HomeMy WebLinkAbout06-03-19 City Commission Packet Materials - C4. North Park Urban Renewal District FY20 Update
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Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Brit Fontenot, Economic Development Director
SUBJECT: North Park Urban Renewal District FY20 Update
MEETING DATE: June 3, 2019
AGENDA ITEM TYPE: Consent
RECOMMENDATION:
Receive the information contained in this memo and consider this in the context
of the FY20 urban renewal district work plans and budgets.
BACKGROUND:
Created by the City Commission in 2006, the original North Park Industrial Tax
Increment Finance District (the “TIFID”) failed to live up to its potential but is on the
verge of an exciting future as an urban renewal district. Originally, the TIFID was
created to entice M-1 and M-2 type industrial-style development to the area. This never
materialized. The TIFID was made up of two property owners. The State of Montana
owns and manages approximately 270 acres of M-1 zoned property and the North Park
Development Partners, LLC, a private development firm, owns and manages
approximately 85 acres of M-2 zoned property in the former TIFID. The North Park
partners purchased the aforementioned 85 acres from the City of Bozeman in 2016 and
secured leases with the State of Montana for properties within the boundary.
The TIFID lacked significant development activities in 2018. The most recent
activity on the ground includes a gas transmission line relocation performed by
Northwestern Energy in 2016/2017. The properties within the District have historically
been, and are currently, leased for agricultural purposes while development planning
continues.
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With no past development activity, TIFID properties continued to suffer from
poor access and lack of basic infrastructure, especially ingress/egress, an interior road
network, a water and sewer distribution system, a stormwater control system and a
telecommunication conduit system. However, despite the lack of activity, i.e.
infrastructure investment and development, the value of properties within the TIFID
continue to rise, but much more slowly than if new development, spurred by
infrastructure investment, occurs. Initial public infrastructure, and other private
development investments, increase the increment value and thus the dollars available
to facilitate additional investment in necessary public infrastructure within the TIFID
allowing additional investment and development, remediation of blight, job creation,
urban renewal and an increase in property values. In 2015, as a condition of the
negotiated sale of the North Park property, the City purchased two public access
easements across State land in the TIFID; Wheat Drive and Flora Lane.
The District structure and boundaries changed in late 2017 with the termination
of the TIFID and creation of the North Park Urban Renewal District (the “URD”). The
boundaries of the North Park URD are slightly larger than the boundaries of the original
North Park TIFID in an effort to capture significant infrastructure improvement
opportunities related to the adjacent rail line and interstate interchange at North 19th
avenue. (Attachments 1 and 2) Click here for the complete 2017 North Park Urban
Renewal District Plan.
CURRENT DEVELOPMENT UPDATE:
Developers of the North Park properties, which includes sites on both private
and public, State-owned school trust land, continue to progress slowly. As of the date of
this memorandum, the development group has submitted a master site plan to the
Community Development Department and the entitlement is under review.
Finally, the development group has expressed interest in working with the City at
the appropriate time on an infrastructure reimbursement agreement for the portions of
public infrastructure improvements within the URD eligible for such reimbursement
under Montana’s urban renewal statutes.
UNRESOLVED ISSUES:
Neither a TIFID nor URD board was appointed by the Commission when the TIFID
was originally organized nor was a board appointed for the recently created URD.
Economic Development staff continues to provide support and resources on an as
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needed basis to the URD. As development plans within the URD progress, a discussion
of the appointment of a URD board, or some other organizational structure, is
recommended.
Finally, staff may return to the Commission at a future date for a discussion of
the aforementioned proposed infrastructure reimbursement agreement.
FISCAL EFFECTS:
Despite the lack of development activity within the District, increment continues
to slowly rise and the District has rebounded from a long-time negative balance.
The TIFID operated with a deficit since its creation in 2006 due to costs incurred
for platting the formerly city-owned 85 acres in the northern section of the TIFID. Only
in 2016 did the TIFID begin show a positive balance. The TIFID balance was rolled
forward from the terminated district with the creation of the North Park URD. As of
May 15, 2019, the North Park Urban Renewal District has a positive fund balance of
$58,732. The next reappraisal and URD valuation cycle occurs in 2020. (Attachment 3)
ATTACHMENTS:
1. Map of the North Park URD;
2. Map of the former TIFID boundary and current URD boundary; and
3. North Park Urban Renewal District Fund balance.
Report compiled on: May 23, 2019
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BEGINNING FUND BALANCE: JULY 1, 2006 ‐$
ADD: REVENUES
Property Tax Increment 334,236$
Interest Income 198
TOTAL REVENUES 334,435$
LESS: EXPENDITURES
Contracted Services/Consultants & Prof Services (61,182)$
Office Expense (227)
Operating Interest Charged For Carrying Negative Cash Balance (21,558)
Capital ‐ Infrastructure & Improvements (188,736)
Transfers‐Out to Other Funds (4,000)
TOTAL EXPENDITURES (275,703)$
CURRENT FUND BALANCE 58,732$
MANDEVILLE INDUSTRIAL TIF DISTRICT FUND BALANCE
Fund 145
As Of 5/15/2019
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