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I3. Res. 6200, TIF Public ProjectsDevelopment Services Department 201 Is'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: KRD-24-01 — Request for Tax Increment Finance (TIF) Assistance for public infrastructure projects MEETING DATE: June 3, 2024 BACKGROUND: Staff is requesting TIF Assistance for public road and storm water projects, which are all eligible projects per the adopted City of Kalispell Public Infrastructure Program and State Urban Renewal Law. The projects are located within the West Side — Core Area boundary and would reconstruct roads that are currently not to city standards and are in poor condition. The projects and estimated fiscal year of improvement consist of the following: Construction Year Est. CIP Name 24 Underhill Court (W Arizona St to W Arizona St (U)) 24 W Center St 7th Ave W to 5th Ave W 24 3rd Ave WN (W Idaho to W Washington St) 24 5th Ave E (Center to 1st St E) 25 3rd Ave E Center to 1st St E 25 Two Mile Drainage, Street Improvements, 25 Glenwood Drive (Hwy 2 to Two Mile Drive 26 W Montana St (Main St to I st Ave W) 26 7th Ave EN - Idaho to South end 26 5th Ave EN (Idaho to E Montana) 26 1st St E (Main to 3rd Ave E) 27 6th Ave EN - Idaho St to Washington St 27 1st Ave EN (Montana to Washington) 27 Teton St from Hawthorn to Irish Ct(including Irish Ct 27 5th Ave WN (Idaho to Center St) 27 1 st St West -9th Ave W to loth Ave W 28 2nd Ave E Center St E to I STSt E 29 8th Ave WN- Idaho St to W Rail Road St 30 7th Ave WN - Idaho St to W Washington 30 1st Ave WN - Idaho to Mall Parkin Lot 30 W Montana St 8th Ave WN to 7th Ave WN 31 W Washington - 5th Ave WN to 6th Ave WN 32 1st St West - 2ndAve W to 3rd Ave W The Council previously held a work session on the proposed projects and directed staff to bring them forth for URA consideration and recommendation. The Kalispell Urban Renewal Agency (URA) held a meeting on May 15, 2024, to consider the request. At the meeting staff recommended that the URA adopt staff report KRD-24-01 as findings of fact and recommended to the Kalispell City Council that the public road and storm water projects be approved as provided up to $200,000 per year for five years. URA discussion concluded that the funding of projects was appropriate and recommended them to the Council. RECOMMENDATION: It is recommended that the Council adopt Resolution 6200, a Resolution authorizing the use of West Side - Core Area Tax Increment Financing for public road and storm water projects. FISCAL EFFECTS: Annual allocation of $200,000.00 for five years from the West Side — Core Are Tax Increment Finance District for the projects. ALTERNATIVES: Deny the request. ATTACHMENTS: Resolution 6200 Staff Report KRD-24-01 URA Minutes c: Aimee Brunckhorst, Kalispell City Clerk RESOLUTION NO. 6200 A RESOLUTION AUTHORIZING THE USE OF WEST SIDE - CORE AREA TAX INCREMENT FINANCING FOR VARIOUS PUBLIC ROAD AND STORM WATER PROJECTS. WHEREAS, the City of Kalispell, Montana (the "City") is authorized by Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43, as amended (the "Act"), to create an urban renewal area, to undertake urban renewal projects therein, to provide for the segregation and collection of tax increment with respect to property taxes collected in the urban renewal area, to issue its bonds to pay the costs of such projects and to pledge to the repayment of the bonds the tax increment derived from the urban renewal area; and WHEREAS, in accordance with the provisions of the Act, on December 17, 2012, Kalispell City Council adopted the Core Area Plan as an amendment to the City of Kalispell Growth Policy 2020 by Resolution No. 5601A, after duly mailed and published notice and a public hearing and receipt of recommendations from the Kalispell City Planning and Zoning Board, which certified that the Urban Renewal Plan conforms to the general plan for the development of the City as a whole and the comprehensive plan of the City for the area containing the Urban Renewal Area; and WHEREAS, City Council adopted the West Side Urban Renewal/Core Area plan by Ordinance 1717 (Original Ordinance 1259); and WHEREAS, in the West Side/Core Area Urban Renewal Plan there are Public Infrastructure Projects which are eligible for Tax Increment Financing; and WHEREAS, the projects, as enumerated on Exhibit "A", are eligible projects per the adopted City of Kalispell Public Infrastructure Program and State Urban Renewal Law; and WHEREAS, an annual allocation of $200,000.00 of funds per year for five (5) years is requested from the West Side — Core Area Tax Increment Finance District for the projects. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL AS FOLLOWS: SECTION). That the listed projects on Exhibit "A" be funded by Tax Increment Financing in the Core Area. SECTION 2. This Resolution shall become effective immediately upon its passage by the City Council. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL, THIS 3RD DAY OF DUNE, 2024. ATTEST: Aimee Brunckhorst, CMC City Clerk Mark Johnson Mayor EXHIBIT "A" Construction Year Est. CIP Name 24 Underhill Court (W Arizona St to W Arizona St (U)) 24 W Center St (7th Ave W to 5th Ave W) 24 3rd Ave WN W Idaho to W Washington St 24 5th Ave E Center to 1st St E 25 3rd Ave E Center to 1st St E 25 Two Mile Drainage, Street Improvements, 25 Glenwood Drive (Hwy 2 to Two Mile Drive 26 W Montana St Main St to 1 st Ave 26 7th Ave EN - Idaho to South end 26 5th Ave EN Idaho to E Montana 26 1 st St E Main to 3rd Ave E 27 6th Ave EN - Idaho St to Washington St 27 1 st Ave EN Montana to Washington) 27 Teton St from Hawthorn to Irish Ct(including Irish Ct 27 5th Ave WN Idaho to Center St 27 1 st St West -9th Ave W to loth Ave W 28 2nd Ave E (Center St E to 1STSt E) 29 8th Ave WN- Idaho St to W Rail Road St 30 7th Ave WN - Idaho St to W Washington 30 1st Ave WN - Idaho to Mall Parking Lot 30 1 W Montana St 8th Ave WN to 7th Ave 31 W Washington - 5th Ave WN to 6th Ave WN 32 1st St West - 2ndAve W to 3rd Ave W STAFF REPORT KRD 24-01 WEST SIDE -CORE AREA PUBLIC PROJECTS REQUEST FOR WEST SIDE -CORE AREA TIF ASSISTANCE KALISPELL COMMUNITY DEVELOPMENT MAY 10, 2024 This is a report to the Urban Renewal Agency and Kalispell City Council regarding a request for Tax Increment Finance (TIF) Assistance for public street and stormwater infrastructure projects in the West Side -Core Area Tax Increment Finance District. A public meeting on this matter has been scheduled before the Urban Renewal Agency for May 15, 2024, beginning at 4:00 PM, at Kalispell City Hall. The Urban Renewal Agency will forward a recommendation to the Kalispell City Council for final action. TIF Assistance Program Overview: The City of Kalispell Development Services staff is requesting funding for street and stormwater infrastructure projects within the West Side -Core Area TIF District. This report will analyze the proposal in accordance with state law and adopted city policies. On December 17, 2012, Kalispell City Council adopted the Core Area Plan as an amendment to the City of Kalispell Growth Policy 2020 by Resolution No. 5601A. The Core Area Plan addresses needs and priorities affecting redevelopment of the Core Area. Additionally, the Council adopted the West Side Urban Renewal -Core Area plan by Ordinance 1717 (Original Ordinance 1259) and the Downtown Urban Renewal Plan by Ordinance 1816. The City of Kalispell utilizes a Tax Increment Finance District (TIFD) within the urban renewal plan boundary as part of the overall strategy to meet its needs of eliminating blight, promoting economic development, improving area employment opportunities, improving area housing opportunities, and expanding the community's tax base in addition to other needs identified in the Montana Code Annotated. The Kalispell City Council Amended West Side — Core Area TIF Assistance Program in 2019, by Resolution 5955. The TIF Assistance Program was developed to support redevelopment activity and advance the goals of the West Side -Core Area Urban Renewal Plan. The statements of policy within the TIF Assistance Program shall be utilized by the Urban Renewal Agency (URA) whenever it gives recommendations to the City Council regarding project funding. Further, the West Side - Core Area Tax Increment Financing Assistance Program identifies Public Infrastructure Programs as recommended by the Council. Such project activities as allowed under City policy and Montana state law include the improvement of public improvements or infrastructure, as 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. The Council previously held a work session on the proposed projects and directed staff to bring them forth for URA consideration and recommendation. It should be noted that the projects summarized below are already designated projects within the West Side -Core Area urban renewal plan; therefore, plan amendments and associated urban renewal processes are not necessary. Applicant: City of Kalispell 201 1 st Avenue East Kalispell, MT 59901 Proposed Projects: Staff is requesting $200,000.00 (annually) in TIF Assistance for public road and storm water projects, which are all eligible projects per the adopted City of Kalispell Public Infrastructure Program and State Urban Renewal Law. The Montana Department of Revenue reported the 2023 Certified Incremental Value for the Westside-Core Area TIF as $5.1 million. The projects are located within the West Side — Core Area boundary and would reconstruct roads that are currently not to city standards and are in poor condition. The projects and estimated fiscal year of improvement consist of the following: Construction Year Est. CIP Name 24 Underhill Court (W Arizona St to W Arizona St (U)) 24 W Center St 7th Ave W to 5th Ave W 24 3rd Ave WN W Idaho to W Washington St 24 5th Ave E Center to 1 st St E 25 3rd Ave E Center to 1 st St E 25 Two Mile Drainage, Street Improvements, 25 Glenwood Drive(Hwy 2 to Two Mile Drive 26 W Montana St Main St to 1st Ave W 26 7th Ave EN - Idaho to South end 26 5th Ave EN Idaho to E Montana 26 1st St E (Main to 3rd Ave E) 27 6th Ave EN - Idaho St to Washington St 27 1st Ave EN Montana to Washington) 27 Teton St from Hawthorn to Irish Ct(including Irish Ct 27 5th Ave WN Idaho to Center St 27 1 st St West -9th Ave W to 10th Ave W 28 2nd Ave E Center St E to 1 STSt E 29 8th Ave WN- Idaho St to W Rail Road St 30 7th Ave WN - Idaho St to W Washington 30 1st Ave WN - Idaho to Mall Parking Lot 30 W Montana St 8th Ave WN to 7th Ave WN 31 W Washington - 5th Ave WN to 6th Ave WN 32 1 st St West - 2ndAve W to 3rd Ave W These project are eligible under MCA 7-15-4288 (4) the acquisition, construction, and improvement of public improvements or infrastructure, 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 ofpersonal property to be used in connection with improvements for which the foregoing costs may be incurred; and 7-15-4283(4) "Infrastructure" means tangible facilities and assets related to water, sewer, wastewater treatment, storm water, solid waste, and utilities systems including natural gas, hydrogen, electrical and telecommunications lines, fire protection, ambulance and law enforcement, workforce housing, streets, roads, curbs, gutters, sidewalks, pedestrian malls, alleys, bridges, and other transportation needs, including but not limited to parking, park and ride facilities and services, and bus, air, and rail service. Further, these projects fits into the adopted West Side — Core Urban Renewal Plan, including on page 31, 35 and 36 (see snippets below). Policies: 1. Increase the presence of higher density housing in the plan area. 2. Upgrade/replace aged and/or inadequate infrastructure (water, sewer, fire flows, sidewalks, streets and street connections) to accommodate higher density housing. 3. Work to improve constraints to housing by removing blighted buildings, improve lighting and pedestrian access. B. Street Improvements The streets within the Core Area vary greatly in both their built standards and functional vehicle carrying capacity. Portions of the two most heavily traveled highways iu the county, Highway 93 (Main Street) and Highway 2 (Idaho Street) are both within the Core Area. Their intersection is in the approximate center of the boundaries of the Core Area Plan. Both Main 'Street and Idaho 'Street are maintained by the Montana Department oFTransportation and include Four travel lanes with sidewalks on both sides of the streets. In addition to Main and Idaho, there are many other city streets in the Core Area where current vehicle carrying capacity varies greatly as does the current built design. A large majority of the streets in the Core Area do not include curb, gutters and sidewalk. These improvements are standard now for all new streets within the city. Those sections of the streets which lack the curb, gutters and sidewalks detract From the appearance of the neighborhood since the overall integrity and design of the street helps to define the quality and appearance in a particular neighborhood. This could translate to perceived property value decline for surrounding commercial and residential properties. In addition, stormwater management is compromised where urban density streets lack curb and gutter and pedestrian safety is at issue where sidewalks are not provided adjacent to busy streets. 3 Strategy: 1. Upgrade existing streets to meet or exceed city street standards. Policies: 1. The city should take the lead in improving the existing streets in the Care Area. 2. The city should take the lead in establishing apriority list For the upgrade of existing streets based on community input. 3. The city should work with adjacent landowners to acquire additional right-of-way, if necessary, for street improvements to allow far the construction of complete streets. 4. Incorporate traffic calming techniques into design and improvements of the local street network to enhance pedestrian safety. The original, March 14, 1997, West Side Urban Renewal Plan included the following specific references to potential projects identified in this request: • Pg 3, North Meridian Neighborhood Plan: "...the Neighborhood Plan looks at the needs of the neighborhood regarding infrastructure, such as roads, pedestrian access, water, sewer, and storm drainage, and sets general policies toward supplying those services. " • Pg 4, North Meridian Neighborhood Plan: "Storm drains, sewer mains, and water mains should be extended to those areas not served by such improvements. The City could possibly assist in the construction of these improvements with tax increment funds. " • Pg 5, Infrastructure Improvements: "Storm drainage and flood plain management are two other critical areas that need analysis to develop and implement solutions. " • Pg 6, Financing Options for Urban Renewal Projects: "The tax increment maybe used to pay any costs of or incurred in connection with the urban renewal projects as allowed by law .... 4. The acquisition, construction, and improvement ofstreets, roads, curbs, gutters improvements for which the foregoing costs may be incurred. (Section 7-15-4288, MCA). " 4 Location of Property: NORTH Westside TIF- City of Kalispell �•{'",,..ar„ 'V&5tsideTI . 3 W_ CityLiMi Lil- *-i` ; ��•, j ry _� a �#. S 2 t 3 ,. m AFT Ew i V sk , % N $ m� 'no r � � vm sew ms F �ePaN IfNlilKeidaJ09122C�9i EMMp}II Planning Dept. ❑25 05 4Mild5 CONCLUSION: The proposed public projects do comply with the expressed intent and the goals, policies, and recommendations of the West Side — Core Area Urban Renewal Plan and the Tax Assistance Program Policies as outlined above. RECOMMENDATION: Staff recommends that the City of Kalispell Urban Renewal Agency adopt staff report KRD-24-01 as findings of fact and recommended to the Kalispell City Council that the four public projects be approved as provided. ATTACHMENTS: Tax Increment Assistance Program Core Area Plan/Original West Side TIF Plan 5 City of Kalispell 201 1" Avenue East Post Office Box 1997 - Kalispell, Montana 59903 KALISPELL Telephone: (406) 758-7701 Fax: (406) 758-7758 Meeting Summary URBAN RENEWAL AGENCY BOARD MAY 15, 2024-4 P.M. CITY HALL— LOWER -LEVEL CONFERENCE ROOM AND VIA ZOOM MEMBERS IN ATTENDANCE Marc Rold (via Zoom) David Girardot Mike Brodie Catherine Potter Cara Lemire PUBLIC COMMENT None. PREVIOUS MEETING SUMMARY May meeting summary accepted. TIF & TEDD OTHERS IN ATTENDANCE Jarod Nygren, Development Services Director PJ Sorensen, Senior Planner Katharine King, Community Development Manager Safe Streets and Roads For All Safety Action Plan is moving forward. The second community open house event will be May 15, 2024, from 5 to 7 pm at Kalispell City Hall, Council Chambers. Information and feedback opportunities are available at the project specific website: https://www.mainstreetkalispellsafetyplan.com/. The project storymap is available at: https://storymaps.arcgis.com/stories/af5387d2a6444daebfcO295alf25d9Oe. The city Staff Report regarding public infrastructure projects, primarily road construction and storm projects, was presented by Jarod. Proposed is the commitment of $200,000 per year for five years (FY 24-FY 29) from the Westside/Core Area TIF for the projects delineated in the staff report. Cara moved to approve, Dave seconded the motion and all voted in favor. In additional comment, Cara recommended the City make an effort to coordinate with adjacent property owners as these projects move forward to encourage "dig once" efforts. BROWNFIELDS Regarding the 3rd & Main parking lot: Montana DEQ is working on an updated and expanded statement of work, increased budget and longer timeline as a result of the discovery of a 8' diameter x 24' long underground heating oil storage tank at the site. Accordingly, a small area of the parking lot is blocked from use. As progress is made, the URA will be kept informed. City staff continue to meet with property owners and prospective property owners who may wish to utilize the City's Brownfields Cleanup Revolving Loan Fund for environmental remediation costs. The City has secured a phase I update on the BNSF Wye Track property in the amount of $3,000 to be paid from the West Side/Core Area TIF. The phase I update is necessary to establish the City's federal prospective purchaser liability protections as the original phase I has expired due to the length of the acquisition process. The property sale is expected to close in June 2024. City Council will be discussing this item at its May 28, 2024, meeting. NEXT SCHEDULED MEETING The Board's next meeting is scheduled for Wednesday, June 19, 2024, at 4 p.m. Meeting adjourned.