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May 2002 COME TO ECONOMIC DEVELOPMENT PLANNING SESSION ON MAY 29
On May 29th, from 12:00 pm to
3:00 pm at the Copper King Hotel and Convention Center, citizens are invited to
attend a Community Planning Meeting for Economic Development. The meeting is sponsored by the
Butte-Silver Bow Local Government, the Butte Local Development Corporation and
the Butte Economic Development Coordinating Council to provide an opportunity
for interested members of the community to share their thoughts and opinions
about economic development for Butte’s future. The keynote speaker will be
Lieutenant Governor Karl Ohs, a rancher from Harrison near Butte before serving
in the legislature and then moving to Helena for his most recent stint in
public service. Ohs will speak about economic
development issues on the state and local level, issues with which he is very
familiar. In the late 1980’s, Ohs
maintained an office in the Business Development Center in Butte and he has
been involved in agribusiness and ranching in Southwest Montana for many years
before entering politics. He gained national recognition
when, as a state legislator, he was invited by the FBI to negotiate a peaceful
resolution to the Freeman standoff near Jordan, Montana in 1996. The facilitated planning
meeting will feature structured breakout sessions where attendees will work on
specific areas of the economy to help develop economic development strategies
for the following areas: ·
Services (Human, Environmental, Others) ·
Education, Workforce, Training ·
Health Services ·
Historic Uptown Butte ·
Resource Extraction & Value-adding, Manufacturing ·
Retail (Capturing Dollars) ·
Small Business (Retention & Expansion) ·
Technology (Aerospace, Cyber Village, Telecommunications, Others) ·
Transportation, Warehousing and Distribution ·
Tourism ·
Development Capital ·
Energy and Infrastructure (Housing, Water, Sewer, etc.) A No-host luncheon will be served at Noon. For reservations, call 723-4349 or send e-mail to
awest00@in-tch.com. NEW DEGREE PROGRAM
COMBINES RESOURCES OF ST. JAMES AND MT TECH A growing field of study that
combines health care education and computer data information management, known
as Informatics, has drawn together two of the region’s largest employers into a
joint venture. St. James Healthcare and Montana Tech, working together, have
developed a new degree in Health Care Informatics at Montana Tech. Students interested in this expanding
discipline will be able to enroll this month. A federal grant of $400,000
will help to establish the new degree program that will accept 25 to 50
students starting this fall. Further fundraising efforts will target federal
funds to raise $1.5 million more to build an 8,000 to 10,000 square foot training
center next to St. James Hospital. The training center would
eventually house an expanding program that would create a national reference
center and business incubator for health care data management, provide
continuing education resources and develop sponsorships, internships and
permanent jobs for graduates. Ray Rogers, Montana Tech’s director of college
relations, estimates that graduates of the program will make in the range
of $40,000 to $50,000 a year after
graduation from the two-to-four-year program. “It’s great to see a
partnership evolve between St. James and Montana Tech,” said Evan Barrett, BLDC
Executive Director. “Everybody wins when the resources of two of the region’s
strongest entities are combined to undertake a new venture like this.” TAP ‘ER LIGHT! -- MSE RENAMES
RESEARCH CENTER AFTER MANSFIELD In a ceremony on March 29th,
Don Peoples, President of MSE and Vince Tonc, President of MSE Technology
Applications, unveiled the new sign for the Mike Mansfield Advanced Technology
Center. The center will continue to pursue several important areas of research
in Mansfield’s name. The center
continues work on its hypersonic wind tunnel research, including proposed
construction of a seven-year, $50 million dollar Mariah II wind tunnel for use
by NASA and the Department of Defense. Tonc also took the opportunity
to announce a new Information Technology partnership with EDS Information
Services, a firm founded by H. Ross Perot that works around the country. Other
areas of research include environmental remediation technologies including
nuclear waste treatment technologies for use overseas, especially in Asia. MSE is already a major employer in Butte
with more than 200 employees and an annual payroll of $11.3 million dollars. FIFTH LOAN FUND TO
WORK FOR BUTTE BUSINESSES The BLDC
now maintains four Intermediary Relending programs funded by the USDA Rural
Development. The four funds create a
pot of $3,060,700 dollars for loans.
BLDC borrows the money for 30 years at 1-percent interest and then puts
it to work in the community through loans to businesses that hold promise to
create new jobs or save existing jobs. This money augments other funding
sources that the BLDC draws on to fund business loans and economic development
projects. These are the Anaconda Arco Loan Fund (BSB-Owned) $500,000; an Economic Development
Administration grant of $2,942,300; a
Community Development Block Grant from the state of Montana for $314,700 and a
second state CDBG for $100,000. Total
initial funds for business loans were $6,917,700. These funds were combined
with bank moneys and owner equity to finance business retention, expansion and
start-ups. On May 14th the BLDC and Rural
Development will finalize that the pot is getting bigger with a fifth USDA IRP
loan fund previously announced by U.S. Representative Dennis Rehberg. “This
fifth fund of $750,000 will bring the total to $3.8 million that we’ve
received,“ said Evan Barrett, BLDC Executive Director. “And it will give us $7
million dollars in initial lending capacity.”
As loans are repaid, the money has been used by the BLDC, according to
Barrett “for over $2.5 million dollars in revolved business loans.” “The USDA Rural Development
program has been a partner that has made a real difference in business
development activity in Butte-Silver Bow,” said Barrett.
ASSESSING THE IMPACT OF BLDC LOAN FUNDS In a recent presentation to the
Butte-Silver Bow Council of Commissioners, the BLDC assessed the amounts and
estimated impacts of development loans from July 1st 2,000 to December 31st,
2001. In the service sector, the BLDC
made nine loans for a total amount of $927,500. This resulted in 15 saved jobs
and 144 new jobs created. In the
manufacturing sector, six loans were arranged for a total of $633,400 in BLDC funds, resulting in 17
saved jobs and the creation of 14 new jobs. In the retail sector, four
loans were made for a total of $435,000, retaining eight jobs and creating
seven new jobs. Two loans were made for community development projects for a
total of $165,000 resulting in 22 new jobs. One construction loan for
$150,000 resulted in the creation of 11 new jobs and a loan in the
transportation sector for $138,750 resulted in five new jobs. A loan was also made by the BLDC in the
wholesale sector for $125,000. In total, the BLDC during this period made 24
loans from its revolving loan funds in the amount of $2,374,650. The total
impact in jobs was 40 jobs saved that would have otherwise been lost and the
creation of 203 new jobs. The BLDC moneys leveraged considerable owner equity
and bank moneys into these business developments. ASiMI SHIFTS ITS EMPHASIS (AND MANAGERS) TO BUTTE As Advanced Silicon Materials
(ASiMI) grows in the future in the semiconductor polysilicon industry, they
will be growing in Butte, as well. After building a $500+ million
dollar plant near Butte to produce high-grade polysilicon, the world’s
second-largest producer has weathered the recent worldwide slow down in the
semiconductor industry aggravated by the downturn in the economies of Pacific
Rim countries. As demand returns for their
product, ASiMI has restructured to prosper in the changing business
environment. A major move has been to
sell their Moses Lake, Washington plant to a partnership that will use the site
to produce low-grade silicon for use in solar photovoltaic panels. Meanwhile, they have decided
that all future growth in the semiconductor portion of their polysilicon
business will occur in their Butte plant.
After an approximate 10% reduction in force because of international market
weakness, ASiMI has begun to recall and rebuild that workforce and expects to
grow beyond that in the future.
SECOND ANNUAL “BUTTE’S IN
BUSINESS” BANQUET Butte is “in Business” and the
proof was the second annual event dedicated to illustrating that fact. Butte’s
in Business was a daylong affair this year with workshops for small businesses,
a business expo and a banquet on the evening of April 16th at the
Copper King Hotel and Convention Center. The event was sponsored by the BLDC,
the Montana Standard and the Butte Chamber of Commerce with assistance from
major employers in the community. The estimated 400 who attended
were able to hear John Antaramain, the mayor of Kenosha, Wisconsin, a community
that has successfully dealt with many problems similar to those now facing
Butte. Antaramain was able to draw parallels between his own experiences in
Kenosha and the similar obstacles that face Butte in its efforts to transform
its economy after losing major industrial jobs. Antaramain described to the
audience how Kenosha focused on attracting small industries to diversify the
economy after suffering the loss of thousands of auto industry jobs that left
the area. His message was that Butte could have the same success if it has the
will to persevere and follow through with ongoing efforts to develop new
businesses in the area. “You have everything in the
works to make it one of the best communities in the state,” Antaramain
said. “The most important thing is to
agree about what needs to be done and work together to make it happen,” he
concluded. WHAT THE NUMBERS DON’T
TELL ABOUT BUTTE JOBS If you look at numbers of jobs
in the local economy, you’ll get a snapshot that resembles a somewhat steady
stable economy with occasional growth or shrinkage. For example, in 1995, there were 15,769 jobs in Butte’s
area. That number grew dramatically to
16,958 in 1998, the final year of the construction boom for the ASiMI
plant. Then by 2000, the number had
dropped again to 15,828 jobs. The truth is that Butte has
been going through a very dramatic period of job loss that has been partially
offset by the aggressive economic development efforts of the BLDC, the local
government and others in the community. These efforts have been directed at
diversifying an economy that traditionally has been dependent on mining-related
jobs that have been rapidly disappearing to one that has more flexibility and
growth potential in many different areas. The 200 jobs that came to Butte
with the ASiMI plant were immediately offset by the closure of Beal Mountain gold
mine near Fairmont that same year. There were 125 primary jobs lost with that
closure and the ripple effect to the economy caused the loss of 219 secondary
jobs there for a total loss to the economy of 344 jobs. (Considering a 1.75 multiplier effect to
account for the loss of secondary jobs). When the Rhone Poulenc plant
closed near Silver Bow, that resulted in the loss of 200 primary jobs and 350
secondary jobs for a total loss of 550 jobs. While the Golden Sunlight Mine
near Whitehall remains in operation, their work force has been reduced by 225
primary employees. This has resulted in the loss of 394 secondary jobs for a
total impact on the economy of 619 lost jobs. Finally, the suspension of
operations at Montana Resources in summer 2000 led to a loss of 330 primary
jobs and 578 secondary jobs, for a total job loss impact of 908. Overall, these
major closures have resulted in the loss of 880 primary jobs and the ripple
effect of losing 1,541 secondary jobs for a total hit to the economy of 2,421 jobs
lost. This assessment doesn’t consider the job reductions and consolidations
over a number of years by Montana Power and St. James Healthcare either. The BLDC can look back at new
jobs it has helped create through its lending to offset this trend created over
the last few years. In the fiscal year of 1998-99, 479 new jobs were
created. A multiplier effect applies
with these jobs created as well (a 1.25 multiplier – less than the multiplier
for very high quality mining-related jobs) and this led to 598 jobs being
indirectly supported during the same time for a total jobs impact of 1,077 jobs
during that time. In fiscal year 1999-2000, 72
direct jobs were created by BLDC efforts with 90 indirect jobs supported for a
total of 162 jobs impacted. In fiscal
year 2000-2001, 166 jobs were directly created with a 207 indirect jobs
supported for a total of 373 total jobs. Overall, during these three fiscal
years, the BLDC, via lending, helped to create 717 jobs, support 896 jobs
indirectly for a total positive job impact of 1,613 jobs. “There are a lot of dynamics
within these numbers,” said Evan Barrett, BLDC Executive Director. “There have been many changing business
circumstances with new companies created or expanded, new companies moving in as
others have closed or reduced their work force.” Butte has been hit hard by
these large closures and the impacts of the downturn in the national economy
after September 11, which locally have postponed the anticipated aggressive
growth of Sato Travel’s new call center and hindered ASiMI’s expansion. On the other hand there has
been some good news. The Montana Aerospace Development
Authority and research work and other activities continue at the Mike Mansfield
Research Application Center. The
National Healthcare Informatics Center, a joint venture between St. James and
Montana Tech, is another bright spot, along with ASiMI’s anticipated
resurgence. Successful work continues to attract high-tech companies to Butte’s Cyber
Village. Environmental cleanup and restoration work continues bringing jobs to
Butte’s economy and another high mark is the continued investment in our
community by St. James Healthcare and the medical community. Butte can also look forward to new jobs created by the construction and
operation of new power plants, hopefully beginning late this year, the
construction of a new jail in Uptown Butte, the growth of facilities and jobs
at Galen and Warm Springs and the opening of a new GM Transloading Center.
PORTLOCK SOFTWARE
BOOTS UP IN BUTTE John Hanley has come home to
Butte and he has brought along a software business that is rapidly expanding to
fulfill the demand for a popular data storage management tool. Storage Manager
for NetWare is one of the most popular network storage management software
packages now on the market. On hearing that Hanley would
relocate Portlock Software’s headquarters to Butte, Governor Judy Martz said,
“We are excited that Portlock Software recognizes the potential economic
benefits of locating in Butte. Mr. Hanley brings to Butte and the state a
wealth of knowledge about the computer industry. He also brings his energy, enthusiasm, and entrepreneurial experience
that will help Montana become a player in this growing industry.” Judy Jacobson, Chief Executive
of the Butte-Silver Bow Local Government said “John Hanley is a native son of
Butte who is returning with the most precious of commodities–-jobs and growth
in the new economy. His software firm is in the forefront of storage management
and will be a good addition to Butte’s Cyber Village. He knows his business,
knows Butte, and knows that both can grow together.” Hanley’s decision has
contributed tremendously to creating a synergy for establishing a flourishing
Cyber Village of high-tech companies in Uptown Butte. Portlock Software (visit them
on the web at www.portlocksoftware.com)
now occupies the fourth floor of the Thornton Block on East Broadway and they
expect to grow to 40 employees in Butte in the near future. “Portlock Software is a
cornerstone new economy business in Butte’s ‘Cyber Village,’”said Evan Barrett,
BLDC Executive Director. “We couldn’t be more pleased that a Butte native has
found his way back to Butte to build his business and help our economy.”
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Butte
is a historic city where you can find conferences, meetings and endless
debate about what happened in the past.
The
passing of Mike Mansfield last October has prompted many Montanans
to assess the legacy of a remarkable man who toiled tirelessly for
his beloved state all of his long life, often from very far away.
To honor Mansfield’s memory and acknowledge his many contributions
to Butte’s economy (in 1974, Mansfield shepherded legislation through
Congress that directed $5 million to establish the center), MSE has
renamed its research center in his honor.
