Enticing Business Growth with State Money

By Beacon Staff

With unemployment in the double digits, a local economic development group, along with Flathead County officials, is working to entice new employers and additional jobs by competing for state grant monies.

Representatives from Montana West Economic Development asked county commissioners last week to help them tap into state funds used to relocate new companies or grow existing ones. Several businesses have already expressed interest, they said.

“The goal is to create good-paying jobs – something we could certainly use right now,” Gary Winship, manager of Montana West’s loan funds, said.

The Big Sky Economic Development Trust Fund (BSTF) program is a state-funded program created by the 2005 Legislature with the intent of developing good-paying jobs and long-term, stable economic growth in Montana. The program is funded by interest from the state’s coal severance tax – about $1.5 million annually.

There are two branches of the BSTF program: Category I economic development projects and Category II planning grants.

The first category awards grants and loans to local governments for economic development projects that create new jobs. It receives 75 percent of the program’s funding, or about $1.1 million.

The other 25 percent of the program’s monies go toward planning grants for economic development organizations throughout the state. The grants can pay for planning activities like feasibility studies, business plans and preliminary architectural reports.

For the past few years, Montana West Economic Development has applied for Category II planning grants, winning monies for a handful of area projects. For example, the group recently helped Stoltze Lumber Co. get a grant to study the feasibility of a cogeneration plant, a green heat and electricity generator.

Now, the local economic development group is looking to help businesses here compete for the BSTF Category I grants.

Last week, the county commission voted 2-0 to help the economic development group institute the program. Commissioner Joe Brenneman was absent from the vote.

In the case of BSTF development grants, the county must act as an in-between for state funds, receiving them from the state’s Department of Commerce and then passing them along to the appropriate businesses.

Montana West Economic Development, however, plans to organize as much as the grant application as possible and work as a liaison with the business owners. They already have some promising prospects lined up.

“There’s about five companies that we’re looking at how can we use this to help them with startup costs or expansions,” Kim Morisaki, manager of client development and resources, said.

Of those, at least two are companies looking to relocate to the Flathead from outside the state, including an equipment supplier for gun manufacturing and a prescription lens maker.

To qualify for a Category I economic development grant, a business has to prove it’s creating eligible jobs, meaning they’re new positions that average 35 hours per week on an annual basis and pay at or above average county wages. In Flathead County, that average wage is $15.08.

The employer is then eligible for up to $5,000 in grant money for every job created. In high-poverty counties, like nearby Lincoln, Glacier, Sanders and Lake County, that number jumps to $7,500.

The grant funds can be used for development projects, like buying new equipment that expands operations, or to cover the costs of relocation from outside the state. Employers must match the grant monies dollar for dollar.

“Really, what it comes down to is if you’re a company coming and creating new jobs and paying more than average county wage, we want to help you,” Morisaki said.

Other program stipulations require the business buy at least half of its production materials from within the state, while also selling half its finished product outside of Montana. A business relocating to the Flathead can’t be funded if it competes directly with a preexisting business here.

Statewide, the types of projects being funded varies greatly, from locally owned operations creating five jobs to large-scale productions with upwards of 250 positions, said Quinn Ness, a section manager with the Montana Department of Commerce.

The largest project to date was the Signal Peak Energy’s coal mine near Roundup, formerly known as the Bull Mountain Coal Company.

“It’s a very open program, very inclusive,” Ness said.

Applications generally outnumber the amount of money each year, so grants are competitive. Grant applications are accepted on a running basis throughout the year in order to expedite the process and ensure companies are notified quickly if they are accepted.

“We want to be as proactive as possible,” Ness said.

It’s a sentiment Montana West Economic Development and the county, facing growing unemployment numbers and a worsening economy, are echoing as well.

Stay Connected with the Daily Roundup.

Sign up for our newsletter and get the best of the Beacon delivered every day to your inbox.