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HomeMy WebLinkAbout04-10-17 City Commission Packet Materials - A5. Resolution 4792, North Park Findings of Blight and Necessity of Rehab 1 Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Brit Fontenot, Director of Economic Development SUBJECT: Resolution 4792 Adopting Findings of Blight and Establishing the Necessity of Rehabilitation and Redevelopment of the North Park Area MEETING DATE: April 10, 2017 AGENDA ITEM TYPE: Action RECOMMENDATION: Approve Resolution 4792 adopting findings regarding the existence of conditions of blight within the North Park area provided in the Statement of Blight, and declaring that the rehabilitation, redevelopment, or a combination thereof of the area is necessary in the best interest of the City. RECOMMENDED MOTION AND VOTE: I move to approve Resolution 4792 adopting the findings regarding the existence of conditions of blight within the North Park area of Bozeman provided in the Statement of Blight, and hereby declare that such areas of blight exist and that the rehabilitation, redevelopment, or a combination thereof of the area is necessary and in the interest of the public health, safety, morals, or welfare of the residents of Bozeman. BACKGROUND: Resolution 4792 aligns with Commission economic development priorities of facilitating mid- to high wage job growth and industry diversification. (EXHIBIT 1) Community partners work together in support of the primary tenets of the City’s recently adopted 2016 Economic Development Strategy: 1. Support retention and growth of existing businesses, while welcoming and encouraging new businesses; 2. Invest in infrastructure to drive economic development; and 3. Support education and workforce development initiatives to provide businesses with qualified workers. (Bozeman 2016 Economic Development Strategy Update) On June 13, 2016, as part of the annual budget approval process, the City Commission reviewed the proposed North Park Tax Increment Financing Industrial District (TIFID) [formerly Mandeville 272 2 Farm] work plan and budget for FY 17. (EXHIBIT 2) At that time, the City-owned portion of the North Park property was under contract for sale. The report to the Commission stated: [I]t is likely that the purchasers of the City-owned property will request that the City Commission consider sun-setting the existing Industrial TIF and create in its place a more flexible Targeted Economic Development District or TEDD. The TEDD offers more flexibility in uses than the older industrial TIF district model and may be more appropriate for the uses contemplated by the buyers. A District Board was never appointed by the Commission. To date, the District is devoid of most development activities, however, if the sale of the North Park property is concluded, the likelihood of development and additional activities following the sale is high. The sale of the property closed on August 23, 2016. Since June, 2016, staff and the property owners, North Park Development Partners and the State of Montana through the Department of Natural Resources and Conservation, have discussed the viability of the existing industrial TIF. Part of that conversation included a discussion of the value of sunsetting the existing industrial TIF and establishing a new district with a better fit for the types of development envisioned on the property. Each agreed that the establishment of an urban renewal district with an emphasis on the development of value added industries within, is a better fit for the proposed development than the existing industrial district. The North Park property is currently zoned a combination of M-1 and M-2 and there is no proposal to change the zoning. (EXHIBIT 3) Section 11, pages 6 and 7 of the Agreement to Sell and Purchase [the city-owned portion of the] North Park property identifies a commitment “to work cooperatively and in good faith after closing regarding the North Park Economic Development District (the “TIF District”)”. (EXHIBIT 4) The proposal to approve Resolution 4792 adopting the findings regarding the existence of conditions of blight within the North Park area and declaring that the rehabilitation, redevelopment, or a combination thereof of the area is necessary in the best interest of the City is part of that collaborative effort. (EXHIBIT 5) Established in 2006, the Mandeville Farm TIFID, now the North Park Industrial TIFID, (the “District”) was established to enable the use of incremental increases in property tax revenues to encourage the attraction and retention of value-adding industries. The District, however, failed to attract private investment, or contribute to the implementation of Bozeman’s economic development strategy. (EXHIBIT 6) Acknowledging that economic development is a long-term proposition, the City should maintain the opportunity to use tax increments to attract and retain value-adding commerce, which includes traded and local sector businesses. However, more innovative approaches to economic development are needed thus the proposal to modify the existing district to an urban renewal district represents this new approach. The Mandeville Farm TIFID is set to expire in 2021. The Commission may consider a proposal to “sunset” (terminate) the Mandeville Farm TIFID, and subsequently create the North Park Urban 273 3 Renewal District (URD) to prevent and eliminate blighted areas per §7-15-4202 MCA, reduce poverty in the City of Bozeman, and deliver efficient public services through the following: • The investment in public infrastructure in support of economic development, with a focus on value-adding commerce • The attainment of urban density to achieve greater efficiency in the delivery of public services • The facilitation of live-work opportunities for workforce housing in proximity to places of employment in value-adding commerce • The creation of opportunities for livable wage jobs in value-adding commerce While a URD offers greater opportunity for innovation than a TIFID, a determination of blight must be made prior to establishing a district. The North Park area is within the urban core, but the Interstate 90 corridor and the Montana Rail Link line, which border the property, serve as physical barriers to the desired development and uses. The North Park area can be described as blighted under the Montana Urban Renewal Law, because its geographic isolation “substantially impairs or arrests the sound growth” of the municipality per §7-15-4201 MCA, making it eligible for designation as a URD. Among other things, lack of appropriate infrastructure, including water, sewer, stormwater, transportation and communication networks, under-developed ingress and egress, inappropriate uses of land or building, and faulty lot layout in relation to size, adequacy, accessibility, or usefulness, can be remedied by investment in infrastructure using tax increment financing in a URD. City Commission action to “sunset” (terminate) the Mandeville Farm TIFID, and instead create the North Park Urban Renewal District (URD) would occur in subsequent steps in the process when the City Commission adopts a proposed urban renewal plan by ordinance. The adoption of Resolution 4792, the findings of blight and establishing the necessity of rehabilitation and redevelopment of the North Park area is a prerequisite for creating a URD and expanding the existing boundaries of the North Park TIFID per 7-15-4210 MCA. NEXT STEPS: In general, next steps include: • City consultation with affected taxing jurisdictions (occurred with Gallatin County and scheduled with BSD 7); • Development of the Bozeman North Park Urban Renewal District (URD) plan; • Planning Board recommendation on conformance of the URD and URD plan with the Bozeman Community Plan; • Certified notice of public hearing to all property owners; • City Commission public hearing and provisional adoption of proposed ordinance; and • City Commission final adoption of proposed ordinance. 274 4 FISCAL EFFECTS: The North Park TIFID currently has a deficit of $20,539 and an anticipated FY 16 increment of $7,900 expected in May 2017. (EXHIBIT 7) This increment will be applied to the existing debt leaving an estimated deficit balance of $12,639 for FY 17. If nothing occurs in the existing District for two fiscal years, it is likely that the District will have cleared the debts associated with the original master planning of the site. If the North Park TIFID is sunsetted as proposed, we will establish a plan to repay the last of the TIFID debt and establish the URD with a base year of 2017. EXHIBITS: 1) Resolution 4792; 2) June 13, 2016 North Park Budget and Work Plan; 3) North Park zoning map; 4) March 23, 2016 executed Agreement to Sell and Purchase the North Park property; 5) North Park Area Statement of Blight; 6) Map of existing North Park TIFID and proposed URD boundaries; and 7) North Park TIFID fund Balance. 275 Page 1 of 5 RESOLUTION NO. 4792 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, FINDING THAT CONDITIONS OF BLIGHT EXIST WITHIN THE MUNICIPALITY IN AND NEAR THE NORTH PARK AREA AND THAT THE REHABILITATION, REDEVELOPMENT, OR A COMBINATION THEREOF OF SUCH AREAS IS NECESSARY IN THE INTEREST OF THE PUBLIC HEALTH, SAFETY, MORALS, OR WELFARE OF THE RESIDENTS OF SUCH MUNICIPALITY WHEREAS, the primary tenets of the City of Bozeman’s economic development strategy are 1) retention and growth of existing businesses, while welcoming and encouraging new businesses; 2) investment in infrastructure to drive economic development; and 3) education and workforce development initiatives to provide businesses with qualified workers. (Bozeman Economic Development Strategy Update, 2016); and WHEREAS, the State of Montana has provided for the redevelopment of those portions of municipalities which constitute an economic and social liability and substantially impair the sound growth of a municipality; and WHEREAS, the procedure provided in Title 7, Chapter 15, Part 42 and 43 of the Montana Codes Annotated authorizes municipalities to exercise urban renewal powers for redevelopment and rehabilitation through urban renewal plans and projects, after the municipality has made a finding that a blighted area exists that substantially impairs or arrests the sound growth of the city or its environs, constitutes an economic or social liability and/or is detrimental to the public health, safety, welfare, and morals in its present condition and use; and 276 Resolution 4792, Resolution of Necessity and Statement of Blight North Park Area Page 2 of 5 WHEREAS, the City of Bozeman City Commission approved Ordinance No. 1684 on November 27, 2006, establishing the Mandeville Farm Tax Increment Financing Industrial District (TIFID) to enable the use of incremental increases in property tax revenues within an infrastructure deficient area to encourage the attraction and retention of value-adding industries; and WHEREAS, the TIFID has failed to attract private investment, or contribute to the implementation of Bozeman’s economic development strategy; and WHEREAS, the City of Bozeman acknowledges that economic development is a long-term proposition and wishes to maintain the opportunity to use tax increments to improve public infrastructure and to attract and retain value-adding commerce, which includes traded / basic sector businesses; and WHEREAS, the City of Bozeman is considering the “sunset” (termination) of the Mandeville Farm TIFID, and the creation of the North Park Urban Renewal District (URD) to prevent and eliminate blighted areas per §7-15-4202 MCA, reduce poverty in the City of Bozeman, and deliver efficient public services through the following: • investment in public infrastructure in support of economic development, with a focus on value-adding commerce; • attainment of urban density to achieve greater efficiency in the delivery of public services; • facilitation of live-work opportunities for workforce housing in proximity to places of employment in value-adding commerce; and • creation of opportunities for livable wage jobs in value-adding commerce. WHEREAS, a review of conditions of blight in the North Park area, which is generally bound by Interstate 90 to the west, North 7th Avenue to the east, Frontage Road to the north and Mandeville Lane to the south, was completed at the direction of the City; and WHEREAS, the Statement of Blight documents the conditions of blight in the North Park area; and 277 Resolution 4792, Resolution of Necessity and Statement of Blight North Park Area Page 3 of 5 WHEREAS, the review identified that conditions of blight as defined by §7-15-4206(2) MCA, existed within the North Park area, associated with the following: • inappropriate or mixed uses of land or building due to vacant and underutilized land resulting in low land values and less efficient use of public infrastructure and services; • defective or inadequate street layout due to the lack of transportation infrastructure - paved streets, sidewalks, curb/gutters and storm drainage facilities; • faulty lot layout in relation to size, adequacy, accessibility, or usefulness due to the remainder of an aliquot part of greater than 167 acres, and large lots created for other purposes, which are too big to be useful for development to urban core standards; • faulty lot layout in relation to size, adequacy, accessibility, or usefulness due to geographic isolation that substantially impairs or arrests sound growth; • unsanitary or unsafe conditions due to lack of municipal infrastructure and the presence of the Bozeman Solvent Site; • improper subdivision or obsolete platting due to remainder of aliquot parts and large lots of 10 to 30 acres in size that are not in conformance, accordance or compliance with current plans, standards or codes; • the existence of conditions that endanger life or property by fire or other causes due to lack of access, a transportation network and municipal services and other conditions that endanger life or property include the uncontrolled railroad crossing and use of barbed wire to fence portions of the property; and • any combination of the factors described above. WHEREAS, conditions of blight exist in the North Park area based on at least three of the factors described above and listed in §7-15-4206(2), MCA; and WHEREAS, it is the desire of the City to exercise, within the defined area, the powers conferred by the Montana Urban Renewal Law; and WHEREAS, Section 7-15-4210, MCA, requires that a municipality adopt a resolution of necessity in order to implement or amend an urban renewal district. 278 Resolution 4792, Resolution of Necessity and Statement of Blight North Park Area Page 4 of 5 NOW, THEREFORE, BE IT RESOLVED by the City Commission (the “Commission”) of the City of Bozeman (the “City”), Montana: Section 1 The City adopts the findings regarding the existence of conditions of blight within the North Park area of Bozeman provided in the Statement of Blight, and hereby declares such areas of blight exist and that the rehabilitation, redevelopment, or a combination thereof of the area is necessary in the interest of the public health, safety, morals, or welfare of the residents of Bozeman. Section 2 The City shall not use its powers of eminent domain to acquire private property for any private use in the implementation of any urban renewal project within this area as shown in the Statement of Blight. Section 3 This resolution is effective immediately. PASSED AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 10th day of April, 2017. CARSON TAYLOR Mayor ATTEST: ROBIN CROUGH City Clerk 279 Resolution 4792, Resolution of Necessity and Statement of Blight North Park Area Page 5 of 5 APPROVED AS TO FORM: KAREN STAMBAUGH Assistant City Attorney 280 Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Brit Fontenot, Economic Development Director SUBJECT: North Park Industrial Tax Increment Finance District Update MEETING DATE: June 13, 2016 AGENDA ITEM TYPE: Consent RECOMMENDATION: Receive the information contained in this memo and consider this in the context of FY 17 TIF District work plans and budgets. BACKGROUND: Created by the City Commission in 2006, the North Park Industrial Tax Increment Finance District (the “District”) has failed to live up to its potential but may be on the brink of an exciting future. (Attachment 1) Originally, the District was created to entice M-1 and M-2 type intensive development. The District is made up of two property owners, the State of Montana (~270 acres) and the City of Bozeman (~85 acres). Currently, District properties suffer from poor access and a lack of infrastructure, especially a road network, water and sewer distribution and a telecommunication conduit system. Without development, the values of the properties inside the district may not rise, or do so much more slowly than if development, spurred by infrastructure investment, would occur thus increasing the increment available to deploy additional public infrastructure within the district. The District currently has a deficit of ($61,174.20). (Attachment 2) The city-owned North Park property, entirely bounded by the North Park Industrial TIF District, remains under contract for sale. All contingencies of the Purchase and Sale Agreement are met or otherwise resolved with one exception; a lease of State lands adjacent to the City-owned parcel(s). The State property is also entirely bounded by the District. Approval of any leases of State lands must be 281 granted by the State Land Board. Department of Natural Resources and Conservation (DNRC) officials advise that prior to the purchasers of the City property appearing before the Land Board for lease approval on State land (a contingency of the sale of the city property), that a pending wildlife concern on adjacent State trust land be resolved. On May 31, 2016 it was confirmed with the DNRC, Bozeman Unit Manager Craig Campbell that the appropriate permits are being processed and will likely be issued in June, 2016 thus satisfactorily resolving the issue. It is likely that the purchasers of the City-owned property will appear before the Land Board in July, 2016. Finally, it is likely that the purchasers of the City-owned property will request that the City Commission consider sun-setting the existing Industrial TIF and create in its place a more flexible Targeted Economic Development District or TEDD. The TEDD offers more flexibility in uses than the older industrial TIF district model and may be more appropriate for the uses contemplated by the buyers. A District Board was never appointed by the Commission. To date, the District is devoid of most development activities, however, if the sale of the North Park property is concluded, the likelihood of development and additional activities following the sale is high. UNRESOLVED ISSUES: The current value of one mill is $86,564. Estimates indicate an approximate 2% increase in taxable values during reappraisal in 2017 which will have an impact on Districts around the City. Commercial and residential property reappraisals have shifted from a six-year to a two-year reappraisal cycle. An additional unresolved issue concerns the debt of the District and how the Commission intends to deal with it in light of how, and when, the debt was incurred and the impact of debt on the District’s ability to reimburse the property owners for public infrastructure improvements. The debt continues to decline as property values climb. Last years’ s District deficit, reported in June of 2015, was ($151,110). FISCAL EFFECTS: The District deficit as of May 26, 2016 is ($61,174.20). Attachments: 1) Map of the North Park Industrial Tax Increment Finance District; and 282 2) North Park Industrial District Revenues and Expenditures to date. Report compiled on: June 2, 2016 283 284 R:\Accounting\TIFD_Tax_Increment_Financing_Districts\Fund_145_Mandeville_Industrial\Mandeville_Industrial_ TIF_Fund_145_Balance_-_05.26.2016.xls\Presentation - 5.26.16 5/26/2016 at 4:05 PM BEGINNING FUND BALANCE: JULY 1, 2006 -$ ADD: REVENUES Property Tax Increment 196,673.29$ TOTAL REVENUES 196,673.29$ LESS: EXPENDITURES Contracted Services/Consultants & Prof Services (7,720.00)$ Contracted Services/Engineers (37,251.23) Contracted Services/General (2,567.49) In-State Travel/Training (3.60) Advertising (42.00) Operating Interest Charged For Carrying Negative Cash Balance (21,111.74) Postage (21.78) Shipping & Handling (43.56) Other/General (350.00) Capital - Infrastructure & Improvements (188,736.09) TOTAL EXPENDITURES (257,847.49)$ CURRENT FUND BALANCE/(FUND DEFICIT)(61,174.20)$ MANDEVILLE INDUSTRIAL TIF DISTRICT FUND BALANCE Fund 145 As Of 5/26/2016 285 286 287 288 289 290 291 292 293 294 295 296 297 298 City of Bozeman North Park Area Statement of Blight January 2017 299 North Park Area - Statement of Blight - January 2017 Page 1 Chapter 1. Introduction and Overview To facilitate mid- and high wage job growth and economic strength and diversification in Bozeman, community stakeholders must work together in support of the primary tenets of the City’s economic development strategy: 1. Retention and growth of existing businesses, while welcoming and encouraging new businesses; 2. Investment in infrastructure to drive economic development; and 3. Education and workforce development initiatives to provide businesses with qualified workers. (Bozeman Economic Development Strategy Update, 2016) In November of 2006, the Bozeman City Commission adopted Ordinance No. 1684, establishing the Mandeville Farm Tax Increment Financing Industrial District (TIFID), to “encourage the attraction and retention of value-adding industries.” The TIFID is located in an area generally referred to as the Mandeville Farm site, now known as the North Park area. It was the intent of the Bozeman City Commission, per Ordinance No. 1684, to use tax increment revenues in combination with other sources to finance the development of the necessary public infrastructure to encourage corresponding investments by the private sector in value-adding businesses, which were defined by the 2008 Administrated Rules of the State of Montana as those industries that: “use mechanical or chemical processes to transform materials or substances into new products in the manner defined as manufacturing in the North American Industry Classification System Manual. "Value-added" is more specifically defined as an increase in the worth of the raw or semi-finished product that results from a mechanical or chemical transformation and may not be attributable to a mere increase in existing production.” In 2011, the Montana Legislature expanded the definition of value-adding industries to include those businesses, “that, through the employment of knowledge or labor, add value to a product, process, or export service resulting in the creation of new wealth.” While it remains the intent of the City of Bozeman to focus on value-adding economic development in the area and contribute to the implementation of Bozeman’s economic development strategy, little private investment has occurred in the 10 years following the TIFID’s creation. North Park is within the urban core; but, the Interstate 90 corridor and 300 North Park Area - Statement of Blight - January 2017 Page 2 the Montana Rail Link line, which border the property, serve as physical barriers to the desired development and planned uses. Acknowledging that economic development is a long-term proposition, the City wishes to maintain the opportunity to use tax increments to attract and retain value-adding commerce, which includes traded / basic sector businesses. Going forward, therefore, economic success in the area will rely on the ability to implement innovative approaches to value-adding economic development that incorporate efficient transportation systems, urban densities and live-work opportunities. These approaches are better served through the creation of an urban renewal district (URD) in the North Park area. While a URD offers greater opportunity for innovation than a TIFID, a determination of blight must be made prior to establishing a district. Conditions in the North Park area can be described as blighted under the Montana Urban Renewal Law, because its geographic isolation “substantially impairs or arrests the sound growth” of the municipality per §7-15-4201 MCA, making it eligible for designation as a URD. More particularly, the following specific conditions of blight, as set forth in §7-15- 4206 MCA, are present within the North Park area:  inappropriate or mixed uses of land or building  defective or inadequate street layout  faulty lot layout in relation to size, adequacy, accessibility, or usefulness  unsanitary or unsafe conditions  improper subdivision or obsolete platting  the existence of conditions that endanger life or property by fire or other causes The TIFID is set to expire in 2021. Therefore, the City of Bozeman is proposing to “sunset” (terminate) the Mandeville Farm TIFID, and instead create the North Park Urban Renewal District (URD) to prevent and eliminate blighted areas per §7-15-4202 MCA, reduce poverty in the City of Bozeman, and deliver efficient public services through the following: • The investment in public infrastructure in support of economic development, with a focus on value-adding commerce • The attainment of urban density to achieve greater efficiency in the delivery of public services • The creation of opportunities for livable wage jobs in value-adding commerce • The facilitation of live-work opportunities for workforce housing in proximity to places of employment in value-adding commerce In December of 2016, the City of Bozeman initiated a review of factors contributing to blight in the North Park area, as a first step in establishing a URD on the properties. The 301 North Park Area - Statement of Blight - January 2017 Page 3 documentation of such conditions, within a municipality, in accordance with state law, provides the necessary foundation upon which a local government may establish a URD to engage in a program to eliminate blight. General Area Description North Park is located to the north and west of the Interstate 90 – North 7th Interchange and is generally bound by Interstate 90 to the west, North 7th Avenue to the east, Frontage Road to the north and Mandeville Lane to the south. A majority of the property is held by the State of Montana as Trust land. Trust Lands are managed by the Trust Land Management Division (TMLD) of the Montana Department of Natural Resources and Conservation. The mission of the TMLD is to manage the State of Montana’s Trust Land resources to produce revenues in support of the Trust beneficiaries, which include public schools and various other state institutions. The remainder of the land is owned privately. Approximate Boundary Map of Area The North Park site is generally located to the north and west of the Interstate 90 – North 7th Interchange and is bound by Interstate 90 to the west, Red Wing Drive to the north and east, Flora Lane to the east and Mandeville Lane to the south. The extent of the parcels included in the North Park area is shown below in Figure 1. The portion indicated as “City of Bozeman parcels” has been sold to a private entity. 302 North Park Area - Statement of Blight - January 2017 Page 4 Figure 1. Approximate Boundary of Parcels in North Park Area State Authorization for the Creation of a URD with a Tax Increment Financing Provision The establishment of a URD must be undertaken in accordance with §7-15-4201, et Seq., MCA and enables a local government to use the tax increment financing (TIF) provision within the state statute to help fund its efforts. TIF directs property tax increments that accrue from increases in taxable value within a specified district to a special fund that can be used to finance public economic development and infrastructure projects. Prior to its creation, the area under consideration for a URD must be found blighted as stated in a “Resolution of Necessity”, adopted by the local governing body under §7-15- 4210 MCA. This Statement of Blight documents the specific conditions of blight. The Setting The City of Bozeman is the county seat of Gallatin County in southwest Montana. The City is named for John M. Bozeman who established the Bozeman Trail and was a key founder of the town in August 1864. The town became incorporated in April 1883 with a Approximate Boundary 303 North Park Area - Statement of Blight - January 2017 Page 5 city council form of government and later in January 1922 transitioned to a city manager/city commission form of government. Bozeman was elected an All-America City in 2001 by the National Civic League. Bozeman is home to Montana State University and is served by Bozeman Yellowstone International Airport. (Wikipedia) The North Park area was in agricultural use for most of the 20th Century. The Mandeville family operated a dairy farm on the site, leasing a portion of the area from the State of Montana. They also raised wheat, oats, barley, hay, corn and grass. The city of Bozeman purchased 85 acres on the north side of the site from the Mandeville family in 2003. The city had intended to use the land for a solid waste transfer station. However, that plan never came to fruition. The City sold the land to a private developer in 2016. Demographic and Economic Information The City of Bozeman is growing. According to 2015 Census estimates, there are 43,405 people living in the City of Bozeman, significantly higher than the 2010 Census figure of 37,280. The county’s population is projected to experience continued growth through 2060, from 97,197 in 2015 to 145,389 in 2060, an increase of nearly 50% (Montana Economic and Information Center). Census information, recorded over a one-hundred-year period, beginning in 1910, indicates that the City’s population has grown rapidly since 1950. The following figure presents population data for the City from 1910 to 2010, based on the decennial census. Source: Montana Census and Economic Information Center However, despite rapid growth, the City’s poverty rate at 21.0% is significantly higher than the poverty rates for Gallatin County, Montana and the nation, which are 13.9%, 15.3% and 15.6% respectively. (American Community Survey – ACS, 2010-2014). 0500010000150002000025000300003500040000 City of Bozeman Population -1890 to 2010 Population 304 North Park Area - Statement of Blight - January 2017 Page 6 Median Household Income for residents living in Bozeman is $46,422, lower than the County’s, median, which is $54,298, slightly lower than the state, at $46,766 and lower than the nation, at $53,482 (ACS, 2010-2014). The following table shows employment in the City of Bozeman by industry. The “Educational services, health care and social assistance” sector employs the most people, followed by “arts, entertainment, and recreation, and accommodation and food services” and “retail trade”. EMPLOYMENT BY INDUSTRY CITY OF BOZEMAN SOURCE: ACS 2010-2014 ESTIMATE MARGIN OF ERROR PERCENT PERCENT MARGIN OF ERROR Civilian employed population 16 years and over 22,330 +/-689 22,330 (X) Agriculture, forestry, fishing and hunting, and mining 497 +/-175 2.2% +/-0.8 Construction 1,439 +/-345 6.4% +/-1.5 Manufacturing 1,566 +/-308 7.0% +/-1.3 Wholesale trade 394 +/-142 1.8% +/-0.6 Retail trade 2,870 +/-376 12.9% +/-1.7 Transportation and warehousing, and utilities 492 +/-173 2.2% +/-0.8 Information 333 +/-121 1.5% +/-0.5 Finance and insurance, and real estate and rental and leasing 1,021 +/-257 4.6% +/-1.1 Professional, scientific, and management, and administrative and waste management services 2,556 +/-502 11.4% +/-2.2 Educational services, and health care and social assistance 6,174 +/-508 27.6% +/-2.2 Arts, entertainment, and recreation, and accommodation and food services 3,297 +/-431 14.8% +/-1.8 Other services, except public administration 856 +/-193 3.8% +/-0.9 Public administration 835 +/-258 3.7% +/-1.2 305 North Park Area - Statement of Blight - January 2017 Page 7 Chapter 2. Establishing Blight Montana law sets forth the specific factors that characterize blight. In particular, state statute defines a blighted area as one that substantially impairs or arrests the sound development of communities, or constitutes an economic or social liability. Per §7-15-4206, MCA, a “blighted area” may be identified as such by reason of: (a) the substantial physical dilapidation; deterioration; defective construction, material, and arrangement; or age obsolescence of buildings or improvements, whether residential or nonresidential; (b) inadequate provision for ventilation, light, proper sanitary facilities, or open spaces as determined by competent appraisers on the basis of an examination of the building standards of the municipality; (c) inappropriate or mixed uses of land or buildings; (d) high density of population and overcrowding; (e) defective or inadequate street layout; (f) faulty lot layout in relation to size, adequacy, accessibility, or usefulness; (g) excessive land coverage; (h) unsanitary or unsafe conditions; (i) deterioration of site; (j) diversity of ownership; (k) tax or special assessment delinquency exceeding the fair value of the land; (l) defective or unusual conditions of title; (m) improper subdivision or obsolete platting; (n) the existence of conditions that endanger life or property by fire or other causes; or (o) any combination of the factors listed in this subsection (2).” (Montana Laws) The North Park area, which includes more than 275 acres, is mostly vacant and in agricultural use, but does include mini-warehouses, two communication towers and a portion of the railroad line. Mandeville Creek bisects the property from south to north and has associated floodplain and wetlands. This review identified that the following factors that contribute to blight, as set forth in §7-15-4206 MCA, are present within the North Park area:  inappropriate or mixed uses of land or building  defective or inadequate street layout 306 North Park Area - Statement of Blight - January 2017 Page 8  faulty lot layout in relation to size, adequacy, accessibility, or usefulness  unsanitary or unsafe conditions  improper subdivision or obsolete platting  the existence of conditions that endanger life or property by fire or other causes Inappropriate Uses of Land While North Park is the keystone among numerous urban commercial districts (North 7th Avenue/Midtown area, I-90 interchanges at N. 7th and N. 19th, and Baxter Lane/North 19th), the area is largely vacant and underutilized. Vacant land in the urban core results in lower land values and less efficient use of public infrastructure and services. Its value is further diminished by lack of or poor access. Defective or Inadequate Street Layout The North Park area has no transportation infrastructure. It lacks paved streets, sidewalks, curb/gutters and storm drainage facilities. The Bozeman Municipal Code requires that streets shall be provided in accordance with the adopted growth policy and/or transportation plan. The future arrangement, type, extent, width, grade and location of all streets shall be considered in relation to existing and planned streets topographical conditions, public convenience and safety, and the planned uses to be served by such streets. Faulty Lot Layout in Relation to Size, Adequacy, Or Usefulness The land in the North Park area includes the remainder of an aliquot part of greater than 167 acres, and large lots of 10 to 30 acres in size that are too big to be useful for development at urban core standards. The existing lot layout was incompletely created by remainder and partially designed for a specific purpose which did not come to fruition. When these issues and the lack of adequate access are combined, the lot layout can only be described as faulty. Faulty Lot Layout in Relation to Accessibility The North Park area is characterized by poor access. The only developed access point is located at the intersection of Mandeville Lane/West Griffin Drive and North 7th Avenue. Interstate-90 borders the west side, the Burlington Northern / Montana Rail Link right- of-way runs along the northern perimeter and the highway overpass is located to the northeast. As a result, there is no access along more than fifty percent of the perimeter of the North Park area. This geographic isolation substantially impairs or arrests the sound growth of the area. The intersection of Mandeville Lane/West Griffin Drive and N. 7th Avenue is within one half-mile of the North Park area and has been identified as operating at a level-of-service 307 North Park Area - Statement of Blight - January 2017 Page 9 (LOS) less than “C” by Montana Department of Transportation (MDT). The intersection must be upgraded to meet the minimum LOS requirements prior to development within the URD boundary. Unsanitary or Unsafe Conditions Due to Lack of Municipal Infrastructure The North Park area has no municipal infrastructure. Future development will require the installation of complete municipal water and sanitary sewer system facilities to serve the planned development. Municipal storm sewer system facilities may also be required by the city. In addition, there are other municipal infrastructure improvements required to eliminate unsanitary or unsafe conditions, including: the offsite upgrade of the downstream sanitary sewer interceptor known as the North Frontage Road Interceptor and the completion of two on-site water mains. Unsanitary or Unsafe Conditions Due to the Presence of the Bozeman Solvent Site State Superfund Facility The Bozeman Solvent Site (BSS) has been designated as a Controlled Groundwater Area (CGWA) due to presence of dissolved perchloroethylene (PCE) in the groundwater at concentrations greater than Montana groundwater standards. The BSS is also a State Superfund site, under the Comprehensive Environmental Cleanup and Responsibility Act (CECRA). Due to the extent of the BSS, the North Park Area has groundwater and land use restrictions. In addition to the groundwater and land use restrictions, the North Park area is within the boundaries of the Solvent Site Water Main Payback District. That payback district was created when the existing 12-inch water main was constructed through the site. The water main was constructed to eliminate use of groundwater under the site that has been contaminated with PCE. The cost of construction of the existing 12- inch water main must be reimbursed by developers at the following rate: $0.082/square foot + Consumer Price Index Adjustment (CPIA). Improper Subdivision or Obsolete Platting The land in the North Park area includes the remainder of aliquot parts left over from the construction of I-90, and large lots of 10 to 30 acres in size that are not in conformance, accordance or compliance with current plans, standards or codes. The Existence of Conditions that Endanger Life or Property by Fire or Other Causes In addition to the lack of access, a transportation network and municipal services, other conditions that endanger life or property include the uncontrolled railroad crossing and use of barbed wire to fence portions of the property. 308 North Park Area - Statement of Blight - January 2017 Page 10 Conclusion In §7-15-4210 MCA, a municipality must find that at least three factors contributing to blight be identified in order to establish an urban renewal district. Based on the information presented in this Statement of Blight, a finding can be made that the North Park area exhibits at least three attributes, which can be described as blighted per Montana Statute, and therefore the area is eligible for inclusion in an urban renewal district. 309 ´ 0 0.25 0.50.125 Miles Legend Parcels North Park TIFID North Park URD Midtown URD North Park URD Revised: 3/10/2017 310 C:\Users\rcrough\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\VOYRP8CP\Fund_145_Balance_-_03.20.2017\Presentation 4/5/2017 at 5:22 PM BEGINNING FUND BALANCE: JULY 1, 2006 -$ ADD: REVENUES PROPERTY TAX INCREMENT 242,501.51$ TOTAL REVENUES 242,501.51$ LESS: EXPENDITURES CONTRACTED SERVICES / CONSULTANTS & PROF SERV (12,559.93)$ CONTRACTED SERVICES / ENGINEERS (37,251.23) CONTRACTED SERVICES / GENERAL (2,567.49) TRAVEL/TRAINING / IN-STATE (3.60) OTHER / ADVERTISING (42.00) OTHER / OPERATING INTEREST (21,464.77) OTHER / POSTAGE (21.78) OTHER / SHIPPING & HANDLING (43.56) OTHER / GENERAL (350.00) CAPITAL / IMP:INFRASTRUCTURE+IMPROV (188,736.09) TOTAL EXPENDITURES (263,040.45)$ CURRENT FUND BALANCE/(FUND DEFICIT)(20,538.94)$ Check Figures Beg Fund Bal 252.20.00 (44,754.35)$ Revenue Offset 242.01.00 28,220.33$ Expenditure Offset 242.02.00 (4,004.92)$ (20,538.94)$ -$ MANDEVILLE INDUSTRIAL TIF DISTRICT FUND BALANCE Fund 145 As Of 03/20/2017 311