Here’s how Blixseth did it

By SCOTT McMILLION Chronicle Staff Writer

Early in 1992, The Nature Conservancy, with $10 million in backing from CNN founder Ted Turner, was trying to buy 165,000 acres from Plum Creek Timber Co., most of it inside the Gallatin National Forest.

The Nature Conservancy planned to trade some of that land with the U.S. Forest Service and launch an experiment in sustainable logging and recreational development. Negotiations dragged on for months, but fell apart after the news became public.

Within a few weeks, Tim Blixseth, along with partners Mel and Norm McDougal, announced they had bought the Plum Creek property. They paid $27.5 million for the land and a sawmill in Belgrade that employed scores of people. But before the papers were signed, they had arranged to sell some big chunks.

“We went to work and found buyers,” Blixseth said in an interview.

He and his partners, calling themselves Big Sky Lumber Co., arranged for other investors to take a 25,000 acre parcel west of Big Sky, the Jack Creek property, for $6.5 million. Today, it has become the ski and golf resort called Moonlight Basin, a place where 20-acre lots are listed for $3 million.

At the same time, timber giant Louisiana Pacific bought the Belgrade sawmill and a multi-year timber contract with BSL for $9 million, Blixseth said. The mill shut down after the lumber contract was complete, and the property became bustling retail space on the west end of Belgrade.

The sawmill and Moonlight sales reduced BSL’s overall price to $12 million, or about $86 an acre for the remaining 140,000 acres. The partners borrowed half of the purchase price.

Blixseth put up “about $3 million” in cash, he said. Today, condos at the Yellowstone Club cost more than that.

LOGGER FIRST

But it took a lot of work to make the Yellowstone Club happen.

Most of the Plum Creek land was in a checkerboard land pattern that stretched from Yellowstone National Park to the north end of the Bridger Mountains. Plum Creek had tried for decades to arrange land swaps that would allow it and the Forest Service to consolidate their holdings.

Some of the property was pristine, untouched and unroaded, while much of it had been heavily logged.

The Plum Creek swaps had a lot of support, but never made it past Congress.

Enter Blixseth.

He told the Chronicle in 1992 that he had come to saw logs and make money and wasn’t worried about battles with environmentalists.

“Maybe someplace in this United States of America, somebody needs to draw a line and protect private property rights,” he said at the time. “Maybe I’m the guy and that’s the place.”

He referred to the property as a “tree farm” and once said he was “tired of people saying clear-cutting is a bad word.”

Statements like that got people’s attention.

Meanwhile, he worked behind the scenes with members of Congress, the Forest Service and environmental groups to hammer out a deal.

By 1993, Congress had approved the first of two land swaps. BSL gave up 38,000 acres, mostly roadless land along the crest of the Gallatin Range, and got 16,300 acres of prime timberland scattered across western Montana. That property, lower in elevation and easier to reach, was logged and/or sold quickly.

By 1995, land prices were still climbing and BSL sold another 8,100 acres to the Forest Service in the Porcupine drainage — prime elk and grizzly bear habitat southeast of Big Sky — for $16.4 million, the appraised value.

Later, it completed another swap with the Forest Service.

By the time it was all said and done, the company traded to the government 101,000 acres in exchange for 47,000 acres, plus $25 million.

Read more here.

Blixseth, Redford helped shoulder state into new economy

By SCOTT McMILLION Chronicle Staff Writer

Robert Redford and Tim Blixseth don’t have much in common, aside from their big impact on Montana’s landscape.

ERIK PETERSEN/CHRONICLE Yellowstone Club owner Tim Blixseth stands in front of the 120,000-square-foot Warren Miller Lodge at the club. “That’s your basic $100 million lodge,” Blixseth said. One is a Hollywood actor, movie producer and liberal environmental activist. The other is a jet-setting billionaire who wheels and deals in luxury real estate.

But they both changed Montana. Between them, they’ve helped shoulder the state into a new economy, one increasingly based on real estate, construction and recreation. It’s what economists call an “amenity” economy, one that relies on scenic views, pleasing lifestyles and portable money.

Redford, with his beautifully produced and photographed 1992 movie “A River Runs Through It,” made a movie star of both Brad Pitt and Montana’s scenery. The film generated tons of glowing publicity about the state, ignited a new craze for fly fishing and started a population influx and demographic shift that the Montana Department of Commerce has dubbed “A River Runs Through It Syndrome.”

Also in 1992, Blixseth landed in Montana, purchasing 140,000 acres of land, then proceeding with a series of land deals that eventually resulted in The Yellowstone Club, a gated community where only millionaires are allowed.

The club symbolizes wretched excess for some people and King Solomon’s mines for others. But love it or hate it, the club stands as the keystone property in the booming Big Sky resort area, a generator of intense publicity, and a major driver of the region’s economy.

Redford’s movie put Southwestern Montana on the map.

And while he didn’t do it alone, Blixseth put it on the market.

Now, 15 years later, this part of the state is a very different place.

New waves of homesteaders have arrived and they aren’t like the honyockers of the early 20th century, the people lured west by hucksters who promised that rain would follow the plow. The first wave of homesteaders came here for free land and a chance to make a living. Most of them went broke.

The new homesteaders are a different sort. Few of them come here looking to expand their wealth. Instead, they bring their own money. Economically, they make their own rain, and a lot of people are hoisting buckets, trying to catch some.

Gallatin County alone has 828 licensed real estate agents – almost a quarter of the state’s total. Bozeman offers a variety of sushi restaurants, plus Persian rug dealers, cosmetic surgery centers and art galleries of all stripes.

On one block of the sunny side of Bozeman’s Main Street, you can find $2,000 espresso machines, $10,000 sofas and $60,000 home theater systems. Million-dollar McMansions pepper the landscape, designer clothing surrounds the tables in tony restaurants, and just try to count all those Audis and Expeditions and Escalades.

And then there’s the cash money. Federal bank regulators say that Gallatin County banks hold $1.6 billion in cash deposits. That’s $20,000 for every man, woman and child in the county. It’s 30 percent above the state average and the total grew by $1 billion between 2000 and 2007.

And the truly wealthy n Forbes Magazines’s list of the 400 richest Americans names at least 10 people with homes in Montana n tend to do their banking somewhere else. They might have a $10 million property in Montana, but home, and the major bank account, remains elsewhere.

“Lots of people with wealth, whether they’re part-timers or not, don’t necessarily do their banking here,” said Larry Swanson, an economist at the O’Connor Center for the Rocky Mountain West at University of Montana.

Measuring the impact of the new wealth in Montana, Swanson said, is like looking at an iceberg: Most of the bulk is underwater and unseen, but that’s what packs the wallop.

At Blixseth’s Yellowstone Club alone, 340 millionaires have already bought land. And Blixseth says he’s confident he can bring in about 500 more.

Some people, particularly those with marketable skills, benefit from the influx of wealth.

“It means an electrician can drive a $40,000 vehicle and live in a $400,000 house,” said Clark Wheeler, a veteran land appraiser in Bozeman. “Twenty years ago, they were living pretty sparse.”

And while a lot of people are putting a lot of money in the bank, the averages don’t tell the whole story. Some people stash a lot of green. Others can’t find much at all.

Poverty remains high in the Gallatin Valley, though it’s largely out of sight.

Read more here.

The $100M house ….. (Big Sky, Montana) that Blixeth built…

By SCOTT McMillion Chronicle Staff Writer

BIG SKY – This is the house that Tim Blixseth built, and it starts with 120,000 square feet – almost three acres – of boards and timbers and stone called the Warren Miller Lodge at the Yellowstone Club.

ERIK PETERSEN/CHRONICLE A pair of skiers rides the lift at the Yellowstone Club where 15 lifts carry a thin stream of passengers from mansion doorways to mountaintop, and lift lines are nonexistent. “That’s your basic $100 million lodge,” Blixseth said.

The lodge contains ski shops and restaurants, lobbies and bars and lots of big, gas-fired fireplaces. Fine art adorns the walls, bronze statuary stands guard everywhere. The wine list will blow your hair back, or at least the prices will. Almost everywhere you look, an employee is cleaning something. The furniture is heavy. The spaces are expansive. Ceilings rise and rise and rise. The heat bill must be incredible.

Upstairs, you find condominiums, some serviced by private elevators. The biggest condo measures 5,900 square feet and each one of those square feet recently sold for about $1,100. That works out to roughly $6.5 million.

And the lodge is just the gateway to this very private and expensive club, where nobody enters until the security guard gets the OK.

 

Gotta Read More Here!

Money Changes Everything…

By SCOTT McMILLION Chronicle Staff Writer

EDITOR’S NOTE: The economy in the Gallatin County area has boomed in recent years, in large part because wealthy people have built homes here. That trend has spread a lot of money around. This week the Chronicle takes an in-depth look at this new economy. Staff Writer Scott McMillion looks at business, philanthropy, agriculture, the environment and the people driving the new economy. Opinions differ as to whether the new wealth is a godsend or an affliction. Either way, the effects are both profound and critical to the region’s future.

ERIK PETERSEN/CHRONICLE Yellowstone Club owner Tim Blixseth stands in front of the 120,000-square-foot Warren Miller Lodge at the club. “That’s your basic $100 million lodge,” Blixseth said. Robert Redford and Tim Blixseth don’t have much in common, aside from their big impact on Montana’s landscape.

One is a Hollywood actor, movie producer and liberal environmental activist. The other is a jet-setting billionaire who wheels and deals in luxury real estate.

But they both changed Montana. Between them, they’ve helped shoulder the state into a new economy, one increasingly based on real estate, construction and recreation. It’s what economists call an “amenity” economy, one that relies on scenic views, pleasing lifestyles and portable money.

Redford, with his beautifully produced and photographed 1992 movie “A River Runs Through It,” made a movie star of both Brad Pitt and Montana’s scenery. The film generated tons of glowing publicity about the state, ignited a new craze for fly fishing and started a population influx and demographic shift that the Montana Department of Commerce has dubbed “A River Runs Through It Syndrome.”

 

Click Here to Read More…

The Automatic Homeowner

In his follow-up book to the bestselling The Automatic Millionaire, David Bach has taken his winning strategies to the next level with The Automatic Millionaire Homeowner, a guide to assist with building wealth through real estate. According to Bach, the plan is quite simple, it works in any market, and it has been thoroughly time tested to work. For years, Americans used their investment dollars in the stock market to grow at a steady pace. When drastic changes occurred, much of that money moved to investment in the real estate market. The purchase of primary residences, home improvement projects, and the investment in second homes all witnessed steady growth as people’s wealth became heavily tied to their homes. The bottom line of Bach’s process is to buy a home, live in it, build wealth, get great tax deductions, and retire rich. Sound too good to be true? The emphasis, however, is that to truly follow this philosophy, it is not about booms and busts in the real estate cycle or timing the market to take advantage of trends, and certainly not to get rich overnight. It is understanding the fact that real estate is not a passing trend, and “as long as you’re alive, you have to live somewhere.” The real wealth building comes from a lifetime of homeownership.

Unfortunately, people often are drawn to schemes and plans with the promise of doing little and receiving much in return. Sometimes it really works, but most of the time it ends up with less than the desired effect. Buyers who flocked to speculative real estate markets to purchase preconstruction homes in order to “flip” quite often found this out firsthand. These situations are what have received much media attention while those who use real estate wisely take the back seat.

So, how do you build real wealth in the real estate market without becoming overleveraged? The key is long term commitment, making sound decisions, and putting yourself in the right mindset.

Some basic action steps to getting on the right road are included below:

Meet with a mortgage professional, whether a mortgage banker (direct lender) or a mortgage broker (independent consultant who will shop your loan with various lenders). Find someone who is knowledgeable and who you trust.

Chose the right type of mortgage to meet your personal needs. There are many options available including fixed rate, adjustable rates, low money down, etc. Ask enough questions to know the pros and cons of each type.

Get the best deal on your mortgage. Shop rates. Know your credit score. Obtain your credit reports and review thoroughly for accuracy.

Find the right home for your situation. What kind of home are you interested in? Where do you want to live? Use the internet to assist in research. Give yourself a “dream with a deadline.”

Work with a great real estate agent. The key things your agent should do for you is listen, help you find out how much you can afford, narrow your search, educate you on the market, assist with price determination and comparable properties, assist you through appraisals, inspections and closing.

Make the mortgage payment automatic. Paying off a mortgage early can save an extraordinary amount of money in interest fees. For example, splitting a monthly mortgage payment into two biweekly payments can cut 5-7 years off of the length of a 30 year mortgage and save tens of thousands of dollars in interest. The difference in your monthly budget will be so gradual, but the payoff is immense.

With negative real estate tales at the forefront in the media, Bach gives a final bit of advice to “bubble proof” your real estate plan and survive potential downturns. First, make sure you can afford your mortgage. Don’t depend on possible sources of additional income or hope that adjustable rates will not rise. Make sure you have financial resources in place to ride out a cycle. Next, think local. Always keep in mind that the national market is irrelevant to you. Then, always get the facts. Know the local market inventory, prices that homes are actually selling for, and the amount of time that homes are staying on the market. Also, never purchase just in order to “flip” the home in hopes of a quick profit. Finally, know that in most cases, time cures all. Patience is the ultimate virtue in real estate.

Robyn Erlenbush is owner of ERA Landmark Real Estate (with offices in Bozeman, Big Sky, Livingston and Clyde Park) and Intermountain Property Management. She can be reached at robyn@eralandmark.com.

Visit us at http://www.eralandmark.com/ & http://www.StuartandSally.com

Thanks to Robyn!

Bozeman Ranked #1 Dream Town by BizJournals.com

This is just fantastic!

Bozeman has been named the #1 ‘Dreamtown’ by Bizjournals.com for its quality of life and business growth, edging out Jackson Hole and Durango, Colorado. Bozeman is a small college town with a sophisticated and cultured atmosphere. Despite its size, Bozeman boasts amenities that larger urban cities would envy. No matter what the season, there are a full range of activities to enjoy, from world-class fly fishing to the thrill of skiing to attending a wonderful symphonic concert.

Whether you are starting up a business, relocating a family, or just wishing to retire or own a second home here: an investment in Bozeman real estate is a sound decision.

Click here to go to BizJournal.com for the America’s Dreamtowns: Quality of Life Rankings!