Port of Skagit Annual Report 2015-2016 The Port of Skagit leads efforts to build a strong economy in Skagit County while valuing the area s natural assets and quality of life.
About the Port Conveniently located in Northwest Washington s fertile Skagit (pronounced Skaa-Jit) Valley, found midway between the metropolitan areas of Seattle, Washington, and Vancouver, British Columbia, the Port of Skagit owns and operates three key facilities: the Skagit Regional Airport, the Bayview Business Park and the La Conner Marina. Combined, the port s three facilities are home to more than 82 businesses that employ some 1,263 workers in sustainable household wage jobs, and we still have plenty of room to grow. Local voters approved the creation of the Port of Skagit in 1964, realizing the need for an entity that would serve the economic needs of Skagit County by helping to create jobs in the natural resource fields of agriculture, wood products, fisheries and mineral extraction. Our focus has broadened over the years, and today the port s essential purpose is to contribute to the economic vitality of Skagit County through the development of facilities and infrastructure that support local commerce, trade and tourism. Padilla Bay La Conner Marina Farm to Market Rd 20 Josh Wilson Rd Skagit Regional Airport Higgins Airport Way Bayview Business Park Peterson Rd 20 Cover Photo: Mavrik Marine specializes in the construction of top quality, aluminum commercial boats at its facility at the La Conner Marina. The long-range aspirations of the Port of Skagit derive from a broader vision of a thriving Skagit Valley. We are helping to build a community with a strong, diversified economy, where high technology, manufacturing and professional jobs, agriculture, timber and service industries combine to create a high standard of living, a healthy environment and distinct sense of place. 2 2016 Annual Report
Contents Director s Report... 5 Port Leadership... 6 Skagit Regional Airport... 8 Bayview Business Park... 11 La Conner Marina... 12 The Future of Northern State... 15 2015 Financial Summary... 16 2016 Operating & Capital Budget... 18 Photo: The Port of Skagit maintains a popular 10.13-mile system of nature trails around its properties on Bayview Ridge. A gravel system winding through forests, along roadways and around wetlands, it is open to bicycles, pedestrians and their pets on leashes. Trails are open from dawn to dusk.
Director s Report It has been particularly satisfying over the past 12 months to see the Port of Skagit establish strong local partnerships, generate bold yet practical investments in our infrastructure, and prepare a solid foundation for the future. Our careful planning efforts give us a robust platform to support the growth we envision as Skagit County s hub port. As we review 2015, I am pleased to report on a successful financial year. The astute leadership of our port commission and the hard work of our staff allow this organization to thrive. As companies large and small start regularly calling to the Port, we see significant opportunities to optimize public-private partnerships, and we are making significant efficiencies across our enterprises to encourage economic development and bring more sustainable community wage jobs to Skagit County. Our preparations will future-proof the port for many years to come. During the summer of 2015, the Port purchased a web-based software program in which the building and maintenance team now have the ability to track work order tickets. The new E-Work Order software allows port staff to be active instead of reactive, preventative, and provides the ability to measure results over time. This reduces inefficiencies, labor costs, and improves the Port s bottom line. Other projects in 2015 included a partial lease with the State for redevelopment of the former Northern State Hospital campus, Flyers Restaurant and Brewhouse located on the flight line at the airport, revamping the La Conner Marina RV Resort at the La Conner Marina, and plans have been completed to build a live grain storage facility at the Bayview Business Park. I hope this report will help you understand and appreciate the value of your Port of Skagit. We are excited for another year, and we look forward to our local community s continued engagement and collaboration on many more projects to come. Patricia Botsford-Martin, Executive Director Photo: A new autoclave arrived in May 2015 at the Hexcel Burlington plant. Good Jobs For Our Community Port of Skagit Mission Statement Port of Skagit 5
Port Leadership The Port of Skagit is governed by three elected commissioners, each one representing a separate district within the overall port district. The commission sets policy, authorizes major expenditures and appoints an executive director who is responsible for administering policies of the Port of Skagit. Commissioners are elected to six-year terms. Commission meetings normally take place at 3 p.m. on the second Tuesday of the month and are open to the public. Special meetings are scheduled on an as-needed basis. The commissioners meet in the commission hearing room at 15400 Airport Drive, Burlington, WA 98233. Find meeting agendas and minutes at http://www.portofskagit.com/about-the-port/port-meeting-notes/ Photo: Commissioner Dr. Kevin Ware speaks with WSU Bread Lab Director Dr. Stephen S. Jones. Dr. Kevin E. Ware District 1 Dr. Kevin Ware was elected to the Port of Skagit County in 2001 and lives just outside Mt. Vernon in Port District 1. During his campaign Ware s stated objectives were to manage the Port s real estate assets in a more businesslike fashion; operate the Airport in a manner that maximized its value to the entire community; and to manage the Marina in a way that better met the needs of both present and future boaters....
Port of Skagit County, Washington Commissioner Districts Steven Omdal Bill Shuler District 2 District 3 Steven Omdal was elected as a Port of Skagit Commissioner representing District 2 for the term 2012 through 2017. His motivation for deciding to run for the commissioner position was to bring new ideas and a for-profit business background to enhance the ability of the port to improve job creation and economic development for all Skagit County residents. Omdal s business background is in sales and management: pharmaceutical (Wyeth-Ayerst / BASF) and logistics (FedEx). Bill Shuler decided to run for Port of Skagit Commissioner in 2009 largely because of its primary goal: Good Jobs for Our Community. Shuler, who lives in Sedro-Woolley, has an unabridged love for Skagit County and says he will work hard to preserve its values. He is highly interested in economic development, believing a strong economic base with sustainable living wage jobs is the foundation of a healthy community. Patsy Martin Executive Director A Skagit County native, Patsy graduated from Mount Vernon High School in 1979 and then earned a bachelor s degree in geology at Western Washington University (WWU). She received her master s degree in political science and environmental studies from WWU in 1993. She started working for the Port of Skagit in 1995 and became executive director in 2007. Patsy and her husband, Dan, live in Mt. Vernon and are the parents of two adult sons.......... Port of Skagit 7
Skagit Regional Airport During 2015, improvements were made to the Flyers Restaurant and Brewhouse facility, a contractor was selected for Runway 10-28 rehabilitation, a new grass runway opened, and a $887,000 grant from the Federal Aviation Administration for safety improvements was awarded. Runway 10-28 Rehabilitation Project The port opened bids on the safety grading project on May 19, 2015. The selected contractor was Scarsella Bros., Inc. Grass Runway Opens Many pilots desire to land on a grass runway at the Skagit Regional Airport. The FAA approved the grass runway during the summer of 2014 and in June of 2015 Skagit Airport Support Association (SASA) took ownership of the project and since then markings have been placed, surface has improved, and the port s maintenance team is beginning to mow the runway area on a weekly basis. Skagit Regional Airport is your aerial gateway to the beautiful Skagit Valley. Situated several miles west of Burlington, WA, the airport offers stunning views from the pattern of the surrounding Skagit Valley, the Cascade Mountains to the east and the San Juan Islands to the west. This popular general aviation facility serves a variety of users, including business, commercial and recreational aviation. Available on the airfield are excellent terminal facilities, aviation fueling and a variety of aircraft maintenance and related services, including qualified flight instruction. Community Aviation Day Community aviation day was held August 22nd. Skagit Airport Support Association and Heritage Flight Museum partnered with the Port of Skagit to create an event around the arrival of the Commemorative Airforce B-17 Aircraft. Runway 11 Safety Improvement Grant U.S. Rep. Rick Larsen, D-Wash., announced that Skagit Regional Airport will receive an $887,000 grant from the Federal Aviation Administration for safety improvements. Photo: Corporate Air Center. The company offers aircraft management, full maintenance, flight training and sales. The airport has two paved runways, an alternate grass landing area and an extensive taxiway system that provides access to all developed areas of the airfield. In its current configuration, the airport is an uncontrolled field (no control tower). Currently the airport is home to more than 150 aircraft, from small single-engine recreational aircraft up to corporate jets. The Port of Skagit commissioners and staff take great pride in their work to maintain Skagit Regional Airport as a safe and attractive facility that will serve an increasingly important purpose as a transportation link for its community in the future. 8 2016 Annual Report
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Bayview Business Park In 2015, projects at the Bayview Business Park included Skagit Valley Malting Grain and Hexcel Expansion, a new cooler for Gielow Pickles Inc, Chuckanut Brewery groundbreaking, a multi-lighting project completion, relocation of port tenants Impressions Worldwide and Aspen Power Catamarans, and a solar array was added to a port building on Westar Lane. Chuckanut Brewery Groundbreaking Bellingham-based Chuckanut Brewery is moving forward with plans for a 7,000 square foot brewery at Higgins Airport Way and Airport Drive in Burlington. Arbour North Architecture of Bellingham is the architect of record for the brewery. Western Refinery Services (WRS) has contracted to complete the concrete and site work and Ferndale-based Emerald Builders will construct the building. 25 Hexcel Celebrates 25th Anniversary Hexcel Corp., one of the Port of Skagit s longest term businesses celebrated the twenty-fifth anniversary of its Burlington plant. The company also constructed a new building that measures approximately 76,451 square feet. Key applications for products made at the plant are commercial and military aircraft, helicopters and aerospace engines, as well as industrial parts. Business Park Adds Solar Array Ameresco and their subcontractor, Artisan Electric, completed design and construction of a solar array on a port-owned building located at 11966 Westar Lane. The port was awarded $205,342 from the Department of Commerce for the 35.75Wp system. The Bayview Business Park s easy access to Interstate 5 and proximity to the adjacent Skagit Regional Airport make this premier facility ideal for professional and manufacturing businesses, with an emphasis on innovative entrepreneurial and diverse enterprises that bring commerce, trade and sustainable community wage jobs to Skagit County. The business park embodies the port s mission, Good Jobs for Our Community. Target sectors include aerospace and marine manufacturing, plus value-added agriculture. At the end of 2013, the Bayview Business Park had 40 tenants and subtenants employing more than 750 people in full- and part-time Multi-Building Lighting Project The project completed a series of lighting upgrades in several buildings on port property. Photo: Lindal Building Products Inc. The Lindal Cedar Home company offers pre-engineered, exclusive, and home design. jobs Ideally positioned halfway between Seattle, WA, and Vancouver, British Columbia, the business park nestles in the beautiful Skagit Valley of northwest Washington. At present it has 36 buildings comprising more than 750,000 square feet of space. Additionally, 85 lots totaling 253 acres remain to be developed. All parcels are surrounded by 1,051 acres of beautifully forested industrial property. The property includes walking trails that connect most parcels. All lots have utilities, including fiber optics, with a variety of lot sizes that range from one to nine acres. Port of Skagit 11
La Conner Marina During 2015, the port completed work on the South Basin Maintenance Project, which involves replacement or repair of structural columns that have been damaged or deteriorated throughout the years. We also installed pump outs and completed updates to the La Conner Marina RV Resort. La Conner Marina RV Resort Saturday May 23, 2015 Port of Skagit completes updates to the La Conner Marina RV Resort. La Conner Yacht Sales Boat Show & Yard Sale Port tenant La Conner Yacht Sales used the marina s South basin parking lot for their annual swap meet and F Dock for the boat show. Proceeds from the event go to Skagit Bay Search and Rescue. North Basin Electrical Repair Project In early July a power cable going from the North Basin to a splice vault approximately 30 feet away, failed causing a loss of power to the marina maintenance shop, jib crane, all of Commercial Dock and the dry boat haul out and wash down areas. The Port contracted with Veca Electric and Technologies, LLC to make all necessary repairs. Photo: The port s Travelift BFMII has a capacity of 220,000 pounds. La Conner Marina, located within easy walking distance of historic downtown La Conner, is a premier destination for recreational boaters, commercial fishers and marine-related businesses and manufacturers. The marina is a clean, service-oriented facility that tourists and La Conner residents alike enjoy visiting. Just as important, it s an easy two-hour cruise from the marina into the heart of the beautiful San Juan Islands. La Conner Marina features two separate moorage basins, which together cover approximately 24 acres. The marina has 366 covered moorage slips, 131 open moorage slips plus 2,400 lineal feet of dock space for overnight moorage and 165 dry boat berths. The marina holds a Clean Marina Program Certification from Clean Marina Washington and received a four-star rating from the Envirostars program. 12 2016 Annual Report
The Future of Northern State 1 Leverage private investment with public funds to create a destination mixed use campus focusing on technology and innovation. 2 Revitalize the historic campus while incorporating new buildings and structures that respect and complement the original Olmsted master plan. 3 Introduce and provide public access opportunities. The Port of Skagit is hard at work on a project that has the potential to give a boost to the economy of eastern Skagit County. Working with the City of Sedro-Woolley and Skagit County, the port is trying to position the former Northern State Hospital property near Sedro-Woolley for redevelopment. Since the mental hospital closed in 1973, the State of Washington and the local community have explored various opportunities for adaptive re-use of the 225-acre campus. The state Department of Enterprise Services leases buildings and grounds to a number of organizations, but approximately 40 percent of the existing buildings are unoccupied. In 2010, the state expressed a desire to surplus the property and look for a local champion to acquire and redevelop the site for a greater community purpose. The partnership consisting of Skagit County, the City of Sedro-Woolley and the Port of Skagit has been working since then to explore this opportunity. The Port of Skagit and Janicki Bioenergy continue to make significant progress in the shared vision to develop a technology campus on the Northern State property. The two parties have been discussing ways a public-private partnership will bring living wage jobs and substantial economic growth to the State of Washington. Port of Skagit 15
2015 Financial Report... The Port of Skagit has three primary sources of income: revenue from leasing and moorage operations, property taxes and grants. In addition, the Port can borrow money by issuing general obligation bonds and revenue bonds. The Port of Skagit s total assets of $64.9 million exceeded its liabilities by $50.5 million on December 31, 2015. As of that date, the port had $57 million in capital assets (net of depreciation). These assets, which include land, buildings, improvements, machinery, equipment and construction in progress, increased in value by $3 million (5.3 percent). Port operating revenues for 2015 totaled $5.3 million, up about $200,000 over the prior year ($5.1 million). The Port received $4.5 million non-operating revenues in 2015. Total operating and maintenance expenses (excluding depreciation) in 2015 were $4.6 million, up about $100,000 from 2014. Non-operating expenses for 2015 were $589,174, down slightly from 2014 ($604,232). Visiting Boaters... 3,000 overnight boat visits annually at La Conner Marina boost tourist spending by approximately $550,000. The port s net position increased to $50,484,028 in 2015. This increase is the result of debt reduction and growth in capital assets. At December 31, 2015, long-term debt outstanding totaled $12.5 million, compared to $12.7 million the previous year. Find more financial information and the most recent State Auditor s Financial Report at http://www.portofskagit.com/about-the-port/financial-information/... 16 2016 Annual Report
............... Air Cargo Business Tenants Port Buildings Land Lease Tax Dollars............... More than a half-million air cargo packages handled per year at Skagit Regional Aiport. Port properties are home to 82 business tenants that produce approximately $265 million in annual revenue. There are 102 buildings totaling nealy 1.3 million square feet on port property, with an occupancy rate of approximately 100%. The port produces seven jobs for each acre of land it leases. The port collects $1.865 million in property tax annually and receives just 2 cents from each dollar in property tax paid in Skagit County................ Port of Skagit 17
Port of Skagit 2016 Operating Budget... Revenue by Economic Unit Marina BBP/Conway Airport Dry Storage 5% 13% 33% 49% Total Revenue by Economic Unit: $5,648,108... Expenses by Economic Unit Marina Administration BBP/Conway Port Airport 9% 19% 15% 25% 32% Total Expenses by Economic Unit: $5,123,857... 18 2016 Annual Report
Port of Skagit 2016 Capital Budget... Skagit Regional Airport Taxiway F, Groundwater Monitoring $31,000 Taxiway A & Ramp Rehabilitation $330,000 Airport Wireless & Firewall $11,500 Equipment Purchase $10,000 Bayview Business Park Clear & Grade Div. 5 & 7 $425,000 Flour Mill Project $600,000 Regional Grain Storage Facility $500,000 Gielow Phase III (Final) $750,000 Bread Lab $943,000 Landscaping $43,250 Building Paint $10,000 Equipment $40,000 La Conner Marina New Jib Crane, Pier and Equip Repair $94,250 Binding Site Plan $40,000 Float replacement design $100,000 Marina WiFi $75,000 Administration Server Replacement $28,000 Workstation Replacement $30,000 Office 365 Upgrade $23,000 Video Teleconferencing $3,000 Backup Storage System $4,000 Port Pavement Maintenance $600,000 Center for Innovation and Technology $214,622 New Vehicles $50,000 Sources of Capital Funds Taxes $1,413,622 Grants $2,036,000 Total Capital Budget: $6.59 million... Port of Skagit 19
15400 Airport Drive Burlington, WA 98223 www.portofskagit.com Good Jobs for Our Community Administrative Offices: 15400 Airport Drive Burlington, WA 98233 Ph: (360) 757-0011 Fx: (360) 757-0014 La Conner Marina: 613 N. 2nd Street La Conner, WA 98257 Ph: (360) 466-3118 Fx: (360) 466-3119 Like us on Facebook https://www.facebook.com/portofskagit/ Follow us on Twitter https://twitter.com/portofskagit