City of Destiny? Tacoma's nickname is starting to fit

By Stephen H. Dunphy
Seattle Times business reporter

JIM BATES / THE SEATTLE TIMES Julie Schmidtke owns a thriving clothing boutique in the Proctor neighborhood of Tacoma.

TACOMA — In the Proctor neighborhood, Julia Schmidtke's boutique clothing store thrives, with customers coming from as far away as Bellevue to take advantage of her sophisticated buying skills.

Along Sixth Avenue, a thoroughfare that runs from downtown to the Tacoma Narrows Bridge, Holly Minniti and her husband have bought and restored a building. Nearby, Jazzbones, a popular stop for musicians and aficionados, lays down a swinging beat that has helped revive this once-seedy part of the avenue.

Where the jobs are  Tacoma / Pierce County profile

Down along the Thea Foss waterway, condos are under construction near the new Museum of Glass and the Tacoma Art Museum. The condos, priced from $350,000, are spoken for, with nonrefundable deposits on all 48 units.

Destiny finally may have arrived in this city once known as "the City of Vacant Lots." As much of the Puget Sound area struggles through recession, Tacoma feels it less and is recovering sooner, going about establishing itself as a destination city filled with museums.

Museums? This is not the Tacoma stuck in most people's minds, one that runs to a blue-collar town with a distinctive aroma.

"Tacoma is not Seattle," says Chris Johnson, a labor economist for the state Employment Security Department. "That's the first thing you need to know."

These days, that is becoming apparent. The new $63 million Museum of Glass had its gala opening last month, giving the city one of the world's premier glass-art museums. And there's the Washington State Historical Museum, a new Tacoma Art Museum, a proposed motorcycle museum, and serious talks to create a showcase for a collection of classic automobiles.

JIM BATES / THE SEATTLE TIMES Condos under construction mark a revival in Tacomašs economy, which is more stable than Seattlešs.

While building an economy on museums may seem far-fetched — one report called it delusional — there are other signs of arriving destiny.

The Port of Tacoma gained bragging rights over its traditionally larger rival, the Port of Seattle, last year, when it moved about 5,000 more containers than Seattle did.

While light rail in the Seattle area still is being talked about, an $80 million downtown line is under construction in Tacoma, set to open next year with five stops from the Tacoma Dome to the Theater District.

The University of Washington's Tacoma campus — the locals call it UW-T — is hailed as a model of how public institutions can help revive downtowns. The university converted an area of dilapidated warehouses and lofts into a modern campus.

Along once-seedy Pacific Avenue, an $89 million convention center is taking shape, and several hotels are being discussed. The Click Network, a city-sponsored fiber-optic system, has earned Tacoma a top ranking on lists of "most wired" cities. Almost $500 million has been spent on big public projects in the past few years, a strong boost to the local economy.

The city's neighborhoods are changing, too. If the Hilltop section of Tacoma is mentioned to most people, they think of crime, but the number of police calls in the two districts that include Hilltop were down 5.6 percent and 22.9 percent in the first quarter this year, compared with the first quarter of last year, police records show. Violent crime — rapes, murders and assaults — are down 22 percent over the past few years.

New projects and less crime are on the positive side of the civic ledger, but Tacoma has its problems. It did not entirely avoid the recession that hit the state early in 2001: Several startups and small companies, drawn to the city because it has fiber-optic cable, have failed.

The city has avoided the worst of the recession in part because Tacoma's "tech" industry is tiny compared with Seattle's. Employment in services — which includes most high-tech jobs — rose about 40 percent in Tacoma from 1990 to 2002. In Seattle the same category grew more than 70 percent.

	JIM BATES / THE SEATTLE TIMES Chris Ouillette and his family moved to Tacoma from Seattle last year so that they could buy an affordable home.

"Tacoma's tech boom going bust" was the headline on the local News Tribune in mid-April. InsynQ, the city's only publicly traded technology company, hangs on, trading on the over-the-counter bulletin board at about 3 cents a share after briefly hitting $20 a share in March 2000.

Tacoma is not a rich city. It has nice neighborhoods and high-income suburbs, but 2000 census figures show that almost half the households are low-income — that is, they have incomes less than 80 percent of the Pierce County median. It ranks near the top among metro areas in Washington, with more than 11 percent of families living in poverty, 2000 census data show.

Per-capita income in Pierce County in 2000 was $25,587. That's about $5,600 lower than the statewide average of $31,230, data from the Employment Security Department show, and almost $20,000 below the per-capita income in King County.

Johnson, the labor economist, said Tacoma has a more stable economy than Seattle, often missing the highs and the lows. The city has lost jobs during the recession, but unlike Seattle, it is seeing improvement, Johnson said.

The Employment Security Department reported a 3.7 percent decline in the number of jobs in the Seattle-Bellevue area in the 12 months ending in April. In Tacoma, the decline in the same period was 0.6 percent. Tacoma is beginning to add jobs, with 1,900 more positions from March to April. Seattle is still losing employment, dropping by about 1,400 jobs in the same period.

While Tacoma lacks a large employer such as Boeing or Microsoft, it does have strong economic drivers.

The diverse economy has a manufacturing base anchored by the Port of Tacoma. Simpson Paper — which closed a 38-year-old furnace in 1999, eliminating much of the source of the "Tacoma aroma" — still runs a big mill in the city.

The military, with about 20,000 soldiers and 7,000 Department of Defense civilian workers, is a stabilizing factor. With four major installations in the area, it provides steady income that keeps the retail economy humming even in slow times.

Public employment plays a big role, with local government, several large state-run institutions, and state workers who commute to work in Olympia. The county has about 50,000 government employees, not including the soldiers.

About 27 percent of the work force drives north to jobs in King County. Although the Tacoma area does not have enough jobs for its residents, the 79,000 who commute bring the paychecks back and spend them in Pierce County.

Tacoma and the surrounding area are losing some of the manufacturing jobs the city was known for. Smelters and mills have closed in recent years, and manufacturing represents about 15.8 percent of jobs today.

"Tacoma used to have a blue-collar image," said Johnson. "Now it's more white collar and camouflage collar."

Tacoma's neighborhoods also are coming back.

Schmidtke, owner of Julia Ellen Clothiers, said she felt the recession last spring and was worried after the terrorist attacks in September but did not see business drop that much. Her shop is on the edge of North Tacoma, where older, stately homes line the streets, some for sale, some being restored.

Down the street, the Queen Anne Thriftway functions much like its namesake in Seattle, serving an upscale clientele living in the large houses nearby. Of course, the houses are cheaper than in Seattle, drawing more people from far away who trade a commute for a nice house that will increase in value.

One of the goals of economic development, said Juli Wilkerson, director of the Tacoma Economic Development Department, is to change that, providing the opportunity for more employment in Tacoma.

On Sixth Avenue, Minniti has seen a real change in the past few years, with several new restaurants coming in.

"There is a wonderful energy here now," Minniti said.

She and her husband run Puget Sound Real Estate, liking so much of what they see in Tacoma that they have shifted their base from Gig Harbor to the Sixth Avenue neighborhood.

Even the old manufacturing base is getting an infusion of new companies.

Chuck Maiwurm was looking for room to expand Contour Laminates, his business based in the Georgetown area of Seattle. He said he was having trouble getting Seattle's attention for his project when two golfing buddies suggested he try Tacoma.

"The city of Seattle was not open for business," said Maiwurm, a Tacoma resident from his days with Weyerhaeuser. "Tacoma made it happen."

Tacoma provided a small tax-relief package and fast-track permitting, and even lined up a city architect to help Maiwurm find what he needed. Today, he has expanded to an industrial site near the port.

The company still has 40 workers in Seattle. Its South Sound expansion has added 10 workers in Tacoma, and 10 more are expected as business picks up.

While Tacoma has great potential, though, it has a ways to go.

"It's about like Portland in 1980," said Steve Rose, a Portland developer who has five properties in Tacoma. "There still is no night life. It is hard to stay over there — I almost prefer to drive back to Portland or go up to Seattle."

Other Seattle companies are beginning to see that potential. El Gaucho, a swank Belltown eatery, is scheduled to open this month, and the Melting Pot, a national fondue chain, opened in June. Restaurants will help, Ross said, and may be more important to the future of downtown Tacoma than anything else.

Wilkerson, of the Tacoma Economic Development Department, agrees.

"When I came here 11 years ago, there was not much going on," Wilkerson said. "The Foss Waterway was a Superfund site. A lot has changed."

Like many people here these days, Wilkerson is looking for the next bold step, and she has some advice for how to view the City of Destiny:

"Stop snubbing us and start looking at us. The old way of thinking is gone."