Wholesale horticultural closing ends local jobs, disrupts nursery supply - Salish Current
February 22, 2024
Wholesale horticultural closing ends local jobs, disrupts nursery supply
Dick Clever

Fewer flowers this year? A wholesale nursery supplier with two sites in Skagit County has announced it is closing in April after a rocky recent history culminating in bankruptcy. (Salish Current photo ©)

February 22, 2024
Wholesale horticultural closing ends local jobs, disrupts nursery supply
Dick Clever

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One of the biggest wholesale horticultural operations in Western Washington is preparing to shut down, laying off 180 workers as hundreds of retailers begin seeking new sources of supply. 

Skagit Horticulture includes 60 acres at two sites in Skagit County and another 295 acres in Mabton in Eastern Washington, where much of the company’s wholesale plant products are grown and shipped to customers in the West and elsewhere in the country. The first plant retailers to begin feeling the absence of Skagit Horticulture are mostly local.

Paige Landham, who operates The Garden Spot in Bellingham, says Skagit Horticulture has been a steady supplier over the years.

“We order from them in the early spring when we need to boost inventory,” she said, wondering where to go next for plant supplies.

Port Townsend Garden Center, in the city of that name, is a regular buyer of Skagit Horticulture goods. Patty Smith, a clerk at the store, estimates that about 15% of the store’s inventory comes from the Skagit nursery. 

Sky Nursery is one of the larger retail greenhouses in the northern Seattle metropolitan area and does some buying from Skagit, but also from other wholesalers. A staff person there said the recent, and permanent, shutdown of the long-established Molbak’s Garden and Home in Bothell has been another major jolt to gardening enthusiasts.

Unexpected

Some of the unease in the nursery industry these days comes from the Federal Reserve’s aggressive hikes on interest rates that has brought inflation within reach of its 2% target. But it has also cooled the economy. Some nursery industry observers are seeing a slowdown in the retail plant stores.

Many in the nursery business were surprised when Skagit Horticulture CEO Scott Crownover announced early this month that the company would be closing as of the end of April. The past few years were good for the industry, thanks in part to the COVID pandemic.

“Sales really accelerated during the five years of the COVID period,” said John Christianson, whose popular nursery is west of Mount Version on the Skagit Flats. He is well-versed on the industry and tracks trends in flora and real estate. Like others in the industry, Christianson was surprised at what seemed a sudden turn in Skagit Horticulture’s fortunes. 

The pending closure also came as a surprise to the Skagit Horticulture staff. Just last month, the company was promoting its plans to sell plants and gardening supplies online.

Christianson was at Skagit Horticulture’s Riverbend Road site when Crownover made the announcement by reading a prepared statement and declining to answer questions. Christianson said it appears that the land will sit idle for now. “Mothballed” was a word used by one observer.

“It will probably be sold to another grower,” Christianson said, because the land is zoned for agriculture and it would be very difficult for a new owner to change the zoning.

He said he ran into an executive from Bellingham’s Smith Gardens last weekend at the annual Northwest Flower and Garden Show at the Seattle Convention Center. The family-owned Smith Gardens has become a large multilocation grower for big-box stores. Christianson asked the Smith representative if the company might be looking at the Mount Vernon property and got a negative response.

Longtime Skagit farmer Tony Wisdom said the same challenges are facing all farmers, whether in greenhouses or croplands. 

“That’s the very same things that caused Skagit Gardens to close,” Wisdom said.

He cited the new law requiring overtime pay over 40 hours/week for agricultural workers, the high cost of transport, taxes and burdensome regulations, among other issues.

Swept up

Skagit Gardens was launched in 1966 by Jim and Ruth Youngsman who operated the nursery for 30 years. They sold the business to International Garden Products, which held it for 10 years, and sold it to a company called Aequitas, based in Portland, Oregon. Skagit Gardens then found itself in a bad situation that was not of its making.

Aequitas came under suspicion from the federal Securities and Exchange Commission, and an investigation exposed a $350 million fraud that resulted in prison terms for the company’s top four executives. The firm had fallen into financial trouble and began using new investors to pay commitments to earlier investors — a classic Ponzi scheme, federal prosecutors said. Evidence at trial showed that Aequitas kept soliciting new investments without disclosing its own financial distress.

Skagit Gardens was one of many businesses swept up in bankruptcy proceedings in the wake of the Aequitas case. The company was bought at auction by Seattle venture capital firm Columbia Pacific Management, the successful high bidder at $8.6 million.

Skagit Gardens was merged in January 2017 with Northwest Horticulture, another company controlled by Columbia Pacific, and renamed Skagit Horticulture. The merger created a stronger combination. Skagit had the quality products and Northwest had a larger scale of operation. But, Crownover said, the mounting costs of operations became unsustainable. 

Two men connected to Columbia Pacific, Daniel Baty and Raymond Brandstrom, are listed as the governors of the company on Washington corporate records. Efforts by Salish Current to reach them have been so far unsuccessful.

— Reported by Dick Clever

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