Update of Market Analysis Study for the Richland Wye Area

Thomas/Lane & Associates economic & public policy consultants

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Update of Market Analysis Study for the Richland Wye Area

City of Richland, Washington

1. Introduction

1.1 Objectives

This updated Master Plan is designed to shape the future development of the Wye

area. The Richland Wye area is a 350-acre mixed-use area bounded on the north

by the Columbia River, on the west by the SR 240, on the south by SR 240 and

the Tapteal commercial development, and on the east by Columbia Park and the

City of Kennewick. The purpose of this Report is to update the short ―market

assessment‖ section of the original Master Plan and provide a current market

assessment of the Richland Wye area.

The report provides a general economic and real estate guide that can be used in

planning the future development of the Richland Wye area. This section of the

overall masterplan report does not provide detailed development plans for

individual parcels or sites, but defines the market parameters, which should guide

the future development potentials of these parcels and sites. Within these defined

parameters, the report offers some general recommendations for actions that the

City of Richland can take to enhance the Wye area‘s future development

potential.

The goals of the market assessment are:

Provide an overview of the Richland-Pasco-Kennewick MSA‘s economy.

Assess the City of Richland‘s economic and fiscal status within the

context of the Benton County and MSA economies.

Describe the major attributes, ownership patterns and locational

characteristics of the Wye area‘s real estate market.

Provide generalized projections of likely future growth in the City of

Richland and the Wye area.

Present a discussion of the alternative development potentials and

strategies for the Wye area.


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1.2 Methods

The method of analysis used in this report consists of two parts: (a) establishing a

realistic analysis of Richland‘s past and future major economic development

trends, and (b) identifying the real estate absorption implications of these trends

for the Wye area.

The report uses shift-share and regression (time series) analysis to identify the

extent to which Richland‘s economy has grown because it (a) partook in the

overall growth of all industries in Washington State, (b) enjoyed an above-

average concentration of economic activity that happened to be growing across

the state, (c) participated in the competitively driven growth resulting from the

location of economic activity in the State, or (d) all – or parts – of each the above.

Traditional shift-share analysis is modified to include an analysis of the

occupational make-up of Richland‘s work force. Many industries have both a

high-tech and low-tech component. For a city such as Richland, with its high-end

work force, the inclusion of occupational data is vitally important.

The second part of our approach uses real estate market analysis to identify

potential absorption of land in the Wye area, including the strategic implications

of such factors as infrastructure requirements, likely build-out schedules and

creation of development institutions and authorities (such as a redevelopment

agency).

The amount and kind of real estate developments that will be exerting a demand

for space in the future is determined by projecting the numbers of employees by

industry and occupation. Different industries and occupations within industries

obviously require different types of real estate development.

1.3 Limits

This section of the report is of a type sometimes referred to as a ―high altitude

reconnaissance‖ study. It proceeds from the view of an airplane flying over

Richland at an altitude of about 25,000 feet – low enough to make out the

significant, broad outlines of Richland and the Wye area‘s economic and real

estate markets. This level of analysis is appropriate to updating the overall Wye

Area Master Plan. To get down to detailed planning of specific parcels or sites


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however will require much more detailed analysis than are contained in this

section of the report but may be addressed within other sections.

Finally, this section assumes:

The U.S. economy will continue to exhibit moderate real economic growth

with relatively low levels of inflation. The Federal Reserve will continue

to slowly increase interest rates, and both budget and trade deficits –

although continuing to be large – will be brought under control.

The U.S. will engage in no new wars or suffer major terrorist attacks.

The long-term relationship between the economies of the U.S. and the

State of Washington will remain essentially the same as they have been for

the past quarter of a century.

The long-term trend toward integration and globalization of the world‘s

economies will continue, although probably at a somewhat slower pace

then was true during the last decade.


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2. Overview of the Richland-Pasco-Kennewick MSA’s Economy

2.1 The MSA Compared to the State’s Economy

Total employment in the Richland-Pasco-Kennewick MSA grew from 78,700

workers in 1994 to 90,530 in 2003 – an average annual growth rate of 1.56

percent.

Figure 1

Richland-Pasco-Kennewick Employment

1994-2003

70,000

75,000

80,000

85,000

90,000

95,000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: Washington Employment Security Department

The MSA‘s growth rate was quite close to the rate of employment growth in

Washington State over the same period of time (1.63 percent). However, the

MSA‘s employment growth, while still mostly positive, was noticeably slow

between 1995 and 1998 and then started growing more recently in a very robust

manner.

State employment, on the other hand, grew sharply in the decade before 2000 and

slowed down more recently. As a result, MSA employment as a percent of state

employment declined from 3.45 percent in 1994 to 3.09 percent in 2000 and then

climbed back to 3.43 percent in 2003.

Averaged over the decade, 1994 through 2003, the MSA‘s percentage of total

state employment was quite stable at 3.25 percent (with a standard deviation of

only 0.14 percentage points).


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Figure 2

Richland-Pasco-Kennewick MSA

Employment as Percent of State

3.45%3.40%

3.24%

3.18%

3.08% 3.10% 3.09%

3.20%

3.33%

3.43%

2.80%

2.90%

3.00%

3.10%

3.20%

3.30%

3.40%

3.50%

3.60%

3.70%

3.80%

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003


Going below the employment totals, significant differences exist between MSA

and state employment. One way to highlight the differences and similarities

between state and MSA employment is through the use of location quotients

(LQs). A LQ is calculated by dividing the percent of total employment in a single

industry in the MSA by the same percent in the state. A LQ equaling one means

that an industry‘s share of total employment is the same in the MSA as it is in the

state. A LQ less than one means that the industry in ―under represented‖ in the

MSA. A LQ greater than one means the industry in more heavily represented in

the MSA then in the state. Because local/regional employment will almost never

exactly reflect state patterns, LQs in the range of 0.90 to 1.10 should be

interpreted as showing little, if any, significant difference between the MSA and

state employments patterns.

Using data developed by Dean Schau, Regional Labor Economist, Washington

State Employment Security Department (WSES)1, the LQs for the Richland-

Pasco-Kennewick MSA compared to the state show roughly comparable

employment distributions for construction, natural resources & mining; trade,

1. Dean Schau, ―Show Me the Money: Growth, Strengths and the Future of the Tri-Cities Economy,‖

(1/7/04)


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transportation & utilities; and government. Under representations of employment

occur in manufacturing; information; and finance, insurance & real estate. Over

representation of employment occurs in services.

Figure 3

Richland-Pasco-Kennewick / State

Location Quotiants

0.00

0.50

1.00

1.50

2.00

2.50

Construct ion,

Nat 'l Resources &

M ining

M anufacturing Trade,

Transportat ion &

Utilit ies

Information Finance, Insurance

& Real Estate

Services Government

Source: Thomas/Lane Associates & the Washington Employment Security Department

Going a step further down in the industry delineations reveals additional

interesting comparisons:

In manufacturing, the MSA has a relatively high concentration of food

manufacturing, but otherwise is almost twice as under-represented as it

otherwise appears (see Figure 4).

Trade, transportation & utilities‘ employment distribution appears somewhat

similar to the state, but this is really only true for retail trade (which dominates

this industrial grouping‘s employment) while wholesale trade, transportation,

warehousing & utilities employment is under-represented by about half

compared to the state (see Figure 5).


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Figure 4


Manufacturing Location Quotiants

-

0.50

1.00

1.50

2.00

2.50

3.00

Tot. Mfg. Mfg,except

Food

Durable Goods

Mfg.

Non-Durable

Goods Mfg.,

except Food

Food Mfg.


Figure 5


Trade, Transportation & Utilties Location Quotiants

-

0.20

0.40

0.60

0.80

1.00

1.20

Trade, Transportation

& Utilities

Wholesale Trade Retail Trade Transportation,

Warehousing &

Utilities


Services employment is really split into two broad categories, one of which is

far more concentrated in the MSA than is true statewide, while the other has


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roughly the same relative concentration. The category that is two to three

times more concentrated consists of two industry classifications: professional,

scientific & technical services (which, in the MSA, contains Pacific Northwest

National Laboratory ) and waste & remediation services (Fluor & Bechtel)

which are closely tied to the nuclear cleanup efforts at Hanford.

2.2. Recent MSA Growth Patterns

Between 1990 and 2000, the Richland-Pasco Kennewick MSA added 17,994 new

jobs, according to the 2003 Strategic Economic Development Plan prepared for

Richland by Taimerica consultants.2 Over 90 percent of the total employment

change during that period occurred in the retail trade and services sectors. Among

the fastest growing services industries were businesses services (including IT and

software) and engineering & management services.

Figure 6

Percent Change in MSA Employment Accounted for by

Different Industries: 1990 - 2000

0%

10%

20%

30%

40%

50%

60%

70%

80%

Agriculture Construct ion M anufacturing Wholesale Trade Retail t rade Services,

Transportat ion,

Communicat ions &

Utilit ies


General merchandise and food stores were the fastest growing retail trade

industries.

2 Economic Development in the New Economy: Richland, Washington (Taimerica Management Company,

November, 204), pg. 96.


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In terms of the importance of different economic sectors, the services,

transportation, communications and utilities sector accounted for almost half (49

percent) of all employment in the Richland-Pasco-Kennewick MSA in 2000 –

with almost three quarters of all services employment concentrated in the waste

remediation, engineering and R&D services.

Figure 7

Distribution of Employment

Tri-Cities MSA, 2000

Agriculture

Construction

Manufacturing

Wholesale Trade

Retail trade

Services, Transportation,

Communications & Utilities


For purpose of comparison, Figure 8 presents a graph of the same the distribution

of employment for the State of Washington.


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Figure 8

Distribution of Employment

State of Washington, 2000

Agriculture

Construction

Manufacturing

Wholesale Trade

Retail Trade

Services, Transportation,

Communications & Utilities


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3 Overview of the Benton County and Richland Economies

3.1. Benton County

Benton and Franklin Counties make up the Richland-Pasco-Kennewick MSA.

With both the cities of Richland and Kennewick located in Benton County, it

makes up approximately two-thirds of the total MSA‘s economy and work force.

The structure of the two counties‘ economies is also quite different. This is

evident from Table 3-1.

Table 3-1

Percent Distribution of Employment

Franklin

County

Benton

County

Agriculture & Mining 31.9% 10.0%

Construction 6.9% 5.4%

Manufacturing 8.6% 6.1%

Wholesale Trade 9.1% 2.4%

Retail Trade 10.7% 14.9%

Transportation 4.0% 0.9%

Finance, Insurance & Real Estate 1.9% 3.7%

Accommodations 2.5% 1.0%

Amusement & Recreation 0.6% 2.1%

Information & Educational Services 1.2% 1.8%

Health Services 8.7% 5.9%

Eng., Mg't, & Bus. Services 0.8% 17.1%

Eating & Drinking Services 6.3% 8.1%

Social & Family Services 2.4% 4.1%

Repair Services 3.3% 1.1%

Other Services, nec 1.3% 15.2%

100.0% 100.0%

Source: WSES, percent distributions calculated by Thomas/Lane Associates

Franklin County‘s employment is more heavily concentrated in agricultural

activities than Benton County. Its greater concentration of jobs in manufacturing


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and transportation are primarily in food processing and related activities – which

are related to the county‘s agricultural base. Franklin County also has a small

concentration of employment in health services.

Benton County‘s most notable concentration of employees is in engineering,

management and business services, which includes both the scientific and

technical work taking place at PNNL and in ―other services,‖ which includes the

waste & remediation services being done by Fluor, CH2Mhill, Bechtel, and

others.

3.2. City of Richland

The City of Richland‘s economy is clustered in scientific, technical, and

engineering activities, including waste remediation, R&D labs, and related

activities. These activities are concentrated within a few large firms. The

Taimerica study, for example, reports that two percent of the firms operating in

Richland account for two-thirds of employment.3 While 75 percent of all private

firms operating in Richland have ten or fewer workers, together they account for

only ten percent of total jobs in the City.

Table 3-2

Richland‘s Distribution of Employment

INDUSTRY TOTAL … 100.0%

Agriculture 0.2%

Construction, Natural Resources & Mining 3.5%

Manufacturing 4.6%

Wholesale Trade 0.6%

Retail Trade 7.1%

Transportation, Warehousing, and Utilities 0.4%

Information 0.2%

Finance, Insurance & real Estate 2.4%

Services 68.9%

Medical 8.8%

Research Services 26.9%

Government 12.1% Source: WSES, percent distributions calculated by Thomas/Lane Associates

Table 3-2 is based on a third quarter 2002 data prepared by WSES‘s Regional

Labor Economist. It shows that over two-thirds of Richland‘s employment is

concentrated in the services sector and that more than a quarter of total

3 Taimerica, op cit, page 98.


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employment is engaged in some type of research activity – including professional,

scientific & technical services and waste treatment and remediation services. The

next largest economic sector is government, which includes the federal

Department of Energy, the Richland School District and WSU-TC, as well as

ongoing state, county and local public administration services. Retail trade

accounts for just over seven percent of total employment.

A slightly different picture of Richland‘s economy comes from the 2000 Census.

Summary Tape File 3 (STF3), which shows a detailed look at industrial

distribution of employment, shown in Table 3-3. The data are not directly

comparable to the WSES data since the Census reports employment by the place

where workers live while WSES reports employment by the place where workers

are employed.

Total services in the Census data are just below 60 percent of total employment,

with professional, scientific, management, administration, and waste management

services equaling almost 30 percent of the total. Retail trade equals about 10

percent.

Table 3-3

Richland‘s Distribution of Census [STF-3] Employment

INDUSTRY TOTAL … 100.0%

Agriculture, forestry, fishing and hunting, and mining: 0.7%

Construction 5.2%

Manufacturing 5.3%

Wholesale trade 2.3%

Retail trade 9.7%

Transportation and warehousing, and utilities: 5.7%

Information 2.1%

Finance, insurance, real estate and rental and leasing: 3.7%

Professional, scientific, mgn‘t, adm, and waste mgn‘t services: 29.8%

Educational, health and social services: 19.9%

Art, entertainment, recreation, accommodation and food services: 7.2%

Public administration 4.6% Source: U.S. Census 2000 (STF-3), percent distributions calculated by Thomas/Lane Associates

The Census also reports the occupational distribution of workers living in

Richland, and these are shown in Table 4. Almost 51 percent of Richland‘s

workers are employed in management, professional and related occupations.


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About 34 percent are employed in non-professional white-collar occupations (i.e.,

sales, office and service occupations) while about 15 percent are employed in

some type of blue-collar production or extraction occupation.

Table 3-4

Richland‘s Occupational Distribution

OCCUPATIONAL TOTAL 100.0%

Management, professional, and related occupations- 50.8%

Service occupations- 12.5%

Sales and office occupations- 21.5%

Farming, fishing, and forestry occupations 0.6%

Construction, extraction, and maintenance occupations- 6.2%

Production, transportation, and material moving occupations- 8.4% Source: U.S. Census 2000 (STF-3), percent distributions calculated by Thomas/Lane Associates


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4. Overview of the Local Real Estate Market

4.1. Specialization Within the Tri-Cities Market Area

The Tri-Cities real estate market area is self-contained and somewhat specialized.

It is isolated within Southeastern Washington, and it is not a part of, or even near,

another large concentration of competitive urban real estate. This attribute gives

the Tri-Cities real estate market its self-contained character.

Businesses would choose the Tri-Cities market as a location for one of several

general reasons:

to be located near to the Hanford complex or the labor force that has been

attracted to it,

to take advantage of opportunities provided by the growing, processing and

production of the region‘s agriculture/viniculture,

to locate warehouse/distribution/production facilities central to the Pacific

Northwest‘s economy with relatively easy access to the northern Rockies,

eastern Washington/Oregon, and inland British Columbia (via US 395, I-90 &

I-82), and

to serve the existing and expected population and businesses in the Tri-Cities

area.

Industrial and business parks associated with the Hanford complex of scientific-

industrial facilities dominate the Richland portion of the Tri-Cities area. Richland,

and to a lesser extent Pasco and Kennewick, offer a range of price levels for

newer and older residential areas, including the recently developed Columbia

Point mixed-use area. Much of Pasco‘s real estate is used for the storage,

processing, and manufacturing of agricultural and other resource-based products.

Kennewick is the location of a regional shopping mall that is surrounded by many

other freestanding retail buildings and strip-shopping centers. In addition,

Kennewick also provides a location for significant ―suburban style‖ quality office

space that is near its retail concentrations.


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All three of the Tri-Cities communities have older downtown areas that are

diffuse and struggling. Richland has a long linear downtown/central business

district composed of three parts: (1) an ―uptown‖ area located near an old strip

shopping center of the same name left over from the post-war new town period

that also includes retail activity located in several smaller, but newer shopping

centers along George Washington Blvd; (2) a recently revitalized ―downtown‖

area; and (3) a ―central business district‖ that includes the city and federal

government complex along with a concentration of medical facilities around the

Kadlec Medical Center.

All three of the communities also have concentrations of suburban type retail

shopping centers adjacent to I-182. Recent developments in the newly developing

suburban portion of Pasco, the Queensgate area of south Richland, and southern

suburban areas of Kennewick are rapidly adding significant retail space. Pasco

also has a small but emerging business park area proximate to the airport.

Washington State University‘s Tri-Cities campus is located in north Richland near

PNNL and the Hanford contractors. Columbia Basin Community College is

located near the airport in Pasco.

Also near the Pasco airport is a 1960‘s-era hotel complex that in the past served as

the main regional convention center. A major outdoor event and recreation

complex is located in close proximity to the newer suburban areas in Pasco.

A recently completed convention center complex in Kennewick is expected to

attract major meetings. Kennewick also has a multi-events arena near the new

convention center, its airport and regional mall. Long linear shoreline parks and

recreation spaces in Richland, Kennewick and Pasco along the Columbia River

are a major regional recreational resource featuring the river shoreline.

The federal government has plans to (a) lower the flood control levee along the

Columbia River in the Wye area and (b) revitalize that stretch of shoreline for

open space, park, and recreational uses.

Freeways link the three Tri-Cities communities. These freeways also divide,

separate, and (to some extent) isolate portions of each community‘s real estate

markets. Two freeways run north-south through the Tri-Cities area. The US-395

corridor connects older areas of Pasco and Kennewick. The I-182 freeway

corridor links newer areas of all three communities. The Wye area is located near


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the I-182 corridor and adjacent to SR-240, which is a main east-west connector

through Kennewick and Richland. A major widening of SR-240 and rebuilding

of the bridges over the Yakima River between Richland and Kennewick is

currently under construction. This re-alignment and reconfiguration of the SR-

240 freeway in the area will provide better access to the Richland Wye area.

While each community has an airport with significant land around it for

development, only the airport in Pasco has scheduled interregional service.

Pasco‘s industrial areas make the most use of the Columbia River for

transportation/shipping.

4.2. Overall Growth in the Tri-Cities Area

No publicly available consolidated data tracking the absorption of

commercial/industrial real estate for the Tri-Cities could be found. Table 4-1

illustrates the general trends in multi-family and non-residential construction

activity using building permit data obtained from the City of Richland.

The pattern for both multi-family and non-residential construction activity is one

of wide variation from year to year. This pattern is consistent with the cyclical

nature of the regional economy in the Tri-Cities. During the past five years there

has been a noted increase in non-residential activity. Due to rising household

incomes and lower interest rates, multi-family construction appears to have

slowed relative to the single-family construction.

In addition to the general specialization of economic and real estate activity

within the Tri-Cities metropolitan area, there is a noticeable degree of real estate

specialization among the typical segments of the local real estate market. Much of

the development in place has occurred in an era of post-war land-use planning.

This has tended to separate uses. There are also some emerging trends, which are

discussed below. An understanding of these market trends is useful for defining

the opportunities (and challenges) for the future development of the Wye area.

To develop successfully, the Wye area will have to compete with, and be competitive to,

other parts of the Tri-Cities regional real estate market.Table 4-1

Richland Building Permit Data: 1994-2004.

Year Multi-family

Units

Value of Multi-

Family Permits

(000’)

New

Construction

Permits Non-

Residential

Value of New

Non-residential

Building

Permits

(000’s)


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2004* 39* $ 7,027* 91* $ 16,652*

2003 33 13,212 135 27,178

2002 39 44,826 112 27,849

2001 131 10,802 88 31,057

2000 9 17,074 47 30,219

1999 41 2,489 42 7,996

1998 24 2,723 38 10,438

1997 20 2,127 46 17,369

1996 3 321 69 16,983

1995 102 9,366 78 25,617

1994 1 -na- 8 3,578

Source: City of Richland, 2004

* Data available through October of 2004

Table 4-2 (Parts a and b), provide an overview of the real estate market segments

found within the three Tri-Cities communities. The segments that are highlighted

are those that currently exist and could potentially be attracted to the Wye area of

Richland. The single-family market segment is not included, as this type of use is

not envisioned to be a major part of the Wye area‘s redevelopment. Multi-family

residences and condominiums, however, might be.

Several of the local real estate professionals interviewed regard the ―Hanford‖

area as a separate market segment of its own, as they do the heavy and light

industrial uses that predominate in the Pasco sub-market. Until recently, the

regional mall and the surrounding areas of Kennewick were considered the retail

core of the Tri-Cities region. As recent growth has proceeded in the Tri-Cities,

real estate uses have begun to disperse, especially retail uses. There is only one

area within the Tri-Cities where there is any concentration of ―festival‖ retail4,

and that is found in Richland‘s downtown area. This area has the only scale of

building patterns typical of pedestrian-friendly type retail -- mostly single story

commercial with few residential uses above the first floor level. This area is

located adjacent to Richland‘s major riverfront park and near the Columbia Point

mixed-use development and is also near a number or tourist and recreational

4 Festival retail refers to a shopping as entertainment environment, and includes the presence of such

amenities as boutique shops, eating and drinking places with outdoor accommodations, street furniture and

attractive signage.


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attractions. Other recreational, tourist and public assembly attractions are either

located on the river shoreline or in public buildings in Pasco and Kennewick.

Tables 4-2a and 4-2b summarize the location of real estate uses that are currently

available and could compete with sites in the Wye are:

4.3. Real Estate Market Attributes

There are a number of attributes of the overall Tri-Cities real estate market that

will affect the potential of the Wye area‘s redevelopment potential. The

following is a listing of overall factors that affect real estate in most of the sub-

markets and locations within the Tri-Cities, including Richland.

Land availability – A striking characteristic of the Tri-Cities, especially the

areas south of the Columbia River (Richland and Kennewick), is that there are

literally thousands of acres of raw vacant land available. While the abundance

of land at relatively low prices is a good for attracting firms from outside the

area, it does not lead to dense development or to building for speculative or

rental markets. Such abundance of cheap developable land makes the

redevelopment of previously developed areas relatively expensive because of

the relocation, demolition, infrastructure replacement costs involved.

Land ownership patterns – The overwhelming amount of available land is

held for sale by public entities including the Ports of Kennewick and Benton,

the Kennewick Irrigation District, and the City of Richland. The development

incentives for these public owners are not the same as those for private

landowners.

Owner/users and commercial condominiums – in smaller metropolitan areas,

office development is an emerging trend. In addition, there has been a noted

dispersion of office industries throughout the State of Washington relative to

larger metropolitan areas. Other than the real estate sub-market associated

with Hanford, most private development occurs in small separated office

buildings in Richland and Kennewick. There is a large concentration of free-

standing owner-occupied, low density, high quality office buildings near

Columbia Center Mall; a small concentration near the Pasco airport, and a

scattering of small office buildings (plus a few multi-story office buildings) in

north Richland and along Jadwin Way and George Washington Boulevard in

downtown Richland. Government agencies, Hanford-related tenants, and


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medical organizations occupy many of the buildings in this latter portion of

the market. A noticeable portion of these smaller and higher quality buildings

are condominiums.


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Table 4-2a

Tri-Cities Real Estate Market Segments

Location

Office Space Retail-

Commercial

Light

Industrial

Heavy

Industrial

Multi-family

Tourism-

Recreation-

Visitor

Richland:

Horn

Rapids &

Hanford

north areas

Scattered-some in

business park

settings in

northern portion

of Richland

Limited:

primarily serves

adjacent

employment

Extensive

development

and large

amounts of

land for more

Extensive

development

and large

amounts of

land for more

Scattered, if

available, mostly

in areas between

Richland‘s central

business district

and Hanford/Horn

Rapids areas;

some newer

residential

development in

edge areas

Not much

available,

limited to golf

courses and RV

parks, incidental

opportunities

along river, e.g.

at WSU-TC

Richland:

Central

business

district

(CBD)

Modest and

scattered

locations in

central parts of

the CBD and

adjacent nears

medical/hospital

complex; tenants

primarily

government,

Hanford related

and medical

Strip shopping

centers of

various ages

throughout the

‗Uptown‘

section of

Richland; small

concentration of

―festival‘ retail

in the

‗Downtown‘

area of

Richland

Not present

and not

appropriate

Not present

and not

appropriate

Scattered within

the three areas of

the linear CBD

Limited

lodging and

visitor

facilities in

CBD some

proximate to

river access

amenities

Richland:

Columbia

Point

Limited mostly

along George

Washington Blvd

Limited mostly

located in strip

centers along

George

Washington

Blvd

Not present

nor

appropriate

Not present

nor

appropriate

Large

Concentration of

mostly higher end

of new multi-

family and

condominiums

Golf courses

and restaurants

and hotels near

river

Table 4-2a


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Tri-Cities Real Estate Market Segments [Con‘t]

Location

Office Space

Retail-

Commercial

Light

Industrial

Heavy

Industrial

Multi-family

Tourism-

Recreation-

Visitor

Richland:

Queensgate

Scattered mostly

associated with

retail and resident

serving

Emerging

neighborhood

shopping

centers and

large format

facilities

Not present

nor

appropriate

Not present

nor

appropriate

Emerging and

scattered multi-

family

Few Scattered

wineries

Richland:

Wye Area

Small with range

of quality from

new to much

older

Mostly Smaller

with range of

quality from

new to much

older; on large

strip-shopping

center on

Columbia

Center Blvd

North

Small

scattered

heavy

commercial

and light

industrial

mostly in

western area

along river

and near SR-

240

interchange

with Columbia

Center Blvd

north

Regional bus

base

Few scattered

smaller and older

with larger older

apartment

complexes in

eastern end

Informal along

river


23

Table 4-2b

Tri-Cities Real Estate Market Segments

Location

Office Space

Retail-Commercial Light

Industrial

Heavy

Industrial

Multi-

family

Tourism-

Recreation-

Visitor

Pasco: I-182

Corridor

Suburban style lower

density concentrated near

airport

New concentration emerging

near I-182 Exit 9 at Road 68

Limited

Scattered in

northern city

areas near

freeway lower

scale

Concentrated

in Port of

Pasco areas,

near I-182 &

US 395

intersection

Scattered and

reemerging in

Northwest

areas of Pasco

near I-182

Large outdoor

recreation area

near I-182 Exit

12 and near

airport

Pasco: within

I-182 beltway

Smaller and scattered Smaller and scattered, with

concentrations at and near

freeway exits on I-182

Smaller and

scattered

Large

concentration

in Port areas

east and along

river

Smaller and

scattered

Not obvious

Kennewick:

Columbia

Center Mall

area

Large concentration in

areas adjacent to the

Columbia Center Mall;

areas to the west near I-182

and SR- 240 are of a

typical suburban style and

mostly good quality and in

small buildings

Large concentration of older

suburban style strip-shopping

centers and in large format (―Big

Box‖) in areas adjacent to the

Columbia Center Mall; and in

areas proximate to the west near

I-182 and SR-240

Small

concentration

near Vista

Field airport

and in adjacent

small business

parks

Located in

limited

amounts near

Vista Field

Large

concentration

in areas

adjacent to the

Columbia

Center Mall;

areas to the

west near I-

182 and SR-

240

Arena,

community

center and

growing

number of

lodgings

facilities east

of the

Columbia

Center Mall

Kennewick:

The rest

Scattered in older eastern

areas near river and US 395

Scattered in older eastern areas

near river and US 395 also in

newer areas south of city near I-

82 and US 395

Scattered in

older eastern

areas near

river and US

395

Scattered in

older eastern

areas near

river and US

395

Scattered in

older eastern

areas of city

and newer

areas south of

city near river

and US 395

Outdoor and

waterfront

opportunities

along

Columbia

River Park and

Clover Island.


24

Development climate – Recent years have produced a sustained positive development

climate propelled both by Hanford-related activities and the growth in the rest of the local

economy. The cyclical experiences of the past, as well as the size of the regional market,

have produced a gradual and incremental patterns in most real estate market segments.

These patterns featurer the predominance of owner-users, shopping centers being an

exception.

Columbia Center Mall and environs – A significant portion of the Tri-Cities non-

industrial real estate activity occurs in areas around the Columbia Center mall. Some real

estate planning and business professionals consider the Wye to be part of this market area

because of its physical proximity.

Geographically and from the perspective of transportation infrastructure, the Columbia

Center mall area is centrally located and accessible from most areas within the Tri-Cities

MSA. In some ways it functions as the central business district of the region (i.e., the

region‘s concentration of retail, office, recreation, tourist and commercial activity);

however unlike most central business districts, it is not an area of dense development.

Instead, it has a suburban horizontal character.

Often surrounding most central business districts there is an area of general-purpose real

estate occupied by businesses needing to be close to the central business district, but that

do not have to be in the higher priced buildings where their clients/customers are located.

The Wye area has the potential to draw these types of businesses.

The environs near the Columbia Center regional mall have attracted many retail

establishments that want to be close to a regional mall, but not in them. The relatively

newer (past twenty years) ―Big Box‖ or large format freestanding retailers have been

attracted to this portion of the Tri-Cities. As the Tri-Cities grows, this type of retail will

want to disperse to locations close to freeway exits. The Queensgate area in south

Richland, the Clearwater and Southridge areas in Kennewick, and the Road 68 area in

Pasco are locations that will compete for the types of retail currently in the Columbia

Center mall area.

Speculative/rental/lease – Large business and office park developments have not been

prevalent as a real estate pattern in the Tri-Cities. The exception is the Hanford area in

north Richland. Real estate developers tend to make a significant portion of their profit


25

by buying land, securing needed permits, building facilities, leasing-up and then selling

their projects to long-term institutional investors. In a market with lower priced and

abundant land this process tends to be more difficult; and speculative developers

interested in selling to institutional investors are rare.

Land prices and rents levels – Interviews with real estate professionals and published

reports indicate that commercial land at well located sites in the areas around the Wye

area sell for $2.50 to $6.00 per square foot. The land in the Port of Kennewick‘s

Spaulding Business Park goes at $2.75 to $3.25 per sq. foot. Office and better

commercial building space rents at up to $20.00 per square foot in the Gage Blvd area

west of the regional mall. Less desirable/locations and older buildings draw $8.00 to

$16.50 per square foot.

The re-development of the Wye area will by necessity fit into, and to some degree be framed

by, these overall regional real estate market patterns.


26

5. Real Estate & Location Analysis of the Richland Wye Area

5.1. Current Land/Real Estate Uses in Wye Area

Current land/real estate uses within the Wye area are a combination of single family

residences, multi-family apartment complexes, vacant land, local and regional retail, heavy

industrial (the Benton-Franklin Transit bus base), light industrial, small offices, public

waterfront/park recreational, and heavy commercial. This latter category, a type of

commercial real estate that typically does not have customers or clients visit the business,

tends to emphasize the repair and servicing of small, high valued equipment and machinery.

This type of real estate typically does not need the amenities of shopping centers or business

parks. Parking for trucks and service vehicles is desired, but large amounts of landscaping

and higher quality signature buildings are not. Heavy commercial uses are attracted to areas

adjacent to CBD‘s. Heavy commercial is a notable current use among the businesses in the

Wye area of Richland.

There is significant vacant land that is ready for development within the Wye area. The Port

of Kennewick has developed the 30-acre Spaulding Business Park, and is seeking to sell

parcels for development. There is a large, vacant, and presumably buildable lot — the site of

a former drive-in theater — along Columbia Park Trail immediately to the northeast of

Spaulding Business Park, on the east side of Georgia Avenue across from the marina

containing the Columbia River Journeys jet boats. Removal of some of the more seriously

deteriorated buildings and clean up of outside storage would produce more vacant space. In

addition, there are some smaller vacant sites within the area. Significant public ownership

exists in addition to the roadways, utilities corridors and port‘s holdings. The regional Benton

Franklin transit system has their major facility there. The area along the Columbia River

contains a shoreline area, a flood protection levee and City parklands, and there may be some

parcels available as a result of the freeway reconfiguration and new interchange that would

be owned by the State.

5.2. Physical Description

The following are key physical characteristics of the Wye area.

The area generally slopes to the north from the south affording views to the river and

north beyond the river to West Pasco, as well as to the east and also toward Saddle


27

Mountain. Sites at the top of the hill and near the freeway have views back across the

freeway and up the hill to the Columbia Center Mall area.

Much of the Wye area does not have significant tree coverage.

There are two major arterials: the east-west Columbia Park Trail Boulevard and North

Columbia Center Way along with Steptoe Boulevard, South of Columbia Park Trail

leading to the Tapteal Development.

A major exit/entrance to the SR-240 freeway exists central in the site at North Columbia

Center Way. The configuration of this interchange will be altered significantly as a result

of the proposed widening of the freeway.

Columbia River Park (a large regional park recreational facility) and the City of

Kennewick form the Wye area‘s boundary on the east side. The SR-240 freeway forms

the area‘s boundary on the south and west, while the Columbia River delineates the

area‘s northern boundary. Residential and public ownerships bound the Wye area on the

east.

Interviews with public officials reflected that there may be some concerns about

contaminated soils issues though the area since has been used as storage for autos and

parts as well as commercial/ industrial vehicle and machinery repair services.

Access to the rest of the MSA via SR-240 is easy from the south side of the Wye area and

access to SR-240 is also relatively easy from the west end.

There is a small boat launching and marina facility on the river near Bateman Island and

Columbia Park Marina.

Other than these attributes there are no other apparent or outstanding features that are

obvious.

5.3. Ownership Patterns

There are several key property owners, who are either owner-users or who have acquired

land for future or potential development or redevelopment. Owner-users include: Port of

Kennewick, the Benton-Franklin Transit System, the City of Richland, U.S Army Corps of

Engineers, State of Washington, and many local businesses and residents.

Properties that could be developed quickly are: the Port of Kennewick‘s Spaulding Business

park, the owners(s) of the vacant ―drive-in‖ theater site, two individual property owners who

own a large strip shopping center (Columbia Center North) and major parking areas plus

parcels in the southeastern corner of the Wye area along Fowler Avenue east of the North


28

Columbia Center Way. There is a large linear site on the south (Tapteal) side of the SR-240

freeway owned by the Robert Young Company. While this prime site is considered part of

the Wye Master Plan area, it is physically and functionally separated, and is not included in

our analysis.

In short, there is private sector interest in redevelopment. Once sites are assembled, the

challenge of development will be less daunting to them.

5.4. Locational Attributes

The Wye area has several strategic locational characteristics that provide potential developers

and businesses with important real estate advantages. These characteristics include:

A central location within the Tri-Cities MSA at the intersection of a major freeway

corridor. Several existing businesses in the Wye area stated that their location choice was

based on being able to get to all parts of the Tri-Cities MSA quickly and easily.

Proximity and sight lines to the Columbia Center Mall and the large concentration of the

retail commercial and other real estate attractions in that area. Some regional real estate

professionals and businesses in the Wye area consider that proximity a significant asset

for locating in the Wye area.

Visibility from the SR-240 freeway is a positive for businesses that need to draw support

from passing traffic. This attribute could also be an attractive feature for a firm that

wants its corporate image announced and visible to the region‘s residents and businesses.

Close proximity to the river is a positive business amenity, as well as a potential

recreation asset. It contributes value to both residential and non-residential real estate

within the Wye area.

The Wye area is adjacent to one of the last stretches of unimproved shoreline on the

Columbia River. The City of Richland and the U.S. Corps of Engineers plan to make it

more accessible as a recreational attraction by lowering the levee along that stretch of the

river. This should also add value to the real estate in the Wye area.

Relatively easy and quick access to the Port of Benton‘s Richland airport, Kennewick‘s

Vista Field airport and the scheduled air service at the Pasco airport is another potential

valuable locational attribute for sites within the Wye area.


29

However there are several locational aspects of the Wye area that provide a challenge for

development and redevelopment. These include:

The Wye area‘s close association with the regional mall is tenuous, particularly if the

regional mall has problems like other malls around the country with maintaining

competitive retail strength within a region in the face of new forms of dispersed retail,

especially large format retail. This could also be a challenge if the trend of moving

resident-serving retail to outlying locations within the region continues. If the future

development of the Wye area is less oriented to retail development, its association to the

mall is less of a potential problem.

Separation from the main areas of Richland by the Yakima River delta and I-182 plus

separation from the rest of the MSA by the SR-240 freeway and the Columbia River limit

the practical access to the Wye area to only a few points.

The current image presented to the traffic on SR-240 and historic reputation of the Wye

area (as being low income, low amenity and crime ridden) present challenges for some

types of future development. The location of a concentration of new auto dealers‘ sales,

service and storage lots along the southern and freeway visible edge of the Spaulding

Business Park cuts both ways. It is a strong identification and reinforces the area as a

retail site. It may not add much to enhancing a higher quality mixed-use ‗urban village‘

image for the area however. Some of this ambiguity could be managed by site and

amenity design and separation from the north sloped portion of the business park.

The word ―challenge‖ was selected advisedly in the above list since none of the

disadvantages are crucial to all types of real estate development and none of the locational

disadvantages seem insurmountable.

5.5. Reasons Current Uses Located in the Richland Wye Area

Interviews with current businesses in the Wye area produced a range of responses to

questions about why they were located there and/or why they stayed. The reasons included:

Central location within the Tri-Cities regional market.

Location near the mall reinforced their retail reputation and destination.

Proximity to and identification with the river and territorial views, recreation and regional

attraction of the Columbia River and its outdoor, open space and recreational facilities.


30

Cheaper land and buildings.

As one might expect, the businesses and property owners interviewed that were located in the

Wye Area had a better opinion of it than almost everyone else. They thought reports of

crime and drug problems were overstated. They pointed to the restaurants and retail stores

located in the Wye area and their ability to attract customers from throughout the Tri-Cities

MSA. They also pointed to the draw of the marina, boat launch, fishing and recreation

facilities as a strong positive that counters any of the negative historical images; and said that

when freeway construction displaced businesses, most desired to stay in the area. In

addition, they pointed to the presence of a number of well-kept owner-occupied single-family

commercial buildings that are sprinkled throughout the area. They also remarked favorably

about the small but cohesive community nature of the area.

The following are potentials that form a firm basis for development and redevelopment in the

Wye area:

Significant planned and proposed public and private projects in the master plan area.

Significant number of property owners who have major amounts of property assembled.

Basic real estate locational advantages within the Tri-cites regional market.

Existing and planned infrastructure improvements.

Existing viable, though small, businesses.

Significant areas that could change, i.e., older and modest single family and commercial

buildings, and underutilized sites and buildings.

5.6. Challenges, Opportunities and Uncertainties for Wye Master Plan Area

If no concerted action, other than the enforcement of the City‘s zoning and land use

regulations and planned public infrastructure improvements occur, the Wye will continue to

provide an area for low-income housing, and a place for less expensive and convenient

locations for smaller businesses. Market forces will eventually fill in the land that is

currently available. This process will probably be slow, given the nature of the overall real

estate development patterns in the region. However, there are enough large to medium sized

parcels in the Wye area that it would not take very long to have a major transformation occur.

Should the City of Richland decide to put forth a major redevelopment effort for the Wye

area, there are some short term and less expensive activities that can and should be

undertaken, including:


31

Identification and organization of the key property owners in the Wye master plan area.

Examination of state laws and application of public-private financing mechanisms for

redevelopment and blighted area actions, such as the Community Renewal Act‘s

mandates, local improvement district, and potential of a public development authority as

a vehicle for redevelopment.

Complete information and data gathering to reduce areas of uncertainties related to

physical site and infrastructure improvement, as well as design and costing of appropriate

infrastructure improvements for the Wye area.

Segmentation of the Wye area into parts that could provide a sharper focus for specific

appropriate real estate market segments and/or implementation actions.

Organize and staff multi-year, multi-jurisdiction, multi-constituent planning process for

the area to assure continuity.

Assure periodic constructive input from the local real estate development, marketing and

property management sector, periodically revisiting the Wye area‘s zoning and regulatory

approach and leaving sufficient flexibility to address unforeseen opportunities that may

arise.

Develop an information campaign to counter any lingering ―image‖ problems for the

area.

Develop a specific and explicit redevelopment strategy that identifies:

o Who will have what redevelopment responsibilities,

o What long term and short term actions and projects will be undertaken,

o Why that set of actions will result in redevelopment, i.e., be clear about the strategy

being followed that makes realistic economic and real estate sense,

o How will each component of the strategy be implemented, what are the action steps,

what are the sources and uses of funds,

o Set priorities for the sub-parts within the Wye master planning area for action, and

o Establish a reasonable phasing and monitoring process.

o Opportunities to determine if the water, sewer, storm or street capacity can handle

build out of redevelopment, and who will pay?

A range of redevelopment strategies for the Wye master planning area is discussed below.

5.7. Potential Land Uses/Real Estate Segments Appropriate for the Wye Master Plan Area


32

Heavy industrial uses, extensive processing, and storage uses and single family detached real

estate and market segments were not considered for the Wye area. Heavy industrial uses

usually require rail or marine transportation facilities, large amounts of outside storage, ‗lay-

down‘ areas, and often produce a whole range of ‗spillover‘ effects (dust, noise, smells, etc)

that are incompatible with existing or proposed and uses at the site.

Single-family residential development could be an appropriate land use at the site, but the

elimination of many current uses, rationalizing land ownership, and elimination of blighted

conditions would be necessary. In addition, there are many better locations in the region for

such uses. Multi-family and condominium residential uses could be developed in portions of

the Wye area if they were appropriately separated from non-residential uses. Reflecting the

high average age of workers employed at Hanford-related facilities, there may be a strong

―empty nester‖ market for mid-rise waterfront condos, similar to the type of development

that exists in the Columbia Point area.

Overall market assessment:

There is potentially a large amount of real estate development that could be

accommodated in the Wye area immediately, located in vacant and under-utilized areas

and eventually through redevelopment.

The Wye area will increasingly have to compete with other areas of the regional real

estate market to attract tenants.

The Wye area‘s advantages are: (1) proximity to and views of the river, (2) proximity to

other regional economic engines (Kennewick‘s mall, retail, office, and recreational

assets), (3) access to regionally important transportation networks, (4) significant existing

vacant and assembled land, (5) viable businesses already there, and (6) public agency

interest in its development and redevelopment.

Retail market assessment:

Neighborhood shopping centers – There already is a large concentration of retail

establishments south of the site. There are not large concentrations of residents nearby

and the Wye area is not centrally or conveniently located within an established or

emerging neighborhood. Eventually, should large amounts of condominiums and multi-

family residential units be developed in the Wye area, there could be some demand for

convenience and neighborhood retail.


33

Community shopping centers – There are better-located existing competitive locations

that are approximate to emerging and established concentrations of population within the

region.

Regional shopping centers - There is an established regional mall very close by. Some

portions of the Wye area, primarily the relatively flat southern portion adjacent to and

visible from SR-240 and the mall areas, could attract large format region serving retail

establishments, but the trend is for such large format retailers to disperse closer to new

and growing portions of the region.

Retailers with a need for large outside storage and display areas, e.g., auto sales, RV,

truck dealers new and used – There are appropriate sites on the relatively flat southern

portion adjacent to and visible from SR-240 and the mall areas that could attract such

region serving retail establishments. Separating such uses from the other types of uses

would be important.

Restaurants, entertainment facilities, lodging (short and long stay), recreational facilities

and specialty retail uses that complement and support them could be attracted to sites

near to, or visible from, the river, especially when the levee‘s height is reduced and park,

open space and recreation improvements are provided.

―Festival‖ retail – There is very little of this type of pedestrian oriented retail in the Tri-

Cities. There are almost no existing environments that could evolve into this type of use.

However if a modest size ―urban village‖ project were to develop in the Wye area‘ then

such ―festival‖ retail could be a part of it. This seems like a fairly long-term prospect and

would require dramatic change in the underlying development climate and parameters in

the Tri-Cities area.

Commercial market assessment:

Offices, small office parks, medium density office buildings; free standing, owner-user,

or multi-tenant development -- The river views, open space, recreational amenities,

integration with residential uses and proximity to existing similar developments up the

hill in the areas around the mall are reasons to believe that the Wye area could attract this

type of real estate market segment. The Brashears office building proposed at the

Columbia Park Trail Boulevard entrance to the Spaulding Business Park is a signal

project, and could demonstrate this market segment as a viable use here.

Heavy Commercial – This use is already a viable use in this area. The Lincare Medical

Products Company, electrical contractors, and professional services engineering and


34

surveying firms are examples. The Wye area‘s central location in the region is a strong

locational attraction for this type of use.

Medical/dental offices and labs would be a type of office use that could be attracted to

this area once appropriate amenities are present.


35

Business Park market assessment

Typically, business parks are oriented to different types of activities: office types, light

industrial types and hybrid types – a few of which are found within the Tri-Cities market.

Unless a major effort is made to assemble a large percentage of land in the Wye area, the

potential for business parks will produce relatively smaller versions, which, may be

appropriate to the size of the Tri-Cities market area.

Multi-family and condominium market assessment

Once the open space, recreational, park and waterfront amenities are in place, the Wye

area will be a very attractive location.


36

6. Projections of Future Growth in Richland

6.1. Projected Employment Growth

Washington State non-agricultural wage and salary employment grew strongly (1.9 percent

annually) between 1990 and 1995 and at a phenomenal rate of 3.1 percent annually between

1995 and 2000. After 2000, the state‘s economy – led by the dot-com bust and simultaneous

decline at Boeing – showed either negative or very slow employment growth, and is expected

to average an anemic 0.3 percent annual rate over the entire 2000 through 2005 period. The

State Office of Financial Management (OFM) long term forecast is for employment to grow

at an annual rate of 1.7 percent between 2005 and 2010, after which it grows at slower, but

still healthy, rates for the next 20 years. These projections are shown in Figure 6.

Figure 9

Washington State Non-Agricultural Wage & Salary

Employment

2,000,000

2,200,000

2,400,000

2,600,000

2,800,000

3,000,000

3,200,000

3,400,000

3,600,000

3,800,000

4,000,000

1990 1995 2000 2005 2010 2015 2020 2025 2029

Actual Forecast

Source: Washington Employment Security Department & Office of Financial Management

The Richland-Pasco-Kennewick MSA and the Benton County did not participate in either the

dot-com or Boeing employment boom of the 1990s, and therefore did not suffer through the

employment ―bust‖ that occurred after 2000. The average annual growth rate of non-

agricultural wage and salary employment in the MSA was 1.1 percent between 1995 and

2000 and is projected by OFM to average 1.6 between 2000 and 2005. Benton County‘s

average annual growth rate of non-agricultural wage and salary employment was 0.6 percent

between 1995 and 2000 and is projected by OFM to average 1.8 between 2000 and 2005.


37

Figure 10

MSA Non-Agricultural Wage & Salary Employment

60,000

70,000

80,000

90,000

100,000

110,000

120,000

130,000

1995 2000 2005 2010 2015 2020 2025 2029

Actual Forecast

Source: Thomas/Lane Associates

Figure 11

Benton County Non-Agricultural Wage &Salary

Employment

50,000

55,000

60,000

65,000

70,000

75,000

80,000

85,000

90,000

95,000

100,000

1995 2000 2005 2010 2015 2020 2025 2029

actual forecast



38

Richland‘s growth of non-agricultural wage and salary employment is projected to closely

track Benton County patterns. Employment increased by 800 net new jobs between 1995

and 2000 – an average annual growth rate of 0.6 percent – and is projected to increase by just

over 2,600 net new jobs between 2000 and 2005 – an average annual growth rate of 1.8

percent. By 2029, non-agricultural wage and salary employment in the City of Richland is

expected to grow from its 2000 level of 28,900 to 43,600.

Figure 12

Richland Non-Agricultural Wage & Salary

Employment

20,000

25,000

30,000

35,000

40,000

45,000

1995 2000 2005 2010 2015 2020 2025 2029

actual forecast


6.2. Distribution of Employment by Industry

The distribution of Richland‘s non-agricultural wage and salary workforce is based on its

adjusted percentage distribution by North American Industrial Classification System

(NAICS) industry codes for 2000. The ―adjustment‖ to the actual 2000 distributions reflects

both a time trending of industry patterns and weighting for different occupational

distributions in Richland and all of Benton County. The resulting distribution of

employment, by industry and by 5-year increment, is shown in Table 6-1.


39

Table 6-1

Projected Distribution of Employment in Richland

Adjusted Richland

2000 Employment Distribution

Richland 2000

Average Employment

Richland 2005

Average Employment

Richland 2010

Average Employment

Richland 2015

Average Employment

Richland 2020

Average Employment

Richland 2025

Average Employment

Richland 2029

Average Employment

Construction 3.3% 943 1,029 1,116 1,199 1,283 1,356 1,423

Manufacturing 3.7% 1,081 1,179 1,279 1,374 1,470 1,554 1,631

Wholesale Trade 1.5% 443 483 524 563 603 637 669

Retail Trade 11.3% 3,273 3,569 3,872 4,159 4,450 4,704 4,937

Transportation 0.5% 141 153 166 179 191 202 212

Information 1.7% 505 551 598 642 687 726 762

Finance 1.5% 421 459 498 535 572 605 635

Insurance 0.6% 182 199 216 232 248 262 275

Real Estate 1.1% 307 335 364 391 418 442 464

Accommodations 1.0% 278 303 329 353 378 400 419

Amusement & Recreation 2.1% 609 664 721 774 828 876 919

Educational Services 0.4% 118 128 139 149 160 169 177

Health Services 5.0% 1,455 1,586 1,721 1,849 1,978 2,091 2,194

Legal Services 1.2% 359 392 425 457 489 517 542

Engineering, Mg't, & Business Services 15.3% 4,430 4,831 5,240 5,630 6,023 6,367 6,682

Eating & Drinking Services 7.4% 2,150 2,345 2,544 2,732 2,923 3,090 3,243

Social & Family Services 3.5% 1,008 1,099 1,193 1,281 1,371 1,449 1,521

Repair Services 2.2% 629 686 744 799 855 904 949

Other Services 36.5% 10,553 11,508 12,484 13,411 14,347 15,167 15,919

TOTAL 100.0% 28,886 31,501 34,172 36,711 39,274 41,517 43,576

Source: TLA using WSES & Census data


40

Engineering, Management & Business Services employment is projected to

continue to grow even though there will be a workforce reduction after the

Hanford waste treatment (vitrification) plant is completed. As reported in The

Impact of the Waste Treatment Plant on the Hanford Communities report, the

annual peak of about 4,500 jobs over the eleven-year life of the project will be in

addition to the expected growth of almost 15,000 net new jobs in the Richland-

Pasco-Kennewick MSA projected to occur under a baseline – no vitrification

plant – scenario. Given the occupational and industrial composition of Richland‘s

economy, a significant number of those jobs will be in the Engineering,

Management and Business Services sector – particularly in the engineering and

scientific R&D industries.5

Other Services, is a catchall category. However much of its expected growth is

expected to occur in services associated with the aging of the Richland-Pasco-

Kennewick MSA‘s population.

6.3. New Business Establishments by Industry

The number of new business establishments in Richland was projected by

dividing each industry‘s employment by the average number of workers per

establishment reported by WSES. These projections are shown in Table 6-6, on

the following page.

Between 2000 and 2020, Richland is projected to have between 180 and 190 net

new business establishments every five years, with this number falling to a level

of 150 land 160 net new business establishments for each five-year period

thereafter.

The industries with the most number of net new firms are projected to be

engineering, management and business services; retail trade; and eating and

drinking places.

5 Perteet Engineering, Thomas/Lane & Associates, and SCM Consultants, The Impact of the Waste

Treatment Plant Project on the Hanford Communities (The Hanford Communities, October, 201), pg3-3.


41

Table 6-2

Projection of New Business Establishments in Richland

Estimated Workers

per Business

Unit

Richland Estimated Business

Units 2000


Units 2005


Units 2010


Units 2015


Units 2020


Units 2025


Units 2029

Construction 7.5 127 138 150 161 172 182 191

Manufacturing 29.2 37 40 44 47 50 53 56

Wholesale Trade 20.5 22 24 26 27 29 31 33

Retail Trade 24.0 136 149 161 173 185 196 206

Transportation 9.3 15 16 18 19 21 22 23

Information 31.0 16 18 19 21 22 23 25

Finance 17.1 25 27 29 31 33 35 37

Insurance 6.2 30 32 35 38 40 43 45

Real Estate 6.3 49 53 57 62 66 70 73

Accommodations 27.2 10 11 12 13 14 15 15

Amusement & Recreation 13.7 45 49 53 57 61 64 67

Educational Services 7.1 17 18 20 21 23 24 25

Health Services 12.0 121 132 143 154 164 174 182

Legal Services 3.8 96 104 113 122 130 138 144

Engineering, Mg't, & Business Services 25.6 173 188 204 220 235 248 261

Eating & Drinking Services 17.3 124 136 147 158 169 179 188

Social & Family Services 11.3 89 98 106 114 122 129 135

Repair Services 5.7 110 120 130 140 149 158 166

Other Services 12.5 844 921 999 1,073 1,148 1,213 1,274

TOTAL 2,085 2,273 2,466 2,649 2,834 2,996 3,145

CHANGE IN TOTAL 189 193 183 185 162 149

Source: TLA using WSES data


42

7. Future Land Use Demand in the Richland Wye Area

7.1 Current Absorption Patterns

In recent years, the Wye area has seen the establishment of the Spaulding

Business Park by the Port of Kennewick and a limited number of other new

developments. Several of the businesses displaced by WSDOT‘s reconfiguration

of the SR-240 interchange have chosen to stay in the area and developed new

buildings. There are newer mixed use or small office buildings. There have been

several businesses that have purchased sites in the Fowler Avenue portion of the

Wye area near the Columbia Center Way North and SR-240 interchange. Some

churning of tenants has occurred at the Colombia Center North shopping center.

A mixed general tenant office building is proposed for site at the entrance to the

Spaulding Business Park. Most of these uses are light industrial/heavy

commercial uses, regionally focused specialty retail, or small professional office

uses.

7.2. Future Development Potential

A multi-stepped process was followed to obtain projections of future growth that

are realistic for the Wye area. First, data on 22 occupational categories and 164

industrial (the new NAICS industrial) categories of employment were examined

and separated in eight real estate market segments that were appropriate for the

Wye area of Richland. Secondly, the employment projections for Richland

developed in Section 6 (see Table 6-1) were divided among those real estate

market segments. It was assumed that Wye area development would be generated

by new economic activity or expansion of such activity rather than movements

within the market, though that may also occur. Thirdly, capture rates were

derived for each real estate segment based on the analysis of the market trends,

conditions and patterns that are in existence and could reasonably be projected for

the Wye area (see Sections 4 and 5). Typical employment densities for suburban

areas were used to estimate land needed for the real estate market segments that

would be attracted to the Wye area. Both low and high range absorption

projections were made. This range was appropriate both because the projection

period is long term and there is a range of potential strategic development

approaches available to the City (see Section 8 below).


43

Several assumptions about the Wye area were made, including:

New development in the near term would be mostly located on currently

vacant properties,

That there would be no additional major ‗move-outs‘ from the Wye area,

That the WSDOT ramp improvements do occur and that the City of Richland

and Corps of Engineers improvements to the river dike system are undertaken,

That zoning within the Wye area will not be an obstacle for location of

businesses,

The capacity of road and utility systems will not be an obstacle for location of

businesses into the area, and

The absorption projections were made for two time periods, consistent with

the employment projections 2005-2015 and 2015-2029.

Key considerations for land absorption in the Wye area rest on the strengths and

challenges discussed above.

Absorption projections were made for six non-residential real estate market

segments:

General office space,

Office space specialized for health services, such as doctors offices and

laboratories,

Lodgings,

Retail space:

o shopping centers,

o non-shopping center, and

o arterial and auto-oriented

Gaming, entertainment, recreation & amusement, and

Light industrial/heavy commercial.

There are a substantial number of retail businesses Richland that are not attracted

to shopping centers or are indifferent to locating within them. This type of retail


44

activity is categorized in the ―non-shopping‖ center retail category. The other

category of retail includes businesses that are oriented to locations on arterials

(e.g. fast food limited service restaurants), and such businesses that sell autos,

parts and services vehicles.

Development absorption projections were also made for multi-family residential

development.


45

Table 7-1

Land Absorption Projections for the Wye Area

Real Estate

Market Segment 2005-2015 2015-2029

Non-Residential: 29 ac. 70 ac.

Office 6.5 16.0

Retail and Other* 12.0 34.0

Light Industrial & Heavy

Commercial 11.0 21.0

Multi-Family Residential 3-12 acres 5–12 acres

* includes: retail (shopping center, non-shopping center, & arterial/auto oriented),

lodging, gaming, entertainments, recreation, amusement, and restaurant

Table 7.1 projects total land absorption in the Wye area for the two time periods covered

during the next twenty-five years for both residential and non-residential land uses.

These projections are for the total Wye area. The actual development may involve

combinations that are influenced by future City land use policies, infrastructure

investments, timing of such improvements and the intensity of public-private

development strategy pursued.

These real estate market segments are those that were evaluated as appropriate and

supportable in the Wye area. The absorption projections did not include:

employment that would locate in heavy industrial areas,

hospital or specialized medical and resident care facilities,

employment directly related to Hanford operations and clean-up activities, and

other professional and technical services,

transportation facilities,

major manufacturing activities,

activities including construction, resource processing or large outside storage,

processing or ‗lay-down‘ areas, and

public and government activities.

Each of the 164 North American Industrial Classification System (NAICS) industries and

22 occupations were examined in order to allocate the types of employment that would

locate into the real estate market segments. This process allowed such industries that

have a portion of their employment located in office space or light industrial/heavy

commercial space to be included rather than left-out of consideration.


46

Table 7-2 gives the assumptions used for translating employment projections into land

projections, including dwelling unit density assumptions. The employment densities are

typical of suburban development locations. Actual employment densities may vary

among firms in each industry depending on their own business/real estate strategies. The

residential multi-family unit absorption projections were made assuming that the annual

average building of such units that has occurred over the past decade in Richland will

continue as associated with employment growth. During that period the annual

absorption was 40 units.

Table 7-2

Land Absorption Assumptions: Non-residential

Real Estate Market Segment

Typical

Employees

per Square

Foot

Floor Area

Ratio

(F.A.R.)

Square Feet

per Acre

Typical

Employment

per Acre

Office Space: General 350 .33 14,375 40

Office Space: Health Services 450 .33 14,375 32

Retail: Shopping Center 500 .25 10,890 22

Retail: Non-shopping Ctr. 500 .20 8,712 17

Retail: Arterial/Auto 500 .15 6,534 13

Restaurant 750 .20 8,712 12

Gaming, Entertainment,

Recreation, Amusement 600 .25 10,890 18

Lodging One/room* .33 14,375 30

Light Industrial/Heavy

Commercial 800 .45 19,602 25

Source: Economic Consulting Services, * room gross square foot per room 500 sq. ft.

Table 7-3

Residential Development Densities Assumptions

Multi-family

Capture

Rates for

Wye Area

Annual

Absorption* 2005-2015 2015-29

2005-2015

@ 12 units

absorbed

per acre*

2015-2029

@ 12 units

absorbed

per acre**

10% 4 40 56 3.3 4.7

25% 10 100 140 11.7 11.7

Source: Economic Consulting Services,

* The annual multi-family unit production in Richland averaged 40 units from 1994 to 2004, see

Table 4-1 Section $ page 16;

** unit size assumed is 1200 sq. ft. with a floor area ratio of .33


47

8. Implications for Strategic Development in the Wye Area

8.1. Alternative Development Scenarios

During interviews with local officials, businesspersons and other Richland Wye

area stakeholders, it became evident that a range of alternate development

scenarios existed, and that not all of them were necessarily compatible (i.e., some

might involve trade-offs). The following are the issues associated with the major

development alternatives identified:

Should development of the Richland Wye area (a) maximize creation of

jobs that will be needed to off-set the expected loss of Hanford DOE jobs,

(b) expand Richland‘s tax base, or (c) some combination of both?

The Richland Wye area is a significant location of low-income housing. If

it is redeveloped, should there be provision for relocating the low-income

households that now live there?

Should Columbia Point‘s development concept of upscale condos and

recreational land uses combined with retail and hospitality uses be

replicated?

What is the right mix of zoning and land use regulations that will optimize

development of the Richland Wye area? Should development emphasize

residential, commercial or retail uses?

How can the Columbia River shoreline that marks the northeast boundary

of the Richland Wye area be enhanced and used to promote regional and

city convention and/or visitor activity?

Should the Richland Wye area be developed to compete with the high

technology industrial and business areas that rim the City‘s north end (e.g.,

the Horn Rapids business center, the Horn Rapids industrial park, the

Richland industrial center, the Battelle campus, the technology and

business campus, etc.)?

Should the City of Richland create a development authority as a vehicle

for guiding the Richland Wye area‘s future development?

Before addressing these issues, the range of uncertainties that will surround any

development effort need to be made explicit.


48

8.2. Uncertainties

Any development scenario involves certain assumptions. In this report, the major

assumptions are:

The relationship between Richland‘s historical and projected economies

will be relatively constant, including the growth of the City within the

context of the Richland-Pasco-Kennewick MSA, and the growth of the

MSA within the context of the state‘s total economy, and

The relationship between the demand for developable land and local

economic growth will not change appreciably in the foreseeable future.

The development strategies (page 46-52) depend heavily on the lowering

of the levee and the improvements to the shoreline that currently remain

unfunded.

Further, it is the underlying assumption of this report that private market forces

are the best promoters of economic development, and that the appropriate role of

City government is to provide the infrastructure and regulatory regime under

which private market forces work best.

8.3. Alternative Development Strategies

The transformation of the Wye area will require a well thought out sustained

development strategy over a long period of time. There are a series of activities

that if undertaken at the beginning will increase the chances and also the pace of

such redevelopment (see section V-6 above). There are many combinations and

permutations of alternative intensity strategies that could be followed depending

on the selection of potential uses and identification of sub-parts of the Wye area

for focus/phasing. The ultimate strategy should be developed as full public

private-multi-jurisdictional process. The following are preliminary ideas to begin

discussions.

Alternative Strategic Development Concepts

The short-term market for development in the Wye area is known. The State

Department of Transportation has plans to reconfigure the SR-240 exit; the

City of Richland and Corps of Engineers have dramatic plans for

redevelopment of the flood control levee along the Columbia river in the Wye

area; there have been recent locations and sales of retail/heavy commercial


49

properties in the Wye area, mainly along the Fowler Street portion near SR-

240; there are plans for the locations of a auto dealer also along the SR-240

frontage and a proposed office building at the Columbia Park Trail entrance of

the Port of Kennewick‘s business park, which has other vacant sites available;

Roger‘s Surveying has built a 10,000 square foot office building, Gamache

Landscaping plans to relocate to the Wye area, and there still are underutilized

commercial and residential sites that could be developed. Land prices are

reported at $2.75 to 3.25 per square foot and higher quality office buildings

can rent good space for $18-20 per square foot. The market analysis in this

section has concentrated more on the long term than short-term market trends.

The following are general development strategies that the City could pursue

over the longer term in order to redevelop the Wye area.

Passive Laissez-faire Strategy

After the City of Richland has completed the sub-area planning for the

Wye area, the private property owners and private regional market

forces are relied upon to accomplish the redevelopment of the area.

The area will get wide notice once the transportation (freeway exit)

and waterfront improvements are made and that may stimulate more

interest in the area. The city provides marketing assistance as it does

with the other focus areas of its economic development strategy.

Market Facilitation Strategy

The City enforces its zoning and building codes, and follows its

economic development strategy as private land owners and developers

reveal their plans. The City assists with facilitating the development

process for the area and proceeds with infrastructure plans for the

riverfront, roadway improvements and utility systems. The city also

markets and emphasizes the area with a strategic planning process, but

leaves the primary tasks of land assembly, and development to the

private property owners there and developers who may recognize the

opportunities that are inherent in the Wye area. As City funds are

available other amenities and improvements maybe made to assist and

stimulate interest and facilitate improvement of the location of firms

into the area.


50

Table 8-1

Framework for Alternative Strategic Concepts For

Redevelopment in Wye Master Planning Area

Actions

Passive

Laissez-

faire

Market

Facilitation

Active

In-fill

Aggressive

Public-

Private

Public Actions;

Planning

Regulation

Urban Design Regulations

Public Infrastructure

X

X

X

X

X

X

X

X

X

X

X

X

Formation of a Development Vehicle

Community Renewal District

Local Improvement District

Public Development Authority

X

X

X

X

X

Infrastructure

Planning

Design

Cost estimation

Financial strategy

Permitting

Construction

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

X

Development Assistance

Strategic Planning-Monitoring

General marketing

Focused intense marketing

X

X

X

X

X

X

X

Land Assembly

Land-owner

organization/participation

Identification of strategic parcels

Public Process Legal Requirements

(i.e., eminent domain requirements)

Acquisition

Relocation

X

X

X

X

X

X

X

X

X

X

X


51

Active In-fill Strategy

The City accomplishes the planning of public infrastructure

improvements envisioned and also targets certain strategic parcels,

most probably those that will benefit and complement the waterfront

areas. The city would also take steps to acquire or be the catalyst for

development on a piecemeal basis as property owners make there

plans obvious. A phased plan of acquisition, public-private investment

and infrastructure improvements are made, as is a coordinated

marketing of the area.

Aggressive Public-Private Strategy

After a well thought out strategic planning process that actively

includes the private property owners and others in the community who

are active in segments of the regional real estate industry, the city

accomplishes the legal actions that will enable it to acquire property in

the area and implements an aggressive redevelopment process. This is

a very expensive and long-term program, but is the best assurance for

the complete redevelopment of the Wye master planning area.

These suggestive strategic concepts are a starting point for a discussion of the

alternatives for redevelopment of the area.

8.4. Recommended Development Scenarios

The Richland Wye area is large and diverse – too large and diverse for any single

development concept to work everywhere. The following discussion, therefore,

addresses recommended development scenarios for different parts of the total

area.

The part of the Richland Wye area that borders the Columbia River

(roughly the area north of Columbia Park Trail and east of Montana

Street) should be reserved for water oriented public and private

recreational developments.

Current plans are for the Corps of Engineers to reduce the levee along the

river by four to five feet and use the spoilings from the top of the levee to

put in a long linear shore side park and walking trail. Expectations are


52

that this $2.3 to $2.5 million project will be completed sometime between

2006 and 2010.

The City should continue to continue to maintain such areas as the Lewis

& Clark Trail Overlook, and proceed with development of the Columbia

Park West on the east end of the Richland Wye area. Encouragement

should be given to the owners/operators of Sundown Marine and the City

might consider encouraging Columbia River Journeys to relocate to a new

facility located along the river. Priority development in the future should

go to private developers of non-industrial marine oriented businesses –

particularly businesses associated with recreation and tourist activities.

The City should consider supporting the development of a mixed income

housing project in the part the Richland Wye area south of Columbia Park

Trail and east of the new SR-240 interchange (the area in and around

Nevada Avenue).

Creation of a low-moderate income housing project will allow for the

relocation of households that will be displaced when the Richland Wye

area is redeveloped. The City should consider opening discussions with

the Washington State Housing Finance Commission about methods and

techniques of raising funding to support the construction of such a project.

It is our understanding that the Port of Kennewick‘s Spaulding Center has

reached agreement with the Washington State Department of

Transportation (WSDOT) to obtain the land immediately to its south. This

area, together with southern half of the Spaulding Center property, has the

potential to be developed as an auto-plex park. This could include getting

some MSA auto dealers to relocate from their present locations to a

Spaulding Center Location.

For automobile dealers, the south side of the Spaulding Center property is

an excellent location. It has visibility from SR-240, it has good access to

the entire Tri-Cities MSA‘s population, and it can draw from people

attracted to the Columbia Center/Tapteal area retail concentrations.

For the City of Richland, creation of a concentration of automobile dealers

would create a source of big ticket sales that would enhance to the City‘s

tax base.


53

Even though one developer who was interested in the autoplex concept

has decided not to pursue it in the Spaulding Center, we feel the market

advantages of the Center for this type of use are still strong. Given the

large potential of this type of development to contribute to Richland‘s tax

base, we recommend that the City of Richland actively go after creation of

an autoplex development in the south part of the Spaulding Center.

The City should consider the possibility of attracting a planned unit

development for active elderly persons in the east end of the Richland

Wye area.

A recent analysis of demographic patterns among workers employed at

Richland‘s engineering, scientific and R&D establishments conducted by

WSES‘s regional economist indicates that a large number of them will be

reaching retirement age within the next ten years. These households will

likely have significant asset holdings and retirement incomes, and many

will be looking for retirement living arrangements in the Tri-Cities area.

An attractive, up-scale retirement living community on the east side of the

Richland Wye area that connects to the planned river shoreline trail area

and has walking access to Bateman Island may represent a feasible market

potential.

It would also bring a significant source of purchasing power to Richland‘s

economy, and would help support numerous additional development

potentials.

The City should beautify and enhance the street entries to businesses at the

park off Fowler, Columbia Center Blvd., and the former freeway off-ramp.

Partnership with property owners and the Port should be sought.

8.5. Implementation Strategies

Development of the Richland Wye area will require a series of pro-active

initiatives on the part of the City of Richland. This action has been started

by the new State Highway project resulting in the demolition and clean up

of some of the older buildings. Partnership with property owners and the

Port should be sought.


54

Access to the Richland Wye area from Fowler to Columbia Center Blvd.

needs to be improved.

The City should consider qualifying the Richland Wye area under the

rules for a Neighborhood Revitalization service Area (NRSA) five year

plan that would allow use of the City‘s CDBG funds for both housing and

economic development in the area.

The City should consider establishing either a District for the purpose of

promoting economic development in the Richland Wye area. Such a

District would benefit development efforts in the area in several ways.

First, it would give the City the option of adding a small amount to the

area‘s property taxes, which would be dedicated to redevelopment efforts

(the Port of Kennewick created such a district and added 45 cents per

thousand dollars of property value, and it has apparently been successful).

Second, a district could aid in the assemblage of the many small parcels

that now exist in the Richland Wye area if it were provided with eminent

domain power. Finally, a district would provide a central locus for a

multi-year redevelopment effort.

Surface Transportation Program or other such funds should be sought.


55

Appendix A

Statistical Tables


56

APPENDIX A

STATISTICAL TABLES

A-1

Total Employment

Wash State MSA Benton Franklin

1994 2,285,003 78,744 59,788 18,956

1995 2,326,492 79,160 59,963 19,197

1996 2,388,241 77,267 57,721 19,546

1997 2,495,185 79,243 58,923 20,320

1998 2,583,666 79,672 58,703 20,969

1999 2,632,612 81,604 60,225 21,379

2000 2,696,146 83,347 61,667 21,680

2001 2,691,210 86,021 64,440 21,581

2002 2,643,715 88,042 66,169 21,873

2003 2,642,313 90,526 68,130 22,396

Source: Washington State Employment Security Department

A-2

Employment & Establishments in Benton County

Year Establishments Employment Emp/Est

1994 3,370 59,788 17.7

1995 3,627 59,963 16.5

1996 3,623 57,721 15.9

1997 3,757 58,923 15.7

1998 4,076 58,703 14.4

1999 4,200 60,225 14.3

2000 4,398 61,667 14.0

2001 4,572 64,440 14.1

2002 4,547 66,169 14.6

2003 4,754 68,130 14.3



57

A-3

Employment & Establishments in Franklin County

Year Establishments Employment Emp/Est

1994 1,737 18,956 10.9

1995 1,827 19,197 10.5

1996 1,753 19,546 11.2

1997 1,866 20,320 10.9

1998 2,056 20,969 10.2

1999 2,124 21,379 10.1

2000 2,224 21,680 9.7

2001 2,264 21,581 9.5

2002 2,292 21,873 9.5

2003 2,437 22,396 9.2 Source: Washington State Employment Security Department

A-4

Benton County Employment in 2000

Industry Employment

Agriculture, Forestry, Fishing & Hunting 4,657

Utilities 120

Construction 2,678

Manufacturing 4,208

Wholesale Trade 1,026

Retail Trade 7,441

Motor Vehicle and Parts Dealers 743

Furniture and Home Furnishings Stores 161

Electronics and Appliance Stores 314

Building Material & Garden Supply Stores 582

Food and Beverage Stores 1,077

Health and Personal Care Stores 280

Gasoline Stations 510

Clothing and Clothing Accessories Stores 637

Transportation and Warehousing 449

Information 1,340

Finance and Insurance 1,290

Real Estate and Rental and Leasing 652

Professional and Technical Services 6,886

Administrative and Waste Services 8,881

Educational Services 238

Health Care and Social Assistance 4,421

Arts, Entertainment, and Recreation 1,093

Accommodation and Food Services 4,534

Other Services, Ex. Public Admin 1,860

Total Government 9,791 Source: Washington State Employment Security Department


58

A-5

Franklin County Employment in 2000

Industry Employment

Agriculture, Forestry, Fishing & Hunting 5,135

Mining 26

Construction 1,104

Manufacturing 1,587

Wholesale Trade 1,035

Retail Trade 2,002

Motor Vehicle and Parts Dealers 666

Furniture and Home Furnishings Stores 49

Building Material & Garden Supply Stores 190

Food and Beverage Stores 359

Health and Personal Care Stores 90

Gasoline Stations 114

Clothing and Clothing Accessories Stores 44

Transportation and Warehousing 723

Information 151

Finance and Insurance 194

Real Estate and Rental and Leasing 486

Professional and Technical Services 250

Administrative and Waste Services 632

Educational Services 111

Health Care and Social Assistance 1,710

Arts, Entertainment, and Recreation 90

Accommodation and Food Services 1,426

Other Services, Ex. Public Admin 957

Total Government 4,053



59

A-6

City of Richland

Third Quarter Employment in 2002

Employer

Units

3rd

Qtr.

Average

Monthly

Employment

INDUSTRY TOTAL … 1,519 30,995

Total Farm 16 65

Construction, Natural Resources & Mining 121 1,085

Manufacturing 34 1,441

Wholesale Trade 20 172

Retail Trade 134 2,194

Transportation, Warehousing, and Utilities 15 138

Information 15 69

Finance, Insurance, and Real Estate 89 739

SERVICES 760 21,348

Medical 138 2,742

Research Services 164 8,341

GOVERNMENT 13 3,743



60

A-7

Detailed Assumptions for Absorption Projections General

Office

Health

Services

Office

Lodging G.E.R.A.3 Retail:

Shopping

Center

Retail:

Non-

Shopping

Center4

Retail;

Arterial

Auto

Restaurant Light

Industrial

Heavy

Commercial

Total

Allocated

Employment1 2005 5615 397 2722 781 892 2594 785 2110 2980 19856

Employment2

Increment 2005-2015

1012 66 449 91 148 432 295 348 533 3374

Employment2

Increment 2015-2029

1332 86 594 120 195 572 389 460 703 4501

Percent of Uses 28.3% 2.0% 13.7% 3.9% 4.5% 13.1% 9.0% 10.6% 15.0% 100.0%

Low Capture Rate Wye

Area

25% 5% 20% 10% 5% 10% 10% 10% 50%

High Capture Rate

Wye Area

50% 20% 33% 25% 10% 25% 25% 25% 75%

Employees/acre 40 32 30 18 17 22 13 12 25

Low Acres 6.3 .1 3.0 .5 .4 2.0 2.3 2.9 10.7 28.6 ac.

High Acres 15.3 .5 6.5 2.6 1.1 6.5 7.5 9.6 21.1 70.1 ac.

Source; Economic Consulting Services:

Notes:

1 including only the employment allocated to the eight real estate market segments/land uses appropriate for the Wye area

2 see Table 6-1, increases in employment for the years indicated

3 Gaming, Entertainment, Recreation and Amusement

4 fifty percent of the retail employment that would be attracted to either shopping centers or that is in different to location within shopping centers.


61

A-8 Employment Allocated for Wye Area Real Estate Market Segment

Percent of Projected

Employment

Allocated to Eight

Real Estate Market

Segments

Employment

Increment Projected

& Allocated

2005- 2015

Employment

Increment Projected

& Allocated

2015-2029

Construction 20% 170 224

Manufacturing 30% 195 257

Wholesale Trade 45% 80 106

Retail 100% 590 778

Transportation 20% 26 33

Information 90% 91 120

Finance 100% 76 100

Insurance 100% 33 43

Real Estate 75% 56 73

Accommodations 100% 50 66

G. E.R.A. 100% 71 145

Health Services 50% 263 345

Legal Services 100% 65 85

Engr. Mgmt. Bus. Serv. 75% 799 1052

Restaurants 100% 387 511

Social, Family & Orgs. 60% 182 240

Repair Services 85% 113 150

Other Services 75% 1903 2508

Projected Employment

in Wye Area Real

Estate Market

Segments

3374

4501

Source: Economic Consulting Services


62

A-9

Allocation of Projected Richland Employment to Wye Area Real Estate Market Segments and Industries

Industry General

Office

Health

Services

Office

Lodging G.E.R.A. Retail:

Shopping

Center

Retail:

Non-

Shopping

Center***

Retail;

Arterial

Auto

Restaurant Light

Industrial

Heavy

Commercial

Total

Allocated

Construction 10% 10%

Manufacturing 5% 25% Wholesale Trade 5% 10% 30 Retail:

Shopping Center 25% Non-shopping Center 25% Arterial/auto orients 50%

Transportation 10% 10%

Information 75% 5% Finance 20% 80%

Insurance 75% 25%

Real Estate 35% 30% 10% Accommodations 100% Gaming, Entertainment,

Recreation, Amusement 100%

Health Services 25% 25% Legal services 100% Engr. Mgmt. Bus. Serv. 65% 5% 5% Restaurants 5% 5% 90%


63

A-9

Allocation of Projected Richland Employment to Wye Area Real Estate Market Segments and Industries [con’t]

Industry General

Office

Health

Services

Office

Lodging G.E.R.A. Retail:

Shopping

Center

Retail:

Non-

Shopping

Center***

Retail;

Arterial

Auto

Restaurant Light

Industrial

Heavy

Commercial

Total

Allocated

Social, Family and other

Organizations 60%

Repair Services 5% 10% 70% Other Services, N.E.C. 10% 20% 30% 15% Increment of

Employment Projected

2005-2015

1012 66 449 91 148 432 285 348 533 3374

Increment of

Employment Projected

2015-2029

1228 86 594 170 195 572 389 461 703 4501

Source: Economic Consulting Services:


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Appendix B

Technical Note on the

Calculation of Absorption

Rates


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APPENDIX B

TECHNICAL NOTE ON THE CALCULATION OF ABSORPTION RATES

Appendix Table A-7 is a summary of the detailed calculations that produce the absorption amount

projected for the Wye area. Projected Richland Employment in 2005 was allocated to eight real

estate market segments that would be expected to be attracted to the Wye area. The employment

increment for the two periods: 2005-2015 and 2015-2029 were adjusted to reflect the amount that

would be appropriate for each of the eight real estate categories. The assumptions for

development densities, i.e., floor area ratios are typical for suburban locations where land prices

are typically cheaper and there are generous parking and landscaping requirement. The

employment densities are also typical for suburban areas and non-residential development. For an

example office space per employee in suburban locations is often 300-400 square feet per

employee, whereas in high-rise central business districts it is 200-250 sq. ft. per employee.

The steps used to arrive at the eight real estate market segments‘ employment allocation were the

following:

create a matrix of 164 NAICS industries by 22 OES occupational groups

the 22 occupational groups (OES numbers) were reduced to eight likely real estate market

segments:

Office: OES occupation group numbers – 11, 13, 15, 17, 23, 43

Office health services: 29, 31

Lodgings: 39

Gaming, entertainment, recreation & amusement: 27

Retail: 41

Restaurants: 25

Light industrial/heavy commercial: 19, 49, 51

[Not allocated were: OES occupation groups public sector 25, 33 and heavy

industrial 37, 45,47, 53

Percentages of employment in each segment were calculated and the 164 industries were

grouped in 22 NAICS industries for which there were projections available for the

Richland portion of the Tri-cities labor market; adjustments were made, see below

Employment increments projected for two time periods 2005-2015 and 2015-2029

The allocated projected employment were calculated for the 22 industries and eight market

segments see Appendix Table B below

The totals employment allocations were summed for each real estate market segment, see

Appendix Table C below

The projected and allocated employment totals were used as the major inputs and used in the

Appendix Table and the employment and development density assumptions were applied

to arrive at projections of land that is potentially available to the Wye area.

The percentage of each industry‘s employment that is allocated for to each of the real estate

segments is displayed in Appendix Table A-8. That table displays the percentage of each industry

reported for and projected for Richland industry that would occur in the eight real estate

categories. It displays the percentages of the total Richland employment projected and allocated

to these 22 NAICS industrial categories and real estate segments. The remainder of each


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industry‘s employment was determined as inappropriate for the Wye area or not likely to locate

there. That table also includes the amount of employment in those eight categories for the two

time periods. The amount employment projected into the eight real estate segments is also

displayed by 22 industrial categories.

Appendix Table A-9 displays the percentages of each industry‘s employment that is allocated into

each of the eight real estate market segments appropriate for the Wye area. In addition the

employment that would be associated with that allocation is summed. These summed amounts for

each of the 22 industries and eight real estate market segments are the major input into the Table

A-7 that uses employment and development densities to determine projected absorption of land.

Two assumptions were made to adjust the data for a realistic allocation of projected employment

in to the real estate market segments.

The portion of the Richland ―Engineering, Management and Business Services‖ industry

employment that would be associated with remediation services, i.e. that category most

closely associated with the activities of the Hanford clean-up was not include. Real estate

professionals in the Tri-cities area regard this employment as a separate market niche.

Taking the percent of this category in the Benton County employment of 2002 and

removing it, approximately 36%, adjusted for the portion of remedial service

employment in this category of Richland‘s employment projections for 2005-2029. This

is probably an understatement, which still leaves some of this employment category in

the absorption projections, which is also probably realistic. The remainder, 64% is

allocated among the real estate segments.

1. An allocation for retail industries that tend to not locate in shopping centers was made.

Those businesses that would either locate or not into shopping centers was allocated to

this real estate segment. This amount which would locate into shopping centers or not

was then reduce by half based on the assumption that some this category would or could

locate into shopping centers but would not locate in the Wye area. There is a shopping

center in the Wye area. It could expand, increase its density or expand and that or the

appearance of a small shopping center is taken care of in the shopping center retail

category. This adjustment is aimed at that portion that would not go to shopping centers

and could be attracted to the Wye area.


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Appendix C

Sources


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APPENDIX C

SOURCES

Bucher, Willis & Ratliff, Wye Master Plan, (City of Richland, December, 1998).

Buxton Company, Retail Location Analysis (prepared for the Cities of Richland and Kennewick, May, 2004).

City of Richland, 2004 Annual Budget, The Challenge of Change.

City of Richland, 2004 Community Survey (Public Information Office, June, 2004).

Fitzpatrick, Clara, “Y, oh Y”, Tri-City Herald (October, 2004), pg A6.

Hopkin, Mary, “Tavern Closure Marks End of Era,” Tri-City Herald, (October 17, 2004), pg. A6.

Speakers Compendium, Tri-Cities Regional Economic Outlook Forum (TRIDEC, January, 2003).

Schau, Dean, “Show Me the Money: Growth, Strengths and the Future of the Tri-Cities Economy” (Washington State Employment Security department, January 7, 2004).

Timerica Management Company, Economic Development in the New Economy: A Strategic Plan for Richland, Washington (November, 2003).

TRIDEC, Tri-Cities Fact Sheet (Tri-City Industrial Development Council, 2004).

Washington State Employment Security Department, Employment & Payrolls in Washington State (multiple years).

Washington State Employment Security Department, Occupational Employment Statistics (multiple years).

Washington State Office of Financial Management, Long Term State Forecasts.


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Appendix D

Persons Interviewed


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APPENDIX D

PERSONS INTERVIEWED

Tim Arntzen Port of Kennewick

Darin K. Arrasmith City of Richland

Planning & Development Services

Wyn Birkenthal City of Richland

Parks & Recreation Department

Tim Bush Suzuki Dealership Owner

David W. Fraley Fluor Hanford

Information Resources Management

Maureen Frix Richland Chamber of Commerce

Diahann Howard City of Richland

Business & Economic Development

R. Bryan Kidder CH2M Hill

Hanford Group, Inc.

William B. King City of Richland

Deputy City Manager

Marvin J. Kinney Port of Benton

Assistant Executive Director/Airport Director

Rita Mazur City of Richland

City Councilmember

Joseph J. Schiessl City of Richland

Housing & Redevelopment

Dean Schau Washinton State Employment Security Department

Regional Economist

Jerry Schneider Fluor Hanford

Economic Diversification

Rick Simon City of Richland

Community & Development Services


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Appendix E

North American Industrial

Classification System

Industries


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APPENDIX E

NORTH AMERICAN INDUSTRIAL CLASSIFICATION SYSTEM INDUSTRIES

Industry Codes

Industry Titles

1100 Agriculture

1151 Support activities for crop production

2123 Nonmetallic mineral mining and quarrying

2213 Water, sewage and other systems

2361 Residential building construction

2362 Nonresidential building construction

2371 Utility system construction

2372 Land subdivision

2373 Highway, street, and bridge construction

2379 Other heavy construction

2381 Building foundation and exterior contractors

2382 Building equipment contractors

2383 Building finishing contractors

2389 Other specialty trade contractors

3111 Animal food manufacturing

3114 Fruit and vegetable preserving and specialty

3116 Animal slaughtering and processing

3118 Bakeries and tortilla manufacturing

3121 Beverage manufacturing

3212 Plywood and engineered wood product mfg.

3219 Other wood product manufacturing

3231 Printing and related support activities

3253 Agricultural chemical manufacturing

3261 Plastics product manufacturing

3323 Architectural and structural metals mfg.

3327 Machine shops and threaded product mfg.

3328 Coating, engraving, and heat treating metals

3332 Industrial machinery manufacturing

3334 HVAC and commercial refrigeration equipment

3339 Other general purpose machinery manufacturing

3345 Electronic instrument manufacturing

3363 Motor vehicle parts manufacturing

3371 Household and institutional furniture mfg.

3391 Medical equipment and supplies manufacturing

3399 Other miscellaneous manufacturing

4231 Motor vehicle and parts merchant wholesalers

4232 Furniture and furnishing merchant wholesalers

4233 Lumber and const. supply merchant wholesalers


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4234 Commercial equip. merchant wholesalers

4235 Metal and mineral merchant wholesalers

4236 Electric goods merchant wholesalers

4237 Hardware and plumbing merchant wholesalers

4238 Machinery and supply merchant wholesalers

4239 Misc. durable goods merchant wholesalers

4241 Paper and paper product merchant wholesalers

4244 Grocery and Related Product Wholesalers

4245 Farm product raw material merch. whls.

4247 Petroleum merchant wholesalers

4249 Misc. nondurable goods merchant wholesalers

4251 Electronic markets and agents and brokers

4411 Automobile dealers

4412 Other motor vehicle dealers

4413 Auto parts, accessories, and tire stores

4421 Furniture stores

4422 Home furnishings stores

4431 Electronics and appliance stores

4441 Building material and supplies dealers

4442 Lawn and garden equipment and supplies stores

4451 Grocery stores

4452 Specialty food stores

4453 Beer, wine, and liquor stores

4461 Health and personal care stores

4471 Gasoline stations

4481 Clothing stores

4482 Shoe stores

4483 Jewelry, luggage, and leather goods stores

4511 Sporting goods and musical instrument stores

4512 Book, periodical, and music stores

4521 Department stores

4529 Other general merchandise stores

4531 Florists

4532 Office supplies, stationery, and gift stores

4539 Other miscellaneous store retailers

4543 Direct selling establishments

4811 Scheduled air transportation

4821 Rail transportation

4841 General freight trucking

4842 Specialized freight trucking

4881 Support activities for air transportation

4884 Support activities for road transportation

4885 Freight transportation arrangement

4921 Couriers

4931 Warehousing and storage


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5111 Newspaper, book, and directory publishers

5112 Software publishers

5121 Motion picture and video industries

5151 Radio and television broadcasting

5172 Wireless telecommunications carriers

5173 Telecommunications resellers

5181 ISPs and web search portals

5221 Depository credit intermediation

5222 Nondepository credit intermediation

5223 Activities related to credit intermediation

5231 Securities and commodity contracts brokerage

5239 Other financial investment activities

5241 Insurance carriers

5242 Insurance agencies, brokerages, and related

5311 Lessors of real estate

5312 Offices of real estate agents and brokers

5313 Activities related to real estate

5321 Automotive equipment rental and leasing

5322 Consumer goods rental

5323 General rental centers

5324 Machinery and equipment rental and leasing

5411 Legal services

5412 Accounting and bookkeeping services

5413 Architectural and engineering services

5414 Specialized design services

5415 Computer systems design and related services

5416 Management and technical consulting services

5418 Advertising and related services

5419 Other professional and technical services

5511 Management of companies and enterprises

5611 Office administrative services

5613 Employment services

5614 Business support services

5615 Travel arrangement and reservation services

5616 Investigation and security services

5617 Services to buildings and dwellings

5619 Other support services

5629 Remediation and other waste services

6110 Educational Services

6211 Offices of physicians

6212 Offices of dentists

6213 Offices of other health practitioners

6214 Outpatient care centers

6215 Medical and diagnostic laboratories

6216 Home health care services


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6219 Other ambulatory health care services

6221 General medical and surgical hospitals

6231 Nursing care facilities

6232 Residential mental health facilities

6233 Community care facilities for the elderly

6241 Individual and family services

6242 Emergency and other relief services

6243 Vocational rehabilitation services

6244 Child day care services

7112 Spectator sports

7115 Independent artists, writers, and performers

7121 Museums, historical sites, zoos, and parks

7132 Gambling industries

7139 Other amusement and recreation industries

7211 Traveler accommodation

7212 RV parks and recreational camps

7221 Full-service restaurants

7222 Limited-service eating places

7223 Special food services

7224 Drinking places, alcoholic beverages

8111 Automotive repair and maintenance

8112 Electronic equipment repair and maintenance

8113 Commercial machinery repair and maintenance

8114 Household goods repair and maintenance

8121 Personal care services

8122 Death care services

8123 Drycleaning and laundry services

8129 Other personal services

8132 Grantmaking and giving services

8133 Social advocacy organizations

8134 Civic and social organizations

8139 Professional and similar organizations

8141 Private households

Update of Market Analysis Study for the Richland Wye Area

Documents

Transcript of Update of Market Analysis Study for the Richland Wye Area