enormously expensive."
Kelly suggests that a large part of the likely ARES appeal to investors and potential utility customers is that "ARES can be deployed at around half the cost of other available storage technologies and produces no emissions, burns no fuel, requires no water, does not use environmentally troubling materials. And it sits lightly on the land."
Stuart Anderson, with his 2,400-acre cattle ranch abutting the freeway in Central Washington and his signature mustache and cowboy hat, was the icon of cowboy country as he built what was regarded, in the 1980s, as the nation's most successful chain of affordable steakhouses. (It was actually dinner house chains but probably doesn't matter.)
Anderson, 93, passed away peacefully Monday at his Rancho Mirage home., surrounded by his family, including his beloved wife Helen, who was his partner for more than 40 years. He had been a diabetic for years but it was lung cancer that caused his death, though he had quit smoking in 1980.
Stuart Anderson founded his Black Angus/Cattle Company Restaurants chain in Seattle in the 1960s and from its corporate headquarters there he grew it into a chain of 122 restaurants spread across 19 states, with more than 10,000 employees and $230 million in annual revenue.
I felt compelled to come and talk to Stuart about his knowing he was in the final stages of life and that he was reconciled to that fact because he had led such a special life. It was filled with family, success, travel and, as Helen said, "lots of love." He had agreed to have me come down on Saturday to his home and work on his obituary together but that was not to be.
That became clear with the email Monday from Helen: "My wonderful, sweet, best friend Stuart has gone to that Mansion in the sky. He will be missed more than words can tell. He was larger than life and loved by so many. He was so pleased with the 93 wonderful years he had but said he was ready to go. Thanks for all the prayers and good wishes."
I first met Stuart four years ago when Betsy and I were vacationing in the desert. I had contracted with the Coachella Valley Economic Partnership to arrange a wine-and-cheese gathering of Northwest snowbirds to learn some business facts about their second home. The local Palm Springs Desert Sun publicized the event and as people visited, someone pointed out to me "there's Stuart Anderson," to which I responded: "I don't think so. I thought he was long gone."
So I went over to introduce myself to Stuart and Helen and learned that the guy with a weathered face and wearing a cowboy hat was much alive and provided an enjoyable get-to-know visit.
A couple of days later, I learned that he was actually going back into the restaurant business, reopening one of his first Black Angus restaurants, located in Rancho Mirage, (that had been forced to close and go out of business during the downturn) This is not really true. Someone came along to buy our lease which we gladly sold because of the downturn of the economy at that time. We were not forced to close.
So I produced a column about Helen and Stuart re-opening and running the restaurant, both of them visiting with customers and making the rounds each day for a number of months before it became clear that the challenge was too much for a man then nearly 90 who had been out of the business too long so gladly sold the lease.
I visited again four months ago with the Andersons at their Rancho Mirage condo, and found Stuart, who was speaking softly and slowly but retained the firm gaze he usually offered from beneath his cowboy hat. He wanted to talk about the book and the challenge of selling copies, compared to his first book. It is the story of how he built the restaurant empire that became a best-recognized national company. The book actually has a longer official title: "Corporate Cowboy. Stuart Anderson: How a maverick entrepreneur built Black Angus, America's #1 restaurant chain of the 1980s."
He first tried his hand as an author when in 1997 he produced "Here's the Beef! My Story of Beef," a book he described to me as "fun and informative," but most importantly to him, thousands of copies were sold in the Black Angus restaurants. The book was meant to be an answer to the highly popular Wendy's commercial of the time in which an elderly lady asks: "Where's the Beef?"
At that point it had been a decade since he had retired after five consecutive years of his restaurants being named the top steakhouse chain in the nation by USA Today in a poll by industry publication Restaurants & Institutions. He admitted candidly, in an interview we did a few years ago, that he decided to retire because the new owners took the fun out of his job.
At the time of his first book, he was still well-remembered, in Washington State in particular. He was often seen as a spokesperson for a series of television commercials he did in the Seattle area for a senior housing organization.
After retiring, he and Helen enjoyed their (You mentioned this in the 1st paragraph: 2,400 acre) ranch sprawled along Interstate 90 west of Ellensburg. He had bought the ranch in 1966 with the intent of raising the Black Angus cattle that would be served at his restaurants. But it turned out to be too great a challenge, for various reasons, so he continued to raise the cattle while buying his beef elsewhere, until he sold the ranch to Taiwanese interests, though to many travelers going past, it remains the Stuart Anderson ranch.
A private family gathering is being planned in Seattle but the celebration of life will be held in Rancho Mirage in November, which would have been his 94th birthday.
In the quarter century since national accounting firm Ernst & Young (now rebranded as EY) brought its Entrepreneur of the Year event to Seattle and the Northwest, the annual black tie gala has represented a community celebration of entrepreneurship. And with that has come a growing awareness of the importance of recognition for those struggling to build businesses and create jobs.
That increased awareness of the role visibility plays has brought with it an array of events, created by firms, organizations and media entities who want to own a piece of visibility value of their own for creating visibility for and thus developing relationships with young companies and the entrepreneurs who guide them.
Indeed all of those other recognition events have brought value to the startup and entrepreneurial ecosystem by allowing individual firms to attract the attention of potential investors and potential new talent.
But the EY event has remained the most prestigious gathering for entrepreneurs, as this year's select group of honorees preparing for the June 17 event at the Sheraton Hotel are coming to learn. Among other things, Northwest winner get to move forward to compete for recognition at the EoY national and world events later in the year with winning entrepreneurs from the 145 cities and 60 countries in which the EoY event is held.
As Dan Smith, managing partner of the Seattle EY office, put it:"We've recognized many remarkable leaders who have disrupted industries, created new product categories, and successfully brought new innovation and technology to traditional industries."
In fact three winners in the local event have gone on to win at the national level. They are David Giuliani, who as founder and CEO of Optiva, won in the manufacturing category in 1997; Zillow Group CEO Spencer Rascoff, who won in the "services" category in 2013, and Zulily CEO Darrell Cavens, who won in the "emerging" category in 2014.
Smith notes that this year's finalists include 21 entrepreneurs from the life sciences, retail and technology industries, adding "we've definitely seen a lot of growth in these sectors compared to 30 years ago when the program started."
This annual Entrepreneur of the Year event has held a special attraction for me because of personal involvement, both before and since the event came to Seattle five years after Ernst & Young launched it in 1986 in Milwaukee.
Part of my regard for the event is having close connection to entrepreneurial honorees for this special recognition. The first was Kathryn Kelly, the president of a young Seattle firm called Environmental Toxicology, who was among those honored as finalists at the second event in Seattle in 1992.
Then came Pete Chase, CEO of Spokane-based Purcell Systems, who won in the communications category in 2006 and became a judge in the following three years, before guiding the sale or his company and launching a new company, Columbia International Finance, for whom I am doing some consulting.
And Leen Kawas, Ph.D., president and CEO of the promising young life science company M3 Biotechnology Inc., is a 30-year-old Jordanian woman who is among this year's honorees and whom I tout as changing the face of life sciences in this state. I have had the satisfaction of being an investor and providing introductions and visibility since she arrived at the helm of the fast-growing company in January of 2014.
The impact of the honor on the entrepreneurs nominated was evidenced by Kelly's reaction back then when I expressed my regret, having nominated her, for the fact she had been one of three finalists but had not won in her category.
"You have to be kidding! Just being here (including the video vignettes of each finalist shown before the envelope is opened and the winner disclosed) was the satisfaction of a lifetime," she said.
There is also a bit of amusement for me when I think of the Entrepreneur of the Year event in that as publisher of the Business Journal I was involved in two entrepreneur of the year events before Ernst & Young brought its event to Seattle.
That came about because Woody Howse, then a partner in the venture capital firm Cable & Howse Ventures, approached me about partnering in an event we named Entrepreneur of the Year, which we promoted and held in the mid-'80s to honor a single entrepreneur each year. It would be hard to top either of our honorees.
The first was W. Hunter Simpson, who had taken over defibrillator-manufacturer Physio-Control 20 years earlier and guided it into a global-leadership role in its industry. The next year we honored Microsoft founder and CEO Bill Gates, whose company was just then gathering momentum, having gone public a year earlier.
Cable & Howse, then the area's premier vemture capital, had a vested interest in creating visibility for entrepreneurs, as did the Business Journal. We were among many organizations then casting about to determine how best to serve those individuals who held the keys to our future.
In fact, some edginess on the part of the Ernst & Young Seattle leadership would have been appropriate at our having pre-empted Simpson and Gates as the two most impressive names in the local entrepreneur community at the time.
PSBJ and Cable & Howse partnered for several years thereafter with another accounting firm to stage a High Tech Entrepreneur of the Year event, before Ernst & Young Managing Partner Karl Guelich called me to let me know our party was over because the real thing was coming to Seattle.
Guelich had allowed us to go ahead without comment with a Seattle event using the E&Y copyrighted name, partly out of friendship and partly because he likely figured, as it turned out accurately, that our event might even lay visibility groundwork for the arrival of the official awards event of that name.
For perhaps a decade, the Business Journal was part of a process that represented a win for the firm, for the newspaper, and for the entrepreneurs as well. Ermst & Young always scheduled its event for a Thursday evening and provided all the advance detail needed for PSBJ to produce a special supplement with stories on the event and all the honorees, passed out to all attendees as a keepsake as they left the event and then it was inserted in the PSBJ copies that arrived in subscribers' mail the following day.
Since then some of the biggest names among regional entrepreneurs have been in the winners' limelight at the Northwest EoY. They included Mark Britton of Avvo, Jim Weber of Brooks Sports, Inc., Dara Khosrowshahi of Expedia, Inc., Gertrude and Timothy P. Boyle of Columbia Sportswear Company, Jeffrey P. Bezos of Amazon.com, Inc. and Howard Schultz of Starbucks Coffee Company.
So perhaps I'm prejudiced, but it seems clear that EY Managing partner Smith is accurate in suggesting that "the award has acquired a great deal of prestige, and is recognized around the world as an emblem of entrepreneurial success."
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Almost four years overdue, federal crowdfunding rules went into effect last week to fulfill a 2012 Congressional mandate to "democratize" the process by which entrepreneurs and small businesses can raise start-up capital from "the crowd" of investors of average means.
Some cynics might view as "Democracy in action" the fact that it took almost four years for the Securities and Exchange Commission to come up with the rules that Congress originally gave it 180 days to enact so the legislation known as the Jumpstarts Our Business Startups (JOBS) Act could go into effect.
But the upside of the years of delay was that almost half of the states, including Washington, were spurred to seize the opportunity to come up with intrastate versions of the crowdfunding concept. As a result entrepreneurs in most states have the choice of federal or state regulations to use in seeking start-up capital from average investors, a choice that would likely not have come to pass without the SEC's foot dragging.
And in fact, the act's regulatory debut of 17 federal filings the first day was characterized as "pretty impressive" by Faith Anderson, the respected Registration and General Counsel Program Manager in the Securities Division of the state Department of Financial Institutions (DFI).
How the individual states have fared in the responses to their crowdfunding legislation has depended on a number of factors. Oregon, for example, because it has a non-profit dedicated to helping entrepreneurs through the process, has had good reviews.
Montana, on the other hand, has an unusual constraint that requires that half of a startups' business must be done in Montana.
"Makes it a pretty small prospective market," quipped Liz Marchi, the Kalispell-based leader of three Montana angel funds.
Before its crowdfunding legislation was approved last year, Montana was already rated the top state in the nation for start-up businesses on the Kauffman Index, the annual state ranking of startups by the Kauffman Foundation, largest entrepreneurship-focused non-profit in the country.
Marchi, who is finding enough entrepreneurs already emerging in the Big Sky Country, is not a big fan of crowdfunding for entrepreneurs, saying "I plan to stay away until all the unintended consequences have been worked out."
Meanwhile, Oregon's non-profit called Hatch Oregon, which travels around the state vetting startups it works with, is getting positive attention from startups there for what amounts to an incubator that seeks to guide entrepreneurs past the financial rocks and shoals of the crowdfunding game.
Hatch, whose platform hosts 10 of the 11 offerings filed in Oregon so far, offers no guarantee to the companies it works with. The incubator also produced a video called "Let's Be Frank" that tries to outline the risks in plain language.
Washington has no such entity to inexpensively help entrepreneurs along the road toward fundraising. But regulators have sought to put in place a program that helps guide startups to produce a document that ensures they are in compliance with securities laws, that investors are protected and entrepreneurs themselves are steered away from possible future liabilities.
The intent is an entrepreneur could be helped through the process without having to necessarily incur the expense of an attorney.
But the fact not all startups want to be so carefully guided is evident by the fact that one of two companies filing under the crowdfunding law got considerable media attention by lamenting that its efforts to get the paperwork done and get to fundraising was being hung up in red tape.
The sense is that what the filing firm viewed as "red tape" was insistence by state regulators that all the requirements be met, and one of the challenges for startup hopefuls is that not all attorneys understand the law and its regulatory requirements at this point.
One nagging aspect of the SEC rules in place that govern the crowdfunding laws of all the states is something known as Rule 147, referred to as the "intrastate offering" exemption, which has strict requirements that intrastate offerings be contained within the boundaries of a single state. In other words, an entrepreneur filing under the Washington State law not only can't take money from the resident of another state, but the resident of another state isn't even to see the offering.
So far, the SEC has been firm in the view that if someone in another state sees the information on the offering, it is no longer intrastate, which would basically nullify the fund-raising effort.
Anderson, chair of the Small Business/Limited Offerings Project Group of the National Securities Administrators Association, produced a report some months ago for the securities departments of all 50 states that was critical of Rule 147 and its impact on entrepreneurs.
The SEC has apparently gotten enough push back from the states on that constraint that, as Michelle Webster, financial legal examiner for DFI, explained, the SEC has several proposals, which are currently merely proposals it will consider that would amend the JOBS Act rules. One that would address that almost universal Rule 147 irritant would allow intrastate visibility for an offering as long as only residents of the filing company's state were permitted to invest.
But the fact is there is no timeline for the SEC to actually act on proposed amendments to rule 147. And some suggest the agency might never act since they do not have a Congressional push to do so.
Joe Wallin, a Seattle attorney with Carney Badley Spellman, who basically wrote the state legislation that created the crowdfunding law in this state, has been critical of the fact that those assisting entrepreneurs to raise funds cannot legally charge a fee representing a percentage of dollars raised unless licensed as a broker-dealer.
That's a federal restriction and Wallin is convinced an easing of that rule would find a lot of individuals and groups stepping forward to provide fee-based assistance based on a percentage of the dollars raised rather high hourly fees.
Washington' Securities Administrator, Bill Beatty, suggested that from now forward, with both federal and state options open to would-be crowdfunders, to be determined is: "will the federal model, which requires the use of licensed portals, or the typical state model, which allows issuers to conduct the offering, be more attractive?"
The sense has been that the cost of using a licensed portal could be a substantial slice of the $1 million that a crowdfunding startup would be permitted to raise the first year. But Beatty said he has gotten the sense of more reasonable pricing from some portal operators.
"If the costs prove to be reasonable, I think federal crowdfunding has a much better chance of gaining traction and being a useful tool for some small businesses," he said.