Hazel Dell the next Hot Bed for Restaurants ?

If there is one complaint common to almost all Hazel Dell or Salmon Creel residents or shoppers it is the question why aren’t there more good restaurants in that part of town. For years the  myth was that the System Development Charges (SDC) by the Clark Regional Waste Water District were too expensive.  These costs are generally based on the per seat capacity of each project and were reputed to add $100,000 to the cost of any project.

Members of the CRWW district staff and Commissioners have always stated that this was an urban legend.  Historically sewer rates in the CRWWD service area have been some of the lowest in the region, and they have worked diligently to keep those SDC charges as reasonably as possible.


With that as back drop – here are some excepts from a recent press release from CRWWD that talks about two new restaurants that recently opened in Hazel Dell.

Clark Regional Wastewater District ready to serve another new restaurant in Hazel Dell Restaurants in south Hazel Dell benefit from lowest sewer charges
in Clark County.

Having just welcomed Chipotle to the area, residents in Hazel Dell are poised to celebrate the opening of Panera Bread.  Scheduled to begin operation before Christmas, Panera Bread will open on the former site of the iconic Steakburger restaurant and miniature golf. 
While sewer may not be your first thought when you hear of a new place to get your morning coffee or to grab a sandwich at lunch, development fees (commonly called SDCs – system development charges) are a key consideration when establishing a new business in any area. Knowing this, the District has worked to reduce the initial cost of sewer connections as much as possible. South Hazel Dell is the most affordable place in Clark County to develop a restaurant; the District’s “Tier 1” SDCs in the south Hazel Dell area are the lowest in Clark County and Panera also was eligible for Clark County’s development fee waiver program.  In addition, Panera received credits for building on a previously developed site, keeping the total sewer fee to less than $750.  


You may recall I wrote about developer Mike Jenkins who owns MAJ Development, whose focus is redeveloping and reinvigorating strategic high traffic locations here locally.  This project is going to be the spark that changes the face of Highway 99.

The press release touted how-  the CRWWD  partnered with the developer to restore and relocate the aging sewer line on site while they completed underground work for the new development.  This forward thinking approach was a win-win for the developer, the District and ratepayers in general.  The initiative optimized the location of the line while completing necessary utility work in the most cost-effective and efficient way possible by digging up the site once.  

My understanding is the SDC for Chipotle is just under $2,000. In the scope of one million dollar building, or half a million tenant improvement these development charges are a very minimal impact on a project such as these.  Expect to see more activity along the Highway 99 corridor, and up in Salmon Creek.

By the way I checked out Panera the Friday night after Christmas after catching a movie.  Very warm inviting interior with a fireplace where you can sit either inside or outside. They are  going to create a lot of fans.



Vision Translated to Reality


My big chance for a question to the panel

The Columbia River Economic Development Council held their final  quarterly luncheon of 2014 at the Heathman Lodge Monday January 15th.   The topic was how strategic planning is vitally important to creating a vital economic future.

This is topic is important because the effects of the 2008 Great Recession set our economic development base back about four years, and brought economic hardship on a wide range of Clark County residents.  The panelists presented examples of recent planning efforts that have born great fruit, or were started  well before those economic hard times and will provide a foundation to surge us forward.

The panel was moderated by John White recently retired from Berger Abam, who built his career around cajoling  public agencies to peer into the future to create a vision and a work plan to get there.

Todd Coleman of the Port of Vancouver shared thoughts on how in 2005 the Port realized they needed to revamp their rail access to ensure they were able to  compete in the global economy.  Chad Eiken of the City of Vancouver took us back through the foundational stages of Esther Short Park’s  rebirth and how that has led over roughly  thirty years to the commencement  of the Water Front project that will finally rise in 2015.

Scott Higgins Mayor of  Camas spoke of a 35 year effort to diversify Camas’s economic base away from a single industry – paper to more modern high tech employers. Steve Stuart reminded us how we all literally stand on the shoulders of predecessors who were willing to take the time to envision an ever brighter future.  In the case of Ridgefield, an old mill that manufactured railroad ties left a legacy of pollution and creosote that was  barrier to the city being able to access it’s own water front. A twenty year effort by the Port of Ridgefield and many partners has cleaned up that “disaster” and laid a new foundation for a new hub of residential and retail activity that will be a magnet for growth.

Todd Coleman sharing how the Port envisioned  2015 in 2005.

Todd Coleman sharing how the Port envisioned 2015 in 2005.

My 5 biggest takeaways:

1. Economic development is a team sport – it takes many agencies working together.

2. Government agencies are best at laying the foundation – the private sector then brings the capital and the jobs.

3.  While there is competition – success is usually maximized with cooperation :an example Clark Regional Wastewater District and Ridgefield working together with Clark County to increase sewer capacity

4. Significant additional work needs to be done to get parcels of  land prepared for use. There are companies every month who don’t locate here because we are not ready.

5. Watch for the Port of Vancouver to play an even larger role in partnering with several other agencies – particularly Clark  County to find a solution to revitalizing the railroad lines through the heart of the county.

I would describe the feeling in the room as quite upbeat, with expectations for 2015 being very positive.



Fed Watch

FedFed watching is a major pastime for investors at any level, but particularly the US stock market and the Commercial Real Estate market have been watching and waiting for every crumb of information they can glean from the central bank’s quarterly gatherings.

Economic news has been steadily improved all year.  Unemployment numbers continue downward.  This month the Fed finally decided it could reign in one of the primary monetary tools it has used to in a series of sweeping campaigns to revive the American economy, during  much of the last six years purchasing trillions of dollars of bonds.

Stock market participants have seen a 131% increase in value since the first phase of the program began.  The Fed hasn’t totally gotten out of the bond business.  As bonds they purchased mature, they’ll replace them with new purchases to hold their current inventory levels at 4.5 billion dollars.

The impact on the rest of the economy is much harder to assess. The Fed’s goal  was that  the bond  purchases would hold  down the cost of mortgage loans and corporate debt, contributing to faster job growth. Certainly it has fueled a burst of lending in the commercial real estate world over the past two years, as property investors, and large corporations have either refinanced existing debt, acquired new properties, or launched development projects.   All of these have helped provide more employment and raised overall economic activity levels.

The cessation of the bond purchases has not changed the Feds low rate policy.  They clearly stated they expect no changes until mid 2015 at the earliest.

You’ll begin to see more discussion of the risks and challenges of the continuing low rates.  There is  ongoing risk of housing, debt, or other bubbles fueled by maintaining  rates at these levels.

All this being said low rates forces those with capital to find higher yields. Commercial real estate presents a great alternative to a bank or CD.  NNN single tenant investments can yield in the 5% to 6 % range, with the backing of some of America’s best companies.






Transition on interest rates?


When will the Fed decide it is time to let interest rates rise?

When will the Fed decide it is time to let interest rates rise?

Members of the Federal Reserve Board have a very active end of summer, with a conference in Jackson Hole and then their upcoming Quarterly policy meeting   September 16 and 17.

The majority on the Fed thinks the economy needs more time to heal and that a rate hike sooner than necessary would damage growth. John Williams of the Federal Reserve branch in San Francisco, which covers the Pacific Northwest was interviewed recently and says more time at these lower rates is the preferred strategy. There is a  hawkish minority that  thinks  the Fed should act very  soon to normalize monetary policy or risk higher inflation, but others have been very vocal they see the inflation risk as much less dangerous then allowing brakes to get put on the employment momentum.

One very interesting dynamic as we move into 2015,  almost one third of the Fed board positions will change over which could certainly impact the policy direction.

What will be the impact on commercial real estate activity?  For now we recommend as we have for the past four years.   Rates are stable, and remain at historic lows.  If you have borrowing needs, consider this as a good time to get with your banker.  If you are ready to move from leasing to owning and want to use an SBA 504 loan, rates are still in the low 5 % range this month, but those loans often fund 6 to 9 months after you purchase a building.  Move into action now.