HomeMy WebLinkAboutAnnual Work Plan and Budget for the North Seventh Urban Renewal Board
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Keri Thorpe
Michelle Wolfe, Board Chair
Andrew Epple, Planning Director
Chris Kukulski, City Manager
SUBJECT: Annual Work Plan and Budget for the North Seventh Urban Renewal
Board (NSURB)
MEETING DATE: August 24, 2009
AGENDA ITEM TYPE: Action Item
RECOMMENDATION: Consider a motion to approve the Annual Work Plan and Budget for
the North Seventh Urban Renewal Board.
BACKGROUND: The North Seventh Urban Renewal Board proposes a Work Plan and
Budget on an annual basis. See attached NSURB Fund Expenditure Plan and supporting
documents for Fiscal Year 2010.
FISCAL EFFECTS: Fiscal effects are described in the proposed expenditure plan
ALTERNATIVES: As suggested by the City Commission.
Attachments: NSURB Fund Expenditure Plan 2010, CRLP Draft, Program Descriptions
Report compiled on: August 19, 2009
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Tax Increment Financing District
Fund Expenditure Plan 2010
For the
North Seventh Urban Renewal District
In November 2006, the City of Bozeman designated a Tax Increment Redevelopment
Area (TIF), underwhich incremental increases in taxes due to redevelopment are
accumulated in a TIF fund. The stated goals and objectives of this Redevelopment Plan
were as follows:
MISSION VISION
This Plan is the city’s response to remedy the conditions of blight found in the August
2005 report through thoughtful redevelopment of the Corridor. The following Corridor
Goals are taken from the Design and Connectivity Plan (DCP). An expanded
description of the intent of each goal is found in the DCP Chapter 2.
Corridor Goals
A basic goal is to have an active and exciting corridor that is attractive with a distinct
character. A strategy for achieving this goal is to improve the experience for the user
by creating safe attractive walkways and streets and by providing buildings and
landscaping that are of interest to users and passersby. Several key strategies should
be followed:
1. Provide a distinct identity for the corridor
2. Develop the corridor as a focus for commercial and entertainment
activities that serve residents and visitors alike
3. Strengthen the corridor as a neighborhood service center
4. Provide mixed use development
5. Clearly define gateways at key locations along the corridor
6. Improve auto, bicycle and pedestrian circulation along the
corridor
7. Provide pedestrian connections to adjacent neighborhoods
8. Establish a wayfinding system
9. Guide new development along the corridor such that it improves the aesthetic
experience
10. Coordinate public and private improvements
11. Strengthen connections between complementary uses
12. Provide flexible public space along the corridor
GUIDING PRINCIPLES
In addition to the specifically stated goals for the District the following Guiding
Principles have been adopted to provide a basis for decision making over the life of the
District. These principles should be applied to any development program or other
activity that will affect the District:
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1. Ensure the health safety and security of the District
2. Balance commerce and livability in the District within the mixed use
framework
3. Public open space is essential to a healthy and appealing urban environment
4. The costs of projects and programs shall be weighed against their benefits to
the District
5. Private property shall not be acquired for other private use through the eminent
domain process in the implementation of any aspect of this plan
6. The City shall not limit its vision for the District improvements to monies
available solely through the TIF funding
7. Projects shall consider impacts on adjacent neighborhoods
8. The city shall consider the impact on the District of all projects undertaken
outside of the District
PREVIOUS WORK AND BUDGET PLANS, STATUS OF EXPENDITURES
The City Commission approved on September 2, 2008 the first submission by NSURB,
considered Phase I of the district’s renewal:
2009 expenditure plan Operating
Budget Other Expenditure
Plan
Balance 08/20/08 93,316 93,316
Interest 1,000 1,000
Big Box Funds 232,000 232,000
Total Revenue Available 94,316 232,000 326,316
Engineering plan, requires RFP 50,000 100,000 150,000
Subsidy program2 10,829 10,829
Part time staff and other professional svcs 10,829 10,829
Right-of-way land acquisitions 10,829 10,829
Construction – Lights, Curb and Gutter, Sidewalk,
Landscaping and Irrigation 11,829 132,000 143,829
Total Expenditures 94,316 232,000 326,316
Ending Balance 0 0 0
2Commercial Rehabilitation Loan Program, copied from Missoula Renewal Agency
Of the above monies approved last September, only $73,579.00 has been slated/spent
for the professional agreement with Allied Engineering for Phase One the engineering
plan. This was done during the April 2, 2009 board meeting. Note: CTEP application for
handicap ramps in sidewalks from I-90 to Aspen Street is a portion of the engineering
plan.
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FY2010 BUDGET PLAN AND REQUEST FOR APPROVAL
During the next fiscal year, NSURB plans on continuing all of the programs approved
by the City Commission last Fall, designating the following enumerated projects also
considered parts of Phase I of the district’s renewal:
1. $16,100 for actual work required to complete bus stop project @ Van
County Market.
’s
to
The current application for a community block grant, Natalie Meyer’s
project, includes this portion for a bus stop in front of Van’s County Market.
State statute 7-15-4288 as “the acquisition, construction, and improvement
of infrastructure”. It complies with the City’s stated redevelopment activities
by helping to improve auto, bicycle and pedestrian circulation along the
corridor.
2. $22,500 more TIF monies for Commercial Rehabilitation Loan Program,
a subsidy program to encourage voluntary compliance by property
owners with life-safety regulations and assistance with façade and site
improvements. This money is permissible use under state statute 7-15-
4233, “to prepare plans for carrying out a program of voluntary or
compulsory repair and rehabilitation of buildings and improvements”. It
complies with the City’s stated redevelopment activities by ensuring the
health, safety and security of the District and helping to guide new
development. This will be added to the previously approved $10,829 for this
subsidy program.
3. $22,500 of TIF monies for demolition program, a subsidy program
encourage property owners. This money is permissible use under state
statute 7-15-4233, “to prepare plans for carrying out a program of voluntary
or compulsory repair and rehabilitation of buildings and improvements”. It
complies with the City’s stated redevelopment activities by ensuring the
health, safety and security of the District and helping to guide new
development.
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2010 North Seventh TIF
Proposed Expenditure Plan
TIF Other
APPROVED
’09 Operating
Budget/
Expenditure
Plan
2010
Expenditure
Plan
Balance 07/01/09 93,316 93,316 93,316
Interest 1,000 1,000 1,000
TIF allocation on 12/31/09 45,000 45,000
Big Box Funds 232,000 232,000 232,000
Community block grant1 16,100 16,100
Total Revenue Available 139,316 248,100 326,316 387,416
Engineering plan, professional
contract with Allied 50,000 100,000 150,000 150,000
Subsidy program2 33,329 10,829 33,329
Demolition program3 22,500 22,500
Part time staff and other
professional services 10,829 10,829 10,829
Public right-of-way
improvements 10,829 10,829 10,829
Construction – Lights, Curb
and Gutter, Sidewalk,
Landscaping and Irrigation
11,829 148,100 143,829 159,929
Total Expenditures 139,316 248,100 326,316 387,416
Ending Balance 0 0 0 0
1community block grant – actuality of dollars yet to be determined
2Commercial Rehabilitation Loan Program, copied from Missoula Renewal Agency; currently approved by
Assistant Legal Counsel Tim Cooper pending required ordinance approval
3Demolition Program – description and application process in the works
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General Description:
North 7th Commercial Rehabilitation Loan Program (CRLP): Through the CRLP, NSURB
subsidizes interest rates on commercial loans to foster voluntary rehabilitation of eligible commercial
properties for the elimination of blight in the North 7th Avenue Corridor. Assistance is available for site
improvements, including but not limited to façade, signage and landscaping, for existing age obsolescent
developments in the North 7th Urban Renewal District.
North 7th Urban Renewal Board
NORTH 7TH URBAN RENEWAL DISTRICT
North 7th Commercial Rehabilitation Loan Program
IMPORTANT: The material included below outlines the North 7th Commercial Rehabilitation Loan
Program and the responsibilities of the APPLICANT, LENDER and the NSURB. Please review this
information carefully before submitting the application forms or finalizing your rehabilitation plans.
Applications must be received at least seven working days prior to the next NSURB board meeting
and/or in conjunction with a Site Plan Application to the City Planning Department. This is to allow
adequate time for a thorough staff review of the application for presentation to the North 7th Urban
Renewal Board.
Failure to receive approvals of a completed application before construction begins may affect the Applicant's
eligibility for this program.
INTRODUCTION
The Bozeman City Commission has authorized the North 7th Urban Renewal Board (NSURB) to implement
and administer the North 7th Commercial Rehabilitation Loan Program (CRLP) in the North 7th Urban
Renewal District. Through the CRLP, the NSURB may subsidize interest rates on commercial loans for the
rehabilitation of commercial properties. These subsidies are applied directly to the interest rate obtained by the
Applicant from participating lending institutions. The Applicant has sole responsibility to obtain and repay the
rehabilitation loan while the Lender undertakes loan review, approval, administration, and collection utilizing
their existing policies and procedures.
Applications for CRLP assistance in the North 7th Urban Renewal District are subject to program eligibility
criteria and project guidelines listed below. In addition, project applications will be accepted and processed in
the order in which they are received and approved based on the availability of funds for the program.
PROGRAM OBJECTIVES
The primary objective of the CRLP is to provide a program to encourage voluntary repair and rehabilitation of
commercial property within the North 7th Urban Renewal District (hereinafter referred to as the “District”) in
accordance with the provisions of the Montana Urban Renewal Law (7-15-4209, M.C.A.). Additional objectives
are to:
• Encourage private investment in commercial property in the District through the use of public
incentives;
• Expand the property tax base in the District through private investment in income producing
properties;
• Stimulate economic and business development within the District; and
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• Retain and expand employment opportunities associated with economic development and increased
construction
activity.
The interest subsidy is given at the discretion of the NSURB based upon review of the Applicant's compliance
with program objectives, eligibility requirements, and eligible construction activities.
The North 7th Commercial Rehabilitation Loan Program offers assistance to property owners in the North 7th
Urban Renewal District in the rehabilitation of their property and tenant businesses with a lease period equal to
or in excess of the term of the subsidized loan. The program provides interest subsidies of up to fifty percent on
commercial loans used for eligible improvements to exterior portions of buildings in the District.
The following eligibility requirements have been established to accomplish CRLP objectives in the repair,
maintenance or renovation of the exterior of buildings and deteriorated sites. These requirements involve the
specifics of individual loan requests and the materials that the Applicant must submit to have a successful
application. Application forms are obtained from the NSURB, and must be completed in their entirety before
the project will be considered.
1. Maximum principal eligible for Site Improvement loans is $200,000. All projects must be reviewed
by the NSURB. Interest subsidy not to exceed the “per project” capped amount for the fiscal year.
2. Maximum loan term eligible for the interest subsidy is 10 years.
3. The interest subsidy may total up to 50 percent of the available interest rate from the Lender, but in
no case will this subsidy exceed seven percentage (7%) points.
4. All commercial property within the District is eligible for this program with the exception of
publicly owned buildings and properties owned by lending institutions. For the purposes of this
program, residential properties with four or more units will be considered commercial properties. All
applications will be reviewed in the order in which they are received by the NSURB.
5. Eligibility is extended to property owners of record or tenants with a lease period equal to or in
excess of the term of the loan. Tenants must submit written approval of the property owner and
evidence of their leasehold interest.
6. Special Improvement District and property tax assessments of the property to be rehabilitated must
be paid to date. Evidence of payment in the form of a tax receipt is required and must be submitted
with the application.
7. Applicants must submit rehabilitation plans for review to the Bozeman Department of Planning and
Community Development. The assigned Planner will make a list of TIF eligible components of the
project. Only those components that demonstrate a reduction in a blighting factor listed in the Blight
Report adopted by Resolution 3839 may qualify for the interest subsidy.
8. Applicants must qualify for a site rehabilitation loan as required by their Lender. The participating
Lender must submit a letter to NSURB that specifies loan principal, interest rate, term, and the
Lender's current local prime interest rate in order to complete the application process.
9. Applicants must fully satisfy any other outstanding requirements related to NSURB funded projects
before they are eligible to submit another application.
10. All TIF eligible expenditures must be itemized by materials and labor. Construction estimates must
be obtained from a licensed and bonded contractors and submitted with the application. Receipts or
comparable documentation will be required for all work undertaken to allow monitoring of actual
costs of eligible project improvements.
11. The Applicant's equity contribution to the project, the total expenditures for eligible improvements
and the commitment to undertake improvements or assume other development costs which are
ineligible for NSURB assistance will determine if the project qualifies for additional tax increment
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funding for public improvements, such as the replacement of sidewalks and the planting of street
trees.
12. The property must currently be in commercial use or there must exist a legally binding commitment,
such as an executed lease agreement, for an enterprise to occupy the structure after rehabilitation is
complete. Evidence of these commitments must be submitted with the application.
ELIGIBLE CONSTRUCTION ACTIVITIES
IMPORTANT: To insure compliance with program objectives and design criteria of the North 7th Urban
Renewal Board and the North 7th Design and Connectivity Plan, all construction undertaken pursuant to
the CRLP must be in accordance with a design that has been reviewed and approved by the City of
Bozeman through the Site Plan and Certificate of Appropriateness review process as outlined in
Chapters 18.30 and 18.34 of the Bozeman Municipal Code (BMC). The Applicant must also obtain all
applicable permits and comply with all municipal ordinances and building codes.
The North 7th Commercial Rehabilitation Loan Program is designed to address the need for rehabilitation of
commercial property facades and deteriorated buildings and/or non-compliant site elements. All applications
must address facade improvements or deteriorated/non-compliant site elements to be eligible for the interest
subsidy. Eligible activities include the following:
1. Improvements to deteriorated buildings through the modification of exterior elements, including but not
limited to, walls, roofs, windows, doors, appurtenances and architectural features, signs, awnings and
painting
2. Exterior improvements for disabled citizens including but not limited to ramps, doors, kickplates,
automatic door openers, walks, guardrails, non-slip materials and level platforms at doors.
3. Replacement of non-compliant signage with compliant signage
4. Landscaping improvements incorporated into a public space such as a parking lot
5. Parking lot improvements which include improvements to pedestrian connectivity and/or ADA
accessibility parking and building access
6. Parking lot surfacing and curbing improvements when included with a reduction in drive accesses and/or
a new shared parking arrangement between adjacent businesses
7. Storm water facility improvements
8. Architectural assistance and design fees are eligible but may not exceed 5 percent of the loan principal for
eligible items or $5,000, whichever is less. In addition, permit fees are an eligible cost for interest
subsidy up to 1 percent of the total loan principal. All fee and permit charges must be itemized.
7. The following activities are ineligible for funding through the NSCRP:
• New construction or additions;
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• Refinancing existing debt;
• Utility connections other than exterior electrical connections;
• Interior rehabilitation;
• Property acquisition;
• Structural elements not related to exterior improvements;
• Work initiated prior to necessary program approvals.
The CRLP is not intended to preclude a participating Lender from making additional loans or loan amounts to
an Applicant for financing the ineligible activities enumerated above, but such loans shall not be entitled to the
interest subsidy.
IMPORTANT: The responsibilities outlined below reflect the general process to be followed to insure
application approval and compliance with program objectives. Maintaining close coordination between
the participants will expedite the review and approval of the application.
APPLICANT RESPONSIBILITIES
The successful Applicant for NSURB assistance must undertake the following responsibilities pursuant to the
CRLP.
1. Applicant completes CRLP and City of Bozeman Site Plan application materials and complies with
all application requirements. This material is provided to the NSURB for review and approval.
NSURB staff will provide informal assistance to the Applicant in completing the necessary forms
and developing a project design that is in compliance with program objectives. Architectural,
Landscaping and Engineering drawings must be provided by the applicant. Final Architectural
Design Review authority will be Design Review Staff within the Department of Planning and
Community Development and/or the Design Review Board (if applicable).
2. The CRLP process does not absolve the applicant of having to apply for deviations and/or variances
as required by the established plan review process.
3. Applicant contacts a participating Lender to obtain a rehabilitation loan. This commitment is
submitted in letter format with the CRLP application.
4. Applicant selects the architect and contractors who will participate on the project and obtains all
permits and approvals associated with the rehabilitation.
5. Applicant is responsible to review the rehabilitation work and upon completion will submit an
application for Final Occupancy through the Bozeman Building Division. NSURB staff will
determine if the rehabilitation work has been completed satisfactorily and recommend or deny
approval for Certificate of Completion to the NSURB.
6. Applicant enters into a Participation Agreement with NSURB.
7. Applicant undertakes all loan repayments and is responsible to comply with all requirements
established by the Lender.
LENDER RESPONSIBILITIES
1. Lender reviews the credit worthiness of Applicant, specifies the interest rate that is available, and
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determines if Applicant meets loan requirements. Lender makes the final determination of loan
eligibility and establishes with the Applicant the method of loan disbursement in accordance with the
CRLP program procedures.
2. Lender conducts all loan administration including closing, disbursements, close out, and all other
actions required to service the loans at no cost to the NSURB.
3. Lender agrees to disburse the loan proceeds only upon certification by the Applicant and NSURB
that the expenses have been incurred and the rehabilitation complies with the approved application.
NSURB RESPONSIBILITIES
1. NSURB reviews the application and determines which rehabilitation activities are eligible. At this
time, the design will be reviewed for compatibility and appropriateness based upon the project's
architectural design and site plan in the context of adjacent structures, the immediate neighborhood
and District.
2. NSURB calculates the discounted present value of the interest subsidy pursuant to CRLP procedures
to determine the NSURB's contribution.
3. NSURB notifies Applicant and Lender of project approval and monitors the project to insure
compliance with design review, eligible activities, and program objectives.
4. NSURB closes out the application upon satisfactory completion of the project and submits NSURB
CERTIFICATION OF FINAL INSPECTION AND REQUEST FOR RELEASE OF FUNDS to the
Lender. This enables the Lender to disburse final loan funds to the Applicant.
DELEGATION OF AUTHORITY
The NSURB is, hereby, delegated authority to administer the CRLP as set forth in this application packet and
Ordinance #_____ and enter into all contracts on behalf of the NSURB necessary to accomplish the purposes of
the program. If, however, an Applicant's project is deemed ineligible for the interest subsidy by NSURB staff,
the Applicant may appeal that decision to the NSURB whose determination with respect to eligibility shall be
final.
Adopted by the NSURB pursuant to Ordinance #_____ of the Bozeman City Commission enacted the
m/day/year.
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TO: Honorable Mayor and City Commission
FROM: Keri Thorpe, NSURB staff liaison
SUBJECT: North Seventh Urban Renewal Board Fiscal Year 2010 Program
Descriptions
MEETING DATE: August 24, 2009
PROPOSAL
The North Seventh Urban Renewal Board (NSURB) Fund Expenditure Plan for FY 2010
recommends three Programs for funding: 1) Commercial Rehabilitation Development Program
(CRLP), 2) Demolition Program, and 3) Public Right-of-Way Improvements Fund. Funding for
the Commercial Rehabilitation Loan Program (CRLP) was approved under the FY 2009 NSURB
Fund Expenditure Plan. Development of the CRLP has progressed but is not finalized. A draft of
the CRLP is included with this report for your review. The other two programs are in initial
stages of development. If the Commission approves the funding for these programs, the NSURB
hopes to have the programs finalized this fiscal year. Final approval of each program by the City
Commission is still needed.
BACKGROUND
North Seventh Avenue has several properties that fall short of the current City standards. Sub-
standard conditions of several properties along N. 7th Avenue contribute to the blighting
influence addressed in the 2006 Blight Report compiled by our former Assistant City Manager
Ron Brey. Some of the blight contributing factors on private property listed in the report include
Instances of age obsolescence of buildings within the study area.
Deterioration of site which includes unpaved parking lots, lack of coordination of parking
lot approaches, non-compliant signage, landscaping missing or out of compliance,
backing into public right-of-way, encroachment into public right-of-way, vacant
buildings
Blight contributing factors in the public right-of-way include
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defective or inadequate street layout: intermittent, insufficient right-of-way width
requiring easements for sidewalk installation
age obsolescence of public improvements: storm drain, streets, sidewalks, missing curb
and gutter, missing sidewalks, lack of ADA sidewalk ramps
The Blight Report states, “Remodeling or redevelopment of older buildings requires compliance
with modern building, access and fire code provisions. Such compliance may result in expensive
additional improvements which can serve as a disincentive for reinvestment in the community’s
older commercial corridor.”
THE THREE PROGRAMS
The NSURB wishes to implement incentive programs to encourage redevelopment of public and
private property along N. 7th Avenue. To that end, the following three incentive programs are
proposed.
1. The Commercial Rehabilitation Loan Program (CRLP) is a subsidy program which
helps to offset the cost of improvements on private property directly related to the
reduction of blight in the District by paying down the interest on loans obtained for site
redevelopment from participating banks. A similar program has been in place in Missoula
for several years, and the Draft CRLP included in your packet is modeled off that
program. Only those project items which mitigate blight and meet the goals of the
adopted Plan for the District are eligible. A listing of eligible project items is provided in
the Draft CRLP. An itemized list and cost of these improvements must be provided by
the applicants. The CRLP application process will run concurrently with site plan review
process coordinated by the Planning Department staff.
Staff has begun developing the administrative procedures for the program. As in
Missoula, the NSURB, would enter into a Memorandum of Understanding with banks
wanting to participate as a program lender. Applicants must also enter into agreements
with the lender and NSURB. Drafts of these agreements are being reviewed by the City
Attorney’s office. If the program is approved, staff and NSURB members will begin
meeting with banks to promote participation. At least one bank, has already expressed
interest in participating.
Creation of this program is allowable under 7-15-4209 and 7-15-4233, MCA.
2. Coupled with the CRLP, the NSURB recommends the establishment of a fund to provide
assistance for the demolition of age obsolescent/blight contributing buildings. This
Demolition Program provides financial assistance for the removal of such buildings
from private property. The NSURB proposes a “per project” cap of $10,000 for FY 2010.
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Demolition and removal of structures is an allowable cost that may be paid by tax
increment financing as stated under 7-15-4288, MCA.
3. The Public Right-of-Way Improvements Fund is established to assist property owners
redeveloping their sites with the cost of improvements to the public right-of-way required
under the adopted plan. In FY 2009, the Commission approved funding for right-of-way
acquisition, but the NSURB has since decided to broaden the application of these funds.
The change is proposed to offset site-specific improvements in the public right-of-way or
public access easements that may be required with site plan review (i.e. sidewalk,
curbing, storm drain, landscaping and street lights). Upgrading the sidewalks, lights and
landscaping along the entire corridor as one project comes with a monumental price tag.
The NSURB realizes opportunities to implement the improvements incrementally as
individual sites redevelop may present themselves. To that end, the NSURB proposes
starting a fund to provide financial assistance for right-of-way improvements in order to
incentivize the redevelopment of N. 7th Avenue. Without the availability of these funds,
the potential cost of public right-of-way improvements will likely dissuade the
redevelopment of properties along the corridor.
At this time, site-specific public right-of-way improvements for the N. 7th Avenue
Corridor have not been established. These improvements will be established as the
NSURB’s engineering consultants most forward with project identification and a lighting
plan. The NSURB proposes a “per project” cap of $10,000 for FY 2010.
These improvements are listed as allowable costs that may be paid by tax increment
financing as stated under 7-15-4288, MCA and creation of the program is allowed under
7-15-4233, MCA.
Program Guidance
The NSURB envisions that a property owner may request funds from all three programs under
one application. The NSURB proposes establishing benchmarks for fund approval. The property
owner will need to demonstrate a substantial investment in the property to qualify for Public
right-of-way Improvement funds, less if the property owner is willing to provide a public access
easement for sidewalk improvements. The NSURB wishes to avoid the “something for nothing”
scenario and create programs that will reward those developments that substantially reduce blight
in the District and bring a site into compliance with City standards.
With the development of all three programs, staff and the NSURB will work closely with the
Planning and Finance Department Directors to create workable incentive programs.
Administrative program details will be worked out over the next fiscal year. Recently, Finance
Director Anna Rosenberry suggested creating a grant program rather than the CRLP to
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incentivize redevelopment of the District. This option will be researched and presented to the
NSURB for consideration.
THE BENEFIT
As redevelopment of N. 7th Avenue occurs, an increase in the taxable value of the properties
should also occur thus increasing the annual increment for the District. This then provides
additional funds to implement the District Plan.
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