1. Selection of West Side Urban Renewal District Projects to be Amended into the Urban Redevelopment Plan__
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REPORT TO. Mayor Fisher and City Council
FROM: Jane Howington, City Manager
City of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903
Telephone: (406) 758-7701 Fax: (406) 758-7758
SUBJECT: West Side Urban Renewal District Projects to be Amended into the Urban
Redevelopment Plan
MEETING BATE: January 4, 2012
BACKGROUND: At the Council meeting of December 19, 2011 city council directed staff to
bring forward potential projects for funding within the current West Side TIF district. The
purpose for this request is to explore the possibility of maintaining the TIF district for use as an
urban renewal and economic development tool within the current district and in conjunction with
the downtown area core planning effort. There has been significant movement toward the
relocation of the rail service that currently cuts across the community and use of the existing tax
increment could be an important element of making the railroad relocation a reality.
The West Side TIF is currently scheduled to expire in mid -March of 2012. Should council
determine to move forward, Ben Johnson, bond counsel with Kennedy -Graven, has provided the
following time frame:
"... There are no onerous statutory requirements for bond approval of TIF revenue bonds,
but we do have tinting issues of amending the ordinance to specifically approve any
projects that are financed with the TIF bonds. Since the amendment to the ordinance is
not effective until 30 days, we will need to have this approved in late January so that we
don't run into timing issues. Therefore, it is highly preferable that the first reading is
January 9th and the second reading is January 23rd. This will give time for the
publication/effectiveness to not cause any issues with the required timing for any bond
issue. I'd suggest that we take preliminary action on the TIF bonds at the January 23rd
meeting after the second reading of the ordinance and then we could come back for the
final approval of the bond issue on February 20th or March 011.
Due to the timing issues of the 15th anniversary of the creation of the TIF district, I would
life to close any financing no later than March 91h or 12th to ensure that we have a couple
of days to spare. I'll also double-check the March 15th/161h date to ensure there are no
issues and that date is clearly the 151h anniversary of the establishment of the district.
We have to get the amendment documents to the Department of Revenue by the end of
January (they have to receive them by then)."
I
I. Purchase of the Begg parcel located at the corner of Glenwood and Husky. Alternatives
within this project include:
a. Purchase of parcel only.
b. Purchase and construction of a public parking lot.
c. Either a or b above, plus the transfer of the city's share of the office building and
associated parking areas to FCEDA.
2. Public improvement projects to include:
a. Upgrade of the Meridian and Appleway intersection to provide lanes for through
and turn lanes plus curb and sidewalk on the southwest corner of said intersection.
b. Hawthorne to Two Mile Drive water looping of a current dead end main.
c. Colorado Street water main loop.
3. Creation of a revolving loan fund to support the demolition and rernediation of lots within
the district that have vacant or dilapidated structures. Implement the first of these projects
in partnership with Kalispell Lumber.
4. Purchase of the 'Turner property on the southwest edge of the Gateway West Mall
development.
URA RECOMMENDATION: On December 28, 2011, staff presented the above potential
projects to the URA for their review and. recommendation. The URA recommendations are as
follows:
I. By unanimous consent, the URA felt there was merit in extending the life of the West Side
TIF.
2. The URA recommends council consideration of financing several projects through the TIP
as follows (in order of priority):
a. Creation of a revolving loan fund (up to $750,000) for the demolition and
rernediation of under-utilized or vacant structures/lots.
b. Partner with Kalispell Lumber for the demolition and rernediation of their property
on the corner of Idaho and 81h .venue W.
c. public infrastructure improvements including the Meridian/Appleway intersection,
the Hawthorne/Two Mile water main looping and, the Colorado Street water plain
looping.
d. Purchase of the Begg property and potential development of public parking.
FINANCIAL PACTS: .Estimated costs for the recommended projects:
$750,000 revolving loan fund for demolition and remediation which includes $250,000 for
the Kalispell Lumber project.
$75,000 for the Meridian/Appleway intersection upgrade.
$56,000 for the Hawthome/Two Mile water main looping project.
$188,000 for the Colorado Street water main looping project.
$300,000 to $500,000 for purchase and improvement of Begg property.
Associated costs for financin and debt issuance to be determined
Total $1,100,000 to $1,700,000
STAFF RECOMMENDATION: Approve URA recommendation for proposed projects in
connection to the West Side TIF.
Respectively submitted,
A
C�4 6
Jane Howington
City Manager
Mayor Tammy Fisher
Kalispell City Council January 2, 2012
In comparing the two parking proposals presented to the Kalispell City
Council, the engineering statement of qualifications (SOQ) lists a number of
items for consideration. They are summarized as follows:
Harris Proposal
Begg
Proposal
Significant Expense
Building Demolition
None
Unknown
Hazardous Materials
None
Extensive
Landfill Disposal costs
None
Required
Asbestos /Lead Investigation
None
Significant Expense
Asbestos /Lead Remediation
None
Unknown
Asbestos/Lead Liability to City
None
Significant
Spring Creek Flooding
None
Yes
Wetland Mitigation
None
Yes
High Ground Water
None
Required
Environmental Permitting
None
Required
Flood Plain Permitting
None
Required
Flood Way Permitting
None
MAI Appraisal
Purchase Price
MAI Appraisal
City
Appraisal Expense
City
9985
2011 Real Estate Taxes
3871
Yes
Extend West Side Tax District
Yes
Various members of the council have expressed their desire to keep the West
Side Tax Increment Finance District from sunsetting. The Begg proposal is
simple and straight forward. The requirements are MAI appraisal, bonding,
design and close of escrow. The Harris proposal is very complex and much
more difficult to fast track by comparison.
Wise use of the TIF money was also a concern of various council members.
The Begg proposal would expend about one third or less of the TIF dollars
than the Harris proposal. While achieving the same purpose it would leave
money to address other projects and not deplete the TIF funding.
Throughout the City are numerous examples of public and private parking
facilities. They are essential to the functioning of private enterprise and
government. Our proposal could be a welcome addition.
e look forward to working with the City on the timely completion of this
project.
Sinc re y,
3 GBe g