West Yellowstone Struggling to Adapt to Changing Business Climate

Howard McCray came to West Yellowstone in 1962 to work in the sawmill, and he remembers bolstering income in “Yellowstone National Park’s bedroom” by running a trapline.

Dale Koelzer and his dad bought land near here in 1939. The retired executive recalled the trip into town: “You got off the highway onto a pothole road, and you could lose your car in some of them.”

Most of the trappers are gone now. Potholes are history too.

“West,” as residents affectionately dub their home, sits at the western entrance to Yellowstone park. Always a summer tourist town--”last one out in winter, turn off the lights”--in recent years it has become a destination for snowmobilers, cross-country skiers and hunters as well.

An additional 300 hotel rooms are slated to be ready next summer, bringing the total to more than 2,000. That’s 700 more than just five years ago.

As capacity for guests has increased, so have the numbers of folks taking care of them. Hundreds of seasonal arrivals turn up every May and November, eager for work. The count of permanent residents has jumped from 300 in 1960 to more than 1,000.

Growth, however, has exacted its price.

The police force, which expanded to six officers two years ago, is per capita the busiest in Montana. And the town is struggling with a dire shortage of affordable housing that many blame for scaring off young families who normally would create the backbone of the community.

“The difference between now and then was then, we didn’t make a living in the winter,” says McCray, whose son, David, now runs Two Top Snowmobile Rental.

Begun in 1964, the rental operation includes 125 sleds, plus a small motel.

The McCrays said when snowmobiling became popular in the late 1970s, West Yellowstone business owners finally began earning enough money to reinvest in their properties, instead of simply leaving town for the winter. There are now dozens of rental operations.

“It became more of a community,” David McCray said.

Local businessmen Clyde Seely and Bill Howell agree the current wave of growth began in 1988, two years after the resort tax was passed by the Montana Legislature.

The 3% tax--on everything from hotel rooms to cross-country ski rentals--provides the town with about a third of its total operating budget, and 10 years ago helped pay for street paving, a water and sewer system and traffic lights.

Seely and Howell built the Holiday Inn West Yellowstone Conference Center in 1994. It’s the biggest place in town, with 123 rooms and 280 snowmobiles to rent during the winter.

Seely said the winter season, and increased resort tax revenue, have enabled better fire protection, more police officers and four full-time emergency service personnel. Despite flat years in 1996 and 1997, revenue from the tax has grown 32% since 1993 to about $1.6 million.

The winter season used to be a time to relax, said Seely, who taught school when he arrived in West Yellowstone 30 years ago. With snowmobilers now, the lifestyle is much more intense.

“It’s all part of progress,” he said. “Some people long for the good old days, when they had to dodge the potholes. But most wouldn’t go back. I know I wouldn’t.”

Judy Carlyle, who with her husband bought the Golden West Motel in 1983, cherishes West Yellowstone’s small-town feel. “When you get sick or have a family tragedy, the town is wonderful for things like that.

“But as far as business goes, there definitely has been a change,” she said.

“Quite a few of the smaller hotels” have been purchased and torn down to make room for the larger chains, she said. Also, some of the older places have been turned into employee housing for the larger hotels.

Carlyle said she remembers a time when you knew all your neighbors, and if one hotel was full, operators simply called their friends. This doesn’t happen as often anymore, she said. Competition for guests, especially in the winter, has become stiffer with the added rooms.

“It’s definitely hurt us,” Carlyle said. “You can’t put up big chain hotels with the national advertising and not expect to hurt the Ma-and-Pa places.”

Said City Councilman Jerry Johnson: “Even six or seven years ago, most of the businesses in West Yellowstone were family-run operations. [Now] corporate America has moved in.”

The latest: The Stage Coach Inn, a West mainstay since 1948, was sold to Denver-based Hospitality Limited South on Feb. 1 after a half-century of local family ownership.

While hotels are expanding, housing for locals remains tight.

Scott Clewell, who was chief of police between 1979 and 1984 and now owns a bookstore, tended bar in the Old Faithful Inn for four years before moving to West Yellowstone in 1978.

He chose the town because it was surrounded by the park and national forest land, limiting the potential for sprawl. He wanted the things he loved--hiking, fishing and skiing--to be protected from rampant growth.

But town officials now blame this dearth of growing room for a critical shortage of affordable housing. With nowhere to grow, property prices have skyrocketed. In the Madison Addition, the last residential subdivision to be created in 1983, even modest-sized townhouses now cost $120,000.

“Young families have really no place to go but out of town,” said Mayor Doug Edgerton, who heads up a citizens committee begun last month to investigate new affordable housing opportunities. He said a solution is at least five years away.

While providing suitable housing for West Yellowstone’s seasonal workers is a concern, Edgerton said the committee’s top priority is finding space for young, lower- to middle-income families who want to buy their first home. When they leave after just a season or two, Edgerton said, “you start missing an entire segment of the economy in your community.”

West Yellowstone’s schools have been hit by high turnover among families. Enrollment rose to a record 290 students in 1996-1997, then dropped to 262 just a year later. The result: The district lost $140,000 in funding, and a history teacher had to be eliminated.

Tough winters might have something to do with the turnover, said West Yellowstone school clerk Mary Davis, but the often-grim financial realities of living in a two-season town with a high cost of living play a major role.

“A family tries to move here, and they get paid minimum wage,” Davis said. “They look for a house, and when they can’t afford one, they leave.”