Andy Montgomery seemed a fish out of the water - or desert, really - as a guest speaker at a global investor gathering in France this summer. Here was the chairman and co-founder of a small bank from California's arid Coachella Valley sharing the mike at the World Investment Conference with the likes of GE International CEO Ferdinando Beccalli-Falco and Pascal Cagni, the French head of Apple. "I was on a panel with the CEO of Siemens [France]," says Montgomery, the head of Western Community Bancshares, a two-bank holding company with $378 million of assets. "That dichotomy was unusual."
Montgomery isn't awed by the big names - his father, after all, is former Great Western Bank chief James Montgomery. But his purpose there wasn't to sell El Paseo Bank, his company's California subsidiary. He was part of an entourage of Coachella region business leaders who traveled last June to La Baule to recruit European and Asian investors for the burgeoning alternative energy businesses in their perpetually sunny and windy "Desert Empire."
"Any time we can get exposure for the Coachella Valley, it's a good thing," says Montgomery, 41. Sitting on two panels and sharing guest-of-honor recognition with the former Bharain ambassador to the U.S., Montgomery that week wore a hat most small bankers have never been fitted for: the roving economic development ambassador.
Community bankers like Montgomery are normally the beneficiaries, not the leading suitors, of major corporate relocations and external investment. But these are not normal times. In Coachella, a crushed housing market and lagging tourism industry in former hotspots like Palm Springs and Rancho Mirage is seeding new ideas for jobs and opportunity - and hence, a future base of customer growth for El Paseo Bank. "A rising tide in the community is just going to help our bank in the long run," Montgomery says.
Part of Coachella Valley's economic revival blueprint is to diversify with renewable energy businesses. Not just power generation, but also research and development corporations, says Bob Marra, president of a local market intelligence firm and founder of the Coachella Valley Economic Partnership. "Andy's been one of the major supports of the organization," traveling and speaking at investment conferences across the state, Marra says. One of the ways Montgomery sells Coachella Valley's green revolution is promoting how the city of Palm Desert is funding long-term energy investment loans to businesses and residences that encourage owners to use solar panels for power consumption. There's also talk of introducing a "feed-in" program where users could sell excess capacity back into the grid, thus making a business relocation to the Coachella Valley even more attractive. "You zero out your electricity bill," Marra says.
When he hits the road, Montgomery likes to promote the idea of the country's "second cities" as preferred markets for investment, in places like Coachella and Utah (where Western operates Frontier Bank in Park City). So does Rob Fazzini, a Normal, Ill., regional market president for Busey Bank.
Fazzini himself was busy this past year on a low-scale economic development plan for his community: bringing a minor league baseball team to Normal. Town leaders saw the crowds, fun and money that independent league teams brought to upstate Joliet, Ill., and Wisconsin communities. "They thought if we could draw in a minor league baseball team, we would draw people from a 50-mile radius into our town, and help all the businesses in town," Fazzini says.
The town asked Fazzini and the $4.3 billion-asset Busey Bank to spearhead loan participations in the construction of an $11.5-million ballpark. Fazzini thought he could round up a few local banks for financing, but most banks passed due to capital restraints or doubts about the project. "Unfortunately it took us visiting 22 other banks to find the four [participating] banks," Fazzini says. He spent four months knocking on doors, including as far south as St. Louis (150 miles), to recruit banks. The final bank needed for the consortium joined in March, and construction began on a stadium the town will share with the local community college. By next spring, the Normal Cornbelters will play ball - and draw from a base of nearly 400,000 people from surrounding areas like Springfield and Champagne.
According to an economic impact study done for Normal, stadium construction will create nearly 500 jobs, and the town will recoup its $1.5 million investment from the estimated $4 million in stadium revenues and added annual sales for restaurants, gas stations and hotels. "It's definitely not a minor-league business," Fazzini says.
As for the Coachella Valley region, there are no definitive signs of fruit yet from the June investor conference. But Montgomery says he plans to continue his proselytizing efforts for his backyard. "Nothing's going to happen very rapidly, and the problems in California are pretty significant," Montgomery says. "There's no magic elixir. But ultimately the strength of California is attracting investment."