H2. Resolution 5757 - Creation of TEDDPLANNING FOR THE FUTURE
REPORT TO:
FROM:
SUBJECT
MEETING DATE:
MONT"A
Doug Russell, City Manager
Jarod Nygren, Senior Planner
Planning Department
201 1st Avenue East
Kalispell, MT 59901
Phone: (406) 758-7940
Fax: (406) 758-7739
www.kalispell.com/planning
Glacier Rail Park Development Plan for Targeted Economic Development
District (TEDD)
April 4, 2016
BACKGROUND: The City of Kalispell in conjunction with the Flathead County Economic Development
Authority (FCEDA) is seeking to foster the development of secondary, value adding industries within the
Glacier Rail Park Development Plan Area as part of the City's overall mission to meet its needs of promoting
economic development, improving area employment opportunities and expanding the community's tax base.
This effort would be made possible through the creation of a Targeted Economic Development District
(TEDD) on 49 acres of land within the larger Glacier Rail Park Development Plan boundary. The City of
Kalispell would need to utilize Tax Increment Financing as part of the overall strategy to provide infrastructure
in support of value -adding industry pursuant to the 2013 Targeted Economic Development District Act,
embodied in 7-15-4279, Montana Code Annotated (MCA). The TEDD would provide the City of Kalispell
with the ability to employ tax increment financing as provided in 7-15-4282, MCA for appropriate public
infrastructure projects in support of "value -adding industry or secondary value-added products or
commodities" within the Glacier Rail Park Development Plan boundary.
In the event that the Kalispell City Council determines that it wishes to create a TEDD to overlay the Glacier
Rail Park, it must first pass a resolution of necessity setting forth its findings that certain facts exist to support
the creation of such a tax increment district. Based upon the evidence presented in the Glacier Rail Park
Development Plan for TEDD, the following findings would be appropriate:
a. The property upon which the Glacier Rail Park will be developed is deficient in the infrastructure
necessary to encourage and retain value -adding industry within the rail park; and
b. The property upon which the Glacier Rail Park will be developed has been designated to be within an
Economically Distressed Area in part due to a decline in the traditional industries of timber, mining
and aluminum production; and
c. The property upon which the Glacier Rail Park will be developed is annexed within the City of
Kalispell, is zoned for purposes consistent with the Glacier Rail Park Development Plan and said
zoning is consistent with the City of Kalispell Growth Policy; and
d. The property upon which the Glacier Rail Park will be developed consists of a continuous area with an
accurately described boundary and is not included within an existing tax increment financing district;
and
e. The Glacier Rail Park Development Plan is specifically of the size and design to host a diversified
base of multiple independent tenants; and
f. The property upon which the Glacier Rail Park will be developed meets the state statutory criteria for
the creation of a TEDD.
The Kalispell Planning Board held a duly noticed public hearing March 8, 2016, to consider the Glacier Rail
Park Development Plan for Targeted Economic Development District. Staff presented the proposed
development plan, providing details of the proposal and evaluation.
During the public comment portion of the hearing, two gentlemen had questions for staff regarding the plan.
Both of their questions regarded whether their properties were being annexed into the project and would they
be affected by the proposal. Staff clarified their questions regarding the plan boundary and the intentions of the
proposed plan. Additionally, a letter of support was received from Turner Askew (Chairman of FCEDA
Board) supporting the proposed plan.
There being no further public testimony, the public hearing was closed and a motion was presented to adopt
the Glacier Rail Park Development Plan for Targeted Economic Development District as findings of fact, and
recommend to the Kalispell City Council the plan be adopted as provided. Board discussion concluded that the
proposed plan was appropriate, and the motion passed 5 in favor and 0 opposed, on roll call vote.
RECOMMENDATION: It is recommended that the Kalispell City Council pass a resolution of necessity
based on the findings provided in the Glacier Rail Park Development Plan for creation of Targeted Economic
Development District.
FISCAL EFFECTS: Positive impacts once implemented.
ALTERNATIVES: Deny the request.
ATTACHMENTS: Resolution 5757
FCEDA Letter of Support
Glacier Rail Park Development Plan for TEDD
Report compiled: March 24, 2016
Aimee Brunckhorst, Kalispell City Clerk
2
RESOLUTION NO. 5757
A RESOLUTION FINDING THAT AN AREA DEFINED IN EXHIBIT "A" AND
LOCATED WITHIN THE ANNEXED BOUNDARIES OF THE CITY OF KALISPELL IS
INFRASTRUCTURE DEFICIENT AND THAT INFRASTRUCTURE IMPROVEMENT
OF THE AREA IS NECESSARY FOR THE WELFARE OF THE RESIDENTS OF THE
CITY OF KALISPELL AND SETTING A PUBLIC HEARING ON THE ACCEPTANCE
AND APPROVAL OF A COMPREHENSIVE PLAN OF DEVELOPMENT AND THE
ESTABLISHMENT OF A TARGETED ECONOMIC DEVELOPMENT DISTRICT.
WHEREAS, on April 21, 2014, the Kalispell City Council by Resolution No. 5669 and upon
petition of the Flathead County Economic Development Authority [FCEDA], a
statutory entity of Flathead County, Montana established pursuant to MCA
7-14-1101 and owner in fee of that certain parcel of property fully described in
Exhibit "A', attached hereto and incorporated fully herein by this reference,
annexed said parcel of property into the incorporated limits of the City of Kalispell;
and
WHEREAS, on May 5, 2014, the Kalispell City Council by Ordinance No. 1737, following the
proper review and recommendation of the Kalispell City Planning and Zoning
Board and duly noticed public hearing, applied a zoning designation to the subject
property of City I-2, Heavy Industrial; and
WHEREAS, on May 5, 2014, the Kalispell City Council by Resolution No. 5673 and upon
petition of the property owner, FCEDA, conditionally approved the preliminary
plat of said subject property with the designated plat name of "FCEDA Rail Park
Subdivision"; and
WHEREAS, the Kalispell City Planning and Economic and Community Development
Departments evaluated the fiscal and economic aspects, as well as the infrastructure
and other physical aspects of the subject property and its contiguous areas in
conjunction with the general economic aspects of the City and Flathead County and
submitted a report entitled "Glacier Rail Park Development Plan for Targeted
Economic Development District (TEDD)" [the Plan], incorporated as Exhibit "B"
herein by reference, that identifies the lack of necessary infrastructure to and within
the subject parcel as well as identifying the need in the City for a district that can
host a diversified tenant base of multiple independent tenants that will encourage
the location and retention of value -adding projects; and
WHEREAS, on March 8, 2016 the Kalispell City Planning and Zoning Board held a duly noticed
public hearing and upon considering the Plan described above for the subject
property as well as the public comment given, determined unanimously to
recommend the comprehensive plan and findings that the City of Kalispell is
infrastructure deficient and that infrastructure improvement of the subject area is
necessary for the welfare of the residents of the City of Kalispell; and
WHEREAS, the Plan, together with related documents, are available for public review at the
offices of the City of Kalispell; and
WHEREAS, it is the desire of the City of Kalispell to exercise the powers conferred by the
Targeted Economic Development District Act set forth at MCA 7-15-4277; and
WHEREAS, the Targeted Economic Development District Act 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 L That the Kalispell City Council accepts the recommendation of the
Kalispell City Planning Board and makes the following findings:
a) The City of Kalispell lacks sufficient capital to rectify the
infrastructure shortage in the infrastructure -deficient subject
property area, thus impeding its ability to achieve economic
growth through the development of value -adding industries;
and
b) The subject property is deficient in infrastructure
improvements; and
c) Infrastructure improvement of the subject area is necessary
for the welfare of the residents of the City of Kalispell.
SECTION IL The Kalispell City Council has the following findings of fact under
consideration to be determined after a public hearing:
a) The subject property consists of a continuous area with an
accurately described boundary that is large enough to host a
diversified tenant base of multiple independent tenants; and
b) The subject property has been zoned by the City as City I-2,
Heavy Industrial, and such zoning designation is consistent
with the Kalispell City Growth Policy; and
c) No portion of the subject property is included within an
existing tax increment financing district; and
d) The "Glacier Rail Park Development Plan for Targeted
Economic Development District (TEDD)" [the Plan] is
appropriate to be the comprehensive development plan for
the district.
SECTION III. A public hearing is hereby called and shall be held on Monday, April
18, 2016 at 7:00 p.m. in the Council chambers on the establishment of
a Targeted Economic Development District (TEDD) within the
bounds of the property described in Exhibit "A" as well as a
comprehensive plan to develop such district.
SECTION IV. Notice of the public hearing shall be published according to the legal
requirements of 7-15-4279 MCA.
SECTION V. This resolution shall take effect immediately upon passage by the
City Council.
PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF
THE CITY OF KALISPELL, MONTANA, THIS 4TH DAY OF APRIL, 2016.
Mark Johnson
Mayor
ATTEST:
Aimee Brunckhorst, CMC
City Clerk
EXHIBIT "A"
EXHIBIT A
CITY OF KALISPELL Tr -,Op
LAND OWNER: FLATHEAD COUNTY ECONOMIC DEVELOPMENTAU r MOR"
A PORTION OF WHITEFISH STAGE ROAD
A PORTION OF EAST OREGON STREET
A tract of land located in N112 of Sectlon 8, Township 28 North, Range 21 West, P.M.M., Flathead
County, Montana, more particularly described as follows: BEGINNING at the southwesterly corner of
Parcel C of Certificate of Survey No.14788, Thence 5 75°3702" W, 63.34 feet to the westerly
right-of-way of Whitefish Stage Road; Thence along said right-of-way the fallowing five (5) courses:
(1) N04°18'57"E, 379.73 feet; (2) S 8922'09" W, 34.27 feet; (3) N 17°55'03" W, 369.62 feet (4)
along a curve to the left with a radius of 1670 feet, an arc length of 241.24 feet and a delta angle of
8"16'36", (5) N 26°11'39"W, 105.11 feet; Thence N 63'51'47' E, 60.00 feet to the easterly
right-of-way of said Whitefish Stage Road; Thence along said right of way the following two (2)
courses: (1) N 63°44'01" E, 49.71 feet; (2) N 22931'52" W. 303.77 feet; Thence along the northerly
boundary of Tract 2 of Certificate of Survey No. 19246 the following nine (9) courses; (1) S 5T23'18"
E. 304.94 feet* (2) N 63°43'36" E, 367.60 feet; (3) S 48°04'24" E, 533.99 feet; (4) S 52°58'24" E,
151.14 feet; (5) S 62°30'24" E, 157.08 feet; (5) S 74"20'24" E, 118.80 feet; (7) S 89°44'24" E. 188.76
feet (8) N 67°23'36" E, 323.40 feet; (9) N 75°5T36" E, 144.93 feet to the westerly boundary of Tract
5 of Certificate of Survey No. 18380; Thence along said westerly boundary N 00110'22" E, 50.37 feet;
Thence N 89°33448" E, 739,18 feet along the northerly boundary of said Tract 5 to the westerly
boundary of Burlington Northern Railroad Right -of -Way; Thence along said right-of-way the following
three (3) courses; (1) S 18°25'34" W, 188.79 feet; (2) along a curve to the left with a radius of
1372.48 feet, an are length of 46.99 feet and a delta angle of 1 °5742" (3) along a curve to the left
with a radius of 1382.69 feet, an arc length of 243.39 feet and a delta angle of 10°M5'08"; Thence
continuing along said right-of-way which Is also the easterly right-of-way of East Oregon Street 5
3V27'32" W. 1070.40 feet to the northerly boundary of Tract 1 of Certificate of Survey No. 14094
which is also the southerly boundary of East Oregon Street; Thence along said boundary between
said Tract 1 and East Oregon Street the following eight (8) courses: (1) N 36°23'55" W. 75.40 feet;
(2) N 67"48'53" W, 96:01 feet; (3) N 77°03'55" W, 75.00 feet; (4) S 88°26'05" W, 125.00 feet; (5) N
65°38'55" W, 182.00 feet; (6) N 86°03'55" W, 35.00 feet; (7) S 79°41'05" W, 42.00 feet; (8) 5
54°56'05" W, 83.19 feet; Thence N 13'49100" W, 98.67 feet to the northerly boundary of East Oregon
Street; Thence along said boundary the following four (4) courses: (1) N 51°20' E, 72.73 feel; (2) N
13049'00" W, 34.85 feet to the southerly boundary of Parcel B of Certificate of Survey No. 19528; (3)
Along said southerly boundary N 51°1829" E, 10 1. 13 feet; (4) Along said southerly boundary S
62°47'38" E, 99.39 feet to the westerly boundary of Tract 4 of Certificate of Survey No. 18380;
Thence along said boundary N 00°52'43" E, 37 0. 95 feet to the southerly boundary of Tract 2 of
Certificate of Survey No. 19246: Thence along said southerly boundary the following three (3)
courses: (1) N 89°40'46" W. 834.59 feet; (2) S 1105602" E, 9,26 feet; (3) S 89°58'54" W, 369.04 feat
to the easterly right-cf-way of Whitefish Stage Road; Thence along said right-of-way 5 04°18'69" W,
364.08 feet to the POINT OF BEGINNING, excepting therefrom Tract 1 of Certificate of Survey No.
6547, which is not part of this annexation. The area to be annexed includes 48.89 acres more or less.
MINlnr MAP
NOT TO SCALE
NOTICE OF PUBLIC HEARING
ON THE ADOPTION OF A GLACIER RAIL PARK DEVELOPMENT PLAN AND THE
ESTABLISHMENT OF A TARGETED ECONONHC DEVELOPMENT DISTRICT
NOTICE IS HEREBY GIVEN, that on the 18th day of April, 2016 at 7:00 P.M., in the
Council Chambers, City Hall, 201 1 st Avenue East, Kalispell, Montana, the City Council of the City
of Kalispell shall hold a Public Hearing on the adoption of a comprehensive plan to be known as
the Glacier Rail Park Development Plan and establishment of a Targeted Economic Development
District (TEDD), pursuant to MCA 7-15-4279. An Ordinance to adopt a comprehensive plan and
establish a TEDD will be presented to the Kalispell City Council for their consideration. The
property to be subject to the comprehensive plan and TEDD is located in the northeast portion of the
City of Kalispell, comprises approximately 49 acres and previously served as a gravel source for
McElroy @ Wilkin.
The City Council, on April 4, 2016, passed a Resolution of Necessity finding that an area
within the Glacier Rail Park Development Plan is infrastructure deficient and that infrastructure
improvement of the area is necessary for the welfare of the residents of the City of Kalispell. The
Resolution further set a Public Hearing on the acceptance and approval of a Comprehensive Plan of
Development and the establishment of a Targeted Economic Development District.
Any person wishing to address the proposed plan and District may appear at this hearing and
make oral statements or present same in writing. Written comments may also be submitted for
council consideration by delivering the same to the City Clerk at 201 First Avenue East, Kalispell,
MT 59901, or by email to citycouncil(c�r�,kalispell.com prior to the hearing.
The proposed plan and district can be viewed on the city's website at
http://www.kalispell.com/planning/ or in the office of the City Clerk at 201 First Avenue East,
Kalispell.
Dated this 5th day of April, 2016.
Aimee Brunckhorst, CMC
City Clerk
Publish: April 10, 2016
April 17, 2016
flathead
county
February 8, 2016
ECONOMIC
DEVELOPMENT
AUTHORITY
Tom Jentz, Director of Planning
City of Kalispell
201 1 st Avenue East
Kalispell, MT 59901
Mr. Jentz,
This letter is in support for the creation of the Glacier Rail Park Targeted Economic
Development District. Flathead County Economic Development Authority looks forward to a
continued partnership with the City of Kalispell to develop the infrastructure needed to attract
manufacturing and other businesses that provide well -paid positions.
Glacier Rail Park and this District will foster economic growth and encourage job creation which
is our organization's focus. We applaud your forward -looking use of TEDD as an economic
development tool. It will stimulate the tenant base of the Rail Park and support secondary,
value -adding industries that take advantage of the Valley's resources. The creation of the rail
park will facilitate orderly growth throughout community as it encourages appropriate industrial
development in locations with the necessary infrastructure to support it.
The Glacier Rail Park and Kalispell Core Area Redevelopment are transformative projects that
will prepare Kalispell and the Flathead Valley for the next 100 years of prosperity and growth.
The Glacier Rail Park TEDD is brings that transformation one more step closer for the
community.
Sincerely,
Turner Askew
Chair
44 2ntl Avenue West
Kalispell. MT 59901
Glacier Rail Park Development Plan for
Targeted Economic Development District (TEDD)
I. Introduction:
The Glacier Rail Park Development Plan embraces a 104 acre area under multiple ownerships
located in the heart of Flathead County in and adjacent to the City of Kalispell. The City of
Kalispell in conjunction with the Flathead County Economic Development Authority (FCEDA)
is seeking to foster the development of secondary, value adding industries within the Glacier Rail
Park Plan Area as part of the City's overall mission to meet its needs of promoting economic
development, improving area employment opportunities and expanding the community's tax
base. This effort would be made possible through the creation of a Targeted Economic
Development District (TEDD) on 49 acres of land within the larger Glacier Rail Park Plan
Boundary. The City of Kalispell would need to utilize Tax Increment Financing as part of the
overall strategy to provide infrastructure in support of value -adding industry pursuant to the 2013
Targeted Economic Development District Act, embodied in 7-15-4279, Montana Code
Annotated (MCA). The TEDD would provide the City of Kalispell with the ability to employ tax
increment financing as provided in 7-15-4282, MCA for appropriate public infrastructure
projects in support of "value -adding industry or secondary value-added products or
commodities" within the Glacier Rail Park Plan Boundary.
There is an opportunity here to utilize an effective economic tool, as envisioned by the state
legislature, through the creation of a TEDD at the Glacier Rail Park. A TEDD would allow the
City to appropriately marshal tax revenues to help fund the public infrastructure that will spur a
diverse private business base to invest there. It is the primary focus of the Glacier Rail Park
TEDD proposal to develop the necessary infrastructure to encourage the location, expansion and
retention of diverse value added industries suitable for an industrial Rail Park.
IL Proiect Summary:
The Glacier Rail Park project, occupying 49 acres within the larger Glacier Rail Park Plan
boundary, is a transformative project for northwest Montana, creating economic opportunities to
spark community revitalization. The project is designed to incentivize private investment to
create jobs and position the region for sustained economic growth into the 21" century by
converting an underutilized gravel pit into a thriving rail -served industrial park. The Rail Park is
11Page
centrally located on a vacant gravel pit which was purchased by FCEDA for the specific purpose
of developing a rail -served industrial park. The Rail Park Project can transform this reclaimed
EPA Brownfields site to a multi -modal long-term use, create jobs and increase freight movement
via rail. It will shift rail use to a location that matches rail access with highway access. The
property has been zoned to meet the requirements for sustained industrial growth. The TIGER
2015 grant funds awarded to this project may be used to leverage local, state, federal and private
dollars to assist with the construction of $4.3 million of rail (13,724 lineal feet) and $2.6 million
in road (6,600 lineal feet) and safety infrastructure for a rail -served industrial park to serve
existing and new prospective businesses. A $10 million investment of TIGER funds will
leverage over $11 million in private and public local, non-federal match and encourage
additional private investment in the Glacier Rail Park. Without the benefit of a TEDD the City of
Kalispell may not be able to adequately assist in the match requirements to derive the most
leverage possible for the TIGER 2015 grant funds.
Construction of the project will contribute to the long-term growth of the economy by fostering
jobs in Northwest Montana. The City of Kalispell works to attract new and expanding
businesses to the region and assist existing companies to grow in order to foster job creation in
the northwest region of Montana which has been designated as an Economically Distressed Area
in part due to a decline in the traditional industries of timber, mining and aluminum production.
A Rail Park designed to modern standards will meet today's manufacturing and industrial
requirements. The Rail Park will also assist existing business to expand as their ability to reach
new markets is improved. Businesses moving into the Rail Park will create new jobs paying
wages estimated to be at or above the county average wage.
III. Goals of the Glacier Rail Park TEDD:
The goal of the Glacier Rail Park TEDD would be to assist the Flathead Valley to recover from
being an Economically Distressed Area by accomplishing the following:
1. To foster economic vitality in the Valley and increase employment opportunities through
infrastructure development in support of secondary value -adding industry;
2. To provide support for business and industries that preserve the quality of life for all
residents;
3. To facilitate the creation of a diversified tenant base of multiple independent tenants
within the TEDD;
4. To encourage secondary, value -adding industries that take advantage of the Valley's
resources for the purpose of engaging in interstate commerce; and
5. To encourage the orderly growth and development of the community.
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IV. Overall Glacier Rail Park Development Plan Boundary Site Description:
The Glacier Rail Park Plan Boundary shown by FIGURE 1 below is generally bound by
Whitefish Stage Road to the West, Stillwater River to the north, BNSF tracks to the east
and Oregon Street to the south. The Glacier Rail Park Plan Boundary totals
approximately 104 acres. The TEDD boundary (within city limits) is approximately 49
acres and the properties outside of the TEDD boundary are approximately 55 acres in
size.
FIGURE 1: Glacier Rail Park Plan Boundary
Note the 55 acres of adjacent land currently within Flathead County. This 55 acres will
not be located within the TEDD; however, this plan is taking into account this 55 acre
area due to the likelihood of the property owners petitioning to annex into the City. It is
anticipated that the development of the infrastructure within the TEDD will catalyze
redevelopment of industrial land adjacent to the TEDD, which will benefit from the
improved infrastructure and increased visibility. In order for these properties within the
County to fully develop, infrastructure will need to be provided. Accordingly, if at a
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future date properties outside of the designated TEDD would like to be included in the
Rail Park, this plan would leave open the possibility of the TEDD being expanded into
those properties.
V. Overall Plan Current Land Use:
The general land use character of the overall Glacier Rail Park Development Plan Area
can be described as industrial. The active land uses in the area are a trucking company, a
landscape stone supply company, a post and pole wood products manufacturing
operation, and a commercial truck repair business. There are residential properties
adjacent to the site on its southern boundary, but there is a significant topographic
difference between the residential properties and the industrial area, with the residential
properties sitting 20 to 30 feet above the industrial zone.
VL Glacier Rail Park Development Overall Development Plan Development Pattern:
Zoning:
The portion of the Glacier Rail Park Plan Boundary within City limits is within the City I-2
(Heavy Industrial) Zoning District. This portion of the Glacier Park Plan boundary is where the
TEDD is proposed to be initially implemented. The Kalispell Zoning Regulations state that the I-
2 zoning district is;
"intended to provide areas . for heavy industrial uses to accommodate heavy manufacturing,
processing, . fabrication and assembling of products or materials. It is also intended that the
encroachment of non -industrial uses within the district be prevented. This zoning district would
typically be restricted to areas designated as industrial on the Kalispell Growth Policy Future
Land Use Map. "
The portion of the Glacier Rail Park Boundary located within Flathead County is within the
County I-2 (Heavy Industrial) Zoning District. If any of these properties were to annex into the
City of Kalispell they would be given a City I-2 zoning designation, as described above. The
Flathead County Zoning Regulations state that the I-2 Zoning District is;
"a district to provide for industrial uses to accommodate heavy manufacturing, processing,
fabrication, and assembly of parts or materials. It is also intended that the encroachment of non-
industrial or unspecified commercial uses within the district be prevented. " Permitted uses in
this district include a variety of heavy industrial uses, including a railroad yard. The county's
zoning code conditionally permits additional heavy industrial uses that tend to deal with
handling or manufacture of dangerous or toxic materials, or produce excessive noise, such as an
airport or motor vehicle race track. "
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Chapter 27.17 (I-2 — Heavy Industrial) of the Kalispell Zoning Ordinance outlines the zoning
district regulations that will be applicable to the plan boundary. The I-2 zoning designation of the
Glacier Park Plan Boundary anticipates rail -served industrial uses. The I-2 zoning district is
consistent with the surrounding industrial character of the area and its location adjacent to the
BNSF right-of-way. The I-2 zoning district gives due consideration of the suitability of this
property for the permitted uses in the zoning district. Setback, height, and lot coverage standards
for development occurring on this site are established in the Kalispell Zoning Ordinance to insure
adequate light and air is provided.
Growth Policy:
The Glacier Rail Park Plan Boundary is designated by the Kalispell Growth Policy Future Land
Use Map as "Industrial' (including the County properties) which anticipates the I-2 zoning district.
The I-2 zoning district is consistent with the industrial designation in the growth policy.
FIGURE 2: Zoning/ Growth Policy Map
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VL City of Kalispell Demographics:
Population (2014 estimate)
21,518
Median Household Income:
$41,009
Personal Per Capita Income:
$22,557
Unemployment Rate Kalispell:
10.4%
Unemployment Rate Flathead County 2012:
8.6%
Persons below poverty level in Kalispell:
16.5%
Note: The project is located within the northwest region of Montana which is an Economically
Distressed Area.
VIL Planning Completed:
Fall 2010-Spring 2015
1) US EPA Brownfields Phase I and Phase II Environmental Site Assessments and
Updates at Rail Park site (former gravel pit)
2) Flathead County 2012 Community Economic Development Strategies (CEDS)
adopted
3) Property acquisition using US EDA Economic Trade Adjustment grant funds
4) Rail Park Environmental Narrative accepted by US EDA
5) Glacier Rail Park Market Analysis
6) Rail Park Site (TEDD Boundary) Annexed and Zoned Industrial
7) Preliminary Plat of Rail Park Approved
8) Rail Park Categorical Exclusion Worksheet completed and reviewed by Federal
Railroad Administration
VIIL Participation:
The City of Kalispell and FCEDA have worked diligently to include public and private sector
stakeholder participation in the project. BNSF has played a pivotal role in the planning and
design of the proposed Rail Park. Watco provided engineering expertise to the design of the rail
and Rail Park Operations Plan. Both railroad companies have brought significant staff expertise,
time and effort toward executing the many steps required to properly plan and appropriately
design this project. Montana Department of Transportation has worked extensively with project
engineers to determine the best location and design for highway access and road improvements
for increased Rail Park traffic and fully recognize the benefits of this multi -modal transportation
improvement plan for northwest Montana.
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IX. Tax Increment Financing for Targeted Economic Development:
The City of Kalispell could create a TEDD on portions of the site within the Plan Boundary that
are within the city limits of Kalispell for the purpose of using tax increment financing as a
development tool. Tax Increment Financing is a procedure that allows municipalities to
"capture" the additional, or incremental, taxes from the district as it increases in value. There is
no increase in property taxes to owners, but all of the incremental ad valorem tax otherwise paid
to the various taxing entities is available for eligible development activities. In 2013, the
Montana Legislature amended the Montana Urban Renewal Law to enable local governments to
create special districts which could employ tax increment financing to assist in the development
and retention of secondary, value -adding industries. The legislation recognized that secondary
value -adding industries, in order to be viable, require public infrastructure that is beyond the
means of most local Montana governments. The Targeted Economic Development Act of 2013
enables local governments to develop the necessary public infrastructure in areas that are deemed
to be infrastructure deficient to assist in secondary, value adding industrial development. Tax
increment financing can be used for improvements defined in 7-15-4288 MCA.
Montana statute defines "secondary value -adding industry" as follows:
I. "Secondary value -adding industry" means an industrial process that engages in
mechanical or chemical transformation of materials or substances into new products in
the manner defined as manufacturing in the North American Industry Classification
System Manual prepared by the United States Office of Management and Budget and
engages in the:
a. Processing of raw materials, such as minerals, ore, oil, gas, coal, agriculture
products, and forestry products; or
b. Processing semi -finished products that are used by the industry as a raw material
in further manufacturing.
XI. Economic Benefits:
Northwest Montana needs improved rail access for freight movement to diversify and strengthen
the economy. This Glacier Rail Park allows Flathead County and Northwest Montana to truly
capitalize on a valuable asset: it's location on the Great Northern Corridor along the BNSF
Railway (BNSF) mainline connecting to national and international markets from the Great Lakes
to the Pacific Northwest. Creation of a rail -served industrial park is identified as an economic
development priority in the 2012 Flathead County Community Economic Development Strategy
(CEDS).
Private companies are considering establishing or expanding operations in the Rail Park to
access rail service. These new and growing businesses expected to locate in the Rail Park will
invest in new facilities and create new, well -paid jobs. Companies have expressed interest in
7 1 P a g e
locating in the park once infrastructure upgrades are complete include; value-added wood
product manufacturers, value-added agricultural and food product manufactures and steel
fabrication companies. It is anticipated that approximately 200 direct jobs will be retained or
created at full build out of the Glacier Rail Park.
It is further anticipated that the development of the infrastructure within the TEDD will catalyze
redevelopment of industrial land adjacent to the TEDD, which will benefit from the improved
infrastructure and increased visibility. These improvements and other economic development
tools such as a Targeted Economic Development District will incentivize additional developers
and manufacturers to invest in facilities on the adjacent 55 rail -served acres zoned for heavy
industry creating further economic growth in the community over the coming decade.
XII. Market Analysis:
KLG Engineering prepared a detailed industrial Rail Park market analysis for the project. The
Rail Park Market Analysis and Feasibility Study identified potential users of the new Rail Park
as the regions' traditional wood products industry, agricultural industry, and businesses shipping
machinery. It also forecast growth in shipment of electronics and pharmaceuticals into and out
of Montana over the next 30 years based on data from the Freight Analysis Framework (FAF).
Shipments of agriculture products, precision instruments, mixed freight, as well as primary and
fabricated metal products are potential areas of growth for transload operations in the Rail Park.
Non-metallic minerals (sand, gravel, cement, stone, and clay) and metallic ores comprise the
majority of exports from Montana to Canada. The Market Analysis indicates expected
enhancement of Canadian trade by attracting these types of industries.
The ultimate purpose of the Rail Park is to attract new business requiring rail access and foster
job growth. The Market Analysis and Feasibility Study for the Rail Park indicated the Rail Park
will connect businesses within a 100-mile radius of Kalispell to the Great Northern Corridor as
well as Canadian ports. Marketing of the Rail Park began in March 2015. Three out-of-state
businesses, three Montana businesses, and one Canadian business have contacted FCEDA for
Rail Park information. These companies are manufacturers of wood or metal value-added
products, agricultural value-added businesses or businesses shipping product to Canada.
Additionally, a number of businesses interested in transload services have contacted FCEDA for
information.
XIIL Enhanced Economic Competitiveness:
The current Kalispell rail served parcels are simply too small to attract new industrial rail users.
This project will create a larger and more viable and appropriate location for industry to access
rail connecting it to the Great Northern Corridor. Rail access, such as will be provided by this
8 1 P a g e
rail park is a valuable and currently underutilized resource that will create new opportunities for
businesses in this remote region.
XIV. Design;
Rail layout/engineering was conducted in collaboration with BNSF and Watco Companies/
Mission Mountain Rail (Watco/MMR). BNSF and Watco Companies (Watco) were
instrumental in designing the plan with multiple lots to serve rail users' needs in the Rail Park as
well as the Operations Plan for Glacier Rail Park. In 2014 the Rail Park (TEDD boundary) was
annexed by the City of Kalispell and the preliminary plat approved.
Engineering design for roads, water, waste water, stormwater and utilities for the Rail Park is
complete. The Montana Department of Transportation has approved the location of a signal on
US Hwy. 2 East. BNSF has accepted the preliminary rail layout and operations plan. The cost of
this engineering work was shared between FCEDA and the City of Kalispell.
9 1 P a g e
XV. Infrastructure Analysis — Statement Of Infrastructure Deficiency:
The City of Kalispell is one of the fastest growing cities in the state. Constructing infrastructure
is expensive and challenging for business. Although the potential for development within the
Rail Park is good, the lack of adequate infrastructure is a significant barrier that must be
addressed. As shown in the engineer's cost estimates shown below, infrastructure can be costly
and prohibitive in many instances. Through the preliminary design process a number of
infrastructure deficient conditions were identified as possible road blocks within the proposed
Glacier Rail Park TEDD:
1) Water System — The Glacier Rail Park Plan boundary either does not have water service,
or is served by private water wells. Fire suppression is not capable without adequate fire
flow being provided. Future site planning includes extending City of Kalispell water
service into the plan boundary in order to meet state and local guidelines for fire
suppression and general water needs.
Engineer's cost estimate for water infrastructure:
Water Infrastructure
17 PVC Water Main
8,600
LF
$ 65.00
$ 559,000
Valves and Fittings
1
LS
$ 78,000.00
$ 78,000
Fire Hydrant Assembly
17
EA
$ 6,000.00
$ 102,000
2" Service
4
EA
$ 1,000.00
$ 4,000
Rail road crossing (steel sleeve)
1
EA
$ 25,000.00
$ 25,000
Temporary service & 20 service
1
EA
$ 60,000.00
$ 60,000
Pavement Surface Restoration
5,156
SY
$ 28.00
$ 144,356
Subtotal
$ 972,356
2) Sewer — State and local regulations limit the ability for septic systems onsite due to
proximity to the Stillwater River and past use as a gravel pit. Any potential industrial
development is impacted because development cannot occur without sewer service.
Currently, no sewer service is being provided; therefore, future site planning includes
extending City of Kalispell sewer service into the plan boundary. The City of Kalispell
wastewater plant has adequate capacity for the development of the properties within the
plan boundary.
Engineer's cost estimate for sewer infrastructure:
101 Page
Wastewater Infrastructure
8" PVC Sewer Main
2,200
LF
$ 55.00
121,000
4" PVC Forcemain
2,400
LF
$ 25.00
$ 60,000
Basic Manhole
12
EA
$ 4,000.00
$ 48,000
Manhole Additional Depth
60
VF
$ 200.00
$ 12,000
Lift Station
1
LS
$ 300,000.00
300,000
Sanitary Sewer Service
4
EA
$ 1,000.00
$ 4,000
Rail road crossing (steel sleeve)
1
EA
$ 25,000.00
$ 25,000
Pavement Surface Restoration
0
SY
$ 24.00
$
SubtotalI
$ 570,400
3) Roads - There is currently no internal road system within the plan boundary. An internal
road system needs to be constructed that can provide adequate emergency access to
proposed developments within the plan boundary. Additionally, the road system leading
into the plan boundary is not sufficient. Significant upgrades need to be done to the road
system connecting the development to U.S. 2. Upgrades include realignment of the
intersection at Flathead Drive and U.S. 2 and new signal.
Engineer's cost estimate for road infrastructure:
Road Improvements to E. Oregon, Flathead Or 13
Inside Rd
Removal of existing asphalt
11,200
SY
$ 3.50
$ 39,200
Gectextile
26,400
5Y
$ 1.25
$ 33,000
Gecgrid
26,400
SY
$ 2.50
$ 66,000
Road Gravel Base Course (6") & Subbase (12")
11,496
CY
$ 25.00
$ 297,407
Sidewalk Gravel Base Course (4")
230
CY
$ 35.00
$ 8,037
Asphalt Pavement (4")
22,933
SY
$ 24.00
$ 550,400
Asphalt Concrete binder
299
ton
$ 650.00
$ 194,532
RR zing safety equipment (2 crossings)
2
EA
$ 400,000.00
$ 800,000
Signs (monument)
1
LS
$ 5,000.00
$ 5,000
Boulevard
2.00
AC
$ 2,500.00
$ 5,000
Curb and Gutter
7,270
LF
$ 32.00
$ 232,640
SidewraLk (T Wide One Side of Road)
15,500
SF
$ 7.00
$ 1D8,500
Gravel interior road after grading
1,175
CY
$ 35.00
$ 41,136
Subtotal
$ 2,370,852
Flathead Drive Traffic Signal
Install Signal at FLathead Dr. and US 2
1
LS
$ 250,000.001
$ 250,000
Subrtota(i
$ 250,000
4) Stormwater - Stormwater storage and treatment devices are not provided for onsite. New
development must provide adequate stormwater retention and treatment facilities prior to
building permit issuance.
Engineer's cost estimate for stormwater infrastructure:
111 Page
Storm Water
48" Manhole
8
EA
$3,800.00
530,400.00
6iY' Manhole
4
EA
$6,800.00
$27,200.00
72"Manhole
1
EA
$8,500.00
$8,500.00
39" Curb Inlet
15
EA
$2,600.00
539,0w.Do
48" Curb Inlet
3
EA
$3,500.00
5110j5DO.DO
60" Curb Inlet
2
EA
$6,800.00
5113j600.00
72" Curb Inlet
1
EA
$8,500.00
$8,500.00
17 RCP Irr. (CL. 5)
310
LF
$43.25
$13,401.36
18" RCP Irr. (CL. 3)
903
LF
$61.00
$55,094.59
24' RCP Irr. (CL. 3)
995
LF
$106.50
$105,937.25
24' RCP Irr. (CL. 5)
114
LF
$110.00
$12,493.1
30" RCP Irr. (CL. 3)
702
LF
$126.25
$88,597.2
30" RCP Irr. (CL. 5)
223
LF
$135.00
$30,138.35
Pond Excavation
2,989
CY
$6.00
$17,931.36
Pond Embankment
1,493
CY
$3.00
$4,477.53
Concrete Dig Out Excavation
3,3D9
CY
$10.00
$33,086.2
Filter Sand
476
CY
$30.00
$14,291.1
Riprap
133
CY
$85.00
511;290.55
Lagoon Site Seeding and Fertilizing
1.0
ACRE
$800.00
$815.3
Hydromulch
4,933
SY
$0.70
$3,452.95
Tackifier
4,933
SY
$0.25
$15233.2
Subtotal
$ 529,940
5) Rail — Limited rail access is provided to the main rail line owned by BNSF. Additional
spur lines will need to be constructed within the Rail Park to provide access to the main
line.
Engineer's cost estimate for rail infrastructure:
Dnsite Raid Construction (from spur into the park including rail to nonCHS lots)
Geotextile
41,844
SY
$ 1.25
$ 52,305
Geogrid
41,944
SY
$ 2.50
$ 104,610
Subballast
20,922
CY
$ 35.00
$ 732,270
Ballast, Ties £t Rail
8,069
TF
$ 175.00
$ 1,412,075
Ho. 9 Turnout
13
EA
$ 60,000.00
$ 780,000
Retaining wall
1
Ls
$ 50,D00.00
$ 50,000
5ubtota(
$ 3,131,260
6) Utilities — Telephone, natural gas, lighting, internet and electric services are not readily
accessible within the plan boundary. These services will need to be installed for new
businesses choosing to operate within the Rail Park TEDD.
Engineer's cost estimate for utilities:
Misc. Utilities
Lighting, telephone, It fiber
1
LS
$ 100,000.00
$ 100,000
Pourer & Electrical
1
LS
$ 110,000.00
$ 110,000
Hatural Gas
1
LS
$ 1fl0,000.00
$ 100,D00
Subtotal
$ 310,000
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7) General — Additional infrastructure and public service deficiencies will be identified over
time. For example, grading, demolition, traffic control, security fencing, etc.
Engineer's cost for some "general" infrastructure:
Grading
Demolition
1
L5
$ 75,000.00
$ 75,000
Hydroseed slopes £t slope stabilization
8.0
AC
$ 25,000.00
$ 200,000
Cut and onsite Fill
164,229
CY
$ 4.50
$ 739,031
Cut and Waste Fill Offsite
192,713
CY
$ 12.00
$ 2,312,556
Subtotal
$ 3,326,587
XVL Environmental:
The project will NOT negatively impact the natural, social or economic environment. Phase I
and Phase II assessments were conducted in 2011 on the Glacier Rail Park site. The project falls
under the purview of the FRA as it is primarily a rail project. As such, the FRA has already
reviewed and commented on the NEPA document. Environmental studies and other documents
demonstrate no negative environmental impacts and therefore no mitigation needed. Properties
outside of the proposed TEDD district, but within the proposed Glacier Park Plan Boundary, will
obtain the appropriate environmental documentation prior to infrastructure being extended to the
property.
XVIL TEDD Program Criteria:
The City of Kalispell could use tax increment financing in conjunction with other funding
mechanisms to support the development of secondary value -adding industry within the Glacier
Rail Park TEDD. Infrastructure projects selected for funding will be required to meet certain
criteria, based on the goals of this plan. Suggested eligibility criteria for reviewing both publicly
and privately initiated requests for infrastructure improvements might include the following:
1) The project must be located within the authorized TEDD.
2) Additional specific criteria which will be used to evaluate applications for assistance will
include but are not limited to:
a) Job creation — Developments will be evaluated based upon the number of jobs
created. Advantage will be given to developments where the wages and benefits for
jobs meets or exceeds the current average County wage.
b) Taxable valuation — In most cases, developers who contribute more to the
community's tax base will be eligible for greater assistance.
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c) Value -adding — Developers must be engaged in secondary industries, defined as those
industries that use a process to transform materials or substances into new products.
d) Leverage ratios — Tax increment funds will be used to construct infrastructure in
support of secondary value -adding economic development. Those investments of tax
increment financing which result in larger infusion of private or other public capital
will generally be viewed more favorable, compared to those which result in smaller
infusion of private or other public capital.
XVIIL Management:
The City of Kalispell TEDD program would be managed by the City of Kalispell Urban Renewal
Agency advisory to City Council. Additionally, the City of Kalispell's Community Development
and Finance Departments have the capacity to manage the Glacier Rail Park TEDD. The City of
Kalispell currently has four TIF Districts located within its boundary and is well versed in the
state regulations pertaining to management of TIF's.
XIX. Amendments:
The plan provides the ability for the tax increment finance district (TIFD), of which a TEDD is a
subset, to be extended into adjacent properties within the Flathead County. If the boundaries of
the TEDD are amended to include new properties, the provisions of Title 7, chapter 15, parts 42
and 43, MCA, shall submit the information described in ARM 42.19.1410 to the department
manner described in ARM 42.19.1402.
Property that is removed from a TEDD as a result of an amendment or change shall be
considered newly taxable property pursuant to 15-10-420, MCA.
XX. Proposed Findings of Fact
In the event that the Kalispell City Council determines that it wishes to create a TEDD to overlay
the Glacier Rail Park, it must first pass a resolution of necessity setting forth its findings that
certain facts exist to support the creation of such a tax increment district. Based upon the
evidence presented in this report the following findings would be appropriate:
a. The document entitled the "Glacier Rail Park Development Plan" is hereby adopted by
the City of Kalispell as its comprehensive development plan as such plan identifies the
use and purpose for which a Targeted Economic Development District [TEDD] may be
created for this land area; and;
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b. The property upon which the Glacier Rail Park will be developed is deficient in the
infrastructure necessary to encourage and retain value -adding industry within the rail
park; and
c. The property upon which the Glacier Rail Park will be developed has been designated to
be within an Economically Distressed Area in part due to a decline in the traditional
industries of timber, mining and aluminum production; and
d. The property upon which the Glacier Rail Park will be developed is annexed within the
City of Kalispell, is zoned for purposes consistent with the Glacier Rail Park
Development Plan and said zoning is consistent with the City of Kalispell Growth Policy;
and
e. The property upon which the Glacier Rail Park will be developed consists of a continuous
area with an accurately described boundary and is not included within an existing tax
increment financing district; and
f. The Glacier Rail Park Development Plan is specifically of the size and design to host a
diversified base of multiple independent tenants; and
g. The property upon which the Glacier Rail Park will be developed meets the state
statutory criteria for the creation of a TEDD.
XXL Conclusion:
Taken as a whole, the Glacier Rail Park is transformative. Investment in this project transforms
an old gravel pit into an active industrial rail park creating a long term boon to the local
economy. The Glacier Rail Park will transform acres and decades of disinvestment and decay
into a robust and vibrant economic hub. Even with the infusion of funds from the TIGER grant,
such funds must be properly focused and leveraged with such economic development tools as a
TEDD to bring the project of the Glacier Rail Park to a successful completion.
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