Becoming a Household Name

How housing providers are making their mark on the Bakken
By Luke Geiver | October 04, 2013

When M SPACE Holdings LLC formed in 2001, the company built modular housing and provided emergency response solutions to customers recovering from disasters like hurricanes, earthquakes and tornadoes. That experience has helped the company create a presence in the Williston Basin’s massive oil and gas development and its need for housing. “We have dealt with everything,” says Nora McGrath, chief administrative officer. Armed with the experiences formed from bringing housing to non-ideal situations, McGrath and the team entered the Bakken knowing they would be facing challenges not typical of other housing providers in traditional markets. 

Initially, providing upscale modular housing in the Bakken was only a small portion of the company’s overall revenue portfolio. “Due to our success in the region,” McGrath says, “it has become a larger piece of our overall business and we expect that it will continue to develop in the years to come.”

The ability of McGrath to speak about the future of M SPACE in the Williston Basin with a long-term view is based on a number of abilities the company’s been able to display during its time there. Although the story of a workforce housing supplier finding success in the Bakken is not unique, what M SPACE has been able to do after first entering the market is. Once focused on providing quality short-term housing options, M Space now acquires and develops land and is building an energy park, following a plan that others who want to turn temporary housing management into a permanent business can emulate. 

The company currently has seven housing parks or developments spread across six different locations. In Watford City, N.D., the company is branching away from temporary housing and constructing over 200 townhomes and over 200 single family homes. In addition to permanent housing, the company has also played a major part in updating the region’s schools. M SPACE is currently working on a 5,500-plus square foot modular classroom complex for early childhood education in Williams County. To date, a classroom space, four-story hotel and a set of faculty housing has already been completed.

In Alexander, N.D., M SPACE is in the process of completing an energy park that includes commercial and light industrial buildings. The structures are located close to one of the company’s housing developments, offering companies the opportunity to house employees nearby, McGrath says. “It is important for people to realize that we are supporting the community in various ways,” she says. If the company’s presence in the region wasn’t well understood before, McGrath and other members of the team believe it should be today. More than 20 new employees have been added to serve the growth in the Bakken and to execute the problem-solving capabilities learned from disaster-stricken regions and nonideal situations.

Driving the Country
Leif Olson, site manager for the company, has probably spent as much time driving through the Williston Basin as a water truck operator. Rather than moving product, however, he is in search of the next great property to develop. As the point man for M SPACE in the region, he is tasked with finding land and finding the landowner. According to Olson, a majority of the time, potential land partners or clients are open to hearing his pitch on why a piece of ground could or should be altered to accommodate a housing location. In most cases, he does more listening than talking.

Although he’s typically received well, Olson does say some landowners present him with concerns about land development that are both easy to understand and hard to deal with. Farm families in high traffic areas present a particular challenge, he says. During one site visit, Olson was on location at what he considered to be a very high traffic corner close to heavy oilfield development. The land was owned by a family who’d farmed the land for multiple generations, and after chatting with the family about the possibility of purchasing the land for development, he was faced with a challenge that money couldn’t fix. “There is sentimental value in the land you can’t put a value on,” he says. “The dirt was part of them. I totally understand that.”

According to Olson, M SPACE is often able to accommodate specific wants and needs of the landowner and works with them to come up with a mutually beneficial arrangement.

Olson emphasizes a listening approach to any potential land partner, and says in some instances, M SPACE will work to situate a housing facility around the wants and needs of a landowner.

Bringing In Housing
Olson’s efforts have resulted in several housing developments. The company currently has unit parks in the N.D. communities of Alexander, Dore, Stanley, Williston and Watford City. The modular units are made in Georgia and take roughly 4 days to deliver to North Dakota. The units are built specifically to withstand the region’s harsh winter and feature added insulation.

Like many housing developers who’ve been entrenched in the region the past five years, one of the biggest challenges that the M SPACE team has encountered is the  changing atmosphere for zoning and regulations. Infrastructure is still lagging behind. “We’ve found that the length of time to get something done here is much longer. You better bring more money and understand it will take longer,” Olson says.

“We are familiar with infrastructure challenges,” McGrath says, “but that doesn’t make the situation any easier.

 Although some regions are in need of housing, certain infrastructure restrictions related to sewer or electric simply won’t allow for further development. Near Fairview, Mont., Olson and the team had hoped to build, but the extreme cost of electricity was prohibitive. To build an 80-unit motel and a truck stop, he says, it would have cost the company $750,000 just for the privilege of having power, not including the cost to hook that power up. The high costs were directly related to an understaffed, overworked Yellowstone Electric Company team in the area and the simple fact that the appropriate amount of power did not exist.

The infrastructure for water is beginning to increase and access is improving. Rock, such as scoria and gravel, is still in demand as modular units or other buildings need a firm base for build-out.     

The company is taking an incubation approach to housing, by providing up-scale modular units to tenants the company hopes will move into permanent housing. “We have clients that are living in these [modular units], and are ready to bring their spouse and move up to the next thing,” Olson says.
M SPACE offers quality and comfort, says McGrath. Its homes are available fully furnished with everything from housewares and linens to HDTV with cable and premium channels. ‘Providing people with more space and all the comforts of home has led to our success” says McGrath, “People want more than just a roof over their head, and M SPACE provides that.”

An early commitment to stay in the region long-term was also crucial to making the company a major presence in the region, as McGrath explains, and with each tenant, that early commitment is showing how M SPACE has become anything but temporary.


~~~~~~~~ SIDE BAR ~~~~~~~~~~~~~~~~~~~~~~~~

A Case for Workforce Housing

There are two main benefits to workforce housing, according to Richard Rothaus, president of Trefoil Cultural and Environmental, a resource management consulting firm. In his recently released white paper, “Return on Sustainability: Workforce Housing for People, Planet and Profit,” Rothuas explains that workforce housing provides safe, affordable living conditions for the skilled workers essential to business, and, “it minimizes the impact of booms on existing communities.”

To prove his theories on workforce housing, Rothaus examined the role of major Williston Basin workforce housing provider, Target Logistics, an Algeco Scotsman Company. According to Rothaus, workforce housing helps reduce the impacts on towns experiencing massive and rapid growth, by reducing the impact on current infrastructure. Target Logistics currently operates a 180,000-gallons-per-day wastewater treatment facility that is adjacent to a workforce housing complex and other company-owned housing. Because of the facility, infrastructure currently infused within the region prior to the presence of oilfield–related workers does not have to service the needs of the Target Logistics complex.

Complexes run like Target Logistic’s also help to corral some of the resource management issues created by a large influx of people to a sparsely populated area. Low-flow faucets, showers and toilets, along with energy-efficient  washers and dryers, thermostat controls and energy-efficient lighting, all featured in Target Logistic facilities, help to reduce the use of resources in a given region. Workforce housing set-ups also create a better atmosphere for resource handling and disposal when compared to unorganized housing developments, the white paper explains.

“Centralized food services reduce packing and shipping needs and also provides an opportunity for a greater collection of cardboard, glass and plastics for recycling, “something shift workers in makeshift housing are not inclined to do.”

~~~~~~~~ END OF SIDE BAR ~~~~~~~~~~~~~~~~~~~~~~~~

----------

Author: Luke Geiver
Managing Editor, The Bakken magazine
lgeiver@bbiinternational.com
701-738-4944