Missoula Notebook

I was curious about the potential effects of Sen. Tester’s act on businesses like Sun Mountain, so—after touring the sawmill—I interviewed Tony Colter, the company’s plant manager and vice president. He told me that Sun Mountain’s mill and logging operations combined could potentially employ up to 300 people, but times have been tough lately. Today, only 120 people work in the mill and finger-joint plant, and about 50 people work in logging. Sun Mountain hopes Tester’s bill could help turn things around.

AIA Architecture Credits Available

NewWest.Net’s Real Estate and Development in the Northern Rockies conference, Oct. 12-13 in Missoula, has many dimensions, and one of them is great architecture and community design. We’re delighted this year to welcome a number of leading regional designers to Missoula, including Lori Ryker, author and architect and founder of the Livingston-based Artemis Institute, who will give a talk entitled “The Case for Civic Architecture in Rural Environments”; Stefan Pellegrini of Berkeley-based Opiticos Design, who will discuss design and the evolution of small towns; and Andy Erstad of Boise-based Erstad Architects, who will be part of a wide-ranging conversation on design and development trends in the region. Among our local architectural luminaries, Jeff Crouch of Kibo will discuss new directions in sustainable design and building, and Marty Noyd of Oz Architects will talk about the new Garlington Lohn and Robinson building that’s now under construction in downtown Missoula.

Other design-related sessions will include a presentation on resort communities by Rebecca Zimmermann, President of Design Workshop, one of the nation’s leading landscape architecture and urban design firms. And don’t forget the Butte architectural heritage tour, an opportunity to see up close some of the most magnificent buildings in the Mountain West. NewWest.Net is a qualified provider for the prestigious American Institute of Architects continuing education program, and AIA credits are available. Visit www.newwest.net/realestate for all the details, or call 406-829-1725.

Missoula Notebook

If passed, the Forest Jobs and Recreation Act would designate the first new Wilderness Areas in Montana since 1983, and I’m up here, in a plane provided by the non-profit Ecoflight, to get a first-hand look at what the bill would actually mean to miles of backcountry in some of the most cherished wilderness in the state. Down below me is the battle zone: forests and landscapes treasured by hikers, loggers, snowmobilers, mountain bikers, horse packers, anglers, hunters, and oil and gas firms, among others. The Tester bill aims to protect wild land while satisfying as many of these groups as possible. But can it succeed?

Big Sky, Past and Future

Creating a major new ski-and-golf resort is no easy trick - there have only been two in the United States in the last 20 years - and for a while it seemed that Moonlight Basin, opened in 2003, had made it over the proverbial hump.

Moonlight’s vision of building a comparatively eco-conscious resort, one where wildlife could roam unencumbered and construction was concentrated in a few core areas while leaving lots of open space, seemed to be right for the times. The real estate sales that would fund much of the development looked solid at the outset. The settlement of a bitter conflict with Big Sky Resort, it's neighbor on the other side of Lone Peak, appeared to create a great opportunity in jointly marketing the two resorts as the "Biggest Skiing in America."

But Moonlight, like so many big development projects across the West, was not equipped to handle a sudden collapse of the real estate business, and the radical shift in the credit markets that went along with it. When lot and home sales stalled last year, Moonlight stopped making payments on more than $100 million in loans while it frantically sought a buyer. The resort's long financial emergency culminated earlier this month in a foreclosure lawsuit by its primary lender, the now-bankrupt Lehman Bros.

Lee Poole, Moonlight's owner, says Lehman has assured him that it will provide the money to keep the resort open while the long-term financing and ownership issues are resolved - a process that could take a year or more. One way or another, Moonlight will almost certainly survive in some form - and its fate will have a big impact on how Big Sky evolves as a resort community. [more]

New West Conference, Oct. 12-13

NewWest.Net’s flagship conference, Real Estate and Development in the Northern Rockies, features a major new element this year: pre-conference tours. And one of those tours promises an entertaining and educational day and night in McCall, Idaho on Oct. 11.

Sponsored by Blackhawk on the River, the McCall program will include a tour of Brundage Mountain with Judd DeBoer, owner of Brundage and developer of several other projects in the area. Then there will be a hiking tour of the Blackhawk nature area with a local herbalist, as well as a horse-drawn carriage tour of the sprawling property. That will be followed by cocktails with Bob Vosskular of the Payette Valley Land Trust and Jim Fronk of Secesh Engineers, and then dinner along the Payette River. Tour participants will overnight at the high-end lodgings at Blackhawk, and then travel to Missoula for the opening of the conference on Monday afternoon, Oct. 12.

Participation in the tour is included with a full conference pass to the NewWest.Net conference, with a modest transportation surcharge for those traveling by bus to Missoula. Check out the conference website at www.newwest.net/realestate for all the details on the event, or call 406-829-1725.

Scandal prompts Congressional action

For more than a decade, West Virginia Democratic U.S. Rep. Nick Rahall watched powerlessly as the Bush administration and a Republican Congressional majority made Royalty in Kind the main method of collecting oil and gas royalties on federal lands.

Huge sums were at stake. For the federal government, oil and gas royalties are one of the biggest sources of revenue, second only to income taxes.  Energy producing states like Wyoming, with vast tracts of federal land, get 49 percent of federal royalties, which annually account for hundreds of millions of dollars in public funds.

As ranking minority member of the House Resources Committee, Rahall repeatedly called for audits of the controversial RIK program and ordered Government Accountability Office oversight reports, only to be frustrated by incomplete information from the Interior Department agency, Minerals Management Service, that administered the program.  He was still on the sidelines in 2008 when an investigation by the Department of Interior Inspector General uncovered widespread corruption and unethical behavior in the Minerals Management Royalty- in-Kind office in Lakewood, Colorado.

On September 8, Rahall’s turn finally came. Now chairman of the powerful House Resources committee, Rahall authored HB 3534, the Consolidated Land, Energy and Aquatic Resources—or CLEAR—Act of 2009. The bill is intended “to provide greater efficiencies, transparency, returns and accountability in the administration of federal mineral and energy resources.”

Yellowstone Club Loan Info Sought

Yellowstone Club founder Tim Blixseth has subpoenaed 31 Credit Suisse officials, demanding that they hand over documents that will shed light on the “predatory lending practices” involving the ritzy club, according to a story today in Marketwatch.com. The source of the story is the Blixseth Group, which is headed by Tim Blixseth.

Here are some story highlights (much of them representing the Blixseth Group’s spin on current events):

-- “Brady Dougan, the Chief Executive Officer of Credit Suisse First Boston, and Hans-Ulrich Doerig, Chairman of the Board of Directors, received the subpoenas along with past and current Executive Board officials and Credit Suisse’s Board of Directors.”

-- The subpoenas stem from the $375 million Credit Suisse loan to the Yellowstone Club in 2005. Blixseth wants to uncover internal documents that explain how the bank developed the loan scheme (one that U.S. Bankruptcy Judge Ralph Kirscher described as “naked greed” that “shocks the conscience of this court.")

Lehman Brothers Wants to Buy Moonlight

Lehman Bros. has taken court action to foreclose on Moonlight Basin, the five-year-old, financially troubled ski-and-golf resort and real estate development near Big Sky. The move comes as no surprise, as the 7,800-acre Montana resort was struggling with massive debt and a stagnant real estate market.

This summer, Moonlight founder and owner Lee Poole wrote a letter to resort property owners stating that Lehman had “made the decision to begin foreclosure proceedings.” Poole predicted that the upcoming ski season would proceed despite the action by the investment bank. “It is Lehman’s intention to continue summer and winter operations at the resort,” his letter stated.

The foreclosure action—which was indeed filed Sept. 10 in Madison County Court—stems from a $100 million loan obtained by Moonlight from Lehman Bros. in 2007. The money was used to buy out Poole’s two partners and continue construction at the property, where ski lifts and the first nine holes of a spectacular Jack Nicklaus golf course have been constructed, as has a main lodge and restaurant. But other major structures, including a main base lodge for skiers, are not yet built.

Sustainability Blog

When a business calls itself green, what does that mean?  The answer may vary from energy-efficient to local or even socially responsible.  According to business schools and thought leaders, the definition is boiling down to a new bottom line: the triple bottom line.

This triad can be described in several ways: people, planet and prosperity; economy, environment and equity; or, economic, ecological and social responsibility.  Regardless of terminology, the successful businesses of tomorrow are embracing sustainability as a fundamental element.  It should not be separate from business strategy and operations; it is about integrating social and environmental concerns into business strategy and operations.

The benefits of a more sustainable approach for a business range from lower operating costs to increased sales, more productive workers, improved brand image and even lower risk.

In a comparison of trash and recycling rates for businesses in the City of Boise, a 3 cubic yard recycling dumpster costs $49.60 per month versus $68.31 for the same size trash container.  This equates to paying 38% more for trash.  Reducing waste in a business has solid economic benefits, conserves resources and preserves land.

Energy-efficiency improvements can also lower operating costs as well as qualify for a range of incentives and often have hidden benefits of health, safety and thermal comfort.  Leaky ductwork and heating equipment not only wastes significant energy, but can draw contaminants into the indoor air we breathe.  Inefficient lighting wastes electricity and produces unwanted heat yet could be qualifying for incentives from Idaho Power.  Their “Easy Upgrades” such as light bulbs, fixtures and sensors as well as a wide range of building retrofits can result in payouts of up to $100,000 per year.  Combine these incentives with federal ENERGY STAR tax deductions and lower utility costs and the ROI just gets better and better.

News Nugget

The overseers of the Leadership in Energy and Environmental Design, or LEED, program are hoping new data collecting guidelines can help seal up some of the gaps in the certification process by better measuring a structure’s total environmental performance, instead of just going by piecemeal benchmarks.

The U.S. Green Building Council, which parents the LEED program, announced the changes two weeks ago, mentioning in a press release that the, “initiative complements the announcement earlier this year that will require ongoing performance data from buildings as part of their certification under the latest version of LEED and beyond.” (Click here for the full press release as a PDF.)

In the New York Times Green Inc. blog this week, Mary Ann Lazarus, the director of sustainable design for HOK, a global architectural firm says the new data collection standards showcases that LEED is an always-evolving program that will bend and flex as it grows up. She says, “So many holes — such as earning points for basically cosmetic touches — have already been closed,” Ms. Lazarus said. “This should result in the closing of even more gaps, more holes.”

LEED has always been the target of some crticism and is often at the center of the debate about what is “green” in architecture. (Our discussions at both NewWest.Net’s Real Estate and Development in the Northern Rockies and Designing the New West almost always find their way to the ups and downs of LEED.)

For a little background, read Richard Martin’s story from New West last year on the many shades of LEED and more recently, a good piece in the New York Times about how in some cases, LEED buildings are not as airtight as they should be.