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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

BUSINESS YEAR IN REVIEW: A year of change


Cabela's new store near Stateline, Idaho, was an instant hit. The region also drew other major retail stores.
 (The Spokesman-Review)
From Staff Reports The Spokesman-Review

Compared to crashing housing markets nationwide, the markets in the Pacific Northwest, and Spokane in particular, with continually appreciating prices, seemed to be bright spots this year. Questions abounded about what would become of Spokane’s nonprofit hospital system when Empire Health Services made clear its intention to sell to a for-profit hospital system based in Tennessee. Wheat hit $10 a bushel, delighting farmers on the Palouse and the region experienced record-low unemployment levels, creating a hiring crunch in some employment sectors.

Here are some of the highlights of the year in business in the Inland Northwest:

Coming off record highs, the housing markets in Spokane and North Idaho slowed down, more noticeably in Idaho than in Spokane. During 2007, Kootenai County’s residential real estate market, which peaked in June 2005, saw the number of homes for sale rise and demand decline. In Spokane, home sales declined compared to last year, but prices continued to rise as officials said the market was returning to a more modest growth rate. However, due to the appreciating values, Spokane’s market received recognition from Forbes magazine and the National Association of Realtors.

The federal government settled its prosecution of Metropolitan Mortgage and Securities Co. with a jail sentence for one executive and civil settlements with five others. The collapse of Metropolitan, the biggest corporate failure in Spokane history, left thousands of investors holding $470 million in unsecured bonds. Another $131 million in preferred shares were rendered worthless by bankruptcy. Hundreds lost their jobs.

C. Paul Sandifur Jr., former chairman and chief executive officer, will pay $150,000, which includes a civil penalty, a repayment of funds to the company and interest payments.

Empire Health Services agreed to sell its hospitals to for-profit Community Health Systems Inc. of Tennessee. The deal is subject to regulatory approval which is expected to last well into 2008. If approved, perhaps $100 million from the proceeds will be routed into a new charitable health foundation in Spokane. The deal also calls for at least $100 million in improvements to the hospitals.

Both Washington and Idaho experienced record-low unemployment levels, making it harder for employers in many sectors to find qualified workers. Workers benefitted from rising wages and more job choices. But many industries – particularly manufacturing, warehousing, construction and groundskeeping – felt pinched by the shortage of qualified workers and higher labor costs.

Wheat hit $10 a bushel this summer rewarding farm families across Eastern Washington and North Idaho with a profitable harvest — an all-too-often rarity in farm country. Farmers and their families were able to pay down debt, buy new equipment and save for retirement.

Spokane’s downtown revitalization continued with ground broken on the Kendall Yard development and completion of the Upper Falls condominiums and other projects. Additional outside investors entered the Spokane market, buying commercial real estate in the downtown core. However, building renovations also pushed out dozens of low-income individuals, shining a spotlight on the city’s struggle to evaluate and create affordable housing.

Two Spokane-area Ford dealerships announced big changes in operations, as American automakers struggled nationwide. Empire Ford closed its doors after almost two decades in business, and Wendle Ford announced a plan to close its Northtown dealership and convert the space into an upscale mall, while expanding dealership operations farther north.

Big ticket events, such as the U.S. Figure Skating Championships and the “Walking with the Dinosaurs” show helped boost demand for hotel rooms in Spokane County by almost 10 percent in 2007. The Spokane market outperformed competing markets in Portland, Seattle and Boise in terms of growth in room demand, which helped drive an increase in the average price for hotel rooms.

The Inland Northwest continued to draw attention from national retailers, with, most notably, Kohl’s department store entering the market with three new locations and national outdoor retailer Cabela’s opening in Post Falls. Retail development boomed along Interstate 90 in Spokane Valley, with Joe’s Sports, Outdoor and More, Lowe’s and Fred’s Appliance all opening or planning new stores.

Itron’s stock price soars, from a low of $49 to a lofty $112, in a year that saw the Liberty Lake-based leader in power metering purchase a European rival in a $1.6 billion deal. The company is poised for more growth as it competes for up to $2 billion in utility contracts, mostly with California utilities.