UW’s former Nuclear Reactor Building now a historic treasure? Also, Redhook brews are losing ground, and zulily is cut down by analysts.
History buffs and architects who have sought for years to save from demolition a 1961 University of Washington building that once housed a nuclear reactor have one more piece of ammunition.
The Washington Trust for Historic Preservation last week named UW’s Nuclear Reactor Building, known as More Hall Annex, as one of the state’s “most endangered” historic properties.
The vacant concrete building once housed a small, working nuclear reactor surrounded by glass walls. Nuclear operations ended in 1988, and the fuel rods were removed. The state gave UW funds to decontaminate and demolish the structure in 2006.
A new technological force is vying for the space: The Computer Science & Engineering Department, in the nearby 85,000-square-foot Paul G. Allen Center, needs room to expand. More Hall Annex is the closest development site, said Theresa Doherty, UW’s senior project director for the campus master plan.
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Historic-preservation advocates say UW should look at other sites for new construction, or at the very least incorporate the former nuclear-reactor building into new development.
The Nuclear Reactor Building was placed on the National Register of Historic Places in 2009 after its listing on the Washington Heritage Register.
Former UW graduate student Abby Martin, who nominated the building for national significance, wrote that the building — “an early work of Brutalism,” a movement that celebrated exposed concrete and other functional elements — evokes the same ideals of a better future through technology celebrated at the 1962 Seattle World’s Fair.
The building was a showpiece for the UWwhen nuclear-engineering programs were popular at universities and nuclear power’s future seemed assured. By 1968, over 75 nuclear reactors were being used at U.S. colleges, Martin wrote.
“The building was one of the first, if not the first, in the nation which was specifically designed with the intention of making the nuclear process visually accessible and open to the public or casual observer,” Martin wrote.
This summer, UW plans to publish a draft environmental-impact statement (EIS) that will explore alternatives to demolition and ask for public comments. Once a final EIS is published, the Board of Regents will decide the building’s fate.
“We have not decided to demolish the building,” Doherty said.
— Sanjay Bhatt: email@example.com
Redhook beers sag as owner refocuses
The granddaddy of Seattle craft brewing may be showing its age. And if you’re seeing less of it around, that’s not just your pub or grocery store.
Shipments of Redhook beer fell 16 percent in the first quarter of 2015 from the year-earlier period, after growing just 3 percent during 2014, Redhook owner Craft Brew Alliance (CBA) reported last week.
Overall the Portland company had a 5 percent drop in sales. Those results sparked an 18.8 percent drop in its stock price Thursday, even as company executives outlined upbeat plans to expand production capacity at its Kona and Widmer breweries and establish a new Seattle pub for Redhook.
Small independent breweries are proliferating across the state, making Washington No. 2 among states in the sheer number of craft breweries, according to the Brewers Association, a Colorado-based trade group. Statewide production by small brewers leapt 21.6 percent last year to 405,131 barrels.
The nationwide growth rate was a slightly less frothy 18 percent, giving craft brewers an 11 percent market share, says Bart Watson, the association’s chief economist.
CBA, no longer considered a craft brewer, has wide-ranging national distribution of its Kona, Widmer and Redhook beers, thanks to part-owner Anheuser-Busch InBev.
But that doesn’t seem to be a big plus: Quarterly sales through A-B fell 7.2 percent for the quarter, while contract brewing and international sales rose 5.9 percent and revenues from the company’s five pubs edged up 2.3 percent.
On a conference call with analysts, CBA Chief Executive Andy Thomas emphasized “our home-market strategy,” selling its beers in the states where they are produced.
Those markets — Washington for Redhook, Oregon for Widmer, and Hawaii for Kona — are “the most profitable and the most crucial to the health of those brands,” he said.
Among the three, however, “the Redhook brand family is our least profitable brand family.”
He said a brewpub the company plans to build in Fremont or Ballard will “reconnect the Redhook brand to the heart of Seattle.” Redhook was founded in Seattle in 1981 but the brewery and pub in Woodinville are its only local presence.
In Washington, Redhook sales did increase last quarter; even sales of its flagship Longhammer IPA were up here, while nationally that beer and Redhook’s Audible Ale were blamed for most of brand’s sales slump.
But in some other markets, where “where we sell a fair amount of volume” of Redhook beers with little profit, the company plans to “transition … to other more profitable brands in the portfolio,” said chief marketing officer Kennet Kunze.
That switch-over, he added, is likely to be “a drag on Redhook performance” in the quarters ahead.
Redhook’s offerings were already cut back last year by 40 percent as the company embarked on what Thomas called “SKU rationalizations,” reducing the number of stock-keeping units or different products. As analyst Francesco Pellegrino of Sidoti put it, Redhook “was the one that was really whacked the most.”
Brewers Association economist Watson says surveys show craft-beer aficionados do care about buying local, so the home-market focus may be a good strategy for CBA.
Running local brewpubs gives a brewer more than just visibility, it’s a form of instant consumer research, he says. “It allows you a lot of freedom in experimenting, getting a lot of feedback.”
— Rami Grunbaum: firstname.lastname@example.org
Analysts get snippy with zulily
Moms-oriented retailer zulily is finding out that hell hath no fury like an analyst disappointed.
Many in the Wall Street analyst community had embraced the Seattle online retailer as one of e-commerce’s most promising wunderkinds. The stock went public at $22 in late 2013 and soared to heights near $70 a share.
Although some bears from the outset highlighted the company’s sluggish shipping times and draconian no-return policies, there were many bulls who touted high customer loyalty, a strong management team and expansion plans that promised to support “sustained strong growth.”
But last Tuesday zulily drove a knife through its admirers’ hearts, significantly lowering its sales target for this year and acknowledging that a lot of the customers it acquired in 2014 were not so loyal after all. Shares dropped by nearly 20 percent after the market close that day, dipping below $10. They’ve since rebounded — unlike the analysts.
“The lily is wilting,” said a report on the earnings by the formerly bullish RBC Capital. “The dramatic deterioration in (zulily’s) fundamentals ranks as one of the most surprising developments we have seen in the Internet sector over the past year.”
The RBC analysts added their take on the strengths of zulily’s management, and its opportunities, now “can be called into question.”
Analysts with Stifel, who enthusiastically began coverage of the company in January with a “buy” rating, were even grimmer as they downgraded shares to “hold.” They also issued an apology.
“We were wrong. Sorry. zulily was not able to transition from the straight fastballs of Little League (its initial model) to the curve balls of the Big Leagues (a more sustained growth model),” the report said. “We made a horrific call on the stock when we initiated coverage in January.”
Still, in the dizzying world of online retail, things can change. As RBC points out in its “upside scenario,” the company could gain more customers who could spend more money as zulily expands into other product lines. As the same research outfit said in a note last year, “Time will tell.”
One thing not predicted by the unhappy analysts: The news Friday that Chinese online giant Alibaba had lifted its previously undislosed stake in zulily to nearly 10 percent, much of it by buying stock after this week’s slump.
— Ángel González: email@example.com