Friends in high places

The Inland Northwest, seemingly without friends among higher-ups at the U.S. Small Business Administration, suddenly has two. Last month, former Tri-Cities legislator Pat Hale joined the Washington, D.C., staff of SBA Deputy Director Melanie Sabelhaus as policy adviser. Norm Proctor, a former lobbyist for Bellevue-based Paccar Inc., became the agency’s Region X administrator last week. Both say they will be sensitive to the region’s needs as budget cuts force the agency to transform itself.

Both also have relationships with Spokane Mayor Jim West, established when he was a Republican leader in the Washington Legislature. The mayor is enthusiastic about the appointments.

A Seattle native and graduate of the University of Washington School of Law, Proctor was responsible for Paccar’s lobbying efforts in the 50 states, not just Washington.

“We kind of worked together a long time,” West recalls. “He’s going to be the kind of guy easy to get to know, easy to work with.”

Proctor succeeds Conrad Lee, whose relations with Spokane business leaders were somewhat prickly. Lee resigned in March to campaign for Congress.

West and Hale worked together very closely in the state Senate, where she served as head of the Republican caucus when West was majority leader. She was responsible for small-business issues, regulatory reform and workforce training. With her direct access to Sabelhaus, Hale will be in an excellent position to make sure the region’s perspective on agency issues is heard, West says.

The SBA has been an important source of money and information for small business. Under one of its programs, banks that lend to small business are guaranteed 85 percent of the loan principal back should the borrower default. Those guarantees are critical in areas like the Inland Northwest where capital is scarce. Loan demand hit record levels in 2003, and 2004 activity may be still higher. But the agency’s operating budget is shrinking, so Administrator Hector Barreto has launched a reorganization he says will cut costs without affecting service.

SBA Region X covers Washington, Idaho, Oregon and Alaska. Proctor says he got something of a feel for the region’s needs as its advocate since 2002, and spent his first days in office talking with the heads of district and branch offices across the territory. The realignment initiated by Barreto will change the size and role of many offices, including Spokane’s, which became a branch of the Seattle office in the fall after decades of independence.

“We don’t want to be this monolithic thing in the community,” Proctor says. “We’re going to be the new SBA.”

The SBA may rely less on centralized offices and more on proposed Alternative Work Sites in smaller population centers like the Tri-Cities, with the Internet providing the first touch point for businesses owners looking for assistance.

Proctor says he hopes to find out more about SBA plans and timetable this week at the SBA Expo in Florida. He says he expects to visit Spokane soon to meet with local business and government officials.

Hale, obviously, knows Eastern Washington well, but the SBA position actually puts her closer to her family home in Richmond, where many of her children and grandchildren live. She has been on the agency’s National Advisory Council for two years. She resigned from her state Senate seat in March.

Hale has already opened doors for Spokane. When area Chambers of Commerce visited Washington, D.C., last month, she arranged a meeting with Sabelhaus, the director of field operations. Sabelhaus, she says, provided assurances that Washington east of the Cascade Mountains would not suffer from the shift of more administration authority to the district office in Seattle. If that starts to happen, Hale adds, she wants to know about it.

“At least it raised the visibility of the issues,” she says, adding that she thinks the nature of the changes within the agency have been misrepresented. SBA is just trying to do the best it can with a smaller budget by making the same decisions private lenders would if they had fewer resources, she says.

Hale says SBA wants to improve the access women have to capital markets, and plug more small businesses into government procurement opportunities with the Department of Homeland Security and other agencies.

Unfortunately, neither Hale nor Proctor could provide assurances the Business Information Center within the Spokane SBA office will be funded beyond the end of this fiscal year. The center has been a great resource for the area. The centers may be among the activities SBA sacrifices for budgetary reasons.

Unfortunate, too, was the rotation of Ted Schinzel out of the acting director’s post in Spokane. Shinzel, who remains with the local office, had the misfortune to be in place during the downsizing, and the criticism from area officials and lenders that ensued. The former director of the Seattle office echoed many of those concerns when he resigned last month. Proctor says Schinzel will have the opportunity to apply for the Spokane position when a decision on a permanent director is made.

The tone of the discussions about the SBA’s future role in the region cannot help but improve with Hale and Proctor in their new posts. If the level of service is undiminished, that would be better still.