Cooper Sees Opportunities, Obstacles Taxes, Resistance To Change Could Limit Area’s Potential
For all its economic strides over the past decade and its ambitions for the next one, Bob Cooper sees Spokane and the Inland Northwest as a region bumping up against its limitations.
A restrictive tax environment, an inability to solve the puzzle of West Plains development, and a fearful failure to embrace the concept of public-private partnership will all impose limits on our economic potential in the next decade, he warns, unless we can muster the leadership and the will to solve these problems.
For the past 10 years, Cooper, 45, has presided over the Spokane Area Economic Development Council. The decade represents the agency’s most productive era in its 25-year history.
Last week, Cooper left Spokane for Ventura, Calif., where he has been hired to create a new economic development agency. But on his way out of town, Cooper paused to offer his perspectives on Spokane’s successes and failures of the past decade, and its challenges for the future.
Cooper came to Spokane the day Momentum was born, and leaves within a few weeks of its demise.
The timing, he says, is coincidental.
But, he adds, all the dramatic economic strides Spokane made during his time here were rooted in the Momentum organization.
“What I saw as probably the first and biggest accomplishment of Momentum,” Cooper says, “was a change in attitude.”
Momentum was the creature of a handful of Spokane’s most powerful business leaders who felt dramatic steps had to be taken to shake Spokane out of almost 15 years of economic doldrums. Calling on corporate leadership throughout the community, the group raised $5 million to fund a five-year plan of aggressive economic recruitment and development. Five years later, the group raised another $5 million and built a second five-year plan on the foundation of the first.
Cooper came to the Spokane EDC at the end of 1986 from his post as general manager of the Economic Development Corp. of Shasta County, Calif. He replaced the retiring Omar Lofgren, who had been president of the EDC for four and a half years.
“My first entry point to the community was the very first meeting of Momentum, back in January of 1987,” Cooper recalled. “What I found most intriguing about it was a skepticism that was related to me in individual conversations.”
One person after another pulled “the new guy” aside to offer their dampening comments about Momentum’s aspirations. Spokane, they said, was a pretty staid and conservative place. There’s really not going to be a lot come out of all this, they said.
“A ‘don’t get your hopes up’ kind of thing,” Cooper said.
But Momentum was able to overcome the prevailing mindset and instill in the business community an enthusiasm and an expectation of success.
“The rest was basic economic development 101,” Cooper added. “It wasn’t too many startling strategies when you got right down to it. Every community says you ought to do business retention and business recruitment and tourism and public policy.
“The formula doesn’t change that much.
“But the momentum came from getting people energized and wanting to do things. Changing the attitudes.”
Cooper agrees with most local economic observers that the breakthrough successes were the Boeing plant and the Seafirst credit card processing operation that located here in the late 1980s.
Those paved the way for a host of manufacturing facilities and data processing-type operations the EDC brought here in a steady parade over the past 10 years.
But the Boeing plant, which located near Airway Heights, also points up what Cooper sees as one of the community’s critical failures.
The bright new facility was to be the jumping-off point for development of the West Plains.
But that hasn’t happened.
And unless it does, Cooper said, Spokane’s economic recruitment efforts over the next decade could be stifled.
“Comprehensive plans and policies all agree that industrial development should be directed to the West Plains,” Cooper said. “But where is the will and the money to implement that?”
When a potential manufacturing recruit comes to Spokane for a visit, Cooper said, the EDC’s options are to show them MeadowWood industrial park at Liberty Lake, or the Spokane Industrial Park on Sullivan Road.
MeadowWood, with its geographical limitations and orientation to large manufacturing operations, is filling up, Cooper said, and the Spokane Industrial Park offers only leased building spaces.
“So where do you go if you are a small company that wants to own your own building on a couple of acres in a nice industrial park?” Cooper asked.
Clearly, these small companies will be the engines of America’s economic growth in the next decade. And without West Plains development, Spokane will have no place to put them.
Cooper said real estate people and developers who have tried to tackle the West Plains issue have been met with frustration upon frustration. The cost of providing necessary infrastructure - water, sewer, power, streets - is beyond the financial reach of most local companies.
“What it needs,” he said, “is a public-private partnership that says we are going to go out there and create the sewer and the water and the drainage and the streets and not require that of the small business person, because they just don’t have the capacity to do that.”
And that brings Cooper to a second chokepoint in Spokane’s economic future - the seemingly inherent resistance to the concept of public-private partnerships that could put many vital projects beyond the region’s financial reach.
“It’s become such a standard way of doing business in other states and other communities,” Cooper said, “because things have just gotten so expensive to accomplish.”
The idea of melding public and private funds for capital projects and economic development is particularly critical in Eastern Washington because, Cooper said, of the tax structure with which the state is saddled.
“Especially here we should understand the concept because our reliance on retail and sales tax is so heavy that you have to have a good economy to create money for the public coffers. The private sector has to do well to keep the state alive.”
But each time such public-private projects are proposed here, they are met with cries of “corporate welfare” and concerns over the lending of public funds to help enrich big business.
“But it isn’t the big guy you’re trying to help with these efforts,” Cooper said. “Sure the water and sewer was extended for Boeing. But if you develop the area out there correctly, there are going to be 100 other small companies that will benefit.”
Looming largest, though, among the limitations that Spokane faces in the next decade, Cooper says, is a backward tax structure.
“We just happen to be on the wrong side of a state line,” he said, referring to Idaho’s more business-friendly environment.
Those small start-up companies that will provide most of America’s economic growth in the years to come get absolutely hammered by taxation in Washington, Cooper said.
Business is taxed on gross sales, he pointed out, rather than on net income. Most states have a corporate income tax. It taxes a company’s profits, and allows deductions for business costs and losses.
“As a start-up, you are typically going to be losing money in those first critical years,” Cooper said. “But the state of Washington says it doesn’t matter. They are going to tax you on your gross sales anyway.
“And that’s just not fair.”
The other crucial issue Cooper sees for the economic future of the region is Spokane’s downtown redevelopment, from the Gonzaga University district to a Davenport arts district to downtown housing alternatives to the River Park Square project.
Spokane is confronted now, he says, with the opportunity to accomplish all of this, and do it right. If only it can muster the will to do so.
But why might that effort fail? Why has tax reform been spurned? Why do public-private partnerships succumb to opposition? Why has the West Plains languished?
To a large extent, all of these points of failure raised by Cooper come down to a question of leadership - the ability to offer visions and mobilize public opinion behind them.
“It’s a harsh thing to say,” Cooper said, “but ultimately, it’s one of those ‘the buck’s got to stop somewhere’ things.”
Cooper is optimistic on this point.
“There has been a marked improvement in the past 10 years of what I’ve seen from elected leadership here,” he said.
He said both the current city council and county commission have been able to attract more capable people. He sees less infighting and bickering, and more willingness to work toward common goals.
“In earlier years, I think the really good people shied away from running for local office because they just didn’t want to have any part of all that,” he said.
“But now you are having the better people step up. And if we can bring back the respect to political office, those people can make the hard decisions, good decisions, and I think you’ll see improvement there.”
Cooper leaves Spokane at a critical moment in his history.
Momentum has expired, and been replaced by a group called Focus 21. Focus 21 and The New Century Plan process seek to build Spokane’s future economic development strategies on a much broader community base than Momentum’s coalition of business leadership.
The agencies that are to carry out those strategies - including the EDC, the Spokane Area Chamber of Commerce, the Spokane Valley Chamber of Commerce, the Spokane Regional Convention and Visitor’s Bureau - are being reorganized and refocused.
Some have speculated that the restructuring drove Cooper out.
But he says no. He heartily endorses the changes.
He says the reorganization will allow the agencies to share resources in areas that can make them more cost-effective and efficient, while maintaining their autonomy. He likes the more sharply focused areas of responsibilities for each agency, and thinks the greater accountability requirements are good.
And in particular, he believes the reorganized EDC, able to focus solely on business recruitment, will allow the agency to build on its successes of the past decade.
“In the past 10 years, we’ve been able to grow our membership from about 50 corporations to 300,” Cooper said. “Our budget has gone from about $200,000 to $1 million.
“I’ve seen dramatic improvement in the quality of individuals who have stepped forward to be our leaders. The 32 board members we have right now are the cream of the crop in our community.
“It’s a good legacy, and whoever is sitting in this chair is going to have a good opportunity to succeed.”
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