Sandpoint is celebrating its centennial this year, and like most milestone birthdays, the event finds this city on Lake Pend Oreille reminiscing about its past and looking ahead to its future.


On its 100th birthday, Sandpoint can be certain of one thing, however: It has kept its looks.


Its always been a great place, says developer Dick Villelli, of Hidden Lakes Golf Resort, near Sandpoint. I guess if we were artists youd say were putting the finishing touches on what already was a beautiful picture.


Still, in many instances, the changes that lie ahead for Sandpoint are likely to be more than just finishing touches. Some, in fact, are more a retouching of economic blemishes.


In one such case, a group of businesspeople have formed an economic-development organization to try to wrest Sandpoint and Bonner County, of which Sandpoint is the county seat, from their dependence on a timber-based economy. The move seems well-directed: At the end of 2000, Bonner County had the highest annual unemployment rate (9 percent) of Idahos three northern-most counties, says Kevin Clegg, executive director of the new Bonner County Economic Development Corp., based in Sandpoint.


I dont think we deserve to be in the position of having one of the highest unemployment rates in North Idaho. I think we can do much better than that, he says.


Recently, developers have begun pouring tens of millions of dollars into swank resorts around the area. No one knows what kind of impact that development will have on Sandpoints future, beyond expanding its already robust tourist trade.


Meanwhile, the city of Sandpoint is undergoing something of a renaissance, with several multi-use projects targeted at the picturesque citys downtown corewhich, by the middle of this decade, no longer will have busy U.S. 95 running through it. In a project that will redefine Sandpoints core, the Idaho Transportation Department is designing a planned $25 million bypass route that will run to the east of downtown Sandpoint, between Sand Creek and Lake Pend Oreille. In another effort to bring change, downtown merchants started a business improvement district late last year to help fund a strategic plan for the city core.


Gloria Waterhouse, a partner in one of the new private-sector downtown real estate projects, says shes a relative newcomer to the area, but in talking to locals whove visited her restaurant and inn in recent weeks, shes seen a general sense of excitement that something new and creative is happening here. It feels like the beginning of a real transition.


Population up nearly 40 percent


Its not as if Bonner County is arising, Sleeping Beauty-like, from a deep slumber.


Over the last decade, the countys population grew by nearly 40 percent, making it the ninth-largest county in Idaho, up from 10th previously.


Many of those new residents are retirees, Clegg believes. However, he says, Id bet you that a sizable proportion of that population growth is simply new folks and families that do need jobs. In the past decade, the growth of big employers such as Coldwater Creek Inc., a nationwide catalog and Internet retailer, and Litehouse Inc., a food-processing company, has been able to provide some of those jobs.


For many years before that, timber was the stalwart of Bonner Countys economy, but the lumber and wood-products industries have been in long-term decline, says Kathryn Tacke, a labor market analyst with the Idaho Department of Labor, in Coeur dAlene. Last year, those industries lost yet another 200 jobs in Bonner County when mills and logging operations cut back or closed because of low lumber prices, she says.


In February, Coldwater Creek permanently laid off 160 people companywide, based on slower-than-expected sales of its spring clothing lines. Those layoffs occurred in Coldwater Creeks operations in Sandpoint, Coeur dAlene, and West Virginia.


In addition, Tacke says, Weve seen somewhat of a decrease in other manufacturing operations (in Bonner County) because of what were seeing nationwide right now in manufacturing.


Job losses and the economic slowdown chopped taxable retail sales in the county by 0.6 percent in the last half of 2000 compared with the year-earlier period, she adds.


Its not like things are really horrible, but certainly the last few months have not been ones that Bonner County would like to see happen again, she says.


Tourism continues to be a big part of the Sandpoint areas economy, what with Schweitzer Mountain Resort ski area nearby, summertime recreational activities at Lake Pend Oreille, and the forested Selkirk and Cabinet mountain ranges that ring Sandpoint.


Tourism jobs arent year-round, however, which leaves Sandpoint and Bonner County in a lull in the fall and spring shoulder seasons, Clegg says. For that reason, tourism and services are an important element of the economy, but they cant be the only thing we rely upon, he says.


Cleggs organization has made it a goal to recruit or retain 50 jobs a year for the next several yearsand they have to be good jobs, meeting or exceeding the states per-capita income of about $22,000, and offering benefits packages to workers, he says.


The EDC is keying in on small to medium-sized companies that are not location-dependent and can take advantage of the quality of life that we enjoy here, he says.


Unfortunately, recruitment efforts continue to be hampered by the regions reputation as a haven for racist kooks, Clegg says.


We find that if we talk to (companies in) California, Washington, or Oregon, theres a little bit of question about the image, Clegg says. If you talk (to companies) on a national level its always Oh my gosh, you guys are the Nazi state. Its really frustrating.


Resorts plan expansions


Villelli, of Hidden Lakes Golf Resort, appears to have found at least one antidote to that image problem: golf.


When Villelli endeavored to sell 45 residential lots near his golf course last year, he attracted buyers from all over the U.S., he says.


We sold eight of our lots to people from Scottsdale, three from New York, and one from Florida, plus four buyers from Seattle, two from Jackson Hole, Wyo., and others from Maryland and California, he says.


They cant believe the value theyre getting, and I dont just mean our projectits the value of Sandpoint and the whole area, he says.


About six to eight homes will be built on those lots at Hidden Lakes this year, he says. He hopes to have county approval to sell 27 additional single-family home lots at the development by the end of the year, and already has received approval to build 36 condominium units in another $8 million project on which he hopes to begin construction this summer.


The residential development follows construction of a 16,000-square-foot, lodge-style clubhouse that opened last week, and the reconfiguration of four of the golf courses 18 holes. Together, those two projects cost $5.5 million.


When Seattle-based Harbor Resorts LLC offered units for sale this spring in a $15 million condominium project its planning at Schweitzer Mountain Resort, it also saw far-flung interest. Buyers for the high-end condominiums (priced at $221,000 to $675,000) came from Colorado, California, and Pennsylvania, as well as from Spokane, Seattle, and Sandpoint, says Schweitzer spokeswoman Ingrid Campbell. Construction has begun on that project, called White Pine Lodge, is expected to be finished by December. In addition, Schweitzers owners have announced plans to build 400 condominium units at the resort over the next 10 years, and to sell off some of the mountains 7,000 acres of property to other developers.


Recently two other resort projects that should goose the local economy were announced near Sandpoint: A 30-room boutique hotel on the south end of the Long Bridge, across Lake Pend Oreille from the city, and a 48-unit golf-and-condominium resort at Garfield Bay, about 15 minutes southeast of the city.


Not a second Sun Valley


Sandpoint-area businesspeople arent sure what those kinds of ritzy projects might mean to their economy or their lifestyle, but many are optimistic.


I think theres a really good chance these things will draw some good infusion of capital into our economy, says Brent Baker, president of Sandpoint-based Baker Construction & Development and a Bonner County resident since 1977.


Its happening to Baker already: His company is building a single-family home at Hidden Lakes and a two-unit condominium building at Schweitzer.


I think if Schweitzer and Hidden Lakes Golf Course both develop well, that will attract people who will see the environment as an excellent one to conduct business in, he says.


Clegg says the resort developments will have an effect (on the rest of the county), theres no doubt about it.


Both Baker and Clegg say concerns have been voiced about the possible Sun Valley-ization of Sandpoint, where very pricey resortsand an influx of movie stars whove paid breathtaking prices for fancy homeshave driven up the cost of living, but both contend thats unlikely to happen in Bonner County.


If somebody buys a ski-in-ski-out condo at Schweitzer, the fallout from that is not real big in Sandpoint, Baker says. For decades, people (have been) building million-dollar homes on the lake, but that hasnt seriously impacted blue-collar housing in town.


The average home price in Bonner County rose 28 percent over the last five years, to $138,474, but in three out of those five years, the average included at least one home that sold for more than a million dollars, says Bill Lewis, of the Bonner County Association of Realtors. In fact, in 1999, the most expensive property sold and reportedan important distinction, since Idaho is one of four states in the nation that dont require the price of real estate transactions to be reportedwas $3.2 million, he says.


That price appreciation is mostly waterfront stuff, he says. We dont have a lot of new (speculative residential) development like you would see in Spokane and Coeur dAlene. Its mostly custom (homes).


Downtown makeover


The future of Sandpoint might be most apparent in its downtown, which has undergone an image makeover in the last decade, with the arrival of Coldwater Creeks retail stores at the Cedar Street Bridge, and new restaurants, shops, and now, even a Starbucks coffee house.


Most recently, Waterhouse, the entrepreneurial newcomer, and her development partner, Spokane-based real estate broker Jan Ekstrom, of Janek Co., opened the Inn at Sand Creek and Sand Creek Grill restaurant in a historic building they renovated on South First Avenue, downtown Sandpoints main street. As part of the $1 million project, the partners also are redeveloping a separate building next door into office space, and are building a music venue, called the Boardwalk Blues Club, there, Waterhouse says. The club, which will have about 50 seats and will serve light meals, should open laterthis summer.


Across the street, Bakers company is building and co-owns a $1.2 million mixed-use building called Vintage Court. That project includes a new home for Ivanos, a long-time Sandpoint restaurant, plus office space and condominium units.


Ekstrom also announced plans last fall to build a $3 million office and condominium project on First Avenue, although that project has been put on hold for now, Ekstrom says.


Waterhouse, who previously lived in Jackson Hole, visited Sandpoint last August to look for real estate investment opportunities and was taken with the place. I came here for one day and moved here the day after Christmas, she says.