Tri-Cities riding high — for now

By Stuart Eskenazi
Seattle Times staff reporter

	STEVE RINGMAN / THE SEATTLE TIMES Firefighter and police trainees from India learn how to deal with hazardous materials at the HAMMER training center in Richland. The center attracts workers from around the world.

At a time when much of the state kvetches over a recession, Richland, Pasco and Kennewick are building and booming. The sandy sagelands preferred by jack rabbits are fast being paved over for homes.

The paradox isn't all that surprising. The Tri-Cities area has always been the economic recluse of Washington state, its providence subject to the whims of the U.S. Department of Energy.

A $4.5 billion department construction project at the Hanford nuclear reservation has ignited the current uptick. But as always, the project — and the jobs that come with it — is finite. So if the past is any indication, the current boom will be followed by an inevitable bust.

Burned in the past, Tri-Citians are hellbent on ending the boom-bust economic cycle that is as much a part of the local milieu as the annual unlimited-hydroplane race on the Columbia River. At least two alternatives are being floated that could make for a softer landing.

One would turn the Tri-Cities into America's home base for homeland security — a counterterrorism and terrorism-response headquarters that would train thousands of workers annually from around the world.

Tri-Cities profile  A region of extremes  Housing boom

Another aims to wean the Tri-Cities from federal-government dependence by advancing the area as a hub for information-technology employment, tapping the progeny of Hanford's impressive brain trust in a very nonnuclear way.

"I truly believe the Tri-Cities is going through its last Hanford hurrah," said Dean Schau, a regional labor economist for the state and an economics professor at Columbia Basin College in Pasco.

Salaries tell the story and underscore the challenge. The average annual salary for a Hanford worker in 2000 was about $61,000, Schau said. That was compared with $26,480, the median wage in the Tri-Cities.

Hanford directly provides 20 percent of the jobs in the Tri-Cities but due to the higher salaries of reservation workers, accounts for one-third of the area's total payroll.

	STEVE RINGMAN / THE SEATTLE TIMES Sam Volpentest, 97, a Tri-Cities booster and co-founder of the Tri-Cities Economic Development Council, envisions the area as becoming a regional training center for homeland security. He lobbies federal officials to keep the Tri-Cities' economy growing.

It's no wonder the fate of Hanford is a real economic concern for Tri-Citians. Major Hanford projects today focus on cleaning up the nuclear reservation, as if it is being prepared for eternal rest.

"It doesn't take a brain surgeon to figure out the Cold War is over," Schau said.

Sam Volpentest remembers when the Cold War started. In fact, he remembers when World War I started.

He lent his name to the Volpentest HAMMER Training and Education Center in Richland. He, U.S. Sen. Patty Murray, D-Wash., and other members of the state's congressional delegation are promoting HAMMER (Hazardous Materials Management and Emergency Response) as a perfect fit for developing homeland-security programs.

It's Hanford coming full circle: The same place where plutonium was manufactured for nuclear bombs could become the training center for workers responding to terrorist acts that use weapons of mass destruction.

Volpentest, who has been a king of Tri-Cities boosters for five decades, is 97. He co-founded the Tri-Cities Economic Development Council in 1963 with Glenn Lee, the feisty then-publisher of the Tri-City Herald newspaper.

Lee died in 1985, but Volpentest remains the council's executive director, tooling around town in his boat-size sedan and lobbying Congress and federal-agency officials on ideas to sustain the Tri-Cities economy long after he is gone.

His latest big pitch is for HAMMER, which opened in 1997 and is managed and operated by Fluor for the Energy Department. About 85 percent of the training at the center has been directly related to Hanford's occupational safety, but it also has trained U.S. Embassy workers, Marines and border guards on how to detect and respond to chemical, biological or nuclear-weapons incidents.

Volpentest sees a far greater potential for the center as terrorism threats plague the world. Police, fire, transportation, utility, defense and a slew of other workers from the Pacific Northwest, the country and the world will need to be trained in counterterrorism and terrorism response.

	STEVE RINGMAN / THE SEATTLE TIMES Homebuilders Mike Koehler, left, and Mike Brantley check plans on a luxury home in Pasco, where housing construction is at a fever pitch.

"This is an opportunity down the road for us, and if we didn't try for it, we would be remiss," Volpentest said.

HAMMER's employee head count is only 53, but the facility could be massively expanded from its current 80 acres.

"It's big business," said Karen McGinnis, HAMMER's director. "We feel like we have a niche here. Hanford, after all, is the granddaddy of the cleanup sites."

If Hanford becomes the training center for homeland security, the Tri-Cities will not break free from federal-government reliance — something sought by Schau and other Tri-Citians who have long promoted economic diversification.

Schau said the Tri-Cities is well-positioned to attract high-tech business, and he points to Lockheed Martin Information Technology in Richland to prove his point. Lockheed's first venture into the Tri-Cities came in 1996 as an Energy Department environmental contractor at Hanford. One year later, the company expanded across the Hanford fence, launching its information-technology (IT) company in civilian territory.

"Our Hanford contract is what brought us here, but it did not take long for us to see the opportunity to invest here, grow our company and make the Tri-Cities a central hub for our future expansion," said Frank Armijo, program director.

When the company began, it provided computer network and support for Hanford-related work exclusively, he said.

Although 80 percent of its business still is Hanford-related, its client list has expanded to include General Motors, Nike, USG and federal agencies unrelated to Hanford. Lockheed, which unloaded its Hanford environmental contract in 1999, employs 600 people in Richland and has plans to expand to 1,000, Armijo said.

"We already have a very talented technology work force in the Tri-Cities, and we don't have the high cost of living of Seattle, for example," he said. "IT work can be done anywhere."

But attracting IT workers could be a challenge as some may be turned off by the slow pace and the desert dust that the area's often-ferocious winds seem to enjoy distributing upon contact lenses. Armijo said Lockheed doesn't expect every smart cookie to want to live in the Tri-Cities.

"We heavily recruit the sons and daughters of Hanford engineers," he said. "This is a great opportunity for them to stay local."

Keeping Tri-Citians in the Tri-Cities is the goal — something the $4.5 billion project at Hanford will not do on its own. Workers are being hired on a short-term basis to design and build a treatment plant where highly radioactive waste stored in Hanford's leaking tank farms will be converted into glass cylinders for long-term storage. The project, which began ramping up about a year ago, is to employ 4,300 people at peak.

About 2,000 workers, primarily well-educated and well-paid engineers along with about 500 construction workers, already have rolled into town to work for project manager Bechtel National. Workers began laying the concrete foundations for the three nuclear facilities on the site last month.

	STEVE RINGMAN / THE SEATTLE TIMES Golfers play on links in Richland, home of the HAMMER training center. A major project at Hanford has meant good times for Tri-Cities residents.

As early as the end of this year, engineers will begin leaving town, their work complete. At the same time, more construction workers will arrive until the number reaches 3,200, said John Britton, a Bechtel spokesman. Construction work, however, begins to wrap up in 2005 in preparation for a 2007 startup. The permanent work force at the plant is expected to be 800 to 1,000.

"This construction project is a real shot in the arm for the Tri-Cities, but it's not like it's going to bring 4,000 or 5,000 permanent jobs here," Britton said.

Although the newcomers working for Bechtel don't expect to stay long, many are buying nice homes in order to maintain the lifestyle to which they are accustomed, said Dave Retter, owner of Windermere Real Estate in the Tri-Cities.

The result has been another of the Tri-Cities' housing booms. A water tower in Pasco casts a long shadow over several new housing developments where recently there were only potato farms or sagebrush. Some of the homes are big and fancy, but many are modest, with prices starting at $80,000.

In the first seven months of this year, 1,177 building permits for new single-family homes have been issued in the Tri-Cities area, according to a Tri-Cities Homebuilders Association report. That represents a more than 50 percent increase over the corresponding seven months of last year and about double the total for the first seven months of 2000.

"Two things are spurring new home construction: people moving to town and a very good move-up market," Retter said.

But longtime Tri-Citians know how this story ends. The most notable Tri-Cities boom occurred in the late 1970s and early 1980s, fueled by the construction of three Washington Public Power Supply System nuclear plants. But when the supply-system's bonds defaulted, the project's acronym, WPPSS, or Whoops, became the punch line for the devastating bust that followed.

How bad was it? In 1978, there were 660 building permits for new homes issued by Kennewick alone, but in 1983, there were only 13 building permits issued throughout the entire Tri-Cities, Retter said.

In the early 1990s, the Tri-Cities experienced another boom as thousands of workers were hired to decommission several of Hanford's processing plants. But from 1994 to 1996, 5,250 Hanford and WPPSS workers had gotten pink slips — about one-quarter of the reservation's work force — and the Tri-Cities experienced another economic downturn.

How bad was that one? In 1994, the Tri-Cities led the nation in home-value appreciation at 20 percent but in 1995, the Tri-Cities led the nation in depreciation at 25 percent, Retter said.

So how good is this current boom? Real-estate agent Mary Lynn Heinen said she did a year's worth of business in the first two months of 2002.

"And I'm barely even trying," she said. "That's what is really scary about it."

Stuart Eskenazi: 206-464-2293 or seskenazi@seattletimes.com.