The Oregon Biz Report - Business News from Oregon

Howard Schultz, Starbucks Release:  I want to acknowledge from the outset some of the difficulty that many of you may be experiencing given the tough operating environment we are facing.  But let me assure you that there has been a relentless focus on making the decisions necessary to put us all in a position to win.  Unfortunately, some of the decisions will result in not only store closures, which we announced earlier this month, but a restructuring of our organization that will eliminate some positions.  Although I, along with the leadership team, made the hard choices to close stores and reduce the number of positions, which will result in loss of jobs, ultimately, I feel that they rest with me.  I fully understand the seriousness of these actions and the concerns you may have, but please be assured that we will treat all departing and remaining partners with respect and dignity.

Below is the summary from teh Portland City Auditor’s Report “HOUSING TAX ABATEMENTS: Oversight inadequate to ensure program goals”
The City’s current tax abatement programs have evolving goals, incomplete reporting and monitoring, and poor verification of either the overall social goals or the specific project benefits that the pro¬grams were designed to provide. The City of Portland exempts some condominium, house, and apartment owners from paying property taxes as an incentive for providing certain public benefits. In this audit, we reviewed three of the City’s tax abatement programs: (1) New Multi-Unit Housing, (2) Transit Oriented Development, and (3) Single Family New Construc¬tion. These programs exempt the value of new housing construction from property taxes, in exchange for providing public benefits such as building new housing in distressed neighborhoods, or providing transit-friendly development.

PORTLAND, Ore.–(BUSINESS WIRE)–Integra Telecom Inc., a facilities-based, integrated communications carrier for business, released the following statement regarding the Federal Communications Commission’s (FCC) decision to deny Qwest Corporation’s petition for forbearance: “Integra Telecom applauds the FCC’s decision to deny Qwest Corporation’s petition for forbearance,” said Dudley Slater, CEO of Integra Telecom Inc. “The commission rightly concluded that the incumbent’s petition was unwarranted, unproven, and would harm consumers and the competitive marketplace.”

By Dr. Eric Fruits, Econinternational

Eric Fruits was invited by Oregon’s Revenue Restructuring Task Force to compare Oregon’s state and local government expenditures with other states. In his presentation, Dr. Fruits reported that:

Oregon’s per capita state and local expenditures almost doubled between the 1998-99 fiscal year and the 2004-05 fiscal year.  The most recent data from the Census shows expenditures of $8,060 per person.

From Oregon Small Business Administration,

Small Business Person of the Year Susan Webb, President, Glass Alchemy, Ltd. The Premier Manufacturer of Borosilicate Art Glass. Small Business Administration Oregon District Director, Harry DeWolf, announces that Susan Webb, President of Glass Alchemy, Ltd., is the SBA 2008 Small Business Person of the Year for the state of Oregon. Awards will also be given to a family-owned business, to small business Champions, and an excellence and innovation award will be given to a small business development center. “For more than 40 years, SBA has recognized outstanding small business owners for their contributions to Oregon’s economy and for their personal achievements during small business week. I am proud to honor our top Oregon entrepreneurs and our true champions of small business whose tireless efforts have provided tangible and significant support to small businesses and their communities,” said SBA District Director, Harry DeWolf.

By Eye on Business, Portland

A New York man was sentenced to more than two years in prison for sending out over 1.2 million spam emails.  Adam Vitale was also fined $180,000.  This judgment is a relief for business in more ways than the obvious reduction of junk emails.  Advanced blocking programs have successfully reduced junk emails but have created a new problem of legitimate emails being labeled as spam when they are not.  This creates an entirely new problem.  It has been stated that dealing with spam and misplaced emails contributes to millions of worker hours lost every year.  I was humored when Bill gates said last year that he is just like the rest of us in that he spends hours every year getting rid of junk emails.

From Portland Business Alliance,

Portland, Ore. – Downtown Portland continues to add businesses and jobs according to the seventh annual Downtown Business Census and Survey conducted by the Portland Business Alliance on behalf of Portland Downtown Services, Inc. (PDSI). Thirty-six more businesses opened their doors in 2007 for a total of 4,198 businesses and 1,434 more employees are now working downtown, according to survey results.

From Dr. Eric Fruits,

EconInternational

A recent LNG terminal building boom has, in turn, produced a natural gas pipeline building boom.  Terminals bring in shipments of liquefied natural gas (LNG).  Through a regasification process, the LNG is changed back into gaseous natural gas.  Pipelines transmit the natural gas (in gas, not liquid, form) from terminals to end users and to other pipelines.

From Economist Dr. Bill Conerly, Conerly Consulting, Businomics.

Knowledge @ Wharton has an interesting article about the growing middle class in emerging countries.  If you sell overseas, or you could sell overseas, make sure you’re up to date on the trend, described in the early part of the article.

There will certainly be challenges in this market.  One point mentioned is price. The new middle class in China and India have less income than the middle class in the Western world.  So they will make discretionary purchases, they will learn to favor certain brands, but their lower incomes will make them more price sensitive than Western consumers are.

Moore Insight, Moore Information

 General election match ups in Washington State reveal Barack Obama leading John McCain by 10 points in the presidential race, while the gubernatorial race is a statistical dead heat today. The following charts show results for both of these races.

Seattle, WA: Today several regional organizations announced the formation of the Pacific Technology Alliance (PacTech).  “PacTech is a grassroots, technology association that will be active in Oregon, Washington, Idaho, Montana and Hawaii” said Tom Gurr, PacTech’s Executive Director.  “PacTech is working to keep consumers and policy-makers educated and informed about the major emerging communications and technology-related issues that impact consumer’s lives” Gurr continued.

Northwest Airlines Announces Personnel Reductions and Added Fees to Help Offset Record Fuel Costs.  NWA Matches Competitors with Fees for 1st Checked Bag, Frequent Flier Award Tickets, and Ticket Changes

EAGAN, Minn. (July 9, 2008)  Northwest Airlines (NYSE: NWA) today announced it will reduce its frontline and management employees by 2,500 as a result of capacity reductions taken to address the unprecedented run-up in oil prices. In addition, NWA will match its competitors and charge fees for the first checked bag and for frequent flier award tickets, and increase the fees for ticket changes.  “Our fuel costs have more than doubled in the past year,” said Doug Steenland, President and CEO of Northwest Airlines. “In order to manage through this unprecedented fuel challenge, we have to take action to both control costs and increase our revenue.”

From Oregon Chapter of National Federation of Independent Business,

Though President Bush already expanded the Family Medical Leave Act earlier this year, the burdensome regulation has been rearing its head in Washington and in several states recently.  Signed into law in 1993, the Family Medical Leave Act mandates companies with 50 or more employees provide their workers with 12 weeks of unpaid leave for situations like individual and family illnesses, adoption and maternity leave. In January, President Bush expanded the act for the first time in 15 years to provide for two new types of military FMLA leave.

From Guest Opinion,

Today’s headline read “New bridge just pushes congestion into future” And “Critics say it’s not a sound investment”.  Issues are being raised over expanding the Interstate bridge over the Columbia River.  Some say it is too much money for a project that will only buy a short amount for traffic relief.  Others say light rail is the answer and some were quoted today as saying it is an Oregon-only problem. 

From Oregon Association of Realtors Home Foundation,

Salem, Oregon- July 3, 2008 – The Oregon Association of REALTORS® HOME Foundation seeks applicants for its 2008 affordable housing grants. Following the success of its first charity gala, “A Taste of Portland,” at the Oregon Golf Club in June, the foundation will be able to provide more grants to organizations throughout the state dedicated to affordable housing.

From Oregon Entrepreneurial Network,

The statewide entrepreneurial community’s biggest gathering of the year will be the 2008 OEN Tom Holce Awards for Entrepreneurship – the 15th annual celebration of entrepreneurial spirit in action throughout Oregon and Southwest Washington. Nominate an outstanding company or individual entrepreneur by April 4th, and help us recognize the best and brightest of Oregon’s entrepreneurs.

By Bill Conerly, Conerly Consulting LLC, Businomics Blog,

Oops, Wall Street got another industry wrong. After proclaiming that casinos were recession-proof, they’ve recently learned just the opposite. Here’s what one mutual fund manager said before the downturn:

“Gaming stocks perform much more like consumer staples than consumer discretionaries. When you look at the long run, people are going to gamble no matter what.” – Dan Ahrens

Here’s what happened to gaming industry stock prices:

Portland based Schnitzer Steel Industries, Inc. announced third quarter revenue up by 37% (year to year), this is an increase by $62 million. Revenues of $972 million was a quarterly record. Schnitzer Steel’s Executive Officer commented in their press release: “We are pleased to report the strongest quarterly financial results in the Company’s history, as each of our three operating divisions posted record revenues and operating income,” said John D. Carter, President and Chief Executive Officer. “Global demand for recycled metals remained robust, driven by economic growth in developing countries. In the Metals Recycling Business, our worldwide market visibility and flexibility to sell both domestically and internationally allowed us to take advantage of strong markets and significantly expand margins and operating income.”