Faced with stagnant construction activity in the Flathead Valley, many local contractors are heading to the Williston Basin to build houses in boom towns.

And like the hundreds of workers clamoring for oilfield jobs in Eastern Montana and Western North Dakota, they’re grappling with the overwhelming challenge of where to house their crews.

Casey Malmquist of Malmquist Construction in Whitefish has been building houses in Williston, N.D., for Halliburton Energy Services for the past year and a half.

“The interesting thing is that the conundrum is the same for the construction industry,” Malmquist said. “Where do you house your work force? We got in fairly early and we got fairly decent housing.”

Malmquist was able to bring in seven three-bedroom mobile homes and built two houses with eight bedrooms apiece for his employees.

A builder of high-end homes in the Flathead, Malmquist became acquainted with Dave Lesar, Halliburton president and chief executive officer, when he built a home for Lesar in Whitefish.

“They’re a big player in the oilfield,” Malmquist said. “A year and a half ago, Dave came to me and said, ‘We’ve got a problem’” with housing people in the Williston area.

Malmquist went to work immediately doing the due diligence needed to start building in North Dakota, scoping out available land and what kind of housing was most needed.

“They’re trying to do this right. Dave wanted single-family homes to attract families, not man camps,” he said. “I’ve been so impressed because Dave has a genuine interest in his employees, and he has this great affinity for Montana.”

Malmquist said Halliburton has hired many Flathead subcontractors for overseas jobs, and in total the company has put about 450 Flathead Valley residents to work in the Bakken oilfields and elsewhere in recent years.

Malmquist’s crews have built 50 single-family homes in Williston over the past 18 months — three-bedroom western-style bungalows ranging from 1,800 to 2,200 square feet, with a price range of $275,000 to $350,000.

His company is on track to build apartments and townhomes next spring in Williston that will provide another 300 much-needed bedrooms.

“It’s been a godsend,” Malmquist said.

He spends about a week every month in Williston and has management staffers from the Flathead who oversee the projects. They work two weeks on and one week off to be able to spend time with their families.

Most of Malmquist’s building materials for the Halliburton homes are coming from Western Building Center, shipped usually by common carrier. Occasionally Western Building Center has sent one of its own semi-trucks to Williston.

Western Building Center General Manager Doug Shanks said Malmquist’s projects, plus orders from other local contractors doing business in the Williston area, have been “a tremendous shot in the arm.”

Shanks said he has a team over there investigating the possibility of starting a satellite store in either Eastern Montana or the Williston area.

“The team is saying if we’re going to do this, we need a presence there,” Shanks said.

Western Building Center most recently priced out materials for Terry Construction in Kalispell, which plans to build 10 homes in Sidney next spring.

“We have a long relationship with Ron and Myrna Terry,” Shanks said. “We hope to work with them” on the Sidney project.

Myrna Terry said her husband, Ron, went over to Williston in August, and the boom-town frenzy he witnessed “was almost too much for him.”

They’ve chosen to work on the Montana side of the oil activity because they don’t have to deal with North Dakota’s licensing and workers’ compensation requirements.

When Ron stopped at City Hall in Sidney to inquire about planned subdivisions, city officials put him in touch with Whitefish developer Jim McIntyre.

McIntyre and his partner bought acreage this year on the outskirts of Sidney and will file a final plat and build streets next spring for a development that will include both residential housing and commercial development.

The Terrys bought 10 of McIntyre’s lots and now are preselling those lots.

Myrna said she got a warm reception from both the Sidney hospital and school system when she put the word out about the new housing.

“The school district in Sidney is considering buying an apartment building. They’re trying to get ahead of the curve,” she said.

Terry Construction, which has built numerous affordable-housing projects in the Flathead Valley, will sell the Sidney homes for $225,000 to $244,000. They’ll come equipped with features such as unusually tall garage doors to accommodate oilfield rigs.

“Ron will live in a fifth-wheel trailer on the [subdivision] land,” Myrna said. “I’ll be here with the kids.”

It will be a challenge to get RV hook-ups for their subcontractors once work is in full swing, she said.

Several of the Terrys’ subcontractors already are working in places such as Watford City, N.D., where plumbers and drywall installers are in high demand.

Like others who have crossed the state to be able to feed their families during the recession, the Terrys are waiting for the Flathead economy to turn around. This is home and the place they’d rather make a living.

In the Flathead, residents often are waiting longer for remodeling jobs or plumbing because the oil boom has harnessed those subcontractors.

McIntyre said building in Eastern Montana is a great opportunity for him.

“I can’t think of a better area in the U.S. to be a developer,” he said. “There’s no place as hot as the Williston Basin.”

He’s done his homework on the potential of oil production from the prolific Bakken Formation.

What he’s gleaned from his research is that there are 30,000 to 40,000 more wells to drill in North Dakota and Montana. Oil companies currently are drilling about 2,000 wells a year, and each well employs 100 people directly during the drilling process. Then there are the related jobs, such as trucking water to disposal wells.

“The spin-off is totally mind-boggling,” McIntyre said.

He said hundreds of miles of gas and oil pipeline will be built in coming years, and he’s heard talk of the need for up to 50 more rail terminals between Sidney and Minot, N.D. There’s a proposal for a refinery under way, and two gas plants are under construction in the Watford City area.

Highway and rail construction will be substantial, he predicted.

“Some say they’ll have to expand the railroad to two tracks across” North Dakota and Montana to handle the oil load,” McIntyre said. “It’s billions of dollars. It’s a magnitude greater than anything they’ve seen before. Many oil companies have billions planned for infrastructure.”

McIntyre is spending three to four days a month in the Sidney area as he finalizes plans for his development.

“We’ll try to do panelization of walls and ship over there to cut down the building time,” he said. “We’ll work seven days a week in the summer.”

Patti Gregerson, executive director of the Flathead Building Association, said her organization isn’t seeing a big exodus of contractors leaving the Flathead. A more typical scenario is that contractors are setting up branch offices in Eastern Montana and Western North Dakota and sending crews there to work.

“It’s a diversification if anything, while they keep the home fires burning here,” Gregerson said. “And that’s a good and healthy thing.”

Glacier Bank is financing a new 72-room Best Western hotel in Sidney that should be done in another three months, said Mike Crimmins, vice president of Glacier Bank.

The hotel owner is a Glacier Bank customer who has an ownership interest in several lodging facilities including two other motels in Sidney.

Crimmins and other bank officials traveled to Sidney earlier this month to check on the Best Western project  and got a feel for how valuable hotel rooms are right now in that area. He and his colleagues were able to get the last room in town only because a painting crew showed up 15 minutes past the check-in deadline. The painters had to travel an hour south to Glendive to get a room and weren’t too happy about their poor timing, Crimmins said.

“Rooms are at an absolute premium,” he said.

Crimmins said Glacier Bank is willing to look at financing projects for their existing customers.

“The big unknown is how long does this oil boom last?” he said. “This thing has far greater potential than in the ’80s, but in the political arena there’s uncertainty.”

The challenge is anticipating at what point supply meets demand. Financial institutions also are challenged by the changing nature of an agriculture-based economy in that area, Crimmins said. “Where do you draw on the expertise” needed to finance projects in an oil economy?

For now anyway, the ramp-up for housing and infrastructure to meet the demands of a booming economy has been a blessing for many workers and companies struggling to survive.

“It’s good for Montana and it’s good for Montana folks,” Crimmins said.

Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at lhintze@dailyinterlake.com.