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2. Resolution 4965 - Cascade Properties Development RequestCity of Kalispell ' F',st Office 13, - 1997 - Kalispell, Montana 59903-1997 -'1 lephone (406' 58-7700 F (406)758-7758 TO: The Honorable Pamela B. Kennedy and City Council FROM: Susan Moyer, Community Development Director James H. Patrick, City Manager SUBJECT: Cascade Properties Development Request and the West Side Urban Renewal District MEETING DATE: December 20, 2004 BACKGROUND: On March 17, 1997, the Mayor and City Council approved and passed Ordinance No. 1259 approving the West Side Urban Renewal Plan for the City of Kalispell, Montana, establishing January 1, 1997 as the base year for calculating the Tax Increment. A map of the TIF District and a copy of the Urban Renewal Plan are attached. The primary goals of the TIF District are identified as: • Assisting in the redevelopment of the 39.5 acres encompassing the Gateway West Mall and the former Crop Hall Building and adjacent sites. • To assist in the reconstruction of Meridian Road. • Infrastructure improvements in an area that has grown piecemeal over the decades, with city services of sewer and water extended incrementally when requested by developers. • Assistance to properties South of U.S. Hwy 2 West: a. To assist in the redevelopment of private property to provide opportunities for light industrial uses. b. The Construction of additional access roads to better serve underutilized industrial land. c. Completion of storm drain and flood plain mitigation measures implemented on the north end of the district. d. Extension of water mains to provide adequate pressure for fire hydrant flows. Due to numerous reasons, redevelopment in this part of the District has not occurred as anticipated. The Gateway West Mall went into bankruptcy around 1985/1986 and American Capital purchased the property on March 2, 2000. Other than the City and the Port Authority acquiring the Stream/TeleTech area on the interior of the mall, nothing major has transpired to draw new tenants or remodel work that would increase the tax base. An additional decline of the site will happen within the next two years when the Signature Theatre Complex will relocate to Section 36. In addition to the decline of the mall area, the former Crop Hale Building and adjacent five vacant lots went into bankruptcy around mid-1990. For several years the building sat vacant, endured considerable vandalism and depreciated in taxable value. Cascade Properties acquired the Crop Hall Building and 5 sites in 2000, and rehabilitated the office building in 2001. The office complex is now fully occupied and has a value of approximately $1,650,000. In April 1999, the City of Kalispell provided Northwest Investments Partnership, L.L. P. Tax Increment assistance in the amount of $53,035 for their on -site infrastructure needs in return for a $904,302 construction investment at Westbrook Square. This equates to 5.9% of the total project cost. Approximately two years ago, the Cascade Properties developers approached Chris Kukulski and Tri-City Planning with plans to build a new office building at the entrance of Financial Drive which feeds into their existing office building, the theaters and the mall site to the east. ,See attached aerial site plan. Financial Drive connects to Two Mile Drive and isutilized by local residents accessing the theaters, the mall, and Idaho; and currently is solely owned by Cascade Partners. The developers were informed that they would be required to upgrade Financial Drive to city standards and that, if there were any way possible, the City would like to realign Financial Drive to create a four-way stop at Hawthorn Avenue. The developers contacted American. Capital to see if they would share in the cost of reconstruction and realignment and were turned down. The single family structure on the northeast corner of Financial Drive and Two Mile Drive is owned by two elderly gentlemen who are only interested in selling the property and not participating in a boulevard upgrade. Staff explored the possibility of acquiring the property; however, without an appraisal, the asking price seems prohibitive. Cascade Partners are requesting that the City share 50150 in the cost of reconstructing Financial Drive. Upon completion, they will then dedicate the street to the City of Kalispell who will assume ownership and maintenance thereof. RECOMMENDATION: Based on the blighted state of Gateway West Mall and the forthcoming further decline caused by the Signature Theaters being relocated, the use of $42,500 of Tax Increment Funds leveraged with the developers' funds to reconstruct Financial Drive appears to benefit the community at large. The $42,500 equates to a .5% investment of Tax Increment funds as compared to a 5.9% investment awarded to the Westbrook Square project in 1999. The road is used as a cut through for the residents in the area to access the theaters; the mall; and Highway 2. r The City will own the road upon completion of construction. An additional 4 lots are targeted to be redeveloped at this site in a mix of commercial/retail and a town home subdivision. Two Mile Drive is highly trafficked at the present time. Financial Drive will be a secondary means of diverting traffic to Highway 2 and to Meridian Drive. Financial Road will be required to have sidewalks which will move pedestrian traffic to the TeleTech location safely. FISCAL IMPACT: Based on the developer's estimation of approximately $9.4 million construction on Lots 1, 3, 6 & 7, an increase to the tax based could occur somewhere around $20,000 per year. The four remaining lots will add considerably to this tax base when their development occurs. ALTERNATIVES: As suggested by Council. Respectfully submitted, Susan Moyer, Director Community Development Memo Prepared: December 16, 2004 James H. Patrick, City Manager RESOLUTION NO.4965 A RESOLUTION TO AUTHORIZE THE USE OF $42,500 OF WEST SIDE URBAN RENEWAL TAX INCREMENT FINANCING FUNDS TO CONTRIBUTE TO THE UPGRADE OF FINANCIAL DRIVE TO CITY STANDARDS. WHEREAS, the West Side Urban Renewal Plan was adopted by Council by Ordinance No. 1259 on March 17, 1997, which plan includes tax increment financing for the benefit of the district; and WHEREAS, included within the stated primary goals of the TIF District are assisting the redevelopment of the acreage encompassing the Gateway West Mall and the former Crop Hale Building and the construction of additional access roads to better serve this underutilized acreage; and WHEREAS, Cascade Properties acquired the former Crop Hale Building and adjacent five sites in the year 2000 and have since then rehabilitated the existing building, which is now fully utilized and substantially increased its value; and WHEREAS, Cascade Properties submitted a Preliminary Plat for the Cascade Business Park which develops the sites adjacent to the Crop Hale Building and contemplates significant improvements to Financial Drive, currently a private road, to City standards and requests a 50150 cost sharing with the City for these costs; and WHEREAS, it is the agreement of Cascade Properties to dedicate Financial Drive to the City upon the completion of the upgrades; and WHEREAS, Financial Drive is heavily used by residents of the area for access to the businesses within this acreage as well as access to Highway 2 which diverts traffic off of the overly used Two Mile Drive and the planned improvements to this road to City standards will benefit the district as well as the community at large; and WHEREAS, the costs for the City's share of the upgrades will be no more than S42,500; and WHEREAS, it is an appropriate use of the tax increment funds to be used to contribute to the costs of the upgrades to Financial Drive. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL AS FOLLOWS: SECTION I. The Financial Director is authorized to expend up to $42,500 from the West Side Urban Renewal District TIF funds for the upgrades to Financial Drive to City standards with said funds to be paid to Cascade Partners upon completion of such upgrades to the satisfaction of the Kalispell Public Works Department and dedication of Financial Drive to the City of Kalispell. PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL, THIS 20" DAY OF DECEMBER, 2004, ATTEST: Theresa White City Clerk Pamela B, Kennedy Mayor EXHIBIT "A" WEST SIDE URBAN RENEWAL TAX INCREMENT FINANCE DISTRICT PROPOSED BOUNDARIES Beginning at the intersection of Meridian Road and Highway 93 in Section 6, Township 28 North, Range 21 West, and heading Southeast along Highway 93 to its intersection with Colorado Street. Then heading West along Colorado Street approximately 700 feet to the Eastern boundary of Assessor's Tract 5CA, then West along the Southern boundary of said parcel a distance of approximately 224 feet, then North along West boundary of Assessor Tract 5CA, then West along the North boundary of Assessor's Tract 5F, then South along the western boundary of said parcel to its intersection with West Wyoming Street, then East a distance of approximately 448 feet along the North boundary of West Wyoming Street to its intersection with Seventh Avenue WN, then South to the Southern border of West Wyoming Street, then West along the Southern border of West Wyoming Street to its intersection with Meridian Road, then South along Meridian Road to its intersection with Highway 2, then East along Highway 2 to its intersection with Seventh Avenue WN, then South along Seventh Avenue West a distance of approximately 1,725 feet to its intersection with First Street West. Then West along First Street West a distance of approximately 1,050 feet to the eastern boundary of Assessor's Tract SDDB, then along the Southern boundary of said tract and Assessor's Tract 5DDA to Meridian Road. Then North along Meridian Road to the Northern boundary of the Burlington Northern railroad easement. Then West along the easement for a distance of approximately 350 feet; then North along the Eastern boundary of Assessor's Tract 14A approximately 175 feet, then East approximately 50 feet; then North and West following the boundaries of. the city limits to Highway 2 West. From Highway 2 West, following the Westerly most city limits to Three Mile Drive. Then east along Three Mile Drive to its intersection with Northwest Lane. Then heading North along Northwest Lane to the Northwest corner of Lot 29, Block 1, Northwest Tract. Then along the Northern boundary of Lot 29 and approximately 200 feet along the Northern boundary of Lot 13, Block 1 of Northwest Tracts; then North along the Eastern boundary of Lot 3, Block 1, Northridge Heights Subdivision to Parkway Drive. Then North along Parkway Drive a distance of approximately 950 feet to the Northwest corner of Lot 9, Block 2, Northridge Heights Subdivision, the east along the Northern boundary of said parcel to its intersection with Highway 93 North, then South along Highway 93 North to Meridian road and the point of beginning. Draft - West Side Urban Renewal Tax Increment District Urban Renewal flan March 14, 1997 URBAN RENEWAL BONDS AND REFUNDING BONDS A municipality has the power to issue bonds to finance urban renewal, including the payment of principal and interest upon any advances for surveys and plans, and to issue refunding bonds for the payment of such bonds previously issued. Such bonds shall be authorized by resolution or ordinance of the local governing body and shall not pledge the general credit of the municipality (Section 7-15-4301, MCA). Specifics related to urban renewal bond authority are contained in Chapter 7, Title 15, Part 43, of the Montana Code Annotated. CONCLUSION The true test of any redevelopment and/or economic development plan will be whether or not the plan stimulates private investment which results in jobs, an improved tax base, and a more humane environment. This statement has been reiterated throughout this text because it is important. Planners, community leaders, and elected officials must realize that investor developers are motivated by profit, reasonably secure investment, and the opportunity for investment growth. Redevelopment and economic development plans must not just treat the symptoms of blight, inadequate public improvements and a stagnant tax base, but attack the cause - lack of profit incentive. Federal and state programs are now focusing on leveraging private dollars with limited grants; local government also ought to channel its efforts in that direction. In order to do so, local government needs to understand what profit incentives are available to businesses in addition to low interest loans, grants, good planning, adequate public services, technical assistance required, and local governments' interest in viability of businesses. R Draft - West Side Urban Renewal Tax Increment District Urban Renewal Plan March 14, 1997 improvements for which the foregoing costs may be incurred. (Section 7-15-4288, MCA) Tax increment funds may be pledged for the payment of revenue bonds issued for urban renewal projects or of general obligation bonds, revenue bonds, or special assessment bonds issued to pay urban renewal costs (Section 7-15-4290, MCA). All of these bonds are tax exempt, i.e., the interest earned by the bond buyer cannot be taxed as income, therefore, a lower than market rate of interest is paid by the seller (municipality). Urban renewal should result in measurable, tangible benefits, as well as keep the area's base taxable value from declining. The base taxable value means, "the actual taxable value of all taxable property within an urban renewal area ... prior to the effective date of a tax inrrPmant financing provision" (Section 7-1 ';-4?AI(2)- MCA)- If blight ig Pliminatprl and if investor developer confidence is restored in the area, all levying agencies may continue to share in the taxes generated by the base. After urban renewal costs have been paid and all bonded indebtedness for the project satisfied, the segregation of tax increment will cease and all taxing bodies will share in taxes generated by the improved tax base. There are no tax benefits or fair market value reductions to properties within the area. Such properties will, however, benefit from any improvements within the area which may occur because of the project. Under Section 7-15-4286, MCA, mill rates of taxing bodies for taxes levied after the effective date of the tax increment provision shall be calculated on the basis of the sum of the taxable value, as shown by the last equalized assessment roll, of all taxable property located outside the urban renewal area and the base taxable value of all taxable property located within the urban renewal area. The mill rate so determined shall be levied against the sum of the actual taxable value of all taxable property located within as well as outside the urban renewal area. The tax increment, if any, received in each .year from the levy of the combined mill rates of all the effected taxing bodies against the incremental taxable value within the urban renewal area, except for the university system mills levied and assessed against property as defined in 7-15-4292(6)(a), MCA, shall be paid into a special fund held by the treasurer of the municipality and used as provided in Sections 7-15-4282 through 7-15-4292, MCA. Therefore, the City shall segregate and apply tax increments accruing to the district as provided in Sections 7-154282 through 7-15-4292, MCA. Ordinance No. 1259 authorizes the City Manager to implement the Flan with the powers set forth in Title 7, Chapter 15, Parts 42 & 43, MCA, and to seek financial assistance as it may become available from the Federal or State government or such other sources as may be determined appropriate by the City Council. January 1, 1997, shall be established as the base year for calculating tax increment. 7 Draft - West Side Urban Renewal Tax Increment District Urban Renewal Plan Mardi 14, i 997 FINANCING OPTIONS FOR URBAN RENEWAL. PROJECTS Tax Increment Financing ("TIF") may only be used in conjunction with the implementation of an urban renewal plan and project. The City Council must declare that urban renewal is "necessary and in the public interest" and that blight exists in an area. The principal of TIF is that the redevelopment project is financed through the use of new tax dollars generated as a result of increased private investment stimulated by a redevelop- ment project. It assumes that the existence of blight has a deleterious effect on private investment in an area. It must also be assumed that if the City of Kalispell adopts a redevelopment plan which will instill developer -investor confidence, the existing tax base will be maintained at least at present levels and improved measurably over the term of the project. The tax increment financed urban renewal project, then, is intended to assure that all levying agencies (schools, state, county, city) may continue to count on a stable "original" base value of private property on which to levy taxes. Any increase in the fair market value of property above the "original base" value, or the increment, will generate new tax dollars; tax dollars that in all probability would not exist were it not for the urban renewal project. Tax increment is "... the collections realized from extending the tax levies, expressed in mills, of all taxing bodies in which the urban renewal area or an industrial district or a part thereof is located against the incremental taxable value." (Section 7-15-4283(8), MCA) "The tax increment, (the new tax dollar) if any, received in each year from the levy of the combined mill rates of all the affected taxing bodies against the incremental taxable value within the urban renewal area ... shall be paid into a special fund held by the treasurer of the municipality and used as provided in 7-15-4282 thru 7-15- 4292." (Section 7-15-4286(2)(a), MCA) The tax increment may be used to pay the following costs of or incurred in connection with an urban renewal project: 1. Land acquisition; 2. Demolition and removal of structures; 3. Relocation of occupants; and 4. The acquisition, construction, and improvement ... of streets, roads, curbs, gutters, sidewalks, pedestrian malls, alleys, parking lots and off-street parking facilities, sewers, sewer lines, sewage treatment facilities, storm sewers, waterlines, waterways, water treatment facilities, public buildings, and other public improvements ... and items of personal property to be used in connection with 0 Draft - West Side Urban Renewal Tax Increment district Urban Renewal plan March 14, 1997 Project funding comes from the Urban Highways Fund with a current credit of approximately $1 million. Total project costs are estimated at $3.1 million with an additional $500,000 needed for related storm drainage improvements. The funds accrue to the project account at $235,000 per year, thus requiring another eight years before construction contracts could be awarded. Additional right-of-way will also be needed, creating impacts on several properties fronting Meridian Road. As tax increment funds become available from the redevelopment of Gateway West Mall and other properties in the district, the West Side Urban Renewal Plan provides a variety of financing options to expedite the reconstruction project. The road and intersections are at or over capacity now, with increasing traffic because of steady growth of commercial and residential development on the west side of Kalispell. Improvements to North Meridian €Xvau are c€€M-CIR LLJ c€€c P1%Jper rlo`vvu€ of the area to sta€.r€€€Ze ai€d €€ittpJ-0v'c a€e tan ruse. INFRASTRUCTURE IMPROVEMENTS The west side of Kalispell has grown piecemeal over the decades, with city services of sewer and water extended incrementally when requested by developers. Road construction has been limited and added on to narrow County roads as expediency dictated. Major widening and reconstruction of existing roads along with new arterials are critical to reduce the increasing traffic congestion associated with the retail and residential development rapidly occuring on the west side. Storm drainage and flood plain management are two other critical areas that need analysis to develop and implement solutions. PROPERTIES SOUTH OF U.S. HWY 2 WEST The area lying to the south of U.S. Hwy 2, east of Meridian Road, has been included in the West Side Urban Renewal Tax Increment Finance District to encourage and facilitate the following projects: 1. To assist in the redevelopment of private property to provide opportunities for light industrial uses in an appropriate neighborhood of similar uses. 2. The construction of additional access roads to better serve underutilized industrial land. 3. Completion of storm drain and flood plain mitigation measures implemented on the north end of the district. 4. Extension of water mains to provide adequate pressure for fire hydrant flows. 5 Draft - West Side Urban Renewal Tax Increment District Urban Renewal Plan March 14, 1997 funds, could assist with the relocation of these public utility companies and encourage the redevelopment and re -use of these sites to a use that is compatible with the Neighborhood Plan. ISSUE 2: The interaction of pedestrians, bicycles, and vehicles can create dangerous situations. GOAL 2: Create a circulation pattern that maintains a separation of incompatible systems. This could be done by providing sidewalks and boulevards along all major streets and roads and by encouraging bicycle lanes that are separate from the vehicle traveling lanes on Meridian Road, Three Mile Drive, and Two Mile Drive. This could also be done by implementing the portion of the Kalispell Transportation Plan that deals specifically with the reconstruction of Meridian Road. ISSUE 3: As the City grows, additional traffic will strain the existing system making it more dangerous. GOAL 3: Create a street system that can accommodate increases in traffic safely. The reconstruction of Meridian Road from U.S. Hwy 2 north to U.S. Hwy 93 is a significant factor in creating a street system that can handle the increased volumes of vehicle and pedestrian traffic in this area. ISSUE 4: City services are not yet available to parts of the North Meridian area. GOAL 4: Provide a full range of services to the area. While infrastructure such as water, sewer, and storm drains exist in the area, these improvements are discontinuous. Storm drains, sewer mains, and water mains should be extended to those areas not served by such improvements. The City could possibly assist in the construction of these improvements with tax increment funds. MERIDIAN ROAD RECONSTRUCTION The adopted Kalispell Transportation flan has identified the reconstruction of North Meridian from U.S. Hwy 2 West north to U.S. Hwy 93 North as the top priories for urban system funding. The project includes the widening of the road to accommodate additional travel lanes, turn lanes, curb, gutter, and pedestrian/bicycle facilities. Design and construction documents are scheduled to be completed late summer, 1997. 4 Draft - West Side Urban Renewal Tax Increment District Urban Renewal Plan March 14, 1997 redevelopment plan will depend on market conditions and development scenarios as outlined above. NORTH MERIDIAN NEIGHBORHOOD PLAN The North Meridian Neighborhood Plan was adopted as an amendment to the Kalispell City - County Master Plan in December of 1994. The Neighborhood Plan was adopted to serve as a guide for the most appropriate action to take when a request for a change in zoning or major development is proposed for the area. The land immediately adjacent to Meridian Road generally has a haphazard organization to its zoning and land use pattern. This situation makes it difficult for property owners to predict what will happen regarding land use in their neighborhood. In addition to the land use and zoning, the Neighborhood Plan looks at the nnn,Ac n{fho ninfrefr..^f.ra.i,c..i-h �c rc�Ac nc%Apciri�r --r^," , +. ­uv...t1—. uvvalGl, sewer, and storm drainage, and sets general policies toward supplying those services. The Neighborhood Plan identifies four (4) major issues of concern in this area and outlines goals to address each of these issues. Those goals are identified as follows: ISSUE 1: The present urbanized land use pattern incorporates a haphazard and incompatible mix of uses. GOAL 1: To set a pattern of land use that incorporates sensitivity to neighboring uses. This could be done by encouraging multi -use commercial development along Meridian Road and U.S. Hwy 2, and primarily west of Two Mile Drive, and by encouraging attached single family or apartment type dwellings to buffer the commercial development from the single family development to the east. Using tax increment funds, the City could also assist with the relocation of businesses that are incompatible with the zoning so that the land could be redeveloped with a use that is compatible with the surrounding area and with the zoning. Certain public utility companies located on Meridian Road are facing difficulties in expanding their offices because of zoning designations. A public utility company located on Meridian Road had at one time shown an interest in purchasing additional property adjacent to their property so that they could expand and consolidate their offices. When the North Meridian Neighborhood Plan was adopted as an amendment to the Kalispell City -County Master Plan, this property and those surrounding it were designated for future high density residential zoning. Because the Kalispell City -County Master Plan designates the entire area around the utility company as high density residential, they were unable to apply for a zone change to allow their business to expand. The City, with tax increment 3 Draft - West Side Urban Renewal Tax Increment District Urban Renewal Plan March 14, 1997 forming WOODMEN PROPERTIES L.C., to pursue the redevelopment of Gateway West Mall and related properties (Exhibit "B"). The property comprises approximately 39.5 acres with the two primary components being the Gateway West Mall and the former Crop Hail Building, which is currently owned by Egghead Software Company. Woodmen Properties L.C. has an option with the mall owners, Collier -Heinz, to redevelop and expand the existing mall. It is their intention to proceed under the Urban Renewal Law by developing a workable and feasible plan, which can be implemented through private enterprise without the exercising of eminent domain. As stated in their proposal: "Our goal is to reverse the trend toward deteriorating physical facilities and falling property values associated with the Property. We would intend to make immediate efforts to create new tenancies in the existing facilities as we move forward with the formation of an acceptable redevelopment plan. As the redevelopment plan is established, -we are prepared to make the necessary investment to eliminate the blight and economic distress currently associated with the Property. At the present time we are studying the redevelopment of the Property under three different scenarios: a. Regional retail mall with three -anchor configuration and associated out parcel retail. b. Business park with multiple low-rise office buildings and limited retail facilities. c. Mixed -use office and retail. ... we would estimate that the investment and redevelopment process could result in a market value for the Property of $20,000,000 to $22,000,000 which represents a substantial increase over the current combined assessed value of the property of $7,857,378. Additionally, this type of redevelopment activity, once completed, will generally require a labor force of approximately 900 to 1,000 individuals to support the ongoing operations associated with the businesses which will locate in the Property. Further, it is important to note that of these jobs, we would estimate that 75% will be new jobs created by businesses locating in Kalispell for the first time." As the analysis shows in Exhibit B, the post redevelopment of the Gateway West Mall could generate an annual tax increment of $284,827. This new incremental tax value will support the issuance of an urban renewal bond in excess of $2,000,000. The bond proceeds will assist in the redevelopment of the property in accordance with applicable statues, Part 42, Urban Renewal, and as specified in Section 7-15-4288, MCA. The specific E EXHIBIT "All WEST SIDE URBAN RENEWAL TAX INCREMENT FINANCE DISTRICT URBAN RENEWAL PLAN INTRODUCTION On January 6, 1997, the Kalispell City Council adopted Resolution No. 4309 finding that one or more blighted areas exist within the areas of the North Meridian Neighborhood Plan and an additional area described below (Exhibit "A"). The North Meridian Neighborhood Plan in general covers an area bounded by U.S. Hwy 2 on the south, U.S. Hwy 93 and Wedgewood Lane on the north; 7th Avenue WN on the east; and Hawthorne Avenue and Northern Lights Blvd on the west. The additional area is formed by extending the easterly 7th Avenue WN boundary described above, south across the railroad tracks to 7th Avenue West to its intersection with First Street West and then westerly to the west Kalispell City Limits at Meridian Road and then north along the westerly boundary of the Kalispell City Limits to Northern Lights Blvd. It was found that rehabilitation, redevelopment, or a combination thereof, within such area is necessary in the interest of the public health, safety, morals or welfare of the residents of the City of Kalispell. The primary goals in creating the Westside Urban Renewal Tax Increment Finance District are to implement the North Meridian Neighborhood Plan that was adopted as an amendment to the Kalispell City -County Master Plan in December of 1994, by both the Kalispell City Council and the Flathead County Board of Commissioners to assist, if necessary, in the redevelopment of the 39.5 acres encompassing the Gateway West Mall and the former Crop Hail Building, and to use available tax increment funds to assist in the reconstruction of Meridian Road and associated projects such as providing storm drains in the area. URBAN RENEWAL PROJECTS The West Side Urban Renewal Tax Increment Finance District Urban Renewal Plan (the "Plan") contains many undertakings that need to be implemented under the authority of this plan. As specified in Part 42, Urban Renewal, MCA, the purpose of an urban renewal plan is to assure that a sound and adequate financial program exists for the financing of urban renewal projects. The following is a brief description of the City of Kalispell's intent to use tax increment funds to implement and finance eligible urban renewal projects: GATEWAY WEST MALL REDEVELOPMENT Westfield Properties Inc., of Salt Lake City, Utah, has entered into a joint venture relationship with Woodbury Corporation, also headquartered in Salt Lake City, UT, Cascade Busines and Technical Center Projected Buiid Out Start Projected Square Date Lot Units Project Cost Feet Spring '04 Roads $ 156,000 Spring '04 Utilities $ 37,000 Spring'05 1 4 Professional Office Condo $ 1,200,000 14,000 Spring '06 3 1 Tech. Center $ 1,500,000 12,500 Spring '07 6,7 42 Gated Town homes $ 6,500,000 $ 9,393,000 Lots 2,4,5,E to be determined Cameron Calder (801) 592-0288 Rulon Nixon (801)380-7301 09108V2004 14:57 FAX 4067585671 NT DEPT OF REVENUE Q001 Montana Department of Revenue Dun Haffmon Acting director September 8, 2004 TO: Rulon Mixon Cascade Professional Building FROM: Scoff Williams Region Manager Property Assessment division RE: Proposed New Construction on Financial Drive; Tax Increment District C In response to your request, l have determined the following for the new construction proposed to be built in Tax Increment District C. $1,000,000 cost of construction of improvements $ 225,000 value of land beneath the improvements Total value of new property; $1,225,000, which would represent a taxable value of roughly $29,000. The district is currently valued at $3,702,693 taxable, and has an incremental growth of $480,346 above the established base year value_ This amount represents a growth of 13% for the District. The projected tax based upon 2003 city levy and current tax rate is as follows: Taxable Value $29,000 X Levy .638966 = $18,530 Consolidated Tax Portion to the District: Taxes $18,530 X 13% (Growth) = $2,408 to the District. I have also attached a copy of exhibit "A" summarizing the primary goals of the District when it was formed. Let me know if you need anythino else, Cusiorner Service i406) 4444900 A, TOO 1406) 444-2= A www.discoverinoMont0r)ci.cgmfrevenue Page 2 West Side Urban Renewal Tax Increment Financial District Please review the enclosed information and let us know if you need additional information or if we need to be in attendance at any upcoming Council meetings. I can be reached at 801-380- 7301. Please send all correspondence to Cascade Professional Center P.O. Box 1522 Orem, Utah 84059. Attention Rulon Nixon. Thank you in advance for your help in this matey. Very truly yours, Cascade Professional Centers Rulon Nixon Cascade Professional Center 100 Financial Dr. Suite 300 Kalispell, Mt. September 14, 2004 City of Kalispell P.O. Box 1997 Kalispell, Mt. 59903-1997 Attention: The Honorable Pamela B. Kennedy Subject: West Side Urban Renewal Tax Increment Financial District Dear Ms..Kennedy Cascade Professional Center, formerly known as the Crop Hail Building has submitted a Preliminary Plat to the Planning Commission for approval to create seven new lots surrounding the existing Cascade Professional Building. During the review process, the planning commission imposed a requirement that we the developer, improve and widen 100 Financial Drive at our expense. In previous meetings with the City Manager, Susan Moyer and others, we have discussed the possibility of using Tax Increment District Funds in participation with the Developers Funds to make the requested improvements to 100 Financial Dr.. With this letter, we are requesting that Tax Increment District Funds be provided to cover 50% of the cost of improvements to 100 Financial Drive. As requested, we are providing the following information for your use in evaluating the feasability of our request: The first building being proposed will be constructed on lots 1 &2 at an estimated cost of $1,000,000.00 . The lot value is estimated at $225,000.00 for a total value of $1,225,000.00. Enclosed is a Site Survey, Site Plan, Preliminary Plat indicating the lot locations, and an elevation of the first proposed building to be constructed. Scott Williams, Region Manager for The Montana Department of Revenue has prepared a calculation of tax revenue that would be generated from the first proposed improvement based upon the above estimated values. This information is enclosed with this letter. Future plans include the construction of a twenty four unit Town Home development on Lot 7 West of the existing Cascade Professional Building. The estimated cost to widen and improve 100 Financial Dr. Is $85,000.00.