HomeMy WebLinkAbout10-01-24 Public Comment - A. Hoitsma - Resolution 5643 (Wallace Works TIF funding)From:Amy Kelley Hoitsma
To:Bozeman Public Comment
Subject:[EXTERNAL]Resolution 5643 (Wallace Works TIF funding)
Date:Tuesday, October 1, 2024 9:57:57 AM
Attachments:Hoitsma_Commission_letter_re_Wallace_Works_TIF_funding_request.docx
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Please accept my public comment on this action item for tonight’s meeting. I’m afraid I amout sick today, so I will not be attending the meeting in person.
Thank you.
Honorable Mayor Cunningham, Deputy Mayor Morrison, and Bozeman City Commissioners:
I am writing to express general support for Resolution 5643 (Approving a Project in theNortheast Urban Renewal District, known as Wallace Works, as an Urban Renewal Project;
Making Findings with Respect Thereto and Approving the Use of Tax Increment Revenues toReimburse Eligible Costs Thereof and Approving a Related Development Agreement), which
is on your agenda for tonight.
My understanding is that this tax increment financing (TIF) proposal is essentially the same as
the one approved by the Northeast Urban Renewal Board (NURB) some years ago, when itwas still a citizen-run board whose members were primarily NE neighborhood residents. (One
big change is the absence of the parking garage, which would also have been funded by TIFfunds and therefore had a larger price tag.) I feel obliged to support the work and the
conclusion drawn by the NURB at that time.
While $2.05 million sounds like a huge price tag for infrastructure improvements, the staff
report contends that they “engaged Economic and Planning Systems, Inc. (EPS) to provide anindependent, third-party assessment of the development” and that “EPS found that the TIF
request of $2,055,563 does not generate above market rate returns for the developer.” I alsounderstand that the final number may come in below this estimate, but not exceed it.
Of course, by definition TIF funding is provided by the development itself, so it is not a directsubsidy from the City: The developer will finance the project up front. When the project is
completed and on the tax rolls, taxes generated by the project itself will be remitted back tothe developer until they are made whole for eligible costs incurred. [Staff report on Resolution
5643]
As currently designed, I believe this project that will match the feel and the needs of the
neighborhood. I believe that the addition of a small grocery store is highly desirable amongneighbors. While I had hoped for a larger number of “affordable” units based on a metric
lower than 80% AMI, I understand that the request for TIF funding is for infrastructure, andnot a “quid pro quo” for a specified number of affordable housing units. To be honest, given
EPS’s conclusion that Wallace Works “may yield a lower rate of return than developers lookfor in a real estate development investment,” I am beginning to lose hope that a residential
development project that is not largely subsidized by outside sources will ever be able toprovide truly affordable housing in our neighborhood.
With my best,
Amy Kelley Hoitsma
706 E. Peach St., Bozeman, MT 59715 | 406-581-1513
TO: Bozeman City Commission FROM: Amy Kelley Hoitsma RE: Resolution 5643 (Wallace Works TIF funding) DATE: October 1, 2024 Honorable Mayor Cunningham, Deputy Mayor Morrison, and Bozeman City Commissioners: I am writing to express general support for Resolution 5643 (Approving a Project in the Northeast Urban Renewal District, known as Wallace Works, as an Urban Renewal Project; Making Findings with Respect Thereto and Approving the Use of Tax Increment Revenues to
Reimburse Eligible Costs Thereof and Approving a Related Development Agreement), which is on your agenda for tonight. My understanding is that this tax increment financing (TIF) proposal is essentially the same as the one approved by the Northeast Urban Renewal Board (NURB) some years ago, when it was still a citizen-run board whose members were primarily NE neighborhood residents. (One big change is the absence of the parking garage, which would also have been funded by TIF funds and therefore had a larger price tag.) I feel obliged to support the work and the conclusion drawn by the NURB at that time. While $2.05 million sounds like a huge price tag for infrastructure improvements, the staff report contends that they “engaged Economic and Planning Systems, Inc. (EPS) to provide an independent, third-party assessment of the development” and that “EPS found that the TIF request of $2,055,563 does not generate above market rate returns for the developer.” I also understand that the final number may come in below this estimate, but not exceed it. Of course, by definition TIF funding is provided by the development itself, so it is not a direct subsidy from the City: The developer will finance the project up front. When the
project is completed and on the tax rolls, taxes generated by the project itself will be remitted
back to the developer until they are made whole for eligible costs incurred. [Staff report on Resolution 5643] As currently designed, I believe this project that will match the feel and the needs of the neighborhood. I believe that the addition of a small grocery store is highly desirable among neighbors. While I had hoped for a larger number of “affordable” units based on a metric lower than 80% AMI, I understand that the request for TIF funding is for infrastructure, and not a “quid pro quo” for a specified number of affordable housing units. To be honest, given EPS’s conclusion that Wallace Works “may yield a lower rate of return than developers look for in a real estate development investment,” I am beginning to lose hope that a residential development project that is not largely subsidized by outside sources will ever be able to provide truly affordable housing in our neighborhood. With my best, Amy Kelley Hoitsma 706 E. Peach St., Bozeman, MT 59715 | 406-581-1513