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HomeMy WebLinkAboutMURD TIF Assistance Draft 070119 MIDTOWN TAX INCREMENT FINANCING (TIF) ASSISTANCE PROGRAM INTRODUCTION The Midtown Urban Renewal Plan (“Plan”), adopted by the Bozeman City Commission on November 16, 2015, authorized the Midtown Urban Renewal Board (“Board”) to establish monetary incentives in the Midtown Urban Renewal District (“District”) in support of the Plan’s goal to promote economic development. The Board established and administers this Tax Increment Financing (“TIF”) assistance program for the redevelopment and rehabilitation of properties within the District. TIF assistance applications are subject to program eligibility criteria and project guidelines listed below. Applications will be accepted and processed in the order in which they are received and approved based on the availability of funds for the program. PURPOSE The purpose of the TIF assistance program is to encourage desirable development/redevelopment projects, as well as assist projects that would not otherwise occur “but for” the assistance provided through tax increment financing. The purpose of this document is to provide guidelines for the Board to offer monetary incentives for development activities in the District in the form of TIF assistance funds. This policy shall be used as a guide in processing and reviewing applications requesting TIF assistance. The Board shall have the option of amending or waiving sections of this policy when it determines, in its sole discretion, such an amendment or waiver is necessary or appropriate. In amending or waiving any sections of this policy, the Board shall document the reason for the deviation. The provision of financial assistance is at the sole discretion of the Board. The Board reserves the right to reject or approve applications on a case-by-case basis, taking into account established policies, specific project criteria and the demand on District services in relation to the potential benefits to be received from the proposed project. Meeting policy guidelines or other criteria does not guarantee the award of TIF assistance. Furthermore, the approval or denial of one application is not intended to set precedent for approval or denial of another application. Page 2 of 16 Midtown Urban Renewal District TIF Assistance Revised January 2017July 2019 PROGRAM OBJECTIVES The primary objective of the TIF assistance program is to encourage investment in development and redevelopment of commercial and mixed use property within the District in accordance with the provisions of the Montana Urban Renewal Law (7-15-4209, 7-15-4233, and 7-15-4288, M.C.A.). Additional District objectives are to: • Encourage private investment in commercial property in the District through the use of public incentives; • Expand the property tax base in the District through private investment in income producing properties; • Stimulate economic and business development within the District; and • Reduce blighting influences in the District The grants are awarded at the discretion of the Board as authorized by the Bozeman City Commission, based upon review of the Applicant's compliance with program objectives, eligibility requirements, and eligible construction activities. GENERAL POLICIES 1. TIF assistance priority will be given to projects that do not have the financial feasibility to proceed without the benefit of the assistance. 2. The applicant shall provide any market and financial feasibility studies, appraisals or other information provided to private lenders for the project as well as any other information or data which the Board, or its financial consultants, may require in order to review the need for TIF assistance. 3. TIF assistance will not be used for projects that place extraordinary demands on District infrastructure or services. 4. The applicant must be able to demonstrate, to the Board’s satisfaction, an ability to construct, operate and maintain the proposed project based upon past experience, general reputation and credit history. 5. The applicant shall provide sufficient market, financial, environmental and other data relative to the successful operation of the project. 6. The Applicant must retain ownership of the project long enough to complete it, to stabilize its occupancy, to establish the project management, and to initiate payment of taxes based on the increased project value. This application must be signed by both the applicant(s) and the property owner(s) (if different). 7. Project plans and construction must comply with all applicable code and permit requirements. Applicant is advised to consult with the City of Bozeman planning and Page 3 of 16 Midtown Urban Renewal District TIF Assistance Revised January 2017July 2019 building departments, licensed architects, engineers, or building contractors before proceeding with final plans or construction. 8. The Applicant must demonstrate significant leverage of private investment through the use of public dollars. ELIGIBLE COSTS TIF eligible expenses are defined by Montana Code Annotated, 7-15-4288 and further limited by the Plan. The project seeking TIF assistance must be located within the boundary of the District. Costs related to the following are eligible for financial assistance: 1. Demolition and removal of structures 2. Construction and improvement of public improvements or infrastructure, including streets, curbs, gutters, sidewalks, alleys, parking lots and off-street parking facilities, sewer lines, storm sewers, waterlines, and impact fees Requests for funding above $50,000 will require the ratification of the Bozeman City Commission. DISBURSEMENT OF ASSISTANCE FUNDS The TIF assistance program is a reimbursement program. No funds will be disbursed until all completion criteria have been satisfactorily met as determined by the Board in its sole discretion. At the end of the project, the recipient will submit a Certificate of Completion and required supporting documentation to the Board including itemized invoices and other documentation as the Board may reasonably request. USE OF ASSISTANCE FUNDS The award of TIF assistance funds is subject to the Applicant entering into a grant agreement with the District. The grant agreement will include requirements that the grantee comply with (i) applicable City of Bozeman procurement regulations related to bidding, hiring, and prevailing wages; (ii) the City’s nondiscrimination policy; and (iii) State of Montana public records laws. The grant agreement will include such additional terms as the District in its sole discretion determines are prudent or necessary to fulfill the goals of the TIF assistance program. TIF assistance funds must be used within two years of the date of the Letter of Award. Any funds not disbursed to the Applicant within that time will remain in the District fund. The Board, in its sole discretion, may provide an extension of up to one year to the original two year timeframe. Use of TIF assistance funds must be in compliance with the terms of the grant agreement Page 4 of 16 Midtown Urban Renewal District TIF Assistance Revised January 2017July 2019 between the Applicant and the District. REVOCATION OF AWARD The grant agreement will include terms providing that an award of TIF assistance may be revoked by the Board if the Board finds, in its sole discretion, that Applicant has failed to comply with any of the terms of the assistance program or grant agreement, or has failed to provide information or provided inaccurate information on the application. Upon such a finding, the Board will provide Applicant with notice of the default and a 30-day opportunity to cure before the award is revoked. The grantee will be required to return TIF assistance funds already disbursed pursuant to the terms of the grant agreement. DISCLAIMER: Neither the Board nor the City of Bozeman will be responsible for the planning, design, or construction proposed by any work conducted as part of the TIF assistance program. No warrantees or guarantees are expressed or implied by the description of, application for, award of or participation in the TIF assistance program. APPLICATION PROCESS AND PROCEDURE Application for TIF assistance shall be made on the forms provided by the Board and submitted to the Economic Development Department for review and comment. Deadlines for submittals shall be as published and posted by the Board. Incomplete forms will be returned to the applicant with an explanation on additional information as may be required. Prior to Board action onsubmitting the grant application, the Applicant must have obtained and provide to the Board the Community Development ’s written comments on the proposed development from the Conceptual Review Application through the Community Development Department. The Conceptual Review must provide adequate detail to receive comments from the Engineering Division on required utility connections and off-site infrastructure. For projects seeking TIF assistance for demolition or payment of impact fees, the City of Bozeman Economic Development Department will review the application and provide a recommendation to the Board and, if applicable, the Bozeman City Commission. If approved by the Board, or City Commission, a “letter of intent” outlining the specific terms and conditions of the TIF assistance will be provided to the applicant. Page 5 of 16 Midtown Urban Renewal District TIF Assistance Revised January 2017July 2019 SUBMITTAL INFORMATION There are two parts to the attached application. All applicants must complete Part 1. Applicants requesting TIF assistance above $50,000 must complete and include information identified in Part 2.  Part 1 – All Applications  Part 2 – Applications requesting funding over $50,000 Page 2 of 16 Midtown Urban Renewal District TIF Assistance Revised January 2017July 2019 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: ________________________________________ Please attach a list of all other property owners, business partners, developers and/or investors Page 3 of 16 Midtown Urban Renewal District TIF Assistance Revised January 2017July 2019 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 different). 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 specific 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 Page 4 of 16 Midtown Urban Renewal District TIF Assistance Revised January 2017July 2019 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.) Page 5 of 16 Midtown Urban Renewal District TIF Assistance Revised January 2017July 2019 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) ofor project o (e.g. industrial, commercial, retail, office, mixed use, residential for sale or for rental, etc.) o 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.  Project Timeline o Include anticipated dates for site acquisition, project start and completion, as well as other project milestones. Multi-phase projects must include details for each Page 6 of 16 Midtown Urban Renewal District TIF Assistance Revised January 2017July 2019 phase. The timeline should also identify any critical or time-sensitive dates as well as any time constraints facing the applicant.  Construction information o 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.   Public Benefits o Fully dDescribe 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. 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. Examples of public benefits include, but are not limited to the following: Re-occupancy of a vacant building  Elimination of blight  Creation of urban density mixed use project that includes new housing options 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. Page 7 of 16 Midtown Urban Renewal District TIF Assistance Revised January 2017July 2019 3.2. Site Maps and Building Plans The Applicant must submit a completed Conceptual Review Application and City responses 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  Anticipated off-site infrastructure improvements  Copy of Concept Review comments 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. Page 8 of 16 Midtown Urban Renewal District TIF Assistance Revised January 2017July 2019 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, provide a detailed narrative response to each criterion and include 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 Midtown District Goals 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 2.1. 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 32. 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. Projects that redevelop underutilized properties will be given priority. Submit information showing current conditions of property. /4 43. 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 64. 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 75. 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 tohat demonstrates the project goes /2 Page 9 of 16 Midtown Urban Renewal District TIF Assistance Revised January 2017July 2019 beyond the minimum Bozeman UDC requirements for site development. reduction of resource demand. Improve, Maintain and Support Innovation in Infrastructure 86. Infrastructure Improvements: Project promotes innovation in infrastructure and/or reduces long term costs of maintenance. Examples include low impact development for stormwater or car charging stations. Does the project enable better connectivity or provide critical infrastructure for the community? Provide plans and descriptions of innovations proposed. /2 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. /2 107. 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. /2 118. The project enhances the North 7th Ave. entryway corridor by having buildings oriented toward the street and designed to provide interest and activity. /32 129. The project enhances the pedestrian experience by using a storefront block frontage (BMC 38.510) as a component of the project. Key elements of the frontage would include 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. /32 1310. The quality of development and overall aesthetics (architectural, site design, landscaping, etc.) are beyond that which is minimally required by the UDC. Provide a narrative and Ssubmit documentation to demonstrate compliance with this criterion. /21 Support Compatible Urban Density Mixed Land Uses 141. The project increases housing units within the District. Submit plans demonstrating an increase in the number of housing units. /64 152. The project has is a mix of uses, including residential and commercial. Commercial uses include retail, restaurant, office and services. Hotels would not be supported unless included with a project that included residential development. Submit plans detailing the proposed mix of uses within the project. /64 163. 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 14. The project provides affordable dwelling units. For the purposes of this criterion, an affordable dwelling unit is defined as a unit that requires no more than 33 percent of a household’s income for housing payments based on a designated percentage of area median income (AMI). Eligible rental units shall be affordable /3 or 6 Page 10 of 16 Midtown Urban Renewal District TIF Assistance Revised January 2017July 2019 at 70% AMI and eligible for sale units shall be affordable at 90% AMI. Condominium units are eligible as for sale units. Eligible rental dwellings to be constructed in the proposed residential development shall be provided by long-term contractual obligation to an affordable housing agency, for a period of not less than 20 years, with a written plan assuring ongoing affordability pricing and eligibility monitoring, and annual re-certification. The city's affordability guidelines and subsequent revisions establish affordability and eligibility. To receive 3 points under this criterion, 10% of all units must meet the affordability criteria. To receive 6 points under this criterion, 20% of all units must meet the affordability criteria. Overall District Relevance 15. 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 16 The investment of public funds in the project results in a leverage ratio of at least 10:1 for multifamily, 8:1 for commercial, or 5:1 for family wage jobs. /4 Total Points /52 To be considered for funding, points must be given in at least 3 of the 5 goal areas, and a minimum of 26 total points. APPROVAL (For Official Use Only) Approval Status: Date Approved: Date Letter of Award Sent: Date Certificate of Completion: Date of Payment Request: Page 11 of 16 Midtown Urban Renewal District TIF Assistance Revised January 2017July 2019 PART 2 FOR PROJECTS REQUESTING OVER $50,000 IN ASSISTANCE 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. 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. This information will be used to perform a third-party financial analysis to determine the project’s anticipated return on investment (ROI) and reasonableness of developer profit. The goal of the Midtown TIF Assistance program is to make projects financially feasible. Therefore, projects that demonstrate financial need for public funding will be given priority. 1. Sources & Uses of Funds a. 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. b. 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 Page 12 of 16 Midtown Urban Renewal District TIF Assistance Revised January 2017July 2019 development costs of the project. If determined, specify the specific line items of the project budget that each source will finance. c. 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. 2. Development Budget a. 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. 3. Budget of TIF Eligible Expenses a. Identify which of the development budget costs are eligible for reimbursement as allowed by 7-15-4288, MCA. 4. 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.