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HomeMy WebLinkAboutAccess Fitness Board Packet 202009031 Staff Report To: Midtown Urban Renewal Board From: Mike Veselik, Economic Development Specialist David Fine, Urban Renewal Program Manager Meeting Date: September 3, 2020 Subject: Access Fitness 431 N 7th Ave TIF Assistance Program Overview The Bozeman City Commission created the Midtown TIF Assistance Program in 2017 to support redevelopment activity and advance the goals of the 2015 Midtown Urban Renewal Plan. The City Commission amended the Program in January 2020. The Midtown TIF Assistance Program supports projects that create significant new taxable value as well as meeting the five goals of the Midtown Urban Renewal Plan. These goals, as required by statute, focus on mitigating blighting conditions in the urban renewal area. Each of these five goals is further refined with particular criteria for a total of sixteen categories that can receive points. Point awards demonstrate specific compliance with the criteria, but are not the only factors the board may consider in recommending an incentive award. For example, the board may also consider new taxable value created by the project, or whether the project would be feasible without a public incentive. In addition to tax generation, the goals of the Urban Renewal Plan and the need for assistance, the Board must also make affirmative findings as required by State Law. Staff Recommendation The Midtown Action Plan, unanimously adopted by the Bozeman City Commission in 2017, recommends increasing building density within the Midtown Urban Renewal District, with a particular emphasis on incentivizing infill development. The Midtown Action Plan describes the concept: Increased building density increases the number of people in the District, which helps create the desired active pedestrian environment. More density of buildings grouped 2 together in districts is especially desired to encourage pedestrians to explore adjacent buildings. The Access Fitness building is the redevelopment of a currently underutilized site and would bring much needed, new services to the 7th Ave corridor. The new services will add to the walkability of the neighborhood and make is a more desirable place to visit. The Midtown TIF Assistance Program allows the payment of eligible costs of development to incentivize development that meets the goals of the Midtown Urban Renewal Plan. The Applicant is applying for an eligible cost areas totaling $50,000. Staff finds that the proposed costs are eligible for TIF assistance. Staff scored the application based on the program criteria. Based on our review and the application materials presented, the project received 29 of 52 available points. The application scored points toward three of five goals of the Midtown Urban Renewal Plan. The project eliminates blight and improves services delivery within the District. The Montana Department of Revenue provided an estimate of the new assessed value of the property based on the owner’s proposed improvements. The property is estimated to increase by $399,400 and generate $4,878.82 in new tax revenue. This would ensure the TIF money is paid back a little more than ten years after issuance. This would allow the project to pay back its assistance in just over 10 years. Staff recommends approval of the project funding request, since the requested assistance could pay back in just over 10 years due to new tax generation from the proposed improvements. Criteria for TIF Assistance Goal Number 1: 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 these criteria. The Montana Department of Revenue provided an estimate of the new assessed value of the property based on the owner’s proposed improvements. The property is estimated to increase by $399,400 and generate $4,878.82 in new tax revenue. This would ensure the TIF money is paid back a little more than ten years after issuance. [3 of 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 3 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. The project eliminates blight by replacing a vacant property and an underutilized lot with a fitness facility. This reuse brings much needed services to the neighborhood. [4 of 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. The project will generate temporary construction jobs. The applicant estimated job creation at roughly twelve jobs across two business. However, one business is a relocation. [1 of 3] Goal Number 2: 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. The renovation has replaced two non-ADA compliant restrooms with new, upgraded ADA compliant facilities. [1 of 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. While locating commercial development in Midtown places it in a centrally located location, this project does not take particularly exceptional or innovative measures to promote transit use, ride sharing, or car sharing. [0 of 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. The Applicant indicates the installation of bike racks on the property located under the roof line of the building. [1 of 2] 4 Goal Number 3: 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. The application shows investment in new Fire Suppression and Potable Water Mains exceeding a total cost of $225,000 to future proof the site. These improvements are a basic requirement for a development of this type and the line upsizing, specifically, was ensured through a previous agreement facilitated by the Midtown Urban Renewal District. Upsizing the lines now will, however, prevent premature damage to the streetscape elements that are being installed. [1 of 2] Goal Number 4: Promote Unified Human Scale Urban Design 8. Vehicular Access Points: 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. The project does not remove any of the sidewalk drive approaches. [0 of 2] 9. Street Orientation: The project enhances the North 7th Ave. entryway corridor by having buildings oriented toward the street and designed to provide interest and activity. The applicant included renderings showing a modern building fronting on North 7th Ave with a modern, façade aesthetically consistent with other buildings on North 7th Ave. [2 of 2] 10. Pedestrian Experience: 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. The project provides enhanced façade transparency with large windows facing the street for its ground floor.The project does not employ a storefront block frontage as described by the code. . [0 of 2] 5 11. Quality of the Development Exceeds Minimum Requirements: 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. Based on preliminary renderings, the project as proposed appears to exceed the requirements of the UDC for architecture and site design. [1 of 1] Goal Number 5: Support Compatible Urban Density Mixed Land Uses 12. Increases Housing Units: The project increases housing units within the District. Submit plans demonstrating an increase in the number of housing units. The project includes no residential units. [0 of 6] 13. Mix of Uses Including Residential: 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. The project only includes eligible commercial uses including service uses. The project does not include a residential component. [0 of 6] 14. Shared Parking: 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. The project does indicate some shared parking between the two businesses located on its site. [1 of 2] 15. Affordable Dwelling Units: 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 6 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 does not include dwelling units of any kind. [0 of 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 are also considered, including pedestrian emphasis and quality of design. The project eliminates blight by adding commercial space to a currently vacant lot in the District. The building is a major aesthetic improvement over the vacant pawn shop. Further, the business brings a much needed service to the area and will allow for district residents and guests at local hotels and motels to walk to services. [4 of 5] 17. Private / Public Investment Ratio: 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. The applicant indicated a total developer cost of $650,000. The current TIF application is for reimbursement of $50,000 for public infrastructure improvements. This is a ratio of 13:1 which is greater than the recommended leverage ratio. [4 of 4] Total Points (23/52) 7 Criteria for Approval of Urban Renewal Project, 7-15-4217 MCA 1) a workable and feasible plan exists for making available adequate housing for the persons who may be displaced by the project;  The project does not displace any persons or housing. 2) the urban renewal plan conforms to the comprehensive plan or parts thereof for the municipality as a whole;  The project is a commercial project located in an area designated for community commercial mixed-use in the Bozeman Community Plan. 3) the urban renewal plan will afford maximum opportunity, consistent with the sound needs of the municipality as a whole, for the rehabilitation or redevelopment of the urban renewal area by private enterprise; and  The project includes a request for tax increment financing assistance that makes the proposed redevelopment project feasible to be undertaken by private enterprise. 4) a sound and adequate financial program exists for the financing of said project.  The Midtown Urban Renewal District currently has adequate revenue to support the tax increment finance assistance for this project through within its existing Work Plan and Budget for Fiscal Year 2021.