The top 10 stories of the year

Housing market, economy top the list this year, as well as a long-time favorite: the waterfront


Photo by Isaac Bonnell

Demolition of the Georgia-Pacific tissue mill began in 2008, giving residents a new glimpse of the waterfront. The city and the port are still hashing out details of a master plan for the site.


What a year it was.

As the longest election season ever came to a close — with an historic ending, no less — headlines shouted the woes of the national and global economy. The federal government began bailing out financial giants and the bouncing stock market ensured that reporters everywhere would not suffer a slow news day.

Granted, 2008 started on rocky ground. The sub-prime mortgage crisis was still unfolding and the word “recession” was still hush-hush. Twelve months later, though, the R-word is a reality that has hit home here in Whatcom County.

In looking back through our archives, we picked out the top 10 stories that have dominated our pages and mean the most for you, our readers.


1 Housing market collapses

In the past, local home prices have made our top 10 list for how fast they have risen. For instance, in 2005 the median home price rose 20 percent to $327,825. This year it’s different.

Median home prices plummeted this summer to a low of $260,500 in August and appear to be stabilizing.

The number of new homes being built also dropped as first-time homebuyers shied away from the market. In April, the BBJ reported that many architects and home builders are relying on custom homes and renovations to weather the storm.

“I’ve seen my business slow down, but I’ve been in business long enough that I’ve seen a lot of these ups and downs,” said local builder Gary Reid, adding that he is able to weather the hard times by doing custom projects. “I’ve always relied on custom building in recession-type times.”


2 Financial sector falters

Banks and financial institutions around the country were jolted as the market continued to be weighed down by bad mortgages. Such “toxic assets,” as the media has called them, helped lead to the demise of Washington Mutual, the nation’s largest savings and loan.

WaMu was seized and sold in September to JPMorgan Chase after customers withdrew nearly $17 billion in deposits in 10 days. Smaller local banks fared much better by having limited exposure to the sub-prime mortgage market and Freddie Mac and Fannie Mae stocks.

By October, though, everyone was feeling the pinch.

“Even though we as community bankers didn’t do the sub-prime loans, we were very much impacted when the market came to a halt,” said Rich Jacobson, CEO of Horizon Bank.


3 Waterfront woes

Waterfront planning this year began on an optimistic note: The Port of Bellingham released the massive, 1,300-page draft environmental impact statement for public review. The glory and sense of accomplishment was short-lived though, as the city called for more studies and review.

From that point, the conflict between the city and the port slowly began to brew. Differing street grids emerged and the fate of several old brick buildings on the former Georgia-Pacific pulp-and-tissue mill site led to a lawsuit.

Meanwhile, demolition began on the tissue mill and the public began demanding compromise between the two street grids. The BBJ broke the news in October about a third street grid, proposed by architect Dave Christensen and developer John Blethen.

“The city has a plan and the port has a plan and they’re not congruous,” Blethen said at the time. “We’re looking for middle ground that would be exciting and affordable. We’re looking for a plan that we think is doable.”

Mayor Dan Pike said he never intended it to become the city’s plan versus the port’s plan. But for many concerned citizens who attended public meetings in November, that was how the situation was perceived.

At one point, upset port commissioners called off waterfront planning altogether, stating that the city had “fundamentally changed its direction on the waterfront redevelopment project.”

The impasse didn’t last long. Port commissioners and City Council members came together in December to reaffirm their commitment to the project. The issue of crafting a development agreement, however, remains a potential flashpoint going into 2009.


4 Hospital merger

After almost a year of discussions, the two largest providers of health care merged in June. PeaceHealth Whatcom Region, which operates St. Joseph Hospital, bought the privately owned Madrona Medical Group for more than $3.4 million.

In January, while both parties were still negotiating a deal, the BBJ examined the difficulties of bringing together two large institutions.

“The bumps in the road will be after acquisition,” said Nancy Steiger, CEO of PeaceHealth. “It’s integrating cultures that is the hard part. It’s like two families coming together.”

By the end of 2008, St. Joseph Hospital had added more than 250 employees and will continue to grow into 2009.


Photo by Isaac Bonnell

Dr. Erick Laine, former CEO of Madrona Medical Group, was instrumental in merging the independent group of doctors with St. Joseph Hospital.


5 The rise and fall of fuel prices

Whatcom County hit a record $4.50 per gallon for regular gas in June, prompting many residents to seek other means of getting around town. Bus ridership skyrocketed and bike sales jumped as shipping costs led to higher prices for most retail items.

Even in April, local companies were struggling to keep up with rising costs.

“It’s acting so fast, we don’t have time to catch up,” said Lex Ludtke, owner of Ludtke-Pacific Trucking. “I’d like to be positive, but it’s terrible. Diesel right now is going through the roof.”

Now fuel prices are going the other way. By mid-December, the average price of gas in Bellingham was down to $1.73. And the big question is: How long will it last?


6 Brown & Cole restructures

This was a good year for local grocer Brown & Cole, now known as The Markets. The company started the year freshly out of bankruptcy and brought on Kevin Weatherill to replace outgoing CEO Craig Cole.

With new direction, The Markets is opening a new store in Birch Bay this year and remodeling several stores, such as the Lakeway Cost Cutter.

The BBJ caught up with Weatherill in October to talk about the company and what consumers can expect from the grocer: “They are going to see a lot of features they don’t see in other supermarkets. They are going to see some new departments I am not going to disclose because we are not there yet,” he said.


Photo by Lance Henderson

Kevin Weatherill, new CEO of The Markets, formerly Brown & Cole, is leading the push to renovate the company’s grocery stores in Washington and Oregon.


7 City, county budget shortfalls

Declining home sales combined with a slowing economy have punched a hole in local government budgets. The City of Bellingham projects zero revenue growth for 2009 and has cut 13 vacant positions. The county’s budget estimates the loss of 36 positions.

According to the city’s September numbers, sales tax is 3.9 percent under projections, B&O tax is 1.5 percent under projections, utilities tax is 2.5 percent below projections, and real estate excise tax is 26.9 percent below projections.

“The bulk of a city’s or county’s expenses is for personnel. So there is not a lot you can do to cut costs without cutting someone’s job,” said Jim Justin, assistant director of legislative affairs for the Association of Washington Cities.

While revenue has been declining, costs have been increasing — meaning 2009 will be a lean year for local governments.


8 Planning for growth

“Infill” seemed to be the word of the year in the planning and development community. The city hosted a second planning academy devoted to infill and is in the process of amending the development code to include that type of housing.

Meanwhile, the county is still working through an appeal from Caitac USA over the limited expansion of Bellingham’s Urban Growth Area. Early in the year, the city and county agreed to place 286 acres in the UGA, down from the originally estimated 2,128 acres.

“The city’s resolution was predicated on the county being upheld,” Pike said. If the county is found in violation of UGA rules, “it would make our resolution moot.”

Alongside infill is the issue of affordable housing. The Countywide Housing Affordability TaskForce concluded it’s year-a-half-long study of affordable housing and released its final report in September.

The CHAT report notes that one-quarter of Whatcom County residents are spending more than the recommended 30 percent of their income for housing. The group made several recommendations to remedy the situation, including continuation of the CHAT group. City and county governments have yet to take any action on the issue, but are expected to in early 2009.


9 Unemployment rises

As the economy continues to slide, local employers have been forced to make job cuts. Arrowac Fisheries closed and cut 30 jobs, Alcoa Intalco Works reduced production and cut 100 jobs, and other manufacturers around the region are slimming down.

At 5.2 percent unemployed, Whatcom County is still faring better than the national unemployment rate of 6.7 percent.

But that may not last long, said regional labor economist Joe Giannamore.

“We are not really insulated,” Giannamore said. “We are going to continue to see a rise in unemployment locally just like we will see nationally.”


10 Bellwether Gate pushes forward

While many large development projects are now on hold, at least some development is moving forward on the waterfront. Bellwether Gate, which will include four buildings and house the new offices for the engineering firm CH2M HILL, survived a height appeal from neighbors this year and began construction.


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