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HomeMy WebLinkAboutAgreement with NorthWestern Energy and Downtown Bozeman Partnership.pdfPage 1 of 2 Commission Memorandum REPORT TO: Honorable Mayor and Commission Members FROM: Chris Kukulski, City Manager Greg Sullivan, City Attorney SUBJECT: Authorize City Manager to Sign Agreement with NorthWestern Energy and Downtown Bozeman Partnership to Transfer NorthWestern’s $50,000 Grant to the Downtown Business Partnership for Reinvestment in Downtown Area MEETING DATE: March 1, 2010. AGENDA TYPE: Action. RECOMMENDATION: Authorize the City Manager to enter into an agreement with NorthWestern Energy (NWE) and the Downtown Bozeman Partnership (the “Partnership”) for the transfer of $50,000 originally allocated by NWE for the Bozeman Downtown Recovery Fund to the Partnership for reinvestment in downtown Bozeman. BACKGROUND: The City of Bozeman entered into an agreement with NorthWestern Energy (NWE) in May 2009 wherein NWE agreed under certain terms and conditions to provide $50,000 to the Bozeman Downtown Recovery Fund to assist in the recovery of businesses affected by the explosion and fire that occurred in downtown Bozeman on March 5, 2009. This fund was established by the Commission to assist property owners in expediting cleanup and redevelopment of the properties destroyed in the March 5th explosion. Despite having established the fund, the owners of the properties destroyed by the explosion did not seek any funds from the original Recovery Fund. The result is that NWE’s original $50,000 contribution is still available for other uses related to economic development in the downtown. Last fall staff brought a proposal before the Commission for using this money for impact fee payments for the properties affected by the explosion. At that time the Commission directed the staff to continue to work with NWE to have the $50,000 used for reinvestment in economic development projects rather than directly offset the impact fee payments. 127 Page 2 of 2 The staff has worked with NWE and the Downtown Bozeman Partnership to have the impact fee payments addressed with tax increment financing money. You item earlier on the agenda for March 1, 2010 authorized the creation of a program for addressing impact fee mitigation payments using money from the Downtown Tax Increment Financing District rather than NWE’s funds. The Partnership also agrees to work with NWE to use the $50,000 for projects identified in the 2009 Downtown Improvement Plan. The agreement before you tonight is acceptable to NWE, the Partnership, and your staff. As such, this agenda item will authorize the City Manager to enter into this new agreement wherein the $50,000 will be transferred from the City to the Partnership for the Partnership to use the $50,000 for reinvestment in the downtown area. The proposed Participation Agreement is attached as Attachment 1. In addition to authorizing the City to transfer the $50,000 to the Partnership the Participation Agreement requires the Partnership to create an oversight committee that includes a member of the Partnership, NWE, and First Security Bank. FISCAL EFFECTS: None at this time. The City may have limited administrative expenses related to transferring the $50,000 to the Partnership. ALTERNATIVES: As suggested by the City Commission. ATTACHMENTS: Bozeman Downtown Economic Development Participation Agreement Report compiled on: February 24, 2010 128 Page 1 of 2 BOZEMAN DOWNTOWN ECONOMIC DEVELOPMENT PARTICIPATION AGREEMENT The City of Bozeman, Montana (the "City") entered into an agreement with Northwestern Energy (“NWE”) in May, 2009, wherein NWE contributed $50,000 to the Bozeman Downtown Recovery Fund (the “Original Fund”) to assist in the recovery of businesses affected by the explosion and fire that occurred in downtown on March 5, 2009. Said contribution currently remains unspent and unencumbered, however, and the City and NWE now desire to enter into a new agreement regarding the use of the original $50,000 that will allow the City to transfer the $50,000 to the Downtown Bozeman Partnership for reinvestment within the downtown area. The Downtown Bozeman Partnership (the “Partnership”) is a member managed limited liability company comprised of three organizations involved in furthering the economic vitality of the downtown Bozeman area: the Downtown Bozeman Association (DBA), the Downtown Business Improvement District (BID), and the Downtown Tax Increment Fund (TIF). The Downtown Bozeman Partnership provides combined operational support in the form of offices and employees for its three member organizations. NWE hereby specifically agrees the City may transfer the $50,000 previously paid into the Original Fund (the "Funding Amount") to the Partnership. NWE agrees the Partnership is authorized to use this money as determined by an oversight committee that will include a representative from the Partnership, NWE, and First Security Bank. The oversight committee will consider investing the funds in a project or projects identified in the 2009 Downtown Improvement Plan. NWE agrees this money will not be returned to the Original Fund or NWE. NWE may treat the grant as a donation to the Partnership or otherwise as NorthWestern Energy may deem appropriate, provided, however, that NWE will not have any further recourse against the City or the Partnership if the City and Partnership otherwise comply with their obligations under this Participation Agreement. NWE is providing the Funding Amount as a gesture of goodwill to assist the City and the Partnership in their efforts to assist businesses in the Bozeman downtown district in regard to recovery from the effects of the March 5, 2009 events. Entering into this Participation Agreement, providing any Funding Amount, or otherwise taking any actions in regard thereto, is not and shall not be deemed an admission of any fault or liability on the part of NWE with respect to the March 5, 2009 events or otherwise, which fault and liability are expressly denied by the NWE. This Participation Agreement is entered into by the City, the Partnership, and the undersigned Funding Participant as of the date set forth below. 129 Page 2 of 2 CITY OF BOZEMAN, MONTANA By: _______________________________ Date: __________ Chris Kukulski, City Manager DOWNTOWN BOZEMAN PARTNERSHIP By: _______________________________ Date: __________ Chris Naumann, Executive Director NORTHWESTERN ENERGY By: ______ Name: ______________________________ Title: ______________________________ Funding Amount: $______________ Date: ____________________________ 130