Montanans turned to the eastern half of the state for optimistic economic news in 2011.
Rural areas across Eastern Montana, including Billings, enjoyed a taste of the money produced by the oil and natural gas bonanza largely taking place across the state line in North Dakota.
“I still assert that a lot of Eastern Montana owes a fair amount of its economic activity to things that are going on in western North Dakota,” said Scott Rickard, who heads The Center for Applied Economic Research at Montana State University Billings.
The boom brought Highland Projects of Sundre, Alberta, to Billings and the company recently hired 18 workers to make the steel tanks used in the oil fields.
With that kind of help, Billings continues to ride out recession better than most places.
Billings is enjoying some high-profile commercial building projects, including the $59 million downtown federal courthouse, which should be ready for occupancy by the end of 2012.
In September, the federal General Services Administration awarded a
second contract to build a $30 million, five-story building to house federal workers. The Boyer Co. of Salt Lake City, which worked with locals Jones Construction and developer Aaron Sparboe, will start work in 2012 on the building at 2021 Fourth Ave. N., longtime home to Aldrich’s Lumber & Building Materials. The contract also funds a warehouse off South 27th Street near Interstate 90.
Remodeling at The Northern Hotel is ready to resume if financing can be finalized.
“We’re so close. I think 2012 will be our year,” said Mike Nelson, who purchased the historic downtown hotel with his brother, Chris Nelson.
Bob McDonald of Washington, who bought West Park Plaza on Grand Avenue in the fall of 2008, has filled several smaller stores but is still waiting to land a couple of big anchor tenants for the mall that has been completely remodeled and renamed West Park Promenade.
Real estate in Billings dipped again this year.
Compared with 2010, the median sales price dropped $7,500 to $177,500. According to the Billings Association of Realtors, 1,475 Billings homes were sold, 31 fewer than last year, and sellers needed an average of 76 days, four more days than 2010, to clinch the deal.
Home construction, hammered during the subprime meltdown and recession, remains stressed. But, this year was a bit better than 2010, said Denise Smith, executive officer of the Home Builders Association of Billings.
“My builders are feeling a lot better about going into 2012,” she said.
If a massive tornado was the memorable weather disaster of 2010, record spring floods marked 2011. Floods destroyed businesses and homes, washed out bridges and roads and stopped trains.
In a surprise move in February, members of the Montana Essential Air Service Task Force chose newcomer Gulfstream International Airlines of Florida, rather than renew the contract that Great Lakes Aviation had to fly to seven Montana cities. Gulfstream started flying the federally subsidized routes in May. In December, Gulfstream changed its name to Silver Airways and is considering adding three direct, but full-fare, flights from Billings to Missoula and Helena, plus Williston, N.D.
In June, Edwards Jet Center bought most assets of its rival, Corporate Air, at Billings Logan International Airport. And Edwards won the contract to service Silver’s airplanes.
After a quarter century of trying, the Otter Creek Coal tracts in southeastern Montana south of Ashland seem poised to start production.
In December, Signal Peak Energy, a coal mine operation south of Roundup, closed temporarily due to a build up of carbon dioxide in a mined-out area. It was one of several temporary shutdowns in 2011. A Switzerland-based commodity trader with Russian ties bought one-third ownership in the mine with intentions to boost production nearly threefold and ship the coal to the Pacific Rim and China.
By year’s end, Stockman Bank was moving into its downtown building at North Broadway and Fourth Avenue North, just in time for the 2011 tax breaks, and planned on building another bank on Grand Avenue.
First Interstate Bank may start construction in early 2012 on another branch bank at Shiloh Crossing.
Brewer Dental is constructing a three-store building on Main Street and Hansen Lane. City Brew is one tenant and the owners are courting other businesses for the third space.
An estimated 1,000 workers camped out in Billings for a good part of the summer, spending millions on hotels, restaurants and other goods and services to help clean up ExxonMobil’s crude oil spill that dumped an estimated 42,000 gallons of crude into the Yellowstone River on July 1.
Billings saw its fourth new car dealership in a decade open last summer, a $5 million Mercedes-Benz shop on King Avenue West. In August, Rimrock Auto Group also broke ground on a $4.4 million Volkswagen dealership at King Avenue West and Shiloh Road.
Skip King and Jeff Averill opened another King’s Ace Hardware at Zimmerman Trail and Grand Avenue.
The last of a handful of white elephant buildings in Billings was put back to use when the three owners of First National Pawn consolidated three stores into the massive former Gibson’s building at 1313 Broadway Ave.
The 2012 commercial construction season in Billings features a pair of giants leading the parade: GSA’s downtown office building and Scheels Sporting Goods, which plans to build its second largest store at Shiloh Crossing.
Steve Scheel, chief executive of the Fargo, N.D., retailer, said the 220,000-square-foot megastore will triple the store’s space at Rimrock Mall, take two years to complete and will feature a saltwater aquarium, indoor Ferris wheel and a shooting gallery.
An attempt by five rural electric cooperatives in south-central Montana and the city of Great Falls to join forces to generate their own power landed in bankruptcy court. The Highwood Generating Station near Great Falls opened in September, but the following month, the parent company, Southern Montana Electric Generation and Transmission Cooperative, filed for Chapter 11. Some co-op members are asking for a forensic audit of Southern’s books.
High platinum and palladium prices helped Stillwater Mining Co.’s profits jump nearly 3 1/2 times for the first nine months of 2011, compared to 2010. But the Montana company’s stock dropped sharply after it announced plans to expand overseas by buying Peregrine Metals Ltd., of Vancouver, B.C., and develop its copper and gold open-pit mine in Argentina. The stock price over the past 52 weeks hit a high of nearly $26 per share, dropped to $7.31 per share and was trading around $10.70 before Christmas. In November, a worker died in an underground accident at the Nye mine in the Beartooth Mountains.
Montana Peterbilt is moving out of its half-century home off downtown Billings and building a $3 million to $4 million dealership in Lockwood just off of the junction of Interstates 90 and 94.
Pacific Steel & Recycling, hemmed in off Sixth Avenue North on the east edge of downtown, also is eying Lockwood for a new plant that would house Montana’s first car crusher. Last summer, Yellowstone County Commissioners nixed company plans to move out by ZooMontana.
Finally, Red Oxx was one local company enjoying increased U.S. Internet sales, which were up an estimated 15 percent during the holidays.
“Online gross sales for our luggage have risen about 17 percent over last year,” said co-owner Jim Markel. “Our Cyber Monday after Thanksgiving was insane and the following Monday was another one.”
Instead of building on their existing property, Markel and Perry Jones purchased the former Motion Industries building at 1123 Second Ave. N., because they could build sooner. By late spring, they expect to open a 12,500 square-foot production factory to complement their Red Oxx’s store at 310 N. 13th St.