Economic chief sent jobs away

The man hired to help revitalize Spokane’s economy previously served as acting chief operating officer of a small dot-com that subcontracted work overseas and nearly went belly up during Seattle’s high-tech meltdown in 2001.

John Pilcher, the city’s new economic development director, said he knows firsthand what happens when a seemingly good idea runs into the reality of too few customers.

“It was a messy situation,” Pilcher, 43, said Wednesday.

He was hired in January by Mayor Jim West to head a newly formed division of economic development, which will be charged with bringing more business, jobs and tax revenue to the city.

But five years ago, Pilcher spent a year working at a start-up company known as Sunhawk.com, which eventually laid off most of its Seattle work force and subcontracted the work with affiliates in London and Russia.

The company was the brainchild of some Microsoft computer programmers. It had gone public on the Nasdaq exchange and raised nearly $20 million through its initial financing. It was formed with a plan to convert Time-Warner’s sheet music library into a digital product without enough customer demand, he said.

“The market for its products really wasn’t developed,” Pilcher said. The company “basically had to get restructured,” a job that was given to Pilcher, he said.

In August 2000, the company fired 32 Seattle employees as part of the restructuring. In January 2001, 34 more people were laid off.

Pilcher said he left the company in the midst of the turmoil, signing an agreement not to talk about its financial inner workings. “I cannot talk about the details of Sunhawk,” he said.

U.S. businesses sending American jobs overseas has become a hot-button issue.

But Pilcher said the Seattle job losses at Sunhawk.com should not be viewed as outsourcing because the restructuring involved previously established subsidiaries.

The company subsequently merged with a California firm, he said.

“The market hype of the whole dot-com era really ended up hurting a lot of individuals,” Pilcher said. “In 1999 and 2000, people were funding things that shouldn’t have been (funded).”

Business fundamentals remain the foundation of any successful venture, he said, adding, “You’ve got to have a product, a market for the product and a financially sustainable model.”

West said Pilcher advised him of his employment with a troubled dot-com before he moved to Spokane. “I think he learned from some of those kinds of things,” the mayor said.

History in business

Pilcher brings with him a substantial resume to the job, which pays $99,000 a year.

He grew up in Puyallup and earned a bachelor’s degree in communications and political science from the University of Puget Sound in Tacoma. He went on to Harvard University, where he completed a master’s degree in business administration.

He spent five years working for Glacier Park Co., which was then a holding company for Burlington Northern Railroad properties.

After that, he spent several years in real estate consulting and development before taking a turn at public service.

He was hired by the Port of Seattle for marketing and then promoted to director of business services in the marine division.

West said his supervision of more than 100 employees at the port was one of the points that caused the mayor to choose Pilcher. The mayor said he also likes Pilcher’s mix of private business and public agency experience.

Prior to taking the city job, Pilcher worked as a consultant in Spokane for Conover Bond development company. He was selected from a field of seven finalists.

Pilcher’s first task in Spokane is reorganization of city functions that involve economic development, including planning, zoning, building, historic preservation, community development, human services and arts.

He said he wants to make sure that the city’s partnership in economic development provides taxpayers with a good return on their money.

“It’s really the private sector that creates jobs and fuels growth in the region,” he said, adding Spokane should be seen as a business-friendly place.

Cities such as Tacoma and Vancouver have had economic development functions for years.

Tacoma has seen results from its efforts in building jobs, and West argued successfully last fall that economic development was so important that the director’s job deserved funding in the face of police, firefighter and other employee cuts.

Pilcher wants to make good use of tax incentives to bring new jobs and projects to the area.

He also said he wants the city to coordinate its work with the chamber of commerce, economic development council and other business-oriented organizations.

“I think this community has some opportunity for growth,” he said.