Glendive at the starting gate for another oil production race

2012-04-08T00:15:00Z 2012-04-09T10:55:04Z Glendive at the starting gate for another oil production raceBy JAN FALSTAD jfalstad@billingsgazette.com The Billings Gazette

A decade ago, when Steve Bury and his family, drawn by the dinosaur digs, moved from Seattle to Glendive, the city's business district was a ghost town.

"Half the downtown was literally closed. I mean closed," Bury said. "You'd hear about what it used to be during the last oil boom and then everyone left. The houses were cheaper than a car."

Now, 30 years after the last oil boom abruptly ended, Glendive and its nearly 5,000 residents are at the starting gate for another oil production race.

Rentals are scarce and pricey. Home prices have skyrocketed. Two new housing subdivisions and a hotel are under construction and four more hotels are being planned, according to Mayor Jerry Jimison.

Taco John's, Subway and Dairy Queen, the only fast-food restaurants in town, are setting records. McDonald's and Hardee's closed about six years ago.

But Glendive's expansion is limited by construction bans along the Yellowstone River floodplain. And, like Sidney and Bainville, its wastewater treatment plant is maxed out.

The city and Dawson County have joined forces to start the next water treatment plant, costing at least $9 million, next summer, one year earlier than planned. And until this plant is finished, the county has banned additional oil field man camps.

"We've got a tsunami of a different sort hitting Glendive. We're being hit and overrun with a force we never envisioned," Jimison said.

Sharing the wealth

Tax dollars from the oil riches aren't flowing yet to the Glendive area to pay for multimillion-dollar improvements.

Under Montana tax law, the state keeps half of all oil and gas revenues, giving schools 20 percent, counties 19 percent and funneling one-10th of 1 percent to the Eastern Montana cities shouldering the impacts.

And local taxpayers who've lived through the last boom and bust cycle three decades ago are justifiably gun-shy about getting dumped at the dance again — stuck with paying for public improvements for decades to come.

For now, though, talk in Dawson County focuses mostly on growth and opportunity.

Four years ago, when Amy Deines became director of Dawson County Economic Development, the phone hardly rang and she had to hunt down business opportunities. Now five to 10 businesses a week call for information.

"It feels like when I come into the office or on my cellphone, too, we're sitting on the precipice just waiting for it to burst," she said.

Bust to boom again

In one decade, Steve and Christie Bury, and their adult daughters Chantell and Cortney, have gone from plopping down $300 in family savings to start the Hell Creek Music & More store, to owning the former JC Penney store, selling it and buying another building for the store at 101 N. Merrill Ave. The family also built the nonprofit the Makoshika Dinosaur Museum across the street.

Back then, Steve had to sell a guitar to buy another and $50 in sales was an "Oh my gosh, day."

Now he runs what the mayor calls the best music store from Bismarck, N.D., to Denver. His friendship with members of the rock band KISS led to a custom painting on the ceiling, a take-off of Michelangelo's Sistine Chapel with God holding a guitar.

"The energy is positive in Glendive now. It's all positive," Bury said. "I think Glendive is going to soon become a must-see in Eastern Montana."

Other signs of growth include:

  • Mud Masters Group, which supplies rig lubricants, has opened an office.
  • A second environmental clean-up company from Texas that Deines can't yet name is closing a deal.
  • The area across the Yellowstone north of Glendive near the fairgrounds is a hot commercial development.
  • SRS Crisifulli Inc., a pump and dredge manufacturing company started in Glendive 46 years ago, is adding people.
  • And Mexico Lindo, the only Mexican restaurant, opened a year ago near Hell Creek Music.

Myrna Quale and Laura Glueckert, who have run The Enchanted Room for 18 years, said their sewing and quilting business has always done pretty well. But now that people have disposable income again, they recently purchased the neighboring Episcopalian Church for a major expansion.

"I feel there's new life in town from the boom and the agriculture sector. Families with children are moving here," Glueckert said. "We needed a little shot in the arm."

Land rush under way

If real estate prices can measure an economic comeback, this paddlefish capital along the Yellowstone is rebounding.

For 30 years, the Elks Club tried to sell 66 acres that used to be a golf course north of town. Six months ago, Texas-based Redneck Pipe Rentals Inc., which deals in oil rig lubricants, paid $380,000 for the land, the cost of a single acre today in Williston, N.D., according to the mayor. Redneck is building a warehouse and has subdivided the rest for sale.

"They got a helluva deal," Jimison said. "But they've got to pay for sewer, water, street and gutter on the whole property and sell about 10 acres back to the Elks for a future club."

Calling his timing lucky, in 2005 Scott Woodward moved from Denver to Glendive to buy the Yellowstone River Inn, the city's only motel with a cafe, bar and casino, plus the Makoshika Motel, which nobody wanted. He renovated half the Makoshika and charges $63 per night, the cheapest in town, for workers who don't receive per diem payments.

His first year was lean. Now his business is growing 20 percent a year as oil field support workers rent rooms for two months in advance even in winter. Still, Woodward keeps his long-range view.

"I'm not going to gouge anybody," he said. "People in Montana have long memories. If they clamp down on fracking, this (boom) could come to a screeching halt."

The Bury's five-bedroom house was purchased in 2001 for $45,000 and sold for twice as much three years ago when they moved in above their store.

"More real estate has changed hands in Glendive in the last six months than it has in the last 30 years," Jimison said. "Some homes sell two or three times in one year."

Terry Knapp at Realty One remembered selling four homes in a single day in the late 1980s for a total of $32,000. One home fetched just $3,000.

"Now that comparable house is selling for $80,000 or $85,000," Knapp said.

But Knapp said most homeowners today can't sell because they have nowhere to move.

Meanwhile, Burlington Northern Santa Fe railroad and the oil industry continue to hire and that jacks up rents and wages. Oil has brought good and bad to Eastern Montana, Steve Bury said.

"We've got a lot of people working but there's not a lot of things for them to do and they frequent the bars, which is fine, but that can lead to trouble," he said.

Schools are the mirror

Glendive's population growth, actual and anticipated, is welcomed by Glendive School Superintendent Jim Germann.

In three decades, Dawson County High School's enrollment has dropped from 1,000 students to 312. But this year, elementary enrollment grew by 66 kids to 827.

"High school enrollment will start growing just from the kids in the pipeline. But that's not until many more houses being built," Germann said.

A self-described skeptic, Germann said he, too, doubts the stamina of this oil race. In 1982, he moved to Williston, N.D., to teach high school German, English and journalism. The oil boom was just ending and there was nothing to rent.

But by spring, the bust arrived with the tulips and the cushy oil sector jobs disappeared.

"A lot of our neighbors left in the middle of the night, and we started farming their empty gardens," Germann said. "We had some good gardens, but it's hard to watch your neighbors all pull out."

Houses that cost $65,000 were selling for half that price two years later and every other house on Germann's block was vacant.

Now that the boom is returning to Eastern Montana, Germann and many other Glendive residents, hope for steady sustainable growth, so they won't have to nail up signs again.

After the oil riches disappeared in the '80s, locals nailed up signs all over Williston parodying an old Oklahoma/Texas saying: "Dear God, please let there be another oil boom and I promise not to piss it away this time."

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