By Isaac Bonnell

There was no shortage of cocktail party conversation in 2009. Every day, it seemed, produced a new headline screaming about pandemic, financial ruin or “cautious optimism” (whatever that is).

The H1N1 flu virus kept schools and businesses on germ patrol for most of the year, and it certainly added fuel to the national debate on health care reform. Michael Jackson left us in June, prompting numerous reenactments of the Thriller dance, and, to top it off, President Barack Obama received the Nobel Peace Prize in December.

But national hysteria aside, we sifted through our archives and picked out the top 10 stories that affected our local business community.

1. Recession and recovery

The economy was the foremost concern last year.

Home prices continued to slump and sales never really caught up to previous levels. Consumer spending was also on the decline, causing many companies to lay off employees. Unemployment in Washington rose to just more than 9 percent, which was still a whole percentage point better than the national average. And for those with money in the stock market, the big question was “When will we hit bottom? When will the economy turn around?”

“The stock market goes down every so often, but when we are in the bottom of the trough, that is when you normally have the most volatility — and that is exactly what we have been seeing,” said Tim Villhauer, an Edward Jones financial advisor, in the May edition of the BBJ.

By autumn, there were some signs of improvement in the economy, but the general consensus was that this will be a “slow, jobless recovery.”

2. NOAA picks Newport, Ore.

After years of wooing the National Oceanic and Atmospheric Administration (NOAA), Port of Bellingham officials received bad news in August when the federal agency announced that it had chosen Newport, Ore., instead as a location for its Pacific marine research facility.

Later that month, on the last day possible, the port appealed the decision to the Government Accountability Office (GAO), stating that NOAA did not address the fact that the Newport site is in a 100-year floodplain.

“There is no evidence in the record that NOAA ever dealt with this issue,” Attorney Frank Chmelik told port commissioners. “With the floodplain issue, they have to reopen the bids or disqualify Newport.”

In early December, the GAO upheld the port’s appeal and directed NOAA to address the floodplain issue. It is still unclear what action NOAA will take, but at least Bellingham is back in the running.

3. Budget cuts

The recession hasn’t been kind to local governments or public institutions. Gov. Chris Gregoire started the year with the tough task of closing a $5.7 billion shortfall in the 2009-2011 budget. By year’s end, though, the situation had worsened and the state was facing a projected $2.6 billion deficit in 2010.

In June, Western Washington University cut $6.1 million from its budget for the academic year. Under the proposed 2010 state budget, WWU could lose another $4 million in state funds for the next school year.

After making cuts for its 2009 budget, the city of Bellingham cut another 13 percent from the 2010 budget. A total of 65 full-time positions have been eliminated since 2008.

“City officials have made tough choices as we downsized the 2009 spending plan, and we face more in this (2010) budget,” Pike said in a statement.

4. Following the stimulus

News media across the nation played “follow the money” last year once the federal government began handing out stimulus funds.

In Whatcom County, the Bellingham International Airport received $3.3 million from the Federal Aviation Administration to modernize airport facilities. The Whatcom Transportation Authority received $1.65 million to replace 11 buses with new, fuel-efficient buses.

In all, Whatcom County governments  and organizations received $87.5 million in federal stimulus money.

5. Rough retail market

By the end of the second quarter, taxable retail sales in the state had fallen 14 percent, the largest drop in state history.

Slumping sales were evident throughout the year, though. Several large retailers closed their Bellingham locations this year: Circuit City, Joe’s Sporting Goods and Linens-N-Things. Times were also tough on small, local businesses. Cameo Shoe Shoppe, Paris Texas, Back Porch Alley and The Keg (to name a few) succumbed to the recession.

Local appliance retailer DeWaard & Bode made a bold move in August, when it announced that it was taking the former Circuit City space. Its old location on Cornwall Avenue is nearly vacant now, with neighboring tenant Sunshine Liquidators closing.

6. Cash for Clunkers

The auto industry got a big boost this year with the federal Cash for Clunkers program. By the time the trade-in deal started, though, Chrysler and General Motors had already declared bankruptcy.

In order to save money, Chrysler pulled its cars from 1,100 dealerships, including Roger Jobs Motors on Iowa Street.

“It solves Chrysler’s problem, but really it takes an asset that we have and basically nullifies it,” said Roger Jobs.

7. Social media splash

Facebook and Twitter gained wide acceptance in the business community last year as struggling companies tried everything possible to keep customers coming through the front door.

Derek Johnson, founder of the group texting company Tatango, opened the eyes of many local business owners during several social media seminars last year. He urged people to think of social media as something more than just advertising, to be interactive on social media and to tie it all back to your business.

“If someone finds you on Facebook, they should also be able to find you on Twitter,” Johnson said. “And you need to always draw people back to your Web site.”

8. Big plans, little financing

Financing remained a major stumbling block for developers last year, which kept many local projects on hold.

Bellwether Gate was held up for eight months while developer Dave Ebenal finalized the project’s financing. In March, Seattle-based Living Care announced that it had plans to build a 91-unit senior living facility in Old Town; that project has yet to apply for building permits

In June, plans were announced for a Marriott hotel on Northwest Avenue. It is slated to be the largest hotel in the county with 204 rooms. Little movement has been seen since June.

9. Building up, not out

Despite the slump in new development, city planners did not slow their efforts to plan for more growth inside city limits.

The City Council passed the controversial Infill Toolkit, which outlined 11 types of medium- to high-density housing that is now allowed in certain parts of the city. Many residents of the downtown neighborhoods expressed concern that infill housing such as townhomes and cottage housing will ruin the single family character of the neighborhoods.

City planners also pushed forward on urban village plans for the Samish Way corridor and the Fountain District.

“Urban villages aren’t for everyone, and they won’t replace the single family residence with a garden and workshed,” said Bellingham Planning Director Tim Stewart. “But now is the time to plan for this type of growth.”

10. Changes at the Port

After 18 years with the Port of Bellingham, Executive Director Jim Darling left the organization in July to take a position with Maul Foster & Alongi, an environmental and engineering consultancy.

Darling said the timing was right to make a transition from the public sector to the private sector. “We just had a recent agreement with the cty on the waterfront and we solidified the Alaska Ferry, so it was a good time.”

While the port continues to search for a new executive director, the board of commissioners will be welcoming a new member this month. Local builder Mike McAuley will replace 16-year incumbent Doug Smith.