At this year’s Skagit Valley Tulip Festival, fans of the flower will find a vivid if belated bloom, a farming landscape suitable for framing and, on one quarter-mile stretch of country road, an awkward, litigious rivalry between one of the valley’s oldest tulip gardens and its former CEO.
On April 1, the first day of the tulip festival, Mount Vernon native Andrew Miller formally opened Tulip Valley Farms, the valley’s fourth tulip-viewing operation. Located in a hazelnut orchard just west of Mount Vernon, Miller’s project still has the crazy-quilt rawness of a startup, with massive metal cargo containers and tents standing in for permanent buildings and acre after striped acre of blooming color.
But barely 900 feet to south, on the other side of Bradshaw Road, sits a much larger and refined establishment: Tulip Town, the 40-year-old viewing farm that Miller and four high school classmates acquired in 2019 — but which also fired Miller last September before taking him to court.
According to the lawsuit, filed March 28 in Skagit County Superior Court against Miller and Tulip Valley Farms, Miller’s neighborly location is intended “to siphon off” Tulip Town’s tourist traffic during the festival, when Tulip Town makes 90% of its annual revenue.
What’s more, Miller deceptively set up the new venture in secret while “still presenting himself as our partner and on our payroll,” according to filings and a statement by Tulip Town’s remaining partners, who largely declined to comment on the case for this story.
Miller sees things differently. In court filings, he and Tulip Valley Farms point out that Miller was never contractually prohibited from starting a competing business.
They also argue that Tulip Town is the party seeking “an unfair competitive advantage” by, among other things, bringing the lawsuit just days before the festival to “cause the most disruption” to Miller’s new venture.
The dispute, a topic of some discussion in this northwest Washington agricultural community, hasn’t visibly interfered with the tulip festival. The bloom, delayed by the cold spring, is peaking and is expected to bring visitors well into May. On a recent weekday, local farm roads were busy with cars that no farmer would own.
Still, after three years of pandemic-thinned crowds, many locals would have preferred a less-litigious start to one of the valley’s biggest economic events, which reportedly brought in 350,000 visitors and $65 million a year before COVID-19, according to festival officials.
For many businesses, “this is as big as Christmas,” says Cindy Verge, the festival’s executive director, who nonetheless concedes that the dispute, like the cold spring weather, “is certainly not something we can control.”
“You’ve got to have trust”
The seeds of that dispute were planted four years ago when Miller and four other members of the Mount Vernon High School Class of 1994 — Angela Speer, Randy Howard, Donnie Keltz and Rachael Ward Sparwasser — decided to buy Tulip Town, then one of the valley’s two viewing farms.
Owners Tom and Jeannette DeGoede, then in their 80s, had fallen into a classic succession trap: Unable to pass the business to their children, they also hadn’t found a buyer to keep the garden going, according to local accounts.
Miller, a military intelligence officer-turned-Amazon employee-turned-economic development consultant, among many other things, convinced his classmates that Tulip Town was a key piece of local agribusiness infrastructure worth investing in, according to media accounts.
Soon after, the classmates formed Spinach Bus Ventures (a reference to the bus they’d ridden as kids working in the local spinach fields) and in June 2019 purchased Tulip Town for $1.6 million, according to county records. The funds were from Sparwasser, an attorney, and her mother, Patti Ward, Sparwasser said.
Although none of the partners had actually farmed, each brought professional skills ranging from law to technology to accounting. Miller, then unemployed, would be CEO with a $120,000 annual salary, according to filings.
As important, the partners brought “a deep well of confidence in one another, based on their shared history,” noted one media account in 2020. As Keltz put it, “Any time you get partners, you’ve got to have trust.”
The trust was immediately tested. In March 2020, just weeks before their first tulip festival, COVID shut everything down. The festival was canceled. The other tulip viewing garden, RoozenGaarde, closed to the public.
Tulip Town adapted. They sold and shipped thousands of bouquets and offered twice-daily virtual tours of the tulip fields, streamed on Facebook. The latter idea had come from Miller, a energetic, charismatic figure who was frequently quoted in media coverage of Tulip Town.
“Thousands of details”
But even as Tulip Town survived its first year, problems were cropping up.
Miller had lots of business ideas, but the company “was disorganized, not executing effectively on its business plans, and struggling financially [and] experienced substantial losses overall during his tenure as CEO,” according to court filings.
Miller also allegedly bungled the 2021 planting by failing to drain the fields sufficiently before putting in the bulbs, among other mistakes, according to filings. Of 7 acres planted, only 1 bloomed the following spring, leading to a “steep drop in visitors and revenues in 2022,” even as other farms had “strong” blooms.
Among those was second-generation Skagit Valley tulip farmer Leo Roozen, one of the owners of RoozenGaarde, a division of the Washington Bulb Co. Although Roozen, like many locals, carefully doesn’t comment directly on the Tulip Town allegations, he does allow that tulip farming is a very complicated business.
“There are thousands of details, and those are the things that a person can have a tendency to not get done, or put off till tomorrow or not even know,” Roozen says. “And those are the things that’ll make the difference.”
In September 2021, Miller’s partners decided to remove him as CEO, according to filings. But because Miller’s “family depended on his income and health insurance,” they moved Miller to a new role — developing a business consulting subsidiary — for a year at the same salary, while also managing the planting.
“The plan was that [Miller] would grow the consulting business during that time, so it would reach sufficient revenues to sustain his compensation going forward,” said Sparwasser in a court filing.
But by last August, after Miller had generated just $17,500 in consulting revenue, the partners started suspecting Miller was involved with another tulip operation.
Calls and emails from several suppliers indicated that as early as May 2022, Miller had been working with a local farmer, Larry Jensen, to open a competing tulip farm, according to filings. (Jensen declined to comment for this story, according to Tulip Valley Farms.)
Convinced that Miller was effectively a competitor — and had used Tulip Town’s name and supplier relationships to “receive favorable pricing” — the remaining partners removed Miller as a member, effective Sept. 30, according to filings. (Speer left the partnership in early 2022, Sparwasser says.)
In an Oct. 19 story in the Skagit Valley Herald, Miller announced plans for Tulip Valley Farms, on 30 acres of land leased from Jensen just south of Tulip Town.
Miller told the Herald that his new venture “is similar to what he did at Tulip Town” but would include “new ideas,” such as allowing visitors to walk among the rows of flowers. “I like to think of it as completing rather than competing,” Miller told the Herald.
Stalemate
The company didn’t file suit until March, after Miller located his entrance close to Tulip Town’s driveway, and after Miller refused to stop using “appropriated photos of Tulip Town fields to advertise his new business,” according to filings.
In addition to the customer-siphoning driveway, the partners claimed Miller had breached his fiduciary duties to their company; had “misleadingly used” their business relationships; and “confusingly associated his new business with Tulip Town in communications to potential customers.”
The partners wanted Tulip Valley Farms permanently barred from operating and any realized revenues and profits held in a trust to pay any judgment against Tulip Valley Farm.
Miller and Tulip Valley Farms contend that Tulip Town’s owners have no case.
The membership agreement explicitly allows members to “engage in or possess an interest in other business ventures of every nature and description … including businesses that are similar to” Tulip Town.
Miller and Tulip Valley Farms say their location was dictated by agricultural requirements, according to court filings. “Tulips cannot be commercially grown in just any field,” states a filing by Tulip Valley Farms.
They argue that Tulip Town sought “an unfair competitive advantage” by the timing of the suit and by interfering with Tulip Valley Farms’ internet traffic.
They also suggest that shutting down Tulip Valley Farms would harm the community, local businesses and the festival. The only “victor” would be “the ego of Rachael Sparwasser,” states a declaration filed by Jensen.
The case is now at something of a stalemate. Miller and Tulip Valley Farms have agreed not to use Tulip Town’s business relationships and photos. In turn, Tulip Town has agreed not to seek a permanent injunction against Tulip Valley Farms’ ongoing operations, but is continuing to sue for damages.
“We’re going to pursue all the remedies that we have available at law,” Sparwasser told The Seattle Times. She declined to say whether any such remedy would include forcing Miller and Tulip Valley Farms to move to another site. On Tuesday, Miller asked the court to dismiss the lawsuit, but as of Thursday, no hearing had been scheduled, according to online records.
“It’s a cold spring”
In the meantime, the tulips continue doing what tulips do. The fields around Mount Vernon are bedecked with horizontal rainbows. Each weekend since mid-April has brought in more tourists. “Last week was crazy,” says Blakely Doerge, who was working Tuesday at Pyung Chang Korean BBQ in downtown Mount Vernon.
Both Tulip Town and its upstart rival are busy, though the crowds at the former were much larger.
Miller, who was at the farm Tuesday, declined to discuss the case. But he said the company has already invested over $200,000 in the new farm, and he expects the business to grow. “We are 80 miles from 6 1/2 million people,” he says.
Miller also hopes the friction with his former partners can ease with time — though for now, he allows, “it’s a cold spring.”
Sparwasser declined to comment on the seasonal temperature.
Tulip Town would hardly be the first agricultural partnership to fracture acrimoniously into competing ventures, says Trevor Lane, an expert in economic development with Washington State University Extension who has followed the tulip tempest.
Lane thinks that if the dispute can be settled quickly, Skagit Valley’s budding tulip sector could actually benefit from a concentration of close-in competitors.
Research on economic “clustering” suggests that agricultural communities looking to expand into tourism, for example, can actually attract more business overall by providing tourists more options in a concentrated area.
That grow-the-pie view is shared by many locals in the tulip world.
“We have plenty of room for multiple growers,” says Verge, the festival director. “There’s more than enough to go around for everybody,” echoes Roozen.
The legal dispute is the wild card, Lane says. In the optimistic version of events, Lane says, the fight blows over, the combatants move on and the next season brings even more visitors.
But “the pessimistic version,” Lane says, “is that two small farms go out of operation and the land becomes housing development.”
–By Paul Roberts, The Seattle Times
(c)2023 The Seattle Times
Distributed by Tribune Content Agency, LLC.
