After two years, new ownership rounds a corner
By Taylor Anderson, Big Sky Weekly Assistant Editor
Contractors at the club up the hill in Madison County were busy last year. Thirteen houses busy, according to Yellowstone Club vice president of sales Bill Collins.
“In the last six months, since May, 13 homes have been completed,” Collins said.
Another 27 homes will be reviewed for approval within the next six months, he said.
Money on housing projects like these creates a trickledown effect that starts with local designers and architects, moves to contractors and their employees, and then to lumberyards, raw material suppliers and local craftsmen. It’s a long chain of economic activity that makes its way around the region when new members join, buy and build.
And while houses have also been going up elsewhere around the region, the rate of development hasn’t picked up nearly as quickly as in the club.
The flurry of building comes after two years of tumultuous nationwide housing markets that didn’t miss the Big Sky area or the Yellowstone Club.
The recent boom also follows the first two years the club has been under new ownership that’s been rebranding a once-tarnished name, while working through the worst economic recession since the Great Depression.
According to Collins, it feels that they’re well on the way to recovery after the recession, and are helping the area rebound, as well.
Local builders are in the middle of nine other residential housing projects, four of which are slated for completion within the first weeks of 2012.
Home projects like these pump money into the Madison and Gallatin county economies by adding hundreds (at times as much as 1,000) of jobs, buying materials for sites from local lumberyards, and providing a sizable piece of the Madison County tax budget annually.
Andy “Cotton” Sarjahani lives in Bozeman and finished a graduate assistantship at Montana State last year working at a Community Supported Agriculture farm.
Last month, the 28-year-old Arkansas native began working as a laborer on a 15,000-square-foot home in the Yellowstone Club with Teton Heritage Builders. He enjoys the job and said it’s fulfilling his needs right now.
“As long as I can pay the bills and as long as I’m continuing to learn or there’s the opportunity to learn, I’ll stay there as long as they need me,” Sarjahani said.
He represents one of the hundreds of labor workers assembling the mansions that dot the mountainsides within the gates of the Yellowstone Club.
Tom Simkins president of Simkins-Hallin Lumber Co. in Bozeman, said that when the area took a drastic dip from the construction boom of the early 2000s, his company suffered with it.
The company works exclusively with contractors, including numerous builders at the club. Three years after the growth rate began to lag in Gallatin and Madison counties, Simkins says he’s sending more building material through the canyon.
“Just the number of loads we take up there, I haven’t broken it down for the Yellowstone Club, but we’re going up there more all the time,” Simkins said.
The 13 houses constructed there last year averaged 7,500 square feet, said Mike Ducuennois, vice president of development at the club. The average general construction cost of each was $500 per square foot.
Ducuennois estimates that string of projects net $45 million in distributed proceeds, goods, services and taxes throughout the area.
That kind of impact resonates well with the governor.
“Those are Montana workers and Montana businesses that are selling goods and services and labor to build those homes. That’s good for the Montana economy,” Gov. Brian Schweitzer said in an interview with the Big Sky Weekly.
“Tourism and second home ownership is a big driver in Montana. I’m glad that the Yellowstone Club got their finances figured out.”
Conservative estimates put the number of construction jobs created during the past year around 300, but the number of workers on a construction site depends on the stage the project is in, so it’s difficult to gauge the number of employed construction workers at any given time of year.
“Currently I’ve got one, four, five six…go to nine, nine employees right now,” said Jim Murphy, owner of Continental Construction, which builds at the club. “That’s carpenters, cabinet makers, masons and administrative help.”
Murphy continued work at the club throughout the bankruptcy and ownership transfer. He said the effects don’t stop with his employees, but percolate throughout the community as workers spend their wages.
“Those guys are turning around and spending money in the area too, there’s a big uptick in activity,” he said.
“During the concrete stage there’s six or seven,” said an architect who wanted to remain anonymous for this story. “After framing, and when you’re roughing in for plumbing and air and installing windows and siding, you could easily have 25 people on that project.”
And while club homeowners pay property taxes in Madison County, many of the workers come from Big Sky and Bozeman, due to the proximity and lack of access to Madison County.
Even with difficulties surrounding the ownership transfer in 2009, the club’s impact on the area made it integral to keeping things moving during the recession.
During peak months—summer and winter—the club employs 560 people. Nearly 200 of those are full time employees.
It was registered by Montana as a Class 7 employer in the latest count in June, meaning it can put up to 499 people to work. It has previously been registered a Class 8 employer, creating up to 999 jobs during peak months.
Together with Big Sky Resort, the Yellowstone Club is the top employer in Madison County. The two resorts are within the top 100 employers in the state.
“In turn, we take that responsibility very seriously,” Collins said.
A cycle of changes
Since the economic downturn, the club has tried to address trend changes in building styles head on.
Homes and buildings that were built five or six years ago displayed an air of opulence that also garnered waste.
And although the homes and amenities being built at the YC are still large, they’re 30 to 40 percent smaller than those that went up in its early building stage, Collins said.
The current owners see themselves as stewards of the land, and keep in mind the 900,000-acre Lee Metcalf Wilderness surrounding them, he added.
They’ve encouraged implementation of green building techniques, and some owners have installed geothermal heating and cooling pump systemsTHB Energy Solutions is working on several of these projects at the club, which can save up to 500 percent efficiency versus propane, said THB’s Parker Thompson.
The club has also moved to lessen its pattern of propane waste by keeping fewer driveways, porches and swimming pools heated on its grounds.
The club would need to continue this new boom if it were to come close to reaching the hundreds of added houses it would take to reach capacity.
“We’ve been selling quite a bit of land, and that land is ultimately built upon,” Collins said. That cycle could continue until there is the potential for 864 front doors within the 13,600 acres the Yellowstone Club is allowed to develop.
Since its new owners took over in December 2009, the Yellowstone Club has made about $300 million in sales, and increased by 50 members, Collins said. Those sales include land, new houses and existing homes.
“We’re adding amenities to compete not only in this market, but for when we come out of this market,” Collins said. “We’re investing in the future, versus hanging on for dear life.”