Butte-Silver Bow County waiting on SATO

As a 90-day delay has stretched into 150 days, Butte-Silver Bow officials are gently nudging SatoTravel’s parent company, Navigant International,
for a deci sion on its plans for Butte.

By Leslie McCartney, of The Montana Standard

Nearly a year ago, SatoTravel, a company specializing in govern ment and military travel, announced that it would site its sixth call center in the
job-starved Mining City. And while officials scrambled to cobble together financing sources and prepare the Sears building for 230 jobs, along
came Sept. 11.
That terrorist action devastated the travel industry and shortly after that date, Sato asked for a 90-day delay on siting the center to reassess its
position.
And while the company has hired a handful of workers for training, the level at which Sato will come to town is unknown, although officials have
been reas sured that the company, now owned by Navigant International of Denver, remains committed to Butte.
“ From what I’ve heard from them, they remain committed to Butte. They like the workforce they’re getting out of Butte, and they want to be here,”
said Butte Local Development Corp. Director Evan Barrett. He added, however, that it is unknown exactly how many jobs will be added and at what
pace, given the difficulties in the travel industry.
Navigant held meetings in Denver Thursday and Friday and an announcement from that company about its future in Butte could come next week.
County officials remain commit ted to Sato as well and would wel come them at any level, even if the company needed smaller digs.
“ We are 100 percent supportive of Sato,” explained Butte-Silver Bow Economic Development Director Kathy Fasso. Fasso joined the county after
Sato made its announcement and details on financing had begun.
County officials are pushing the company for answers because the $3.8 million set aside to renovate the Sears building could be put to use in other
county projects. Also, changes in Sato’s commitment could alter the use of state and federal loans and grants.
Originally, the county pursued a two-pronged approach to fund the project, with the main piece being a board of investments infrastructure program
loan. The unique program allows a tax credit for companies and has been used successfully for such businesses as Advanced Silicon Materials Inc.
and MSE.
The loan program is attractive as an economic development tool because it allows the county to bor row money on behalf of a business at a
beneficial rate. The county then assesses a usage fee equal to the principal and interest due on the loan; however those businesses become
eligible to receive a tax cred it.
In researching the program for Sato, however, the county encoun tered a serious problem. That is because Sato would have to partner with a large
tax-appetite company to be able to take advantage of the full tax credit.
At the state level, since the incen tive was formulated by Montana, it works well. But, as Fasso explained, at the federal level, the partner com pany
— which gets nothing from the deal since it pays cash and receives equal tax credits — could end up with a liability.
“ The lack of use-fee deductibility for the capital partner at the federal level renders the state incentive worthless,” Fasso explained. “ The problem
can only be solved at the federal level.”
The problem with the investment program surfaced locally because of Sato’s need to partner with a much larger company. So Butte-Silver Bow
contacted Sen. Max Baucus.
Baucus has agreed to try to get language inserted into a bill that would protect a partner in the board of investments and Fasso pointed out that
protecting a partner is impera tive. “ It would be a benefit to the whole state of Montana,” Fasso said of removing an obstacle in the pro gram.
Along with the board of invest ments loan, the county planned to seek an Economic Development Administration grant, and as a back up, maybe
use funding from the local Urban Revitalization Agency. However, everything hinges on a firm, binding agreement with Sato.
That was something the county was working on when Sept. 11 hap pened.
“ We were in the process of work ing with an attorney and drawing up the agreement,” said Butte-Silver Bow Chief Executive Judy Jacobson.
In the meantime, however, the county has spent $478,000 worth of URA funding to pay for renovation of the Sears building and purchase
equipment. And officials point out that the money spent to renovate the building isn’t wasted because if Sato does not occupy the building, it may
be appropriate for another business.
“ We’re not out the money for the asbestos removal and all that ’85 eventually we will put someone in there. That is money well-spent,” Jacobson
said.
The equipment is a different matter. While Sato will probably still need some of the equipment, no matter what its presence in town, the generators
bought for the project may instead be used in the new Butte-Silver Bow jail.

http://www.mtstandard.com/newslocal/1news.html