HomeMy WebLinkAbout09-22-26 Public Comment - M. Campanelli - MSUIC TIF zig zaggingFrom:Mark Campanelli
To:Bozeman Public Comment
Cc:Alison Sweeney; Natsuki Nakamura; Daniel Carty
Subject:[EXTERNAL]MSUIC TIF zig zagging
Date:Tuesday, September 22, 2026 10:51:29 AM
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Greetings City Commission,
The bonding for the MSUIC TIF has seemed to take a concerning zag after the (alsoconcerning) "pay-go" zig. I have reviewed some of the documents surrounding the required
TIF district lifetime extension required for the proposed bonding to reimburse the developer. Icontinue to be skeptical of this arrangement. This includes, but is not limited to, the following
items:
I would have really appreciated City Staff to have explained what happened to the pay-
go plan and the relaxation of the LTV ratio to a "target" instead of a firm lower bound,both of which required significant Staff and Commission time for an amendment to the
development agreement. Let's never forget that, clearly, almost every developer stronglyprefers full repayment as soon as possible.
The apparent absence of land-value tax being part of the tax increment (due to non-profit MSU being the land owner) was touted by Staff in the TIF-board meeting as a
good thing. The development of the initial parcels likely causes the value of theremaining land & parcels to increase (inc. the purported network effect of a technology
park). How can something that reduces the City's debt burden be "sold" (spun?) by Staffas a good thing?!?
Staff and MSU admit that short term tenancy is expected for this project, which inmy view only means that a 25-year bond payback is an even higher risk endeavor than
perhaps was originally "sold" to the Commision and residents of Bozeman.Where do the City funds for the 1-year reserve for the bond come from? (If my reading
of the bonding requirements is correct, then it is not true that the bonding has "noimpact" on the City's credit, because this depends, perhaps indirectly, on the City's
overall financial position, which includes its required reserves.)Staff claims no fiscal effect to extending the lifetime of the TIF district! Well, the
properties (existing and new) will likely appreciate from this point, so, without furtheraction, extending the lifetime can only mean that all new tax-increment funds will be
diverted from the general fund for an extended period. That sounds like a fiscal effect tome, in an environment where the City is perennially short of general funds. (I think the
downside case here likely means the City dips into its bonding reserve, which is also nota good fiscal eventuality.)
Why isn't the City itself holding the bond for, potentially, a significantly lower interestrate (perhaps ~5% instead of 6.25%), in what appears to be middle-man profiteering
and/or a tacit admission of unacceptable debt risk?It's sad that City is unwilling/unable to weigh in on the MSUIC's tenancy, which it has
welcomed wholeheartedly despite significant troubling morality aspects.
In closing, given that this current TIF-bonding "cake" is mostly baked (and, to reiterate, it's
not a very good cake), I recommend that the Commission move to approve the currentextension and bonding ONLY under the restriction that any additional lifetime extension and
bonding for district be prohibited and not be considered by Staff. Furthermore, all extraMSUIC TIF funds should be remitted immediately to the general fund until the district expires
at the soonest possible time.
Mark CampanelliBogert Park resident
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