There was a time when the Capital Lodge 'man camp' outside Tioga, North Dakota was teeming with oilfield workers, as many as 1,000 at the peak.
The guests there occasionally made local headlines for brawls — a couple of them violent. But more recently, Capital Lodge’s name popped up in local papers for a very different reason. The owners are looking to downsize.
“This facility here has slowed down dramatically,” says Tony Miller, an oilfield worker who has stayed at Capital Lodge. “When I first started coming here right around December, you'd wait in line to get food. And now it's kind of come and go as you please.”
In March, David Brown, the vice president for operations, acknowledged that Capital Lodge was looking to move some of its units to other parts of the Bakken oil patch. Its investors also looked into the possibility of converting some of the mancamp into a commercial motel. Occupancy had dropped below 300 during the winter months, though Brown said some of that could be seasonal.
Trends in the oil industry do not favor a rebound for the man camp. Drilling rig counts and payrolls have both dropped off. Man camps in North Dakota and Texas are both taking a hit as a result, according to Ed Hirs, an energy economist at the University of Houston.
“We know that the rates they charge per day have dropped in some cases by more than half,” says Hirs. “It really doesn't matter what the rate is. They don't have anyone there to pay $10 a day, let alone $100 a day.”
Hirs points out the man camps were always meant to be temporary. The goal was to replace them with new apartments and homes — but he says some of those more permanent projects are in trouble, too.
“I've talked to a one real estate developer who started a $30 million project in the heart of the Bakken with the idea that, 'Heck, this might be worth $60 million,'” Hirs says. “But now they're looking at trying to make due with less than half the projected occupancy and perhaps less than half the projected rental rates.”
The president of the Williston Area Builders Association, Dave Nordenstrom, says the spring inventory of homes for sale was elevated, another sign of softer demand. But he’s not worried about a glut of homes on the market.
“I think as time goes on here that will shake out and builders will slow down some of their production,” he says.
Like a lot of locals, Nordenstrom says a break from the frenzied pace of the oil boom is welcome. He argues that the oil industry may be down but not out. Experts say there’s likely a 20-year supply of oil in the Bakken shale area, and the workers who support the industry going forward will still need housing.
“The oil isn’t going anywhere,” Nordenstrom says. "It's still going to be there.”
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