HomeMy WebLinkAbout07-13-20 City Commission Packet Materials - C3. North Park Urban Renewal District FY21 WP and Budget
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Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Mike Veselik, Economic Development Specialist
Brit Fontenot, Economic Development Director
SUBJECT: North Park Urban Renewal District FY21 Update
MEETING DATE: July 13, 2020
AGENDA ITEM TYPE: Consent
RECOMMENDATION:
Receive the information contained in this memo and consider this in the context
of the FY21 urban renewal district work plans and budgets.
BACKGROUND:
Created by the City Commission in 2006, the original North Park Industrial Tax
Increment Finance District (the District) failed to live up to its potential but is on the verge
of an exciting future as an urban renewal district. Originally, the District was created to
entice M-1 and M-2 type industrial-style development to the area. This never
materialized. The District was made up of two property owners. The State of Montana
owns and manages approximately 270 acres of M-1 zoned property and the North Park
Development Partners, LLC, a private development firm, owns and manages
approximately 85 acres of M-2 zoned property in the former TIFID. The North Park
partners purchased the aforementioned 85 acres from the City of Bozeman in 2016 and
secured leases with the State of Montana for properties within the District boundary.
The District lacked significant development activities in 2018, 2019, and the first
half of 2020. The most recent activity on the ground includes the construction of a gas
transmission line relocation performed by Northwestern Energy in 2016/2017. The
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properties within the District have historically been, and are currently, leased for
agricultural purposes while development planning continues.
With no past development activity, the District properties continued to suffer
from poor access and lack of basic infrastructure, especially ingress/egress, an interior
road network, a water and sewer distribution system, a stormwater control system and a
fiber optic conduit system. However, despite the lack of activity, i.e. infrastructure
investment and development, the value of properties within the District continue to rise,
but much more slowly than if new development, spurred by infrastructure investment,
occurs. Initial public infrastructure, and other private development investments, increase
the increment value and thus the dollars available to facilitate additional investment in
necessary public infrastructure within the District allowing additional investment and
development, remediation of blight, job creation, urban renewal and an increase in
property values. In 2015, as a condition of the negotiated sale of the North Park property,
the City purchased two public access easements across State land in the proposed district;
Wheat Drive and Flora Lane.
The District structure and boundaries changed in late 2017 with the termination
of the TIFID and creation of the North Park Urban Renewal District (the District). The
boundaries of the North Park URD are slightly larger than the boundaries of the original
North Park TIFID in an effort to capture significant infrastructure improvement
opportunities related to the adjacent rail line and interstate interchange at North 19th
avenue. (Attachments 1) Click here for the complete 2017 North Park Urban Renewal
District Plan.
CURRENT DEVELOPMENT UPDATE:
Developers of the North Park properties, which includes sites on both private and
public, State-owned school trust land, continue to progress slowly. As of the date of this
memorandum, the development group has submitted a master site plan to the
Community Development Department and the entitlement is under review.
Finally, the development group has expressed interest in working with the City at
the appropriate time on an infrastructure reimbursement agreement for the portions of
public infrastructure improvements within the URD eligible for such reimbursement
under Montana’s urban renewal statutes.
WORK PLAN AND BUDGET:
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Professional Services and Bond Counsel $70,000
Staff is working with an investment group and is in the preliminary stages of
formulating agreement for the investor to install necessary infrastructure that activates
the North Park property and for the investor to be reimbursed for this infrastructure
investment at a later date. This process may require outside legal counsel and
professional services to facilitate a final development agreement.
UNRESOLVED ISSUES:
Neither a TIFID nor URD board was appointed by the Commission when the TIFID
was originally organized in 2006 nor was a board appointed for the recently created URD
in 2018. Economic Development staff continues to provide support and resources on an
as needed basis to the URD.
Finally, if the development process continues, staff may return to the Commission
at a future date for a discussion of the aforementioned proposed infrastructure
reimbursement agreement.
FISCAL EFFECTS:
Despite the lack of development activity within the District, increment continues
to slowly rise and the District has rebounded from a long-time negative balance.
The TIFID operated with a deficit since its creation in 2006 due to costs incurred
for platting the formerly city-owned 85 acres in the northern section of the TIFID. Only in
2016 did the TIFID begin show a positive balance. The TIFID balance was rolled forward
from the terminated district with the creation of the North Park URD. As of June 15, 2020,
the North Park Urban Renewal District has a positive fund balance of $88,736.
(Attachment 2)
ATTACHMENTS:
1. Map of the North Park URD;
2. North Park Urban Renewal District Fund balance.
Report compiled on: June 29, 2020
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BEGINNING FUND BALANCE: JULY 1, 2019 65,679.50$
ADD: REVENUES
Property Tax Increment 22,216$
Interest Income 840
TOTAL REVENUES 23,056$
LESS: EXPENDITURES
TOTAL EXPENDITURES -$
CURRENT FUND BALANCE 88,736$
MANDEVILLE INDUSTRIAL TIF DISTRICT FUND BALANCE
Fund 145
As Of 6/19/20
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