HomeMy WebLinkAbout12-16-19 City Commission Packet Materials - C11. Res 5087, MURD TIF Assistance Program
Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: David Fine, Urban Renewal Program Manager SUBJECT: Resolution 5087 Authorizing the Midtown Urban Renewal District Tax Increment Finance Assistance Program and Authorizing the Bozeman Midtown Urban Renewal Board to Provide for the Administration of the Program. MEETING DATE: December 16, 2019 AGENDA ITEM TYPE: Consent RECOMMENDATION: Adopt Resolution 5087. BACKGROUND ON THE MIDTOWN TAX INCREMENT FINANCE ASSISTANCE PRORAM: TIFAP incentivizes projects creating significant new taxable value that also facilitate the five blight remediation goals of the Midtown Urban Renewal Plan. The two part incentive program attempts to strike a balance between welcoming all investors to the District and participating in projects are unlikely “but for” TIF assistance. Applicants requesting $50,000 or less in assistance have their project reviewed under program criteria based only on the urban renewal program goal. Applicants requesting more than $50,000 in assistance are required to submit detailed financial data on their project to show how TIF assistance would make a project feasible that might not be feasible without TIF assistance. Maximum awards are capped based on demonstrated need and contingent on the availability of appropriated incentive funds. Some large projects may require the approval of mid-year budget amendments by the City Commission to proceed. The program takes aim at one of the major challenges to redeveloping a corridor. It is difficult to make an investment case for redevelopment when existing structures produce modest rents, even when the subject property is obviously underdeveloped. Existing rents, combined with the cost of demolition and infrastructure upgrades make it tricky to catalyze redevelopment without the addition of incentives to the business case. The proposed incentives are tailored to address this dilemma by addressing the costs of demolition and infrastructure upgrades associated with new development. The program allows TIF assistance to be used for two eligible components of projects:
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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. Incentive funds will be committed to the project at the time of grant to allow the funds to be considered as part of the development pro forma, but would be paid on a reimbursement basis at the time the building receives a certificate of occupancy. This stipulation significantly reduces risk for the City making sure funds are only awarded after the activities creating new taxable value are completed. The Board also made recommendations regarding application fees for the program. These recommendations require different noticing under State Law and will be provided to the City Commission with a separate memorandum and draft resolution. BACKGROUND: The City Commission, pursuant to Resolution 4770 on January 23, 2017, authorized the existing Midtown Tax Increment Finance Assistance Program (TIFAP). The program has been quite successful with $33 million in new private investment currently under construction that would not have been feasible, “but for” TIFAP. After nearly three years of experience with the program, the Midtown Urban Renewal Board (“Board”) and Staff drafted recommended improvements to the Program. These changes are primarily designed to improve the administration of the program by requesting more complete and better-organized documentation from applicants as well as clarifying existing criteria and eliminating criteria made irrelevant by changes to various codes (UDC, ADA, etc.). In making these small changes, the Board seeks to incentivize projects that exceed what is already required by other codes for any project, whether it is within the Midtown Urban Renewal District (MURD) or elsewhere. The Board also proposes adding a criterion to incentivize, when feasible, the inclusion of affordable housing within projects that receive incentive funds. This criterion as drafted in August in consultation with the Human Resource Development Council (HRDC) staff. While the inclusion of a certain amount of affordable housing in projects is not required by this criterion, its inclusion in a project will allow the project to receive up to six additional points in the review out of up to 52 available points. Staff does not recommended requiring affordability in all proposed projects as most proposals it receives are already infeasible at market rates and affordability dramatically increases the total value of incentives required to make a project feasible.
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Explanations follow for the modification to the evaluation criteria. 1. Moved to the end of the list. Renumbering of all criteria follows. 2. no change 3. The change prioritizes redevelopment over greenfield development for receiving points for the blight elimination criterion. 4. no change 5. Points for accessibility are reserved for retrofits to existing structures, since accessibility is a requirement of new construction. 6. no change 7. The change requires that the project exceed the minimum UDC requirements as they relate to facilitating active transportation. 8. The change modifies the criterion to provide examples of the what the Board would consider “innovation in infrastructure”. The list is intended to be illustrative and not exhaustive. 9. Criterion 9 is removed as eliminating the parking between the development and the building is required by the B-2M block frontage standards. Storefront block frontages, specifically, are incentivized by a later criterion. 10. The change adds specific support for storefront block frontages in new projects. Ground floor retail is very difficult under current market conditions and is perceived as more difficult in a pedestrian oriented construct. 11. The change asks for a narrative to explain how the criterion is satisfied. 12. no change 13. These modifications to the criterion clarify the meaning of “mixed-use” for receiving points to mean a combination of commercial and residential uses. The Midtown Action Plan’s directive to incentivize housing along the corridor guides this determination. Since the Midtown URD already includes 16 hotels, the Board is excluding hotels from the being classified as mixed-use for this criterion. 14. No change.
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15. Affordable Housing. This new criterion adds up to 6 points for the inclusion of affordable housing in projects. 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. The project provides affordable dwelling units, as defined in BMC 38.380.040.
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 at 70% AMI and eligible for sale units shall be affordable at 90% AMI. Condominium units are eligible as for sale units. Additional points may be awarded for projects that provide on-site housing for the proposed workforce. 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. 16. Moved from criterion #1 to the end. 17. This new criterion provides points for meeting the private to public investment ratio for various development types as recommended by Leland Consulting Group. The Midtown Urban Renewal Board voted unanimously on September 5, 2019 to recommend the adoption of these program updates to the City Commission.
FISCAL EFFECTS: The approval of this program has no immediate fiscal impact on the District. The Commission will have the opportunity to approve annual work plan and budgets for the District that implement this program and its associated appropriations. For example, in FY 2017, the Commission approved $250,000 for existing redevelopment incentive programs.
ATTACHMENTS:
Resolution 5086 Midtown Tax Increment Finance Assistance Program update (clean) Midtown Tax Increment Finance Assistance Program update (redline) LINKS: Midtown Action Plan (2017)
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Page 1 of 5
RESOLUTION NO. 5087
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN,
MONTANA AUTHORIZING THE MIDTOWN URBAN RENEWAL DISTRICT TAX
INCREMENT FINANCING ASSISTANCE PROGRAM AND AUTHORIZING THE
BOZEMAN MIDTOWN URBAN RENEWAL BOARD TO PROVIDE FOR THE
ADMINISTRATION OF THE PROGRAM.
WHEREAS, the Bozeman City Commission did, pursuant to law, on the 22nd day of
August 2005, adopt Resolution Number 3839, declaring that blighted areas exist in the portion of
the North Seventh Avenue Corridor and that rehabilitation, redevelopment, or a combination
thereof of the area is necessary and in the interest of the public health, safety, morals, or welfare
of the residents of Bozeman; and
WHEREAS, the Bozeman City Commission did, pursuant to law, on the 27th day of
November 2006, adopt Ordinance Number 1685 defining the North Seventh Urban Renewal
District boundary, creating a North Seventh Urban Renewal Board and authorizing the Board to
act as the “agency” to exercise urban renewal powers; and
WHEREAS, the Bozeman City Commission did, pursuant to law, on the 16th day of
December, 2015, adopt Ordinance Number 1925, the Bozeman Midtown Urban Renewal District
Plan (the “Plan”), defining an expanded District boundary, renaming the District the Bozeman
Midtown Urban Renewal District (the “District”), delineating new goals and strategies for
eliminating blight, and authorizing the Bozeman Midtown Urban Renewal Board (“Board”) to
act as the “agency” to exercise urban renewal powers; and
WHEREAS, the Plan, “Encourages commercial and residential development or
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Resolution 5087, Authorizing the Midtown Urban Renewal District Tax Increment Finance Assistance Program
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redevelopment of identified infill areas through the use of and publicizing of incentives, such as,
but not limited to, public infrastructure support”; and
WHEREAS, the Board develops an Annual Work Plan and Budget to implement the
Plan that is presented to the Bozeman City Commission for approval following a public hearing,
which may include the appropriation of funds for an incentive program as authorized by the
Plan; and
WHEREAS, the intent of these funds is to offset the cost of redevelopment of
substandard or “blighted” properties within the District; and
WHEREAS, by Ordinance Number 1925 the Board was granted the powers under
Section 7-15-4233; and
WHEREAS, Section 7-15-4233(1)(a), MCA, grants the City the power to formulate and
coordinate a workable program as specified in 7-15-4209, 15-MCA; and
WHEREAS, Section 7-15-4209, MCA, states: (1) a municipality may formulate a
workable program for utilizing appropriate private and public resources:
(a) to eliminate and prevent the development or spread of blighted areas;
(b) to encourage needed urban rehabilitation;
(c) to provide for the redevelopment of such areas; or
(d) to undertake such of the aforesaid activities or other feasible municipal activities as
may be suitably employed to achieve the objectives of such workable program.
(2) Such workable program may include, without limitation, provision for:
…
(b) the rehabilitation of blighted areas or portions thereof by re-planning, removing
congestion, providing parks, playgrounds, and other public improvements, by encouraging
voluntary rehabilitation, and by compelling the repair and rehabilitation of deteriorated or
deteriorating structures; and
(c) the clearance and redevelopment of blighted areas of portions thereof.
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Resolution 5087, Authorizing the Midtown Urban Renewal District Tax Increment Finance Assistance Program
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WHEREAS, Section 7-15-4288, MCA, “Costs that may be paid by tax increment
financing” allows the municipality to use tax increments to pay the following costs of or incurred
in connection with an urban renewal project. 1) demolition and removal of structures, 2)
improvement of infrastructure, 3) public improvements and 4) costs incurred in connection with
the redevelopment activities allowed under 7-15-4233; and
WHEREAS, to fulfill the above statutory requirements, the Board developed a program
for granting monies appropriated by the City Commission to redevelop and rehabilitate the
District the name of which program is the Midtown Urban Renewal District Tax Increment
Financing Assistance Program (“Midtown TIF Assistance Program”); and
WHEREAS, the purpose of the Midtown TIF Assistance Program is to encourage
investment in development and redevelopment of commercial and mixed use property within the
District; and
WHEREAS, the Bozeman City Commission authorized the original Midtown TIF
Assistance Program on January 23, 2017 pursuant to Resolution 4770; and
WHEREAS, the on September 5, 2019, the Board developed and recommended changes
to the Midtown TIF Assistance Program to the Bozeman City Commission to improve the
administration of the program and enhance the specificity of the Program’s objectives;
NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of
Bozeman, Montana (the “City”), as follows”
Section 1
The primary objective of the Midtown 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:
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Resolution 5087, Authorizing the Midtown Urban Renewal District Tax Increment Finance Assistance Program
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• 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
Section 2
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, as provided in the Midtown TIF
Assistance Program as set forth in Attachment “A”.
Section 3
The Board provides a Work Plan and Budget to the City Commission on an annual basis at
which time the Board requests a portion of the District’s tax increment be allocated for the
Midtown TIF Assistance Program and therefore eligible projects granted awards by the Board.
Section 4
The Board is, hereby, delegated authority to administer the Midtown TIF Assistance Program as
set forth in Attachment “A” and may enter into agreements with Applicants necessary to
accomplish the purposes of the program.
Section 5
For purposes of administering the Midtown TIF Assistance Program, Resolution 5087
supersedes and replaces Resolution 4770.
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Resolution 5087, Authorizing the Midtown Urban Renewal District Tax Increment Finance Assistance Program
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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 16th day of December 2019.
CYNTHIA L. ANDRUS Mayor
ATTEST:
ROBIN CROUGH City Clerk
APPROVED AS TO FORM:
GREG SULLIVAN
City Attorney
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Midtown TIF Assistance Application Part 1 Page 1
Midtown Urban Renewal District
TAX INCREMENT FINANCING ASSISTANCE (TIF) 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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Midtown TIF Assistance Application Part 1 Page 2
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)
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:
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Midtown TIF Assistance Application Part 1 Page 3
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 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
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Midtown TIF Assistance Application Part 1 Page 4
Additional Information
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) of 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 phase. The
timeline should also identify any critical or time-sensitive dates as well as any time
constraints facing the applicant.
Construction information
o size of any existing structure to be demolished or rehabbed; size of any new
construction; types of construction materials (structural and finish); delineation of
square foot allocation by use
Public Benefits
o Projects with a high degree of public benefits are typically more likely to receive TIF
assistance. The criteria on pages 4-6 of this application are intended to help the Board
understand and evaluate the public benefits for a project. Provide a detailed narrative
response to each criterion and include supporting documentation.
2. Site Maps and Building Plans
The Applicant must submit a completed Conceptual Review Application and City responses to the
Board. 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, including anticipated costs
Copy of Concept Review comments
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Midtown TIF Assistance Application Part 1 Page 5
CRITERIA FOR TIF ASSISTANCE
The Board will review each TIF assistance application the Board using the following criteria and point
system. Points can range from 0 to the maximum shown below in each category. The following criteria
will be used to rate your project. 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.
Midtown District Goals Points
Promote Economic Development
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 criterion.
/4
2. 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. The
characteristics of an underutilized site includes land on which development occupies
only a small amount, and/or land or buildings that are or have been vacant for some
time. Submit information showing current conditions of property.
/4
3. 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
4. Facilitates Public Health and Mobility: Project will construct or improve ADA access
to and within existing structures. Provide detailed information demonstrating that
the current condition inhibits public health and mobility and the proposed
improvements benefit accessibility.
/1
5. 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
6. 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 that demonstrates the project goes beyond the
minimum Bozeman UDC requirements for site development.
/2
Improve, Maintain and Support Innovation in Infrastructure
7. Infrastructure Improvements: Project promotes innovation in infrastructure and/or
reduces long term costs of maintenance. Examples include low impact development
for stormwater, incorporation of green roof design into building architecture, or car
charging stations. Low impact development (LID) incorporates designs such as
bioretention facilities, rain gardens and permeable pavers. 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
8. The project reduces the number of vehicular access points to the property and
improves the pedestrian experience. Provide plans, agreements or other methods to
/2
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Midtown TIF Assistance Application Part 1 Page 6
demonstrate reduction.
9. The project enhances the North 7th Ave. entryway corridor by having buildings
oriented toward the street and designed to provide interest and activity.
/2
10.
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 façade transparency, building articulation, street furniture and/or
landscaping. Submit plans and details that address this criterion.
/2
11. 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 submit documentation to demonstrate compliance with this criterion.
/1
Support Compatible Urban Density Mixed Land Uses
12. The project increases housing units within the District. Submit plans demonstrating
an increase in the number of housing units.
/6
13. The project is a mix of 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.
/6
14. 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
15. 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 at 70% AMI and
eligible for sale units shall be affordable at 90% AMI. Condominium units are eligible
as for sale units. Additional points may be awarded for projects that provide on-site
housing for the proposed workforce.
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.
/3
or 6
Overall District Relevance
16. 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
17. 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
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Midtown TIF Assistance Application Part 1 Page 7
APPROVAL (For Official Use Only)
Approval Status:
Date Approved:
Date Letter of Award Sent:
Date Certificate of Completion:
Date of Payment Request:
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PART 2
FOR PROJECTS REQUESTING OVER $50,000 IN ASSISTANCE
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 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
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
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.
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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.
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Midtown Urban Renewal District TIF Assistance
Revised
January 201August7 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 building departments,
licensed architects, engineers, or building contractors before proceeding with final plans or
construction.
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Midtown Urban Renewal District TIF Assistance
Revised
January 201August7 2019
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 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.
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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 Director’s written comments on the proposed development
from the Conceptual Review Application. 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.
Application for TIF assistance are reviewed and analyzed using the information provided by the
application. Criteria are provided in the application materials and the applicant should provide detailed
documentation to demonstration adherence with the goals of the program. In addition, an analysis by a
third-party economic consultant will be used to evaluate the application for creation of new taxable
value. The analysis will include a return on investment and estimated payback period for public
assistance and proposed metric for the ratio or private investment to public assistance. An additional
assessment will be completed of the development pro forma in order to assess the reasonableness of
the applicant’s incentive request.
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.
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
Fee - $3,500.00 for applications requesting funding over $200,000
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[create separate document for application]
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
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).
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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
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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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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 phase. The
timeline should also identify any critical or time-sensitive dates as well as any time
constraints facing the applicant.
Construction information
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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.
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.
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CRITERIA FOR TIF ASSISTANCE
The Board will review each TIF assistance application using the following criteria and point system.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 tThe following criteria will be used to rate your project. 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. The
characteristics of an underutilized site includes land on which development is only
a small amount of the land or land or buildings that are or have been vacant for
some time. 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
4.5.
Facilitates Public Health and Mobility: Project will construct or improve sidewalks,
including ADA access to and within existing structures buildings. Provide detailed
information demonstrating that the current condition inhibits public health and
mobility and the proposed improvements benefit accessibility.
1//1
65. 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
76. 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 beyond the
minimum Bozeman UDC requirements for site development. reduction of resource
demand.
/2
Improve, Maintain and Support Innovation in Infrastructure
87. Infrastructure Improvements: Project promotes innovation in infrastructure and/or
reduces long term costs of maintenance. Examples include low impact
/2
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development for stormwater, permeable pavers, incorporation of green roof
design into building architecture, or car charging stations. Does the project enable
better connectivity or provide critical infrastructure for the community? Provide
plans and descriptions of innovations proposed.
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
108. 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
119. The project enhances the North 7th Ave. entryway corridor by having buildings
oriented toward the street and designed to provide interest and activity.
/32
1210.
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
1311. 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
142. The project increases housing units within the District. Submit plans demonstrating
an increase in the number of housing units.
/64
153. 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
164. 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
15. The project provides affordable dwelling units, as defined in BMC 38.380.040. 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 at 70% AMI and eligible for sale units shall be affordable at
90% AMI. Condominium units are eligible as for sale units. Additional points may
be awarded for projects that provide on-site housing for the proposed workforce.
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
/3 or
6
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affordability criteria. To receive 6 points under this criterion, 20% of all units must
meet the affordability criteria.
Overall District Relevance
16. 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
17. The investment of public funds in the project results in a leverage ratio of X/X 10:1
for multifamily, 8:1 for commercial, or 5:1 for family wage jobs.
/4
Total Points /4452
APPROVAL (For Official Use Only)
Approval Status:
Date Approved:
Date Letter of Award Sent:
Date Certificate of Completion:
Date of Payment Request:
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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.
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 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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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
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
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.
Note: Changes to financial documentation, development budget to timelines after the project has been submitted
and reviewed by the third-party financial analyst will require a review fee to be paid by the applicant. The review
fee will cover the re-work required by the analyst. Projects may be charged an additional $7,500.00 to cover the
cost of re-analysis. All awards are contingent upon staff analysis, board recommendation and City Commission
approval of a projects ability to meet the criteria and an analysis of the role of public assistance in meeting
appropriate fiscal feasibility criteria.
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