County-funded development agency helps local businesses, recruits new ones

2012-04-22T00:10:00Z 2014-08-25T10:55:33Z County-funded development agency helps local businesses, recruits new onesBy TOM HOWARD thoward@billingsgazette.com The Billings Gazette

As CenturyLink completed the acquisition of Qwest Communications about a year ago, the Louisiana-based telecommunications company began looking for a new location for its regional headquarters serving Montana and Wyoming.

Yellowstone County's Big Sky Economic Development agency rolled out the welcome mat for CenturyLink, touting Billings as a major trade center with good transportation connections and a diverse economy.

"Their offer was that being in a larger city for Montana created lots of inroads," said Michelle Jackson, market development manager for CenturyLink, which operated an office in Kalispell before the Qwest acquisition.

"When we came to Billings to look, we found that the economy was stronger than we had anticipated. We contacted Big Sky and the rest is history. They really took us in," Jackson said.

Yellowstone County is unique in Montana as the only county setting aside a countywide tax levy devoted to economic development. In 1989, county commissioners formed the Montana TradePort Authority, the agency that evolved into Big Sky Economic Development. This year the countywide levy will raise more than $1 million.

The agency over the years has occasionally been criticized by people suggesting that it spends public money on projects better left to the private sector. The agency has extended millions of dollars in financial incentives to land a major employer, a common practice in every state in the nation.

But it's not just big, new employers BSED is after. Agency officials say much of its tax funding goes to help homegrown businesses get off the ground and to help existing businesses to thrive.   

Jeremy Ferkin, CenturyLink's regional manager for Montana and Wyoming, appreciated the warm reception and the pro-business atmosphere in Billings.

"We had a series of meetings, and they continued to call us," Ferkin said. BSED even hosted a welcoming party for CenturyLink, which has 10 employees in the Crowne Plaza Hotel in addition to about 70 already working in the Billings area.

Jeremy Vannatta, director of business outreach, recruitment and marketing for BSED, said the strategy for bringing CenturyLink to town was to highlight the advantages of doing business in Billings.

"Once we understood they were looking at Billings, we connected them into the community and arranged some meetings to show how they could be successful," Vannatta said.

BSED offered no financial incentives to CenturyLink. But the company was so impressed with the welcome that it agreed to become a member investor with Big Sky Economic Development Corp., a sister organization whose members contribute private money to complement the taxpayer-funded organization. Over the past decade, EDC members like CenturyLink have contributed $1.2 million toward boosting the local economy.

CenturyLink's move to Billings was a recruitment success, and it represents a step toward BSED's goal of attracting or retaining 1,000 jobs in Yellowstone County during the fiscal year that ends June 30.

The goal of attracting 1,000 jobs during the 2012 fiscal year was part of BSED's strategic plan. So far, BSED has counted 800 new jobs that resulted through its activities, Vannatta said.

In 2009, GE Capital opened an operations center, known as the General Electric Montana Center of Excellence. As part of a complex financial arrangement, BSED agreed to build the $7 million building and lease it back to GE, which initially brought around 150 employees to Billings.

Steve Arveschoug, BSED's executive director, said GE Capital is following through with a pledge to add more jobs. The company approached him about 18 months ago, saying they were considering adding a new group of employees who would be in charge of property tax administration for company assets. GE was looking for accounting and finance majors, so Arveschoug arranged meetings with officials from Rocky Mountain College and Montana State University Billings. That led to the hiring of 10 to 15 additional employees, almost all of them local, Arveschoug said.

BSED grabs headlines when it lures major employers such as GE Capital or telecommunications provider Bresnan Communications, now part of Cablevision Systems Corp. What many people may not realize is that the bulk of BSED's efforts go toward helping local businesses, Arveschoug said.

The three pillars of BSED's mission are job creation and expansion, business recruitment and community development.

BSED received a little more than $1 million from the countywide tax levy for 2012. If your home is worth around $200,000, you paid about $8.

But additional revenue -- state and federal funding, reimbursements from the EDC to cover the cost of staffing and other private dollars -- pushes the agency's budget to $1.9 million.

The EDC's $450,000 budget includes $169,000 in contributions from member investors, and revenue from the Small Business Administration's 504 loan program and other loan programs.

Arveschoug also hopes to add to a $400,000 cookie jar known simply as the opportunity fund, which represents the proceeds from the sale of the former Montana Dakota Utilities building in downtown Billings. BSED purchased the building in 2006 and later sold it to the General Services Administration as property was being assembled for the new federal courthouse, now under construction.

One idea for using the money is to extend infrastructure to serve major new employers coming to Billings, Arveschoug said.

Ty Elkin, senior vice president of Yellowstone Bank and one of 31 board members, said it's a mistake to conclude that BSED focuses solely on trying to recruit business to town.

"More resources are spent on existing businesses that are already here," Elkin said.

The Small Business Administration 504 program, which BSED administers, made $7 million in loans last year. When you consider that the SBA funding is matched by a like amount of local bank financing, that represents a significant amount of investment, Elkin said.

"My hope is that we can let people know that it's sexy to talk about when we bring in a GE or a Bresnan. But the bread and butter of what we do is developing existing businesses," Elkin said.

As a banker, Elkin often deals with prospective business owners who have a dream but often lack specific information on how they can make a new business sustainable.

"We send them down there (to BSED) and they return with a three- or four-page business plan that projects income and expenses and is realistic. Now they have an idea that has a backbone," Elkin said.

James McCord, manager for Bay Ltd., formerly known as Berry Y&V, said BSE has been supportive as the company has moved forward with plans to build equipment used in the tar sands of Alberta. Last fall, BSED's board agreed to apply for $1.25 million from the Big Sky Economic Development Trust Fund, a job-training program, to help Bay Ltd. train new employees. Bay Ltd. is in the process of hiring welders and other workers for its Billings operation.

Last year Destynee Trevino, co-owner of Trevino's Tortillas, took a course called FastTrak, through the Small Business Development Center at BSED. She came away with a business plan that will help her and her husband, Chris, improve operations and expand their business.

"One thing I liked was being able to network with other small business owners who are going though the same kinds of things we are," Trevino said. "We would ask each other different things they have heard about or tried and whether it worked."

Jolene Rieck, owner of Peaks to Plains Design, found herself south of Glasgow in January doing mapping services for the Bureau of Land Management.

"The funny part was, I never saw Glasgow during the daylight. We were out of town before sunrise and didn't return until after dark," Rieck said.

Rieck landed the contract with the BLM after working with the Montana Procurement and Technical Assistance Center at BSED. "I worked through them and got a women-owned business certificate," Rieck said.

Billings businessman Marty Connell credits BSED for playing a key role in reviving the East Billings Urban Renewal District, the area between downtown and MetraPark that's targeted for redevelopment.

"We look at them as Mother Earth. They created us," said Connell, who is president of the EBURD. He said BSED's community development division provided the expertise that brought grants for planning and environmental remediation to the area.

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