A New Economic Development Strategy for Clallam County

Docks at Sekiu, courtesy of J. Stephen Conn.

Clallam County seems to be emerging (somewhat) from the dark woods of the Great Recession … but it is really a mixed picture. As our economic outlook has begun to brighten over the past year a big, and ongoing, conversation has been: how should government and the private sector best position themselves to encourage economic development?

A Mixed Backdrop

Our county-wide transit agency just saw its best month ever for sales tax remittances from the department of revenue. I pay close attention to this trend, since it is the only local sales tax that’s collected county-wide and has been the same 0.3% for a very long time. It’s as good as it gets for a real-time indicator of our county’s economic activity. But, and this is a big one, four sawmills have closed in the last several months too, throwing several hundred people out of work, and of course, those were good paying jobs. We have yet to see the full effect of this in our unemployment and household income statistics, but there will be a measureable impact.

My county’s economy has suffered a huge negative impact from the effects of the Spotted Owl-driven Northwest Forest Plan of several decades ago, as have many other counties. At first, and for a long time afterward, there was a lot of what I call “guilt money” showered on the affected local governments, and especially on local economic development organizations. That money has largely been withdrawn, and counties are now pretty much on their own in figuring out how to re-orient their economies and market themselves. 

Rural counties have a (mostly) small economic infrastructure fund thanks to a state sales tax credit for this purpose, but in many cases, for smaller population counties, it’s not very much money. There is also a small biennial grant from the department of commerce to local associate development organizations, but in our case, it barely pays for one staff member. 

So how do we best position ourselves for our economic future and who should be in control? In my view, economic development is an “all hands” effort. No one should sit on the sidelines in either the public sector or in the private sector. Counties with port districts that span the entire county, such as ours, arguably have a tailor-made solution, since port districts have economic development as a main mission – but there is a danger that all other area governments may simply wash their hands of involvement – and funding – since “the port will do that.”

Another problem inherent in public agencies: The Public Records Act and the Open Public Meetings Act are wonderful laws for government, but for a public-sector economic development office, can be perceived to work against the legitimate needs for businesses to keep their affairs (such as expansions and relocations) and problems (such as the need for candid management advice or help in securing financing) out of the public eye.

In our case, the local economic development council had great difficulty in transitioning from extensive federal and state funding to small amounts of local funding and very little private sector funding. The board of directors was way too big to be nimble, since all the local governments felt the need to have a representative on the board. The whole enterprise was on the verge of folding its tent, since no one had confidence in it. 

A New Strategy Emerges

After a year-plus long conversation, we finally settled on a new strategy (the first written one in a long time) that sought to answer three critical questions: (1) What business are we in? (2) What does success look like? and (3) How will we know when we get there?

The strategy seeks to capitalize on the chief economic assets of our county: a deepwater harbor, providing lots of opportunity for marine trades and water related business to flourish; abundant natural resources (trees, agricultural lands, and fisheries); industrially zoned lands for advanced manufacturing of the “low volume, high value” sort; and great places to play, supporting a vibrant tourism industry. For more information see: Strategic Direction 2014 – 2018, Clallam County Economic Development Council, August, 2014.

We also decided to go with a much smaller private-sector-majority board to address the nimbleness issue. Finally, we established a two-and-a half year probationary period to see if a countywide, non-profit corporation with a combination of mostly local public funding and mostly private sector management will prove to be a workable model. 

The ultimate goal is for the majority of funding for this organization to come from private sources. We’ll see.  So far, so good, but major tests of our collective ability to achieve boot-strap economic improvement are yet to come. I fervently hope we will be able to meet and overcome them.