HomeMy WebLinkAbout08 11 2008_Subsidiary information for Agenda Action Items 1-5
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Anna Rosenberry, Finance Director
Chris Kukulski, City Manager
SUBJECT:
1. North Seventh Urban Renewal Request (NSURB)
**Multiple Agenda Items – Action Items**
2. Area Economic Development Plan Request (Prospera/City)
3. Bozeman Revolving Loan Fund Request (Prospera)
4. Big Sky Energy Revolving Loan Fund Request (Northern Rocky Mountain RC&D)
5. Downtown Neighborhood Plan Request (Downtown Partnership)
MEETING DATE: August 11, 2008
RECOMMENDATION: Decide which of the above requests should be funded from the
City’s Development Impacts (Big Box) Fund.
BACKGROUND: A number of requests have come to the City for use of the economic
development portion of Big Box money. At this point, $375,000
Request:
remains unallocated, and could
be committed by the Commission tonight. Summary of Requests:
Amount:
1. North Seventh Urban Renewal Request $375,000
2. Area Economic Development Plan $35,000
3. Bozeman Revolving Loan Fund $200,000
4. Big Sky Energy Revolving Loan Fund $100,000
5. Downtown Neighborhood Plan $50,000
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Request #1 is now a request for $375,000. See the attached memo from staff and the North
Seventh Urban Renewal Board.
Request #5 is now for a “minimum of $50,000”, decreased from their original request of
$100,000.
A fixed fee for future large-scale retailers has not been adopted, so it is unlikely that the City will
collect this type of money in the future.
FISCAL EFFECTS: Once the Final Budget is adopted, a project that receives a
commitment tonight may begin to draw funds from the City. If the Commission stipulates any
other funding requirements (attaining matching funds, etc.), we will delay payments until those
requirements have been met.
ALTERNATIVES: As suggested by the City Commission.
Respectfully submitted,
Anna Rosenberry, Finance Director Chris Kukulski, City Manager Report compiled on: August 6, 2008
Attached Documents: Development Impacts Fund Report, dated June 30, 2008
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The Development Impacts (Big Box)
Fund accounts for the dollars the City
receives to mitigate impacts related to
large-scale retail developments.
In 2002 Home Depot paid $500,000
for impacts related to their project.
$100,000 was submitted directly to
Farmhouse Partners for affordable
housing. $400,000 was deposited with
the City. The fund has also received
$450,000 from Wal-Mart, and is expect-
ing to receive $500,000 from Lowes,
over 2 1/2 years. Once the Lowes’
payments are received, Development
Impact dollars will total $1,450,000
(with $100,000 going directly to Farm-
house Partners). $85,775 has been
earned in interest since 2002.
To date, $893,000 has been commit-
ted to various projects, leaving an un-
committed balance of $642,774 once all
payments are received.
Affordable Housing & Economic De-
velopment: There was no specific con-
dition language for distribution of the
Wal-Mart dollars. Home Depot’s con-
dition allocated 20% for affordable
housing and 80% for economic devel-
opment. In August 2003, the Commis-
sion voted to divide the Wal-Mart and
Home Depot money 50/50 between
affordable housing & economic devel-
opment projects. In August 2005, the
condition approved for Lowes allo-
cated 20% for affordable housing and
80% for economic development.
After discussion by the Commission, it
was determined that the original intent
was to divide the Lowes dollars 50/50.
Affordable Housing Revenues:
Home Depot FY03 $250,000
Wal-Mart FY04 $225,000
Lowes FY07 $ 50,000
Interest Earnings to date $ 42,887
Lowes FY08 & FY09 $200,000
Total Revenues: $767,887
Affordable Housing Commitments:
Farmhouse Partners - submitted directly: FY03 $100,000
The Road Home Project: FY04 $100,000
The Road Home Project: FY05 $100,000
The Road Home Project FY08 $200,000
Total Commitments: $500,000
Uncommitted Dollars: $267,887
Dollars not Available until FY09 $100,000
Development Impacts Fund
(Big Box Fund)
ISSUED: JUNE 30, 2008 CITY FINANCE DEPARTMENT, ANNA ROSENBERRY, DIRECTOR
Revenue & Commitments
Narrative of the Big Box Fund
Economic Development Revenues:
Home Depot FY03 $250,000
Wal-Mart FY04 $225,000
Lowes FY07 $ 50,000
Interest Earnings to date $ 42,887
Lowes FY08 & FY09 $200,000
Total Revenues: $767,887
Economic Development Commitments:
GVIBA FY03 $ 25,000
N 7th Design & Connectivity Plan: FY05 $ 68,000
Gallatin Ice Foundation Arena: FY07 $300,000
Total Commitments: $393,000
Uncommitted Dollars: $374,887
Dollars not Available until FY09 $100,000
Affordable Housing Economic Development
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PAGE 2 DEVELOPMENT IMPACTS FUND
Affordable Housing—Projects
Farmhouse Partners: In 2001, Home Depot contributed $100,000 directly to an exist-
ing Farmhouse Partner’s Affordable Housing project. The money allowed Farmhouse to re-
pay an outstanding $50,000 loan from the Community Affordable House Advisory Board,
saving the project interest costs. The other $50,000 was used to subsidize the rents for four to
eight units, allowing them to be rented to tenants earning as-low-as 40% of Area Median In-
come, a market that the program was normally unable to reach without assistance.
The Road Home: In November 2003, the City gave $100,000 to affordable housing down-
payment assistance via HRDC’s “The Road Home” program. The City dollars were part of a
local match for a $500,000 CDBG grant that provided services to persons/families earning
60%-80% of Area Median Income. In January 2005, HRDC was granted an additional
$100,000, and in September 2007, another $200,000. “The Road Home” provides education,
counseling and assistance with loan packages, as well as down-payment assistance dollars.
Economic Development—Projects
GVIBA: In FY2003, the City awarded $25,000 of Economic Development dollars to the
Gallatin Valley Independent Business Alliance (GVIBA). Its mission is “to promote locally
owned independent businesses in order to preserve the Gallatin Valley’s unique character.”
GVIBA is know for its “Buy Local, You Bet” campaign. City dollars were allocated to their
website www.gviba.org, brochures, a membership directory, and print, television & radio ads.
N 7th Design & Connectivity Plan: In June 2005, the Commission funded the Design
and Connectivity Plan for North Seventh Avenue. The actual cost of the plan was $68,000.
At the time the Plan was funded, it was intended that the document provide the design frame-
work for further improvements to the area in conjunction with an anticipated TIF district for
N. 7th Avenue and for the development of CTEP projects along the corridor. The plan was
completed in 2006 and has been incorporated into the new North 7th TIF district.
Gallatin Ice Foundation Arena: In October 2006, the Commission approved the
Foundation’s request for a total of $300,000: $125,000 to improve the existing Haynes Ice Pa-
vilion at the Fairgrounds, and $175,000 for the future construction of an additional Ice Arena
adjacent to Haynes. The money is disbursed once it is matched dollar-for-dollar by local
pledges raised by the Foundation, with the $125,000 for the existing pavilion paid in 2007.
The project anticipates providing increased commercial opportunities city-wide, and be a mag-
net for increased development and investment in the general vicinity of the Fairgrounds.
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DRAFT EXCERPT OF MINUTES
FROM THE JULY 14, 2008 BOZEMAN CITY COMMISSION MEETING
SECTIONS RELATING TO FUNDING REQUESTS FOR BIG BOX ECONOMIC DEVELOPMENT FUND MONEY
3:17:02 B. Call to Order - Regular Meeting - 7 p.m. - Community Room, Gallatin
County Courthouse, 311 West Main Street 3:18:57 F. Public Comment
Mayor Jacobson opened general public comment.
3:19:34 Mr. Hope spoke about North 7th and stated that there is a big chunk left out of the committed
Big Box economic development funds. He submitted to the record a letter written to the
Commission and signed by local merchants in April 2005 requesting to have a connectivity plan
done for the North 7th corridor and requesting $250,000 from Big Box funds. They did the
Winter Plan (a connectivity plan) which was allocated $50,000, but it ended up costing $68,000. Reviewing the record, he understands that $50,000 was allocated for the plan, and they'd
reserved $250,000 for us to come back and talk to the Commission about how to spend it. It took
us three years to complete the plan, the blight study, set up the TIF, and the board is approved
and has had four meetings. We are ready to move forward. In our mind we went $18,000 over
budget on the Winter Plan, so there would still be $232,000 reserved and committed for the North 7th corridor. The motion isn't clear, but the vote was unanimous; he asked the Commission
to look back at their notes.
Mike Hope - Public Comment
3:27:26 Public Comment closed.
Mayor Jacobson closed public comment.
4:16:34 Mayor Jacobson
Mayor Jacobson asked for a staff member who could illuminate on Mr. Hope's earlier
observations.
4:16:59 Ron Brey, Deputy City Manager
Mr. Brey stated that in June 2005 business and property owners along North 7th came before the
Commission seeking Big Box funds for development of a design and connectivity plan for North
7th to the tune of $50,000, and $250,000 toward the implementation of the plan. Finally, it was
agreed that the North 7th folks would create a TIF and that the Commission was interested in funding $50,000 for the plan. He read a portion of the motion from the June 6, 2005 minutes that
was passed by unanimous vote: "and hold in abeyance the spending of any additional large scale
retail impact monies earmarked for economic development until the Commission has discussed
how to prioritize the expenditure of those monies." In later minutes, those monies would be
alluded to or discussed as being earmarked, or even stronger terms. The North 7th folks have done several steps and are ready to focus on what to use those funds for, and they were first to
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put in request for the funds. The $50,000 for the design and connectivity plan grew to $68,000
with Commission approval; the plan was well received.
4:19:39 Mr. Brey
Mr. Brey stated that at different times different Commissioners have taken a run at it, but Commissioners have never really done it: discussed how to prioritize the expenditure of those
funds.
4:20:13 Cr. Krauss
Cr. Krauss thought they talked about not being able to spend the $250,000 because it was set aside, in discussions after giving money to the fairgrounds/hockey rink.
4:20:42 Mr. Brey
Mr. Brey stated that there have been several points where it was referenced as set aside money,
but the motion he read is the only time that the Commission took a vote.
4:21:23 Anna Rosenberry, Finance Director
Ms. Rosenberry stated that at this point the fund has $374,887 on the economic development side
that has not been committed by a Commission vote. If they subtracted out the $232,000
discussed by Mr. Hope and Mr. Brey, they would be left with a balance of $142,887.
4:22:09 Cr. Bryson
Cr. Bryson requested that the official request for $232,000 needs to be scheduled for the next
meeting so they can make a decision.
4:25:59 Cr. Becker
Cr. Becker suggested that Mayor Jacobson could ask that we only consider a certain amount this
evening and withdraw that amount of funding from the decisions that are made this evening.
4:26:33 Mayor Jacobson Mayor Jacobson stated that's what she was thinking too, but it seems that more than one
Commission has stood solidly behind the North 7th Corridor Urban Renewal District, and we
can't renege on that now. It's too important to the economic development of our City. She doesn't
see why it can't be subtracted from the $374,000.
4:31:57 Cr. Rupp
Cr. Rupp stated that they did take the vote, but it's a question of what it means. The abeyance is
to suspend. We should gather all these requests together, and he is prepared to make a motion to
postpone the decisions to a date certain after the public hearings and come back together and
ascertain what we have to do with the $250,000 to make sure it can compete and then put them in some sort of priority.
4:33:04 Cr. Rupp
Cr. Rupp stated that he would move that we postpone to a date certain each one of these items
and then we bring them all back on that date and make a decision.
4:33:26 Mayor Jacobson
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Mayor Jacobson stated that she would like to proceed with Cr. Rupp's plan.
4:33:32 3. Proposal for the Development of the City of Bozeman's Economic
Development Plan (Bob Hietala of Prospera Business Network and Epple)
4:33:47 Bob Hietala, CEO of Prospera Business Network
Mr. Hietala stated that Prospera wants to facilitate the development of the Economic
Development Plan for the City. He gave a brief overview of the proposal and the $35,000
funding request for Big Box economic development funds.
4:42:47 Mr. Hietala
Mr. Hietala emphasized that Prospera is committed to doing this. If you want to move forward
and want an Economic Development Plan process, we will drive it for six months and deliver
that for you with input from a wide variety of sources.
4:43:13 Cr. Becker
Cr. Becker wanted Mr. Hietala to include statutory constraints and legislative options.
4:44:49 Cr. Becker Cr. Becker wanted to include a GIS component in the economic development plan, pulling
together the movement from bedroom communities, the role of public transportation, TIF
districts, historic neighborhoods.
4:45:54 Mr. Hietala Mr. Hietala stated that we'll add a GIS component.
4:46:14 Public comment opened.
Mayor Jacobson opened public comment.
4:46:27
Ms. Tonkovich, of 380 Mountain Lion Trail, works at First Security Bank and is a volunteer
serving as the president on the Prospera Board of Directors. The board has reviewed this plan
and is in full support of Prospera going forward. We are fully confident that the Prospera staff
and team of directors can put in the time to facilitate and deliver this plan for the City of Bozeman. The board has diverse members from all sectors of the economy.
Kathleen Tonkovich - Public Comment
4:47:28 Public Comment closed.
Mayor Jacobson closed public comment.
4:47:45 Cr. Rupp Cr. Rupp stated that he likes the structure and benchmarks of this proposal, but the role and
involvement of the local Chamber of Commerce is lacking or absent. He stands by the pledge he
made that the Chamber should write the Economic Development Plan. He needs to sort out more
information of how this all ties together. 4:48:53 Cr. Krauss
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Cr. Krauss stated that this is the way to get this business plan done.
4:50:55 Mayor Jacobson
Mayor Jacobson stated that this is long overdue, we need it, and Prospera has put together a very good plan.
4:51:10 Cr. Bryson
Cr. Bryson stated that if you have to come back here because we don't make a decision tonight, it
would helpful if you have David Smith or a Chamber of Commerce member supporting you in the drafting of this plan; bring them to the table. Show that you are working together in some
cooperative fashion.
4:54:14 Cr. Rupp
Cr. Rupp is looking for a date so he can make a motion to postpone to that date.
4:55:40 Cynthia Jordan Delaney, Deputy City Clerk
Ms. Delaney stated that the August 11 meeting has no Action items.
4:57:25 Mr. Kukulski Mr. Kukulski suggested that they take August 11.
4:57:30 Motion and Vote
that we postpone the action on this 'til August 11.
It was moved by Cr. Rupp, seconded by Cr. Bryson, that we postpone the action on this 'til August 11.
Those voting Aye being Crs. Rupp, Bryson, Krauss, and Mayor Jacobson.
Those voting No being Cr. Becker.
The motion carried 4-1.
4:57:54 4. Bozeman Revolving Loan Fund Update and Request for Funding (Peter
Bertelsen and Bob Hietala of Prospera Business Network)
4:58:07 Peter Bertelsen, Prospera Business Network Mr. Bertelsen stated that Prospera has managed the Bozeman Revolving Loan Fund under an
agreement with the City since 2006. He gave an update on the Bozeman RLF, the 11 existing
loans currently out, and the positive economic impacts in Bozeman. Given the fund's current
available balance of $88,000, he is requesting $200,000 to recapitalize the fund.
5:09:57 Public Comment
Mayor Jacobson opened and closed public comment. No person commented.
5:10:10 Motion and Vote
that we continue this until August 11.
It was moved by Cr. Bryson, seconded by Cr. Krauss, that we continue this until August 11.
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Those voting Aye being Crs. Bryson, Krauss, Becker, Rupp, and Mayor Jacobson. Those voting No being none.
The motion carried 5-0.
5:10:29 5. Big Sky Energy Revolving Loan Fund Proposal to request Big Box Funds
Seed Money to assist Businesses inside the City of Bozeman (Josh Kellar, Northern Rocky Mountain RC&D)
5:10:38 Josh Kellar, Coordinator of Northern Rocky Mountain RC&D Mr. Kellar presented a proposal to utilize $100,000 of the Big Box funding to capitalize a
revolving loan fund for the purposes of energy conservation and efficiency, and green energy
production. He gave background on the Northern Rocky Mountain Resource Conservation and
Development and its sister organization, the Northern Rocky Mountain Economic Development
District.
5:20:23 Public Comment opened.
Mayor Jacobson opened public comment.
5:20:34 Ms. Fagan, of 2216 Arrow Leaf Hills, stated that she is a Bozeman resident who grew up here,
and she is part of the energy committee that's helped Josh put this proposal together. She is very,
very supportive of this. With higher fuel prices and energy costs, the economy, and the threat of
global warming, she wants to see this community provide leadership on renewable energy
projects, and local businesses need a kick start to take on this leadership.
Jody Fagan - Public Comment
5:22:14
Ms. Evans, of 3075 Spring Meadows Drive, stated that she was a former employee of the
Gallatin Development Corporation (now Prospera) and the RC&D. She is a volunteer on this
energy loan project, and supports this project. She discussed the immediate impact that these loans would have, with companies saving money on their utility bills starting on day one after
installation. After the loans are paid off, the company can use those funds to invest in the
business.
Cynthia Evans - Public Comment
5:23:12 Public Comment closed. Mayor Jacobson closed public comment.
5:23:24 Cr. Rupp
Cr. Rupp advised coordinating this with the Climate Protection Task Force because this type of
project is one of their main recommendations.
5:24:30 Motion and Vote
to defer this to August 11.
It was moved by Cr. Krauss, seconded by Cr. Becker, to defer this to August 11.
Those voting Aye being Crs. Krauss, Becker, Rupp, Bryson, and Mayor Jacobson. Those voting No being none.
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The motion carried 5-0.
5:25:11 6. Downtown Bozeman Partnership Big Box Funding Request for a Downtown
Neighborhood Plan (Chris Naumann, Downtown Bozeman Partnership) 5:25:21 Chris Naumann, Downtown Bozeman Partnership
Mr. Naumann requested an allocation of $100,000 from the Development Impact Fund (Big
Box) to help finance the Downtown Neighborhood Plan as part of the Bozeman 2020 Plan
Update. He presented the need to formulate an updated vision for downtown Bozeman. The BID and TIF boards have earmarked $20,000-$40,000 to contribute to this plan.
5:32:44 Cr. Bryson
Cr. Bryson would like see to see downtown create its own vision and not spend $100,000 to hire
an outside consultant. We should be able to do that. Is there any alternative you can do to insert yourself more prominently in the 2020 Plan and get your message out about the vitality and importance of downtown?
5:33:47 Mr. Naumann
Mr. Naumann stated that it is important for the downtown component to be incorporated officially in the 2020 Plan as an implementation document and not just a vision document, and we are looking for partners to fund that.
5:36:14 Mayor Jacobson
Mayor Jacobson sees the benefit of urban design experts working on downtowns, so she agrees that just a downtown vision document won't do much for us.
5:40:34 Cr. Krauss
Cr. Krauss thinks the neighborhood plan should expand the view of downtown to incorporate the
one way streets. He wants Mr. Naumann to cut the cost of this plan. 5:46:04 Public Comment opened.
Mayor Jacobson opened public comment.
5:46:20 Ms. Wolfe, of 205 North 8th Avenue, is on the North Seventh Urban Renewal Board. Whatever you need from us to make it official, we'd be happy to give you and make sure we're all on the
same page. We thought this funding was a settled issue. We are game on and moving: the TIF
District has been formed, we've got an excellent connectivity plan, we have meetings and voting
members, and we want to start with sidewalks, lighting, safety, and intersections.
Michelle Wolfe - Public Comment
5:48:34 Public Comment closed.
Mayor Jacobson closed public comment.
5:48:43 Motion to open and continue to August 11.
It was moved by Cr. Becker, seconded by Cr. Rupp, to open and continue to August 11.
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5:50:13 Vote
to open and continue to August 11.
[It was moved by Cr. Becker, seconded by Cr. Rupp, to open and continue to August 11.]
Those voting Aye being Crs. Becker, Rupp, Bryson, Krauss, and Mayor Jacobson. Those voting No being none.
The motion carried 5-0.
5:50:40 Cr. Becker Cr. Becker has a clear idea how he wants to see the money broken out: $35,000 for Prospera to get the Economic Development Plan off the ground including the line item issues, cooperation
with the Chamber, and GIS issues; $50,000 to get the Energy RLF off the ground; $50,000 for
the Prospera RLF request and specific direction if we want to; $50,000 for the Downtown Plan
that they could match with their own $40,000 or more; leaving $140,000 for North Seventh, $40,000 available in 2008 and $100,000 available in 2009.
5:52:59 Cr. Rupp
Cr. Rupp starts with the prior commitment of $232,000 to North Seventh; $100,000 for the
Downtown Plan; $50-60,000 to get the energy fund going; and he needs to be convinced of the Chamber's involvement and strong local support with Prospera's Economic Development Plan.
5:53:51 Cr. Bryson
Cr. Bryson takes $232,000 right off the top of the $374,887 total, which leaves us with $142,887.
He supports an exact dollar-for-dollar cash match with whatever the Downtown Bozeman Partnership can get from the BID and TIF Boards. He isn't sold on any of the rest unless he hears more information. If Prospera comes with Chamber members, then they've got him for $35,000,
but until he sees those green coats, he will wait. He is open to suggestions to parsing out the rest,
but not to all of them. We have to dump the bulk into one.
5:54:45 Cr. Krauss Cr. Krauss believes he made a commitment years ago to the $250,000, but he might break it
down differently. He is open to taking the $68,000 out of the $250,000, which leaves $182,000
for North Seventh. He agrees not to dilute the resources from here. Certainly, spend $35,000 for
the Economic Development chapter; it's a priority. He likes matching dollar-for-dollar up to $50,000 for the Downtown Plan. The Big Sky Energy Revolving Loan Fund has the most tenuous connection to the Big Box money. If you want to carve $100,000 out of the General
Fund for this, he is open to it.
6:01:25 Mayor Jacobson Mayor Jacobson stated that we need a good Economic Development Plan, and that's $35,000. For the Downtown Plan, she wants Mr. Naumann to check out consulting firms and see what that
might take; it could come close to $100,000. If Prospera is making $33,000 a month from loan
payments, within six months they'll have a few hundred thousand dollars; that's a lower priority.
In terms of energy, there's a new green collar economy that's developing with jobs, so that's pretty important. She wants to think and reflect before giving dollar figures. She agrees with at least $182,000 for the revitalization of North Seventh.
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6:03:29 Cr. Krauss
Cr. Krauss stated that he could be convinced that it's $232,000 for North Seventh and that's what
we need to follow through with. That $50,000 could be well spent there.
6:04:51 Mayor Jacobson
Mayor Jacobson stated that her own math said $232,000 for North Seventh.
Prepared by Cynthia Jordan Delaney, Deputy City Clerk
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