January 30, 2013

A building boom coming

By Neal A. Shipman
Farmer Editor

With several new residential and commercial developments already under construction in Watford City, 2013 is shaping up to be one of the busiest construction years in the community’s history.
And last Wednesday evening, Watford City business and economic leaders had an opportunity to hear firsthand from three of the developers who are working to help bring new motels, restaurants, retail shopping, apartments, along with affordable housing and additional daycare facilities to a community that is experiencing unprecedented population growth as a result of the development of the oil and natural gas deposits in the Bakken Oil Shale Formation in McKenzie County.
It is estimated that the city of Watford City could see its permanent population swell from a rather sleepy community of 1,500 people three years ago to a bustling city of 20,000 or more in the next several years. And with that potential growth in population comes a tremendous need for housing and retail services.
Filling the immediate need for new retail businesses to serve the Watford City area is the development of South Park, a new retail development being constructed on the corner of U.S. Highway 85 and the N.D. Highway 23 Bypass.
“South Park is moving rapidly forward,” stated Brett Erdmann of South Park Development. “Two new hotels are already being constructed on the site and Oppidan Investment Company will be bringing a Cash Wise grocery store and a Cash Wise Liquor store to the new development,” stated Erdmann. “In addition, Alco will be opening a store in the new complex.”
According to Erdmann, he has already received commitments for two new restaurants and a Maverick Gas Station and Convenience Store. In addition, Erdmann noted that Subway and possibly a Dairy Queen has committed to be tenants in the development.
While Erdmann stated that he is fielding calls from many other possible businesses who would like to have a presence in the community, one of the major issues holding some of the companies back from making the investment in Watford City is the lack of a work force.
“The first question we get from new businesses looking at opening stores here is the availability of workers,” stated Erdmann. “That is a big hurdle that we have to overcome.”
According to Erdmann, the lack of employees is what may keep a McDonald’s, which was initially interested in opening a location at South Park, out of the community right now.
It is that lack of a work force to fill the jobs in the community’s retail, business and healthcare sectors that is a concern to city and business leaders. Even though Watford City and McKenzie County is going to see a continued boom in new jobs being created by the oilfield industry with upward to 12,000 to 14,000 energy jobs in the county for the next 20 years being forecast, non-oilfield businesses are finding it difficult, if not impossible, to find help.
Which is why Brent Sanford, Watford City mayor, says it is imperative that the city continue to expand its existing water and sewer lines to new areas outside the existing city limits to allow for new homes and apartments to accommodate new families that want to work and live in the community.
“We (the city) need to make $192 million in infrastructure improvements in the next year to expand our water, sewer and transportation systems into these new areas,” stated Sanford. “These funds need to come from somewhere, and a little town like Watford City just can’t bond for that kind of money. We are going to need help.”
And according to Sanford, with the city being in the epicenter of the Bakken development, the development and growth of Watford City is going to happen. It is just a matter of time and money.
“It (the growth in population) can happen quickly with state assistance,” stated Sanford. “We could see this happen in the next two to five years if the state can get us the money.”
One of the big components to attracting new families to the Watford City area is the availability of affordable housing. And this summer, two new housing units will be open that will begin to meet the housing shortage. One project, Prairie Heights, is a 124-unit apartment complex being developed by Lutheran Social Services Housing (LSS) in partnership with MBI, an oilfield service company. The other housing project, Wolf Run, along with a 200-unit daycare facility is being developed to meet the housing needs for essential city, county and school employees.
According to John Phillipps of LSS, Prairie Heights, which will open in September of 2013, will not only provide housing for MBI employees but will also offer rental rates far below the current market rate for nonoilfield workers.
“We think that it is critical that we be able to provide affordable housing,” stated Phillipps. “And Prairie Heights, which is designed to be a neighborhood community complex, will allow us to meet our ultimate goal of providing affordable family housing.”
While the majority of the 124 units in Prairie Heights will be used by MBI for employee housing, Phillipps says that 16 of the units will be made available on income-based rental rates to the public.
“We will be offering rental rates that are much lower than what you would normally find in the oil patch,” stated Phillipps. “We are looking at monthly rental rates of between $700 and $1,000 based on the number of bedrooms in each apartment.”
But according to Phillipps, the income-based units will rent for even less with one-bedroom apartments renting for $411 per month, two-bedroom units renting for $507 per month and three-bedroom units renting at $685 per month.
The Wolf Run Village and Wolf Pup Daycare projects, which will be located west of the Watford City Elementary School, were started last summer and will be operational this coming fall.
“The Wolf Run Village units will provide housing for teachers, as well as essential city and county employees and law enforcement officers,” stated Mark Bragg, who is coordinating the development effort. “And the daycare facility will provide a very valuable service as it will allow the second parent to be able to enter the force.”
Bragg is also the developer of a new housing and commercial project that will be located on the south side of N.D. Highway 23 near the Fox Hills Golf Course.
“We have 300 acres of land that we will be developing for housing and commercial use in the coming years,” stated Bragg. “With water and sewer now being available to the site, we hope to begin developing the site in the next few months.”
The new development, according to Bragg, will include hotels, a shopping complex, apartments and single family homes.
“When we first came here, we found a community that knew what it needed was to expand its infrastructure to allow for growth,” stated Bragg. “They are doing that and they are going to see the new development.”
But to Bragg, one of the hurdles communities like Watford City, that are being so impacted by the energy development, is facing is the lack of support from the state.
“It is puzzling to me why so small a part of the huge wealth that is being generated here is leaving the county and not coming back to it to help with the infrastructure demands,” stated Bragg. “Last year, McKenzie County sent $600 million to the state treasury. And you know what they got back? About $18 million, or 3.4 percent of the money.”
With McKenzie County currently producing 25 percent of the state’s oil production and over 40 percent of the state’s natural gas production, Bragg believes that the state needs to direct more of the money back to the counties in which the wealth is being generated.
“Thiry percent of $600 million would help solve a lot of the problems that Watford City is facing as a community,” stated Bragg, who has been meeting with North Dakota legislators to support bills that would direct more funds to oil-impacted communities.