What's Ahead: Business trends to watch for in 2015

With a waterfront development agreement looming, changes coming to the grocery industry, and more breweries preparing to open by summer, 2015 should be another busy year for business news in Bellingham and Whatcom County.

The following items are just a few of the things that could make headlines in the year ahead.

Beer pouring in

Two new breweries opened in Bellingham in 2014, and two more are poised to open this year, while several established breweries are expanding. Livability.com ranked Bellingham number 8 in its national list of best cities for craft beer, and some local groups are trying to make Bellingham a brewery destination.

Stones Throw Brewing, at 1009 Larrabee Ave. in Fairhaven, will be Fairhaven’s first brewery when it opens later this year. John Luciano, co-owner of Stones Throw, said the he and co-owner Jack Pflueger are working on their tap room and brewing facility. In mid-January, they were brewing 12-gallon test batches and waiting for larger brewing equipment to arrive.

Luciano said he hopes to open the brewery by summer.

Another new company called Gruff Brewing is working on a tap room and brewery at 104 E Maple, across the street from Boundary Bay Brewery.

Eric Wight, Jameson Longman and Chris Bierman, owners of Gruff Brewing, hope to open their brewery and tap house this spring. Wight said the three have been brewing and working on the building during evenings and weekends while working full-time day jobs.

Kulshan Brewing Co., which opened its brewery and tap house at 2238 James St. in April 2012, is planning a spring opening for its second brewery and tap house north of Interstate 5 at 1538 Kentucky Street. The 12,000-square-foot warehouse space will allow Kulshan to brew about 15,000 barrels a year. Kulshan’s original facility maxed out its brewing capacity in 2014 at about 3,100 barrels, Vitt said.

Wander Brewing, at 1807 Dean Ave., opened May 2014 and already can’t keep up with demand for its craft beer. Its owners are planning to double brewing capacity this year, co-owner Colleen Kuehl said.

Chuckanut Brewery and Kitchen, at 601 W. Holly St., is planning to expand as soon as possible, owner and brewmaster Will Kemper said.

“I really can’t make any more beer in this facility,” Kemper said. “Right now we’re maxed out.”

Kemper said he doesn’t have a new space lined up yet. Chuckanut opened in 2009, making it the second oldest brewery in town next to Boundary Bay, which started brewing beer on Railroad Avenue in 1995.

Kemper said new breweries opening is a good thing for established breweries.

“With other breweries coming on board, business is only increasing. Everybody benefits,” he said. “Seemingly, there’s so much activity with craft beer but it’s nothing in the overall beer world.”

Bellingham Tap Trail is working with breweries and event organizers toward improving Bellingham’s tourist appeal. In its third year, Bellingham Beer Week had about three dozen breweries participating in events.

To tie the brewery scene together, the Bellingham Tap Trail, an organization that started in 2014 to promote local beer, published maps to Bellingham’s breweries and tap houses, and plans to offer brewery tours this spring, co-founder Scott Pelton said.

Waterfront development agreement

The Port of Bellingham and an Irish firm called Harcourt Developments have been negotiating an agreement for a piece of the G-P Waterfront since February 2014. In January, Port Executive Director Rob Fix said an agreement could come before the Port of Bellingham commissioners at a Feb. 3 meeting.

The agreement will likely be for about 14 acres on the northern end of the G-P site, including the Granary Building, Fix said. Last year, the port and Harcourt were talking about 10 acres. If Harcourt developed the first 10 acres successfully, they could be awarded a contract for another 10, Fix said in a July 2014 Port Commission meeting.

The discussed agreement has changed, and now includes more specific performance metrics for the Irish firm’s work, Fix said.

“It’s still a concern whether someone performs or not. There’s enough performance measurements in there that we’re in good shape,” he said. “If they don’t perform they don’t get the whole 14 acres.”

Harcourt is a development, management and investment company with a portfolio of international projects.

The Titanic Quarter in Belfast is one of Harcourt’s biggest projects. The firm redeveloped 300-acre former shipyard where the Titanic was built. Fix toured the Titanic Quarter and several other Harcourt projects in December. While there, Fix got a chance to review Harcourt’s 2012 finances, he told the commissioners in December.

“I found out that their assets do indeed exceed their liabilities,” Fix told the Port Commission at its Jan. 6 meeting. “In 2012 they exceeded them by about $70 million.”

He did not get to see Harcourt’s 2013 finances.

Harcourt is currently involved in several lawsuits. One is over a development project on the island of Jersey, in the Channel Islands. Harcourt is suing over money spent on work carried out before Jersey terminated Harcourt’s contract, according to the Jersey Evening Post.

Grocery changes coming

Haggen’s announcement in December 2014 that it would be acquire 146 former Albertsons and Safeway stores this year made national headlines, but a new Safeway at Sunset Square and some other coming changes will likely make bigger waves in the grocery industry in Bellingham and Whatcom County this year.

Safeway should open in the former Cost Cutter location at 1275 E. Sunset Drive on Feb. 6, Safeway spokesperson Chieu Lash said. The 67,000-square-foot store will have a deli, flower stand, bakery, wine department, and an organic and natural foods section. It will also have an in-store Starbucks kiosk, free Wi-Fi, and a fueling station.

The new Safeway will likely affect everyone in grocery — even the Community Food Co-op, said co-op general manager Jim Ashby.

“We’ll notice it,” Ashby said. “It’s further fragmenting the market. I don’t think it will have a huge impact on us, but everything affects us a little bit.”

The co-op also has big plans for 2015. It is expanding across West Holly Street to the building that housed the Better Than New clothing store. Ashby expects the co-op’s new wing, called the Co-op Connections Building, to open in mid-May with a bakery, classrooms and administrative offices.

Across the street, the co-op’s original location is also scheduled for a remodel. Ashby said the north end of the store will change, including updates to the deli and meat section, as well as more seating in the mezzanine area that currently houses offices.

Safeway isn’t the only grocery moving into a former Cost Cutter. Grocery Outlet is planning to open a new store in the Ferndale Cost Cutter, which is closing early this year. Grocery Outlet will occupy a 20,245-square-foot section of the building at 1750 Labounty drive in Ferndale. Melissa Porter, vice president of marketing for Grocery Outlet, said the store should open mid-summer and will likely have about 30 employees.

The Markets LLC, a Bellingham-based grocery company, owns Cost Cutter. The company closed its Bellingham store, the Market at Lakeway, in 2013. The Markets LLC could not be reached for this story.

Haggen’s acquisition of 146 West Coast stores doesn’t include any in Whatcom County, but the company is hiring at its Bellingham corporate office.

Costco still hasn’t announced anything about its possible future store on West Bakerview Road. Costco officials began discussing the site, on the north side of West Bakerview Road near Pacific Highway, with the city in late 2012. Costco hasn’t applied for a building permit.

Costco spokesperson Kayleen Burnett said it’s the company’s policy to not comment on upcoming projects or changes until plans are finalized.

Legislators look at pot

Bellingham’s Top Shelf Cannabis became Washington’s first recreational marijuana store in the state on July 8, 2014. Six months later, Bellingham has six legal pot shops, and more retailers and growers are on the way.

With the current tax structure on recreational marijuana, there may not be room in the market for many more. Data released by the Washington State Liquor Control Board shows that as new stores open, sales numbers decrease at established stores.

One stated goal of Initiative 502, which legalized the possession and purchase of marijuana for adults 21 and over, was to eventually eradicate the black market for marijuana. Recreational marijuana is taxed 25 percent at each transaction – from grower to processor, from process to retailer, and from retailer to consumer. When it hits shelves, a gram of pot typically costs between $20 and $30 – more than twice the street market value.

Liquor control board spokesperson Brian Smith said in July that a gray market of medical patients selling legally obtained marijuana to people who aren’t medical patients will be challenging to eliminate.

Lawmakers hope to address a range of marijuana-related issues during the state’s 2015 legislative session, which began Jan. 12.

Legislators pre-filed seven cannabis-related bills. The bills ranged from an overhaul of medical marijuana to erasing misdemeanor marijuana crimes from past offenders’ records.

“The most important thing is to come up with a legally sanctioned, safe system for medical marijuana users,” Gov. Jay Inslee said during a legislative preview.

Aaron Nelson, vice president of operations at 2020 Solutions, which has two recreational marijuana stores in Bellingham, said he is following the legislative session closely. He thinks people who are suffering should have access to affordable medical marijuana, but he thinks the system should change, he said.

“The state legislature needs to correct the tremendous inequity resulting from a highly taxed and regulated recreational marijuana industry trying to survive amid numerous unregulated, untaxed medical marijuana dispensaries,” Nelson said in an email. “It’s simply a matter of fairness.”

Tourism promotion

A two-fold increase in the amount of three-star-and-above hotel rooms in Bellingham is underway. Hotels in Bellingham have had low vacancy rates since 2002, which made Bellingham an attractive destination for new hotels.

In response to the surplus of new hotel rooms, the City of Bellingham is seeking proposals for a new “signature event” that would attract overnight visitors to Bellingham during the tourism offseason between September and March.

“Establishing another signature event in Bellingham will not only build excitement for its residents and business owners but continue to establish a brand for Bellingham as an exciting destination,” Bellingham Mayor Kelli Linville said in a press release about the event. “Being the central point between two large cities, we have a real opportunity to explore events that differ from what the larger cities offer and to encourage visitors to seek out Bellingham for something unique.”

The city of Bellingham has approximately $75,000 to put toward the event for 2015, and $50,000 for both 2016 and 2017.

Money for the event comes from the city’s lodging tax special projects fund, which is supported by lodging tax collected at hotels and motels in Bellingham. It is a separate fund from the tourism promotion fund, which awards yearly tourism promotion grants and is also supported by lodging tax collected in the city.


Photos: Andy Bronson | For the BBJ

Chuckanut lead brewer Bryan Caldwell working on a batch of beer.
Chuckanut lead brewer Bryan Caldwell working on a batch of beer.
Chuckanut owner Will Kemper is looking to expand his operation.
Chuckanut owner Will Kemper is looking to expand his operation.
Chuckanut lead brewer Bryan Caldwell working on a batch of beer.
Chuckanut lead brewer Bryan Caldwell working on a batch of beer.

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