KALISPELL — For every federal and state dollar spent to build the U.S. Highway 93 bypass around Kalispell, nine were produced by the time it was fully opened.
That’s a billion-dollar harvest from 2001 to 2016, according to a first-of-its-kind study Ed Toavs produced when he went back to school.
Toavs, who grew up in nearby Columbia Falls, is now administrator of the Montana Department of Transportation’s Missoula District. He spent the eight months since a ribbon-cutting opened the north and final half of the seven-mile bypass last October crunching numbers with an assistant economics professor at the University of Idaho.
They found that even with overly conservative numbers, the project that cost $135 million from design and right-of-way acquisition to road construction resulted in gross sales numbers of new construction and business earnings of more $75 million a year in the 16-year study period. That pencils out to $1.21 billion.
“That’s the number that gets people’s attention, and rightfully so,” said Toavs. “If you look at it from an investment-output standpoint, that’s just about a 9-to-1 ratio. This also shows an average of 760 jobs created per year” as a result of the bypass construction.
Toavs (say "Taves") is an engineer at heart and by training. But at the urging and sponsorship of his boss in Helena, MDT deputy director Pat Wise, he enrolled in a two-year executive master’s program in business administration at his alma mater in Moscow, Idaho.
He received his degree last month, but not before producing a second-year thesis that analyzed the economic impact of the Kalispell bypass.
Wise said the 66-page report is something like MDT has never seen.
“Not to the depth that Ed took it to, just because it’s pretty intense background in the master’s program economic analysis,” she said.
The report is already drawing interest from Toavs’ counterparts in Montana and elsewhere. And it plays directly into the future plans of Kalispell and Flathead County leaders.
The pros and cons of infrastructure spending is a hot-button topic at all levels of government, said Joe Unterreiner, president of the Kalispell Chamber of Commerce. The chamber and its business members pushed for the bypass and helped champion a successful bid in the 2017 Legislature to raise the state gas tax for state highway funding.
“We’ve got a really good case study that’s a local example here right now that will be a huge asset for us in talking in our city and our county, state and federal areas,” Unterreiner said.
Everyone agrees that the bypass route is not complete. The new north half has the feel of an interstate highway, even prompting grumbles that speeds are limited to 55 mph. The south half that opened in 2010 is only two lanes, which can cause traffic snarls at peak times.
“At a quarter to 8 in the morning we’ll see, I’ve heard, anywhere from 35 to 50 cars backed up at the Foys Lake Road roundabout,” Toavs said.
The comments he tends to hear, he said: “Love what you’ve done on the north half, absolutely no complaints. Please come back and finish the south half.”
“And we will. It’s just a matter of we have a few parcels to complete acquisition on and we need to finish the design. Then it’s always the game of funding and when we could fit that in."
Talk of a bypass to ease congestion in downtown Kalispell dates back to post-World War II. Unterreiner said he has a copy of a Daily Interlake article from 1947, when a group of his predecessors from the Chamber of Commerce broached the idea to the City Council.
As I-90 and I-15 were built to the south and east starting in the 1960s, Kalispell was isolated as the largest city in Montana not on the interstate system.
But serious consideration of a bypass didn’t come to a head until the 1990s, as an environmental impact study of the Somers-to-Whitefish corridor was in the works. A special appropriation from Congress of $150,000 funded a 1991 study of routes, with the two favored being east of the city via Willow Glen Road and west following the Somers-Kalispell railroad spur.
The westside option was finalized by the Federal Highway Administration in 1994, and the state Transportation Department began acquiring largely undeveloped property and fine-tuning the route. The early 2000s saw large-scale commercial development around U.S. 93 north of town with the arrivals of Home Depot in 2001, Target in 2002 and Lowe’s in 2004.
By 2005 the location of Glacier High School was settled upon. It was west of U.S. 93 near the north end of the future bypass, with uncertain access. In August of that year Sen. Max Baucus, the senior Democrat on the powerful Senate Finance Committee, was in Kalispell handing out a mock check of $30 million for the bypass on the same day President George W. Bush signed into law a $286 billion federal highway bill.
Commercial development centered and continues to center around the north end, especially a square mile of Montana Department of Natural Resources and Conservation land, Section 36, that's all but filled. Even as the south bypass opened in 2010, work to fund and finish the north half stalled out with the economy. Toavs noted in the report the section came to be dubbed “the Half Pass.”
MDT’s announcement in 2014 that it was ready to complete the north connection to West Reserve Street spurred development plans anew. A contract of nearly $34 million awarded to LHC Inc. of Kalispell was the largest in Montana Department of Transportation history. Construction of the north bypass began in the fall 2015. Its completion last October came at the end of a record visitation year for Glacier National Park and bodes well now for this summer’s first full tourist season.
“All of our residents know about it,” said Dave Prunty, Flathead County’s public works director. “Once the folks start coming through with their big RVs to West Glacier to spend their summers here, I think it’ll be huge for not impacting the downtown with the bigger vehicles like we’ve seen for years. I hope and I think downtown businesses are going to benefit through this tremendously.”
That’s been the plan all along. Toavs touted the cooperation MDT has enjoyed with the city, county and local businesses since the early planning days.
In the closing remarks of his report, he wrote: “The Bypass connection allows for discussion to begin on how the historic downtown district could look and function in the future with an emphasis on attracting destination traffic yet allowing for the movement of through-traffic.”
Highway 93 through downtown Kalispell “now has a chance to be a Main Street,” said Tom Jentz, Kalispell’s planning and building director.
Already the bypass has helped Kalispell land a competitive federal transportation grant of $10 million that in the next two years will fund removal of the railroad tracks from downtown. Jentz said bids just opened on construction of a $12 million, 40-acre railroad industrial park on the eastern edge of town. The last rail industrial users in town will be relocated there, two parts of $20 million of construction projects the park figures to spur.
That in turn will free up 40 acres of underused land downtown.
“It’s the tip of the iceberg of what’s going to be happening in this community,” said Jentz. “While the bypass provides energy into the greater region, we have a chance to invest in our downtown so the city as a whole becomes a better place. This is a project that just keeps on giving and giving.”
Toavs and Professor Steven Peterson at the University of Idaho used three data sets in their study: The federal aid contracts that have gone into building the bypass so far (from which the figure of $135 million in costs was derived); new residential and commercial construction that can be attributed to construction of the bypass, and wages and jobs produced by new commercial construction.
Toavs said Don Brummell of LHC, who was involved in building part of the south half with another company, helped come up with “hyper-accurate” figures on the costs.
Jantz and his city staff, along with Unterreiner at the chamber, produced a list of new businesses they deemed attributable to construction of the bypass. It provided one of the biggest surprises of the project, Toavs said: Some 83 parcels of property developed since 2001, providing 2 million square feet of new construction. Led by Wal-Mart and the Hilton Homewood Suites, each worth more than $8 million, the 83 businesses combined for $140 million of construction value. That's $5 million more than the bypass cost to build.
Still, they left out construction of Glacier High as well as multimillion-dollar improvements to Flathead Valley Community College and Kalispell Regional Medical Center to the east of Highway 93. Their inclusion probably could have been justified, Toavs said.
"But we wanted to make sure that we were defensible and conservative in our approach.”
The Department of Labor and Industry helped with the third data set, calculating total figures of earnings for the 50-plus businesses that built along the bypass corridor over the last four quarters on record.
“Due to confidentiality reasons, they can’t disclose that business by business, but they were able to take all of them and give me a total number for jobs and wages produced,” said Toavs.
Anticipating the argument that not all new construction in the area nor all new wages could be attributed solely to the bypass, Toavs and Kalispell city manager Doug Russell arrived at multipliers of 65 percent for new construction and 33 percent for job creation.
These days Toavs has his weekends back and other projects to focus on in the Missoula division. Foremost among them are a new four-lane Russell Street bridge in Missoula and its accompanying street improvements. But the Kalispell bypass remains special.
“Since the days of the interstate we don’t build a whole lot of new construction and new routes, and to actually have one make it past the finish line is pretty remarkable,” Toavs said. “I doubt that I’ll see another one in my career.”
His first foray into the world of economic impact provides a benchmark for other transportation projects.
"Having the 9-to-1 investment to output is something that not just MDT or other (Departments of Transportation) should look at,” Toavs said. “I think it's something that communities holistically should look at.
Maybe it's not a major bypass. Maybe there'll be more naysayers than Kalispell experienced and maybe not every project will have a 9-to-1 return.
“But you're probably going to get a pretty good multiplier, would be my speculation after going through this exercise," Toavs said. "That's something I think communities should look at when you're trying to plan and look for funding opportunities.”