Citing a downturn in the oil and gas industry, CH2M Hill has announced it is closing its Bellingham office.
The engineering firm announced the decision to its employees Monday afternoon, Sept. 21, said John Corsi, a spokesman for the company. The closure will impact 120 employees. Corsi said they are working with each one of them to either find work within the company or at other organizations.
Corsi said the office at 21 Bellwether Way will close within the next 60 days, but some staff will be asked to stay on for a few months as they finish ongoing projects.
CH2M Hill has had a significant impact on the local economy, given the high-wage jobs it offers. The Bellingham office has focused on the development of major oil and gas projects, but the industry has been quite challenging recently, given the plunge in oil prices in the past year.
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The office itself has deep roots in the community. Before it was bought by CH2M Hill in 2007, it was owned by VECO, which also did a lot of oil and gas projects locally and in Alaska. After being bought by CH2M Hill, the Bellingham office grew, moving from the Flatiron building in the downtown district to the waterfront in 2010. At the time of the move, the office had about 250 employees.
The Bellingham office had weathered tough times in the oil and gas industry before. During the global recession in 2009, Ken Marzocco, who was then president and general manager of the Bellingham office, said in an interview that the local office was expanding its geographic area, looking beyond projects in Alaska and the Pacific Northwest into Mexico and South America.
With oil prices currently around $46 a barrel, however, Corsi said the adverse global market conditions resulted in lower profitability on the company’s services.
“This has prompted us to re-evaluate where we are serving our clients in this sector so that we can continue to provide them quality, cost-competitive solutions,” Corsi said.
While the Bellingham office focused on oil and gas projects, including the local refineries, the company itself has handled a variety of other projects in Whatcom County, including with government agencies such as the city of Bellingham and the Port of Bellingham.
In May 2013 CH2M Hill was hired to prepare the Environmental Impact Statement to evaluate the Gateway Pacific Terminal project. Corsi said that any local projects will continue to be handled by company experts in other offices. CH2M Hill has offices in 50 countries and across the U.S., including in the Seattle, Spokane and Richland areas of Washington state.
The announcement is a setback in the expanding professional and business services sector in Whatcom County. In August Whatcom County had 8,500 people employed in that sector, 600 more than a year ago, according to data from the Washington State Employment Security Department.
It’s an important category for a local economy, because it tends to pay higher-than-average wages, said Anneliese Vance-Sherman, a regional labor economist for the state. While the average annual Whatcom County salary is around $41,000, the county average in professional and business services is $63,000, she said. Along with engineering firms like CH2M Hill, professional services include businesses in several other sectors, such as accounting and architecture.
“Professional services has been growing in Whatcom County and across the state, and that’s good for the economy,” Vance-Sherman said.
The challenge of professional services for a local economy is the volatility. Since a professional service company contracts with other companies, business can quickly fluctuate, she said. When oil prices were high and companies were looking for more supply, engineering firms in that field were finding plenty of work.
The closure of the Bellingham CH2M Hill office will have a ripple effect in the community, said Hart Hodges, director of the Center for Economic and Business Research at Western Washington University. An engineering firm doesn’t use a huge amount of physical resources, but those high salaries the employees receive are spent in the community, including at retail stores and restaurants.
The closure also underscores the point that labor market volatility can impact anyone, including those who make above-average salaries, Hodges said. With that kind of skill set, Hodges would expect many of the workers at CH2M Hill will be able to find jobs, but it may be outside of Whatcom County because options are limited here.
“Some will be moving on, and that will be our loss,” Hodges said.
CH2M HILL HISTORY IN BELLINGHAM
It’s been through several ownership changes over the years, but the Bellingham office of CH2M Hill has played a significant role providing engineering jobs for more than 40 years. Here’s a timeline:
1974: The engineering firm opens as Hallanger Engineers.
1987: Bought by shareholders, the firm becomes Christenson Engineering.
1990: The company moves into a location on Bay Street, known as the Flatiron Building.
1993: VECO purchases Christenson Engineering.
September 2007: VECO is purchased by CH2M Hill.
November 2007: CH2M Hill announces that it is expanding into a new building on Bellwether Way.
September 2009: With the global recession in place, CH2M Hill announces that it is moving into the waterfront building rather than expanding, resulting in it vacating the Flatiron Building. In April 2010 Faithlife (known at the time as Logos Bible Software) announces that it will move into the Flatiron building.
August 2010: CH2M Hill moves into its current location on Bellwether Way.
May 2013: CH2M Hill is hired to prepare the Environmental Impact Statement to evaluate the Gateway Pacific Terminal project, the proposed coal port at Cherry Point. At the time of the announcement, the company said it would work on the project in its Bellevue and Bellingham offices. Spokesman John Corsi said the work will continue to be handled by staff experts throughout the company.
September 2015: CH2M Hill announces that it is closing the Bellingham office.