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1. Selection of West Side Urban Renewal District Projects to be Amended into the Urban Redevelopment Plan__ _ _ —_.— _—_—__—____ _ :�. ____ _ . __ _ _ _ ... ..._.._ _ _ _— _ ....... _... _ _ _ __ __ _ _ .......:....::. __ .......... .........:::: ....:...:.: ............. ........::.:.: __ .......... ........::::: e .:.::.::.:: __ _ _ _ _ ...._ ......... _ _ _ __ —r__ _ __ _ __ _ __ _ _ ....::...... _r .::.::.:...:....:......:.::... ___ -- — ............... :::.::.... __ _.: .. _.. ! . 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