HomeMy WebLinkAbout06-03-19 City Commission Packet Materials - C5. South Bozeman Technology District FY20 Update
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Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Brit Fontenot, Economic Development Director
SUBJECT: South Bozeman Technology District 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:
The Bozeman City Commission created the South Bozeman Technology District
(the "District") in December, 2012 and authorized the District's use of tax increment
financing to support a wide array of statutorily defined activities within the District,
including the development of public infrastructure. Click here to review the District’s
comprehensive development plan.
A primary purpose of creating the South Bozeman Technology District (the
"District") was to address existing public infrastructure deficiencies on property
envisioned for use by the Montana State University Innovation Campus ("MSUIC") as a
location to create a campus of innovation excellence. Currently, the Advanced Research
Laboratory (“ARL”) is under construction in the south east corner of the site. Additional
site development, via infrastructure and new building construction, is planned for the
property over the next few years continuing to deploy the necessary infrastructure to
facilitate the aforementioned development. (Attachment 1)
In the effort to create and sustain the MSUIC as an innovation leader and
economic driver in this region, the City continues to support MSU, the MSU Foundation,
the MSUIC and other community partners to carry out the vision of the Innovation
Campus. Since the last report, the MSUIC Board was very active and much has been
accomplished to get the first facility, the Advanced Research Laboratory (“ARL”), under
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construction and set the stage for the development of the balance of the property
within the District and on the MSUIC site. The developers of the MSUIC property,
Charter Realty, have expressed interest in a reimbursement agreement for eligible costs
of infrastructure but to date we have not negotiated a final agreement document for
Commission consideration. (Attachments 2 and 3)
OPPORTUNITY ZONE:
The South Bozeman Technology District is surrounded In March, 2018 the
Commission authorized the City Manager to sign and submit to the Governor of
Montana an Opportunity Zone proposal. Click here to view the Commission memo and
proposal: City of Bozeman Opportunity Zone Proposal. The City Commission
unanimously supported the proposal. The Tax Cuts and Jobs Act of 2017 established a
new economic development program called Opportunity Zones designed to encourage
long-term private investments in low-income communities. The program provides a
federal tax incentive for taxpayers who reinvest unrealized capital gains into
“Opportunity Funds,” which are specialized vehicles dedicated to investing in low
income areas called “Opportunity Zones” for a period of ten years. As recommended by
the City, the Governor nominated Census Tract 11.02 and the U.S. Treasury Department
confirmed the Governor’s nominations. This designation is federal not municipal and as
such, the City has had little involvement beyond directing interested parties to
resources. We are aware of three private funds created to leverage the Opportunity
Zone. (Attachment 4)
UNRESOLVED ISSUES:
Unresolved issues include the potential for a future reimbursement agreement
for the eligible public portions of infrastructure required for the development of the
MSUIC parcel. This becomes less likely as time passes due to the shrinking availability of
reimbursement funds. Additionally, due to the historical lack of activity, the District
functions with staff support but without a Board. All District decisions are taken up
directly by the City Commission. With approximately half of the district term remaining
from the original fifteen year timeline, it remains entirely possible that this District will
continue to see low, if any activity for the foreseeable future. In this instance, this lack
of TIF activity is not reflective of the ongoing private investment in the District via the
MSUIC development.
FISCAL EFFECTS:
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Until late 2018 there was no real development activity on the site. Thus, very
little increment has accrued since 2012 when the District was created. As of May 15,
2019 the District deficit is ($7,611). The continued deficit is related to the following
expenses; 1) in FY14 there was $7,085.50 in legal fees charged to the fund, and 2) in
FY15 an additional $536 in legal fees were charged to the fund. These legal fees are
resultant from the draft reimbursement agreement prepared by outside counsel for
eventual use with the site developer. The value of the proposed first phase of
development is approximately $17 million dollars which should erase the deficit and add
value, and increment, at the next reappraisal and District valuation cycle in 2020.
(Attachment 5)
ATTACHMENTS:
1) South Bozeman Technology District map;
2) MSUIC Brochure;
3) Research at Montana State University and the MSU-IC; and
4) Opportunity Zone Map, Census Tract 11.02 ; and
5) South Bozeman Technology TIF District Fund Balance.
Report compiled on: May 22, 2019
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PARTNERS
The Innovation Campus brochure was made possible with the support of our partners and:Adam Friedman Business Development
adam@msuinnovationcampus.com
406.314.9005
222 East Main Street, Bozeman, MT 59715
Justin Cook Executive Director
justin.cook@msuic.org
406.223.2409
“Silicon Valley gets all the glory, but the
real hotbed of American entrepreneurship
appears to be a few hundred miles to the
northeast: Montana.”
- NEW YORK TIMES
INTEGRATING TECHNOLOGY & COMMUNITY IN BOZEMAN
DEFENSE TECHNOLOGYENTREPRENEURSHIPCYBER SECURITYBIOTECHNOLOGYPHOTONICS OPTICS ENGINEERING
msuinnovationcampus.com
MSU INNOVATION CAMPUS, LOCATED NEXT TO
MONTANA’S LARGEST RESEARCH UNIVERSITY, IS THE
FIRST COLLABORATIVE RESEARCH PARK OF ITS KIND IN
MONTANA. A DESIGNATED OPPORTUNITY ZONE, PART OF
THE 2017 TAX CUTS AND JOBS ACT, IT OFFERS WORKSPACES
FOR RESEARCH AND TECHNOLOGY COMPANIES IN ONE OF
THE MOST DESIRABLE PLACES IN THE COUNTRY.
OPPORTUNITY ZONE
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BE IN BOZEMAN
Nestled between four mountain ranges, Bozeman has
long been a destination for adventure seekers and
outdoor enthusiasts. Today, it’s attracting a new crowd:
high-tech companies and entrepreneurs. Bozeman
serves as a hub of culture, arts and entertainment,
while maintaining its rank as a premier outdoor
destination, offering blue-ribbon fishing, first-class
skiing, hiking, rafting and other opportunities.
Downtown Bozeman is just a short drive to Bozeman
Yellowstone International Airport, the busiest airport
in the state, offering non-stop flights to 15 cities in the
U.S. and connections around the world.
The Innovation Campus is a designated Opportunity Zone, which means
that investors who locate their business here can benefit from federal
tax incentives. The Opportunity Zone program is part of the $1.5 trillion
Tax Cuts and Jobs Act that was passed by Congress in 2017.
Incentives include:
• 10-year deferral of capital gains
• 15% reduction in your overall tax payment
• Tax-free gains for 10+ years while in the Innovation Campus
• Walking distance to Montana State
University, shopping and transportation
• More than a dozen potential building sites
• 20 minutes to Bozeman Yellowstone
International Airport
“Bozeman has long been a magnet
for outdoor enthusiasts, but the
small city has also earned another
reputation as a boomtown for
entrepreneurs in high technology.”
- FAST COMPANY 2017
Montana ranked #1 in the nation for
entrepreneurship startup activity by the Ewing
Marion Kauffman Foundation (2013-2016)
#1
High-tech sector contributed more than $1.5
billion in revenue in 2017 and continues to
grow (Montana High Tech Business Alliance)
$1.5B
Predicted amount of high-tech job growth
(Montana High Tech Alliance, 2017)
19.2%
Bozeman, Montana is ranked #1 as the
fastest growing micropolitan city in the U.S.
Growth
• Money Magazine’s Best Places to Live 2017
• Bozeman Yellowstone International Airport named fifth
best airport in the U.S. by Money Magazine in 2018
• Montana State University is the largest research college
in Montana
• “Biggest Skiing in America” at Big Sky Resort
• Local’s choice skiing at Bridger Bowl Ski Area
• World-class fishing, rafting, hiking
• 90-minute drive to Yellowstone National Park
• Extensive network of in-town bike and walking trails
BOZEMAN STATS
• 42-acre campus next to Montana State University
• Shovel-ready spaces for lab, medical, high-tech companies
• Built-to-suit workspaces ranging from 10,000 to 150,000
square feet
• Opportunities for collaboration between researchers,
students and technology companies
• Connected with Bozeman Fiber broadband
WHAT WE OFFER
OPPORTUNITY ZONE Bozeman Direct Flights
msuinnovationcampus.com
“Blending high-tech companies,
motivated students and cutting-
edge research in state of the art
facilities – this is the future of
technology innovation.”
JUSTIN COOK,
Executive Director of The Montana State University Innovation Campus
BUILD & GROW YOUR BUSINESS IN BOZEMAN
Serving as the nucleus for Bozeman’s
burgeoning high-tech economy,
the MSU Innovation Campus offers
workspaces for advanced technology
companies interested in setting up
shop in Bozeman, Montana. The first
collaborative research park of its kind
in Montana, MSU Innovation Campus
meets the increased need for top tier
research and technology workspaces in
one of the most desirable places to live
and work in the country.
BOZEMAN
SEATTLE
PORTLAND
SAN FRANCISCO
LOS ANGELES LAS VEGAS
SALT LAKE CITY
DENVER
MINNEAPOLIS / ST. PAUL
CHICAGO
DALLAS /FORT WORTH
ATLANTA
NEW YORK
NEWARK
HOUSTON
PHOENIX
LONG BEACHBridger Bowl Ski AreaGallatin RiverMontana Instruments, Bozeman MT28
Research at Montana State University
and the MSU-IC
Renee Reijo Pera
Vice President for Research MSU
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Excerpt of Letter from President Franklin D Roosevelt to Office of Scientific
Research and Development (July, 1945):
1) What can be done …. to make known to the world as soon as possible the
contributions which have been made during our war effort to scientific knowledge?
2) With particular reference to the war of science against disease, what can be
done now to organize a program for continuing in the future the work which has
been done in medicine and related sciences?
3) What can the Government do now and in the future to aid research activities
by public and private organizations? The proper roles of public and of private
research, and their interrelation, should be carefully considered.
4) Can an effective program be proposed for discovering and developing
scientific talent in American youth so that the continuing future of scientific
research in this country may be assured on a level comparable to what has been
done during the war?
Research in Universities Began with the Land Grant Institutions and
Established Current Funding Model Following WWII
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Strategic Planning
Goal: Double our expenditures to $220M+ by 2021.
1) Precision agriculture
2) Natural resources (including energy)
3) Optics
4) Health and biomedical sciences
Rural health in native and non-native populations, especially mental
health
Immunology, microbiology, zoonotics and antibiotic resistance
Foundational strategic area across disciplines: Data/modeling/computation
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The Original Mission and Vision of the MSU -IC
Mission & Vision
The Mission of the Montana State University Innovation Campus is –“Create
a world-class university-related research park to promote economic
development and partnerships between high-tech based businesses and the
research community of Montana State University, the region, and the State of
Montana.
The Vision of the Montana State University Innovation Campus is –“To be
recognized as ‘the place’ that provides a unique community to connect people
and support public private partnerships to stimulate new ideas, push forward
the advancement of research and science, and produce new discoveries and
technologies that will transform the world.”
Paraphrased: Our mission is to provide unprecedented opportunity for our
students at Montana State University and positively engage the surrounding
community and the state of Montana.
99 32
Types of Innovation Centers
Incubators
Accelerators
Research/tech parks
100 33
MSU Synergy with MSU-IC
1) Longevity
Precision nutrition/medicine
Lifestyle/financial choices
Education
Transitions
2) Classified Research
Data sciences
Optics
3) Workforce development
Clinical Sciences
Clinical trials (current clinical trials in schizophrenia, meth use)
Healthcare workforce
Native and rural health
Computer Sciences
Veteran re-entry
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Many Models for the MSU-IC
QB3: UC Berkeley, UC San Francisco, UC Santa Cruz
CALIT2: UC San Diego, UC Irvine
UU Research Park
USU Research Park
Stanford University
Purdue Innovation Park
Colorado State University at Boulder
102 35
The Vision For the Physical Space
103 36
Schematic of the Current Space
104 37
Take-Home Message
The research enterprise is our shared enterprise and should serve Montana
including the technology community.
We have the opportunity to create one of the world’s most sustainable and
outstanding research enterprises, to be envied nationally, that is responsive to
the needs of Montana and beyond.
105 38
Appendix
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106 39
Funding
107 40
VPR Research Funds
108 41
This Year
1.Focused on fundamentals: Policies and support to olleges, departments, centers and
institutes
2.MSU Funding Opportunities and Publications updates weekly
3.Research Expansion Funding issued with Deans and President (have seen >3X ROI to date)
4.Increased and improved proposal (“no RFP left behind”)
5.Restructured the VPRED office to improve oversight, customer-service mentality and focus
6.Established first Centers and Institutes (Center for Communication of Science, Center for
Mental Health Research and Recovery, Center for Health and Safety Culture, HELPS
Laboratory, pending: eXtreme Gravity Institute)
7.Developed external relationships important to funding, economic development
8.MT Research Initiative
9.S&C Programs/Centers/Institutes RFP
10.Bridge-funding, IDC and space policies adopted
11.Prioritization process underway
12.Nomination committee formed
13.Established research student internship partnership with Stanford University
14.Unprecedented grant awards and incoming funds including prestigious national centers
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National Centers
Funding in national competition from NSF::
David Dickensheets and colleagues, National Nanotechnology Research Center; $3M
Site visit from Keck Administration:
Brent Peyton and colleagues, Thermal Biology Institute –$2M; $2M match
Discovering Alkaliphilic Hyperthermophilic Archaea: Novel Organisms and Molecules for Medicine,
Chemicals, and Energy
Invited to submit full proposals:
1.Kenning Arlitsch, Patrick O’Brien and Jerry Sheehan -Expanding Serendipitous Knowledge
Discovery -$1.5M; $1.5M match
2. Robert Usselmann and David Singel –The Quantum Biology of
Reactive Oxygen Species -$1.5M; $1.5M match
3.Brian Bothner, Ed Dratz, Valerie Copie, David Dickensheets and
Tomas Gedeon --High Time Resolution Analysis of Metabolism,
Oxidative Stress and Stem Cell Reprogramming --$1.5M; $1.5M match
110 43
The MT Research and Economic Development Initiative
1.Palmer –Development and Commercialization of Autonomous Chemical & Biological
Instrumentation for Water Quality Monitoring (UM): $1,292,398
2.Voyich –One Medicine: Reducing the Impacts of Inflammatory and Infectious Diseases
on Animal and Human Health (MSU): $1,500,000
3.Lefcort –Synergistic Improvement in the Diagnosis & Treatment of Mental Illness,
Dementia, & Chronic Pain (MSU): $1,462,158
4.Spangler –Enhancing MT’s Energy Resources: Research in Support of the State of
MT Energy Policy Goals (MSU & MT Tech): $1,200,000 plus MSU Northern $800,000
5.Jacobsen –Increasing Profitability by Improving Efficiency of MT’s Farm & Ranch
Lands (MSU): $2,276,734
6.Patel -Translational Science at the Neural Injury Center (UM): $2,234,834
7.Shaw –Optics & Photonics Research for MT Economic Development (MSU):
2,496,513
Distribution to date:
MSU $9,735,405
UM $3,527,232
Remaining for additional projects (TBA) $1,737,36311144
Service Layer Credits:
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ParksBozeman Opportunity Zone
0 ½1¼MilesRevised: 5/15/2019
This map was created by theCity of BozemanGIS Department
Intended for Planning purposes only.
Legend
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BEGINNING FUND BALANCE: JULY 1, 2013 ‐$
ADD: REVENUES
Property Tax Increment 289
TOTAL REVENUES 289$
LESS: EXPENDITURES
Contracted Services/Consultants & Prof Services (7,900)$
TOTAL EXPENDITURES (7,900)$
CURRENT FUND BALANCE / (FUND DEFICIT) (7,611)$
SOUTH BOZEMAN TECHNOLOGY TIF DISTRICT FUND BALANCE
Fund 192
As Of 5/15/2019
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