INSIDE: Bike & Type opens downtown • Bars and restaurants use downtime to remodel • United Way steps in to help
Summer 2020 • Vol. 1 Issue 3
Missoula sees $229M worth of new construction in 2019 Page 14
El Cazador owners plan new restaurant in Missoula
New players add flavor to Midtown revival Page 8
Page 4
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MISSOULA BUSINESS • SUMMER 2020
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El Cazador owners to open new restaurant in Missoula DAVID ERICKSON david.erickson@missoulian.com
T
he family that's owned and operated the popular El Cazador restaurant in downtown Missoula for a quarter of a century is in the final stages of opening a new location at 2221 South Ave. The new El Caz Taqueria will be in the old Viva Mexico restaurant building, which is undergoing a full remodel right now.
"We are hoping to be open in three months," explained Maria Hernandez. She and her husband, Alfredo, and their children are envisioning the new spot to be more for Missoula locals, as the downtown location is usually overflowing with tourists because of its location right on Higgins Avenue. Maria and Alfredo's daughters, Lala and Isabel Hernandez, have turned the family catering truck into a permanent food truck in the
Index:
parking lot of the new location for now, which they'll operate until the restaurant is ready. Then, they'll be heading up operations there. "We're excited," Lala explained, while taking orders for pineapple and steak minitacos from a customer. Lala and Isabel are instrumental in the food truck's popularity, according to Maria. That's because you'd be hardpressed to ever find the duo in a rotten mood, even during the heat of summer. "They're always happy, always cheerful," she said. "Customers come back to see them." Maria Hernandez said the pandemic delayed the opening, but they're working hard on painting the interior and redoing the kitchen. Eventually, they hope to have a large southfacing outdoor patio, but for now they're just focusing on getting the inside ready.
Economic indicators Up close: Sweet developments on Brooks Street Tech check: Bike & Type cowoking space Missoula development builds on strong foundation Giving back: United Way helps deliver PPE Up Close: UM economist offers projections In the works: Bars and restaurants remodel Facebook: internal audit pushes systemic change Missoula tech cos adapt to pandemic disruption Ramos: Quantitative easing not the answer CARES Act changes worth noting Small businesses face tough choices Chamber helps members have voice in Washington
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MISSOULA BUSINESS • SUMMER 2020
Lala, right, and Isabel Hernandez work inside the El Cazador food truck on South Avenue on July 8. The truck has been up and running since March at the site of the second permanent El Cazador restaurant, which will be operational in an estimated three months.
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On the cover:
PHOTO BY TOM BAUER, MISSOULIAN
Big Dipper employee Aidan Moser holds a double scoop at the Paxson store.
Publisher Editor Advertising Business editor
Jim Strauss Gwen Florio Toni LeBlanc David Erickson
For questions about news or pitches, contact David Erickson, david.erickson@missoulian.com, 406-523-5253. For advertising information, contact Toni LeBlanc, Toni.leblanc@missoulian.com, 406-523-5242.
NO PART OF THE PUBLICATION MAY BE REPRINTED OR REPRODUCED WITHOUT PERMISSION. Š2020 LEE ENTERPRISES, ALL RIGHTS RESERVED. PRINTED IN MISSOULA, MT, USA.
MISSOULA BUSINESS • SUMMER 2020
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Economic indicators
10th
Where Montana ranks in terms of quickest workforce recovery from the lockdown, according to unemployment data collected by the financial firm Wallet Hub. The ranking is based in part on the change in number of unemployment insurance initial claims the week of June 15, 2020, compared to that same week in 2019. The ranking also takes into account the change in the number of unemployment insurance initial claims since mid-March to June of 2020 compared to that same time period in 2019.
46,000 The number of unemployment insurance payments issued by the Montana Department of Labor and Industry for the week of June 15 through June 19. oyment rate
13.3%
The unemployment rate of the United States overall in May. nt rate
$47 million 9%
Montana’s unemployment rate in May, down 2.9% from where it was in April.
The total amount of unemployment insurance payments issued by the Montana Department of Labor and Industry for the week of June 15 through June 19. That number includes the additional $600 weekly Federal Pandemic Unemployment Compensation benefits.
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MISSOULA BUSINESS • SUMMER 2020
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TOM BAUER, Missoulian
Charlie Beaton, owner of Big Dipper Ice Cream, employs 20 new people in the company's Paxson location. 8
MISSOULA BUSINESS • SUMMER 2020
Growing Missoula
Big Dipper expands as city eyes big changes for Brooks Street Corridor DAVID ERICKSON david.erickson@missoulian.com
C
harlie Beaton celebrated the 25th year of owning and running Big Dipper Ice Cream by opening a brand-new location in Missoula’s Midtown area, also known as the Brooks Street Corridor. Meanwhile, city officials are studying ways to transform the area to make it more pedestrian friendly while adding 15-minute bus service. The new Big Dipper South shop has indoor seating, unlike the original location on the Hip Strip, and is located in the Paxson Plaza across the parking lot from the AMC dine-in movie theater. Beaton is part of a wave of business owners who are flocking to Missoula’s Midtown area to serve the demands of the tens of thousands of people who live on the southern and central parts of town. “There’s just a lot of development going on out here,” Beaton said. He said he’s heard there will be a housing development going in near the mall soon. A new 110,000-square foot SCHEELS All Sports store is set to open in the mall in 2021, and the AMC movie theater is set to re-open in July. The Dram Shop next door to Big Dipper is putting the finishing touches on a new outdoor patio space. Tim Winger, the general manager of Southgate Mall, has hinted that a new tenant could be in place in the old Lucky’s Market grocery store space in the near future although nothing is confirmed.
Beaton hired 20 new workers for the new location to go with the 35-40 people he already employs in Missoula. He’s got some unique flavors for the Midtown customers, including cayenne caramel, vegan mint chip and butter pecan. The chai milkshake, using Montana-made Tipu’s Chai, is also a big hit. It’s summer now so people are enjoying the new patio, but Beaton said it’ll be nice to have the indoor seating during Missoula’s long fall, winter and spring when it’s not so nice out.
In May, the Missoula Redevelopment Agency’s board heard a presentation about the Brooks Corridor TransitOriented Development Infrastructure Study and committed $30,000 in Tax Increment Financing for the next phase. The study, essentially, is a document sponsored by multiple groups and
organizations that aims to provide fixedroute, 15-minute Mountain Line bus service in the area. Then, the study looks at ways to foster mixed-use development in that district with a range of housing types and prices to support fixed-route transit. Another goal is to improve the corridor aesthetics with gateways, street trees and other plantings along with pedestrian-scale lighting and other amenities to create a place where “people want to be and to spend time.”
Beaton worked 12-hour days when he first started out as a young man selling coffee and ice cream, and he’s happy to finally have the new location finished and ready to go. “It’s been a lot of fun,” he said. The reason he invested hundreds of thousands of dollars into a remodel project along the Brooks Street Corridor is because he, like many others, sees potential and new business opportunities in the area. A broad coalition of Missoula groups have for the past two decades been planning and tinkering at plans for shaping the Brooks Corridor as a pedestrian- and Beaton installed the original Big Dipper sign at the bike-friendly thoroughfare Paxson store. for shopping and living.
According to Annette Marchesseault, a project manager and redevelopment specialist with the Missoula Redevelopment Agency, the goal is to “transform Brooks Street into the dynamic, economically thriving, multi-modal community resource it has the potential to become.” The Missoula Urban Transportation District, the Missoula Midtown Association, the Missoula County Fairgrounds and the City of Missoula are all contributing funding and staff time to the effort to make the street feel like less of a car-centric “point A to point B” vibe. “Mountain Line has for quite some time now been wanting to get a 15-minute bus on the corridor,” Marchesseault explained. MISSOULA BUSINESS • SUMMER 2020
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TOM BAUER, Missoulian
Jack Puckett dries out a rental pack raft at the Trail Head River Sports store in Midtown Missoula. The Trailhead recently expanded from its downtown Trailhead store. The River Sports store stocks everything from complete rafts, accessories, canoes, kayaks, stand-up paddleboards and more, along with a rental department and repair shop, and is the largest boat store of its kind in the Pacific Northwest. “It sounds simple, but in order to make that work you have to get people safely on and off bus and safely across street so they can get to where they’re going. And you need a critical mass of population either working or living there.” When pedestrians and bicyclists feel safe in the area, they’ll bring their checkbooks. That’s the theory that the MRA board is working on and why they unanimously voted to approve the funding for the next phase of the study. 10
MISSOULA BUSINESS • SUMMER 2020
“There’s 2,000 businesses along the Brooks Street Corridor that employ 17,000 people,” said board member Ruth Reineking. “Those are a lot of people that could utilize that bus system if it’s running. In that area there’s also a population of 16,000 people for which Brooks is a definite corridor, for which accessing the other side of the street is a barrier.” She said the safety aspect is also an economic aspect.
“It’s worth emphasizing the opportunity for economic development with the permanence of the bus,” she said. “And just knowing Missoula is going to continue to grow. The economic opportunities there are really quite great, and I think that needs to be emphasized as well.” Reineking said studies have shown that the transportation infrastructure in the area is going to be maxed out in 20 years, so the “time is now” to address it.
Marchesseault said she believes the study will help city leaders make decisions to improve the overall transit service and provide a “balanced, healthy business environment.” “The vision is for some sort of transformation on Brooks Street,” she said. “It’s a broad coalition of groups and folks who are participating in this vision, all working together on this.”
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Tech check
SARA DIGGINS, Missoulian
Yossi Langer works for his California-based technology company remotely from the Bike and Type workspace on Tuesday morning. Langer is from out of town and is in Missoula visiting family. "I needed to get out of the house to work," he said.
Bike & Type
New coworking spaces in downtown Missoula DAVID ERICKSON david.erickson@missoulian.com
with room for perhaps as many as 200 workers.
A Missoula entrepreneur is hoping to cut down on car traffic in the downtown area by opening new coworking spaces in historic buildings.
“Inexpensive office space is in demand, especially downtown, and we saw this as kind of a creative solution to that,” Caras explained. “I toured a WeWork (coworking space) a few years ago and always thought it was cool. I think it’s going to be a fun spot.”
Nick Caras recently opened the new Bike & Type coworking facility at 415 N. Higgins Ave., which can accommodate 60-70 users. He’s also in the design phase for another coworking space in the lower level of the Hammond Building at 101 S. Higgins and that should be open this fall, 12
MISSOULA BUSINESS • SUMMER 2020
He and his team rapidly remodeled the building at 415 N. Higgins, which was built in 1911 and features an alley that connects West Pine Street with the
former Old Post Pub parking lot. He’s turned that into an outdoor office space, and he’s got inside offices, conference rooms, private rentable desks and a break room. With the rise in work-from-home and remote work across the United States, coworking spaces have become increasingly popular as a way for people to socialize, have an office to meet clients and use office services. The Bike & Type features fiber internet, a receptionist that can direct clients, secure entry and
Thursday night meet-and-greets featuring local beer in kegs from Worden’s Market just steps away. “This alley had always been kind of vacant and a den of vice,” Caras jokes. “But I thought it was really cool and kind of European-feeling, so I wanted to do something with it. We’re going to use it as event space so people can do their wedding or throw parties here." Then, during the day it’ll be an outdoor coworking space, he said.
"And then we have one more large space inside, kind of like a quiet area. It’s still under construction/remodel.” The alley is now strung up with bare-bulb lights and Caras set up some speakers. The Witch of the Woods Tattoo parlor rented one of the spots in the alley recently. “We’re looking for partnerships with artists to use the space more or maybe even do murals,” he added. There are already about 50 microoffices in the building with a wide variety of tenants. Caras said he’s had a lot of interest in the new coworking spots, from architecture to financial workers. “A virtual office is $60 a month, and that gets you a mailing address and three days of use of the office per month and you can rent conference rooms,” Caras said. “The coworking membership is $150 a month, and that gets you 24-
hour access to the space. You can get a dedicated lockable desk for $250, and private offices start at $350 and go up from there.” He plans on trying to find a coffee/ pastry cart to utilize the space in the future. Caras has even bigger plans for the lower level of the Hammond building. He intends to build a secure bike-storage facility with showers that can be used by people renting coworking spaces there or simply office workers anywhere in downtown Missoula that don’t want to deal with traffic and parking a car on their commute. He’s also planning to perhaps work with El Cazador Mexican restaurant to offer food and beverage service there and might have an outdoor courtyard as well. Pam Udall does advocacy and outreach on behalf of Texas physicians,
and she recently rented a space at Bike & Type. “I live in Missoula, but I work in Austin, Texas,” she said. “I’ve been spending part of my time there and part here for the last year, but since COVID I’ve been in Missoula since March full-time. I spent the first three months working from home, and it got monotonous. I felt my productivity was falling. I need people around me. I need to get dressed and have more structure in the workday. So I’m glad Nick did this.” She said even a half day in a regular office-style work environment will make her more productive than an entire day sitting at home in front of her computer. “It allows me to get structure, and see people and actually get social interaction besides my cat,” she said, laughing. “(Bike & Type) has a good atmosphere. I’m excited to ride my bike downtown and
get my coffee and interact again. I’ve been isolated for three months, so I’m looking forward to getting some normalcy.” She said Austin has "more corporatestyle" coworking places so she's glad to have a locally-owned spot. "Nick's place is great," she said. "It's open, there's a good vibe to it. They provide everything you need. It's good to come back home from work. If you use your home from work, you can't create a balance. You want a work place and a home space." Caras said he's gotten positive reactions from the users he's renting to so far. "The timing might be terrible for this, but it also might be good because there's probably a lot of users that want to get out of the house and get away from their kids after the pandemic," he said. "Plus, I have the outdoor space for that."
A sign for Bike & Type hangs on the newly remodeled alleyway, which became part of the expansion of the business. MISSOULA BUSINESS • SUMMER 2020
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TOM BAUER, Missoulian
Construction continues this spring on units being built on Charlo Street in Missoula's Northside neighborhood.
Firm foundation
Missoula sees strong level of construction in start of 2020 DAVID ERICKSON david.erickson@missoulian.com Missoula saw a robust level of construction activity in the first three months of the year, although those numbers don’t reflect much of the effects of the coronavirus pandemic. 14
MISSOULA BUSINESS • SUMMER 2020
According to the City of Missoula’s Development Services Office, staff issued 1,656 building permits in the first quarter of 2020. The total market value of construction for building permits issued from January through March was $43.7 million. That’s about twice
as much market value of construction as was issued in the same time period in 2019 and the strongest first quarter since 2016. Residential construction activity was also brisk. "In this three-month period, building
permits were issued for a total of 111 residential units comprising 99 single units, 4 duplex units and 8 multi-units,” said Alicia Vanderheiden, the office’s business manager, in a report. “39 of these units were approved through a Townhome Exemption Development (TED) process.”
Market value of construction in Missoula The TED process allows developers to build multi-family housing without going through the rigorous subdivision regulations while still having certain requirements. Gov. Steve Bullock issued a stayat-home order on March 26, and it’s still unclear what level of construction activity occurred from March through June. However, construction was still considered an essential business, so projects in Missoula continued. The numbers for the second quarter have not been processed yet, Vanderheiden said. The total market value of construction of building permits issued in all of 2019 was $228.9 million, which is $5 million more than 2018, but still short of the level of development activity seen in 2016 and 2017. In 2017, a record $277 million worth of construction was permitted in the city. A total of 7,633 permits were issued in 2019 compared to 8,354 permits issued a year earlier. "The distribution of permit type was comparable between the two years,” Vanderheiden said. "Of the 455 total residential units recorded in 2019, 81 were approved through a Townhome Exemption Development process.” Several large-scale projects are underway in Missoula, including work on an expanded Missoula International Airport and a new $36-million Missoula
Public Library. The Department of Veterans Affairs is building a huge new clinic on West Broadway, and DJ&A Engineers, Planners and Surveyors is building a multi-story office building on West Broadway as well. Other large projects, including a proposal for a large civic events center, hotel, restaurants, condos and plaza at the Riverfront Triangle are facing uncertainty because of the pandemic and the economic recession it has caused. According to Matt Mellott of Sterling Commercial Real Estate Advisors in Missoula, 2020 is on pace to see 35% fewer multifamily housing units built compared to 2019. Over the past 12 months, according to Mellott, 921 new apartment units have been delivered. In that same time frame, 901 units have been absorbed by the market and there are 90 units currently under construction. “Missoula is a supply-constrained market,” Mellott said in a recent report. “The supply expected to come online within the next 6-12 months is inadequate to meet demand, unless population growth stops or reverses. 176 units are expected to deliver in the balance of 2020.” MISSOULA BUSINESS • SUMMER 2020
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Giving back
Eric Legvold: From bartender to COVID-19 responder, a lifelong giver
BEN ALLAN SMITH, Missoulian
Legvold has worked for United Way for nearly three years. Since his start at the organization, he's tackled several projects including the Imagination Library and The Home Ignition Zone Program. MAZANA BOERBOOM mazana.boerboom@missoulian.com
“50 masks. Washable. (Call) Arlene Olson … if you need more,” the note said.
Following his new every-other day routine, Eric Legvold unlocked the padlock on the house-shaped box marked with the words “Donate Masks Here” in bold red text. Gathering up the bags and piles of donated masks, he discovered a note accompanying a donation.
They always needed more masks, so Legvold called the number and talked with Olson. Upon realizing she was at risk for contracting COVID-19, he promised to pick up the masks from her in a socially distanced way the next time she had some to donate.
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The next day Olson called Legvold back: She and her daughter had spent the entire day prior sewing 100 masks. Legvold is the director of impact at United Way of Missoula County. His job is to be the eyes, ears and hands in the Missoula community, said his boss and Chief Executive Officer at United Way of Missoula County Susan Hay Patrick.
Legvold is the type of person who would rather be on a dusty trail or lounging by an alpine lake than working an office job, Patrick said, but he comes to work every day with a smile and a work ethic unlike any other. “He’s a leader, and you can tell he’s a leader,” Patrick said about Legvold. “He has a very open presence. When you see him, he smiles readily. He listens.”
Legvold has worked with United Way for about three years, but has lived in Missoula for nearly 16. In that time, he has taken the connections he's built in the community and an ethic of giving back to help people at home in Missoula and as far away as India. Legvold moved to Missoula in August 2004 with no money and no job prospects. He camped out while he searched for work and after a month almost gave up to return to the Twin Cities when he landed a job busing at Finn and Porter. He spent the year working hard. He got promoted to bartender after only a few months and gained Montana residency. He started school the next year at the University of Montana and worked toward an undergraduate degree in forestry and recreation management.
the course of seven years collected more than $125,000 worth of gear, medical equipment and wilderness medicine training for the people living in the remote mountain villages. After nearly a decade traveling to India, Legvold has picked up a few life lessons,
people and organizational skills he learned with more than 20 years bartending have carried into the nonprofit work he does now. Eventually when Legvold was in graduate school working toward a Master of Business Administration, Patrick
young kids around Missoula and Mineral county to cultivate a love of reading. The latter is a forest fire prevention program that helps homeowners prepare their property to be forest fire resistant at a more affordable cost. Since March, though, his work has shifted to emergency COVID-19 response. He spearheaded the COVID-19 emergency assistance fund, which offered a $400 grant to service and gig workers who were out of work. He worked long weeks, probably 65 hours or more, processing the 1,100 applications. He had help from his colleague at the Human Resource Council, Lena Negrete.
He continued bartending even after graduating, but also started part time at a small nonprofit called Nature Link. With Nature Link, he took students on study abroad trips to the Garhwal region of northern India where they would spend Legvold, director of impact at United Way of Missoula County, drops masks into a a month or two studying and donation box at Community Medical Center in June. Legvold spearheaded the COVID-19 immersing themselves in the Himalayan cultures. emergency assistance fund, granting over $350,000 to 850 service industry and gig
workers He felt lucky to witness the natural beauty and cultures of places most people will never see. Once a snow leopard wandered through his camp, and even though it was dark he caught a glimpse of the rare cat maybe 20 feet from him. The people he encountered in the Garhwal lived often treacherous lives. They guided people up the Himalayan mountains, trekking across glaciers in flip-flops and using umbrellas as ice axes. Hospitals were between five hours and five days away from villages. Legvold realized he could help. He’s a self-acclaimed gear junkie, with more backpacking and mountaineering equipment than he knew what to do with, and he knew there were many others like him in Missoula. He started a gear drive called Gear for the Garwhal, and over
who were out of work.
one being that he doesn’t need much to be happy. “And that there’s a lot of good in the world,” Legvold said. “There’s a lot of people that would literally give you the shirt off their back when they only really own 10 shirts.” He met a lot of different kinds of people working as a bartender too. He served the musician Sting, many local celebrities and even met his current boss Patrick serving her at Finn and Porter. He forged bonds and friendships and a connection with Missoula. He gained a lot of experience walking the line between a confidant and an enforcer. He listened to and supported the variety of people he met, but also maintained structure and order. The
recommended him for an intern position at United Way. He was hired full time right after graduation. Legvold knew he could make more money somewhere else, but felt the quality of life and rewarding work he could do in Missoula was worth it. “There is a quality of life in Missoula that is unparalleled,” he said. “...There’s just not another place on this earth that is like it. And to be surrounded by 10 million acres of wilderness is not too bad either, I got to say.” At United Way, he’s taken on several projects, two of his favorites being Imagination Library and The Home Ignition Zone Program. Imagination Library sends free books every month to
They were able to distribute $350,000 among 850 people. He had volunteers call each person who received money, and he called those who didn’t qualify. It was difficult for him to do, as he knew what it was like living paycheck to paycheck as a bartender. Now most of his COVID work centers on collecting, washing and distributing masks. People can donate masks to United Way, and Legvold brings them to be washed for free at Missoula Textile Services, and he brings them to organizations around town like the Poverello Center, the school district and Missoula Aging Services.
One young woman at Missoula Textile Services always washes, untangles and packages the masks with patience and a smile. To Legvold she’s the embodiment of the caring and supportive nature of Missoulians. His parents and his brother all work in the health care industry. He never saw himself going into that line of work, but they always taught him to serve and give back. “If I can provide one avenue of health to the great community that is Missoula, I’ll take it. I’ll run with it and I’ll do it with a smile on my face,” Legvold said. “You might not see it because it’s underneath a mask, but I’m smiling every time that I drop off a group of face masks to organizations.” MISSOULA BUSINESS • SUMMER 2020
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Up close
Patrick Barkey, director of the University of Montana Bureau of Business and Economic Research, reflects at his office in a file photo.
Economist talks pandemic, projections
KEILA SZPALLER keila.szpaller@missoulian.com Patrick Barkey has made economic projections through multiple recessions, but he said doing the work during a pandemic feels different. "Things usually don't happen this fast in the economy," said Barkey, director of the Bureau of Business and Economic Research at the University of Montana. "It's been a case of a disease that grows geometrically, and it's been the case of economic assessments changing if not daily, at least weekly." 18
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On March 11, the World Health Organization declared COVID-19 to be a pandemic, and on March 13, the United States declared a national emergency from the novel coronavirus outbreak. Many economies including that of the state of Montana were temporarily shut down, and recent reopenings around the country have led to another surge in cases of the respiratory illness that has killed some 130,000 in the United States and more than half a million worldwide. In Montana, 23 people had died as this
publication went to print, and cases have been climbing again in recent weeks after a plateau. In May, economists from the Bureau revised economic projections for Montana from the previous month as more data showed a tougher economic forecast for the state across industries. An updated report predicted a steeper drop in personal income — a hit of $6.4 billon instead of $3.9 billion, or an 11.7% drop, compared to 2018 — and they forecast higher job losses and a slower economic recovery that would extend beyond 2022.
In a recent interview, Barkey, head of the Bureau since 2008, said the economy continues to change quickly, and July would bring significantly distressing projections for assessments of GDP, or gross domestic product, in 2020. He said with the first quarter of the year seeing the economy falling 8% to 9%, the projection this month for the annualized growth rate may look like a drop of 30% to 40%, although that estimate may not hold and does not account for more recent upticks in economic activity.
"It's going to stun people who don't deal with these numbers all the time," said Barkey, involved with forecasting and economic research policy for more than 30 years.
This July, the additional federal $600-a-week unemployment benefit is expected to end, an amount Barkey described as a finger in the dike that isn't even covering the hole.
On the cusp of more increases in COVID-19 cases around the country, he said the pandemic has created new opportunities for entrepreneurs and spurred technological adaptations, yet created pain for many individuals and businesses. He said the evidence shows the worst is probably in the rearview mirror, but businesses and households still will suffer.
"Having that expire is going to hurt, but it's hurting already," Barkey said.
"I think the big question is, 'How much permanent harm is being done to the economy?'" Barkey said. The novel coronavirus has dealt a blow to Montana's economy, but Barkey said the recovery — at least recently — has looked better than expected. "The reopening of the economy did bring consumer spending back pretty strongly, surprisingly strongly, actually, so that took economists by surprise, and it was on the upside," Barkey said. In the spring, he said economists could see a direct connection between infection rates and the economy, with the number of cases going up as the economy sank. Going forward, however, Barkey said he believes that relationship will change. "There's certainly going to be a lot of impacts of higher COVID rates, morbidity and deaths, and there's clearly impact from the steps we're taking to mitigate the spread of the virus," he said. "But there will not be, going forward, I believe, as close of a connection between infection rates and economic activity." He also noted that governments can shut things down, but that doesn't mean consumers and the public will stop their activities. Regardless, he said evaluating the "roller coaster" of infection rates and making projections has been challenging, and it's the nature of the forecasting business. "Obviously, predicting infections has been very difficult and very humbling. A lot of very smart people have been humbled by that," Barkey said.
He said plenty of households didn't get the extra benefit and needed it, but many households also received it and didn't need it. At the same time, Barkey said Congress acted quickly, and it would have been "far worse to design something more efficient that would have taken longer to roll out."
Montana and look to his projections to better understand the state of the economy.
information helps people in her job know which sectors of the economy are doing well and which ones will expect hurdles.
Rep. Nancy Ballance, R-Hamilton, chair of the appropriations committee for the Montana Legislature for six years, said lawmakers get information from the legislative finance division, but it's helpful to have different economic perspectives as well as Barkey's insights.
"Those are big picture things that aren't membership focused, but help me understand the big picture," Latrielle said.
"I think he's very thorough," said Ballance, a Hamilton Republican who also served on the legislative revenue committee her first interim session and
"Where it gets bad is your job, employer, community, neighborhood, when those things are affected. I watched my retirement vanish when the stock market went down just like everybody else. It is kind of scary." -Patrick Barkey, director of the Bureau of Business and Economic Research at the University of Montana "It took a little courage because there will be some very ugly stories about individual businesses," he said. Lawmakers bolstered the economy with "head-spinning amounts of money," he said, but even those aren't enough because "the economy is just too big." "The resources would never be there to really plug the hole. It's been a great help, though," Barkey said. The most recent report from the Bureau predicts the economy in Montana won't get back to pre-pandemic levels until 2024. He said the hit is significant because Montana is an income tax state, and income from the corporate and individual sides will be affected. "Reasonable people can disagree, but it does look pretty harsh, and I hope I'm wrong," Barkey said. Lawmakers and business leaders said they appreciate Barkey's work for
finance committee the last three interim sessions. She said national economic projections aren't hard to come by, but Barkey dives into information that is specific to Montana and focused in on Treasure State industries, and his deep understanding of the state helps inform people in her position. In January, before the pandemic, he presented a report on workforce shortages and development, a topic important to the state at the time, to Ravalli County, and to the Legislature. "It was very well aligned with what we were doing," Ballance said. "Housing was part of it. He really covered the full spectrum of workforce issues." Kim Latrielle, president and CEO of the Missoula Area Chamber of Commerce, said it's always helpful to learn from Barkey the outlook for specific industries, such as tourism and wood products and agriculture. She said the
As the effects of COVID-19 pulse through the Montana economy this year, Latrielle is especially interested in the assessment Barkey will make looking back. ("The shoes are still dropping.") She said she's grateful the University of Montana provides the resource. "In this time more than ever, I think we're going to be probably more interested in just exactly what happened … how did it impact us," Latrielle said. Economists are social scientists, people who love it when things change and like to measure relationships between things, Barkey said. As such, he anticipates much analysis of the way people have been adapting, how families get along, how distance learning works, how people learned to cook in the shutdowns. "There's probably going to be 5,000 doctoral dissertations written about this time in our life," he said. That's interesting to people in his field, but he said economists feel the effects just as others do: "Where it gets bad is your job, employer, community, neighborhood, when those things are affected. I watched my retirement vanish when the stock market went down just like everybody else. It is kind of scary." But he said the pandemic also spurred some positive changes in society and proved some developments were equipped to handle stress. In the peak of the crisis, for instance, he said technology largely performed, such as with Zoom meetings and Amazon deliveries. Some of the developments that are taking place have implications for public health, such as the ramp up of telemedicine. Also, he said in the face of the crisis, authorities relaxed regulations in order to expedite a vaccine. "Will they be enough?" Barkey said. "We all hope so." MISSOULA BUSINESS • SUMMER 2020
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In the works
Bars and restaurants remodel during pandemic lockdown
BEN ALLAN SMITH, Lee Newspapers
Matt Warner, general manager at Press Box, discusses new renovations at the restaurant and bar last month. Press Box added new carpet, paint, bar railing and a full-scale remodel of the kitchen. 20
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The upstairs seating area at Press Box sits empty. Warner said the restaurant is addressing certain health code violations cited by the Missoula City-County Health Department and hopes to be up and running by the end of July. David Erickson david.erickson@missoulian.com
be featured in the next issue, reach out to newsdesk@missoulian.com):
If there’s one silver lining to the lockdown that took place in Montana this spring due to the coronavirus pandemic, it’s that restaurants and bars that would normally be packed with people were unexpectedly empty and had time to remodel.
• The James Bar in downtown Missoula remodeled a portion of the interior with a U-shaped bar and a slightly different layout. Owner Seamus Hammond said the re-design "doubled" the amount of bar seating to about 19 while keeping about the same number of indoor tables. "We brightened it up, livened it up," he said. The reviews from customers so far have been all positive, he added.
Quite a few establishments in Missoula County were able to take advantage of the quiet period to get some work done. Here’s an incomplete list (if your business remodeled and you’d like to
• The Bum Steer in Florence went through a “refresh and slight remodel.”
• KT’s Hayloft Saloon in Lolo put down new flooring in the bar, new carpet in the casino, new flooring in the dining room, bought new tables, refinished the bar surface and “scrubbed the place spotless.” • The owners of the historic Missoula Club bar and burger joint, known locally as the Mo Club, invested in new paint and repairs, among other minor upgrades. • Red’s Bar put in a new floor and refinished the bar surface. • The Reno bar and restaurant in
East Missoula went through a significant remodel. • The Press Box in Missoula put in new flooring, new paint, a new bar railing and is completely remodeling the kitchen. The bar and restaurant shut down in December after the Missoula City-County Health Department cited the business for health code violations, but general manager Matt Warner said they’re addressing all the problems and hope to be open by the end of July. "We hope to be open in two weeks," Warner said on June 29. MISSOULA BUSINESS • SUMMER 2020
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JOSE LUIS MAGANA, AP
In this Sept. 5, 2018, file photo, Facebook COO Sheryl Sandberg testifies before the Senate Intelligence Committee hearing on Capitol Hill in Washington. Sandberg and Facebook CEO Mark Zuckerberg met with civil rights leaders Tuesday, July 7, 2020, including the organizers of a widespread advertising boycott of the social network over hate speech on its platform, in an effort to convince critics that it is doing everything it can to rid its service of hate, abuse and misinformation.
Facebook civil rights audit: 'Serious setbacks' mar progress BARBARA ORTUTAY AP Technology Writer A two-year audit of Facebook’s civil rights record found “serious setbacks” that have marred the social network’s progress on matters such as hate speech, misinformation and bias. Facebook hired the audit’s leader, 22
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former American Civil Liberties Union executive Laura Murphy, in May 2018 to assess its performance on vital social issues. Its 100-page report released Wednesday outlines a “seesaw of progress and setbacks” at the company on everything from bias in Facebook's algorithms to its content moderation,
advertising practices and treatment of voter suppression. The audit recommends that Facebook build a “civil rights infrastructure” into every aspect of the company, as well as a “stronger interpretation” of existing voter suppression policies and more concrete action on algorithmic bias.
Those suggestions are not binding, and there is no formal system in place to hold Facebook accountable for any of the audit's findings. “While the audit process has been meaningful, and has led to some significant improvements in the platform, we have also watched the company make
painful decisions over the last nine months with real world consequences that are serious setbacks for civil rights,” the audit report states.
said Rashad Robinson, the executive director of Color for Change, one of several civil rights nonprofits leading an organized boycott of Facebook advertising.
Those include Facebook's decision to exempt politicians from fact-checking, even when President Donald Trump posted false information about voting by mail. Facebook CEO Mark Zuckerberg has cited a commitment to free speech as a reason for allowing such posts to remain on the platform, even though the company has rules in place against voter suppression it could have used to take down — or at least add warning labels to — Trump's posts. Last month, Facebook announced it would begin labeling rule-breaking posts — even from politicians — going forward. But it is not clear if Trump's previous controversial posts would have gotten the alert. The problem, critics have long said, is not so much about Facebook's rules as how it enforces them. “When you elevate free expression as your highest value, other values take a
Sheryl Sandberg, Facebook's chief operating officer, said in a Facebook newsroom post that the company has a long way to go, but is making progress.
back seat,” Murphy told The Associated Press. The politician exemption, she said, “elevates the speech of people who are already powerful and disadvantages people who are not.” More than 900 companies have joined an advertising boycott of Facebook to protest its handling of hate speech and misinformation.
Civil rights leaders who met virtually with Zuckerberg and other Facebook leaders Tuesday expressed skepticism that recommendations from the audit would ever be implemented, noting that past suggestions in previous reports had gone overlooked.
“This audit has been a deep analysis of how we can strengthen and advance civil rights at every level of our company — but it is the beginning of the journey, not the end,” she wrote. “What has become increasingly clear is that we have a long way to go. As hard as it has been to have our shortcomings exposed by experts, it has undoubtedly been a really important process for our company.”
“What we get is recommendations that they end up not implementing,”
Associated Press Writer Amanda Seitz contributed to this story.
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Missoula tech companies adapting to pandemic-caused disruption
Montana’s high-tech companies came roaring into 2020, reaching the pinnacle of a six-year boom – growing nine times faster than the overall Montana economy, paying twice the median wage, and earning a record $2.5 billion in revenue in 2019. Tech companies expected to add 2,800 new jobs and make $133 million in capital expenditures at their Montana facilities in 2020, according to an annual survey conducted by the Bureau of Business and Economic Research at the University of Montana. In January, Bozeman’s Next Frontier Capital reported that venture capital investment in Montana companies rose to $150 million in 2019, a more than 500 percent increase in five years. At the end of 2019, Michael Goguen, a partner for 20 years at Silicon Valley’s Sequoia Capital, launched Two Bear Capital in Whitefish.
matter is, there isn’t going to be certainty for a while,” Trom said.
Workiva is a software-as-a-service (SaaS) company headquartered in Iowa with more than 1,000 employees. About 100 of them, including Trom, work from Montana offices in Bozeman and Missoula. Trom said his business is fortunate that its customers, including government agencies and Fortune 500 firms, are stable, though cascading effects from other companies may affect Workiva at some point.
CHRISTINA QUICK HENDERSON Executive Director, Montana High Tech Business Alliance
Immediately after we captured this snapshot, the outlook changed overnight as the COVID-19 pandemic became a national emergency. Over the last three months, the Montana High Tech Business Alliance has conducted more than 20 interviews with large employers, high-growth startups, and investors to piece together a new picture of Montana’s tech industry as it navigates COVID-19.
BUSINESS IMPACT Tech leaders who shepherded companies through previous downturns all said the same thing — this time it was different. Workiva CTO Jeff Trom noted that past recessions came on gradually, but this time it was “like you hit a brick wall in the course of a week.” One of the most difficult aspects of the crisis has been the inability to predict when the virus will subside, and economic freefall will end. “What drives everybody crazy is the uncertainty and, you know, the truth of the
Businesses whose products served an immediate need, such as IT services, or who had large cash reserves or venture capital to rely on, have come through relatively unscathed. In some cases, companies have grown.
Other tech firms suffered heavy losses because their customers were hit hard by the shutdowns – verticals including small businesses, education, retail, restaurants, hospitality and marketing.
JOB LOSSES AND GAINS In the early days of the pandemic, a few tech companies that were growing fast at the start of 2020 abruptly lost revenue. To adjust, firms cut nonessential expenses and, in some cases, laid off workers. Job cuts at impacted companies typically included between 15 and 50 percent of employees. For tech executives, who have repeatedly cited excellent workers as one of the top benefits of doing business in Montana, layoffs were uniformly deemed awful. But even in the dark cloud of tech job losses, there are silver linings. Managers did not see recent cuts as permanent job losses and planned to start recalling employees when the economy recovers. Additionally, highly skilled tech workers have good prospects of being rehired. Funds available through the federal CARES Act and its Paycheck Protection Program gave many tech leaders the confidence to keep employees on the payroll.
Hiring freezes are ending as firms reopen offices and get more comfortable interviewing, training, and managing new employees remotely.
Workiva welcomed its largest intern class at the beginning of the summer – all remote. According to a company statement, interns will have “virtual access to leaders and mentors, one-on-one coaching, hands-on training, challenge competitions and a variety of professional development and learning opportunities.”
“We’re adjusting to where we see consumers going,” Orvidas said.
OnX is still adding to its team of more than 160 employees in Missoula and Bozeman.
MONTANA ADVANTAGE For the sixth year, tech leaders reported that Montana’s quality of life provides them a significant advantage in business. This benefit has been amplified by COVID-19,
OnX is still adding to its team of more than 160 employees in Missoula and Bozeman. ATG, a Cognizant company, recently announced plans to create 68 jobs in Missoula over the next two years. ATG is preparing to launch the fourth cohort of its All-InMissoula (AIM) program in partnership with the University of Montana. AIM pays trainees from all backgrounds to prepare for highpaying technology careers. Two Bear Capital founder Goguen said he believes the market for tech jobs in Montana will recover relatively soon as growing companies look for talent. “I don't think it will be a long time,” said Goguen. “Hopefully you'll see a significant ramp up this year in opportunities.” Missoula-headquartered outdoor technology company onX has seen an uptick in usage for its apps that help hunters and offroaders find new trails and public land. “We're seeing strong business results, and we feel very grateful that our app is enabling people to get out and enjoy the outdoors during this crisis,” said onX CEO Laura Orvidas. CEOs often said they aimed for a nimble response to market shifts. OnX, for example, put plans for expanded partnerships with retail stores on pause while pivoting more to online.
as Montana residents have abundant opportunities to safely enjoy nature. Montana businesses also avoid health concerns in dense urban areas, such as elevators in 70-story high rises. CDC recommendations to limit the use of public transportation are irrelevant to employees who bike or drive their own cars to work. And Montana’s low case counts could make the state even more appealing to knowledge workers as remote work becomes more commonplace. Some tech insiders saw worker dissatisfaction with urban centers prior to the pandemic. “If you just watched the direction that places like Silicon Valley were going, it was heading for a bubble to burst in that traffic, wages, rents, everything were just getting to that breaking point,” said Goguen. “I think it was true in other highly dense urban areas – New York and Boston. Already there was a sort of force that said, gosh you know, why does it have to be Silicon Valley?” Christina Quick Henderson is the executive director of the Montana High Tech Business Alliance MISSOULA BUSINESS • SUMMER 2020
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Quantitative easing creates insurmountable debt Many Americans no doubt have heard nationwide pay raise. The second tool at the the phrase “quantitative easing” (QE) used disposal of congress and the president is that by politicians, the media, and bureaucrats of federal spending. In times of economic alike but have not had it properly explained recession politicians have created “stimulus by anyone. Quantitative plans” and “new deals” which easing is not something drastically increase the spending that you will see explained of government. Many folks within on a 30-second political ad the Keynesian school of economic paid for by a candidate, a thought believe that this will boost PAC, or a c6 non-profit. the economy and create jobs. I Unfortunately, the primary will explore this further in a future reason it is never explained column. in depth is due to what Monetary policy is developed the primary purpose of the and implemented by our central tool is. Many may think bank, the Federal Reserve (the that it is for increasing the Fed) created under the Wilson money supply, to boost JESSE Administration in 1913. The Fed the economy, or to “save has two primary tools at its disposal: RAMOS jobs." In order to accurately Quantitative easing and control is a Missoula City assess whether or not these over the fed funds rates. The goals objectives are truly achieved Council member of both are to control the money by QE we need to explore in and a registered supply in the U.S. The Fed and the depth what it is to determine financial adviser. folks that run it have an incredible what its objectives truly are. amount of power and even more In order to do this, we need confidence. The Fed believes that it knows to understand the two separate types of the proper amount of money the U.S. policies the government uses to control the economy needs to have circulating at any economy. given movement, an incredibly arrogant Fiscal policy is developed and mindset to have, at best. implemented by both chambers of Congress Historically, The Federal Reserve has and the executive branch, not the Federal primarily used interest rates to control the Reserve bank. Those entities have two U.S. money supply. If interest rates are primary tools at their disposal, government spending and adjusting the rates of taxation. higher both the public and the corporations are more likely the save. When interest rates In times of economic depression and are higher it becomes harder to afford to recessions, politicians have historically borrow money. In addition, the higher the enacted tax cuts to increase the money interest rates of borrowing, the higher the supply. By doing this, they are encouraging interest rates on savings accounts are. People people to spend, invest and create jobs. The are receiving a higher reward for saving money that otherwise would have gone to money in their bank account in the form the federal government would instead go of higher growth provided by the higher back into the pockets of the Americans who interest rates credited in their account. earned the money, essentially resulting in a
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Having artificial, governmentcontrolled interest rates low for an extended period, as they have been, has devastating consequences to both the American people and the economy. This is what we are currently experiencing in the U.S.. We have become a consumer economy, where we are producing very little within our own borders but import billions of dollars in products from other nations to feed our consumptive habits. Personal, government, and corporate debt has exploded as a result with savings rates and cash reserves plummeting to generational lows. The U.S. currently spends without saving and consumes without producing. There are obviously many reasons for this, but one of the primary reasons is in fact the artificially low interest rates set by the Fed.
Quantitative easing is the Fed increasing the money supply above and beyond what is possible with artificially low interest rates, which inevitably exacerbates the previously outlined problems. Debt monetization occurs when the Fed orders the U.S. treasury to print money out of thin air and then uses that money to purchase U.S. government bonds to finance the U.S. deficit of a fiscal year to support a massive amount of government spending such as auto and bank bailouts, the CARES Act, etc. and then holds it on its balance sheet for an extended period of time. This, consequently, increases the money supply of the nation by adding more dollars into circulations. This means that you have more dollars chasing the same amount of goods and services available in the economy. This leads to inflation, because when you have more dollars available to compete with the same amount of goods it drives up prices, eroding the purchasing power of the dollars that you have saved or are earning.
These downsides to QE are well known and basic common sense to most Americans. As a result, when it was first implemented on a massive scale by the Fed in 2008, Chair Ben Bernanke had to come up with a clever way of explaining it away. He explained that QE only become debt monetization when the Fed held the government bonds on its balance sheet for an extended period. Bernanke went on to say that they could circumvent the downsides of QE by simply shrinking their balance sheet over time and selling the debt back into the private sector in the “near future." The glaring issue with this is that for politicians and appointed government officials, the “near future” is merely the next election. When the U.S. first entered COVID, roughly 12 years after the FED first implement QE1, its balance sheet was near record highs. Now, four short months later, the balance sheet of the fed is well on its way to being double it’s all time high.
Having assessed the downsides and the major lie that QE was built on, it is easy to determine that QE is nothing more than a Band-Aid and temporary fix for major underlying issues and incompetency’s with both government spending and economic policy. The fact of the matter is that the only thing QE does is buy politicians and government officials time, not time to solve the problem, but time to win the next election. Quantitative easing merely addresses symptoms of an underlying disease and not the disease itself. The time bought by QE is paid for by the American people in the form of inflation, decreased savings rates, higher taxes, and insurmountable debt laid upon the nation for generations. Jesse Ramos is a Missoula City Council member and a registered financial adviser.
Be aware of key changes in government recovery programs While the investment markets have been confusing and constantly shifting, so have the federal government’s economic recovery packages. The CARES Act includes a variety of programs aimed at lessening the impact of the COVID-19 pandemic.
• Additional provisions for group retirement plans The SECURE Act passed at the end of 2019 provided changes for both businesses and individuals; these changes seem to have been lost in the chaos of the pandemic.
• Individuals can wait until age 72 to take Required Minimum One such program, Distributions (up from age 70 ½) the Paycheck Protection Plan (PPP), has detailed • Tax credits for employers provisions that have Will Johnson starting retirement plans for their led to a fair amount of Financial Advisor employees confusion. Below are FBL Marketing • Ability for employers some updates provided by Services to pool together on retirement Congress and the SBA as plans of early June. I encourage all business owners to talk All of these legislative changes, with their advising team about specifics.
coupled with investment market volatility, underscore the importance of working with an investment team who understands your goals and ensures you have a financial plan that is adaptable to ever-changing conditions. Lastly, if you are in a position of relative financial strength during these turbulent times, I urge you to please consider supporting local organizations committed to the vitality and economic stability of our community, particularly those that support the growth and development of our youth. Organizations like the Boys and Girls Club, YMCA, Missoula Area Chamber of Commerce, Missoula Downtown Association, the Midtown Association, and so many more are committed to keeping our community strong. Let’s do what we
are able to support the health of our community and the small businesses that make us unique and vibrant. Will Johnson is a Financial Advisor in Missoula working with individuals, families and small businesses. For the past 12 years, he has operated his firm with commitment and dedication towards building a strong community through financial contributions as well as playing an active role on many community leadership boards. Securities & services offered through FBL Marketing Services, LLC+, 5400 University Avenue, West Des Moines, IA 50266, 877-860-2904, Member SIPC. Advisory services offered through FBL Wealth Management, LLC+. Neither the Company nor its agents or advisors give tax, accounting or legal advice.
• Increased the PPP payback period • Extended the wage window • Reduced the requirement of loan money that must be spent on payroll • Extended the rehiring deadline for laid-off employees • Increased leeway on loan forgiveness for employers unable to rehire employees or reopen to business in a way that complies with safety standards I have personally noticed that many individual investors are not aware of key provision of the CARES Act and how they might take advantage of temporary 2020 rule changes. In particular: • Provision that allows individuals normally required to take Required Minimum Distributions (RMDs) from their qualified accounts (such as 401(k) or Traditional IRAs) to skip their 2020 required amount if not yet taken • Access to retirement funds without the typical early withdrawal penalty for those under age 59½ who meet specific financial hardship qualifications due to the COVID-19 pandemic MISSOULA BUSINESS • SUMMER 2020
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Moving Montana forward in challenging times According to the U.S. Small Business Administration, Montana is home to over 123,000 small businesses that employ more than 65% of our private workforce. Entrepreneurship and small business is clearly the backbone of our state.
Bob Burns Missoula Market President of Stockman Bank.
But the past few months have been challenging for our small business community. 2020 has not been kind. No one could have predicted the events of the past six months and it’s uncertain what the next six months will bring.
As the COVID-19 health crisis unfolded, our state was forced to shut down and “shelter-inplace” to slow down the spread of the virus. While necessary, the shutdown was devastating to Montana’s small business community. As business bankers, we knew first-hand from our customers, the overwhelming challenges that were facing them. So, when Congress approved
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the Paycheck Protection Program, we made sure we were ready. Our bankers worked long hours, often through the night, to help our customers obtain PPP loans. We also answered the call from other Montana businesses that were not able to receive assistance from their own banks. Over the past three months in Missoula, we have helped 281 Montana businesses obtain Paycheck Protection Program loans totaling over $35 million. Statewide, Stockman Bank has helped nearly 3,300 Montana businesses obtain Paycheck Protection Program loans totaling over $300 million. These loans helped local businesses keep their doors open and their people employed.
1. "First and foremost, don’t just automatically run out and borrow as much as you can. The State of Montana, US Small Business Administration and other agencies have some helpful programs. However, it may not be best for your situation to borrow the maximum from each eligible program. Make sure you understanding the parameters (eligibility, payback/forgiveness, reporting/
3. "Do strategic planning about your business needs. Don’t just go back to what you were previously doing. Plan how your business will operate during this restart period and then the next phase after restart. You will need to scale your business, plan your budget, inventory, work force, and other aspects accordingly. Unfortunately, it is not, and will not, just be business as usual. Many business models will be permanently changed."
Over the past three months in Missoula, we have helped 281 Montana businesses obtain Paycheck Protection Program loans totaling over $35 million.
Now, as we look ahead to the second half 2020, our business bankers and lenders are ready to help businesses move forward, one step at a time.
So what should businesses be doing right now to move forward through this crisis? Stockman CEO, Bill Coffee, has participated in numerous meetings, discussions and media interviews over the past few months and is often asked this very question. Here is his answer:
monitoring, etc.) and your anticipated use of the funds." 2. "Give serious thought, with realistic expectations, to how long it will take you to get back to pre-COVID levels. I believe it will take most small businesses 12-18 months to get back to these levels. Some will never get back to these levels."
4. "After this thorough soul searching, planning and projecting, contact your banker to discuss the available options. Focus on your specific needs and what you anticipate the future holds." As the PPP’s debt forgiveness process gets underway, it’s important to keep yourself informed and in touch with your banker. You can find detailed PPP information at www. sba.gov or by contacting your lender.
We are on the road to recovery. It just may be slower than we all would like. The key is continued support of our local businesses. When we help our local businesses move forward, we move our communities forward, which then moves Montana forward. Bob Burns is the Missoula Market President of Stockman Bank.
Wheat is Montana's big winner in USMCA
TOM LUTEY, Lee MT Newspapers editor@missoulian.com
Montana farmers selling grain into Canada made small gains in the U.S., Mexico, Canada trade agreement launched earlier this month. Canadian elevators starting July 1 were to fairly grade a handful of U.S. wheat varieties planted in Montana. For years, U.S. wheat varieties unrecognized in Canada were downgraded to animal feed status and discounted in price, regardless of whether the grain was of high milling quality. “It allows Montana grains to be treated on an equal basis with Canadian grains when they’re shipped north. And that has been a sore spot,” said Mike Cuffe, Pacific NorthWest Economic Region president. Cuffe, who is also a Republican state senator from Eureka, advocated for the new grain terms. “My understanding was that there was a real imbalance. Any wheat going north was automatically dropped to a feed wheat, feed grain, cattle feed value, which was the lowest valued product, even if it was used for fine pastry.”
Montana Wheat and Barley Committee Executive Vice President Cassidy Marn said that three wheat varieties planted in Montana are recognized in Canada. Getting more varieties recognized will involve Canadian research and approval, which could take a few years. "They have the option now, so that's an improvement, at some level, if the price was ever favorable for us to go north," Marn said.
At first glance, the biggest advantage in USMCA is that Montana lost very little in the new trade agreement. Terms for shipping Montana malt barley into Mexico remained unchanged. Sugar exported into the U.S. from Mexico didn't increase, though Canadian sugar exports did, a change that could negatively influence the domestic price paid for Montana beet sugar. Nationally, the big selling point for USMCA replacing the North American Free Trade Agreement was a retooling of auto manufacturing rules. U.S. automakers with operations in all three nations will have to use more parts made in North America. The pay of the workers making those parts
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also increases, a change that makes it less advantageous to shift auto manufacturing to Mexico.
Both Montana Sens. Steve Daines, a Republican, and Jon Tester, a Democrat, voted for USMCA.
The new trade agreement also sets terms for intellectual property and digital trade, which weren’t on the horizon when NAFTA was negotiated more than 26 years ago. NAFTA was initiated by the administration of President George H.W. Bush and finalized by Democratic President Bill Clinton in 1993.
Montana’s sugar beet farmers had a stake in USMCA, as well. The $100 million industry is comprised of beet acres along the Yellowstone and Big Horn Rivers and sugar factories in Billings and Sidney. Trade organizations for beet and cane farmers were concerned early that USMCA would result in more sugar imports from Canada and Mexico.
But NAFTA was opposed by labor unions and the left-leaning agricultural groups alike. The trade agreement made it easier to relocate manufacturing jobs to cheaper markets, while also granting better U.S. access to beef, vegetables and other farm products from Canada and Mexico. President Donald Trump made a 2016 campaign promise to get rid of NAFTA, which he called the worst deal ever. Congressional Republicans throughout the USMCA process recognized the new trade agreement was very similar to NAFTA. Senate Finance Committee Chairman Chuck Grassley, an Iowa Republican, referred to USMCA as “new NAFTA” when the Senate approved it in January.
The Sweetener Users Association, a group of confectioners and candy companies who opposed the U.S. sugar quota system and advocated for more sugar imports, praised the increased sugar imports from Canada. .
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Imports drive sugar prices down. The U.S. government uses a sugar quota system, which requires the government to begin buying sugar from U.S. manufacturers at a base price when imports drive prices lower. Mexico is the largest sugar exporter to the U.S. USMCA allows more Canadian sugar into the United States.
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Chamber of Commerce CEO: Working to find solutions COVID-19 has forced us all to change the way we do things. From learning how to work remotely to social distancing, there’s been a rapid pace to change in 2020. Through it all, the Chamber has worked to support local businesses navigate this new world. In March, as the community shut down and businesses had to change the way they interacted with the public, the Chamber began tracking information about which businesses remained open and how their operations had changed. This served as a community resource which we updated on a daily basis. We also began collecting information about a variety of resources available to businesses to help them KIM weather the LATRIELLE storm.( http:// www.missoula Missoula Area chamber.com/ Chamber of coronavirusCommerce resources) From Chief Executive SBA Economic Officer Impact Disaster Loans to the PPP program in the CARES Act, we made sure local businesses knew they had assistance available. The Missoula Chamber played a key role during passage of the CARES Act. Our Montana congressional delegates contacted the Chamber and asked us to survey business members to gauge their needs. That information went directly from Missoula to DC. The Chamber created a survey in less than 24 hours and sent over 100 responses to DC within the first week. As the state entered Phase II of reopening, the Chamber partnered with the Missoulian and Stockman Bank to help businesses promote their reopening. We distributed “Yes, We're Open” signs around town and shared video and photos of local businesses 30
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flipping their sign to open. We were met with an honest appreciation from those businesses for being the first organization to welcome them back and celebrate their reopening with them. The Chamber along with several economic organizations in Missoula, joined a coalition promoting SaferMissoula.org which has resources and information available to everyone aimed at helping limit the spread of COVID-19 and ensure a safe opening for Missoula businesses and organizations. You can check the site for best practices on social distancing, sanitizing spaces and mask wearing. During this time of uncertainty, the Chamber has continued to push ahead with our key community initiatives that we’ve been working on over the past year. We continue to work with partner organizations to look for ways to provide increased access to affordable, quality child care in the community. Now, as
workers begin returning to their offices, the need for child care is greater than ever. We will be looking at local statistics to determine how COVID-19 and the related shutdown impacted child care options in Missoula. The community was already in need of more options and the shutdown put new burdens on the industry. Having options for children is important for parents’ ability to return to their careers and the Chamber continues to champion efforts to provide options parents feel good about. Last year, Missoula County applied on for federal grant money to help fund infrastructure development in an area between Mullan Road and West Broadway. This was the third such application. The Chamber offered to organize the lobbying efforts and garnered the support of 19 individuals who traveled to DC in support of last year’s application, resulting in $13 million to the community.
This year, the county has applied for the remaining $10 million needed to complete the project list. Again, the Chamber is stepping forward with the support of the private sector to lobby in support of the application. COVID-19 has created new challenges for meeting with government officials in person but we’re creating alternative channels for sharing Missoula’s story with federal officials via a professionally-produced video pitch. Local businesses are the heart of the Missoula community. They employ our residents, sponsor youth sports teams, support local nonprofit organizations and so much more. We’re proud to support them through this difficult time and hope that you will join with us. Remember to make an extra effort to find ways to support your local business community. Kim Latrielle is the CEO of the Missoula Area Chamber of Commerce.
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