By Noah Hill
While Montana news headlines warn of impending affordable housing crises, entrepreneurs and tech executives are also feeling a real estate crunch. Rapid business growth demands physical growth, which can be a challenge in some of Montana’s space-restricted communities, like Missoula and Bozeman.
Business executives from around the state gathered to discuss some of the challenges associated with planning for company growth at a Montana High Tech Business Alliance CEO Roundtable hosted by Blackfoot at Missoula College in May.
Building the Space: Cost, Quality and Time
Ask any business owner in Missoula or Bozeman, and they’ll tell you that office space is hard to find. As a result, many business owners opt to build their own.
“The process of developing commercial space is one defined by constraints,” said Joe Easton, Project Development Manager at Jackson Contracting.
Easton, along with CTA Architects Engineers Project Designer Jimmy Talarico and Blackfoot CEO Jason Williams, offered practical tips for Montana high tech and manufacturing companies anticipating new construction or expansion projects.
The speakers emphasized the importance of planning and stated that, in order to be successful, companies need to identify the quality of the work environment, the desired timeline for project completion, and the budget for the project. These three components comprise the “vision triangle” of project development, Easton said.
“Make sure you get the architect, the contractor with good subcontractor relationships, and maybe even a banker in a room as soon as possible,” Talarico said. “When there is so much to choose from, it is important that your project is a priority.”
Easton recommended that after designing 10 percent of the new building, the growing business and the architect should partner with a contractor to discuss how the office space fits with the company’s vision in order to ensure realistic expectations about the project.
“The owner gets to control two of those components,” said Talarico. “If you want to say it has to be cost-effective and ‘I need it under this certain timeframe,’ quality is is going to take a hit.”
“Our challenge in assistance to any owner, whether it’s a new industrial manufacturing or office plan is to find that sweet spot in the middle of the triangle between cost, quality and time,” said Easton.
Envisioning the Future: Sustainable Growth and Montana Values
One Missoula business looking to revolutionize high tech real estate development is Blackfoot. Founded in 1954, Blackfoot Telephone Cooperative initially provided telephone services to the Missoula area but has expanded grown into a technology leader throughout the state and beyond. The company headquarters is on a 10-acre campus on North Russell Street in Missoula. Currently, most of that land is storage space for spools of fiber optic cables and other communication infrastructure equipment, but Williams would like to expand the useful footprint of the property beyond storage.
“While we’re in business to make money like everybody else, instead of paying Wall Street, we pay our [local] owners and from a board standpoint, from a cooperative values standpoint, just as important as making money is bettering the community,” said Williams.
Blackfoot has sights set on developing the land into a new high-tech campus for businesses in Missoula. The current Blackfoot headquarters, just minutes from downtown Missoula, make the site a strong candidate for such a project.
“We are in the business of finding companies that we feel culturally align with [our vision], with Montana roots,” said Williams.
The campus has excellent connectivity provided by underground fiber optic cables crisscrossing the property. The site also hosts cell phone towers for both AT&T and Verizon, positioning the campus to be the first location in Montana to receive ultra-fast 5G cellular networks.
Despite the rapid technological advancement in Missoula, Williams said he feels that most Missoula residents do not want the city to be the next venture capital hub; the community is committed to maintaining the ethos of the town.
“Balancing the growing need for commercial property while maintaining key factors that contribute to the atmosphere has proven difficult for developers,” said Joe Fanguy, Vice President for Strategic Development at Blackfoot.
Missoula, unlike other Montana population centers, sits in the bottom of a small valley and faces tight geographical constraints to developing commercial property. This, coupled with a multifaceted affordable housing crisis, has led city government to prioritize housing development over commercial development.
Bozeman and Missoula are notorious for having really tight site zoning requirements that you need to follow to know what areas of town you can actually be looking at for development, said Talarico.
Redeveloping existing property, as Blackfoot plans to do, is one work around for stringent zoning requirements because it expedites the building process significantly by reducing the amount of time local officials spend in the permitting process.
As businesses continue to grow, communities in Montana will have to grapple with competing economic and lifestyle interests. According to Easton, zoning regulations across the state will have to be relaxed to accommodate more residential and commercial development in order to maintain current rates of entrepreneurship and economic growth.
Based on experience gained while renovating an old FBI office for his business, Evan Tipton, CEO of TOMIS, recommends that businesses take a two-pronged approach to ensure sustainable growth.
“First you have to support the existing infrastructure,” Tipton said. “In the real estate arena, you need to update existing systems, like plumbing, and then you need to invest in your employees.”
Tipton has implemented a non-traditional investment equity system to retain valuable employees; making sure employees can afford investments like a home helps guarantee their longevity at the company.
Getting to Work: Parking and Transportation
While they don’t usually top the list of concerns for a growing business, parking and transportation can present unique challenges for companies and their employees. As the footprint of commercial real estate grows, space for parking proportionally shrinks, despite an increased number of employees on the property. Encouraging use of public transportation and biking to work can help alleviate parking shortages.
Companies growing around the state are also looking to make their time on the road as efficient as possible. Inimmune, a pharmaceutical startup in Missoula, found their own solution — passenger vans — so that employees commuting from Hamilton would not have to make a two-hour round trip drive on a daily basis. The ride-sharing service through Missoula Ravalli TMA additionally eases crowding in an environment where parking can get competitive.
While limited statewide commuting services across Montana exist (Neptune Aviation offers a twice weekly scheduled round trip flight from Missoula to Billings), companies like onX, which has offices in both Missoula and Bozeman, are struggling to make commutes between cities efficient. onX in particular has expressed interest in developing a small ride-sharing program for business executives who need to commute between Missoula and Bozeman.
Planning for high tech business growth is a multifaceted process, so cooperation across industries, from contracting to transportation, equips each company for not just the coming year, but the next 10 years. As Montana’s tech industry continues to grow, entrepreneurs should look for creative ways to work with other businesses so that Montana’s tech boom stays strong and sustainable in the coming years.
About the Author: Originally from Kalispell, Noah Hill will graduate from the University of Montana in May with a degree in microbiology and plans to attend law school. In his free time, Noah enjoys rafting, fishing, hiking, and reading a good book.
About the Publisher: Launched in 2014, the Montana High Tech Business Alliance is an association of 350 high tech and manufacturing companies and affiliates creating high-paying jobs in Montana. For more information visit MTHighTech.org.