News

Montana investors contribute funding to attract businesses throughout the state

Flathead Valley businesses that have contributed money to a private economic-development effort are earning a return on their investment.

By TOM HOWARD
Of The Gazette Staff

Stream International brought 900 high-tech jobs to Kalispell three years ago, and a local incentive package backed by private funding helped seal the deal.

Liz Harris, president of the Flathead County Economic Development Authority, said local businesses contributed more than $600,000 to a local economic development fund beginning 1995-96. Part of that money went into helping attract Stream to Kalispell.

"The up side is that we were able to show a return on investment for our members," Harris said. "Stream added a $10 million annual payroll to the economy."

Over the years agencies in Kalispell, Missoula, Butte and Bozeman have helped create and preserve jobs by raising investment capital from the private sector.

In Yellowstone County, where taxpayers provide the lion’s share of seed money to attract and keep business, private-sector funding for economic development is just starting to catch on.

Last year, the Big Sky Economic Development Authority announced a plan to raise $500,000 a year to establish the private, nonprofit Big Sky Economic Development Corp. Money contributed to the Big Sky EDC will be used to provide a wider variety of economic development efforts.

In six months, about $80,000 has been raised for the new Big Sky EDC. The effort got a boost several weeks ago when Computers Unlimited agreed to contribute $5,000 a year over three years for a total commitment of $15,000.

Other contributors, called member investors, include US Bank, Walls Fargo Bank, The Billings Gazette, Sysco Food Services of Montana, Crowley Haughey Hanson Toole & Dietrich, Executive Property Services, First Citizens Bank, KPMG LLP, Stockman Bank, Billings Association of Realtors, NorthWestern Corp., First Interstate BancSystem and HGFA Architects

"We’re fortunate in Billings because we have a public mechanism for funding economic development," said Mike Schaer, chief executive of Computers Unlimited and a member of the Big Sky EDA Board of Directors. "But most communities do economic development strictly through the private sector, and we need to do that too."

Schaer said the way to promote good wages is by attracting and promoting businesses. "The more people you hire, the more salaries can go up," he said.

Joe McClure, director of the Big Sky EDA, said the private funding will help the organization expand and diversity its efforts to attract new business and retain existing businesses.

The new organization will have its own board of directors and will provide services that aren’t offered through Big Sky EDA, McClure said. Those services could include a Small Business Administration-sponsored lending program for small businesses.

Billings businessman Bruce Whittenberg, who has been soliciting contributions for the Big Sky EDC for the past month, said the business community is interested in the effort.

"I’ve been gathering feedback, trying to find out what businesses’ needs are and what they feel about Big Sky EDA," Whittenberg said. "People are supportive. But people also want value for what they’re giving money. This is not intended to be a donation. It’s intended to be an investment where a business can get some kind of return."

McClure said business owners who invest in economic development agencies believe the theory that rising tides float all boats, that encouraging new business is good for everybody.

Some Montana communities have developed an extensive track record for private-sector economic development.

Dick King of the Missoula Area Economic Development Corp. said the agency raises about $90,000 a year.

"Our priority is assisting existing businesses, especially those that are trying to expand," King said.

"You have to pay attention to business retention, even in an area that’s growing," King said. "We do market Missoula, but we don’t do a funded campaign. There’s strong consensus that when you can help a local company, there’s a lot of support for that."

King said the MAEDC has helped a Seeley Lake sawmill put together a $2.5 million financing package to modernize the plant.

In Butte, the Butte Local Development Corp. manages an $8.5 million loan fund and many other programs. Most of the money comes from the private sector.

"We do all aspects of economic development," said Jim Smitham, marketing director.

Tom Howard can be reached at 657-1261 or at [email protected]

Copyright © The Billings Gazette, a division of Lee Enterprises.

http://www.billingsgazette.com/index.php?id=1&display=rednews/2003/01/10/build/business/65-cityfunding.inc

Sorry, we couldn't find any posts. Please try a different search.

Leave a Comment

You must be logged in to post a comment.