03/20/00 Flowers to Board of Land Comm/Moratoriumt-ifizens for a Better Flathead
P.O. Box 771 ® Kalispell, MT ® 59903-0771
(406) 756-8993 ® FAX (406) 756-8991 ® e-mail: citizens@digisys.net
March 20, 2000
State Board of Lands Commissioners
Box 201601
Helena, MT 59620-1610
Dear Commission Members,
On behalf of Citizens For A Better Flathead I would like to support the request being
made to you today to place a moratorium on the development of state lands near urban areas -until
the Board adopts a plan for how the state will proceed with these types of projects in the future.
Having said this however, I want to clarify how we see this request interfaces the current DNRC
development proposal for Section 36 on the outskirts of Kalispell.
Six months ago I brought before this board concerns identified by Citizens For A Better
Flathead and several other groups about the process and scope of review that would be conducted
by the Department of Natural Resources and Conservation (DNRC) in their proposal to convert
Section 36 to primarily commercial uses. At that meeting I felt that this Board thoughtfully and
adequately addressed most of the concerns that we raised. You clearly indicated a number of
steps that the DNRC should follow as part of the approval process for the Neighborhood Plan for
Section 36. These included:
Development would not proceed without a signed MOU between the DNRC and local
governments.
2. After the MOU between the Department and the City of Kalispell is drafted, it would be
the subject of public hearings and would then be brought back before the Board of Land
Commissioners for consideration before adoption.
Prior to consideration by the Land Board the MOU and Section 36 Neighborhood Plan
would be the subject of MEPA analysis by DNRC.
4. Until the MOU is drafted and agreed upon, there should be "a suspension of any further
movement forward" on Section 36, including a pending request by the DNRC for
extraterritorial zoning.
Given these steps that you outlined at your last meeting, we are not here today to ask that
you place an additional moratorium on Section 36 in Kalispell. Rather we are here to urge you to
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encourage the DNRC to move forward and take the steps that you outlined six months ago. We
are particularly interested in seeing the DNRC take the first step to develop an initial outline of
the elements that need to be addressed in an MOU.
As we pointed out in our previous comments, the precedents established in an MOU
covering the commercial development of state lands in Kalispell can impact similar developments
on state lands elsewhere in the state and it can have significant impacts on the economic vitality of
the Kalispell area. Here again I think that it is important to remind ourselves of the size of
development that the DNRC is proposing for Section 36:
100 acres of mixed commercial development,
140 acres of mixed professional,
100 acres of mixed residential
In contrast, the downtown core area of Kalispell is approximately 40 acres, the adjoining Kalispell
Center Mall is 20 acres and Gateway West Mall is about 13 acres. Gateway West Mall is where
the City of Kalispell has recently committed a $4 million incentive package to create 500 new jobs
and the revitalization of this currently empty mall.
We feel that it is important to keep the scale of development being proposed here clearly
in mind as both the DNRC and the City of Kalispell move forward to develop this MOU. We
would suggest that this MOU needs to be grounded in two fundamental principles:
Sound planning that benefits the economy of the Kalispell area as well as the state,
and
Recognition that new growth must assume a fair share of the costs of services it
generates.
To ensure sound planning this MOU needs to address:
a legal framework that allows the state to promote sound planning while
complying with MCA 77-6-202 which requires that the state must lease to the
highest bidder. Sound planning is premised on the ability of local governments to
define preferred patterns of growth in part by limiting permitted uses. The City of
Kalispell may be very supportive of a newly proposed high-tech business park, the
associated new job creation it could represent and the ability of this combination to
help to attract grant funding to extend sewer and water to this area. It may not,
however, be as interested in supporting aU highest bidder, such as series of "stuff -
marts" or "mega -malls" that have the potential to seriously impact the existing tax
base of the city.
a time frame for phased development that recognizes the city's legitimate use of a
growth policy plan and zoning which serves to stabilize growth, conserve the value
of property and preserve the character of neighborhoods. The DNRC has
attempted to include in its proposed Neighborhood plan an element that addresses
phased development and permitted uses of these 340 acres. These contain positive
ingredients. We would suggest, however, that this is an area that needs much
more detailed consideration and economic analysis in the process of formulating
language for an MOU.
To ensure that new growth assumes a fair share of the costs of services it generates,
this MOU needs to address:
® the fact that state owned land is exempt from taxation on the land itself. Taxes on
land are an important revenue source to cover costs such as sewer, water, fire and
police protection. In 1999 commercial lands in Kalispell accounted for 10% of the
overall taxable valuation. Any annexation or extension of services must take into
account this 10% loss in revenue factor that will be faced in providing services to
state lands. This becomes increasingly important given that, revenue sources to
pay for infrastructure needs of municipalities are being significantly impacted by
recent state legislation included in SB 184 and SB 200. Again all these factors
need to be considered in a fiscal impact analysis of conditions to be included in an
MOU. We can be certain that any developer who enters into a commercial lease
with state lands will understand their cost and profit margin. This MOU should
serve as a guarantee that the commercial development of state lands can operate as
an independent source of funds for school trust lands and not as new indirect tax
increase on residential property owners in Kalispell.
I should also point out here that Kalispell faces some difficult growth choices
currently. Given existing commitments and current proposals excluding state
lands, the Kalispell sewage treatment plant will be at 110% of its capacity. Needed
expansions of fire, police and storm water facilities will not be able to be
postponed much longer. These factors will make a win -win agreement with state
lands especially important.
® a formula for the establishment of the lease value of the DNRC lands that
represents a fair and competitive value. This will both meet the state's need to
comply with MCA 77-6-202 which requires the state to seek full market value and
insure that the downtown Kalispell business core area can remain viable and will
not have to unfairly compete with less than market value leases. Here again SB
184 has established a real nightmare for cities trying to direct commercial growth
to more cost effective urban centers by setting artificially low values for fringe
lands while the downtown core areas are assessed at relatively high values.
In conclusion, let me say that we are supportive of the DNRC following the steps defined
by this Board at your September meeting and of their developing an MOU that addresses the
points we have raised today. We also urge this board to support the call for a moratorium on new
projects and to move forward now on the development a comprehensive policy, learning from the
experiences of other states, as we have begun to share with you today.
Your leadership is needed to help Montana join the ranks of other progressive states,
facing mounting growth pressures, who are developing comprehensive rules and policies for the
management of state lands. Development of this plan should also provide the state the opportunity
to develop conservation minded and smart growth friendly lease conditions that can establish our
state's practices to be models of high quality development and sensitive environmental practices
for the private sector as well.
Sincerely,
Mayre Flowers
Program Director