Staff Report/January 4, 2012City of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903
Telephone: (406) 758-7701 Fax: (406) 758-7758
REPORT TO: Mayor Fisher and City Council
FROM: Jane Howington, City Manager
SUBJECT: West Side Urban Renewal District Projects to be Amended into the Urban
Redevelopment Plan
MEETING DATE: 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 timing 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 91h 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 6tn
Due to the timing issues of the 15tn anniversary of the creation of the TIF district, I would
like to close any financing no later than March 91h or 121h to ensure that we have a couple
of days to spare. I'll also double-check the March 15th/161n date to ensure there are no
issues and that date is clearly the 15th 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)."
1. 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 remediation 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:
1. 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 TIF
as follows (in order of priority):
a. Creation of a revolving loan fund (up to $750,000) for the demolition and
remediation of under-utilized or vacant structures/lots.
b. Partner with Kalispell Lumber for the demolition and remediation of their property
on the corner of Idaho and 81h Avenue W.
c. Public infrastructure improvements including the Meridian/Appleway intersection,
the Hawthome/Two Mile water main looping and, the Colorado Street water main
looping.
d. Purchase of the Begg property and potential development of public parking.
FINANCIAL IMPACTS: 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 Hawthorne/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 financing 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,
Jane Howington
City Manager