HomeMy WebLinkAbout05-20-19 City Commission Packet Materials - A1. Res 5046, Approving West Peach Condos as an Urban Renewal Project
Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: David Fine, Urban Renewal Program Manager SUBJECT: Public Hearing for Resolution 5046 – A Resolution Approving a Project in the Bozeman Midtown Urban Renewal District, Known as West Peach Condos, as an Urban Renewal Project, Making Findings with Respect Thereto and Approving the Use of Tax Increment Revenues or Tax Increment Revenue Bonds to Pay, Reimburse or Finance Eligible Costs Thereof; Approving a Related Development Agreement; and Making a Reimbursement Declaration MEETING DATE: May 20, 2019 AGENDA ITEM TYPE: Action RECOMMENDATION: Adopt Resolution 5046.
RECOMMENDED MOTION:
Incorporating the information and findings in the staff report to the Midtown
Urban Renewal Board, the staff memorandum to the City Commission, oral
findings made by the Commission during the public hearing, information and
findings contained in the proposed resolution, and after considering public
comment, I hereby move to adopt Resolution 5046. BACKGROUND: The attached Staff Report to the Midtown Urban Renewal Board (“Board”) contains significant detail about this project and the proposed incentive. Please refer to the Staff Report for this detail. The Bozeman City Commission created the Midtown Tax Increment Financing (TIF) Assistance Program (the “Program”) in 2017 to support redevelopment activity in the District and advance the goals of the 2015 Midtown Urban Renewal Plan. The Midtown TIF Assistance Program supports projects that
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create significant new taxable value as well as meeting the five goals of the Midtown Urban Renewal Plan. These goals, as required by statute, focus on mitigating blighting conditions in the urban renewal area. The Applicant for West Peach Condos, West Peach, LLC, submitted an application for TIF Assistance under the Program. West Peach Condos project includes 17 housing units with two bedrooms, three bathrooms and an office, to be sold as condominiums. The Board considered the application at their regular meeting on May 2, 2019, voted unanimously to direct Economic Development staff to negotiate a development agreement with the Applicant and recommended an incentive award under the Program to cover the eligible costs of offsite infrastructure, including water, sewer, street, sidewalks, and street lighting, not-to-exceed $256,335. This amount includes a 15% contingency on the incentive amount recommended by the Staff Report to mitigate the potential for increased construction costs. The proposed Development Agreement allows for reimbursement of actual invoiced eligible costs up to the not-to-exceed amount of $256,335. Resolution 5046 designates West Peach Condos as an Urban Renewal Project and authorizes the City Manager to sign the proposed Development Agreement. The Resolution approves using tax increment revenues or proceeds of tax increment revenue bonds to pay or reimburse West Peach, LLC, as the developer of the project for certain eligible costs of associated public infrastructure. These public infrastructure costs are detailed in Exhibit “C” of the Development Agreement. Pursuant to the proposed Development Agreement, the City would agree to reimburse the Developer for the cost of public infrastructure only after the project receives a Certificate of Occupancy showing its completion. REQUIRED FINDINGS: The Montana Urban Renewal Law requires, as a criterion for approval of an urban renewal project, that the City Commission make the following findings. See Staff Report to the Board for staff’s analysis (pp. 6-7). These findings are included in Resolution 5046 in Section 3. a. A workable and feasible plan exists for making available adequate housing for the persons who will be displaced from their housing by the Project; b. The Plan and the Project conform to the Bozeman Community Plan or parts thereof for the City as a whole; c. The Plan and the Project will afford maximum opportunity, consistent with the needs of the City as a whole, for the
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rehabilitation or redevelopment of the District by private enterprise; d. Taking into account the use of tax increment revenues or the proceeds of tax increment revenue bonds to pay or reimburse the Developer for all or a portion of the Eligible Costs, there is expected to be a sound and adequate financial program for the financing of the Project; and e. The Project constitutes an urban renewal project within the meaning of the Act and the Plan. The attached Staff Report includes a detailed analysis of the Midtown TIF Assistance Application for West Peach Condos. FISCAL EFFECTS: The Development Agreement stipulates that the City will reimburse the Developer for Eligible Costs not-to-exceed $256,355. This amount includes a 15% contingency on the staff recommended amount to account for the increased cost of public bidding. The Applicant expects that project will be completed as early as spring 2020 (Fiscal Year 2020). Funding is currently included in the Board’s recommended Work Plan and Budget for Fiscal Year 2020. Staff is not anticipating the need to issue bonds to cover the costs of this project at this time. However, Staff is taking the necessary procedural steps to ensure that bonds could be issued for this project in the event that unforeseen events occur. Leland Consulting created a tax generation model for the Midtown Urban Renewal District. According to their model, the project would produce net new annual tax revenues of $63,411, which would allow TIF assistance for incentives to be paid back in under 5 years (assumes a 5% interest rate on the advanced amount) for new increment-based payback if assistance is provided at the staff recommended amount. The ratio of public assistance to private investment for the Board recommended incentive is 24.77:1.
ATTACHMENTS:
• Resolution 5046
• Development Agreement (West Peach Condos)
• Staff Report to the Midtown Urban Renewal Board, West Peach Condos project
• Leland Consulting Tax Increment Analysis
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• EPS: TIF Request Review, West Peach Condos
• West Peach Condos, Midtown TIF Assistance Application
• 2015 Midtown Urban Renewal Plan
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RESOLUTION NO. 5046
RESOLUTION APPROVING A PROJECT IN THE BOZEMAN MIDTOWN URBAN
RENEWAL DISTRICT KNOWN AS WEST PEACH CONDOS AS AN URBAN
RENEWAL PROJECT, MAKING FINDINGS WITH RESPECT THERETO AND
APPROVING THE USE OF TAX INCREMENT REVENUES OR TAX INCREMENT
REVENUE BONDS TO PAY, REIMBURSE OR FINANCE ELIGIBLE COSTS
THEREOF; APPROVING A RELATED DEVELOPMENT AGREEMENT; AND
MAKING A REIMBURSEMENT DECLARATION
BE IT RESOLVED by the City Commission (the “Commission”) of the City of Bozeman,
Montana (the “City”), as follows:
Section 1
Recitals.
1.01. Under the provisions of Montana Code Annotated, Title 7, Chapter 15, Parts 42 and
43 (the “Act”), the City is authorized to create an urban renewal area, prepare and adopt a
redevelopment plan therefor and amendments thereto, undertake urban renewal projects therein,
provide for the segregation and collection of tax increment with respect to taxes collected in such
area, issue its bonds to pay the costs of such projects and to refund bonds previously issued under
the Act and pledge to the repayment of the bonds the tax increment and other revenues derived
from projects undertaken within the urban renewal area.
1.02. Pursuant to the Act and Ordinance No. 1685 adopted by the Commission on
November 27, 2006, as amended by Ordinance No. 1925, adopted by the City Commission on
December 16, 2015 (collectively, the “Ordinance”), the City has created the Bozeman Midtown
Urban Renewal District (the “District”) as an urban renewal district and has approved the Bozeman
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Resolution 5046, Approving a Project in the Midtown Urban Renewal District Known as West Peach Condos
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Midtown Urban Renewal Plan (the “Plan”) for the District containing a tax increment financing
provision, all as set forth in the Ordinance and the Plan.
1.03. The Plan details conditions of blight in the District, including physical deterioration
of public improvements, including with respect to streets, curbs, gutters, sidewalks, storm
drainage, lighting and landscaping. In addition, the Plan outlines goals and initiatives for the
District, including installing signage, lighting, landscaping and sidewalk, curb, gutter and street
improvements, to promote economic development, improve multi-modal transportation and
improve, maintain and support innovation in infrastructure.
1.04. On May 6, 2019, the Commission adopted Resolution No. 5045, calling a public
hearing to approve the construction of a residential condominium project known as “West Peach
Condos,” expected to consist of approximately seventeen units with private garages, and related
public infrastructure improvements, including sidewalks, street lights, street improvements and
water and sewer infrastructure improvements (collectively, the “Project”) as an urban renewal
project under the Act and the Plan and to approve using tax increment revenues or proceeds of tax
increment revenue bonds to pay or reimburse West Peach, LLC, as developer of the Project (the
“Developer”), for certain eligible costs thereof, consisting of the costs of the public infrastructure
improvements (the “Eligible Costs”). On May 20, 2019, a duly noticed public hearing was held on
the approval of the Project and the use of tax increment revenues to pay or finance all or a portion
of the costs of the Project and all persons appearing were given an opportunity to speak at the
public hearing.
Section 2
Approval of the Project as an Urban Renewal Project.
The Commission hereby approves the Project as an urban renewal project under the Act
and the Plan. The Project, including the Eligible Costs, is contemplated by and within the scope of
the Plan, and the Eligible Costs are eligible for tax increment financing under the Act.
Section 3
Findings.
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Resolution 5046, Approving a Project in the Midtown Urban Renewal District Known as West Peach Condos
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The Commission hereby finds with respect to the Project as follows:
a. no persons will be displaced from their housing by the Project;
b. the Plan and the Project conform to the Bozeman Community Plan or parts
thereof for the City as a whole;
c. the Plan and the Project will afford maximum opportunity, consistent with
the needs of the City as a whole, for the rehabilitation or redevelopment of
the District by private enterprise;
d. taking into account the use of tax increment revenues or the proceeds of tax
increment revenue bonds to pay or reimburse the Developer for all or a
portion of the Eligible Costs, there is expected to be a sound and adequate
financial program for the financing of the Project; and
e. the Project constitutes an urban renewal project within the meaning of the
Act and the Plan.
Section 4
Development Agreement; Use of Tax Increment.
4.01. The Midtown Urban Renewal Board (the “Board”) and the Developer have
negotiated a Development Agreement, the form of which is attached hereto as Exhibit A. The
Development Agreement is hereby approved in substantially the form attached. The City Manager,
or her designee, is hereby authorized and directed to finalize, approve, execute and deliver to the
Developer the Development Agreement, substantially in the form attached as Exhibit A, with such
changes as she shall deem necessary or appropriate.
4.02. The Commission hereby approves the use of tax increment revenues or proceeds of
tax increment bonds to pay or reimburse the Developer for Eligible Costs of the Project, subject to
the terms and conditions of the Development Agreement. No further Commission action shall be
required if the City’s obligations under the Development Agreement are to be paid or satisfied
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Resolution 5046, Approving a Project in the Midtown Urban Renewal District Known as West Peach Condos
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with tax increment revenues then on hand and available therefor. If the City’s obligations under
the Development Agreement are to be financed with proceeds of tax increment revenue bonds, the
forms of such bonds and the terms and conditions thereof shall be prescribed by a subsequent
resolution or resolutions to be adopted by this Commission.
Section 5
Reimbursement Expenditures.
5.01. Regulations. The City may issue tax-exempt bonds in one or more series (the
“Bonds”) to finance all or a portion of the Eligible Costs and pay costs associated with the
financing. The United States Department of Treasury has promulgated regulations governing the
use of proceeds of tax-exempt bonds, all or a portion of which are to be used to reimburse the City
for project expenditures paid by the City prior to the date of issuance of such bonds. Those
regulations (Treasury Regulations, Section 1.150-2) (the “Regulations”) require that the City adopt
a statement of official intent to reimburse an original expenditure not later than 60 days after
payment of the original expenditure. The Regulations also generally require that the bonds be
issued and the reimbursement allocation made from the proceeds of the bonds within 18 months
(or three years, if the reimbursement bond issue qualifies for the “small issuer” exception from the
arbitrage rebate requirement) after the later of (i) the date the expenditure is paid or (ii) the date
the project is placed in service or abandoned, but (unless the issue qualifies for the “small issuer”
exception from the arbitrage rebate requirement) in no event more than three years after the date
the expenditure is paid. The Regulations generally permit reimbursement of capital expenditures
and costs of issuance of the bonds.
5.02. Prior Expenditures. Other than (i) expenditures to be paid or reimbursed from sources
other than the Bonds, (ii) expenditures constituting preliminary expenditures within the meaning
of Section 1.150-2(f)(2) of the Regulations, or (iii) expenditures in a “de minimus” amount (as
defined in Section 1.150-2(f)(1) of the Regulations), no expenditures for the Eligible Costs of the
Project have been paid by the City before the date 60 days before the date of adoption of this
Resolution.
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Resolution 5046, Approving a Project in the Midtown Urban Renewal District Known as West Peach Condos
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5.03. Declaration of Intent. The City reasonably expects that it may reimburse the
expenditures made for Eligible Costs of the Project out of the proceeds of Bonds in an estimated
maximum aggregate principal amount of $275,000 after the date of payment of all or a portion of
the Eligible Costs of the Project. All reimbursed expenditures shall be capital expenditures, a cost
of issuance of the bonds or other expenditures eligible for reimbursement under Section 1.150-
2(d)(3) of the Regulations.
5.04. Budgetary Matters. As of the date hereof, there are no City funds reserved, allocated
on a long-term basis or otherwise set aside (or reasonably expected to be reserved, allocated on a
long-term basis or otherwise set aside) to provide permanent financing for the expenditures related
to the Project, other than pursuant to the issuance of the Bonds. The statement of intent contained
in this Resolution, therefore, is determined to be consistent with the City’s budgetary and financial
circumstances as they exist or are reasonably foreseeable on the date hereof.
5.05. Reimbursement Allocations. The City’s Finance Director shall be responsible for
making the “reimbursement allocations” described in the Regulations, being generally the transfer
of the appropriate amount of proceeds of the bonds to reimburse the source of temporary financing
used by the City to make prior payment of the Eligible Costs of the Project. Each allocation shall
be evidenced by an entry on the official books and records of the City maintained for the Bonds
or the Project and shall specifically identify the actual original expenditure being reimbursed.
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Resolution 5046, Approving a Project in the Midtown Urban Renewal District Known as West Peach Condos
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PASSED, ADOPTED, AND APPROVED by the City Commission of the City of
Bozeman, Montana, at a regular session thereof held on the 20th day of May, 2019.
___________________________________
CYNTHIA L. ANDRUS
Mayor ATTEST:
___________________________________ ROBIN CROUGH City Clerk
APPROVED AS TO FORM:
___________________________________
GREG SULLIVAN
City Attorney
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Resolution 5046, Approving a Project in the Midtown Urban Renewal District Known as West Peach Condos
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CERTIFICATE AS TO RESOLUTION AND ADOPTING VOTE
I, the undersigned, being the duly qualified and acting recording officer of the City of
Bozeman, Montana (the “City”), hereby certify that the attached resolution is a true copy of
Resolution No. 5046, entitled: “RESOLUTION APPROVING A PROJECT IN THE
BOZEMAN MIDTOWN URBAN RENEWAL DISTRICT KNOWN AS WEST PEACH
CONDOS AS AN URBAN RENEWAL PROJECT, MAKING FINDINGS WITH RESPECT
THERETO AND APPROVING THE USE OF TAX INCREMENT REVENUES OR TAX
INCREMENT REVENUE BONDS TO PAY, REIMBURSE OR FINANCE ELIGIBLE
COSTS THEREOF; APPROVING A RELATED DEVELOPMENT AGREEMENT; AND
MAKING A REIMBURSEMENT DECLARATION” (the “Resolution”), on file in the original
records of the City in my legal custody; that the Resolution was duly adopted by the City
Commission of the City at a regular meeting on May 20, 2019, and that the meeting was duly held
by the City Commission and was attended throughout by a quorum, pursuant to call and notice of
such meeting given as required by law; and that the Resolution has not as of the date hereof been
amended or repealed.
I further certify that, upon vote being taken on the Resolution at said
meeting, the following Commissioners voted in favor thereof: ______
; voted against
the same: ; abstained from voting
thereon: ; or were absent: ___.
WITNESS my hand officially this 21st day of May, 2019.
ROBIN CROUGH City Clerk
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EXHIBIT A
[Form of Development Agreement]
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DEVELOPMENT AGREEMENT (West Peach Condominium Project)
This DEVELOPMENT AGREEMENT (this “Agreement”) is dated as of May 20, 2019
by and between West Peach, LLC (the “Developer”), and the CITY OF BOZEMAN, MONTANA, 121 N. Rouse Ave., Bozeman, Montana 59771 (the “City”). The Developer and
the City are each individually referred to herein as a “Party” and collectively as the “Parties.”
RECITALS:
WHEREAS, under the provisions of Montana Code Annotated, Title 7, Chapter 15, Parts
42 and 43, as amended (the “Act”), the City is authorized to create urban renewal areas, prepare and adopt an urban renewal plan therefor and amendments thereto, undertake urban renewal projects therein, provide for the segregation and collection of tax increment with respect to
property taxes collected in such areas, and apply tax increment revenues derived from projects
undertaken within the urban renewal area to pay eligible costs;
WHEREAS, pursuant to the Act and Ordinance No. 1685 adopted by the City Commission of the City (the “City Commission”) on November 27, 2006, as amended by Ordinance No. 1925, adopted by the City Commission on December 16, 2015 (collectively, the
“Ordinance”), the City has created the Bozeman Midtown Urban Renewal District (the
“District”) as an urban renewal district and has approved the Bozeman Midtown Urban Renewal
Plan (the “Plan”) as an urban renewal plan in accordance with the Act, which Plan provides for the segregation and collection of tax increment revenues with respect to the District;
WHEREAS, the Developer proposes to undertake the construction of a residential
condominium project, expected to consist of approximately seventeen units with private garages,
and related public infrastructure improvements, including sidewalks, street lights, street
improvements and water and sewer infrastructure improvements, as described more particularly on Exhibit A hereto (the “Project”), on land located in the District at the northwest corner of
West Peach Street and N. 3rd Avenue in Bozeman, Montana, which is legally described
on Exhibit B hereto (the “Land”);
WHEREAS, the Developer submitted to the Midtown Urban Renewal Board of the City
(the “Board”) an application for tax increment assistance with respect to certain eligible costs of the Project;
WHEREAS, on May 2, 2019, the Board approved and recommended that the City
Commission approve, subject to the terms and conditions of this Agreement, the application of
tax increment assistance in the amount of $256,335 with respect to certain eligible costs of the
Project;
WHEREAS, pursuant to Resolution No. 5046 adopted on May 20, 2019, after a duly
called and noticed public hearing, the City Commission approved the Project as an urban
renewal project under the Plan and the Act and authorized the use of tax increment revenue of
the District to reimburse the Developer for eligible costs of the Project, consisting of the design,
engineering and construction of certain infrastructure improvements associated with the Project, including sidewalks, street lights, street improvements and water and sewer infrastructure
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improvements (the “Infrastructure Improvements”), described more particularly on Exhibit C
hereto, in the maximum amount of $256,335, subject to the terms and conditions of this
Agreement; and]
WHEREAS, the City Commission may determine in its sole discretion to issue tax increment urban renewal revenue bonds in one or more series (the “Bonds”) to finance all or a portion of the Infrastructure Improvements to be reimbursed to the Developer in the maximum
amount of $256,335 and pay associated costs of the financing; and
WHEREAS, the Parties desire to enter into this Agreement which sets forth the
obligations and commitments of the Parties with respect to the Project, including the Infrastructure Improvements.
NOW, THEREFORE, the City and the Developer, pursuant to the Act, each in
consideration of the representations, covenants and agreements of the other, as set forth herein,
mutually represent, covenant and agree as follows:
Section 1. Definitions; Rules of Interpretation; Exhibits.
1.1. Definitions. For all purposes of this Agreement, except as otherwise expressly
provided or unless the context clearly requires otherwise, the following terms have the meanings
assigned to them, respectively:
“Act” means Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43, as amended
or supplemented.
“Agreement” means this Development Agreement, dated as of May 20,2019, by and
between the City and the Developer, as it may be amended or supplemented from time to time in
accordance with the terms hereof.
“Bonds” has the meaning given in the Recitals above.
“City” means the City of Bozeman, Montana, or any successors to its functions under this Agreement.
“City Commission” means the governing body of the City.
“Costs of Issuance” means, if the City issues Bonds, the following costs but only to the
extent incurred in connection with, and allocable to the Bonds: underwriter’s spread, counsel
fees, financial advisor fees, rating agency fees, trustee fees, paying agent fees, bond registrar, certificate, and authentication fees, accounting fees, printing costs for bonds and offering
documents, public approval process costs, feasibility study costs, guarantee fees, other than for
qualified guarantees; and similar costs.
“Developer” means West Peach, LCC, a Montana limited liability company, and its
successors and assigns in accordance with and as permitted under this Agreement.
“Developer Certificate” means the certificate attached hereto as Exhibit E.
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“District” means the Bozeman Midtown Urban Renewal District, an urban renewal
district created by the Ordinance pursuant to the Act, as such may be enlarged or reduced from
time to time in accordance with the Act.
“DOR” means the State of Montana Department of Revenue.
“Environmental Laws and Regulations” means and includes the Federal Comprehensive Environmental Compensation Response and Liability Act (“CERCLA” or the
“Federal Superfund Act”) as amended by the Superfund Amendments and Reauthorization Act
of 1986 (“SARA”), 42 U.S.C. §§ 9601 et seq.; the Federal Resource Conservation and Recovery
Act of 1976 (“RCRA”), 42 U.S.C. §§ 6901 et seq.; the Clean Water Act, 33 U.S.C. § 1321 et seq.; and the Clean Air Act, 42 U.S.C. §§ 7401 et seq., all as the same may be from time to time amended, and any other federal, state, county, municipal, local or other statute, code, law,
ordinance, regulation, requirement or rule which may relate to or deal with human health or the
environment including without limitation all land use, zoning, and stormwater control
regulations as well as all regulations promulgated by a regulatory body pursuant to any statute, code, law, ordinance, regulation, requirement or rule.
“Fiscal Year” means the period commencing on the first day of July of any year and
ending on the last day of June of the next calendar year, or any other twelve-month period
authorized by law and specified by the Commission as the City’s fiscal year.
“Indemnified Parties” has the meaning given to it in Section 7.1.
“Infrastructure Improvements” means the design, engineering, work, construction, materials, equipment and the other improvements described as such in Exhibit C hereto, as the
same may be amended or supplemented from time to time, in accordance with the terms hereof.
“Land” has the meaning given to it in the recitals hereof.
“Land Use Regulations” means all federal, state and local laws, rules, regulations, ordinances and plans relating to or governing the development or use of the Land or the Project.
“Milestone” of “Milestones” has the meaning given in Section 3.4 hereof.
“Milestone Date” or “Milestone Dates” has the meaning given in Section 3.4 hereof.
“Ordinance” has the meaning given to it in the recitals hereof.
“Person” means any individual, corporation, limited liability company, partnership, limited liability partnership, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
“Prevailing Wage Rates” means the Montana Prevailing Wage Rate for public works
projects as published from time to time by and available from the Montana Department of Labor
and Industry, Research and Analysis Bureau, P.O. Box 1728, Helena, Montana 59624, telephone number (800) 541-3904.
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“Project” means the facilities to be constructed by the Developer on the Land pursuant to
this Agreement, as described more particularly on the attached Exhibit A.
“State” means the State of Montana.
“Tax Increment” means the amount received by the City pursuant to the Act from the extension of levies of Taxes (expressed in mills) against the incremental taxable value (as defined in the Act) of all Taxable Property, and shall include all payments in lieu of Taxes
attributable to the incremental taxable value and all payments received by the City designated as
replacement revenues for lost Tax Increment.
“Taxable Property” means all real and personal property located in the District and subject to Taxes, including land, improvements and equipment.
“Taxes” means all taxes levied on an ad valorem basis by any Taxing Body against the
Taxable Property (exclusive of the six mill levy for university purposes levied by the State), and
shall include all payments in lieu of taxes received by the City with respect to Taxable Property.
“Taxing Body” means the City; the County of Gallatin, Montana; High School District No. 7 (Bozeman), Gallatin County, Montana; Elementary School District No. 7 (Bozeman), Gallatin County, Montana; the State; and any other political subdivision or governmental unit
that levies or may hereafter levy or cause to be levied Taxes against property within the District.
“Unavoidable Delay” means a delay resulting from a cause over which the Party
required to perform does not have control and which cannot or could not have been avoided by the exercise of reasonable care, including but not limited to, acts of God, accidents, war, civil unrest, embargoes, strikes, unavailability of raw materials or manufactured goods, litigation, and
the delays of the other Party or its contractors, agents or employees in the performance of their
duties under or incident to this Agreement.
1.2. Rules of Interpretation.
(a) The words “herein,” “hereof” and words of similar import, without reference to
any particular section or subdivision, refer to this Agreement as a whole rather than to any of its
particular sections or subdivisions.
(b) References to any particular section or subdivision hereof are to the section or
subdivision of this Agreement in its original signed form, unless otherwise indicated.
(c) The word “or” is not exclusive but is intended to contemplate or encompass one, more or all of the alternatives conjoined.
1.3. Exhibits. The following Exhibits are attached to and by reference made a part of
this Agreement:
Exhibit A: Project and Project Costs
Exhibit B: Description of the Land
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Exhibit C: Infrastructure Improvements
Exhibit D: Milestones
Exhibit E: Form of Developer Certificate
Exhibit F: City’s Statement of Non-Discrimination
Section 2. Representations.
2.1. City Representations. The City hereby represents as follows:
(a) Pursuant to the Act, and after a public hearing duly called and held, the City by
the Ordinance has duly created the District.
(b) Pursuant to Resolution No. 5046 of the City Commission, the City approved the use of Tax Increment, if available, to reimburse or, as appropriate, pay the costs of the
Infrastructure Improvements in a total amount not to exceed $256,335. Subject to the terms and
conditions of this Agreement, the City intends to reimburse the Developer for the Infrastructure
Improvements in an amount not to exceed $256,335.
(c) The DOR has advised the City that, as of January 1, 2019, the base taxable value (as defined in the Act) of the District is $3,507,723.
(d) Based on the representations of the Developer , beginning in tax year 2019 (fiscal
year ending June 30, 2020), the completed Project is expected to have a market value of at least
$6,607,039.
(e) The City Commission has duly authorized the execution and delivery of this Agreement.
2.2. Developer Representations. The Developer hereby represents as follows:
(a) The Developer is a limited liability company, duly formed, validly existing and in
good standing under the laws of the State and is duly qualified to do business in the State. The
Developer has the power to enter into this Agreement and by all necessary corporate action has duly authorized the execution and delivery of this Agreement.
(b) The Developer has good marketable title to the Land, free and clear of all liens,
encumbrances and defects except such as do not materially affect the value of the Land or
materially interfere with the use made and proposed to be made of the Land by the Developer.
(c) The Developer has the financial capability or commitments to complete the Project at a cost not less than $6,606,245.71.
(d) The Developer is not aware of any facts the existence of which would cause the
Developer to be in violation in any material respect of any Environmental Laws and Regulations
applicable to the Project or the Infrastructure Improvements. The Developer has not received
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from any local, state or federal official any notice or communication indicating that the activities
of the Developer have been, may be or will be in violation of any Environmental Laws and
Regulations applicable to the Project or the Infrastructure Improvements.
(e) Neither the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of or compliance with the terms and conditions hereof is prohibited or limited by, conflicts with or results in a breach of the terms,
conditions or provisions of the certificate of formation, partnership agreement or operating
agreement of the Developer or any evidence of indebtedness, agreement or instrument of
whatever nature to which the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing.
(f) There is no action, suit, investigation or proceeding now pending or, to the
knowledge of the Developer, threatened against or affecting the Developer or its business,
operations, properties or condition (financial or otherwise) before or by any governmental
department, commission, board, authority or agency, or any court, arbitrator, mediator or grand jury, that could, individually or in the aggregate, materially and adversely affect the ability of the Developer to complete the Project.
(g) The Developer acknowledges and agrees that the sole source of funds for
reimbursing the Developer under this Agreement is Tax Increment and/or proceeds of the Bonds,
which would be paid from Tax Increment. The Developer further acknowledges and agrees the amount of Tax Increment is dependent upon a number of variables, including, without limitation, the taxable value of the Project, the number of mills levied by Taxing Bodies, and then-
prevailing state laws regarding computation of Tax Increment. The Developer agrees that if Tax
Increment in the amount of $256,335 is not available to the City to reimburse the Developer
and/or, if the City, in its sole discretion, determines that it cannot reasonably sell the Bonds, whether due to lack of Tax Increment, market conditions, or otherwise, the City shall have no obligation to pay to the Developer the amount of reimbursement described in Section 4. The
Developer agrees that such event shall not constitute a default by the City hereunder.
(h) The Developer acknowledges and agrees that the estimates of assessed (market)
and taxable values set forth in this Agreement (and any resulting estimates of Tax Increment) are estimates only and are based on information provided by the Developer to the City and various assumptions that the City believes are reasonable. Actual assessed (market) and taxable values
of the Project and actual Tax Increment generated by the Project or in the District may vary
significantly based on variables over which the City has no control.
(i) The Developer acknowledges and agrees that the Bonds, if authorized and issued, are special, limited obligations of the City and shall not be paid from any funds of the City other than Tax Increment. The Developer understands and agrees the Bonds, if authorized and issued,
will be subject to all the terms and conditions of the bond resolution authorizing their issuance
(the “Bond Resolution”), including, without limitation, if the City determines in its sole
discretion, a requirement that the Developer make up any shortfalls in the Tax Increment available to pay the debt service on the Bonds, and that, if the Bonds are draw-down bonds, the City may be prohibited from making future draws on the Bonds if all the conditions applicable to
a draw are not satisfied. The Developer acknowledges and agrees that an event of default or
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default under the Bonds or the Bond Resolution does not constitute a default under this
Agreement, unless the event of default or default is a result of the failure by the Developer to
perform an obligation of the Developer identified in the Bond Resolution.
Section 3. Developer Undertakings.
3.1. Construction and Maintenance of Project. The Developer hereby agrees and
commits to the City that it will diligently prosecute to completion the construction of the Project
in accordance with this Agreement, the site plan submitted to the City and all applicable federal,
State and local laws, rules, regulations, ordinances and plans relating to or governing the
development or use of the Project, including applicable Land Use Regulations and Environmental Laws and Regulations. The Developer agrees and commits to the City that
construction of the Project shall be substantially complete by December 1, 2020, subject to
Unavoidable Delays. The total costs of the Project are shown on Exhibit A hereto. The
Developer has the financial capacity to complete the Project, and the Developer agrees to pay all
costs thereof. If there is an increase in the costs of the Project from that shown on Exhibit A hereto that cannot be covered by the contingency amount, the Developer shall notify the City of
the increase and submit additional evidence in a form acceptable to the City that the Developer
has the financial capacity to cover such additional costs and complete the Project. At all times
during the term of this Agreement, the Developer will operate and maintain, preserve and keep
the Project or cause the Project to be operated, maintained, preserved and kept for the purposes for which it was constructed, and with the appurtenances and every part and parcel thereof, in
good repair and condition. The Developer agrees to permit the City and any of its officers,
employees or agents access to the Land for the purpose of inspection of all work being
performed in connection with the Project; provided, however, that the City shall have no
obligation to inspect such work.
3.2. Preparation, Review and Approval of Construction Plans. In connection with the
Project, the Developer, at its sole expense, shall prepare and submit construction plans, drawings,
and related documents for each portion of the Project to the appropriate City officials for
architectural, engineering or land use review and written approval or permits. The Developer
acknowledges that no review or approval by City officials hereunder may be in any way construed by the Developer to replace, override or be in lieu of any required review, inspection,
or approval by the City Planning Division, or any other building construction official review or
approvals required by any State laws or local ordinances or regulations. Nothing contained in
this Agreement indicates or evidences that the City has approved or will approve the Project or
any portion thereof. This Agreement does not affect or limit the City’s regulatory powers with regard to the Project, including, without limitation, those relating to building permits or other
permits or the payment of fees.
3.3. Construction of the Infrastructure Improvements. The Developer shall acquire,
install, construct or otherwise provide the Infrastructure Improvements. The Developer
acknowledges and agrees that the City is not responsible for acquiring, installing, constructing or otherwise providing the Infrastructure Improvements. The estimated costs of the Infrastructure
Improvements are shown on Exhibit C hereto.
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3.4. Milestones of the Project. Certain steps in the development of the Project are
listed on Exhibit D attached hereto (collectively, the “Milestones”; each a “Milestone”),
together with the dates by which the Developer is obligated to complete the Milestones
(collectively, the “Milestone Dates”; each as it relates to a particular Milestone, the “Milestone Date”). The Developer acknowledges and agrees that the City in reserving or offering to make available Tax Increment to pay or reimburse the Developer for the Infrastructure Improvements
necessarily means that certain Tax Increment is not available to pay or reimburse other
undertakings or costs for the benefit of the District and that the City reasonably expects
additional Tax Increment as a result of completion of the Project. The Developer acknowledges and agrees that conditioning the availability of Tax Increment or proceeds of Bonds to pay or reimburse the Developer for the Infrastructure Improvements on completion or satisfaction of the
Milestones by the corresponding Milestone Dates is reasonable. If the Developer is unable to
complete or satisfy a Milestone by the corresponding Milestone Date, the Developer shall make
a formal written request to the City Commission, with appropriate supporting material, to extend the Milestone Date and, as appropriate, subsequent Milestone Dates. The City Commission may, in its sole discretion, determine whether such extension is appropriate and, if so, fix a new and
superseding Milestone Date and also adjust other subsequent Milestone Dates, along with any
other terms or conditions, or it may, in its sole discretion, elect to terminate this Agreement, in
which case the City will have no obligation to reimburse or pay the Developer hereunder.
3.5. Prevailing Wage Rates; Competitive Bidding. The Developer understands that
the City is obligated to follow certain laws with respect to the expenditure of public funds, which
includes Tax Increment. The Developer agrees to comply with laws that govern City contracting
obligations, including public procurement laws relating to all of the Infrastructure Improvements,
such as, without limitation, laws and rules regarding prevailing wage and solicitation of work on a competitive basis.
Without limitation of the foregoing, the Developer agrees that in the awarding of
contracts for the Infrastructure Improvements (i) it will, and it will cause its contractor to,
publicly bid competitively contracts for each component of the Infrastructure Improvements, and
(ii) through its contract with its contractor, it will, in addition to the requirements of Sections 3.9 and 3.10, require its contractor to, pay the Prevailing Wage Rates on such contracts related to the
Infrastructure Improvements. The Developer will provide to the City all documentation
requested to verify the compliance of the Developer and its contractor with the foregoing
requirements. Failure of the Developer or its contractor to bid competitively contracts for each
component of the Infrastructure Improvements or to require contracts entered into directly with contractors or sub-contractors to include provisions requiring the contractor or sub-contractor to
pay the Prevailing Wage Rates on the work related to the Infrastructure Improvements will be
considered a breach of this Agreement and the City will be entitled, at its discretion and without
obligation, to exercise any and all measures to assure compliance and retroactive compensation
plus interest to workers not paid in accordance with this Agreement, and recovery of any penalty or fine assessed by the State attributed to any failure to pay the Prevailing Wage Rates.
Additionally, the Developer acknowledges that a violation of these requirements may, in the
City’s sole discretion, cause the Infrastructure Improvements to be ineligible for the application
of Tax Increment, in which case the City will have no obligation to reimburse or pay the
Developer hereunder.
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3.6. Utilities. The Developer shall not interfere with, or construct any improvements
over, any public street or utility easement without the prior written approval of the City. All
connections to public utility lines and facilities shall be subject to approval of the City and any
private utility company involved. The Developer at its own expense shall replace any public facilities or utilities damaged during the Project by the Developer or its agents or by others acting
on behalf of or under their direction or control of the Developer.
3.7. Permits and Compliance With Laws. The Developer will obtain, in a timely
manner, all required permits, licenses and approvals, and will meet all requirements of all local,
state and federal laws, rules and regulations which must be obtained or met in connection with the acquisition and construction of the Project, including the Infrastructure Improvements. Without limiting the foregoing, the Developer will request and seek to obtain from the City or
other appropriate governmental authority all necessary land use, zoning, and building permits.
The Developer will comply in all material respects with all Environmental Laws and Regulations
applicable to the construction, acquisition, and operation of the Project, including the Infrastructure Improvements, will obtain any and all necessary environmental reviews, licenses or clearances under, and will comply in all material respects with, Environmental Laws and
Regulations. In addition, the Developer shall comply fully with all applicable state and federal
laws, regulations, and municipal ordinances related to worker safety including but not limited to
the Occupational Safety and Health Act (OSHA), the safety rules, codes, and provisions of the Montana Safety Act in Title 50, Chapter 71, MCA, all applicable City, County, and State building and electrical codes, and the Americans with Disabilities Act.
3.8. Easements. To the extent that the Infrastructure Improvements are to be located
on the Land, the Developer hereby agrees to grant to the City and applicable utility companies
from time to time such easements, rights-of-way and similar licenses in a form required by the City and as are reasonably necessary to permit the City to own, operate and maintain the
Infrastructure Improvements.
3.9. Non-Discrimination Statement. The Developer agrees to require its contractor(s)
to be in compliance with the City’s Statement of Non-Discrimination attached hereto as Exhibit
F, as well as Title 49, Montana Code Annotated, regarding activities related to the Project, including the Infrastructure Improvements. The Developer agrees that in its contracts with its
contractors the Developer’s contractor will be required to require its subcontractors to comply
with the City’s Statement of Non-Discrimination attached hereto as Exhibit F, as well as Title
49, Montana Code Annotated, regarding activities related to the Project. The Developer agrees to
provide copies of all such contracts upon request by the City.
3.10. Worker’s Compensation Insurance. The Developer shall provide in its
construction contracts related to the Project with all of its respective contractors that such
contractors are to be covered by a Worker’s Compensation insurance program with the State, a
private insurance carrier, or an approved self-insurance plan in accordance with State law.
3.11. Cooperation with City and DOR. The Developer agrees to provide to the City and, as requested, the DOR information that may be required by the City and/or the DOR to
determine, or make reasonable projections regarding, the amount and timing of receipt of Tax
Increment resulting from the Project. Such information may include, but is not limited to timing
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of construction and estimated completion dates of all or portions of the Project, costs of
construction, materials used in construction, uses of the Project or any portion thereof,
allocations of uses to spaces and square feet of spaces included in the Project, and any other
information that may be relevant. The Developer understands and agrees that the City will rely on such information from the Developer in making determinations regarding the amount of Tax Increment resulting from the Project that may be available and the timing of the availability of
Tax Increment resulting from the Project, and that such information may be a critical factor in
the City’s determination regarding whether to issue and the sizing and other features of the
Bonds.
Section 4. City Undertakings. Subject to satisfaction of all conditions in Section 5
below, and solely from Tax Increment on hand or proceeds of the Bonds, the City agrees to pay
or reimburse the Developer for the Infrastructure Improvements in an amount not to exceed
$256,335. The Parties acknowledge and agree that, subject to the terms and conditions of this
Agreement, (i) the actual costs of the Infrastructure Improvements may exceed $256,335, but $256,335 is the maximum amount that the City will reimburse the Developer for the
Infrastructure Improvements; and (ii) if the actual costs of the Infrastructure Improvements
exceed $256,335, the City has discretion to allocate the reimbursable amount among the
Infrastructure Improvements. The City may issue the Bonds in its sole discretion to pay or
reimburse the Developer for all or a portion of the costs of the Infrastructure Improvements to be paid or reimbursed. The Bonds, if authorized and issued, will have such terms and conditions as
are approved by the City Commission. This Agreement does not require or imply that the City
has any obligation to issue the Bonds.
Section 5. Payment of Reimbursement Amount for the Infrastructure Improvements.
Payment of the amount of reimbursement described in Section 4 by the City to the Developer for Infrastructure Improvements shall be subject to the following conditions and in accordance with the following procedures:
5.1. Conditions to Payment or Reimbursement.
(a) (i) The Developer must have completed or satisfied each of the Milestones by the
applicable Milestone Date, as such date may have been extended by the City Commission pursuant to Section 3.4 hereof, (ii) the City must have issued a certificate of occupancy for the
Project, (iii) the Infrastructure Improvements must have been completed in their entirety and the
City must have delivered to the Developer written acceptance of the Infrastructure Improvements
(which may be in the form of a Certificate of Completion or such other format as required by the
City), and (iv) the Developer must demonstrate to the City’s satisfaction, by a title report or other means acceptable to the City, that the Infrastructure Improvements are free of financial liens and
any encumbrances affecting the Infrastructure Improvements must be acceptable to the City.
(b) Reimbursement by the City for costs of the Infrastructure Improvements must be
based on paid invoices for costs incurred by the Developer, its contractors and subcontractors or
utility companies, which the Developer must supply to the City. The City may reject, in its sole discretion, any invoice related to the Infrastructure Improvements. The City will notify the
Developer of any rejected invoice and the reason it was rejected.
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(c) The Parties agree that the City will have no obligation to pay or reimburse the
Developer for any of the costs of the Infrastructure Improvements unless at the time of such
request (i) all of the Developer’s representations as set forth in Section 2.2 are true and correct,
(ii) the Developer is not in breach of any covenant or undertaking as set forth in Section 3, and (iii) unless and to the extent the City issues the Bonds, there shall be adequate Tax Increment on hand to pay the amount of the reimbursement or cost or expense and satisfy all other financial
obligations related to the District.
(d) If some or all of the costs of the Infrastructure Improvements are to be paid or
reimbursed with the proceeds of the Bonds, the City shall have determined, in its sole discretion, but with the cooperation of the Developer, that the Tax Increment is sufficient to pay the debt service on the Bonds as and when due and, as applicable, to satisfy other requirements under the
Bond Resolution, such as funding an adequate reserve, meeting applicable debt service coverage
requirements, and paying costs of issuance, and to satisfy all other financial obligations related to
the District. The Developer understands and agrees the City shall have no obligation to and may not issue the Bonds if the City is unable to find and determine that the Tax Increment is sufficient to pay the Bonds timely, to satisfy the requirements of the Bond Resolution, and to
satisfy all other financial obligations related to the District.
If any of the above conditions are not satisfied in the determination of the City, the City
shall have no obligation to pay or reimburse the Developer for any of the costs of the Infrastructure Improvements and the City’s determination to refrain from paying or reimbursing, or its inability to pay or reimburse, any of the costs of the Infrastructure Improvements shall not
be or result in a default of this Agreement.
5.2. Process for Payment or Reimbursement.
(a) By the date that is 90 days before the date the Developer estimates the Project will be first placed in service, the Developer shall notify the City in writing of the components of the Project remaining to be completed before it expects the City will issue the certificate of
occupancy for the Project. The Developer shall provide a further update to the City when it
reasonably expects that the Project will be placed in service in roughly 30 days.
(b) After receiving a certificate of occupancy for the Project, the Developer shall provide to the City a signed request for reimbursement substantially in a form attached as Exhibit E hereto and acceptable to the City, accompanied by the invoices and lien waivers from the
contractors or subcontractors performing or that have performed the work to be reimbursed. In
addition, the Developer agrees to provide to the City any additional information requested by the
City for the City to determine whether the Developer’s request for reimbursement complies with this Agreement.
(c) By the date that is five months after the submission by the Developer of a
complete and acceptable request for reimbursement, as determined by the City, the City, subject
to the terms and conditions of this Agreement, shall reimburse to the Developer costs of the
Infrastructure Improvements in an amount not to exceed $256,335, either directly from Tax Increment or from proceeds of Tax Increment Bonds; provided, however, if the City shall earlier determine that the Tax Increment is not sufficient to reimburse the Developer for the costs of the
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Infrastructure Improvements it has paid, either because there is insufficient Tax Increment then
available or the City determines there is insufficient Tax Increment to permit the issuance of
Bonds, then the City shall so inform the Developer in writing and this Agreement shall thereupon
terminate and neither Party will have any further rights or obligations hereunder, except as set forth in those provisions that expressly survive termination of this Agreement.
Section 6. Sources of Repayment; Covenants to Pay Taxes.
6.1. Taxes. The Developer shall pay or cause to be paid when due and prior to the
imposition of penalty all Taxes and all installments of any special assessments payable with
respect to the Land and the Project and any improvements thereto or extension thereof.
6.2. Maintenance of Land and Project. The Developer agrees to use its commercially
reasonable best efforts to maintain and operate the Land and the Project so as to be able at all
times to pay promptly and when due all property taxes levied with respect to the Land and the
Project.
6.3. Injunction; Specific Performance. The Parties agree that, in the event of a breach of this Section 6 by the Developer or its successors or assigns, the City would suffer irreparable
harm. Therefore, in the event the Developer or its successors or assigns fails to comply with the
provisions of this Section 6, the Developer agrees that the City may pursue any remedy at law or
in equity, including the remedies of injunction and specific performance.
Section 7. Indemnification and Insurance.
7.1. Indemnification. The Developer releases the City and all City Commission
members, board members, officers, agents, servants and employees of the City (the
“Indemnified Parties”) from, and covenants and agrees that the Indemnified Parties shall not be
liable for, and agrees to indemnify, defend and hold harmless the Indemnified Parties against,
any loss, damage, cost (including reasonable attorneys’ fees), claim, demand, suit, action or other proceeding whatsoever (i) arising or purportedly arising out of, or resulting or purportedly
resulting from, the acquisition and construction of the Project, including the Infrastructure
Improvements, any violation by the Developer of any agreement, condition or covenant of this
Agreement, the ownership, maintenance and operation of the Project, or the presence on any
portion of the Land, of any dangerous, toxic or hazardous pollutants, contaminants, chemicals, waste, materials or substances; or (ii) which is proximately caused by the Developer or its
officers, agents, contractors, consultants or employees.
7.2. Insurance. Developer shall keep and maintain the Project at all times insured
against such risks and in such amounts, with such deductible provisions, as are customary in
connection with facilities of the type and size comparable to the Project, and the Developer shall carry and maintain, or cause to be carried and maintained, and pay or cause to be paid timely the
premiums for direct damage insurance covering all risks of loss, including, but not limited to, the
following:
1. fire
2. extended coverage perils 3. vandalism and malicious mischief
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4. boiler explosion (but only if steam boilers are present)
5. collapse
on a replacement cost basis in an amount equivalent to the Full Insurable Value thereof. “Full
Insurable Value” shall include the actual replacement cost of the Project, exclusive of foundations and footings, without deduction for architectural, engineering, legal or administrative fees or for depreciation. The policies required by this Section 7.2 shall be subject
to a no coinsurance clause or contain an agreed amount clause, and must contain a deductibility
provision not exceeding $100,000.
Subject to the terms of any mortgage relating to the Project, policies of insurance required by this Section 7.2 shall insure and be payable to Developer, and shall provide for release of insurance proceeds to Developer for restoration of loss. The City shall be furnished
certificates showing the existence of such insurance. In case of loss, Developer is hereby
authorized to adjust the loss and execute proof thereof in the name of all parties in interest.
During construction of the Project, any and all of the foregoing insurance policies may be maintained by the Developer’s contractor; provided that once the Project is placed into service, Developer shall maintain all of the foregoing insurance policies. In addition, as a condition to
placing the Project in service, the City may require that the Developer or owner of the Project
obtain additional insurance that would protect the City or the City’s interest in the Infrastructure
Improvements.
In addition to and independent of the above, the Developer shall at the Developer’s expense secure liability insurance through an insurance company or companies duly licensed and
authorized to conduct insurance business in Montana. The insurance shall not contain any
exclusion for liabilities specifically assumed by the Developer in this Section. The insurance
shall cover and apply to all claims, demands, suits, damages, losses, and expenses that may be asserted or claimed against, recovered from, or suffered by the City in relation to construction of the Project and the Infrastructure Improvements without limit and without regard to the cause
therefore. The Developer must furnish to the City an accompanying certificate of insurance and
accompanying endorsements in amounts not less than as follows:
Commercial General Liability - $1,000,000 per occurrence; $2,000,000 annual aggregate
The above amounts shall be exclusive of defense costs. The City, its officers, agents, and
employees, shall be endorsed as an additional or named insured on a primary non-contributory
basis on the Commercial General Liability policy. The insurance and required endorsements
must be in a form suitable to City and shall include no less than a thirty (30) day notice of cancellation or non-renewal. The City must approve all insurance coverage and endorsements prior to the Developer commencing work on Project or Infrastructure Improvements. Developer
must notify the City within two (2) business days of Developer’s receipt of notice that any
required insurance coverage will be terminated or Developer’s decision to terminate any required
insurance coverage for any reason.
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Section 8. General Provisions.
8.1. Conflicts of Interest; City’s Representatives Not Individually Liable. The
Developer represents that it does not employ, retain, or contract with an officer or employee of
the City and that no member, officer or employee of the City has a personal or financial interest, direct or indirect, in this Agreement or in the Project, or a financial interest in the Infrastructure Improvements. No member, officer or employee of the City shall be personally liable to
Developer in the event of any default under or breach of this Agreement by the City, or for any
amount that may become due to Developer for any obligation issued under or arising from the
terms of this Agreement.
8.2. Rights Cumulative. The rights and remedies of the Parties of this Agreement,
whether provided by law or by this Agreement, shall be cumulative, and the exercise by any
Party hereto of any one or more of such remedies shall not preclude the exercise by such Party,
at the same or different times, of any other remedy for the same default or breach or of any of its
remedies for any other default or breach of the Party subject to the limitation of remedies provided herein. No waiver made by such Party with respect to the performance or the manner
or time thereof, of any obligation under this Agreement, shall be considered a waiver with
respect to the particular obligation of the other Party or a condition to its own obligation beyond
those expressly waived in writing and to the extent thereof, or a waiver in any respect in regard
to any other rights of the Party making the waiver of any obligations of the other Party. Delay by a Party hereto instituting or prosecuting any cause of action or claim hereunder shall not be
deemed a waiver of any rights hereunder.
8.3. Term of Agreement. This Agreement shall remain in effect until the date that it
terminates or is terminated by the City, as follows:
(a) If payment or reimbursement of costs of the Infrastructure Improvements is made directly from Tax Increment and not proceeds of Bonds, this Agreement will terminate on the date that is 10 days after the date the City makes the final payment or reimbursement of costs of
the Infrastructure Improvements to the Developer hereunder.
(b) If the City issues Bonds, this Agreement will remain in effect until the final
maturity or payment date of the Bonds or such earlier date that the Bonds are prepaid in full, discharged, and no longer outstanding.
(c) This Agreement may be terminated by the City in its sole discretion on a date
earlier than described in (a) or (b) above at any time after failure by the Developer to complete or
satisfy a Milestone by the applicable Milestone Payment Date.
(d) If the City has determined Tax Increment is insufficient under Section 5.2(c) above, this Agreement shall terminate in the manner and on the date described in Section 5.2(c) above.
(e) Notwithstanding the foregoing provisions of this Section, Sections 6, 7, and 8 of
this Agreement shall in all events survive the termination of this Agreement.
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8.4. Limitation on City Liability. No agreements or provisions contained in this
Agreement nor any agreement, covenant or undertaking by the City contained in any document
in connection with the Project, including the Infrastructure Improvements, shall give rise to any
pecuniary liability of the City or a charge against its general credit or taxing powers, or shall obligate the City financially in any way except with respect to then-available Tax Increment. No
failure of the City to comply with any term, condition, covenant or agreement herein shall
subject the City to liability for any claim for damages, costs or other financial or pecuniary
charge except to the extent that the same can be paid or recovered from then-available Tax
Increment; and no execution on any claim, demand, cause of action or judgment shall be levied upon or collected from the general credit, general funds or taxing powers of the City (except as
such constitute then-available Tax Increment). Nothing herein shall preclude a proper party in
interest from seeking and obtaining specific performance against the City for any failure to
comply with any term, condition, covenant or agreement herein; provided that no costs, expenses
or other monetary relief shall be recoverable from the City except as may be payable from the Tax Increment. This Agreement shall not constitute or be construed to give rise to a debt of the
City.
8.5. Assignment. This Agreement is unique between the City and Developer and no
Party may assign any rights or privileges, or delegate any duties or obligations under this
Agreement, without first obtaining the written consent of the other Party.
8.6. Successors Bound By Agreement; No Third Party Beneficiary; No Property
Interest. Subject to compliance with Section 8.5, this Agreement will inure to the benefit of and
be binding upon the Parties to this Agreement and their respective successors in interest and
permitted assignees. This Agreement is for the exclusive benefit of the Parties, does not
constitute a third-party beneficiary agreement, and may not be relied upon or enforced by a third party. This Agreement, by itself, does not create or give rise to a property interest in the Land or the Project.
8.7. Prior Agreements. This Agreement supersedes, merges and voids any and all
prior discussions, negotiations, agreements and undertakings between the Parties with respect to
the subject matter of this Agreement. The Parties waive and release each other from any claims, actions, or causes of action that relate in any manner to any prior discussions, negotiations,
agreements and undertakings between the Parties with respect to the subject matter of this
Agreement.
8.8. Entire Agreement. This Agreement, including any exhibits and attachments
hereto, embodies the entire agreement and understanding of the Parties with respect to its subject matter. All Parties shall be prohibited from offering into evidence in any arbitration or civil
action any terms, conditions, understandings, warranties, statements or representations, whether
oral or written, with respect to the subject matter of this Agreement and that are not contained in
this Agreement.
8.9. Amendments, Changes and Modifications. This Agreement may be amended and any of its terms may be modified only by written amendment authorized and signed by the
Parties hereto.
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8.10. Headings. The headings of articles and sections in this Agreement are inserted for
convenience of reference only and do not limit or amplify the terms and provisions of the
Agreement in any manner. The headings will be ignored and will not affect the construction of
any provisions of this Agreement.
8.11. Notice. Any formal notice, demand or communication required or permitted by
the terms of this Agreement to be given to the City or Developer will be in writing and will be
delivered to such Party either: (i) by personal hand-delivery; or (ii) by depositing the same in the
United States mail, certified mail with return receipt requested, addressed to such Party at the
address named below, with postage prepaid thereon. Notice will be deemed complete upon receipt of the notice pursuant to any of the foregoing methods of notice.
If to City:
City of Bozeman
Attention: Bozeman City Manager 121 N. Rouse Ave.
P.O. Box 1230
Bozeman, MT 59771
With a copy to:
Bozeman City Attorney
121 N. Rouse Ave.
P.O. Box 1230
Bozeman, MT 59771
If to Developer:
West Peach, LLC Attention: Julien Morice
320 West Lamme
Bozeman, MT 59715
The City and the Developer, by notice given hereunder, may designate different addresses to
which subsequent notices, certificates or other communications should be sent.
8.12. Severability. If any provision of this Agreement is declared void or held invalid,
such provision will be deemed severed from this Agreement and the remaining provisions of this
Agreement will otherwise remain in full force and effect.
8.13. Duplicate Originals or Counterparts. This Agreement may be executed in two or
more counterparts, each of which will be deemed to be an original copy of this Agreement and
all of which, when taken together, will be deemed to constitute one and the same agreement.
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8.14. Place of Performance. The place of performance of this Agreement will be in the
City of Bozeman, Gallatin County, Montana.
8.15. Governing Law. This agreement and the legal relations between the Parties
hereto will be governed by and construed in accordance with the laws of the State of Montana, without giving effect to any choice of law statutes, rules, or principles.
8.16. Dispute Resolution.
(a) Any claim, controversy, or dispute between the Parties, their agents, employees, or
representatives shall be resolved first by negotiation between senior-level personnel from each
Party duly authorized to execute settlement agreements. Upon mutual agreement of the Parties, the Parties may invite an independent, disinterested mediator acceptable to the Parties to assist in
the negotiated settlement discussions.
(b) If the Parties are unable to resolve the dispute within thirty (30) days from the date
the dispute was first raised, then such dispute may only be resolved in a court of competent
jurisdiction in compliance with the applicable law and the provisions of this Agreement.
8.17. Further Assurances and Corrective Instruments. The Parties agree that they will,
from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, such supplements hereto and such further instruments as may reasonably be required
for correcting any inadequate or incorrect description of the Project, including the Infrastructure
Improvements, or for carrying out the expressed intention of this Agreement.
8.18. Reports/Accountability/Public Information. Developer agrees to develop and/or
provide documentation as requested by the City demonstrating the Developer’s compliance with
the requirements of this Agreement. Developer shall allow the City, its auditors, and other
persons authorized by the City to inspect and copy its books and records for the purpose of
verifying that the reimbursement of monies distributed to Developer pursuant to this Agreement was used in compliance with this Agreement and all applicable provisions of federal, state, and
local law. The Developer shall not issue any statements, releases or information for public
dissemination regarding this Agreement or the work contemplated hereunder without prior
written approval of the City.
[Balance of page intentionally left blank]
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IN WITNESS WHEREOF, the Parties hereto have caused this Development Agreement
to be executed as of the 20 day of May, 2019.
CITY OF BOZEMAN, MONTANA
By: _______________________________________
Printed Name: Andrea Surratt
Title: City Manager
[Signature Page to Development Agreement]
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WEST PEACH, LLC
By:
Name: Julien Morice
Title: Managing Partner
[Signature Page to Development Agreement]
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A-1
EXHIBIT A
PROJECT AND PROJECT COSTS
SUMMARY DESCRIPTION OF PROJECT: Design and construction of a residential condominium project, expected to include approximately seventeen units with private garages
and related improvements.
PROJECT COSTS: Land (Fair Market Value) .......................................................................................$1,050,000.00
Soft Costs (Engineering, Architecture, Planning, Permitting, Carrying Costs, Marketing, etc.)
..................................................................................................................................$1,105,208.45
Hard Costs (Direct Construction Costs) ..................................................................$5,501,037.26
Total Project Costs .......................................................................................$7,656,245.71
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B-1
EXHIBIT B
LEGAL DESCRIPTION OF THE LAND
WESTLAKES 1ST ADD, S01, T02 S, R05 E, Block 1, Lot 1-2-3, AMND PLAT F-25A
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C-1
EXHIBIT C
The Parties acknowledge and agree that, subject to the terms and conditions of this
Agreement, (i) the actual costs of the Infrastructure Improvements may exceed $256,335, but $256,335 is the maximum amount that the City will reimburse the Developer for the Infrastructure Improvements; and (ii) if the actual costs of the Infrastructure Improvements
exceed $256,335, the City has discretion to allocate the reimbursable amount among the
Infrastructure Improvements.
Summary Description of the Infrastructure Improvements:
Offsite improvements, including water and sewer infrastructure, street improvements, sidewalk improvements, street lights, and related improvements $222,900
Contingency 33,435
Total Costs of Infrastructure Improvements $256,335
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EXHIBIT D
MILESTONES
MILESTONE MILESTONE DATE
Building Permit Application (Phase 1 and 2)
Building Permit Application (Phase 3 and 4)
July 1, 2019
December 1, 2019
Issuance of Certificate of Occupancy for all Phases December 1, 2020
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EXHIBIT E
FORM OF DEVELOPER CERTIFICATE
TO: City of Bozeman, Montana FROM: West Peach, LLC (the “Developer”) SUBJECT: Reimbursement for Infrastructure Improvements This Developer Certificate requests $_________ for reimbursement of costs of the Infrastructure Improvements, as defined in the Development Agreement between West Peach, LLC and the City of Bozeman, Montana, dated as of [_________], 2019 (the “Development Agreement”). Capitalized terms used but not otherwise defined herein shall have the respective meanings given such terms in the Development Agreement. Pursuant to Section 5.2(b) of the Development Agreement, the undersigned hereby certifies on behalf of the Developer that: (a) the expenditures for which reimbursement is requested are listed in summary form in the attached schedule headed “Project Expenditures;” (b) invoices paid by the Developer corresponding to the expenditures set forth on the attached Project Expenditures Schedule are appended to the attached schedule headed “Project Invoices;” (c) the amounts for which reimbursement is requested have been paid by the Developer to contractors, subcontractors, materialmen, engineers, architects or other persons who or that have performed necessary or appropriate services or supplied necessary or appropriate materials for the acquisition, construction, renovation, equipping, and installation of the Infrastructure Improvements; (d) the contractor and subcontractors were solicited and retained competitively and all persons performing work on the Infrastructure Improvements were paid the Montana prevailing wage for such work; (e) no part of the several amounts requested to be paid, as stated in such certificate, has been or is the basis for the payment of any money in any previous request; (f) the reimbursement of the amounts requested will not result in a breach of any of the covenants of the Developer contained in the Development Agreement; and (g) no litigation has been instituted or is threatened with regard to any amounts sought to be reimbursed, and binding and enforceable lien waivers have been obtained from all contractors, subcontractors, materialmen, and others with regard to all work related to any amounts for which reimbursement is requested. The Developer represents that all of the representations of the Developer in Section 2.2 of the Development Agreement are true and correct as of the date hereof and the Developer is not in
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E-2
default of the performance of any of its undertakings or obligations under Section 3 of the Development Agreement as of the date hereof. Dated: _____________, 20__ [__________________] By: Authorized Developer Representative
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EXHIBIT F
CITY’S STATEMENT OF NON-DISCRIMINATION
Statement of Non-Discrimination ____________________________________(name of entity submitting) hereby affirms it will
not discriminate on the basis of race, color, religion, creed, sex, age, marital status, national
origin, or because of actual or perceived sexual orientation, gender identity or disability and
acknowledges and understands the eventual contract will contain a provision prohibiting discrimination as described above and this prohibition on discrimination shall apply to the hiring and treatments or proposer’s employees and to all subcontracts.
______________________________________
Name and title of person authorized to sign on behalf of submitter
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Staff Report
To: Midtown Urban Renewal Board
From: David Fine, Urban Renewal Program Manager
Date: April 26, 2019
Subject: West Peach Condos project
305, 315 & 321 West Peach Street
TIF Assistance Program Overview
The Bozeman City Commission created the Midtown TIF Assistance Program in 2017 to support
redevelopment activity and advance the goals of the 2015 Midtown Urban Renewal Plan. The
Midtown TIF Assistance Program supports projects that create significant new taxable value as
well as meeting the five goals of the Midtown Urban Renewal Plan. These goals, as required by
statute, focus on mitigating blighting conditions in the urban renewal area. Each of these five
goals is further refined with particular criteria for a total of sixteen categories that can receive
points. Point awards demonstrate specific compliance with the criteria, but are not the only
factors the board may consider in recommending an incentive award. For example, the board
may also consider new taxable value created by the project, or whether the project would be
feasible without a public incentive. In addition to tax generation, the goals of the Urban Renewal
Plan and the need for assistance, the Board must also make affirmative findings as required by
State Law.
Staff Recommendation
The Midtown Action Plan (2017) suggests that housing is a vital component of
redeveloping commercial nodes. Increased urban housing density is necessary to support
neighborhood commercial activity that promotes walkability and multi-modal transportation.
While there is a strong preference for supporting projects with higher densities and a vertical
mix of uses, the Action Plan calls for attracting more housing investment and the need for all
types of housing. The West Peach Condos project adds housing to the Midtown Urban Renewal
District (the “District”). To date, no projects have been completed that add housing in any
configuration to the District. A previous project proposed for West Peach St., the “Midtown
Apartments,” recently requested to withdraw from their award of TIF assistance due to the
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infeasibility of the project even with incentives. The lack of completed projects suggests the
market for Midtown product is untested, which increases the degree of risk for developers, and
makes incentives important for early projects. Incentives may create the potential for higher
returns to mitigate higher risk, which may attract investment that would not occur without
these incentives. Once developers complete more projects and test market conditions, the
Board may be able to better define what kinds of projects need incentives and at what level.
The Midtown TIF Assistance Program allows the payment of eligible costs of
development to incentivize development that meets the goals of the Midtown Urban Renewal
Plan. The applicant is applying for several eligible cost areas totaling $548,208.51. Staff finds
that the proposed costs are eligible for TIF assistance. Staff scored the application based on the
program criteria. Based on our review and the application materials presented, the project
received 25 of 44 available points. The application scored points toward four of five goals of the
Midtown Urban Renewal Plan. The project eliminates blight and advances the District goal of
providing increased housing stock within the District to drive further commercial development.
Leland Consulting Group (LCG) completed a financial analysis of the project to help staff
evaluate the application for creation of new taxable value. Their report analyzed return on
investment (ROI), estimated payback period for the public assistance and proposed target
metrics for the ratio of private investment to public assistance. LGC bases their analysis on
awarding the applicant’s full assistance request. LCG recommends a ratio of private investment
to public assistance of 10:1 or greater for multifamily projects; the ratio for this project is
11.05:1.
LCG also created a tax generation model for the Midtown URD. According to their
model, the project would produce net new annual taxes of $63,411, which would allow TIF
assistance to be paid back in 12 years (assumes a 5% interest rate on the advanced amount) for
new increment-based payback if assistance is provided at the applicant’s requested amount.
In order to ensure that the level of assistance makes the project feasible, but does not
provide unreasonable returns to the developer, staff hired Economic and Planning Systems, Inc.
(EPS) to provide a third-party assessment of the development pro forma. This component of the
review process is obtained to assess the reasonableness of each applicant’s incentive request.
EPS performed their analysis using a target discount rate and capitalization rate based on
Bozeman market conditions. Their analysis projects that the project would require incentives
between $30,000 and $222,900 to meet the reasonable target rates of return. The consultants
note, however, that the applicant’s estimate for offsite costs related to infrastructure is
approximately $224,300. While the project does not meet all the goals of the District, investing
in regional infrastructure clearly aligns with the intent of the URD Plan. Due to untested market
for new for-sale townhome/condo development in Midtown and the catalytic nature of the
project, staff recommends that the Midtown Urban Renewal Board consider an incentive award
of $222,900. An incentive award at this level would pay back in approximately 4 years.
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Criteria for TIF Assistance
Overall District Relevance
1. Relevance to the Midtown Urban Renewal Plan: 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 are also considered, including pedestrian
emphasis and quality of design.
The project eliminates blight by improving a vacant property with a new condominium
development project, which increases the taxable value of the property use. A new access will
provide for driveways and garages to be located on the interior of the project. Eight of the units
will have front doors facing E. Peach Street, which will enhance the pedestrian environment of
the area. This project does not receive the full five points because lacks mixed-use development,
a key component of the Urban Renewal Plan.
[3 of 5]
Goal Number 1: 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 these criteria.
Leland Consulting Group (LCG) created a tax revenue generation model for the Midtown URD.
Using data provided by the property owner, LCG estimates that the property will provide an
estimated annual net tax revenue increase of $63,411 for the District. The projected net
increase in value of the property is $6,607,039. For the assumptions related to these
projections, please see the LGC report. [3 of 4]
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.
The project eliminates blight by replacing a recently vacant lot with a 17-unit condominium
development that increases the density of within the District.
[4 of 4]
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 criterion.
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The project will generate temporary construction jobs. [1 of 3]
Goal Number 2: 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.
The project adds new sidewalk to N. 3rd Avenue, which currently does not have sidewalks on
either side of the street. An existing sidewalk on E. Peach Street will replaced with a new 6-foot
wide sidewalk to enhance pedestrian mobility. [1 of 1]
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.
While locating housing and commercial development in Midtown places it in a centrally located
location, this project does not take particularly exceptional or innovative measures to promote
transit use, ride sharing, or car sharing. [0 of 1]
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.
The project is located along E. Peach Street, which has a bike lane. No additional bike facilities
within the right-of-way are proposed. One shared bike rack is proposed, but the plans do not
indicate that it is covered. [1 of 2]
Goal Number 3: 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.
While the project improves the right-of-way for N. 3rd Avenue by adding sidewalk, curb, gutter
and a streetlight, no specific innovations to reduce long-term maintenance costs are proposed
within the application. [0 of 2]
Goal Number 4: Promote Unified Human Scale Urban Design
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9. Street Frontage: 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.
The project is designed with one new access from E. Peach Street and one from North 3rd
Avenue. This enable eight of the new townhomes to face E. Peach Street, thereby improving the
street frontage. [2 of 2]
10. Vehicular Access Points: 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.
The project proposes removes one existing a drive approach from E. Peach Street. [2 of 2]
11. Street Orientation: The project enhances the North 7th Ave. entryway corridor by having
buildings oriented toward the street and designed to provide interest and activity.
The project is not located along North 7th Avenue, and therefore does not directly enhance the
entryway corridor. However, E. Peach Street is a City Collector Street, with high visibility, and
therefore this project enhances a corridor within the District.
[1 of 3]
12. Pedestrian Experience: 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 criterion.
The project provides enhanced façade transparency with new residential buildings that face E.
Peach Street. While the facades for each unit are repetitive, the new residences will enhance
the pedestrian experience more so than the current vacant lot. [2 of 3]
13. Quality of the Development Exceeds Minimum Requirements. 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
criterion.
Based on preliminary renderings, the project as proposed appears to meet the requirements of
the UDC for architecture, site design, and landscaping. [1 of 2]
Goal Number 5: Support Compatible Urban Density Mixed Land Uses
14. Increases Housing Units: The project increases housing units within the District. Submit
plans demonstrating an increase in the number of housing units.
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The project includes 17 for sale residential units. [4 of 4]
15. Mix of Uses Including Residential: The project has a mix of uses, including residential.
Submit plans detailing the proposed mix of uses within the project.
The project only includes residential units. While the application indicates that each unit has a
home office, because the office is integrated into the unit, it cannot be considered a mixed-use
project. [0 of 4]
16. Shared Parking: 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.
The project does not indicate any shared parking. Each 2-bedroom unit will have a 2-car garage.
[0 of 2]
Total Points (25/44)
Criteria for Approval of Urban Renewal Project, 7-15-4217 MCA
1) a workable and feasible plan exists for making available adequate housing for the
persons who may be displaced by the project;
The project does not displace any persons or housing.
2) the urban renewal plan conforms to the comprehensive plan or parts thereof for the
municipality as a whole;
The project is a residential project located in an area designated for residential use
in the Bozeman Community Plan.
3) the urban renewal plan will afford maximum opportunity, consistent with the sound
needs of the municipality as a whole, for the rehabilitation or redevelopment of the
urban renewal area by private enterprise; and
The project includes a request for tax increment financing assistance that makes the
proposed redevelopment project feasible to be undertaken by private enterprise.
4) a sound and adequate financial program exists for the financing of said project.
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The Midtown Urban Renewal District currently has adequate revenue to support the
issuance of tax increment bonds to finance the tax increment finance assistance for
this project.
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West Peach Condos
Tax Increment Analysis
April 8, 2019
Prepared by:
Andy Parks, CPA
Leland Consulting/GEL Oregon, Inc.
on behalf of the City of Bozeman Economic Development Department
Summary
Applicant plans to build a 17-unit condominum residential building located in the heart of Bozeman's Midtown District.
Applicant plans to invest approximately $6.6 million and is requesting $548,209 from the Agency.
* Return on Investment (ROI)
* Estimated payback period, and
The following schedule summarizes analysis findings:
Estimated costs to complete project 6,472,039$
Estimated capitalized interest 135,000
Less: 2018 market value per assessor
(improvements only)-
Net estimated increase in value 6,607,039
Estimated net increase in taxable value 89,195
TIF tax rate - estimated - FY 2021 710.93
Estimated incremental taxes (TIF) - annual 63,411
TIF investment 548,209
ROI - estimated 11.6%
Estimated payback period (years)12.07 assumes 5.0% interest rate on advanced amount
Private investment to public investment 11.05 Metric:
Greater than 8 to 1 - commercial
Greater than 5 to 1 - family wage jobs
Assumptions
Cost and timing information provided in application - except construction financing which is estimated
Estimated start date Mar-19
Estimated completion phases I and II Jan-20
Estimated completion phases III and IV Spring 2020
Increase in property taxes applicable fiscal year 2022
Construction Interest - estimated 135,000 Per applicant
Analysis has been performed to determine:
http://gis.gallatin.mt.gov/common/parcel_informati
on.aspx?tab=taxcode&taxID=RGG3097&geocodeid=0
6079801405070000
Greater than 10 to 1 - desired for multi-
family
Property valuation is limited to the cost approach, i.e., cost to complete project and real market value will likely differ.
Different valuation methods include but are not limited to; income approach, sales comparisons, and Capital Asset Pricing
Model.
* Private investment to public investment
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M E M O R A N D U M
To: David Fine, City of Bozeman
From: Brian Duffany and Tim Morzel, Economic & Planning
Systems
Subject: Bozeman URA TIF Request Review: West Peach Condos
Date: April 26, 2019
This memorandum provides a summary of the analysis Economic &
Planning Systems (EPS) has completed relating to the request for tax
increment financing (TIF) for the West Peach Condo development. EPS
has been contracted by the City of Bozeman to complete an evaluation
of developer requests for TIF and specifically evaluate key project
assumptions, such as construction costs, sales revenues, and operating
revenues and expenditures, as well as overall developer return. The
purpose of this analysis is to ensure that the assumptions presented by
a developer align with current market conditions and industry standards.
This memorandum provides an overview of the evaluation criteria, an
overview of the key inputs, and a summary of the key findings. The
detailed analysis and supporting tables are provided in the appendix of
this memorandum.
Approach
As part of the TIF application process, each developer is required to
submit a formal proposal that includes a project overview and key
project assumptions. These materials include a summary of the
development program, construction costs, eligible costs, sales revenues,
and ongoing revenue and expenditure assumptions. Using this
information as a starting point, EPS has structured a static and time
series pro forma that summarizes this information as well as a number
of other key project metrics such as project return. This analysis
evaluates the performance of each project on an unleveraged pre-tax
basis in order to evaluate the project fundamentals exclusive of the
unique equity and debt structure of each project.
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Project Assumptions
This section provides a summary of the development assumptions submitted by the development
team and a comparison to current market conditions or industry standards.
Development Program
Location: NW Corner of West Peach Street and N 3rd Avenue
Parcel Area: 0.90 acres (39,204 square feet)
Stories: 2-stories
Total Building Area: 37,000 square feet
Commercial Program: The current proposal does not contemplate any commercial space on
this site.
For-Sale Residential Condos: The proposal contemplates 17 for-sale condos for this site. Each
condo is anticipated to have 2-bedrooms, 3-bathrooms, and an office. Each unit is estimated to
have roughly 1,650 square feet of living space and a 530 square foot garage. Total unit size is
estimated at roughly 2,180 square feet.
Project Costs
Land Costs
Total: $1,050,000
Cost per Land SF: $27 per square foot
Percent of Total Costs: 14 percent of total
Comments: Land costs typically range from 10 to 20 percent of total project costs depending on
the development type and local market. At 14 percent of total, this project is within that range.
In addition, land costs at roughly $27 per square foot appear to align with other recent
transactions in this area.
Hard Costs
Total: $4,479,840
Cost per GBA: $160 per square foot
Comments: Average construction costs in the larger market area are estimated to range from
$100 to $150 per square foot. At $160 per square foot, this project falls just above that range.
Estimated hard costs for the recently reviewed Aspen Crossing project, which included a 3-story
multiuse building, were also estimated at $160 per square foot. A project of that density would
typically have construction costs higher than 2-story townhome/condo construction. It is
important to note that this project contemplates high quality design and finishes and
construction costs reflect that.
Soft Costs
Total: $1,090,537
% of Hard Costs: 22.97 percent
Comments: Generally, soft costs for comparable projects typically range from 20 to 30 percent
of hard construction costs (vertical construction costs). At 23.97 percent of hard costs this
project is within that range.
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For-Sale Revenues
Gross Revenue: $9,095,000
Comments: Sales values are currently estimated at an overall average of $535,000 per unit or
roughly $325 per square foot. While this price point is at the higher end of the market for
Bozeman as a whole, it is below the asking price of recently completed townhomes within the
same proximity of Main Street. It is also important to note that due to the untested nature of the
surrounding location there are no true comps that exist to date, which adds to the overall project
risk. Due to the unproven nature of the surrounding area and the other recently completed
projects that were evaluated as part of this analysis, the estimated sales price of $535,000 per
unit appears to be reasonable.
Project Return
The performance of the project with and without a public investment is estimated by using two
primary criteria. The first is an evaluation of the overall project returns on an annual basis. This
approach relies on an evaluation of the projects Net Present Value (NPV) and Internal Rate of
Return (IRR). The second approach is based on a static (single point in time) evaluation of the
project’s total value and compares that to total construction costs. Although this approach is
generally less precise than the times series evaluation, it provides an additional test of overall
project feasibility. The purpose of this analysis is to provide an evaluation of the feasibility of the
project with and without a potential public investment.
Overall Project Return
The first method used to evaluate project return is an evaluation of the project’s internal rate of
return (IRR). Generally, the IRR is the percentage rate earned on each dollar invested for each
period it is invested. The IRR is typically used by investors to compared alternative investments
based on their potential rate of return. Mathematically, the IRR is an iterative calculation that
determines the discount rate that results in a net present value (NPV) equal to zero. The NPV is
the estimated value of all future cash flows of an investment discounted to the present. The NPV
of a given series of cash flows is heavily dependent on an investor’s discount rate, which reflects
an individual investor’s opportunity cost of capital. In other words, an investor’s discount rate
reflects their expected rate of return for investments with a comparable level of risk.
For the purpose of this analysis, the discount rate is used as a hurdle rate in determining an
appropriate rate of return for a given project. When determining appropriate discount it is
important to consider the following rates when building up to a project discount rate.
Inflation rate and the riskless rate of return (U.S. 10-Year Treasury Note rate of return)
General real estate risk (timing and market cycle risk)
Product type risk (i.e., multifamily, retail, office, etc.)
Market risk (geographic specific)
In addition to an evaluation of these rates, EPS referenced published data documenting discount
rates in the western United States. Finally, in determining an appropriate discount rate for this
specific property EPS, considered the following project specific factors:
Project Location – While this site is only a short drive from downtown Bozeman, the
surrounding area is still a relatively untested market for new for-sale townhome/condo
development. Due to the untested nature of the surrounding area there are added risks that
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warrant a slightly higher discount rate compared to projects being developed in more
established locations.
Market Cycle – The nation and generally the local real estate market has experienced nearly
10 straight years of year-over-year growth. In most real estate markets there is a natural
cycle of expansion and contraction that typically ranges from seven to 10 years. Given the
fact that Bozeman may be at the tail end of this cycle or nearing a phase of oversupply, there
is additional risk associated with the timing of the market.
Project Financing – The anticipated project financing has an impact on the unleveraged
hurdle rate due to the fact that debt typically has a lower required rate of return (i.e. interest
rate) than equity. For the purposes of this analysis, EPS has assumed that 75 percent of the
project is financed with debt and the remaining 25 percent is financed by equity.
Without public investment the project achieves an internal rate of return of 8.68 percent. The
factors outlined above and the risks associated with this type of project, at this location, and in
this phase of the real estate cycle warrant a discount rate of approximately 9.00 percent. While
this estimate is somewhat subjective, it reflects a variety of current market conditions and risk
factors. In order to achieve an internal rate of return of 9.00 percent the project requires
approximately $30,000 in public investment.
Static Project Feasibility
Evaluating the project from a static (i.e., single point in time) perspective provides an evaluation
of a given project’s feasibility. This method relies on a comparison of the total project costs to a
given project’s total estimated revenues. For this project, total value is calculated by netting the
value (after sales commissions) of the revenues generated by condo sales against total project
costs.
For this project a return on cost hurdle rate of 15.0 percent is estimated to be reasonable.
Netting total condo sale revenues of $8.50 million against estimated construction costs of
$7.66 million results in a return on cost of 11.65 percent. In order to achieve a 15.0 percent
return on cost, the project requires roughly $222,900 in public investment.
Project Request
The developers of the West Peach Condos are requesting $546,483 in public investment in order
to fund project-specific eligible costs. Based on the two methodologies outlined above, EPS
estimates that the project funding gap ranges from $30,000 to $222,900.
The developer has identified a variety of eligible project costs that include residential impact
fees, cash in lieu payments, utility costs, demolition, and offsite improvements. The developer’s
list of eligible improvements is estimated at $546,483, which is the request for funding. Within
the identified eligible costs the developer has estimated offsite costs associated with the
improvement of 3rd Avenue at approximately $224,300. While this project in its entirety may not
meet all of the goals of URA, investing in regional infrastructure clearly aligns with the intent of
the URA Plan. Funding all or a portion of the 3rd Avenue costs both addresses blight in the plan
area and further removes barriers to additional development through a strategic investment in
local infrastructure.
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Prepared for:
City of Bozeman
Prepared by:
Economic & Planning Systems, Inc.
Date:
April 25, 2019
EPS #183115
Draft Financial Model
TIF Request Review:
West Peach Condos
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TIF Request Review: City of Bozeman
4/25/2019
Table 1
Project Summary and Key Assumption Sensitivity
TIF Request Review: West Peach Condos
Description Amount Developer
Low High
KEY ASSUMPTIONSRevenue Assumptions
Commercial Rental Rate N/A NNN $18.00 $22.00 N/A N/A
Multifamily Rental Rate N/A per square foot $1.25 $1.55 N/A N/A
Condo Sales Value $535,000 per unit $450,000 $600,000 $529k-$539k Inside
per sf $324.83 per sf
Cost Assumptions
Land Cost 13.71%% of total cost 10% 20%13.71%Inside
Hard Construction Costs $160 per GBA $100 $150 $160 Higher
Soft Construction Costs 22.97%% of HC 20% 30%22.97%Inside
Total Construction Cost $207 per GBA $200 $235 $207 Inside
Return Assumptions
Internal Rate of Return Hurdle 9.00%IRR
Static Return Hurdle 15.00%return on cost = net revenues / total cost
PROJECT SUMMARY
Total Cost land, infrastructure, hard, and soft Duration
Total Condo Sale Revenue net condo sale revenue Construction Period 12 months
Net Project Revenue $892,261 net project revenue Condo Absorption Period 18 months
Return on Cost 11.65%ROC
Internal Rate of Return 8.68%IRR
PROJECT GAP
Developer Request as stated in application
Static Estimate total revenues/value less cost
Time Series Estimate discount rate hurdle
Average average
Sensitivity Analysis
Time Series Estimate: Residential Sales Price Time Series Estimate: Construction Hard Cost
-29,518 8.50% 8.75% 9.00% 9.25% 9.50%-29,518 8.50% 8.75% 9.00% 9.25% 9.50%
$525,000 -$126,698 -$149,458 -$172,088 -$194,590 -$216,965 $140 $610,316 $587,123 $564,061 $541,131 $518,330
$530,000 -$54,981 -$77,957 -$100,803 -$123,519 -$146,107 $150 $313,526 $290,333 $267,272 $244,341 $221,541
$535,000 $16,737 -$6,456 -$29,518 -$52,448 -$75,249 $160 $16,737 -$6,456 -$29,518 -$52,448 -$75,249
$540,000 $88,454 $65,044 $41,768 $18,623 -$4,391 $170 -$280,053 -$303,246 -$326,307 -$349,237 -$372,038
$545,000 $160,172 $136,545 $113,053 $89,694 $66,467 $180 -$576,842 -$600,035 -$623,096 -$646,027 -$668,828
Time Series Estimate: Absorption Period
-29,518 8.50% 8.75% 9.00% 9.25% 9.50%
14 months $134,316 $114,025 $93,839 $73,755 $53,774
16 months $68,178 $46,254 $24,451 $2,766 -$18,801
18 months $16,737 -$6,456 -$29,518 -$52,448 -$75,249
20 months -$24,416 -$48,625 -$72,692 -$96,619 -$120,407
22 months -$58,086 -$83,126 -$108,017 -$132,759 -$157,354
Static Estimate: Residential Sales Price Static Estimate: Construction Hard Cost
-222,865 14.50% 14.75% 15.00% 15.25% 15.50%-222,865 14.50% 14.75% 15.00% 15.25% 15.50%
$525,000 -$329,965 -$345,928 -$361,821 -$377,646 -$393,402 $140 $403,178 $386,910 $370,714 $354,588 $338,531
$530,000 -$260,183 -$276,298 -$292,343 -$308,319 -$324,225 $150 $106,388 $90,121 $73,925 $57,798 $41,742
$535,000 -$190,401 -$206,668 -$222,865 -$238,991 -$255,047 $160 -$190,401 -$206,668 -$222,865 -$238,991 -$255,047
$540,000 -$120,620 -$137,039 -$153,387 -$169,663 -$185,870 $170 -$487,191 -$503,458 -$519,654 -$535,780 -$551,837
$545,000 -$50,838 -$67,409 -$83,908 -$100,336 -$116,692 $180 -$783,980 -$800,247 -$816,444 -$832,570 -$848,626
Source: Economic & Planning Systems
Y:\Projects\DEN\183115-Bozeman MT P3 Development Feasibility\Models\[183115-MODEL-West Peach Condo-04-22-2019.xlsm]T-Summary
Return on Cost
Cost per sfProject Discount Rate
Abs PeriodReturn on Cost
NNNProject Discount Rate
Cost per sfSale PriceProject Discount Rate
Market Range
-$7,657,039
$8,549,300
-$222,865
-$29,518
$546,483
-$126,191
Economic & Planning Systems 2 of 7122
TIF Request Review: City of Bozeman
4/25/2019
Table 2
Eligible Costs Summary
TIF Request Review: West Peach Condos
Description Amount % of Total
City of Bozeman - Residential Impact Fees $144,118 26%
City of Bozeman - Cash In Lieu of Water Rights $12,648 2%
City of Bozeman - Cash In Lieu of Park Land $17,199 3%
Northwestern Energy - Utilities $13,215 2%
Madison Engineering / C&H Engineering - Engineering Services $15,000 3%
EST - Street Light, Installation, Service $9,000 2%
Spectrum - Communications $5,000 1%
H & H Earthworks - Demo $32,331 6%
High Country Paving - Offsite Improvements, Fire Suppression - 4” Water Line $217,789 40%
Morrison Design - Boulevard Landscaping $7,000 1%
EST - Fiber/Conduit $10,000 2%
High Country Paving - Sidewalks $6,500 1%
Ironwood Development - General Contractor At 12% $56,682 10%
TOTAL $546,483 100%
% of Total Project Cost 7.1%
Source: Development Team; Economic & Planning Systems
Y:\Projects\DEN\183115-Bozeman MT P3 Development Feasibility\Models\[183115-MODEL-West Peach Condo-04-22-2019.xlsm]T-Elig Costs
Economic & Planning Systems 3 of 7123
TIF Request Review: City of Bozeman
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Table 3
Development Program
TIF Request Review: West Peach Condos
Description Units Square Feet % of Total Revenue Assumptions
COMMERCIAL NNN ($/sf)
Office N/A N/A N/A N/A
Retail N/A N/A N/A N/A
Flex N/A N/A N/A N/A
Other N/A N/A N/A N/A
Subtotal N/A N/A N/A N/A
RESIDENTIAL
Ownership (Condos)Sale Price ($/unit)
1-Bed N/A N/A N/A N/A
2-Bed 17 37,060 100% N/A
3-Bed N/A N/A N/A N/A
4-Bed N/A N/A N/A N/A
Total 17 37,060 100% $535,000
Rental (Apts.)Rental Revenue ($/sf)
1-Bed N/A N/A N/A N/A
2-Bed N/A N/A N/A N/A
3-Bed N/A N/A N/A N/A
4-Bed N/A N/A N/A N/A
Total N/A N/A N/A N/A
TOTAL 17 37,060 100%
Source: Development Team; Economic & Planning Systems
Y:\Projects\DEN\183115-Bozeman MT P3 Development Feasibility\Models\[183115-MODEL-West Peach Condo-04-22-2019.xlsm]T-Program
Economic & Planning Systems 4 of 7124
TIF Request Review: City of Bozeman
4/25/2019
Table 4
Development Costs
TIF Request Review: West Peach Condos
Description Quantity Cost Total % of Total
LAND COSTS
Land 1,050,000$ 13.7%
Land Costs 1,050,000$ 13.7%
TOTAL LAND COST 1,050,000$ 13.7%
Horizontal Development Costs
Land Development 767,871.27$ 10.0%
Waste Management 1.0 unit $10,000.00 total 10,000.00$ 0.1%
Onsite improvements 1.0 unit $381,117.82 total 381,117.82$ 5.0%
Offsite improvements 1.0 unit $217,789.04 total 217,789.04$ 2.8%
Lighting improvements 1.0 unit $9,000.00 total 9,000.00$ 0.1%
Tree Removal 1.0 unit $1,500.00 total 1,500.00$ 0.0%
Landscaping 17.0 unit $5,000.00 total 85,000.00$ 1.1%
Miscellaneous 1.0 unit $20,000.00 total 20,000.00$ 0.3%
General Contractor Overhead 6.00%% of total $724,406.86 total 43,464.41$ 0.6%
TOTAL HORIZONTAL CONSTRUCTION COSTS 767,871$ 10.0%
Vertical Development Costs
Hard Costs 4,748,630$ 62.0%
Renovation Costs 0.0 per sf 0 sf -$ 0.0%
New Construction $160.0 per sf 27,999 sf 4,479,840.00$ 58.5%
General Contractor Overhead 6.00%% of total $4,479,840.00 total 268,790.40$ 3.5%
TOTAL VERTICAL CONSTRUCTION COSTS 4,748,630$ 62.0%
Soft Costs
General Soft 318,493$ 4.2%
Impact Fees 17.0 unit $8,477.54 total 144,118.18$ 1.9%
Cash in Liey of Water Rights 1.0 unit $12,648.00 total 12,648.00$ 0.2%
Cash in Liey of Park Land 1.0 unit $17,199.00 total 17,199.00$ 0.2%
Power (to the meter)1.0 unit $15,000.00 total 15,000.00$ 0.2%
Communications (cable, internet, phone)1.0 unit $5,000.00 total 5,000.00$ 0.1%
Planning and Zoning App 1.0 unit $2,000.00 total 2,000.00$ 0.0%
Engineering 1.0 unit $30,000.00 total 30,000.00$ 0.4%
Architecture 1.0 unit $40,000.00 total 40,000.00$ 0.5%
Mailboxes 2.0 unit $4,000.00 total 8,000.00$ 0.1%
Geotechical 1.0 unit $1,500.00 total 1,500.00$ 0.0%
Marketing 1.0 unit $14,000.00 total 14,000.00$ 0.2%
Interior Design 1.0 unit $10,000.00 total 10,000.00$ 0.1%
Inspections and Testing 1.0 unit $1,000.00 total 1,000.00$ 0.0%
General Contractor Overhead 6.00%% of total $300,465.18 total 18,027.91$ 0.2%
Sales and Professional Fees 539,544$ 7.0%
Architecture & Engineering 1.0 unit $1,500.00 total 1,500.00$ 0.0%
Phase 1 Environmental Consultant 0.0 unit $0.00 total -$ 0.0%
Phase 2 Environmental Consultant 0.0 unit $0.00 total -$ 0.0%
Geotechnical Exploration 1.0 unit $1,200.00 total 1,200.00$ 0.0%
Testing and Inspection Services 0.0 unit $0.00 total -$ 0.0%
Legal Gees 1.0 unit $6,000.00 total 6,000.00$ 0.1%
Real Estate Fees 1.0 unit $503,965.00 total 503,965.00$ 6.6%
Insurance 1.0 unit $26,879.00 total 26,879.00$ 0.4%
Other 0.0 unit $0.00 total -$ 0.0%
Financing Fees and Costs 232,500$ 3.0%
Land Financing Cost 5.00%rate $1,050,000.00 land 52,500.00$ 0.7%
Financing Fees 1.00%rate $4,500,000.00 loan 45,000.00$ 0.6%
Construction Interest 3.00%rate $4,500,000.00 loan 135,000.00$ 1.8%
Lender Inspecting Archtect 1.0 unit $0.00 total -$ 0.0%
Lender Legal Fees 1.0 unit $0.00 total -$ 0.0%
Other 1.0 unit $0.00 total -$ 0.0%
TOTAL SOFT COSTS 1,090,537$ 14.2%
TOTAL PROJECT COST 7,657,039$ 100.0%
Source: Development Team; Economic & Planning Systems
Y:\Projects\DEN\183115-Bozeman MT P3 Development Feasibility\Models\[183115-MODEL-West Peach Condo-04-22-2019.xlsm]T-Cost
Economic & Planning Systems 5 of 7125
TIF Request Review: City of Bozeman
4/25/2019
Table 5
Condo Revenue Estimate
TIF Request Review: West Peach Condos
Description Amount
Gross Revenue
Total Units 17
Revenue per Unit $535,000
Total Revenue $9,095,000
Taxes
Tax Rate [1] 0.00%
Total Taxes $0
Sales Commissions
Commissions Rate 6.0%
Total Commissions -$545,700
NET CONDO REVENUE $8,549,300
Source: Development Team; Economic & Planning Systems
[1] This analysis is an evaluation of returns before taxes and
debt and as a result does not account for the estimated
taxes that the developer will have to pay.
Y:\Projects\DEN\183115-Bozeman MT P3 Development
Feasibility\Models\[183115-MODEL-West Peach Condo-04-22-
2019.xlsm]T-Condos
Economic & Planning Systems 6 of 7126
TIF Request Review: City of Bozeman4/25/2019Table 6Development Revenues and Expenditures TIF Request Review: West Peach CondosKEY ASSUMPTIONSProject Timing Start Year DurationConstruction PeriodYear 012 monthsCondo Absorption PeriodYear 118 monthsDescriptionFactor EscalationTotal Year 0 Year 1 Year 2 Year 3 Year 4 Year 5DEVELOPMENT COSTSConstruction Completion100% 0% 0% 0% 0% 0%Construction Cost -$7,657,039 -$7,657,039 $0 $0 $0 $0 $0Land$1,050,0002.0%-$1,050,000 -$1,050,000 $0 $0 $0 $0 $0Horizontal Development Costs$767,8712.0%-$767,871 -$767,871 $0 $0 $0 $0 $0Vertical Development Costs$4,748,6302.0%-$4,748,630 -$4,748,630 $0 $0 $0 $0 $0Soft Costs$1,090,5372.0%-$1,090,537 -$1,090,537 $0 $0 $0 $0 $0Total Commercial Costs -$7,657,039 -$7,657,039 $0 $0 $0 $0 $0REVENUECondo Sales Schedule0% 67% 33% 0% 0% 0%Condo Sales $8,549,300 $0 $5,699,533 $2,849,767 $0 $0 $0Gross Revenue$9,095,0000.0%$9,095,000 $0 $6,063,333 $3,031,667 $0 $0 $0Taxes Condo Sales0.0% N/A$0 $0 $0 $0 $0 $0 $0Sales Commissions6.0% N/A-$545,700 $0 -$363,800 -$181,900 $0 $0 $0PROJECT CASH FLOWSNet Project Cash Flows $892,261 -$7,657,039 $5,699,533 $2,849,767 $0 $0 $0Construction Costs -$7,657,039 -$7,657,039 $0 $0 $0 $0 $0Condo Sales $8,549,300 $0 $5,699,533 $2,849,767 $0 $0 $0Net Present Value9.00%-$29,518 -$7,657,039 $5,228,930 $2,398,592 $0 $0 $0Internal Rate of Return 8.68%Source: Economic & Planning SystemsY:\Projects\DEN\183115-Bozeman MT P3 Development Feasibility\Models\[183115-MODEL-West Peach Condo-04-22-2019.xlsm]T-Time SeriesEconomic & Planning Systems7 of 7127
WEST PEACH CONDOS
BOZEMAN MIDTOWN TIFF ASSISTANCE REQUEST
128
PROPERTY INFORMATION
•
APPLICANT INFORMATION
•
COMPANY PROFILE
•
PROJECT DETAIL
PART 1
129
Midtown Urban Renewal District
TAX INCREMENT FINANCING APPLICATION
PART 1
Property Information
Property Address: ____________________________________________________________
Property Owner: _____________________________________________________________
Legal Description: ____________________________________________________________
Property Geo-Code: __________________________________________________________
County Tax ID #: ____________________________________________________________
Applicant Information
Property Owner
Tenant
Developer
Other
Applicant’s primary contact:
Name: ________________________________________________________________________
Business Name:
_________________________________________________________________
Business Phone: _______________________________Cell Phone: _______________________
Email: ________________________________________
Project Representative (if not applicant):
Name: ________________________________________________________________________
Business Name:
_________________________________________________________________
Business Phone: _______________________________Cell Phone: _______________________
Email: ________________________________________
Property Owner (if not applicant):
Name: ________________________________________________________________________
Business Name:
_________________________________________________________________
Business Phone: _______________________________Cell Phone: _______________________
Email: ________________________________________
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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.
This application must be signed by both the applicant(s) and the property owner(s) (if
di erent).
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 Midtown Urban Renewal District TIF assistance
program. I (we) understand that failure to comply with the terms of the TIF assistance program
may result in revocation of an award.
I (we) understand the work to be undertaken must be in accordance with all applicable
requirements of the Bozeman Municipal Code and any special conditions established by the
approval authority, and must receive all required approvals prior to commencing the work. I
(we) understand if approved for TIF assistance, the work to be performed must also be in
accordance with TIF assistance program procedures and the general design guidelines for the
District, as well as the specic plans approved for the project. I (we) acknowledge that the City
has an Impact Fee Program and impact fees may be assessed for my project. Further, I (we)
agree to grant City personnel and other review agency representative’s access to the subject
site during the course of the review process (Section 38.34.050, BMC).
Applicant (s) (Print Name)
Signature of Applicant Date
Property Owner(s) (Print Name)
Signature of Property Owner Date
Julien Morice
West Peach, LLC
03/08/2019
03/08/2019
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Midtown Urban Renewal District TIF Assistance Revised
January 2017
Company 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):
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.)
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Midtown Urban Renewal District TIF Assistance Revised
January 2017
Project Detail
Property Status:
Vacant land
Building on leased land – Describe:
Land and building(s) – Describe:
Type of TIF Assistance Sought:
Requesting assistance for public infrastructure costs
Building demolition
Value of TIF Assistance Sought:
$
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:
1. Project Narrative
Provide an overview of the project in narrative format. The narrative must include a
description of the following aspects of the project:
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.
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Midtown Urban Renewal District TIF Assistance Revised
January 2017
2. Site Maps and Building Plans
The Applicant must submit a completed Conceptual Review Application to the Board and
concurrently to the Community Development Department. The Conceptual Review
application must include, at minimum:
Photographs of project site and/or building
Map showing the location of the site and its immediate surroundings
Proposed development plans including site plans, floor plans indicating square
footage and layout, building elevations
Description of parking accommodations for residential units and commercial uses
Estimated date of occupancy
Prior to Board action on the grant application, the Applicant must have obtained and provide
to the Board the Community Development Director’s written comments on the proposed
development from the Conceptual Review Application.
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January 2017
CRITERIA FOR TIF ASSISTANCE
In reviewing the TIF assistance application the Board will evaluate each project utilizing the
following criteria and point system. 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. The Board will use this information to evaluate the project.
Overall District Relevance Points
1. Relevance to the Midtown Urban Renewal Plan – 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
/4
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.
/4
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
criterion.
/3
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.
/1
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.
/1
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
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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 Ave. entryway corridor by having
buildings oriented toward the street and designed to provide interest and
activity.
/3
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 criterion.
/3
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 criterion.
/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.
/4
15. The project has a mix of uses, including residential. Submit plans detailing the
proposed mix of uses within the project.
/4
16. 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.
/2
Total Points /44
APPROVAL (For Official Use Only)
Approval Status:
Date Approved:
Date Letter of Award Sent:
Date Certificate of Completion:
Date of Payment Request:
136
PrOjEct InfO
WEST PEACH CONDOS
PROJECT ARCHITECTPROJECT MANAGER
PROJECT NAME
Phase I & II - Fall 2019 | Phase III & IV - Summer 2020
ESTIMATE DATE OF OCCUPANCY
PROPERTY INFO
Physical Address:
321, 315 & 305 W Peach St
Bozeman, MT 59715
Legal Description:
WESTLAKES 1ST ADD, S01, T02
S, R05 E, Block 1, Lot 1-2-3,
AMND PLAT F-25A
Property Geo-Code:
06-0798-01-4-19-18-0000
06-0798-01-4-19-17-0000
06-0798-01-4-19-16-0000
County Tax ID:
RGG29023
RGG29022
RGG23191
Property Owner:
West Peach, LLC
Julien Morice
Ironwood Development
406-581-9999
j@ironwoodd.com
Cole Robertson
Plum Design LAB
406-540-4437
cole@plumdesign.com
PROJECT DESCRIPTION
The West Peach Condos are modern condos located in the heart of
Bozeman’s Midtown District. This project will provide seventeen units
with private garages and outdoor decks.
WEST PEACH CONDOS
10BOZEMAN MIDTOWN TIFF ASSISTANCE REQUEST
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4
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PrOjEct NARRATIVE
WEST PEACH CONDOS
11BOZEMAN MIDTOWN TIFF ASSISTANCE REQUEST
The 0.9 acre R5 zoned property sits on along north side of the 300 block of West Peach Street.
The site currently is vacant and ready for utilities, water/sewer and off-site improvements to
begin upon approval. The project will be built in four phases. Completion of Phase I & II is
projected for the fall of 2019 and Phase III & IV for the spring of 2020.
Centrally located in the heart of Bozeman’s Midtown District, the West Peach Condos project
will include four residential buildings, featuring a total of 17 townhome style condominiums.
The two southern buildings will face West Peach Street and the two northern buildings will face
the adjacent vacant lot and North Grand Park. This development, designed by local architect
Cole Roberston at Plum Lab Design, will mix modern aesthetics with traditional quality crafts-
manship. Each unit celebrates the rich history and character of this unique neighborhood, while
accommodating the needs of today’s urban family.
Well planned and impressively spacious living areas offer the ultimate condo lifestyle. Each
2,180 sq ft residence features three bedrooms, three bathrooms, modern kitchen amenities,
in-unit laundry, a privately enclosed 150 sq ft yard patio, a 533 sq ft double car garage and two
balconies with spectacular views of the surrounding neighborhood and Bridger Mountains.
On-site features will include guest parking spaces for bikes and vehicles, snow removal services
and trash removal services.
The exterior materials chosen for this project are incredibly durable and will bring a vibrant,
modern feel to the neighborhood. A mix of different materials such as composite siding,
concrete walkways and porches, cedar fencing for private patios and balconies, metal hand rails
and metal front entrance awnings bring the modern design together and keep it from becom-
ing boring. Each individual condo uses a signature color inside the balcony areas and front
awnings to emphasize the uniqueness of each unit and draw the eye to the entrances.
The landscape plan for the development includes numerous trees, shrubs and lawn areas that
all shall have permanent underground irrigation installed to ensure a healthy landscape for
years to come.
The project’s centralized location presents inherent advantages that are sure to contribute to
the overall success of the development. The West Peach Condos location received a 72 walk
score and 75 bike score. The project is just three blocks east of North 7th Ave and Bozeman’s
Midtown corridor making it easy for residents to support the businesses within the district.
With nearby schools, parks, restaurants, services and public transportation this location is ideal
for an infill development project.
12
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WEST PEACH CONDOS
12BOZEMAN MIDTOWN TIFF ASSISTANCE REQUEST
CRITERIA FOR TIF ASSISTANCE
OVERALL DISTRICT RELEVANCE
1. RELEVANCE TO THE MIDTOWN URBAN RENEWAL PLAN: 5 / 5
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.
Located at the corner of West Peach Street and North 3rd Avenue, in the heart of Bozeman’s Midtown District,
this vibrant 17 condo development mixes modern aesthetics with traditional quality craftsmanship. Designed by
local architect, Cole Roberston / Plum Lab Design, each unit celebrates the rich history and character of this
unique neighborhood, while accommodating the needs of today’s urban family. These condos are mixed use as
they not only have well planned spacious living areas and modern amenities but they also include a home office
from which a small business could be managed. From the West Peach Condos you can enjoy easy access to
walking and biking trails, restaurants, bars, coffee shops, retail stores and entertainment venues.
PROMOTE ECONOMIC DEVELOPMENT
2. TAX GENERATION: 4 / 4
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.
The vacant land is currently taxed at $5,600.00 per year. The sale price of the West Peach Condos is estimated to
be $520,000.00 each. The County Assessor then estimates the cost to build each unit, plus the land value, and
times that number by 1.25-1.5, which gives you your annual tax. I estimate the cost to build and the land to be
approximately $460,000.00 per unit. Estimated property tax revenue is as follows:
$460,000.00 x .0138 = $6,348.00 per unit.
$6,348.00 x 17 units = $107,916.00 total annual tax.
3. ELIMINATION OF BLIGHT: 4 / 4
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.
The vacant land had three vacant homes which were demolished. These structures were non historic, and were in
a state of disrepair. The largest home had been condemned for a number of years due to it being deemed
unsafe and structurally unsound.
4. EMPLOYMENT GENERATION: 3 / 3
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 criterion.
The West Peach Condos project will employ several small businesses and contractors in the area. All of our
subcontractors and suppliers are local, Bozeman companies. Each unit will also allow for a home based business
to be operated from the unit.
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CRITERIA FOR TIF ASSISTANCE
IMPROVE MULTI-MODAL TRANSPORTATION
5. FACILITATES PUBLIC HEALTH AND MOBILITY: 5 / 5
Project will construct or improve sidewalks, including ADA access to buildings. Provide detailed
information demonstrating that the current condition inhibits public health and mobility.
This property had two small houses and one condemned, large apartment building/house which have been
demolished. These old structures were non historic, and were in a state of disrepair. The large apartment
building/house had been condemned for a number of years due to it being deemed structurally unsound, unsafe
and frequented by homeless people and unlawful activities. The current conditions of the property do not
promote pedestrian traffic due to a lack of lighting, security, poor sidewalk conditions on West Peach Street
and no sidewalk on North 3rd Avenue. North 3rd Avenue currently does not meet city standards as it lacks
curb and gutters, sidewalks, proper drainage, etc.
The West Peach Condos project improvements to public health and mobility include:
· A new, six foot wide city sidewalk along both West Peach Street and North 3rd Avenue.
· Road improvements on North 3rd Avenue along the east side of this property which includes new
curbs and gutters with several approaches.
· A new street light on the corner of West Peach Street and North 3rd Avenue.
6. REDUCES RESOURCE DEMAND: 1 / 1
Project promotes the use of transit, ride sharing, or car sharing. Provide plans, agreements or other
methods to demonstrate reduction of resource demand.
Although our project does not include a ride share program, families that live and own these condominiums
will be within easy walking/biking distance to Midtown and Historic Downtown Bozeman. With a 72 walk score,
considered “Very Walkable” and a 75 bike score, considered “Very Bikeable”, they are just minutes from
schools, parks, walking trails, restaurants, services and public transportation. Scores can be found on the Walk
Score website at www.walkscore.com. There are three Streamline bus stops are within a few blocks of the
property.
7. PROMOTES ACTIVE TRANSPORTATION: 2 / 2
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.
There is currently a bike lane along West Peach Street. The new street light that we will be installing will
provide light for increased rider security and safety. We will have bike racks onsite, and each unit will have a
double car garage and storage where bikes can be stored.
WEST PEACH CONDOS
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West
Peach
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IMPROVE, MAINTAIN AND SUPPORT INNOVATION INFRASTRUCTURE
8. INFRASTRUCTURE IMPROVEMENTS: 2 / 2
Project promotes innovation in infrastructure and/or reduces long term costs of maintenance. Provide
plans and descriptions of innovations proposed.
Infrastructure improvements for the West Peach Condos project promotes innovation and reduces long term
costs of maintenance by constructing the following:
· A new, six foot wide city sidewalk along both West Peach Street and North 3rd Avenue.
· Road improvements on North 3rd Avenue along the east side of this property which includes new
curbs and gutters with several approaches.
· A new street light on the corner of West Peach Street and North 3rd Avenue.
· New water, fire, and sewer lines.
· New communications lines.
· The boulevard will be fully landscaped with multiple new trees and a new irrigation system will be installed.
· This project is also required to contribute and participate in the SID that will be created for the street light
and intersection improvement at West Peach Street and North 7th Avenue.
PROMOTES UNIFIED HUMAN SCALE URBAN DESIGN
9. IMPROVES STREET FRONTAGE: 2 / 2
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.
The site plan and buildings are oriented so that the garages do not front West Peach Street or North 3rd
Avenue. Each unit will have two parking stalls within their garage. There are seven designated street parking
stalls available to visitors that do not encroach/impede on the right of way or the bicycle lane.
10. REDUCES ACCESS POINTS: 2 / 2
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.
The property currently has three access points (old driveways) that have aprons or access onto West Peach
Street. This project will abandon those access points and create only one point of access onto West Peach
Street and one access point on North 3rd Avenue.
11. ENHANCES NORTH 7TH AVENUE: 2 / 3
The project enhances the North 7th Ave. entryway corridor by having buildings oriented toward the
street and designed to provide interest and activity.
Although this project is not located on North 7th Avenue it is part of the Midtown District. West Peach Street
is used as a major collector for people within the Midtown District. This project will dramatically improve the
“Street-scape” or appearance of the property from West Peach Street. This property had three condemned
or abandoned structures on it. The West Peach Condos project will have patios and decks fronting West
Peach Street that will provide outdoor recreational spaces for owners and guests creating visual interest and
activity.
CRITERIA FOR TIF ASSISTANCE
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12. ENHANCES PEDESTRIAN EXPERIENCE: 3 / 3
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 criterion.
The current stretch of sidewalk along West Peach Street is in disrepair and not very pedestrian friendly. There
is currently no sidewalk along North 3rd Ave. West Peach Street and North 3rd Avenue will be revived with
new sidewalks for pedestrians, new landscaping complete with an automated irrigation system, new trees,
and lighting. Our project will provide a much needed improvement and will create visual interest with the
buildings vibrant design enhancing the pedestrian experience.
13. QUALITY OF DEVELOPMENT / OVERALL AESTHETICS: 2 / 2
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 criterion.
The current R5 zoning designation for this property allows for a much more dense usage than what we are
proposing. We believe providing more of a townhome style development vs. apartments fills a need for
urban families that is not currently being met. Our project was designed by Plum Lab Designs to complement
existing architecture in the area while adding a more modern flair to the neighborhood. Elements such as
exterior patios, covered decks, and garage doors that are hidden from the street, improve the overall
aesthetics of these structures. Low maintenance exterior materials will allow these buildings to maintain their
appearance for years to come.
SUPPORT COMPATIBLE URBAN DENSITY MIXED LAND USES
14. INCREASES HOUSING: 4 / 4
The project increases housing units within the District. Submit plans demonstrating an increase in the
number of housing units.
This property currently has zero housing units on the property. The West Peach Condos will add 17 new
condominiums to the Midtown District.
15. MIX USE: 4 / 4
The project has a mix of uses, including residential. Submit plans detailing the proposed mix of uses
within the project.
The West Peach Condos are designed with the small business owner and/or entrepreneur in mind. Each
condo will include an office space that is separate from the residential living areas. See floor plans included.
16. SHARED PARKING: 1 / 2
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.
Although we do not have any designated “shared” parking stalls onsite, this project meets or exceeds
parking standards of the UDC. Home based business owners will not have to drive to park anywhere. Their
garage parking is essentially shared as they are living and working from their home. Instead of a mixed use
building in which parking stalls are used by two different people at different times of the day, the West Peach
Condo project allows the same person to live and work while using the same parking stall.
TOTAL POINTS 42 / 44
CRITERIA FOR TIF ASSISTANCE
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WEST PEACH CONDOS
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PLANS
PHASE I
315 W. Peach // 5 Condominiums
PHASE III
307 W. Peach // 4 Condominiums
PHASE II
311 W. Peach // 4 Condominiums
wEst PEACH STREET
PHASE IV
305 W. Peach // 4 Condominiums
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WEST PEACH CONDOS
17BOZEMAN MIDTOWN TIFF ASSISTANCE REQUEST
PLANS
LOWER LEVEL
MAIN LEVEL
UPPER LEVEL
MECHDWWHPANTRY CABINETIN-UNIT FEATURES
• 2 Bedroom + Office / 3 Bath
• Double car garage
• Stainless steel appliances
• Contemporary quartz
countertops
• Commercial quality luxury
vinyl floors
• Ceramic and porcelain tile
• Pendant and recessed lighting
• Soft-close, full extension
cabinetry
• Modern, polished chrome
plumbing fixtures
• Generous decks and patio
• Full-sized front load washers
and dryers
• Air conditioning
• High-speed internet fiber
ON-SITE FEATURES
• Guest parking spaces
for bikes & vehicles
• Snow removal services
• Trash removal services
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PHOTOS
WEST PEACH CONDOS
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West
Peach
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PHOTOS
WEST PEACH CONDOS
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MAPS
WEST PEACH CONDOS
20BOZEMAN MIDTOWN TIFF ASSISTANCE REQUEST
N. 7TH AVE
WEST PEACH STREET
West
Peach
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PARKING
WEST PEACH CONDOS
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41 SPACES SHOWN
1 BIKE RACK
148
PROJECT TIMELINE
•
PUBLIC BENEFITS
•
PROJECT FINANCIAL INFORMATION
PART 2
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PART 2
FOR PROJECTS REQUESTING OVER $50,000 IN ASSISTANCE
1. Detailed Project Information
Submit the following information regarding the project requesting TIF assistance.
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:
Re-occupancy of a vacant building
Elimination of blight
Creation of new retail choices
Increased tax revenue
Job-training opportunities
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. Include
documentation in support of estimates of public benefits.
2. Project Financial Information
In order for the Midtown Urban Renewal District Board to adequately review applications
seeking TIF assistance, the following information must be submitted with the application.
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 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.
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January 2017
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.
Budget of TIF Eligible Expenses
Identify which of the development budget costs are eligible for reimbursement as
allowed by 7-15-4288, MCA.
Financial Commitments
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.
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TIMELINE
WEST PEACH CONDOS
25BOZEMAN MIDTOWN TIFF ASSISTANCE REQUEST
2017 / 2018 JAN / FEB / MAR APR / MAY / JUN JUL / AUG / SEP NOV / DEC / JAN SPRING 2020
Evaluation and concept for the West Peach Condo project began in the spring of 2017. Demo of the existing
building was completed in the summer of 2017. Planning and review is to be completed in the winter of 2019.
Off site improvements are expected to begin in March 2019. Improvements to 3rd Ave include new water/sewer
lines, new fire lines, new sidewalks, curbs/gutters, and a street light. Utilities are expected to be brought into the
development in June and construction of Phase I beginning in July. Completion of Phase I & II is projected for
the fall of 2019. Completion of Phase III & IV is projected for the spring of 2020.
EXCAVATION / FOUNDATION
CONCEPT & DESIGN
OFF SITE IMPROVEMENTS
DEMO
PHASE III & IV
COMPLETE
FINISHING WORK
UTILITIES / WATER / SEWER
CONSTRUCTION
PLANNING & REVIEW
PHASE I & II
COMPLETE
152
PUBLIC BENEFITS
WEST PEACH CONDOS
26BOZEMAN MIDTOWN TIFF ASSISTANCE REQUEST
04
05
01
02
03
Re-Occupancy of Vacant Land
321, 315 & 305 West Peach Street was the past location of three abandoned structures. Since
their demolition, these lots have sat vacant while the project has undergone concept, design,
and approval. The West Peach Condos will be a redevelopment project that will make the area
more vibrant and desirable which will draw activity to the Bozeman Midtown District.
Elimination of Blight
Currently 321, 315 & 305 West Peach Street consists of vacant land. The developer/owners have
already demolished the old structures. The West Peach Condos project will provide much
needed added value to the area. The landscape plan for the development includes numerous
trees, shrubs and lawn areas that all shall have permanent underground irrigation installed to
ensure a healthy landscape for years to come. The condo design will bring a vibrant, modern feel
to the neighborhood. Marrying the outside and inside spaces with spacious balcony areas
providing openness and the ability to sit outside while being above vehicular traffic.
Urban Living
The West Peach Condos project will include four buildings, featuring a total of 17 condominiums.
Each residence consists of 2,180 sq ft of living space, 533 sq ft double car garage, 150 sq ft
enclosed yard patio, 90 sq ft covered deck off master bedroom, and 110 sq ft covered deck off
the living room. Large windows provide spectacular views of the surrounding neighborhood and
Bridger Mountains. The project’s centralized location presents inherent advantages that are sure
to contribute to the overall success of the development. The West Peach Condos location
received a 72 walk score and 75 bike score. The project is just three blocks west of North 7th
Ave and Bozeman’s Midtown corridor making it easy for residents to support the businesses
within the district. With nearby schools, parks, restaurants, services and public transportation this
location is ideal for an infill development project.
Increased Tax Revenue
With the construction of the West Peach Condos this will create new residential spaces which in
turn will create new property taxes. See estimated property taxes include in the budget.
New Jobs and Local Sales
With the construction of the West Peach Condos we will be hiring 40+ local subcontracting
companies, suppliers and their employees. Supporting local businesses builds strong
communities by linking everyone involved in a web of economic and social relationships that
contribute the cities economic success, enriching the whole community.
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SOURCES & USES OF FUNDS
WEST PEACH CONDOS
27BOZEMAN MIDTOWN TIFF ASSISTANCE REQUEST
The West Peach Condos Sources and Uses of Funds statement below shows a cash and land investment
from Ironwood Inc and Skeeter LLC. Construction will be financed locally at either Opportunity Bank of
Bozeman or First Security Bank of Bozeman.
West Peach, LLC is partnered by local business owners Ironwood, Inc and Skeeter, LLC.
USES OF FUNDS
LAND (Fair Market Value) $ 1,050,000.00
SOFT COSTS $ 1,105,208.45
- Engineering, Architecture, Planning, Permitting,
Carrying Costs, Marketing, etc.
HARD COSTS $5,501,037.26
- Direct Construction Costs
TOTAL USES OF FUNDS $ 7,656,245.71
SOURCES OF FUNDS
LAND | Ironwood, Inc & Skeeter LLC $ 1,050,000.00
- Fee Simple, Free and Clear
CASH | Skeeter, LLC $ 105,000.00
CASH | Ironwood, Inc $ 59,000.00
CONSTRUCTION LOAN $ 6,442,245.71
TOTAL SOURCES OF FUNDS $ 7,656,245.71
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DEVELOPMENT BUDGET
WEST PEACH CONDOS
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TIF ELIGIBLE EXPENSES
WEST PEACH CONDOS
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CITY OF BOZEMAN | Residential Impact Fees
$144,118.20
CITY OF BOZEMAN | Cash-In-Lieu of Water Rights
$12,648.00
CITY OF BOZEMAN | Cash-In-Lieu of Park Land
$17,199.00
NORTHWESTERN ENERGY | Utilities
$ 13,215.39
MADISON ENGINEERING / C&H ENGINEERING | Engineering Services
$15,000.00
NORTHWESTERN ENERGY | Street Light Installation, New Service
$ 9,000.00
SPECTRUM | Communications
$ 5,000.00
H & H EARTHWORKS | Demo
$32,331.24
HIGH COUNTRY PAVING | Offsite Improvements: Water, Sewer, Roadway, Sidewalks, Street Light
$217,789.04
MORRISON DESIGN | Boulevard Landscaping
$7,000.00
EST | Fiber/Conduit
$10,000.00
HIGH COUNTRY PAVING | Sidewalks East of North 3rd Ave if Required
$ 6,500.00
IRONWOOD DEVELOPMENT | General Contractor at 12%
$ 56,682.01
ESTIMATED TOTAL $548,208.51
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