Can technology save Satsop?

SAFEHARBOR.COM is bringing New Economy jobs to Grays Harbor County, an area once dependent on the fishing and timber industries.

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SATSOP, Grays Harbor County - On a rural highway, past empty farmland and rusty trailers and Chevys on cinder blocks, a newfangled technology company sits high atop a hill, a sign that the future may have finally arrived in Grays Harbor County.

In the heart of this depressed timber and fish economy, three Grays Harbor County natives, Brian Sterling, Bo Wandell and Bill Miller, started Safeharbor.com, a company that provides Web-based technical support to businesses.

The company today employs 120 in a place where workers pass down chainsaws like family heirlooms, a place where a burgeoning high-tech company isn't supposed to be.

"There's this idea that people who are not from the city lack sophistication and skills," said Sterling, the chief executive officer. "I think they're missing the boat."

In the center of one of the country's hottest high-tech markets, Safeharbor.com took the counterintuitive route, launching its operations in the dot-com equivalent of Siberia. To the utter surprise of observers, it has successfully lured information-technology workers out of larger cities such as Seattle and Portland.

In the process, it has become a symbol of the county's rebirth, and somewhat of an experiment as to whether a rural area can reshape itself into a high-tech corridor.

"There's this buzz," said Comet Brower, the company's contact-center manager and a Grays Harbor County native.

"The techie, geeky kids - they can stay at home and still have job opportunities. That's where they see their future without having to leave."

While Grays Harbor County residents are usually skeptical of businesses that skip into town promising prosperity, the men offering up such assurances this time are viewed differently.

They're from here.

Three men from Hoquiam

Sterling, Wandell and Miller all were raised in nearby Hoquiam, where they entered into their first joint business venture in the early 1970s as editors for the Hoquiam High School Grizzly Gazette. They charged local businesses for advertising space and sold the newspaper for a dime apiece, posting a $6,000 profit by the end of the year.

As fraternity brothers at the University of Washington, they made money by charging a buck apiece for mixed drinks at less-than-legal cocktail parties - an operation that was shut down after high-school students caught on.

Each man went his own way, carving distinct business paths that would eventually lead to their current partnership.

Miller, the company chairman and general partner of Kirkland-based Olympic Venture Partners, served as general manager for Microsoft's advertising business unit, where he designed marketing programs for MSNBC, Expedia, Investor, Slate and Microsoft Network.

Sterling, the chief executive, served as president of Plan.IT, a technical-consulting company focused on the lumber and paper industries. Before that, he was general manager of Amerada Hess' Virgin Island subsidiary, where he oversaw operations for the largest oil refinery in the world, with 7,000 employees and $3 billion in annual revenue.

Wandell served as vice president of worldwide sales for iCat, where he helped grow annual company revenue from $200,000 to $4.4 million over 24 months and also played a primary role in the company's effort to raise $19.6 million in venture capital. He also served as vice president of sales for Spry, an Internet service provider that was sold to CompuServe for $100 million.

Since college, the men and their families have met once a year for a summer vacation. In fall 1998, they joined forces to launch Safeharbor.com.

The premise behind the company is simple.

Most online companies provide "help" areas for customers, where they can ask questions about products and services. Safeharbor.com builds self-help pages for those businesses that walk users step by step through problems. The company also staffs a call center, where technical-support analysts answer questions via telephone and e-mail.

George Dale, vice president of the company's regional contact centers, said its business model lowers costs because roughly 90 percent of customers' questions can be solved online. Companies such as ImageX.com, which sells printed business materials, and Eterra.com, which sells gardening supplies to stores, have subscribed to the service.

For an area where unemployment reached double-digit percentages in the past decade, 120 jobs - with the promise of hundreds more - is significant.

Safeharbor.com, with expected revenue of $8 million this year, plans to break ground soon on a second, 44,000-square-foot building at the Satsop Development Park, where it will house up to 400 call-center workers.

Sterling, the CEO, said roughly 60 percent of its employees live in Grays Harbor County. "Being able to multiply this," he said, "it's like cell division."

Nuclear plant turned tech park

The company would have never come to Satsop, though, had it not been for the Satsop Development Park, the site of the Washington Public Power Supply System's failed nuclear-power plant.

The WPPSS plant (commonly pronounced "whoops") was dreamed up in the early 1970s, when Americans feared the world would run out of oil.

A consortium of mostly farmers and small-town businessmen proposed to meet the demand by selling bonds to build five nuclear power plants - three on the Hanford reservation and two in Satsop. The twin plants in Satsop were supposed to generate enough nuclear energy to light much of the Puget Sound basin.

But energy concerns soon dwindled, and the plants were no longer considered necessary. By that time, the projects were millions of dollars over budget.

When WPPSS defaulted on $2.25 billion in municipal bonds in 1983, it was the largest bond default in U.S. history.

It left behind two unfinished nuclear plants in Satsop, with two 500-foot cooling towers that, on a clear day, can be seen from as far away as Olympia. The jobs of some 5,000 construction workers who fueled the local economy for a while were gone, too.

It was yet another setback for an area that seemed to never get ahead.

Leroy Tipton, director of the Grays Harbor Chamber of Commerce, said residents here have worked in the cyclical timber economy for so long that they have grown accustomed to the never-ending sequence of fiscal depression and recovery.

"It was common to walk into a pawn shop in the wintertime and see chainsaws and sewing machines sitting in the back room, waiting to be redeemed," Tipton said.

"People were just trying to make ends meet a little bit longer, a little bit better."

But this time it may have been different.

While the WPPSS issue played out, federal environmental policies were beginning to change the way Americans use wood. In the early 1990s, logging in the Olympic Peninsula and Quinault shut down almost overnight.

Tipton said residents began to realize that the lack of work was no longer cyclical or market-driven. "Work that your grandpa did and your dad did and you dropped out of high school to do just wasn't there anymore," he said, "and it wasn't going to be there again."

In October 1992, the unemployment rate soared to 14 percent after the ITT Rayonier mill in Hoquiam closed because of a weak paper market, putting more than 625 longtime employees out on the street overnight.

Grays Harbor Paper opened in its stead the following September, but rehired just a third of the employees.

Diana Davis, 53, a technical-support analyst for Safeharbor.com, worked for the paper mill off and on from 1988 to last year.

"Life after Grays Harbor Paper was tough," said Davis, whose first job was cleaning stalls when she moved here in 1986. "There were no data-entry or computer jobs. People don't leave computer jobs here; they retire."

In the early 1990s, site owners Bonneville Power Administration (BPA) and WPPSS officially terminated the nuclear-plant project.

State law required that they restore the nuclear site to its original condition, essentially ripping out $2 billion worth of infrastructure at a cost of roughly $50 million.

Then State Rep. Sid Snyder, D-Long Beach, sponsored legislation that cleared the way for the site to be used as a business park. The law allowed BPA and WPPSS to transfer the property to the Grays Harbor Public Development Authority (PDA), a quasi-governmental agency assembled to oversee the park.

In August, the owners turned over the keys to the PDA, plus $15 million in seed capital.

Still, residents were skeptical.

"Growing up here, we've seen a lot of companies come here and say they're going to do big things," said Chayne King, 29, a senior technical analyst for Safeharbor.com. "People have the attitude, `We'll believe it when we see it.' "

The county was still reeling from the episode three years ago when Hoquiam learned it was in the running for a $300 million Nucor Steel mill that would bring 250 new jobs to the area, with an average salary of $57,000 a year.

At the height of the county's recession, residents were eager to show their support for the Fortune 500 company.

They staged a hero's welcome at the Hoquiam High School gym, where company representatives were greeted by a high-school marching band and more than 500 adorning fans, some of whom pumped signs that read, "Welcome Home, Nucor."

But in December 1997, after 19 months of intense negotiations, Nucorp chose a site in Coos Bay, Ore., instead.

The company eventually pulled out of Coos Bay, too, after its negotiations with Weyerhaeuser, which owned the land for the proposed site, had failed.

Tammi Garrow, the director of the Satsop Development Park, said residents were deeply disappointed.

"Those things happen every day across America," she said. "You have winners and you have losers. You just pick up your tools and keep trying."

Move to lure high-tech jobs

With the explosion of dot-coms in the state, the PDA decided to go after its share of the wealth. It invested a third of its seed capital into telecommunications infrastructure, which included enough bandwidth to power 20 buildings and 24,000 phone lines.

Safeharbor.com was its first high-tech tenant. One big lure: The park leased space for less than $1 a square foot a month.

Garrow said it would be useless to lure high-tech tenants if the development couldn't provide connectivity, redundancy and unlimited bandwidth.

Although the park has more traditional tenants such as Weyerhaeuser, Ocean Spray and Northwest Specialty Woods, it touts itself as an alternative location for dot-coms in Seattle, where skyrocketing rents and traffic congestion are beginning to impede their growth.

"We basically followed through on our commitment," Garrow said. "If you come here, we will deliver."

It's unclear, though, how many high-tech companies will follow suit.

The Legislature enacted a law last year that gives many high-tech companies in rural areas business-and-occupation-tax credits. Safeharbor.com saved $15,000 in taxes last year and is projected to receive a roughly $130,000 credit this year.

The state knows of only three companies that have taken advantage of the new program, although actual figures are hard to pin down because the state does not require businesses to submit an application to receive the tax credit.

Meanwhile, things are looking up for the county.

The unemployment rate is now about 7.4 percent, which is still several points higher than the regional average, but it's improving. Last year, Grays Harbor County posted the second-highest rate of increase in taxable retail sales for the first three quarters.

And Safeharbor.com is not the only employer bringing jobs to the area.

Stafford Creek Corrections Center, just outside the Aberdeen city limits, will add 600 direct jobs to the local economy.

Quinault Indian Nation-run Beach Resort and Casino, outside of Ocean Shores, will add 350 jobs.

Techline, an Aberdeen Internet service provider, has grown from two employees to 35.

Luxury-ship builder Westpark Shipyards has doubled its employment in the past six years.

Wandell said it's been easy so far to lure new employees to Grays Harbor County, even with a shortage of qualified technology workers statewide.

The company pays wages comparable to Seattle, even though a dollar stretches much further here. Call-center trainees start at $8.50 an hour and go to $10 an hour after a 90-day review. Knowledge engineers' wages range from $40,000 to $70,000.

For entry-level positions, the company offers training courses through the Center for Education and Lifelong Learning.

Students who graduate from the training course are guaranteed 90 days with the company to see if they're a potential fit.

Currently, the company has 1,000 resumes on hand, although not all of the applicants are qualified.

Dave Eagle, 34, the company's knowledge-engineer team leader, said working for a high-tech company in a small town is like having the best of both worlds.

Eagle, who worked for Seattle-based Primus Knowledge Solutions before he came here, used to live 75 miles from work so his three children could attend smaller schools. His commute from Burlington to Seattle - 23 miles to the bus stop and then 1 1/2 hours on the bus - was four hours each day.

"It wasn't that I didn't like Seattle - I was born in a small town," said Eagle, a former Navy cryptologist. "Coming here was like a breath of fresh air."

`Out of sight, out of mind'

Down the hill from the development park, locals are divided on the company's impact.

At the Rusty Tractor in Elma, a restaurant and bar with a wooden chicken on its roof, customer Dale Bray, 62, said he thinks most locals haven't made the connection yet.

"It's kind of `out of sight, out of mind,' " he said.

Boyd Morrow, who owns a variety store down the street, said the company will be good for the economy unless it grows too big.

The only other problem, he said, is that Elma doesn't have a Starbucks.

"Most corporate people," he said, "like Starbucks."

The Elma City Council recently declared it wanted to be known as Elma.com.

City officials are eager to jump on the bandwagon, one they hope won't collapse.

"It's living proof that you can have a successful technology business in rural Washington," said Garrow of the development park. "If you can do it in Satsop, it can be done in other places."

Monica Soto's phone message number is 206-515-5632. Her e-mail address is: msoto@seattletimes.com