Tourism and a growing population likely helped Benton and Franklin counties outpace the state in retail sales growth during the third quarter of 2007.
The state Department of Revenue reported that taxable retail sales in Benton County increased 11.4 percent during July, August and September, to $657.3 million compared with the same time in 2006. Franklin County saw a 9.2 percent increase to $276.3 million in the same period.
"This has become a regional service center for the southeast part of the state," said Carl Adrian, president and CEO of the Tri-City Development Council, citing growth in shopping, health care and air service.
That number is a stronger gauge of consumer spending than overall retail sales because it doesn't include more volatile sectors such as construction and wholesale trade, according to the department.
All three cities saw increases in retail trade.
Kennewick saw the largest jump, with third-quarter retail trade in 2007 growing 12.1 percent to $225 million.
New and used car sales accounted for more than $37 million of that, increasing nearly 50 percent from car sales in the third quarter of 2006.
And apparel and accessories were responsible for more than $23 million of the city's retail trade, a 20 percent growth over the third quarter of 2006.
Further expansion at Columbia Center mall may be part of the reason. Several women's clothing stores opened at the end of 2006 and beginning of 2007, including Chico's, Coldwater Creek, Ann Taylor Loft and Talbots.
Restaurants, which are not classified in retail trade, also kept busy, experiencing a 10.4 percent growth to more than $29 million.
Kennewick City Manager Bob Hammond said the jump was likely a result of more traffic in the Columbia Center area.
Overall, Kennewick's taxable retail sales grew 12.4 percent for the third quarter, to $370 million.
Though Pasco's taxable retail sales growth was the smallest of the three cities, at 3.3 percent to $222.1 million, City Manager Gary Crutchfield said the number was a welcome relief after a flat 2006.
The city relies heavily on sales tax for its income, since its property tax base is about half that of Richland's and Kennewick's, he said.
Retail trade was up about 2.6 percent in Pasco.
Sales of building materials, such nails and lumber, jumped 103 percent to $10.5 million, likely because of the Lowe's store that opened on Road 68 in October 2006.
But overall construction in the city was down about 8 percent to $32.8 million, mostly because of the slow in new home construction, Crutchfield said.
Through September 2007, 110 fewer residential building permits were issued in the city compared with the same period in 2006.
New and used car sales slowed as well, by nearly 11 percent, which Crutchfield attributed to Toyota of Tri-Cities' move to Kennewick in May 2007.
Pasco's slowing construction didn't have a large effect on Franklin County, which experienced a 25 percent growth in that sector to $67.6 million. The expansion at Coyote Ridge Corrections Center in Connell likely fueled the growth, as the project pays out an average of about $8 million per month, said Scott Frakes, the center's superintendent. The project started in fall 2006 and is expected to wrap up this October.
In Richland, wholesale trade, retail trade and restaurants were big drivers.
The city's retail trade grew about 9 percent in the third quarter, caused by strong furniture and general merchandise sales.
Gary Ballew, the city's economic development manager, said more tourists helped the restaurant business, as there weren't any big restaurant openings between October 2006 and September 2007. Retail sales at the city's eateries grew 14.8 percent, to $18.4 million.
Anthony's at Columbia Point was one recipient of the increased business, although the restaurant would not divulge its numbers.
Lane Hoss, vice president of marketing for Anthony's Restaurants, said the Richland restaurant saw more customers last year. Visitors in town to visit wineries keep tables full on weekends, while business travelers frequent the restaurant mid-week, she said.
"We (also) get great support from local people," Hoss said.
Amici's on Lee Boulevard has experienced a similar trend, said owner Piper Strand.
Along with the local regulars, more of her customers are wine tourists. And area hotels generate a regular customer base for her Italian restaurant as well, she said.
Richland's overall taxable retail sales increased 9.4 percent, to $211.2 million.
"It strengthens the city of Richland's tax base and lets us know we're providing opportunities for our citizens to spend money here locally," as well as attracting out-of-towners, Ballew said.
"If you look at the numbers over the last several years, not just sales tax numbers, you see that this is the fastest-growing metro in the state. Some of that translates into sales tax," he said.
The region's economy was growing at a swift 5.6 percent at the end of the third quarter last year, compared with flat growth that same time in 2006, said state regional economist Dean Schau.
"The Tri-Cities remains one of the growth leaders in the state," he said, adding that construction at the vitrification plant at Hanford added about 1,000 jobs in 2007.
Last year also was strong for agriculture and a record year for food processing, he said.
"We're picking up population because people are making the quality of life decision to come here," Schau said.
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