Market Overview: 2021: The year the Tri-Cities hit 300,000 – and its stride

History will remember the early 2020s for the devastating coronavirus pandemic, the shutdowns, the economic chaos.

It would be easy to assign the booming construction scene of 2021 to a Covid-19 recovery.

The bounce back may be real, but population and job growth are the real drivers of the diverse array of construction occurring in the Tri-Cities in late 2021.

And with thousands of new jobs coming to Pasco next year, population and job growth will keep driving residential, commercial and civic construction.

Karl Dye, president of the Tri-City Development Council (TRIDEC), said construction was on the rise before the pandemic. But he doesn’t dismiss the Covid-19 impact. Shutdowns and supply chain issues led to a bottleneck that is resolving itself.

Population boom

But a growing population is undeniable.

The Tri-Cities is the fourth largest metro area in Washington, after Puget Sound (which includes Seattle, Tacoma, Bellevue), Spokane and Vancouver. And it is gaining attention.

“The more we grow our population, the greater awareness that we have,” he said. “It’s becoming kind of a perfect storm.”

With more than 300,000 residents, the region is gaining new attention from companies that aren’t interested in smaller markets.

Amber Hanchette, director of real estate operations for the Port of Kennewick, noted the importance of growth during a routine presentation during a port meeting on Sept. 14.

The topic: A market assessment commissioned to help establish what prices the port will charge for development sites at Columbia Gardens Urban Wine & Artisan Village and Vista Field.

“Our population has pushed over 300,000,” she told the commission, by way of explaining pricing and real estate activity.

“That’s what becomes a key indicator for a lot of companies that aren’t looking at smaller communities but are looking at population numbers as a threshold.”

Two newcomers are telling examples, she said.

Crumbl, the Utah-based cookie chain, opened stores in Richland and Kennewick. Popeyes Louisiana Kitchen is replacing a former car dealership at Highway 395 and West Clearwater Avenue in Kennewick – its first-ever Tri-City location.

While welcome, those projects pale compared to the big ones taking place in Pasco and to a lesser extent elsewhere. Collectively, three food processing plants (Darigold Inc., Reser’s Fine Foods and Local Bounti) will employ more than 1,500.

Add in two Amazon Inc. distribution warehouses near Sacajawea State Park and the local workforce will easily expand by 3,000.

And those don’t factor in the amount of residential and retail development across the city.

Pasco has its Broadmoor area, where Issaquah-based Costco Inc. is expected to – finally – add a second store once concerns about local roads are addressed.

Construction hotspots dot the four cities.

Richland has its Horn Rapids and Duportail areas. West Richland has the Belmont Business District and the Heights at Red Mountain Ranch. Kennewick has its Bob Olson Parkway corridor and Southridge. Pasco has its thriving industrial district and Broadmoor areas.

Private investment could top $1 billion. Darigold alone is expected to spend $450 million to $500 million on its protein and butter plant.

The Tri-Cities is known for its expansive waterfront vistas. This one showcases the confluence of the Columbia and Yakima rivers. (Photo by Scott Butner Photography)

Infrastructure investment

Private investment is dominant, but public sector investment is considerable. Beyond the Hanford site, where the U.S. Department of Energy is preparing to start up its $17 billion waste vitrification plant, local governments are busy keeping up.

The four cities and three ports are pouring hundreds of millions more into the civic infrastructure and amenities the region needs to function and to keep up with a growing population.

Pasco and Kennewick are building long-awaited road projects – Lewis Street overpass for Pasco and Ridgeline Drive underpass for Kennewick.

Both received significant support from Connecting Washington, the gas tax-funded transportation package authorized by the 2015 Legislature.

Pasco is upgrading water (drinking) and wastewater (sewage) treatment plants to modernize and expand capacity.

And it’s spending tens of millions on its industrial process wastewater facility, critical to food processors. Pasco utility ratepayers will be relieved to hear the food processors that use it will bear the $31 million cost.

Kennewick will complete a
6 million-gallon water reservoir in the Creekstone area – 20th Avenue and Irving Street – in mid-2022. The $15 million project will retire an aging tank and provide more reliable service to a fast-growing end of town.

Home supply vs. demand

No construction roundup would be complete without a nod to home construction.

Tri-City permitting agencies authorized 1,200 permits with a combined value of $390 million in the first eight months of 2021, according to Home Builders Association of Tri-Cities. That’s more new homes authorized in the same period each year going back to 2016.

Demand continues to outpace supply, with homes selling in less than 10 days, on average.

Lola Franklin, CEO of the Tri-City Association of Realtors, said one agent reported receiving 27 offers on a single home in a highly competitive market that has sent the average price of a home above $400,000.

The wave confirms the Tri-Cities’ status as one of Washington’s metro areas to watch.

With just over 300,000 people, the Tri-Cities trails the Puget Sound area (4 million), Spokane/Spokane Valley/Coeur d’Alene (735,000) and Vancouver (354,000) for population. Vancouver is part of the Portland metro area, with 2.5 million people.

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