Economic Trends and Conditions Summary Report Island County Economic Development Element
March 2020
Prepared for:
Island County
Prepared by:
Island County Planning & Development Island County Economic Trends & Conditions Report
Community Attributes Inc. tells data-rich stories about communities that are important to decision makers.
President and CEO Chris Mefford, AICP
Project Manager Kristina Gallant, AICP
Analysts Eliza Brower Madalina Calen Nancy Eklund, AICP Michaela Jellicoe Bryan Lobel Zack Tarhouni Elliot Weiss, AICP
Community Attributes Inc. 500 Union Street, Suite 200 Seattle, WA 98101
www.communityattributes.com
Island County Economic Trends & Conditions Report
Contents
Introduction ...... 4
Demographic and Economic Profile ...... 5 Demographic and Socioeconomic Characteristics ...... 7 Labor Force Characteristics and Trends ...... 18 Employers and Industries ...... 26
Land and Infrastructure Availability ...... 41 Land Availability ...... 41 Infrastructure ...... 45
Economic Development Opportunities ...... 51 Existing & Potential Funding Mechanisms ...... 51 Economic Resiliency & Diversification ...... 52 Business & Industry Growth ...... 51 Regulations & Policies for Economic Development ...... 54
Appendix: Planning and Regulatory Context ...... 59 Washington State Growth Management Act ...... 59 Island County Comprehensive Plan ...... 59 Island County Countywide Planning Policies ...... 60 Island County Urban Growth Areas & Rural Areas of Intensive Development ...... 61 Other Economic Development Plans, Districts, and Organizations ...... 62
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Introduction
Background and Purpose Island County is creating an economic development element for the Island County Comprehensive Plan. The goal is to prepare an element that is well-informed by data and tailored to Island County’s unique opportunities and challenges. The Element will also include goals specific to the seven transportation gateways identified by the County for further analysis.
The purpose of this report is to provide data and analysis to serve as the foundation for further work on economic development of Island County.
Methods This report relies on secondary data analysis, including reviewing existing plans and reports. Most data are provided at the County-wide level, reflecting the County’s jurisdiction. Where possible with available data, the report also summarizes data at the planning area level. In addition to this report, the Economic Development Element will be informed by stakeholder interviews, a property owner survey, and a dedicated Gateway Analysis. Support for this analysis includes the following data sources: • American Community Survey • Washington State Office of Financial Management • Washington State Employment Security Department • U.S. Bureau of Labor Statistics • U.S. Department of Agriculture
Organization of this Report This report includes the following sections:
• Demographic and Economic Profile: Data and analysis on Island County’s population, households, income, employment, and businesses. • Land and Infrastructure Availability: Analysis on Island County’s commercial land and infrastructure. • Economic Development Opportunities: Identifies opportunities for economic development that are well-suited to Island County’s attributes and goals. • Appendix: Planning and Regulatory Context: Reviews important planning documents with implications for the economic development element.
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Demographic and Economic Profile
Key Findings
Demographic and Socioeconomic Characteristics • Island County population is growing steadily, but more slowly than the state overall. Its average annual population growth from 1990 to 2017 was 1.2%, lower than the 1.5% growth observed for the state over the same period (Exhibit 1). The population data do not include part-time residents with vacation homes in the county, which may be significant. • Of the County’s four planning areas – Camano Island, North Whidbey, Central Whidbey, and South Whidbey – North Whidbey is the most populous, due to the presence of the largest urban growth area in the County. North Whidbey also has a higher share of young adults and children compared to the other three areas, largely influenced by the presence of the Navy base. (Exhibit 5) • In recent years, South Whidbey’s population has been stable or slightly declining. Central Whidbey has seen the most rapid growth, while North Whidbey has added the greatest number of people. Camano Island’s population has also been increasing, but supporting economic growth on Camano Island will be more challenging as there are no urban growth areas on the island and limited services in many areas of the island. (Exhibit 7) • Island County has a relatively smaller share of residents in workforce groups. Much of the County’s recent growth has been composed of older adults. Today, 35% of residents are over 60, compared to 22% Statewide. This age cohort has accounted for 78% of Countywide population growth since 1990, compared to 35% statewide. Older residents present consumer market opportunities and increased need for services, where ages 20 to 60 represent workforce age cohorts. (Exhibit 4) • Households in Island County’s rural areas tend to have higher median household incomes than those in and around the County’s incorporated cities. The cost of living, particularly for housing, has been reported as a growing challenge for local residents and businesses (Exhibit 13). The demand for housing in and near Island County’s cities and commercial centers is an important indicator of momentum and development interest (for further exploration).
Labor Force Characteristics and Trends • The recession had a lasting impact on employment in Island County. The County experienced deeper job losses compared to the State, and its recovery began several years later. The local employment growth rate caught pace with the State beginning in 2016. (Exhibit 15) • Island County residents are generally well-educated, and more likely to have completed some higher education compared to neighboring counties. The
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distribution varies by age and location within the County, however. While Camano Island is attracting well-educated young adults, South Whidbey’s young adults are the least likely to have a degree despite being the best- educated planning area overall. (Exhibits 18-20) • More than half of employed residents commute out of Island County, most to King or Snohomish County. The distribution of destination varies by geographic area. (Exhibits 21-27). This presents both an opportunity to tap into that talent for businesses in the county, as well as a challenge to compete with employers outside of the county.
Employers and Industries • Island County’s largest employer is Naval Air Station Whidbey Island. The installation employs 7,050 military personnel and 2,400 civilian and contract employees and has an estimated economic impact of $1.04 billion in Island and Skagit Counties. • Most civilian jobs in Island County are in local government, health care, and education, followed closely by arts, entertainment and hospitality. (Exhibit 30). • The 2017 average annual wage paid by jobs in Island County was $40,200, well below the state average of $66,200 (Exhibit 29). Increasing wage levels requires strategies that include business expansion, entrepreneurial supports and business recruitment. • Agriculture remains an important part of the Island County economy, through both direct impacts (agricultural sales) and indirect impacts (boosting rural character and rural-dependent sectors and tourism).
Strategic & Planning Implications • These trends suggest that county growth is currently characterized by older adults moving into the county. This population appears to bring higher incomes and locate in rural areas. Rural residents are able to drive to commercial centers both on and off the island to meet their service and household needs. This is contrasted with the County’s cities and towns, which tend to attract households with lower ages, but also lower incomes. In Langley, according to ACS 5-Year Estimates, the population under 18 increased by 61% from 2010 to 2017. Children now represent 20% of the population, up from 15.5% in 2010. • Strategically, for economic development, this implies that the challenge for economic growth includes attracting and retaining working age adults (20 to 60 years old) to fuel business activity.
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Demographic and Socioeconomic Characteristics
Population Island County’s population grew from about 60,000 residents in 1990 to about 83,000 residents in 2017. This represents a 37.5% increase in population and a 1.2% compound annual growth rate (CAGR), which is less than the state’s population growth of 1.5%.
Exhibit 1 illustrates this population growth along with Island County’s adopted 2036 projection. The State Office of Financial Management (OFM) develops low, medium, and high growth projections for counties. Under OFM’s low growth scenario for Island County, it would actually lose population over time. This could be due to its large share of older adults, and the deep impact of the recession. Conversely, the high scenario would represent a significant increase in population growth over what has been seen in recent decades.
In 2016, Island County adopted 87,917 as its 2036 population projection for comprehensive planning, based on OFM projections and their own analysis of past growth trends. This number is lower than the 2017 OFM medium projection for 2036 (92,639) but would still require accommodating an additional 5,167 new residents between 2018 and 2036.
Exhibit 1. Past and Projected Population Growth, Island County, 1990 – 2036
Sources: Washington State Office of Financial Management, 2019; Community Attributes Inc., 2019.
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The majority of Island County is rural, with only three incorporated jurisdictions (Oak Harbor, Coupeville and Langley). Exhibit 2 illustrates population growth in these communities from 1990-2018. Throughout this period, Oak Harbor remained the largest population center in the County by a wide margin, with almost 23,000 residents in 2018. Langley and Coupeville grew more rapidly, with each growing at 1.2% annually, compared to 1.0% average annual growth in Oak Harbor. Growth patterns have been varied over the years. Oak Harbor is heavily impacted by staffing changes at the base, and has experienced stronger growth from 2002-2009, 2.3% on average, but has averaged 0.4% per year since 2011. Coupeville experienced a similar trend, while Langley has been growing more rapidly in recent years.
Exhibit 2. Population of Island County Cities and Towns, 1990- 2018
25,000 0.4% 22,500 2.3% Oak Harbor 22,780 20,000
17,500 17,176 15,000 12,500 10,000 7,500 5,000 1,905 1.4% 0.4% 1,175 2,500 1,377 Coupeville Langley - 845 1.4% 1.7%
Source: Washington State Office of Financial Management, 2019.
The majority (69%) of Island County residents live outside the County’s three incorporated cities. This includes several unincorporated yet concentrated communities in Rural Areas of Intense Development (RAIDs), including Freeland and Clinton.
The following exhibits compare Island County to a selection of neighboring counties to provide regional context. Exhibit 3 provides a segmentation of residents by age for Island County and the broader region. The largest segment of Island County residents is aged 35 to 59, followed by the 60 to 74 age segment. Almost 60% of all Island County residents are 35 or older, and one third of the population is over 60. San Juan County has a much higher share of older residents than Island County, but otherwise Island County has a high share of older adults relative to the region. The age composition of a community is an important factor in economic development in that it provides information about the available local workforce and the specific service needs of the community.
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Exhibit 3. Population Age Characteristics, Island County and Comparison Geographies, 2017
Sources: US Census Bureau, American Community Survey, 2017 5-Year Estimates; Community Attributes Inc., 2019.
Exhibit 4 shows how Island County’s age composition changed from 1990 to 2018. During that time, the segment of people 60 years old and older grew more than any other age segment, accounting for 78% of total population growth. The proportion of children in the County population has declined from 28% in 1990 to approximately 21% in 2018. In absolute terms, the number of children in Island County rose from 1990 to 2000, peaking at 19,953 in 2000. The total has been steadily dropping since that time, and was 17,676 in 2018. This is still higher than the 1990 total of 17,009.
Exhibit 4. Population and Age Cohorts, Island County, 1990 – 2018
Sources: Washington State Office of Financial Management, 2019; Community Attributes Inc., 2019.
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Island County has established four Planning Areas: Camano Island, North Whidbey, Central Whidbey, and South Whidbey. North Whidbey Island is the most populous area, and also features the highest number and proportion of children and young adults. The other three areas have a much higher proportion of older adults (age 60 and above), ranging from 39% of Camano to 45% of Central Whidbey. Approximately 20% of North Whidbey residents are in the older cohort, and while this is the lowest percentage, at 8,000 persons this represents the highest absolute concentration of older adults. (Exhibit 5)
Exhibit 5. Population and Age Cohorts, Island County Planning Areas, 2017
Sources: Washington State Office of Financial Management, 2019; Community Attributes Inc., 2019.
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Exhibit 6. Population Density, Island County, 2018
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Exhibit 7 shows how the population by planning area has been changing in recent years. Central Whidbey grew by 4.9% from 2011 to 2017, the largest percentage increase, while North Whidbey added the largest number of people. When looking at recent years (2011 to 2017), however, Central Whidbey has lost population and South Whidbey population has remained steady, compared to North Whidbey and Camano population growth (700 and 800 residents respectively). This demonstrates that growth is not linear, can include annual losses, and is very uneven across planning areas. (Note: there is variation in totals between Exhibits 5 and 6 due to rounding.)
Exhibit 7. Population by Planning Area, 2011-2017
Sources: US Census Bureau, American Community Survey 2011, 2014, & 2017 5-Year Estimates; Community Attributes Inc., 2019
In terms of racial diversity, Island County is generally comparable to the other counties examined and slightly less diverse than the State of Washington population. The majority (85%) of Island County residents are Caucasian (Exhibit 8). The comparison counties are also majority-Caucasian, ranging between 77% (Snohomish County) and 93% (San Juan County) of residents. Statewide, approximately 77% of residents are Caucasian.
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Exhibit 8. Population by Race, Island County and Comparisons, 2017
Sources: US Census Bureau, American Community Survey, 2017 5-Year Estimates; Community Attributes Inc., 2019.
Island County is becoming more ethnically diverse. Its minority population accounted for 61% of total population growth from 2000 to 2017. Island County’s Hispanic population more than doubled during this period. As of 2017, approximately 7.1% of Island County residents are of Hispanic origin, up from 4% in 2000. This is the fastest growing segment of the County’s population, and represents 33% of the total population growth from 2000. There has also been significant growth in the Black and Asian communities in Island County, as well as a growing number of those responding of two or more races. Coupeville and Oak Harbor are more ethnically diverse than the Island County average, with the Hispanic and Latino population making up 17.0% and 11.6% of the total, respectively. (Exhibit 9)
Exhibit 9. Change in Island County Diversity, 2000 – 2017 Population Change, 2000 2010 2017 2000-2017 Total Population 71,558 78,506 80,323 8,765 12%
Total Minority Population 10,629 13,131 15,980 5,351 50% Hispanic (any race) 2,843 4,242 5,733 2,890 102% Black or African American 1,634 1,520 2,505 871 53% American Indian and Alaska Native 639 503 867 228 36% Asian 2,941 3,173 3,620 679 23% Native Hawaiian and Other Pacific Islander 291 371 278 -13 -4% Some other race 159 183 169 10 6% Two or more races 2,122 3,139 2,808 686 32%
Sources: U.S. Census Bureau, 2000 and 2010 Decennial Census and American Community Survey, 2017 5-Year Estimates
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Income Household income, as a measure of economic performance, is important to consider in the context of economic development. Generally, an economic development strategy will aim to increase incomes and decrease income inequality. Exhibit 10 compares household incomes in Island County to several neighboring and comparison counties. Of all Island County households, 17% earn less than $25,000 annually, and 10% earn more than $150,000 annually. Of all counties included in the comparison, Island County’s household income is most similar to Skagit County, where the median income is $59,263, compared to $61,516 in Island County. The median income Statewide is higher, at $66,174.
Exhibit 10. Household Income, Island County and Comparison Geographies, 2017
Median $61,516 $60,271 $68,336 $59,263 $78,020 $56,419 Income Sources: US Census Bureau, American Community Survey, 2017 5-Year Estimates; Community Attributes Inc., 2019.
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Exhibit 12. Income by Planning Area, 2017 Camano North Whidbey Central Whidbey South Whidbey 98239 98253 98236 98249 98260 98282 98277 & 98278 (Coupeville) (Greenbank) (Clinton) (Freeland) (Langley) Median household income $74,221 $54,690 $64,412 $60,132 $67,594 $59,935 $63,613 Per capita income $40,269 $28,127 $37,714 $38,943 $39,479 $42,152 $39,629
Source: US Census Bureau, American Community Survey, 2017 5-Year Estimates
Exhibit 11 compares income across Planning Areas and Exhibit 12 illustrates the spatial distribution of median household income throughout Island County by US Census Bureau block group. Camano Island enjoys the highest median incomes, which may be due in part to Camano’s more direct access to mainland jobs that pay higher wages, and North Whidbey the lowest median incomes. The map indicates that rural areas have higher median household incomes, while areas in and around the County’s incorporated cities have lower median household incomes with the exception of a few pockets of high incomes in the Coupeville area and in the southwest section of the North Whidbey Planning Area.
Census data does not include characteristics for members of the military, so while the parts of North Whidbey that show comparatively low incomes correspond to the location of NAS Whidbey, that data may be misleading.
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Exhibit 13. Median Household Income by Block Group, Island County, 2017
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Poverty and Cost of Living There are households facing economic hardship in Island County. According to 2017 American Community Survey 5-year estimates, 9.5% of the population is living in poverty. In Island County this challenge is currently concentrated most in families, rather than older adults – 14.3% of children under 18 are living in poverty, compared to 3.8% of people age 65 and above.
Poverty rates vary widely across the county, with the North Whidbey area having the highest poverty rate and the Clinton area with the lowest poverty rate. (Exhibit 14) The lower poverty rates in the Clinton area and on Camano may be a reflection of the easier access to higher paying jobs off-island.
Exhibit 14. Poverty Level by Planning Area, 2017 Camano North Whidbey Central Whidbey South Whidbey 98239 98253 98236 98249 98260 98282 98277 & 98278 (Coupeville) (Greenbank) (Clinton) (Freeland) (Langley) All people 6.1% 12.2% 8.5% 10.4% 4.8% 7.9% 8.5% Under 18 years 6.2% 18.5% 14.7% 0.0% 4.8% 8.8% 12.2% 65 years and over 3.6% 4.3% 4.8% 2.5% 0.5% 3.5% 4.6%
Source: US Census Bureau, American Community Survey, 2017 5-Year Estimates
The median cost of housing among Washington Counties has increased significantly in recent years, with home prices in most Counties now between $150,000 and $350,000. In the Central Puget Sound those costs are significantly higher, including Island County where a typical 2017 home value was estimated to be slightly over $400,0001.
In 2017, 48.2% of Island County’s renters and 38.6% of its homeowners with a mortgage were considered cost burdened. This means that they spend more than 30% of their income on housing costs. The cost of housing can be a concern if it deters new workers and businesses from locating in the area.
1 “Q3 2018 County Median Home Prices by State and County”, National Association of Realtors, 2019.
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Labor Force Characteristics and Trends
Total Employment Island County was hit harder by the recession than other areas in Washington State. As shown in Exhibit 15, Island County lost an estimated 1,600 jobs from 2007 to 2013, around 10% of the peak total. By comparison, Washington State lost approximately 5% of its employment from 2008 to 2010. Island County’s employment began to recover from the recession in 2015, and exceeded the pre- recession peak in 2018. According to the Washington Employment Security Department, 2016 was the first year that local employment once again grew at a similar rate to the state overall.
Exhibit 15. Civilian Non-Farm Employment, Island County, 2000-2018
Sources: Washington State Employment Security Department, Nonagricultural Wage and Salary Employment, 2019. Note: These data exclude active duty military and some agricultural workers. Employment totals vary by data source.
Unemployment As of January 2020, Island County had a civilian labor force of 37,483 persons and an unemployment rate of 5.0%. Island County currently has the ninth lowest unemployment rate of Washington’s 39 counties. Neighboring King and Snohomish counties have the lowest rates in the state, at 2.7% and 3.1%, respectively. San Juan County is comparable at 4.8%, while Skagit has 6.2% unemployment.2
According to American Community Survey estimates from 2017, unemployment is uneven throughout the County, with the highest unemployment rate in North
2 Washington State Employment Security Department, January 2020.
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Whidbey.3 The areas with the lowest unemployment rates are the Greenbank area and the Clinton area (2.0% and 2.4% respectively). The reasons for these low rates are different for each location. Greenbank has a very small, adequately employed workforce and Clinton enjoys easy access to jobs both on- and off-island. (Exhibit 16)
Exhibit 16. Unemployment by Island County Planning Area, 2017 Camano North Whidbey Central Whidbey South Whidbey 98239 98253 98236 98249 98260 98282 98277 & 98278 (Coupeville) (Greenbank) (Clinton) (Freeland) (Langley) Unemployment Rate 7.3% 7.7% 7.0% 2.0% 2.4% 6.7% 4.7%
Source: US Census Bureau, American Community Survey, 2017 5-Year Estimates
According to American Community Survey (ACS) 2017 5-year estimates, 41% of the population over 16 are not currently in the labor force. This is influenced by the area’s high retiree population (31% of Island County households have retirement income). This could also reflect a lack of employment opportunities for military spouses. Island County’s workforce participation rate is lower than its neighbors, except San Juan County. Island County also has the highest unemployment rate of this group, according to ACS estimates.
Exhibit 17. Workforce Summary, Island County and Neighbors, 2017 San Juan Skagit Snohomish Whatcom Island County Kitsap County County County County County Population Age 16 and Older 66,900 211,200 14,300 97,700 614,800 175,200 In Work Force 39,600 59% 130,900 62% 8,000 56% 58,300 60% 415,600 68% 110,400 63% Unemployed 2,700 6.7% 7,500 5.7% 300 4.0% 3,700 6.4% 22,400 5.4% 7,500 6.8%
Source: US Census Bureau, American Community Survey, 2017 5-Year Estimates
Military Personnel According to Naval Air Station Whidbey Island’s November 2018 Economic Impact Assessment, 9,078 people are employed on the installation (approximately 75% military personnel and 25% civilian and contractor support personnel) who live in either Island or Skagit counties, with a total payroll of $547.5 million. In 2018, 50% of the wages in Island County were paid by NAS Whidbey, down from 68% in 2004. This indicates a healthy diversification of job sectors in the County, a key facet of economic resiliency.
In addition to being Island County’s largest employer, the installation generated an estimated economic impact of $1.04 billion in 2017 in Island and Skagit Counties.
3 The American Community Survey 2017 5-Year Estimates are the most recent estimates available at geographies smaller than the County level.
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Educational Attainment An educated workforce is a critical asset for economic development. Thirty-two percent of Island County residents (age 25 or older) hold a bachelor’s degree or higher, and 72% have completed, at a minimum, some college coursework, while five percent have not graduated from high school (Exhibit 18). This compares favorably to the selected comparison counties (Skagit, Snohomish and Whatcom), where 9%- 11% of residents have not completed high school and 62%-67% have completed some college.
Exhibit 18. Educational Attainment, Island County and Region, 2017
Population 25 Years and Over 100% Bachelor's 90% degree or higher 32% 31% 28% 80% 36% 70% Some college or associate's 60% degree 34% 34% 50% 40% 31% 40% High school graduate, GED, 30% or alternative 28% 20% 26% 25% 23% 10% Less than high 9% 11% 9% school graduate 0% 5% Island Skagit Snohomish Whatcom County County County County Source: US Census Bureau, American Community Survey 2017 5-Year Estimates.
Within Island County, educational attainment varies by planning area and by age. (Exhibit 19-20) Throughout the County, those above age 65 are more likely to have a bachelor’s degree or higher compared to the “workforce population” as a whole. (Those age 25-64) While South Whidbey has the highest population share with a degree, there are significant disparities by age. South Whidbey’s adults age 25-34 are the least likely to have a degree out of any age group or planning area, while its adults over 65 are the most likely to have a degree. Central Whidbey shows similar trends, but with less of a gap between younger and older adults. Camano Island is unique in that its young adults have a higher educational attainment than those age 35-64. This suggests that young professionals may now be moving to the area relatively early in their careers. North Whidbey residents are the least likely to have a degree, but the absolute number of residents with degrees is higher than any other planning area.
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Exhibit 19. Population with Bachelors Degree or Higher by Planning Area,Island County, 2017
Camano North Whidbey Central Whidbey South Whidbey Share of population with a bachelor's degree or higher 25 to 34 years 34.3% 23.1% 24.2% 18.1% 35 to 44 years 27.2% 26.3% 29.2% 43.2% 45 to 64 years 28.6% 22.2% 42.8% 40.6% 65 years and over 42.6% 30.8% 42.1% 48.3%
Workforce population (Age 25-64) 29.3% 23.5% 36.8% 37.4%
Total population over age 25 34.2% 25.2% 39.0% 41.5%
Source: US Census Bureau, American Community Survey 2017 5-Year Estimates.
Exhibit 20. Educational Attainment by Planning Area, Population Over 25, Island County, 2017
Source: US Census Bureau, American Community Survey 2017 5-Year Estimates.
Journey to Work In 2017, forty-two percent of Island County’s employed residents also worked in Island County, while the remaining 58% percent worked in other counties throughout Washington. The most common commute destinations for Island County workers were King County (20%), Snohomish County (16%) and Skagit County (9%). Every day, around 21,700 Island County residents are leaving the county for work, and 5,100 people are coming into the County for work from somewhere else. (Exhibit 21) Island County’s share of residents living and working in-County is low
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relative to most of its neighbors, though Snohomish County exports a large number of workers to King County, despite being an employment center in its own right. In all of these estimates, LEHD totals have been adjusted to include estimated military employment according to ACS estimates. (Exhibit 22)
Exhibit 21. County of Employment for Island County Residents, 2017 County of Employment Employees Island County, WA 15,629 42% King County, WA 7,305 20% Snohomish County, WA 6,148 16% Skagit County, WA 3,203 9% Whatcom County, WA 1,276 3% Pierce County, WA 769 2% Kitsap County, WA 575 2% Thurston County, WA 357 1% Clallam County, WA 235 1% Spokane County, WA 221 1% All Other Counties 1,565 4% Total Employed Residents 37,282 Island County Population 82,790 Share of Employed Residents 46% Sources: US Census Bureau, Longitudinal Employer-Household Dynamics, OnTheMap, 2017; US Census Bureau, American Community Survey, 2017 5- Year Estimates; Community Attributes Inc., 2020.
Exhibit 22. Share of Employed Residents Working in Home County, 2017
Sources: US Census Bureau, Longitudinal Employer-Household Dynamics, OnTheMap, 2017; US Census Bureau, American Community Survey, 2017 5- Year Estimates; Community Attributes Inc., 2020.
Most people who work in Island County (70%) are also residents (Exhibit 23). The most common places of residence for those who commute into Island County are King County (8%), Snohomish County (6%), and Skagit County (4%).
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Exhibit 23. County of Residence for Island County Workers, 2017 County of Residence Employees Island County, WA 11,576 70% King County, WA 1,289 8% Snohomish County, WA 987 6% Skagit County, WA 655 4% Whatcom County, WA 446 3% Pierce County, WA 327 2% Kitsap County, WA 237 1% Thurston County, WA 181 1% Clallam County, WA 147 1% Spokane County, WA 120 1% All Other Counties 685 4% Total Jobs in Island County 16,650 Sources: US Census Bureau, Longitudinal Employer-Household Dynamics, OnTheMap, 2017; Washington State Employment Security Department, 2015; Community Attributes Inc., 2019.
Island County workers’ commute characteristics vary by geography. In evaluating data from the County’s four planning areas, employed Camano residents are most likely to commute to Everett and Seattle. There is anecdotal evidence that many work at Boeing facilities in Everett, which may be further supported by Camano’s higher median household income (Exhibit 10). No locations on Whidbey Island make the top list of commute destinations for Camano residents. More than half of people employed on Camano Island also live there. (Exhibit 24)
Exhibit 24. Commute Characteristics, Camano Island, 2017 Where Residents Work Where Workers Live Count Share Count Share Everett, WA 808 11.8% Camano, WA 451 51.0% Seattle, WA 735 10.7% Stanwood, WA 33 3.7% Stanwood, WA 592 8.7% Marysville, WA 27 3.1% Camano, WA 451 6.6% Mount Vernon, WA 26 2.9% Mount Vernon, WA 281 4.1% Arlington, WA 21 2.4% Marysville, WA 255 3.7% Everett, WA 20 2.3% Arlington, WA 250 3.7% Seattle, WA 16 1.8% Bellevue, WA 203 3.0% Bellingham, WA 9 1.0% Renton, WA 156 2.3% Lake Goodwin, WA 9 1.0% Burlington, WA 131 1.9% Lake Stevens, WA 8 0.9% All Other Locations 2,981 43.6% All Other Locations 265 29.9%
Sources: US Census Bureau, Longitudinal Employer-Household Dynamics, OnTheMap, 2017; Community Attributes Inc., 2019.
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In North Whidbey Island, people are more likely to live and work locally in Oak Harbor than in other planning areas. The remaining North Whidbey commuters disperse to a wide variety of destinations located to the north and south. (Exhibit 25)
Exhibit 25. Commute Characteristics, North Whidbey, 2017 Where Residents Work Where Workers Live Count Share Count Share Oak Harbor, WA 2,934 23.5% Oak Harbor, WA 1,980 32.4% Seattle, WA 908 7.3% Anacortes, WA 144 2.4% Coupeville, WA 874 7.0% Coupeville, WA 114 1.9% Anacortes, WA 616 4.9% Bellingham, WA 103 1.7% Bellingham, WA 388 3.1% Mount Vernon, WA 90 1.5% Mount Vernon, WA 386 3.1% Seattle, WA 68 1.1% Everett, WA 369 3.0% Marysville, WA 53 0.9% Bellevue, WA 307 2.5% Camano CDP, WA 42 0.7% Burlington, WA 201 1.6% Sedro-Woolley, WA 38 0.6% Kent, WA 183 1.5% Everett, WA 36 0.6% All Other Locations 5,330 42.7% All Other Locations 3,445 56.4%
Sources: US Census Bureau, Longitudinal Employer-Household Dynamics, OnTheMap, 2017; Community Attributes Inc., 2019.
In Central Whidbey, there is an exchange between Coupeville and Oak Harbor for workers and residents. Beyond that concentration, the next most common place of work for Central Whidbey residents is Seattle, followed by Freeland. (Exhibit 26)
Exhibit 26. Commute Characteristics, Central Whidbey, 2017 Where Residents Work Where Workers Live Count Share Count Share Coupeville, WA 411 14.7% Oak Harbor, WA 600 22.8% Oak Harbor, WA 290 10.4% Coupeville, WA 120 4.6% Seattle, WA 288 10.3% Freeland, WA 69 2.6% Freeland, WA 141 5.0% Anacortes, WA 49 1.9% Everett, WA 123 4.4% Camano, WA 43 1.6% Bellevue, WA 69 2.5% Bellingham, WA 21 0.8% Bellingham, WA 54 1.9% Mount Vernon, WA 19 0.7% Anacortes, WA 52 1.9% Clinton, WA 18 0.7% Mount Vernon, WA 39 1.4% Langl ey, WA 16 0.6% Renton, WA 38 1.4% Marysville, WA 14 0.5% All Other Locations 1,289 46.1% All Other Locations 1,657 63.1%
Sources: US Census Bureau, Longitudinal Employer-Household Dynamics, OnTheMap, 2015; Washington State Employment Security Department, 2015; Community Attributes Inc., 2019.
March 2020 PAGE 24 Island County Economic Trends & Conditions Report
South Whidbey residents are most likely to commute to Seattle, with Freeland in a close second place. The top four places of residence for local workers are all on Whidbey Island, followed by Seattle (Exhibit 27).
Exhibit 27. Commute Characteristics, South Whidbey, 2017 Where Residents Work Where Workers Live Count Share Count Share Seattle, WA 711 12.4% Freeland, WA 207 6.2% Freeland, WA 543 9.5% Oak Harbor, WA 145 4.3% Everett, WA 480 8.4% Langl ey, WA 136 4.1% Langl ey, WA 271 4.7% Clinton, WA 103 3.1% Coupeville, WA 226 3.9% Seattle, WA 77 2.3% Bellevue, WA 134 2.3% Everett, WA 50 1.5% Clinton, WA 117 2.0% Coupeville, WA 40 1.2% Lynnwood, WA 111 1.9% Bellingham, WA 29 0.9% Oak Harbor, WA 107 1.9% Anacortes, WA 25 0.7% Kirkl and, WA 96 1.7% Mount Vernon, WA 24 0.7% All Other Locations 2,929 51.2% All Other Locations 2,515 75.1%
Sources: US Census Bureau, Longitudinal Employer-Household Dynamics, OnTheMap, 2015; Washington State Employment Security Department, 2015; Community Attributes Inc., 2019.
March 2020 PAGE 25 Island County Economic Trends & Conditions Report
Employers and Industries Due to the unique nature of Island County’s major employers, the estimated number of people employed in Island County varies depending on the source. Specifically, military employment, most agricultural employment, and self-employed people and contractors are not included in covered employment estimates. The Bureau of Economic Analysis develops County-level estimates that include these categories of employment. According to the BEA, Island County was home to 35,312 total full and part time jobs in 2017. As shown, nearly one third of Island County’s jobs are provided by “nonfarm proprietors”. These are sole proprietorships and partnerships. (Exhibit 28)
Exhibit 28. Total Full and Part Time Jobs by Type and Industry, Island County, 2017
2017 Jobs Jobs by Type Wage and Salary Employment 24,005 Farm Proprietors Employment 337 Nonfarm Proprietors Employment 10,970 35,312 Jobs by Industry Farm Employment 471 Private Nonfarm Employment 24,167 Federal Civilian Government Employment 1,345 Military Employment 5,995 State and Local Government Employment 3,334 35,312
Source: US Bureau of Economic Analysis, 2019
Military Employment Naval Air Station Whidbey Island is the Navy’s premier naval aviation installation in the Pacific Northwest. The air station is the home for all of the Navy’s tactical electronic attack aircraft squadrons as well as home to four anti-submarine and maritime surveillance squadrons and a signals intelligence reconnaissance squadron. During the 2005 Base Realignment and Closure process, NAS Whidbey Island was rated as having the highest value of all Pacific bases examined.4
Employment at NAS Whidbey has fluctuated over time as missions change and technology changes. The transfer of the P-8 squadrons to NAS Whidbey is the most recent build-up, but does not exceed the historic highs on the base. The base is scheduled to disestablish the VQ-1 squadron in 2021.
4 Naval Air Station Whidbey Island Fact Sheet
March 2020 PAGE 26 Island County Economic Trends & Conditions Report
Civilian Employment In 2018, the industry paying the highest average wage in Island County was Wholesale Trade and Utilities, while education was the lowest. Government and Manufacturing also pay average wages significantly higher than the average across all industries. (Exhibit 29)
Exhibit 29. Average Wage by Industry, Island County, 2018
Source: Washington Employment Security Department, 2019; CAI, 2019
Over the past 18 years, civilian employment in Island County’s industry sectors has remained relatively consistent in terms of job sector percentage shares. In 2018, Public Administration, Health Care, Education represented 34% of all Island County civilian jobs, up from 31% in 2000. (Exhibit 31)
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Exhibit 30. Island County Civilian Employment by Job Sector, 2018
Source: US Census Bureau, QWI Explorer, 2019
Exhibit 31. Civilian Employment by Industry, Island County
100% Agriculture, Natural Resources 90% Other Services 80% Arts, Entertainment, 70% Hospitality
Retail Trade 60%
50% Manufacturing, Wholesale Trade 40% Construction
30% Transportation, 20% Wharehousing, Utilities
Professional, Management, 10% Real Estate
0% Public Administration, Health Care, Education
Source: US Census Bureau, QWI Explorer, 2019
March 2020 PAGE 28 Island County Economic Trends & Conditions Report
The largest job gains from 2000 have been in Health Care Services, Accommodations and Food Service, and Manufacturing. These industries present momentum to leverage. (Exhibit 32)
Construction experienced the most significant contraction during the recession, which was a common occurrence across the country, but has since regained much of the share lost during that time. The largest job losses since 2000 have occurred in Management, Finance and Insurance, Information, and Retail. None of these sectors have surpassed their 2000 employment numbers. (Exhibit 32)
Retail sales in Island County have exceeded pre-recession highs, but retail employment remains flat. (Exhibit 33) This may in part be due to changing trends in the retail markets and the increase use of on-line sales, which may represent a diversification from primarily supporting residents and tourists to broader, off- island markets (additional research may provide insight into the causes and impacts of this shift).
March 2020 PAGE 29 Island County Economic Trends & Conditions Report
Exhibit 32. Island County Civilian Employment by Job Sector
5,000 4,828
4,500
4,000
3,500
3,000
2,500 2,238 2,000 1,865
1,500 1,401
1,000
500
-
Public Administration, Health Care, Education Professional, Management, Real Estate Transportation, Wharehousing, Utilities Construction Manufacturing, Wholesale Trade Retail Trade Arts, Entertainment, Hospitality Other Services Agriculture, Natural Resources
Source: US Census Bureau, QWI Explorer, 2019
March 2020 PAGE 30 Island County Economic Trends & Conditions Report
Exhibit 33. Taxable Sales at Retail Outlets (NAICS 44-45), Adjusted for Inflation
$125,000,000 3,000
2,500 $100,000,000 2,000
$75,000,000 1,500
1,000 $50,000,000 Unadjusted Seasonally-adjusted 500 Retail Employment
$25,000,000 0
Source: Washington Department of Revenue
Exhibit 34 presents data related to Island County’s business establishments. Most establishments are in the Services sector, accounting for 54% of the total. The vast majority of business establishments are small (92%), having fewer than 10 employees.
Exhibit 34. Island County Business Establishment Characteristics, 2019
Establishments by Size
250 or Less than 10 10-50 50-249 Industry Establishments More Employees Employees Employees Employees Construction and 765 738 26 1 0 Resources Finance, Insurance, 450 417 29 1 0 and Real Estate Manufacturing 176 162 9 3 1
Retail 535 481 44 10 0 Services 2,885 2,718 141 19 2 Wholesale Trade 281 262 16 3 0 and Utilities Education 121 81 23 16 0
Government 100 38 25 33 4
Total 5,313 4,897 313 86 7
Source: D&B Hoovers, 2019
March 2020 PAGE 31 Island County Economic Trends & Conditions Report
As of 2017, Island County had 6,012 nonemployer establishments, according to the Census’ Economic Annual Survey. These are businesses with no paid employees and gross annual receipts over $1,000. This data represents self-employed people and sole proprietors, but also includes independent contractors. Across all sectors, gross receipts averaged $42,311 per establishment in 2017. The sector with the highest average income was real estate, followed by finance and insurance. The sectors with the lowest average receipts were educational services and arts, entertainment, and recreation. The sector with the highest number of nonemployer establishments was professional, scientific, and technical services. (Exhibit 35)
Exhibit 35. Nonemployer Establishments by Sector, Island County, 2017 Receipts per Sector Establishments Receipts Establishment Arts, entertainment, and recreation 481 $ 8,624,000 $ 17,929 Accommodation and food services 152 $ 4,111,000 $ 27,046 Other services (except public administration) 703 $ 17,109,000 $ 24,337
Agriculture, forestry, fishing and hunting 167 $ 11,438,000 $ 68,491 Mining, quarrying, and oil and gas extraction 4 $ 215,000 $ 53,750 Utilities 15 $ 373,000 $ 24,867 Construction 490 $ 35,189,000 $ 71,814 Manufacturing 154 $ 4,147,000 $ 26,929 Wholesale trade 90 $ 5,095,000 $ 56,611 Retail trade 648 $ 22,774,000 $ 35,145 Transportation and warehousing 119 $ 4,196,000 $ 35,261 Information 97 $ 3,736,000 $ 38,515 Finance and insurance 141 $ 11,660,000 $ 82,695 Real estate and rental and leasing 687 $ 59,759,000 $ 86,985 Professional, scientific, and technical services 1,008 $ 39,020,000 $ 38,710 Administrative and support and waste management and remediation services 461 $ 10,157,000 $ 22,033 Educational serv ices 182 $ 2,197,000 $ 12,071 Health care and social assistance 413 $ 14,575,000 $ 35,291
Total for all sectors 6,012 $ 254,375,000 $ 42,311
Source: US Census Bureau Economic Annual Surveys, 2017
Exhibit 36 shows the specific individual occupations comprising the most workers in Island County. Altogether, these occupations account for around 38% of jobs in Island County. Industries reflected strongly in the list include retail, food service, healthcare, and hospitality.
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Exhibit 36. Top Occupations in Island County by Share of Total Employment, 2018
Share of Occupation Employment Retail Salespersons 3.7% Combined Food Preparation and Serving Workers, Including Fast Food 3.5% Cashiers 2.6% Office Clerks, General 2.5% Waiters and Waitresses 2.3% Registered Nurses 1.9% Maintenance and Repair Workers, General 1.8% Janitors and Cleaners, Except Maids and Housekeeping Cleaners 1.4% General and Operations Managers 1.4% Secretaries and Administrative Assistants, Except Legal, Medical, and 1.4% Executive Cooks, Restaurant 1.4% Customer Service Representatives 1.4% Police and Sheriff's Patrol Officers 1.3% Bookkeeping, Accounting, and Auditing Clerks 1.3% Compliance Officers 1.3% Maids and Housekeeping Cleaners 1.2% Business Operations Specialists, All Other 1.2% Landscaping and Groundskeeping Workers 1.0% Stock Clerks and Order Fillers 1.0% First-Line Supervisors of Food Preparation and Serving Workers 1.0% Firefighters 1.0% Construction Laborers 1.0% Personal Care Aides 1.0%
Source: Washington State Employment Security Department, 2018
Exhibit 37 presents the average annual wage by industry sector for jobs located in Island County from 2012-2018, adjusted for inflation. During this time period, the average annual wage across all industries has increased from about $37,900 to about $40,500. However, Island County trails the statewide annual average wage (about $66,200) by about $26,000. Sectors that pay above average wages in Island County are Wholesale, Transportation and Utilities (WTU), Manufacturing, Construction and Resources, Finance, Insurance and Real Estate (FIRE), and the public sector. The FIRE sector also saw the most rapid increase during this period.
March 2020 PAGE 33 Island County Economic Trends & Conditions Report
Exhibit 37. Average Annual Wage, Island County, 2012-2018 (2018 $)
Industry Sector 2012 2013 2014 2015 2016 2017 2018 CAGR Construction $34,600 $34,400 $34,900 $36,200 $37,000 $37,400 $36,600 0.6% Finance, Insurance, $35,800 $35,900 $37,000 $38,000 $41,500 $41,100 $42,600 3.1% & Real Estate Manufacturing $48,500 $50,800 $52,100 $53,300 $55,400 $55,600 $57,000 2.7% Retail $27,100 $27,300 $28,500 $29,500 $30,000 $29,900 $30,500 2.0% Services $38,300 $34,900 $35,800 $32,700 $33,400 $34,700 $34,600 -0.4% Wholesale Trade & $65,000 $60,800 $59,300 $56,200 $57,600 $60,600 $61,000 1.0% Utilities Government $49,900 $49,500 $50,300 $51,100 $52,000 $52,900 $55,300 1.7% Education $38,000 $31,200 $29,400 $27,000 $26,200 $25,700 $23,700 -7.6%
Annual Weighted $37,900 $37,200 $37,400 $37,600 $38,700 $39,500 $40,500 1.1% Average Sources: Washington State Employment Security Department, 2019; Community Attributes Inc., 2019.
Exhibit 38 presents retail sales data and indicates that most retail spending occurs in Island County’s incorporated cities. The data also indicate that spending patterns vary in each city. Langley has high retail sales in spending categories associated with tourism and visitation, such as Accommodation and Food Services and Drinking Places. Oak Harbor has high retail sales in spending categories associated with resident shopping. Within the unincorporated areas, there are several areas with significant retail concentrations that could rival sales in Langley or Coupeville, including Freeland, Clinton, and Terry’s Corner.
Exhibit 38. Total Taxable Retail Sales (Thousands), 2018
Oak Unincorporated Island County Description Coupeville Langley Harbor Island County Total Food Services and Drinking Places $7,387 $10,073 $59,145 $26,660 $103,265 Accommodation $2,000 $4,466 $6,963 $5,578 $19,007 M otor Vehicle and Parts Dealers $325 $108 $22,626 $8,743 $31,802 Other Retail $14,435 $15,923 $190,988 $186,295 $407,642
Total $29,196 $31,954 $404,603 $381,334 $847,087 Sources: Washington State Department of Revenue, 2018; Washington State Office of Financial Management, 2018
The largest employers in Island County by approximate total employment is provided in Exhibit 39. As shown, government entities and health care establishments rank highly. The largest private sector employer, Nichols Brother Boat Builders, build ferries, fishing vessels, yachts, and more for clients across the
March 2020 PAGE 34 Island County Economic Trends & Conditions Report
nation. Large retail businesses also rank highly among the largest private sector employers.
Exhibit 39. 10 Largest Island County Employers by Total Employment Approx. Employer Industry Employment Naval Air Station Whidbey Island: Active Duty Federal Government 8,400 Naval Air Station Whidbey Island: Civilian Federal Government 2,100 Oak Harbor School District Education 1,000 WhidbeyHealth Healthcare 700 Island County County Government 469 South Whidbey School District Education 224 Nichols Brothers Boat Builders M anufacturing 218 Walmart Retail 198 City of Oak Harbor Local Government 185 Technical Services Inc M anufacturing 170 IDEX Health & Science Healthcare 169 Skagit Valley College Education 155 Safeway Retail 155 Careage of Whidbey Healthcare 150 Coupeville School District Education 130 Payless Foods Retail 129 Island Transit Transportation 122 New Leaf NASWI Contractor 115 Regency on Whidbey Healthcare 110 Whidbey Telecom Telecommunications 103 Home Depot Retail 100 Haggen Food & Pharmacy Retail 100 Penn Cove Shellfish Aquaculture 100 Stanwood Camano School District Education 99 Saar's Super Saver Foods Retail 68 Camano Plaza IGA Retail 65 Heritage Bank Banking 63 Star Store Retail 49
Sources: Island County Economic Development Council, 2019
Understanding what skills are in demand by local employers is critical for workforce development. The most commonly required hard skills listed in Island County job postings from November 2018 to February 2019 are presented in Exhibit 40. Hard skills are those that are teachable and measurable abilities, such as writing, reading, math or ability to use computer programs. The requested skills range from operating heavy equipment (such as tractor-trailers, forklifts and pallet jacks) to using computer programs (include Microsoft Office and SQL Server). “Freight+” is a multi-carrier shipping manifest system.
March 2020 PAGE 35 Island County Economic Trends & Conditions Report
Exhibit 40. Top 25 Hard Skills from Online Ads
Rank Skill Postings
1 Freight+ 155 2 M icrosoft Office 75 3 Preventive maintenance 48 4 Tractor-trailers 42 5 Android 38 6 Switches 36 7 Quality Assurance 33 8 Blueprints 30 9 Bilingual 30 10 Forklifts 22 11 Mathematics 21 12 Quality control 18 13 Tax preparation 16 14 Food preparation 16 15 Equipment M aintenance 15 16 Pallet jacks 14 17 Retail merchandising 14 18 Bilingual Spanish 14 19 M icrosoft SQL Server 13 20 Technical support 13 21 M icrosoft Windows 13 22 M icrosoft PowerPoint 13 23 Internet of Things 12 24 Accounts payable 12 25 Network routers 12
Sources: Washington State Department of Employment Security, 2019.
The occupation that is most in demand in Island County is registered nurses, with more advertised openings from November 2018 to February 2019 than any other occupation (Exhibit 41). Health care-related occupations also rank second and third in advertised openings, which is consistent with prior data indicating that health care institutions are among the County’s largest employers (Exhibit 39). Several other health care-related occupations are listed in the top 25 for advertised openings, including health technologists and technicians, vocational nurses, medical assistants, medical records and health information technicians, physical therapists and speech-language pathologists.
March 2020 PAGE 36 Island County Economic Trends & Conditions Report
Exhibit 41. Top 25 Occupations Advertised and Median Annual Wages Median Annual Rank Occupation Wage 1 Registered Nurses $59,780 2 Personal Care Aides $27,287 3 Social and Human Service Assistants $35,574 4 M aintenance and Repair Workers, General $44,614 5 First-Line Supervisors of Office and Administrative Support Workers $58,069 6 Retail Salespersons $28,316 7 Aircraft M echanics and Service Technicians $58,031 8 Tellers $29,281 9 Customer Service Representatives $29,611 10 Occupational Therapists $93,103 11 Health Technologists and Technicians, All Other $45,163 12 Licensed Practical and Licensed Vocational Nurses $45,348 13 Receptionists and Information Clerks $35,277 14 Office Clerks, General $36,906 15 First-Line Supervisors of Retail Sales Workers $45,493 16 Medical Assistants $37,976 17 Network and Computer Systems Administrators $59,780 18 M edical Records and Health Information Technicians $36,849 19 Secretaries and Administrative Assistants, Except Legal, M edical, and Executive $37,322 20 Construction Laborers $45,386 21 Stock Clerks and Order Fillers $28,732 22 M aids and Housekeeping Cleaners $26,057 23 Combined Food Preparation and Serving Workers, Including Fast Food $23,853 24 Physical Therapists $75,913 25 Speech-Language Pathologists $73,635 Sources: Washington State Department of Employment Security, 2019.
Two colleges have campuses on Whidbey Island – Skagit Valley College and Columbia College. Skagit Valley College has programs for nursing, maintenance, and office support skills. Columbia College in Oak Harbor also has programs for nursing and social and human services.
Agriculture The total acreage in farms has stayed consistent over the past 20 years, with 11.9% of land in farms in 1997 and in 2017 (some small fluctuations year to year). (Exhibit 42) The sizes of farms are shifting, however, with fewer farms over 500 acres and increasing number of farms less than 50 acres, which results in a greater number of farms.
March 2020 PAGE 37 Island County Economic Trends & Conditions Report
Exhibit 42. Island County Farms, 1997-2017
1997 2002 2007 2012 2017 Total Farms 261 348 458 377 390 Total Farmland (acres) 15,900 15,018 17,699 15,249 15,850 Average Farm Size 61 43 39 40 41 Median Farm Size 27 17 16 15
Source: USDA, National Agricultural Statistics Service, Agricultural Census data.
While more farms in Island County are medium sized (55% are 10 to 50 acres in size), a large percentage of farms are small operations (one-third are only one to nine acres in size), and 42% of Island County farms are not farmed for commercial purposes (less than $2,500 in sales annually). (Exhibit 43)
Exhibit 43. Island County Farms by size and sale, 1997-2017
1997 2002 2007 2012 2017 Farms by size 1 to 9 acres 51 97 139 122 113 10 to 49 acres 126 172 235 182 213 50 to 179 acres 66 65 63 56 42 180 to 499 acres 16 12 19 14 19 500 to 999 acres - 1 2 3 3 1,000 acres or more 2 1 - - - Farms by value of sales Less than $2,500 113 180 241 201 167 $2,500 to $4,999 51 50 65 45 78 $5,000 to $9,999 31 48 68 40 59 $10,000 to $24,999 35 30 39 57 46 $25,000 to $49,999 9 18 21 15 16 $50,000 to $99,999 8 6 11 6 12 $100,000 or more 14 16 13 13 12
Source: USDA, National Agricultural Statistics Service, Agricultural Census data.
When adjusted for inflation, the market value of the products sold has decreased (Exhibit 44), making it harder for farms remain financially viable for commercial purposes. This presents both a challenge and opportunity for the County, and explains, in part, the expansion of agri-tourism. (Exhibit 45)
March 2020 PAGE 38 Island County Economic Trends & Conditions Report
Exhibit 44. Market value of agricultural products sold, average sales per farm
$80,000
$62,467 $60,000
$40,000 $28,944 $30,774
$20,000 Average per farm (2017 $) Average per farm (nominal) $- 1987 1992 1997 2002 2007 2012 2017 Source: USDA, National Agricultural Statistics Service, Agricultural Census data.
Exhibit 45. Agricultural market value and profitability, 1997-2017 1997 2002 2007 2012 2017 Market value of products $10,538,000 $9,801,000 $14,344,000 $11,467,000 $12,002,000 Average per farm $40,376 $28,165 $31,319 $30,416 $30,774 Crop sales 15% 22% 26% 29% 25% Livestock sales 85% 78% 74% 71% 75%
Market value, adjusted for inflation Market value (2017 $) $16,103,160 $13,345,210 $16,863,930 $12,240,380 $12,002,000 Avg per farm (2017 $) $61,699 $38,350 $36,821 $32,467 $30,774 Net cash from sales $1,218,000 -$1,492,000 -$400,000 -$1,282,000 $761,000 Average per farm $4,665 -$4,263 -$873 -$3,401 $1,951
Agri-tourism and recreational services Farms N/A 2 12 6 19 Income $148,000 $110,000 $489,000 Average per farm $12,333 $18,333 $25,737
Source: USDA, National Agricultural Statistics Service, Agricultural Census data.
As shown in Exhibit 46, the number of farm workers in Island County has decreased over the past two decades while the total payroll has increased.
The lack of affordable housing for farm workers, and confusion about requirements for on-farm housing options, may be contributing to the decrease in total number of farm workers, migrant farm workers in particular, as well as the increased number of hobby farms. During the 2018 update of the Housing Element, the agricultural community expressed strong interest for more housing options for farm workers.
March 2020 PAGE 39 Island County Economic Trends & Conditions Report
Island County is currently updating farm worker regulations as a part of the implementation plan for the Comprehensive Plan.
Exhibit 46. Island County Farm Employment, 1997 – 2017 1997 2002 2007 2012 2017 Farms Employing Workers 106 64 108 112 84 1 worker 30 16 36 39 27 2 workers 11 12 19 29 19 3 or 4 workers 35 12 34 21 15 5 to 9 workers 13 17 6 16 13 10 workers or more 17 7 13 7 10
Total workers 646 405 491 426 397 Total payroll $1,978,000 $1,239,000 $2,187,000 $2,209,000 $2,542,000 Average per worker $3,062 $3,059 $4,454 $5,185 $6,403
Payroll, Inflation-Adjusted Payroll (2017 $) $3,022,590 $1,687,040 $2,571,210 $2,357,980 $2,542,000 Avg. per Worker (2017 $) $4,679 $4,165 $5,236 $5,535 $6,403
Workers by Days Worked Less than 150 days 520 372 399 315 281 Number of Farms 104 63 83 73 64 150 days or more 126 33 92 111 116 Number of Farms 48 12 41 48 32
Source: USDA, National Agricultural Statistics Service, Agricultural Census data.
March 2020 PAGE 40 Island County Economic Trends & Conditions Report
Land and Infrastructure Availability
Key Findings
Land Availability • Large portions of Island County have lower assessed market land values, consistent with the area being rural. • The Transportation Gateways are varied in character and size, and provide different opportunities and challenges with regard to access and circulation patterns. Approaches to improving development regulations, access, and circulation may vary considerably. • Vacant land is limited in the gateways, and most heavily concentrated in the gateways Camano Gateway and Clinton RAIDs. • Increased development potential in the Airparks may be limited by FAA regulations and future plans for expansion, depending on the specific development goal. • Larger tracts, broadband internet, and relatively low cost of land in the rural area, particularly in South Whidbey, will continue to invite opportunities for home based businesses.
Infrastructure • Ferry capacity challenges have had, and will continue to have, significant impacts, particularly for Central and South Whidbey Island. • Lack of sanitary sewer in the RAIDs and NMUGA will continue to impede the full development potential of these areas.
Strategic & Planning Implications • The gateways located within RAIDs have a varied character and will likely have different planning goals. This should be reflected in zoning, but is limited by GMA requirements for RAIDs. • Island County’s rural character is valued by many residents, and compatibility with adjacent uses is a key consideration for the gateways.
Land Availability Exhibits 47-50 show the assessed market value of parcels per land square foot, including land and improvements, for each of Island County’s four planning areas. These values are determined by the Assessor and may differ from market sale value, but this metric helps indicate where land is most intensely developed and where there may be redevelopment potential.
March 2020 PAGE 41 Island County Economic Trends & Conditions Report
Exhibit 47. Total Assessed Market Value per Land SF, North Whidbey Island, 2019
March 2020 PAGE 42 Island County Economic Trends & Conditions Report
Exhibit 48. Total Assessed Market Value per Land SF, Central Whidbey Island, 2019
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Exhibit 49. Total Assessed Market Value per Land SF, South Whidbey Island, 2019
March 2020 PAGE 44 Island County Economic Trends & Conditions Report
Exhibit 50. Total Assessed Market Value per Land SF, Camano Island, 2019
March 2020 PAGE 45 Island County Economic Trends & Conditions Report
As shown, in addition to the County’s incorporated areas, development is more focused on the coastline and in the UGAs and RAIDs. The most expansive areas having low assessed market land value per square foot are generally located in Central Whidbey Island, consistent with its undeveloped and agricultural use.
Infrastructure
Transportation Park-and-Ride Island County has nine park-and-ride facilities with a cumulative 615 parking spaces. Island Transit, which operates free service in Island County, owns four additional properties that could be converted to park-and-ride if funding becomes available.
Non-Motorized The only County roads with bike lanes are Main Street and Harbor Avenue in Freeland. Throughout the County there are roads with a wide shoulder (4 feet or greater) usable by bicycles and pedestrians. The number of non-motorized travelers is increasing across the state. A 10% overall increase was recorded from 2008 – 2012 at three locations in Oak Harbor.
The 2018 Non-Motorized Trails Plan identifies several potential projects, including trail improvements, educational programs, and data collection infrastructure such as bike counters.
Air Transportation There are three privately owned airfields in the County; Camano Island Airfield, A.J. Eisenberg Airport, and the South Whidbey Airpark. There are also naval airfields at Whidbey Naval Air Station and Coupeville Naval Outlying Field.
Rail Transportation There is no rail service within Island County. The closest Sounder train station is in Mukilteo while the closest Amtrak stations are in Everett, Mount Vernon, and Stanwood.
Ferry Service There is ferry access to Island County via the Mukilteo-Clinton and Port Townsend- Coupeville routes. Ridership on both routes is expected to increase across all boarding methods. By 2030, capacity is projected to exceed Level 1 service standards, meaning additional pricing strategies may be used to encourage walk-on
March 2020 PAGE 46 Island County Economic Trends & Conditions Report
passengers. The Port Townsend-Coupeville route is expected to exceed Level 2 standards, meaning additional investment in ferry capacity should be considered.5
A new ferry terminal is being constructed in Mukilteo, scheduled to open in 2020. In addition to improving safety, the new terminal will offer better connections to the Sounder and other transit options as well as overhead pedestrian loading to improve efficiency.
The Puget Sound Regional Council identified several routes for potential passenger- only ferries in its long-range transportation plan. There are currently no Washington State Ferries of this type, but the state legislature authorized locally supported passenger service in 2003.
Island County Transportation Improvement Plan The following projects are currently identified in Island County’s 2015-2020 Transportation Improvements Plan (TIP):
• Miscellaneous guardrail projects • Miscellaneous HMA structural overlays • Intersection alignment improvement projects • Miscellaneous right-of-way and minor safety improvements • Shoulder widening program • Maintenance and operations
Utilities Sanitary Sewer There is a septage facility near Coupeville that is owned by the County, but the County does not own a sewer treatment plant. The lack of infrastructure impedes development in the gateways and, most importantly, in the Freeland Non-Municipal Urban Growth Area.
Solid Waste Transfer Facilities There are four solid waste facilities in Island County; one in Oak Harbor, Coupeville, Langley, and Camano Island. They range in capacity from 32 tons per day (Oak Harbor and Langley) to 430 tons per day (Coupeville). Combined, these facilities meet the 20-year projected level of service requirement.
Surface Water Management Storm drainage is handled by a mix of natural systems, constructed conveyance, and tide gates. According to the Capital Facilities Plan, “because of the complexity of site-specific aspects, a County-wide firm standard is difficult to establish.”
5 Island County. (2016). Island County Comprehensive Plan: Transportation Element.
March 2020 PAGE 47 Island County Economic Trends & Conditions Report
Water Island County residents are served by public water supplies (72%) and individually owned wells (28%). The greatest ground water quality concerns are high levels of iron, manganese, nitrates, and arsenic, as well as saltwater intrusion.
Community Parks and Recreation Island County has 3,741.6 acres of park land. Natural Recreation Areas account for 66.2% of the total park land, followed by Conservation Areas (28.7%) and Community Parks (3.4%). The County has identified a need for more trails, motorized boat launches, hand-carried boat launches, primitive campgrounds, kayak camps, dog parks, and hunting areas.
Education The County is served by four school districts: Oak Harbor, Coupeville, South Whidbey, and Stanwood-Camano. Oak Harbor faces significant capacity issues that are likely to increase in the future because of enrollment growth, mandated class size reduction, and full-day kindergarten. To accommodate this, the district is expected to have 40 portable classrooms in operation by the 2019-2020 school year. The high maintenance cost of portables makes this an unsustainable solution. Approximately half of Oak Harbor students are Navy-connected.
Coupeville capacity is adequate and has invested in school improvements. South Whidbey School District has excess capacity and declining enrollment. Stanwood- Camano, which extends across Island and Snohomish counties, is projected to meet capacity requirements for the next five years.
Fire Protection There are four fire stations in Camano Island, seven in North Whidbey, six in South Whidbey, and three in Central Whidbey. Stations are staffed by a combination of career personnel, volunteers, and paid-on-call personnel. North Whidbey plans to hire additional career firefighters to keep pace with increasing population and calls. South Whidbey is also in need of additional full-time personnel due to increased calls. Central Whidbey’s incident rate is growing faster than the population.
Transportation Gateways
Land Availability Island County varies in character and culture, and the seven transportation gateways reflect this variation. Further analysis will focus on the gateways in greater depth. In terms of land availability, there are currently 34 vacant parcels located within the seven gateways comprising 78 acres of land. These are mostly concentrated in the Clinton and Camano Gateways, though the South Whidbey
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Airpark has the second greatest vacant land supply in terms of acreage. (Exhibit 30)
Infrastructure The gateways located with RAIDs have challenges related to circulation and access that may require larger long-term planning efforts to identify and implement impactful solutions. (Exhibit 51) Stakeholders have indicated that several of the Clinton businesses are adjacent to the highway and have access issues and other development barriers through zoning. Further analysis will attempt to identify additional development barriers.
Exhibit 51. Vacant Land by Gateway Area, Island County, 2019
Vacant Parcels Vacant Acres Transportation Gateways Camano Gateway 15 39.6 Clinton 12 7.1 Coupeville Ferry 2 5.8 Deception Pass 0 0.0
Airparks A.J. Eisenberg 0 0.0 Camano Island 1 5.0 South Whidbey 4 20.6 34 78.1
Sources: Island County Assessor, 2019; Community Attributes Inc, 2019
Sewer While the urban areas in Island County water and sewer infrastructure, most of the rural areas rely on private wells, small Group A and Group B public water systems and on-site septic facilities imposing challenges for business development and expansion in those areas. Lack of sanitary sewer will continue to impede full and highest use of the gateways. Identifying and reserving adequate land for the provision of on-site septic facilities becomes increasingly challenging.
Ferry Service Ferry traffic in the Clinton and Coupeville gateways continue to bring a steady stream of traffic through the gateways. The route projected to have the most vehicle growth between 2017 and 2040 is Port Townsend/Coupeville, with a 49 percent increase (334,300 vehicles and drivers in 2017, increasing to 498,200 vehicles and drivers in 2040).6
6 Washington State Ferries 2040 Plan, www.wsdot.wa.gov/sites/default/files/2019/01/07/WSF-2040-Long-Range-Plan-2019.pdf
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The Clinton-Mukilteo Ferry currently leads the state in vehicle ridership with 2,221,000 vehicles/passengers utilizing the ferry in 2017. Projections place the Clinton-Mukilteo ferry vehicle ridership as a leader in the state for the next twenty years.
The impacts of ferry service will continue to present issues and opportunities for Coupeville and Clinton.
Other high-level observations of the gateway areas: Entryways • The Camano Gateway is segmented into two separate areas which are close to each other but not contiguous. The first area has some commercial development, but around half of its area is composed of vacant parcels. The second, Terry’s Corner, features a local retail center and park. • The Clinton Gateway features commercial development along the highway surrounded by residential development. The Clinton Gateway includes nearly all the existing multifamily development in the gateways – nine out of 11 parcels. • The Coupeville Ferry gateway is the smallest of the gateways, and is characterized by the ferry dock and its parking and loading areas, a state park, and large lake. • Half of the Deception Pass gateway is located within Deception Pass State Park. The remaining non-park parcels are occupied by an RV park and a few lower-density, older commercial buildings. Airparks: • The AJ Eisenberg Airport gateway is mostly composed of the airstrip itself, with an adjoining single family home and some agricultural land. Development on open spaces may be limited due to the proximity to the runway and associated FAA restrictions. • A large share of the Camano Island Airfield is devoted to the airfield itself. The non-airfield parcel features several small commercial or light industrial buildings, one of which is now home to a brewery. Development on open spaces may be limited due to adjacency to the runway. • In addition to the South Whidbey Airpark itself, the gateway features a number of designated forest parcels and three vacant parcels. Development potential on the vacant parcels may be limited due to adjacency to the runway. The gateway also features several single family homes and commercial properties.
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Economic Development Opportunities
The purpose of this section is to list potential opportunities for economic development. These opportunities were selected based on Island County’s characteristics and best practices for economic development in similar communities. Any government has limited resources and must make careful decisions about how to prioritize them. This section offers a wide variety of opportunities, with the expectation that the County would likely focus on a shorter list of top priority actions. This section is intended to provoke thought and provide creative inspiration as the County continues to define its highest priority economic development goals.
Business & Industry Growth Often, economic development agencies focus core efforts in two categories – business retention and expansion (BRE), and business recruitment. This section outlines opportunities to support the growth of existing businesses, and the recruitment of new entrepreneurs, businesses, and industries to Island County.
Oak Harbor Opportunity Zone A census tract in Oak Harbor was recently designated an Opportunity Zone – a federally-enacted tool to provide tax incentives to investors who fund businesses in underserved communities. Island County should support the ongoing planning for this important zone being completed by the EDC and the City of Oak Harbor – especially now as the federal regulations for this zone are still being drafted. Intergovernmental cooperation in this key area could identify numerous coordinated opportunities to leverage new private commercial investment in and around Oak Harbor.
Business Development Tools The County can leverage its resources to increase awareness of and applications for USDA Rural Business Development Grant on the part of rural small businesses in Island County, as well as the recently revised USDA Business and Industry Guaranteed Loans for fruit and cattle industry development. In addition, materials can be developed to raise awareness of and guide applicants through the processes to obtain Small Business Administration and Community Development Funds loans for small business development.
Local Business Growth The County can choose to empower local entrepreneurs and focus on growing and nurturing local businesses rather than hunting for “big game” outside the area. The County could inventory its “growth stage” businesses – the ones most likely to bring outside money into the local economy – and partner with local organizations and institutions such as WSU Extension to connect these key local businesses with sophisticated business intelligence tools and databases not typically available to
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them. These include strategic market research, geographic information systems, search engine optimization and social media marketing.
Agricultural Heritage Opportunities for Island County to leverage its agricultural heritage to grow local economic activity include food hub development (described above) and other value- added food processing support; connecting local growers to organizations that can assist with organic certification and marketing; supporting Chamber and EDC efforts to expand agri-tourism, and specific supports for Island County’s burgeoning winery, cidery, and brewery industry such as supporting the creation of districts, trails, and/or tours.
Business Climate There is a great opportunity for the County to facilitate more understanding of local business needs on the islands and the challenges they face in locating, expanding, or doing business – especially those related to government policy, regulatory, licensing and development. A survey could be designed, or a series of focus groups, interviews, open houses, or community business owner meetings held, to determine the extent and nature of these challenges. The County could maintain a database to identify local businesses and track their contacts with the County and Cities in order to identify and address ongoing challenges. The County can hold informal events with local business owners on an ongoing basis to discuss challenges, identify regulatory and other opportunities for improvement, and foster positive rapport.
Economic Resiliency & Diversification The following represent opportunities to strengthen economic resiliency and diversification in Island County. By strategically leveraging existing businesses, sectors, infrastructure, or proximity, the County can strengthen economic diversity, minimize vulnerability to economic shocks, and speed recoveries from the same.
Infrastructure Provision & Redundancy Generally Island County is well-served with transportation infrastructure. Most major arterials and collectors have parallel capacity and route alternatives. Nevertheless, the County has an abundance of private drives and a substantial amount of residences in the rural area are located on private drives. This has been a challenge as private drives inherently create conflicts when more commercial uses are integrated into them (home based businesses, etc.). Adding redundancy to key network nodes also renders County businesses and industries more resilient in the face of natural disasters, climate change, unplanned closures, and other events.
Areas with a potential need for increased redundancy mentioned by stakeholders include additional ferry services, additional or expanded road ingress/egress, and
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additional access features on current roadways (such as added turn lanes, parking, or business access from limited-access highways).
High-speed internet provision in Island County varies greatly. In South Whidbey, Whidbey Telecom provides broadband internet access, while in parts of Central Whidbey and North Whidbey internet access is limited to dial-up. The Port of Coupeville is planning to study internet access in the area in greater depth.
Seasonal Balance The County should support the ongoing work of the EDC and local Chambers to market and grow opportunities for shoulder- and off-season activities for both visitors and locals. Recreational development, including cross-country mountain biking, coastal trail hiking, horseback riding, etc., would be attractive and convenient to nearby metropolitan residents in the winter and off seasons. Other marketable opportunities could include fishing, foraging, fruit and wine tours, road bike loops, and flower farm viewing. Much of North Whidbey lies within the Olympic rain shadow, making it a desirable off-season destination for local and regional visitors.
Artisanal and Craft Industries Island County has a robust artisanal community. Innovative tools and techniques exist that the County could support to expand the market for local artisanal and craft industries and producers. A locally produced goods and crafts “aggregator” could transport wares produced in Island County to larger metropolitan markets. Facilitating cooperative business service provision such as accounting, training, or security could enhance the competitiveness of local producers. The County could support the development of a local food hub (see the Mad River Food Hub in Vermont that offers four basic services not easily accessible to Vermont farmers and food entrepreneurs: processing space, storage space, distribution assistance, and business planning). Recruitment of co-working and maker space firms from nearby metros would provide critical creative and incubator space to local entrepreneurs. The City of Twisp, Washington, created a Public Development Authority to acquire and develop a 6.4-acre site that would become Twisp Works – an innovative campus for artisans and craftspeople that has spawned dozens of businesses to date.
Leveraging Existing Assets Naval Air Station Whidbey Island (NASWI) could be leveraged to expand economic development in the County. The County also could proactively pursue growth in industry sectors that require similar skills present in NASWI personnel to provide high-quality jobs for veterans and other residents.
Other assets that might be leveraged for economic development include ferry loading and unloading zones and gateways, South Whidbey Airpark, Camp Casey, and RAIDs located along entry / egress routes to state parks and natural areas.
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Large manufacturing and technology employers, such as Nichols Brothers Boat Builders, IDEX, and NASWI contractors Chugach Industries, represent opportunities to expand training linkages with WSU Extension or other educational / training institutions and programs to grow the local on-island talent pipeline.
Regulations & Policies for Economic Development The following identify opportunities to facilitate business growth and retention through updates to local regulations and policies – including zoning and land use – and improved intergovernmental coordination.
Intergovernmental Cooperation A strong precedent has already been set for intergovernmental cooperation between Island County and its local municipalities with the creation of and planning for the Joint Planning Areas (JPAs) surrounding the cities of Oak Harbor and Langley. The County can build off this and other cooperative efforts to formalize intergovernmental economic priorities in the forthcoming Comp Plan update / new economic development element and articulate specific partnerships, timing, budgeting, priorities and other elements of this coordination by project and goal area. Commitment to countywide economic goals will require multi-agency cooperation and could spur new partnerships and coordination structures that may have lasting impacts. In addition, the County could work with local municipalities, agencies, nonprofits, and the private sector to coordinate and leverage land use, infrastructure, and transportation investments to maximize return on investments.
Urban Design Upgraded, place-based design guidelines for Island County’s non-residential and mixed-used RAIDs could enhance and reinforce their unique identity and character while ensuring consistent, steady implementation. The County could do this by re- visiting and updating its current design guidelines. These guidelines could especially pertain to the public realm and address such elements as signage, lighting, landscaping, street planting, etc. In addition, the County could support the EDC in partnering with local educational institutions—such as WSU-Everett design program students or University of Washington planning, architecture, or landscape architecture students—to provide pro-bono design consultation for local businesses or even create a revolving façade improvement fund for local businesses in these areas.
Transportation Gateways Airpark Gateways The seven Transportation Gateways in Island County vary widely in character and composition, with differing challenges and economic development opportunities for each. Three Gateways are airports – Camano Island Airfield, A.J. Eisenberg Airport, and the recently-transacted South Whidbey Airpark. Development
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opportunities on vacant or underutilized parcels in these Gateways is limited by airport operations areas and buffers, and FAA restrictions, but is still viable. Sites in these zones are uniquely positioned for potential growth in distribution, fabrication, and other light industrial activities, as well as higher-impact commercial activities.
Camano and Deception Pass The Camano and Deception Pass Gateways are significant primary entry and egress points – front doors – to Island County for many visitors and residents. They also comprise designated mixed-use RAIDs with Rural Village / Gateway Village zoning. Challenges in these zones include limited access to local businesses from the highway, and insufficient parking. The Camano Gateway also contains a number of vacant parcels representing infill and new development opportunities. For these areas, ensuring that RAID boundaries and zoning standards are appropriately assigned to permit optimal opportunities for development are both key to facilitating growth.
Coupeville and Clinton The remaining Gateways consist of ferry terminals and adjacent feeder areas and face unique challenges. While significant commercial activity exists in the Clinton Gateway along 525, the corridor is frequently congested due to the busy ferry service on and off the island. This node is a currently-designated a RAID, comprised of Rural Center zoning surrounded by Rural Residential. The volume of traffic through these areas is significant –the Clinton-Mukilteo ferry run has the highest volume of cars in the system (2 million cars a year) and the Deception Pass State Park is the most-visited State Park in Washington with over 2 million visitors each year – the challenge has been how to capture that traffic and is one of the greatest gateway opportunities. Given that the volume of movement through these areas is significant on a statewide level, ensuring that zoning has been optimized to serve both visitors and transportation-oriented development is important to realize the full potential of these districts.
The County has considered in the past the transition of Clinton to Non-Municipal UGA status, which could allow for increased density and service provision – especially given the concentration of vacant parcels there. This designation could allow for infrastructure planning and upgrades to relieve both congestion and the major age-related septic system problems and interrelated problems with stormwater management and slope stability prevalent in the area.
Other RAIDs and Freeland NMUGA Rural character is one of Island County’s most valued assets, providing geographical diversity, a sense of community and identity, and the quality of life desired by many island residents. At the same time, Island County’s non-Transportation Gateway RAIDs encompass important economic development opportunity zones. Optimizing the environment for commercial activities in these zones could happen in a number
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of ways. As mentioned above, basic infrastructure challenges – including circulation, access, parking, and sewer and stormwater system provision – represent a major obstacle to new, infill, and re-development in several of the non-residential RAIDs. In the Freeland NMUGA, the Freeland Water and Sewer District has planned for sewer service upgrades and expansion, but this plan remains unimplemented as of yet and the Water System Plan update that will add an additional well is currently awaiting approval by the WA Department of Health.
A Place for Home Industries to Grow Additionally, while Island County plays host to significant home occupation / home- based business activities in its incorporated and unincorporated zones and rural lands, these do not frequently transition into the RAIDs as they grow in large part due to the lack of land zoned for these businesses. The County may consider reviewing current zoning standards, within existing GMA mandates, to ensure that adequate flexibility and capacity exists for cottage / artisanal production and home- based business activities – keeping in mind impacts to off-site neighboring properties. These often comprise a low-impact blend of commercial and industrial activities (sometimes referred to as make in back, sell in front establishments). These burgeoning businesses represent an important opportunity for Island County.
Existing & Potential Funding Mechanisms In addition to Island County’s current sources of funding there are a number of other mechanisms the County could pursue for economic development purposes – especially with regard to infrastructural development and public-private site redevelopment ventures.
Existing Funding Mechanisms In 2019, 7% of Island County expenditures ($6.9 million) were utilized for economic development purposes. $1.3 million (or 19%) of this funding comes from Island County’s participation in the “.09 Rural Economic Development Funds” program (RCW 82.14.370). This state-enabled sales tax credit-back of .09% is currently utilized to fund the Economic Development Council (EDC) for Island County – a 501(c)6 non-profit focused on promoting and assisting business growth. The EDC provides resources to support the business community, including direct business counseling and demographic analyses, topical business information, direct marketing exposure, business counseling services, and business financing planning.
The County’s 2019 budget also contains funding for 34 FTE Planning & Community Development staff – three of whom are long-range planners that help administer economic development programs and policies ($0.5 million is budgeted for 2019 for long-range planning). There may be opportunities to additionally fund, or convert, staff resources to economic development implementation.
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In addition to the above, the County levies a 2% Hotel/Motel tax, and earmarks funds from this total for tourism promotion ($310k projected for 2019). A Lodging Advisory Committee reviews grant applications and makes recommendations to the Island County Board of County Commissioners regarding tourism-related projects and programs to fund. A Historic Preservation surcharge is also currently implemented by the County.
Other Tools for Economic Development There are numerous other funding mechanisms available to Island County and its businesses through the federal, state and private/nonprofit sources. The Washington Department of Commerce offers access to a wide range of support and educational programs and resources, and funding opportunities that address issues that can play a role developing a healthy economy. These programs focus around the pillars of “Growing the Economy,” Building Infrastructure,” Promoting Washington,” and “Serving Communities.” A brief sampling of some of the programs available follows:
• Key Sector Programs supporting Aerospace, Agriculture and Food Manufacturing, Clean Technology, Forest Products, Information and Communications, Life Science/Global Health, Maritime, and Military and Defense-associated businesses. Support for these sectors can include funding, tax incentives, financing, educational resources, clearinghouse services, support through trade associations, and other assistance. • Business Development Services that market Washington sites for new investments. • Business Grants and Loans that target support for smaller businesses through the Small Business Credit Initiative, the Export Voucher Program, and the Community Economic Revitalization Board (CERB). • Economic Partnerships with Washington Counties through Associate Economic Development (ADO) organizations funding in part by the State of Washington. • Business Development Programs that provide a range of targets for education and assistance programs that focus on helping small businesses grow • Infrastructure enhancement programs aimed at helping businesses and communities add or expand infrastructure necessary for economic and community development In addition to direct business and business-focused programs, the Department of Commerce also offers programs that help build community capacity, flexibility, and quality of life for the local residents. Housing-related programs support affordable housing, home-ownership and rental property projects, and improve and preserve housing conditions (some of these opportunities are discussed more fully in the recently updated Housing Element). Other programs address issues such as homelessness, drug abuse, and crime and safety.
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Economic development efforts can be supported through the Community Development Block Grants (CDBG), as well as through other state-authorized local financing opportunities such as the creation of Local Improvement District (LID) creation and assessments.
While Island County currently collects building permit fees, it could also work with local jurisdictions and communities to evaluate the feasibility of utilizing development impact fees to provide an additional revenue stream for infrastructure funding. Additionally, both cities and counties in Washington may establish Transportation Benefit Districts (TBDs) to fund transportation improvement projects.
Many municipalities, counties and state agencies in Washington have also utilized Public Corporations or Public Development Authorities (PDAs) to improve the administration of federal or state grants and programs (including some above listed). This mechanism, particularly in Washington, is viewed as a useful approach for endeavors that the County may not want to undertake itself – for example, for development of a site or sites together with private property owners and investors in a public-private partnership.
Island County could work with its local communities to consider application for a Washington state Main Street designation or affiliation through the Washington Trust for Historic Preservation and Washington Department of Archaeology and Historic Preservation. Such a program helps local communities revitalize their downtown business area and infrastructure while enhancing both the appearance and image of their commercial core.
See the “Business & Industry Growth” section below for other funding mechanisms available to local businesses and business districts directly, as well as a discussion of Oak Harbor’s Opportunity Zone.
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Appendix: Planning and Regulatory Context
Washington State Growth Management Act An economic development element is an optional element under the Washington State Growth Management Act (GMA). The GMA goals for an economic development element are as follows (note: bullets added for readability):
RCW 36.70A.070(7): Economic Development.
• Encourage economic development throughout the state that is consistent with adopted comprehensive plans, • promote economic opportunity for all citizens of this state, especially for unemployed and for disadvantaged persons, • promote the retention and expansion of existing businesses and recruitment of new businesses, • recognize regional differences impacting economic development opportunities, and • encourage growth in areas experiencing insufficient economic growth, • all within the capabilities of the state’s natural resources, public services and public facilities. The GMA requires that element establish local goals, policies, objectives, and include the following:
• Summary of the local economy (population, employment, payroll, sectors, businesses, sales, etc.) • Summary of the strengths and weaknesses of the local economy defined as the commercial and industrial sectors • Identification of policies, programs, and projects to foster economic growth and development and to address future needs.
Island County Comprehensive Plan
The Island County Comprehensive Plan identifies four planning areas: Camano Island, North Whidbey, Central Whidbey, South Whidbey. Planning for each of these areas addresses the specific population, employment, and economic needs in that area.
In December 2016, Island County adopted its updated Comprehensive Plan, which moved goals and policies related to economic development to a placeholder chapter (chapter 2), with a more intensive review and development of a full Economic Development Element deferred to a future work plan/docket (note: this report is a
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part of that effort). The placeholder chapter, though brief, includes the following statements.
• Island County economic development strategies will encourage appropriate development, consistent with the County’s rural character and protection of its environment.
• Lack of a diversified economic structure makes the County dependent on a few employers. Currently, the County’s economic base depends heavily on the Whidbey Naval Air Station and on commuter accessibility to mainland employment opportunities. Reliance on off-island employment sources can add stress to the County’s limited transportation accessibility to the mainland.
• The lack of strong, county-oriented economic centers has fostered a unique dispersal pattern of small commercial centers.
• Island County will continue to encourage compatible and complementary land uses, policies, and strategies to support existing economic drivers.
• Goal 1: Encourage diverse economic development consistent with adopted comprehensive plans.
Overall, job growth in the County is expected to increase by 2,301 jobs by 2036, with 1000 of those jobs being uniform Navy jobs.
Island County Countywide Planning Policies The GMA further requires that counties adopt Countywide Planning Policies (CWPPs) (RCW 36.70A.210 and WAC 365-196-305) to guide and coordinate issues of regional significance. The Island County Countywide Planning Policies are intended to guide intergovernmental planning efforts, fully implement the planning goals identified in the GMA, and ensure that the actions of government agencies within Island County are coordinated and consistent with one another. The importance of economic development is referenced throughout the CWPPs, and is identified specifically in Goal #13:
Develop a coordinated and diverse economic base that provides employment opportunities and improves the wellbeing of all economic segments of Island County’s population. The County and Municipalities will consider economic development broadly by incorporating Planning Policies throughout their planning documents that are supportive of a coordinated economic development strategy.
The CWPP Economic Development and Employment policies (Section 3.11) focus on making decisions that broaden economic opportunities and meet the needs of growth while retaining a high-quality environment. Policies in support of this objective
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include those that focus on encouraging the County and local municipalities to support growth that is protective of the natural environment, well-planned, expands the tax base and is fiscally sound, and considers input from the community. The goals also emphasize that economic growth in the County should be coordinated and consistent with locally adopted plans.
The CWPPs also address economic development considerations that relate to the County’s Urban Growth Areas (Section 3.3.6), Urban Development (Section 3.4.5), Facilities of Countywide or Statewide Significance (Section 3.7.3), and Limited Areas of More Intense Rural Development (LAMIRDs), known in Island County as Rural Areas of Intense Development (RAIDs).
Island County Urban Growth Areas & Rural Areas of Intensive Development Each of the municipalities of Oak Harbor, Langley, and Coupeville has established an urban growth area. Land use and development decisions with the incorporated area of those communities are managed by that community, subject to its local planning documents:
• City of Oak Harbor Comprehensive Plan 2036 • City of Langley Comprehensive Plan • Town of Coupeville Comprehensive Plan While these municipal plans define local priorities for growth and economic development affecting both the incorporated and unincorporated areas of the UGAs, the County has development review authority within the unincorporated portion. Such decisions in the UGA should be consistent with CWPPs
Freeland is the only Non-Municipal Urban Growth Area (NMUGA) in Island County, and the County has adopted a Subarea Plan that defines a growth phasing plan for Freeland.
In order to protect the rural character and qualities of the County, and acknowledge existing areas of development, the Island County Comprehensive Plan established areas known as Rural Areas of Intensive Development (RAIDs). Within these defined areas, GMA allows for more intensive development that would be allowed typically under rural zoning. Island County designated 43 residential RAIDs and, a total of 25 non-residential and mixed-use RAIDs. (Several RAIDs are examined more closely in the Gateway analysis conducted for this element.) Development within RAIDs is managed by the County.
Island County also plays a role in the planning process affecting several other locations within the County. Planning for the Ebey’s Landing National Historical Reserve has been addressed through a partnership between federal and state government, Island County, and the Town of Coupeville. The Whidbey Island Naval
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Air Station (NAS Whidbey) and Outlying Field Coupeville (OLF) planning generally considers local input, State of Washington, Island County, the City of Oak Harbor, NAS Whidbey personnel, state and federal agencies, and other appropriate stakeholders to routinely coordinate to minimize and mitigate possible impacts. NAS Whidbey is a major employer and economic driver in north Whidbey and Island County.
Other Economic Development Plans, Districts, and Organizations In addition to municipal and county government plans and economic development policies, several other organizations exist to help direct Economic Development efforts.
The Economic Development Council for Island County (EDC) was designated by the state of Washington and Island County as an Associate Economic Development Organization (ADO). The EDC’s mission is to diversify and strengthen the local economy, preserve and progress the quality of life of islanders, and stabilize the economic interests of Whidbey and Camano Islands. They provide technical expertise and guidance, resources, and research to area business members, and assist in providing their members with the periodic services of the Washington Small Business Development Center (SBDC).
The Board’s membership includes business, healthcare, and nonprofit employees; municipal, military, and utility employees; educators; transportation professionals; and local elected officials. The EDC is funded through several different sources, including Island County, which provides the organization with an annual grant of $75,000 from Rural Counties Development Fund, also known as “0.09 funds.”7
Some communities have conducted community planning in conjunction with other public agencies. One example is the Clinton Market Study developed in 2017 for the community of Clinton and the Port of South Whidbey. That document identified both community economic development ambitions, as well as concepts for further developing the rural center in Clinton. Other local organizations addressing economic development include:
• Camano Island Chamber of Commerce • Clinton Chamber of Commerce • Coupeville and Central Whidbey Chamber of Commerce • Greater Freeland Chamber of Commerce • Langley Chamber of Commerce
7 Whidbey News-Times, “Director, Assistant Are Out at Island County EDC,” Stensland, Jessie, October 17, 2017.
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• Oak Harbor Chamber of Commerce In addition, there are numerous special purpose districts with plans and policies that can affect economic development throughout the County. These include area fire districts, the Whidbey Island Conservation District, Snohomish Conservation District, public water and sewer districts, Sno-Isle Libraries, Whidbey Island Public Hospital District, the three School Districts serving Whidbey Island, Stanwood Camano School District, the Ports of Coupeville and South Whidbey, and various utility districts.
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