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Tech Firms Recreation

Employees of ClassPass, a New York City-based tech company, pictured in their Missoula office in the winter of 2017-18. The company, like many other tech firms in the state, said Montana's recreational opportunities are a major reason they've been able to attract and retain skilled talent to generate and grow revenue. 

A swiftly growing tech company in downtown Missoula called ClassPass is expanding to the fifth floor of the First Interstate Bank building and has signed an agreement with the county to create another 40 high-paying jobs on top of the over 70 it’s already created here.

The Missoula Economic Partnership recently worked with ClassPass to secure a Big Sky Economic Development Trust Fund grant to reimburse the company this week for about $159,000 for creating 22 jobs in the past year.

The company will get reimbursed about $300,000, minus administrative fees, if they create the 40 expected new jobs.

The money comes from the state’s coal severance tax to reimburse businesses for wages (up to $7,500 per job) and equipment expenditures. To qualify for the top award, the jobs must pay at least $18.50 per hour and must bring in revenue from outside Montana.

Almost all of ClassPass’s customers are located outside of Montana, so the workers at the Missoula office bring in new revenue to the local economy. Among other services, the company has an app that allows customers to take different fitness classes at different gyms based on a monthly subscription, rather than just buying a membership to one style of gym. For example, a customer who is traveling can find a yoga, Pilates or aerobics class without having to join a particular studio.

Jean Curtiss, a Missoula County Commissioner, voted on Thursday to approve the money for ClassPass and said she's been pleased with the company's growth and the economic boost and tax revenue it's provided to the county.

"They've been really successful," she said. "I'm not looking for a yoga studio when I'm on vacation, but apparently a lot of people do."

The company is headquartered in New York and has employees all over the world, but opened a Missoula office last year with ambitious plans to hire 120 workers over the next two years. Sales staff work to target individuals looking for more variety in their fitness routine and studios looking to add customers.

When the company first opened its Missoula office, it originally applied for $345,000 in BSEDTF grant funds to create 45 jobs.

Nicole Rush, the grants administrator for the Missoula Economic Partnership, said the company’s growth has been beyond original expectations.

“They have actually already hired more than 70 employees at their Missoula office, so well above the grant target for job creation,” she said.

The 14,744-square-foot fifth floor of the downtown First Interstate Bank building (officially called the First Interstate Center) on Front Street has been vacant since it was completed in 2009. It is the largest single Class A office space downtown, according to local real estate brokers. ClassPass will be moving into that and retaining its current office space in the Millennium Building nearby.

Missoula County Commissioner Dave Strohmaier said he’s happy with the Big Sky Economic Development Trust Fund program in Missoula.

“Generally, I’ve been pleased with the local success rate of actually creating jobs,” he said. “I know there’s been some challenges across the state with that granting program where some businesses have not followed through and not realized job creation they’ve proposed. But here in Missoula I’ve been pleased with what has come to fruition. The work that ClassPass has done in the community is big.”

The program has reimbursed roughly 30 companies in Missoula for creating over 270 jobs. Roughly $3.8 million of the grant funds have been doled out in the county since 2005, and $2.9 million was solely for job creation.

Strohmaier said he always asks companies why they’re choosing Missoula when they make their pitch for the state funding.

“Almost without exception, the first response from these outfits is quality of life,” he said. “Low taxes or incentives to relocate there maybe play into the decision, but the overriding factor is this is a vibrant community and the quality of life is great for employees. So as we’re looking to promote Missoula County, we want to keep that at the forefront.”

In fact, ClassPass CEO Fritz Lanman told the Missoulian last year that a big part of the reason he chose Missoula was because of the "abundant active lifestyle opportunities" here.

A representative of ClassPass could not be reached for comment.

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