Loading...
05. Public Hearing - Urban Renewal Plan-Airport/Ballfield Complex_ I e GILKJ i� ell Incorporated 1892 Telephone (406) 758-7700 FAX (406) 758-7758 Post Office Box 1997 Kalispell, Montana Zip 59903-1997 TO: Al Thelen, Interim City Manager FROM: Michael Baker, C.L.P. Director of Parks and Recreation RE: Interlocal Agreement Athletic Field Complex DATE: June 14, 1996 Dear Al, Initial contact has been made with School District 5, Flathead County, and Flathead Valley Community College, to determine potential for an interlocal agreement regarding the development and maintenance of the proposed Youth Athletic Complex. A presentation was made to the Flathead County Park and Recreation Board and in return they responded with a letter expressing support for the complex, however, financial support for development and maintenance was not available as stated in the attached letter. School District 5 has expressed interest in developing a complex that will facilitate their High School athletic program. They are expressing interest in both development and maintenance obligations. The Flathead Valley Community College has also expressed interest in developing a participation agreement dependent on their level of involvement with college intermural and curriculum athletics, to be determined at a later date as their programs mature. I feel as this project evolves we can approach the interested agencies and coordinate an interlocal development and maintenance agreement that would be beneficial to all participants. MB/dlw Attachment Douglas Rauthe Mayor Al Thelen Interim City Manager City Council Members: Gary W. Nystul Ward I Cliff Collins Ward I Norbert F. Donahue Ward II Dale Haarr Ward II Jim Atkinson Ward III Lauren Granmo Ward III Pamela B. Kennedy Ward IV M. Duane Larson Ward IV 225 Cemetery Rd - Kalispell, MT 59901 (406)758-5800 FAX: (406)758-5929 CONRAD ATHLETIC COMPLEX 758-5805 May 13, 1996 Dan Johns 216 N. Riding Road Kalispell, MT 59901 Dear Dan: This letter is written to express the Flathead County Parks and Recreation Board's support of the concept of relocating ball fields to one central location. Please be aware, however, that at this time our budget prohibits any facilitation of this project. We are also unable at this time to commit to future funds for development or maintenance of this community endeavor. Sincerely, Bob Norwood Superintendent It Incorporated 1892 Planning, Economic & Community Development Department P.O. Box 1997 Kalispell, MT 59903-1997 To: Al Thelen, Interim City Manager From: Lawrence Gallagher, PECDD Director Subject: Kalispell City Airport - Ground Lease Consi erations Date: June 14, 1996 248 Third Avenue East (406) 758-7740 (406) 758-7739 (office fax) (406) 758-7758 (City Hall fax) This Memorandum is in response to your request for amplification and clarification of Financing Options discussed in THE "KALISPELL CITY" AIRPORT/ATHLETIC COMPLEX REDEVELOPMENT PLAN. The Plan presents the financing options on pages 31-42, with the specific reference to Option 2: LAND LEASE beginning on page 31. When the document was completed several months ago, I wrote: "The City may want to consider a combination of revenue enhancement measures which could include a combination of outright sale, partial around leases, or even a participation in redevelopment projects. The City has a successful track record and experience in forming public/private partnerships where it uses its authority to encourage the maximum private utilization and investment in land in exchange for a "public interest" participation in the project. From 1987 through the end of FY 95, the City has received over $2.6 million in principal and interest on its UDAG loan to the Kalispell Center Mall; LP and the PV of the mortgage it holds on the project is over $2.7 million. It should carefully consider the advantages of creating another redevelopment project for the Airport. The City could stimulate a project at the Airport that would continue to pay dividends long into the future." EL.1A: niHSi:u; OPPORTUNITY Al Thelen, Interim City Manager E Page 2 June 14, 1996 I have added emphasis to the first and to the last two sentences of that paragraph to focus the ensuing discussion of options available to the City Council and the important objective of keeping all the options open until a full evaluation can take place. I don't believe that can be accomplished between now and the adoption of an ordinance creating the Airport/Athletic Complex Urban Renewal Plan. In the discussion of the land lease option on page 31 of the REDEVELOPMENT PLAN ANALYSIS, I acknowledged MDOT's admonishment to "avoid selling any land" which is generally good advice - that is if you can finance airport capital improvements without cash from the sale of land or adequately secured ground rent annualized at full market rates. (By secured, I mean a land lease not subordinate to a heavy first mortgage and/or secured with personal guarantees similar to the personal guarantee the City has with the Kalispell Center Mall Limited Partnership. If ground rent (lease revenue) is pledged as security for any borrowing, the lender or bond buyer will discount it, demand a high debt coverage ratio plus a funded reserve even greater than that which may be demanded for an ad valorem tax increment pledge as security. The City's real estate appraiser raised valid questions and issues during their discussion of the land lease alternative for the industrially zoned property along Airport Road. Rather than paraphrase their advice, the following is the summary paragraph of their discussion: "The potential for leasing to someone for construction other than that which would be related to the city airport was examined. Assuming a ground lease at the lower end of the proposed range, $0.075/SF/YR, a one acre parcel would have a lease amount of 43,560 X $0.075 or $3,267/YR. At a 10% capitalization rate this would suggest a site value of $32,670 ($0.75/SF). This would compare with a 1.06 acre industrial site sale at $32,500. The implication is that there is little if any incentive to a lessee to lease rather than purchase, unless he could invest the capital at a return of more than 10%. In addition an owner would have the benefits of any increase in value with the ownership, whereas on the lease he would likely be faced with increased lease payment in later years. The potential for leasing other than for airport related uses thus appears minimal." Al Thelen, Interim City Manager Page 3 June 14, 1996 Once again, I have added emphasis to the appraiser's written opinion and will add further emphasis by reiterating my observation: "The relevance is that developers evaluate and measure not only the return on money invested in real estate but also the return of it, and, like all investors, they seek maximum growth and appreciation and whenever possible a tax shelter or deferral. Paying ground rent has lost some of the appeal it used to have. Nonetheless, the alternative is available. One final observation: The City should consider its cost of capital and the return of and on capital invested in public projects. Generally, it should not consider leasing public land at rates far below what it has to pay to raise capital for other public improvements or projects or at rates below what it receives on temporary surplus or reserve funds held and invested for later use unless there is a greater public benefit. Other public benefits "necessary and in the public interest" recognized by statute include safety, employment and private investment opportunity, and an improved tax base among other things to be considered." However, "... instead of outright sale, the possibility of a long term lease for private use may be considered as an alternative. City staff concurs with the admonishment to avoid selling land essential for airport use or future expansion but not necessarily land with a higher and better use for private redevelopment, i.e., Parcels 11 & 12 - adjacent to U.S. Hwy 93." "Using an arbitrary 6% to 10% capitalization rate would indicate that Parcel 11 - Haven Ballfields, should generate from $45,000 - $75,000/YR, or $0.25/SF/YR - $0.42/SF/YR in ground rent, depending on the nature of the lease arrangement. Parcel 12 - Daley Ballfields, using the same cap rate assumptions, should generate lease revenues ranging from $75,657 to AI Thelen, Interim City Manager Page 4 June 14, 1996 $126,096/YR, or $0.10/SF/YR to $0.17/SF/YR in ground rent. If both parcels were leased at the top rate, the combined lease income could reach $200,000. However, developers and lenders in Montana and Kalispell generally dislike land leases for redevelopment even though land costs seem to be at an all time high in the market. Perhaps the mood will change." The OPTION 2: LAND LEASE discussion in the Plan concludes: "Because the City of Kalispell does not have a local government charter, it is restricted by state law as to the procedures and limitations on selling or leasing public land. The City Attorney should advise the Council on statutory limitations, suffice it to say, flexibility and participation are not possible - unless the City adopts an urban renewal plan and project for the area." The City Council has the legislative authority to adopt Ordinance No. 4256, "A RESOLUTION FINDING THAT AN AREA OF BLIGHT EXISTS WITHIN THE AREA OF THE KALISPELL CITY AIRPORT/ATHLETIC COMPLEX REDEVELOPMENT PLAN ANALYSIS AND 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," without finalizing how it will dispose of or elect to lease land. What it must do is find that the Airport Plan and Project is necessary and in the public interest and that a sound financing plan exists. As presented, the Plan under consideration offers ample evidence that a sound financing plan exists with alternatives. The ultimate test of the Plan will be the City`s ability to generate the capital required to implement the Plan. lathead Regional Development Office 723 5th Avenue East - Room 414 Kalispell, Montana 59901 Phone: (406) 758-5980 Fax: (406) 758-5781 May 22, 1996 Al Thelen, Interim City Manager City of Kalispell P.O. Drawer 1997 Kalispell, MT 59903 Re: Planning Board Consideration of the Airport Urban Renewal Plan - Tax Increment Finance District and Improvement Bonding Dear Al: The Kalispell City -County Planning Board and Zoning Commission held their regular meeting of May 14, 1996 at 7:00 p.m. in Kalispell City Council Chambers to consider the Kalispell ` Airport Urban Renewal Plan in accordance with, Section 7-15- 1 (1) M.C.A. states that "Prior "" --- to the approval of an urban renewal project, the local governing body shall submit the urban renewal project to the planning commission of the municipality for review and recommendations as to its conformity with the comprehensive plan or parts thereof for the development of the municipality as a whole. " A staff report was presented by Narda Wilson of the Flathead Regional Development Office describing the Airport Plan boundaries, the Tax Increment Finance District boundaries and how the financing mechanisms facilitate the anticipated improvements. Larry Gallagher with the Department of Community Department elaborated on the goals of the plan and the financing methods. Gib Bissell, chairman of the Airport Advisory Board, also spoke in favor the Plan stating that the upgrades to the airport would serve many diverse interests, The Board discussed the Airport Urban Renewal and agreed that it is a valuable project for the City as well as the community. They noted that the Airport Urban Renewal Plan will implement the goals of the Kalispell Airport Neighborhood Plan, improve infrastructure and investment opportunities in the area as well as increase the tax base. The Planning Board recommends that the City Council move ahead with the creation of the tax increment finance district and the implementation of the Airport Urban Renewal Plan. This matter has been scheduled for public hearing at the regular meeting of the City Council on June 17, 1996. Providing Community Planning Assistance To: • Flathead County • City of Columbia Falls • City of Kalispell • City of Whitefish • Al Thelen, Interim City Manager Airport Urban Renewal Plan Page 2 Please contact this Board or Narda Wilson at the Flathead Regional Development Office if you have any questions. Respectfully submitted, Therese Fox Hash President TFH/NW/ Attachments: FRDO Report #KRD-96-01 and packet Draft minutes from the 5/14/96 Planning Board meeting H: \ ... \ 1996\KRD96- l . TRM AIRPORT URBAN RENEWAL PLAN FLATHEAD REGIONAL STAFF REPORT s i' i MAY 3, 1996 A report to the Kalispell City -County Planning Board and the Kalispell City Council regarding the Kalispell Airport Urban Renewal Plan. A meeting on this matter has been scheduled before the Kalispell City -County Planning Board for May 14, 1996 and a public hearing has been scheduled before the City Council for June 17, 1996. � In 1994, the Kalispell City Council and the Flathead County Board of Commissioners adopted the Kalispell City Airport Neighborhood Plan as an amendment to the Kalispell City County Master Plan. This Plan outlines improvements for the Kalispell Airport and recommendations for implementation. Elements of the Plan include relocating the existing ballfields and redevelopment of the site for commercial / industrial uses; upgrading the airport to FAA standards; improving the existing infrastructure; and creating opportunities for private investment. The City of Kalispell hopes to accomplish these goals, in part, by creating a tax increment finance district so that bonds may be issued to finance the necessary improvements. The City of Kalispell Department of Planning, Economic and Community Development has prepared a document titled the "Kalispell City Airport / Athletic Complex Redevelopment PIan Analysis." This document is approximately 40 pages in length and provides a detailed documentation of the properties included within the neighborhood plan, identifying publicly owned property, leasehold interests and privately owned properties. It also provides a detailed analysis of relocation costs for the recreational facilities and associated costs and discusses the financing alternatives for the redevelopment of the area and airport improvements. The report concludes by stating that the goals of the Airport Urban Renewal Plan are to eliminate blight in the area, upgrade the existing facilities and provide profitable, private investment opportunities. This is recommended to be accomplished through the sale of surplus land or through a tax increment financed urban renewal project; or through a combination of both. AREA BOUNDARIES The Airport Neighborhood Plan boundaries are shown the map included with this staff report as Attachment A which indicates that it is bordered on the north by 18th Street East, south along Airport Road to the soccer fields and then turns east and jogs south for a quarter mile, jogs east for a quarter mile, jogs south approximately a third of a mile to Cemetery Road, runs east for a quarter mile and then jogs north for approximately one third of a mile to Highway 93 South. The Plan's western boundary follows US Highway 93 South back to 18th Street East. The Plan area contains approximately 122 acres of private property and approximately 135 acres of City - owned property. The Tax Increment Finance (T.I.F.) District boundarie vary from the Neighborhood Plan boundaries in that they extend beyond the Plan boundaries to the west and follow Ashley Creek. Additionally the T.I.F. District boundaries follow the city limits along the south and include the Haven Ballfields along the east. The T.I.F. District boundaries follow the city limits because of certain bond issuance limitations and restrictions for areas outside the city limits. The area included within the Plan boundaries, but outside the T.I.F. District may be considered for annexation into the future and subsequent inclusion into the T.I.F. District. The area within the Tax Increment Finance District would be eligible for low interest loans for urban renewal, rehabilitation and construction of new building, thereby increasing the City's tax base. The increased revenue will be used to pay off the bonding obligations within a relatively short period of time, and will ultimately generate more tax revenue for the City. A more detailed explanation and analysis of the financing options, enabling state statues and long term benefits can be found in the "Kalispell Airport / Athletic Complex Redevelopment Plan Analysis." KALISPELL CITY -COUNTY PLANNING BOARD REVIEW Parts 42 and 43 of the Montana Code Annotated are cited as the "Urban Renewal Law." Part 42 provides a statement of policy in blighted areas, the need for redevelopment and rehabilitation of blighted areas as well as the preparation of an urban renewal plan. Section 7-15-4213 through Section 7-15-4215 outlines the responsibilities of the Planning Commission and hearing requirements on the urban renewal plan. Part 43 provides for the authorization to issue urban renewal bonds, infrastructure development bonds, obligations for the repayment of bonds and other financing elements. With regard the Planning Commission, Section 7-15-4213(1) states that "Prior to the approval of an urban renewal project, the local governing body shall submit the urban renewal project to the planning commission of the municipality for review and recommendations as to its conformity with the comprehensive plan or parts thereof for the development of the municipality as a whole." Further, Section 7-15-4213(2) states, "The planning commission shall submit its written recommendations with respect to the proposed urban renewal plan to the local governing body within 60 after receipt of it." Subsequent to the recommendation of the Planning Commission the City Council will hold a public hearing. This public hearing has been scheduled for June 17, 1996. All of the property owners within the proposed Tax Increment Finance District will be notified by mail. This notice will include the date and time of hearing, area proposed for the urban renewal and a general 2 Staff would recommend the Planning Board provide the City Council with a recommendation for approval of the proposed Kalispell Airport Urban Renewal Plan as presented for the following reasons: 1. The Airport Urban Renewal Plan will implement the goals of the Kalispell Airport Neighborhood Plan, an addendum the Kalispell City -County Master Plan. 2. The Airport Urban Renewal Plan will eliminate existing blight conditions; provide rehabilitation, redevelopment and development opportunities. 3. The Airport Urban Renewal Plan will improve the existing infrastructure and airport operations. 4. The Airport Urban Renewal Plan will provide for profitable, private investment opportunities. 5. The Airport Urban Renewal Plan will provide the opportunity to improve the existing recreational facilities which may be relocated to the State Lands property on Highway 93 North and Four Mile Drive. 6. The Airport Urban Renewal Plan will benefit the community and municipality by increasing the tax base for the City of Kalispell. Staff would further recommend that the Kalispell City -County Planning Board and Zoning Commission formulate a recommendation to be presented to the City Council prior to the public hearing scheduled for June 17, 1996. H:\FRDO\REPORTS\KALISPEL\KRD96-l.RPT 3 r-� S AIRP®RT URBAN REN \ ",% ♦ ®�«,«,a pat_ P t,.pa N SCALE V-1000, et' rr I -1 - ii1144VV T \ 0 _ - _ o.. AX - DfS7JCT a AMPORT N -- _ L c tv1 ," "' • w � � i • >ti y° t' x _ y 1 r '--.., a {: +�" � ��� �a � •' _ �/� ! X:STN~ '= _ — 1 � � 1 St y� >-N C� `_ �j it _1 _ j— VAC,aM �` ; : }, • � �.�, .,. � S•NI _ eye' r L9l4 ZZ,40 X � uc ,ram o • i tr to to • 1 �' . •�� i. a F5-T VS'?c ! "'� A urz._ Ann MCt IN,_ :• r� :..t7,f no IN- M. z2x ZFA �! MW ., �,.. • Y _. so ( n YN kf --__ t,� jy[ Y•.,� y� m x. ,.. Flathead Reaional Development Office 723 5th Avenue East - Room 414 Kalispell, Montana 59901 May 2, 1996 Phone: (406) 758-5980 Contact Narda Wilson Fax: (406) 758-5781 758-5980 PUBLIC SERVICE ANNOUNCEMENT KALISPELL CITY -COUNTY PLANNING BOARD AND ZONING COMMISSION TO CONSIDER IMPLEMENTATION OF THE AIRPORT URBAN RENEWAL PLAN The Kalispell City -County Planning Board and Zoning Commission will hold their regular meeting on Tuesday, May 14, 1996, beginning at 7:00 p.m. in the Council Chambers, Kalispell City Hall, 213 First Avenue East, Kalispell. During this meeting, the Planning Board will consider the implementation of the Airport Urban Renewal Plan and will formulate a recommendation to the Kalispell City Council as required by Montana Code, Section 7-15-4215. The following is a brief description of the proposal: The City of Kalispell wishes to implement the Kalispell City Airport Neighborhood Plan which was adopted as an amendment to the Kalispell City -County Master Plan by the Kalispell City Council and the Flathead County Board of Commissioners. This Plan includes a strategy to improve the airport safety and operation as well as enhancing the opportunities for private investment and economic development in the area. Elements of the Plan include the relocation of the existing ballfields, upgrading the City Airport to FAA standards and improving the existing infrastructure which will afford opportunities for private investment in the area. These improvements will be accomplished, in part, through the creation of a tax increment finance district. The City of Kalispell Department of Planning, Economic and Community Development has prepared a document known as the "Kalispell City Airport / Athletic Complex Redevelopment Plan Analysis" which defines an area for redevelopment which contains approximately 122 acres of private property and 135 acres of City property. The Planning Board will forward a recommendation to the Kalispell City Council. The City Council has scheduled a public hearing on this matter for June 17, 1996. Documents pertaining to the proposed Airport Urban Renewal Plan are on file in the Department of Planning, Economic and Community Development located at Third Avenue East and Third Street East or at Flathead Regional Development Office, 723 Fifth Avenue East, Room 414, Kalispell, MT 59901, and are available for public review during regular office hours. Interested persons are encouraged to attend the meeting and make their views and concerns known to the Board. Comments in writing may be submitted to the Planning, Economic and Community Development Office or the Flathead Regional Development Office at the above addresses prior to the date of the meeting. h.VTdoVsaslkpb5-14.psa Providing Community Planning Assistance To: • Flathead County • City of Columbia Falls • City of Kalispell • City of Whitefish RESOLUTION NO, 4256 WHEREAS, on the 19th day of September, 1994, the City Council of the City of Kalispell adopted the Kalispell City Airport Neighborhood Plan as an amendment to the Kalispell City County Master Plan, and WHEREAS, said Kalispell City Airport Neighborhood Plan (hereinafter Plan) adopted a strategy to improve the airport operation and safety while enhancing opportunities for increased private investment in the area, and WHEREAS, the Plan contained the following goals necessary for the implementation of the strategy: 1) to minimize hazards to navigation; 2) to develop the airport in accordance to any airport layout plan; 3) to increase development opportunities on nearby properties; 4) to promote compatible land use in and around the airport; 5) to establish a funding mechanism for airport operations; and 6) to establish a priority schedule for plan implementation. WHEREAS, the Airport Advisory Board, established by Resolution No. 4210 , and the Planning, Economic and Community Development Department of the City have evaluated the social, fiscal and physical aspects of the area within the Plan and adjacent areas, and WHEREAS, the Planning, Economic and Community Development Department authored a document known as the Kalispell City Airport/Athletic Complex Redevelopment Plan Analysis (hereinafter Analysis) which includes a study of land uses, ownership, building conditions and demographics within the area, and WHEREAS, the Analysis identifies the following blighting conditions within the area: 1) existence of abandoned City landfill 8.3 acres within the area which has been encroached upon by adjacent property owner and used for junk vehicle storage; 2) under utilization of property within the area with uses ranging from light industrial, residential, vacant, and commercial; 3) lack of dedicated public right-of-way in appropriate places and the existence of unimproved private access at inappropriate locations, especially in area of Waste Water Treatment Plant and South end of Airport runway; 4) uncontrolled access points at Daley Ballfields at U.S. #93 and Third Avenue at U.S. #93 and Lion Park at U.S. #93; 5) lot lay -out on West side of Airport runway does not promote utility or accessibility either to Airport or existing lots; 6) although some of the area has adequate public sewer and water services, a significant portion of area does not have access to sewer and water facilities; 7) existence of 44 private in -holdings totaling 122 acres as well as City ownership of approximately 135 acres within area; 8) location of Daley Ballfields and Soccer Fields adjacent to Airport runway creates a potential for an accident occurring on the Airport to affect children and adults occupying Fields; 9) virtually unlimited and uncontrolled access to Airport runway by automobile or pedestrian traffic creates situation which is dangerous to aircraft and encroaching traffic; 10) location of threshold at North end of Airport runway causes aircraft approaching on runway 13 to fly at a low elevation over Flathead High School and the Football Field; 11) location of privately owned property within Airport Protection Zone both to North and South of Airport runway causes the Airport not to meet Federal Aviation Administration standards and creates significant potential aircraft obstacles; 12) lighting system on airport runway does not consistently work and is subject to repeated outages. WHEREAS, the above factors involving land use, ownership, transportation and safety indicate a relationship of factors contributing to the blighting conditions which exist in the area under S 7-15-4206, MCA, and �� 2 WHEREAS, both the Plan and Analysis, together with related documents, are available for public review at the of faces of the City of Kalispell; and WHEREAS, it is the desire of the City of Kalispell to exercise the powers conferred by the Montana Urban Renewal Law; and WHEREAS, the Montana Urban Renewal Law states that no municipality may exercise any of the powers conferred therein until after its local governing body shall have adopted a Resolution of Necessity. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL, MONTANA: SECTION I. That one or more blighted areas exist in the City of Kalispell, specifically the area encompassing Kalispell City Airport/Athletic Complex Redevelopment Plan Analysis. SECTION II. That the rehabilitation, redevelopment, or combination thereof, of such area or areas is necessary in the interest of the public health, safety, morals, and welfare of the residents of the City of Kalispell. SECTION III. That a public hearing be scheduled to be held on the 17th day of June, 1996 at 7:00 P.M. on a Redevelopment Plan for the City Airport/Athletic Complex. SECTION IV. That this resolution shall take effect immediately upon passage by the City Council. PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL THIS 1st DAY OF APRIL, 1996. Attest: Debbie Gifford, CMC Clerk of Council 3 Douglas D. Rauthe-Mayor EXHIBIT "A" The project area is bounded generally by starting at the intersection of Twelfth Street West and U. S. Highway 93 South, then south along U. S. Highway 93 South to 18th Street West, then east to Third Avenue East, then south to the City limits boundary, then west following the southern city limits boundary to Ashley Creek, then north following Ashley Creek to the west edge of the city shop property and Rawson Field, then north to Twelfth Street West, then east to the point of beginning. For purposes of this Redevelopment Plan, City owned land lying adjacent to U. S. Highway 93 and occupied by the Haven Sallfields and Lion°s Park is considered to be a part of the Airport property. 4