Block grant nixed for SmartLam project

SmartLam, an “advanced cross-laminated timber and wood-processing business,” will launch as planned this summer in Columbia Falls.

But it must do so without a low-interest, $800,000 loan because state officials shifted $1.7 million available for economic development projects over to another program where it will be used to help pay for community development and infrastructure projects.

“This project is going forward,” Doug Shanks, president of Western Building Center, said about SmartLam. Western Building Center has invested in the SmartLam venture and the company’s truss plant site is where the new business will be located.

The company is busy installing equipment and hopes to test that equipment over the next two weeks and start some production by mid-August.

“In two years we hope to have 30 positions. The loan would helped us ramp up further and faster,” Shanks said. “But this is a hiccup, just one of the hurdles that we’ve run into. We definitely are going forward.”

Montana West Economic Development applied for the Community Development Block Grant money through a business loan program run by Montana Department of Commerce.

The request for the pass-through federal funds would have given SmartLam a 2 percent loan to buy a major piece of production equipment.

That application, sponsored by Flathead County and the city of Columbia Falls, was developed over several months and received last week by Montana Department of Commerce.

But this week, everyone was surprised to hear that all of the money still available for the economic development program was being transferred to a community development program where it can be used for infrastructure, water and sewer projects and fire damage repairs.

Montana Department of Commerce Director Dore Schwinden said the agency had funded only two business loan program applications all year, each for about $400,000.

Along with SmartLam’s application, those are the only requests for economic development funds the agency had received. Meanwhile, in the community development program, requests had once again outpaced available funds, Schwinden said.

“We decided the wise thing to do was to transfer the remaining [funding] to the infrastructure side, rather than the economic development, job creation side,” he said. “A lot of that is kind of in preparation for the infrastructure needs the energy boom is causing in Eastern Montana and the Hi-Line.”

In all, Montana received $6.2 million of Community Development Block Grant funding for the year, money that can be shifted at the director’s discretion among economic development, housing and community development programs.

“It’s the age-old thing,” Schwinden said. “There’s an unlimited amount of work to do and only so much money.”

Schwinden added that communities in Northwest Montana still can apply for the Community Development Block Grant funding and that state has other sources of funding available to help businesses, including work force training grants.

“There are a wealth of other funding opportunities through this agency .. This by no means closes the door on this project or any others,” he said.

Still, it was disappointing news for Montana West Economic Development and others locally who had invested a significant amount of time in the SmartLam application with no idea that funding was about to be transferred.

“Montana West Economic Development is disappointed to hear all of the CDBG business loan funding has been diverted,” Director Kellie Danielson said.

The outcome likely will create a longer time frame for SmartLam to ramp up its production and create jobs, she said.

“What is equally disappointing is the company, Montana West staff, the city manager of Columbia Falls and county staff spent considerable time drafting the application and hosting several public hearings with the county commissioners,” Danielson said.

“For the past few months of communicating with the Department of Commerce staff about the application we were not made aware of any potential issues with the funding source. It was a total surprise to us,” she said.

Reporter Tom Lotshaw may be reached at 758-4483 or by email at tlotshaw@dailyinterlake.com.