HomeMy WebLinkAbout04-01-21 Agenda and Packet Materials - Midtown Urban Renewal Board (MURB)A.Call meeting to order at 4:30pm
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B.Changes to the Agenda
C.Public Comment
Please state your name and address in an audible tone of voice for the record. This is the time for
individuals to comment on matters falling within the purview of the Committee. There will also be
an opportunity in conjunction with each action item for comments pertaining to that item. Please
limit your comments to three minutes.
D.Approval of Minutes
D.1 Approve minutes from March 4, 2021 (Fine)
E.Action Items
E.1 Select Chair and Vice Chair for the remainder of 2021.(Fine)
E.2 Recommendation to the Bozeman City Commission regarding additional funding for the Ruh
Building.(Fine)
E.3 Recommendation to the Bozeman City Commission regarding the Midtown TIF Assistance
Application for the 9TEN affordable housing and mixed-use project.(Fine)
E.4 Consider inclusion of the Park's Departments request for funding of improvements to the
Westlake Park in the Fiscal Year 2022 Work Plan and Budget recommendation.(Fine)
E.5 Midtown Urban Renewal District Work Plan and Budget for Fiscal Year 2022 First
Review(Fine)
THE MIDTOWN URBAN RENEWAL BOARD OF BOZEMAN, MONTANA
MURB AGENDA
Thursday, April 1, 2021
1
F.FYI/Discussion
G.Adjournment
For more information please contact David Fine.
This board generally meets the 1st Thursday of the month from 4:30pm to 6:00pm.
Committee meetings are open to all members of the public. If you have a disability and require
assistance, please contact our ADA coordinator, Mike Gray at 582-3232 (TDD 582-2301).
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Memorandum
REPORT TO:Midtown Urban Renewal Board
SUBJECT:Approve minutes from March 4, 2021
MEETING DATE:April 1, 2021
AGENDA ITEM TYPE:Citizen Advisory Board/Commission
RECOMMENDATION:Approve minutes from March 4, 2021
STRATEGIC PLAN:1.2 Community Engagement: Broaden and deepen engagement of the
community in city government, innovating methods for inviting input from
the community and stakeholders.
BACKGROUND:Approve draft minutes from March 4, 2021.
UNRESOLVED ISSUES:n/a
ALTERNATIVES:n/a
FISCAL EFFECTS:n/a
Attachments:
March 4 notes.pdf
Report compiled on: March 30, 2021
3
Page 1 of 4
Unapproved minutes from March 4, 2021 board meeting
via WebEx TO DO List:
Everyone attend April 1 WebEx board meeting
In attendance: Susan Fraser, Jennifer Madgic, Andrew Cetraro, Kevin Cook, Nolan
Campbell, Valerie Wyman, David Fine
A. Call to Order – Andrew called to order at 4:33pm.
B. Disclosures concerning giving public comment during virtual meeting
C. Changes to Agenda – none.
D. Approval of Minutes
Nolan motioned to approve the minutes from March, April, September and December 2020
MURB meetings. Valerie seconded the motion. All in favor.
E. Public Comment – none at this moment in the meeting.
F.1. Action Item – Westlake BMX Park request from the Parks Department
Addi Jadin, Parks planning manager, presented (see Attachment A). David reminded the
board that MURB had covered the costs of developing the master plan and especially
important was the expensive back-in angle parking on 5th.
David asked Addi where they are in the planning and she responded they are awaiting
word on funding. David then asked when will the project be installed and Addi reported
hopeful for a March 31 bid launch and completion this upcoming construction season.
David then asked where are the budget numbers coming from, and Addi said the $363K is
an over shot of forecasted costs, and actual work will only use dollars required, returning
any others back to MURB.
Valerie said she likes the plan and thanked Addi for clarifications. David told the board he
is bringing the FY22 budget to the April board meeting, asking if this project is something
wanted to see as a line item on that budget. Andrew said the same and glad to know David
adding it to the FY22 budget. Discussion continued.
Public Comment called –
Emily Talago, 416 W Short, president of the Midtown Neighborhood Association,
thanked Addi for summertime meetings with user groups. She reminded everyone
about the Childrens Memorial Garden being in the mix. How are user groups signed up
for agreements? Can MURB give user groups budgets?
Matt Cloninger, Gallatin Valley BMX representative, noted the parking improvements
along 5th are great, i.e. safety improved. Thanked Addi and Parks for the work and
MURB for their ongoing support.
Adam Oliver, 617 N 5th, on SWBA board, and appreciates the ongoing support, noting
Addi has been great. Adam added they have an agreement with BLM; staff will be
onhand this summer; trying to become more established.
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Page 2 of 4
Richard Hayes, another SWBA representative, appreciated the opportunity with MURB.
BMX park is an asset to our community and these funds will help us get to the end of
upgrades to the park.
David asked Danielle with Sanderson-Stewart why this is divided into two bid packages,
and she responded will do storm drainage and electrical, re-grading of last year’s road
work under Bid 1. Bid Pack 2 includes amenities that need to be installed afterward.
Addi noted community development review coming up; will put Bid Pack 1 through first
while finalizing Pack 2, submitting Pack 2 as separate application for their review. Top
soil and utility work will be covered by existing funds. Once this basic work done then
futurerom new construction fee funding will be used for the memorial garden, etc. Addi
added there will be a memorandum of understanding with all user groups detailing their
responsibilities to this park. Addi then spoke to Emily’s question as to budget going to
user groups and the answer being no.
Discussion continued. Nolan is in support and spoke to his personal experience in the
park with his son. He noted that he agreed it needed help as presented in this plan as it is
an asset to Midtown, to our entire community. Valerie echoed her support. Valerie directed
staff to include this request in MURB’s FY22 budget. Kevin seconded Valerie’s request of
staff. David said this was what he needed in order to proceed.
David then told Addi that he will need an itemized budget request and Addi confirmed she
will produce. Addi closed by thanking everyone for their confidence.
F. FYI
David said Sanderson-Stewart has submitted the 5th Street Trail for approval and is
hopeful the dirt work will happen Spring 2022.
David asked if the board might be able to attend a special meeting later this month as
have a large affordable housing project to consider. With Spring Break plans it was
determined this large item will have to be on the April 1 agenda.
Nolan asked David how the board vacancies were looking, and David said there are two
applications for both voting and non-voting positions. Jennifer added she hopes to get
these applicants added to the commission‘s March 23 agenda for approval.
Nolan asked if there are other projects coming online, and David reported Zambon’s is
close; ELM grant approved by commission; and El Mercadito moving forward.
H. Adjournment
Nolan thanked Andrew for chairing. Andrew adjourned the meeting at 5:35pm.
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Page 3 of 4
Attachment A
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Page 4 of 4
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Memorandum
REPORT TO:Midtown Urban Renewal Board
SUBJECT:Select Chair and Vice Chair for the remainder of 2021.
MEETING DATE:April 1, 2021
AGENDA ITEM TYPE:Citizen Advisory Board/Commission
RECOMMENDATION:Select Chair and Vice Chair for the remainder of 2021.
STRATEGIC PLAN:4.3 Strategic Infrastructure Choices: Prioritize long-term investment and
maintenance for existing and new infrastructure.
BACKGROUND:Select Chair and Vice Chair for the remainder of 2021.
UNRESOLVED ISSUES:n/a
ALTERNATIVES:Select Chair and Vice Chair for the remainder of 2021.
FISCAL EFFECTS:n/a
Report compiled on: March 30, 2021
8
Memorandum
REPORT TO:Midtown Urban Renewal Board
SUBJECT:Recommendation to the Bozeman City Commission regarding additional
funding for the Ruh Building.
MEETING DATE:April 1, 2021
AGENDA ITEM TYPE:Citizen Advisory Board/Commission
RECOMMENDATION:Approve up an additional $103,737 to fund streetscape improvements at the
Ruh Building.
STRATEGIC PLAN:2.2 Infrastructure Investments: Strategically invest in infrastructure as a
mechanism to encourage economic development.
BACKGROUND:When the developers of the Ruh Building submitted their initial application
to the Midtown TIF Assistance Program, they did so with a streetscape
design that did not take into consideration future Montana Department of
Transportation (MDT) intersection work at the corner of N. 7th Ave. and
Durston Rd. The Economic Development Department worked with Morrison-
Maierle, MDT, and City Engineering to come up with a future-resistant
design that would not be summarily ripped out as part of the intersection
design. The design includes a seating wall that matches seating walls
elsewhere on the corridor. Since these changes were initiated as part of N.
7th streetscape work, Staff recommends that the Board recommend up to
an additional $103,737 in funding to the Bozeman City Commission.
Staff does not recommend approval of additional funding for the upsized
water pipe as City water standards are clear and could have been accounted
for by the Applicant's engineering team.
UNRESOLVED ISSUES:None at this time.
ALTERNATIVES:As proposed by the Board.
FISCAL EFFECTS:Up to $103,737 should be included in the proposed work plan and budget
for 2021 if this item is recommended.
Attachments:
TIFF Increase request.docx
Report compiled on: March 30, 2021
9
Members of our city council, the Ruh Building has made phenomenal progress in 2020 and we
are looking forward to a completed project by early summer! As with any project of this size,
certain additions and necessary adjustments have been made from the original building plans.
We are requesting a TIF reimbursement increase of $103,736.90 for our 7th Ave streetscape
work. We were recently made aware that the plans that were submitted and approved by the
city originally do not presently meet the vision or the standards that the city is expecting on the
7th Ave corridor revitalization. was After these discrepancies were noticed by our contractor and
the City we revised our plans to meet the City’s criteria and design preferences set forth.
Although we also rebid the project to ensure its completion in a timely and cost-efficient manor,
the modifications to the original plans created a substantial change in the cost and so we are
asking the city to increase our funds for street scape budget by $103,736.90.
We are additionally requesting an increase of TIF funds in the amount of $60,942.39 for the
required changes to the water service line that was installed, connecting our building to City
water. The original plans, approved by the City, called for use of the existing 2-inch pipe,
however, City engineers came back and required we abandon this connection and instead, a 4-
inch pipe to a 3” meter be installed This change not only increased our costs due to the larger
material pipe, but required the closure, excavation and repaving of Durston Road (further
complicated by plans provided to our engineers and contractors showing incorrect placement of
existing pipes) and also required significant changes to the water meter and riser room inside
the building. Because this change request was entirely out of our control and required by the
city, we would like assistance in covering the consequential costs of this utility/service line
change.
Please let me know if I can provide any further information or clarification on either of these
issues. Thank you for your review and consideration of our requests.
Colin Ruh-Kirk
Project Manager
10
Memorandum
REPORT TO:Midtown Urban Renewal Board
SUBJECT:Recommendation to the Bozeman City Commission regarding the Midtown
TIF Assistance Application for the 9TEN affordable housing and mixed-use
project.
MEETING DATE:April 1, 2021
AGENDA ITEM TYPE:Citizen Advisory Board/Commission
RECOMMENDATION:Endorse the Applicant's request for $2,168,312 in TIF assistance to support
the addition of affordable housing units to the District.
STRATEGIC PLAN:4.5 Housing and Transportation Choices: Vigorously encourage, through a
wide variety of actions, the development of sustainable and lasting housing
options for underserved individuals and families and improve mobility
options that accommodate all travel modes.
BACKGROUND:See attached staff report.
UNRESOLVED ISSUES:See attached staff report.
ALTERNATIVES:See attached staff report.
FISCAL EFFECTS:See attached staff report.
Attachments:
Application 9TEN_ MURD_TIF_Request_ Revised 02-23-
2021.pdf
9TEN Midtown Board Staff Report 20210401.docx
9Ten Leland Revised TIF Analysis March 2021.pdf
EPS 203151-MEMO-TIF Review-9TEN-03-20-2021.pdf
Report compiled on: March 30, 2021
11
BOZEMAN MIDTOWN TIF ASSISTANCE REQUEST
MAY 2019
Revised February 2021
9TEN mixed use
802-910 North 8th Avenue
12
Residential Mixed-Use In-
9TEN mixed use
Bozeman Midtown TIF Assistance Request
Project Summary
The 9TEN mixed use project site is located west of the North 7th Avenue U-Haul and
southwest of Gallatin Valley Furniture. The project site is vacant and is generally bound by
North 8th Avenue, Aspen and Juniper Streets. This infill project targets a best use scenario
for the site by delivering higher density, smart -growth development with for-sale workforce
and affordable housing near the core of Midtown. This project will provide much needed
housing in a central location and will foster desirable, walkable urban living, especially as
Midtown continues to evolve. Furthermore, this project will provide tenant amenities not
common to most multifamily developments in the area. The development proposed consists
of two buildings to be constructed in a single phase. A concept review application for this
project was submitted to the City of Bozeman Office of Community Development on May
7th, 2019.
At full build out the site will include two buildings totaling 105,600 sf and off-street parking.
Building 1 is located on the north end of the site and consists entirely of residential condo
units and tenant amenity space. Building 2 is located on the south end and consists of a
mix of residential condo units and ground floor commercial space. 20 percent of the total
residential units will be affordable, offered for sale at 80% AMI. The project will also
provide open space and tenant amenities on site, both on ground level and in-building. The
commercial space will front onto Aspen Street, providing an active and engaging
streetscape.
The project is seeking TIF assistance for public infrastructure, impact fees, and cash-in lieu
of parkland cost associated with the development.
The property abuts existing rights-of-way along Aspen Street, Eighth Avenue and a 20’
wide alley. However, there are currently no completed streets and limited utility
infrastructure at this location. This project proposes to collaborate with the City of Bozeman
to complete the infrastructure adjacent to this property. Anticipated improvements include
new infrastructure at North 8th Avenue between Aspen and Juniper Streets, and
completion/update of infrastructure along Aspen and Juniper Streets from North 7th to
North 8th. This includes all necessary curb and gutter, sidewalks, water line extensions and
stormwater infrastructure needed at these locations. Additionally, it is anticipated that the
existing sewer line that runs in the alley to the east will need to be re-routed to some
extent. This project will also extend Bozeman Fiber Optic to the site. It is anticipated the
project would incur the burden of these costs initially, with eventual reimbursement via TIF
Assistance Funds.
13
Residential Mixed-Use In-
9TEN mixed use
Bozeman Midtown TIF Assistance Request
Project Summary
Good Housing Partnership (GHP) is committed to extended outreach and marketing through
local community partners in order to offer these units first to the local workforce, individuals
and families that qualify within the 80% -120% AMI price range. This effort and process will
be for the sale of the 20% deed restricted units as well as the other units. Additional
restrictions will also be put into place in order to maximize the benefits to owner occupied
housing and disincentivizing any immediate resales due to initial below market purchase.
Another restriction will be through the prohibition of short-term rentals (less than 28 days)
and a restriction that if a unit is sold for a profit within five years, GHP will be entitled to
50% of the net profit and will have the ability to waive this based on the circumstance.
14
Concept Review: 816 North 8th
Residential Urban Infill
9TEN mixed use
Bozeman Midtown TIF Assistance Request
PROPERTY INFORMATION
• • • • • •
APPLICANT INFORMATION
• • • • • •
COMPANY PROFILE
• • • • • •
PROJECT INFO & DETAIL
• • • • • •
CRITERIA FOR TIF ASSISTANCE
• • • • • •
PROJECT NARRATIVE
• • • • • •
MAPS, EXHIBITS, PLANS
PART 1
15
Concept Review: 816 North 8th
Residential Urban Infill
9TEN mixed use
Bozeman Midtown TIF Assistance Request
Property Address: 802-910 North 8th Avenue
Legal Description: Lots 13-18 & south 35 feet of Lot 12, Block 12
of Durston’s 2nd Subdivision
Property Owner 816 N 8th, LLC
& Developer: Geoff Anderson
203.376.0746
geoffreympanderson@gmail.com
Property Owner Good Housing Partnership
& Developer: Geoff Anderson
406.414.6500
geoffanderson@goodhousingpartnership.com
Project Intrinsik Architecture, Inc
Representative: Attn: Scott Freimuth
o. 406.582.8988 c. 719.330.9496
sfreimuth@intrinsikarchitecture.com
PROPERTY & APPLICANT INFO
16
Residential Mixed-Use In-
9TEN mixed use
Bozeman Midtown TIF Assistance Request
Geoff Anderson
02-22-2021
Same
17
9TEN mixed use
Bozeman Midtown TIF Assistance Request
Business Location:
The project site is currently a vacant, undeveloped lot at 802-910 North 8th
Avenue
Year Business Established:
2018 (816 N 8th LLC)
Type of Business
816 N 8th LLC is a development company
Outline Business Plan: See following pages for Development revenue,
tax generation, source, and use of funds. (Please note these are the best
estimates and projections at this time).
COMPANY PROFILE
18
9TEN mixed use
Bozeman Midtown TIF Assistance Request
TAX REVENUE
Annual Tax Generation $249,923
TIF FUNDING
Eligible TIF Funding Requested $2,168,312
PAYBACK PERIOD
Estimated TIF Payback timeline 8.6 Years
PROJECTED SALES REVENUE
Gross Sales Revenue: Residential (See Below) $28,802,757
Gross Sales Revenue: Commercial
(2,000 Net SF @ $300/SF)
$600,000
Total Gross Sales Revenue (Less Fees) $27,785,605
RESIDENTIAL (CONDO) SALES REVENUE
PROJECT REVENUE
19
9TEN mixed use
Bozeman Midtown TIF Assistance Request
SOURCES & USES OF FUNDS
The 9TEN project will use and allocate funds and resources as outlined below.
USE of FUNDS
LAND (fair market value) $ 2,500,000
SOFT COSTS (Planning, Arch, Engineering, Entitle-
ments)
$804,000
CONSTRUCTION COSTS $17,940,000
HARD COST CONTINGENCY $1,794,000
IMPACT FEES $ 634,932
PERMIT FEES $ 200,000
CASH-IN-LIEU OF PARKLAND $105,192
MISC (Title, Recording, Insurance) $183,600
FINANCE COSTS (Origination, Lender Legal, Ap-
praisal)
$ 330,150
LOAN INTEREST $905,142
PUBLIC INFRASTRUCTURE COSTS $1,396,188
C.O.B. FIBER OPTIC $32,000
TOTAL $26,825,204
SOURCE of FUNDS (CONSTRUCTION)
CONSTRUCTION LOAN $19,000,000
DEVELOPER EQUITY $7,825,204
TOTAL $26,825,204
20
9TEN mixed use
Bozeman Midtown TIF Assistance Request
Project Information:
9TEN is a mixed-use development consisting of two buildings: one an
exclusively residential building with 45 units (Bldg 1) and a second mixed-
use with commercial & 45 multi-household residential units (Bldg 2).
Property Manager: 816 N 8th, LLC
General Contractor: TBD
Project Intrinsik Architecture, Inc
Manager: Attn: Scott Freimuth
406.582.8988
sfreimuth@intrinsikarchitecture.com
Property Status
The property is currently vacant, undeveloped land.
Type of TIF Assistance Sought
Assistance with Public Infrastructure Costs, Impact Fees, CILP, Bozeman
Fiber Optic
Value of TIF Assistance Sought
$2,168,312
PROJECT INFO & DETAILS
Project 9TEN mixed use
The subject site (1.62 acres) is vacant land on the SW portion of the block
between N Seventh & N Eighth Avenues and Juniper & Aspen Streets. The
site is adjacent to the current U-Haul store and Gallatin Valley Furniture. The
site is currently vacant and lacks adjacent infrastructure. This project seeks
to complete the block with streets and infrastructure in addition to new
Site:
Estimated Occupancy:
Summer 2023
21
Residential Mixed-Use In-
9TEN mixed use
Bozeman Midtown TIF Assistance Request
$31,162,872
22
Concept Review: 816 North 8th
Residential Urban Infill
9TEN mixed use
Bozeman Midtown TIF Assistance Request
CRITERIA FOR TIF ASSISTANCE
PROMOTE ECONOMIC DEVELOPMENT
1. Tax Generation: The two building, totaling 92,00 SF and
including 90 condo units and 2,100 sf of commercial space will
significantly increase the tax base for the site. Further, the
addition of this development from a vacant lot to a vibrant mix
used campus will increase the property values for adjacent
sites, thus increasing the overall tax generation for the area.
2. Elimination of Blight: Currently the site is vacant, undeveloped
land and the adjacent rights-of-way (ROW) are incomplete.
Adjacent lots (U-Haul, Cat’s Paw) and ROW contain
infrastructure that does not meet current City standards,
including a lack of sidewalks, curb and gutter, standard access
points, etc... The development of this site will build out the City
block generally encompassed by Juniper & Aspen Streets and
7th & 8th Avenues complete with standard sidewalks, improved
drive access points, boulevard tree plantings and street lights.
This infrastructure will create safer and more and pedestrian
friendly streetscapes, and replacing vacant land with an active
mixed-use will foster a more vibrant destination consistent with
the goals of the district.
3. Employment Generation: The project development itself will
create jobs in the form of design and construction opportunities
for local businesses. Upon final build out, the commercial
space, totaling 2,100 sf, will generate office or retail based jobs.
Additionally, property management and maintenance positions
will be required for the post-occupancy operations and upkeep.
4/4
4/4
1/3
23
Concept Review: 816 North 8th
Residential Urban Infill
9TEN mixed use
Bozeman Midtown TIF Assistance Request
CRITERIA FOR TIF ASSISTANCE
IMPROVE MULTI-MODAL TRANSPORTATION
4. Facilitate Public Health & Mobility: This project will provide equal
accessibility throughout the buildings, site, and streetscape by
meeting or exceeding current ADA design requirements. two Type A
accessible condo units will be provided and the remainder of the
units will be designed to be Type B adaptable units, providing
flexibility for any unit in the development to be upgraded with
accessible features. Additionally, an elevator will be provided in each
building for accessible access to all floors and amenity areas.
5. Reduces Resource Demand: The Blue Line bus stop is only a few
blocks away (less than .15 miles) and allows riders to access the
transfer station downtown in under 10 minutes and then connect to
the other lines headed for other destinations in the city. With these
planned densities, ride sharing opportunities are probable, as is
bicycle transport.
6. Promotes Active Transportation: This project seeks to promote
Bicycle transport given proximity to downtown and area amenities by
providing covered bike parking and a bicycle repair facility as an
amenity to the tenants.
IMPROVE, MAINTAIN and SUPPORT INNOVATION IN
INFRASTRUCTURE
7. Infrastructure Improvements: The project proposes to complete
streets, sidewalks, and utilities to complete the public infrastructure
for the block. At this time, standard systems are anticipated all on-
site infrastructure.
1/1
1/1
1/2
0/2
24
Concept Review: 816 North 8th
Residential Urban Infill
9TEN mixed use
Bozeman Midtown TIF Assistance Request
CRITERIA FOR TIF ASSISTANCE
PROMOTE UNIFIED HUMAN SCALE URBAN DESIGN
8. Reduced Vehicular Access: There are three main vehicular
access points via the alley at the rear of the site, designed to
consolidate access points while moves vehicular access to the
rear of the buildings and away from the Pedestrian circulation on
Aspen Street and Eighth Avenue.
9. Enhances 7th Ave Entry Corridor: The proposed project does
not front directly onto North 7th Avenue. However, the commercial
space is located on the Aspen Street frontage and utilizes
storefront block frontage design features (see item 10) to activate
this streetscape and provide a visual connection to 7th and the
surrounding corridor. Although set back with landscape frontage,
the building facades along 8th avenue are oriented towards the
street. An active landscaped open space is proposed to serve as
a both a buffer from ground floor dwelling units and the street as
well as to engage pedestrians along 8th.
10. Street Frontage: As mentioned above, Building 2 will adhere to
Storefront Block standards along Aspen street, promoting
pedestrian activity with 12’ wide sidewalks, weather protection,
and expansive storefront glazing. The overall site configuration
highlights the pedestrian oriented street façade and prioritizes
pedestrian access. Furthermore, setbacks and landscaping along
8th will exceed the requirements of the Bozeman UDC and
landscaped and urban plazas are placed directly adjacent to the
sidewalks at building entries.
11. Quality of Development: The design intent is to exceed the
Bozeman UDC requirements in order to provide thoughtful and
living units. This includes specific tenant amenity spaces unique to
the site and project as well as enhanced open space including a
variety of landscaped areas and plaza spaces.
1/2
1/2
1/1
6/6
25
Concept Review: 816 North 8th
Residential Urban Infill
9TEN mixed use
Bozeman Midtown TIF Assistance Request
SUPPORT COMPATIBLE URBAN DESNITY MIXED LAND USES
12. Increases Housing Units: This project proposes 45 units in
Building One and 45 units Building two, for a total of 90 dwelling
units of workforce housing including 10 much needed affordable
units. This will include a mix of Studio, 1, 2. & 3 bedroom units.
13. Mixed Use: Building two includes 2,100 sf of commercial on the
ground floor along with 45 multi-household dwelling units on the
subsequent three floors. The project as a whole places multiple
households in the heart of the Midtown district, walkable to
multiple commercial and retail destinations, and encouraging
future development.
14. Shared Parking: The project currently does not have a shared
parking component. It will be providing, at a minimum, the
required parking B-2M zoning requirements; as opposed to
providing no or limited parking as currently allowed in the Midtown
District. The applicant may explore a shared parking agreement
with adjacent properties in the future.
15. Provides Affordable Housing: This project is anticipated to
provide 21 units (23% of total units) offered for sale at 80% AMI.
OVERALL DISTRICT RELEVANCE
16. Relevance to the MURD: This project touches on the major goals
and objectives identified in the Midtown Urban Renewal Plan:
Specifically, 9TEN will promote economic development; improve
opportunities for multimodal transportation; promote unified,
human scale urban design and support compatible urban density
mixed land uses.
4/6
0/2
3/3
5/5
4/4
TOTAL POINTS: 40/52
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Concept Review: 816 North 8th
Residential Urban Infill
9TEN mixed use
Bozeman Midtown TIF Assistance Request
PROJECT NARRATIVE
Intro
This project consists of a 1.62 acre site zoned B-2M located along North 8th
Avenue between Aspen and Juniper Streets. The 816 North 8th Avenue project
consists of two 4-story buildings and related site improvements. Building 1 is
exclusively residential and Building 2 provides ground floor space, and multi-
household residential. Building 1 totals 52,800 gross sf and includes 45
dwelling units and 3,550 sf of tenant amenity space. Building 2 totals 52,800
gross sf and includes 45 dwelling units, 2,550 sf of ground floor commercial,
and 1,000 sf of tenant amenity space. This application seeks TIF assistance for
Impact fees for both buildings, as well as costs to build out non-existent street
and utility infrastructure adjacent to the property. A concept review application
for this project was submitted to the City of Bozeman Office of Community
Development on May 7, 2019.
Building Design
Upon full build out, the site will include off-street parking, a residential building,
and a building with a mix of residential units and ground floor commercial
space, as well as open space and tenant amenities. The commercial space will
front onto East Aspen Street, providing an active and engaging storefront for
pedestrians. The commercial space will be built as shell space with the
flexibility to accommodate a single large or several smaller commercial tenants.
The remainder of the building will house dwelling units, which at this time are
anticipated to be a mix of Studio, 1, 2, and 3 bedroom units. Preliminarily, this
project will include 45 units in Building 2 and 45 units in Building 1. Open space
for tenants will be provided by a mix of private balconies, in-building amenity
space, and ground-level open space. Building 1 will include the fourth floor roof-
top amenity space for tenants. Additionally, Building 1 will house ground level
lobbies with workstations and lounge space, and additional tenant amenity
areas.
27
Concept Review: 816 North 8th
Residential Urban Infill
9TEN mixed use
Bozeman Midtown TIF Assistance Request
PROJECT NARRATIVE
Anticipated Infrastructure improvements
The public right-of-way abuts the property on all sides, but the streets are not
complete and the utility infrastructure at these locations is minimal. This project
proposes to collaborate with the City of Bozeman to complete the infrastructure
adjacent to this property. Anticipated improvements include paving, curbs,
gutter and public sidewalks of North 8th Avenue between Aspen and Juniper
Streets. Additional improvements along Aspen and Juniper Streets from North
7th to North 8th are anticipated. This includes the water, sewer, and
stormwater infrastructure needed at these locations. Additionally, it is
anticipated that the existing sewer line that runs in the alley to the east will
need to be re-routed to some extent. It is anticipated the project will incur the
burden of these costs with some sort of payback program with the city and
through the TIF assistance program.
Access and Parking
Both Building 1 and 2 will front on North 8th Avenue, where the primary
residential entrances will be located. A central drive access is located in
between the two buildings. Surface parking will flank the entire length of the
east side of the property, accessible via the Alley, as well as along the central
drive, and alley to the North of the site. The Alley will be accessed by the
Aspen street to the south as well as a west entrance to the north of the
property.
Schedule
With necessary approvals, construction of streets and infrastructure will begin
summer 2021 with building construction beginning in fall 2021, and a target
completion date of summer 2023.
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Bozeman Midtown TIF Assistance Request
MAPS, EXHIBITS, PLANS
29
9TEN mixed use
Bozeman Midtown TIF Assistance Request
SITE SURVEY
30
9TEN mixed use
Bozeman Midtown TIF Assistance Request
SITE DIAGRAM & VICINITY
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Bozeman Midtown TIF Assistance Request
Conceptual Aerial Perspective looking East
Conceptual Aerial Perspective Looking West
PERSPECTIVE IMAGES
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Bozeman Midtown TIF Assistance Request
PERSPECTIVE IMAGES
Conceptual Perspective from Southwest
Conceptual Perspective From Northwest
33
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PERSPECTIVE IMAGES
Conceptual Perspective From Northeast
Conceptual Perspective From Southeast
34
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CONCEPTUAL SITE PLAN
N
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Bozeman Midtown TIF Assistance Request
FLOOR PLANS
N
BUILDING 1 LEVEL 1 FLOOR PLAN
BUILDING 1 LEVEL 4 FLOOR PLAN
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Concept Review: 816 North 8th
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Bozeman Midtown TIF Assistance Request
FLOOR PLANS
BUILDING 2 LEVEL 1 FLOOR PLAN
N
BUILDING 1 LEVELS 2,3,4 & BUILDING 2 LEVEL 2,3 FLOOR PLAN
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Bozeman Midtown TIF Assistance Request
PART 2
PROJECT TIMELINE
• • • • • •
PUBLIC BENEFITS
• • • • • •
PROJECT FINANCIAL INFORMATION
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Residential Mixed-Use In-
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Concept Review: 816 North 8th
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Projected Project Milestones
Infrastructure entitlements submittal May 15, 2021
Development entitlements submittal (Site Plan) May 15, 2021
Start of infrastructure construction Aug. 1, 2021
Development Building Permit Submittal Aug. 15, 2021
Start of development Construction Nov. 1, 2021
Est. completion of infrastructure construction May. 1 ,2023
Est. completion of development construction (occupancy) June 1, 2023
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PUBLIC BENEFIT
Re-occupancy of Vacant Land
This lot has historically been vacant, so this isn’t re-occupancy in the true
sense. However, the addition of this project will complete the block making the
area more vibrant, desirable and walkable. Project infrastructure will
contribute to “completing” Aspen and Juniper Streets. Additionally, Aspen
Street is a designated “Storefront” block frontage, and the streetscape will be
reflective of that with wider sidewalks and an activated streetscape.
Elimination of Blight
Currently the parking lots, sidewalks and curbs in and around the site are not
up to city standards and are unsafe. As part of this project and site
development, infrastructure will contribute to complete and improve conditions
on Aspen & Juniper Streets. Rather than unsightly, vanishing streets to
nowhere, the block will be completed and built to City Engineering Standards.
This means pedestrian friendly routes, sidewalks and boulevard tree plantings.
Clearly defined ground level spaces will surround the new buildings providing
office and retails spaces along with a mixture of multi-household workforce
living units.
Creation of New Office/Retail Spaces
Building 2 includes 2,550 sf of ground level commercial space. The use(s) is
TBD, but it will be well suited for office or retail space with a highly visible
location in the Midtown corridor.
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Concept Review: 816 North 8th
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Bozeman Midtown TIF Assistance Request
Urban Living Options
This project proposes a variety of dwelling types including Studio, 1,2, & 3
bedroom units. The design of the building and layout of dwelling units will
maximize natural light coupled with surrounding views of the mountains
encompassing the valley. This site is located in the heart of Midtown and
residents will enjoy many options to access local eateries, music venues,
services, bus lines, schools and Downtown.
Health and Mobility
Site development will modernize this block and area of the Midtown Corridor.
It is close to the Blue Line and easily accessible for pedestrians, cyclists, bus
riders and drivers alike. The site will include accessible facilities and a green
space for passive recreation and enjoyment. Its proximity to other Midtown
Amenities and the urban sidewalk network make it an easy destination to
access. Site improvements will also create a clean, safe and inviting location
within the district.
Increased Tax Revenue
This project development will translate into new property tax revenues that
contribute to future Midtown projects. A breakdown of the anticipated tax
projections are as follows:
Projected Annual Taxes: $ 249,923
Payback to TIF (8 years): $2,168,312
New Jobs and Local Sales
The project development itself will create jobs in the form of design and
construction opportunities for local businesses. Upon final build out, the
commercial space, totaling 2,550 sf, will generate office or retail based jobs.
Additionally, property management and maintenance positions will be
PUBLIC BENEFIT
43
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Bozeman Midtown TIF Assistance Request
44
9TEN mixed use
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Concept Review: 816 North 8th
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Bozeman Midtown TIF Assistance Request
TIF ELIGIBLE EXPENSES
Description Amount
CITY of BOZEMAN: Impact Fees $634,932
CITY of BOZEMAN Cash In Lieu of Parkland
(61,158 SF @ $1.72 / SF)
$105,192
Public R.O.W. Infrastructure Upgrades
( Juniper, Aspen & 8th )
$1,396,188
Bozeman Fiber Optic ( 800 LF @$40 LF Est.) $32,000
TOTAL
$2,168,312
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Staff Report
To: Midtown Urban Renewal Board
From:David Fine, Urban Renewal Program Manager
Meeting Date:April 1, 2021
Subject:9TEN Mixed Use Project, Midtown TIF Assistance Application
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 2019. The Midtown TIF Assistance
Program supports projects that contribute to the following five goals of the Midtown Urban
Renewal Plan: 1) Promote economic development; 2) Improve multimodal transportation; 3)
Improve, maintain, and support innovation in infrastructure; 4) Promote unified, human scale
urban design; and 5) Support compatible urban density mixed land uses. 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 seventeen 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, whether the project would
be feasible without a public incentive, and the project’s provision of amenities and services that
contribute to walkability and quality of life in the district and surrounding neighborhoods.
Staff Recommendation
The City Commission created the Midtown Urban Renewal District in 2006 with the
vision of a walkable pedestrian centric area with compact urban density. The Commission
adopted 2017 Midtown Action Plan reinforced this vision and named five elements for targeted
redevelopment that would help implement the urban renewal plan. These targeted private
investment elements included 1) infill, 2) increased building density, 3) encouraging multimodal
transportation, 4) retail that serves surrounding residents, and 5) providing housing to support
commerce in the area. These goals are represented in the criteria for the Midtown TIF
Assistance Program, whose goal is to promote projects that meet these criteria, drive growth in
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taxable value, and create demand for market driven redevelopment. At this phase of Midtown’s
redevelopment lifecycle, few projects containing the target elements are financially feasible, but
for TIF incentives. Incentives may create the potential for higher returns to mitigate higher risk,
which will likely attract investment that would not occur without these incentives.
Bozeman struggles, given current market dynamics, to facilitate the construction of
workforce housing at attainable prices. Recently approved urban renewal projects with a major
housing component, such as the Ruh Building, Aspen Crossing, and West Peach Condos, require
significant assistance to attain feasibility as market rate projects.
Good Housing Partnership’s 9TEN is a major workforce housing project with 90 units
offered for-sale. The project offers 21 units at prices that could be affordable for residents
making 80% of the area median income (AMI). These units will be deed restricted and offered to
qualified families on a means-tested basis. The remaining 69 units will be priced to be affordable
to individuals and families making 110% AMI.
Good Housing Partnership (GHP) is committed to extended outreach and marketing
through local community partners in order to offer these units first to the local
workforce, individuals and families that qualify within the 80% -120% AMI price range.
This effort and process will be for the sale of the 20% deed restricted units as well as the
other units. Additional restrictions will also be put into place in order to maximize the
benefits to owner occupied housing and disincentivizing any immediate resales due to
initial below market purchase. Another restriction will be through the prohibition of
short-term rentals (less than 28 days) and a restriction that if a unit is sold for a profit
within five years, GHP will be entitled to 50% of the net profit and will have the ability to
waive this based on the circumstance.(Application, p.3)
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 identified several eligible cost areas totaling $2,168,312.Staff finds that the
proposed costs for infrastructure and impact fees 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 38 of 53 available points. The application scored points toward
five of five goals of the Midtown Urban Renewal Plan. The project eliminates blight and
advances the District goal of creating urban density land uses and providing increased housing
stock within the District to drive further development.
The proposed incentive request of $2,168,512 is consistent with the goals of the
Midtown Urban Renewal Plan. In order to ensure that the level of assistance makes the project
feasible, but does not provide unreasonable returns to the developer, staff hired Economic and
Planning Systems, Inc. (EPS) to provide a third party assessment of the development pro forma.
Staff contracts for this component of the review process to assess the reasonableness of each
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applicant’s incentive request. EPS concluded their analysis and found that the Applicant’s
request was reasonable:
A TIF amount equating to the developer’s full request of $2.2 million results in an
unleveraged IRR of 11.2 percent, a leveraged IRR of 23.7 percent, and a return on cost of
11.2%. While these rates of return are slightly higher than the identified target hurdle
rates, they are still within a range that is reasonable for project rates of return in this
market and would not represent a “windfall” for the developer. There are numerous
factors that will influence the project’s actual performance, and the estimates here are
in our opinion within a range of reasonableness given the risk and uncertainty associated
with any real estate development project. The project is also providing public benefits in
the form of permanently affordable housing, and is making efficient use of underutilized
land consistent with the vision for North 7th.(EPS, p. 9)
The Applicant is requesting $2,168,312 to mitigate the costs of public infrastructure and
impact fees for the project. The project meets several goals of the urban renewal plan and
makes productive use of a poorly located piece of property. Given that this project includes 90
units of workforce housing at prices that are below most of the for-sale product currently on the
market, and the inclusion of provisions to prohibit short term rentals and quick and speculative
resale, Staff recommends that the Board consider an incentive award for GHP’s full request of
$2,168,312.
Leland Consulting Group (LCG)/ GEL Oregon completed a financial analysis of the project
to help staff evaluate the application for creation of new taxable value. Their report analyzed
return on investment (ROI), estimated payback period for the public assistance and proposed
target metrics for the ratio of private investment to public assistance. LGC bases their analysis
on awarding the applicant’s full assistance request. LCG recommends a ratio of private
investment to public assistance of 10:1 or greater for multi-family projects; the ratio for this
project is greater than 11.37:1.
LCG also created a tax generation model for the Midtown URD. According to their model, the
project would produce net new annual taxes of $204,727, which would allow TIF assistance to
be paid back in 18.24 years (assumes a 5% interest rate on the advanced amount) for new
increment-based payback if assistance is provided at the staff recommended amount. Without
accounting for the cost of capital, payback on the project would take 10.6 years.
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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 9TEN project promotes economic development in the service of blight remediation with two
new 4-story buildings totaling 92,000 SF that include 2,100 SF of commercial space. Leland
Consulting Group (LCG) / GEL Oregon created a tax revenue generation model for the Midtown
URD. Using data provided by the property owner, LCG estimates that the property will provide
an estimated annual net tax revenue increase of $204,727 for the District, with the net increase
in the value of the property of $26,287,948. For the assumptions related to these projections,
please see the LGC / GEL report. [4 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
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 substantially increases the density and taxable value of development on the
property. 9TEN addresses a defective and inadequate street layout, in which Aspen St. ends at a
field and an unpaved alley. The project will add missing sidewalks to Aspen St. and provide
better traffic circulation by building 8th Ave. to a full city standard between Aspen St. and
Juniper St. The alley will be paved. 9TEN alleviates the blighting condition of inappropriate land
coverage with vacant land in the urban core through the addition of urban density workforce
housing. The project addresses the age obsolescence of vitrified clay sewer pipe that runs
underneath adjacent buildings by installing new city standard sewer pipe in the 8th Ave. right of
way. [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 supplies 2,100 SF of commercial space for office or retail jobs. The jobs have not
been specifically identified. Construction of the project will create short-term employment in
the building trades. [1 of 3]
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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 project adds new storefront block frontage standard sidewalks at the corner on Aspen St.
The new building will be ADA accessible. Pedestrian access and facilities will be dramatically
improved on Aspen St. [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 housing and 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.
Covered bike parking is provided. [1 of 2]
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 project meets the standard requirements of the City code for street trees, sidewalks and
water and sewer infrastructure. It provides a connection to and extension of the City’s fiber
optic conduit system. [1 of 2]
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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 reduce the number of vehicular access points to the property. [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 project will bring Aspen St. up to City standards with curb, gutter, sidewalk, and street trees
adjacent to the UHaul property. The project is located on an undeveloped site and cannot
“improve” the street frontage where none currently exists. The project meets the code
requirements adjacent to the site.
[1 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 a storefront design with 12 foot
sidewalks and tree grates fronting Aspen St. The project includes street trees as well as meeting
sidewalk requirements. The project does improve the pedestrian experience by adding
sidewalks and street trees adjacent to UHaul and the Cat’s Paw. No landscaping plan was
submitted with this application. [1 of 3]
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 minimal
requirements of the UDC for architecture, site design, and landscaping. [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 90 residential units. [6 of 6]
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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 2,100 SF of storefront commercial space as part of building 2. [2 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 not share parking among compatible uses. [0 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
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 includes 21 units that are deed restricted for affordability and deemed affordable
for individuals and/or families making 80% AMI. [6 of 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 9TEN project creates significant attainable workforce housing in the walkable and bikable
core of Bozeman. In this way, it supports multimodal transportation and reduces wider
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infrastructure demand. The project includes ground floor commercial space and supports the
District goal of supporting urban density mixed land uses. 9TEN double fronts the corner of
Aspen St. and 8th Ave. and provides visual interest with compatible human scale urban design.
[5 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. [4 of 4]
The ratio of private investment to public investment for the project is 11.37:1
Total Points (38/53)
Findings on 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 Midtown Urban Renewal Plan adopted in 2015 made findings that mixed-use
projects that included commercial and residential uses were in conformance with
the comprehensive 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
issuance of tax increment revenue bonds that could support this project.
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9Ten Draft - pending confirmation of tax rates with County Treasurer
Tax Increment Analysis
March 23, 2021
Prepared by:
Andy Parks, CPA
Leland Consulting Group/GEL Oregon, Inc.
on behalf of the City of Bozeman Economic Development Department
Summary
Applicant plans to build a mixed use; 90 unit condominum residential building located by North 8th, Aspen and Juniper streets.
Applicant plans to invest approximately $26.825 million and is requesting $2.168 million from the Agency.
* Return on Investment (ROI)
* Estimated payback period, and
The following schedule summarizes analysis findings:
Estimated value of completed project 26,825,204$
Estimated capitalized interest - Included in estimated value
Less: 2020 market value per assessor 537,256
Net estimated increase in value 26,287,948
Allocation of increase to residential 26,225,204
Allocation of increase to commercial 62,744 $600,000 (sales price) less existing 2020 value
Estimated net increase in taxable value 355,226
TIF mill tax rate - estimated - FY 2025 576.33
Estimated incremental taxes (TIF) - annual 204,727
TIF investment 2,168,312
ROI - estimated 9.4%
Estimated payback period (years)18.24 assumes 5.0% interest rate on advanced amount
Private investment to public investment 11.37 Metric:
Greater than 8 to 1 - commercial
Greater than 5 to 1 - family wage jobs
Assumptions
Cost and timing information provided in application - except construction financing which is estimated
Estimated start date 8/2021
Estimated completion 6/2023
Valuation
The property valuation used in the analysis is based on the estimated construction and other uses provided by the applicant. The
estimated sales price is greater than the estimated cost to complete the project. Different valuation methods include but are not
limited to; income approach, sales comparisons, construction cost and Capital Asset Pricing Model.
Analysis has been performed to determine:
* Private investment to public investment
Estimated value is less than the estimated sales prices of units
https://itax.gallatin.mt.gov/detail.aspx?taxid=RGG1786
Greater than 10 to 1 - desired for multi-
family
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203151-MEMO-TIF Review-9TEN-03-20-2021.docx
M E M O R A N D U M
To: David Fine, City of Bozeman
From: Brian Duffany and Tim Morzel, Economic & Planning
Systems
Subject: Bozeman URA TIF Request Review: 9TEN
Date: March 19, 2021
This memorandum provides a summary of the analysis Economic &
Planning Systems (EPS) has completed on the request for tax increment
financing (TIF) assistance for the 9TEN mixed-use project. EPS has been
contracted by the City of Bozeman to complete an evaluation of
developer requests for TIF to evaluate key project assumptions, such as
construction costs and sales revenues, as well as overall project
feasibility. The purpose of this analysis is to evaluate the project’s
financial performance to help the North 7th Urban Renewal Board
determine if the request for TIF is financially justified and would not
create an excessive windfall to the developer.
This memorandum provides an overview of the evaluation criteria, an
overview of the key inputs, and a summary of the key findings.
Approach
As part of the TIF application process, each project developer is required
to submit a formal proposal that includes a project overview and cost
and revenue estimates. These materials include a summary of the
development program, construction costs, eligible costs, sales revenues,
and any ongoing revenue and expenditure assumptions. Using this
information as a starting point, EPS has structured a static and time
series pro forma that summarizes this information as well as a number
of other key project metrics such as project return. This analysis aligns
with the approach used to evaluate past projects and provides a
baseline for evaluating this project’s request for TIF.
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Memorandum March 19, 2021
Bozeman TIF Review: 9TEN Page 2
Project Assumptions
This section provides a summary of the development assumptions submitted by the development
team and a comparison to current market conditions or industry standards.
Development Program
Location: Bounded by North 8th Avenue, Aspen and Juniper Streets
Parcel Area: 1.62 acres (70,567 square feet)
Stories: 4-stories
Total Building Area: 92,000 square feet
Commercial Program: 2,000 square feet of general commercial space
For-Sale Residential Condos: The proposal contemplates 90 for-sale condos for this site. Of
the total units, 21 units (23 percent of total) will be priced at 80 percent of area median income
(AMI) and 69 units (77 percent of total) are anticipated to be priced at market rate prices.
Sale Price: $337,197 for market rate units; $244,931 for 80% AMI units
Purchase/Ownership Restrictions: The units priced at 80 percent of AMI will be available
only to buyers who qualify in that income range, and the units should have a restrictive covenant
or deed restriction that enforces that affordability level in perpetuity or an extended time period
(e.g. 20 to 30 years). The owner has also volunteered to impose restrictions to disincentivize
investment purchases and “flipping”. The developer would impose a deed restriction in which
they recoup 50 percent of the re-sale profit if a unit is sold at a profit within 5 years of the
original purchase.
Project Costs (Summarized in Table 1)
Land Costs
Total: $2,500,000
Cost per Land SF: $27 per square foot
Cost per Unit: $27,800 per unit
Percent of Total Costs: 9.3 percent of total
Comments: Land costs typically range from 10 to 20 percent of total project costs depending on
the development type and local market. At 9.3 percent of total ($27,900 per unit), this project is
slightly below that range. The lower land cost may indicate the fact that the property has lower
visibility than properties with direct frontage on North 7th and has difficult access. From a TIF or
public investment perspective, EPS suggests that the use of TIF would not be subsidizing land
values or property owners in this case.
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Hard Costs
Total: $19,734,000
Cost per Square Foot (GBA): $215 per square foot
Comments: Average construction costs in the larger market area have ranged from $175 to
$225 per square foot. At $215 per square foot, this project falls just above that range. It is
important to note that there has been considerable cost volatility and significant cost increases
over the past 12 months. As an example, the average price of lumber in the US has increased
roughly 70 percent over the 12 months. Due to a variety of local and national factors,
construction costs may continue to escalate and may result in higher construction costs at actual
time of construction.
Soft Costs
Total: $3,163,016
% of Hard Costs: 11.8 percent
Comments: Generally, soft costs for mixed-use projects range from 20 to 30 percent of hard
construction costs (vertical construction costs). At 11.8 percent of hard costs this project falls
below that range indicating that the developer has been able to find cost efficiencies.
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Memorandum March 19, 2021
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Table 1
Project Construction Cost Summary
Description Total per unit per sf % of Total
90 units 92,000 sf
LAND COSTS
Land 2,500,000$ 27,778$ 27.17$ 9.3%
Land Costs 2,500,000$ 27,778$ 27.17$ 9.3%
TOTAL LAND COST 2,500,000$ 27,778$ 27.17$ 9.3%
Horizontal Development Costs
Land Development 1,428,188$ 15,869$ 176.32$ 5.3%
Public Infrastructure Costs 1,396,188$ 15,513$ 172.37$ 5.2%
C.O.B. Fiber Optic 32,000$ 356$ 3.95$ 0.1%
TOTAL HORIZONTAL CONSTRUCTION COSTS 1,428,188$ 15,869$ 15.52$ 5.3%
Vertical Development Costs
Hard Costs 19,734,000$ 219,267$ 214.50$ 73.6%
Construction Cost 17,940,000$ 199,333$ 195.00$ 66.9%
Hard Cost Contingency 1,794,000$ 19,933$ 19.50$ 6.7%
TOTAL VERTICAL CONSTRUCTION COSTS 19,734,000$ 219,267$ 214.50$ 73.6%
Soft Costs
General Soft 1,927,724$ 21,419$ 20.95$ 7.2%
Architecture/Survey/Engineering/Review 804,000$ 8,933$ 8.74$ 3.0%
Impact Fees 634,932$ 7,055$ 6.90$ 2.4%
Permit Fee 200,000$ 2,222$ 2.17$ 0.7%
Cash-In-Lieu pf Parkland 105,192$ 1,169$ 1.14$ 0.4%
Misc (title, recording, Insurance)183,600$ 2,040$ 2.00$ 0.7%
Financing Fees and Costs 1,235,292$ 13,725$ 13.43$ 4.6%
Finance Costs 330,150$ 3,668$ 3.59$ 1.2%
Loan Interest 905,142$ 10,057$ 9.84$ 3.4%
TOTAL SOFT COSTS 3,163,016$ 35,145$ 34.38$ 11.8%
TOTAL PROJECT COST 26,825,204$ 298,058$ 291.58$ 100.0%
Source: Development Team; Economic & Planning Systems
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Memorandum March 19, 2021
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For-Sale Revenues (Summarized in Table 2)
Gross Residential Revenue: $29,010,131
Comments: The affordable units at 80 percent of AMI will have pricing of approximately
$245,000 per unit. Based on typical lending terms (4.0 percent interest rate, 5.0 percent down
payment, and 30-year term), affordable home prices for households earning 80 percent AMI in
Gallatin County are estimated at $241,000 for household sizes of 1.5 persons and $281,000 for
household sizes of 2.5 persons. The average of roughly $245,000 is within this range. The
average value for units priced at 110 percent AMI is estimated at $337,197 per unit. Net
residential sales prices are reduced by 5.5 percent in order to account for fees and closing costs.
Commercial Revenue: $600,000
Comments: The 2,000 square feet of commercial space has an estimated value of $300 per
square foot. Net commercial sales prices are also reduced by 5.5 percent in order to account for
fees and closing or leasing costs.
Table 2
Program and Revenue Summary
Description Units Square Feet % of Total Per Unit/SF Total
COMMERCIAL
General Commercial N/A 2,000 2%$300 $600,000
Subtotal N/A 2,000 2%$300 $600,000
RESIDENTIAL
Condos - 80% AMI (Priced at 70% AMI)
Studio 4 N/A 4%$181,630 $726,520
1-Bed 7 N/A 8%$221,983 $1,553,881
2-Bed 4 N/A 4%$262,156 $1,048,624
3-Bed 6 N/A 7%$302,420 $1,814,519
Total 21 N/A 23%$244,931 $5,143,544
Condos - 100% AMI (Priced at 90% AMI)
Studio 0 N/A 0%$255,670 $0
1-Bed 0 N/A 0%$277,537 $0
2-Bed 0 N/A 0%$321,030 $0
3-Bed 0 N/A 0%$342,657 $0
Total 0 N/A 0%N/A $0
Condos - 110% AMI
Studio 12 N/A 13%$249,741 $2,996,892
1-Bed 25 N/A 28%$305,103 $7,627,575
2-Bed 12 N/A 13%$360,465 $4,325,580
3-Bed 20 N/A 22%$415,827 $8,316,540
Total 69 N/A 77%$337,197 $23,266,587
Residential Subtotal 90 90,000 98%$315,668 $28,410,131
GROSS REVENUES 90 92,000 100%$29,010,131
NET REVENUE [1]$27,414,574
[1] Fees and commissions are estimated at 5.5 percent of total
Source: Development Team; Economic & Planning Systems
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Memorandum March 19, 2021
Bozeman TIF Review: 9TEN Page 6
Project Return
The performance of the project with and without public investment from TIF is evaluated with
two approaches: a time series cash flow, and on a static basis. The time series evaluation
estimates the project’s Net Present Value (NPV) and Internal Rate of Return (IRR) accounting for
the time-value of money. The second approach is based on a static (single point in time)
evaluation of the project’s total value and compares that to total construction costs.
Project Feasibility
Internal Rate of Return and Net Present Value
The IRR is the percentage rate earned on each dollar invested for each period it is invested. The
IRR is typically used by investors to compare alternative investments based on their potential
rate of return. Mathematically, the IRR is an iterative calculation that determines the discount
rate that results in a net present value (NPV) equal to zero. The NPV is the estimated value of all
future cash flows of an investment discounted to the present. The NPV of a given series of cash
flows is heavily dependent on an investor’s discount rate, which reflects an individual investor’s
opportunity cost of capital. In other words, an investor’s discount rate reflects their expected
rate of return for investments with a comparable level of risk.
For the purpose of this analysis, the discount rate is used as a hurdle rate in determining an
appropriate rate of return for a given project. When determining appropriate discount it is
important to consider the following rates when building up to a project discount rate.
• Inflation rate and the riskless rate of return (U.S. 10-Year Treasury Note rate of return)
• General real estate risk (timing and market cycle risk)
• Product type risk (i.e., multifamily, retail, office, etc.)
• Market risk (geographic specific)
• Amount of debt financing and cost of debt
Without public investment the project achieves an unleveraged internal rate of return of 4.72
percent. The factors outlined above and the risks associated with this type of project, at this
location, and in this phase of the real estate cycle warrant a unleveraged (all equity, no debt)
discount rate of approximately 10.00 percent. While this estimate is somewhat subjective, it
reflects a variety of market conditions and development risk factors. In order to achieve an
internal rate of return of 10.00 percent the project requires approximately $1.8 million in public
investment, as shown in Table 3. Accounting for developer debt financing, the project has a
leveraged IRR of 3.92 percent and requires approximately $1.6 million in order to achieve a
target leveraged hurdle rate of 17.50 percent.
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Memorandum March 19, 2021
Bozeman TIF Review: 9TEN Page 7
Table 3
Time Series Pro Forma
Description Factor Escalation Total Year 0 Year 1 Year 2
DEVELOPMENT COSTS
Construction Completion 100%0%0%
Construction Cost -$25,589,912 -$25,589,912 $0 $0
Land $2,500,000 2.0%-$2,500,000 -$2,500,000 $0 $0
Horizontal Development Costs $1,428,188 2.0%-$1,428,188 -$1,428,188 $0 $0
Vertical Development Costs $19,734,000 2.0%-$19,734,000 -$19,734,000 $0 $0
Soft Costs (Exc. Financing Cost)$1,927,724 2.0%-$1,927,724 -$1,927,724 $0 $0
Total Commercial Costs -$25,589,912 -$25,589,912 $0 $0
REVENUE
Condo/Commercial Sales Schedule 0%50%50%
Condo Sales $27,414,574 $0 $13,707,287 $13,707,287
Gross Condo Revenue $28,410,131 0.0%$28,410,131 $0 $14,205,065 $14,205,065
Gross Commercial Revenue $600,000 0.0%$600,000 $0 $300,000 $300,000
Taxes Condo Sales 0.0%N/A $0 $0 $0 $0
Sales Commissions 5.5%N/A -$1,595,557 $0 -$797,779 -$797,779
UNLEVERAGED PROJECT CASH FLOWS
Net Project Cash Flows $1,824,662 -$25,589,912 $13,707,287 $13,707,287
Construction Costs -$25,589,912 -$25,589,912 $0 $0
Condo Sales $27,414,574 $0 $13,707,287 $13,707,287
Net Present Value 10.00%-$1,800,406 -$25,589,912 $12,461,170 $11,328,336
Internal Rate of Return 4.72%
LEVERAGED PROJECT CASH FLOWS
Developer Cash Flows $589,370 -$7,372,633 $0 $7,962,003
Construction Costs -$25,589,912 -$25,589,912 $0 $0
Finance Costs $330,150 -$330,150 -$330,150 $0 $0
Loan Interest $905,142 -$905,142 -$452,571 -$271,543 -$181,028
Construction Debt $19,000,000 2.0%$19,000,000 $19,000,000 $0 $0
Condo Sales $27,414,574 $0 $13,707,287 $13,707,287
Construction Loan Repayment -$19,000,000 $0 -$13,435,744 -$5,564,256
Net Present Value 17.50%-$1,605,678 -$7,372,633 $0 $5,766,955
Internal Rate of Return 3.92%
Source: Economic & Planning Systems
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Memorandum March 19, 2021
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Static Project Feasibility
Evaluating the project from a static perspective provides another indication of the project’s
financial performance. This method compares the total project costs to the project’s net
revenues. Here, the total value is calculated by netting the value (after sales commissions) of the
revenues generated by condo sales and the commercial sales against total project costs.
For this project a return on cost hurdle rate of 10.0 percent is used. Netting total condo sale
revenues and commercial sale revenues of $27.41 million against estimated construction costs of
$26.82 million results in a return on cost of 2.20 percent. In order to achieve a 10.0 percent
return on cost, the project requires roughly $1.9 million in public investment, as shown in Table
4.
Table 4
Static Financial Performance
Eligible Improvements
The developer has identified several eligible costs consistent with the North 7th URA policy,
summarize in Table 5. Identified eligible improvements total approximately $2.2 million and
include roughly $635,000 for city impact fees, $105,000 for parkland cash-in-lieu, $1.4 million
for public right-of-way infrastructure upgrades, and $32,000 for the installation of fiber optic
cables.
Table 5
Eligible Improvements
Description Amount
Total Construction Costs $26,825,204
Net Revenues $27,414,574
Return on Cost 2.20%
Return on Cost Hurdle 10.0%
Revenue Target $24,922,340
Gap (-) / Surplus (+)-$1,902,864
Source: Development Team; Economic & Planning Systems
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Description Amount % of Total
CITY of BOZEMAN: Impact Fees $634,932 29.28%
CITY of BOZEMAN Cash In Lieu of Parkland (61,158 SF @ $1.72 / SF)$105,192 4.85%
Public R.O.W. Infrastructure Upgrades ( Juniper, Aspen & 8th )$1,396,188 64.39%
Bozeman Fiber Optic ( 800 LF @$40 LF Est.)$32,000 1.48%
TOTAL ELIGIBLE IMPROVEMENTS $2,168,312 100.00%
Source: Development Team; Economic & Planning Systems
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Memorandum March 19, 2021
Bozeman TIF Review: 9TEN Page 9
Project Request
The Developer is requesting $2,168,312 in TIF to fund eligible costs that include City impact fees
and eligible right-of-way improvements around the site. Based on the three methodologies
outlined above funds, EPS has estimated an average project gap of roughly $1.77 million, as
shown in Table 6. With this level of subsidy the project achieves an unleveraged IRR of 9.9
percent, a leveraged IRR of 19.2 percent, and a return on cost of 9.4%.
A TIF amount equating to the developer’s full request of $2.2 million results in an unleveraged
IRR of 11.2 percent, a leveraged IRR of 23.7 percent, and a return on cost of 11.2%. While
these rates of return are slightly higher than the identified target hurdle rates, they are still
within a range that is reasonable for project rates of return in this market and would not
represent a “windfall” for the developer. There are numerous factors that will influence the
project’s actual performance, and the estimates here are in our opinion within a range of
reasonableness given the risk and uncertainty associated with any real estate development
project. The project is also providing public benefits in the form of permanently affordable
housing, and is making efficient use of underutilized land consistent with the vision for North 7th.
Table 6
Project Performance with TIF
Description Subsidy Amount Target Return Actual Return
Estimated Gap
Unevered IRR $1,800,406 10.0%10.0%Unleveraged IRR
Leveraged IRR $1,605,678 17.5%17.5%Leveraged IRR
Static $1,902,864 10.0%10.0%Return on Cost
Average $1,769,649
Return with Subsidy
Average Estimated Gap $1,769,649
Unevered IRR 10.0%9.9%Unleveraged IRR
Leveraged IRR 17.5%19.2%Leveraged IRR
Static 10.0%9.4%Return on Cost
Developer Request $2,168,312
Unevered IRR 10.0%11.2%Unleveraged IRR
Leveraged IRR 17.5%23.7%Leveraged IRR
Static 10.0%11.2%Return on Cost
Source: Economic & Planning Systems
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Memorandum
REPORT TO:Midtown Urban Renewal Board
SUBJECT:Consider inclusion of the Park's Departments request for funding of
improvements to the Westlake Park in the Fiscal Year 2022 Work Plan and
Budget recommendation.
MEETING DATE:April 1, 2021
AGENDA ITEM TYPE:Citizen Advisory Board/Commission
RECOMMENDATION:Include up to $301,863 in funding for Westlake Park improvements in the FY
2022 Work Plan and Budget recommendation.
STRATEGIC PLAN:3.4 Active Recreation: Facilitate and promote recreational opportunities and
active health programs and facilities.
BACKGROUND:The Midtown URD's Aspen and 5th improvements project significantly
impacted Westlake Park, in particular the free style course. The addition of a
plaza and landscaping improvements to the park was part of a long term
plan for the Aspen Festival Street. Staff recommends funding for upgrades to
the park that were impacted by previous projects. Staff urges the board to
consider further upgrades to the park in future budget years.
UNRESOLVED ISSUES:Final design of the proposed improvements is not completed at this time.
ALTERNATIVES:At the discretion of the Board.
FISCAL EFFECTS:Any recommended funding of this item should be included in the the
proposed FY 2022 Work Plan and Budget.
Attachments:
2021-2022 Westlake Park Budget Proposal.pdf
Report compiled on: March 30, 2021
65
Cash-in-Lieu of
Parkland
Midtown Urban
Renewal District Match/In-kind Alternatives
mobilization 5,238.13$
irrigation north and south 30,000.00$
construction access 3,500.00$
laydown area 5,000.00$
strip export sod/organics 7,800.00$
export non-suitable 2,000.00$
silt fence 1,575.00$
fill/topsoil from 5th/Aspen $35,700.00
water line 2,500.00$
electric relocation 5,000.00$ 4,250.00$ subtotal 37,500.00$ 29,363.13$ 35,700.00$
mobilization 13,804.00$
strip clay 8,000.00$
final screen and re-grade clay 23,000.00$ 12,400.00$ 7,600.00$
rock retaining walls 27,800.00$ starting hill / loading ramp 20,000.00$ cut fill balance on site for track 40,000.00$
fabricated ramps 31,200.00$ 10,000.00$
design consultation 10,000.00$ subtotal 51,000.00$ 125,204.00$ 17,600.00$
mobilization 1,827.50$
storm treatment, pond, drainage 20,000.00$ 1,500.00$ $19,250.00 Additional Capacitysubtotal20,000.00$ 3,327.50$
mobilization 5,797.00$
seeding ph 1 and 2 15,950.00$
aggregate base course 6,000.00$
steel access gate 3,500.00$
Site furnishings 4,500.00$
Pathways 10,000.00$
Plaza incl rockery 32,750.00$
boulevard trees 10,000.00$ subtotal 73,997.00$ 10,000.00$
mobilization 8,491.50$
shade structures 390.00$ $ 7,000.00
announcer booth 5,000.00$ 5,200.00$
soil tac 6,400.00$ 7,150.00$
track drainage 9,000.00$ 1,950.00$
concrete work/bleacher pad 14,000.00$
bleachers 10,000.00$ 130.00$
starting gate 55,500.00$
project management $ 32,500.00
subtotal 44,400.00$ 55,500.00$ 47,320.00$
TOTAL IMPROVEMENTS 152,900.00$ 287,391.63$ 74,920.00$
Contingency (15%) 17,600.00$ 44,706.89$
Design/
Engineering 23,000.00$
Construction/Admin Fees 25,264.26$
TOTAL per FUND 193,500.00$ 357,362.78$ 74,920.00$
TOTAL PROJECT COST $ 625,782.78
Westlake Park 2021-2022
Design and Construction Proposal
Improvements
Funding Sources
Landscaping
and Site
Improvements
BMX
Grading,
Utilities, Misc
Freestyle
Course
Stormwater
66
Memorandum
REPORT TO:Midtown Urban Renewal Board
SUBJECT:Midtown Urban Renewal District Work Plan and Budget for Fiscal Year 2022
First Review
MEETING DATE:April 1, 2021
AGENDA ITEM TYPE:Citizen Advisory Board/Commission
RECOMMENDATION:Provide feedback to Staff regarding the FY 2022 Work Plan and Budget
STRATEGIC PLAN:2.2 Infrastructure Investments: Strategically invest in infrastructure as a
mechanism to encourage economic development.
BACKGROUND:Discuss the Work Plan and Budget for Fiscal Year 2022 and provide feedback
to Staff.
UNRESOLVED ISSUES:Staff needs to further refine the year end balance for budgeting purposes.
ALTERNATIVES:At the recommendation of the Board.
FISCAL EFFECTS:TBD
Attachments:
Midtown Budget FY 2022 draft 042021.pdf
Report compiled on: March 30, 2021
67
Bozeman Midtown Urban Renewal Board Fiscal Year 2022 Work Plan and Budget
FY2022
Revenue and Cash
Estimated FY21 Ending Balance (NEEDS ANALYSIS)$753,183
Estimated FY22 Revenue 1,164,775.00$
Total Cash $1,917,958
Midtown Infrastructure Improvements Urban Renewal Project
Westlake BMX Park Improvements $302,000
Outside Legal Counsel
For Bonding and Redevelopment Agreements $60,000
Redevelopment Incentive Programs
Technical Assistance Grants 1:1 match [2 grants]$15,000
Direct Incentives - Midtown TIF Assistance Program $100,000
City Fiber Conduit Connection Incentive Program $20,000
District Operations
Outreach Engagement and Mailing $2,000
Midtown Marketing and Recruitment $10,000
Contracted Professional Services $50,000
Payroll $89,000
Training $6,000
Approved Grants and Direct Incentives
West Peach Condos $256,355
The Ruh Building
Aspen Crossing
Zambon Building $45,000
The Elm Grant $233,000
The Ruh Building Streetscape $103,737
Total New Expenditures for FY 2021
New Expenditures $1,292,092
TOTAL EXPENDITURES FY 2021 $1,292,092
Year End Balance $625,866
68