03. City Service Request for Urban Renewal Funds - Westbrook Square ProjectN
MEMORANDUM
February 18,1999
To: Al Thelen, Interim City Manager
From: Jim Hansz, Director of Public orks
Subject: Cost Estimate for Westbrook Square Improve ents
I have reviewed the improvements listed the City Service letter dated January 14, 1999, and have
prepared an independent cost estimate based on information provided by Jackola Engineering. I
spoke with Chris Jackola this morning to further clarify several points and learned the following.
• Improvements at the intersection will not be constructed due to the planned construction of
Meridian Road. They are not part of the itemization in the City Service request.
• Curb and gutter estimates are for replacement of damaged on -site curb and any new curb
necessary to create the parking areas shown adjacent to US 2. No curb and gutter will be
replaced within the ROW.
• The cost of street lamps has been revised down to $2,235.00 each, plus installation.
• The landscaped area adjacent to US 2 has a total area of approximately 7,350 square feet. Of
this total, 1,675 square feet is within the ROW.
• Concrete seating benches are co -located with three of the street lamps.
With this information, and bid rates from recent City contracts, I have prepared an independent
estimate of costs for the improvements within the US 2 ROW.
Item
1. Street lamp
2. Conduit & wiring
3. Lamp bases
4. Curb & gutter**
5. Sidewalk, 6 feet wide
6. Seating benches
7. Sod with soil prep.
8. Irrigation system
QLaanti
Unit Rate
Cost
4
$2,235.00/ea.
S8,940.00
400 LF
$12.00/LF
$4,800.00
4
$500.00/ea.
$2,000.00
430 LF**
$10.00/LF**
S4,300.00**
2,350 SF
$3.30/SF
$7,755.00
3
$150.00/ea.
$450.00
1,675 SF
$1.30/SF
$2,180.00
1,675 SF
$2.00/SF
$3,350.00
Total estimated cost
S33,775.00
** Note: Per.Jackola Engineering, this item is not scheduled for replacement.
Post Office Box 1997 - Kalispell, Montana 59903-1997
Telephone (406) 758-7700 - FAX (406) 758-7758
February 18, 1999
Mr. Al Thelen
City of Kalispell
P.O. Box 1197
Kalispell, MT 59901
Dear Mr. Thelen:
As you know, City Service has proposed a highway and pedestrian enhancement project
along with the completed storm water mitigation/infrastructure system associated with
our Westbrook project at Hwy 2 West and Meridian Road.
Our intention with the highway/pedestrian portion of the project is to enhance the western
entrance to Kalispell and improve the pedestrian access to our property. City Service will
pay for the design as well as the construction coordination, bonded completion, and
financial carrying costs to reimbursement. We have communicated this desire to the
Council and have a pending request to include this work in the Development Agreement
we proposed in our letter of January 14, 1999.
It has been suggested that Public Works provide some elements of the project. This
creates a coordination and execution problem. We suggest that either City Service or the
City undertake the sole responsibility for executing this project. We are happy to
cooperate with either choice.
We would appreciate a response to this letter by March 1 as this project is under tight
construction deadlines. Thank you for working with us in bringing this project and our
requests for Tax Increment funding for both this and the Westbrook infrastructure to a
conclusion.
Sincerely,
1411kit-
Matthew J. Waatti
Vice President - Properties
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MEMO
To: Mayor & City Council
From: Al Thelen, Interim City Manager
Date: February 11, 1999
Re.: City Service Request
In light of the discussion on Monday evening, I have completed some research on City Service's
request for tax increment funds for their Westbrook Square project:
A Mr. Waatti submitted a letter to the City on July 28, 1998 requesting tax increment funds
identifying $230,000 of projected expenses and indicating that they understood that about
S 100,000 would be available from the City.
B. On October 14 representatives of the project met with the City Council to discuss their
project and request. It was made clear that the City did not have any funds available in this
district and we would explore bonding options. The developer was asked to submit a letter
outlining the specific infrastructure improvements needed such as storm sewers, curbs,
gutters, and landscaping that have typically been accomplished in other increment districts.
Post Office Box 1997 - Kalispell, Montana 59903-1997
Telephone (406) 758-7700 - FAX (406) 758-7758
Mayor and City Council
Page 2
February 12, 1999
Councilman Donahue stated that he had no problem with the $22 thousand for storm sewers,
the $16 thousand for landscaping, and $32 thousand for sidewalk and curbs, and perhaps $30
thousand for demolition for a total of $100,000. Mayor Boharski's concluding comment was
that we all agree to help, even though we don't know how much and the need to obtain a list
of projects for the City to fund was stressed. (See attached excerpts from October 14, 1998
meeting.)
C. On October 11, 1998 Westbrook obtained a foundation permit valued at $38,500 and on
January 11, 1999 Westbrook obtained a building permit for 23,217 square feet valued at
$865,302. The total building permit value then is $904,302 and what the taxable value will
be is unknown. The new value will be placed on the tax rolls on January I of 2000 and will
generate increment dollars in budget year 2000/2001. It is my estimate that the increment will
be approximately $15,000 a year.
D. On January 14, 1999 Mr. Waatti- wrote Glen Neier a letter (copy attached) with the apparent
list that Council asked for in the October meeting. It includes water runoff and storm sewer
mitigation actual costs for the Westbrook project totaling $76,943.12. It also included a list
of Highway Beautification and Pedestrian improvements estimated to cost $47,980. This
letter (copy attached) proposed a Developers Agreement that would reflect an anticipated
$25,000 minimum increase in taxable value over a five year period. The aforementioned list
Mayor and City Council
Page 3
February 11, 1999
of improvements estimated to cost $47,980 are typical improvements that the City has funded
in the downtown increment project and would be constructed in the public right-of-way.
These improvements could be placed in a Developers Agreement with City Service and now
that we have $90,000 in the West Side Urban Renewal Fund, you can amend the 1998/99
budget to appropriate the available funds and spend them for these improvements if that is
your desire.
Under past procedures we have not reimbursed a developer for on site work performed by the
developer that is included in Mr. Waatti's letter amounting to $76,913.12 and already completed.
In addition, we do not have the funds to cover this expense.
The concept that a developer should in some way be given fiords directly related to the increment that
may be generated by a development needs to be set aside. It is not an entitlement! To be sure the
proposed development should be one factor to consider in the business deal but the value of a specific
development to the overall Urban Renewal Plan should be paramount.
A reading of Ordinance #1259 which establishes the West Side Urban Renewal Project reflects a
tremendous need for infrastructure improvements, namely subs and streets, storm sewers, sidewalks,
highways and the development of a financial plan to build these infrastructure improvements. It
specifically identifies the Gateway West Mall Redevelopment as the key to the financing plan and
suggests that it could provide an annual tax increment of $294,827 per year and support a $2,000,000
bond issue. It will be some time before this becomes a reality and the City needs to be very cautious
about making commitments of tax increment dollars from the West Side Urban Renewal Project. At
best it will be three years before the Mall Redevelopment will produce additional tax dollars.
Mayor and City Council
Page 4
February 12, 1999
RECONCV NDATION: It appears to me that the Council can direct staff to prepare a Developers
Agreement with City Service to provide the improvements identified in their list estimate of the
Highway Beautification Improvements of $47,980 and also initiate a budget amendment to
appropriate the $90,000 currently available in the West Side Project so that you can implement the
Developers Agreement. The City's Public Works Department is reviewing the cost estimate and
quantities for the Highway Beautification and Pedestrian improvements with City Service and should
complete their review on Tuesday, February 16, 1999.
January 14, 1999
Mr. Glen Neier
Acting City Manager
City of Kalispell
312 1st Ave East
Kalispell, Mt. 59901
Dear Mr. Neier:
Following is a summary of estimated and incurred costs for on -site improvements related
to water and storm runoff mitigation with the WestBrook project. As discussed with the
council, we are requesting TIF fund reimbursement for these costs along with anticipated
expenses for sidewalk, lighting, and highway right-of-way planned for the spring. The
anticipated budget for these two TIF projects is $124,923.12. We propose a Developer's
Agreement that would reflect the anicipated $25,000 minimum increased taxable
valuation over a five-year period to cover the costs.
TAX INCREMENT ITEMS:
Site Water Mitigation and Storm Sewer Improvements — Actual Costs
11 rolls of filter cloth $ 4,400.00
6,208.12 yards of fill material screened and compacted 45,008.87
Separator tanks, manholes 6,683.50
Labor 8,451.52
Pipe and fittings 3,179.53
Drain rock and compaction 9,219.70
Total $ 76,943.12
!WR
Highway Beautification and Pedestrian Improvements -- Estimated
4 light poles $ 9,600.00
-Electrical bases and wiring 6,400.00
Hwy 2 sidewalks, curbs and gutters 16,480.00
Seating 500.00
Landscaping, irrigation and grass 15,000.00
Total $ 47,980.00
Enclosed are the actual billing invoices for the storm water mitigation. Also, the selected
light poles and proposed design for the highway beautification is included along with a
rendering of the new building. If you have questions, please call.
Sincerely,
AW W
wt�I
Matthew J. Waatti
Vice President - Properties