Bellingham: Economy

Major Industries and Commercial activity

The year 2001 delivered a number of blows to Bellingham's economy. Georgia-Pacific Corp. closed its pulp and paper mill, resulting in the loss of 420 high-paying jobs and nearly $1 million to the local economy each year. Alcoa's Intalco Works aluminum plant also shut down part of its Bellingham operations, further trimming the local work-force. Heightened border security after the September 11th terrorist strikes significantly reduced the number of visitors from Canada that spent their retail and entertainment dollar in Whatcom County.

Local officials realized that the area's dependence on resource-based industries made it particularly susceptible to such events, and that diversification was necessary to ensure future stability and growth. The downfall of diversification is that tourism- and other service-related jobs tend to pay far less than manufacturing jobs. While hospitality jobs paid an average of $26,000 per year in Whatcom County, the jobs lost at Georgia-Pacific paid about $52,000 a year, according to Jim Vleming, a state economist, in the July 31, 2002, issue of The Seattle Times.

Still, jobs in service industries are increasingly important, not just to Bellingham's economy but to that of the nation as a whole. This is due in large part to the emergence of technology-driven sectors in the 1990s. Whatcom County employment in services increased from 18.9 percent in 1981 to 25.6 percent in 2000, while manufacturing employment shrunk from 20.8 percent to 14.3 percent over the same period.

Bellingham's economy has been traditionally based on agriculture, fishing, and timber. Today, these segments are still vital components of the local economy, though of less importance than they once had been. The bulk of Whatcom County's agricultural activity involves berry and dairy farming. Although the number and size of farms has been steadily declining, production has been climbing. In 2001 the county's 201 dairy farms produced milk valued at $185 million, compared to the 480 farms and $130 million in production in 1985. During 2000, workers in Whatcom County's berry farms produced more blueberries and raspberries than any other county in the state, and ranked second in strawberries. Seed potatoes and apples are also important crops.

Commercial fishing, one of the area's oldest industries, has taken a drastic downturn due to overfishing, shortened seasons, and falling prices. Once home to one of the largest commercial fishing fleets, Whatcom County had 740 commercial vessels in 1985; by 2002 the Port of Bellingham reported only 177 such vessels. The forestry industry tends to be more stabile, as loggers in Whatcom County rely more on private lands than on public timberlands, making them more impervious to federal environmental restrictions on public resources.

Despite the losses in paper and aluminum segments, manufacturing remains an important industry in Whatcom County. Manufacturing of wood products and transportation equipment has seen gains in recent years. Boatbuilding is a crucial segment of the transportation equipment sector, as its focus has shifted from fishing vessels to the production of luxury yachts and military boats.

Healthcare is becoming increasingly vital to the local economy. Comprised of such areas as hospitals, nursing and residential care, ambulatory clinics, and social assistance, the healthcare field employed nearly 7,600 residents of Whatcom County in 2003. Across the nation, healthcare is a booming industry, driven by an aging and increasingly obese population. The Bureau of Labor Statistics estimates that certain segments of this industry will experience a growth of up to 4.5 percent in wages between 2002 and 2012.

Items and goods produced: boats, lumber and wood products, tissue paper, refined oil and petroleum products, blueberries, strawberries, raspberries, seed potatoes, apples, processed frozen foods, baked goods

Incentive Programs—New and Existing Companies

Local programs

The Bellingham Whatcom Economic Development Council promotes local businesses, products, and services, and helps firms in interfacing with regional, national, and international markets. It assists businesses by providing information on expansion and investment decisions, and by providing liaison with government officials and community leaders. It also offers a revolving loan program and a public infrastructure program. Additionally, the Port of Bellingham, a municipal corporation, offers an industrial revenue bond program and a foreign trade zone program to benefit local businesses.

State programs

The state of Washington offers a number of incentive programs to attract new and expanding businesses to the state. Among them are B & O tax credits; sales/use tax deferrals for technology and manufacturing companies as well as for firms relocating or expanding in distressed areas; and loan programs that apply to rural areas and the redevelopment of brownfields.

Job training programs

Job training programs are offered by the state of Washington, and the Bellingham Whatcom Economic Development Council facilitates the implementation of workforce development programs. Training programs for a variety of industries, including healthcare and manufacturing, are offered by such institutions of higher learning as Bellingham Technical College, Northwest Indian College, Western Washington University, and Whatcom Community College.

Development Projects

Funding for the Depot Market Square was secured in 2004. When completed, this development will serve not only as the permanent home of the Bellingham Farmers Market, but also as a community gathering place for public and private events. Elsewhere in Bellingham, the first phase of construction of the Bellwether on the Bay was completed in the early 2000s, with the second phase underway in 2005. Bellwether on the Bay is a mixed-use complex occupying 15 acres of waterfront property. Phase I developments include two office buildings, the four-star Hotel Bellwether, a fitness center and spa, and a variety of restaurants and shops.

Aside from commercial developments, Bellingham has devoted considerable resources to improve culture, recreation, and the general quality of life. The Taylor Avenue Dock and Boardwalk was completed in 2004; this $2.9 million project restored and improved the historic dock and built a new boardwalk connecting the dock to Boulevard Park. September 2004 hailed the grand opening of the Studio Theatre, a 3,000-square-foot room within the historic Mt. Baker Theatre to host small-scale musical and theatrical productions. Also in 2004, a clean-up and restoration project was initiated at the Holly Street Landfill. Reconstruction of portions of the Civic Field Complex, including its grandstands, football field and track, stadium, and skate park, will be completed in stages from 2005 through 2006 at the cost of over $9.9 million.

Economic Development Information: Bellingham/Whatcom Chamber of Commerce & Industry, 1201 Cornwall Ave., Ste. 100, PO Box 958, Bellingham, WA 98227; telephone (360)734-1330; fax (360)734-1332; email chamber @bellingham.com. Bellingham Whatcom Economic Development Council, 105 E Holly St., PO Box 2803, Bellingham, WA 98227; telephone (360)676-4255; toll-free (800)810-4255; fax (360)647-9413; email info@bwedc.org. Greater Whatcom Partnership for a Sustainable Economy, c/o Port of Bellingham, 1801 Roeder Ave., PO Box 1677, Bellingham, WA 98227; telephone (360)676-2500

Commercial Shipping

Whatcom County has four major locations for U.S.-Canada border crossings: two in Blaine, one in Lynden, and one in Sumas. Freight rail service is offered in Bellingham by the Burlington Northern Santa Fe, Canadian Rail, and Canadian Pacific railroads. Among its motor freight companies are Puget Sound Truck Lines, Roadway Express, and Yellow Transportation. The area is also home to 10 local freight brokers. Bellingham International Airport (BIA) serves as a base for charter airlines and is a port of entry for general aviation aircraft. The airport is home to Foreign Trade Zone #129, an area where foreign goods bound for international destinations can be temporarily stored without incurring an import duty. BIA also offers customs brokerage and air cargo services, and as of 2002 houses a U.S. Customs office.

The Port of Bellingham, a municipal corporation dedicated to fulfilling the essential transportation needs of the region, operates a cargo terminal with three ship berths, backed up by two warehouses. Among its exports are wood pulp and aluminum ingots from local factories; its primary import is cottonseed pulp for cattle feed. The port administers five federally designated foreign trade zones to promote manufacturing, warehousing, and trade in the region.

Labor Force and Employment Outlook

The following is a summary of data regarding the Bellingham metropolitan area labor force, 2004 annual averages.

Size of nonagricultural labor force: 76,900

Number of workers employed in . . .

construction and mining: 7,000

manufacturing: 8,200

trade, transportation and utilities: 14,700

financial activities: 3,000

professional and business services: 6,100

leisure and hospitality: 8,800

government: 15,500

Average hourly earnings of production workers employed in manufacturing: $18.27 (2004 annual statewide average)

Unemployment rate: 6.0% (January 2005)

Largest employers	Number of employees
Western Washington University	2,235
St. Joseph Hospital	1,757
Bellingham School District	1,651
Whatcom County	930
City of Bellingham	892
Haggen Inc.	843
Sodexho Services	648
Brown & Cole	634
T-Mobile	525
Fred Meyer Inc.	441

Cost of Living

According to the U.S. Bureau of Economic Analysis, the per capita personal income for Whatcom County was $23,133 in 2002. This figure was not only below the national average of $29,469, it trailed behind Washington state overall, at $31,230. Explanations include increased competition from Canada, a decline in high-paying manufacturing jobs combined with an increase in low-paying service jobs, and an increase in the number of part-time employees.

The following is a summary of data regarding several key cost of living factors for the Bellingham metropolitan area.

1999 (4th Quarter) ACCRA Average House Price: $179,000

1999 (4th Quarter) ACCRA Cost of Living Index: 107.8 (U.S. average = 100.0)

State income tax rate: None

State sales tax rate: 6.5% (food and prescription drugs are exempt)

Local income tax rate: None

Local sales tax rate: 1.7%

Property tax rate: $11.40 per $1,000 of assessed value (2005)

Economic Information: Bellingham/Whatcom Chamber of Commerce & Industry, 1201 Cornwall Ave., Ste. 100, PO Box 958, Bellingham, WA 98227; telephone (360)734-1330; fax (360)734-1332; email chamber@bellingham.com