Tri-City businesses grow by 14% in 3 years, state says

Kristi Pihl, Tri-City HeraldJanuary 3, 2014 

The Tri-Cities continued to add new businesses to its ranks during the last three years, despite higher unemployment rates and Hanford layoffs.

The number of Tri-City companies who reported taxable retail sales to the state has grown by 14 percent since 2010, according to the state.

The Tri-Cities had more than 16,800 businesses who reported taxable retail sales in the second quarter of this year.

Lori Mattson, president and CEO of the Tri-City Regional Chamber of Commerce, attributes some of the business growth to the Tri-Cities being one of the fasted growing communities in the nation.

During the same time period, the Tri-Cities saw its population grow about 6 percent, to an estimated 268,200, according to the state.

Population growth particularly has spurred expansion of the health care and service industries, Mattson said. And the area is also seeing continued growth in wineries.

"We have all of those ingredients that create that great recipe for a place to relocate and open a business," she said. Mattson cited the area's schools, health care, weather, transportation network, work force and economy among our strengths.

Bruce Davis, center director at the Small Business Development Center, said the area also has seen growth in manufacturing and a rebound in construction.

Richland's total taxable retail sales from construction was up about 55 percent to $42.9 million for April through June.

Kennewick and Pasco also saw double digit growth. Kennewick was up by about 26 percent to $40.6 million, while Pasco increased about 24 percent to $30.8 million.

Construction projects that received building permits in Kennewick between April and June include the $2 million Kennewick Perry Suites, a 14-unit apartment complex for adults with disabilities, a $2.2 million Kadlec Urgent Care clinic and a $1.4 million Gesa Credit Union remodel.

Pasco projects included the $1.1 million new St. Vincent De Paul Society Food Bank, a $1 million remodel of Goodwill's new Pasco thrift store and a $2.3 million Grimmway Farms carrot processing plant.

Richland projects that started in the second quarter of this year included a $2.2 million Les Schwab Tire Center, a $5 million Kadlec Regional Medical Center remodel and the $9.3 million Kadlec Healthplex.

Davis said other issues also contributed to growth in the Tri-Cities.

Federal stimulus money, although now gone, had a positive effect, he said. And the Tri-Cities did not see a drop in real estate values like other areas did.

"We've got a diversity (of industries) that's strong, and we are drawing people in from outside of the Tri-Cities," Davis said.

Davis said the Tri-City unemployment rate -- at 7 percent in November -- continues to be a drag on the economy but some people who can't find jobs are starting their own businesses.

In addition to business growth, the Tri-Cities continued to see taxable retail sales climb during the second quarter, according to data recently released by the state Department of Revenue.

Richland saw the most growth, at nearly 18 percent to $227.2 million when compared to the same months last year.

Kennewick kept its stronghold on the bulk of retail sales at $397.5 million, up about 6 percent from a year ago, according to the data.

And Pasco saw retail sales climb by 9 percent to about $223.5 million.

The Tri-Cities saw spikes in the sales of new and used vehicles, building materials, garden supplies, clothing and shoes and online sales.

Pasco and Kennewick saw additional sales from books, sporting goods, toys and hobby and craft stores.

The hospitality industry also did fairly well compared to the same months last year. Richland and Kennewick saw growth in both hotel accommodations and restaurant sales, while Pasco was slightly down in accommodations, but up in restaurant business.

Kim Shugart, Tri-Cities Visitor & Convention Bureau vice president, said that Benton County experienced a 3.5 percent growth in hotel and motel occupancy the first half of this year compared to the same time in 2012.

Franklin County had a 2.4 percent decline in occupancy during the first six months, compared to the same time last year, she said.

But overall, both counties had an increase in revenues that was enough to make up for Pasco's dip in occupancy, Shugart said.

-- To submit business news, go to bit.ly/bizformtch.

-- Kristi Pihl: 582-1512; kpihl@tricityherald.com

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