2014 Employment at Cherry Point Report

originally published Jan. 9th, 2017

Whatcom County Council has a choice: Is Cherry Point open for business, or not?

John Huntley, president of Mills Electric in Bellingham, found himself recently in a place he never thought he’d be – in a room full of people on a snowy night, standing in front of the Whatcom County Planning Commissioners, and talking about the future of businesses at Cherry Point.

“I was under the mistaken impression that if you simply did your work, did it right, and followed the rules, the government would support your efforts,” he said, recalling that experience in an interview. “That didn’t appear to be the case at this meeting.”

Huntley is one of many contractors, business allies, and company executives and employees scratching their heads over a certain proposed amendment to one important section of one especially significant chapter in the 11-chapter Whatcom County Comprehensive Plan.

The puzzler was sent to the Planning Commission by the Whatcom County Council, and if approved as written the amendment would discourage future business growth and would squeeze existing and future business operations in Cherry Point.

At the core of why it’s so vital: Cherry Point is the only area in Whatcom  County zoned for heavy industrial use, and as such it’s become a giant center for community prosperity.

The controversial amendment in question has become the focal point of a heated battle about Cherry Point’s future, in general, and specifically what the future looks like for its long-standing, current business base.

A last-minute proposed change that would harm Cherry Point businesses

In June of 2016, the County Council was finishing its review of the Comprehensive Plan – the document that is the policy-setting map for Whatcom County’s growth.  At the 11th hour, after more than a year of review, the Council offered up an amendment to the Land Use section that attempted to put a stop to the growth of the businesses operating in Cherry Point.

It also would ban any throughput of fossil fuel shipments in and out of the area.

County Council member Barbara Brenner, the sole vote against the amendment that passed 6-1, offered her own amendment, which was rejected by the Council. “I don’t want to see real unrefined fossil fuel go to Asia, because it will all come back here as pollution since Asia has few regulations for refining,” she said in a phone conversation about her position. The Council majority passed an ordinance that goes much farther than unrefined fossil fuel since it includes propane, butane, natural gas, and other fuels that are not unrefined.

“But I also want us to treat our refineries as good stewards, because they’re doing a clean job,” Brenner continued. “Most of the pollution and acidity around here isn’t coming from them. It’s coming from Asia on the prevailing winds and currents. Our refineries are good businesses and good citizens. If we keep pushing them they may leave and we could wind up with even more pollution coming from Asia and fewer decent paying jobs.”

STAKEHOLDERS SPEAK OUT 

The non-profit Whatcom Business Alliance (WBA), with a board – including Huntley on the executive committee – and its membership comprising businesses of every size, and from every industry in Whatcom County, felt it was important to create a member coalition of Cherry Point businesses and stakeholders and bring balance to the conversation.

The coalition’s intent is to educate the County Council on the consequences of the language about current and future business at Cherry Point, as well as the businesses, schools, fire districts, libraries, non-profits, municipalities, and others who rely on the economic activity out there.

The area adds value to the Whatcom quality of life

The ramifications of Cherry Point’s business health is not limited to its geographic footprint.  Cherry Point industries serve as a linchpin to Whatcom County’s economic health, and therefore its quality of life. A joint Western Washington University and University of Washington study commissioned by the WBA in 2014 quantified what most people already perceived instinctively, including:

• The Cherry Point Industrial Zone is home to 2,200 jobs, roughly 2.5 percent of the total job base in the county — and supports directly or indirectly roughly 11 percent of the jobs in the County (about 9,000).
• The jobs in the Cherry Point area have an average wage of around $114,000 a year (compared to the County average of $41,000).
• The businesses in the Cherry Point Industrial Zone pay more than $200 million in taxes each year – which pays for everything from schools to public safety to general government serviCherry-Point-Impact-Studyces.
• The businesses also support others in the community by making more than $1 million in charitable contributions each year.

“BP Cherry Point Refinery is contained within the Blaine School District,” according to Amber Porter, the director of Finance and Operations for the Blaine district. “Approximately 26 percent of the tax revenues collected for the Blaine High School construction project are expected to come from BP. Phillips 66 is a local partner and major financial contributor towards our annual Math Championships Competitions.”

The business alliance makes some headway

In the face of pushback from the business community, employees, contractors, and other stakeholders, the County Council punted the proposed amendment back to the Planning Commission last August to discuss, determine and recommend appropriate language. In doing so, the Council passed a six-month moratorium on any fossil fuel projects at Cherry Point, thereby freezing any development, improvements, or expansions by current businesses or new projects (and the jobs that would come with all that).

Which brings us back to John Huntley in front of the Planning Commission on a cold December night.

“Why fix something that’s not broken?” Huntley said. “My business and many others rely on the companies at Cherry Point and it’s common business sense that if you’re not able to adapt to the changing marketplace – if you’re frozen in time – your business won’t survive.”

What’s in the proposal?

The proposed amendment by the Council picks winners and losers at Cherry Point – with the existing companies and any future development there becoming the losers.

The amendment essentially puts up a “no further upgrades or action” sign on all the businesses now at Cherry Point.

“Taking future flexibility away from our facility practically ensures that we will be unfairly constrained,” said Karen Shorten, Plant Manager at Phillips 66 Ferndale Refinery. ”Our competitors, including those in Skagit County, will be able to take advantage of opportunities that we won’t be able to.”

Second, the language attempts to ban the possibility of a fourth industrial pier at Cherry Point, choking off the opportunity for shipping of products or commodities of any kind- not just fossil fuels.

Brad Owens serves as president of the Northwest Jobs Alliance, and he weighed in on the attempt to eliminate the possibility of building a fourth industrial pier. “The existence of a naturally deep-water shipping terminal in the Cherry Point urban growth area would attract large scale economic development,” he said. “Economic development that creates desperately needed family wage jobs. It really seems counter-intuitive to ban a gateway to the rest of the world for the exportation of domestic products and/or commodities.”

The amendment ban, if it became permanent, would stifle free-market competition. Shorten at Phillips 66 said in an email response for this article: “In a very competitive commodity market like ours, these kinds of advantages are significant and could jeopardize our future profitability and thus our viability.”

Legal questions arise

Tony Larson, president of the Whatcom Business Alliance (WBA), observed: “This is a one-sided amendment created with a goal of stopping climate change around the world.” The WBA provides a nonpartisan voice for business countywide in addressing issues like this one; Cherry Point is a lightning rod with its three mega-industries comprising oil and aluminum production.

“While it’s a laudable goal to address concerns about climate change, limiting the ability for a private company to export its legal products is a slippery slope and clearly falls outside the Council’s legal authority,” Larson said. “This amendment will not achieve its desired objective and instead will put thousands of local jobs at risk, as Ms. Brenner so aptly pointed out. It will also damage a significant portion of our tax base that funds education and public safety and fuels our local economy.”

The WBA Board, which has business advocacy as one of its platforms, holds consensus that free-market heavy industrial business and attention to environmental concerns are not mutually exclusive.”

“There is a way to both balance the economic opportunities at Cherry Point and protect the environment,” Larson said. “But with this proposed amendment it’s clear the County Council doesn’t see it that way at this point.”

The County’s amendment includes language for Whatcom County to conduct a study for the sole purpose of determining how the county can ban the transportation of fossil fuels through the county.  “Even the Council’s own legal counsel said their attempt to regulate interstate commerce is unconstitutional,” Larson said.

Ironic twist in the need for deep-water shipment

An irony, regarding environmental concerns: What if you consider that a large manufacturer of, say, solar panels or wind turbines or electric cars wanted to build a plant in the U.S. with access to a deep-water port?

All concerned parties opposed to the County Council proposal recognize that manufacturing on a large scale requires ability to ship on a large scale. As Owens at NWJA pointed out, shipping by water is the most environmentally friendly and responsible means to ship large quantities of product.

What he called “a gold mine of property” at Cherry Point, with the possibility of an already-approved fourth pier, opens up to large-scale development and manufacturing. Cherry Point remains the last deep-water access site left on the West Coast large enough to accommodate cape-size vessels. That holds appeal for all kinds of large manufacturing plants.

What’s next?

When economic development is proposed for Cherry Point, an abundance of local, county, state, tribal, and federal oversight and review already takes place before development of any kind gets approved.

The fight for Cherry Point’s jobs and Whatcom County’s economic well-being will roll into the 2017 calendar year with an aggressive agenda during these first few months of the year.  At the time of this writing (Dec. 18), the County’s Planning Commission was expected to send a final version of their work back to the County Council in January for its members to accept, reject, or amend the recommended language from the Planning Commission.

“The Planning Commission has worked hard, taken their role seriously, and improved the language,” Larson said.  “But it’s not there yet.”

Haven’t we seen this before?

The WBA has given the Planning Commission proposed language, put together by its members and stakeholders, that they contend will balance the needs of business and continue environmental protection. The Planning Commission has taken extra time to look at the alternative language, and only time will tell how much or how little they will accept.

Not so long ago that new regulation in Bellingham forced large employers such as Georgia Pacific to close. The bottom line is that the language in the County Council’s amendment looks like a recipe for history to repeat itself. One dire possibility is that “poison pill” language could give the county an opportunity to create ordinances that could cause large employers to see the beginning of the end and eventually shut down.

“No matter what the Commission does, it goes to the County Council and we’ll need all hands on deck to try to convince them that bad planning can affect new and current business growth,” Larson said. “Good planning can protect the environment, and help economic growth and tax revenue for the whole county. There are many good examples of this at Cherry Point right now – wildlife management, crops, and more.”

But for now it appears the future of Cherry Point hangs in the balance.