HomeMy WebLinkAboutMURD Revised TIF Assistance 102816 draftMIDTOWN URBAN RENEWAL DISRICT
TAX INCREMENT FINANCIAL ASSISTANCE and APPLICATION
INTRODUCTION
The Bozeman City Commission has authorized the Midtown Urban Renewal Board to implement
and administer the tax increment financing assistance program in the Midtown Urban Renewal District (hereinafter referred to as the “District”). Financial assistance may be awarded for
remediation of blight through the redevelopment and rehabilitation of properties and improvements to public infrastructure within the District. These grants are dispersed at the completion
of all improvements associated with the project.
Applications are subject to program eligibility criteria and project guidelines listed below. In addition, project applications will
be accepted and processed at intervals selected by City staff. All awards are contingent on the availability of funds for the program.
PURPOSE
The purpose of this document is to provide
a guideline for the District to offer Tax Increment Financing Assistance for development activities in District.
As a matter of policy, the District will consider using Tax Increment
Financing to assist private developments only in those circumstances in which the proposed private projects show a demonstrated financing gap and meet the goals identified in the Bozeman
Midtown Urban Renewal Plan.
This policy shall be used as a guide in processing and reviewing applications requesting Tax Increment Financing assistance. The City shall have the option
of amending or waiving sections of this policy when determined necessary or appropriate. In amending or waiving any sections of this policy, the City shall document the reason for the
deviation in the project’s development agreement.
The fundamental purpose of Tax Increment Financing assistance is to encourage desirable development/redevelopment projects that would
not otherwise occur “but for” the assistance provided through Tax Increment Financing.
It is the intent of the City to provide a minimum amount of Tax Increment Financing assistance.
The provision of financial assistance is at the sole discretion of the City. The City reserves the right to reject or approve projects on a case-by-case basis, taking into account established
policies, specific project criteria and the demand on City services in relation to the potential benefits to be received from the proposed project. Meeting policy guidelines or other
criteria does not guarantee the award of Tax Increment Financing assistance. Furthermore, the approval or denial of one project is not intended to set precedent for approval or denial
of another project.
PROGRAM OBJECTIVES
The primary objective of the Bozeman Midtown Urban Renewal District is to provide a program to encourage investment in development and redevelopment
of commercial and mixed use property within the District in accordance with the provisions of the Montana Urban Renewal Law.
Additional objectives are to:
Reduce blighting influences in the District;
Encourage private investment in commercial property in the District through the use of public incentives;
Expand the property tax base in the District through private investment in income producing properties; and
Stimulate economic and business development within the District;
The grants
are awarded at the discretion of the District Board and the Bozeman City Commission, based upon review of the Applicant's compliance with program objectives, eligibility requirements,
and eligible construction activities.
GENERAL POLICIES
Tax Increment Financing assistance will not be provided to projects that have the financial feasibility to proceed without
the benefit of the assistance. Individuals requesting Tax Increment Financing assistance must demonstrate, to the satisfaction of the District, sufficient private financing commitments
in the project.
The applicant shall provide any market and financial feasibility studies, appraisals or other information provided to private lenders for the project as well as any
other information or data which the District, or its financial consultants, may require in order to review the need for Tax Increment Financing assistance.
Tax Increment Financing assistance
will not be used for projects that place extraordinary demands on District infrastructure or services.
If requested by the District, the applicant shall provide adequate financial guarantees
to ensure completion of the project, including, but not limited to, assessment agreements, letters of credit, cash escrow and personal guarantees.
The applicant must be able to demonstrate,
to the District’s satisfaction, an ability to construct, operate and maintain the proposed project based upon past experience, general reputation and credit history.
The applicant shall
provide sufficient market, financial, environmental and other data relative to the successful operation of the project.
The applicant must retain ownership of the project long enough
to complete it, to stabilize its occupancy, to establish the project management, and to initiate payment of taxes based on the increased project value.
The level of Tax Increment Financing
assistance should be reduced to the lowest possible level in the least amount of time by maximizing the use of private debt and equity financing first.
ELIGIBLE COSTS
TIF eligible expenses are defined by Montana Code Annotated and which the City has further limited for eligibility for financial assistance. The project seeking TIF assistance
must be located within the boundary of the TIF district.
Costs related to the following are eligible for financial assistance:
Demolition and removal of structures
Construction and
improvement of public improvements or infrastructure as allowed by the Montana Urban Renewal Law, and applicable impact fees
Requests for funding above $50,000 will require the review
and approval of the Bozeman City Commission.
APPLICATION PROCESS AND PROCEDURE
Application for Tax Increment Financing assistance shall be made on the forms provided by the District.
In
addition to the information requested in the Tax Increment Financing assistance application, the applicant shall submit a preliminary financial commitment from a financial institution;
plans and/or drawings for the project; background information on the applicant; a proforma analysis; and financial statements. The District may also require that the applicant meet with
the City of Bozeman Finance Department to determine the level of increment that will be generated by the proposed project.
Completed applications will be submitted to the Economic Development
Department for review and comment. Incomplete forms will be returned to the applicant with an explanation on additional information as may be required.
Projects seeking assistance will
also be subject to administrative approvals by the appropriate review authority:
For projects seeking TIF assistance to construct and improve public improvements or infrastructure (not
including payment of impact fees), the City of Bozeman Development Review Committee will review the application and materials and provide a recommendation to the Midtown Urban Renewal
District Board and the Bozeman City Commission.
For projects seeking TIF assistance for demolition or payment of impact fees, the City of Bozeman Economic Development Department will
review the application and provide a recommendation to the Midtown Urban Renewal District Board and the Bozeman City Commission.
If approved by the District Board, or City Commission,
a “letter of intent” outlining the specific terms and conditions of the TIF assistance that will could provided to the applicant.
SUBMITTAL INFORMATION
Below is a summary of the information to be submitted along with the attached application.
Summary Letter
Provide a summary of the project in the form of a letter.
The letter should include the following essential information about the project:
Description of site or building, including address and TIF District
Current and proposed uses
Description of end users
Project start and end users
Name of developer and owner
Total
development costs
Overview of private-sector financing
Amount of TIF assistance requested
Statement regarding why TIF is essential
Summary of property tax increment projections
Profitability
Description of public benefits
Project Narrative
Provide an in-depth overview of the project in narrative format. The narrative must include a description of the following aspects of the project:
Current condition
of the site and historical overview that includes the size and condition of any existing structures, environmental conditions, and past uses of the site.
Proposed use(s) or project
(e.g. industrial, commercial, retail, office, mixed use, residential for sale or for rental, etc.)
Construction information about the project including size of any existing structure
to be demolished or rehabbed; sized of any new construction; types of construction materials (structural and finish); delineation of square foot allocation by use; total number and individual
square footage of residential units; type of residential units (e.g. for-sale, rental, condominium, single-family, etc.); number and type of parking spaces provided; and construction
phasing.
Confirm that this project is consistent with goals and objectives identified in the Midtown Urban Renewal Plan.
Site Maps and Building Plans
Provide a map that shows the
location of the site. Also provide a map that focuses on the project and its immediate surroundings. Submit building plans, a minimum of conceptual level, to convey uses, building size,
square footage of interior units, and other important features.
Detailed Project Information
Table of Proposed Uses
Provide a detailed overview of the uses in the project. Details must include: building size, the number and type of unit (if multiple
units), residential density (if proposed), construction cost per square foot, and the projected amount of total sales revenue.
Project Timeline
A project timeline is required. Include
anticipated dates for site acquisition, project start and completion, as well as other project milestones. Multi-phase projects must include details for each phase. The timeline should
also identify any critical or time-sensitive dates as well as any time constraints facing the applicant.
Public Benefits
Fully describe the public benefits that can be realized by
the completion of this project. Projects with a high degree of public benefits are typically more likely to receive TIF assistance. Examples of public benefits include, but are not limited
to the following:
Elimination of blight
Creation of new retail choices
Increased tax revenue
Job-training opportunities
Re-occupancy of a vacant building
This statement should
include qualitative examples of public benefits as well as quantifiable and measurable outcomes of the short-term and long-term benefits to the District. Support documentation for the
estimates of public benefits can be included.
Demonstration of Need
Provide a detailed statement that accurately and completely explains why TIF assistance is needed. This statement
should provide the reasons why the project would be unachievable or have unacceptable financial returns without TIF.
Project Financial Information
Sources & Uses of Funds
Identify
the sources of funds used to finance the project. Typical sources include equity, lender financing, mezzanine financing, other anticipated types of public assistance, and any other types
or methods of financing. Describe the sources of equity and include a term sheet for lender financing, if available.
TIF assistance is generally available as a reimbursement after
the project is complete. Thus, the project budget must identify the up-front sources intended to finance the development costs of the project. If determined, specify the specific line
items of the project budget that each source will finance.
Summarize the uses of funds. General categories to be identified include: acquisition and related site costs, hard construction
costs, and a breakdown of soft costs.
Development Budget
Provide an accurate and detailed development budget for the project that includes a detailed breakdown of significant line item costs consistent with the sample included in the application
packet. The budget should be arranged to identify acquisition and site related costs, hard costs, and soft costs. Also, identify all line items that are performed by the developer, owner,
or related entities.
Request for TIF Assistance
Specifically state the amount of TIF assistance that is necessary to make this project possible. State how the developer will fund
project costs that will be reimbursed with TIF increment after those project costs have been incurred. For example, will the developer provide additional equity or borrow additional
funds to “front-fund” the TIF assistance?
Budget of TIF Eligible Expenses
Identify which of the development budget costs are eligible for reimbursement as allowed by the Montana TIF
statutes.
Analysis of Financial Need
Each application must include financial analyses that demonstrate the need for TIF assistance. Two analyses must be submitted: one without TIF
assistance and one with TIF assistance. The applicant must indicate the minimum return or profit the applicant needs to proceed with the project and rationale for this minimum return
or profit. The analyses will necessarily differ according to the type or project that is being developed.
Mixed Use Commercial / For-Sale Residential – Provide either separate analyses
for each component of the project or include in the revenue sources for the for-sale portion, the sale value of the commercial component based on the net operating income of the commercial
space at stabilization. Indicate how the sale value was derived.
Owner-Occupied Commercial –Provide copies of the analyses that the company used to determine the amount of TIF assistance
that would be needed to allow the company to meet or exceed the company’s minimum investment threshold(s) for proceeding with the project.
Financial Commitments – for projects requesting
over $80,000 in assistance
Submit commitment letters and/or term sheets from all lenders for proposed debt (such as construction, mezzanine, permanent, and government financing) and
all other financial sources of the project (such as grants, and tax credits). Commitment letters must clearly specify the nature and terms of the obligations.
Midtown Urban Renewal District
TAX INCREMENT FINANCING APPLICATION
Property Information
Property Address: ____________________________________________________________
Property Owner:
_____________________________________________________________
Legal Description: ____________________________________________________________
Property Geo-Code: ______________________________________
____________________
County Tax ID #: ____________________________________________________________
Applicant Information
Property Owner
Tenant
Developer
Other
Name:
Business Name:
Social Security Number: or EIN:
Business address (if different from proposed project
address):
City: State: Zip:
Phone: Email:
Please attach a list of all other property owners, business partners, developers and/or investors associated
with this project, with the above information provided for each.
I (we), by signature below, certify that the information supplied in this application is, to the best of my (our) knowledge,
true, accurate, and complete, and is provided for the purpose of obtaining approval to participate in the District TIF programs. I (we) understand the work to be performed will be in
accordance with all City codes, and must receive all approvals, as required in the City of Bozeman Unified Development Code, and that any work performed prior to approval will result
in the TIF application being declared void.. I understand if approved for TIF assistance, the work to be performed will be in accordance with the program procedures and the general design
guidelines for the district, as well as the specific design concept and improvement plan approved for this property.
Signature of Applicant Date
Contact Information
Applicant’s primary contact:
Name: ________________________________________________________________________
Business Name: ______________________________________________________
___________
Business Phone: ________________________________Cell Phone: _______________________
Email: ________________________________________
Architect (if applicant has retained
his/her own architect)
Name: ________________________________________________________________________
Business Name: _________________________________________________________________
Business Phone: ________________________________Cell Phone: _______________________
Email: ________________________________________
Engineer (if applicant has retained his/her own
engineer):
Name: ________________________________________________________________________
Business Name: _________________________________________________________________
Business
Phone: ________________________________Cell Phone: _______________________
Email: ________________________________________
Contractor: (if applicant has retained his/her own contractor)
Name: ________________________________________________________________________
Business Name: _________________________________________________________________
Business Phone: ____________________
____________Cell Phone: _______________________
Email: ________________________________________
Attorney: (if applicant has retained his/her own attorney)
Name: __________________________________
______________________________________
Business Name: _________________________________________________________________
Business Phone: ________________________________Cell Phone:
_______________________
Email: ________________________________________
Investor/ Developer/ Business Profile
Business Location
New business establishing itself in Bozeman
Existing
business
Expanding/remodeling at same location
Expanding to an additional location
Existing business relocating from (identify location):
Street Address:
City: State: Zip:
Other:
Year Business
Established:
Type of Business (Describe):
Facility Square Footage:
Current:_________________________________________________________________
Estimated Impact
of Redevelopment Project:____________________________________
Annual Property Tax:
Current:_________________________________________________________________
Estimated Impact of Redevelopment
Project:____________________________________
Has a business plan been developed in relation to the proposed project?
No (Development of a business plan may be required as part of the
application process.)
Yes (Include a copy with the application.)
Property Status:
Vacant land
Building on leased land – Describe:
Land and building(s) – Describe:
Property Owner (if not applicant):
Name: _________________________________________________________________
Address: _________________________________________________________
_______
City: _______________ ________State: _____________________Zip: __________
Type of TIF Assistance Sought:
Requesting assistance for public infrastructure costs
Building
demolition
Other per statute
Will this project proceed if TIF assistance is not granted?
No
In a limited fashion (explain):
Yes, but at a later date (explain):
Yes, as scheduled
Other:
CRITERIA FOR TIF ASSISTANCE
In reviewing the TIF Application the District Board shall evaluate each project utilizing the following criteria and point system. Projects must accumulate
at least 18 points to be considered for approval. Points can range from 0 to the maximum shown below in each category. Please rate your project according to the following criteria. To
receive points for any given item, documentation demonstrating adherence to the criteria must be submitted with the application.
Overall District Relevance
Points
1.
Relevance
to the Midtown Urban Renewal Plan Goals listed below – Documentation of the project’s impact in relation to the goals and objectives of the Midtown Urban Renewal Plan, particularly mixed-use
development. Urban design elements will also be considered, including pedestrian emphasis and quality of design.
/5
Promote Economic Development
2.
Tax Generation: The project
will increase the taxable value within the District. The increase in taxable value due to new construction & rehabilitation is estimated by the County Assessor’s office or State Department
of Revenue to determine tax increment generation. Submit documentation of estimated tax projections to receive points for this criteria
/2
3.
Elimination of Blight – The project’s
direct and indirect impact on the physical and fiscal deterioration within the Tax Increment Financing District and the community. Submit information showing current conditions of property.
/2
4.
Employment Generation – Total employment generated by the project assessed in terms of new permanent and part-time jobs, and construction jobs. Submit documentation of
estimated new jobs to receive points for this criteria
/1
Improve Multi-Modal Transportation
5.
Facilitates Public Health and Mobility: Project will construct or improve sidewalks,
including ADA access to buildings. Provide detailed information demonstrating that the current condition inhibits public health and mobility.
/2
6.
Reduces Resource Demand: Project
promotes the use of transit, ride sharing, or car sharing. Provide plans, agreements or other methods to demonstrate reduction of resource demand.
/2
7.
Promotes Active Transportation:
Project promotes bicycling as an active transportation option by constructing or improving bike lanes, providing covered bike parking, and/or participating in a bike share program. Provide
plans, agreements or other methods to demonstrate reduction of resource demand.
/2
Improve, Maintain and Support Innovation in Infrastructure
8.
Infrastructure Improvements:
Project promotes innovation in infrastructure and/or reduces long term costs of maintenance. Provide plans and descriptions of innovations proposed.
/2
Promote Unified Human Scale
Urban Design
9.
The project improves the street frontage by eliminating parking between the right-of-way and the building. Provide plans to demonstrate improvement in street
frontage.
/2
10.
The project reduces the number of vehicular access points to the property and improves the pedestrian experience. Provide plans, agreements or other methods
to demonstrate reduction.
/2
11.
The project enhances the North 7th entryway by having buildings oriented toward the street and designed to provide interest and activity.
/2
12.
The project enhances the pedestrian experience with elements such as façade transparency, building articulation, street furniture and/or landscaping. Submit plans and details that
address this criteria.
/2
12.
The project enhances the pedestrian experience with elements such as façade transparency, building articulation, street furniture and/or landscaping. Submit plans and details that
address this criteria.
/2
13.
The quality of development and overall aesthetics (architectural, site design, landscaping, etc.) are beyond that which is minimally required by
the UDC. Submit documentation to demonstrate compliance with this criteria.
/2
Support Compatible Urban Density Mixed Land Uses
14.
The project increases housing units
within the District. Submit plans demonstrating an increase in the number of housing units.
/2
14.
The project has a mix of uses, including residential. Submit plans detailing
the proposed mix of uses within the project.
/5
15.
The project shares parking among compatible uses. Provide details demonstrating compliance with the UDC and as well as total
number of parking spaces reduced because of a shared arrangement.
/1
Total Points
/36