HomeMy WebLinkAbout06-04-18 City Commission Packet Materials - C12. FY18 South Bozeman Technology District Annual Update
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Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Brit Fontenot, Economic Development Director
SUBJECT: South Bozeman Technology District Update
MEETING DATE: June 4, 2018
AGENDA ITEM TYPE: Consent
RECOMMENDATION:
Receive the information contained in this memo and consider this in the context
of the FY 19 urban renewal district work plans and budgets.
BACKGROUND:
The Bozeman City Commission created the South Bozeman Technology District
(the "District") in December, 2012 and authorized the District's use of tax increment
financing to support a wide array of statutorily defined activities within the District,
including the development of public infrastructure. Click here to review the District’s
comprehensive development plan.
A primary purpose of creating the South Bozeman Technology District (the
"District") was to address existing public infrastructure deficiencies on property
envisioned for use by the Montana State University Innovation Campus ("MSUIC") as a
location to create a campus of innovation excellence. Currently, property within the
District lacks the necessary infrastructure to facilitate the aforementioned development.
(Attachment 1)
The City continues to support MSU, the MSU Foundation, the MSUIC and other
community partners to carry out the vision of the Innovation Campus. Since the last
report, the MSUIC Board has been very active and much has been accomplished to set
the stage for the development of the first building in the District and on the MSUIC site,
the Advanced Research Laboratory (“ARL”). A developer for the ARL, and future phases,
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has been selected and the site work is underway for the construction of the first campus
facility, the ARL.
(Attachment 2)
The City’s Planning Division is working with the development team through the
review process for the initial phase of the project. Additionally, the Economic
Development department, in consultation with the City Attorney, is working with the
development team on a reimbursement agreement for eligible expenses related to the
installation and improvement of public infrastructure in the various phases of the
project.
The Board:
The District Board and staff have met irregularly over the past several years. Two
years ago, an updated vision was forwarded by MSU leadership and charted the existing
course of the MSUIC over the next several years. (Attachment 3)
At that time, and as development discussions began in earnest, many of the
Board members realized real or perceived conflicts of interest related to their
professional roles and resigned from the board. The Economic Development
Department deploys staff resources to the District as necessary.
The Commission has always retained final decision making authority and as such
the Board resigned in order to clear the way for the City Commission to act,
unobstructed, on recommendations as necessary. As the ARL and subsequent phases of
development progress, a discussion of the appointment of the SBTD board, or some
other organizational structure, is recommended.
Opportunity Zone:
In March, 2018 the Commission authorized the City Manager to sign and submit
to the Governor of Montana an Opportunity Zone proposal. Click here to view the
Commission memo and proposal: City of Bozeman Opportunity Zone Proposal. The City
Commission unanimously supported the proposal. The Tax Cuts and Jobs Act of 2017
established a new economic development program called Opportunity Zones designed
to encourage long-term private investments in low-income communities. The program
provides a federal tax incentive for taxpayers who reinvest unrealized capital gains into
“Opportunity Funds,” which are specialized vehicles dedicated to investing in low
income areas called “Opportunity Zones.” As recommended by the City, the Governor
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nominated Census Tract 11.02. The final designation of an Opportunity Zone is made by
the U.S. Treasury Department. Once officially designated, this Zone becomes an
important economic development tool for the City. (Attachment 4)
UNRESOLVED ISSUES:
Unresolved issues include the approval of a reimbursement agreement for the
eligible public portions of infrastructure required for the development of the MSUIC.
Additionally, as activity increases in the District, the Commission should determine if
District management should be returned to a board, some other structure, or whether
the Commission should continue to act in that Board capacity.
FISCAL EFFECTS:
Until 2018 there has been no real development activity on the site, thus no
increment has accrued. The District deficit reported in 2015 was ($7,410). In 2016 and
2017 the District deficit hovered around ($7,450). As of May 14, 2018, the District deficit
is ($7,561). The value of the proposed first phase of development is approximately $17
million dollars which should erase the deficit and add value, and increment, at the next
reappraisal and District valuation cycle.
ATTACHMENTS:
1) South Bozeman Technology District map;
2) MSUIC Brochure;
3) Research at Montana State University and the MSU-IC; and
4) Opportunity Zone Map, Census Tract 11.02.
Report compiled on: May 17, 2018
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PARTNERS
The Innovation Campus brochure was made possible with the support of our partners and:Adam Friedman Business Development
adam@msuinnovationcampus.com
406.314.9005
222 East Main Street, Bozeman, MT 59715
Justin Cook Executive Director
justin.cook@msuic.org
406.223.2409
“Silicon Valley gets all the glory, but the
real hotbed of American entrepreneurship
appears to be a few hundred miles to the
northeast: Montana.”
- NEW YORK TIMES
INTEGRATING TECHNOLOGY & COMMUNITY IN BOZEMAN
DEFENSE TECHNOLOGYENTREPRENEURSHIPCYBER SECURITYBIOTECHNOLOGYPHOTONICS OPTICS ENGINEERING
msuinnovationcampus.com
MSU INNOVATION CAMPUS, LOCATED NEXT TO
MONTANA’S LARGEST RESEARCH UNIVERSITY, IS THE
FIRST COLLABORATIVE RESEARCH PARK OF ITS KIND IN
MONTANA. A DESIGNATED OPPORTUNITY ZONE, PART OF
THE 2017 TAX CUTS AND JOBS ACT, IT OFFERS WORKSPACES
FOR RESEARCH AND TECHNOLOGY COMPANIES IN ONE OF
THE MOST DESIRABLE PLACES IN THE COUNTRY.
OPPORTUNITY ZONE
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BE IN BOZEMAN
Nestled between four mountain ranges, Bozeman has
long been a destination for adventure seekers and
outdoor enthusiasts. Today, it’s attracting a new crowd:
high-tech companies and entrepreneurs. Bozeman
serves as a hub of culture, arts and entertainment,
while maintaining its rank as a premier outdoor
destination, offering blue-ribbon fishing, first-class
skiing, hiking, rafting and other opportunities.
Downtown Bozeman is just a short drive to Bozeman
Yellowstone International Airport, the busiest airport
in the state, offering non-stop flights to 15 cities in the
U.S. and connections around the world.
The Innovation Campus is a designated Opportunity Zone, which means
that investors who locate their business here can benefit from federal
tax incentives. The Opportunity Zone program is part of the $1.5 trillion
Tax Cuts and Jobs Act that was passed by Congress in 2017.
Incentives include:
• 10-year deferral of capital gains
• 15% reduction in your overall tax payment
• Tax-free gains for 10+ years while in the Innovation Campus
• Walking distance to Montana State
University, shopping and transportation
• More than a dozen potential building sites
• 20 minutes to Bozeman Yellowstone
International Airport
“Bozeman has long been a magnet
for outdoor enthusiasts, but the
small city has also earned another
reputation as a boomtown for
entrepreneurs in high technology.”
- FAST COMPANY 2017
Montana ranked #1 in the nation for
entrepreneurship startup activity by the Ewing
Marion Kauffman Foundation (2013-2016)
#1
High-tech sector contributed more than $1.5
billion in revenue in 2017 and continues to
grow (Montana High Tech Business Alliance)
$1.5B
Predicted amount of high-tech job growth
(Montana High Tech Alliance, 2017)
19.2%
Bozeman, Montana is ranked #1 as the
fastest growing micropolitan city in the U.S.
Growth
• Money Magazine’s Best Places to Live 2017
• Bozeman Yellowstone International Airport named fifth
best airport in the U.S. by Money Magazine in 2018
• Montana State University is the largest research college
in Montana
• “Biggest Skiing in America” at Big Sky Resort
• Local’s choice skiing at Bridger Bowl Ski Area
• World-class fishing, rafting, hiking
• 90-minute drive to Yellowstone National Park
• Extensive network of in-town bike and walking trails
BOZEMAN STATS
• 42-acre campus next to Montana State University
• Shovel-ready spaces for lab, medical, high-tech companies
• Built-to-suit workspaces ranging from 10,000 to 150,000
square feet
• Opportunities for collaboration between researchers,
students and technology companies
• Connected with Bozeman Fiber broadband
WHAT WE OFFER
OPPORTUNITY ZONE Bozeman Direct Flights
msuinnovationcampus.com
“Blending high-tech companies,
motivated students and cutting-
edge research in state of the art
facilities – this is the future of
technology innovation.”
JUSTIN COOK,
Executive Director of The Montana State University Innovation Campus
BUILD & GROW YOUR BUSINESS IN BOZEMAN
Serving as the nucleus for Bozeman’s
burgeoning high-tech economy,
the MSU Innovation Campus offers
workspaces for advanced technology
companies interested in setting up
shop in Bozeman, Montana. The first
collaborative research park of its kind
in Montana, MSU Innovation Campus
meets the increased need for top tier
research and technology workspaces in
one of the most desirable places to live
and work in the country.
BOZEMAN
SEATTLE
PORTLAND
SAN FRANCISCO
LOS ANGELES LAS VEGAS
SALT LAKE CITY
DENVER
MINNEAPOLIS / ST. PAUL
CHICAGO
DALLAS /FORT WORTH
ATLANTA
NEW YORK
NEWARK
HOUSTON
PHOENIX
LONG BEACHBridger Bowl Ski AreaGallatin RiverMontana Instruments, Bozeman MT225
Research at Montana State University
and the MSU-IC
Renee Reijo Pera
Vice President for Research MSU
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Excerpt of Letter from President Franklin D Roosevelt to Office of Scientific
Research and Development (July, 1945):
1) What can be done …. to make known to the world as soon as possible the
contributions which have been made during our war effort to scientific knowledge?
2) With particular reference to the war of science against disease, what can be
done now to organize a program for continuing in the future the work which has
been done in medicine and related sciences?
3) What can the Government do now and in the future to aid research activities
by public and private organizations? The proper roles of public and of private
research, and their interrelation, should be carefully considered.
4) Can an effective program be proposed for discovering and developing
scientific talent in American youth so that the continuing future of scientific
research in this country may be assured on a level comparable to what has been
done during the war?
Research in Universities Began with the Land Grant Institutions and
Established Current Funding Model Following WWII
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Strategic Planning
Goal: Double our expenditures to $220M+ by 2021.
1) Precision agriculture
2) Natural resources (including energy)
3) Optics
4) Health and biomedical sciences
Rural health in native and non-native populations, especially mental
health
Immunology, microbiology, zoonotics and antibiotic resistance
Foundational strategic area across disciplines: Data/modeling/computation
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The Original Mission and Vision of the MSU -IC
Mission & Vision
The Mission of the Montana State University Innovation Campus is –“Create
a world-class university-related research park to promote economic
development and partnerships between high-tech based businesses and the
research community of Montana State University, the region, and the State of
Montana.
The Vision of the Montana State University Innovation Campus is –“To be
recognized as ‘the place’ that provides a unique community to connect people
and support public private partnerships to stimulate new ideas, push forward
the advancement of research and science, and produce new discoveries and
technologies that will transform the world.”
Paraphrased: Our mission is to provide unprecedented opportunity for our
students at Montana State University and positively engage the surrounding
community and the state of Montana.
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Types of Innovation Centers
Incubators
Accelerators
Research/tech parks
100 230
MSU Synergy with MSU-IC
1) Longevity
Precision nutrition/medicine
Lifestyle/financial choices
Education
Transitions
2) Classified Research
Data sciences
Optics
3) Workforce development
Clinical Sciences
Clinical trials (current clinical trials in schizophrenia, meth use)
Healthcare workforce
Native and rural health
Computer Sciences
Veteran re-entry
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Many Models for the MSU-IC
QB3: UC Berkeley, UC San Francisco, UC Santa Cruz
CALIT2: UC San Diego, UC Irvine
UU Research Park
USU Research Park
Stanford University
Purdue Innovation Park
Colorado State University at Boulder
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The Vision For the Physical Space
103 233
Schematic of the Current Space
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Take-Home Message
The research enterprise is our shared enterprise and should serve Montana
including the technology community.
We have the opportunity to create one of the world’s most sustainable and
outstanding research enterprises, to be envied nationally, that is responsive to
the needs of Montana and beyond.
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Appendix
11
106 236
Funding
107 237
VPR Research Funds
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This Year
1.Focused on fundamentals: Policies and support to olleges, departments, centers and
institutes
2.MSU Funding Opportunities and Publications updates weekly
3.Research Expansion Funding issued with Deans and President (have seen >3X ROI to date)
4.Increased and improved proposal (“no RFP left behind”)
5.Restructured the VPRED office to improve oversight, customer-service mentality and focus
6.Established first Centers and Institutes (Center for Communication of Science, Center for
Mental Health Research and Recovery, Center for Health and Safety Culture, HELPS
Laboratory, pending: eXtreme Gravity Institute)
7.Developed external relationships important to funding, economic development
8.MT Research Initiative
9.S&C Programs/Centers/Institutes RFP
10.Bridge-funding, IDC and space policies adopted
11.Prioritization process underway
12.Nomination committee formed
13.Established research student internship partnership with Stanford University
14.Unprecedented grant awards and incoming funds including prestigious national centers
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National Centers
Funding in national competition from NSF::
David Dickensheets and colleagues, National Nanotechnology Research Center; $3M
Site visit from Keck Administration:
Brent Peyton and colleagues, Thermal Biology Institute –$2M; $2M match
Discovering Alkaliphilic Hyperthermophilic Archaea: Novel Organisms and Molecules for Medicine,
Chemicals, and Energy
Invited to submit full proposals:
1.Kenning Arlitsch, Patrick O’Brien and Jerry Sheehan -Expanding Serendipitous Knowledge
Discovery -$1.5M; $1.5M match
2. Robert Usselmann and David Singel –The Quantum Biology of
Reactive Oxygen Species -$1.5M; $1.5M match
3.Brian Bothner, Ed Dratz, Valerie Copie, David Dickensheets and
Tomas Gedeon --High Time Resolution Analysis of Metabolism,
Oxidative Stress and Stem Cell Reprogramming --$1.5M; $1.5M match
110 240
The MT Research and Economic Development Initiative
1.Palmer –Development and Commercialization of Autonomous Chemical & Biological
Instrumentation for Water Quality Monitoring (UM): $1,292,398
2.Voyich –One Medicine: Reducing the Impacts of Inflammatory and Infectious Diseases
on Animal and Human Health (MSU): $1,500,000
3.Lefcort –Synergistic Improvement in the Diagnosis & Treatment of Mental Illness,
Dementia, & Chronic Pain (MSU): $1,462,158
4.Spangler –Enhancing MT’s Energy Resources: Research in Support of the State of
MT Energy Policy Goals (MSU & MT Tech): $1,200,000 plus MSU Northern $800,000
5.Jacobsen –Increasing Profitability by Improving Efficiency of MT’s Farm & Ranch
Lands (MSU): $2,276,734
6.Patel -Translational Science at the Neural Injury Center (UM): $2,234,834
7.Shaw –Optics & Photonics Research for MT Economic Development (MSU):
2,496,513
Distribution to date:
MSU $9,735,405
UM $3,527,232
Remaining for additional projects (TBA) $1,737,363111241
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