Silver Mountain ski resort put up for sale

» Idaho’s Silver Mountain resort for sale « Idaho Business Review.

Spokane’s “The Union Credit Union” Closed by Regulators

State regulators shut down a Spokane credit union Friday — the first in 15 years — after its finances fell victim to high unemployment among members, who were mainly workers in the recession-battered construction industry.

via Business & Technology | Spokane credit union closed by regulators | Seattle Times Newspaper.

The stated cause of the failure is interesting … unemployment? Who would have guessed?

Numerica Credit Union of Spokane Valley will take over the deposits of TUCU’s members. Here’s the official press release.

Earlier in the week, Spokane based AmericanWest Bancorporation announced it will file Chapter 11 bankruptcy and sell its branch structure to a private investment group.

2 local bank failures in one week…

Update: Spokane’s Commercial Real Estate Vacancy Rate takes a Sharp turn for the worse

Data source: OfficeSpace.com

I usually update this early in the week but, since the latest data is from the end of the week and with the sharp change, I am updating this chart earlier. I am just guessing that this might have something to do with businesses clearing out by October 31st. By why is this month any different than other months? I do not know.

Read more of this post

Spokane’s car theft rate is 18th worst in the nation

Spokane used cars are at higher risk of theft than new cars | Car Deal Expert.

Car thieves took 70 Honda’s (and that’s Honda’s only) in the past 9 days.

This is awful – and likely another indicator of the areas economic troubles.

May be some one was trying to steal the city’s fire engine?

Unmanned fire engine hits Spokane home

Unmanned fire engine hits Spokane home – News Story – KXLY Spokane.

This isn’t economic or demographic… just embarrassing.

Related Articles

More likely to die of drug overdose in Spokane, than in a car crash

SRHD: More likely to die of drug overdose than car crash | KREM 2 News | KREM.com | When it Matters Most | HealthLink.

Not sure what that means. May be we do not have many car crashes? Just hoping …

Spokane-based AmericanWest Bancorporation to file Chapter 11 bankruptcy

The parent company of AmericanWest Bank will file Chapter 11 bankruptcy and the Court would supervise a competitive bidding process for the Bank’s common stock“. The retail AmericanWest Bank will remain in operation.

Third Quarter Results

While the news sort of spins this story as a positive, here’s the bottom line:

Read more of this post

Spokane area firm Itron Announces Record Quarterly Financial Results

Itron, Inc. – Itron Announces Record Quarterly Financial Results.

Itron is said to employ nearly 500 people in Liberty Lake, Wa, near Spokane. The company employs perhaps 7,500 to 8,000 total including elsewhere in the U.S. and outside the U.S.

The company makes electric power meters and sees significant opportunity with the up coming transition to “smart meters” for electricity, gas and water.

CNN: “Microsoft’s consumer brand is dying”

Ouch. Big Ouch: Microsoft’s consumer brand is dying – Oct. 27, 2010.

Microsoft, as a company, has failed to create new businesses around new products.

Reuters says much the same. Read more of this post

Sprint’s new 4G cellular network covers much of Washington – but not yet Spokane

4G Coverage and Speeds.

No Sprint 4G in Spokane. But they cover most west side cities and the Tri-cities.

T-Mobile has their 4G network in Spokane. Sort of.

I checked the T-Mobile coverage map and they provide 3G to my home but not 4G. Surprisingly, most of South Hill and large sections of the Spokane Valley have 3G but not 4G service. I do tip my hat to T-Mobile though for providing a detailed coverage map that estimates signal strength down to the street level. T-Mobile’s network is not “true 4G” but it is a much faster data service.

Other providers, like Verizon, AT&T, Cricket? “4G” is Australian for “press release”.

60 Minutes reports: Real unemployment is 17% nationwide

I wrote previously that Spokane’s 8.2% unemployment rate estimate is off in space. With huge office, retail and industrial real estate vacancy rates, a growing population but yet non-farm jobs held nearly constant for ten years, the 8.2% rate does not make sense. There are 10% fewer jobs in Spokane County than there were in 2007.

CBS’s 60 Minutes apparently agrees, saying that actual nationwide unemployment today is closer to 17%. They interview a former Silicon Valley fiber optics engineering manager who now works a retail sales job at Target to illustrate.

Read more of this post

Empty bio-tech building faces foreclosure in Seattle

Business & Technology | New, empty biotech building faces foreclosure | Seattle Times Newspaper.

177,000 square feet. Across the street from the Fred Hutchinson Cancer Research Center. And the life science building is empty and the bank is foreclosing.

Biotech is said to be the future of Spokane too.

Major research centers in Spokane?

The following is from Prof. Richard Florida’s blog on the “creative class” and related topics. Research centers are concentrated in relatively few areas (and not in Spokane or Eastern Washington – see the map in the linked article):

It’s a given that scientific talent is highly mobile. But distance still plays a role. All other things equal, it is both easier for and more likely that leading scientists and researchers will move within these clusters – say between Boston and New York, or even Chicago and Toronto; much the same is true among, say, L.A., San Francisco, and Seattle. And collaboration within them is surely easier as well. This kind of proximity creates considerable short- and long-run advantages both for the universities and research centers within the cluster and the cluster as a whole.

This would seem to imply that ongoing efforts to upgrade research universities, attract top scientific talent, and build world-class research environments in China, India, the Middle East, and other parts of the world are likely to face significant uphill battles. And that established mega-clusters are likely to enjoy significant advantages into the foreseeable future.

via Creative Class » Blog Archive » Where the World’s Brains Are – Creative Class.

These comments apply also to the incoherent cluster strategy in Spokane.

FRONTLINE: a hidden life: spokane: a view of their city | PBS

This is from 4 years ago but is interesting: FRONTLINE: a hidden life: spokane: a view of their city | PBS.

Its a look at Spokane in the context of the newspaper running the late Mayor Jim West out of town.

Spokane commercial real estate vacancies take a turn for the worse

Retail and Office real estate vacancy rates move higher while Industrial vacancy category drops slightly.

Source: OfficeSpace.com

As always, firms use different ways of estimating vacancy rates and one estimate will not be the same as that provided by another firm. Regardless of the source of estimates, the key is to look at the relative magnitude and the trend over time. My gut feel is that Spokane’s economy hits bottom in 2011 and then drags along the bottom for some period of time.

The increasing vacancy rates are inconsistent with the State’s report of a declining unemployment rate in Spokane. We know that population is increasing, total employment has been nearly flat for a decade, and commercial vacancy rates have continued to rise. If commercial vacancies go up, there are necessarily fewer jobs. The official unemployment rate of 8.2% is inconsistent with the other data.

“Two separate realities” for Spokane?

The following is from a political story about California politics. But this quote stood out as similar to what I see happening in Spokane:

The result is two separate California realities: a lucrative one for the wealthy and for government workers, who are largely insulated from economic decline; and a grim one for the private-sector middle and working classes, who are fleeing the state.

via The Golden State’s War on Itself by Joel Kotkin, City Journal Summer 2010.

In Spokane, it is the government and the health care class that has come to dominate.

Another interesting quote suggests Spokane could end up looking like California:

Read more of this post

Police shootings in Spokane

Tattered Flag flown in front of the Spokane Va...

Image via Wikipedia

I was not going to comment on the controversy over numerous recent police involved shootings in the Spokane area since I did not think them related to the economy.

But the recent trend of a police involved shooting every 2 weeks may have an economic or demographic angle. I will get to that in a moment.

(Photo is of a badly torn and tattered flag flown by the Spokane Valley Police Department. What’s up with that?)

Brief History

For the 4th time in 8 weeks, Spokane area law enforcement has shot another person. As is typical, the only witness is the deputy, officer or trooper who did the shooting, together with unusual practices in the local police department that have led to questionable investigations.

The details are far to complex to summarize here – and I have no intent of judging innocence or guilt of either the victim or the officer.

For the benefit of readers outside the area, a bit of recent history. Spokane area police have been involved in some major controversies in recent years. The alleged murder of Otto Zehm, for example, the U.S. Attorney’s office alleges a cover up involving at least ten members of the Spokane Police Department all the way up to the acting police chief at the time.

Or the story of the off duty police officer who shot Shonto Pete in the head, outside a bar, at night. And then apparently called his union leadership before calling 9-1-1.

A few years back, a group of young people had a peaceful protest against police brutality, and participated in a peaceful march from Peaceful Valley to the downtown venue for a 4th of July celebration. Shortly thereafter, the police were arresting lots of young people and accusing them of assaulting police officers. Some time later, the police revealed they had secretly made a video tape of the proceedings – and on the audio track was heard two police officers talking about how much fun it would be to incite a riot (really) …. soon thereafter, all charges were dropped.

Against that background, we come to August 25th, when a prominent local citizen and church Pastor, Scott Creach was shot and killed late at night by a deputy sheriff in the parking lot of the business owned by Mr. Creach. This was followed by a litany of bizarre statements by the police that union rules prohibited interviewing a police officer for 72 hours and that this led to better recall. Worse than that, the deputy left hours after the shooting for a week long vacation that ended up in Las Vegas. The inconsistent statements were non stop, culminating a few weeks later with the Sheriff’s PR spokesperson accusing the Creach family of saying things to the media to add a bunch of zeros to a legal claim against the County. The same PR person falsely accused a local TV station of trespassing when they photographed the officer’s out of state home – from the sidewalk.

Unprofessional behavior seemed rampant in this case.

Over the next 8 weeks, 3 more people would be shot including an unarmed 39 week pregnant woman, and a guy alleged to be shooting at police and some one alleged to have mental problems and a sharp piece of obsidian. The unarmed pregnant woman’s shooting was blamed on an “accidental discharge” of the officer’s weapon.

And the guy alleged to be shooting at police? The newspaper reported there was no forensic evidence – like spent shell casings – to confirm that the guy ever fired a weapon. Who knows?

Then, yesterday, police shot and killed a 50 year old man alleged to have possibly approached police with a “sharp object”.

I have no idea who is right or wrong in any of this – except I will fault the inexcusably sloppy and unprofessional way that the investigation of the Creach shooting was dealt with. They also put the officer’s patrol car back in service the next morning without first collecting potential evidence from the vehicle.

How This Relates To Spokane Economics and Demographics

The questions people are asking are:

1 – Why are the police compelled to shoot so many in Spokane? 14 people have been shot in the state in the past 2 months. Spokane has 7% of the State’s population but 29% of the shootings.

2-If its not a change in the police, is it a change in the people?

Is it something in Spokane?

Readers of this blog know that the actual data about Spokane is often very different than what we think we know about Spokane. As I have said repeatedly, what I have learned has been quite surprising.

Something is going on here. Something quite serious. Is the economic situation worse than what we are told? Is there a greater concentration of mental illness, depression, and drug addiction in Spokane? (As posted elsewhere on this web site, all of those occur with greater frequency in Spokane than the rest of the state.) What is it? Crime rates have always been much greater than the State average.

Please read this comment by “Zelda Krups” who, when I read this, thought perhaps this was a pseudonym of me (it’s not!)  She writes in comments to the first news story about the shooting (and I do not have permission to reprint this so leave a note in comments and I’ll remove it if this is a problem):

in the Great Recession, there’s an even more pronounced attitude of “Avert your eyes; let’s not talk about what we just saw.” When it comes to analyzing the statistics and drawing some valid conclusions, what we get instead are Progress Report luncheons where bankers and economists predict that prosperity is just around the corner. ….

Spokane is poor, has a growing crime problem, low-wage jobs and an unemployment rate far higher than anyone is willing to speak about publically.[sic]

I am not the only one to have noticed the disconnect between public pronouncements about Spokane and the reality.

—–

Local’s now refer to the area as Spokompton, after the gang violence of Compton, Ca. Others call its Spokanistan. Not sure why other than perhaps to refer to some periodically unstable government regimes in the “-stans” area of Asia.

Why no one believes the unemployment estimate in Spokane

A few days ago, the State of Washington released the latest unemployment estimates and unemployment in Spokane is reported to have gone down. Which should be a positive report.

For many, though, a falling unemployment rate does not seem real. Here’s why – as shown in a chart of Spokane’s employed non-farm workforce versus population. As you can see, the overall population has been increasing while the number employed has been falling recently and is mostly steady over the past decade.

The State estimates unemployment by estimating the number of people working and the number of people wanting to work, versus the number not currently employed. The unemployment rate is considered to go down if more people choose not to work, even though fewer people might be working.

Thus, a lower unemployment rate – which seems like good news – can also be bad news. When unemployment drops because fewer people are looking for work (given up?) rather than an increase in jobs, it means that society is less productive.

For this chart, the 2010 population for Spokane County is estimated as 2009 plus the amount of increase from 2008 to 2009. That’s a crude estimate of course, but likely close enough. The number of employed comes from the US Bureau of Labor Statistics and is the same data also available at Workforceexplorer.com.

While the official unemployment rate is down, a smaller percent of the population in Spokane County is working at jobs showing up in the official tally. (The chart uses the official data for non-farm jobs from which the government also excludes active duty military, self employed and some others.)

I wonder why the population is increasing but the job totals are not increasing. I worry that this is not “good news”.

Why Washington’s Top Down Industrial Clustering Policy Will Fail

Government run industrial clustering, like we have in Washington, and which has been inflicted on Spokane, has been tried in Japan and failed:

Faced with declining competitiveness, Japan launched a series of top-down initiatives in the ’80s to boost innovation. It invested billions of dollars in creating industry clusters—by developing large technology parks and providing subsidies for companies that locate in them. All these efforts failed to achieve their objectives. Undeterred, the Japanese government is doubling its bet and creating a new cluster in Okinawa. With a world-class research university as its nucleus, it hopes to turn this tropical paradise—which happens to be home to America’s largest Asian military base—into a global research-and-development center.Doubtless the university will provide Japan with significant long-term benefit. But the cluster will fail: All the other ingredients for innovation are missing.

via Okinawa’s Doomed Innovation Experiment – BusinessWeek.

Like Spokane, Japan plans to re-make Okinawa into an “info tech, biotech and environmental science cluster” at the direction of the government. Unlike Spokane, Okinawa will have a comprehensive research university.

But these plans will fail, says the author, because:

The Japanese have it all wrong. The original clusters failed—just as nearly all the cluster development projects all over the world fail—because the basic premise is wrong: Governments can’t mandate or manufacture innovation, no matter how much they invest. Clusters happen where like-minded entrepreneurs congregate, start risky ventures, and learn from one another other by networking. Innovation is a by-product of this synergy and experimentation. What is needed is less government control, not more.

Read the linked story, above. The story is a mirror image of what is happening in Spokane – and documents why industrial clustering will fail here, for the same reasons.

More about Washington’s industrial clustering policy is here. Spokane’s industrial clustering policy, set down by Olympia, is not going to work – except to the extent the State is making it happen by funding more government and more health care in Spokane.

The critical importance of comprehensive research universities in the 21st century

Research universities increasingly function as a key hub institution of the knowledge economy – from Stanford University’s role in Silicon Valley to MIT’s role in greater Boston’s Route 128 high-technology complex, from the University of Texas at Austin to the rise of the North Carolina Research Triangle, not to mention Carnegie Mellon’s role in Pittsburgh’s regeneration. But what are the world’s leading centers for university research?

via Where the World’s Brains Are – Richard Florida – Business – The Atlantic.

(Update 2017: Richard Florida mostly admits he’s theories have been all wrong.)

Regrettably, Spokane is lagging in immediate proximity to a comprehensive research university. While WSU-Spokane’s charter includes research, the majority of its future work will primarily be in health care and health sciences.

Spokane’s ability to generate innovation in the broad areas of science, technology and engineering is severely hampered by its lack of graduate research programs, and its lack of most science and engineering graduate programs.

This is a harsh reality for Spokane’s 21st century future. Read more of this post