HomeMy WebLinkAbout09-03-19 Public Comment - B. Fontenot and D. Fine (with Economic Development) - Industrial Land Use Policy and the Community Plan
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Memorandum
Date: September 3, 2019
To: Bozeman Planning Board
From: Brit Fontenot, Economic Development Director
David Fine, Urban Renewal Program Manager
Re: Industrial Land Use Policy and the Community Plan
Bozeman’s Opportunity Zone and the Community Plan
Expanding Land Designated Community Commercial/Mixed Use Land in
Midtown
Industrial Land Use Policy and the Community Plan
Economic and Planning Systems (EPS) prepared a Demographic and Real Estate
Market Assessment (the “EPS Report”) in support of the Community Plan planning
process. The report showed that Bozeman has only captured 10% of the industrial growth
in the Bozeman/Belgrade/ Four Corners triangle area due to land cost and, to a lesser
extent, lower development regulations and costs in the surrounding area. EPS projected
2017-2040 demand for industrial land at 113 acres and showed that Bozeman currently
has 141 acres of appropriately zoned industrial land. This analysis would suggest that our
supply of industrial land under current zoning and the existing future land use map is
adequate and does not require policy change. We would like to challenge the assumptions
underlying the idea that future land use map does not need to change.
Economic Development staff believe that the current map contains the
appropriate quantity of land for industrial development, but that the location of the
current supply is flawed. EPS correctly identifies that the majority of the undeveloped
land available for new industrial development is located within the North Park Urban
Renewal District and the Idaho Pole property (a soon to be delisted superfund site). These
are excellent industrial sites, but these sites cannot serve as the principal or only new land
for industrial development for three reasons:
1. Infrastructure Deficiency. North Park and Idaho Pole have significant
infrastructure issues requiring a developer to make a major investment to support
the necessary buildout of these sites. The EPS Report notes that most Bozeman
industrial projects are relatively small, so to utilize these sites a developer would
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need to plan for attracting several industrial projects within a fiscally appropriate
timeframe. Given recent development trends for industrial development in
Bozeman, this is a highly speculative proposition.
2. Lack of Ownership Diversity. The currently supply of industrial land is principally
owned by three parties: Idaho Pole Company, North Park Development LLC (get
real name) and the State of Montana, which currently leases its land to the other
north park developer. This fact means that only 2 entities control most of the city’s
undeveloped industrial land, and since much of that land is leased, potential
tenants would need to be willing to make capital investments on leased land. We
may be over reliant on two property owners making beneficial development
choices.
3. Location is not Well-Matched to Bozeman’s Photonics Cluster. The City has
identified the photonics industry as a notable cluster that is experiencing growth.
While not all photonics manufacturers require industrially designated land to
conduct their manufacturing operations, many of these firms are highly sensitive
to railroad vibrations and could locate in land designated industrial. Almost all the
undeveloped land designed industrial is adjacent to railroads and does not serve
this identified cluster well.
Is Industrial Development the Highest and Best Use? The Economic Development
Department will also ask the Planning Board whether industrial is the highest and best
use of the developed and undeveloped land currently designated for industrial use. Much
of this land is less than two miles from downtown, is adjacent to the Rouse Ave. and
Wallace/L St. corridors and is proximate to excellent parks and trails. It is possible that
much of this land could be developed as Community Commercial/ Mixed-Use in a way that
would have significant community benefits and promote a more compact, walkable urban
form. As part of the Community Plan update process other land could be considered for
industrial designation that better meets the needs of the Bozeman community. Finally,
we suggest that our largely clean manufacturing industries could be allowed in most parts
of Bozeman without adverse impacts. We should consider whether many industrial uses
that currently must locate in industrially designated land could also be accommodated in
other commercially designated areas and coexist easily with a mix of other uses.
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Bozeman’s Opportunity Zone and the Community Plan Update
What is an Opportunity Zone?
The Tax Cuts and Jobs Act of 2017 established a new economic development
program called Opportunity Zones (OZ) 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 in to “Opportunity
Funds,” which are specialized vehicles dedicated to investing in low-income areas
called “Opportunity Zones.”
The OZs are comprised of Low-Income Community Census tracts and
designated by governors in every state and territory. The program has the potential
to direct private capital toward distressed communities and serve as a catalyst for
long-term, inclusive economic development. This may include revitalization,
workforce development, affordable housing, infrastructure, and business startup
and expansion.
Eligibility
Tracts in which the poverty rate is at least 20 percent; or
Tracts in which the median family income does not exceed 80 percent of
the statewide median family income if located outside of a metropolitan
area; or
Tracts in which the median family income does not exceed 80 percent of
the statewide median family income or the metropolitan area median
family income, whichever is higher.
Relevance to the Community Plan update
OZs are a unique effort at incenting investment in distressed areas communities
around the United States. Opportunity Zones did not exist prior to 2018. Bozeman’s OZ
straddles the City/County boundary and is consists of approximately 5,020 acres of both
developed and undeveloped land. The MSU Innovation Campus property is inside the OZ.
Considering the interest generated by local, private sector “opportunity funds” it seems
prudent to consider what this could mean for land use in this area of the City. The current
land use map (see below) identifies a variety of uses, particularly along the primary
transportation corridor with the largest swaths identified as residential and PLI.
Additionally, there are many projects, residential and commercial, in various stages of
development, currently underway within the OZ.
The large tracts of available undeveloped land in the Opportunity Zone, if
appropriately designated, could support the rapid growth of Bozeman’s high-tech sectors,
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including high-tech manufacturing, supporting mid to high-wage job growth. Incentivizing
additional private investment through an Opportunity Zone will increase commercial and
residential options across a wide spectrum of economic strata due to the large areas of
undeveloped land in the tract thus improving live/work options for job seekers at multiple
income levels. The future land use designations in the Opportunity Zone should consider
allowing for a mix of commercial and residential uses in what is now land primarily
designated exclusively for residential use.
Map of the Opportunity Zone Boundary layered with the Future Land Use map.
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Map of the Opportunity Zone Boundary
Expanding Land Designated Community Commercial/Mixed Use Land in Midtown
When new zoning for the Midtown corridor was last considered, the Midtown
Urban Renewal Board and Economic Development staff advocated for a zoning
designation that allowed for a wide mix of uses and significantly more dense development
throughout the Midtown area. Most of Bozeman’s commercially designated land is
arranged along road corridors, but these land areas are not particularly deep, which
makes it difficult to create walkable mixed-use nodes of development. Since the existing
future land use map called for Residential adjacent to the Midtown corridor, Community
Development created a new R-5 zoning designation and applied it to Midtown’s
residentially designated areas and applied the new B-2M zoning designation, where the
map designated Community Commercial/ Mixed-Use. With the new Community Plan
under consideration, Economic Development staff would like to propose widening the
areas designated Community Commercial/ Mixed-Use, to include undeveloped land that
is currently designated R-5.
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Future Land Use Map: Proposed Midtown Expansion of Community Commercial/ Mixed
Use
Legend: Residential: gold | Community Commercial/ Mixed-Use: pink
Extent of Proposed Community Commercial/ Mixed-Use Expansion Area: red outline