April 2, 2006 in Business

Industrial evolution

By The Spokesman-Review
 
Photos by Liz Kishimoto photo

Tarra Chapman, cuts a sheet of chai-with-almond Bumble Bars at Bumble Bar, Inc., located in the Spokane Business and Industrial Park. Bumble Bar makes gluten and dairy-free energy bars and operates in 3,200 square feet of space.
(Full-size photo)

New building planned

» Spokane Business and Industrial Park is constructing a $6.5 million building at Trent Avenue and Sullivan Road for tenant Core-Mark International.

» Core-Mark is a distributor of packaged consumer products for the retail industry. It currently has a branch at the industrial park and another on North Dyer Road, and will combine those operations into the new building.

» It’s expected to move into the new facility in mid-November.

When Glenn and Elizabeth Ward tired of a grueling commute via ferry and freeway from their home on Vashon Island to their business in Tacoma, they decided to give Spokane a try.

Two years ago the couple shopped around for commercial space to lease for Bumble Bar Inc., their 11-year-old organic nutrition bar company. They landed in an unlikely place.

In the past, a company with just 11 employees making gluten-free food might have seemed a shoe-horn fit among the manufacturing biggies at Spokane Business and Industrial Park.

But management at the Spokane Valley business park treated Bumble Bar like a major player, carving out 3,200 square feet of space, building offices and a production room and negotiating a competitive lease to seal the deal.

“This kind of facility in Puget Sound would (cost) almost double. The park is just wonderful to do business with,” Glenn Ward said.

Bumble Bar, which has sales of $1.2 million a year, is growing at about 20 percent a year. Ward said the industrial park offers room to accommodate that growth as well as a rare sense of community. “When you need some help, your neighbor will be there to help you.”

Largest in the state

At over a half-century old, Spokane Business and Industrial Park is an often-unheralded force in the regional and state economies. The Spokane Valley complex is home to 120 companies with about 4,500 employees.

Washington CEO magazine recently dubbed the 615-acre business park the largest in the state — pitting it against newer complexes in densely populated areas such as Seattle and Kent.

The complex, with its 106 buildings with 4.5 million square feet of leasable space, weathered downturns in the economy that brought an about 13 percent vacancy rate from 2001 through 2004. Today, the park has 95 percent occupancy.

“We have been on a curve here. Right now we’re boasting the best occupancy the park has had since we bought it,” said Dean Stuart, marketing director for Crown West Realty LLC, the owner of the park since 1996.

Crown West has invested $35 million on renovation and construction in the park. The company built seven new buildings with high ceilings and multiple dock doors — amenities that make loading and unloading freight easier.

Expansion plans include building a $6.5 million distribution center for Core-Mark International, a distributor of packaged consumer products for the convenience retail industry. Stuart said work will begin on the 100,000-square-foot facility, to be located at Trent Avenue and Sullivan Road, within the next 30 days.

Old naval supply depot

The Spokane Business and Industrial Park initially got its start as the Velox Naval Supply Depot during World War II. Traces of its former life include a still-active U.S. Army Reserve Center.

According to “The Spokane Valley: Volume 4” written by local historian Florence Otto Boutwell, trains traveled in and out the park, shipping cargo such as high-octane airplane fuel and medical supplies.

The General Services Administration deemed the park “surplus” in 1958, Boutwell wrote, and two years later the property was sold to Spokane Industrial Park, Inc., a subsidiary of Washington Water Power Co., which later became Avista Corp. Washington Water Power sold the park to free up capital for other acquisitions, the company said at the time. Although it didn’t announce the purchase price, the park had been listed for sale in 1995 for $53 million.Crown West’s parent company, Petrus Partners, a Wall-Street investment company, bought the park.

Because every building needed re-roofing, Crown West formed its own roofing company to do the work. Other improvement projects included adding insulation, electrical upgrades, new paint and resurfacing the majority of some 12 miles of roads inside the park.Part of the park’s success in building up its tenant base can be attributed to its willingness to carve up big spaces for small to mid-size businesses, offering suites as small as 1,200 square feet, Stuart said.”The trend has certainly been toward a smaller user rather than a larger one,” he said. “These days most of the people who walk through the doors are looking for 4,000, 6,000 and 8,000 square feet.”

Industrial space in the park leases from 17 cents to 40 cents per square foot and Stuart said agreements are negotiated aggressively, adding, “We don’t lose deals based on price.”

Additionally, the park has onsite management and its own maintenance staff, another draw for perspective tenants.

Tenant mix is changing

A recent survey found that the park’s business base is more diverse than in the past.

Initially, the vast majority of the companies were manufacturers. Today, only 60 percent of the companies leasing space are manufacturing-based. Another 30 percent are distributors and 10 percent are retail and other service-oriented businesses, Stuart said.

Horizon Furniture Inc., owned by brothers Paul and Doug Johnson, is among a small group of retailers operating in the park.

The company no longer manufactures the furniture it sells and, instead, offers discount shopping in a no-frills warehouse setting. Last year the company sold about $5 million worth of furniture.

Paul Johnson said Horizon switched locations within the park once and then was able to expand within its existing building.”We started out here in the summer of ‘96. We basically had about 2,000 square feet and now we have 60,000 square feet,” Johnson said, adding that locating in the park helps Horizon maintain its discount pricing.

“Our overhead is very low here,” Johnson said. “If we were to put this building on Sprague or Division, we’d be paying considerably more for space.”

Other less-traditional companies that have settled into the former manufacturing hub include coffee and wine distributors, a wholesaler of clothing and products made from hemp, high-tech start-ups and Merlin Motors Inc., a company that makes a three-wheeled motorcycle that looks like a roadster.

Customers are sticking around. Stuart said the park boasts a retention rate of about 89 percent for this decade.

Spokane Industries Inc., a steel foundry, leases 280,000 square feet of space there and has been at the park for about 50 years. Inland Empire Distribution Systems started with 10,000 square feet in 1983 and now leases 320,000 square feet of space.

When businesses do leave, Stuart said, it’s often to purchase or build their own facility.

Huntwood Industries, for example, recently built a state-of-the-art manufacturing facility in Liberty Lake. While the company vacated 240,000 square foot of space in the industrial park, about a third of its former space already has been filled, Stuart said.

Other tenants are expanding. Diversified Marine Products recently added 8,000 square feet to the space it leases for its wholesale business, for a total of 21,000 square feet of space. The California-based company supplies retailers with water-sport toys, such as tubes and wakeboards, and fish finders and other gadgets.

Manager Mike Kenney said company representatives looked at multiple commercial locations but chose the Spokane Business and Industrial Park because it offered easy access to Interstate 90 for trucking shipments to its 50 to 70 customers in Eastern Washington and North Idaho.

In addition to lease rates Diversified Marine Products can live with, Kenney said the park’s management is customer service-oriented, adding, “They’re just a good company to work with.”


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