Tri-Cities’ northern neighbor, Adams County, is moving forward with plans for infrastructure to support the growth of its food processing and distribution sectors, based on positive projections for the area’s potential as a low-cost hub for these industries.
Results from two recent site selection studies conducted by The Boyd Company, a New Jersey-based consulting service, show that key operating costs are lower in Adams County compared to a number of other major food processing and distribution cities across the nation.
Some major names have already established operations in Adams County — J.R. Simplot Co. and McCain Foodservice — but there is still a lot of untapped potential, according Stephen McFadden, Adams County’s economic development director.
“The sky’s the limit,” he said. “There’s a lot of open ground and a lot of opportunity.”
An uncertain future for international trade partnerships and export tariffs, water scarcity in agricultural areas like California and the pending Food Safety and Modernization Act means key costs like labor, real estate, power and taxes become bigger deciding factors in corporate site selection, according to The Boyd Company.
This means enhanced opportunities for Adams County.
The Boyd Company found that Othello ranked lowest for labor, real estate, power and tax costs among 30 cities housing major concentrations of food industry operations.
The study calculated annual operating costs for a fictional 125,000-square-foot facility employing 300 nonexempt workers.
In the site selection study, Othello ranked the lowest in average annual operating costs at $23.1 million. Boston was the most expensive city at $28.4 million.
Seattle ($27.4 million) and Portland ($24.7 million) were among the other locations included in the study. The Tri-Cities were not included.
The distribution warehousing analysis compared 25 cities with regional proximity to major port and intermodal transport facilities. Ritzville ranked second for low annual operating costs at $11.6 million. About $10,000 separated Ritzville from the most affordable city, Chesterfield, Virginia.
Stoughton, Massachusetts, was the most expensive city considered at $15.7 million.
Kent was the only other Washington city included in the report with an operating cost of about $13 million.
McFadden hopes to capitalize on these findings by using them to support ongoing corporate recruitment efforts.
“One new project, one new investment in our community, has a long-term effect and long-lasting impact, and once you get one, you get the next one,” he said.
McFadden reported that traditionally the county, population 20,000, did not actively recruit new companies, but it soon became clear to him that many declining communities were at risk of collapse if new job opportunities weren’t created and more active efforts made to stimulate the economy.
“Adams County is entirely ag-driven. We were really attached to our tradition of growing wheat, and we weren’t thinking about what happens as the economy changes,” McFadden said.
In 2015, Adams County reached out to The Boyd Company to conduct an analysis of the county to identify the types of industries that could be successfully recruited to help grow the economy.
“The analysis pointed us toward expansion of the food and beverage processing industry in Othello and the establishment of Ritzville as a future distribution warehousing and logistics hub,” McFadden said, saying this is a natural complement to the county’s agricultural base.
During this past year, The Boyd Company collected data on site selection factors and comparative operating costs across the country.
“The idea that Ritzville in Eastern Washington can have virtually the same operating cost structures as a right-to-work market in the southeast like Chesterfield should be turning a lot of heads and I expect it to do that in corporate boardrooms,” said John Boyd Jr., principal at The Boyd Company.
“It really underscores the very compelling operating cost advantages that exist in Adams County for these jobs. Food processors and their distributors need to be competitive with their rivals based in low-cost countries in China and Mexico and India and other places,” Boyd said
Much like the neighboring Tri-City area, Adams County is well positioned to serve the global marketplace with its proximity to crops, food processors, water and transportation.
“I don’t want to take what they have—you don’t steal from your neighbor,” said McFadden, who said he maintains many positive relationships and alliances with neighboring county, port and city entities. “Inside the state we’re all trying to accomplish the same thing. Economic development is a neighborhood act, and I consider the Columbia Basin my neighborhood.”
McFadden explained that since active recruitment wasn’t a part of the county’s strategy in the past, “we didn’t have a presence, but quietly, food processing in Othello is well-known.”
Carl Adrian, president and CEO of the Tri-City Development Council, affirmed that many of the food processing and distribution companies his office works with don’t have areas north of the Tri-Cities and the Basin on their radar.
McFadden is working to change that perception by securing money for investment in infrastructure to attract new food processors to the area.
“It shows companies that we’re intentional,” he said.
In January, Adams County and the Port of Othello received $1.25 million from the state Legislature for the pre-design and engineering for the second phase of an industrial wastewater treatment and water reuse plant that will process 3.4 million gallons per day.
Food processing uses a significant amount of water, and the resulting gray water is usually applied to crops afterward.
Adams County aims to re-envision this system to return gray water to federal drinking water standards to be used again in food processing.
McFadden said he believes this green component will lend additional marketability and attract more businesses interested in adding more environment-friendly practices to their profile.
In the next year to 18 months, McFadden said contractors will be selected and construction will begin.
Meanwhile, in the town of Lind, population 500, the fruits of successful promotion efforts are taking shape in the form of the state’s largest utility-grade solar farm to date.
Ground was broken May 24 on the 170-acre Avista Utilities project—25 times larger than any other solar operation in Washington—which will produce 28 megawatts of energy annually.
McFadden said this is an excellent example of where active recruitment and advocacy made all the difference.
“We saw it and became aware of it and got involved and said we want that project to come to Adams County,” he said.
“We got a letter of support from Gov. Inslee’s office last June for the effort,” McFadden said. “And then as the solar companies were doing their scientific analysis, they determined that Adams County is the best solar production region in all of Avista’s territory. So, this is the first one; we think there will be more.”
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