Today in New West news: an update on One Big Sky Center, University of Colorado prof to become State Department’s chief economist, and where Wyoming coal fits into the 2016 general election.
Earlier this summer, in mid-August, we reported that a trio of developers had come forward with a large scale plan for changing the dynamic of downtown Billings, Montana. The proposal from development consortium MontDevCO LLC, One Big Sky Center, would include “a 70,000-square-foot conference center, a 160-room hotel, downtown residences that cater to both seniors and millennials, plus the addition of major retail and office space downtown,” all capped with two skyscrapers poised to redefine the skyline. You can see a rendering of the center above.
While ambitious, the Center is only in its preliminary stage, and city officials have a lot of questions over the cost and impact. Indeed, according to the Billings Gazette, the city hired St. Paul, Minnesota-based adviser Springsted to look at financing plans for the Center:
The project in its current form is a combined effort of the developers, the city and the Downtown Billings Alliance. It includes the hotel, a related conference center, apartments, and retail and office space. That project, which also includes a $21 million, 650-stall parking structure, is pegged at about $124 million in hard costs alone. Including soft costs such as design work and marketing, the estimated price tag is closer to $165 million.
By comparison, the city’s most recently completed parking structure, the 540-stall Empire Parking Garage, which includes retail space, cost $13 million.
Near the end of its presentation, Springsted listed some questions the city council might consider before granting its approval:
• Can the developers deliver the project as represented?
• Can one proposed funding mechanism — the federal EB5 program that provides foreign investors green cards in exchange for investment — be counted on for at least $30 million?
• $165 million is a big project most anywhere, the analysis states. Can it work in a major regional center like Billings?
The Gazette further reports Springsted will deliver a presentation to the Billings City Council Monday, October 24 at 6:30 p.m., allowing the council to discuss their findings:
Once it’s heard from its consultant, Springsted of St. Paul, Minn., the city council will have a pair of One Big Sky Center decisions to make on Monday.
It’s being asked to approve a predevelopment memorandum of understanding between the city and MontDevCo LLC for the redevelopment site north of First Avenue North and on both sides of N. 29th Street.
The MOU designates MontDevCo as the exclusive developer of the site, which will allow MontDevCo to market the $165 million project and, according to a memo by Assistant City Administrator Bruce McCandless, obtain financing for it.
The MOU “contains no concrete commitments or responsibilities, but it authorizes the staff to work with the developers to produce an acceptable development agreement by June 30, 2017,” McCandless wrote.
In addition, the city council will decide on a resolution that will allow the city to use bond proceeds to reimburse itself for the project’s development expenses, including engineering, financial, legal and other services, before the bonds are issued. According to McCandless, Internal Revenue Service rules prevent cities from using bond proceeds to reimburse themselves for these expenses unless the bond issuer adopts a reimbursement resolution early in project development.
The reimbursement will occur only if the city issues the bonds.
Over in Colorado, according to the Boulder Daily Camera, University of Colorado economics professor Keith Maskus has announced he is leaving the university to serve as chief economist for the U.S. State Department. Speaking to the Camera, Maskus explained what his position entails (he’ll be “managing a group of seven economists doing a lot of long-term research and monitoring what’s going on in the global economy and how it’s impacted by issues like climate change, refugees, migration, trade agreements”) and what these issues means for places like Boulder County:
As a regional matter, Boulder is one of the beneficiaries of big trade agreements, because they export new technology and expand economic growth, creating more high-tech and high-skill jobs.
The rest of Boulder County is not as vibrant, but certainly there’s a lot going on in Broomfield and Longmont. It’s an area that’s very well placed to benefit from globalization.
The people in Boulder who are concerned about these trade agreements are concerned also because there are elements of the agreements that they argue will make it difficult for countries to have their own environmental policies because they will be subject to lawsuits by companies.
I think that’s a misunderstanding, a tendency to overstate the likelihood that these kinds of lawsuits will take place and (companies will) win.
Within the [Trans-Pacific Parternship] there are certain rules that protect values of investments against regulatory changes that governments might make, but raises much stronger roadblocks to lawsuits than previous agreements.
I think the system works pretty well but I understand why progressives are concerned.
Finally, down in Wyoming, coal has been a big issue in 2016, both in coal country and on the campaign trail, as both Hillary Clinton and Donald Trump have made their views known. Both are diametrically opposed on coal’s place in the future of U.S. Energy; Clinton wants to further goals outlined under the Obama Administration’s Clean Power Plan, which include shifting to more natural gas and (eventually) renewable energy sources and curbing emissions, while Trump wants to “kill” the CPP and more or less recrown coal.
According to the Casper Star Tribune, both are lofty ideals, but some Wyoming authorities are skeptical either candidate would be able to fully implement their vision:
Both candidates have made claims that would require more than the word of the next president to keep.
Trump has made a number of promises in regard to revitalizing the market. He has promised more jobs, more production in all markets. But that is not how the market functions, [Director of the Energy Economics and Policies Center at the University of Wyoming Rob] Godby said.
“You can’t bring back coal jobs and gas jobs. It’s been natural gas that’s hurt coal,” he said. “Those sorts of dynamics haven’t been fully spelled out, other than he says he would eliminate regulations that actually work against these sectors. Then of course on the manufacturing side it’s going to be a trade argument that causes all these jobs to re-emerge.”
[State Senator (R-Gillette) Michael] Von Flatern echoed those sentiments. Trump cannot fix the downturn. Even the coal lease moratorium means little right now, because there are no buyers for coal reserves, he said.
Clinton, on the other hand, has said she would offer federal assistance to communities transitioning away from coal, largely by offering federal dollars for retraining workers. She’s also promised a program for schools in those communities, where federal money would make up the difference from diminished industry revenue.
Those promises are problematic, as they would require congressional budgetary approval for her to make good on her word, Godby pointed out.
It is likely that the Senate and House will be divided, so no promise depending on congressional support is going to be a shoo-in, he said.
For coal communities, Clinton’s promise of help is more insult than assurance.
What coal communities hear is a promise to end their mining, Von Flatern said.
In the end, however, all parties were more or less in consensus when it came to the future of Wyoming coal: King Coal isn’t coming back anytime soon.