The URL can be used to link to this page

Home My WebLink About12-16-21 Public Comment - A. Hoitsma - Re_ Request for TIF assistance for Wildlands development (CONSENT ITEM on Agenda for 21 December 2021)From:Amy Kelley Hoitsma To:David Fine Cc:Agenda; reno walsh; Dave Chambers; D. Booth; Jeremy Mistretta Subject:Re: Request for TIF assistance for Wildlands development (CONSENT ITEM on Agenda for 21 December 2021) Date:Thursday, December 16, 2021 2:48:27 PM CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. Thank you for that clarification, David. I was a little surprised to see it under “Consent” for next week’s meeting, so I thought I’d better send the Commission essentially the same letter I sent to the NURB. Glad to know it will be an action item on January 11. By that time it should have gone through Planning so things could well look very different. Best, Amy Amy Kelley Hoitsma 406-581-1513 aok@mcn.net aokworks.com On Dec 16, 2021, at 2:24 PM, David Fine <DFine@BOZEMAN.NET> wrote: Hi Amy – Thank you for your comments. A quick note on the Consent Item. The item is a Resolution of Intent, which is a formal way of noticing a public hearing. The public hearing is at the January 11, 2022 City Commission meeting, where the item would be an action item and would receive full discussion and consideration. David David Fine | City of Bozeman Economic Development C: 406.551.0209 |dfine@bozeman.net | www.bozeman.net | he / him / his From: Amy Kelley Hoitsma <aok@mcn.net> Sent: Thursday, December 16, 2021 2:12 PM To: Agenda <agenda@BOZEMAN.NET> Cc: David Fine <DFine@BOZEMAN.NET>; reno walsh <renowalsh@gmail.com>; Dave Chambers <dchambers@csp2.org>; D. Booth <ddjbooth@gmail.com>; Jeremy Mistretta <Jeremy@newageartisans.com> Subject: Request for TIF assistance for Wildlands development (CONSENT ITEM on Agenda for 21 December 2021) CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. Honorable Mayor Andrus and Members of the City Commission: In considering whether to approve the TIF assistance request by Outlaw Real Estate Partners (OREP) for the Wildlands mixed-use development on E. Peach and N. Wallace, I would like you to consider a few items. Given it is a “Consent Item" I don’t believe you schedule time for discussion, so I hope this letter will provide food for thought if not discussion among Commissioners. PARKING In their request “BOZEMAN MIDTOWN TIF ASSISTANCE” for TIF assistance (which I assume is NURD TIF assistance), OREP lists “fifty-six at-grade parking for commercial and residential uses of the Site” in the Project Summary. On page 8, however, they spell out that the only parking they plan to provide is 14 garage stalls and 15 uncovered parking lot spaces, plus 3 curb spaces on Wallace, for a total of 32 spaces. The current number of on-site parking spaces is 33. Despite the addition of residences totaling 28 bedrooms and three new commercial spaces, they are proposing to actually REDUCE the number of parking spaces in an already-congested area. In other words, their current proposal would NEGATIVELY IMPACT the amount of infrastructure in the neighborhood regarding to parking. ADDITION OF SMALL RESTAURANT In the Project Summary, OREP also lists the addition of a new “ground floor restaurant” and “retail space.” The plans submitted to the Planning Department, however, show three “shells” for “artisan manufacturing”—not restaurant and not retail. In fact, it is my understanding that they wouldn’t be allowed to have an additional restaurant based on the parking calculations they made to justify providing only 32 spaces. Had they intended one of three new commercial spaces to be a restaurant, I believe they would have had to provide significantly more parking than 2 spaces per unit. In the “Criteria for TIF Assistance” under “Infrastructure Improvements” (page 8) they state: “[The first level] will also provide space for two more tenants (office and very small restaurant) on the south side of the property along Peach Street.” It would be important for you to know exactly what they are proposing for the neighborhood, since the description is different even within the request document. AFFORDABLE HOUSING Rather than provide affordable or attainable housing, OREP promises to include it in their NEXT development. They use this to justify “points” in the criteria for TIF assistance. This raises many questions, including: What sort of legal document would guarantee this promise? What if OREP doesn’t go forward with this development? What if they sell the property? What if they go bankrupt? SOLAR PANELS In the “Criteria” list—under “Sustainability”—they give themselves points because they say: “The project incorporates solar panels, low/no maintenance exterior materials, and a high level of insulation to maintain energy efficiency.” I have poured over the project plans literally for hours, hoping to find some reference to alternative energy and/or energy efficiency and see no mention of it —especially not solar panels, which I assume would show up on rooftop schematics. This is not to say that it is untrue; just that it is worth questioning. CONSULTANT RECOMMENDATIONS In their “Review of Wildlands Project Financial Performance,” Economic & Planning Systems (EPS) state the following in their Recommendations to the City: The financial analysis above shows that this project has a financing gap. The analysis shows that the project is not likely to result in a net loss, but the financial returns may not be high enough for a developer to want to proceed. The ROI is estimated at 4.22 percent compared to a target of 10 to 15 percent. The IRR is estimated at 6.88 percent, well below a hurdle rate of 9.5 percent. The project itself does not provide any affordable or attainable housing. The average price in the development is $1.6 million. EPS does not recommend that the City or Northeast Urban Renewal District invest in a project building units priced more than double the current median price in the City. The project design or site limitations may contribute to the feasibility gap. The fact that there is a financing gap on a project with sale prices averaging over $800 per square foot may indicate a larger issue with the design of the project and yield on the site (number of units possible). It is likely that there are not enough residential units to cross subsidize the mixed use space which is not feasible at the costs in this proposal. EPS does not recommend that TIF be used to cure a design, site or zoning constraint like this. In EPS’ opinion, TIF is more appropriately used for addressing physical or redevelopment constraints such as a lack of utilities, contamination, demolition, other conditions of blight, or to provide affordable housing. I believe these points are worthy of serious discussion. I have already submitted comments to the Planning Department regarding my concerns about parking with this project. I believe the current parking proposal is a project “design flaw” that adds to the financial uncertainty of this project. Were the City to require OREP to go back to the drawing board and add a significant number of parking spaces, I am not sure there is a solution for them. Please know that I was somewhat supportive of the project when it was first proposed. Unless the parking proposal changes significantly, I find myself unsupportive, and therefore feel the project unworthy of TIF assistance. With my best, Amy Kelley Hoitsma 706 E. Peach Street(406) 581-1513 City of Bozeman emails are subject to the Right to Know provisions of Montana’s Constitution (Art. II, Sect. 9) and may be considered a “public record” pursuant to Title 2, Chpt. 6, Montana Code Annotated. As such, this email, its sender and receiver, and the contents may be available for public disclosure and will be retained pursuant to the City’s record retention policies. Emails that contain confidential information such as information related to individual privacy may be protected from disclosure under law.