HomeMy WebLinkAboutC3. South Boz TIF1
Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Brit Fontenot, Director of Economic Development
SUBJECT: South Bozeman Technology District Update MEETING DATE: June 1, 2015
AGENDA ITEM TYPE: Consent
RECOMMENDATION:
Receive the information contained in this memo and consider this in the context of FY 16
TIF District work plans and budgets.
BACKGROUND:
The Commission created the South Bozeman Technology District (the “District”) in December, 2012 and authorized the District’s use of tax increment financing to support a wide
array of activities, statutorily defined, within the District including the development of public
infrastructure.
A primary purpose of creating the South Bozeman Technology District (the “District”) was to address existing public and high tech infrastructure deficiencies on property occupied by
the Montana State University Innovation Campus (“MSU IC”). Currently, the District lacks the
infrastructure necessary to facilitate the aforementioned development.
The FY 14-15 District work plan and budget were presented to the Commission on December 16, 2013. The timing was different than the other TIF districts reporting timelines due
to when the district was created and the timing of the projects. (Exhibit 1) Over the course of the
past 18 months incremental progress has been made by the Innovation Campus (IC) developing
plans and generating interest from the private sector in both developing the site and tenancy in
the IC. Additionally, the City has worked closely with IC staff to develop a TIF reimbursement agreement as well as supporting the IC’s EDA grant application for infrastructure improvements.
Finally, the MSU IC’s Executive Director has left the position and the MSU Foundation is
actively seeking to fill the vacancy. The absence of an Executive Director has impeded the
progress of the IC and the District.
The District Board has met irregularly over the past several months but met recently on
May 19th to re-establish priorities and re-connect with the IC’s interim leadership and chart a
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path forward in partnership with the IC. Several issues were discussed; the composition of the
District Board, MSU IC leadership changes, MSU IC development plans, the recent denial of the
IC’s EDA grant application, the reimbursement agreement, a transition of the TIF to a TEDD,
property reappraisal and the FY16 budget and work plan. (Exhibit 2) The course of action includes; the IC seeks to gain a deeper understanding of the needs of
the eventual users of the IC, we intend, to the extent possible, to cross-populate the meetings of
the IC Board and the District Board to build a stronger partnership, further investigate the pros
and cons of sun setting the existing and restrictive technology TIF and recreating a more flexible Targeted Economic Development District or TEDD.
The Current SBTD Board includes:
First Name Last Name Expires Appointed
Gary Bloomer July 8, 2016 July 8, 2013
Matt Johnson July 8, 2015 July 8, 2013
Steve Johnson July 8, 2018 7/28/14, 7/8/2013
John Jutila July 8, 2016 July 8, 2013
Kathleen Saylor July 8, 2015 July 8, 2013
UNRESOLVED ISSUES:
In November the City received preliminary data for the property reappraisal that the State
of Montana is conducting and implementing for our FY16 fiscal year (2015 tax year). We will
not receive the final Certified Taxable Values until July 2015; this necessitates using the preliminary information for a calculation of property tax levies in our budget.
The State has projected a dramatic decrease in assessed values for both commercial
(19.25% decrease) and residential (3.52% decrease) property in Bozeman. They attribute
this change to the timing of appraisal cycles and the Great Recession. Under existing laws, the City is both allowed and required to increase its number of mills in order to off-set decreased tax
dollar collections that come about from decreased assessed property values.
The State estimates that the value of one mill, levied city-wide after Tax Increments are
excluded, will be $80,331 in FY16. This represents an 8.6% decrease in the city’s mill value in FY15. For levies that are required to be established at certain dollar values (i.e. debt service), we
will need to raise our mills to bring in the same number of dollars. For levies that were approved
at set mill amounts (i.e. Fire Capital & Equipment levy), we will yield fewer dollars due to
reappraisal.
FISCAL EFFECTS:
Currently the District balance as of May 19, 2015 is ($7,410). (Exhibit 3)
Exhibits:
1) December 16, 2013 City Commission packet material regarding the South Bozeman
Technology Districts’ 2014-2015 works plan and budget;
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2) May 1, 2015 SBTD Agenda; and 3) South Bozeman Technology District Revenues and Expenditures to date; and
4) Map of the South Bozeman Technology District.
Report compiled on: May 21, 2015
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Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Brit Fontenot, Director of Economic Development
SUBJECT: The South Bozeman Technology District 2014 – 2015 Work Plan and Budget and direction on a proposed reimbursement agreement between the
City of Bozeman and the Montana State University Innovation Campus
for costs incurred for initial funding of District infrastructure.
MEETING DATE: December 16, 2013
AGENDA ITEM TYPE: Action Item RECOMMENDATION: Approve the South Bozeman Technology District 2014 – 2015 Work Plan and Budget and provide direction on the content of a proposed reimbursement
agreement.
RECOMMENDED MOTION: I move to approve the South Bozeman Technology District 2014 – 2015 Work Plan and Budget and direct staff to return to the Commission for final
approval of a proposed reimbursement agreement on the Commission’s Consent agenda.
I. PROJECT BACKGROUND The Commission created the South Bozeman Technology District (the “District”) in
December, 2012 and authorized the District’s use of tax increment financing to support a wide
array of activities within the District including the development of public infrastructure. Over the
past 11 months we have been working to get the District up and running by appointing the District’s board, adopting bylaws, and now presenting the Commission with the District’s first
Work Plan and Budget. Should the Commission adopt the Work Plan and Budget we will move
forward with drafting a reimbursement agreement for costs that may be paid from tax increment
between the City and the Montana State University Innovation Campus (“MSUIC”) should it
make initial investments to fund public infrastructure within the District.
Before the specifics of the Work Plan, Budget and proposed reimbursement agreement
are discussed, I provide some additional background on the importance of the District to the
ongoing vitality of Bozeman’s high tech industries.
A primary purpose of creating the South Bozeman Technology District (the “District”) is
to address existing public and high tech infrastructure deficiencies on property occupied by the
MSU Innovation Campus (“MSUIC”). Developing public infrastructure is the first and most
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critical step to achieve the goals for the District as set out in the South Bozeman Technology
District Comprehensive Development Plan (the “CDP”). Obviously, the District’s CDP fulfills
the goals of the Bozeman Community Plan (the “BCP”) and the City of Bozeman’s 2009 Economic Development Plan (the “EDP”). The goals of the City’s overall EDP are not only synchronized with those of the District’s CDP but also with MSUIC in the context of the development of a technology district. Currently, the District lacks the infrastructure necessary to
facilitate the aforementioned development.
Since the adoption of the City’s EDP in 2009, the City has prioritized support for the following high growth potential sectors:
• Photonics;
• Bio-sciences;
• Manufacturing;
• High-tech; and
• The outdoor industry.
Most of the sectors identified above are also supported by the mission and vision of the
District’s CDP and MSUIC and will directly benefit from the development of public infrastructure in the District.
With the development of public infrastructure, the District becomes critical in the growth
of Bozeman’s high tech industry by assisting in the creation of a centralized campus where
innovation and research at MSU is commercialized and transferred into high-tech businesses and high-paying jobs. MSU is a leader in the growth and development of Bozeman’s technology
industry, and is the reason the Bozeman area is considered the technology center of the state.
MSU’s research innovation has led to the creation and growth of businesses in Bozeman and
throughout the state, providing employment opportunities in industries such as agriculture,
energy, construction, healthcare, technology, photonics, manufacturing and biosciences. Home to more than 100 technology-based firms, Bozeman has become the high-tech
center of Montana; and it is one of the largest technology communities in the northern Rocky
Mountains. Bozeman’s technology sector has grown significantly since the early 1990s.
Bozeman’s technology sector includes firms engaged in advanced manufacturing and
laser optics; information technology—application development, information technology services,
software, internet applications, telecommunications, pharmaceuticals, biotech or bioscience and
agricultural, environmental and other activities. These firms are, for the most part, selling their
goods and services entirely to customers located outside of Montana and many located outside of the United States. It is estimated that these firms directly employ more than 3,000 people whose
earnings are significantly higher than the county’s annual average wage.
MSU has grown to become a regional leader in research and creative projects with nearly
$100 million in research expenditures in Montana each year. MSU was recognized by the Carnegie Foundation for the Advancement of Teaching as one of 96 research universities
nationally with “very high research activity.” MSU has strong ties to industry in the Bozeman
area, particularly in the life science, aerospace, agriculture, engineering and information
technology sectors. MSU lists relationships with over 150 companies which include research
support, licensing agreements, and consulting services.
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Additionally, the concentration of research activity at MSU has fueled the development
of technology-based companies clustered in and around Bozeman and is a significant contributor
to Bozeman’s vibrant entrepreneurial technology economy. University technology transfer and
commercialization activities have been driving economic development nationwide since the early 1980’s when changes in federal legislation accelerated the process and increased incentives for collaboration between universities and industry. MSU is no exception. According to the MSU
Technology Transfer Office, technology developed at MSU has resulted in the spin-off of 30
companies and licensing by 37 companies in the Bozeman area and nearly 300 companies
statewide. MSU holds 163 licenses for patents for innovations such as biological, chemical, and engineering processes and compounds, including coatings for the space shuttle and pharmaceutical drugs. Of those 163 licenses, 60% are with Montana companies, many located in
Bozeman. Further development of MSUIC will enhance these results.
The strength of Bozeman’s technology economy has also translated into private companies receiving research, development and investment funding. During the 2000-2004 time period, Montana ranked 10th in the nation in the average annual number of federal Small
Business Innovation Research (SBIR) awards made, with nearly half going to Bozeman
companies.
The development of the District infrastructure and the facilities at MSUIC will further solidify MSUIC, MSU and Bozeman as the place to do high-tech business in Montana.
II. DISTRICT CHRONOLOGY
Each link contains the Commission Memo and associated packet material.
A. On November 5, 2012, the City Commission approved Resolution 4414 adopting
the South Bozeman Technology District Comprehensive Development Plan
(“CDP”). B. November 19, 2012 the City Commission approved the second reading of Ordinance 1844 creating the South Bozeman Technology District.
C. On May 20, 2013, the City Commission approved Resolution 4439 creating the
South Bozeman Technology District Board.
D. On July 8, 2013, the City Commission appointed the South Bozeman Technology District Board.
E. On November 18, 2013, the City Commission ratified the South Bozeman
Technology District Board bylaws.
III. DISTRICT WORK PLAN AND BUDGET 2014-2015 The City has been a partner with MSUIC since the concept, and through the creation, of
the District. As the Work Plan depicts, MSUIC envisions a rapid pace of development of the
40+ acres of the District. The option of waiting to the regular budget cycle for approval of the
District Work Plan and Budget would only delay development plans already in motion, costing time and money. Generally, in May of the yearly budget cycle, the Board of each TIF District (Downtown, North 7th, Northeast and Mandeville1) presents an annual work plan and budget for
Commission approval. The timing of this request reflects the desire of South Bozeman
Technology District to gain Commission approval of its proposed Work Plan and Budget now
1 To date, the Mandeville TIF Board has not been appointed.
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and further, get direction on the reimbursement agreement discussed in more detail below so
development of public infrastructure in the District can move forward during 2014.
Because the District is less than a year old it has not yet developed the tax increment necessary to fund the development of public infrastructure. As development occurs, the increment is provided by capturing the increase in property taxes as property values within the
District increase. The captured dollar amount, the “increment” is returned to the District to pay
the costs of certain improvements as allowed by MCA 7-15-4288.
The District Board adopted the Work Plan and Budget on December 3, 2013. As shown in the District’s Work Plan and Budget, MSUIC has begun engineering and design work related
to streets, roads, curbs, gutters, sidewalks, roadways, walking paths, irrigation, landscaping,
water features, open green spaces, street lighting, signage and other infrastructure and intends to
initially finance the necessary infrastructure to facilitate the build-out of MSUIC over the next two to five years. Out of the strong desire to keep their development project on schedule, MSUIC is incurring allowable costs that may be paid by tax increment financing prior to the
accumulation of any increment. The District proposes, upon Commission direction approval, to
execute a “reimbursement agreement” between the City and MSUIC to facilitate the
reimbursement for development costs that may be paid by tax increment financing. IV. REIMBURSEMENT AGREEMENT DISCUSSION POINTS
As noted above, currently there are minimal increment funds available to cover allowable
costs of the infrastructure improvements necessary to develop MSUIC. Despite the lack of increment funding available to cover allowable costs that may be paid by tax increment financing, MSUIC is proceeding with initial engineering and planning work required to develop
the infrastructure phase of the project (see Section VII of the Work Plan and Budget).
The District proposes a contractual agreement between the City and MSUIC whereby MSUIC will be reimbursed for upfront costs associated with the infrastructure phase that may be paid by tax increment financing. Elements of the “Reimbursement Agreement” may include:
A. A significant percentage of each year’s tax increment would be committed to
reimbursement to MSUIC for allowable costs incurred in engineering and constructing specific public infrastructure.
1. The remaining increment will be dedicated to other District needs at the
discretion of the Board: “At the discretion of the Board, establish a
reserve account for some percentage of the available yearly increment for other District needs. The rationale for establishing a reserve of the yearly available increment funds not dedicated to reimbursement allows some
District flexibility in meeting the needs of a District tenant that may
require unanticipated, yet allowable improvements.” (Section 7C of the
Work Plan and Budget) B. The City Attorney suggests that contracts between the City and MSUIC for
reimbursement must include:
1. The City’s standard discrimination provisions;
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2. Require all contracts entered into by MSUIC wherein costs sought for
reimbursement will be incurred must comply with the City’s purchasing
policy and all requirements regarding prevailing wages, and if necessary
the City’s living wage; 3. A requirement that all contracts entered into wherein costs sought for reimbursement will be incurred will be subject to a City audit;
4. Have a term no greater than 15 years unless bonding occurs;
5. Include a detailed list of services and infrastructure that will be authorized
for reimbursement that can include engineering services, construction, and demolition of existing structures; and 6. Recognize that should sufficient increment to fully reimburse MSUIC for
its authorized costs never be realized during the life of the District that
such unpaid balance will not be paid unless the City agrees to sell bonds,
at its sole discretion. C. The reimbursement agreement may also include payment to MSUIC of accrued
interest on the payback balance remaining on MSUIC’s original expenditure.
D. The reimbursement agreement may authorize reimbursement to MSUIC for
allowable costs associated with District improvements, as authorized by 7-15-4288 MCA. E. Reimbursement must be consistent with the BCP and CDP.
F. Frequency of reimbursement; and
G. Demolition of existing structures, see Section II. B., Other Improvements
(wetlands, signage, demolition) of the proposed Work Plan. FISCAL EFFECTS: There has been, and will continue to be, significant staff time invested in
assisting the District’s forward progress. Creation of a reimbursement agreement and tracking
costs and payments will require additional staff and legal review. Oversight of the District’s
activities has, and will continue, to be a project of the Department of Economic Development in partnership with MSUIC. Other than staff time, additional fiscal effects to the City in addition to those identified here and the increment are undetermined at this time.
ALTERNATIVES: As suggested by the City Commission.
Report compiled on: December 3, 2013
Attachments:
1. SBTD 2014 – 2015 Work Plan and Budget.
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SOUTH BOZEMAN TECHNOLOGY DISTRICT
2014-2015 WORK PLAN & BUDGET
This Work Plan and Budget implements, for the years 2014 and 2015, the South Bozeman Technology District’s Comprehensive Development Plan. I. INTRODUCTION
The South Bozeman Technology District (the “District”) was created by Ordinance 1844
on November 4, 2012. The District is a mechanism designed to assist in financing major
infrastructure improvements critical to the revitalization and development of 42-acres located between College and Garfield Streets.
The District will address existing infrastructure deficiencies at the Montana State
University Innovation Campus (“MSUIC”) to achieve the goals set out in the Bozeman Community Plan (“BCP”), City of Bozeman’s 2009 Economic Development Plan (“EDP”) and the District’s Comprehensive Development Plan (“CDP”). Plan goals are aligned to enhance the
local and regional economies through job creation and industry diversification, cornerstones of
the City’s economic development strategy.
Additionally, commercialization of MSU’s research and intellectual property has led to the creation and growth of businesses in Bozeman and throughout the state, providing
employment opportunities in industries such as agriculture, energy, construction, healthcare,
technology, pharmaceuticals, photonics, manufacturing and biosciences.
The District may provide funding for costs as authorized by law in 7-15-4288, Montana Code Annotated (“MCA”):
Costs that may be paid by tax increment financing. The tax increments may be
used by the local government to pay the following costs of or incurred in
connection with an urban renewal area or targeted economic development district as identified in the urban renewal plan or targeted economic development district
comprehensive development plan:
(1) land acquisition;
(2) demolition and removal of structures;
(3) relocation of occupants; (4) the acquisition, construction, and improvement of public improvements or
infrastructure, including streets, roads, curbs, gutters, sidewalks, pedestrian malls,
alleys, parking lots and off-street parking facilities, sewers, sewer lines, sewage
treatment facilities, storm sewers, waterlines, waterways, water treatment
facilities, natural gas lines, electrical lines, telecommunications lines, rail lines, rail spurs, bridges, publicly owned buildings, and any public improvements
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authorized by Title 7, chapter 12, parts 41 through 45; Title 7, chapter 13, parts 42
and 43; and Title 7, chapter 14, part 47, and items of personal property to be used
in connection with improvements for which the foregoing costs may be incurred;
(5) costs incurred in connection with the redevelopment activities allowed under 7-15-4233;
(6) acquisition of infrastructure-deficient areas or portions of areas;
(7) administrative costs associated with the management of the urban renewal
area or targeted economic development district;
(8) assemblage of land for development or redevelopment by private enterprise or public agencies, including sale, initial leasing, or retention by the local
government itself at its fair value;
(9) the compilation and analysis of pertinent information required to adequately
determine the needs of the urban renewal area or targeted economic development
district; (10) the connection of the urban renewal area or targeted economic development
district to existing infrastructure outside the area or district;
(11) the provision of direct assistance to secondary value-adding industries to
assist in meeting their infrastructure and land needs within the area or district; and
(12) the acquisition, construction, or improvement of facilities or equipment for reducing, preventing, abating, or eliminating pollution.
II. PARTNERSHIPS FOR THE DEVLOPMENT OF THE DISTRICT
One of the District’s primary partners in accomplishing its stated goals is the MSU
Innovation Campus (“MSUIC”). The MSUIC is a 501 (c) (3) non-profit organization and a subsidiary of the MSU Alumni Foundation (“MSUAF”) and governed by the MSUAF Board of Governors. The mission of MSUIC is to “Create a world-class university-related research park
to promote economic development and partnerships between high tech-based businesses and the
research community of Montana State University, the region, and the State of Montana”.
MSUIC is governed by MSUAF and responsible for the development of the 42-acres outlined in the South Bozeman Technology District Comprehensive Development Plan.
In addition to MSUIC, the Advanced Technology Inc. (“ATI”) is a for-profit corporation
established in the 1980s for the development of the Advanced Technology Park – a 22-acre park with 11 landowners and 15 buildings. ATI is also a subsidiary of MSUAF and governed by the MSUAF Board of Governors.
MSUAF is an independent 501 (c) (3) non-profit organization. The mission of the
MSUAF is to “create lifelong relationships and strengthen its resources to advance Montana State University.” Their mission is accomplished through a variety of means including the engagement of alumni and friends (alumni relations), promotion of membership (alumni
association), and the cultivation and solicitation of private support (donor relations) for the
advancement of MSU. MSUAF has daily interactions with a wide array of constituents –
campus leaders, students, alumni, members, donors, friends of MSU and the public at large.
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All assets under ATI and MSUIC – buildings and land – are governed and controlled by
MSUAF through its Board of Governors.
The MSUIC has obtained funds through the MSU Alumni Foundation to initially finance the geo-technical, engineering services, and administration of construction to install public
infrastructure on the 42-acre site. A request for the services was advertised through an RFP
process, and after review of all submitted proposals, a contract is currently under negotiation
with CTA Engineering (“CTA”) in Bozeman, Montana. MSUIC will pay for the costs of the
services to be provided by CTA. It is intended that the costs for these services, not to exceed $225,000, will be reimbursed to MSUIC, through the District over time, from annual increments
of the District. MSUIC will reimburse MSU Alumni Foundation. MSUIC and MSU Alumni
Foundation understand that the timing of, and eventual amount of reimbursements, are not
guaranteed by the City or the District.
The primary active uses within the District include office, laboratory, light
manufacturing, warehouse, distribution, and specialized research and design facilities, which
collectively will occupy approximately 70% of the District. The balance of the area is comprised
of public infrastructure that includes; streets, roads, curbs, gutters, sidewalks, roadways, walking
paths, irrigation, landscaping, water features, open green spaces, street lighting, signage and other public infrastructure as defined in 7-15-4288, MCA.
Without bonding, the term of the District is limited by Montana law to 15 years. The
District established tax year 2012 as the base year for valuation. Construction of facilities in the
District is projected to begin in the next 12 to 24 months and continue over the next 10 – 20 years. The following table provides the estimated construction start dates:
SOUTH BOZEMAN TECHNOLOGY DISTRICT
PROJECT ESTIMATED START DATES
Professional Services/Engineering 2013/2014
Installation of Infrastructure & Open/Green Space(s) 2014
Construction of Buildings 2014 – 2029
Project funds will be a combination of District increment funds and grant funds to cover
geo-technical, professional services/engineering, and installation of all infrastructure and open/green space(s), as outlined on pages 7 - 8. Developer equity, conventional financing, tax
credits through the Montana Community Development Corporation, and federal grant funds
through the Department of Commerce will be used to cover construction of buildings.
Conventional financing provided by the developer(s) will include both private construction
financing and permanent financing. Terms of construction and permanent financing will be determined through negotiations between MSUIC, private developer(s), and private developer’s
equity partners and private lending institutions.
Currently, there are minimal increment funds available to cover allowable costs of the
necessary infrastructure improvements. MSUIC is proceeding with initial engineering and planning work required to develop the infrastructure phase of the project. It is anticipated that
MSUIC will request reimbursement for allowable costs associated with the improvements within
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the District. Commonly TIF districts enter into reimbursement agreements for repayment of
upfront costs initially borne by the developer provided those costs are allowable to be paid by tax
increment financing (see Section I). The District could identify up to 100% of the available
yearly increment for reimbursement of allowable costs to MSUIC. Alternatively, rather than allocate the entire increment to reimbursement the District could allocate some percentage to a
reserve fund for other District needs. Within the next one to three years, some percentage of
available yearly increment will be utilized for:
A. Reimbursement to MSUIC for allowable costs of Professional Services/Engineering of public infrastructure; and
B. Reimbursement to MSUIC for allowable costs for the installation of Infrastructure
and Open/Green Space(s).
III. DISTRICT MISSION
The District’s mission is to:
A. Promote technology-based and knowledge-based economic development;
B. Provide funding mechanisms to support the development of a world-class
research park in order to promote academic and industry collaboration and technology transfer; C. Support the development of state-of-the-art-facilities including specialized
research and development activities, programs, services, and amenities to grow
successful research and technology-based businesses; and
D. Promote ‘the place’ to link academic, private, government researchers and scientists in order to advance new discoveries in support of the citizens of the City of Bozeman, Gallatin County, the Bozeman School District and State of Montana.
IV. DISTRICT GOALS
District goals as established by the 2012 CDP include:
A. Establish public/private partnerships between business, industry, government and
Montana State University;
B. Create internships, assistantships, and part-time and full-time opportunities for
Montana State University students;
C. Create high-tech/high-paying jobs for the citizens of the City of Bozeman and the State of Montana;
D. Increase local, regional, State and global competitiveness; and
E. Increase economic benefits for the citizens of Bozeman, Gallatin County and the
State of Montana.
The District conforms to the City of Bozeman‘s Community Plan and provides a funding
mechanism to pay for the costs of improvements needed to stimulate the growth of high-tech,
high-paying jobs and development of a university-related research park with specialized research
and development facilities through public and private investment.
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Important components of the District:
A. Specialized Research and Development Facilities – Mixed use office, laboratory, light manufacturing, warehouse, distribution, institutional and research facilities
focused development; and
B. Open Space – The Plan will provide open green spaces with walking paths, water
features, and a small park.
V. MSUIC BACKGROUND The following narrative provides a brief background of the evolution of MSUIC. In
1986, MSU, under the leadership of President Bill Tietz, requested Montana State University
Alumni Foundation develop and manage the first and only university-related research park in
Bozeman, Montana, known as the Advanced Technology Park (ATP). Montana State University Alumni Foundation obtained property upon which the ATP was developed. In that same year, engineering services and installation of infrastructure was completed. In 1988, the first building
known as the Nopper Building was completed. Over the subsequent 10 years, 12 additional
buildings were constructed. As of January 1, 2012, there are more than 35 businesses and
research groups housed in the ATP employing more than 200 people. Approximately 46% of those employed are MSU graduates. In addition, more than a dozen start-up companies originated in the ATP between 1988 and 2008.
In November of 2011, the Advanced Technology Inc. (ATI) Board received approval
from the MSU Alumni Foundation to hire the first Executive Director to oversee full operation of ATI and push forward a new vision and development of a 21st Century University-related Research Park, to be known as the MSUIC. In July of 2012, MSUIC was formed as a 501(c) (3)
with non-profit exemption status.
The District was created by the City of Bozeman, via Ordinance 1844 on November 4, 2012. The District Board was authorized on May 20, 2013 via Commission Resolution 4439. The focus of the District is development of a university-related research park on 42-acres,
referred to as the MSUIC. A conceptual master plan was developed by MSUIC projecting
construction of up to 19 buildings on the site with more than 750,000 square feet to be developed
over a 15-year period. Investment in infrastructure and construction costs at full build-out of the 42-acres is estimated to be approximately $100 million. This represents the estimated cost of all public infrastructure and the MSUIC funded construction of 19 specialized research and
development facilities. It is important to note there are over 200 university-related research
parks across the United States. Several funding mechanisms are used to develop these parks,
which include a combination of: 1) TIF District increment; 2) federal grants; 3) state grants and programs; and 4) private developers. It is common practice for university-related research parks to work with their respective municipalities to establish TIF Districts to assist in funding
engineering and associated costs related to the installation of infrastructure in order for
development to occur.
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VI. DISTRICT FUNDING PRIORITIES
This section outlines District funding priorities for the development of the District
and the MSUIC:
A. Property assembly costs including, but not limited to, acquisition of land, or rights and interests therein. If additional land is required, funds allowable through the
TIF may be considered for such acquisition;
B. Demolition of structures on the 42-acre site (farm sheds & buildings), and the
clearing and grading of land. Currently, there are several farm sheds and
buildings the property that must be demolished and removed before construction of infrastructure can begin;
C. Costs of studies, surveys, designs, plans and specifications. In order to maximize
the design to its full potential and use, MSUIC hired CTA Engineering to conduct
all environmental, geo-tech, and infrastructure design;
D. Professional service costs, including, but not limited to, architectural, engineering, legal, marketing, financial, and planning services. MSUIC awarded a contract,
through an RFP process, to CTA Engineering to assist with all engineering design
and construction, documentation required by the City and/or legal document
filings;
E. Environmental remediation and site preparation. CTA Engineering, as part of services to be provided, will conduct a Phase I Environmental survey of the 42-
acres;
F. Streetscape and costs of construction of public and, if necessary, private utilities
and facilities or improvements. CTA Engineering, through an RFP process, has
been awarded a contract to work with MSUIC to design, and construct, professional streetscapes that will complement the design standards between
College, 19th and Garfield Streets. MSUIC and CTA Engineering will work with
City Staff to control costs of construction of public utilities and facilities
improvements; and
G. Financing costs for the above listed items including, but not limited to, all necessary and incidental expenses related to the issuance of obligations incurred
by MSUIC, and which may include payment of interest on any obligations.
H. Construction of all streets, roads, curbs, gutters, sidewalks, roadways, walking
paths, irrigation, landscaping, water features, open green spaces, street lighting,
signage, small park, utilities (water, sewer, storm water, gas, electric, telephone and fiber optic), and other public infrastructure on the 42-acres.
VII. DISTRICT BUDGET FY2015
The District intends the allowable costs shown in the priorities below would be approved
for reimbursement from available yearly increment of the District. The District’s partner, MSUIC, is expected to provide up-front funding for the amounts shown below and reimbursed through a “reimbursement agreement” with the City. The agreement could commit up to 100%
of each annual yearly increment to reimburse MSUIC for these allowable costs. The District
intends to allocate some large percentage of the available yearly increment to the MSUIC
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reimbursement. However, the District could also establish a reserve fund and direct a small
percentage of the available yearly increment for other District needs that fall within allowable
costs. The District Board has not yet identified a percentage of reimbursement from the yearly
allowable increment and prefers to maintain some flexibility in this regard.
The District’s priorities for 2014 and 2015 include the following priorities with
corresponding initial budget estimates:
A. PRIORITY I:
Professional Services/Geo Technical and Engineering, to include:
1. Phase I environmental site assessment $9,000
2. Topographical survey $6,500 3. Street dedication easement $4,500
4. Preliminary engineering report $27,300
5. Design and permitting $109,400
6. Construction administration $68,300
TOTAL PROFESSIONAL COSTS $ 225,000.00
B. PRIORITY II:
Installation of Grand Avenue off of Garfield Street, running north and south, which connects (T’s) to Technology Boulevard roadway running east and west between
the Advanced Technology Park and the Morrison Maierle building, and which also
includes installation of all curb, gutter, sidewalks, irrigation, signage, street lighting and
landscaping along common roadways (Grand Avenue and Technology Boulevard).
In addition, installation of all utilities (water, sewer, storm water, electrical, gas,
telephone & fiber optic), wetland relocation or damage mitigation, demolition of farm
sheds and buildings, entrance and street signage, and street lighting, which includes all
costs associated with bonding, insurance, mobilization, preparation of Notice of Intent
(“NOI”) and Stormwater Pollution Prevention Plan (“SWPP”) and contingencies.
Estimated Construction/Project Costs:
Roads, Curb, Gutter, Sidewalks, Irrigation & landscape $ 914,755.27
Sewer, Water & Storm Drainage & Dry Utilities $ 1,080,248.76 Other Improvements (wetlands, signage, demolition) $ 648,240.00
Taxes, Bonds, Insurance and Mobilization, Prepare NOI and SWPPP $ 406,487.00
Construction Contingency $ 304,973.00
TOTAL ESTIMATED CONSTRUCTION/PROJECT COSTS $ 3,354,704.03
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C. PRIORITY III:
The Board proposes the establishment of a TIF reserve account to secure from 0% and 20%, at the discretion of the Board, of the available yearly increment for other
District needs. The rationale for establishing a reserve of some percentage of the yearly
available increment funds not dedicated to reimbursement allows some District flexibility
in the yearly reimbursed amount to MSUIC and balances the potential needs of a District tenant that may require site improvements, the costs of which may be paid by tax increment financing.
VIII. DISTRICT DEVELOPMENT STRATEGIES
The following strategies, outlined in the approved CDP, A. Plans to develop the property within the District primarily emphasize improving
vehicular access, innovative design both interior and exterior, use of land,
conservative sewer, water, and storm water management, as well as a redundant
fiber backbone and state-of-the-art telecommunication facilities; B. Install innovative water wise landscaping and, to the extent practical, preserve existing trees and vegetation;
C. Provide opportunities for the mixing and integration of different types of uses,
both business and light manufacturing, under a well-designed plan;
D. Amend the zoning ordinances for high-tech and mixed-use development that allows the integration of different types of activities with businesses within a pedestrian-oriented development under a coherent overall plan;
E. Promote development in highly visible locations by working with land owners,
purchasing properties, demolishing existing structures, and improving the sites;
F. Install public improvements for the public good; and G. Transform and expand the site into a world-class university-related research park, MSUIC, and into a high-tech research and development community while at the
same time contributing to the economic growth and prosperity of Montana State
University, the City of Bozeman, Gallatin County, the region, and State of
Montana. IX. DISTRICT IMPACTS AND BENEFITS
A. Direct Economic Impact:
The build-out of MSUIC within the District has the potential for significant
positive economic impacts to the community, the region and the State of Montana in terms of short and long-term job creation. The business sectors supported by the
development of the District add economic diversity to the region, have high-growth
potential, and generally provide mid-to-high level wages. Additionally, the development
of the District increases the amount of public infrastructure in the area and, consequently,
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the values of the properties within and surrounding the District. The economic impact of
District development also includes increased opportunities for MSU and Bozeman School
District students to work and gain experience at the MSUIC with MSU researchers and
private companies. The value of the proposed MSUIC high-tech facilities will significantly increase the increment over the term of the District.
Estimated direct economic impacts of District development include:
1. Short and long-term Construction jobs; 350 2. Permanent jobs; 1,900
3. Assistantships/internships/part-time;
employment for MSU students; 800
4. Infrastructure costs; and $ 8,150,000
5. Research and Development Facilities costs $ 91,850,000
B. Benefits to Montana State University:
1. Increase in research grants and sponsored research opportunities;
2. Opportunities to work with private sector to solve “real world” problems; 3. Collaborate with industry experts;
4. State-of-the-art facilities – unique architecture both interior and exterior;
5. Opportunities for faculty consulting recruiting and retention; and
6. Internship and career opportunities for students.
C. Benefits to Bozeman, Gallatin County, Region and State of Montana:
1. Direct benefits:
a. Provide a mix of quality jobs (functions and skills): i. Working in MSUIC (permanent jobs with opportunity for
growth and career development)
b. Provide new amenities and infrastructure (amenities, improved
street grid, utilities, etc.):
ii. Transportation:
Linkage to connect central business district;
Linkage to Montana State University and Gallatin
College;
Linkage to restaurants and retail; and
Linkage to surrounding neighborhoods and housing. iii. Attract commercial development:
Retail;
Dining;
Entertainment;
Hotel/Conference Center; and
Parking
iv. Attract new residents to the area.
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v. Increase surrounding property values.
2. Indirect benefits:
a. There will be a ripple effect on the community from the
development of the MSUIC – development will enhance the
caliber, size and reach of those ripples;
b. Area jobs servicing employees and companies located on the
MSUIC; c. Critical mass and cluster of high-tech research and development
companies, services and amenities in and around MSUIC; and
d. Support for schools through collaboration with MSUIC (science,
technology engineering and math/STEM) schools that could
provide alternative educational options.
3. Benefits to the City, County and State:
a. Solidify Bozeman as a global technology city;
b. Develop a world-class 21st Century University-related research park; c. Attract tech companies, established and start-up, to the region;
d. Create jobs throughout the area;
e. Create an option for high-growth tech companies to remain,
expand and prosper in the City; f. Attract additional risk capital (investment and investors) to the region;
g. Help retain top rated science, technology, and research talent in the
region;
h. Provide a living laboratory for cutting-edge sustainable development; i. Create an environment for technology companies to seed, take root
and make a home in Bozeman, the region, and the State; and
j. Tap into the commercial potential of private and federal dollars
invested in research. X. DISTRICT ADMINISTRATION
Administration of the District will be conducted by the District Board, City staff, MSUIC
Executive Director, and the Bozeman City Commission. ####
49654
THE SOUTH BOZEMAN TECHNOLOGY DISTRICT (SBTD) BOARD MEETING
BOZEMAN, MONTANA
AGENDA
Tuesday, May 19, 2015
A. Call to Order – 12:00 p.m. Bozeman City Hall (121 North Rouse Ave.), Gallatin Meeting Room B. Public Comment – Please state your name and address in an audible tone of voice for the record. This is the time for individuals to comment on matters falling within the purview of the City of
Bozeman’s Economic Development Council. This public comment period will be your only
opportunity to comment at this meeting. Please limit your comments to 3 minutes or less.
C. Action Items
1. SBTD Board meeting schedule and minutes, appointments and terms (Johnson);
2. MSU Innovation Campus (Murray);
a. Leadership Transition;
b. Development Plans;
c. EDA Grant Application ;
d. MSUIC/SBTD Reimbursement Agreement;
e. SBTD TIF transition to a TEDD.
3. 2015 Property Reappraisal and impacts on SBTD property values (Fontenot);
4. FY 16 SBTD Budget and Workplan Presentation, June 1, 2015 (Fontenot).
D. FYI/Discussion/Updates
E. Adjournment
South Bozeman Technology District meetings are open to all members of the public. If you have a
disability that requires assistance, please contact our ADA Coordinator James Goehrung, at
582-3232 (TDD 582-2301).
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South Bozeman Technology TIF District
Fund 192
beginning balance July 1, 2013 ‐$
* * PLUS: Revenues
Property Tax Increment 260$
TOTAL REVENUES 260$
* * LESS: Expenditures
DORSEY & WHITNEY LLP ‐ legal fees to create TIFD 7,622$
FUND INTEREST EXPENSE for carrying negative cash balance 49$
TOTAL EXPENDITURES (7,671)$
current balance May 19, 2015 (7,410)$
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