Amid discourse about the national economy, during a retreat of local economic development leaders, attendees heard some very upbeat comments as they sought direction for strategy for the coming year.

 Montana is "very lucky," said Marilyn Floberg, "I think the stars are aligned right for us." Floberg was one of some thirty-plus board members of the Big Sky Economic Development Authority (BSEDA) and the Big Sky Economic Development Corporation (EDC) who met on Friday for a day-long planning conference.

Montana is at the top of the heap right now and we need to take advantage of that Lyle Knight told his audience as luncheon speaker. "We are a bright spot in the country," said Knight, the President of First Interstate Bank. "We are going to ride through this economic downturn just like we have others. We are relatively unscathed," said Knight, "and CEO’s around the country know that and are looking at the state." Such attention poses opportunities for Montana, which should be pursued.


"There are opportunities even during challenging times," said a former board member Patrice Elliot, President of Wells Fargo Bank, "That is our job, to figure out those opportunities."

Billings is well prepared to deal with the current economy, said businessman Jim Roscoe of Roscoe Steel, who spoke as a guest panelist. Relating an adage that before one could learn to give a punch, one has to learn to take a punch, Roscoe said that Billings has "done it right," and communities that aren’t faring as well, "didn’t prepare on how to take a punch."

Direction is what the administrators of BSEDA and EDC were looking for and the retreat gave them much of that, not only from board members, but from other community leaders and from staff members of the two sister organizations, which provide a wide range of economic development programs and services for Yellowstone County.

Board members listened to comments from city and county government officials and other leaders before forming discussion groups around tables in a large conference room of the Mansfield Center.

After gathering input, board members made recommendations about priorities for the agencies. Two top recommendations were to keep on track with oversight of the development of the East Downtown Billings TIFD (Tax Increment Finance District), and to continue with the BEAR (Business Expansion and Retention) program.

"Don’t bite off more than you can chew," was also a repeated admonishment.

BSEDA/EDC Director Steve Arveschoug said that staff would review the day’s results and bring a draft plan to the boards at their next meeting.

There are five states that are bucking the national economic trend, according to Lyle Knight – Montana, North Dakota, South Dakota, Wyoming and Vermont. Although not certain about what is going on in Vermont, Knight said that the common denominators to the standing of the four western states are "common sense" (the states didn’t have the "crazy housing markets, except for a few isolated areas") and natural resource industries, most specifically those related to energy.

Those western states are also our competitors, according to Knight, and he recommended as one course of action, that we go to them and find out what they are doing "that gives them an advantage over us."

One advantage Montana has over them is an international border with Canada, pointed out Knight. And Canada is "kind of cruising" through this economic crisis. So when it comes to dealing with Canada, "we are where the action is." He recommended looking at ways to build upon that.

"We are very rich in natural resources," he continued, pointing out that 7.5 percent of the world’s coal supplies are in Montana. "That is significant," he said.

Knight urged Montana to accept the stimulus money. It would be "nuts" not to take it, he said. "Economic stimulus doesn’t work unless you take it and use it."

"How fortunate we are to live here with jobs and opportunities," said Knight, adding that "as we bring business in we need to engage the LEED process." LEED refers to "green" building, which Knight said, "pays for itself." "And, they sell" – in enticing people to a community, he said.

Knight was asked if he thought there was going to be a "tsunami" of regulations coming at the banking industry. He replied that he believed it is coming "for all the wrong reasons." He said it "makes us very nervous and we couldn’t be more against it."

Given the actions of Congress to date, "If they are willing to do that, they will be willing to do much more. They are going to move that pendulum too far," he said, pointing out that the banking community responsible for the problems are investment banks and not community banks. But he said that business needs investment banks. "Who is going to be the creators of capital?" he asked, "You cannot look to community banks because they are way to heavily regulated."

He also talked about the arm-twisting banks were subjected to in getting them to accept TARP (Troubled Asset Relief Program) funds, even when they said they didn’t need it or want it. CEOs were told that it was their patriotic duty to accept the funds, he said. He also emphasized that the TARP funds have to be paid back at a five percent rate of interest; and, that the government took an ownership position with the banks for the funds. Because it must be paid back, TARP expenditures won’t be inflationary, said Knight. The stimulus program is what will add to the inflation index, he said.

While a list of BSEDA/EDC accomplishments racks up a number of recruiting successes, that may not be a priority for the future, given the economic situation of the nation. Closer attention given to growing and retaining existing businesses was a common theme among the comments.

"There should be a balance," said Roscoe, between the focus on new business recruitment and support for existing business. "Existing business is just as important as new," he said. In looking at the economic climate, Roscoe suggested that they ask, "How do we take advantage of what is going on? You don’t come to Billings or stay in Billings for free," said Roscoe, "We have to remember that."

While Billings and Montana may seem to be escaping the impact of the economic troubles around the world, "you have to remember that many of our net exporters are doing business with companies far away," said Roscoe, so it’s possible for local businesses to feel the impact of their declines.

"You have to use your limited resources to be more efficient than ever," advised Knight. One of the primary things he has "come to know" in his eleven years in Montana said Knight, "is that entrepreneurship is strong. We create jobs through small businesses. Often times in economic development arenas we look for the home run, while the long systemic backbone of economic growth are the entrepreneurs."

Elliott said that she had been involved with two other economic development organizations before coming to Billings, and "Their sole purpose was to recruit new business." While that makes for great headlines, she said, they didn’t have "the diversity and all of the services" that are offered through BSEDA/EDC.

One of the most significant recruitment projects for BSEDA was that of the General Electric Capital Corporation, for which the agency oversaw the construction of a facility this past year. With the suggestion that that be repeated, staffers pointed out the difference between that project and others, such as Bresnan locating in Billings. They said that GE was an unexpected project and consumed a great deal of staff time. While BSEDA rose to the occasion, BSEDA "may not want to be that kind of a developer," said a staff member.

Chamber of Commerce Director John Brewer voiced a strong position supportive of continued recruiting efforts. "I don’t see what else could be done on the retention side," he said, "BEAR is an excellent program." He cited a number of national surveys and studies that list Billings as a great place to live and a good place to invest. The community should be pushing to take advantage of that image, he said.

Commissioner Jim Reno said that the county is often engaged in projects important to the community but about which the community is unaware. Among some of those issues currently is the need to refurbish the 8th floor of the Courthouse, which used to be the county jail. There is a lot of iron that must be removed, which will be costly, he said. The successful management of MetraPark and the refurbishing of WPA barns on the back side are also county efforts about which there is little awareness.

Reno said also, "The Bench Connector, I believe is going to happen and that will give new life to what is the fifth or sixth largest community in the state [the Heights]." In addition it will enhance the experience of visitors who attend events at MetraPark. As it is, visitors can have a great experience attending a show or event and then arrive home "as mad as ____" having had to spend two hours getting out of the parking lot, he explained.

The Mayor of Laurel Ken Olson, related the needs of his community and projects of importance. He commended BSEDA for their help in establishing the first TIFD for Laurel. The project is helping to build the community’s commercial sector and another TIFD could probably help revitalize Laurel’s downtown, he said. He also pointed out the need for a mass transit system that would serve well, not only Laurel and Billings, but also Red Lodge with its ski area, and Stillwater County with the Stillwater Mine.

Billings City Manager Tina Volek vowed that the city will build the proposed Inner-belt Loop to serve Heights traffic to the westend, even without state funding. She said it is important for the sake of Heights business.

She also announced that the city’s 2010 budget appears to be in "good shape – it will not have a lot of problems." Enterprise funds and budgets are doing well, she said, "the departments’ challenges are the mill levies," which are at maximum levels. The city charter capped levies, she said, in anticipation that "we would have alternative sources of revenues, which haven’t materialized." At the same time, the state legislature keeps adjusting the value of a mill downward, which other governmental entities can compensate for by increasing the mill levies, but the city cannot with its charter.

The city needs more reservoirs, having "outstripped" the reservoirs it now has, reported City Public Works Director Dave Mumford. The city needs $160 million in storm water collection, and has only about $3 million of funding, he further pointed out.

While funding in the past has allowed the city to keep up with its water, sewer and road needs, Mumford said, "Our challenge, now, is federal standards that are putting a huge demand on us. "We have to figure out how to meet federal standards without increasing costs" to ratepayers and taxpayers. The city faces, for example, having to meet new standards of sewage treatment which under current systems and technology would raise monthly bills to $87. The city is looking for ways to do it for less, he said.

City councilman Ed Ulledalen said that recruiting new businesses to the city may have to take a backseat to recruiting new workers, given the size of the labor force. He pointed out that in the past Billings benefited from the "emptying out" of the small towns, but that era is over. Now the issue is, "How do we draw in qualified workers?" Increasingly rather than just a job, they are looking for amenities, he said.

A point agreed to by Brewer who said, "Quality of life amenities are true economic drivers."

Their comments dovetailed with a call for action from BSEDA board member Kate Hamlin, who said that the city needs to focus on improving the entrances to Billings. With refineries and major industrial sites lining the interstate, she said, people passing through get a poor impression of the community.

Roscoe admitted that his business is one of those contributing to the problem. But, he said, "I’m still looking for that book on how to beautify a steel fabricating plant." He pointed out that Billings grew up along the railroad tracks – it was the railroad that made economic growth possible. "It’s a tough deal," he said, "but it is what it is."

There was considerable agreement that great strides have been made in improving working relationships within the community. "We create a greater presence in Helena, whether actual or perceived," said Bruce McIntyre of the Chamber of Commerce, "It will make a difference for the future of Billings."

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