California investment firm spurns Seattle area for rural Clark County; where drivers are coming from; warm economic outlook on a snowy day
When Ken Fisher, CEO of Fisher Investments, was looking to open new offices for his California-based money-management firm a few years back...
By Seattle Times business staff
When Ken Fisher, CEO of Fisher Investments, was looking to open new offices for his California-based money-management firm a few years back, he quickly identified income-tax-free Washington state as a potential location.
But Fisher didn't locate in downtown Seattle. Or downtown Bellevue. Or downtown Tacoma. Or anywhere else in the central Puget Sound region. Instead, he's building a campus on 170 acres on the western edge of Camas, in Clark County.
"It took about four seconds to rule Seattle out," Fisher said from his home office in Woodside, Calif., tucked between San Francisco and Silicon Valley. "If we went to Seattle, we wouldn't be a big fish in a small pond — we'd be a medium-sized fish in a big pond."
But Fisher Investments bulks large in Clark County, even given the county's rapid growth over the past two decades. The firm has $41.3 billion in assets under management, some 24,500 clients (mostly rich individuals) and 1,250 employees, more than a third of whom now work in Camas.
That, Fisher said, helps make for a smooth working relationship.
"In Bellevue or Seattle, we would not get the cooperation on a friendly basis that we get in Clark County in general and Camas in particular," he said. "We get permitting fast — they do everything they can to be helpful. Where we come from, planning and development is the 'infinite no' department."
Traffic was another consideration, Fisher said. In contrast to the car-clogged highways in the Puget Sound area, "I've never seen 14 and 205 [the highways between Camas and Portland] bottlenecked. We can pull out of Camas and literally be behind the gate at Portland (International Airport) in 20 minutes."
Housing is more affordable in Clark County, he said, and Fisher Investments employees can avail themselves of tax-free shopping just across the Glenn Jackson Bridge.
The firm's first building in Camas opened in late November, and more than 450 people now work there; it has room for 150 or so more. A 30,000-square-foot IT center is under construction; the foundation has been laid for a third building, twin to the existing one.
Fisher, a California native, leaves no doubt about how he feels about that state as a place to do business: The word "cesspool" came up more than once in an hourlong conversation.
Though he's raised the possibility of moving his firm's headquarters from the Bay Area to Texas, Florida or Camas, Fisher says he's in no hurry to make that particular decision.
"It might evolve that way, but timelines — drawing an arbitrary line in the sand — why would I do that?" he said. "My approach is, let's see how things go."
— Drew DeSilver, firstname.lastname@example.org
Where all those
are coming from
The Fisher folks aren't the only people moving to Washington. They are, however, among a dwindling band of California emigrants.
This take comes courtesy of the state Department of Licensing, which besides regulating cosmetologists and overseeing mixed martial-arts bouts, also licenses drivers. By tracking how many out-of-state driver's licenses are surrendered, and from where, versus how many Washington licenses are turned in from elsewhere, one can get a pretty good picture of state-migration patterns.
Despite the state's slack economy, final year-end numbers show the state gained a net 107,869 new drivers from elsewhere, up 13.1 percent from 2010 — itself up 30.1 percent from 2009.
Interestingly, the increase resulted from fewer Washingtonians leaving, not more newcomers arriving. There were 150,533 out-of-state licenses surrendered last year, down 5.6 percent from 2010, but only 42,664 Washington licenses were returned, a third fewer than the year before.
California has long been the leading supplier of new Washingtonians, but fewer of them appear to be making the trip; 26,770 people traded in their California drivers licenses for Washington ones last year, down 2 percent from 2010.
In fact, Californians have made up a smaller share of new drivers each year since 2005. That year, 24.6 percent of all new drivers came from California; last year just 16.8 percent did.
Oregon, the second-largest source of new Washington drivers, has maintained a relatively steady share — about 13 percent, give or take a percentage point or two, though there were bumps up in 2009 and 2010. The third-biggest new-driver source, Texas, spiked up 14.1 percent last year, accounting for 5.3 percent of new drivers.
— Drew DeSilver
Though Thursday's snow and ice hurt attendance at U.S. Bank's 2012 Economic Outlook Breakfast, speakers there called the region's economy warm, maybe even hot.
Washington ranked seventh among the states in annual job growth in November, and led the nation in personal-income growth in the third quarter, Portland economist John Mitchell said. He forecast 1.5 percent job growth for Washington this year.
"You've got an industry mix to die for," he said, speaking at the Sheraton Seattle Hotel.
But Mitchell added that changes in federal fiscal policy and the debt crisis in Europe could affect the economy's expansion.
Jeffrey Lyon, CEO of Kidder Mathews, the state's largest commercial real-estate firm, warned that property investors who bought five or six years ago will need to recapitalize their debt because their loans will come due soon. New investors could get huge discounts off what the properties sold for during the boom, he said.
Institutional investors looking for higher returns are betting on Seattle real estate, Lyon said, with downtown-office properties likely to reach market values not seen since 2006 and 2007.
"Rental rates are going up" in these core buildings, Lyon said.
For investors, the apartment market is heating up, too: Last year there were 86 deals in Washington totaling $1.23 billion, he said, up from 66 deals worth $761 million in 2010.
Likewise, the hotel market — especially luxury properties — is doing well. Occupancy rates were highest last year in luxury-boutique hotels in downtown Seattle, Lyon said. Overall, average occupancy rates rose to 65 percent, up slightly over the previous year.
Meanwhile, those who own retail space — especially suburban malls — are caught in a squeeze as more consumers spend less and buy used instead of new items. Commercial tenants, taking a page from Starbucks, are asking for sharp rent reductions, Lyon said.
The pressures could bring changes to downtown Seattle's retail landscape, he said. Levi's Original store at 1500 Sixth Ave. is closing for good Sunday. A company spokesman could not be reached for comment.
— Sanjay Bhatt, email@example.com
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