Spokane Valley ponders Huntwood perks – Retaining company has city leaders feeling pressure

The fledgling city of Spokane Valley has run right into its first major economic development problem.

John Stucke
Staff writer

Huntwood Industries, the largest custom cabinet maker in the West, needs to expand.

With 500 people at work in a clean, modern factory that pays above-average wages, the manufacturer is the sort of company many cities envision as an ideal job creator.

And indeed, some communities are reportedly dangling relocation incentives.

Attempting to beat back lucrative offers coming from Idaho cities and other suitors, worried Spokane Valley officials are scrambling to assemble any and all perks allowable under Washington’s notoriously restrictive economic development laws.

"We’ve been up to our ears just getting the city door open and sending out a pro-business message," said Spokane Valley Mayor Mike DeVleming. "Now it comes down to how to back our claims with real action."

The Huntwood puzzle at least is a learning experience, he said.

Tim Hunt, owner of Huntwood, said his company is "looking at options in Washington and Idaho," with substantial interest from other areas, too.

"Having said that, nothing is etched in stone," Hunt said. "We might have more to say in a couple months."

City staffers in Spokane Valley aren’t waiting around.

Lee Walton, who served as interim city manager, said staff has quickly catalogued available industrial lands and researched traffic, water, sewer and power issues.

"Huntwood told us they have a problem and mentioned three or four other cities that have expressed interest in them relocating," Walton said, "and here we are still emerging from the egg."

Located in the Spokane Industrial Park along North Sullivan, Huntwood Industries has outgrown its 260,000 square feet of shop, office and showroom space.

Dean Stuart, director of marketing for Crown West Realty LLC., said there’s plenty of room within the industrial park for expansion. With an 11 percent vacancy rate, Stuart said there has been no indication Huntwood is ready to move out.

City memos indicate Huntwood is searching for space costing about 55 cents a square foot per month. That’s a low price point unable to be met at such obvious Spokane Valley sites as Mirabeau Point, lands owned by Avista Corp. on Barker Road, or Inland Empire Paper Co. land at Mission and Flora.

Owner Hunt declined to discuss the specifics on Huntwood’s relocation wish list, other than to say his business "has grown through the grace of God. Please print that. It’s important."

In Idaho, local communities can employ financial leverage unavailable to Washington cities. It makes economic development more difficult for so-called border towns like Spokane Valley.

Take Buck Knives Inc., for example. The company relocated to Post Falls from a San Diego suburb after looking at other cities. The choice was made easier by government and private aid that included $750,000 from Idaho to train employees. Other incentives included a $3,000 state reimbursement for each worker Buck hires and trains. That could be another $600,000 pledge if the company realizes its plan to create 200 jobs.

On top of that was a $100,000 welcome-to-Idaho check from Bechtel Corp.

Helping to orchestrate the deal was Rick Carr, president of Jobs Plus.

He said there’s no current effort by Kootenai County to lure Huntwood from Spokane Valley.

"The indirect dialogue we had with them was quite sometime back — months ago," Carr said.

City Councilman Mike Flanigan said he feared Spokane Valley’s push may be too little, too late.

"I think at this point, the odds are 50-50 we can keep them," he said. " (Huntwood) had already developed a mental picture of their plan and we were left almost in the position of having to recruit them.

"We’re moving as quickly as we can to change their minds to stay."

Flanigan, along with DeVleming, lamented that they didn’t have more to offer.

"Five hundred jobs is a very serious issue," DeVleming said. "We’re doing everything we can and trying to find out exactly what’s in our economic toolbox. We wish it had more tools."

Mark Turner, president of the Spokane Area Economic Development Council, declined to speak specifically about Huntwood, but acknowledged "a very real need for us in Spokane County to identify existing employers and do what we can do to help them."

"It’s best not to take them for granted."

The Washington Constitution has strict prohibitions guiding direct and indirect aid to business. For instance, spending public funds for private purposes is outlawed. So is the extension of credit by local governments to benefit private concerns, said Dave Mercier, the new city manager of Spokane Valley.

He added that there are some instances in Washington state where investments in public projects such as sewer line extensions, road widening projects, street lighting and sidewalks can be done as long as they provide public benefit and a cost recovery mechanism.

Spokane Valley city attorney Stan Schwartz said the city can’t offer cash giveaways nor waive the approximately $110,000 permitting fee that would be charged to build on about 25 acres.

Yet, he said, there are things left to be done.

"We can still be creative," he said.

Education benefits can be extended, said DeVleming, which would allow Huntwood to maintain and further train its workers and new hires.

And there’s been some talk of trying to take advantage of the area’s empowerment zone that offers credits on state sales taxes and business and operations taxes awarded by the state Revenue Department.

To collect those benefits, employers must locate and invest within an empowerment zone — in this case, areas within the city of Spokane — or, if the business is located in the county it must hire from within that zone.

Flanigan said using the empowerment zone is a stretch for Huntwood. "I don’t think we can really do that."

He added: "What we need to do is figure out what can be done, what’s fair, and go out and show them the benefit of doing business in Spokane Valley.

"Isn’t this something for us just right out of the gate?"

Business writer John Stucke can be reached at (509) 459-5419.

http://www.spokesmanreview.com/news-story.asp?date=050603&ID=s1346121&cat=section.business