There was no lack of business news in the Inland Northwest this year, making it difficult to come up with a list of top stories. But some issues dominated our pages, either because of the number of people they affected, their economic impact, or because they signaled a change in an industry or in the community’s direction. Here, then, are our picks for the top regional business stories of the year.
Metropolitan Mortgage & Securities meltdown: Just days before the New Year this 50-year-old Spokane company suspended dividend and interest payments to its investors. Before January was out, Metropolitan Mortgage’s independent auditor had quit, as had C. Paul Sandifur Jr., Met’s president and CEO and son of its founder. Metropolitan Mortgage filed for Chapter 11 bankruptcy protection in February and its insurance affiliates were thrown into receivership. A special investigator was appointed by the Bankruptcy Court to dig into the company’s finances. A grand jury was convened in Portland to probe for possible criminal wrongdoing. Meanwhile, Metropolitan began selling off its choice properties, including its eye-catching office tower in downtown Spokane, which went to Davenport Hotel owners Walt and Karen Worthy, its Metropolitan Performing Arts Theater, purchased by entrepreneurs Mitch and Cindy Silver, and its 77-acre parcel along the Spokane River just north of the downtown core, which was snapped up by North Idaho developer Marshall Chesrown. Legal fees are mounting in the tangle of lawsuits and bankruptcy court actions. And note-holders were told in August that they could receive as little as 10 cents on the dollar for their investments in Metropolitan and its sister company, Summit Securities.
Hospitals ailing: Poor reimbursement rates by federal and state health care programs continued to dog Spokane’s hospitals, which are among the largest employers in the region. Meanwhile, a struggling local economy meant steep increases in the hospitals’ charity care write-offs and bad debts. Financial woes prompted layoffs at both Empire Health Services, which operates Deaconess Medical Center and Valley Hospital and Medical Center, and Providence Health Care, parent of Sacred Heart Medical Center and Holy Family Hospital. Empire’s CEO resigned in October, to be replaced by an outside turnaround specialist on a one-year assignment.
Downtown redux: Residential lofts, condominiums, parking garages, retail storefronts, offices, boutique hotels, entertainment venues — all of these kinds of projects were proposed or built in downtown Spokane this year.Downtown housing, especially, was a recurring theme. Developer Ron Wells bought a Spokane fire station and announced plans to create retail, parking, and condominium units there. On the other side of downtown, developer Rob Brewster continued work on his Havermale Park mixed-use project, with a first phase of 28 apartment units. California developers stepped forward to save the historic Rookery and Mohawk buildings from the wrecking ball and announced plans to renovate the two buildings into condominiums and apartments.
Destination — Kootenai County: Construction began on facilities for two big new employers in Kootenai County — Sysco Foods and Buck Knives — and another company, U.S. Bank, announced that it also would open a major operation in North Idaho. The Minneapolis-based bank is building a 60,000-square-foot call center in Coeur d’Alene that’s scheduled to open in the spring with about 150 employees. Company projections are for 500 employees at the end of five years. Buck Knives’ new manufacturing plant in Post Falls also is expected to open in the spring. That company will hire about 150 people. And Sysco Corp. broke ground in the spring on a 120,000-square-foot warehouse in Post Falls that will employ 150 and supply restaurants in three states.
Real estate surged: Rising home-mortgage rates didn’t cool home sales or construction of residential real estate in Spokane and Kootenai counties this year. In Kootenai County, contractors built 1,871 new single-family homes from the second quarter of 2003 to the same time in 2004. Spokane County added 1,844 single-family homes and issued permits for 1,300 new apartment units during that time. Construction accounted for a large percentage of job growth in both counties over the past year. As of mid-year, median home prices had risen sharply in Spokane and North Idaho.
Hot Zone launched: Spokane became — at least temporarily — one of the nation’s most technologically advanced cities when it flipped the switch in June on its downtown wireless “Hot Zone.” The Hot Zone encompasses 100 square blocks of the city center and offers free high-speed wireless Internet access. The project was a collaboration of government and private industry. Spokane police now use the zone’s wireless connectivity to quickly check suspects’ records, and the city plans other uses for the technology. Spokane was in front of most bigger metropolitan areas in creating a free wireless zone, drawing nationwide attention to the Inland Northwest.
Convention Center project: Work began in late summer on one of the largest public construction projects to take place in the region in the past few years — expansion of the Spokane Convention Center. Already, however, the 100,000-square-foot, $80 million project has had its share of turmoil. Three members of the Public Facilities District board overseeing the project quit this year, and work got under way a month later than expected due to a delay in acquiring needed property. In December, the PFD said the project is facing about $4 million in cost overruns.
University District takes shape: A university district on the east end of the downtown Spokane became more than an idea with a series of planning meetings, a federal grant to pay for yet more planning and the start of a new building. The core of the university district, the Riverpoint Higher Education campus, is getting a new $33.8 million Academic Center that’s slated for completion in 2006. The University district is sought by economic development officials for its expected payoff in growth of technology and science-based businesses in the region.
Mining prospects brighten: Higher metals prices boosted the fortunes of the Northwest’s mining companies. Silver prices of $6 to $8 an ounce were the norm through most of the year, after years of languishing at $5 an ounce or less. Gold futures rose about $450 an ounce for the first time since 1988. The improving prices had a ripple effect. Miners in Idaho’s Silver Valley pocketed thousands of dollars in bonuses that are tied to silver prices. Investors began eyeing the junior mining companies that do much of the industry’s exploration work. And big mining companies, such as Coeur d’Alene Mines, pursued new projects.
Skating event announced: Spokane was chosen as the site of the 2007 U.S. Figure Skating Championships, beating out Boston. Early ticket sales to the event have been brisk and organizers are saying it could draw more than 120,000 spectators and have a local economic impact of $30 million. The skating championships could prove to be the single biggest sporting event in the city’s history.