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What’s in store for Butte's economic development in 2019?

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What’s in store for Butte's economic development in 2019?
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In Butte and beyond, the health of the local economy seems to be on everyone’s mind as 2019 gets underway.

In 2018 alone, the Mining City saw the announced departure of two retailers and one restaurant from the once bustling Butte Plaza Mall, echoing headlines from previous years, which have seen an onslaught of national brands go into bankruptcy.

The biggest blow came in April when Herberger’s parent company, Bon-Ton Stores Inc., announced that it too would fold.

But as the holiday season drew to a close, good news came for local leaders and economic-development advocates.

That’s when FCR — formally First Call Resource, a company that provides call center support and other business services — announced it would be opening a facility in the former location of JC Penney in the Butte mall and bring 350 jobs to the Mining City and surrounding communities.  

Economic-development advocates Julie Jaksha and Joe Willauer serve cities and towns throughout southwest Montana, and they say the communities in their region often have one thing in common: they’re looking for revitalization.

Jaksha and Willauer, who are currently leading a joint venture between their respective organizations, Headwaters RC&D and the Butte Local Development Corp., don’t look back on 2018 as a time of doom and gloom. In fact, they and other economic development advocates in the region say a lot of good happened last year and they’re optimistic, even confident, about what’s in store for 2019.

Highlights from 2018

2018 proved to be an eventful year in Butte.

Praxis Center (econ outlook copy)

An architect's rendering of the Praxis Center planned for the southwest corner of Park and Arizona streets in Uptown Butte. The company continues to move forward with the $35-million center for learning and rural simulation training center.

The year saw the announcements of several new projects, including the proposed $35-million Praxis Center for Innovative Learning and Rural Health Care Simulation Training Center, along with not one but two cryptocurrency mining facilities.

One development from last year that Willauer and Jaksha seemed particularly excited about was the recent acquisition of a $600,000 Brownfields grant from the U.S. Environmental Protection Agency to clean contaminated sites in southwest Montana that do not fall under Superfund. 

In the year ahead, the BLDC will administer the grant, which the two described as “huge” in terms of economic development.

In a nutshell, the funds help developers and other investors offset the costs of performing environmental assessments, which look for contamination from substances like petroleum, asbestos and lead paint. The money can also be used to pay for cleaning up contamination at development sites.

“It’s for redevelopment,” Jaksha explained, noting that developers often steer clear of properties with suspected contamination because of the potential testing and cleanup costs.“This will give them the funding to find out exactly what’s there.”

Jim Davison, executive director of the Anaconda Local Development Corp., also hopes the Brownfields funds will usher in new development.

Davison said the cost of environmental assessments and cleanup is often a barrier to development, so having access to Brownfields funds is a meaningful step forward.

What’s more, the funds can also indirectly help projects acquire financing, as investors and banks sometimes ask for environmental assessments.

Applying for the funds is a competitive process. The BLDC and Headwaters hope to start accepting applications for the funds in mid-February.

Opportunity Zones

The nomination of portions of Butte and Anaconda as Opportunity Zones by Gov. Steve Bullock in April was also a highlight from 2018.

The Opportunity Zone program came out of the Tax Cuts and Jobs Act of 2017, and the idea behind the program is to encourage investment in low-income communities that might otherwise be overlooked by investors.

The incentives provided by the program are in the form of deferred taxes on capital gains.

Under normal circumstances, when someone makes a profit on an investment, they might reinvest their money in, for example, the stock market. But with the new program in place, investors can instead invest in a project in an Opportunity Zone and avoid getting hit, or get hit less severely, by taxes on capital gains.

Diving for economic development

Ridge Waters (econ outlook copy)

Ridge Waters pool at Stodden Park exceeded expectations in terms of attendance and revenue with its opening in 2018. Officials expect the success to continue.

For Butte-Silver Bow Chief Executive Dave Palmer, the opening of the $8.7 million Ridge Waters pool at Stodden Park was also a major highlight in 2018. According to previous news stories, the park far exceeded expectations in terms of attendance and revenue.

What also tops the chief executive’s list of highlights was the formation of Butte’s economic-development team.

The team — an informal group led by Palmer and consisting of county officials, economic-development nonprofits and other organizations — started meeting over a year ago in an effort to work as a united front toward shared goals.

Together they organized a party of local officials who attended an annual convention of the Site Selectors Guild in Cincinnati last spring.

Site selectors are professionals who help companies find locations for an expansion or to set up a new business. According to Palmer, most large companies turn to site selectors when they want to make a major move, so “getting on their radar is huge,” he said.

In addition, the team invited four site selectors from the guild to attend a days-long tour of the Mining City during the summer.

The economic development group had to raise $24,000 to put on the tour, but for Palmer and others on the team, the site selectors’ visit was worth the investment

“I think that went a long way in getting the word about Butte out there … I think we’re going to continue, we’re not going to let it drop,” the chief executive said.

The team also facilitated a potential relationship with Texas-based analytics firm Buxton Co., which gave a public presentation in Butte in October.

The presentation was intended to gauge public sentiment toward a potential relationship with the company, which uses Big Data to help jurisdictions reach out to retailers and vice versa.

Palmer said he hopes that by the end of the month the team will have a proposal for Buxton, whose services cost $50,000 per year. The team is hoping to raise the money from grants and other sources. 

Giving the presentation in October was Buxton Vice President of Sales Robb Miller.

Miller spoke with The Montana Standard earlier this month and noted that communities and companies have been increasingly turning to analytics, while retail recruitment has become more competitive than ever.

“No longer can communities sit back and say retail follows rooftop,” Miller said.

But all too often community leaders approach retail recruitment in what Miller calls a “spray and pray” approach.

After identifying retail as an important piece of economic development, community leaders in their enthusiasm often reach out to as many different retailers as possible with little strategy behind their approach.

What Buxton proposes to do is take the guesswork out of the equation by providing officials with information about which retailers would be a good fit for the consumers who live in their communities.

For Buxton, consumer profiles are composed of a lot more than age, sex and location.

The company makes use of around 300 different datasets, which contain detailed consumer information from a range of sources, including credit-card transactions, mobile-phone data, loyalty cards and more. The company uses this information to group consumers according to 71 different categories. Using this approach, the company helps officials identify which brands are a good match for their communities.

“We’ve got the ability to go down to the household level on over 115 million households across the country. It gives us the ability to understand how people behave as consumers and use that information to identify (whether there are) enough of those right types of customers in certain markets,” Miller said.

Using Buxton’s data shouldn’t be about courting specific brands that leaders already have in mind, Miller says.

“We want to let the data speak for itself and lead us to who truly are those best retailers for that community,” said Miller. “Because, at the end of the day, you want to ensure that you’re bringing in sustainable retail concepts.”

“We see a lot of potential in the market and we’re excited about the potential of working with the community,” said Miller of Butte.

In the region

Butte wasn’t the only place with new developments in 2018.

Dillon saw a volunteer-driven effort to revamp Jaycee Park, which occupies one city block bordered by Idaho, Sebree, Washington, and Reeder streets in the heart of the city’s downtown district. 

Splash pad opens in Dillon's Jaycee Park (econ outlook copy)

Last summer the Jaycee Park Renovation Project Committee of volunteers installed a $725,000 project, including a splash pad, public restroom, pavilion, outdoor amphitheater and playground in Dillon. Committee member RayAnn Sutton is shown cutting the ribbon on opening day.

In 2017, volunteers came together to form the Jaycee Park Renovation Project Committee and embarked on a $725,000 project to install a splash pad in the park along with a public restroom, pavilion, outdoor amphitheater, and $150,000 playground.

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In August, volunteers built the playground during a days-long “community build,” and in September held a ribbon-cutting for the new splash pad.

Phillipsburg residents saw further renovation of Winninghoff Park with the construction of a new stage to host the Philipsburg Summer Concert and other events.

Philipsburg stage (econ outlook copy)

A new $25,000 stage was completed in August in Philipsburg's Winninghoff Park. Improvements to the park are ongoing.

The stage is one among several ongoing improvements to the park, which functions as an amphitheater in the warm months and ice-skating rink in the cold.

In Deer Lodge, city officials have completed a downtown master plan, which outlines several goals and milestones, including improvements to downtown and outdoor amenities.

Brian Bender, chief administrative officer for the city of Deer Lodge, said the plan came out in 2017 and economic-development and government leaders have been working toward implementing some of the plan’s goals ever since.

Most recently, the Montana Department of Commerce awarded the city a $15,000 grant to install wayfinding signs to direct residence and visitors to various attractions and amenities. Similarly, the city received a more-than $790,000 grant in 2017 from the Montana Department of Commerce for sidewalk repairs on Main Street and to make the area more handicapped accessible.

In Anaconda

Jim Davison, ALDC executive director, said one 2018 highlight came in the form of a truck-body manufacturer setting up shop in the former Arbiter Building, located east of town off Montana Highway 1.

Intercontinental Truck Body Co. made substantial improvements to the 46,000-square foot building throughout the year, including installing a new roof on the property, upgrading the lighting and wiring, and constructing a 5,000-square-foot addition, not to mention clearing out debris from the building, which had been neglected from years of non-use.

ITB Welding fabricator Kim Schaub (econ outlook copy)

Welding fabricator Kim Schaub is at work on a piece of equipment for Intercontinental Truck Body Co. at the company's new home in Anaconda's Arbiter Building, located east of town off Montana Highway 1. The company recently moved from Conrad to Anaconda and boasts around 30 employees.

Today more than 30 employees work at the facility as welders, machinists, engineers, electrical workers and more, nearly doubling ITB’s workforce from what the company had in Conrad.

The company also works with students from the Anaconda Job Corps.

Davison said the company seemed to be “outpacing” itself in terms of hiring, noting that officials anticipated that the company would have around 25 employees by the end of the year.

“They’ve been a big boost to the community,” he said.

Another highlight for Davison includes the continued development in Anaconda’s downtown district along Park and Commercial avenues.

Anaconda established an Urban Revitalization Agency in the area in January 2014 and started funding projects in 2016.  At the time, the URA was generating around $45,000 a year, Davison said. But flash forward to 2018, and the URA saw its budget go up to around $153,000.

In 2019, he believes the URA will have a budget of over $200,000.

This, Davison said, could indicate that downtown development is increasing property assessments in the area — “which tells us that there’s been significant investment in downtown,” he said.

Anaconda’s downtown has seen the rehab of a handful of buildings in the past five years, including the redevelopment of the Electric Light Building into Smelter City Brewing, 101 Main St.; the remodel and revamp of Donivan's restaurant; 211 E. Park Ave.; and an ongoing project to revive the Montana Hotel at the corner of Park Avenue and Main Street. Smaller projects have taken place, too, like roof repairs, new signs for businesses and foundation upgrades, some of which have utilized URA funds.

Challenges

But 2018 hasn’t been without its challenges.

Anaconda seemed especially hard-hit by state budget cuts that affected service providers — the organizations and nonprofits that serve populations such as people with mental-health, physical and intellectual disabilities, among others.

As a result of a 2017 state budget shortfall, $49 million in cuts went into effect for Montana’s Department of Public Health and Human Services, causing the department to reduce funding and reimbursement rates to a range of organizations and service providers.

Pat Noonan, public policy officer for Anaconda-based service provider Aware Inc., told The Montana Standard in July that the nonprofit had lost approximately 100 jobs since the cuts went into effect Jan 1. Meanwhile, last year also saw Butte-based BSW, formally Butte Sheltered Workshop, pull its services from Anaconda.

In August, the state announced it was putting $30.5 million back into DPHHS, but many providers have said the damage has already been done.

Workforce challenges

In the years ahead, communities through the nation are likely to feel the burn from anticipated workforce shortages, especially in the healthcare and construction sectors.

During a 2016 economic lecture series,  Patrick Barkey, director of the Bureau of Business and Economic Research at the University of Montana, said the share of the national workforce made up of construction workers has been low in comparison with historical norms since 2010.

To get back to normative levels, the nation will need about 550,000 more workers than it currently has. But there’s a problem: there are only 500,000 unemployed men aged 55 and under in the United States.

Put simply, there aren’t enough workers to fill the positions.

For decades college was touted as the gateway to a middle-class lifestyle — noted Palmer, Butte’s CEO — but for many learning a trade has offered a viable alternative to college.

In light of the anticipated workforce shortage, Palmer said he’d like to see greater access to trade education in Butte, whether it’s in the form of apprenticeships, more programs like those offered at Highlands College or just education geared toward learning about trades as possible career options.

At the intersection of two major economic drivers for the region — healthcare and education — is a beefed-up nursing program at Montana Tech.

According to the Montana Hospital Association, in Montana alone there will be a shortage of more than 2,100 nurses by 2020.

Montana Tech nursing students

Grace Stefano, a nursing student, demonstrates what she learned in her nursing class on a recent morning at Montana Technological University in Butte. Montana Tech is now accepting 40 students per year in its four-year nursing program.

Karen VanDaveer, the nursing department’s director, said it was a “fabulous” year for the new degree option.

The first cohort of students all passed their licensure exam and had jobs lined up prior to graduation.

The department is now accepting 40 students per year in the program, and there are plans in the works to eventually increase enrollment among pre-licensure baccalaureate students by 15 to 20 percent.

To make room for their ambitions, the department has secured a new location for its simulation labs in the Science and Engineering Building and is currently fundraising to support the move and upgrade.

“We know that the need is out there for nurses in Montana,” VanDaveer said.

Goals for 2019

Interior of Bert Mooney (econ outlook copy)

Bert Mooney Airport in Butte

Leaders in multiple communities said they hope to tackle housing issues in their communities, while officials in Butte hope to land a flight to Denver for the Bert Mooney Airport.

Superfund continues to be an ongoing issue for Butte and Anaconda.

Both Davison and Palmer said finishing work on an agreement with Atlantic Richfield Co. is among their top priorities.

The Environmental Protection Agency’s most recent plan is to have a consent decree — the legal document that will put Atlantic Richfield to work to finish the cleanup — signed and delivered by late spring or early summer for the Butte Hill. That time table was released before the shutdown.

Doug Benevento (econ outlook copy)

EPA Region 8 Administrator Doug Benevento talks about the ongoing Superfund issues in Butte and the surrounding area in this 2018 file photo. Benevento said the agency will lift the Superfund stigma from Butte by 2024 and Anaconda by 2025.

Anaconda was already around a year behind schedule on its consent decree before the shutdown went into effect. But Doug Benevento, EPA Region 8 director, has previously said the agency will lift the Superfund stigma off Butte by 2024 and Anaconda by 2025. It’s unclear if EPA will still be able to hold to those deadlines.

Nonetheless, Palmer and Davison said they hope these efforts will take Butte and Anaconda one step closer to getting delisted as Superfund sites.

Willauer, meanwhile, noted a never-give-up attitude in the Butte and Anaconda communities.

“I think one of the coolest things about our community is the resiliency. The mine’s ebbs and flows over the years I think have created that in a lot of people,” said Willauer. “With things like we have seen with retail, where you see that need for transition, instead of just whining and complaining people step up and do it.”

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