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HomeMy WebLinkAboutResolution 5420 Approving Certain Projects in the South Bozeman Technology Tax Increment Financing District RESOLUTION NO. 5420 RESOLUTION APPROVING CERTAIN PROJECTS IN THE SOUTH BOZEMAN TECHNOLOGY TAX INCREMENT FINANCING DISTRICT AS TECHNOLOGY INFRASTRUCTURE DEVELOPMENT PROJECTS AND USING TAX INCREMENT REVENUES OR TAX INCREMENT REVENUE BONDS TO REIMBURSE ELIGIBLE COSTS ASSOCIATED WITH SUCH PROJECTS; APPROVING A RELATED DEVELOPMENT AGREEMENT; AND MAKING A REIMBURSEMENT DECLARATION BE IT RESOLVED by the City Commission (the “Commission”) of the City of Bozeman, Montana (the “City”), as follows: Section 1 Recitals. 1.01. Under the provisions of Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43, as in effect on December 31, 2012 (the “Act”), the City was authorized to create technology districts for the purpose of encouraging the location and development of technology infrastructure development projects in the State of Montana, to provide for the segregation and collection of tax increment with respect to property taxes collected in such technology districts, and to apply tax increment revenues derived from projects undertaken within the technology districts to pay eligible costs. 1.02. Pursuant to the Technology District Act and Ordinance No. 1844 adopted by the City Commission of the City (the “City Commission”) on December 19, 2012 (the “Ordinance”), the City has created the South Bozeman Technology Tax Increment Financing District (the “District”) as a technology district. By Resolution No. 4414, adopted by the City Commission DocuSign Envelope ID: 91AFC30A-AE2A-4AC3-B19E-41273B68F049 Resolution 5420, Approving Projects in the South Bozeman Technology Tax Increment Financing District 2 on November 5, 2012, the City Commission has adopted the South Bozeman Technology District Comprehensive Development Plan (the “Plan”) as a comprehensive development plan that ensures that the District can host a diversified tenant base of multiple independent tenants, in accordance with the Technology District Act. The Plan provides for the segregation and collection of tax increment revenues with respect to the District. 1.03. Big Sky QF, LLC, a Delaware limited liability company (“BSQ”), has leased approximately 4.87 acres of land located in the District from Montana State University Innovation Campus, a Montana non-profit corporation (“MSUIC”), and has subleased such land (the “Industry Land”) to Industry Bozeman Property, LLC, a Montana limited liability company (“IBP”) on May 26, 2022. IBP proposes to undertake the construction on the Industry Land of an approximately 86,000 square foot building to be used as flexible commercial workspace, to include 61,000 square feet of offices and 25,000 square feet of indoor common space, as well as related site improvements and related improvements (the “INDUSTRY Project”). In addition, BIG SKY AURORA, LLC, a Delaware limited liability company (“BSA”) has leased approximately 4.80 acres of land located in the District from MSUIC and has subleased such land (the “Aurora Land”) to Aurora Operations, Inc., a Delaware corporation (“AOI”) on February 17, 2022. BSA proposes to undertake the construction on the Aurora Land of an approximately 78,000 square foot building to be leased to AOI for use as office space, research and design activities and potentially manufacturing, as well as related site improvements (the “Aurora Project” and, together with the INDUSTRY Project, the “Projects”). In furtherance of the Projects, BSQ and BSA propose to undertake the construction of certain infrastructure improvements, including construction of street, curb, gutter and sidewalk improvements, street lighting improvements, water and sewer line extensions, storm sewer infrastructure, utilities, related landscaping and related improvements (collectively, the “Infrastructure Improvements”). Big Sky ICINF, LLC, a Delaware limited liability company (the “Developer”), is an affiliate of BSQ and BSA, and has requested that the City approve using tax increment revenues or proceeds of tax increment revenue bonds to reimburse the Developer for the costs of the Infrastructure Improvements. DocuSign Envelope ID: 91AFC30A-AE2A-4AC3-B19E-41273B68F049 Resolution 5420, Approving Projects in the South Bozeman Technology Tax Increment Financing District 3 1.04. On June 14, 2022, a duly noticed public hearing was held on the question of approving the Projects as technology infrastructure development projects, and the use of tax increment revenues or proceeds of tax increment bonds to reimburse the Developer for costs of the Infrastructure Improvements and all persons appearing were given an opportunity to speak at the public hearing. Section 2 Findings. The Commission hereby finds with respect to the Projects as follows: a. the Projects are technology infrastructure development projects, and the Projects and the Infrastructure Improvements will encourage the location and retention of technology infrastructure development projects within the District and the State of Montana; b. the Projects will encourage the location of tenants in the District that are businesses or organizations engaged in technology-based operations within Montana that, through employment of knowledge or labor, add value to a product, process or export service that results in the creation of new wealth and for which at least 50% of the sales of the business or organization occur outside of Montana or businesses or organizations that are manufacturing companies with at least 50% of their sales to other Montana companies that have 50% of their sales occurring outside of Montana; and c. the costs of the Infrastructure Improvements are costs permitted to be paid from tax increment revenues or proceeds of tax increment bonds under Section 7- 15-4288 of the Technology District Act. Section 3 Approval of the Projects as Technology Infrastructure Development Projects. DocuSign Envelope ID: 91AFC30A-AE2A-4AC3-B19E-41273B68F049 Resolution 5420, Approving Projects in the South Bozeman Technology Tax Increment Financing District 4 The Commission hereby approves the Projects as technology infrastructure development projects under the Technology District Act and the Plan. The Projects and the Infrastructure Improvements are contemplated by and within the scope of the Plan, and the Infrastructure Improvements are eligible for tax increment financing under the Technology District Act. Section 4 Development Agreement; Use of Tax Increment. 4.01. The City’s Director of Economic Development and the Developer have negotiated a Development Agreement, the form of which is attached hereto as Exhibit A. The Development Agreement is hereby approved in substantially the form attached. The City Manager, or in the event of his absence or disability, his designee, is hereby authorized and directed to finalize, approve, execute and deliver to the Developer the Development Agreement, substantially in the form attached as Exhibit A, with such changes as such officer shall deem necessary or appropriate. The execution and delivery by an appropriate officer of the City of the Development Agreement shall be conclusive as to the approval of such officer of the terms of the Development Agreement. 4.02. The Commission hereby approves the use of tax increment revenues or proceeds of tax increment bonds to reimburse the Developer for the Infrastructure Improvements, subject to the terms and conditions of the Development Agreement. No further Commission action shall be required if the City’s obligations under the Development Agreement are to be paid or satisfied with tax increment revenues then on hand and available therefor. If the City’s obligations under the Development Agreement are to be financed with proceeds of tax increment revenue bonds, the forms of such bonds and the terms and conditions thereof shall be prescribed by a subsequent resolution or resolutions to be adopted by this Commission. DocuSign Envelope ID: 91AFC30A-AE2A-4AC3-B19E-41273B68F049 Resolution 5420, Approving Projects in the South Bozeman Technology Tax Increment Financing District 5 Section 5 Reimbursement. 5.01. The City may issue tax-exempt bonds in one or more series (the “Bonds”) to finance all or a portion of the Infrastructure Improvements and pay costs associated with the financing. The United States Department of Treasury has promulgated regulations governing the use of proceeds of tax-exempt bonds, all or a portion of which are to be used to reimburse the City for project expenditures paid by the City prior to the date of issuance of such bonds. Those regulations (Treasury Regulations, Section 1.150-2) (the “Regulations”) require that the City adopt a statement of official intent to reimburse an original expenditure not later than 60 days after payment of the original expenditure. The Regulations also generally require that the bonds be issued and the reimbursement allocation made from the proceeds of the bonds within 18 months (or three years, if the reimbursement bond issue qualifies for the “small issuer” exception from the arbitrage rebate requirement) after the later of (i) the date the expenditure is paid or (ii) the date the project is placed in service or abandoned, but (unless the issue qualifies for the “small issuer” exception from the arbitrage rebate requirement) in no event more than three years after the date the expenditure is paid. The Regulations generally permit reimbursement of capital expenditures and costs of issuance of the bonds. 5.02. Other than (i) expenditures to be paid or reimbursed from sources other than the Bonds, (ii) expenditures constituting preliminary expenditures within the meaning of Section 1.150-2(f)(2) of the Regulations, or (iii) expenditures in a “de minimus” amount (as defined in Section 1.150-2(f)(1) of the Regulations), no expenditures for the Infrastructure Improvements have been paid by the City before the date 60 days before the date of adoption of this Resolution. 5.03. The City reasonably expects that it may reimburse the expenditures made for Infrastructure Improvements out of the proceeds of Bonds in an estimated maximum aggregate principal amount of $3,599,178 after the date of payment of all or a portion of the costs of the Infrastructure Improvements. All reimbursed expenditures shall be capital expenditures, a cost of issuance of the bonds or other expenditures eligible for reimbursement under Section 1.150- 2(d)(3) of the Regulations. DocuSign Envelope ID: 91AFC30A-AE2A-4AC3-B19E-41273B68F049 Resolution 5420, Approving Projects in the South Bozeman Technology Tax Increment Financing District 6 5.04. As of the date hereof, there are no City funds reserved, allocated on a long-term basis or otherwise set aside (or reasonably expected to be reserved, allocated on a long-term basis or otherwise set aside) to provide permanent financing for the expenditures related to the Infrastructure Improvements, other than pursuant to the issuance of the Bonds. The statement of intent contained in this Resolution, therefore, is determined to be consistent with the City’s budgetary and financial circumstances as they exist or are reasonably foreseeable on the date hereof. 5.05. The City’s Finance Director shall be responsible for making the “reimbursement allocations” described in the Regulations, being generally the transfer of the appropriate amount of proceeds of the bonds to reimburse the source of temporary financing used by the City to make prior payment of the costs of the Infrastructure Improvements. Each allocation shall be evidenced by an entry on the official books and records of the City maintained for the Bonds or the Infrastructure Improvements and shall specifically identify the actual original expenditure being reimbursed. DocuSign Envelope ID: 91AFC30A-AE2A-4AC3-B19E-41273B68F049 Resolution 5420, Approving Projects in the South Bozeman Technology Tax Increment Financing District 7 PASSED, ADOPTED, AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 14th day of June, 2022. ___________________________________ CYNTHIA ANDRUS Mayor ATTEST: ___________________________________ MIKE MAAS City Clerk APPROVED AS TO FORM: ___________________________________ GREG SULLIVAN City Attorney DocuSign Envelope ID: 91AFC30A-AE2A-4AC3-B19E-41273B68F049 CERTIFICATE AS TO RESOLUTION AND ADOPTING VOTE I, the undersigned, being the duly qualified and acting recording officer of the City of Bozeman, Montana (the “City”), hereby certify that the attached resolution is a true copy of Resolution No. 5420 entitled: “RESOLUTION APPROVING CERTAIN PROJECTS IN THE SOUTH BOZEMAN TECHNOLOGY TAX INCREMENT FINANCING DISTRICT AS TECHNOLOGY INFRASTRUCTURE DEVELOPMENT PROJECTS AND USING TAX INCREMENT REVENUES OR TAX INCREMENT REVENUE BONDS TO REIMBURSE ELIGIBLE COSTS ASSOCIATED WITH SUCH PROJECTS; APPROVING A RELATED DEVELOPMENT AGREEMENT; AND MAKING A REIMBURSEMENT DECLARATION” (the “Resolution”), on file in the original records of the City in my legal custody; that the Resolution was duly adopted by the City Commission of the City at a regular meeting on June 14, 2022, and that the meeting was duly held by the City Commission and was attended throughout by a quorum, pursuant to call and notice of such meeting given as required by law; and that the Resolution has not as of the date hereof been amended or repealed. I further certify that, upon vote being taken on the Resolution at said meeting, the following Commission members voted in favor thereof: ; voted against the same: ; abstained from voting thereon: ; or were absent: . WITNESS my hand and seal officially this 14th day of June, 2022. (SEAL) __________________________________ MIKE MAAS City Clerk DocuSign Envelope ID: 91AFC30A-AE2A-4AC3-B19E-41273B68F049 Andrus, Cunningham, Pomeroy, Madgic Coburn Resolution 5420, Approving Projects in the South Bozeman Technology Tax Increment Financing District A-1 EXHIBIT A [Form of Development Agreement] DocuSign Envelope ID: 91AFC30A-AE2A-4AC3-B19E-41273B68F049