- Associated Press - Sunday, May 3, 2015

WILLISTON, N.D. (AP) - Williston isn’t a boom town any more, but an emerging economy.

That comment, from Larry Jensen of Jones Lang LaSalle, was one of the more interesting to emerge during public discussion of Williston Crossing, a proposed $500 million mixed-use development north of town.

Jensen secures deals and manages relationships with anchor stores, theaters and big box tenants for JLL clients. The Williston Herald (https://bit.ly/1KqIAlW ) asked him to elaborate later on what he meant by describing the city as an emerging economy.

“When you create a technology like fracking and that gives you access to a resource like oil, it can create a new environment for growth and prosperity,” Jensen said. “When that oil seems to be as large a resource as it is here, and when you look at the value of that resource and all the jobs and everything that are a result of that, you just see an economy that emerges.”

He believes that Williston’s economy will continue to emerge despite the downturn in oil. Especially if the city builds the kind of things that create desire in people to buy homes and locate in the area.

“Once you get a stable population base, it’s the resource driving growth, and growth driving service jobs, and then it’s a whole new economy,” he said. “Williston in the past has been a result of agriculture, and now you have the ability to economically access a resource that has been a successful driver of economies around the world. So how exciting to have arguably the world’s most valuable resource in a large quantity now economically available.”

The idea that there is an emerging economy in Williston is something Mayor Howard Klug can agree with wholeheartedly.

“Williston is becoming a regional center,” Klug says. New restaurants, long on the drawing board, are finally coming to fruition. The $72 million Williston Area Recreation Center has been a game changer for the community, and Klug believes the upcoming expansion and relocation of the airport will be another.

Klug says all the numbers he is seeing still support the idea of an emerging economy here in Williston despite the recent oil slump. The mayor sees everything from population and sales tax figures to traffic studies, hotel occupancy rates and birth rates.

“Our sales taxes are still No. 1 of any city in the state,” Klug said. “That might change some with the slide in oil prices, but a lot of that number is just because we do a lot of business in Williston.”

Traffic studies show more people and more day trips heading into Williston, and occupancy rates and visitor numbers are still at the top of a three-state region.

“With the activity we are seeing out there, I think all sections are continuing to move forward,” Klug said.

To him, an emerging economy means something that’s more manageable than drinking water from a fire hose - an allusion to a comment from Nancy Hodur, a North Dakota State University researcher. She estimated Williston grew 20 percent from 2012 to 2014.

“It’s something that’s going to sustain your community and allow a manageable type of growth into the future,” Klug said. “In no way is what we’ve been going through manageable. It’s amazing to me that the people who tried to manage it did as well as they did, not only from the city, but also from a county level as well. All of western North Dakota, even. They’ve done the best they could with the resources they had.”

Seeing the new restaurants coming online, touring the new Menards as it goes vertical - these are evidence of an emerging economy, too, Klug believes. And they are coming online in spite of the oil price slump.

“Things have stabilized,” he said. “This is going to be a stable area to make plans to move into some areas that are ready for use. Those kind of thoughts are coming to the forefront, which is pretty exciting. It’s not like people haven’t worked on this for a long long time.”

Williston has been the fastest growing micropolitan area in the country for the past three years, driven largely by the vast reserves of oil trapped in the rocky shale of the Bakken.

A drop from insane growth to only a little bit crazy is something community leaders would welcome.

They’re casting the downturn in oil as a chance to catch the community’s collective breath, work on infrastructure, housing and other needs and get ready for the inevitable next round of rising oil prices.

“The boom happened,” Chamber President Scott Meske says. “The boom is boomed. The echoes of the boom are fading, if not completely. So now what is left? We have to go all right, what do we want to be?”

There is a lot of catching up to do inherent in that question, Meske points out.

“We don’t have enough schools or police officers,” he said. “A tsunami came ashore here in ‘08, ‘09 and ‘10 and now the wave has receded. We have to see where we need to fill in the holes.”

Meske also believes continued high labor figures tell the story of an emerging economy.

Unfilled job postings last year in December were around 4,000 with North Dakota Job Services. They were down in December to around 2,000 - a number that reflects a lot of the unmet needs in the labor market.

As of April 22, that unmet need was still high, with 1,599 jobs posted. Cindy Sanford, director of Job Services ND estimates they represent just 40 percent of the total unfilled position.

The oil slump has released some pressure on other sectors, allowing them to obtain better qualified employees than they’ve had access to in the past.

“It’s not just a mad scramble to fill jobs with any warm human body that gets off the train anymore,” Meske said. “We’re still going to grow, just not at that pace anymore. I think it’s a matter of what is the new normal and how are we going to address the new normal.”

Shawn Wenko, economic developer for Williston, says the emerging economy is evident in all the new construction that’s still coming online in 2015.

There are 100 new homes, for example, going up north of Williston in spite of the oil price slump, one of many projects still underway. The 100 homes are being built by Mike Dolbec, who says he still sees huge demand for single-family homes. He feels comfortable moving ahead with the investment and doesn’t believe this will be a reprise of the 80s bust.

“I’ve been in North Dakota all my life, so I’ve seen the up and down cycles,” he said. “I don’t think it’s anything like what we’ve faced in the past. There’s too much infrastructure. It’s not going away. Things might slow down for a short period, but I feel it’s going to be crazier than it ever was in a short amount of time.”

Birth rates have tripled, an indicator that families are locating here and will want affordable single-family dwellings. Mercy Medical Center is estimating it will see 1,000 newborns this year.

“That signals the migration of families to this area,” Wenko said.

This is a community that’s building itself, he says, and a simple drive around town shows it.

There’s the $16 million four-story renaissance building that includes affordable housing, office space and retail in downtown Williston.

There’s the remodel of the New Williston Development Center as a new home for the chamber of commerce, economic development, small business development center and planning and zoning.

There’s a $56 million high school getting ready to start and the recently completed $72 million recreation center. Then there is $122 million in proposed road improvements between city and county that will also be built this year.

Wenko said three developers were recently in Williston vying for the chance to build a convention center here, and the Williston airport expansion has drawn interest from top developers from around the world.

“We are settling in now for some long-term sustainable growth,” he said. “And we are starting to see commercial sectors emerge. Menards is vertical. Sportsman’s Warehouse is coming soon. More announcements are coming this year and into next year.”

(asterisk)(asterisk)(asterisk)

No one knows yet if oil has hit the bottom of this down cycle - the rig count is now under 100 - but its industry leaders point out there is an awful lot of wealth still trapped in the ground. Production technology is getting better and better all the time, too, and producers have alluded to technological advances that make them confident they can weather an extended slump.

Stephen McNally, general manager in North Dakota for Hess Corporation, told a gathering of community leaders earlier this year at the Mondak Energy Alliance that the future of oil and gas in the Bakken is going to be a long one.

Many companies were already reducing rigs, he said, because they have become more efficient at finding and extracting oil.

Hess plans to spend about $1.8 billion in the Bakken this year - close to what they spent last year - and operating expenses of about $1 billion. “That should give you an appreciation of our view of the asset here, and where we think oil prices will be in the future.”

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Information from: Williston Herald, https://www.willistonherald.com

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