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Economist, Larry Swanson says Montana’s future growth will be in cities

The future growth of Montana’s economy lies increasingly in and around its cities and in service industries, despite the state’s rural, agriculture- and resource-based image.

By JOHN HARRINGTON, IR Business Editor

That was the message economist Larry Swanson, associate director of the Center for the Rocky Mountain West at the University of Montana, delivered to local business leaders Wednesday at the annual meeting of Gateway Economic Development Corp.

"People don’t think of Montana as being urban in nature, but 80 to 90 percent of the economic growth over the last 10 years has been urban in character," Swanson said.

He said that even without any large metropolitan areas, Montana’s cities are sized right to capture the job and income growth in medical, professional and service-related fields that have fueled the economy throughout the Intermountain West.

"We talk down the service sector like there’s something wrong with it, but that’s the area that will continue to grow." he said. "Most longstanding industries are stagnant or declining, while sectors spurred by area population and income growth are expanding. Strategies for economic development must reflect where the economy is going, not where it’s been."

While Missoula, Bozeman and Kalispell and the counties that surround them are poised for the fastest growth, Swanson said Lewis and Clark County is on a similar track.

"By nearly every measure, the quality of economic life in Lewis and Clark County is improving," he said.

He said that statewide economic growth rates reported at 1 to 3 percent don’t tell the true story, which is that the cities are growing quickly while rural counties, particularly those in the eastern part of the state, struggle to stay afloat.

"The economy is more and more human resource-based and less and less natural resource-based," he said. "In Montana, we need to assist cities, not deny that we have any."

Gateway’s mission is to create and retain jobs in Lewis and Clark, Broadwater, Meagher and northern Jefferson counties. In the past 12 months, the nonprofit has made 14 new local loans totaling close to $800,000: eight loans for $556,645 in Lewis and Clark County; five loans for $210,000 in Broadwater County; and one loan for $25,000 in Meagher County.

All told, Gateway has 59 loans to small businesses outstanding, with four delinquent.

Gateway also made a deal with the City of Helena whereby Gateway will take ownership of its current office space on Poplar Street. Gateway will within a month move its offices into the Chamber of Commerce Building downtown and use the Poplar Street space as a business incubator for startups.

"This strengthens the financial stability of Gateway by providing us with a rental income stream and reducing our debt load," Bartel said.

On the down side, Gateway lost its Community Development Financial Institution designation from the U.S. Treasury Department, for not having enough minorities on the board of directors, Bartel said.

Gateway also presented its annual awards to various businesses and individuals that have contributed to the region’s economy in the last 12 months.

Building a Business Award — Recognizing a business that has opened its doors in the last year and been outstanding through the creation of a sound business and employment opportunities, given to Alan Nicholson, developer of the Great Northern Town Center in downtown Helena.

Business Growth Award — Recognizing business owners who have grown their businesses substantially in the past two years, contributing to the region through employment opportunities, presented to Tom Hoffman, president of Summit Aeronautics in Helena, and Kit and Viola Johnson of J-4 Automotive in East Helena.

Certificate of Achievement — Recognizing a business that has demonstrated steady growth and customer service in the region, presented to John and Tami Hahn of Hahn Ranch & Feed Supply in Townsend.

Economic Impact Award — Recognizing a person or entity for extraordinary leadership in the advancement of the region’s economy, presented to Helena City Manager Tim Burton.

John Harrington can be reached at 447-4080 or [email protected].

http://helenair.com/articles/2003/09/18/montana/a01091803_05.txt

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