
Labor market economist Dean Schau (left), Tri-Cities Research District executive director Diahnn Howard (center) and John Bookwalter of Bookwalter Winery are among those working to build a more dynamic business climate in the Tri-Cities, a process that involves more than a little bridge building among the various municipalities and organizations. (Photo by Mark Vandonge)

Economists. They're kind of dry. They look at charts and graphs and spreadsheets and laugh at inside jokes most of us just don't get.
But lately, Dean Schau, a Tri-Cities labor economist, has been waxing quite lyrical. "Give us your road-weary, your mortgage poor," he wrote in a recent state report, "your huddled masses yearning for sun-filled days." What's got this dismal scientist busting out in free verse? It's the numbers he's seeing on those charts and graphs and spreadsheets, which say the Tri-Cities are the economic hot spot of Washington.
That's right, the Tri-Cities. The butt of decades of radioactive-glow-in-the-dark jokes, derided as the "Dry Cities." Yet the humble Tri-Cities have led the state in population growth since the start of this decade. Percentage-wise, they're also among the leaders in job creation, and average Tri-Cities paychecks are among the highest in the state, thanks to high-paying high-tech jobs in science and health care research.
What's to like about the Tri-Cities? Plenty, says Rabindra Nanda, the chief marketing officer at Vivid Learning Systems, a Pasco online software company.
"We've got a great pool of talent we can draw from. Traffic's not an issue. You've got the cost of living; it's obviously lower. The weather, that's another benefit. You've got organizations like Pacific Northwest Laboratories out here, which provides a steady stream of engineers, Ph.D.s, people who have that kind of background."
Nanda says his company is "going through a very, very exciting time. We've got some plans for hypergrowth and the plans are pretty much to be here. We don't see any particular hindrances to growing."
Hypergrowth also describes what's happening here where the Columbia, Snake and Yakima rivers meet.
Pasco has been the fastest-growing city in the state since 2000, growing 57 percent to 50,210 people. Likewise, Franklin County (of which Pasco is the seat) was the fastest growing county in Washington during the same period, growing by 37 percent to 67,400 people.
Across the river, Benton County is the third-fastest-growing county in the state since the millennium, growing by 14 percent to 159,400. The population of West Richland grew by nearly 29 percent, making it the Tri- Cities region's fourth city with more than 10,000 people.
The job market is strong. Nearly one of every 10 jobs created statewide last year was created in the Tri-Cities metro area. The growth -- 4,900 jobs -- was greater than the total for Spokane and Yakima combined. The construction of a new nuclear waste treatment plant at Hanford added 1,000 high-paying jobs, but construction and food processing also were big growth areas.
Food processing is providing a solid blue collar employment base. Average pay in the sector is a very livable wage in the Tri-Cities. But Benton County also has some of the state's best-paying jobs. The most recent state payroll numbers show the average worker there brought home $830 a week, the third highest average in the state.
Within certain sectors, the pay is fabulous. The average pay for construction workers on Hanford projects is nearly $116,000 a year, Schau says. A new federal report shows that engineering managers earned an average of more than $55 an hour -- $114,000 a year.
And paychecks go further here. The most recent figures show the median home price in the Tri-Cities was $172,600, roughly 40 percent lower than the statewide median and 60 percent lower than in King County. Put another way, for the price of a nice two-bedroom condo in Bellevue, $432,000, you could buy a five bedroom house on a golf course in Richland.
That low-cost housing is one of the factors driving growth, says Schau, who's been tracking an influx of transplanted Californians.
During the housing boom, they cashed out the equity in their homes and moved north into relatively affordable places in western Washington's lovely suburbs. Then they experience their first westside winter, and after months of gray and gloomy weather, they desperately start seeking out sun. They're finding it east of the Cascades, according to Schau, who says the phenomenon is driving growth in Wenatchee, Walla Walla, the Yakima Valley and, especially, the Tri-Cities.
"They move there and just find it delight ful," he says. "We're picking up a lot of people who are voting with their feet."
"People think of the desert," says Peter Brehm, a vice president with Infinia, a Kennewick start-up in the solar power industry. "They don't realize the river's here and the parks that are available and the biking that's available."
Clearly, there are a lot of things going right in the Tri-Cities. There are also some real problems.
Combine the brainpower of all the different workers on the Hanford site -- those working directly for the U.S. Department of Energy, the researchers at the Pacific Northwest National Laboratories, and those working for the three major private contractors -- and you've got intellectual capital that easily rivals the software cluster surrounding Microsoft in Redmond, and the biotechnology cluster surrounding the University of Washington Medical Center and Fred Hutchinson Cancer Research Center in Seattle.
PNNL -- a federally funded research laboratory -- is an incredible resource, says Diahnn Howard, the director of the Tri-Cities Research District in Richland. "There are only nine of them in the nation and the Richland lab is the only one that can do private work."
But what you don't see is a booming tech-based industry sector, with eager entrepreneurs forming their own companies to commercialize their research. There are a few -- Vivid Learning, where Nanda works, was formed by ex-Hanford workers laid off during the mid-'90s -- but nothing comparable to the big batch of biotechs that sprouted up in South Lake Union or Bothell, or the slew of software start-ups on Lake Washington's eastern shore.
There are a couple of reasons for this, insiders say.
For starters, access to local venture capital is limited. There is VC money available ? PNNL contractor Battelle has a fund to help local start-ups, for example ? but the region between Prosser and Pasco just doesn't have the kind of wealth one finds on the west side of the state.
And some whisper that maybe the jobs out at Hanford are just a little too good. Think about the kind of people who take government research jobs, says one insider. They're technically brilliant but typically not risk-takers. Give them interesting work and top salaries in a place where they can afford to buy big homes and nice cars, and "there's no incentive for people to leave Battelle and form their own companies." There's also the balkanized nature of local decision making. Outsiders tend to see the Tri-Cities as one entity, but the truth is there are four city governments, three port districts, two counties and nearly 20 other assorted agencies, districts, bureaus and boards, all with a piece of the economic development pie -- and all historically jealous of their neighbors. That makes it hard to get things done on a regional basis, according to Angelos Angelou, a noted urban economist who's done three studies of the Tri-Cities in the past five years. Businesspeople don't argue.
"They have their own little fiefdoms," says one local executive, who asked not to be named for fear of alienating officials who must approve his company's expansion plans. "It would do a lot if you had one city to deal with here."
The fact that there are three -- well, four -- cities here leads to another issue that makes it hard to grow. Angelou notes that Tri-Cities residents love the small-town feel of their communities. But the flip side is that you've got a big urban area with no coherent downtown, few restaurants and little nightlife.
That, Angelou warns, makes it hard to attract young professionals. Yet it's those young professionals, people aged 25 to 44, who are most likely to develop the new ideas and start the new companies that can keep a local economy vital.
At Infinia, Brehm says it can be a challenge to recruit the engineers the company needs to fulfill its expansion plans. "We've had people turn us down because of the location. We have great luck attracting families here. We have a harder time attracting singles here."
Business leaders acknowledge the problems -- and say things are starting to change. Brehm's company, Infinia, is an example. It's bringing to market a new kind of solarpowered engine that generates electricity 50 percent more efficiently than traditional solar cell technology. It's definitely carbon-friendly -- the only byproduct is hot water. The first three years of production already have been sold, mostly to buyers in Spain, where the government is offering incentives to help it comply with the Kyoto treaty on climate change.
The company's Sterling engines are a spinoff of technology developed at Hanford in the 1960s as a means to use plutonium to power artificial hearts. Infinia has raised almost $70 million in three rounds of venture financing since 2005, Brehm says. Paul Allen's Vulcan Capital group is one of the leading investors.
The company is growing rapidly, and it has found local agencies to be very helpful, he says. "They're very aggressive, and they work well together."
Alternative energy -- particularly solar -- should be a big growth market for the Tri- Cities, he says. "We have 300 days of sunshine."
Research is also pressing forward on biofuels. After a campaign by local leaders, Washington State University has expanded its Tri-Cities branch campus to offer a full range of four-year degrees, and it's recruited a top-of-the-line biofuels researcher from Denmark, Birgitte Ahring, to teach and study.
"We want to take a leadership role through her work and have the community have a role in the areas of sustainability and clean energy," says Diahnn Howard.
Having the four-year WSU campus in Richland also should help keep more young people in the community, says John Bookwalter, the co-owner and manager of Bookwalter Winery in Richland. "We're keeping a demographic in town that we've never been able to keep because they've had to go somewhere else for an education."
At the other end of the age spectrum, having more retirees in the communities may also be making them more attractive cities to live in, Howard says. Their arrival has spurred an increase in retail development, bringing new stores and restaurants -- the kinds of things the Angelou reports showed the Tri-Cities lacked.
And the influx of older people also has increased demand for health care, which is leading to expansion at Tri-Cities hospitals. They've become a regional health care center, Bookwalter says, and they're working with a handful of fledgling Hanford spinoffs in fields using nuclear isotopes, which can be focused to kill cancer cells.
The growth of the wine industry also is creating a new environment. As the Red Mountain viticultural area just west of the Tri-Cities develops, it will attract more tourists.
"I'd like to think of the wine biz as the positive cultural halo," he says. "The more critical mass, the more wine areas are developed, the more people come and tour. Then it attracts the supportive industries we need, like better restaurants and hotels."
That will go a long way toward making the community an attractive place for graduates of WSU Tri-Cities to stay. "We have enormous intellectual capital, some of the most in the nation, to help solve big problems," Bookwalter says, "whether it be biofuels or just being the breadbasket for the rest of the world.
"It's an exciting time to be where we are. There's just so many things that are lining up and going in the right direction. I don't see us as being the boom-and-bust area that we used to be."
Bryan Corliss is a senior writer at Washington CEO Magazine
Tri-Cities is simply BURSTING with potential, but can't quite get where it needs to be or should be.
Weather, traffic, cost of living - I can't think of anywhere in the COUNTRY that offers a better combination.
However, the cities don't cooperate and the result is a very fragmented area that cannot focus on a common goal. I am still convinved the Tri-Cities could be a major destination (rivers, golfing, etc.) if the four cities would FOCUS TOGETHER on a common goal.
I am in favor of consodlidating the four cities and so are many others. I hope to see this on the ballot in the near future for another attempt to truly pull the Tri-Cities toegether and become the area it has the potential to be.