WENATCHEE — Winnie’s Hallmark, one of the two remaining original tenants in Valley North Shopping Center, will end its 50-plus year run in Wenatchee Jan. 25.

It’s been owned by the Fowler family for 35 years.

“Our location has been signed over to a new tenant and with no viable space to relocate, we will be focusing our efforts into other markets,” read a statement. The Fowlers continue to operate two other Winnie’s Hallmark shops — one in Spokane and the other near Boise.

The “going out of business” sale on the 4,500-square-foot location at 1330 N. Miller St., started Nov. 26.

Paul Fowler, now 62, and his father, Wally, purchased Winnie’s Hallmark in 1983 from Bob and Connie Cutler, who had opened it in 1966, one of the original tenants in what was then an enclosed Valley North Shopping Center. Named for Connie’s aunt Winnie, the Fowlers decided to keep the name.

Wally Fowler had managed the mall’s Pay Less Drug for years and the Cutlers approached him about buying the card shop, Paul Fowler said.

The venture turned into a multi-generational family operation. Rachelle Fowler, 30, has handled the retail and product purchasing, while her dad handled bookkeeping and payroll. Her grandfather, 86, helped with banking and janitorial work. Her grandmother, Lucille, 91, did a lot of the filing and accounting but retired about four years ago.

During a construction remodel in 2000 that turned the enclosed mall into a “big box" center, Winnie’s Hallmark relocated for a year to the Harle Center, across North Miller Street from the mall.

The Fowlers operated a contract postal station in the mall store for about 15 years, until the new post office opened in 2015 on Maple Street.

The store has changed with the times.

“Hallmark used to be more of a collectible store,” Rachelle Fowler said. Now it’s more “boutiquey.” About two-thirds of the merchandise is from Hallmark, leaving the other one-third to come from elsewhere.

Technology also has changed the business, for better and for worse over the years. Electronic point of sale inventory improves purchasing decisions, while the trend toward online shopping hurt, at least at first.

“We’re seeing a trend back now. People still want to come in, to get a better connection,” Paul Fowler said.

The state’s minimum wage increase hit hard, but Alcoa’s layoffs a couple of years ago hit harder.

“We went from showing a 15 percent increase in sales in September to a 10 percent decrease in November after the layoffs were announced,” he said. “Those were all middle-class jobs that went away — that’s the heart of our customer base.”

Paul Fowler said said he is looking to open a new “roof top” somewhere in Eastern Washington, but it likely won’t be in Wenatchee.

“I don’t think the market is here to support it. That, and the occupancy costs are too high,” he said.

After agreeing to a short-term lease for reduced rent at Valley North Center, he knew he would be eventually be faced with a tough decision about the fate of the Wenatchee store. He had been keeping an eye out for an alternative suitable space, but “nothing matched up with our needs.”

The landlord, in the meantime, was looking for a long-term tenant.

This September, “he found someone who wants to put a store into this location,” Fowler said. The name of the new tenant has not yet been announced.

 

EAST WENATCHEE — A steady hum, like a million bees, fills the air outside of five warehouse-like buildings, each with its own transformer.

It doesn’t seem like much, but this is a brand new Bitcoin mining center, located near Pangborn Memorial Airport. The mining center is owned and operated by Chinese company Bitmain. Each building contains 1,620 mining machines, operating 24 hours, 365 days a year, said Jeff Stearns, Bitmain director of operations for North America. The machines are slightly bigger than a shoe box.

The building’s design is patented, including the filtration system and how the machines are placed, down to the inch, Stearns said.

The company Bitmain started in 2013 and it manufactures cryptocurrency mining machines, Stearns said. It is currently looking at expanding to about 17 locations in North America.

The company chose to build in Douglas County for several reasons including the abundance of renewable energy, cheap energy, limited chance of natural disasters and community support, he said.

The Port of Douglas County expressed enthusiasm in having Bitmain locate here, Stearn said.

What makes this Bitcoin mining operation different than other companies is a few things, Stearns said. For one the company purchased the property, instead of leasing. Also, the mining center could be switched to mine for different types of cryptocurrency other then Bitcoins.

Bitmain is also using its blockchain data centers to work on artificial intelligence, he said, which gives the company a bit more security with its broader portfolio. This center, though, is only mining Bitcoin.

The mining operation itself is very efficient, Stearn said. The sides of the building are covered in vents that can be opened or closed to allow in airflow. There is a filter on the vents to prevent large particles, such as insects, from getting inside.

The interior of the buildings contains three hallways. In the first hallway there is a water curtain that can be turned on during the summer. The air then picks up water particles that can cool down the machines. The water comes from two reservoirs beneath the buildings. In the winter the vents are closed and the warm air coming out of the machines is recirculated through the building to keep the machines warm.

The second hallway is filled with orderly rows of machines, blinking lights and a few wires. Then in the last hallway the machine’s fans can be seen.

If the machines break or start to slow down, they alert people monitoring the machines from a separate building, Stearn said. The machines can then be removed and sent to a repair shop in Malaga. The shop in Malaga will service all the block-chain centers in North America, Stearn said. 

The company is here for the long haul and believes there is a bright future ahead.

“If we didn’t see prosperity associated with an endeavor such as this, I don’t think we would be moving forward,” he said.

 

WENATCHEE — Goodfellow Bros. employees’ lunch options have expanded considerably.

The 45 or so who had been working out of offices at 1407 Walla Walla Ave. — the company’s headquarters for the past 40 years — moved in late September to the 12,000-square-foot second floor of the Metropolitan Building at 135 N. Wenatchee Ave.

They are now just a flight of steps away from downtown restaurants and access to Riverfront Park via the RiverWalk Crossing pedestrian bridge at the foot of First Street.

If they feel like staying in for lunch, no worries. The office has a full kitchen, not to mention a slew of common spaces, meeting rooms, overhead windows that bring natural light to the interior hallway and other amenities still in the works, including a shower and workout room downstairs.

“There’s space to get away from your desk and socialize a little bit,” said Chris Martin, project manager and cousin to CEO Chad Goodfellow. Martin works with Pacific Rim Land, the company’s real estate offshoot that also now has offices in the building.

Goodfellow Bros. Inc. (GBI), a fourth-generation family-owned large heavy/ civil contractor — as in building airports, bridges, roads, golf courses, parks, wastewater treatment facilities, wind and solar farms and dams — was started in 1921 in Wenatchee by Jim Goodfellow Sr. and his brothers Jack and Bert. It now has 10 offices and about 1,200 employees in four states — Hawaii, Oregon, California and Washington — but Wenatchee remains home.

“We take a lot of pride in the fact that our company was founded in Wenatchee,” said Chad Goodfellow, Jim Goodfellow Sr.’s great grandson. “We jumped at the opportunity to do something to benefit the community in a positive way; investing in the downtown corridor is a win/win for both our employees and the community.”

The new office space reflects that commitment, not only with the investment in upgrading the historic building (circa 1929), including reusing the original vertical-grain fir flooring and 2-by-14s in the design, but displayed on murals depicting to the company’s history, mission and vision.

One of those was done by Kyler Martz, a Seattle tattoo artist and illustrator who hand-drew a 1950s classic pen-and-ink style that encapsulates the company’s history.

Goodfellow declined to say how much the remodel project cost, but said it was expected to be less than the cost of building a new office — even if they could have found property.

“We started looking two or three summers ago,” Goodfellow said. “We knew we had outgrown the (former office) and were talking about different options. We actually had run out of space probably 10 years before that.”

“We had been on Walla Walla for 40 years,” he said. “It had been expanded a bunch of times. It wasn’t the most functional space. And Pacific Rim offices had been pushed out onto the Highway (97A), in a portable by Stemilt. Now everyone is back together.”

  

WENATCHEE — The number of retail jobs in Chelan and Douglas counties has dropped for the past four months, a dim spot in a humming economy with record low unemployment and a growing labor force.

Recently revised stats show it might not be quite as dim on both sides of the Columbia River, said Regional Labor Economist Don Meseck who analyzes employment and civilian labor force data for the state’s Employment Security Department.

The two counties added about 100 retail jobs in all of 2017, but when that data is separated by county, it shows Douglas County added 167 retail jobs last year, while Chelan County lost 98 retail jobs.

Those breakout stats are not yet available for 2018.

“It is likely this trend continues and that much of the recent softness in local retail is centered in Chelan County versus Douglas County,” Meseck said.

The caveat, he added, is about 75 percent of the new retail jobs are in “other retail trade,” which includes online shopping rather than “brick-and-mortar” businesses.

Statewide, the retail industry has added jobs for 97 consecutive months.

In his “Labor Area Summary” report for October, published Nov. 21, Meseck notes 300 fewer retail jobs in Chelan and Douglas counties combined from October 2017 to October 2018, a 4.8 percent drop, leaving a total of 6,000 retail jobs.

Other two-county October statistics include an unemployment rate of 3.8 percent, down from 3.9 percent last October. The number is once again noted as the lowest in month-to-month comparisons “since electronic records were implemented by our agency in 1990,” Meseck said.

The rate is up 0.5 percent from September, but still “great economic news,” he said.

The total number of nonfarm jobs rose by 900 between October 2017 and 2018, while the number of workers grew by 2,191.

“This labor force growth was quite strong, although the number of unemployed expanded by 20 during this timeframe,” Meseck said. “Encouraging news for the economy.”

Other previously noted trends continued into October as well:

 

WENATCHEE — Andrew’s Sew and Vac closed in December after eight years of business in the valley.

Owner Andrew Weaver said he and his wife Michelle were hoping to focus on their other business venture, a quilting machine manufacturer in Missouri.

They purchased the Gammill Quilting Machine Company a couple of years ago while continuing to operate the sew and vac store in Wenatchee and one of Gammill’s machine dealerships in the Northwest.

“We had three businesses going, which was way too much,” Weaver said.

Looking to downsize, he sold the machine dealership in March.

“Then we were down to two businesses and I looked for a buyer for this store,” he said. “I talked to several parties who were interested but ultimately I wasn’t able to make a deal with any of them.”

So Weaver made the decision to close the Wenatchee store.

Andrew’s Sew and Vac opened in 2010 in a much smaller space. “We just had this small space, maybe 400 square feet,” Weaver said. “It was the size of two bedrooms, basically.”

Soon they outgrew the space so they took over the floor, then the whole building. Then they moved to their current building.

“That was just crazy growth for the first couple years,” Weaver said.

And while the business is gone, the Weavers plan to stick around.

“We have Washington state licenses, our cars are plated in Washington even though they might spend more time in Missouri,” he said. “This is home, it’ll always be home.”

  

EAST WENATCHEE — The Port of Douglas County has identified Texas-based Red Team Investments as the frontrunner to take over Giga Watt’s bitcoin-mining facilities in Pangborn Industrial Park if the company doesn’t survive its Chapter 11 bankruptcy.

“The point of the whole effort is to make sure there’s productive use of that property,” Port Executive Director Lisa Parks said.

The Port began the process of terminating Giga Watt’s lease on Nov. 1 after $620,000 worth of liens were filed by an electrical company looking to recoup unpaid work done on the site in 2017.

Shortly after that the Port began looking for a potential new tenant for lots 10-12 in the industrial park, which are currently filled by Giga Watt.

The new tenant may also receive Giga Watt’s partially completed structures, depending on how the bankruptcy case is resolved.

Port officials requested business proposals from nine bitcoin and blockchain companies across the country.

The Port received five letters of intent, which were obtained independently by The Wenatchee World. They outlined each company’s ideas for completing construction and operating the site.

Red Team Investments’ letter was chosen for its thoroughness and commitment to community development, Parks said.

But the Port will not be able to make any moves with the space until Giga Watt’s bankruptcy case is resolved.

The company filed for Chapter 11 protection through the Eastern District of Washington on Nov. 19, the night before it was scheduled to have a hearing in Douglas County Superior Court with the Port.

The company listed assets of between zero and $50,000 and liabilities between $10 million and $50 million.

The next step in its case will be a creditors meeting on Jan. 9. “Bottom line there’s no guarantees of anything at this point because it is all dependent on the legal process with Giga Watt,” Parks said.

It is possible that Giga Watt is able to restructure and come out of the court proceedings ready to continue its lease, she said. In that case the Port would table its efforts to find a new tenant.

“We may be obligated to continue working with them,” Parks said. “If that’s the case then we’ll do that in good faith.”

The four other companies that sent in proposals were Bitmain, Salcido Enterprises, Columbia River Investments and Peak Digital Prospecting.

Salcido Enterprises, the only locally headquartered company that submitted a proposal, already has one bitcoin-mining facility in the industrial park.

Bitmain, a Chinese company, opened a bitcoin-mining facility on private land near the airport in November.

 

MANSON — Chelan County has received an application for an agricultural tourism resort in Manson. The proposed agricultural tourism resort, called Antheia of Chelan, would be off Griffith Ranch Road and covers about 19 acres. The property is owned by Gerry and Kim Ustanik, who also own the Mountain View Lodge at Lake Chelan.

The owners resubmitted their application on Nov. 30 to include some details requested by county planners.

The resort would be focused around glamping — glamorous camping — where people will be able to live in shed-like structures with nice amenities and experience farming, as well as other sustainable practices, said Kim Ustanik.

The resort would consist of:

The resort would be seasonal and close down for the winter, said Allisa Hei, Antheia of Chelan Vice President of Operations and the Ustanik’s daughter. It will built out in three phases and take 10 years to complete, they would like to be finished with phase one by spring of 2019. The resort will have a Mediterranean feel, Hei said.

 

WENATCHEE — New bitcoin miners in Chelan County willing to pay upfront capital costs and higher monthly rates could be in operation starting April 1.

Chelan County PUD commissioners on Dec. 3 approved the proposed cryptocurrency rate designed to reduce risk to the PUD for the energy-intensive computer use associated with blockchain and bitcoin mining.

The new rate for operations in commercial and industrial areas with available capacity will pay a little more than 6 cents a kilowatt hour (kWh). Rates for operations in residential areas, if capacity is available, will start at about 9 cents a kWh and increase to 10.5 cents/ kWh in April 2020.

Average 2017 commercial power rates by state range from more than 7 cents/kWh to nearly 27 cents/kWh, according to the federal Energy Information Administration.

Approval of the new rate comes with a partial lifting of the moratorium allowing PUD staff to start reviewing about 19 applications that have been in limbo since March, when the moratorium was placed.

The moratorium will be lifted when the new rate takes effect in April. That’s also when new applications will be accepted.

Wenatchee, Chelan, Leavenworth and Entiat are all discussing zoning for cryptocurrency miners. Some have called moratoriums on new cryptocurrency mining businesses until the zoning has been figured out.

Miners already operating legally will pay the “Schedule 35” rate for high density loads until the new rate, listed as “Schedule 36,” takes effect April 1.

A second phase of the rate, which includes a demand charge for operators in the residential areas, goes into effect April 2020.

 

WENATCHEE — Catholic Charities Housing Services recently broke ground on a $16.9 million affordable-housing facility to be located at 1545 S. Mission St.

The 67-unit complex will house families with children, people with disabilities and low-income residents, and will have an on-site manager. It will be four stories and 71,846 square feet, and have one-, two- and three-bedroom units.

Catholic Charities Housing Services received about $12.6 million through the Washington State Housing Finance Commission’s Low-Income Housing Tax Credits and $1.95 million from the state Housing Trust Fund. Chelan County committed about $724,000, to be paid over four years.

The budget also includes a private loan of $475,000 and a deferred development fee of $275,000. In addition, the project received $77,307 from the city of Wenatchee and small donations from community members.

M.C. Lundgren, ZBA Architecture and Beacon Development Group are working on the project.

 

WENATCHEE — Kerri Walker owns a small business and her husband Jason works remotely for Microsoft, but on an average day their coworkers include an architect, a filmmaker and a freight logistics manager.

It’s made possible through the coworking space model, which offers daily or monthly desk space for people who work from home or small business owners without an office.

They’re part of an exploding national trend that now has a firm foothold in Wenatchee. Six months ago the valley had zero coworking spaces. In six months time there will be three open — with capacity for more than 100 workers.

Jason and Kerri opened the valley’s first, Mission St Commons, 218 S. Mission St., in September.

Another, the Wenatchee Workspace, 1737 N. Wenatchee Ave., opened Dec. 3. J. Michael Walker — who’s not related to Kerri and Jason — decided to open one of his own by repurposing space his family owns in north Wenatchee.

A third, tentatively called The Mercantile, 12 N. Wenatchee Ave., is scheduled to open downtown in March. Jeff and Heather Ostenson partnered with Rick and Cory Wray in October to buy a 21,000 square-foot building on Wenatchee Avenue across from Cafe Mela. They plan to turn to the 9,000 square-foot main floor into a coworking and event space.

The Leavenworth Community Workspace, which opened in 2015, was the region’s only coworking space until this year.

Economic progress, cheap power and fast internet has made North Central Washington a beacon for technology job expansion over the past few years, driving the need for alternative office space, according to local developers.

Our Valley Our Future, a collaborative focused on housing and economic development, identified coworking space development as a goal in its February 2018 action plan.

It’s important to think of them as more than just a physical place to work, said Shiloh Burgess, the executive director of the Wenatchee Valley Chamber of Commerce.

“Being an entrepreneur can be a very lonely experience, so it’s creating an environment where you can go, get the work done, grow your business,” she said.

These new ventures also encourage economic growth in the area, Burgess said.

 

WENATCHEE — Confluence Health is increasing the minimum wage of its employees to $15 an hour starting Jan. 4.

The change will affect 1,200 of its employees, Confluence Health spokesperson Andrew Canning said. Its current minimum wage is set at the state minimum, which is $11.50.

About 450 of its employees will be moved up to the $15 minimum, but the company will also make changes to the wages of its employees slightly above $15.

The biggest reason for the company to make the change was to increase recruitment and retention of its employees, he said. The minimum wage in the state is also increasing to $13.50, so Confluence Health needs to stay competitive.

Confluence Health is one of Central Washington’s biggest employers with close to 4,000 employees.

 

WENATCHEE — Building permits have been issued to 220 apartment units in the Wenatchee Valley in 2018, up from 28 last year, according to the November Real Estate Snapshot published Dec. 11 by Pacific Appraisal Associates.

Housing officials are hoping the boom, which is largely due to a pair of multimillion-dollar projects, will help meet the area’s increased housing demand.

Beyond the complexes that have been permitted since last January, several more are in the early planning stages and will apply for permits soon, said city of Wenatchee Economic Development Director Steve King.

The bulk of the 2018 development can be attributed to 600 Riverside — a five-building, 144-unit addition to the Riverside 9 apartment complex in Wenatchee.

The development is valued at more than $12 million, according to city of Wenatchee permit records.

Kirkland-based Weidner Apartment Homes hasn’t announced when the new project will open, but said the Wenatchee market was a natural fit for the company.

“As a Washington based company, it was a natural progression for us to move into the Eastern Washington market,” the company said in a statement Wednesday. “After seeing the success and community engagement from Riverside 9, we are excited to provide housing in a market where there hasn’t been for a long time.”

The second-biggest development to be permitted in 2018 was Catholic Family Charities’ new $16.9 million affordable-housing development on South Mission Street and Crawford Avenue, which broke ground in November with 67 units.

The bump in units may help raise the area’s vacancy rate, which is another good indicator of supply meeting demand, King said.

Currently the rental housing vacancy rate is 2 percent, according to Pacific Appraisal Associates’ September Snapshot.

The demand for apartments has gone up as the population’s housing priorities change, King said.

“People are changing their housing types so a certain percentage of people are looking for apartments, it’s not just young kids that are renting,” he said. “People of all ages are renting apartments.”