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Business Roundup | Wall Street Journal reports on NCW’s bitcoin ‘mania’

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Workers put together some of the planned 17 pods being built last month at Pangborn Airport Business Park for Giga Watt Inc., one of several high-profile cryptocurrency companies in North Central Washington. The buildings will house computer servers that will host bitcoin mining operations.

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Wall Street Journal reports on NCW’s bitcoin ‘mania’

NCW — North Central Washington — energized by cheap hydro power — continues to sizzle as a hotspot for cryptocurrency operations. And the world has taken notice.

No sooner had financial cable TV network CNBC aired its video report (Jan. 11) on Wenatchee’s bitcoin operations — labeling us bitcoin mining’s “epicenter” — than the Wall Street Journal rolled into town to write about what it calls NCW’s “bitcoin mania.” The newspaper’s story appeared Feb. 11.

True, not many NCW residents know what a bitcoin is. The easy explanation is that it’s a digital currency created and maintained by multiple high-powered computers that rely on cheap power. That’s why the PUDs in Chelan, Douglas and Grant counties — which provide electricity at 2 to 4 cents per kilowatt hour (the U.S. average is 10 cents) — get hugs from the bitcoin industry.

Bitcoins are also on a rollercoaster ride when it comes to value. In 2017, the cryptocurrency started the year at around $930, peaked at almost $20,000, then settled at year’s end to around $14,000. On Feb. 15, the value was just under $9,900.

The WSJ article by writer Alison Sider had a number of interesting facts about bitcoin mining in our area. A few tidbits:

  • Since October, the Chelan PUD has received four mining inquiries for 100 megawatts each. That’s enough power for 50 hospitals. Each mining operation could require $40 million in new infrastructure, and nobody is quite sure who would pay for it.
  • Chelan PUD General Manager Steve Wright, fretting over these huge energy requests and how they might affect local power rates, put it sternly: “We do not intend to carry the risk of bitcoin prices on our system.”
  • Bitcoin operations can squeeze into small spaces. Shoe-box size computers filling a 25-by-25-foot room can use as much power as 1,000 homes. Miners have crammed equipment into an old laundromat, former fruit-packing warehouse and apartments.
  • There are at least 30 known mining operations in Chelan, Douglas and Grant counties. More want in. Some local PUD and civic officials say they’re getting 20 calls a week from miners.
  • When it comes to bitcoin mining, local utilities are being forced to rethink their rate structures, add upfront charges and deposits and require in-depth engineering plans for each operation. The Chelan PUD has been a leader on this front.
  • Not surprisingly, some NCW residents are alarmed at the bitcoin influx. “They worry these miners will drain the area of the surplus power that can be sold into energy markets, helping keep (local) rates low,” wrote Sider.
  •  Jeffrey Bishop, executive director of the Port of Moses Lake, said power companies are jammed up with requests from miners, which means other companies face longer waits to be hooked up or serviced. “It reeks of a bubble,” said Bishop. “I’m really concerned that we’re going to spend a lot of time and money and money pursuing this only for it to collapse on itself.”

Details: See the CNBC video report at http://cnb.cx/2mnRE6K. Read the WSJ article at http://on.wsj.com/2ExpSQ3 (subscription needed).

 

Flywheel Conference to help spin startup ideas into reality

WENATCHEE — Got an idea for a startup company? An upcoming conference could give you a boost.

The Flywheel Investment Conference — a gathering of angel investors, venture capital and private equity firms, entrepreneurs and startup hopefuls — will include educational seminars, speaker panels, an investment competition, luncheon and evening celebration.

Now in its second year, the one-day conference will run from 9 a.m. to 8 p.m. April 19 at the Stanley Civic Center, Wenatchee. For more info and registration, visit flywheelconference.com.

The Flywheel Investment Conference is a dynamic opportunity for startups to present their unique ideas,” said Randy Fenich, a partner at Moss Adams, one of four conference sponsors. “This is North Central Washington’s driving force behind innovation and growth.”

Hosted by the Greater Wenatchee Area Technology Alliance (GWATA),, the conference’s other sponsors are Ogden Murphy Wallace, Confluence Health and Microsoft.

One highlight of the conference will be a “Shark Tank”-style presentation in which startups compete for a chance to receive an investment award of $100,000 from NCW angel investors. The online application period for startups to participate in the challenge runs through March 9.

Wenatchee has a rich entrepreneurial climate with the capacity to grow,” said Jenny Rojanasthien, GWATA’s executive director.

Through the conference and a regional network of angel investors, “We can further support companies with resources that they need to thrive,” she said.

 

Hospital levy approval a ‘gold win’ for community, says CEO

QUINCY — Passage of a levy Feb. 13 that helps fund the future of Quincy Valley Medical Center brought together the whole community in an Olympics-sized effort, says the hospital’s top exec.

It’s a ‘gold win’ for our entire team, our entire community,” said medical center CEO Glenda Bishop. “A huge number of residents were supportive, engaged and invested in working towards a victory.”

The $875,000 maintenance-and-operation levy gained 69.4 percent approval (1,240 votes) to beat substantially the 60 percent approval required to pass. About 30.6 percent of voters (540 votes) said no to the measure.

The one-year property tax levy — officially labeled Grant County Hospital District No. 2, Proposition No. 1 — was on a Grant County special election ballot Tuesday after failing by 34 votes in November.

Approval now means taxpayers will be assessed 21.79 cents per $1,000 of assessed property value. Supporters have estimated a home valued at $250,000 would be assessed about $55 for the year, or less than $5 per month.

The community’s thumbs-up to the measure “helps protect this facility’s vital role of offering hospital and emergency services to people who live here,” said Bishop.

The medical center currently provides 24-hour emergency care, physical therapy for a wide range of patients and clinic services to residents that includes preventive care, immunizations and assessment and treatment of injured workers.

Bishop emphasized that the levy is not for capital improvements but to help cover operating expenses during development of “a plan for the future of health care in Quincy.”

Top priority: “Aggressively addressing the need for a new partner that will help ensure that this facility survives,” said Bishop. Already underway, the effort would establish a partnership with a larger medical corporation, such as Confluence Health in Wenatchee or another system in the region.

The search for a partnering medical system will likely continue through this year, said Bishop, with an announcement coming sometime in 2019.

 

Glass studio reshapes to include retail and B&B ‘experience’

WENATCHEE — A local glass studio specializing in handcrafted smoking gear and art pieces has reshaped itself to include a new retail space, studio and bed-and-breakfast inn featuring lessons for guests in making glass items.

West Coast Glass Studios, owned by 20-year-veteran glass artist John Craddick and wife Lyndi, in December launched the company’s new retail space inside Wenatchee vape shop Smoke & Go, 823 N. Miller St. Display cases feature more than 50 West Coast smoking pieces — spoons, bongs and pipes, including bubblers (using water), sherlocks (curved stems) and steam rollers (dry pipe).

I see it as the mega-superstore of West Coast products,” said Craddick. “This is the place to find a great sampling of our glass pieces.”

Owned by Jon Reynoldson, Smoke & Go stocks vape and smoking accessories, tobacco products, beer, wines, energy drinks and other items. It’s the only smoke shop in Chelan and Douglas counties, said the owner, with a drive-through window.

In addition, Craddick said his West Coast Glass Studios has joined with Seattle merchandiser West Coast Distributors to supply glass pieces to more than 200 outlets in the Pacific Northwest. Craddick’s studio has also inked a distribution deal with an East Coast supplier.

Now we’re making thousands of pieces to fill orders from all around the country,” said Craddick.

The company also sells non-smoking art and decor items — drinking glasses, wine bottle stoppers, pendants, window hangers and designer marbles — at the Country Gift Store in the Aplets & Cotlets Candy Kitchen in Cashmere.

West Coast Glass Studios moved to the Wenatchee Valley in 2012. The business soon opened a production studio near Walla Walla Point Park in Wenatchee and featured art glass courses and outreach programs on glass shaping to local schools and community venues, such as Pybus Public Market.

Last year, the company restructured its production, moved to a new studio near Cashmere and opened a bed and breakfast that offers, says its listing on Airbnb.com, “the Northwest Glass Experience — creating with fire!”

The overnight accommodation (one bedroom, living room and kitchen) includes an hour-long glass-working demo and class for guests. “We offer a unique, inside look at the equipment and techniques for making practical pieces and art objects from glass,” Craddick said.

West Coast’s retail offerings, studio and glass-working B&B combine, said Craddick, “as a way for our business to make a person’s smoking experience better, to take it to the next level.”

 

Panel: Startup requirements include passion, money, sleep

WENATCHEE — Four of our area’s top tech whizzes bared their digital souls last month during a panel discussion chock-full of confession, advice and nuts-and-bolts economics.

The panel discussion was the most recent installment of GWATA’s Entrepreneurial Lunch Series — this one on local technology companies — and it drew around 80 business and tech folks to the Confluence Technology Center for sage advice.

On the panel roster were Dave Carlson, CEO of Giga Watt, the East Wenatchee company offering computer services to cryptocurrency miners; Drew Zabrocki, CEO of Centricity Global, a Wenatchee-based software company providing blockchain services for the “Internet of Ag”; Korey Korfiatis, CEO of Legwork, a Wenatchee company specializing in customer-relations software for the dental industry; and Tom Arnold, founder and chief tech officer for PetHub, a Wenatchee company using digital networks to help pet owners identify and locate their animals.

Moderator for the discussion was Jenny Rickel, chief operating officer for Native Network, which advises Native Americans on the building of Internet and digital networks on tribal lands.

Here are a few facts and comments gleaned from their one-hour chat:

  • Korfiatis: Legwork’s business is booming. In just a couple of years, they’ve signed up more than 1,000 dental offices to use their software packages with around 70 more signups coming each month.
  • Arnold: PetHub sells collar tags that link to Internet services that help locate lost pets. Last year, the company sold 400,000 tags.
  • Carlson: “If starting a new company, start something you’re passionate about. Keep the money in sight, sure, but don’t launch a startup just for the money. You need the passion to keep you working, and working still more.”
  • Arnold: About startups, “Talk to people. Talk to everyone you can. You want people to rip your ideas apart, turn them inside out. Be open, be honest in your presentation, then ask for advice and keep asking.”
  •  Zabrocki: “Don’t forget, equity is expensive. Don’t sell your soul for the money. If you want to maintain control of your startup company, then sell, sell, sell (your products and services).”
  • Korfiatis: “What keeps me up at night? Recruitment. We’re growing fast and hiring fast, and we need to maintain our customer support while we maintain and update our products. To keep up, support staff needs to be trained. It’s stressful making sure we can offer the best support possible.”
  • Carlson: “What keeps me awake at night? First, I recommend all entrepreneurs get a full eight hours of sleep. It’s important for fueling your day and the tasks that need to be done. That can be hard to do when you get a great idea, or you’re solving a problem, and you’re super-jazzed, super excited. Be careful, though … those (ideas) can turn into demons that haunt you, that keep you up all night.”
  • Arnold: “As an entrepreneur, you’ll be doing everything — cleaning the office, running to the store, coming up with the next big idea that will take your company to the next level. Consider that you might not be the person to run your company on a day-to-day basis. You can come up with those big ideas, but are you the person to handle everything else” that makes the company run?
  • Carlson: “Yes, good point. I know entrepreneurs who are great with the ‘big picture’ stuff but need to hire a capable team, a quality team, to make sure the company runs right everyday.”
  • Zabrocki: The one thing Chelan and Douglas counties could do to support and encourage local technology companies is “help attract more programmers, help recruit in urban areas. OK, the pay here may be less, but this is a beautiful area that also has less noise, less traffic, less stress. The community has helped get the word out, but we can’t stop now.”
  • Korfiatis: “We need more software developers, and to get those we need more training, more classes for local students and tech workers. Ultimately, we need more ways to teach people this profession. Our company is growing fast, and we’re searching for hires. It’d be great to have them come from right here.”

 

New boutique brings a world of products to downtown

WENATCHEE — Thirteen years is a long time to plan your store opening.

But Kayme Clark, owner of downtown’s new Mulberry Manor Boutique, began in 2004 to brainstorm about colors, displays and product mix. Clearly, her planning has paid off.

Clark’s boutique at 6 S. Wenatchee Ave. — in the former location of Palmer Shoes — features an eclectic blend of upscale products from around the world. Grouped by themes, offerings include a wide array of jewelry, kitchen wares, women’s accessories, vintage Japanese kimonos, men’s grooming supplies, garden-themed decor items and about a dozen other categories.

All together, the store features “thousands of hand-picked items,” she said. And most of those products — from more than 35 vendors — are also available on Mulberry Manor’s website.

About the store’s name, Clark said “manor” describes “a big, solid home with multiple rooms filled with interesting things. That’s the way I envision this store.” And “mulberry”? No hidden meanings there, said Clark. “It’s just one of my favorite trees.”

Tasteful design with “global flair” comes natural to Clark, 37, who has worked full-time for more than a decade as a graphic designer and travel photographer. For years she researched and designed textbooks full-time for publisher Directed Media, Inc., in East Wenatchee.

Putting together a textbook is certainly a lot of work,” she said. The company’s geography text “Washington: A state of Contrasts” took her seven months to complete. It’s now used by scores of school districts for middle and secondary grades. “It’s gratifying to know that thousands of students are using our books as part of their education,” she said.

In 2005, Clark began traveling the world in search of antiques, which in recent years she has sold at her own vendor booth at Apple Annie’s Antique Gallery in Cashmere. She also began taking photos on her journeys, a talent which has grown into the lucrative sideline business Kayme Clark Photo & Design.

Clark has been chosen as one of 30 photographers from around the world who will show work at the 2018 Venice Architecture Biennale running May through November at the European Cultural Center in Venice, Italy.

I love design, I love photography, I love antiques and unique products,” said Clark. “The store allows me to do them all.”

She noted that her love of travel can be fulfilled in searching for one-of-a-kind product lines from around the world. And her visual skills can be put to good use by designing in-store displays and photographing items for the Mulberry Manor website.

Featured product lines include celebrity chef Jamie Oliver’s kitchen and home wares, Olivina men’s grooming products, nautical- and garden-themed decor items, women’s accessories such as handbags, scarves, gloves and hats and more.

Clark said she’d actively been searching for the perfect store space since 2016 and had narrowed her choices to three locations, two of them in downtown Wenatchee. The store opened Dec. 6.

This space topped the others because of its openness, big windows with lots of light and a large workspace in the back.’,” she said.

Also, this big, airy space makes me happy.” said Clark. “It feels like home.”

 

Sell BPA assets? Not so fast, say Cantwell and local power execs

NCW — The old idea keeps popping up: Sell the transmission lines and equipment of the Bonneville Power Administration to help finance new infrastructure projects.

But not so fast, say U.S. Senator Maria Cantwell (D-Washington) and local power execs. Those power lines are owned by BPA customers and are an integral part of the Northwest economy. Plus, the sale of BPA assets may not be as profitable as hoped.

I’ll be working to once again stop this bad idea in its tracks,” said Cantwell, ranking member of the Senate Energy and Natural Resources Committee.

The sell-off idea was included last month in President Donald Trump’s proposed infrastructure initiative that has suggested selling government assets ranging from airports to parkways to federal power companies.

The privatization proposal, estimated by the White House at $4.9 billion in new revenues, has been discussed by several administrations, including those of presidents Ronald Reagan, George W. Bush and Bill Clinton. A preliminary budget released in May by Trump included the BPA proposal, and it was included again in the latest infrastructure initiative.

The $200 billion proposal follows Trump’s campaign promise to rebuild infrastructure — highways, bridges, airports, schools and hospitals — while reducing environmental regulations to speed permitting and prompt the sale or privatization of certain federal assets.

Potential targets for divestiture could include Reagan National Airport and the George Washington Memorial Parkway, both in Washington, D.C., and power transmission assets of the BPA, Tennessee Valley Authority (TVA), Southwestern Power Administration and Western Area Power Administration.

The Federal Government owns and operates certain infrastructure that would be more appropriately owned by state, local or private entities,” the Trump plan says. It calls for giving federal agencies “authority to divest of Federal assets where the agencies can demonstrate an increase in value from the sale that would optimize the taxpayer value.”

The BPA markets hydropower from a system of 31 federal dams on the Columbia River and its tributaries in Washington, Oregon, Idaho and Montana. Most of that power is sold to consumer-owned utilities that — unlike the Chelan and Douglas PUDs — don’t operate their own dams.

The American Public Power Association, a trade group representing public power companies, said in a statement it was disappointed by the divestiture proposal, wire services have reported. The association noted that the transmission assets of federal power companies have been paid for by electricity customers.

Gary Ivory, general manager of the Douglas County PUD, on Monday gave a thumbs-down to privatizing parts of the BPA. “The assets have been paid for by Northwest customers who deserve the perpetual benefit,” he said by email. “We are confident that the strong Northwest congressional delegation will protect this (BPA) system.”

Steve Wright, general manager of the Chelan County PUD and a former CEO of the BPA, emphasized that, if enacted, the proposal would have little direct impact on the local utility since the Chelan PUD buys no power from the federal power agency.

That said, we recognize the BPA as a marketer of power generated at federal hydro projects that provide many benefits to the region,” Wright said. The dams generate power that is sold mostly at-cost through the BPA to community utilities and provide structure and opportunities for irrigation, flood control, fish and wildlife, navigation and recreation.

In June, Wright argued (with co-author Randy Roach, a former BPA general counsel) in an op-ed piece published in The Register-Guard in Eugene, Oregon, that the president’s sell-off proposal probably wouldn’t be feasible due to a “lock” on hydropower transmission requirements included in the BPA’s power contracts with its customers.

Included in power contracts since 1996, that lock would likely impose large transaction costs to any potential buyer of BPA assets and embroil new owners in lengthy litigation with the federal government, Wright said.

Possible litigation would seek, said Wright, “to enforce the contracts and preclude profit-taking from the sale of the system. That should effectively limit the selling price such that the increased revenue estimates (proposed in Trump’s preliminary budget) cannot be realized.”

Cantwell added that the sell-off could raise electricity rates for community utilities buying BPA power and “throw sand in the gears of the Northwest’s economy.”

 

Wenatchee bear-hugs the Panda

WENATCHEE — By now, local residents have already raced to get their orange chicken fix at Wenatchee’s new Panda Express, which opened to huge crowds Feb. 1 on North Wenatchee Avenue.

Panda fans have stood in lines stretching out the door, waited in long drive-through queues and even (on its opening weekend) engaged in mini-traffic snarls to dine on black pepper chicken and honey walnut shrimp.

What can I say?” smiled General Manager Adrian Cuevas. “People love Panda Express.”

Based in California, the Chinese fast-food company (more than 2,000 locations nationwide and growing) spotted a large, no-Panda void in North Central Washington that needed to be filled, said Cuevas.

Plus, the Panda Express in Yakima, previously the closest Panda to Wenatchee, had noticed that a growing number of its customers hailed from NCW. “That was the clincher,” said Cuevas, “to build a restaurant here.”

On a construction fast track, crews poured footings in late September for the 1,450-square-foot restaurant. The company-owned outlet — an upscale prototype of Panda Express design — opened just four months later.

Cuevas noted that the Wenatchee building’s exterior and interior have a more contemporary design than traditional, stand-alone Panda Express outlets. The new restaurant also boasts an upscale theme for color and design elements (lights, table styles, wall art) not found at Pandas located in commercial strips, mall food courts and airports.

Cuevas, 27, was raised in Wenatchee. For the last two years, he’s worked at Yakima’s Panda Express. When the general manager position came open in Wenatchee, he jumped to apply and, maybe, have a chance to move back home. He got the job.

Now, Cuevas leads a crew of 20 (hiring continues at pandacareers.com) to serve the hundreds — no, thousands — of Wenatchee Valley-ites so far who have satisfied their Panda cravings with one of the restaurant’s 15 entrees and side dishes.

As the Chinese New Year neared (Feb. 16), Panda Express promoted its newest seasonal dish, Eight-Treasure Chicken Breast. It’s eight ingredients are chicken, diced pork sausage, bell peppers, celery, Chinese black beans and whole dry chili peppers, all “wok-tossed” with a spicy-savory sauce.

But the favorite item that everyone asks for?” laughed Cuevas. “Orange chicken. They want that orange chicken.”

Details: Panda Express Chinese Kitchen, 1920 N. Wenatchee Ave., Wenatchee (next to EZ’s Burger Deluxe). Phone: 662-0800. Web: pandaexpress.com. Open: 10:30 a.m. to 10 p.m. daily.

 

Community Shopper delivers coupons, deals to community’s shoppers

EAST WENATCHEE — A longtime publisher of coupon-and-bargain mailers in the Puget Sound area has relocated to the Wenatchee Valley to launch a community shopper serving businesses in Chelan and Douglas counties.

Chuck Caldwell, publisher of the Wenatchee Valley Community Shopper, last month mailed the publication’s fourth issue to 25,000 upper-income residences in East Wenatchee, Wenatchee and — new with the most recent issue — households in Cashmere, Leavenworth and Chelan.

My philosophy is based on serving the consumer first,” said Caldwell. “I work with businesses to bring good deals to diners, shoppers, car owners, home owners and just about everyone else.”

The latest Community Shopper hit mailboxes Feb. 8 with around 50 advertisers, all touting discounted services or products. The publication also features a few area events, but contains no articles. Caldwell has planned five issues a year timed loosely with the seasons and holiday months.

So far, each issue has featured a cover photograph of Wenatchee Valley children, chosen randomly from submissions sent by parents. A professional photographer then snaps portraits of the kids for the next issue.

Families love that we feature their kids on the cover,” said Caldwell. “The kids have turned out to be the rock stars of the publication.”

Caldwell, 61, began in 1998 to publish direct-mail shoppers in Redmond, Kirkland, Ballard and West Seattle. The business grew, he said, “because I always approached businesses with an easy-going manner — never a hard sell attitude — to make sure what I offer will work for them.”

If the business’ advertising offer wasn’t “outstanding” — say, it offered just 10 percent off a service or meal — then he’d help them craft something better, he said. “I want to be successful by helping them to be successful.”

As growth in the Seattle area brought thousands of new residents and the accompany traffic congestion, Caldwell, who drove extensively to sell ads in the Seattle area, began thinking that he and wife Debra should relocate. “It dawned on me that I didn’t want to die of a stroke behind the wheel in a traffic jam,” he said.

Wenatchee was a logical choice, said Caldwell, because since 1983 he has led rafting trips down the Wenatchee River. “We were familiar with the area,” he said. Compared to Seattle, “It’s quiet, it’s friendly and it’s beautiful.”

The Caldwells took advantage of the Seattle-area’s booming real estate market, sold their Redmond home, moved to East Wenatchee in 2016 and around six months later published their first Community Shopper on the east side of the mountains.

Looking at it from a business perspective, I’m selling exposure for a product or service,” Caldwell said. “It’s a kind of blanket coverage to high-income families who, I think, will repeatedly look through each issue and begin to take notice of certain advertisers. The coupon deals? Well, that’s a bonus.”

Caldwell said he believes his direct-mail shopper provides a good service to businesses and consumers.

Now it’s up to the community to use the coupons and take advantage of the deals,” he said.