Hanford: the money trail

Third of 5 parts The new luxury homes, shimmering ponds and golf course greens loom above the golden desert like an opulent mirage. Roadside golf balls the size of beach balls lure house hunters to “Horn Rapids,” where construction teams pound out spacious, course-side houses starting “in the mid-200s.” More than 3,000 homes, two schools and an industrial park are planned for this ambitious Richland project, within view of Hanford’s ominous gray nuclear domes and stacks. Across town in the Tri-Cities, Cadillacs, Pontiacs, Mitsubishis and Mercedes sell quicker than ever. Jacuzzis go like bathtubs. Big diamond rings, pricey homes and expensive office furniture sell at record pace, too. This economic transfusion comes courtesy of U.S. taxpayers, now pouring $2 billion a year into the new Hanford cleanup mission. While there is scant evidence of the public investment on the Hanford grounds, the money is changing the face of the Tri-Cities. Humble housing still carpets much of Pasco and beyond, but the once barren hillsides of Kennewick and Richland sparkle with view homes the size of high school gymnasiums. Streets are jammed with new cars, bright as jelly beans, shuttling between glass office buildings and custom homes. To picture the Tri-Cities’ construction bonanza, imagine new houses popping up in Spokane about three times faster than they now do. Hungry businesses are crossing the Cascades and the Rockies to jockey for space at Hanford’s money trough. As a Richland contractor puts it: “Anybody who can swing a hammer has opened Joe Blow Construction Company.” The U.S. Department of Energy is spending public cash to prevent environmental disasters, but also to fuel the Tri-Cities economy. A draft DOE document indicates the agency ranks the region’s business future as high a priority as complying with cleanup agreements. Many see the economic commitment as a well-deserved final jobs program for the people who “built the bomb” and endured the boom and bust cycles that came with it. Some Tri-Cities leaders envision the cleanup money creating a high-tech industrial hub that survives long after the federal dollars leave town. Many builders, merchants and others aren’t looking that far ahead. They’re immersed in the high-roller moment, trying to make what they can while the Tri-Cities is flush. “I’ve never seen so damn many new cars on the road!” says 90-year-old Richland resident Sam Volpentest, a Tri-Cities booster. “Some of these people think this’ll go on forever. They’re smoking the wrong stuff.” THE MONEY MACHINE The federal government now sends more money to the Tri-Cities, population 110,000, than it pries loose from all of Idaho’s 1 million residents. In fact, if all personal federal income taxes collected from Idaho and half of Montana were hauled to Hanford, there wouldn’t be much left by year’s end. Hanford’s $2 billion ripples through the Northwest and beyond, but most of it stays in the Tri-Cities. About half of it pays the salaries and benefits of local residents. The 18,750 workers average $43,000 a year - twice what the average Spokane worker makes. Hundreds of Hanford employees make over $80,000 a year. Hanford provides a fourth of the Tri-Cities’ jobs and close to half of its total income, giving Benton County the second highest wages in the state. Only affluent Bellevue residents have more pocket money than Richland folks. Hanford also spreads the wealth by shooting about $600 million directly into private companies, buying everything from high-tech cleanup gear and tools to computer services, office decor and donuts. The money gets around. About $16 million went to Spokane last year, to more than 200 different businesses. Another $5.6 million made it into Idaho. The biggest share falls closest to Hanford. The DOE’s top contractors spent about $175 million on goods and services in the Tri-Cities last year. The list of 500-plus recipients reads like the Yellow Pages. Some of the companies are big, some small, some surprising. Westinghouse gave International Technology Corp. $18 million last year for mostly environmental work. Another million was dropped at Cellular One, and $928,000 went to lease office space from Ivan Cook, who traded farmland for a downtown building years back. Hanford’s biggest contractor also spent $6,000 at a Pasco bakery, $38,000 at Kennewick Schwinn Cyclery, and $1,800 at the Book Worm. Retouching by Rhonda got $28 for improving photographs of Westinghouse officials. Taxpayers paid the bills. Pasco doesn’t see nearly as much of the cash as Richland and Kennewick. It remains a hub for migrant farm workers, not scientists and engineers. Wages still lag behind most of the state. But some Pasco businesses thrive on the Hanford money. “They just buy good quality, top-of-the-line stuff,” says a Pasco furniture dealer who counts on Westinghouse and other Hanford contractors for 20 percent of his cash flow. “They use a lot more upscale equipment. The local people can’t afford it.” THE RIPPLE EFFECT Many of Hanford’s well-paid troops can be found clogging Richland’s Jadwin Avenue and George Washington Way as early as 3:30 p.m. most weekdays. Some stop for a beer at the hip R.F. McDougall’s overlooking the Columbia River. Others go to Kennewick’s Columbia Center Mall or other shopping meccas. “Business is definitely on the upswing,” says Dennis Schoeneberg, manager of Dodson’s Jewelers in Kennewick. “We’re (selling) more and more of the larger diamonds” - carat-plus rocks starting at $6,000. Up the street, Apollo Spas is thriving, too. The company sold about 300 hot tubs in the Tri-Cities since the Spokane firm opened an office there 19 months ago, says manager Rob Taylor. Hottest models? Jacuzzis in the $4,000 range “with all the bells and whistles,” Taylor says. “We almost wish we would have gotten a bigger store down here, but you can’t foresee the future.” Hotels and convention centers are also buzzing with out-of-town people attending Hanford-related conferences. Outsiders now boost the Tri-Cities economy with about $16 million a year - four times their impact in 1991. Car dealers also smile at day’s end. The more cars you pack on the lots the more cars you sell, says Bruno Rudolph, ad director for Bill McCurley’s auto dealerships in Pasco. Cadillacs and luxury imports are hot sellers. McCurley’s peddled more $30,000-and-up Mercedes by May this year than it sold in any other entire year. “There were some real skinny years,” Rudolph says. “But now it’s almost to the point we can’t get enough cars on the lot.” Across the street, Camrys and Accuras exit Simpson Toyota with new owners behind the wheels. Manager Fred Nolan can’t stop a grin. “It’s been going like crazy.” After shopping, many Hanford workers return to homes in the new planned communities with inviting names like Meadowood Estates, Orchard Hills and Sagewood Meadows. A blimp floats above the Morningside neighborhood advertising “new homes” while cars wheel past three tiers of convulsing fountains into the Fountain Hills. There is evidence Tri-Cities construction crews may have built more big, expensive houses than the region can fill. Demand is slowing. About 20 times as many houses have been built in the Tri-Cities this year than in all of 1988, the year before the cleanup began. The Tri-Cities built more homes this year than Spokane County despite having about a third the residents. Average new home prices were $68,500 in early 1991. Today they run about $113,000. The Tri-Cities was among the top five markets of fastest growing home prices in the country for most of the past two years. It twice topped the charts. Scenic golf-course-living is the rage. Along with Horn Rapids and Canyon Lakes - where street signs warn drivers to watch for golf carts - the Meadow Springs course is one of the Tri-Cities’ coveted neighborhoods. City records show Meadow Springs course-side real estate is almost a Hanford who’s who. Skirting the greens are houses owned by a Kaiser engineer, a Westinghouse vice president, a Westinghouse engineer, a Battelle researcher and other managers. “We get a lot of people wanting to move into these communities who don’t even play golf,” says a TriCities developer. “They just like the ambience of it all.” DEJA VU The Tri-Cities was a cluster of dusty farm towns before the Manhattan Project in 1943 seized a half-million acres north of Richland to make plutonium. The community relished its role in “ending the war.” Richland High School athletic squads became the “Bombers.” But embracing the atom came with a price: a roller-coaster economy that thrives and dives with the nation’s nuclear investments. The Tri-Cities rode high with the building of Hanford, the Cold War arms race, construction of commercial nuclear power plants, and the Reagan arms build-up. The dips in between were painful. During some busts displaced workers fled town, leaving houses on the market. By 1989, the new jackpot emerged: cleanup. Within three years, there were more Hanford workers than during peak plutonium production. Downtown property values soared with the demand for apartments and office space. The current boom may be peaking, and could end abruptly with a round of Hanford budget cuts. Congress is starting to grouse about dubious cleanup progress on a 40-year project that some say could devour $100 billion. Tom Dellinger, a Pasco contractor who worked on Hanford projects for 20 years, says the Tri-Cities has been at the DOE’s mercy for too long. “We’ve been a prostitute for DOE since the ‘40s, and it’s not right for the community any more,” he says. “The prostitute’s getting old. She’s got a lot of lines in her face.” Peter McMillin is too busy working to worry much about a potential bust. His Richland construction company, Zygotech Inc., tripled its revenues in the past three years thanks to Hanford work, which provides 80 percent of his business now. “It’s good cash flow,” he says. “They pay good. I wish I could do all my work there.” On a recent afternoon, McMillin was among dozens of contractors salivating at the prospect of building 150,000 square feet of office space for Hanford workers. The project has gold rush potential. The government sweetened the deal to attract immediate interest, promising a guaranteed 15-year lease to anyone who builds it. After the first lease ends, the contractor would likely own the building outright. Any further rent would be profit. “I can’t think of something that would be a better investment than that,” McMillin says, marvelling. “It’s practically a printing press for money.” THE VISION The Tri-Cities’ goal is to break free of its economic cycle and make this latest vein of public gold last. Trying to create the self-reliant hub, activists have already used public money to help land three major research laboratories with the potential to do work far beyond mopping up nuclear cesspools. The progress sparks optimism. Richland’s latest economic development plans offer this vision of its “picturesque All-American City” in the year 2013: “Recognized as the technology nucleus of the Northwest since the early 1990s, Richland has earned a reputation as a world-class center of environmental science and engineering. The massive cleanup of the Department of Energy’s Hanford Reservation has generated a flourishing accumulation of high-tech R&D and industrial firms.” The city’s crystal ball also calls the Horn Rapids golf community - now a fledgling project with 80 homes - one of the city’s two “signature developments.” Richland city leaders swooned at a Bellevue developer’s Horn Rapids proposal last fall to create an “electronic community, a lifestyle package for the 21st century.” The city has spent taxpayers’ money getting sewer and water lines to the new development. Millions more would be needed to build the two schools. Benton County Treasurer Claude Oliver considers Richland’s commitment at Horn Rapids a potential taxpayer menace. He fears that once the Hanford money slows and many well-paid workers leave, Horn Rapids could turn into a sour investment taxpayers will shoulder for years. He says the region’s explosive growth has driven the county into record debt, building roads and expanding schools, jails, courts, administration offices and more. The county is $120 million in the red now, with another $100 million of debt possibly on its way. “The growth is positive when the economy’s going up,” Oliver says. “But when the economy’s going down it becomes a double whammy. Businesses stay clear of the area because of the debt.” If this boom busts, Oliver doesn’t like the scenario. He sees bankrupt developers and irate taxpayers. “It’s the people who will be left behind who will be left holding the bag.” John Lindsey says Oliver’s vision is overly gloomy. “I, and the people I work for, think we can avoid an inevitable bust,” says the president of the Tri-City Industrial Development Council. “We have a stronger base, a different underpinning to the economy now.” But when Lindsey gives speeches he often warns crowds the Tri-Cities needs a substitute for Hanford jobs. He reminds people the region will eventually have to survive without the federal dollars. “The (Energy Department) is going to clean up this site,” he says, “and then they’re leaving.”