Hometown entrepreneur, Chris Nelson, founder and CEO of Zoot Enterprises, is bringing a portion of his multi-million dollar company to Billings. In a joint announcement last week, Nelson announced that he will purchase the GE Building, at 3333 Hesper Road, from Big Sky Economic Development (BSED).
The announcement came at the regular monthly meeting of the BSED Board, which then unanimously approved a letter of intent spelling out the terms of an agreement in which Zoot will purchase the building for $8 million. The transaction is expected to close in a matter of just a few months.
“We are marrying the software for which we are known with GE-trained staff to deliver top-notch service to our customers, and what could be better than doing so in my home town?” quizzed Nelson, whose plans include recruiting some of the approximately 25 people who will be released by GE when they leave at the end of 2017.
Nelson’s joy at the prospect of the GE building acquisition seemed to be matched by the roomful of Billings business and civic leaders who had gathered to attend a half-day BSED planning event on April 13 at the Hilton Garden Inn.
Nelson founded Zoot in 1990, when he developed an instant credit decision service. The technology allows consumers to apply for and receive store credit cards within seconds. The company has since grown to become a leader in the financial technology (fintech) sector. Zoot now does business around the globe, approving $1.5 million in loans every day. It employs 265 people at its headquarters near Bozeman.
Part of BSED’s deal with Zoot includes helping to cover an estimated $2.5 million cost to retrofit the building to meet Zoot’s needs. That will include contributing $500,000 from BSED’s opportunity fund, as well as passing along $600,000 that was part of their settlement with GE, and $763,500 GE paid to cover three years of costs to operate and maintain the building.
Arveschoug said that BSED – an entity of county government that provides economic development services – will assist Zoot in the future in applying for business assistance programs including job training funds for which the company will probably qualify.
It was quite recent — on March 31 – that BSED completed an agreement to terminate a long-term lease held by GE.
BSED built the GE facility in 2009 to recruit GE Capital to Billings. Over a year ago, GE announced that they were divesting themselves of GE Capital, the division that was headquartered there.
BSED Director Steve Arveschoug said that his agency worked with GE to develop a win-win scenario that would not only leave BSED whole in regard to the building, but to retain as many GE employees employed in the community as possible.
Arveschoug emphasized that GE has continued their commitment to the community throughout the process, and will continue to work to make the transition of ownership to Zoot Enterprises as smooth as possible. GE expects to conclude its business in Billings by the end of 2017.
“GE has been an excellent partner from the beginning and it is through our work with them that we are able to position ourselves to effectively recruit Zoot to the Billings market,” he said.
“It all started with a tour,” said Arveschoug. “We reached out to Zoot back in February of 2016 to tour their facility in Bozeman and brainstorm prospects for the Billings GE team and facility.” As the dialogue between Zoot and Big Sky Economic Development continued, it became clear that there was an opportunity for Zoot to grow into the GE space, retain a portion of the GE team, and expand the services they offer financial institutions world-wide.
“It is a significant opportunity for growth,” said Arveschoug. “It makes sense for this community to sell the building” to a Montana-based company, he added.
Being able to sell the building so quickly relieves BSED of considerable potential future costs, from its continued maintenance and security to costs associated with marketing it, as well as the risk associated with owning a highly-specialized facility, encumbered with debt, and having to find a tenant that fit with its purpose.
The fit with Zoot Enterprises could hardly be better, and “The proposal puts BSED in position to pivot and look for the next job -creating opportunity,” said Arveschoug.
“Coming back to Billings and investing in Billings is a great experience,” said Nelson, who with his brother, Mike, grew up in Billings. Together, the brothers renovated the historic Northern Hotel in downtown area, which Mike now manages.
Chris Nelson also owns two other downtown buildings, one of which he said he purchased with the intent to relocate Zoot Enterprise in Billings, a plan rejected by his employees who did not want to relocate.
Being able to expand his business as it grows into Billings not only serves that goal, but also helps to build redundancy into his business, which is an important part of their disaster plan. Nelson explained that they have built other computer centers in other areas of the country and the world providing similar redundancy including Salt Lake City, Frankfurt Germany, London England, and Amsterdam Holland.
“Now, with several financial back-office operations in Billings and an excellent team being released from GE, Zoot sees a significant opportunity to grow in Billings,” said Nelson.
Zoot Enterprises continues to be a global provider of advanced origination, acquisition, and decision management solutions. Its customer-centric tools and services enable Zoot’s clients to add value and differentiation, while providing nimble, scalable solutions to specific business objectives. A leader in the fintech industry, Zoot’s cloud based secure processing environment delivers millisecond real time decisions accessing hundreds of cutting edge data sources to help reduce risk and increase conversions. The company’s international client base includes major financial institutions, retailers and payment providers.
Nelson said he expects his company to start with about ten employees and to be employing close to 25 within a year. “It depends on what projects we get,” he said. Nelson expressed optimism about being able to find the skills and talent needed from the Billings labor market, as Zoot continues to grow. As an industry develops, hiring a specific skill set, a community eventually generates an adequate labor pool, he explained, “and Billings has arrived.”
Nelson explained that prospects for future employment by the company are significant because they do almost everything “in house,” for security purposes. They offer a “whole strata of jobs,” said Nelson.
Nelson added that as he has talked to some of their Silicon Valley clients about his new plans, some of them have expressed interest in locating in Billings themselves, and have inquired about what the community has to offer.
Nelson said that it has been wonderful to build his company in Montana. “We would never have been able to do what we have done in the Silicon Valley,” he said.