Tapping Wineries and Breweries as an Economic Development Tool

Sometimes the best way to incubate is to ferment. One Southeast Washington State city has leveraged its unique natural resources to create an incubator for aspiring winemakers.

Walla Walla, Washington, population roughly 30,000, is tucked away in the rural southeast corner of the Evergreen State, about 250 miles southeast of Seattle and 200 miles east of Portland, Oregon. It’s not the kind of place people go to by accident. In addition to being home to the Washington State Penitentiary, downtown Walla Walla was recognized as one the American Planning Association’s “Great Places in America” in 2012. Its vibrant, tree-lined historic downtown with abundant street-side dining and public gathering space is enough to entice tourists who might not otherwise venture to the far-flung corner of the state.

However, the quaint downtown and charm isn’t the only thing that brings people to Walla Walla. The tranquil town is surrounded by unique topography and climate that lends itself to growing wine grapes. Leoneti Cellars, established in 1977, trailblazed the industry, establishing a vineyard on a small plot of land southeast of downtown. The founder’s grandparents–Italian immigrants to the region at the turn of the 20th century–made a living as farmers and grew grapes so they could produce small batches of wine for themselves and family and friends. Over the next several years, the wine industry slowly gained momentum. With notoriously choosy consumers and a small number of wineries, it was not until the mid 1990s that the region started to gain recognition as a destination for wine enthusiasts.

Walla Walla Vineyard and Hot Air Balloons (3)
Hot air balloons rise over a vineyard at sunrise near Walla Walla, WA. Photo credit: author’s image.

Today, more than 140 wineries operate in and around Walla Walla. A 2011 report showed that the wine industry was directly responsible for more than 2000 jobs and annual revenue of roughly $96 million.¹ Counting multiplier jobs, the total rises to over 6000, nearly 15% of the region’s workforce. Perhaps most surprising is the industry’s steady growth during the recession: between 2006 and 2011 the wine industry in Walla Walla grew by over 11%.

Like the product itself, the region’s wineries took time to mature. As winemaking gained momentum in Walla Walla, local officials took notice, recognizing the nascent industry as a potential economic development boon for the region. However, winemaking is as much a science as it is an art. Aspiring winemakers in the region couldn’t find the trained professionals or afford to build the specialized production facilities they needed to expand their businesses.

Seven Hills Winery
Wine aging at Seven Hills Winery in Walla Walla, WA. Photo credit: Joe Mabel; Wikimedia Commons

Enter Walla Walla Community College. In 2000, the college, with assistance from local industry leaders and economic development officials, launched Associate’s Degrees and certificate programs in Enology and Viticulture, and in related fields such as branding and marketing. Local wineries and winemakers are involved with the program, providing both hands-on experience and financial aid. Students in the program are responsible for winemaking and operations of College Cellars, a state-bonded winery that partially funds the Enology and Viticulture program with its revenue. Today, the program’s graduates are not only helping sustain the winemakers already in the region but are striking out on their own, continuing to grow the industry. Its unique course offerings are also drawing in students from across the country who are seeking the specialized skills necessary to establish and operate a winery.

The Port Authority of Walla Walla and the state of Washington each played a significant role in advancing the industry to new heights. In 2006, the Washington State Economic Development Board allocated $1 million dollars to construct three “incubator” buildings on undeveloped land near the regional airport. Two years later, the state and the Port Authority funded an expansion of the facility from three buildings to five. Each building contains specialized production facilities, a tasting room, and offices, and can be leased by an upstart winemaking operation for up to six years. Rent for the facilities is scaled and increases annually, allowing tenants to keep costs low and boost working capital while they scale up operations. In addition, the incubators are in close proximity to many other local winemakers who lease nearby industrial facilities from the Port Authority, making it easy for winemakers to share expertise and for tourists to move from winery to winery sampling wine. Since they opened in 2007, the incubators have helped more than 20 wineries get off the ground. (Click here to view the program’s eligibility requirements and rent schedule)

Incubator Buildings. Photo Credit Port of Walla Walla
Incubator buildings near Walla Walla Regional Airport. Photo Credit: Port of Walla Walla

Recently, the incubator project welcomed a new tenant: a brewery. The hope is to entice the spirit-loving tourists coming to the region to trade the wine glass for a pint glass. The Port Authority might be onto something with their new tenant: central Washington state is one of the world’s best places to grow hops and produces roughly 77% of the country’s supply of the hemp variant. Could brewing be the new wine-making? It’s not yet evident–but city and state economic development professionals helped capitalize on their natural resources to promote a niche wine industry into a world-class asset for an otherwise stagnant rural region.

What can other cities and towns learn from Walla Walla?

  • Take Stock of Your Assets. Every city and town has something that sets it apart. There aren’t many places that are ideal for vineyards, but historic buildings, natural resources, or local artists, can become a source of pride (and revenue) for your city.
  • Look to the Edges. Talk to the folks living and doing work on the peripheries and learn more about what they’re up to and how it’s going. There could be a vibrant art community just outside of town looking for a partnership and guidance.
  • Form Creative Partnerships. The Port Authority of Walla Walla manages a regional airport and many other industrial facilities but they found a way to use their assets: providing construction financing and free land for development of the incubator facilities. Whether public or private, see what organizations are interested in a partnership.
  • Small is Good. Economic development officials in the area could have tried to entice a multinational commercial winemaker to come to the city as a wholesale buyer of local grapes, possibly even to establish a big production facility in the area. Instead, they went small, promoting boutique producers, creating more jobs, and having a greater economic impact on tourism and the region’s tax base.
  • Partner with Local Education Institutions. Not every industry requires an advanced degree but many–especially manufacturing and agriculture–require some sort of specialized training. See if there is a way to partner with local educational institutions to provide the skills necessary to grow and sustain an industry.

Cover photo: A picturesque vineyard a few miles south of Walla Walla, WA, with the Blue Mountains in the background. Photo credit: author’s image.

  1. “Revisiting the Economic Impacts of the Walla Walla Wine Cluster.” Economic Modeling Specialists, Inc. 2011. Accessed from: https://www.wwcc.edu/CMS/fileadmin/wine/DOCS/Revisiting_the_Economic_Impacts_of_the_Walla_Walla_Wine_Cluster_EMSI.pdf

Chris Bendix is an Editorial Board member for CPJ. He has a passion for seeking equity, efficiency, and sustainability in policy-making, especially at the nexus of transportation and real estate. A Seattle native, Chris earned a BA in Philosophy from Whitman College (in Walla Walla, Washington). He will graduate from DCRP in 2017 with specializations in Housing & Community Development and Transportation.