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HomeMy WebLinkAbout06-02-22 Midtown Urban Renewal Board Agenda & Packet MaterialsA.Call meeting to order at 4:30 Via Webex: https://cityofbozeman.webex.com/cityofbozeman/onstage/g.php?MTID=e94850cc2782a1631e4c8ee5c761c9839 Click the Register link, enter the required information, and click submit. Click Join Now to enter the meeting Via Phone: This is for listening only if you cannot watch the stream or channel 190 • Call-in toll number (US/Canada): 1-650-479-3208 • Access code: 2558 627 0613 B.Disclosures C.Changes to the Agenda D.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. E.Action Items E.1 FY2023 Midtown Work Plan and Budget(Fine) F.FYI/Discussion G.Adjournment THE MIDTOWN URBAN RENEWAL BOARD OF BOZEMAN, MONTANA MURB AGENDA Thursday, June 2, 2022 For more information please contact David Fine (dfine@bozeman.net) This board generally meets the 1st Thursday of the month from 4:30pm to 6:30pm 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). In order for this Board to receive all relevant public comment in time for this meeting, please submit via the Commission Comment Page or by emailing agenda@bozeman.net no later than 12:00 PM on the day of the meeting. Public comment may be made in person at the meeting as well. 1 Memorandum REPORT TO:Midtown Urban Renewal Board FROM:David Fine, Economic Development Program Manager SUBJECT:FY2023 Midtown Work Plan and Budget MEETING DATE:June 2, 2022 AGENDA ITEM TYPE:Citizen Advisory Board/Commission RECOMMENDATION:I move to approve FY2023 Midtown Work Plan and Budget STRATEGIC PLAN:2.2 Infrastructure Investments: Strategically invest in infrastructure as a mechanism to encourage economic development. BACKGROUND:The Midtown Urban Renewal Board provided recommendations to staff regarding their work plan and budget priorities at their regularly scheduled April 7, 2022 meeting. The proposed work plan and budget represents staff's best attempt to capture these priorities. The goal of this action item is to vote on a Board recommended work plan and budget for Fiscal Year 2023 to be shared with the City Commission at their June 14, 2022 meeting. UNRESOLVED ISSUES:None at this time. ALTERNATIVES:As suggested by the Board. FISCAL EFFECTS:The proposed Work Plan and Budget for Fiscal Year 2023 includes $4,489,541 in requested appropriations from the Midtown Urban Renewal District tax increment fund. Attachments: Midtown Budget FY 2023 draft.pdf Fiscal Year 2023 Midtown Work Plan and Budget and Annual Report draft 2.docx Report compiled on: May 27, 2022 2 Bozeman Midtown Urban Renewal Board Fiscal Year 2023 Work Plan and Budget Revenue and Reserves Undesignated Fund Balance $3,026,064 Estimated FY22 Ending Balance $448,000 Estimated FY23 Revenue $1,076,082 Total Cash and Reserves $4,550,146 Infrastructure Investments Westlake BMX Park Improvements $293,641 Codify Design Standards for N. 7th Avenue Streetscape $50,000 5th Ave Trail $191,000 Festival Street Lighting extensions, fabrication and installation $100,000 Bond Repayment Series 2020 $410,000 Professional Services and Outside Legal Counsel Outside Legal Counsel for Bonding and Redevelopment Agreements $60,000 Contracted Professional Services $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 Outreach and Marketing Outreach Engagement and Mailing $10,000 Midtown Marketing and Recruitment $10,000 District Operations Payroll $97,900 Training $12,000 General Administrative Costs $20,000 Approved Grants and Direct Incentives Workforce Housing Project (9TEN)$3,000,000 El Mercadito $40,000 TOTAL EXPENDITURES $4,489,541 Year End Balance $60,605 3 Bozeman Midtown Urban Renewal District An Urban Renewal District with a Tax Increment Financing (TIF) Program Midtown Urban Renewal Board Annual Work Plan and Budget FY2023 Page 1 of 9 MIDTOWN URBAN RENEWAL DISTRICT FY2022 ANNUAL REPORT and FY2023 WORK PLAN AND BUDGET The City Commission passed Ordinance No. 1685, “Adopting an Urban Renewal Plan for the North Seventh Avenue Corridor and Adjacent Properties”, on November 27, 2006. On December 16, 2015, the City Commission passed Ordinance No. 1925, which adopted a new urban renewal plan, expanded the boundaries of the original district, and renamed the North Seventh Urban Renewal District the Bozeman Midtown Urban Renewal District. The 2015 Midtown Urban Renewal Plan provides for the remediation of blighted conditions within the urban renewal area by advancing five broad goals through a series of implementing activities and strategies. The five goals include the following items: 1. Promote Economic Development Rationale: Economic vitality strengthens the community, provides for physical needs of the citizens, opens reinvestment opportunities, and helps to eliminate the conditions that contribute to blight. 2. Improve Multimodal Transportation Rationale: Increasing travel options supports public health, reduces resource demand, increases efficiency and reduces costs, improving the quality of life and making the community a better place to live and work, helping to eliminate conditions that contribute to blight. 3. Improve, Maintain and Support Innovation Infrastructure Rationale: Infrastructure is the backbone of the community. Private development typically requires a corresponding public investment in infrastructure. Therefore, capital improvements in the district will help achieve economic vitality and address conditions that contribute to blight. 4. Promote Unified, Human Scale Urban Design Rationale: Protecting and building upon existing physical assets increases vitality, desirability and leverages economic development, strengthening community values and mutual support helping to eliminate the conditions that contribute to blight. 5. Support Compatible Urban Density Mixed Land Uses Rationale: A sense of place is strengthened by a strong core identity. Increasing live-work opportunities and community interaction, ensures that the North 7th Avenue area remains a great place to live, work, operate a business, and play, and helps to eliminate conditions that contribute to blight. 4 Bozeman Midtown Urban Renewal District An Urban Renewal District with a Tax Increment Financing (TIF) Program Midtown Urban Renewal Board Annual Work Plan and Budget FY2023 Page 2 of 9 The City Commission approved the Midtown Action Plan in 2017, which charted a new direction in pairing infrastructure spending and blight remediation with proposed private investment. The intent of the Action Plan is to, “attract targeted private investment by leveraging the market potential of the Midtown District and removing barriers to redevelopment through strategic infrastructure investments and incentives.” The Annual Report and the recommended Work Plan and Budget reflect this specific strategy and approach to using private investment to propel blight remediation and urban renewal. The Midtown Action Plan proposes targeting future development that includes the following elements: Infill.The intent of urban renewal is to remove blight to improve an area for the entire community benefit. Remodeling of existing structures or infill of underutilized lots is the priority of this Plan. As discussed, infill development is more challenging than vacant greenfield development and warrants focused investment of staff time and resources. Increased building density.Increased building density increases the number of people in the District, which helps create the desired active pedestrian environment. More density of buildings grouped together in districts is especially desired to encourage pedestrians to explore adjacent buildings. Buildings that are separated by large parking area or vacant lots will impede pedestrian movement. Encourages multimodal transportation.New projects should provide amenities such as adequate bike parking or bus schedule real time monitors in lobbies. At the same time, the Urban Renewal District should invest in infrastructure projects such as bike lanes and signals or covered bus stops to make alternative transportation options visible, safe, and desirable. Retail that serves surrounding residents.To achieve a more vibrant pedestrian-oriented environment the District must consist of uses that are a frequent destination by residents. Retail amenities that are experience based such as restaurants or ice creams shops are desired because they generate activity and are more resilient to emerging ecommerce trends. Such amenities will also attract more housing investment. Housing.Bozeman is in significant need of all types of housing, therefore it is called out as a specific use that is desired. The Midtown District zoning is intended to accommodate more dense housing projects with potential access to retail amenities nearby. The City Commission funded a package of several major infrastructure improvements in the District through the approval of $6,500,000 in bonds with a 25 year term on July 6, 2020. The infrastructure improvements include the streetscape infrastructure on N. 7th Ave. that enhances the walkability, aesthetics, and investment potential of the District as a whole, along with improvements to Aspen St. and N. 5th Ave. that will accelerate ongoing private investment in this emerging node of commercial activity. The District is also focused on investing in public infrastructure that removes barriers to specific private investments. These incentives primarily pay for the costs of public infrastructure associated with the private projects, as well as demolition costs and the cost of 5 Bozeman Midtown Urban Renewal District An Urban Renewal District with a Tax Increment Financing (TIF) Program Midtown Urban Renewal Board Annual Work Plan and Budget FY2023 Page 3 of 9 various system development charges, such as impact fees. These early investments in projects will create new incremental taxable value that will allow for greater blight remediation throughout the District in the coming years. Over time, these increases in taxable value will benefit the broader community by increasing the overall tax base through productive infill development. The remediation of blighted conditions in the District and its ongoing redevelopment will take many years. Bozeman has 23 more years to focus on redevelopment of the Midtown area. As instructed by Commission adopted policy documents, the District will continue to focus on remediating blight, by attracting targeted private investment and growing the tax base. 6 Bozeman Midtown Urban Renewal District An Urban Renewal District with a Tax Increment Financing (TIF) Program Midtown Urban Renewal Board Annual Work Plan and Budget FY2023 Page 4 of 9 Midtown Urban Renewal District (MURD) FY2022 Annual Report (July 1, 2021 to June 30, 2022) Highlights of investments over $15,000 are documented below. Series 2020 Bond Payment $410,000 The City Commission approved the first series of bonds for the district for $6,500,000. The proceeds of the bonds were to pay for the N. 7th Ave. Streetscape Project and the Aspen and 5th Improvements Project. The term of the bonds is 25 years. Midtown Infrastructure Improvements Urban Renewal Project $358,917 The Midtown Infrastructure Improvements Project includes several sets of public infrastructure improvements throughout the District. Expenditures on this project in Fiscal Year 2022 included completion of the N. 7th Streetscape Project between Durston Rd. and Mendenhall St. and the reconstruction of Short St., adjacent to the ELM event center to address stormwater, and ADA issues. In addition, this project included upgrades to the streetscape along N. 7th Ave., adjacent to the Ruh Building to ensure the streetscape matched the style of the recently installed elements. The Ruh Building (encumbered from FY21)$ 747,500 The Ruh Building is proposed as a 34,066 SF, 3-story, mixed-use building with restaurant/retail uses on the ground floor and 16 residential units on the upper floors. The project is located at the northwest corner of N. 7th Ave. and Durston Rd. The City Commission approved the project as an urban renewal project pursuant to Resolution 4991 following a public hearing at its February 11, 2019 meeting. The project represents a $6,676,667 investment in the District. The Ruh Building Streetscape $ 103,737 The Board recommends approval of a forthcoming amendment to the existing grant agreement for The Ruh Building. At staff’s urging, the Developer modified their site plan to make sure the streetscape elements matched those on the remainder of the corridor. In addition the Montana Department of Transportation (MDT) is widening the intersection of N. 7th Ave and Durston Rd. and the new design is configured to be able to remain in place with the widening project. Aspen Crossing (encumbered from FY21)$ 849,959 Aspen Crossing is a 65,000 square foot, 3-story, mixed-use building with restaurant/retail uses on the ground floor, second floor offices, and 25 residential units on the upper floor. The project represents at least a $13,029,045 in the District. Zambon Building (encumbered from FY21) $ 45,000 The project represents a $2,941,000 investment in the District and approximately 10,000 SF of commercial space. Staff expects this item will be requested for payment before the end of FY 2022, but may also occur in early 2023. 7 Bozeman Midtown Urban Renewal District An Urban Renewal District with a Tax Increment Financing (TIF) Program Midtown Urban Renewal Board Annual Work Plan and Budget FY2023 Page 5 of 9 West Peach Condos (encumbered from FY21) $ 256,355 The West Peach Condos project is comprised of 17 two bedroom, one office, three bathroom, and two car garage, townhouse-style condominium units. The project is located at the northwest corner of N. 3rd Ave. and W. Peach St. The City Commission approved the project as an urban renewal project pursuant to Resolution 5046 following a public hearing at its May 20, 2019 meeting. The project represents a $7,656,246 investment in the District. El Mercadito $40,000 Through adaptive reuse of an existing vacant structure at 511 W. Mendenhall St., El Mercadito proposes renovations to the interior of the building, to the exterior façade, the addition of landscaping, outdoor seating, and electrical utility upgrades. The building will house a Hispanic food market and fast-casual dining space and second location for El Mercadito LLC., whose business in Four Corners has grown and is expected to continue to thrive in a more urban, pedestrian-oriented location. The grant funds three blocks of neighborhood electrical infrastructure upgrades that were necessary to allow for a commercial kitchen in this commercially-zoned location. Staff expects this project could receive reimbursement this fiscal year, but the project could extend into FY 2023. Westlake Park Improvements $39,359 The Parks Department oversaw completion of a new start gate and associated concrete work for the BMX track at the park. The new gate is expected to reduce noise and increase safety for races. Relocation and reconstruction of the mountain bike course is expected to be completed in FY 2023. Streetscape Operations and Maintenance Manual $8,000 The new streetscape will require regular maintenance. This item would allow the designer to create a manual to make sure long-term care and maintenance of the recently installed facilities is properly documented. Expenditures Compiled May 16, 2022 8 Bozeman Midtown Urban Renewal District An Urban Renewal District with a Tax Increment Financing (TIF) Program Midtown Urban Renewal Board Annual Work Plan and Budget FY2023 Page 6 of 9 Midtown Urban Renewal District (MURD) FY2023 Work Plan (July 1, 2022 to June 30, 2023) Midtown Infrastructure Improvements Westlake Park Improvements $318,641 The District paid to add back-in angle parking to serve as parking for Westlake Park as part of last year’s improvements to N. 5th Ave. The project significantly impacted the mountain bike facilities manage by Southwest Montana Mountain Bike Association (SWMMBA). A recently update park master plan calls for relocating the mountain bike facilities and building an entrance plaza near the intersection of N. 5th Ave. and the recently complete Aspen Festival Street. The improvements would also include a new, quiet electric start gate for the BMX course, which will allow for much quieter operations and an improved racing experience. The District spent $39,359 on BMX track related elements of this project in FY 2022. Codify Design Standards for N. 7th Ave. Streetscape $50,000 Recent improvements to the N. 7th Ave. streetscape are not currently required for redevelopment projects on the corridor. In order to protect the public investments already made and to ensure design continuity for the corridor, codifying the streetscape design is necessary for the future development of the corridor. This project is continuing FY 2023. N. 5th Ave. Multi-Use Path $200,000 Staff obtained an easement to install a 10ft paved multi-use path along the N. 5th Ave. right-of-way to connect the path on Oak St. to Westlake Park and to provide bike and pedestrian connectivity where N. 5th Ave. does not currently exist. Festival Street Lighting extensions $ 100,000 This project adapts the recently installed light poles and string lights on W. Aspen St. to make them compliant with the National Electrical Code and “Night Skies” ordinance. Bond Repayment Series 2020 $ 410,000 The City Commission approved the Series 2020 bonds for a 25 year term that ends 2045. $410,000 is the annual payment on the $6,500,000 in debt issued to finance the cost of the N. 7th Ave. Streetscape Project, and the Aspen and N. 5th Ave. Improvements Project. Professional Services and Outside Legal Counsel Contracted Professional Services $ 60,000 9 Bozeman Midtown Urban Renewal District An Urban Renewal District with a Tax Increment Financing (TIF) Program Midtown Urban Renewal Board Annual Work Plan and Budget FY2023 Page 7 of 9 To assist with district management and implementation of the work plan and budget, as well as responding to new opportunities, Staff will contract for services on an as-needed basis. Outside Legal Counsel $ 60,000 The Midtown Urban Renewal District continues to see strong interest in redevelopment. This interest will necessitate work on development agreements under the Midtown TIF Assistance Program, and depending on the scope of the projects, the need to issue additional bonds. Redevelopment Incentive Programs The Midtown Urban Renewal District’s redevelopment incentive programs are based on criteria included in the 2015 Midtown Urban Renewal District Plan and the 2017 Midtown Action Plan. Technical Assistance Grants (TAG)$ 15,000 This program is to provide technical assistance funding to encourage developers to build on parcels along the N. 7th Avenue corridor, or rehabilitate existing structures. It recognizes the complexities of redeveloping parcels which have existing substandard buildings and infrastructure; it was created to offset the costs of those complexities with grants for those proposing work which eliminates blight and advances the implementation of the District Plan. The program was approved by Resolution 4777 and is administered by the MURB. The maximum grant amount for the program is $7,500 and requires a 1:1 match. Midtown Tax Increment Finance Assistance Program – Direct Incentives $ 100,000 The City Commission approved an incentive program, the Midtown TIF Assistance Program pursuant to Resolution 4770 in 2017. Resolution 5087 reauthorized and updated the Program in 2019. Awards will be based on the quality of projects and their support of the Midtown Urban Renewal Plan. Projects of a larger magnitude may require the issuance of tax increment revenue bonds. Projects $50,000 and under may be awarded by the Board and sent to the City Commission as Consent Items. Projects over $50,000 require the approval of the City Commission. Fiber Conduit Connection Incentive Program $ 20,000 The District has made significant investments in facilitating competitive telecommunications options through the provision of public conduit. This program, modeled on a program created by the Downtown URD provides matching grants of up to $2,500 to connect buildings to the City conduit system. The program facilitates connections to infrastructure and the utilization of the existing conduit investment. 10 Bozeman Midtown Urban Renewal District An Urban Renewal District with a Tax Increment Financing (TIF) Program Midtown Urban Renewal Board Annual Work Plan and Budget FY2023 Page 8 of 9 Outreach and Marketing Outreach and Mailing $ 10,000 The Board has requested money for public noticing and outreach activities in the District. The purpose of these outreach activities is to inform and engage property owners and the public in the implementation of the Midtown Urban Renewal Plan. Midtown Marketing and Recruitment $ 10,000 This item includes maintenance of the District website, midtownbozeman.org, as well as programs like the banner program to drive traffic to the website. The District uses the website to communicate effectively with property owners, developers, and the public and “to disseminate blight clearance and urban renewal information.” In addition, the board and staff continue to actively recruit development projects in the district that are in support of the urban renewal plan. District Operations Payroll $ 97,900 The City’s Economic Development Department manages the Bozeman Urban Renewal District in response to City Commission and the Midtown Urban Renewal Board work plans and policy guidance. 1.5 FTE are dedicated to staffing the Bozeman Urban Renewal Program as a whole, of which the Midtown URD contributes a proportionate share of funding. Training $ 12,000 Strong professional development drives the success of the urban renewal program. Staff plans to participate in the National Development Council’s Economic Development Finance Professional (EDFP) Certification Program and the International Economic Development Council’s (IEDC) certified economic developer course series over a number of years General Administrative Costs $ 20,000 This line item provides funding for the general and ordinary cost of running a successful program and allows the program to respond to opportunities and challenges during the year. 11 Bozeman Midtown Urban Renewal District An Urban Renewal District with a Tax Increment Financing (TIF) Program Midtown Urban Renewal Board Annual Work Plan and Budget FY2023 Page 9 of 9 Midtown Tax Increment Finance Assistance Program Approved Grants and Direct Incentives Workforce Housing (9TEN)$ 3,000,000 The project, as currently proposed, includes 100 units of housing. Forty units are deed restricted for at least 30 years and limited to prices that are affordable to households making 120% of the area median income (AMI). Forty units will be sold at prices that are affordable to households making 120% of the area median income (AMI), but will not be deed restricted beyond initial sale. The remaining 20 units will be offered at the market rate. The project also features 3000 SF of ground floor commercial space double fronting the corner of W. Aspen St. and N. 8th Ave. This project is currently on hold and the board would like to be able to use these funds on similar projects that would provide workforce housing within the District. 12