Governor Gary Locke’s Remarks
Remarks before the National Association of Industrial and Office Properties (NAIOP)
June 19, 2002
Thank you for that kind introduction. I am pleased to have this opportunity to speak to you this morning.
Commercial real estate development plays an important role in our state’s economy. Businesses and industries rely on the availability of affordable, convenient space in which to operate. And, of course, our economy benefits when business is strong.
I know that the market for commercial real estate in the Puget Sound area is very soft. During 2001, vacancy rates for office space have risen from about 4 and a half percent to almost 14 percent, according to Kidder Mathews.
And many experts anticipate the trend will continue, with forecasts of higher vacancy rates by 2003. Industrial space vacancy rates have also gone up, increasing from about 4 percent at the beginning of 2001 to almost seven percent by the end of the year.
But the economy will come back, and the commercial real estate market will get better. But we must redouble our efforts to maintain a positive business climate in our state. We have had many successes, but there is more that needs to be done to improve our competitiveness.
The single, most important thing we can do to keep our state’s competitive edge is to enact a long-term transportation plan that fixes the congestion choking our economy.
We know demand has outstripped investment. Investing in our transportation system now will put people to work and keep our economy moving for years to come. Improving our transportation system enables employers to be more competitive, improves freight mobility, provides lasting economic development opportunities in rural and urban areas, cuts congestion, and yes, it will improve highway safety for all of us.
One of the first steps we’ve taken to improve our economic engine is to ensure a more efficient Department of Transportation.
Today we have new ways to measure the performance of the DOT to make sure the department is accountable for its decisions and actions.
WSDOT has two crucial tools to speed up the delivery of projects: environmental permit streamlining and design-build contracting.
Through an omnibus transportation reform bill sought by my office—that I signed into law last January, WSDOT will have the authority to contract with the private sector for a host of construction services that previously were limited to DOT employees only. This will help ensure faster project delivery. This legislation also included several steps to improve our state prevailing wage law, and other steps to get the most bang for the buck in transportation investment, preservation, and maintenance.
Many other reforms, efficiencies, and steps toward greater accountability have been enacted. In fact, with two exceptions—a ban on studded tires and executive appointment of the DOT secretary—we’ve acted on every one of the state’s Blue Ribbon Commission recommendations for transportation. The one recommendation that remains… the one that will have a huge effect on the future of our economy and quality of life… is funding the list of critical highway, bridge, ferry, rail, and transit improvements.
This fall, voters in our state will face the single most important question in generations. Will we invest in our future or lose jobs and economic competitiveness? Will existing businesses grow and expand here? Will we make our roads and bridges safer for those who travel them?
While I would have preferred a vote in Olympia when our legislature was in session, this measure is a win for the people of Washington and I am fully support it. Senator Slade Gorton and I have been working very hard to get the R51 campaign underway.
The passage of Referendum 51 will result in thousands of new jobs. If the regional transportation investments are added in, there will be well over 20,000 family wage jobs created and sustained for several years. Family wage jobs for laid off workers eager to return to work. Furthermore, the better transportation system that will result from R51 improvements will help spawn new businesses and many family wage jobs for years to come.
We now have a blueprint for a brighter economic future and a better quality of life. We must work together to make that future a reality.
Let’s talk for a moment about some of the transportation improvements that R51 will bring to the state of Washington.
Projects you’ll see include:
· $100 million for improvements on SR 520 between Seattle and Bellevue.
· $450 million toward rebuilding the Alaskan Way Viaduct.
· $1.5 billion to get started on major improvements to 405, adding lanes, reworking interchanges, and fixing other chokepoints along the corridor.
· $207 million for the North Spokane corridor.
· $500 million to extend Highway 509 to connect with I-5 south of SeaTac.
· $373 million to build a new freeway connector between I-5 and SR167 in Fife.
· And, while we know road improvements are critical, we must also use the transportation system we’ve got more efficiently. That’s where additional funding for park & ride lots, car and van pools, and transit come in. The more people per vehicle (be it bus, van, or car), the faster all of our commutes will be.
As you can tell, a lot is at stake for our state in November. If we don’t step up to the plate, two things are certain: jobs and businesses will expand or relocate somewhere else, and the cost of these projects will just get more and more expensive. It’s up to us.
Transportation improvements are the most important step to maintaining our economic competitiveness. However, I’m pleased to report that we were successful in winning passage in the Legislature of many of the other recommendations from my Competitiveness Council – which I convened last year to find the best ways to keep our state thriving with new and expanded businesses.
We won legislation to improve equity and fairness in our unemployment insurance system. Business should pay into it what they get out of it. Too many sectors of our economy are paying more than their fair share.
We also were able to clarify the taxation of investment income…
One of the most critical issues for competitiveness is regulatory reform. We have established focused leadership to bring major reform and accountability to Washington State’s regulatory system. Paul Isaki, my new special assistant for Business and Regulatory Reform, is overseeing regulatory reform. He is working very closely on important projects to ensure that their permitting moves ahead in a timely fashion and that business has a clear understanding of what is required to obtain a permit.
The Office of Permit Assistance has also been moved into my office. This office provides critical information to applicants, and facilitates and coordinates permit processes. We believe this office will play an important role in holding the department of ecology’s feet to the fire as Ecology focuses on permit streamlining.
Although it is critical now, transportation is not the only kind of infrastructure important to our economic future. We have secured long-term, predictable funding for the Community Economic Revitalization Board, or CERB, as a vehicle for transportation and other infrastructure investments, such as sewer, water, and telecommunications, that are tied to private investment and job creation, especially in rural areas. And we are continuing to look for new tools to assist in building economic development infrastructure. We will be holding an economic development summit in September to unveil recommendations being developed by public/private economic development entities.
My administration is working hard to build partnerships with the business community, to make sure state government is helping businesses thrive. When our businesses thrive, our communities thrive and when our communities thrive, our families thrive.
It’s important that in designing strategies for economic recovery, we think not only about the short-term need to get people to work and into the stores, but also about the long term requirements for a strong economic foundation: a modern, reliable transportation system, a 21st century workforce, a vibrant, entrepreneurial business climate, and a great quality of life.
Thank you very much for having me here today.