City of Kalispell Tax Increment Financing Districts Annual Report

Transcription

1 City of Kalispell Tax Increment Financing Districts Annual Report Prepared by: Kalispell Urban Renewal Agency & Community & Economic Development Department

2 Introduction 1 The intent of this report is to provide a comprehensive understanding of existing Tax Increment Financing (TIF) Districts. Knowledge of TIF projects and other actions related to TIF in addition to financial reports serve to improve TIF management and implementation on behalf of the community. This report documents Kalispell Tax Increment Financing Districts for the period September 2016 through August Summary Tax Increment Financing District law is found at Title 7, Chapter 15, Parts 42 and 43, of the Montana Code Annotated. In Kalispell, applications for Tax Increment Financing are accepted through the Community and Economic Development Department, reviewed and considered by the Urban Renewal Agency and ultimately decided by City Council. - I $39,229,175 $42,373,220 8% I $8,387,046 $8,394,103.84% I $9,598,211 $9,536, % $1,141, % [i1,16 The Montana Department of Revenue 2017 Certified Taxable Valuation Information annual report is the source of all current taxable, base taxable and incremental values utilized in this report. The Department of Revenue s information for the Kalispell City taxing jurisdiction was certified August 2, Note that certification of values is determined on a single day in the calendar year and therefore provides a snapshot of value. It is not uncommon for values to vary between the time of the certification and the actual collection of taxes by the Department of Revenue. It should be mentioned that due to changes in the Department of Revenue s valuation method in 2015 readers saw significant changes in valuation from 2014 to 2015, with values becoming more comparable from 2015 to 2016 and due to the the addition of the Glacier Rail Park Targeted Economic Development District (TEDD) TIF base values increased from 2016 to Further, it is important to note that the West Side TIF boundary was expanded by City Council action in December 2012 to include the Core Area leading to a recalculation of the base taxable value. The recalculation together with the significant variations in taxable values experienced throughout the City creates year to year calculations that can be counter-intuitive. The City of Kalispell Tax Increment Financing Districts are overseen by a five-member volunteer board, the Urban Renewal Agency (URA). Board members are appointed by City Council to serve four-year, staggered terms. Members and board terms for :

3 2 Member Marc RoW Jeff Zauner Dave Girardot Shannon Freix Matt Venturini Position Chairman Member Member Member Member Term Expires 04/30/ /30/ /30/ /30/ /30/2020 The URA held five meetings and attended one public meeting from January 2017 through August The Urban Renewal Agency receives staff support from the City of Kalispell, Community and Economic Development Department. The Urban Renewal Agency meeting history for the period September 2016 to August 2017 follows: Meeting Date Attendance Action 01/10/2017 RoId, Zauner, Venturini Discussion of proposed dog park in the South Kalispell/Airport TIE District, acceptance of duties as Kalispell Brownfields Committee, Northwest Drywall Memorandum of Understanding overview 03/01/2017 All Members City Manager, Doug Russell, gave an overview of 2017 TIF/URA legislative proposals, acceptance of TIE Annual Report, Brownfields Program update, timeline for construction at Glacier Rail Park shared 05/17/2017 All Members Discussion of 18 th Street and Airport Road intersection, Brownfields Program update, TIGER/Kalispell Core & Rail Redevelopment Project update 07/19/2017 Rold, Zauner, Ereix, Venturini City Manager shared details possible airport users group management of city airport, 18 th Street and Airport Road intersection and Street and Airport Road at the Hwy 93 South intersection modification discussion, Brownfields Program briefing, TIGER/Kalispell Core & Rail Redevelopment Project update 08/16/2017 All Members Public Works Director, Susie Turner, provided details regarding possible modification of the 18 Street & Airport Road and/or 13 Street & Airport Road at Hwy 93 South intersection modifications, Board moved to make a recommendation to City Council for a traffic study of the two intersections, invitation to TIGER/Kalispell Core & Rail Redevelopment Project groundbreaking ceremony shared

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5 4 West Side/Core Area Tax Increment Financing District In accordance with provisions of Montana State Law, City Council adopted Ordinance No on March 17, 1997, establishing the West Side Urban Renewal Tax Increment Financing District and adopting the urban renewal plan. The ordinance also established January 1, 1997, as the base year for calculating the tax increment of the district. The enabling legislation documents the following purpose of the West Side TIF: Whereas, the Plan [West Side Urban Renewal Plan] for the project area requires, among other things: a. setting a pattern of land use incorporating sensitivity to neighboring uses; b. creating a circulation pattern that maintains a separation of incompatible uses; c. creating a street system that can accommodate increase in traffic safety; and d. providing a full range of services to area. In November 2012, City of Kalispell Ordinance No modified the boundaries of the Westside TIF District to include an area referred to as the Core Area. The Core Area encompasses 365 acres and is focused along the major roadways of Idaho Street, Main Street, Center Street, Meridian Street, and 5th Avenue West North. In February 2013, Kalispell City Council Resolution No was adopted as an amendment to the West Side Urban Renewal Plan, the Core Area Plan. The intent of the Core Area Plan is to eliminate blight and encourage redevelopment in the district through the use of TIF as specified by State Law. Current City Council Ward: Ward 1 Council Members: Kari Gabriel and Sandy Carlson T1 $7,932,918 0 $8,211, % $278, % I The table shows decrease in both the current taxable value and the total incremental value from 2016 to The current assessed value of property within the West Side TIE District increased from $7,932,918 to $8,332,869 resulting in 5% growth from the base assessed value established in 2012 at the time of the District s expansion. On September 10, 2014 the URA approved a 6-month extension of the 11 Main Street Developer s Agreement to accommodate street and sidewalk closure required for the extension of the fire line to the building as well as façade improvements, the project was completed in November The URA also approved Historic Façade Improvement Grant funding for 7 Main Street to accompany the already approved Westside TIF Technical Assistance funding for repair

6 5 and rehabilitation of the building façade comparable to historic standards, this project was completed in June The recently restored property was recently purchased by a local business owner and will soon be opening as Noble Dance studio with long-term lease apartments on the 2 floor. In April 2015, City Council approved Resolution No.5719, accepting the recommendation by the City of Kalispell Urban Renewal Agency to identify the project known as the Kalispell Core and Rail Redevelopment Project as an urban renewal project that may be financed by West Side Tax Increment Funds. The funds identified are considered match for the Transportation Investment Generating Economic Recovery (TIGER) grant and will be used to fund a portion of the Kalispell Core and Rail Redevelopment Project. In October 2015, the City of Kalispell and its partner Flathead County Economic Development Authority (FCEDA) were awarded $10 million in TIGER VII grant funding for the Kalispell Core and Rail Redevelopment Project, these funds were obligated and construction on the Glacier Rail Park site began in August This project begins with the construction of the new Glacier Rail Park at the reclaimed gravel pit on the east side of Kalispell, allowing the two businesses currently using rail services to relocate to the new rail park. Following the relocation of those businesses the old rail line, currently dissecting the center of Kalispell, will be converted into a bike and pedestrian trail, creating a safe, alternative transportation corridor that connects citizens of this economically disadvantaged section of the community to work and education opportunities. This project allows for redevelopment of approximately 44 acres of vacant, blighted, brownfields properties within the area, creating new vitality in the epicenter of the community. For more information and updates on this project please visit: This project has become an economic catalyst within the Kalispell Core Area and has led to a number of redevelopment projects in the area from 2012 to present: Year of Completion Project Name Permit Amount Location 2012 A to Z Engineering $210, E Center St Loading Dock/Brannigan s Renovation! 2012 $700, E Center St Addition 2013 Depot Place Senior Living $2,741, E Center St 2013 Flathead Liquor $119, Hwy 2 W 2013 River Church $587, Hwy 2 W 2014 Starbucks $750, N Main St 2014 Kalispell Kidds Dental $1,300, N Meridian Main Street $83,000 7 Main St 2016 Papa Murphy s $400, E Center St

7 Fuel Fitness $1,700, Hwy 2 W 2017 Herberger s Addition $2,000, N Main St Main Street Noble Dance Studio $50,000 7 Main Street 2017 NW Automotive Expansion $45, Ave W 2017 Rivals Sports Bar $50, Hwy 2 W 2017 McDonalds Rebuild $815, Hwy 2 W 2017 Sunrift Beer Company $117, t Ave WN TOTAL $11,669,038 The West Side TIF District will expire on January 1, West Side TIF Fiscal Year 2016 Revenue (7/1/16-6/30/17) West Side TIF beginning cash July 1, 2016: $4,002,943 Tax Increment Revenue: $528,471 Investment Earnings Revenue: $41,119 Fiscal Year 2017 Available for Expenditures: $4,572,533 West Side TIF Fiscal Year 2017 Expenditures and Commitments: Personal Services: ($50,216) Contract Services: ($2,192) Administration Transfer: ($3,464) Debt Service: ($34,016) Pre-TIGER ($418,160) Redevelopment Activity: ($9,700) Total Expenditures and Commitments: ($517,748) Uncommitted Cash as of 6/30/2017: $4,054,785

8 Date: Sept 12th, 2017 FilePath: IKristaIO9l

9 8 South Kalispell/Airport TIF In accordance with provisions of Montana State Law, City Council adopted Ordinance No on July 1, 1996, establishing the City Airport/Athletic Complex Urban Renewal District and adopting the Kalispell City Airport/Athletic Complex Redevelopment Plan Analysis establishing January 1, 1996, as the base year for calculating the tax increment of the district. The enabling legislation documents the following purpose of the Airport Tax Increment Finance District: Whereas, among the identified goals and objectives of the Urban Renewal Plan are: a. Minimizing hazards to navigation; b. Developing the airport in accordance with an airport layout plan; c. Increasing development opportunities on nearby properties; d. Promoting compatible land use in and around the airport; e. Establishing a funding mechanism for airport properties; and f. Establishing a priority schedule for plan implementation. Ordinance No was adopted by Council on July 18, 2005, amending the City Airport/Athletic Complex Redevelopment Plan, authorizing an urban renewal project and approving revenue bonds. Current City Council Ward: Ward 4 Council Members: Tim Kluesner and Phil Guiffrida South KalispelAirport TIF District South Base Taxable Value South Kalispell/Airport Current Taxable Value Total South Kalispell/Airport TIF Incremental Value $453,612 $1,149,211 $695,599 $453,612 0 $1,191, % $737, % The table above compares values from year 2016 to 2017, showing an increase in both the current taxable value and the total incremental value. It should be noted that the current assessed value of property within the South Kalispell/Airport TIF District has increased from $453,612 to $1,191,058 resulting in a 163% increase above the base assessed value established in 1996 at time of District s creation. As a result of project bonding issued in September 2005, beginning January 1, 2006, and continuing each year through July 1,2020, up to $500,000 of the annual increment will be utilized to pay debt service. In the November 2013 election, the city electorate, by referendum, voted to reject a City Council proposal to undertake significant upgrades at the city airport. In response to the referendum vote City Council retained the services of CTA Architects/Engineers to provide planning services for updating the South Kalispell/Airport Urban Renewal Plan. This update,

10 through public outreach, identified key development and redevelopment concepts in the South Kalispell Corridor, to specifically develop a series of short term and long term options for the airport, airport lands and surrounding affected neighborhoods. City Council approved Ordinance No on August 1, 2016 amending the City of Kalispell Airport/Athletic Complex Redevelopment Plan to adopt and incorporate The South Kalispell Urban Renewal Plan. As a result of the plan, a recently established airport users group has approached the City of Kalispell with a proposal to take over management of the airport, details are currently in negotiation and will go before City Council for consideration. The South Kalispell/Airport TIF District will expire July 1, South Kalispell/Airport TIF Fiscal Year 2016 Revenue (7/1/16-6/30/17) South Kalispell/ Airport TIF beginning cash July 1, 2016: $1,441,237 Tax Increment Revenue: $600,745 Investment Earnings Revenue: $18,304 Fiscal Year 2016 Available for Expenditures: $2,060,286 South Kalispell/Airport TIF Fiscal Year 2017 Expenditures and Commitments: Personal Services: ($23,902) Contract Services: ($1,939) Administration Transfer: ($9,243) Debt Service: ($178,483) Redevelopment Activity: ($0) Total Expenditures and Commitments: ($213,567) Uncommitted Cash as of 6/30/2017: $1,846,719 9

11 10 ANORTH Airport TIF- City of Kalispell 2:, - -p i:. r,1. I 4. fl LUES1ON A4 11 GREcNCV ALDR :1 MERGANR DR I Date: Sept 12th, 2017 FilePath:I/2017/KristaJOSl Kalispell Planning Dept Feet

12 11 Old School Station, Industrial In accordance with provisions of Montana State Law, City Council adopted Ordinance No on November 21, 2005, establishing the Old School Station Industrial Tax Increment Financing District, identifying its boundaries and establishing January 1, 2005, as the base year for calculating the tax increment of the district. Current City Council Ward: Ward 4 Council Members: Tim Kluesner and Phil Guiffrida The table above shows a decrease in current taxable value or incremental value from 2016 to It should be noted that the current assessed value of property within the Old School Station Industrial District increased from $126 to $18,877, a 14,882% over the base assessed value established in 2005 at time of District s creation. This high percentage of increase in value is the result of the TIF being created while the properties were still undeveloped sites. A portion of the annual increment from this TIF is pledged for repayment of Special Improvement District bonds, as needed and as funds are available, over the life of the bond, January 1, 2007, through July 1, In fiscal year 2017 $15,000 was transferred for this purpose. City Council took action by means of Resolution No on April 6, 2015 to take assignment from Flathead County of its tax liens on the six parcels of Old School Station, for both the Technology and Industrial Districts, by paying past dues taxes and assessments, subsequently, Council passed Resolution No on April 20, 2015 to retain and sell the properties. City Council selected Flathead Valley Brokers to list and market the properties. For additional information on the properties for sale, please visit the following webpage: economic development! The Old School Station Industrial TIF is scheduled to terminate on the fifteenth year following its creation on January 1, 2020.

13 12 Old School Station Industrial Fiscal Year 2017 Revenue (7/1/16-6/30/17) OSS TIF beginning cash July 1, 2016: $10,279 Tax Increment Revenue: $9,840 Investment Earnings Revenue: $146 Fiscal Year 2017 Available for Expenditures: $20,265 Old School Station Industrial Fiscal Year 2017 Expenditures and Commitments: Personal Services: ($0) Contract Services: ($15,000) Administration Transfer: ($0) Debt Service: ($0) Redevelopment Activity: ($0) Total Expenditures and Commitments: ($15,000) Uncommitted Cash as of 6/30/2017: $5,265

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15 14 Old School Station, Technology In accordance with provisions of Montana State Law, City Council adopted Ordinance No on November 21, 2005, establishing the Old School Station Technology Tax Increment Financing District, identifying its boundaries and establishing January 1, 2005, as the base year for calculating the tax increment of the district. Current City Council Ward: Ward 4 Council Members: Tim Kluesner and Phil Guiffrida The table above compares the values for year 2016 to 2017, showing an increase in current taxable value and total incremental value. The current assessed value of property within the Old School Station Technology TIF District increased from $390 to $95,241, a 27,307% increase over the base assessed value established in 2005 at the time of the District s creation. This high percentage of increase in value is the result of the TIF being created while the properties were still undeveloped sites. A portion of the annual increment from this TIF is pledged for repayment of Special Improvement District bonds, as needed and as funds are available, over the life of the bond, January 1, 2007, through July 1, In fiscal year 2015, $60,000 was transferred for this purpose. The Old School Station Technology TIF is scheduled to terminate on the fifteenth year following its creation on January 1, 2020.

16 15 Old School Station Technology Fiscal Year 2017 Revenue (7/1/16-6/30/17) OSS TIF beginning cash July 1, 2016: $9,731 Tax Increment Revenue: $62,938 Investment Earnings Revenue: $150 Fiscal Year 2017 Available for Expenditures: $72,819 Old School Station Technology Fiscal Year 2017 Expenditures and Commitments: Personal Services: ($0) Contract Services: ($56,123) Reimbursements/other: ($0) Debt Service: ($0) Redevelopment Activity: ($0) Total Expenditures and Commitments: ($56,123) Uncommitted Cash as of 6/30/2017: $16,696

17 16 Glacier Rail Park Targeted Economic Development District In accordance with provisions of Montana State Law, City Council adopted Ordinance No on May 2, 2016, establishing the Glacier Rail Park Targeted Economic Development District, identifying its boundaries and establishing January 1, 2016, as the base year for calculating the tax increment of the district. Current City Council Ward: Ward 2 Council Members: Wayne Saverud and Chad Graham Glacier Rail Park TEDD Glacier Rail Park Base Taxable Value Glacier Rail Park Current Taxable Value Glacier Rail Park TIF Incremental Value 2017 $7,057 $7,676 $619 The Glacier Rail Park Development Plan embraces a 104-acre area under multiple ownerships located in the heart of Flathead County in and adjacent to the City of Kalispell. The City of Kalispell in conjunction with the Flathead County Economic Development Authority (FCEDA) sought to foster the development of secondary, value adding industries within the Glacier Rail Park Plan Area as part of the City s overall mission to meet its needs of promoting economic development, improving area employment opportunities and expanding the community s tax base. This effort was made possible through the creation of a Targeted Economic Development District (TEDD) on 49 acres of land within the larger Glacier Rail Park Plan Boundary. The City of Kalispell will utilize Tax Increment Financing as part of the overall strategy to provide infrastructure in support of value-adding industry pursuant to the 2013 Targeted Economic Development District Act, embodied in , Montana Code Annotated. The TEDD provides the City of Kalispell with the ability to employ tax increment financing as provided in , MCA for appropriate public infrastructure projects in support of value-adding industry or secondary value-added products or commodities within the Glacier Rail Park Plan Boundary. The Glacier Rail Park TEDD allows the City to appropriately marshal tax revenues to help fund the public infrastructure that will spur a diverse private business base to invest in the area. It is the primary focus of the Glacier Rail Park TEDD is to develop the necessary infrastructure to encourage the location, expansion and retention of diverse value added industries suitable for an industrial Rail Park. The goal of the Glacier Rail Park TEDD are to assist the Flathead Valley to recover from being an Economically Distressed Area by accomplishing the following: a) To foster economic vitality in the Valley and increase employment opportunities through infrastructure development in support of secondary value-adding industry;

18 b) To provide support for business and industries that preserve the quality of life for all residents; c) To facilitate the creation of a diversified tenant base of multiple independent tenants within the TEDD; d) To encourage secondary, value-adding industries that take advantage of the Valley s resources for the purpose of engaging in interstate commerce; and e) To encourage the orderly growth and development of the community. Investment in this project allows for the redevelopment of the former McElroy/Wilson gravel pit into an active industrial rail park creating a long term boon to the local economy. The Glacier Rail Park transforms acres and decades of disinvestment and decay into a robust and vibrant economic hub. 17 The Glacier Rail Park TEDD is scheduled to terminate on the fifteenth year following its creation on January 1, 2031.

19 -, 18 I d Date: Sept 12th, 2017 FilePath:I/201 7IKria/ Kalispell Planning Dept

20 19 This report reviewed and approved by the Urban Renewal Agency on October 18, 2017: Dcvb /8, Date MarcjRold, Urban RenwaI Agency Chairman Katharine Thompson, Assistant D(rector of Community & Economic Development Krista mmers, Cpmunity Development Coordinator

21 20 Submit Inquiries To: Katharine Thompson Assistant Director of Community & Economic Development 201 First Avenue East Kalispell, MT / CIT) OF -q MONTANA