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TMCNet:  2014 Econ Outlook: BLDC key to businesses locating, growing here [The Montana Standard, Butte :: ]

[February 09, 2014]

2014 Econ Outlook: BLDC key to businesses locating, growing here [The Montana Standard, Butte :: ]

(Montana Standard (Butte) Via Acquire Media NewsEdge) Feb. 09--As executive director of the Butte Local Development Corp., the area's designated point agency for businesses wanting to locate or expand here, Jim Smitham is in a "what have you done for me lately" position.


The BLDC played a key role in getting Butte hooked up as Montana's first community fiber optic network. The computer system has potential to be a major driver of economic development and its launch last week brought Gov. Steve Bullock to town.

In fact, other Montana cities are looking to the network in Butte as something to emulate.

It's big, Smitham says, but it won't take long for most people to forget about it.

"That will be in the minds of the people for a short period of time," he said. "The next thing they want to see is dirt flying for a new Target store or something. So there is always that 'What have you done for me lately?'" The BLDC, whose four-member staff is overseen by a 17-member board, serves multiple roles in an overall effort to bring new businesses to town, keep existing ones here or help them expand.

Among its chief duties is administering loans, nine of them through federal programs and one through the state. The BLCD is not a bank and does not offer lines of credit.

But it can and often does take secondary, collateral positions that pave the way for bank loans for businesses that would not qualify on their own. The agency's loan portfolio -- which includes loans working now and money on hand -- is about $11 million.

"We will take a little more risk because that is what we are designed to do," Smitham said.

Former BLDC President Tom Downey, who stepped down from that post in November, said such "gap" funding can be crucial in bringing or keeping businesses here.

As just one example, it helped Community, Counseling and Correctional Services Inc. finance construction of a new $5 million Montana Chemical Dependency Center in Butte, Downey said. The old center building in Butte no longer met federal standards and the new one, which opened in January, kept 57 jobs here.

"That was really a key and I think that kind of thing goes unnoticed," Downey said.

The BLDC also played roles in Butte landing a SeaCast titanium vacuum melting facility and what is now Renewal Energy Corp.'s silicon materials production plant. The companies combined employ more than 300 people.

The BLDC has three contracts with local governments -- one with the Butte-Silver Bow chief executive's office, one with the Urban Renewal Agency that administers a tax- increment financing (TIF) district Uptown, and one with Butte's TIF Industrial District.

Those contracts combined pay the BLDC about $75,000 for such things as business and loan analysis and support. The agency used to get property tax levy that raised about $60,000, but Butte-Silver Bow administers that fund now, Smitham said.

The competition for new or expanding businesses among states and individual communities is fierce nationwide, and many cities have agencies similar to the BLDC that have bigger pots of money to tap for providing incentives.

"The frustrating part is the fact that in Great Falls, Billings, Missoula -- I know those entities have gone out for fundraising in their communities and raised several million dollars and they utilize that for marketing their community," Smitham said.

Downey acknowledged the in-state competition. "We are not the only game in town, so even from the standpoint of local development corporations, it's competitive," he said.

Smitham said Butte's 1,300-acre industrial park does carry some competitive advantages, including its location at the intersections of Interstates 15 and 90 where two major railroads also meet.

The area includes a foreign trade zone and infrastructure already in place, and the county has land is available at $2,000 an acre. Smitham called that "dirt-cheap." "The city realizes that they are not in the real-estate business," he said. "They want to be a partner in the development of these projects and in job creation." The BLDC spends some of its time compiling information for companies shopping for locations. The companies tell states what their wants and needs are for things like land, water and power needs, roads and available workforce.

Much of their search process is conducted anonymously, so state commerce officials send the needs lists to communities in Montana with code names such as Fido or Galactica. The BLDC then gathers information on how needs can be met.

The process can last for months or even years as conditions change and businesses narrow their choices.

"They are usually not looking at just Montana but the northwest, so they will throw their net over the whole northwest," Smitham said.

"It's a multi-layer process and it takes time," he said. "We had a project two years ago and it was us and one other site and we were right in it to the end, but they chose a location in Oklahoma." When that happens, the agency seeks as much information as possible on why another locale was chosen and what made the difference.

"We don't consider it a failure if we can make adjustments accordingly," Smitham said.

The BLDC also combs prospective federal contracts and informs businesses in Butte-Silver Bow that might qualify or be interested. The agency also offers assistance to businesses it knows are struggling.

The help can include a review of their circumstances, suggestions for improvements and programs they might tap.

The agency does not do any general marketing itself, Smitham said, but it is working on a marketing plan for the city and county that will include plenty of social media.

Downey said the board, which includes leaders of many area businesses, is very active.

"From my perspective, the board is very involved in the oversight and direction of the BLDC," he said. "They are a good sounding group for current activity and for business-to-business relationships." Reach Smith at mike.smith@mt-standard.com or 406-496-5511.

___ (c)2014 The Montana Standard (Butte, Mont.) Visit The Montana Standard (Butte, Mont.) at www.mtstandard.com Distributed by MCT Information Services

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