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H2. Res. 6180, TIF Policy AmendmentKALisPEii, Development Services Department 201 1st Avenue East Kalispell, MT 59901 Phone: (406) 758-7940 Fax: (406) 758-7739 www.kalispell.com/plannine REPORT TO: Doug Russell, City Manager FROM: Jarod Nygren, Development Services Director SUBJECT: Resolution 6180 — Request to amend expenditure limits within the West Side Urban Renewal — Core Area Tax Increment Financing Assistance and Downtown Kalispell Tax Increment Financing Assistance Programs. MEETING DATE: January 16, 2024 BACKGROUND: In 2019, the City adopted the Downtown Tax Increment Finance (TIF) District and made updates to the West Side - Core Area TIF application. Since that time, significant cost increases at all levels of development have come to fruition. Accordingly, the Urban Renewal Agency discussed increasing allowable expenditure limits within both the West Side and Downtown TIF programs as follows to reflect the current market more appropriately: • Street Tree Placement Program grant increase from $5,000 to $10,000; • Sidewalk Placement Program grant increase from $5,000 to $15,000; • Historic Facade restoration projects grant increase from $50,000 to $150,000; • Facade Improvement Program loan program increase from $50,000 to $250,000; • Rehabilitation/Code Compliance loan program increase from $50,000 to $250,000; • Site Demolition/Preparation/Cleanup loan/grant program from $50,000 to $250,000; • Technical Assistance Program grant increase from $5,000 to $20,000; and • Threshold for Third -party analysis of financial feasibility increase from $100,000 to $200,000 TIF funding requests. The Kalispell Urban Renewal Agency (URA) held a meeting on December 13, 2023, to consider the request. URA discussion concluded that the updates to the TIF programs were appropriate, and the motion passed unanimously on roll call vote. RECOMMENDATION: It is recommended that the Council adopt Resolution 6180, a Resolution amending the expenditure limits within the Westside Urban Renewal — Core Area Tax Increment Financing Assistance and Downtown Kalispell Tax Increment Financing Assistance Programs. FISCAL EFFECTS: No immediate fiscal impacts, however, the amendments will increase the eligible amount of funding for eligible TIF projects. Eligible projects will still have to be approved by both the URA and Council according to the TIF policies and will not be automatically guaranteed funding. ALTERNATIVES: Deny the request. ATTACHMENTS: • Resolution 6180 • Downtown Kalispell Tax Increment Financing Assistance Program with track changes • Westside Urban Renewal — Core Area Tax Increment Financing Assistance Program with track changes • URA Minutes Aimee Brunckhorst, Kalispell City Clerk RESOLUTION NO.6180 A RESOLUTION AMENDING THE EXPENDITURE LIMITS OF THE "DOWNTOWN KALISPELL TAX INCREMENT FINANCING ASSISTANCE PROGRAM" AND THE "CITY OF KALISPELL WEST SIDE URBAN RENEWAL — CORE AREA TAX INCREMENT FINANCING DISTRICT ASSISTANCE PROGRAM" AS RECOMMENDED BY THE CITY OF KALISPELL URBAN RENEWAL AGENCY. WHEREAS, in 2019, the City Council adopted the "Downtown Kalispell Tax Increment Financing Assistance Program" and updated the "West Side Urban Renewal — Core Area Tax Increment Financing District Assistance Program" documents, as recommended by the Urban Renewal Agency; and WHEREAS, since that time, costs at all levels of development have significantly increased, and the Urban Renewal Agency is recommending increasing the allowable expenditure limits within both the West Side and Downtown TIF programs in order to reflect the current market more appropriately; and WHEREAS, the Urban Renewal Agency has recommended increasing allowable expenditure limits within both the West Side and Downtown TIF programs as follows: • Street Tree Placement Program grant increase from $5,000 to $10,000; • Sidewalk Placement Program grant increase from $5,000 to $15,000; • Historic Facade restoration projects grant increase from $50,000 to $150,000; • Fagade Improvement Program loan program increase from $50,000 to $250,000; • Rehabilitation/Code Compliance loan program increase from $50,000 to $250,000; • Site Demolition/Preparation/Cleanup loan/grant program from $50,000 to $250,000; • Technical Assistance Program grant increase from $5,000 to $20,000; and • Threshold for Third -parry analysis of financial feasibility increase from $100,000 to $200,000 TIF funding requests. NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL, MONTANA, AS FOLLOWS: SECTION 1. The City of Kalispell hereby amends the allowable expenditure limits of the "Downtown Kalispell Tax Increment Financing Assistance Program", attached hereto as Exhibit "A" and incorporated fully herein by this reference, and the allowable expenditure limits of the "West Side Urban Renewal — Core Area Tax Increment Financing District Assistance Program", attached hereto as Exhibit "B" and incorporated fully herein by this reference, as policies to guide the City of Kalispell Urban Renewal Agency. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL THIS 16TH DAY OF JANUARY, 2024. ATTEST: Aimee Brunckhorst, CMC City Clerk Mark Johnson Mayor EXHIBIT "A" Downtown Kalispell Tax Increment Financing Assistance Program City of Kalispell- Urban Renewal Agency City Council Resolution 5955 Date: 12/16/19 1 Table of Contents Introduction 2 Urban Renewal Agency 2 Purpose 2 Program Objectives 2 Polices 3 Criteria for Reviewing Funding Applications 3 Eligible Activities 5 Eligible Applicants 6 Eligible Properties 6 Application Process 6 Important 7 Shared Utilities Program 9 Street Tree Placement Program 10 Sidewalk Placement Program 11 Historic Fagade Program 11 Fagade Improvement Program 13 Rehabilitation/Code Compliance Program 15 Site Demolition, Cleanup, and Preparation Program 16 Technical Assistance Program 17 Public Infrastructure Program 18 Approved by Urban Renewal Agency 812112019 N INTRODUCTION On December 4, 2017, 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 Downtown Plan addresses a number of key topics that affect the future growth and development of Downtown Kalispell. Subsequently, the Kalispell City Council adopted the Downtown Kalispell Urban Renewal Plan on December 3, 2018, thereby establishing an urban renewal district as part of 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. The implementation of the Downtown Kalispell Urban Renewal Plan will include the use of Tax Increment Financing (hereby referred to as "TIF") as provided in 7-15-4282 through 7-15-4294, MCA for appropriate public infrastructure projects in support of redevelopment within the Urban Renewal District boundary. TIF districts are typically characterized by blight that limits new investment within the Urban Renewal District. TIF is an important element of economic development in the City of Kalispell as a means to fund development activities. The TIF program operates by first establishing a base year taxable value for all properties within a designated boundary. Property taxes from that boundary or district continue to be paid to all taxing jurisdictions such as schools, county, etc., on the basis of the base year valuation. All increases in property taxes in the district above this tax base valuation due to new development or reappraisals are assigned to the City of Kalispell to be used to fund eligible activities identified within the Downtown Kalispell Urban Renewal Plan. URBAN RENEWAL AGENCY The Downtown Kalispell TIF is managed by the City of Kalispell Urban Renewal Agency advisory to Kalispell City Council. In 2010, pursuant to City of Kalispell Resolution 5435, an Urban Renewal Agency (hereafter referred to as "URA") was established for the purpose of assisting the Kalispell City Council in evaluating and proposing TIF district plans and projects. The five - member committee is responsible for reviewing all TIF applications and making recommendations to Kalispell City Council. PURPOSE It is the primary focus of the Downtown Kalispell TIF assistance program to encourage the location, expansion and retention of business and housing opportunities suitable for Downtown Kalispell. The TIF would do this by incentivizing growth within the plan boundary, which has otherwise been stagnant. The purpose of the TIF assistance program is to encourage desirable development/redevelopment projects, as well as assist projects that would not otherwise occur "but for" the assistance provided through TIF. The purpose of this document is to provide guidelines for the URA to offer monetary incentives for development activities within the urban renewal district in the form of TIF assistance funds. PROGRAM OBJECTIVES Approved by Urban Renewal Agency 812112019 The primary objective of the TIF assistance program is to encourage investment in development and redevelopment of mixed -use, commercial and multi -family (four units or more) within the district in accordance with the provisions of Montana Urban Renewal Law. Additional objectives within the urban renewal district include: Expand the property tax base in the district through private investment in income producing properties; Stimulate economic and business development within the district by improving public infrastructure deficiencies; and • Reduce blighted properties within the district. POLICIES I. TIF assistance will be given to projects that do not have the financial feasibility to proceed without the benefits of the TIF fund assistance. 2. The applicant shall provide market and feasibility studies, appraisals, etc. provided to private lenders of the project as well as any other information the URA, or Kalispell City Council may require in order to review the need for TIF assistance. 3. A third party analysis shall be provided for applications requesting more than $24-00,000 in TIF assistance. The third party analysis will be contracted by the city from a list of qualified consultants at the applicant's expense. The third parry analysis is required to ensure that project assumptions provided by developer align with current market conditions and industry standards. 4. The applicant shall be able to demonstrate their ability to construct, operate and maintain the proposed project based on past experience, general reputation and credit history. 5. TIF assistance will not be used for projects that place an extraordinary demand on the district infrastructure. 6. The relationship of private investment to public investment of a project shall be significant enough to ensure prudent investment of public funds within the TIF District. A prudent expenditure would equate to $1 of public money for every $9 of private money invested in a project. 7. The applicant shall retain ownership of the project long enough to complete it, occupy it, establish property management, and initiate payment of taxes based on the increased project value. CRITERIA FOR REVIEWING FUNDING APPLICATIONS In reviewing the TIF assistance application the URA will evaluate each new development project utilizing the following criteria, in addition to the policies outlined above. When an application is submitted, documentation demonstrating adherence to the following criteria must be submitted. 1. Each project must achieve each of the following criteria: Tax Generation — In order for the Downtown Kalispell TIF District to stay economically healthy for the maximum benefit to the district and community, a project Approved by Urban Renewal Agency 812112019 4 is expected to generate new taxes. The increase in taxable value due to new construction & rehabilitation is estimated by the County Assessor's office or State Department of Revenue to determine tax increase generation. • Elimination of Blight The project's direct and indirect impact on the physical deterioration within the TIF. • Project Feasibility —A determination of feasibility is made based on the strength of the applicant's demonstration of market demand for the project as contained primarily on the pro forma and financing commitments. • Applicant's ability to perform — An assessment of the applicant's capability to undertake the relative complexities of the project based on past performance and the project design and management team on similar projects based on the complexity of the project. • Timely Completion — The feasibility of completing the project according to the applicant's proposed project schedule. • Plan Goals — The project's ability to significantly further specific goals found in the Downtown Kalispell Urban Renewal Plan, The Downtown Plan, and Kalispell Growth Policy Plan -It 2035 goals and policies. 2. Each project must achieve at least 2 out of the 5 criteria: • Investment The project's potential for subsequent investment within the TIF district. • Unique Opportunities —The project's potential to present a unique opportunity, meet a special need, or address specific TIF district or community goals such as filling a market niche or providing an un-met community need. • Environmental Impacts —The project's ability to positively impact the environment in terms of brownfields cleanup, noise, dust, and traffic reduction; pollution reduction, etc. • Building The quality of development and overall aesthetics are beyond that which is minimally required by the UBC. • Job Creation— Projects that create opportunities for new employment contribute to the economic vitality of the district and community in a variety of ways. Projects creating five or more full-time equivalent jobs would be considered to have a significant positive impact on the economic well-being of the district, and will be given greater priority. Additionally, new jobs that pay at or above the median county income level will be given priority. 3. Each project must achieve at least 3 out of the 6 criteria: Approved by Urban Renewal Agency 812112019 5 • Housing Increases housing units, including integrating a variety of residential housing types to accommodate people of different age groups and income levels. • Urban Development — Redevelopment that considers the downtown's character and promotes a mix of uses emphasizing retail uses on the main floor and offices or residential uses on upper floors. • Parking Recognize that there are special parking considerations downtown which differ from other areas. A project should use innovative parking management and shared parking provisions, including for general public use. • Recreation Incorporates amenities into the development such as pocket parks, activity nodes and gathering spaces. • Facilities Public Health and Mobility Project will construct or improve sidewalks, including ADA access to buildings. • Alternative Transportation —Project promotes the use of bicycling, transit, ride sharing, car sharing, etc. ELIGIBLE ACTIVITIES Per Montana State Law (7-15-4288 M.C.A.) 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 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; Approved by Urban Renewal Agency 812112019 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. ELIGIBLE APPLICANTS • Property owners or their designated representatives whose property is located within the TIF district are eligible to apply. ELIGIBLE PROPERTIES Properties must be located inside the Downtown Kalispell TIF District and be: • Commercial • Mixed -use • Multi -family properties consisting of four or more units APPLICATION PROCESS Applicants must submit a complete written application for each TIF project to the City of Kalispell Community and Economic Development Department. The TIF application is available online at hM2s://kalispell.com/164/Community-Development under `online applications' or by contacting the Community and Economic Development Department. Completed applications must be received at least ten business days prior to the URA board meeting at which time the application will be considered. This is to allow adequate time for a thorough staff review of the application for presentation to the URA committee. Incomplete applications will be returned to the applicant with an explanation on the additional information required. The following procedure has been developed to expedite the review of TIF funding requests: 1. Initial contact- Contact the Community and Economic Development Department, City of Kalispell, 201 First Avenue East, Kalispell MT 59901, (406) 758-7713, kking2kalispell_com Approved by Urban Renewal Agency 812112019 to discuss the project and determine eligibility for TIF assistance. 2. Complete a TIF application with required attachments- The applicant must prepare a TIF application for each funding request and include all required attachments. The Community and Economic Development staff will assist the applicant in preparing the application. 3. Staff review and evaluation — Staff will evaluate projects within the Downtown Kalispell Urban Renewal District for their consistency with the Downtown Urban Renewal Plan and associated policies and criteria outlined herein. Staff will prepare a staff report including findings of fact and provide a recommendation to the URA. 4. URA review and approval - Upon submittal of all necessary information, the URA will review the merits of the project and the need for funding. The URA will review the project, adopt findings of fact, and issue a recommendation on the funding request or any part thereof, and any special terms of TIF assistance to Kalispell City Council. Applicants are encouraged to be present during this review. 5. City Council review and approval- The Kalispell City Council shall act on applications within 30 days of URA recommendation, and take formal action to approve or deny the request. Every decision of the city council pertaining to granting, denial or amendment of TIF assistance shall be based upon "Findings of Fact." Applicants are encouraged to be present during this review. 6. Development agreement- Upon approval by Kalispell City Council, the City of Kalispell and the applicant must execute a legally binding Development Agreement which establishes the terms and conditions of the TIF assistance. Among the terms and conditions, the agreement shall specify the schedule for the start and completion of the project. The Development Agreement must be executed within six months of City Council approval; if not completed by this time the applicant must re -apply for project funding. IMPORTANT: Applicants seeking funding, by either grant or loan, through a City of Kalispell Tax Increment Financing District, must take into account the following considerations: 1. Tax increment financing may only be used to offset such costs of development as are allowed pursuant to MCA §7-17-4288. 2. The applicant's costs of development incurred prior to receiving tax increment funding approval from the Kalispell City Council and satisfying all conditions of such approval shall not be eligible for tax increment funding. 3. Development approved for tax increment financing assistance may not rely upon receiving immediate reimbursement of money expended upon an approved project, as the tax increment funds may not be immediately available at the time of construction. The City will not be obligated to use any funds for reimbursement purposes outside of its tax increment Approved by Urban Renewal Agency 812112019 E-' district accounts. As the City has no control over the amount tax increment generated by the district, it will not make any guarantees as to the timing or amount of tax increment financing reimbursement that it will ultimately be able to pay. 4. All development agreements that contain tax increment financing assistance for a project shall include a clause that will subordinate the financial assistance described in the development agreement to such other tax increment financing projects entered into at any time during the life of the TIF district that are financed through revenue bonds secured by the tax increment generated by the district. 5. Other compliance and code requirements may apply. URA recommendation and City Council approval of funding does not relieve the applicant's responsibility to secure all necessary permits. 6. At any point in the review process the Community and Economic Development Department staff or URA may request more information of the applicant or solicit comment on the project from other public agencies. Items included in personal financial statements will not be subject to public review, presentation, or comment by other agencies. 7. All requests for loan dollars will be subject to approval by the City of Kalispell Revolving Loan Fund Committee. City of Kalispell Community and Economic Development Department Revolving Loan Fund Policy and Procedures will apply to all loans. Current financial statements for each shareholder involved in the project may be required, as well as documentation of financial capacity. This information will be kept confidential, subject to challenge in a court of law. Downtown Kalispell Tax Increment Financing District Programs: I. Public/Private Incentive Grant Programs: Grant Programs: • Shared Utilities 9 • Street Tree Placement 10 • Sidewalk Placement 11 • Historic Facade Restoration 11 IZ Private Investment Programs: Loan Programs: • Farade Improvement 13 • Rehabilitation/Code Compliance 15 • Site Demolition, Cleanup, and Preparation 16 • Technical Assistance 17 III. Public Infrastructure • Projects as recommended by City Council 18 Approved by Urban Renewal Agency 812112019 L PUBLIC/PRIVATE INCENTIVE GRANT PROGRAMS Shared Utilities Program Objectives: The primary objective of the Shared Utilities Program is to improve shared public services such as water, sewer, sidewalks, parking (public/shared), and traffic circulation within the TIF District. Guidelines: Shared Utilities projects may be eligible for a grant related to 100% of all public infrastructure costs and/or impact fees. No funds will be disbursed until all completion criteria have been satisfactorily met as determined by the URA and Kalispell City Council. Maintenance obligations are that of the property owner. Costs incurred in connection with redevelopment activities allowed under Montana State Law 7-15-4288 (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 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 7-75-4288 (10)- The connection of the urban renewal area or targeted economic development district to existing infrastructure outside the area or district Kalispell Growth Policy Plan -It 2035 Recommendations: Kalispell Growth Policy Plan -It 2035, Chapter 6 Historic Downtown and Core Area Policy (8) — Encourage development and redevelopment by creating incentives for developers to offset infrastructure and other site costs. Kalispell Growth Policy Plan -It 2035, Chapter 4 Housing recommendation 2 — Investigate alternative funding mechanisms to reduce impact fees. Kalispell Growth Policy Plan -It 2035, Chapter 4 Business and Industry recommendation 3 — Explore alternative funding mechanisms for infrastructure to eliminate reliance on impact fees. Approved by Urban Renewal Agency 812112019 10 The Downtown Plan Goals: Chapter 4, Implementation Goal 3 (d) — Upgrade inadequate infrastructure including city water mains for fire flows to accommodate the full use of historic buildings downtown. Chapter 4, Implementation Goal 3 (e) — Develop a revolving loan/grant program using TIF or other funding resources to help business fund necessary infrastructure or property reinvestment. Chapter 4, Implementation Goal 3 (g) — Provide infrastructure that supports new technology, i.e. — WIFI, fiber-optic, etc. Examples of Eligible Activities: Projects benefiting more than one business Impact fees Examples of Ineligible Activities: • Permit Fees • Utilities benefiting only the applicant's property Street Tree Placement Program Objectives: The primary objective of the Street Tree Placement Program is to encourage the placement of street trees through the City of Kalispell Tree Placement and Maintenance Program per City Council Ordinance 1086. Guidelines: Street Tree Placement Program projects may be eligible for a 50150 matching grant up to $10-5,000 for street trees not part of a larger development project. Eligible applicants will work with the City of Kalispell Parks and Recreation Department's Tree Placement and Maintenance Program. Costs incurred in connection with redevelopment activities allowed under Montana State Law • 7-15-4233 (i) To improve, clear, or prepare for redevelopment any real or personal property in an urban renewal area. The Downtown Plan Goals: Chapter 3, Implementation Goal 5 (f) — Increase landscaping to soften the area and create more appealing location. Examples of Eligible Activities: Approved by Urban Renewal Agency 812112019 11 • New street tree placement within public right-of-way • Irrigation systems limited to the life of the tree Ineligible Activities: • Trees being placed outside the public right-of-way Sidewalk Placement Program Objectives: The primary objective of the Sidewalk Placement Program is to encourage development, and provide safe pedestrian navigation from business to business in the TIF District. Additional objectives include expanding the property tax base, stimulation of business and economic development and retention and expansion of employment in the district. Guidelines: Sidewalk Placement Program projects may be eligible for a 50% matching grant up to $15,000 for projects constructing or replacing sidewalks not part of a larger development project Costs incurred in connection with redevelopment activities allowed under Montana State Law • 7-15-4288 (5) Costs incurred in connection with the redevelopment activities allowed under 7-15-4233. 7-15-4233 (i) To improve, clear, or prepare for redevelopment any real or personal property in an urban renewal area. The Downtown Plan Goals: • Chapter 4, Implementation Goal 4 (c) — Improve pedestrian and bike access throughout the plan area to improve safety and mobility. Example of Eligible Activities: Sidewalk placement in the public right-of-way Handicap ramps at intersections Examples of Ineligible Activities • Sidewalk out of the public right-of-way Historic Facade Restoration Program Objectives: Approved by Urban Renewal Agency 812112019 12 The primary objective of the Historic Fagade Restoration Program is to encourage voluntary repair and rehabilitation of commercial, mixed -use and multi -family property (minimum of 4 units) in the Downtown TIF District in a way that advances the aesthetic environment and enhances the pedestrian experience. Additional objectives include expanding the property tax base, stimulation of business and economic development and retention, and expansion of employment in the district. Guidelines: Historic fagade restoration projects may be eligible for a 50% matching grant up to $150,000. Some projects may also qualify for additional funding under the Facade Improvement Loan Program. To qualify under the historic fagade restoration program, buildings must either be individually listed on the National Register of Historic Places, in a designated historic district, or at least 50 years old. Historic photographs of Kalispell and its downtown store fronts may be available and should be used when determining the original character of a building design. Applicants should make a reasonable effort to provide historic images of the building. If no image is available the applicant should provide research on materials and building styles consistent with the construction date of the building or other appropriate time period. Materials and workmanship should accurately replicate the historic facade. Rehabilitation is limited to building facades visible from the street. Improvements shall be scaled to the pedestrian and provide visual interest both day and night. Effort should be made to facilitate access into the building and to create a building facade which conveys permanence and improves the aesthetics of the area. Improvements shall incorporate green building techniques and energy efficiency measures where feasible. Non -conforming improvements, per municipal zoning and building codes, shall not be considered. Costs incurred in connection with redevelopment activities allowed under Montana State Law • 7-15-4233 (i) to improve, clear, or prepare for redevelopment any real or personal property in an urban renewal area The Downtown Plan Goals: • Chapter 4, Implementation Goal 3(c) — Offer incentives to encourage historic fagade and exterior amenity improvements. • Chapter 4, Implementation Goal 5 (a) — Craft architectural design standards that are downtown specific that encourage renovations and new construction to blend in with and enhance the current historic flavor of the downtown. Design Criteria: The URA will review the design for compatibility and appropriateness based upon the project's architectural design, historic appearance, and site plan in the context of adjacent structures, the immediate neighborhood. Approved by Urban Renewal Agency 812112019 13 Examples of Eligible Activities Projects that preserve the storefront's character defining elements such as: display windows, transom, kickplate, entry, upper -story windows, and cornice molding Projects that avoid use of materials that were unavailable when the storefront was constructed (vinyl, aluminum siding, mirrored/tinted glass, artificial stone, and brick veneer) and use paint colors based on the buildings historical appearance Examples of Ineligible Activities • Interior rehabilitation • Roof and re -roofing unless the roof is a prominent historic facade element which is visible from the street or sidewalk • Structural foundations • Security bars • New construction or additions • Site improvements in the public right-of-way including sidewalks, curb, and gutter, and planters IL PRIVATE INVESTMENT PROGRAMS Facade Improvement Program Objectives: The primary objective of the Facade Improvement Program is to encourage voluntary repair in the TIF District in a way that advances the aesthetic environment and enhances the pedestrian experience. Additional objectives include expanding the property tax base, stimulation of business and economic development and retention and expansion of employment in the district. Guidelines: The Fagade Improvement Program is a loan -based program eligible up to $250,000. Terms and rates are subject to the decision of the URA and Revolving Loan Fund Committee. Costs incurred in connection with redevelopment activities allowed under Montana State Law • 7-15-4233 (i) To improve, clear, or prepare for redevelopment any real or personal property in an urban renewal area • 7-15-4288 (12) The acquisition, construction, or improvement of facilities or equipment for reducing, preventing, abating, or eliminating pollution The Downtown Plan Goals: • Chapter 4, Implementation Goal 3(c) — Offer incentives to encourage historic facade and Approved by Urban Renewal Agency 812112019 14 exterior amenity improvements. Chapter 4, Implementation Goal 5 (a) — Craft architectural design standards that are downtown specific that encourage renovations and new construction to blend in with and enhance the current historic flavor of the downtown. Design Criteria: URA will review the design for compatibility and appropriateness based upon the project's architectural design and site plan in the context of adjacent structures, the immediate neighborhood, and the vision for the TIF District. Fagade improvement projects are subject to City of Kalispell Architectural Review Committee and Building Department approvals as appropriate. Rehabilitation is limited to building facades visible from the street. Improvements shall be scaled to the pedestrian and provide visual interest both day and night. Effort should be made to facilitate access into the building and to create a building facade which conveys permanence and improves the aesthetics of the area. Non -conforming improvements, per municipal zoning and building codes, shall not be considered. Other criteria may be applied by the URA depending on the specifics of the application and the URA's determination of the priorities for redevelopment within the district. Examples of Eligible Activities: • Projects consisting of permanent materials such as stone, brick, or heavy gauge metal (Materials with a limited life span such as EFIS (synthetic stucco) are generally not eligible) • Projects increasing the energy efficiency of the building • Projects using recycled, renewable and otherwise green material • Projects enhancing the pedestrian environment • Projects improving the aesthetics of the district • Projects with architectural detailing addressing pedestrian scale Examples of Ineligible Activities: • Interior rehabilitation • Roof and re -roofing unless the roof is a prominent facade element which is visible from the street or sidewalk • Structural foundations • Security bars • New construction or additions • Site improvements in the public right-of-way including sidewalks, curb, and gutter, and planters. Approved by Urban Renewal Agency 812112019 15 Rehabilitation/Code Compliance Program Objectives: The primary objective of the Rehabilitation/Code Compliance Program is to improve the project's interior design and structure, and ensure the building is in compliance with City code. Additional objectives include expanding the property tax base, stimulation of business and economic development and retention and expansion of employment in the district. Guidelines: The Rehabilitation/Code Compliance Program is a loan based program eligible up to $250,000. Terms and rates are subject to the decision of the URA and Revolving Loan Fund Committee. Eligible projects are subject to City of Kalispell Architectural Review Committee and Building Department approvals as appropriate. The URA will review the project for compatibility and appropriateness based on the vision for the West Side Urban Renewal- Core Area TIF District. Per the Montana Code Annotated 2013, section 7-15-4206 (17): "Rehabilitation" may include the restoration and renewal of a blighted area or portion of the area in accordance with an urban renewal plan by: (i) Carrying out plans for a program of voluntary or compulsory repair and rehabilitation of buildings or other improvements... Costs incurred in connection with redevelopment activities allowed under Montana State Law • 7-15-4233 (i) To improve, clear, or prepare for redevelopment any real or personal property in an urban renewal area. Growth Policy Plan -It 2035 Policies: Kalispell Growth Policy Plan -It 2035, Chapter 6 Historic Downtown and Core Area Policy (8) — Encourage development and redevelopment by creating incentives for developers to offset infrastructure and other site costs. Kalispell Growth Policy Plan -It 2035, Chapter 6 Historic Downtown and Core Area Policy (4) — Encourage rehabilitations and reuse of existing downtown buildings. The Downtown Plan Goals: Chapter 4, Implementation Goal 3(i) — Develop cost effective options for meeting existing fire codes. Chapter 4, Implementation Goal 3 (e) — Develop a revolving loan/grant program using TIF or other funding resources to help business fund necessary infrastructure or property reinvestment. Examples of Eligible Activities: • Projects addressing ADA Compliance Approved by Urban Renewal Agency 812112019 16 Projects addressing and eliminating specific code violations and conditions that could be injurious to the public's health, safety, and welfare Projects stimulating economic and business developments by providing safe environments for workers, businesses and the public Improvement to the building's interior and /or exterior that address repair and rehabilitation Examples of Ineligible Activities: • Working capital • Product for sale Site Demolition, Cleanup, And Preparation Program Objectives: The primary objective of the Site Demolition/Preparation/Cleanup Program is to prepare sites for redevelopment. Additional objectives include expanding the property tax base, stimulation of business and economic development and retention and expansion of employment in the district. Guidelines: Site Demolition/Preparation/Cleanup projects may be eligible for loan funds, and/or a 50% matching grant up to $250,000. Approved projects must be fully prepped for redevelopment, including removing all demolition materials and attractive nuisances, leveling the site, capping all utilities, stabilizing the site from wind and erosion, and securing the site as necessary. Eligible projects must first complete a Phase I and/or Phase II environmental site assessment (ESA) as necessary on the site to characterize the site. Phase I and Phase II ESA's may be done at the property owner's expense, under the City of Kalispell Brownfields Program as funds are available, or as a TIF grant. In the event that environmental remediation is necessary at the site for reuse, a Brownfields clean-up loan or TIF loan may be pursued. Phase II environmental site assessments may eligible for a 50% matching grant, up to $50,000. Costs incurred in connection with redevelopment activities allowed under Montana State Law • 7-15-4288 (2) Demolition and removal of structures • 7-15-4288 (5) Costs incurred in connection with the redevelopment activities allowed under 7-15-4233 • 7-15-4233 (i) To improve, clear, or prepare for redevelopment any real or personal property in an urban renewal area • 7-15-4288 (12) The acquisition, construction, or improvement of facilities or equipment for reducing, preventing, abating, or eliminating pollution. Approved by Urban Renewal Agency 812112019 17 The Downtown Plan Goals: • Chapter 4, Implementation Goal 3 (f) — Continue promoting the Brownfields programs in order to prepare environmentally degraded properties for redevelopment. Examples of Eligible Activities: • Phase I and Phase II environmental site assessments • Projects that are fully prepped for redevelopment, including removing all demolition materials and attractive nuisances • Projects leveling the site, capping all utilities, stabilizing the site from wind and erosion, and securing the site as necessary Examples of Ineligible Activities: Construction or reconstruction of the public utilities serving the site Marketing and/or sale of building site or building Technical Assistance Program Objectives: The primary objective of the Technical Assistance Program is to support the applicant with technical assistance during the preliminary phases of site improvement projects within the TIF. Additional objectives include expanding the property tax base, stimulation of business and economic development and retention and expansion of employment in the district. Guidelines: The Technical Assistance Program is a grant based program. Eligible applicants may receive up to $20-:-+,000. Technical Assistance applicants must submit the biography, resume, and licensing certificate as appropriate for the firm conducting the technical assistance. Costs incurred in connection with redevelopment activities allowed under Montana State Law • 7-15-4233 (i) To improve, clear, or prepare for redevelopment any real or personal property in an urban renewal area 7-15-4233 (m) To prepare plans for carrying out a program of voluntary or compulsory repair and rehabilitation of buildings and improvements The Downtown Plan Goals: • Chapter 3, Implementation Goal 2 (g) — Begin planning the location and funding for a Approved by Urban Renewal Agency 812112019 18 new parking garage within The Downtown Plan boundary. • Chapter 3, Implementation Goal 4 (b) — Identify major gathering or destination points (Core Area, public buildings, parks, commercial areas) in need of pedestrian access and connection. • Chapter 3, Implementation Goal 6 (b) — Support the creation of a performing arts venue. Examples of Eligible Activities: • Architectural Design • Engineering • Landscape Design • Fagade design • Landscape/hardscape design • Marketing and/or feasibility studies Examples of Ineligible Activities: • Demolition/Construction • Permits, building, and appraisal fees III. PUBLIC INFRASTRUCTURE PROGRAMS Public Infrastructure Objectives: As recommended by City Council Costs incurred in connection with redevelopment activities allowed under Montana State Law • 7-15-4288 (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 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 7-75-4288 (10)- The connection of the urban renewal area or targeted economic development district to existing infrastructure outside the area or district The Downtown Plan Goals: • See Chapter 4, Implementation Approved by Urban Renewal Agency 812112019 EXHIBIT "B" Amended West Side Urban Renewal - Core Area Tax Increment Financing Assistance Program City of Kalispell- Urban Renewal Agency City Council Resolution 5955 Formatted: Highlight Date 12/16/19 1 Table of Contents Introduction 2 Background Information 2 Program Objectives 2 Policies 3 Criteria for Reviewing Applications 3 Eligible Activities 5 Eligible Applicants 6 Eligible Properties 6 Application Process 6 Important 7 Shared Utilities Program 9 Street Tree Placement Program 10 Sidewalk Placement Program 11 Historic Fagade Program 11 Fagade Improvement Program 13 Rehabilitation/Code Compliance Program 15 Site Demolition, Cleanup, and Preparation Program 16 Technical Assistance Program 17 Public Infrastructure Program 19 Approved by Urban Renewal Agency INTRODUCTION Tax Increment Financing (hereafter referred to as `TIF') is an important element of economic development in the City of Kalispell as a means to fund development activities. The TIF program operates by first establishing a base year taxable value for all properties within a designated boundary. Property taxes from that boundary or district continue to be paid to all taxing jurisdictions such as schools, county, etc., on the basis of the base year valuation. All increases in property taxes in the district above this tax base valuation due to new development or reappraisals are assigned to the City of Kalispell to be used to fund eligible activities identified within the urban renewal plan for the West Side Urban Renewal -Core Area TIF District. IMITO 01c" K/1110 U 10 Tel Nu /1I Y 1610 In 1997, an urban renewal plan was adopted by the Kalispell City Council creating the West Side Urban Renewal Plan and Tax Increment Financing District, (City of Kalispell Resolution 4309). The intent of the plan was to improve the area and encourage redevelopment through the use of TIF as specified by Montana Urban Renewal Law 7-15-42 and 7-15-43, M.C.A. In 2010, pursuant to City of Kalispell Resolution 5435, an Urban Renewal Agency (hereafter referred to as `URA') was established for the purpose of assisting the City Council in evaluating and proposing tax increment finance district plans and projects. This five member committee is responsible for reviewing all TIF applications and making recommendations to Kalispell City Council. In 2012 City of Kalispell Ordinance 1717 modified the boundaries of the Westside Tax Increment Financing District to include an area referred to as the "Core Area". The Core Area is an area encompassing 365 acres. Most initial redevelopment efforts will be focused along the major roadways of Idaho Street, Main Street, Center Street, Meridian Road, and 5' Avenue West North so that a more concentrated impact is realized. In 2013, Kalispell City Council Resolution 5605 adopted as an amendment to the West Side Urban Renewal Plan, the Core Area Plan. The intent is to eliminate blight and encourage redevelopment in the West Side Urban Renewal- Core Area TIF District through the use of TIF as specified by State Law. The goals and objectives of the Core Area Plan lay the groundwork for redevelopment. The language of the planning document encourages the development of innovative and creative projects in Kalispell consistent with this plan. It is the intention of the City of Kalispell to foster creative and innovative projects within the West Side Urban Renewal- Core Area TIF District as well as through the use of its public/ private partnership programs and other available resources. PROGRAM OBJECTIVES The primary objective of the TIF assistance program is to encourage investment in development and redevelopment of mixed -use, commercial and multi -family (four units or more) within the district in accordance with the provisions of Montana Urban Renewal Law. Additional objectives within the urban renewal district include: Approved by Urban Renewal Agency I21/2019 • Expand the property tax base in the district through private investment in income producing properties; • Stimulate economic and business development within the district by improving public infrastructure deficiencies; and • Reduce blighted properties within the district. POLICIES 1. TIF assistance will be prioritized to projects that do not have the financial feasibility to proceed without the benefits of the TIF fund assistance. 2. The applicant shall provide market and feasibility studies, appraisals, etc. provided to private lenders of the project as well as any other information the URA, or Kalispell City Council may require in order to review the need for TIF assistance. 3. A third party analysis shall be provided for applications requesting more than $2-00,000 in TIF assistance. The third party analysis will be contracted by the city from a list of qualified consultants at the applicant's expense. The third party analysis is required to ensure that project assumptions provided by developer align with current market conditions and industry standards. 4. The applicant shall be able to demonstrate their ability to construct, operate and maintain the proposed project based on past experience, general reputation and credit history. 5. TIF assistance will not be used for projects that place an extraordinary demand on the district infrastructure. 6. The relationship of private investment to public investment of a project shall be significant enough to ensure prudent investment of public funds within the TIF District. A prudent expenditure would equate to $1 of public money for every $9 of private money invested in a project. 7. The applicant shall retain ownership of the project long enough to complete it, occupy it, establish property management, and initiate payment of taxes based on the increased project value. CRITERIA FOR REVIEWING FUNDING APPLICATIONS In reviewing the TIF assistance application the URA will evaluate each new development project utilizing the following criteria, in addition to the policies outlined above. When an application is submitted, documentation demonstrating adherence to the following criteria must be submitted. 1. Each project must achieve each of the following criteria: • Tax Generation — In order for the West Side TIF District to stay economically healthy for the maximum benefit to the district and community, a project is expected to generate new taxes. The increase in taxable value due to new construction & rehabilitation is estimated by the County Assessor's office or State Department of Revenue to determine tax increase generation. • Elimination of Blight — The project's direct and indirect impact on the physical Approved by Urban Renewal Agency I21/2019 deterioration within the TIF. • Project Feasibility — A determination of feasibility is made based on the strength of the applicant's demonstration of market demand for the project as contained primarily on the pro forma and financing commitments. • Applicant's ability to perform — An assessment of the applicant's capability to undertake the relative complexities of the project based on past performance and the project design and management team on similar projects based on the complexity of the project. • Timely Completion — The feasibility of completing the project according to the applicant's proposed project schedule. • Plan Goals — The project's ability to significantly further specific goals found in the West Side Urban Renewal Plan, Core Area Plan, and Kalispell Growth Policy Plan -It 2035 goals and policies. 2. Each project must achieve at least 2 out of the 5 criteria: • Investment— The project's potential for subsequent investment within the TIF district. • Unique Opportunities — The project's potential to present a unique opportunity, meet a special need, or address specific TIF district or community goals such as filling a market niche or providing an un-met community need. • Environmental Impacts — The project's ability to positively impact the environment in terms of brownfields cleanup, noise, dust, and traffic reduction; pollution reduction, etc. • Building — The quality of development and overall aesthetics are beyond that which is minimally required by the UBC. • Job Creation— Projects that create opportunities for new employment contribute to the economic vitality of the district and community in a variety of ways. Projects creating five or more full-time equivalent jobs would be considered to have a significant positive impact on the economic well-being of the district, and will be given greater priority. Additionally, new jobs that pay at or above the median county income level will be given priority. 3. Each project must achieve at least 3 out of the 6 criteria: • Housing — Increases housing units, including integrating a variety of residential housing types to accommodate people of different age groups and income levels. • Urban Development — Redevelopment that considers the Core Area vision by Approved by Urban Renewal AgencyPI21/2019 promoting a mix of uses emphasizing retail uses on the main floor and offices or residential uses on upper floors. • Parking — Recognize that there are special parking considerations, which differ from other areas. A project should use innovative parking management and shared parking provisions, including for general public use. • Recreation — Incorporates amenities into the development such as pocket parks, activity nodes and gathering spaces. • Facilities Public Health and Mobility — Project will construct or improve sidewalks, including ADA access to buildings. • Alternative Transportation — Project promotes the use of bicycling, transit, ride sharing, car sharing, etc. ELIGIBLE ACTIVITIES Per Montana State Law (7-15-4288 M.C.A.) 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 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; Approved by Urban Renewal Agency 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. ELIGIBLE APPLICANTS • Property owners or their designated representatives whose property is located within the Core Area are eligible to apply ELIGIBLE PROPERTIES Properties must be located inside the West Side Urban Renewal -Core Area TIF boundary and be: • Commercial, • Mixed -use, and/or • Multi -family properties consisting of four or more units APPLICATION PROCESS Applicants must submit a complete written application for each TIF project to the City of Kalispell Community and Economic Development Department. The TIF application is available online at https://kaliVell.com/164/Community-Development under `online applications' or by contacting the Community and Economic Development Department. Completed applications must be received at least ten business days prior to the URA board meeting at which time the application will be considered. This is to allow adequate time for a thorough staff review of the application for presentation to the URA committee. The following procedure has been developed to expedite the review of TIF funding requests: 1. Initial contact- Contact the Community and Economic Development Department, City of Kalispell, 201 First Avenue East, Kalispell MT 59901, (406) 758-7713, kking(i kalispell.com to discuss the project and determine eligibility for TIF assistance. 2. Complete a TIF application with required attachments- The applicant must prepare a TIF application for each funding request and include all required attachments. The Community Approved by Urban Renewal Agency 8/21/2019 and Economic Development staff will assist the applicant in preparing the application 3. Staff review and evaluation -Staff will evaluate projects within the West Side Urban Renewal District for their consistency with the West Side Urban Renewal Plan and associated policies and criteria outlined herein. Staff will prepare a staff report including findings of fact and provide a recommendation to the URA. 4. URA review and approval -Upon submittal of all necessary information, the URA will review the merits of the project and the need for funding. The URA will review the project, adopt findings of fact, and issue a recommendation on the funding request or any part thereof, and any special terms of TIF assistance to Kalispell City Council. Applicants are encouraged to be present during this review. 5. City Council review and approval - The Kalispell City Council shall act on applications within 30 days of URA recommendation, and take formal action to approve or deny the request. Every decision of the city council pertaining to granting, denial or amendment of TIF assistance shall be based upon "Findings of Fact." Applicants are encouraged to be present during this review. 6. Development agreement - Upon approval by Kalispell City Council, the City of Kalispell and the applicant must execute a legally binding Development Agreement which establishes the terms and conditions of the TIF assistance. Among the terms and conditions, the agreement shall specify the schedule for the start and completion of the project. The Development Agreement must be executed within six months of City Council approval; if not completed by this time the applicant must re -apply for project funding. IMPORTANT: Applicants seeking funding, by either grant or loan, through a City of Kalispell Tax Increment Financing District, must take into account the following considerations: 1. Tax increment financing may only be used to offset such costs of development as are allowed pursuant to MCA §7-17-4288. 2. The applicant's costs of development incurred prior to receiving tax increment funding approval from the Kalispell City Council and satisfying all conditions of such approval shall not be eligible for tax increment funding. 3. Development approved for tax increment financing assistance may not rely upon receiving immediate reimbursement of money expended upon an approved project, as the tax increment funds may not be immediately available at the time of construction. The City will not be obligated to use any funds for reimbursement purposes outside of its tax increment district accounts. As the City has no control over the amount tax increment generated by the district, it will not make any guarantees as to the timing or amount of tax increment financing reimbursement that it will ultimately be able to pay. Approved by Urban Renewal Agency 4. All development agreements that contain tax increment financing assistance for a project shall include a clause that will subordinate the financial assistance described in the development agreement to such other tax increment financing projects entered into at any time during the life of the TIF district that are financed through revenue bonds secured by the tax increment generated by the district. 5. Other compliance and code requirements may apply. URA recommendation and City Council approval of funding does not relieve the applicant's responsibility to secure all necessary permits. 6. At any point in the review process the Community and Economic Development Department staff or URA may request more information of the applicant or solicit comment on the project from other public agencies. Items included in personal financial statements will not be subject to public review, presentation, or comment by other agencies. 7. All requests for loan dollars will be subject to approval by the City of Kalispell Revolving Loan Fund Committee. City of Kalispell Community and Economic Development Department Revolving Loan Fund Policy and Procedures will apply to all loans. Current financial statements for each shareholder involved in the project may be required, as well as documentation of financial capacity. This information will be kept confidential, subject to challenge in a court of law. West Side Urban Renewal -Core Area Tax Increment Financing District Programs: L Public/Private Incentive Grant Programs: • Shared Utilities 9 • Street Tree Placement 10 • Sidewalk Placement 11 • Historic Fagade Restoration 11 IL Private Investment Loan Programs: • Facade Improvement 13 • Rehabilitation/Code Compliance 15 • Site Demolition, Cleanup, and Preparation 16 • Technical Assistance 17 III. Public Infrastructure • Projects as recommended by City Council 19 Approved by Urban Renewal Agency L PUBLIC/PRIVATE INVESTMENT PROGRAMS: Shared Utilities Program Objectives: The primary objective of the Shared Utilities Program is to improve shared public services such as water, sewer, sidewalks, parking (public/shared), and traffic circulation within the TIF District. Guidelines: Shared Utilities projects may be eligible for a grant related to 100% of all public infrastructure costs and/or impact fees. No funds will be disbursed until all completion criteria have been satisfactorily met as determined by the URA and Kalispell City Council. Maintenance obligations are that of the property owner. Costs incurred in connection with redevelopment activities allowed under Montana State Law 7-15-4288 (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 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 • 7-75-4288 (10)- The connection of the urban renewal area or targeted economic development district to existing infrastructure outside the area or district Kalispell Growth Policy Plan -It 2035 Recommendations: Kalispell Growth Policy Plan -It 2035, Chapter 6 Historic Downtown and Core Area Policy (8) — Encourage development and redevelopment by creating incentives for developers to offset infrastructure and other site costs. Kalispell Growth Policy Plan -It 2035, Chapter 4 Housing recommendation 2 — Investigate alternative funding mechanisms to reduce impact fees. Kalispell Growth Policy Plan -It 2035, Chapter 4 Business and Industry recommendation 3 — Explore alternative funding mechanisms for infrastructure to eliminate reliance on impact fees. Approved by Urban Renewal Agency 10 Core Area Plan Goals: • Chapter 4 Vision & Goals #10. Develop and fund a loan/grant program that offers incentives to commercial property owners to improve/upgrade their properties. Examples of Eligible Activities: • Projects benefiting more than one business • Impact fees Examples of Ineligible Activities: • Permit Fees • Utilities benefiting only the applicant's property Street Tree Placement Program Objectives: The primary objective of the Street Tree Placement Program is to encourage the placement of street trees through the City of Kalispell Tree Placement and Maintenance Program per City Council Ordinance 1086. Guidelines: Street Tree Placement Program projects may be eligible for a 50/50 matching grant up to $10-,000. Eligible applicants will work with the City of Kalispell Parks and Recreation Department's Tree Placement and Maintenance Program. Costs incurred in connection with redevelopment activities allowed under Montana State Law • 7-15-4233 (i) To improve, clear, or prepare for redevelopment any real or personal property in an urban renewal area. Core Area Plan Goals: • Chapter 2 Goals for Our Future # 8. New development and redevelopment that incorporates parks, landscaped boulevards, open spaces for casual public interaction and landscaping that compliments architecture and the neighborhood to encourage active use of the built environment. Examples of Eligible Activities: • New street tree placement within public right-of-way • Irrigation systems limited to the life of the tree Ineligible Activities: Approved by Urban Renewal Agency 8/21/2019 11 • Trees being placed outside the public right-of-way Sidewalk Placement Program Objectives: The primary objective of the Sidewalk Placement Program is to encourage development, and provide safe pedestrian navigation from business to business in the West Side Core Area TIF District. Additional objectives include expanding the property tax base, stimulation of business and economic development and retention and expansion of employment in the district. Guidelines: Sidewalk Placement Program projects may be eligible for a 50% matching grant up to $15,000 for projects constructing or replacing sidewalks not part of a larger development project. Costs incurred in connection with redevelopment activities allowed under Montana State Law • 7-15-4288 (5) Costs incurred in connection with the redevelopment activities allowed under 7-15-4233. • 7-15-4233 (i) To improve, clear, or prepare for redevelopment any real or personal property in an urban renewal area. Core Area Plan Goals: • Chapter 4 Vision & Goals # 11. Improve pedestrian and bike access throughout the Core Area. a. Target a program to replace existing walks in deteriorated condition. i. Establish a dedicated funding source for sidewalk replacement. ii. Share cost 50-50 between abutting property owner and City. iii. Identify key routes where the public may need to take a greater share to ensure complete routes are completed. Example of Eligible Activities: • Sidewalk placement in the public right-of-way • Handicap ramps at intersections Examples of Ineligible Activities: • Sidewalk out of the public -right-of-way. Historic Facade Restoration Program Objectives: The primary objective of the Historic Fagade Restoration Program is to encourage voluntary Approved by Urban Renewal Agency 8/21/2019 12 repair and rehabilitation of commercial, mixed -use and multi -family property (minimum of 4 units) in the West Side Urban Renewal -Core Area TIF District in a way that advances the aesthetic environment and enhances the pedestrian experience. Additional objectives include expanding the property tax base, stimulation of business and economic development and retention, and expansion of employment in the district. Guidelines: Historic facade restoration projects may be eligible for a 50% matching grant up to $150,000. Some projects may also qualify for additional funding under the Facade Improvement Loan Program. To qualify under the historic fagade restoration program, buildings must either be individually listed on the National Register of Historic Places, in a designated historic district, or at least 50 years old. Historic photographs of Kalispell and its Core Area store fronts may be available and should be used when determining the original character of a building design, when appropriate. Applicants should make a reasonable effort to provide historic images of the building. If no image is available the applicant should provide research on materials and building styles consistent with the construction date of the building or other appropriate time period. Materials and workmanship should accurately replicate the historic facade. Rehabilitation is limited to building facades visible from the street. Improvements shall be scaled to the pedestrian and provide visual interest both day and night. Effort should be made to facilitate access into the building and to create a building facade which conveys permanence and improves the aesthetics of the area. Improvements shall incorporate green building techniques and energy efficiency measures where feasible. Non -conforming improvements, per municipal zoning and building codes, shall not be considered. Costs incurred in connection with redevelopment activities allowed under Montana State Law • 7-15-4233 (i) to improve, clear, or prepare for redevelopment any real or personal property in an urban renewal area Core Area Plan Goals: • Chapter 2 Goals for Our Future #5. A functional, physical and architectural connection between the traditional downtown and other surrounding neighborhoods and the Core Area as appropriate. • Chapter 4 Vision & Goals #10. Develop and fund a loan/grant program that offers incentives to commercial property owners to improve/upgrade their properties. a. Develop a revolving loan/grant program using TIF or other funding sources i. Encourage facade and exterior amenities improvements ii. Offer incentives for expansion and mixed use opportunities Design Criteria: The URA will review the design for compatibility and appropriateness based upon the project's architectural design, historic appearance, and site plan in the context of adjacent structures, the Approved by Urban Renewal Agency 8/21/2019 13 immediate neighborhood, and the vision for the West Side Urban Renewal- Core Area TIF District. All projects are subject to Site Review Committee and Architectural Review Committee approval. Examples of Eligible Activities: • Projects that preserve the storefront's character defining elements such as: display windows, transom, kickplate, entry, upper -story windows, and cornice molding • Projects that avoid use of materials that were unavailable when the storefront was constructed (vinyl, aluminum siding, mirrored/tinted glass, artificial stone, and brick veneer) and use paint colors based on the buildings historical appearance Examples of Ineligible Activities: • Interior rehabilitation • Roof and re -roofing unless the roof is a prominent historic facade element which is visible from the street or sidewalk • Structural foundations • Security bars • New construction or additions • Site improvements in the public right-of-way including sidewalks, curb, and gutter, and planters II. PRIVATE INVESTMENT PROGRAMS Facade Improvement Program Objectives: The primary objective of the Facade Improvement Program is to encourage voluntary repair in the West Side Urban Renewal -Core Area TIF District in a way that advances the aesthetic environment and enhances the pedestrian experience. Additional objectives include expanding the property tax base, stimulation of business and economic development and retention and expansion of employment in the district. Guidelines: The Facade Improvement Program is a loan based program eligible up to $250,000. Terms and rates are subject to the decision of the URA and Revolving Loan Fund Committee. Costs incurred in connection with redevelopment activities allowed under Montana State Law • 7-15-4233 (i) To improve, clear, or prepare for redevelopment any real or personal property in an urban renewal area Approved by Urban Renewal Agency 14 • 7-15-4288 (12) The acquisition, construction, or improvement of facilities or equipment for reducing, preventing, abating, or eliminating pollution Core Area Plan Goals: • Chapter 2 Goals for Our Future #5. A functional, physical and architectural connection between the traditional downtown and other surrounding neighborhoods and the Core Area as appropriate. • Chapter 4 Vision & Goals #10. Develop and fund a loan/grant program that offers incentives to commercial property owners to improve/upgrade their properties. a. Develop a revolving loan/grant program using TIF or other funding sources i. Encourage facade and exterior amenities improvements ii. Offer incentives for expansion and mixed use opportunities iii. Actively advertise and promote this program • Chapter 4 Vision & Goals #14. Amend the city's architectural design standards. a. Work with the public, business owners, property owners and the city's Architectural Review Committee to develop design guidelines tailored for the Core Area. Design Criteria: URA will review the design for compatibility and appropriateness based upon the project's architectural design and site plan in the context of adjacent structures, the immediate neighborhood, and the vision for West Side Urban Renewal- Core Area TIF District. Fagade improvement projects are subject to City of Kalispell Architectural Review Committee and Building Department approvals as appropriate. Rehabilitation is limited to building fagades visible from the street. Improvements shall be scaled to the pedestrian and provide visual interest both day and night. Effort should be made to facilitate access into the building and to create a building fagade which conveys permanence and improves the aesthetics of the area. Improvements shall incorporate green building techniques and energy efficiency measures where feasible. Non -conforming improvements, per municipal zoning and building codes, shall not be considered. Other criteria may be applied by the URA depending on the specifics of the application and the URA's determination of the priorities for redevelopment within the district. Examples of Eligible Activities: • Projects consisting of permanent materials such as stone, brick, or heavy gauge metal (Materials with a limited life span such as EFIS (synthetic stucco) are generally not eligible) • Projects increasing the energy efficiency of the building • Projects using recycled, renewable and otherwise green material • Projects enhancing the pedestrian environment • Projects improving the aesthetics of the district • Projects with architectural detailing addressing pedestrian scale Approved by Urban Renewal Agency 8/21/2019 15 Examples of Ineligible Activities: • Interior rehabilitation • Roof and re -roofing unless the roof is a prominent facade element which is visible from the street or sidewalk • Structural foundations • Security bars • New construction or additions • Site improvements in the public right-of-way including sidewalks, curb, and gutter, and planters Rehabilitation/Code Compliance Program Objectives: The primary objective of the Rehabilitation/Code Compliance Program is to improve the project's interior design and structure, and ensure the building is in compliance with City code. Additional objectives include expanding the property tax base, stimulation of business and economic development and retention and expansion of employment in the district. Guidelines: The Rehabilitation/Code Compliance Program is a loan based program eligible up to $250,000. Terms and rates are subject to the decision of the URA and Revolving Loan Fund Committee. Eligible projects are subject to City of Kalispell Architectural Review Committee and Building Department approvals as appropriate. The URA will review the project for compatibility and appropriateness based on the vision for the West Side Urban Renewal- Core Area TIF District. Per the Montana Code Annotated 2013, section 7-15-4206 (17): "Rehabilitation" may include the restoration and renewal of a blighted area or portion of the area in accordance with an urban renewal plan by: (i) Carrying out plans for a program of voluntary or compulsory repair and rehabilitation of buildings or other improvements... Costs incurred in connection with redevelopment activities allowed under Montana State Law • 7-15-4233 (i) To improve, clear, or prepare for redevelopment any real or personal property in an urban renewal area. Core Area Plan Goals: • Chapter 4 Vision & Goals #10. Develop and fund a loan/grant program that offers incentives to commercial property owners to improve/upgrade their properties. a. Develop a revolving loan/grant program using TIF or other funding sources Approved by Urban Renewal Agency 8/21/2019 16 iv. Encourage fayade and exterior amenities improvements v. Offer incentives for expansion and mixed use opportunities vi. Actively advertise and promote this program Examples of Eligible Activities: • Projects addressing ADA Compliance • Projects addressing and eliminating specific code violations and conditions that could be injurious to the public's health, safety, and welfare • Projects stimulating economic and business developments by providing safe environments for workers, businesses and the public • Improvement to the building's interior and /or exterior that address repair and rehabilitation Examples of Ineligible Activities: • Working capital • Product for sale Site Demolition, Cleanup, And Preparation Program Objectives: The primary objective of the Site Demolition/Preparation/Cleanup Program is to prepare sites for redevelopment. Additional objectives include expanding the property tax base, stimulation of business and economic development and retention and expansion of employment in the district. Guidelines: Site Demolition/Preparation/Cleanup projects may be eligible for loan funds, and/or a 50% matching grant up to $250,000. Approved projects must be fully prepped for redevelopment, including removing all demolition materials and attractive nuisances, leveling the site, capping all utilities, stabilizing the site from wind and erosion, and securing the site as necessary. Eligible projects must first complete a Phase I and/or Phase II environmental site assessment (ESA) as necessary on the site to characterize the site. Phase I and Phase II ESA's may be done at the property owner's expense, under the City of Kalispell Brownfields Program as funds are available, or as a Core Area TIF grant. In the event that environmental remediation is necessary at the site for reuse, a Brownfields clean-up loan or TIF loan may be pursued. Phase II environmental site assessments may eligible for a 50% matching grant, up to $50,000. Costs incurred in connection with redevelopment activities allowed under Montana State Law • 7-15-4288 (2) Demolition and removal of structures Approved by Urban Renewal Agency 8/21/2019 17 • 7-15-4288 (5) Costs incurred in connection with the redevelopment activities allowed under 7-15-4233 • 7-15-4233 (i) To improve, clear, or prepare for redevelopment any real or personal property in an urban renewal area • 7-15-4288 (12) The acquisition, construction, or improvement of facilities or equipment for reducing, preventing, abating, or eliminating pollution Core Area Plan Goals: • Chapter 4 Vision & Goals #9. Remove/clear all vacant or blighted properties in the Core Area for the key purpose of redevelopment. a. Develop a financial assistance program to help property owners clear vacant and hazardous buildings and assist the property owner to prepare a site for redevelopment (scrap and bake program). • Chapter 4 Vision & Goals # 8. A viable Brownfield program in the Core Area. a. Target the Core Area as a priority Brownfield area. b. Maintain a funding pool of grant and loan funds at the city level to address Brownfield issues. c. Advocate for the clearance of existing identified Brownfield sites including UST and LUST sites. i. Proactively contact those property owners on a regular basis offering available services to mitigate the issues. Examples of Eligible Activities: • Phase I and Phase Il environmental site assessments • Projects that are fully prepped for redevelopment, including removing all demolition materials and attractive nuisances • Projects leveling the site, capping all utilities, stabilizing the site from wind and erosion, and securing the site as necessary Examples of Ineligible Activities: • Construction or reconstruction of the public utilities serving the site • Marketing and/or sale of building site or building Technical Assistance Program Objectives: The primary objective of the Technical Assistance Program is to support the applicant with technical assistance during the preliminary phases of site improvement projects within the Approved by Urban Renewal Agency 8/21/2019 18 Westside Urban Renewal Plan- Core Area TIF. Additional objectives include expanding the property tax base, stimulation of business and economic development and retention and expansion of employment in the district. Guidelines: The Technical Assistance Program is a grant based program. Eligible applicants may receive up to $20--'�,000. Technical Assistance applicants must submit the biography, resume, and licensing certificate as appropriate for the firm conducting the technical assistance. Costs incurred in connection with redevelopment activities allowed under Montana State Law • 7-15-4233 (i) To improve, clear, or prepare for redevelopment any real or personal property in an urban renewal area • 7-15-4233 (m) To prepare plans for carrying out a program of voluntary or compulsory repair and rehabilitation of buildings and improvements Core Area Plan Goals: • Chapter 2 Goals for Our Future #5. A functional, physical and architectural connection between the traditional downtown and other surrounding neighborhoods and the Core Area as appropriate. • Chapter 2 Goals for Our Future # 8. New development and redevelopment that incorporates parks, landscaped boulevards, open spaces for casual public interaction and landscaping that compliments architecture and the neighborhood to encourage active use of the built environment. • Chapter 4 Vision & Goals #10. Develop and fund a loan/grant program that offers incentives to commercial property owners to improve/upgrade their properties. a. Develop a revolving loan/grant program using TIF or other funding sources i. Encourage facade and exterior amenities improvements Examples of Eligible Activities: • Architectural Design • Engineering • Landscape Design • Fagade design • Preliminary development review assistance • Restoration guidance • Renovation/reuse study • Preliminary cost estimates • Code analysis Approved by Urban Renewal Agency 8/21/2019 19 • Landscape/hardscape design Examples of Ineligible Activities: • Demolition • Construction • Permits, building, and appraisal fees • Marketing and/or feasibility studies III. PUBLIC INFRASTRUCTURE PROGRAMS: Public Infrastructure Objectives: As recommended by City Council Costs incurred in connection with redevelopment activities allowed under Montana State Law • 7-15-4288 (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 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 • 7-75-4288 (10)- The connection of the urban renewal area or targeted economic development district to existing infrastructure outside the area or district Core Area Goals: See Chapter 4 of the Core Area Plan, Vision & Goals: First Steps Approved by Urban Renewal Agency