Idaho Towns See Tourism Putting Them Back on Map

COEUR D'ALENE, Ida. —  No one was more surprised than Duane Hagadone when readers of Conde Nast Traveler magazine last fall chose his middle-of-nowhere lakeside resort as the best tourist stop in the mainland United States.

The Coeur d’Alene Resort--which has since opened a golf course boasting the world’s only floating green--had done almost no national advertising to draw visitors to northern Idaho, where logging, mining and farming have long reigned supreme.

Throughout the Pacific Northwest, towns such as Coeur d’Alene are attempting to smooth out the vagaries of their economies by using their natural resources and scenery to attract tourists.

As a result, along with neighbors Washington and Oregon--which have benefited strongly from aircraft production, high-tech manufacturing and Pacific Rim trade--Idaho has been riding out the nation’s current recession in relatively fine style.

The Northwest has been less affected than the rest of the nation by the overall slowdown in manufacturing. Moreover, a steady influx of Californians, many of them retirees, to Seattle, Portland and even northern Idaho continues to fuel growth.

In Idaho, the shift to tourism is putting some towns literally on the map. Many Americans know of the state as the source of silver and potatoes but have no idea where it is exactly.

“I think (tourism) is the wave of the future for this area,” said Carl Benscheidt, a former West Coast producer-director for “CBS Evening News,” who moved with his family four years ago from Pacific Palisades to Hayden Lake, near Coeur d’Alene.

Some business owners in Coeur d’Alene profess surprise when asked about the recession. They say the nation’s downturn has largely passed by this unassuming town of 25,000, the biggest town in Kootenai County.

Tourism Feeds Boom

Since 1986, the county has seen its average employment increase by 4,300 jobs to more than 32,000. Property values are up 14% from a year ago, and a building surge is under way. Much of the boom is fed by tourism.

About 40 miles east of Coeur d’Alene, motorists whizzing across the Idaho Panhandle on Interstate 90 are greeted by a billboard: “Willkommen zu Kellogg.” The sign is a message that shop owners plan to transform Kellogg from a bleak mining town into a bright Alpine village, to cater to skiers and mountain bikers drawn to the slopes of the town’s new Silver Mountain resort.

Similarly, when logging soured years ago, Leavenworth, Wash., was saved by a conversion into a theme town with Bavarian cafes and shops. After the lone sawmill burned in Riggins, Ida., townspeople redecorated storefronts Western-style and promoted rafting trips and fishing excursions on the Salmon River, with great success. The logging port of Grays Harbor, Wash., next year will become a port of call for Royal Caribbean cruise passengers.

And Sandpoint, an old Idaho timber community north of Coeur d’Alene on Lake Pend Oreille, has become a mecca for weavers, potters and painters, with an annual festival to prove it. The town was just chosen one of four model communities by the Tourism Center of the University of Minnesota Extension Service, which is developing a how-to program for rural towns interested in developing their tourism potential.

Idaho’s $1.4-billion tourism business, the state’s fastest-growing industry, helped boost the number of jobs in the state by 5.5% in 1990 over 1989, a growth rate second only to Nevada’s. And Idaho led the nation in construction job growth, with a stellar 17.9% increase.

Despite the gains, not everyone is taking to the new order. Middle-aged miners and timber workers grumble that they can’t make a living waiting tables or parking cars for the minimum wage. And higher property values mean that their taxes are going up even as they file for unemployment benefits.

A Cyclical Industry

Economists point out that service jobs don’t provide as much economic staying power as manufacturing. And they warn that tourism carries its own risk, being a cyclical industry vulnerable to economic downturns.

Cecil D. Andrus, governor of Idaho’s million residents, is quick to agree that tourism “is not a panacea. But it’s a tremendous help and part of our overall diversity.”

To Hagadone, who can see the house where he was born from his office on stilts in Lake Coeur d’Alene next to his hotel, tourism seemed the logical path when the economic mainstays started sagging.

Coeur d’Alene, 40 minutes from the Spokane, Wash., airport, sits on the northern end of what National Geographic magazine has described as one of the five most beautiful lakes in the world. From the 125-mile shoreline, hills dense with pines poke through the morning mist; fish abound.

“I saw what tourism did for the Hawaiian islands,” said Hagadone, 58, whose Hagadone Corp. owns the Idaho Panhandle’s seven newspapers as well as real estate, Coeur d’Alene’s two radio stations and This Week magazine guides in Honolulu.

“Thirty years ago, Hawaii had high unemployment and was in the red. Two years ago, (legislators) spent a month fighting over what to do with the surplus. That all came through tourism.”

Starting in the 1970s, Hagadone watched as hundreds of miners and mill workers, faced with depressed markets, took pay cuts or lost their jobs. Many boarded up their houses and moved away. Coeur d’Alene’s young people were forced to look elsewhere for employment.

Then, in the 1980s, the town suffered another blow, gaining notoriety--now largely shrugged off--as the home base of a gaggle of zealous white supremacists called Aryan Nations.

Looking to expand his business, Hagadone bought a lackluster hotel on the lake and set about converting it into a world-class destination, to the jeers of some townspeople who viewed his gamble as folly. The 338-room, 18-story Coeur d’Alene Resort opened five years ago. Hagadone says it is profitable, thanks to word-of-mouth convention and tourist business--and a lot of favorable national publicity.

Sawmill to Golf Course

When a 100-year-old sawmill--a grungy melange of logs, tires and rusting equipment--closed nearby, with a loss of 225 jobs, Hagadone obtained the property for a golf course to supplement the hotel, convention facilities and restaurants.

A cleanup and millions of dollars’ worth of landscaping transformed the place into a spiffy, expensive 18-hole golf course, which opened in April. Golfers are ferried to and from the hotel aboard $125,000 custom-made mahogany cruisers.

So far, Hagadone and Jerald J. (Jerry) Jaeger, his resort partner, have invested more than $100 million in the hotel, golf course and an adjacent shopping plaza. There are plans to build another hotel. All told, the resort employs about 2,000 people in the summer peak.

But there are detractors. Some townspeople complain that Hagadone has usurped too much of the lake. His business interests are so pervasive locally that some residents have taken to derisively calling the town “Coeur de Duane.”

Hagadone has also waged war with companies that produce bluegrass seed, one of the region’s most lucrative agricultural products. After harvest in late summer, grass farmers burn off the old-growth stubble to clear the way for new growth. The clouds of smoke, Hagadone complains, annoy tourists. Some of the fields happen to be next door to a new greyhound racing park that Hagadone has an interest in.

Such quibbles aside, many residents see the growth of tourism as inexorable.

“You can’t say that everything is all copacetic,” said Kevin Laverty, public affairs manager for GTE Northwest Inc. in Coeur d’Alene. “But (tourism) does bring revenue. People do decide to settle here. Coeur d’Alene is taking a new direction.”

For Hagadone, that means extending the tourist season beyond the busy summer. To do so, he is attempting to build winter trade with a link to the new Silver Mountain ski resort in nearby Kellogg. Last year, he offered special ski-hotel packages that included round-trip bus rides from the Coeur d’Alene Resort to the slopes.

The $20-million gondola and ski area--paid for by Von Roll of Switzerland, a $6.4-million federal grant and Kellogg taxpayers--opened last June and drew 78,000 summer visitors. A snap of frigid December weather dampened the holiday business; instead of a projected 100,000 skiers, the resort attracted only 85,000.

From the bright-blue gondola cars, which travel 3.1 miles up Kellogg Peak in 19 minutes, riders get a bird’s-eye view of the Silver Valley and one of the nation’s most notorious Superfund cleanup sites, the old Bunker Hill lead and zinc smelter.

Mines Shut Down

For decades, the smelter provided livelihoods for thousands of Silver Valley residents, but it also spewed out heavy doses of lead that deforested hillsides and contaminated soil and waterways for miles around. A decade after it ceased operating, scores of the area’s children still show levels of lead in their blood that the government considers dangerously high.

The site, notable for two spindly smokestacks visible from the Alpine-style gondola base building, is in the early stages of a federally mandated cleanup and replanting program that is expected to cost more than $100 million.

Ever since mining for lead, silver, zinc, gold and other metals began in the Silver Valley in 1883, residents have been accustomed to a boom-bust cycle. But, in 1981, when low silver prices sent mining into a tailspin and an exodus of miners’ families sent property values plummeting, the residents who remained began to think about diversifying. Although some of the region’s mines came back from the slump, all but two have closed again in recent months with the continuing depression in silver prices.

“It didn’t take a rocket scientist to see what had happened in Park City and Telluride,” said Peter Forsch, general manager and chief executive of Silver Mountain, referring to former mining towns in Utah and Colorado that became popular ski areas.

As Forsch, a recruit from Aspen, sees it, Kellogg is about “20 years behind Park City, which was an old, beat-up ghost town. The blueprints are out there in other areas that have made the transition.”

Among the doubters are the region’s many longtime miners. “I don’t see how tourism can save this place,” said Alan Longley, a Silver Valley miner who has been laid off twice in eight years. “They can bring in all the tourism they want, but $4- to $5-an-hour jobs just don’t cut it.”

Darrell Brown, who worked for many years in the chemistry lab at Bunker Hill, took a job four years ago at the Coeur d’Alene Resort and now figures he makes about $14,000, including tips, compared to $30,000 plus benefits at the mine.

And Kellogg is still a long way from supplanting Tahoe or Vail as a winter hot spot. So far, the resort, hampered by a lack of lodging, has attracted primarily day skiers. “Kellogg needs to beautify and clean up,” Forsch said. “Three of every four buildings are still boarded up.”

In Kellogg’s grim downtown, a storefront here and there is being spruced up with a brightly painted facade, as required by a new ordinance aimed at dressing up the town. Locals call it “Bavarianizing,” because the new statute requires storefronts to have an Alpine look. Although some merchants were disappointed in the first ski season’s business, most seem determined to stick it out.

“I’m not foolish enough to think this will happen overnight,” said Theresa Dimico, manager of a clothing and accessories store on Main Street who hopes soon to open her own store to cater to the tourist trade. “I want to get in on the ground floor. In five years, this place is going to be great.”

Jim Carpenter, a former San Jose engineer who moved up two years ago to work at Miner’s Hat Realty in Kellogg, said speculators from California and elsewhere helped turn the area into a seller’s market during the winter. One family was offered $100,000 for a home that cost $35,000 in 1988. With the mines closing, however, home prices have been dropping again.

But Carpenter has high hopes that Silver Mountain will catch on, given its easy freeway access and plans for more lodging and meeting facilities.

Among the more promising commitments is that of Harry Magnuson, a mining and real estate executive from nearby Wallace, to build a 100-room hotel and convention center on 10 acres next to the gondola base. Although the local papers have been full of stories about Magnuson’s own financial woes, he contends that funding “is not going to be a problem.”

Magnuson and Hagadone both agree that tourism alone cannot keep the northern Idaho economy robust. They want to attract light manufacturing and other businesses, so that the region won’t be overly dependent on yet another cyclical business.

Toward that end, Coeur d’Alene executives four years ago raised $1 million and started the Jobs Plus economic development agency. Since then, Bob Potter, a retired AT&T; executive, has been recruiting small companies from California to set up shop in northern Idaho.

“It’s critical to diversify,” Potter said. About a dozen companies--from a scientific instrument maker to a wheelchair manufacturer--have migrated from California. All told, the agency has wooed employers with about 700 jobs.

Last September, Herman Roup, tired of long commutes and hefty car-phone bills, moved his Bendigo contemporary swimwear company to Coeur d’Alene from Laguna Niguel.

“We wanted a better quality of life,” Roup said, adding: “But we had to educate our buyers that we weren’t going to send them potato-skin bikini tops.”

Despite northern Idaho’s being discovered by Roup and others, Hagadone holds no fear of torrid growth turning Coeur d’Alene into a Southern California-style metropolis.

“We’re an inland, out-of-the-way area,” Hagadone said. “We’ll never become an L.A. But it’s good, solid growth. And it’s exciting.”