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H1. Ord 1820 - Creating TIF DistrictCity of Kalispell Charles A. Harball Office of City Attorney City Attorney 201 First Avenue East P.O. Box 1997 Kalispell, MT 59903-1997 TO: FROM: MEMORANDUM Doug Russell, City Manager )(L Charles Harball, City Attorney Tel 406.758.7709 Fax 406.758.7758 charball@kalispell.com SUBJECT: Ordinance No. 1820 — To Create a Downtown Urban Renewal Tax Increment Financing District as an Overlay to the Downtown Urban Renewal District MEETING DATE: January 22, 2019 — Regular Council Meeting BACKGROUND: On December 4, 2017, following many months of extensive interaction with the public, the Kalispell City Council adopted the Downtown Plan as an amendment to the City of Kalispell Growth Policy Plan -It 2035 by Resolution No. 5846. The adopted Downtown Plan identifies the City's overall mission to meet its needs of promoting economic development, improving area employment opportunities, improving area housing opportunities and expanding the community's tax base within the downtown area. It further identifies areas of blight within the downtown area that may be rehabilitated through replanning, removal of congestion, the provision of parks, playgrounds, and other public infrastructure improvements, and through encouraging voluntary rehabilitation. Finally, the Plan identifies the goal of creating a Downtown Urban Renewal District with a Tax Increment Finance District as an overlay for the purposes of constructing appropriate public infrastructure projects to invigorate the redevelopment of blighted conditions. Sixteen years ago, the Kalispell Downtown Urban Renewal District and the Tax Increment Financing District overlay statutorily sunset after 22 years of service during which substantial rehabilitation to public infrastructure and private investment in the District occurred. Since that time, significant commercial investment has been made outside of Downtown Kalispell. Additionally, the Westside Urban Renewal and Tax Increment Financing Districts have been expanded to the Core area and are now ripe for investment by new development. Because of the attractive investment opportunities outside of the downtown area and the blight that continues to be there, a significant likelihood exists that a deprivation of investment will continue in the downtown area, increasing blighted properties, decreasing property values and the community's tax base in that area. Ordinance No. 1820 - Creation Of a Downtown Urban Renewal Tax Increment Financing District January 22, 2019 Page - 2 Therefore, the Kalispell City Council passed Ordinance No.1816 establishing the Downtown Urban Renewal District on second reading on December 17, 2018 and will become effective on January 16, 2019. On December 17, 2018, the City Council passed a Resolution of Intent to give notice to the public of the Council's intent to consider creating a Tax Increment Financing District overlay to the Downtown Urban Renewal District for the purposes of providing funding to rehabilitate and improve public infrastructure within the Urban Renewal District in order to attract private investment. On January 7, 2019 the City Council held the public hearing and took comment from the public and two comments were received. RECOMMENDATION: It is recommended that the Council consider and pass Ordinance No. 1820 on first reading. ALTERNATIVES: Council may seek to amend the Ordinance, reject the Ordinance or continue the matter for further consideration. Office of City Attorney City of Kalispell CERTIFICATE AS TO ORDINANCE AND ADOPTING VOTE I, the undersigned, being the duly qualified and acting recording officer of the City of Kalispell, Montana (the "City"), hereby certify that the attached ordinance is a true copy of a Ordinance entitled: AN ORDINANCE ESTABLISHING AN URBAN RENEWAL TAX INCREMENT FINANCING DISTRICT ENCOMPASSING A PORTION OF DOWNTOWN KALISPELL AS DELINIATED IN THE DOWNTOWN PLAN AMENDMENT TO THE CITY OF KALISPELL GROWTH POLICY PLAN -IT 2035 AS SET FORTH IN THE ATTACHED EXHIBIT "A" TO BE KNOWN AS Till: DOWNTOWN KALISPELL URBAN RENEWAL TAX INCREMENT FINANCING DISTRICT (the "Ordinance"), on file in the original records of the City in my legal custody; that the Ordinance was duly adopted on first reading by the City Council of the City at a meeting on January 22, 2019, and the meeting was duly held by the City Council and was attended throughout by a quorum, pursuant to call and notice of such meeting given as required by law; and that the Ordinance has not as of the date hereof been amended or repealed. I further certify that, upon vote being taken on the Ordinance at said meeting, the following City Council members voted in favor thereof: voted against the same: abstained from voting thereon: or were absent: WITNESS my hand officially this 22nd day of January, 2019. Aimee Brunckhorst, CMC City Clerk I further certify that the Ordinance was duly adopted on second reading by the City Council of the City at a regular meeting on February 4, 2019, and that the meeting was duly held by the City Council and was attended throughout by a quorum, pursuant to call and notice of such meeting given as required by law; and that the Ordinance has not as of the date hereof been amended or repealed. I further certify that, upon vote being taken on the Ordinance at said meeting, the following City Council members voted in favor thereof: voted against the same: abstained from voting thereon: or were absent: WITNESS my hand officially this 4th day of February, 2019. Aimee Brunckhorst, CMC City Clerk ORDINANCE NO. 1820 AN ORDINANCE ESTABLISHING AN URBAN RENEWAL TAX INCREMENT FINANCING DISTRICT ENCOMPASSING A PORTION OF DOWNTOWN KALISPELL AS DELINIATED IN THE DOWNTOWN PLAN AMENDMENT TO THE CITY OF KALISPELL GROWTH POLICY PLAN -IT 2035 AS SET FORTH IN THE ATTACHED EXHIBIT "A" TO BE KNOWN AS THE DOWNTOWN KALISPELL URBAN RENEWAL TAX INCREMENT FINANCING DISTRICT. WHEREAS, on December 4, 2017, following many months of extensive interaction with the public, the Kalispell City Council adopted the Downtown Plan as an amendment to the City of Kalispell Growth Policy Plan -It 2035 by Resolution No. 5846; and WHEREAS, the adopted Downtown Plan identifies the City's overall mission to meet its needs of promoting economic development, improving area employment opportunities, improving area housing opportunities and expanding the community's tax base within the downtown area; and WHEREAS, the Downtown Plan further identifies areas of blight within the downtown area that may be rehabilitated through replanning, removal of congestion, the provision of parks, playgrounds, and other public infrastructure improvements, and through encouraging voluntary rehabilitation; and WHEREAS, the Downtown Plan identifies the goal of creating a Downtown Urban Renewal District with a Tax Increment Finance District as an overlay for the purposes of constructing appropriate public infrastructure projects to invigorate the redevelopment of blighted conditions; and WHEREAS, sixteen years ago, the Kalispell Downtown Urban Renewal District and the Tax Increment Financing District overlay statutorily sunsetted after 22 years of service during which substantial rehabilitation to public infrastructure and private investment in the District occurred; and WHEREAS, since the time of the Kalispell Downtown Urban Renewal District and Tax Increment Financing District sun setting in 2002, significant commercial investment has been made outside of Downtown Kalispell; additionally, the Westside Urban Renewal and Tax Increment Financing Districts have been expanded to the Core Area and are now ripe for investment by new development; and WHEREAS, because of the attractive investment opportunities outside of the downtown area and the blight that continues to be there, a significant likelihood exists that a deprivation of investment will continue in the downtown area, increasing blighted properties and decreasing property values and the community's tax base in that area; and WHEREAS, the Kalispell Planning Board held a duly noticed public hearing September 11, 2018, to consider the DRAFT Downtown Kalispell Urban Renewal Plan in which staff report KRD-18-02 that provided details of the proposal and evaluation was accepted by the Planning Board as findings of fact and transmitted to the City Council; and WHEREAS, on September 19, 2018 the Kalispell Urban Renewal Agency held a duly noticed public meeting to consider the DRAFT Downtown Kalispell Urban Renewal Plan in which it recommended approval on a vote of 4 to 1. WHEREAS, pursuant to the terms of MCA Title 7, Chapter 15, Part 42 the Kalispell City Council approved a resolution of intent and in conformance with Section 7-15-4215 of the Act held a duly noticed public hearing on November 19, 2018 considering all oral and written comment and testimony as well as all evidence reviewed by the Kalispell City Planning Board, including the Downtown Plan Amendment previously approved by Council; and WHEREAS, on December 3, 2018, pursuant to MCA 7-15-4210, the Kalispell City Council passed Resolution No. 5905 a Resolution of Necessity finding that areas of blight exist within the boundaries of the Downtown Plan Amendment to the City of Kalispell Growth Policy Plan -It 2035 and that rehabilitation, redevelopment, or a combination thereof, within such area is necessary in the interest of the public health, safety, morals or welfare of the residents of the City of Kalispell; and WHEREAS, on December 17, 2018 the Kalispell City Council passed Ordinance No. 1816 on second reading establishing the Downtown Kalispell Urban Renewal District and further passed Resolution No. 5906 stating its intent to create a Downtown Kalispell Urban Renewal Tax Increment Financing District and setting a duly noticed public hearing for such on January 7, 2019, all pursuant to the terms of MCA Title 7, Chapter 15, Part 42; and WHEREAS, on January 7, 2019 the Kalispell City Council held a duly noticed public hearing to take oral and written comment from the public regarding the creation of a Downtown Kalispell Urban Renewal Tax Increment Financing District and received two public comments, one in favor of the creation of the district from the president of the Downtown Business Improvement District and one other comment that additional property taxes should not be imposed upon the properties within the district. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF KALISPELL AS FOLLOWS: SECTION 1. The Kalispell City Council hereby finds that it is in the best interests of the residents of the City of Kalispell that the City should exercise its powers pursuant to the terms of the Montana Urban Renewal Act, MCA Title 7, Chapter 15, Part 42, to create the Downtown Kalispell Urban Renewal Tax Increment Financing District, physically described in Exhibit "A", attached hereto, for all legal purposes authorized under the Act. SECTION 2. Effective Date. This Ordinance is to be posted as required by law and copies made available to the public upon request. This Ordinance shall take effect thirty (30) days after its final passage. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL THIS 4TI I DAY OF FEBRUARY, 2019. Mark Johnson Mayor ATTEST: Aimee Brunckhorst, CMC City Clerk Exhibit "A" Downtown Kalispell Urban Renewal Tax Increment Financing District Boundary The Downtown Kalispell Urban Renewal Tax Increment Financing District Boundary embraces a 95-acre area. Starting at the intersection of 3rd Avenue West and 1 st Street the plan is bound by heading easterly on 1 st Street until 3rd Avenue East, thence southerly along 3rd Avenue East until the intersection with 4th Street, thence westerly along 4th Street until 2nd Avenue East, thence southerly along 2nd Avenue East until 5th Street, thence Westerly along 5th Street until 1 st Avenue East, thence southerly along 1 st Avenue East until 9th Street, thence westerly along 9th Street until 1 st Avenue West, thence northerly along 1 st Avenue West until 5th Street, thence westerly along 5th Street until 2nd Avenue West, thence northerly along 2nd Avenue West until 4th Street, thence westerly along 4th Street to 3rd Avenue West, thence northerly along 3rd Avenue West until the point of beginning, shown in the map below: