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Ordinance 1774 - Amends South Kalispell Urban Renewal PlanORDINANCE NO.1774 AN ORDINANCE AMENDING THE CITY OF KALISPELL AIRPORT/ATHLETIC COMPLEX REDEVELOPMENT PLAN TO ADOPT AND INCORPORATE THE APRIL 2016 DRAFT OF THE SOUTH KALISPELL URBAN RENEWAL PLAN AS RECOMMENDED BY THE KALISPELL CITY PLANNING AND ZONING BOARD. WHEREAS, the City of Kalispell, Montana (the "City") is authorized by Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43, as amended (the "Act'), to create an urban renewal area, to undertake urban renewal projects therein, to provide for the segregation and collection of tax increment with respect to property taxes collected in the urban renewal area, to issue its bonds to pay the costs of such projects and to pledge to the repayment of the bonds the tax increment derived from the urban renewal area; and WHEREAS, in accordance with the provisions of the Act, this Council adopted Ordinance No. 1242, on July 1, 1996, establishing an urban renewal area within the City designated as the "City of Kalispell Airport/Athletic Complex Urban Renewal District' (the "Urban Renewal Area") and adopted an urban renewal plan therefor, entitled the "Kalispell City Airport/Athletic Complex Redevelopment Plan Analysis" (the "Urban Renewal Plan"), after duly mailed and published notice and a public hearing and receipt of recommendations from the City/County Planning Board, which certified that the Urban Renewal Plan conforms to the general plan for the development of the City as a whole and the comprehensive plan of the City for the area containing the Urban Renewal Area; and WHEREAS, by Ordinance No. 1260, adopted by this Council on March 17, 1997, this Council amended Ordinance No. 1242 to provide for the segregation of and application of tax increment in the Urban Renewal Area and established January 1, 1996 as the base year for calculating the tax increment as provided in Sections 7-15-4282 through 7-15-4293 of the Act; and WHEREAS, by Ordinance No. 1541, adopted by this Council on July 19, 2005, this Council amended Ordinance No. 1260 to include additional projects for which bonded indebtedness was undertaken thereby extending the life of the South Kalispell Tax Increment District to the termination of the indebtedness; and WHEREAS, on January 1, 2015 the City contracted with CTA Architects Engineers to assist in an update of the South Kalispell Urban Renewal Plan through conducting a study that identified issues through public outreach, identifying key development and redevelopment concepts in the South Kalispell Corridor, to specifically develop a series of short term and long term options for the airport, the airport lands and surrounding affected neighborhoods, and to prepare and present an updated draft of the South Kalispell Urban Renewal plan for consideration by the City Council; and WHEREAS, CTA Architects Engineers completed its study and issued its Draft South Kalispell Urban Renewal Plan April 2016 to the City, which was then published by the City on its website, and WHEREAS, pursuant to MCA 7-15-4213, on April 12, 2016, the Kalispell Planning and Zoning Board took public comment on the Draft South Kalispell Urban Renewal Plan April 2016 at a noticed public hearing, reviewed and considered it as to its conformity with the Kalispell City Growth Policy 2020 and transmitted it to the City Council with the finding that the Plan conforms to the Kalispell City Growth Policy 2020 and should be adopted by the City Council; and WHEREAS, pursuant to MCA Sections 7-15-4214, 7-15-4215 and 7-15-4221 the City Council, after due notice was published and mailed, held a public hearing on July 18, 2016 to take and consider oral and written comment as evidence regarding the Draft South Kalispell Urban Renewal Plan April 2016; and WHEREAS, upon considering all evidence presented by the public and the Draft South Kalispell Urban Renewal Plan April 2016, and the recommendation of the Kalispell Planning and Zoning Board, it is the finding of the Kalispell City Council that the Plan conforms to the Kalispell City Growth Policy 2020; and WHEREAS, upon considering all evidence presented by the public and the Draft South Kalispell Urban Renewal Plan April 2016, it is the finding of the Kalispell City Council that the existing Urban Renewal Plan of the City known as the "Kalispell City Airport/Athletic Complex Redevelopment Plan Analysis" should be updated by replacing and amending it with the Draft South Kalispell Urban Renewal Plan April 2016 as amended by the Kalispell City Council and naming it the "South Kalispell Urban Renewal Plan." NOW THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF KALISPELL, MONTANA, AS FOLLOWS: SECTION 1. The Kalispell City Council hereby adopts the Draft South Kalispell Urban Renewal Plan April 2016 with amendments as shown on Exhibit "A" attached hereto and fully incorporated herein by this reference as findings and amends the Urban Renewal Plan of the City known as the "Kalispell City Airport/Athletic Complex Redevelopment Plan Analysis" by replacing and amending it with the amended Draft South Kalispell Urban Renewal Plan April 2016 and naming it the "South Kalispell Urban Renewal Plan." PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL, THIS 1ST DAY OF AUGUST, 2016. Mark John Mayor CMC g46 M®N�� _� •r:ba-n,. . a AL jw _ � w 77 Aw 40 1 ■ TABLE OF CONTENTS I. INTRODUCTION...........................................................................1 APlan and a Vision..............................................................................1 Description of District Boundaries.................................................1 Urban Renewal District..................................................................1 Tax Increment Financing District (TIFD).....................................1 History of the Airport..........................................................................4 History of Prior Planning Efforts.....................................................4 1996 Airport Layout plan (ALP)....................................................5 1996 Kalispell City Airport/Athletic Complex Redevelopment Plan5 1999 Phase I Master Plan Airport Feasibility Study..................5 2012 Final Master Plan...................................................................5 II. SUMMARY OF PUBLIC PARTICIPATION ..............................7 Meetings and Workshops.................................................................7 2015 Project Kick Off......................................................................7 Public Outreach Process................................................................7 Summary of Public Outreach from the 2012 .............................7 ProjectWebsite..............................................................................8 Newsand Media..............................................................................8 Public Open Forums.......................................................................9 Comment Boards and Surveys........................................................9 Emerging Trends and Themes.........................................................11 Summary.................................................................................................12 III. ANALYSIS OF OPTIONS.............................................................15 ExecutiveSummary.............................................................................15 Introduction..........................................................................................16 Existing Conditions............................................................................17 Prior Airport Studies.......................................................................17 Airport and Airfield Configuration..............................................17 AirportRole......................................................................................17 Other Area Airports........................................................................18 Aviation Activity at the Airport....................................................18 TrafficPatterns................................................................................19 Airport Constraints.........................................................................19 Airport Alternatives............................................................................24 Introduction....................................................................................24 Alternative 1 — Keep Airport As-Is................................................26 Alternative 2 — Close the Airport.................................................30 Alternative 3 — FAA Compliant Airport in Current Alignment 34 Alternative 4 — Incorporation into an Airport Authority ........36 Alternative 5 — Privatize the Airport............................................37 Summary — Comparison of Alternatives......................................38 Endnotes Assumptions and Sources............................................40 IV. DEVELOPMENT RECOMMENDATIONS AND STRATEGIES .... 42 LandUse Strategies............................................................................42 Development Guidelines..................................................................43 Improvement Projects and Opportunity Sites ..........................45 Airport Redevelopment Opportunity..........................................59 Tax Increment Financing...................................................................63 Tax Increment Financing Projects................................................63 Minimizing Hazards to Navigation..............................................63 Increasing Economic Development Opportunities .................64 FinancingMethods..............................................................................65 Tax Increment Financing...............................................................65 Industrial Development Bonds.....................................................65 General Obligation Bonds.............................................................65 Private Financing............................................................................65 Public/Private Partnerships..........................................................65 Stateof Montana...........................................................................65 Community Development Block Grants......................................65 Federal Grant Administration.......................................................66 LocalFunding..................................................................................66 City/County Partnerships..............................................................66 Brownfields............................................................................................67 V. APPENDIX A..................................................................................68 Airport Alternatives Detailed Financial Tables and Pro-Formas.68 Alternative 3 as Previously Proposed...................................................... 70 VI. APPENDIX B...................................................................................78 Improvement Project Planning Level Cost Estimates.............78 LIST OF FIGURES Figure 1: District Boundaries............................................................................... iv Figure 2: Regional Context Map......................................................................... 2 Figure 3: Public/Private Airport Lands and Flood Hazard Areas ................... 3 Figure 4: Planning Timeline.................................................................................4 Figure 5: Schedule of Public Outreach Events ................................................. 6 Figure 6: Comparison Between 2012 and 2015 Public Comments ............... 7 Figure 7: Project Website Homepage................................................................. 8 Figure 8: A Comment"Tag Cloud".......................................................................9 Figure 9: Public Open House Flyer..................................................................... 10 Figure 10: Example of an Informational Handout ............................................ 10 Figure 1 1: Public and Stakeholder Opinion on the Three Alternatives......... 11 Figure 12: Recreational facilities.......................................................................... 13 Figure 13: Aviation and Non -aviation Development Opportunities ............. 14 Figure 14: Airport Development Alternatives Financial Summary ................ 17 Figure 15: Airport Financial History.................................................................... 25 Figure 16: Baseline Financial Projections........................................................... 25 Figure 17: Existing Airport Capital Improvement Plan .................................... 26 Figure 18: Alternative 1 Capital Costs and Resulting Revenue ...................... 27 Figure 19: Alternative 1 Revenue and Expense Summary ............................... 27 Figure 20: Alternative 1 Comparison to Baseline .............................................. 29 Figure 21: Alternative 2 Capital Costs and Resulting Revenues ..................... 32 Figure 22: Alternative 2 Revenue and Expense Summary ............................... 32 Figure 23: Alternative 2 Comparison to Baseline .............................................. 32 Figure 24: Airport Management Structure Comparison ................................. 36 Figure 25: Alternative Summary.......................................................................... 38 Figure 26: Baseline and Alternative Returns on Investment ........................... 39 Figure 27: Existing Land Use Map........................................................................41 Figure 28: Improvements Projects and Opportunity Sites Table ................... 45 Figure 29: Improvements Projects and Opportunity Sites Map.....................46 Figure 30: Cemetery Road Improvement Concept...........................................47 Figure 31: New Elementary School Concept ..................................................... 48 Figure 32: Dog Park Concept................................................................................49 Figure 33: Community Park Concept.................................................................. 50 Figure 34: Trail Expansion Concept..................................................................... 51 Figure 35: Welcome to Kalispell Sign Concept .................................................. 52 Figure 36: Highway 93 Business Park Design Example .................................... 53 Figure 37: Highway 93 Business Park Concept .................................................. 54 Figure 38: Aviation Business Park Concept........................................................ 55 Figure 39: Park-N-RideTrailhead Concept.........................................................56 Figure 40 : Relocated City Shop Complex Concept .......................................... 57 Figure 41: 1 st Ave Commercial District Concept .............................................. 58 Figure 42: Land Use Alternative 1 for Airport Closure ..................................... 60 Figure 43: Land Use Alternative 2 for Airport Closure ..................................... 61 Figure 44: Concept for a New T-Hangar Complex ................................... 62 Figure 45: 1990 and 2015 Aerial Imagery.......................................................... 64 Figure 46: Starbucks Brownfields Project........................................................... 67 Figure Al: Alternative 3 Revenue and Expense Summary .............................. 71 Figure A2: Alternative 3 Comparison to Baseline ............................................. 71 Figure A3: Alternative 3 Capital Costs and Resulting Revenues .................... 71 PW !_ ,� V f r L, S. Kalispell Urban Renewal District �,,F . s r+`• s',�, y� Tax Increment Finance District IN �1 �"-�►:�`�. :�.= rs ,•�ti. ' ram, � , ■• .l .:;5' T 7 0 1/8 Miles 1/4 Miles 1/2 Miles !la► „ , V oil � s •�4 I � Y1 1 � • i. 'i b _ e,� ^1 - a era � s Pj .� Figure 1: The South Kalispell Urban Renewal District and TIFD Boundaries April 2016 INTRODUCTION A PLAN AND A VISION The City of Kalispell contracted with CTA in December of 2014 tofu rther the planning effort within the South Kalispell Urban Renewal Planning Area. The Plan is a result of the failed referendum in November of 2013 related to the FAA funding opportunity and upgrades to Kalispell City Airport. The City's Growth Policy and Tax Increment Financing District (TIFD) outline the City's goals and objectives for this planning area. The Growth Policy encourages efficient use of space, orderly growth consistent with high qualityoflife,fiscalsoundness, environmental conservation and community vitality; while the TIF District encourages 'increasing development opportunities, funding mechanism for the Airport, minimizing hazards to navigation, developing an airport layout plan, and establishing a priority schedule for plan implementation' Facing unprecedented growth, the area faces a variety of issues such as traffic congestion along Highway 93, lack of pedestrian facilities, parks, and an uncertain future with the Airport, and a need for additional police and fire services. While these challenges can seem overwhelming, they can also provide an opportunity to create a vision unique in character to South Kalispell. The South Kalispell Urban Renewal Plan will incorporate the work done in prior planning efforts and will be consistent with the City's Growth Policy while providing new ideas, guidance, and strategies for implementation. DESCRIPTION OF DISTRICT BOUNDARIES Urban Renewal District The South Kalispell Urban Renewal District is an approximately 720-acre area partially within the southern corporate limits of the City of Kalispell and Flathead County. The area lies in the broad plain of the Stillwater and Flathead Rivers and their tributaries, lending its topography to be generally flat or gently sloping.The land drains water to Ashley Creek on the western and southern boundary, and to the Stillwater River just outside the area's eastern boundary. Elevations range from about 2,950 to 3,000 feet above sea level. The roughly triangular district itself is bound by Airport Road on the west, Cemetery Road on the south, Willow Glen Road on the south and east, 3rd Avenue and US Highway 93 on the north and east and extending north the intersection of 13th Street, US Highway 93 and Airport Road. Duetothe relatively flat terrain in comparison to the surrounding mountain peaks, the Urban Renewal District area is subject to flooding and FEMA Flood Insurance Rate Maps indicate a flood hazard area exists around the Ashley Creek drainage. There are an estimated 450 parcels of land within the Urban Renewal District boundaries, with the smallest being 100 square feet and the largest being 27 acres. Average parcel size in the Urban Renewal District is 1.6 acres, much larger than that of the City of Kalispell (0.39 acres, or 17,000 square feet). Historically, the district was platted as Bakers Southside Addition, Browns Addition, Poston Addition, Purdys Addition, Ryker Addition and Daley Field Subdivision, with Courtyard Subdivision and Diamond Lils Condo Subdivision being two of the newer subdivisions. Approximately 46% of the Urban Renewal District is in the City of Kalispell with the remaining 54% in Flathead County. Most of the land in the Urban Renewal District is privately owned, many of the largest parcels are public: about 36% is owned by the city, county, federal government or school district. Roughly 31 % of the Urban Renewal District is in commercial use, 17% is vacant and 11 % is used for residential. Tax Increment Financing District (TIFD) The TIFD comprises approximately 266 parcels over roughly 230 acres including and surrounding the Kalispell City Airport. Average parcel size within theTIFD is 0.87 acres.There are an estimated 103 individual property owners in theTIFD, with the largest being the City of Kalispell, which owns about 58% of the total land area. SOUTH KALISPELL Urban Renewal Plan --- ' Nv Ln ': LATH EAD COUNTY Foys Lake -- --- C i tY _ 0f w Kalispell _. •_i 4 South Kalispell Urban Renewal District 0 1/2 1 2 Miles tN r_:i W fathead ------ --- Figure 2: Regional Context Map 2 1 April 2016 Figure 3: Public/Private Airport Lands and Flood Hazard Areas 4 3 SOUTH KALISPELL Urban Renewal Plan HISTORY OF THE AIRPORT The Kalispell City Airport (Airport) has a long and rich history nestled in the back country of Northwest Montana. Kalispell is the only city in Montana that has two public use airports (2012 Master Plan Update pg. 121). Kalispell City Airport is a city owned public use general aviation airport that is located south of the downtown central business district of Kalispell and encompasses approximately 71+ acres of property.The Airport has been in operation since 1911 when the first known flight from the immediate area of Kalispell was made on June 21,1911 from the fairgrounds by Eugene Ely in a Curtis bi-plane (1979 Kalispell City Airport Mini -Master Plan; Montana and the Sky, Frank W. Wiley, 1966). The airport has been in its present location for more than 83 years and is one of the oldest and largest General Aviation airports in the State of Montana (City of Kalispell website). The history of the Airport is summarized in Chapter 3 of the 2012 Final Master Plan. The planning history for the Kalispell City Airport started back in 1928 when the City purchased 135 acres from various property owners on the south end of Kalispell. Of the 135 acres purchased in 1928 approximately 71 acres remain in city ownership as the other land parcels have been sold for various city projects throughout the years (1999 Phase I Master Plan Airport Feasibility Study prepared by Morrison — Maierle, Inc.). The following summary of studies shows that the City has recognized the need to keep the Airport and the subsequent development of south Kalispell in the forefront as the City continued to grow. Figure 4: Planning Timeline 1911: First flight from current airport location HISTORY OF PRIOR PLANNING EFFORTS 1960's and 1970's In the mid 1960's, the Kalispell Airport Association was a few private aircraft owners and interested business men who entered into a lease with the City to manage the Airport. By 1986, management was turned back over to the City. (T. Jentz chronological history). Beginning with the 1979 Mini -Master Plan the City recognized the need to address Airport operation and maintenance as well as necessary safety upgrades and day to day management procedures. Some of the recommendations included overlaying the Airport runway, acquiring additional property to extend the Airport clear zone, and fencing the Airport. 1993 Kalispell City Airport Neighborhood Plan In 1993, Montana Planning Consultants of Kalispell, MT prepared the Kalispell City Airport Neighborhood Plan. This plan had similar recommendations to extend the runway, remove hazards from the runway clear zone, and recommended airport zoning regulations for compatible land use be adopted. City Council adopted the plan on September 19, 1994. 1928: City purchases 135 acres of land for the airport 1960s: Kalispell Airport Association formed 4 1 1911 1920 1930 1940 1950 1960 April 2016 1996 Airport Layout Plan (ALP) The city council directed Pecia and Associate to develop an Airport Layout Plan (ALP) that would comply with FAA standards to assist the City in future planning. The Plan completed in August 1996 reiterated many of the same projects: relocate the runway 900 feet to the south; provide for a B-2 design; widen the runway from 60 to 75 feet; lengthen the runway to 4,300 feet. A March 28,1998 council action limited the City to no more than $1 million dollars in local funds for airport activities - either as matching funds with FAA or to be used for local improvements. (T.Jentz chronological summary). 1996 Kalispell City Airport/Athletic Complex Redevelopment Plan The Kalispell City Airport/Athletic Complex Redevelopment Plan prepared by Kalispell Planning, Economic & Community Development Office took the 1993 Neighborhood Plan and suggested the following goals such as minimizing hazards to airport navigation; developing an Airport Layout Plan; increasing development opportunities on nearby properties; promoting compatible land uses in and around the Airport; establishing funding mechanisms for airport operations; and establishing a priority for plan implementation. Projects included: extend runway to the south to obtain 4,700 feet and purchase property; remove objects within the Runway Protection Zone (RPZ) and purchase private property located within the protection zone; fence the Airport; relocate 16 baseball and soccer fields in the vicinity of the Airport. 19; '8: Airport "Mini -Master Plan" 1986: Airport management turned back to city from Kalispe 1994: Kalispell City Airport Neighborhood Plan 1996: Kalispell City Airport/Athletic Complex Redev. Plan 1996: Airport Layout Plan 1 1999: Phase I Master Plan 2012: Final Master Plan 2013: Airport Referendum 2015: S. Kalispell Urban Renewal Plan The Plan recommended that airport improvements be financed by a combination of a TIFD and by the sale of airport properties (ball fields, under used Highway 93 frontage, etc.). The redevelopment plan was adopted by the City Council in July, 1996 along with the South Kalispell Airport TIFD, which expires July 1, 2020. 1999 Phase I Master Plan Airport Feasibility Study The Phase I Master Plan prepared by Morrison — Maierle, Inc. was partially funded by a FAA planning grant. The plan developed 5 alternatives and provided conceptual costs for each. Alternatives included upgrading the Airport, moving the runway, rotating the runway, extending the runway, acquiring land for redevelopment, and relocating the Airport. The plan recommended Alternate 2. This included a five -degree rotation of the runway, moving the runway south 900 feet and construction a B-2 airport with an initial 3,600 foot runway. The plan was adopted November 1, 1999. 2012 Final Master Plan In 2012, Stelling Engineers, Inc. prepared a 2012 Final Master Plan.The plan was an extensive process which included a detailed analysis of the Airports inventory, forecasted use, facility requirements, improvement alternatives, development constraints, and a capital improvement program. The planning process also included an extensive public outreach component. City Council adopted II Airport Association the plan in April of 2012. 1970 1980 1990 2000 2010 2015 4 5 2015 MEETING DATES JAN FEB MAP APR DESCRIPTION Project Kick-off Meeting JANUARYI2 ■ Primary Stakeholder Meetings FEBRUARY 11-13 ■ Launched ProjectWebsite/Survey FEBRUARYI6 ■ Mass mailing of public open forum invitation to all FEBRUARY 23 ■ property owners within a 100 foot boundary of the airport Advertisements regarding the project and the FEBRUARY 2015 public open forum were placed in the Flathead Beacon and Daily Interlake KGEZ Radio Interview MARCH 3 ■ Community Open House Forum MARCH 10 ■ Media interviews with the Flathead Beacon, Daily MARCH 10 ■ Interlake, and local TV stations Personal telephone calls and interviews with MARCH 11-12 ■ additional primary stakeholder contacts, including all hangar lessees/owners Mass email group was created to keep all MARCH 13 ■ interested parties connected to the project Community Open House Forum Design APRIL 7 ■ Charette/Workshop Presentation to City Boards on Preliminary APRIL 29 ■ Findings Report Figure5: Schedule of Public Outreach Events April 2016 SUMMARY OF PUBLIC PARTICIPATION MEETINGS AND WORKSHOPS 2015 Project Kick Off January 12th, 2015 kicked off the official South Kalispell Urban Renewal planning effort with team members from the City of Kalispell, CTA, and Mead & Hunt meeting to discuss the goals and strategies for this large land planning exercise. The table top planning exercise included looking at the larger picture of South Kalispell with the goal to create a unique character and design by creating a distinction between the developments north of Kalispell and the Core Area Downtown Plan. South Kalispell desires to be a uniquely identified destination that meets the needs of South Kalispell residents as well as the larger Flathead Valley area including the tourism economy. The primary focus of this large land planning exercise was to discuss goals and strategies for the current and future development opportunities within the South Kalispell Urban Renewal District, while creating a unique character and livability to the South Kalispell area. Public Outreach Process Early in the planning process, the project team identified several primary stakeholder groups representing a large and diverse constituent of Kalispell businesses and residents as the target audience for the first public outreach effort. During the week of February 11th-13th, 2015, CTA staff met individually with members from this group including the Chamber of Commerce, Kalispell Downtown Association, Montana West Economic Development, Kalispell Convention & Visitors Bureau, Kalispell School District, Kalispell Quiet Skies, City Airport Advisory Board and Urban Renewal Committee, public works and parks departments, Flathead Valley Community College, Glacier Park International Airport, Red Eagle Aviation, Kalispell Regional Medical Center, Hilton Garden Inn, and Aero Inn. Additional personal telephone contacts were made to individual airport hangar owners/lessees, and other business enterprises including REMAX Real Estate Developers, Fun Beverage, Greg Goode Trailer Sales, Flathead County Fairgrounds, Flathead Valley Hockey Association, and Flathead Area Young Professionals. Summary of Public Outreach from the 2012 Airport Master Plan Update The 2012Airport Master Plan Update included public open house workshops where 89 comments were received from the public (2012 Master Plan pg. 124). Responses included those that represented businesses as well as individual responses from within and around the surrounding community. The responses in 2012 were overwhelming in favor of keeping and upgrading the Airport. The public responses were in contrast to the failed referendum in 2013 which negated the council's decision to accept FAA money and upgrade the Airport per the recommendations in the Master Plan. The 2015 public outreach process has yielded similar results, with the public in favor of keeping the Airport and upgrading it to meet safety and compliance standards for general aviation airports. The question on how to fund these improvements remains. Figure 6: Comparison Between 2012 and 2015 Public Comments -7nni 74% - 2015 Keep Airport Do Not Keep Airport 4 7 SOUTH KALISPELL Urban Renewal Plan The week of February 23rd,2015 individual mailers were sent to all property owners within the 100 foot boundary of the City of Kalispell Airport inviting them to the public open forum on March 10th, 2015 at the Hilton Garden Inn and providing information regarding the project website and survey. Project Website As social media becomes the new 'norm' for keeping a large part of a communities constituency connected, CTA created a project specific website for the South Kalispell Urban Planning effort. This project website was launched the middle of February and remained updated and active through the planning process.The website provided a key public outreach component by providing a survey specific to South Kalispell and the urban planning effort. Questions were asked in a manner that would provide holistic feedback on the development of South Kalispell and also gauge the temperature of the community's commitment to the Kalispell City Airport. Figure 7. Project Website Homepage The survey and public outreach effort had over 100 responses and comments and the results have been combined with the primary stakeholder interviews and public open forum interviews and included on the Public Input Survey Response Board. Project Website Link: http://southkalispelIurbanrenewaI.com/ News and Media Both of Kalispell's local newspapers (the Flathead Beacon and Daily Interlake) do a great job engaging in local community issues. Our project team was in contact with the local papers regarding the planning effort including placing advertisements for the March 10th, 2015 open house and staying in contact regarding the Plan's progress and milestones. Newspaper articles covered the planning efforts. Local radio host John Hendrix did a radio spot on March 3rd, 2015 covering the open forum and continues to follow the plan and progress of the plan. Local TV stations also took an interest and covered the public open forum on March 10th, 2015. NO April 2016 COMMENT BOARDS AND SURVEYS Public Open Forums During the public meetings, several comment boards were introduced to gather broad comments and opinions. An online survey provided further There were two public forums held at the Hilton Garden Inn. The first opportunity to gather comments, themes and opinions. public forum on March 10th, 2015 yielded a large turnout with interactive participation using post -it note boards maps and surveys. The second The following are examples of the questions posed on the boards and public open forum held on April 7th yielded a smaller turnout however most of the attendees were engaging for the first time. The public outreach process yielded a dynamic yet consistent theme of comments that are weighted in response shown on the Public Results Survey Board. Priorities seem to be increasing the quality of livability in the South Kalispell area that includes connectivity of streets, bike and pedestrian pathways, and increased park and trail use. Comments related to the Kalispell City Airport were mixed with slightly more opinions favored in keeping the Airport and making it more sustainable. Coffee/ RestaurantslGrocery Agriculture Clean It Up Dog Park Convention Center Entrance Commercial tion Helicopters are a Nuisance Helicopters are Not a Nuisance Fitness FAA Compliance/Funding Incompatible Use Housing& Mixed"Use Water Office & Industrial Air Keep Airport Phase Out Airport parks & Trails Scphoolsilot ility Traffic plane watching Noise Tax Burden Tourism Walkability Figure 8: A Comment "Tag Cloud" that emphasizes the most frequently mentioned issues, topics or concerns from the public comment posting boards. The size of the word correlates to the number of times that topic was mentioned. online survey: Q: What do you like the most/least about the Airport? Q: What environmental issues most concern you? Q: What is the biggest change (good or bad) you have seen in the past 5 years? Q: Name some recreational facilities you would like to see? Q: What kinds of public services, infrastructure, housing or commerce would you like to see in the South Kalispell area? Response highlights included: • "I am neutral and sympathize with both sides" • "We like watching the planes take off and land" • "Noise and danger from airplanes is unacceptable" • "The Airport is critical to this community" • "It is a tax pit, close it!" • "Economic driver for Kalispell" One of the key pieces of input gathered regarded the general notion of the Airport's future. Three alternatives were presented: 1) keep the Airport as currently configured, 2) bring the Airport into FAA compliance, and 3) phase out airport operations. 4 9 SOUTH KALISPELL Urban Renewal Plan Figure 9: Public Open House Flyer SOUTH KALISPELL Urban Penewal Plan PROJECT BACKGROUND Since the late 1970's there have been a number of studies completed regarding the future of the City of Kalispell Airport These studies have Included a thorough analysis of the existing condition of the Airport aswell as Identified significant barriers related to the redevelopment of the Air port. Over the years, basic operation and maintenance of the Airport has allowed It to remain In operation, however, the current con- dltion of the Al rport does not meet the minimum FAA design standards and therefore Is not eligible to receive federal funding via grants or low I nterest loans. With min l mal capital Investment over the last several decades, the Airport Is face ng a future th at will require significant financial capital to mitigate these current barriers. PREVIOUS STUDIES • 1979 Kalispell City Airport Mini Master Plan prepared by TAP, Inc;AVla - tion & Economic Conrt sultants • 1993 Kalispell city Al rpoNeighborhood Plan • 1996 Kalispell City Alrpo rtlAthletic Complex Redevelopment Plan Analy- sis prepared by the Kalispell Planning and Economic & Community Development Department. • 1999 To asiblllty Master Plan Study prepared by Morrison - Malerle, Inc. • 2001 SRe Selection Study prepared by Robert Peccla &Associates, Inc I Federal Aviation Administration and Montana Aeronautics Division • 2002 Final Environmental Assessment prepared by Robert Pe cola & As- sociates,lnc. • 2012 City of Kalispell Airport - Master Plan Update - Final Please join us for a OMMUNITY OP EN HOUSE South Kalispell Urban Renewal Plan art of the The City of Kalispell has hired CTA to assist in creating the future vision for South Kalispell. This our community. Please join us, we want to hear from you. effort includes determining the future of the City of Kalispell Airport. The time is now to e P solution and help create the future vision of y Please visit the project website for more information: t //s ith6 lisoell uhanren wal o TUESDAY APRIL 1T", FROM 2:OOPM T01:OOPM Hilton Garden inn,1840 US Hwy 931 Kalispell ,MT oa m" nob�mo t�aiwc� ,1 e u�0� Qm sa�ill HISTOPV OF AVIATION CURRENT The Kalispell City Airport has a long and rich history with the first CTA has been hired by the City of Kalispell to provide the City of The effort will Include a `live' project website that wl ll encourage public known flipht from the Immediate area of Kalispell made on Kalispell, Airport Advisory Board, and Community with guidance for the comment as well as keep the planning process as dynamic as possible. June 21, 1911 from the fairgrounds by Eugene Ely In a future development of South Kalls pelf. The objective of this plan Is to Public outreach, Input, and feedback are critical to the successful Curtis bl-plane (Source. 1979 Kalispell City Air- assist the Community with the future planning and vision of South outcome of the South Kalispell Urban Renewal Plan. port MInI-Master Plan; Montana and the Sky, Kalls pelt that Includes an analysis of the Airport 's future development Frank W Wiley, 1966) and has been _ ol, ons. The final document will be the South alispell Urban Renewal FUTU PE In Its present location for more than 83 years. It Is one of Plan. The future of the Airport will be Influenced by feedback received from the oldest and la rg- One of CTAs primary roles Is to collect public Input from as many stake- the community. This plan Is an Intera ctive process. Be part of the est General Avl ation holders as possible. CTA will be meeting l ndlvldually with stakeholders solution and help create the future vlslon of your community' a lrports In the State as well as larger forum public meetings to facilitate feedback regarding of Montana (Source. City of Kalispell we b- the future of the Airport and vision for South Kalispell. CiA Architects Engineers Project Stephanie eay site). Contact Ph. a0s 222. 0104 e 1606 Em.s phani y@ctagroup com Figure 70: Example of an Informational Handout 10 1 April 2016 Figure 11: Public and Stakeholder Opinion on the Three Alternatives Keep Airport as Currently Configured Phase Out Airport Operations 26% / 32% Bring Airport into FAA Compliance Figure 11 above illustrates the breakdown of opinion. Outside of meetings, workshops and forums, the public and stakeholders had access to the online survey creating an opportunity for a larger reach of the public. The survey generally yielded more detailed comments, as participants could submit responses on their own time. EMERGING TRENDS AND THEMES The following represents the trends and themes that emerged from the various input and public participation sessions: TRAILS/PARKS/BIKE PATHS OR DOG PARK Recreational facilities like bike and pedestrian trails or dog parks attract people to an area from nearby neighborhoods. This idea was widely supported by the public. MIXED USE HOUSING Housing provides the rooftops needed to support various commercial retail or office uses. New amenities can also be introduced when designed with a mixed use component. There was interest in offering different housing types and levels of affordability. • COMMERCIAL DEVELOPMENT The public commented that uses such as fitness centers, coffee, restaurants, grocery, light industry, and office were desired commercial uses in the neighborhood. CITYANDAIRPORTENTRANCE/SIGNAG EISSUES South Kalispell lacks a defined entrance into the City. The public supported an entrance sign. The airport entrance and access also lacks visibility and could be improved. TRAFFIC Citizens considered that increased development would intensify traffic on south Kalispell's streets. SCHOOLS Noted was the importance of quality neighborhood schools, as well as their school's ability to serve new students in the future. Comments also centered around the school spurring new residential developments which would increase traffic. CONVENTION CENTER Additional conference or convention space would increase the area's strength as a commercial district. PRESERVING AGRICULTURE Agriculture will remain a key contributing factor to the region's economy and should be preserved to maintain existing community character. ALTERNATIVES The three main alternatives emerged as follows: 1) Keep Airport as Currently Configured, 2) Bring Airport into FAA Compliance, and 3) Phase out Airport Operations. 4 11 SOUTH KALISPELL Urban Renewal Plan IMPROVE LOCAL ROADS The degradation of existing roads such as Airport Rd and Cemetery Rd is seen as a concern. CLEAN UP EXISTING BUSINESSES Having a clean and uncluttered commercial environment is important to keeping and attracting new business as well as promoting quality of life. Some comments centered around cleaning up blighted properties and incentivizing businesses to improve their business frontage and curb appeal. RECREATION: BALL FIELDS, ICE RINK, AMUSEMENT PARK, SIGHTSEEING, PLANE WATCHING Numerous and diverse active recreational facilities promote the public health and welfare. People desired being able to recreate where they live. Less travel time to recreational areas such as parks and ballfields was desired. WALKABILITY AND CONNECTIONS TO S. KALISPELL AND DOWNTOWN CORE Attracting neighborhood amenities like local commercial uses complements promoting bike/pedestrian facilities in creating a well-connected, walkable environment. Creating a walkable community was a very popular comment. HERITAGE OF AVIATION AND ACCESSIBILITY FOR LOCAL PILOTS Maintaining the small neighborhood airport activities will continue to allow ease of access for local pilots, a long-standing amenity in the area. HOTEL AND TOURISM DISTRICT An opportunity exists to promote South Kalispell as a tourism destination complete with abundant hotels and commercial amenities. Most of the hotel accommodations for the City of Kalispell are located in the south urban renewal area. The public outreach process for the South Kalispell Urban Renewal Plan prompted concerned business groups and citizens alike to look specifically at the South Kalispell area. While being one large land mass, there are two very unique opportunities within this area. South Kalispell as a whole offers a combined mix of industrial, commercial, residential and City uses with the stronger theme being commercial and industry. The second distinct use within this larger area is the operation of the Kalispell City Airport. The general consensus was weighted in favor of keeping the Airport, with the concern focusing on the Airport becoming more fiscally constrained and able to support annual operation and maintenance as well as reinvestment projects. It was clear that the community did not want the Airport to become a tax burden. Strong public opinion supported a walkable community with trails and parks; an entrance sign into South Kalispell; mixed use development including commercial and residential as well as light industry was also very popular. There was also interest in incentivizing existing businesses to make their business more attractive. 12 1 _ y r ►'` vi� ' a - •a ' , : , , ��' a +- ' „ . - r 4 "AL 6.. -Iw�- %CkI W It IT VIC: ill I a ! } a► Ik TF e -7�4r x w Figure 12: Recreational facilities, like the Begg Park baseball fields, were mentioned as a valuable community asset in south Kalispell. ' (Photo: K. Brady). SOUTH KALISPELL Urban Renewal Plan Figure 13: Aviation and Non -aviation Development Opportunities ❑BLUE: Aviation compatible business development opportunities GREEN: Non -aviation ❑business development opportunity (city could repurpose for commercial development) r—,i L _ J City Limits 14 1 April 2016 ANALYSIS OF OPTIONS Mead blunt EXECUTIVE SUMMARY ------------------------------------------------------------------------------------- As we have seen in the public outreach process there was no clear overwhelming desire from the community to close the Airport. The public seems to support continued operation of the Airport if two goals are met: 1) the Airport is not expanded to take additional commercial aircraft; 2) the Airport does not become a tax burden to the community. The only definitive decision made by the public was to vote down FAA funding to expand the Airport. During the"analysis of options" exercise, each of the alternatives presented below contained a series of decisions that would need to be made by the political body. There was no alternative clearly directing a decision to continue operating the Airport in the future, nor to close the Airport. What was made clear during the analysis is that this general aviation airport cannot sustain itself without full development of available property, and FAA participation in capital improvement projects. Without FAA participation in capital projects, the Airport operates at a loss even with full development of revenue producing property. Airports are an essential public facility, meaning that they provide benefit to the community beyond their core function. General aviation (GA) airports support recreational, business and flight training aviation activities on a regular basis. They provide jobs for those that work at the airport, and the services and products purchased by airport businesses contribute to the local economy. Business GA users may come to the region in support of other industries (such as business managers and owners), and although their economic contribution may not be directly tied to the Airport, their activities in the region make a substantial economic contribution and the Airport facilitates their access to the community. Beyond day to day activities, airports play a vital role in emergency response, law enforcement, and disaster management when needed. If the city wishes to keep the Airport an active and viable community asset there will need to be a concerted political decision and financial commitment from the City. Efforts to reinvest in capital projects and create additional long term revenue generating sources will need to be a priority. Revenue options include: increased business opportunities, taxation, and FAA funding. The option of selling and redeveloping the Airport is a potential alternative for the City as a long term program to eliminate a financial and managerial commitment. When making this decision the City should weigh the discernible value of the Airport and its broader reaching impacts to the community. Additional considerations should include the large amount of available developable land in the greater Kalispell area. At this time, there is no shortage of developable properties within the North or South areas of Kalispell. If the Airport is closed for redevelopment, the redevelopment of this large land mass could create a long-term blighted property that may sit vacant for many of years until development pressure increased. It should be noted however that there is a considerable amount of existing infrastructure in the form of water and sewer mains within the Airport property making it attractive for development. This report analyzes the financial, community and aviation -related impacts of three improvement /reorganization alternatives for the Kalispell City Airport (S27 or"the Airport") and provides two additional alternatives that would require further research and analysis. Improvement alternatives are being considered because the City operates the Airport at a net loss, and improvement projects are needed to extend the life of the Airport, and to comply with Federal Aviation Administration (FAA) design standards should the Airport desire to accept FAA money in the future. 4 15 SOUTH KALISPELL Urban Renewal Plan EXECUTIVE SUMMARY (CONT.) The report looked at near -term (five-year) capital costs and near -and long-term (five years and beyond) operating cost and revenue projections. The goal of this analysis is to weigh the needed and recommended airport improvement projects against the financial feasibility and return on investment of their implementation. The five alternatives include the following: 1. Keep the Airport as it is using City funding 2. Close the Airport 3. Request FAA funding for the Airport in its current alignment 4. Incorporation into an Airport Authority 5. Privatization of the Airport A"baseline"financial forecast was also prepared to show what it would cost to keep the Airport running'as-is' with only the necessary improvements. The financial analysis includes a discounted cash flow analysis QCFA) and projections of capital costs. Operating costs and revenues grow in proportion with the level of investment in infrastructure at the Airport. There are too many unknowns and political uncertainties associated with Alternative 4 and Alternative 5 so they are not included in the financial analysis. Alternatives 1 and 3 both make the necessary improvements to keep the Airport operational while Alternative 2 closes the Airport and allows the City to use this property for other uses, some of which could produce revenue that is not accounted for in this analysis. Given what is known today, both Alternative 2, Close the Airport, and Alternative 3, Request FAA Funding, provide the same valuation in the long term, but for considerably different levels of investment. In terms of capital investment, Alternative 2 costs $2 million more than Alternative 3. Key differences between the two are that Alternative 2 eliminates the Airport and the financial obligation of running it, while Alternative 3 will require the City to operate the Airport for at least 20 years beyond the date of the last grant received. Alternative 2 will likely use up most, or all, of the available tax increment finance (TIF) district funding that is available while Alternative 3 will make substantial use of FAA funds. Alternatives two and three generate positive valuations, and it is expected that full development of airport property will produce a self-sustaining enterprise (with the assistance of FAA funds for future development). Alternative 1 does not produce a positive valuation. Alternative 2 eliminates the Airport as a transportation asset for the City which may have economic impacts beyond airport finances. Should the City be able to convert airport property to a revenue producing land use, either via tax revenue or a city -owned use that generates more revenue than the Airport, then Alternative 2 may provide additional financial benefit over the other alternatives. Additional research will be needed on Alternative 2 to make this assessment. INTRODUCTION In 2013, after years of airport studies, a plan was in place to bring the Kalispell City Airport (S27 or "the Airport") up to current Federal Aviation Administration (FAA) standards with 90% of the funding provided by the FAA. The City Council voted to move forward with the planned projects; however, a local voter referendum was passed which reversed the City Council decision and ended the planned updates to the Airport. Since that time the future of the Kalispell City Airport has been uncertain and the Airport has lacked a long-term plan. In late 2014 the City of Kalispell selected a consultant team to assist the City with gathering public opinion and providing a long-term plan for the southern area of Kalispell, including the Airport. As approximately 10% (71.4 acres) of the study area is occupied by the Airport, the future of the entire south Kalispell area is closely tied to the future of the Airport. 16 1 April 2016 Stakeholder and public outreach meetings were conducted in February and March of 2015.Over one hundred people provided input over the course of these public outreach sessions and 17 stakeholders met individually with the consultant team. This report is organized into two sections; Existing Conditions and Alternatives and Financial Implications. The intent of this report is to provide sufficient information on airport development options so that decision makers can make a decision about the future of the Airport which best reflects the future considerations of the City. A discounted cash flow analysis tries to work out the value of an investment today, based on projections of how much money the investment will make in the future. Comparing the Alternatives using a discounted cash flow analysis allows the City to consider the present value of an investments future cash flow in order to arrive at a current fair value estimate for the investment. Figure 14: Airport DevelopmentAlternatives Financial Summary Alternative Net Present Value (2015 $, 7% Rate) DCFA Valuation Capital Costs Baseline ($1,400,000) $900,000 1 ($1,300,000) $900,000 2 $300,000 $3,100,000 DCFA valuation equals sum of five year cash flows and ongoing (beyond five years) income. Mead &Flunt EXISTING CONDITIONS Prior Airport Studies Major airport planning efforts and studies that have been completed over the past two decades include the following studies. • 1999 Airport Master Plan • 2001 Site Selection Study • 2002 Environmental Assessment • 2008 Airport Economic Impact Study • 2009 Airport Layout Plan Update • 2012 Final Master Plan Update and Environmental Assessment A recurring theme of these Studies is the Airport's lack of compliance with FAA standards. The Master Plans and subsequent Environmental Assessment (EA) identified areas of the airfield which do not comply with current FAA design standards.The Master Plans and EA provided a series of programmatic approaches for compliance with FAA standards. Airport and Airfield Configuration The Airport is located immediately south of the Kalispell city core, 7 miles north of Flathead Lake,16 miles south of the City of Whitefish, and 23 miles southwest of Glacier National Park. The Airport is a general aviation (GA) facility with one 3,600 foot long runway (designated as Runway 13-31) with a full length parallel taxiway on the east side and a partial parallel taxiway on the west. The runway has no visual landing aids other than an airport beacon and non-standard runway edge lights. The Airport has no instrument landing procedures. Jet fuel and 100LL (100 low lead is the common fuel for piston powered aircraft) are available at the Airport, as well as major airframe and power plant repair. 4 17 SOUTH KALISPELL Urban Renewal Plan Airport Role The FAA's National Plan of Integrated Airport Systems (NPIAS) classifies Kalispell City Airport as a "local/basic airport" The NPIAS defines a local/ basic airport as follows:: Local: Supplements local communities by providing access to local and regional markets. These airports have moderate levels of activity with some multiengine propeller aircraft. These airports average about 33-based propeller -driven aircraft and no jets. Basic. Supports general aviation activities, often serving aeronautical functions within the local community such as emergency response and access to remote communities. These airports have moderate levels of activity with an average of 10 propeller -driven aircraft and no jets. The Airport plays many roles in the community, which are explained in greater detail below. ABaseforPilots. Kalispell City Airport is a convenient general aviation airport for pilots who live or work in Kalispell and the greater Flathead Valley. A Point of Air Access for Visitors to the Region and Community. Kalispell City Airport is a gateway for general aviation visitors to northwest Montana and the nearby Glacier National Park. The region draws tourists and business people alike. A Place for Commerce and Business. Kalispell City Airport is used as a gateway to the region for commerce and business, bringing additional revenue and economic activity to the region. A Base forAviation-Related Community Emergency Services. Kalispell City Airport is an important access point for emergency medical transportation, search and rescue operations, law enforcement operations, and other emergency services. Following natural disasters, airports which are not damaged are utilized as a point of access for emergency and disaster relief services. Should ground transportation routes be blocked or impassable, air transportation may be the only access point for these services. Other Area Airports Glacier Park International Airport (KGPI) is located eight miles to the northeast. KGPI is a non -hub primary airport which accommodates commercial air carrier service, military and general aviation activity for the region with its 9,007 foot A runways number reflects the magnetic heading of that runway. The magnetic heading is rounded to the nearest ten degrees and the zero is omitted. For example: runway 13-31 reflectmagnetic headings of 130 and 310 degrees respectively. long primary runway and 3,504 foot long crosswind runway. Other GA airports within 50 miles of Kalispell City Airport that have paved runways include: • Polson (8S1) - 30 miles • Hot Springs (S09) — 36 miles • Ronan (7S0) — 38 miles • Libby (S59) — 48 miles Aviation Activity at the Airport Kalispell City Airport is a non -towered airport, meaning that it does not have an air traffic control tower. It is difficult to obtain accurate counts of aircraft activity at non -towered airports because there is not a system in place to count every flight. The 2012 Final Master An operation refers to one take off or one landing. A touch - and - go is counted as two operations. Plan Update used 15,800 annual operations for the baseline, increasing to 27,686 annual operations within the years 2023-2032. This equates to approximately 42 operations per day on average. These numbers are typical of a single runway GA airport of this size. As is commonly the case with non -towered GA airports, the FAA Terminal Area Forecast (TAF) projections show no change in aviation activity from 2015 levels. The reason for this is that FAA forecasters lack sufficient local knowledge to predict changes. A more realistic forecast scenario is 18 1 April 2016 that airport activity will respond to local economic and social changes. According to County records 1, Flathead County experienced a 22% increase in population between the years 2000 and 2010, or about 2% per year on average. The City of Kalispell grew at 40% over the ten year period from 2000 to 2010, or 4% per year on average. Population growth does not directly correlate to demand for aviation; however, if population is growing as a result of economic growth, then the region may experience growth in aviation activity as well. Traffic Patterns Although the Airport only has one runway, there are two runway ends which may be used for takeoffs and landings. Left traffic patterns are used to serve both Runway 13 and 31.This means that aircraft can be expected to fly on both the east and west sides of the Airport when arriving, departing or performing touch -and -goes. Aircraft will also likely be arriving and departing using straight -in and straight-out procedures aligned with the runway. When conditions warrant pilots are encouraged to observe the following local noise abatement procedures and instructors are requested to emphasize these procedures to their student pilots. Noise abatement procedures are voluntary — not regulatory. The Airport encourages pilots to use noise abatement procedures as part of its good neighbor policy with surrounding land uses; however, there is no way of tracking compliance, incentivizing compliance, and punishing non-compliance. 45' DEPARTURE STRAIGHT-OUT DEPARTURE ------ D� FINAL UPWIND Mead &Flunt Noise abatement procedures are intended to reduce the level and duration of aircraft noise exposure by noise sensitive land uses, such as schools and educational facilities, residences, and places of worship. • The preferred "No Wind" take -off runway is Runway 13. • The preferred"No Wind" full stop landing runway is Runway 31. • When departing RWY 13, and leaving the traffic pattern, aircraft should climb straight out, avoiding the KGEZ radio towers, and proceed enroute. • When departing RWY 31, and leaving the traffic pattern, if practicable, aircraft should make a 60 degree turn left or right and climb to cruise altitude. • After take -off, reduce power to recommended climb settings as soon as practical. Slight power reductions will significantly reduce noise levels. • When practicing touch and go landings at night, pilots are encouraged to use the facilities at KGPI. • In constant -speed -propeller aircraft, if safety and the operators manual permits, avoid using high rpm settings in the traffic pattern. Airport Constraints The Airport has a series of existing constraints. Some of these are related to off -airport land uses, while others are safety and setback standards which are not met.This section focuses on those constraints related to the Airport in its existing configuration, not the planned developments recommended in the 1999 and 2012 Master Plans. Part 77 Obstructions Title 14 of the Code of Federal Regulations, Part 77, is titled Safe, Efficient Use, and Preservation of the Navigable Airspace. Part 77 specifies the details of a series of three-dimensional airspace surfaces which radiate from an airport. Part 77 provides the FAA with standards for designating penetrations to these surfaces as airspace obstructions. 4 19 SOUTH KALISPELL Urban Renewal Plan The 1999 Airport Master Plan and 2012 Final Master Plan Update identify two broadcast antenna towers as being penetrations to the Part 77 airspace surfaces and the FAA has designated these towers as airspace obstructions. The two towers penetrate the existing horizontal surface and the Runway 31 approach surface. If left unresolved, the obstructions would continue to pose a hazard to air navigation and could prevent the Airport from ever obtaining instrument approach procedures. Runway Protection Zones Runway Protection Zones (RPZ) are an FAA design standard aimed at protecting people and property on the ground from an aircraft accident 20:1 CONICAL SURFACE APPROACH SLOPE 7:1 TRANSITIONAL SURFACE PRIMARY SURFACE TYPICAL FAR PART 77 SURFACES occurring prior to, or beyond the end of a runway. FAA standards for what is considered a compatible use have changed over time. FAA Advisory Circular 150/5300-13A (change 1) specifies what land use are permissible within the RPZ without further evaluation. Those uses are: • Farming that meets airport design standards. • Irrigation channels that meet the requirements of AC 150/5200-33 and FAA/USDA manual, Wildlife Hazard Management at Airports. • Airport service roads, as long as they are not public roads and are directly controlled by the Airport operator. • Underground facilities, as long as they meet other design criteria, such as RSA requirements, as applicable. • Unstaffed NAVAIDs and facilities, such as equipment for airport facilities that are considered fixed -by -function in regard to the RPZ. Land uses otherthan thosespecified above require additional compatibility evaluation by the FAA. The Airport currently has multiple land uses located within the RPZs for Runway 13 and 31 that the FAA would likely consider incompatible such as residential uses and public roads. The FAA requires closer analysis of incompatible land uses when a "triggering event" occurs. Triggering events that would warrant closer analysis are: • An airfield project (e.g., runway extension, runway shift) • A change in the critical design aircraft that increases the RPZ dimensions • Anew or revised instrument approach procedure that increases the RPZ dimensions • A local development proposal in the RPZ (either new or reconfigured). Additional Improvements Identified The 1999 and 2012 Airport Master Plans identified the following improvement projects in order to bring the Airport into compliance with FAA standards in its current configuration. • Increase separation between runway and parallel taxiways from 130 feet to 150 feet • Widen taxiways from 20 feet to 25 feet • Acquire property needed for 250 foot wide Runway Object Free Area • Installation of a complete perimeter fence system • Runway lighting system upgrades • Replacement of the existing airport beacon • Installation of Precision Approach Path Indicators, a lighted segmented circle and windsock, and reflectors along the edge of the taxiway and apron 20 1 April 2016 • Airport Business and Lease Structures The 2012 Master Plan notes that Kalispell City Airport did not have a pavement survey completed as part of the 2012 "State Survey of General Aviation Airports"due to the absence of FAA funded pavements at S27.The Master Plan notes that there is some cracking, weathering, and oxidation occurring at the Airport during the inventory in 2012. The Master Plan capital improvement plan recommended runway reconstruction occur in the 2016-2018 grant years, with taxiway reconstruction to follow in 2019. Due to the absence of pavement condition data, this analysis relies on the Master Plan as the most recent assessment of pavement condition and schedules improvement projects according to the City of Kalispell's capital improvement plan. According to a 2012 Rates and Charges Survey conducted by the Montana Aeronautics Division, the ground lease rates at Kalispell City Airport are some of the most expensive in Montana and T-hangar lease rates are on the higher side of average. As of March 2015, there are 16 leaseholders on the Airport. The terms of the leases vary from 1 year lease for a T-hangar to a 99 year lease for the Hilton Garden Inn. Lease rates vary depending on the type of lease: • Rates for private ground leases are $0.16 per square foot of hangar space per year. T-hangar units are owned by two private entities and are rented at $200- $250 per year. There are 20T-hangar units on the airport parking apron (Gross), and 10 additional T-hangar units on the northwest side of the Airport (Billmayer). The Airport collects 50 percent ofT-hangar rent from the private entities, and is guaranteed a minimum payment of $500 a month per T-hangar building (not per T-hangar unit) regardless of occupancy. • The Airport charges a $0.06 per gallon fuel flowage fee. For comparison, the following rates and charges are included for other Montana GA airports. These rates are as reported in the 2012 Rates and Charges Survey conducted by the Montana Aeronautics Division: • Big Timber - $0.15 per square foot for commercial, $0.10 per square foot for private ground lease Mead &Flunt • Chester - $0.12 per square foot per year for ground lease, $250 per year for hangar • Eureka - $0.05 per square foot per year for ground lease • Fairview - $0.06 per square foot per year for private ground lease • Fort Benton - $75 - $140 per month for hangars • Glasgow - $0.12 x 1.2 square foot for commercial, $0.10 x 1.2 square foot for private ground lease $70-$100 per month for T-Hangars • Lewistown - $0.09 per square foot for ground lease, $55 - $90 per month for hangars • Livingston - $0.16 per square foot for private hangar ground lease, $103 per month for T-Hangar • Malta - $0.10 per square foot for private ground lease, $0.20 per square foot for commercial, $100 per month forT-Hangars. • Plentywood - $0.08 per square foot for private ground lease, $0.10 per square foot for commercial ground lease • Stevensville - $0.06 per square foot of ground lease, $150-$210 per month for hangars. 2013 Airport Improvement Voter Referendum In 2013, a plan was in place to bring the Airport into compliance with FAA design standards. The FAA had allocated funding for the majority of the projects and the Kalispell City Council voted to move forward. However, opponents of the Airport improvement projects tookthe issue to the voters in the form of a voter referendum to overturn the City Council's decision. The voter referendum passed, ending efforts to move forward with the Airport improvement projects and rejecting FAA funding. The passage of this voter referendum brought into question the long-term viability of the Airport.These circumstances have left the Airport in a state of uncertainty. Ambiguity about the future has discouraged private investment at the Airport. Private investment and revenue generating projects are needed in order for the Airport to be a viable, contributing aviation facility. 4 21 SOUTH KALISPELL Urban Renewal Plan FAA Funding Mechanisms and Obligations Airport owners always have the option to maintain and fund projects through local means, but most of the 3,345 public -use -airports contained in the National Plan of Integrated Airport Systems (NPIAS) accept some amount of financial assistance from the FAA. The FAA has several different mechanisms for funding airport improvement projects depending on the type of project and the type of airport. For GA airports like Kalispell City Airport, a majority of projects are funded through the Airport Improvement Program (AIP). The AIP fund assists with capital projects/ expenses at eligible airports. In order to be eligible for AIP funds, an airport must first be included in the NPIAS. The AIP is funded separately from the FAA operating budget. The funds are generated from a variety of aviation related fees such as aviation fuel taxes, commercial airline ticket fees, and cargo shipment fees. Monies in the AIP are not funded through general U.S. treasury funds. This is an important distinction that the FAA makes in an effort to emphasizes that AIP funds originate, and remain in, the aviation system. As a condition for receiving AIP grants, the FAA has a series of grant assurances or obligations that the Airport sponsor (owner) must abide by for twenty years from receipt of funds. It is important to note that these grant assurances do not currently applyto the Kalispell CityAirport because it has not accepted federal funds. However, the FAA grant assurances would apply in Alternative 3, or any variation of the project which includes receipt of federal funds. Key grant assurances that pertain to the Airport are summarized below. The full list of airport sponsor assurances can be found on the FAA website at the following link: http://www.faa.ciov/airports/aip//cirant assurances/ Good Title. It, a public agency or the Federal government, holds good title, satisfactory to the Secretary, to the landing area of the Airport or site thereof, or will give assurance satisfactory to the Secretary that good title will be acquired. Consideration of Local Interest. It has given fair consideration to the interest of communities in or near where the project may be located. Consultation with Users. In making a decision to undertake any airport development project under Title 49, United States Code, it has undertaken reasonable consultations with affected parties using the Airport at which project is proposed. Public Hearings. In projects involving the location of an airport, an airport runway, or a major runway extension, it has afforded the opportunity for public hearings for the purpose of considering the economic, social, and environmental effects of the Airport or runway location and its consistency with goals and objectives of such planning as has been carried out by the community and it shall, when requested by the Secretary, submit a copy of the transcript of such hearings to the Secretary. Further, for such projects, it has on its management board either voting representation from the communities where the project is located or has advised the communities that they have the right to petition the Secretary concerning a proposed project. Operation and Maintenance. The airport and all facilities which are necessary to serve the aeronautical users of the Airport, other than facilities owned or controlled by the United States, shall be operated at all times in a safe and serviceable condition and in accordance with the minimum standards as may be required or prescribed by applicable Federal, state and local agencies for maintenance and operation. It will not cause or permit any activity or action thereon which would interfere with its use for airport purposes. It will suitably operate and maintain the Airport and all facilities thereon or connected therewith, with due regard to climatic and flood conditions. 22 1 April 2016 Any proposal to temporarily close the Airport for non -aeronautical purposes must first be approved by the Secretary (of transportation). Hazard Removal and Mitigation. It will take appropriate action to assure that such terminal airspace as is required to protect instrument and visual operations to the Airport (including established minimum flight altitudes) will be adequately cleared and protected by removing, lowering, relocating, marking, or lighting or otherwise mitigating existing airport hazards and by preventing the establishment or creation of future airport hazards. Compatible Land Use. It will take appropriate action, to the extent reasonable, including the adoption of zoning laws, to restrict the use of land adjacent to or in the immediate vicinity of the Airport to activities and purposes compatible with normal airport operations, including landing and takeoff of aircraft. In addition, if the project is for noise compatibility program implementation, it will not cause or permit any change in land use, within its jurisdiction, that will reduce its compatibility, with respect to the Airport, of the noise compatibility program measures upon which Federal funds have been expended. Exclusive Rights. It will permit no exclusive right for the use of the Airport by any person providing, or intending to provide, aeronautical services to the public.. Fee and Rental Structure. It will maintain a fee and rental structure for the facilities and services at the Airport which will make the Airport as self-sustaining as possible under the circumstances existing at the particular airport, taking into account such factors as the volume of traffic and economy of collection. Mead &Flunt Airport Revenues. All revenues generated by the Airport and any local taxes on aviation fuel established after December 30, 1987, will be expended by it for the capital or operating costs of the Airport; the local airport system; or other local facilities which are owned or operated by the owner or operator of the Airport and which are directly and substantially related to the actual air transportation of passengers or property; or for noise mitigation purposes on or off the Airport. Hangar Construction. If the Airport owner or operator and a person who owns an aircraft agree that a hangar is to be constructed at the Airport for the aircraft at the aircraft owner's expense, the Airport owner or operator will grant to the aircraft owner for the hangar a long term lease that is subject to such terms and conditions on the hangar as the Airport owner or operator may impose. These grant assurances in effect create a more ridged management structure and less flexibility for the City. They also protect the aviation users'interest and any federal financial contribution. Contrary to some public perception, the City would not "lose control" of the Airport. The City must consider these grant assurances, and the twenty year encumbrances when weighing options for the future of the Airport. This first section of the report presented the relevant existing conditions surrounding the Airport in an effort of preparing the reader with an understanding of the Airport's circumstances. The following section of this report outlines the aviation and financial implications of the alternatives which arose from the public outreach sessions. 4 23 SOUTH KALISPELL Urban Renewal Plan AIRPORT ALTERNATIVES Introduction Five high level concepts for the future of the Airport were considered and further developed through February and March 2015 stakeholder and public outreach meetings. 1. Keep the Airport as it is using City funding 2. Close the Airport 3. Request FAA funding for Airport in its current alignment 4. Incorporation into an Airport Authority 5. Privatize the Airport This section provides an analysis of Alternatives 1 and2 from a financial impact perspective. Cost assumptions and sources are included asendnotes. Where appropriate, alternatives use TIF funding to pay for development, but not for operations and maintenance expenses. TIF funding availability assumes $1.325 million available in 2016 and $415,000 of additional funding available per year until the TIF sunsets in 2020. Unused TIF funds are carried forward to subsequent years; however, when the TIF sunsets, unused funds must be returned to taxing authorities. Recommendations are provided for alternative implementation. A summary of the alternatives and a discounted cash flow analysis are included at the end of this section. Examples of GA airports in similar scenarios are included below to illustrate the inherent difficulties of long term self-sufficient GA airport operations Hot Springs County —Thermopolis Municipal Airport - Wyoming (THP): THP is a publicly owned GA airport. THP is operated and maintained through a contract between the County and the local Fixed Base Operator (FBO). The County pays the FBO annually and the FBO is responsible for operations and daily maintenance. Airport revenues (fuel sales, hangar leases) are retained by the FBO; therefor, the County operates THP at an annual loss. As of 2015, the County is planning for THP to be incorporated into the FAA NPIAS in order to be eligible for FAA AIP funds. The long term plan for THP includes using AIP funds for Airport relocation. • Catalina Airport - California (AVX): AVX is a privately owned public -use GA airport which does not receive AIP funding. The runway is in severe disrepair and repair costs exceed available funds. The owner is in the process of finding an eligible sponsor for the AVX with the objective of qualifying for and receiving FAA funds. • W. K. Kellog Airport - Michigan (BTL): BTL is a publicly owned GA airport which uses a variety of funding sources. BTL uses AIP funds for capital projects, and funds from the local Tax Increment Finance (TIF) District to aid with the local match requirements. Although BTL is not entirely self-sufficient and relies on AIP funds, the combination of TIF funds and general funds support operational costs. • Other private airports: Throughout the country there are many small GA airports that are privately owned and funded by their owners. Ownership can be a single entity or a consortium type partnership with multiple owners. In most all of these scenarios the owners are responsible for all funding requirements. In the United States, the vast majority of GA airports are not entirely self-sufficient. Most receive operating and capital funds from a variety of sources including city, county, state and federal sources. The Kalispell City Airport requires significant capital investment from outside sources to pay for much needed improvements. Cash flow generated by airport operations is not sufficient to pay for needed capital improvements. Airport Financial History As shown in Figure 15, the Airport operated at an average net loss of $99,499 per year from 2010 to 2014. If depreciation is not included, the Airport has had positive cash flow in 2010 and 2013 and operated at an average net loss of $124 from 2010 to 2014. Positive cash flows were caused by irregular events (contract legal services expense being lower in 2010 than in previous years and a one-time contribution from a local government fund of $92,625 in 2013), not by normal revenues exceeding expenses. It is recommended thatthe City not include depreciation in financial analysis because depreciation represents the decline in value of an asset that has already been paid for, and not a cash expense paid by the Airport.This will present a more accurate picture of operating expenses and revenues. 24 1 April 2016 Figure 15: Airport Financial History Figure 16: Baseline Financial Projections In order to assess airport development alternatives, a pro -forma financial statement has been prepared for a baseline scenario. In this scenario, the Airport continues to operate as it does today. Investment is limited to needed maintenance and repair. Financial projections for the baseline scenario are presented in Figure 16, and the airport capital improvement plan is presented in Figure 17. Construction expenses in Figure 16 are ineligible for TIF funding because these expenses are considered maintenance of existing facilities, not development of new facilities. Figure 16 represents airport cash flows and expenses should the Airport continue operating "as -is" Capital improvement costs beyond what can be covered by airport revenues are paid for by the City of Kalispell. Operating expenses and revenues are projected to grow over time based on trends observed over the past five years. Mead &Flunt Revenue growth is limited by the existing number of revenue -producing properties on the Airport, and is expected to grow through lease rate increases (e.g. increasing lease rates to reflect the true value on the market). Expenses are expected to grow at nine percent per year, driven by contracted labor and materials that support the capital improvement program. Figure 17. Existing Airport Capital Improvement Plan ImprovementCapital P. Main Runway Overlay 372,000 Road and Parking Lot Crack Seal 14,794 West Taxiway Overlay 255,516 North Fuel Island Overlay 14,280 Main Hangar Taxiway Overlay 41,446 East Taxiway Overlay 362,167 Ryan Lane Overlay 40,119 Airport Road Overlay 56,000 Total 0 386,794 311,242 402,286 56,000 Source: City of Kalispell 4 25 SOUTH KALISPELL Urban Renewal Plan Tax Increment Finance Options: In July 1996 the City established a TIF District for the South Kalispell/Airport District with a sunset date of July 1, 2020. The TIF District has an annual bond payment of approximately $500,000 and generates approximately $631,000 in revenue per year. This TIF District is one of two taxing jurisdictions availablefortheCitytouse asan Airport funding source (the other being traditional property tax revenues). There will be $1,325,000 in TIF funds in 2016, and an additional $415,000 in TIF funds per year until 2020. TIF funds can be used for new construction and actions that support development (e.g. buying out leases), but not to cover maintenance or for operating expenses.TIF funds must be used prior to the TIF sunset date in 2020. Alternative 1 — Keep Airport As -is Approximately three-quarters of the stakeholders, airport users and the public responded with the desire to keep or expand the Airport. In Alternative 1, necessary capital improvements are made, and available property is leased to private developers with the intent of generating new revenue in support of the long term viability of the Airport. Alternative 1 requires similar capital investment as the baseline scenario. Improvement projects are considered maintenance of existing facilities and are therefore ineligible for TIF funds to pay for improvements. Without FAA involvement, financial responsibility for capital projects, maintenance activities, and operating costs that are not covered by airport revenues will fall on the City. The City will rely on increased airport revenues to cover airport costs. Several avenues exist for the City to implement capital projects that will increase revenues. Invest now in much needed maintenance projects. This will send a signal to the aviation community and prospective users, tenants and business that the City is serious about the long term viable operation of the Airport. The east and west taxiways are in need of maintenance, which should be a high priority item for the City to address. • Attract a developer for anew 18-unitT-hangar complex. Enter into a lease agreement similar to the existing T-hangar lessees which guarantees $500 a month per T-hangar building, or 1/2of rents owed to the developer. After a certain level of occupancy it is expected that 1/2of rents owed will exceed $500 a month, which explains the increase in revenue from 2018 to 2019 and 2020. The City will not develop hangars because of the cost, slow payback period, and low rate of return (and potential loss), but instead continue to lease property to private developers. Identify areas on airport/city property for future development. In order for additional users to relocate to the Airport, a land use development plan needs to be in place. Areas for non -aviation uses (e.g., industrial park, self -storage facility) should be located in areas that are already separated from the airfield. Aviation related uses (additional hangars, FBOs, and other aviation service providers) should be located in areas with access to the airfield. Much of the airfield area has been developed already; however, several areas of infill exist. If the City chooses Alternative 1, a land use development plan should be prepared for the development of surplus property As revenue increases, the City should consider undertaking projects to bring the airfield into compliance with FAA standards, even if the Airport is not obligated to do so by FAA grant assurances. Since this alternative would not utilize FAA funds, no requirement would exist to comply with FAA grant assurances. As a liability precaution, the City should also consider publishing a continuous Notice to Airmen (NOTAM) specifying the areas which do not meet FAA standards. Capital expenditure and associated revenue projections are shown in Figure 18.Over time, new hangars come online and help provide additional income for the Airport. Figure 18 includes capital expenses programmed by the City of Kalispell, and additional capital expenses required to increase revenue, such as maintaining airfield facilities in a condition that will attract private investment. Figure 19 shows the resulting revenues and expenses associated with Alternative 1. Detailed revenue and expense projections are included in Appendix A. 26 1 April 2016 Figure 18: Alternative 1 Capital Costs and Resulting Revenue I Revenues T-Hangar Ground Lease 2016Alternative 0 0 0: 6,000 2019 13,200 2020 23,760 Total 42,960 Hangar Site Leases 1,200 4,120 8,760 11,840 15,000 40,920 Ground Leases 0 2016Expenses 30,000 31,000 0: 32,000 2019 33,000 2020 126,000 Total Ek Main Runway Overlay 0 372,000 0 0 0 372,000 No Road and Parking Lot Crack Seal 0 14,794 0 0 0 14,794 No North Fuel Island Overlay 0 0 14,280 0 0 14,280 No Main Hangar Taxiway Overlay 0 0 41,446 0 0 41,446 No West Taxiway Overlay 0 0 255,516 0 0 255,516 No Ryan Lane Overlay 0 0 0 40,119 0 40,119 No East Taxiway Overlay 0 0 0 362,167 0 362,167 o Airport Road Overlay 0 0 0 0 56,000 56,000 Revenues in Figure 18 represent anew revenue only. A comprehensive revenue and expense pro forma is included in Appendix A. Figure 19: Alternative 1 Revenue and Expense Summary 1 2016Alternative 0: 2019 2020 Operating Revenues (+) 90,800 125,520 139,960 153,340 170,860 Operating Expenses (Except Depreciation) (-) 133,800 143,600 154,200 167,500 185,300 Capital Expenses (-) 0 386,794 311,242 402,286 56,000 Surplus (Shortfall) (43,000) (404,874) (325,482) (416,446) (70,440) Revenue assumptions are that 15 new hangar site leases (five 100'xl00' and ten 60'x60' hangars) will come online between 2016 and 2020. The lease rates assume $0.16 per square foot per year for 2016, then growing at 2.2% per year in line with the U.S. rate of inflation forecast. The City will need to include such escalation in new leases, and adjust existing leases when possible to reflect true market value for the property. Absorption rate of the new development areas will depend on market demand and the completion of other airport improvement projects that will help grow developer confidence. Alternative 1 projections assume a total of two units will be built by 2016; a total of five will be built by 2017; a total of nine will be built by 2018; a total of 12 will be built by 2019; and all 15 spaces will be built by 2020. Mead &Flunt The 18 unit T-hanger building is expected to be in place by 2019 and revenue projections assume the minimum of $500 a month ($6,000 a year) is paid to the City in the first year while the developer markets the units to tenants. This fee structure is identical to existing T-hangar building leases. If the developer is successful in leasing more than five spaces, then the City will receive t/2 of the rent due per month in line with the other T-hangar lease agreements, which will provide up to $23,760 a year in revenue at full hangar occupancy. Hangar development in Alternative 1 represents a "maximum development" scenario, where all available airport property is developed to produce revenue. Additional Avenues for Increasina Airlaort Revenue: "True -up" Existing Ground Lease Rates: The City should consider bringing existing ground leases up to true market rates. This will require additional analysis to determine the true market rate for the ground leases. Depending on the ground lease structure, this may not be possible for several of the sites for many years. As ground leases expire or come up for renewal, the City should include an escalation clause which allows lease rates to grow at the expected rate of inflation (at a minimum). To remain competitive with off -airport sites, the City could provide "shovel ready" sites. "Shovel ready" generally means any environmental work and field investigations have been completed and the project is ready for design work. Sewer, water and power infrastructure are generally available throughout the Airport property. These utilities could be extended to specific project sites in advance in an effort to encourage development. While this approach should incentivize development, it comes at a cost to the City. These costs are not included in the financial projections. Consider establishing a newTIF District for the Airport beyond 2020. Although this might be a less desirable action politically, it would provide the City with a sustained source of revenue for the Airport. Establishing a TIF District would be a significant undertaking, requiring time and expense from the City. 4 27 SOUTH KALISPELL Urban Renewal Plan Available options but not recommended: Establish landing fees and/or overnight tie -down fees. This could discourage use at the Airport and drive aviation activity to other airports. The following airports in Montana have established such fees: - Glasgow- $25/night single -engine, $50/night multi -engine - Stevensville - $3/night single -engine, $5/night multi -engine - No airports in Montana charge landing fees for non-commercial GA aircraft. An example of a busy GA airport which has additional fee structures is Montgomery Field, San Diego, California: - Overnight transient parking: $5/night for aircraft with a Maximum Takeoff Weight (MTOW) of 10,000 Ibs or less, or $1 per 1,000 Ibs for aircraft over 10,000 Ibs MTOW. For example, a Cessna 172 = $5/ night. A King Air 200 = $13/night. - Landing Fees apply to all aircraft operating under a Part 135 certificate, regardless of how an individual flight is operated. $10 for aircraft 10,000 Ibs MTOW or less, or $1 per 1,000 Ibs for aircraft over 10,000 Ibs MTOW. For example, a Cessna 421 = $10/landing. A Citation Excel = $20/landing. Fiscal Impacts: There would be immediate costs to the City for overdue maintenance projects. Ru nways and taxiways are the main areas reported by users as needing immediate attention. The City should adhere to their Capital Improvement Plan forthe near -term high priority projects to enhance tenant and user confidence, and facilitate capital planning. A detailed pro forma, capital costs, and revenues and expenses are included in Appendix A. There would be immediate costs to the City for overdue maintenance projects. Runways and taxiways are the main areas reported by users as needing immediate attention. The City should adhere to their Capital Improvement Plan for the near -term high priority projects to enhance tenant and user confidence, and facilitate capital planning. A detailed pro forma, capital costs, and revenues and expenses are included in Appendix A. When comparing cash flows from different time periods, it is critical to account for the time -value of money. Due to changes in inflation and purchasing power, the value of $1 in 2015 is more than it is in 2016, and much more than it is in 2020. One way to look at it is that a good or service that costs $1 today will cost $1.40 in 2020 dollars. The good or service does not change, only the amount of money required to pay for it. Revenues and expenses in the pro -forma statements are presented in the dollar values for the years that they occur (e.g. 2017 revenues are in 2017 dollars, and 2020 revenues are in 2020 dollars), but when the costs and benefits of the alternatives are compared to each other, all dollars are adjusted to present value, which is 2015 dollars. The present value adjustment uses the "discount rate" of 7% that the White House Office of Management and Budget (OMB) recommends for evaluating long term financial performance of government -funded projects, which are not subject to the same market risks and tax implications and private sector investments. This discount rate accounts for inflation, changes in purchasing power, and risk. With all dollar values having the same purchasing power, expenditures and revenues occurring in different years or across many years can be compared. A discounted cash flow analysis (DCFA) for Alternative 1 provides insight on net present value (NPV) of five year costs and revenues, and expected long-term financial gain. The DCFA uses a 7% discount rate to bring future monies into 2015 dollars, and assumes that revenues will grow in pace with inflation at 2% annually.The DCFA for Alternative 1 is presented in Appendix A. Alternative 1 requires capital investment of $900,000 over the next five years, which includes the capital projects in Figure 19, adjusted to present value at a 7% discount rate. The Airport valued at negative $1.3 million after these improvements are made (negative $1 million in cash flow over the five years, and negative $300,000 in ongoing loss overthe life of the Airport).This means that the City will need to invest more money than the Airport is expected to return. After improvements for Alternative 1 are complete, it is expected that the Airport will provide economic benefit for the community by way of jobs and local tax base, however, economic benefits are not reflected in airport finances. 28 1 April 2016 Meeting FAA Design Standards • Alternative 1 does not meet FAA design standards. • FAA design standards for either ARC / or ARC 11 facilities require additional capital projects as described in Alternative 3 and AppendixA • The cost to the City of meeting FAA funding is up to ten times more than with FAA funding. • The NPV of capital costs to meet FAA Design standards using City funds is $3.2 million over five years The DCFA assumes that the City of Kalispell will finance the initial $900,000 investment in pavement rehabilitation, and that the T-hangars and box hangars will be built by a private developer. The City will receive rent from the private developer for these newly developed hangars. Spending $900,000 to receive negative $1.3 million in value may not look like a wise investment; however, cities do not operate like for -profit enterprises. Many essential city functions, such as schools, emergency services, and parks and recreation, do not generate profit. These services increase value of private enterprises that use them, which comes back to the City in the form of tax and licensure revenue and quality of life and emergency preparedness. Jobs and economic output are generated through temporary construction jobs and long-term jobs on airport, and off -airport that use aviation as part of their business or supply the aviation sector. When compared to the baseline scenario which has no investment or improvement beyond safety -critical items and ongoing maintenance, Alternative 1 has a DCFA valuation that is $61,969 greater over the long-term. The numbers are similar because the baseline scenario still requires substantial maintenance over the next five years just to keep the Airport operational. The Airport operates at a loss in both scenarios, but covers more of its operating [Figure 20: Alternative 1 Comparison to Baseline] Mead &Flunt expenses in Alternative 1 after five years due to additional lease revenue from private hangar sector development. Due to the high level of assumptions involved in the DCFA valuation, there is little difference between Alternative 1 and the baseline scenario. A comparison between Alternative 1 and the baseline is presented in Figure 20. Aviation Impacts: Alternative 1 is notthe ideal scenario from an aeronautical perspective because it does not comply with FAA design standards. The Recommended Airport Plan in the 2012 Final Airport Master Plan was full compliance with FAA standards. However, Alternative 1 is a reasonable compromise given the history and political environment surrounding the Airport. Alternative 1 does provide a way for the Airport to voluntarily meet FAA standards as funds are available by increasing revenue opportunities and encouraging private investment. Community Impacts: Alternative 1 keeps the Airport as the City's financial responsibility. Although the community will continue to receive the economic benefits from the presence of the Airport (e.g. jobs, spending within the community, and taxes), the financial investment needed to maintain a safe operating environment at the Airport is considerable. It is expected that the City will need to support this investment with its general fund. Should the City need to take money from other city departments, then the community may have to wait longer for needed improvements in areas. Findings for Alternative 1 - Keep Airport As -Is Keeping the Airport open in an as -is configuration without seeking external funding does not produce a profitable enterprise. Challenges to producing sustained profit include limited property available for revenue producing development due to the Airport being surrounded by roads, other development, and aviation clear areas; limited ability to raise lease rates due to competition from other airports nearby and existing leases; and the costs associated with airfield maintenance. Across the country, some GA airports have secured additional revenue by leasing available property to non -aviation large -lot commercial development. Due to the site constraints mentioned above, it is not expected that there is sufficient property at S27 to support aviation development and large lot commercial; therefore, the Airport will be dependent on aviation -related rents to offset costs. 4 29 SOUTH KALISPELL Urban Renewal Plan While the pro forma in Appendix A shows Alternative 1 with a loss of $70,440 in 2020, this level of loss is largely dependent on private investment generating additional lease revenue for the Airport. Without this investment, or if it takes longer to materialize than planned, the loss will likely be greater. From a capital investment perspective, Alternative 1 is less expensive from a capital investment perspective than the Airport closure option (Alternative 2), and more expensive than getting FAA involvement and having to meet FAA standards (Alternative 3). Consideration must be given to how the expenses will be paid, as capital projects in Alternative 2 and some capital projects in Alternative 3 are eligible for TIF funding, whereas none of the capital projects in Alternative 1 are eligible for funding. Although Alternative 3 is less expensive purely in terms of capital costs, Alternative 3 will require a new planning effort, negotiation with the FAA, and local politically wrangling. As financial conditions improve with future aviation and non -aviation growth at the Airport, continuing to invest in the airfield and meet FAA standards where practical will support the viability of the Airport. If the City chooses to move forward with Alternative 1, a publicity campaign should immediately occur to make existing and prospective users, tenants, and business aware of the City's dedication and plan for continued operation of the Airport. The ability of an airport to obtain financial self-sufficiency depends on increasing user confidence in the Airport and attracting demand and revenue generating uses. Alternative 1 — Action Plan 1. Invest in the east and west taxiway maintenance projects. 2. Hire a full-time Airport Manager. 3. Consider attracting private development for newT- and box hangar projects. 4. Prepare a land use development plan for vacant airport lands. 5. Engage in a publicity campaign to provide information on how the City plans to continue funding and maintaining the Airport. 6. As funds are available, strive to meet FAA standards even if not required. Alternative 2 — Close the Airport Closing the Airport is an option that is available to the City, but it has the possibility of being a complicated and costly alternative. Closure would be made in the form of a distinct and deliberate action from the City. If no action is taken by the City and the Airport continues to deteriorate to the point where it is operationally deficient, the City may at some point become liable for failure to maintain the pavement. The following are the financial and aviation impacts associated with an airport closure: Lease Buyout: The following section regarding lease contents, implications to the City and the lease summary table in Appendix A, is included as planning level information only and does not constitute a legal analysis of the leases. As the lease languages read, lease buyout would be required at "a point when the City discontinues aviation operations on the Kalispell Airport site.' Figure 21 and Figure 22 show a strong increase in revenue in 2019 and 2020 as a result of the The City currently has both ground leases and building leases on the Kalispell City Airport. • In a ground lease, the tenant leases the ground for a fixed term and may build a structure at their own cost. If these leases are terminated early the City may be responsible for paying the tenant the unamortized portion of the building cost. • In a building lease, the tenant leases a building owned by the City. land sale and TIF funding offsetting capital expenses. It is expected that the City will have sold off interest in the property by 2020, and will not receive future revenue, meaning that revenue and expenses beyond 2020 will equal $0. Should the City choose to lease and not sell the property, the cash flow will be much lower in 2019 and 2020; however, the City will continue to receive revenue from the property into the future. In this scenario, the City will also continue to incur expenses associated with upkeep. 30 1 April 2016 Seven of the sixteen leases currently in effect at the Kalispell City Airport have clauses stating that if the City discontinues aviation operations at the Airport, the lease shall terminate and the City shall pay the fair market value at the existing usage of the improvements constructed on the site. At least one lease has clauses requiring appraisal of the fair value of the remaining term of the lease and payment of that amount to the lessee. Others require the unamortized portion of the cost of the hangar to be paid to the tenant. In order for the City to close the Airport and buyout the existing leases, official appraisals would be required (in some cases two appraisals) to determine the appropriate dollar amount. The City will need to pay for property appraisal and lease buy-out. This option carries a risk of litigation depending on the results of the appraisal. Note: the cost of ground lease buyouts will decrease overtime as the lease term nears expiration and building near the ends of their useful lives; however, the buyout costs associated with hangars at fair market value will likely increase due to inflation and general value increases. Potential Impacts at KGPI: Relocation of users to KGPI in the event of Kalispell City Airport's closure has been suggested at public meetings by those in favor of closing the Airport. An important impact to consider is the comingling of GA and air carrier aircraft. The mixing of small GA aircraft with air carrier, and corporate jets is possible, but not necessarily a desirable scenario. The FAA, airport operators and air traffic controllers prefer to separate these two user groups when possible. Difference in sizes and operating speeds of air carrier and small GA aircraft adds a level of complexity to the Airport environment and the potential for airfield delays as larger aircraft have to wait for smaller aircraft to clear the runways and airspace. Currently, there is adequate capacity at KGPI to accommodate additional general aviation activity. The Flathead Municipal Airport Authority (FMAA) owns and operates KGPI and two other GA airports where it can separate operations and infrastructure requirements ofthe two different user classes of aircraft (small GA and air carrier/business jet). A sudden influx of small GA aircraft into an airport that is not prepared to accommodate their permanent relocation could be problematic. Since hangars are not eligible for FAA AIP funds, FMAA would be responsible for either paying directly for construction of Mead &Flunt new hangars at KGPI or attracting investors to do so. Commercial service airports like KGPI typically focus their efforts on commercial and business aviation investment opportunities. Alternatively, the FMAA could choose to do nothing about new hangar construction and plane owners would need to go elsewhere for services outside of the City of Kalispell. Fiscal Impacts: Costs associated with this alternative include immediate costs of lease buyout and a loss of economic activity generated by Airport businesses that choose not to relocate within the region. It should be assumed that some of the reported jobs, payroll and total activity/output would be lost with the Airport closure. This report does not attempt to quantify that loss, nor does it quantify potential economic gain associated with reuse of the Airport site. A detailed five year pro -forma analysis, capital costs, and detailed revenues and expenses of Alternative 2 are included in Appendix A. A critical element that is missing from the Alternative 2 pro -forma is the future revenue potential of the property. If the City chooses to re -purpose the property for another civic use, there will be costs and revenue implications. If the City sells the property and it is re -developed, there will be taxes and jobs generated. Due to the unknowns about the future of the property, the on -going revenue is listed as $0 to the City. In order to accurately compare Alternative 2 to Alternative 1, it is recommended that more research be done on what the property could be re -purposed for. Within this report two general options are depicted from a land use perspective but no detailed analysis has been contemplated. The DCFA for Alternative 2 uses the same 7% discount rate as Alternatives 1 and 3. What is different between Alternatives 1 and Alternative 2 is that the DCFA for Alternative 2 assumes no long-term income from the property once it is sold. Depending on what the City does with the property, it may become taxable. Tax revenue will depend on what types of uses are built on the site. It is recommended that the City of Kalispell develop an area plan for the site should Alternative 2 be pursued in order to calculate the future tax revenue. The DCFA for Alternative 2 is presented in Appendix A. 4 31 SOUTH KALISPELL Urban Renewal Plan The NPV of the cash flows for Alternative 2 is $300,000, a positive result largely due to TIF funding and proceeds from the sale of the property offsetting the expense of the lease buy-outs. If the City chooses not to sell the property it is recommended that the DCFA be re -run to better assess long-term property tax income from the site. The present value of capital projects and lease buy-outs associated with Alternative 2 is $3.1 million in 2015 dollars at a 7% discount rate. There is a negative return on investment because the City does not generate enough revenue from the sale of the land to cover the costs associated with selling it (even with the use of TIF funds); however, this loss could be smaller, or even a net gain should the City be able to produce tax revenue from the site over the long-term. If the site is converted to another civic use, then proceeds from the land sale to cover some expenses in 2019 and 2020 if it desires to use the TIF funds for other purposes. As shown in Figure 23, Alternative 2 is $1.7 million less expensive to the City than continuing to operate the Airport as -is in the long -run. However, Alternative 2 requires $2.2 million more in upfront capital investment ($3.1 million in Alternative 2 compared to $900,000 in the baseline scenario). The reason behind this is that the City can use TIF funds to cover closure expenses in Alternative 2, and cannot use TIF funds in the baseline scenario. As stated previously, the City could see a more positive return with Alternative 2 if there was a plan to redevelop the property into a revenue producing land use, through lease or property tax. Using TIF funds for airport closure means that these funds will not be used for other property tax income is not expected; however, there may be economic improvement projects in the South Kalispell area. benefits associated with newjobs. As shown in Figure 21 and Figure 22, Alternative 2 has high up -front costs; however, if these costs are spread over time, there should be sufficient TIF funding to cover buy outs. The opportunity cost here is that this improvement alternative uses all available TIF funds, and it is possible that the City may want to use TIF funds to pay for improvements in the South Kalispell area that are not related to the Airport.The City can use the Figure 21: Alternative 2 Capital Costs and Resulting Revenues Revenue Property Sale 1 20MMENdW 0 1 Alternative 0 1 2 0: 0 1 2019 887,500 1 2020 887,500 Total 1,775,000 TIF Funds 0 2016Expenses 756,550 2017 1,255,200 2018 558,250 2019 415,000 2020 2,985,000 Total TIF Ground Lease Buy Out 0 279,800 223,800 447,600 167,800 1,119,000 Yes Hangar Purchase 0 476,750 381,400 762,800 286,050 1,907,000 Yes Red Eagle Buy Out 0 0 650,000 0 0 650,000 Yes Phase I Environmental 0 0 0 22,000 0 22,000 Yes Building Demo 0 0 0 0 196,000 196,000 Yes Pavement Demo 1 0 0 1 0 1 5,000 1 0 1 5,000 1 Yes Figure 22: Alternative 2 Revenue and Expense Summary 2 2016Alternative 0: 2019 2020 Operating Revenues(+) 82,175 829,565 1,290,595 1,465,450 1,302,500 Operating Expenses-) 147,900 179,100 186,400 57,900 36,000 Capital Expenses (-) 0 756,550 1,255,200 1,242,400 649,850 Surplus (Shortfall) (65,725) (106,085) (151,005) 165,150 616,650 [Figure 23: Alternative 2 Comparison to Baseline] Aviation Impacts: This alternative is the least desirable of the three alternatives from an aviation perspective. New airports are exceedingly difficult and costly to site. It is expected that displaced aircraft would relocate to other area airports. Community Impacts: Alternative 2 removes the Airport which takes away a transportation asset; however, there are other facilities in the area that can support the displaced airport users. Given that there is surplus capacity (in terms of runway capacity and developable land for aviation uses) at other airports, removal of the Kalispell City Airport does not cause overly negative impact the area's airport system. Removal gives the City a chance to replace the Airport with a facility or facilities that benefit the community in other ways, such as a school or a 32 1 park, or another civic facility. It also allows the City to develop the property which produces short-term construction economic impacts, and longer term industry economic impacts such as new jobs and increased tax base. Findings for Alternative 2 - Airport Closure — Not recommended due to the high cost of lease buyouts and negative aviation implications, in addition to the loss of services and economic activity that would occur for the City of Kalispell. Losing an access point for emergency medical transportation, search and rescue operations, law enforcement operations, and other emergency services would be a significant loss which is not quantifiable in terms of City finances. Alternative 2 — Action Plan Should the City decide to move forward with Alternative 2, the following steps should be taken: 1. Consult legal counsel on the best path forward for closure and lease buyout. 2. Plan for a date, in the future, on which the City will no longer provide for aviation operations. 3. Begin a conversation and dialogue with leaseholders on decision to close and the date which closure will occur. 4. Begin lease appraisal process. 5. Conclude lease buyout process with legal counsel. 6. Advertise closure date and provide adequate time for users to relocate. 7. Close the Airport and demolish the runway. 8. Sell or lease the property. April 2016 Mead &Flunt 4 33 SOUTH KALISPELL Urban Renewal Plan Alternative 3 — FAA Compliant Airport in Current Runway Alignment Another alternative suggested during the public outreach process was one that would re-engage the FAA in the Airport's future. This proposal would involve using FAA funding for improvement projects to bring the Airport into compliance with FAA design standards. The Airport will remain in its existing location, with the same runway configuration and alignment. The feasibility and success of Alternative 3 depends on FAA willingness to fund the necessary improvement projects. In the early stages of this project, FAA staff at the Helena Airport District Office were contacted about the possibility of re -involvement with the Kalispell City Airport. The FAA said that it is still possible for the City to become eligible for and receive FAA funds. A re -validation analysis and discussion would be required between the City and the FAA but the possibility is not off the table. Alternative 3 will implement the airfield development plan "Site 1 — Option D"from the 2012 Final Airport Master Plan Update. A graphic of the project components is located at the end of this document. Project components included in the 2012 Final Airport Master Plan Update are as follows: • Airport facilities constructed to Airport Reference Code (ARC) B-1 design standards (60 feet runway width, 150 feet separation between runway and taxiway, 25 feet wide taxiways). • Runway reconstructed to its current length of 3,700 feet but could be extended to a length of 4,300 feet. • No shift or offset of runway centerline. • No rotation, orientation remains 13/31. • Requires the relocation of five hangars and three shops on Airport property. • Requires the full or partial acquisition of approximately 16 land parcels (no residential) The FAA has indicated to the City of Kalispell that there is not funding available for ARC B-I airports. Although B-I is a FAA design standard, and upgrading the airfield to B-I standards would meet FAA design criteria, B-I airports are such a low priority for the FAA Helena Airports District Office it is unlikely that the level of capital investment needed to perform the upgrades would ever become available. A pro forma for Alternative 3 was prepared, and is included in Appendix A. The Airport Reference Code (ARC) has two components relating to theAirport design aircraft. The first component, depicted by a letter, is the aircraft approach category and relates to aircraft approach speed (operational characteristic). The second component, depicted by a Roman numeral, is the airplane design group and relates to airplane wingspan or tail height (physical characteristics), whichever is the most restrictive. The FAA indicated that if the City chose to construct the Airport to ARC B-II standards, which would require larger safety areas and setbacks, then funding may become available. The City voted against funding an ARC B-II Airport and this option is not explored further. Due to the severe challenges associated with its implementation, Alternative 3 is removed from consideration. 34 1 April 2016 Mead &I,Iunt 4 35 SOUTH KALISPELL Urban Renewal Plan Alternative 4 — Incorporation into an Airport Authority There is a possibility that the Kalispell City Airport could be incorporated into an airport authority. Airport authorities are independent, public agencies created by state legislation. Many different forms of authorities exist. Some have the power to levy taxes and the use of eminent domain, and some do not. Airport authorities of some type make up approximately 39% of airport ownership structures nationwide. Figure 24 presents generalized advantages and disadvantages of an authority - exceptions exist in all cases. Figure 24: Airport Management Structure Comparison Authority Municipality • Provides focused leadership Access to other city resources a Insulates elected officials Power to tax & eminent • Better serves a larger domain community Issue bonds Q Provides a business focus V Money may not be available Financial and political a� to support the Airport constraints r� Greater exposure to liability Airport competes for > (need to purchase insurance) attention/resources • Leadership may not focus on airport exclusively The Flathead Municipal Airport Authority (FMAA) operates Glacier Park International Airport and two GA airports (Ferndale and Whitefish). Some comments at public outreach events asked what potential exists for the Airport to join the FMAA, and what potential exists for creating a new authority for the Airport and perhaps others nearby? Inclusion of the Airport into the FMAA would require an agreement between the City of Kalispell and the FMAA. Considering that the FMAA already operates two GA facilities, it is unlikely that they would need to acquire a third; however, there may be operational benefits and economies of scale for the FMAA which increase interest. It is recommended that the City approach the FMAA Board of Directors to discuss the practicality of joining FMAA. A second airport authority option is that the Kalispell City Airport forms its own airport authority independent of the FMAA. This option would increase costs in the short -run as additional airports or revenue generating facilities would need to be acquired and a new taxation zone would need to be established to support the new airport authority's operations. In the absence of a tax, and without an airport with strong revenue generating potential in the authority, it is unlikely that this option would be financially advantageous to the City or the new airport authority. City legal council should be consulted on the potential for taxing authority if two independent airport authorities existed within the same county. If Kalispell City Airport was to be incorporated into the FMAA or other authority, the City of Kalispell would likely lose control of decisions regarding airport management, operations and finance. The City would also lose potential revenue generated through airport improvements; however, it would benefit from spill -over economic growth associated with on -airport businesses. Fiscal Impacts: Depending on the agreement made between the City and the future Airport Authority, any sale proceeds would go to the City of Kalispell.The new Airport Authority would then assume responsibilities for financial obligations as well as collection of any revenue. Due to the absence of facts about Alternative 4 costs and revenues, no DCFA was performed. The City will need to do additional analysis before a DCFA can be performed. Findings for Alternative 4: Incorporation into an Airport Authority — If the City chooses to explore the Airport Authority path, the City would need to hold a meeting the FMAA on the topic to gauge interest and benefits for both parties. 36 1 April 2016 Alternative 5 — Privatize the Airport Within the contents of this study the airport is shown to lose money in all of the primary three financial alternatives. If the City of Kalispell keeps the airport as is, it continues to lose money. If the City takes FAA funding, keeping the runway orientation in -place, it continues to lose money. Based on the findings of this study, the City also loses money if the airport is closed in the near future and is sold for alternative uses. For purposes of this report, sale values for the airport property are $25,000/acre when looking at the airport land on a gross sale basis. Often municipalities and counties are faced with decisions of operational shortfalls or looking to transfer services and even infrastructure to the private sector. Across North America it is quite common for governmental entities to privatize services and infrastructure of all types, including water, sewer, sanitary and landfill services. Some toll roads are examples of private or public -private partnerships in transportation. Over the past 25 years the federal government has privatized tens of thousands of acres of land across the country in dozens of military base closure operations, many of which include airports. In fact, if there is a service being provided by a government entity it generally can be provided by the private sector as well. If the City of Kalispell wanted to explore the true value of the airport property and set some conditions in its transfer of the land, the City could establish and issue an airport acquisition request for proposal (RFP). From a land development standpoint the airport does offer some attractive conditions including readily available utilities and vehicular access, as well as surrounding services. As previously stated, the existing airport hangar leases and required buy-out pose confusing conditions for the next many years. However, often the private sector can do things the public sector cannot including negotiating lease buyouts for cash or non -cash considerations in relation to a greater development. The old adage that the private sector can move faster than the public sector is often, but not always, true. If the City chose to issue an acquisition RFP it could also choose to favorably weigh continued use as an airport for a minimum number of years as a key decision factor in any transfer of land. This would send the signal to the private sector aviation industry to investigate a private sector operation of the airport, as well as give time and possible initiative to the Flathead Mead &Flunt Municipal Airport Authority to consider its options in acquiring and operating the airport. The City would want to make its intentions clear and give ample time for development, or groups entertaining the option of continuing to operate the airport, traction to put together deals to respond to the RFP. Minimum elements the City will want to consider if it chooses this option include the following: • Conduct a true detailed real estate appraisal of airport property prior to accepting RFP results, • Set minimum return expectations, • Establish a schedule for due diligence during the RFP (Minimum 180 days), • If the airport is to continue to operate, is there a minimum time frame for its operation (ie. 10 years) and minimum time frame to bring airport up to FAA standards, • If the airport is to be repurposed, a transition should identify holding the City harmless for hanger lease termination occurring prior to airport closure. • Explore all available legal angles of privatizing city owned land. Exploring a Privatization option is really a combination of the previous four options as each of them could actually become a part of the results of any RFP. The major issue herein is that the City of Kalispell gets out of the General Aviation airport business. In privatizing, any scenario may come forward including: • Keeping the airport operating in its current configuration, • Closing and repurposing the airport for other land uses, • Utilizing FAA funds if the airport were to be acquired by another governmental entity or airport authority, • Acquisition by an existing or newly established airport authority. If at the end of the RFP period the City is unhappy with the results of any offers received, the council could move forward with any option it chose. It would have a clearer understanding at that time of what the private or quasi private sector thought of the value of the land as a viable airport or alternative real estate development potential. 4 37 SOUTH KALISPELL Urban Renewal Plan SUMMARY - COMPARISON OF ALTERNATIVES Alternatives presented require investment from the City. Potential funding sources include the FAA, the Montana Department of Transportation, the TIF fund (for certain improvements) and the City's general fund. The City could also issue a revenue bond or look for private investors. Regardless of the funding source, the City will need to make an investment in the Airport in order to generate additional revenues necessary to make the Airport profitable. Without additional funding over the next five years the Airport will continue to lose money and facilities will degrade to a point where they may become inoperable. The same is true for the investment required to close the Airport, as leases will need to be bought out and the property will need to be redeveloped. The alternatives presented above contain aeronautical, community, and financial implications to the City.The aeronautical factors of the alternatives are not quantifiable in the way that the economic factors are. Ultimately, [Figure 25: Alternative Summary] what alternative is best depends greatly on the community's vision for the Airport. Alternative 1 gives the City flexibility to close the Airport in the future should private development not arrive; however, the capital costs for Alternative 1 are $900,000.The capital costs associated with Alternative 2 are nearly three and a half times as expensive as Alternative 1 over the next five years; however, 96 percent of these expenses can be covered with TIF funds and the remaining can be covered from property sale proceeds. Alternative 2 provides the City with an opportunity to convert the Airport to a land use that provides greater civic or economic benefit. Alternative 2 also frees the City of on -going airport maintenance beyond five years. Key benefits and drawbacks of each alternative are summarized in Figure 25. Financial analysis was run for two of the five alternatives and the baseline scenario. Financial considerations and ranking is based on return on investment and what the investment provides the City and the surrounding community. Alternative Capital Costs 5 Year Cash Flows Ongoing Income DCFA Valuation Benefits Drawbacks • Provides safe, efficient airport 0 Does not meet FAA standards Alternative 1 Greater flexibility if closure sought 0 City must self -fund future capital $900,000 ($1,000,000) ($300,000) (1,300,000) in long-term improvements and maintenance • City investment may inspire private 0 Not eligible for TIF funds investment • Ability to reuse site for potential 0 Considerable up -front financial greater economic benefit investment • Potential for City to profit instead of 0 Loss of aviation facility and Alternative 2 $300,000 $0 $300,000 operating facility at a loss association emergency $3,100,000 Other facilities in area to take management / disaster relief displaced users benefits • Able to use TIF funds 0 Many unknowns about future revenue potential Note: Capital costs are factored into 5 Year Cash Flows, along with operating revenues and operating expenses. DCFA Valuation = 5 Year Cash Flows + Ongoing Income 38 1 April 2016 Alternative 2 has higher capital costs than Alternative 1 and produces a positive cash flow over the five years as TIF funds and proceeds from the sale of land cover closure costs. Should the City sell and allow development on the property, the tax revenue will improve the DCFA valuation and make Alternative 2 even more competitive than Alternative 1 from a DCFA perspective. It is recommended that the City investigate what the development potential is on this piece of property and whether the City can afford to pay the closure fees and wait for years to be reimbursed through property taxes. Alternative 2 has higher capital costs than the baseline "do nothing" scenario, but the return on investment (through land sale and elimination of ongoing airport maintenance costs) is more promising than continuing to operate the Airport at a loss. Of the two scenarios, Alternative 2 provides a positive DCFA valuation of $300,000; however, the capital costs are higher. The key difference is whether the City wishes to keep the property as an airport or not. Alternative 2 removes the aviation asset, freeing the City from the expense of operating the Airport but potentially eliminating associated economic benefit in the process. [Figure 26: Baseline and Alternative Returns on Investment] Net Present Value (2015 $, 7% Rate) Alternative DCFA Valuation Capital Costs (1,300,000)• /1 //1 11 111 11 111 Mead &Flunt 4 39 SOUTH KALISPELL Urban Renewal Plan ENDNOTES ASSUMPTIONS AND SOURCES ,. County data https:Hflathead.mt.gov/about_flathead_county/index. php z. Cash flow information provided by the City of Kalispell. 3. East Taxiway - Assumed cost of $38 per sq. yard of asphalt overlay applied to an area of 8,000 sq. yards. 4. West Taxiway - Assumed cost of $38 per sq. yard of asphalt overlay applied to an area of 5,078 sq. yards. s. Estimated salary including benefits. 6. Hangar site lease revenue estimates based on $0.16/sq. ft. for ten (10) 60'x60' and five (5) 100'x100' box hangars with progressive ground lease structures. Range in revenue reflects initial lease year and end lease year. 7. Ground lease non -aviation revenue assumes $0.16/sq. ft. for a large (180,000 sq. ft. leasehold) non -aviation related development on the City owned compost site. s. Assumes $1 million for site work/paving/utilities and $1.5 million for buildings. Based on engineers planning level estimate. Results in 18 new t-hangars with lease rates of $500 per month. 9. Calculated based on remaining ground lease terms. Assumes initial hangar construction costs of $130/sq. ft. See Lease Summary Table for compiled lease information. ,o. $1.9m estimate brought forward from 2012 Airport Master Plan estimates. Assumes fair market buyout of seven (7) hangar leases. See Table 6-2 contained in 2012 Airport Master Plan. ,,. Estimate assumes 25% of the 2012 Airport Master Plan $2.6 million buyout estimate for both Red Eagle and the Hilton lease. Inclusion of the Hilton lease was incorrect and inflating that number.The 25% estimate was based subtracting out the more expensive highway frontage and more substantial investment in the Hilton property. 12. Demolition of runway assumes two days of work (16 hours) by two pieces of heavy earthmoving equipment at $156/hr. 13. Assumes the FAA would be willing to negotiate and come to an agreement on the future configuration of the Airport 14. Typical cost for ALP update 15. Alternative 3 cost assumptions brought forward from 2012 Airport Master Plan 16. Obstruction removal refers to the relocation of five hangars and three shops on airport property. Source 2012 Airport Master Plan. 17. Source: Airport Council International 40 1 3 .___ _. QUINCV 1pOP 'RIVERGIENCi FE4l OR .. f - - -MERGANSER DR _ April 2016 Mead &Flunt Figure 27: Existing Land Use Map Existing Land Use OResidential .Government Facility .Commercial Professional Office or Health Care .Mobile Home Park .Sevver Treatment Plant .Open Space .Industrial .Airport, Golf Course, Fairgrounds SOUTH KALISPELL URBAN RENEWAL DISTRICT South Kalispell/Airport Redevelopment Area L j Current Airport Tax Increment Finance District City Limits Mead Ount �o Fr N 4 41 «IUTH KALISPELL Urban Renewal Plan DEVELOPMENT RECOMMENDATIONS AND STRATEGIES LAND USE STRATEGIES The goal of the South Kalispell Urban Renewal Plan is to integrates ustainable, socially responsible, and economically sound recommendations and implementation strategies to improve the quality of life for residents of Kalispell and the greater region. Land use planning is a political and iterative process that needs to remain flexible and open to changing conditions. Decisions made with active participation, using a consensus building process, have a greater chance of implementation and success. This plan will incorporate smart growth policies such as promoting infill development, mixed use development, protecting natural resources, encouraging walkability, and redevelopment opportunities. Existing land use in the South Kalispell Urban Renewal District include a variety of commercial, industrial, mixed use, and residential properties, as well a large amount of undeveloped open space (see Figure 25). One of the major land holders in the Planning Area is the Kalispell City Airport, which occupies approximately 10% of the larger 720-acre planning area. Developing partnerships between public entities and private development can maximize limited resources and provide for a more robust investment opportunity and create a better outcome for the long term health of the community. These agreements can also ensure a more consistent development standard and pattern between cities and counties increasing the levels of service for health, safety, fire, and general livability. 42 1 April 2016 DEVELOPMENT GUIDELINES The following Development Guidelines are general policy statements that inform land use decisions within the Urban Renewal District. Attract the Right Type and Size of Development A city can influence where and what kind of growth happens by pointing out locations where public services and other environmental factors make the most sense for new development. Once these locations are indicated on a map, the City can make it easier to develop a project with various incentives. Provide the Highest Level of Public Services and Facilities Growing without subsequently expanding public infrastructure impairs the City's ability to provide a high level of public service to Kalispell's taxpayers. Within their limits, the City should make decisions based upon the impacts a project has on their ability to provide services such as water, sewer, emergency services, roads and other customer services. Attract High Quality Projects Higher quality development can cost more, however low quality projects become a burden on the City and its residents over time. The City can only afford to move forward by approving and building the best projects the market will bear. Promote a Transportation Network that is Safe for Pedestrians, Bikes, and Vehicles Increased traffic volumes related to urban development have raised significant concerns about vehicular and pedestrian safety. Public officials and agencies should strive to provide a network of streets that are safe and accessible for all modes of travel, and where possible, implement urban design elements that encourage reduced speeds in high traffic areas. A South Kalispell for Everyone Kalispell is home to people of all means, but across the region rising costs of services, goods and housing is driving out long-time residents and preventing new residents from moving to town. Supporting development that provides affordable housing and a mix of uses and services should be a priority in the Urban Renewal District. A Sustainable South Kalispell A sustainable city is one that is structured to survive a potential bust, and one that considers impacts to the environment as it grows. Economic growth in the region will one day stop, and the City can prepare by making sustainable fiscal and land use decisions now. The City must institute careful planning to avoid overbuilding or overextending infrastructure. Supporting environmentally -sensitive development is also a priority. Encouraging builders to use locally -sourced materials is an example of sustainable development that saves on transportation costs and supports local businesses. 4 43 SOUTH KALISPELL Urban Renewal Plan Promote a Family -Oriented Community Families have and will continue to move into South Kalispell because of the existing family -oriented character. Ensuring there are resources that support the health, safety, convenience and livelihoods of families young and old will improve the quality of life for all area residents. Neighborhood amenities, such as local businesses, parks, community activity centers (churches, schools or clubs), grocery stores and banks, for example, build a strong family -friendly community. Keep the Small Town Character Part of the attraction of living in Kalispell is the small town character, which is derived from the rural lifestyle, close-knit and friendly neighbors and quiet neighborhoods. Within the commercial area of town, a welcoming, pedestrian -scaled environment with local businesses and slow traffic speeds contributes to the unhurried, small town atmosphere. Keep South Kalispell Beautiful Sweeping vistas, plentiful natural open space and local culture all contribute to South Kalispell's beauty. Maintaining these elements for future generations to enjoy is a goal that requires tremendous foresight on the part of local leaders. Enacting policies that preserve open space and views, and require native, drought -tolerant plantings that are appropriate for this region will help achieve this goal. Also, encouraging new construction that is compatible with the town's historic fabric is a great example of how local character contributes to a beautiful city. 44 1 April 2016 IMPROVEMENT PROJECTS AND OPPORTUNITY SITES The following list describes some examples of high-level projects intended to implement the long-term redevelopment vision expressed in this plan. Specific capital projects are categorized into broader improvement categories. These projects are reflective of a series of capital projects that the city might implement unilaterally and in conjunction with private development interests to strengthen the urban fabric of South Kalispell. Figure 28: Improvements Projects and Opportunity Sites Table Improvement Projects or Opportunity Sites Acres Ownership 1. Cemetery Road Project 5 Public 2. New Elementary School 25 School District 5 3. Dog Park 2 to 5 1 Private Owner 4. Community Park 15 1 Private Owner 5. Highway 93 Trail Expansion — Public Right -of -Way 6. "Welcome to Kalispell" Sign — Public Right -of -Way 7. Highway 93 Business Park 7.5 City of Kalispell, 1 Private Owner 8. Aviation Business Park 3 Whitefish Credit Union 9. Park-N-Ride/Traill head 4.4 MT Dept. of Transportation 10. Relocate City Shops for Mixed -Use Development 4.9 City of Kalispell 4 45 SOUTH KALISPELL Urban Renewal Plan 1 Cemetery Rd Project 2 New Elementary School 3 Dog Park 4 Community Park 5 HWY 93 Trail Expansion 6 Welcome to Kalispell Sign 7 Business Park 8 Aviation Business Park 9 Park- N-Ride/Trailhead 10 Mixed -Use Development City of Kalispell South Kalispell Urban Renewal District 0 118 114 112 Mile �N Figure 29: Improvements Projects and Opportunity Sites Map 1; --------------- ----------------- April 2016 Improvement 1. Improve Cemetery Road from Airport Road to Highway 93 Currently constructed to county road profiles, Cemetery Road is more and more undersized forthe increasing amount oftraffic. While not in the confines of this study, we recommend a Traffic Study be conducted for Cemetery Road to determine current traffic counts and projected traffic counts due to the new school programmed at Airport Road north of Cemetery Road. Even without an increase in expected traffic volume, the current roadway is in substandard shape for a major east -west corridor bordering the Figure 30: Cemetery Road Improvement Concept IR BIKE PATH BOULEVARD CURB & GUTTER 4'ASPHALT G' CRUSHED BASE 15' SELECT SUBBASE 60'-T R O.W southern boundary of the Airport. The roadway is narrow and lacks adequate shoulders and pedestrian and bicycle separation. Specifically, there needs to be a new bridge or major pipe arch over the Ashley Creek. The current culvert is undersized and increases the potential for flooding upstream of the crossing. With the eventual addition of an elementary school on the south west side of the Urban Renewal District, additional vehicle and pedestrian traffic will be evident along Cemetery Road. 0 a, i L.1 . C ASPHALT S' CRUSHED BASE 8r SELECT SUB -RASE 8" CRUSHED BASE SHOULDER RURALSTREET ' ` 6 SCALE:Ie&• T-01 W o" MINOR ARTERIAL SCALE. 110" a 1' - 0' CEMETERY ROAD SECTIONS SOUTH KALISPELL URBAN RENEWAL DISTRICT KALISPELL, MONTANA 4 47 SOUTH KALISPELL Urban Renewal Plan Improvement 2. New Elementary School The Kalispell School District has purchased land along Airport Road directly south of the City's wastewater treatment plant. This plan does not propose to develop the new elementary school, but rather intends to proactively identify potential opportunities and challenges, with the assumption that the new school will be constructed within a five-year period. Figure 31: New Elementary School Concept The school district will plan and develop the new school. Figure 31 depicts how a proposed school might fit in the site. Specific concerns include setback of the school from Airport Road and enabling a sense of arrival to the school. Significant components to the site plan include a perimeter road around the school with accessibility to future residential development areas to the south and east. © Main Entrance Q Parking Area Pick-uplDrOp-offkea Play Area Future Road Connection - Gravel Access Road © Foothall Field pSoccer Field pJunior Soccer Field - School Ruilding - 80,000 SF Total Porkog Spacos - 3A4 pmmm� IL ovNEW ELEMENTARY SCHOOL 0 100' 200' 400' i SOUTH KALISPELL URBAN RENEWAL DISTRICT m KALISPELL, MONTANA NORTH REF SCALE: 1" = 200' April 2016 Improvement 3. Dog Park Perhaps one of the most positively discussed recommendations during the course of the public outreach process was the concept of a dog park located within the South Kalispell Urban Renewal District. Dog parks can be an incredibly utilized public gathering space where adults, children, and dogs can recreate. This environment requires thoughtful planning around regulations for public health and welfare. Dog parks should be fenced and should require Figure 32: Dog Park Concept it ■ 'r • FF T f� verification of current veterinary records and licensing. It is also common for an entry fee to be utilized for a dog park that would include a card reader access pass for entry. In the proposed location shown in Figure 32 the dog park is part of the proposed community park. A future cost estimate can be found in Appendix B. DOG PARK SOUTH KALISPELL URBAN RENEWAL DISTRICT KALISPELL, MONTANA L* 0 62.5125' 250' NORTH REF 4 49 SOUTH KALISPELL Urban Renewal Plan Improvement 4. Community Park As part of the overall Urban Renewal District a 15 to 30 acre community Studies show that community revitalization can happen when cities invest park is recommended. Possible locations include a 15-acre parcel south of in parks. Community engagement, economic development, tourism, and Cemetery Road and west of Highway 93. This community park will offer green infrastructure are just a few of the benefits of a healthy community an opportunity to relocate Begg Park and provide a large open space park system. Detailed cost estimates can be found in Appendix B. recreational park with various opportunities for diverse uses such as disc golf, adult exercise classes, painting classes, community gardens, and family or community gatherings. Figure 33: Community Park Concept Community Center Splash Park Pavillion :-` Volleyball Horseshoes Playground 't. Parkin - I � -" ��[ • t-. . ' -� U Covered Basketball Gouris Tennis Courts I4V x w 1 i 1 �v�Sr Q Picnic Area ,� — L1� ' - ` y�• I I!� Fvent Lawn 1 IAmphitheater f •. ,]� ,�1�• '�' 'QM Football Field Dog Park Fvent Lawn 2 Soccer Field �- Pond t Maintenance Skate Park 4T ` a © Trail Fntry/Signage VW 9 Ilk. _Vol ,-. -� Future Road * " � F. ti�L9�e ..r i► .ypdss •� �� .�rr COMMUNITY PARK g ,25 Zsg 500 SOUTH KALISPELL URBAN RENEWAL DISTRICT 0. KALISPELL, MONTANA NORTH REF SCALE: 1" = 250' April 2016 Improvement 5. Highway 93 Trail Expansion As new development occurs along the east side of Highway 93, there is an opportunity to construct a bike tail bordering the property. While slowly this trail linkage is taking shape, it is too slowto be useful, leaving large gaps of unconstructed trail. Recommended as part of the South Kalispell Urban Renewal District Plan is to create a'bridge the gap'wholesale development of a bike trail, uniting the district along its most visible corridor. Figure 34: Trail Expansion Concept HWY 93 4 VARIES 12'-01 ASPHALT TRAIL The city is encouraged to approach Montana Department of Transportation (MDT) to help facilitate the trail system along the right-of-way. As currently envisioned, the bike trail could be equally split between MDT, the City of Kalispell, and private funding sources. The trail construction is approximately 1.5 miles in length connecting it to the northern part of the City's street system. Detailed cost estimates can be found in Appendix B. THROUGH —CONNECTION OF HWY 93 TRAIL SYSTEM ° a 81 '"' SCALE- 118" = 1' - 0" HWY 93 TRAIL SYSTEM SOUTH KALISPELL URBAN RENEWAL DISTRICT KALISPELL. MONTANA 4 51 SOUTH KALISPELL Urban Renewal Plan Improvement & Welcome to Kalispell Located at the intersection of Highway 93 and the Highway 93 Bypass, on the east side of the highway, is a proposed location for an official Welcome to Kalispell entry monument. This feature must make a statement that you are entering the City of Kalispell. As one ofthe more straightforward projects to be proposed in the Plan, this feature will provide visitors to Kalispell firm acknowledgement that they have arrived. City entry monuments are a traditional means to identify a city's location and character. Figure 35: Welcome to Kalispell Sign Concept In 2013 the City undertook a Way Finding Project to develop a common city entrance sign and way finding plan that would tie the various sectors of Kalispell together under one unifying vision. The effort included an extensive public outreach process with the end result being the Welcome to Kalispell sign as seen in Figure 35. Also included was way finding signage for identifying the historic downtown district, museums, Kidsports Complex, parks, and other public facilities. 52 1 April 2016 Improvement 7. Highway 93 Business Park The predominant land use in the South Kalispell Urban Renewal District is a mixture of light industrial and commercial. The majority of the light industrial is individually developed along Highway 93 and as a whole is somewhat random. Still the opportunity exists to create a catalyst project south of Cemetery Road on the west side of Highway 93 fora business park featuring a combination of light industrial and commercial developments. A Business Park featuring development opportunities such as can be developed in phases and become a catalyst for new development types in the renewal district. Figure 36: Highway 93 Business Park Design Example 4 53 SOUTH KALISPELL Urban Renewal Plan Figure 37: Highway 93 Business Park Concept Al rr hiph loft-- — — " I, I s r- I --- - — — —------ --------- I: J J J J J J I I J HWY 93 BUSINESS PARK SOUTH KALISPELL URBAN RENEWAL DISTRICT KALISPELL, MONTANA n � ti Commercial - 16,400 SF •.,�. J Commercial - 15,700 SF Light Industrial-11,200 SF s� Light Industrial - 15,600 SF Q Light Industrial - 8,400 SF v Light Industrial- 10,500 SF e� Future Road p Fntry Feature 4 Parking Area Commemiat - ?2,100 SF •� I ight Industrial - 45,700 SF Total Parking Spares - 2R4 0 50' 100' 200' NORTH REF SCALE: 1" = 100' It April 2016 Improvement 8. Aviation Business Park Should the City elect to keep or expand the General Aviation airport, ancillary development compatible with zoning and aviation uses could greatly improve the sustainability of the Airport. Given the location of the Airport and the existing infrastructure at the Airport (roads, electrical service, gas, water, sewer, fiber optic), the investment for an Aviation Business Park could be highly marketable. These highly flexible warehouse and office space can provide technologically advanced turnkey business opportunities. Figure 38: Aviation Business Park Concept L P, 1 ,..;'e� AVIATION BUSINESS PARK SOUTH KALISPELL URBAN RENEWAL DISTRICT KALISPELL, MONTANA The example shown in Figure 38 doubles as an enhanced entry to the Airport capitalizing on a new entry sign and better definition to — and identification of — the Airport. Should the Airport remain, a concerted effort should be made to embrace the Airport as a part of the South Kalispell urban fabric. The location of the site is in a privately -owned tract of land south of the Hilton Hotel and bordering Highway 93. k ' look �jJ Aviation Repair J Airport Operations Red Fagle Aviation J Kalispell City Airport r Hilton Garden Inn Lion Park © Rosauers Food & Drug Parking Area Nk Fntry Portal - Repair- Ait � s - 10 00 Airport Ope2ticns - 10,000 SF port Total Parking Spares - 162 v3 0 50' 100' 200' NORTH REF SCALE: 1 = 100' 4 55 SOUTH KALISPELL Urban Renewal Plan Improvement 9. Park-N-Ride Trailhead Located off the US Highway 93 Bypass directly south of the Urban Renewal District, a roughly 4.4 acre MDT -owned parcel has potential to be used for a trailhead and to provide needed parking for recreational uses. Being adjacent to Ashley Creekand the regional bicycle trail, this site has potential for various recreational and open space activities should MDT choose to develop or transfer the land. Detailed cost estimates can be found in Appendix B. Figure 39: Park-N-Ride Trailhead Concept } PARK 'N' RIDE TRAILHEAQ SOUTH KALISPELL URBAN RENEWAL DISTRICT KALISPELL. MONTANA A,%HL EY CREEK t M ?H IGH hflEW PART{ lkr� 56 1 April 2016 Improvement 10. Relocate City Shops for Mixed -Use Development The City of Kalispell Shops are located on an approximately 4.9 acre site located on 1 st Avenue West adjacent to Legends Stadium. Relocating the shops to other city -owned land on the Airport property would provide a strategic site for new mixed use development. The value of a land sale could aid in relocation costs. Figure 40: Relocated City Shop Complex Concept • 0 Q RELOCATED CITY SHOP COMPLEX SOUTH KALISPELL URBAN RENEWAL DISTRICT KALISPELL, MONTANA A new 1 st Avenue Commercial District development (Figure 40) could also potentially provide evening and weekend parking for the stadium, which currently has no parking. Q CityO(iicea lb City Shop © City Garage Q Storage Yard 0 Parking Area Q City Vehicle Parking (e� Kalispell City Airport fQ Murdoch's Ranch & Home SupPly City Offices - 15,000 SF City Shop - 6,000 SF City Garage - 14,000 SF Total Parking Spares - 121 0 50' 100' 200' NORTH REF SCALE: 1" = 100' 4 57 SOUTH KALISPELL Urban Renewal Plan Figure 41: 1 stAve Commercial District Concept r i f - 1st AVE COMMERCIAL DISTRICT SOUTH KALISPELL URBAN RENEWAL DISTRICT KALISPELL, MONTANA Live/Work - 12,000 SF Live/Work - 8,700 SF Live/Work - 11,400 SF r ^r } O Live/Work - 10,500 SF Q Live/Work - 6,200 SF Live/Work - 4,400 SF Legends Stadium S r Q r xl © Northwest Ballet School & Co QCattlemen's Bar & Casino © Parking Area ! ive/Work - 53,200 SF Total Parking Spares - 197 IV 1111111i7I..W -.do 0 50' 100' 200' NORTH REF SCALE: 1 = 100' C0 ' April 2016 AIRPORT REDEVELOPMENT OPPORTUNITY Redevelopment of the Airport property is an alternative the City needs to consider if the decision is made not to continue airport operations. Historical planning efforts have mainlyfocused on keeping and maintaining the Airport. These comprehensive plans have laid out deficiencies and improvements required along with the necessary capital required to complete these improvements, but very little planning effort has been spent on what potential redevelopment options could happen at the Airport and what the possibilities might look like. Over the last several decades, extensive development has occurred in and around the Airport reflecting a mixture of land use and zoning such as government facilities, commercial, residential, open space, and industrial. Redevelopment could occur using a number of these development options. The South Kalispell Airport TIF encompasses a total of 230 acres of which the Airport is approximately 71 acres. In perspective to the entire SKURD planning area of 720 acres, the Airport represents about 10% of the overall planning area. Kalispell City Airport is part of this TIF District and as such has been the beneficiary of some of the TIF funds. Some of these funds have been used to reinvest in Airport infrastructure and maintenance. The airport property has extensive infrastructure available for redevelopment purposes including:sewer,water,fiber optic, gas, telephone, and underground power. With a heavy investment in infrastructure already in place, developers may find this property as having a built in incentive and ripe for redevelopment. Through the public outreach process community comments included creating an anchor for the South Kalispell area that would help spur additional economic interest and development. Preliminary discussions with Flathead Valley Fairgrounds staff identified limited expansion opportunities at the current fairground location. As additional growth and changing demands of the community occur, there may be a need for future fairground space. Recognizing that County Commissioners have made a concerted effort to reinvest in existing fairground facilities, and recognizing the difficulty in replacing the existing level of infrastructure, one option for future expansion may be the use of a portion of the redeveloped airport property to support ancillary fairground uses. Current City zoning supports this land use at this location, however, this opportunity would require a significant effort on the City's and County's part to work together to meet these larger regional goals. Figure 42 shows a redevelopment option that includes a new High School as well as County Fairground Facility. Another alternative the City could consider for repurposing the Airport is to convert the property to private land use. The land use plan shown on Figure 43 depicts a possible land -use alternative that includes: light industrial on the southernmost portion of the Airport, transitioning to mixed use and multifamily moving north. An investment of a new commercial collector roadway with cul-de-sacs has been identified within the central north -south core of the west taxi way and provides a central spine access through the site, as well as enhances the development opportunity of the new repurposed airport. If the City chooses to sell the Airport property and allow for redevelopment the City would begin to realize additional tax revenue as the property developed. Redevelopment of this property would create additional jobs and would spur additional economic activity throughout South Kalispell by becoming a destination location. The increase in additional traffic would benefit existing businesses within the urban renewal area, however, the City would need to plan for increased demand on City utilities such as water, sewer, storm water and roadways. A traffic study would be needed to assist with the future development of this area so that careful consideration and planning are done regarding accessibility, walkability, connectivity, infrastructure, and design. Moreover, with the redevelopment option, the City would not have the continued financial commitment of labor, operation and maintenance costs, and capital reinvestment costs associated with the Airport. 4 59 SOUTH KALISPELL Urban Renewal Plan Figure42: Land Use Alternative 1 for Airport Closure Legend • - �QI R,.I—trtl F.nirq—nds Kalispell South Hiph S h-1 R.1--hd City Shop 8uildirW Parking, .� Primary Vehi-1. Cir-htion- ;—� I.S. Hiflh—y!Y.{ - I _ � I A"• I 6 J p / � I i� I Land Use Alternative 1 i i Relocated Fairgrounds ,1_•� ��_�� _______--- _____ Kalispell South High School F` '•'' Relocated City Shops Z '7 IN ;� c.•'- • ., - ,:' - Parking LANDUSE ALTERNATIVE 1 FOR AIRPORT CLOSURE SOUTH KALISPELL URBAN RENEWAL DISTRICT KALISPELL, MONTANA 60 1 April 2016 Figure 43: Land Use Alternative 2 for Airport Closure Legend Multil�ily Ra_ Wr ial Mixed Use Gammerrial f Remg6d-tbi Light 1.1-Ma1 7 Relopted City Shop BuiNinpx e _ Primary VehL-arlar Circulatnn U.S. Highway 91 J� LANDUSE ALTERNATIVE 2 FOR AIRPORT CLOSURE SOUTH KALISPELL URBAN RENEWAL DISTRICT KALISPELL, MONTANA 4 61 SOUTH KALISPELL Urban Renewal Plan [Figure 44: Concept for a New T-Hangar Complex] 1 f AIRPORT HANGERS SOUTH KALISPELL URBAN RENEWAL DISTRICT KALISPELL, MONTANA J 18 "T" Unit Hangers J Asphalt Apron J Kalispell City Airport "T" Hangers - 2,5, 000 SF April 2016 TAX INCREMENT FINANCING South Kalispell is the beneficiary of one of the City's Tax Increment Finance Districts (TIF's). The Kalispell City Airport/Athletic Complex and Redevelopment Plan Analysis was originally adopted by Ordinance No. 1242 in July, 1996 setting the basis for the subsequent approval of a Tax Increment Financing District. Subsequently, Ordinance No. 1260 amended Ordinance 1242 and established January 1, 1996 as the base year for the TIF. The primary goals associated with the original 1996 Urban Renewal Plan and use of TIF monies still remain intact. Specific goals include: • Minimize hazards to navigation • Develop the Airport in accordance with an airport layout plan • Increase development opportunities on nearby properties • Promote compatible land use in and around the Airport • Establish funding mechanisms for airport operations • Establish a priority schedule for plan implementation Since the adoption of the 1996 Urban Renewal Plan and TIF, several of the above goals have been addressed. Resolution 4978 proposed to use tax increment finance district monies in the amount of $1,900,000 for capital projects at the Airport using tax increment urban renewal bonds. These improvements included: purchase of land and improvements currently owned by Red Eagle Aviation; construction of the northwest ramp and taxiways; construction of the northwest utilities; construction of an internal vehicle access road; purchase and installation of automatic vehicle security gate. These projects were referred to as Phase I of the Airport Master Plan. Tax Increment Financing Projects Ordinance No. 1541 in 2005, authorized a $2,000,000 urban renewal revenue bond for the Airport projects listed in Resolution 4978 providing a funding mechanism to complete the projects. Resolution No. 5602 adopted in 2012 authorized the purchase of a permanent easement and a 40 year lease on State of Montana School Trust Lands annexing the land in to the City and allowing for the relocation of youth athletic fields in the amount of $2,260,496.00. Minimizing Hazards to Navigation Ordinance No. 1745 adopted in October of 2014, focused on addressing many of the navigational safety issues, including the establishment of airport land use zones, height restrictions, airport runway protection zones, use restrictions, administrative procedures, airport influence notification zones, and enforcement. In conjunction with Ordinance No. 1745, the City completed and adopted a 2012 Master Plan for the Airport that included an Airport Layout Plan and a variety of alternatives for FAA and Non -FAA compliance upgrades. The failed referendum in 2013 precluded the City from accepting FAA funding to bring the Airport into full FAA B2 Standard requirements and subsequently has left the Airport again with an undecided future. The current TIF expires July 1, 2020. It is recommended that the City look into a new and expanded TIF district within the larger South Kalispell Urban Renewal Area as a mechanism for future funding. 4 63 SOUTH KALISPELL Urban Renewal Plan INCREASING ECONOMIC DEVELOPMENT OPPORTUNITIES There has been an increase in development opportunities since the adoption of the 1996 Urban Renewal Plan. The relocation of the ball fields to KidsSports Complex allowed for the redevelopment of some of the Airport's commercial properties. Figure 45: 1990 and 2015 Aerial Imagery Land developed between 1990 and 2015 New development opportunities have included commercial development such as Murdochs, Hilton Garden Inn, Rosauers, and Penco. Located directly on Highway 93 these improvements can spur additional economic development within the planning area. 64 1 April 2016 FINANCING METHODS Funding for capital improvement projects has always been a complex and competitive process. Needs always exceed available funds and priorities must be set. It is important that the City leverage its funding using creative grants, funding leverage, and public/private partnerships to help implement the capital improvement projects in the Plan. The projects listed in the Plan have been identified as the higher priority projects supported by prior planning documents, growth policies, public input, and best management planning practices. The goal of the project list is to help spur economic development using smart growth planning policies thereby increasing the livability of the community. Tax Increment Financing Tax Increment Financing Districts Title 7, Chapter 15, Parts 42 and 43, Montana Code Annotated (MCA), are a way for government agencies to collect revenue and facilitate needed improvements within a specifically designated area. The Montana Urban Renewal Law requires the project to be in an area of blight and that the urban renewal project is done in conjunction with an urban renewal plan. Improving social welfare, public safety, and public health by reinvesting into urban renewal projects are key components in creating a successfulTIF District.TIFD's are 15 yearfinancing tools and can be leveraged with revenue bond financing. http://www.leci.mt.ciov/bills/mca toc/7 15.htm Industrial Development Bonds Industrial Development Bonds (IDB's), Title 90, Chapter 5, Part 1 MCA provide an additional financing tool, although, not as commonly applied and TIFD's. IBD's can promote industrial development without an undue burden to the tax payer. http://www.leci.mt.ciov/bills/mca toc/90 5.htm General Obligation Bonds General Obligation Bonds,Title 7, Chapter 15 Parts 4301 &4302 MCA.These bonds can be issued for water and sewer projects as well as urban renewal projects and require voter approval. http://www.leci.mt.clov/bills/mca toc/7 15 43.htm Private Financing Private Financing can contribute significant capital infrastructure improvements as properties develop. The'growth pays for growth' policy allows Cities to require new development to mitigate impacts to schools, transportation systems, water, wastewater services, and environmental impacts. Creating a consistent city standard for development within the Urban Planning Area will provide opportunities as new properties develop. Public/Private Partnerships Public/Private Partnerships are another innovative way to leverage capital reinvestment dollars. Developer agreements between public entities and private development to upgrade, or further improvements can benefit both the economy and the livability of the community. State of Montana Montana State Community Transportation Enhancement Grant is another area of capital funding that is designed to increase multi -modal transpor- tation methods and community walkability. http://www.citiesthatwork.com/mdt/mi/ftools.shtml Community Development Block Grants Community Development Block Grants (CDBG), administered by the State of Montana, can be of assistance for communities that are focusing improvements to benefit low to moderate incomes, create jobs, prevent blight, redevelopment opportunities, and/or create newjobs. CDBG funds again are best utilized in an urban renewal area and can be combined in conjunction with other funding tools. http://comdev.mt.gov/CDBG/cdbgpIanninggrants.mcpx 4 65 SOUTH KALISPELL Urban Renewal Plan Federal Grant Administration Federal grants can sometimes be leveraged with state grants and local funds. Federal grants come with a number of grant assurances that can make the application and administration of the grants somewhat cumbersome but do provide a variety of opportunities for improvements. Brownfield redevelopment, transportation, bike/pedestrian trail facilities are good applications for federal granting sources. The Federal Aviation Administration (FAA) is a funding source for general aviation airports. The FAA funds airports throughout the state to assist with keeping them in compliance with FAA safety regulations and standards. General aviation airports are also able to receive annual Airport Improvement Program (AIP) funding to assist with a programmed capital improvement list. http://www.faa.gov/about/office org/headquarters offices/ato/service units/ acquisition/grants/?CFID=160792860&CFTOKEN=d322f3d7710aa530-53B06F86- B9A5-BBAB-6E4CB7E06DAD7752&isessionid=97F925109B87911252DD761738 F7DBBA.www US Department of Agriculture offers rural business opportunity grant program, rural economic development loan and grant and community facilities grants. http://www.usda.gov/wps/portal/usda/usdahome?navid=GRANTS LOANS US Department of Commerce invest in Strong Cities, Strong Communities Visioning Challenge as well as planning and local technical assistance programs. http://search.commerce.gov/search?querLgrants&affiliate=commerce. qov&s u bm it.x=0&su b m it.y=0 The US Environmental Protection Agency supports the Brownsfields Assessment Program; Brownfield Economic Development Initiative; Brownfields and Lands Revitalization; building blocks for sustain communities; smart growth technical assistance programs. http://www.epa.ciov/brownfields/ US Department of Health and Human Services offers the Community Transportation Grants — Small Communities Program. http://www.hhs.ciov/cirants/index.html US Department of Housing and Urban Development assists with integrated planning and investment planning grants. http://www.usa.ciov/directory/federal/department-of-housing-and-urban- development.shtml Local Funding Local Funding is always a mechanism to complete capital improvement projects. Local funding can be generated through impact fees, tax increment financing districts, resort and local option taxes, urban transportation districts, parking benefit districts, and transportation utility fees. Local funding is commonly used more for match requirements of other funding agencies (grant sources) versus fully funding capital projects. City/County Partnerships City/County partnerships via Inter -Local Agreements are sometimes used for capital projects that may cross jurisdictional boundaries or have significant benefit or impact to each agency. Partnerships can include water/wastewater utilities, transportation, bike/pedestrian projects, as well as others. 66 1 April 2016 BROWNFIELDS The term Brownfield Site applies to real property that maybe compromised and unable to develop due to the perceived or real presence of a hazardous substance, pollutant, or contaminant. If eligible, federal funding may be available to conduct an environmental assessment which identifies the contaminant and extent of contamination on these sites. The City of Kalispell has been proactive in creating a successful Brownfields program and in the past has been awarded Brownfield funding for community wide assessments and clean up. There are potential properties within South Kalispell that may benefit from this program. The City is a willing partner in this process and can work with concerned property owners or developers that may be interested in this program. Reinvesting in Brownfield properties is another way to spur economic vitality. Developers are more interested in reinvestment and community members are more apt to spend their time and resources within an area that has been redeveloped with Brownfield dollars. TIFD funding can also be utilized to leverage Brownfield development projects. Figure 46: Starbucks Brown fields Project '. During construction i6 L-W* -Ll i T �1 n 46 It is recommended that the City encourage Brownfield applications within the South Kalispell Urban Renewal District and encourage the use of TIF funding as an opportunity for Brownfield reinvestment projects. The site below in Figure 46, formerly a service station and a parking lot, was redeveloped into a Starbucks near the Kalispell Center Mall using Brownfield redevelopment funds. r9 -4 IOUTH KALISPELL Urban Renewal Plan APPENDIX A AIRPORT ALTERNATIVES DETAILED FINANCIAL TABLES AND PRO-FORMAS Alternative 1 Pro Forma Revenues Comercial Fees Tie Down Fees Hangar Leases Hangar Site Leases FRO Lease Ground Leases Fuel Tax FAA Airport Improvement Program Contribution from Local Gov. Fund Investment Earnings Misc. Earnings Expenses Salaries - Full Time Salaries - Seasonal Health Insurance Retirement Travel, Dues, and Training Office Supplies Electricity Telephone Equipment Rental CS-Labor+Materials CS -Snow CS -Legal Equipment Mantenance Property Insurance Maintenance by Public Works Administrative Transfer Data Processing Transfer Depreciation Construction -In -Progress Net Revenue (Loss) - Accounting Net Revenue (Loss) - Cash Flow 2015 2016 2017 2018 2019 2020 $ 13,400 1% 14% $ 14,800 10% 16% $ 16,300 100/0 13% $ 18,000 10% 13% $ 19,800 10% 13% $ 21,800 10% 13% $ 600 -22% 1% $ 800 33% 1°/ $ 800 0% 1% $ 800 0% 1% $ 800 0% 1% $ 800 0% 00/ $ 12,000 4% 13% $ 11,600 -3% 13% $ 11,500 -1% 90/0 $ 17,600 53% 13% $ 24,700 40% 16% $ 35,260 43% 21% $ 24,100 38% 26% $ 18,800 -22% 21% $ 21,420 14% 17% $ 26,360 23% 19% $ 29,140 11% 19% $ 32,300 11% 19% $ 17,900 0% 19% $ 18,300 2% 20% $ 18,600 2% 15% $ 18,900 2% 14% $ 19,200 2% 13% $ 19,600 2% 11% $ 16,600 37% 18% $ 17,000 2% 19% $ 47,400 179% 38% $ 48,800 3% 35% $ 50,200 3% 33% $ 51,600 3% 30% $ 4,800 -15% 5% $ 5,700 19% 6% $ 5,700 0% 5% $ 5,700 0% 4% $ 5,700 0% 4% $ 5,700 0% 3% $ - 0% 00/ $ - 0% 00/ $ - 0% 00/ $ - 0% 00/ $ - 0% 00/ $ - 0% 00/ $ - 0% 00/ $ - 0% 00/ $ - 0% 00/ $ - 0% 00/ $ - 0% 00/ $ - 0% 00/ $ 900 39% 1 % $ 900 0% 1 % $ 900 0% 1 % $ 900 0% 1 % $ 900 0% 1 % $ 900 0% 1 % $ 2,900 0% 3% $ 2,900 0% 3% $ 2,900 0% 2% $ 2,900 0% 2% $ 2,900 0% 2% $ 2,900 0% 2% $ - -100% 0% $ 55,000 0% 24% $ 56,000 2% 99/b $ 57,000 2% 10% $ 58,000 2% 99/b $ 59,000 2% 18% $ 1,600 50% 1°/ $ 1,700 6% 1°/ $ 1,800 6% 00/0 $ 2,000 11% 0% $ 2,200 10% 0% $ 2,500 14% 1°/ $ - -100% 0% $ 10,000 0% 4% $ 12,500 25% 2% $ 15,600 25% 3% $ 19,500 25% 3% $ 24,400 25% 7% $ -100% 0% $ 4,000 0% 2% $ 4,500 13% 1°/ $ 5,000 11% 1°/ $ 5,500 10% 1°/ $ 6,200 13% 2% $ -100% 0% $ 800 0% 00/ $ 800 0% 00/0 $ 800 0% 00/ $ 800 0% 00/ $ 900 13% 0% $ -100% 0% $ 500 0% 00/ $ 1,300 160% 00/0 $ 1,400 8% 0% $ 1,600 14% 0% $ 1,800 13% 1°/ $ 1,900 3% 1% $ 2,100 11% 1°/ $ 2,300 100/0 0% $ 2,500 9% 0% $ 2,700 8% 0% $ 3,000 11% 1°/ $ - -100% 0% $ 800 0% 00/ $ 800 0% 00/ $ 800 0% 00/ $ 800 0% 00/ $ 800 0% 00/ $ 800 -46% 0% $ 1,800 125% 1°/ $ 1,900 6% 00/ $ 2,100 11% 0% $ 2,400 14% 0% $ 2,700 13% 1°/ $ 36,000 89% 20% $ 8,500 -76% 4% $ 9,000 6% 1°/ $ 9,800 9% 2% $ 10,800 10% 2% $ 12,200 13% 40/ $ 5,395 6% 3% $ 5,500 2% 2% $ 5,800 5% 1°/ $ 6,300 9% 1°/ $ 7,000 11% 1°/ $ 7,900 13% 2% $ 21,300 526% 12% $ 21,700 2% 10% $ 22,800 5% 4% $ 24,600 8% 4% $ 27,000 10% 40/ $ 30,300 12% 9% $ 1,500 434% 1% $ 7,900 427% 3% $ 8,300 5% 1% $ 9,000 8% 2% $ 9,900 10% 1°/ $ 11,100 12% 3% $ 8,600 -31% 5% $ 6,700 -22% 3% $ 7,100 6% 1% $ 7,700 8% 1°/ $ 8,500 10% 1°/ $ 9,600 13% 3% $ - 0% 00/0 $ - 0% 00/ $ - 0% 00/0 $ - 0% 00/ $ - 0% 00/ $ - 0% 00/ $ 1,500 -65% 1% $ 3,000 100% 1°/ $ 2,900 -3% 00/0 $ 2,300 -21% 0% $ 1,800 -22% 0% $ 1,500 -17% 0% $ 5,500 51% 3% $ 3,800 -31% 2% $ 5,800 53% 1°/ $ 7,300 26% 1°/ $ 9,000 23% 1°/ $ 11,400 27% 3% $ 95,100 -1% 53% $ 94,000 -1% 41% $ 91,900 -2% 15% $ 91,900 0% 16% $ 90,800 -1% 14% $ 85,700 -6% 26% $ - 0% 00/0 $ - 0% 00/ $ 386,794 0% 62% $ 311,242 -20% 56% $ 402,286 29% 610/ $ 56,000 -86% 17% 000 00 -.a Operating Revenues (+) 93,200 90,800 125,520 139,960 153,340 170,860 Operating Expenses (Except Depreciation) (-) 84,095 133,800 143,600 154,200 167,500 185,300 Capital Expenses (-) 0 0 386,794 311,242 402,286 56,000 Surplus (Shortfall) 9,105 (43,000) (404,874) (325,482) (416,446) (70,440) April 2016 Alternative 2 Pro Forma Revenues Comercial Fees Tie Down Fees Hangar Leases Hangar Site Leases FBO Lease Ground Leases Fuel Tax FAA Airport Improvement Program Contribution from Local Gov. Fund Investment Earnings Misc. Earnings Expenses Salaries - Full Time Salaries -Seasonal Health Insurance Retirement Travel Dues and Training Office Supplies Electricity Telephone Equipment Rental CS-Labor+Materials CS -Snow CS -Legal Equipment Mantenance Property Insurance Maintenance by Public Works Administrative Transfer Data Processing Transfer Depreciation Constructi on -I n-Progress Closure Costs Net Revenue (Loss) - Accounting Net Revenue (Loss) - Cash Flow 00 2015 1 2016 1 2017 1 2018 1 2019 1 00 2020 $ 13,400 1% 14% $ 14,800 10% 18% $ 16,300 10% 2% $ 17,900 10% 1% $ 19,700 10% 1% $ - -100% 0% $ 600 -22% 1% $ 450 -25% 1% $ 330 -27% 0% $ 90 -73% 0% $ - -100% 0% $ - 0% 0% $ 12,000 49/ 13% $ 9,000 -25% 11% $ 6,600 -27% 1% $ 1,800 -73% 0% $ - -100% 0% $ - 0% 0% $ 24,100 38% 26% $ 18,075 -25% 22% $ 13,255 -27% 2% $ 3,615 -73% 0% $ - -100% 0% $ - 0% 0% $ 17,900 0% 19% $ 17,900 0% 22% $ 17,900 0% 2% $ - -100% 0% $ - 0% 0% $ - 0% 0% $ 16,600 37% 18% $ 12,450 -25% 15% $ 9,130 -27% 1% $ 2,490 -73% 0% $ - -100% 0% $ - 0% 0% $ 4,800 -15% 5% $ 5,700 19% 7% $ 5,700 0% 1% $ 5,700 0% 0% $ - -100% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ 900 39% 1% $ 900 0% 1% $ 900 0% 0% $ 900 0% 0% $ - -100% 0% $ - 0% 0% $ 2,900 0% 3% $ 2,900 0% 4% $ 759,450 26088% 92% $ 1,258,100 66% 97% $ 1,445,750 15% 99% $1,302,500 -10% 100% $ - -100% 0% •00 $ 45,000 0% 19% $ 46,000 2% 4% 00 $ 47,000 A % 2% of Exp 3% $ 1,391,100 -100% 0% 0% 0% $ 1,600 509/. 1% $ 1,700 6% 1% $ 1,800 6% 0% $ 2,000 11% 0% $ - -100% 0% $ - 0% 0% $ - -100% 0% $ 8,200 0% 3% $ 10,300 26% 1% $ 12,900 25% 1% $ - -100% 0% $ - 0% 0% $ - -100% 0% $ 3,300 0% 1% $ 3,700 12% 0% $ 4,100 11% 0% $ - -100% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - -100% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - -100% 0% $ 500 0% 0% $ 800 609/. 0% $ 400 -509/. 0% $ - -100% 0% $ - 0% 0% $ 1,900 3% 1% $ 2,100 11% 1% $ 2,300 lo% 0% $ 2,500 9% 0% $ - -100% 0% $ - 0% 0% $ - -100% 0% $ 800 0% 0% $ 800 0% 0% $ 800 0% 0% $ - -100% 0% $ - 0% 0% $ 800 -46% 0% $ 1,800 125% 1% $ 1,500 -17% 0% $ 1,000 -33% 0% $ 400 -609/. 0% $ - -100% 0% $ 36,000 89% 209/. $ 36,600 2% 15% $ 29,700 -19% 3% $ 18,300 -38% 1% $ 5,800 -68% 0% $ - -100% 0% $ 5,395 6% 3% $ 5,500 2% 2% $ 4,500 -18% 0% $ 2,800 -38% 0% $ - -100% 0% $ - 0% 0% $ 21,300 526% 12% $ 21,700 2% 9% $ 28,700 32% 3% $ 34,500 209/. 2% $ 31,100 -10% 2% $ 28,000 -10% 49/ $ 1,500 434% 1% $ 7,900 427% 3% $ 6,400 -19% 1% $ 5,500 -149/ 0% $ 4,200 -249/ 0% $ - -100% 0% $ 8,600 -31% 5% $ 6,700 -22% 3% $ 6,900 3% 1% $ 7,500 9% 0% $ 7,500 0% 1% $ - -100% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ 1,500 -65% 1% $ 2,700 809/. 1% $ 19,100 607% 2% $ 21,200 11% 1% $ 7,400 -65% 1% $ 6,600 -11% 1% $ 5,500 51% 3% $ 3,400 -38% 1% $ 16,600 388% 2% $ 25,900 56% 2% $ 1,500 -949/ 09/. $ 1,400 -7% 0% $ 95,100 -1% 53% $ 94,000 -1% 39% $ 92,900 -1% 9% $ 91,900 -1% 6% $ 90,800 -1% 7% $ - -100% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ 5,000 0% 0% $ - -100% 0% $ - 0% 0% $ - 0% 0% $ 756,550 (106,085) 0% 74% $ 1,255,200 00 66% 82% $ 1,237,400 -1% 89% $ 649,850 -47% 95% Alternative 2 Operating Revenues (+) 2015 INE 93,200 20 82,175 829,565 0181 1,290,595 1,465,450 1 1 1,302,500 Operating Expenses (-) 84,095 147,900 179,100 186,400 57,900 36,000 Capital Expenses (-) 0 0 756,550 1,255,200 1,242,400 649,850 Surplus (Shortfall) 9,105 (65,725) (106,085) (151,005) 165,150 616,650 SOUTH KALISPELL Urban Renewal Plan ALTERNATIVE 3 Alternative 3- FAA Compliant Airport in Current Runway Alignment Another alternative suggested during the public outreach process was one that would re-engage the FAA in the Airport's future. This proposal would involve using FAA funding for improvement projects to bring the Airport into compliance with FAA design standards. The Airport will remain in its existing location, with the same runway configuration and alignment. The feasibility and success of Alternative 3 depends on FAA willingness to fund the necessary improvement projects. In the early stages of this project, FAA staff at the Helena Airport District Office were contacted about the possibility of re -involvement with the Kalispell City Airport. The FAA said that it is still possible for the City to become eligible for and receive FAA funds. A re -validation analysis and discussion would be required between the City and the FAA but the possibility is not off the table. Alternative 3 will implement the airfield development plan "Site 1 — Option D"from the 2012 Final Airport Master Plan Update. A graphic of the project components is located at the end of this document. Project components included in the 2012 Final Airport Master Plan Update are as follows: • Airport facilities constructed to Airport Reference Code (ARC) B-I design standards (60 feet runway width, 150 feet separation between runway and taxiway, 25 feet wide taxiways). • Runway reconstructed to its current length of 3,700 feet but could be extended to a length of 4,300 feet. • No shift or offset of runway centerline. • No rotation, orientation remains 13/31. • Requires the relocation of five hangars and three shops on Airport property. • Requires the full or partial acquisition of approximately 16 land parcels (no residential). Alternative 3 assumes that the City and FAA investment will make the Airport an attractive location for private developers, which will increase airport ground lease revenue.The City will not develop hangars because of the cost, slow payback period, and low rate of return (and potential loss), but instead continue to lease property to private developers as in Alternative 1. It is expected that private developers will have lower overhead costs and be able to more efficiently and flexibly manage leases, set lease rates, and keep hangars full while returning a profit. Considering that Alternative 3 involves FAA funds, there are political concerns which are not as pronounced in Alternatives 1 and 2. The City will have to determine if accepting FAA funds (in a more limited role than the previous The Airport Reference Code (ARC) has two components relating to theAirport design aircraft. The first component, depicted by a letter, is the aircraft approach category and relates to aircraft approach speed (operational characteristic). The second component, depicted by a Roman numeral, is the airplane design group and relates to airplane wingspan or tail height (physical characteristics), whicheveris the most restrictive. Master Plan project) and operating in accordance with FAA grant obligations is something that would be acceptable to the public. The general public voted against this approach in 2013; therefore, the City will need to provide additional documentation that supports this approach. Fiscal Impacts: Although 90% of this alternative would be funded through FAA Airport Improvement Program grant funds, the City would still be responsible for the "matching" 10%. Some of these funds could come from the TIF (for development projects) while maintenance projects are ineligible for TIF funding. Additional expenses would likely be incurred for a coordination/planning effort (updated Airport Layout Plan) to determine a course of action with FAA. If the Airport becomes eligible for FAA funding, it will receive $150,000 per year in FAA Entitlement Funds to support capital improvement projects. The FAA will fund 90% of major future capital projects, such as a runway reconstruction or overlay, with these entitlement funds, and will provide additional "discretionary" funds when deemed appropriate and necessary. Discretionaryfunds are only provided when available, and when entitlement funds are fully used. Capital expenses are lower than Alternatives 1 and 2 because the FAA would fund the majority of capital projects 13. A five year pro -forma analysis, capital costs, and detailed revenues and expenses in this Appendix. 70 1 April 2016 A DCFA for Alternative 3 provides insight on NPV of five year costs and revenues, and expected long-term financial gain. This DCFA uses the same 7% discount rate as Alternatives 1 and 2 and the same 2% growth rate of positive cash flows as Alternative 1. Figure A 1: Alternative 3 Revenue and Expense Summary 020 Operating Revenues (+) 98,800 228,020 290,460 223,340 220,860 Operating Expenses (Except Depreciation) () 142,400 166,700 229,100 173,300 189,500 Capital Expenses (-) 102,294 118,624 110,119 106,000 Surplus (Shortfall) (43,600) (40,974) (57,264) (60,079) (74,640) As with Alternative 1, the long-term cash flows are highly variable depending on what discount rate is used and future valuation is contingent on private investment in hangars. Using the 7% discount rate for purposes of comparison, Alternative 3 is valued at $400,000 in 2015 dollars (see Figure All). The NPV of construction investments is $400,000 in 2015 dollars; and Alternative 3 produces an even return on investment. FigureA2: Alternative 3 Comparison to Baseline Alternative 3 repairs the airfield and maintains it similar to Alternative 1, the major difference between these two alternatives is that the City must bear more of the capital costs in Alternative 1 due to the absence of FAA funding and because projects are ineligible forTIF funding. For this reason, the scale of improvement projects is less in Alternative 1 than in Alternative 3. A comparison is presented in Figure A2. FigureA3: Alternative 3 Capital Costs and Resulting Revenues 3 Revenues T-Hangar Lease Revenue 2016Alternative 0 0 0: 6,000 2019 13,200 2020 23,760 Total 42,960 Hangar Site Leases 1,200 4,120 8,760 11,840 15,000 40,920 Ground Leases 0 30,000 31,000 32,000 33,000 126,000 TIF Funds for Capital Projects 8,000 102,500 150,500 70,000 50,000 381,000 Capital Expenses Update ALP 8,000 0 0 0 0 8,000 Yes Land Purchase, Obstruction Removal 0 87,500 87,500 0 0 175,000 Yes Environmental Permitting 0 15,000 15,000 0 0 30,000 Yes Design 0 0 48,000 0 0 48,000 North Fuel Island Overlay 0 0 1,428 0 0 1,428 Main Hangar Taxiway Overlay 0 0 4,145 0 0 4,145 0 Airport Road Overlay 0 0 0 0 56,000 56,000 No Road and Parking Lot Crack Seal 0 14,794 0 0 0 14,794 No Ryan Lane Overlay 0 0 0 40,119 0 40,119 No West Taxiway Overlay 0 0 25,552 0 0 25,552 Runway Rehabilitation 0 0 0 70,000 0 70,000 East Taxiway Reconstruction 0 0 0 0 50,000 50,000 k-upuur Wsls unit ure euyiure wr rfifi runuiny ure ❑sreu ur t uio ur ureu cupuur cvsu. a rs ussurneu nature FAA will fund eligible improvements at 90%. Aviation Impacts: This alternative would provide the best outcome from an aviation perspective. Anything that moves the Airport closer to full compliance with FAA standards is beneficial. Community pacts: Alternative 3 continues to provide the community with an aviation facility, and takes advantage of FAA funding to reduce the local share of improvement projects. Revenue -producing improvements, including hangars, are not eligible for FAA funding; however, these projects can be seen as an investment to make the Airport more financially sustainable in the future, and most of the expense of building these facilities will be borne by the private sector. Short-term community impacts include construction jobs and material sales that support construction; and longer term impacts include less reliance by the Airport on the City's general fund, which frees up money for other City programs. 4 71 SOUTH KALISPELL Urban Renewal Plan Findings for Alternative 3 - Request FAA funds for Airport Improvements in Current Runway Alignment — If the City has the political willingness to pursue Alternative 3, it would be the recommended course of action. The City could choose to proceed with this alternative, and if an agreement cannot be reached with the FAA, the City can revert to Alternative 1. The downside of this approach would be the potential for more time to pass without a clear direction for the Airport, and completion of high priority maintenance projects. Alternative 3 — Action Plan Should the City decide to move forward with Alternative 3, the following steps should be taken: 1 City representatives organize and attend a meeting with FAA representatives to discuss potential for project. 2. With FAA agreement, prepare an updated ALP and CIP. 3. Coordinate with FAA on timing on process moving forward. Alternative Capital Costs 5 Year Cash Flows Ongoing Income DCFA Valuation Benefits Drawbacks • Provides safe, efficient airport 0 Loss of flexibility if closure sought in • Lower capital costs due to FAA long-term funds 0 More substantial capital Alternative 3 ($200,000) $400,000 $400,000 0 Ongoing FAA entitlement funding improvements needed to meet FAA $400,000 Able to use TIF funds for some standards projects 0 Contrary to voter decision • City and FAA investment may 0 Airport will continue to lose money inspire private investment April 2016 Alternative 3 Pro Forma Revenues Comercial Fees Tie Down Fees Hangar Leases Hangar Site Leases FBO Lease Ground Leases Fuel Tax Contribution from Local/Federal Gov. Fund Investment Earnings Misc. Earnings Expenses Salaries- Full Time Salaries - Seasonal Health Insurance Retirement Travel, Dues, and Training Office Supplies Electricity Telephone Equipment Rental CS-Labor4Materlals CS -Snow CS -Legal Equipment Mantenance Property Insurance Maintenance by Public Works Administrative Transfer Data Processing Transfer Depreciation Constructi on -I n-Progress Acquisition Costs Net Revenue (Loss) - Accounting Net Revenue (Loss) - Cash Flow 2015 1 2016 1 2017 1 2018 1 2019 1 2020 $ 13,400 1% 14% $ 14,800 100/b 15% $ 16,300 100/o 7% $ 18,000 100/8 6% $ 19,800 100/o 9% $ 21,800 100/o 100/o $ 600 -22% 1% $ 800 33% 1% $ 800 00/a 0°/ $ 800 0% 0% $ 800 0% 0% $ 800 0% 0% $ 12,000 4% 13% $ 11,600 -3% 12% $ 11,500 -1% 5% $ 17,600 53% 6% $ 24,700 40% 110/ $ 35,260 43% 16% $ 24,100 38% 260/ $ 18,800 -22% 19% $ 21,420 14% 90/ $ 26,360 23% 90/a $ 29,140 11% 13% $ 32,300 11% 15% $ 17,900 0% 190/ $ 18,300 2% 190/ $ 18,6W 2% 8% $ 18,900 2% 7% $ 19,200 2% 90/ $ 19,600 2% 9% $ 16,6W 37% 180/ $ 17,000 2% 17% $ 47,400 179% 21% $ 48,800 3% 17% $ 5Q200 3% 22% $ 51,600 3% 23% $ 4,800 -15% 5% $ 5,700 19% 60/ $ 5,700 0% 2% $ 5,700 0% 2% $ 5,700 0% 3% $ 5,700 0% 3% $ - 0% 0% 0% 00/ $ - 0% 00/ $ - 0% 0% $ - 0% 00/ $ - 0% 0% $ 900 39% 1% $ 900 0% 1% $ 900 0% 00/ $ 900 0% 0% $ 900 0% 00/ $ 900 0% 00/ $ 2,900 0% 3% $ 10,900 276% 11% $ 105,400 867% 460/ $ 153,400 46% 53% $ 72,900 -52% 33% $ 52,900 -27% 24% 00' of 60: ' of , ' of 00 ' of $ - -100% 00%$ 55,000 0% 23% $ 56,000 2% 160/ $ 57,000 2% 13% $ 58,000 2% 15% $ 59,000 2% 177 $ 1,600 50% 1% $ 1,700 6% 1% $ 1,800 6% 0% $ 2,000 11% 0% $ 2,200 100/b 1% $ 2,500 14% 1% $ - -100% 0% $ 10,000 0% 4% $ 12,500 25% 3% $ 15,600 25% 4% $ 19,500 25% 5% $ 24,400 25% 6% $ -100% 0% $ 4,000 0% 2% $ 4,500 13% 1% $ 5,000 11% 1% $ 5,500 100/b 1% $ 6,200 13% 2% $ -100% 00/ $ 800 0% 0% $ 800 0% 0% $ 800 0% 0% $ 800 0% 00/ $ 900 13% 0% $ -100% 00/ $ 600 0% 0% $ 2,300 283% 1% $ 3,000 30% 1% $ 2,300 -23% 1% $ 2,300 0% 1% $ 1,900 3% 1% $ 2,100 11% 1% $ 2,300 100/b 1% $ 2,500 9% 1% $ 2,700 8% 1% $ 3,000 11% 1% $ - -100% 0% $ 800 0% 00/ $ 800 0% 0% $ 800 0% 0% $ 800 0% 00/ $ 800 0% 00/a $ 800 -46% 0% $ 1,800 125% 1% $ 1,900 6% 1% $ 2,100 11% 0% $ 2,400 14% 1% $ 2,700 13% 1% $ 36,000 89% 200/ $ 16,500 -54% 7% $ 24,000 45% 7% $ 72,800 203% 17% $ IQ800 -85% 3% $ 12,200 13% 3% $ 5,395 6% 3% $ 5,500 2% 2% $ 5,800 5% 2% $ 6,300 9% 1% $ 7,000 11% 2% $ 7,900 13% 2% $ 21,300 526% 12% $ 21,700 2% 90/ $ 22,800 5% 60/ $ 24,600 8% 60/. $ 27,000 100/b 7% $ 3Q300 12% 8% $ 1,500 434% 1% $ 7,900 427% 3% $ 8,300 5% 2% $ 9,000 8% 2% $ 9,900 100/b 3% $ 11,100 12% 3% $ 8,6W -31% 5% $ 6,700 -22% 3% $ 7,100 6% 2% $ 7,700 8% 2% $ 8,500 100/b 2% $ 9,600 13% 3% $ - 0% 00/ $ - 0% 00/ $ - 0% 00/ $ - 0% 00/ $ - 0% 00/ $ - 0% 0% $ 1,500 -65% 1% $ 3,200 113% 1% $ 5,300 66% 1% $ 4,800 -9% 1% $ 2,700 -44% 1% $ 1,900 -30% 0% $ 5,500 51% 3% $ 4,100 -25% 2% $ IQ500 156% 3% $ 15,100 44% 3% $ 13,200 -13% 4% $ 14,700 11% 4% $ 95,100 -1% 53% $ 94,000 -1% 400/ $ 91,900 -2% 25% $ 91,900 0% 21% $ 90,800 -1% 240/ $ 85,700 -6% 22% $ - 0% 00/ $ - 0% 00/ $ 14,794 0% 4% $ 31,124 110% 7% $ 11Q119 254% 290/ $ 106,000 -4% 280/ $ - 0% 00/ $ - 0% 00/a $ 87,500 0% 240/a $ 87,500 0% 200/ $ - -100% 0% $ - 00/. 00/ .00$(16Q340) Alternative 3 2015 2016 2017 20181 1 1 Operating Revenues (+) 93,200 98,800 228,020 290,460 223,340 220,860 Operating Expenses (Except Depreciation) (-) 84,095 142,400 166,700 229,100 173,300 189,500 Capital Expenses (-) - - 102,294 118,624 110,119 106,000 Surplus (Shortfall) 9,105 (43,600) (40,974) (57,264) (60,079) (74,640) 4 73 SOUTH KALISPELL Urban Renewal Plan Kalispell City Airport - Existing Lease Buyout Summary City Lease Number Lease Name payment Lease Term Lease Rate Lease Start Estimated Payout Assumptions due on City Payout closure $8,064 (office) 20years - and$9,600 $650,000 Termination by city requires appraisal of fair plus two 5 (hangars) per (estimate, not 1 Red Eagle Yes year year, and $3,600 Oct -OS included in value of the remaining term of the lease and Payment of that amount to the lessee extensions e fee for fuel total below) system Lease is subject to termination by lessee if 2 Hangars 1 & 9 No 1 Year $500 per month Jul-06 $0 airport is abandoned. No closure payment Peter Gross clause in lease Contained in Condo Hangar $0.16 per square the total Lease clause requires payment of "fair 3 Yes 20 years Feb-07 Master Plan market value at the then existing usage of the A-3-1 Sands foot per year number of improvements constructed on the site" $1.9 million Contained in Condo Hangar $0.16 per square the total Lease clause requires payment of "fair 4 A-3-2 Mount Yes 20 years foo foot per year Apr-07 Master Plan market value at the then existing usage of the Cleveland number of improvements constructed on the site" $1.9 million Contained in Condo Hangar $0.16 per square the total Lease clause requires payment of "fair 5 Yes 20 years Feb-07 Master Plan market value at the then existing usage of the A-3-3 Pierce foot per year number of improvements constructed on the site" $1.9 million Contained in $0.16 per square the total Lease clause requires payment of "fair 6 Site A-4 T&L Yes 20 years Aug-07 Master Plan market value at the then existing usage of the foot per year number of improvements constructed on the site" $1.9 million Contained in Site A-5 Mount $0.16 per square the total Lease clause requires payment of "fair 7 Yes 20 years Nov-08 Master Plan market value at the then existing usage of the Cleveland foot per year number of improvements constructed on the site" $1.9 million $130/ sq. ft. assumed for original construction cost, times approximate 88'X75' $0.16 per square bldg. = $858,000. Residual value assumes 8 Site A-5 Gross Yes 20 years Oct-06 $343,200 straight-line depreciation and 15 year useful foot per year life (858,000/15=57,000 per year). Payout value equal to remaining six years (57, 200/yea r x6 = 343, 200) 74 1 April 2016 Kalispell City Airport - Existing Lease Buyout Summary City Lease Number Lease Name payment Lease Term Lease Rate Lease Start Estimated Payout Assumptions due on City Payout closure $130/ sq. ft. assumed for original construction cost, times approximate 60'x60' Site A-7 Goose $0.16 per square bldg. = $470,000. Residual value assumes 9 Yes 20 years Oct-04 $125,333 straight-line depreciation and 15 year useful Bay foot per year life (470,000/15=31,333 per year). Payout value equal to remaining four years (31,333/year x4 = 125,333) $130/ sq. ft. assumed for original construction cost, times approximate 60'x60' bldg. = $470,000. Residual value assumes $0.16 per square 10 Site A-8 HC-60 Yes 20 years Jul-06 $188,000 straight-line depreciation and 15 year useful foot per year life (470,000/15=31,333 per year). Payout value equal to remaining six years (31,333/year x6 = 188,000) Site A-8 North 11 Country Part of Above Lease Holdings $0.17 per square City payment clause only refers to 12 Site A-11 No 20 years foot per year- Feb-08 $0 unamortized portion of the cost of a hangar. Padilla empty site No hangar on this site. $130/ sq. ft. assumed for original construction cost, times approximate 60'x80' bldg. = $624,000. Residual value assumes 13 Site A-12 Yes 10years $0.16 per square Oct-06 $249,600 straight-line depreciation and 15 year useful Strand foot per year life ($624,000/15=$41,600 per year). Payout value equal to remaining six years ($41,600/year x6 = $249,600) Contained in $0.16 per square the total Lease clause requires payment of "fair 14 Site A-1,2,3 Yes 20 years N/A Master Plan market value at the then existing usage of the foot per year number of improvements constructed on the site" $1.9 million Lease is subject to termination by lessee if 15 T-Hangar - No 1 year $500 per month N/A $0 airport is abandoned. No closure payment Billmayber clause in lease $0.16 per square 16 Hilton No 99 years N/A $0 None foot per year Total City Payments $906,133 4 75 SOUTH KALISPELL Urban Renewal Plan Ir Off +' J FAkU.LEL TAICCWAY- `�:��.��._ �. � � %' ■L . Y �� ` i ,plc .�'� - _ ,. `� �f •[~�T4Cf.J . 76 1 April 2016 1 Cemetery Rd Project 2 New Elementary School 3 Dog Park 4 Community Park 5 HWY 93 Trail Expansion 6 Welcome to Kalispell Sign 7 Business Park 8 Aviation Business Park 9 Park- N-Ride/Trailhead 10 Mixed -Use Development City of Kalispell South Kalispell Urban Renewal District 0 118 114 112 Mile �N 1; --------------- ----------------- 4 77 IOUTH KALISPELL Urban Renewal Plan APPENDIX B IMPROVEMENT PROJECT PLANNING LEVEL COST ESTIMATES Improvement 1 Estimate Cemetery Rd Improvements $9,100,000 Improvement 2 Estimate Elementary School N/A Improvement 3 Estimate Dog Park $400,000 Improvement 4 Estimate Community Park $6,400,000 Improvement 5 Estimate Expand Highway 93 bike and pedestrian trail network $650,000 Improvement 6 Estimate "Welcome to Kalispell"sign $260,000 Improvement 7 Estimate Highway93 Business Park $16,700,000 Improvement 8 Estimate Aviation Business Park $5,000,000 Improvement 9 Estimate Park-N-Ride Trailhead $535,000 Improvement 10 Estimate Relocate City Shops/1 st Ave Commercial District $22,000,000 TOTAL $61,045,000 78 1 April 2016 CEMETERY ROAD PLANNING LEVEL COST ESTIMATES Cemetery Road Improvements Demolition/Desi n/Prep Surveying/Staking 80 HR 9 $100.00 = $8,000 Ln ineerin /Desi n 1 LS 9 $800,000.00 = $800,000 Asphalt Demo 6000 LF 9 $30.00 = $180,000 Silt Fence/SWPP 12000 LF 9 $2.91 = $34,920 Strip Topsoil 9 Acre 9 $5,000.00 = $45,000 Subtotal $1,067,920 Grad in /Roadwa s Survey! n/Stak! ng 400 HR 9 $100.00 = $40,000 Earthwork - Bulk 33000 CY 9 $10.00 = $330,000 Finish Grade 27000 SY 9 $2.00 = $54,000 Curb/Gutter 12000 LF 9 $35.00 = $420,000 4" Asphalt/12" Base/18" Subbase 46' wide 6000 LF 9 $312.00 = $1,872,000 Su btota I $2, 716, 000 Utilities Surveying/Staking 500 HR 9 $100.00 = $50,000 Storm Sewer w/Manholes 12000 LF 9 $80.00 = $960,000 Sanitary Sewerw/Manholes 6000 LF 9 $45.00 = $270,000 Water Line 12" Inc. Lxcav/Backfill 6000 LF 9 $54.00 = $324,000 Subtotal $1,604,000 Amenities Site Lighting 100 LA 1 9 1 $4,000.00 = $400,000.00 si na e 11 LS 1 9 1 $20,000.00 = $20,000.00 Subtotal $420,000 Subtotal = $6,007,920 Contingency 9 25% _ $1,501,980 Subtotal = $7,509,900 General Conditions 9 10% _ $750,990.00 Subtotal = $8,260,890 Contractor OH & Profit 9 10% _ $826,089 Total $9,086,979 Rounded $9,100,000 4 79 SOUTH KALISPELL Urban Renewal Plan DOG PARK PLANNING LEVEL COST ESTIMATES Dog Park Demo lition/Desi n/Prep Surveying/Staking 20 HR @ $100.00 = $2,000 Fn ineerin /Desi n 1 LS @ $10,000.00 = $10,000 Site Demo 1 LS 9 $500.00 = $500 Silt Fence/SWPP 120 LF 9 $2.91 = $349 Strip Topsoil 2 Acre @ $5,000.00 = $10,000 Subtotal $22,849 Grading Surveying/Staking I 20 HR 19 1 $100.00 = 1 $2,000 Earthwork - Bulk 10001 CY 1 @ 1 $10.00 = $10,000 Finish Grade 100001 SY 1 @ 1 $2.00 = $20,000 1 S u btota 1 $32,000 Utilities Surveying/Staking I 500 HR 19 1 $100.00 = $50,000 Water Line 2" Inc. Fxcav/Backfill 5001 LF 19 1 $34.00 = $51,000 S u btota 1 $101, 000 andscaping/Irrigation andscaoina/Seedina u btota I Amenities Site Lighting 11 LS 1 @ 1 $10,000.00 = $10,000.00 Fencing 40001 LF 1 @ 1 $25.00 = $100,000.00 S u btota 1 $110, 000 Subtotal = $315,849 Contingency @ 5% _ $15,792 Subtotal = $331,642 General Conditions @ 10% _ $33,164.17 Subtotal = $364,806 Contractor OH & Profit @ 10% _ $36,481 Total $401,286 Rounded $400,000 April 2016 COMMUNITY PARK PLANNING LEVEL COST ESTIMATES Community Park Community Park Community Center 1 LS @ $1,500,000 = $1,500,000 Splash Park 1 LS @ $400,000 = $400,000 Pavilion 1 LS @ $50,000 = $50,000 Volleyball 1 LS @ $30,000 = $30,000 Horseshoes 1 LS @ $4,000 = $4,000 Playground 1 LS @ $30,000 = $30,000 Tarking 300 pace @ $2,000 = $600,000 Covered Basketball Courts 1 LS @ $100,000 = $100,000 Tennis Courts 2 EA @ $90,000 = $180,000 Picnic Area 1 LS @ $50,000 = $50,000 Event Lawn/Amphitheatre 1 LS 9 $500,000 = $500,000 Soccer Fields 6 EA @ $50,000 = $300,000 Event Lawn 1 LS 9 $30,000 = $30,000 Football Field 1 LS @ $400,000 = $400,000 Maintence Facility 1 LS 9 $150,000 = $150,000 Skate Park 1 LS @ $100,000 = $100,000 Trail 4000 LF @ $80 = $320,000 Si na e 1 LS @ $50,000 = $50,000 Road 1 LS @ $250,000 = $250,000 S u btota 1 $5, 044,000 Subtotal = $5,044,000 Contingency @ 5% _ $252,200 Subtotal = $5,296,200 General Conditions @ 10% _ $529,620.00 Subtotal = $5,825,820 Contractor OH & Profit @ 10% _ $582,582 Tota 1 $6, 408, 402 Rounded $6,400,000 4 81 SOUTH KALISPELL Urban Renewal Plan HIGHWAY 93 TRAIL EXPANSION PLANNING LEVEL COST ESTIMATES Through -Connection of HWY 93 Trail System Demo lition/Desi n/Prep Surveying/Staking 40 HR @ $100.00 = $4,000 Fn ineerin /Desi n 1 LS @ $10,000.00 = $10,000 Site Demo 1 LS 9 $5,000.00 = $5,000 Silt Fence/SWPP 400 LF 9 $2.91 = $1,164 Strip Topsoil 3 Acre @ $5,000.00 = $15,000 Subtotal $35,164 Grad in/Pavement Surveying/Staking 20 HR @ $100.00 = $2,000 Earthwork - Bulk 5500 CY 9 $10.00 = $55,000 3" Asphalt/12" base/Geo rid 5000 LF @ $60.00 = $300,000 Finish Grade 11000 SY @ $2.00 = $22,000 Subtotal $379,000 Utilities Surveying/Staking I 20 HR 1 @ 1 $100.00 = $2,000 Incidental Utility Removal 1 ILS 1 @ 1 $5,000.00 = $5,000 S u btota 1 1 $ 7,000 ndscaping/Irrigation ndscapinq/Seedinq S u btota I Amenities Site Lighting 11 LS 1 @ 1 $10,000.00 = $10,000.00 Benches 21 FA 1 @ 1 $800.00 = $1,600.00 S u btota 1 $11, 600 Subtotal = $482,764 Contingency @ 10% _ $48,276 Subtotal = $531,040 General Conditions @ 10% _ $53,104.04 Subtotal = $584,144 Contractor OH & Profit @ 10% _ $58,414 Total $642,559 Rounded $650,000 82 1 April 2016 HIGHWAY 93 BUSINESS PARK PLANNING LEVEL COST ESTIMATES HWY 93 Business Park HWY 93 Business Park A Commercial 16400 SF 9 $180.00 = $2,952,000 B Commercial 15700 SF 9 $190.00 = $2,983,000 C Light Industrial 11200 SF 9 $140.00 = $1,568,000 D Light Industrial 15600 SF 9 $140.00 = $2,184,000 F Light Industrial 8400 SF 9 $140.00 = $1,176,000 F Light Industrial 105001 SF 1 9 1 $140.00 = $1,470,000 Future Road 1 FA $150,000.00 = $150,000 Fntry Feature 1 FA $60,000.00 = $60,000 Parking 290 spacel 9 1 $2,000.00 = $580,000 Subtotal $13,123,000 Subtotal = $13,123,000 Contingency 9 5% _ $656,150 Subtotal = $13,779,150 General Conditions 9 10% _ $1,377,915.00 Subtotal = $15,157,065 Contractor OH & Profit 9 10% _ $1,515,707 Total $16,672,772 Rounded $16, 700,000 4 83 SOUTH KALISPELL Urban Renewal Plan AVIATION BUSINESS PARK PLANNING LEVEL COST ESTIMATES Aviation Business Park Aviation Business Park Aviation Repair 12000 SF @ $125.00 = $1,500,000 Airport Operations 10000 SF @ $190.00 = $1,900,000 Site Utilities/Lighting 1 LS @ $150,000.00 = $150,000 Site Improvements/Parking 150 spaces 9 $2,000.00 = $300,000 Misc.landscaping/Site Amenities 1 LS 9 $50,000.00 = $50,000 S u btota I $T 900, 000 Subtotal = $3,900,000 Contingency @ 5% _ $195,000 Subtotal = $4,095,000 General Conditions @ 10% _ $409,500.00 Subtotal = $4,504,500 Contractor OH & Profit @ 10% _ $450,450 Total $4,954,950 Rounded $5,000,000 Z April 2016 Park'N' Ride Trailhead Demolition/Design/Prep Surveying/Staking 10 HR @ $100.00 = $1,000 Engineering/Design 10 % @ $1,000.00 = $10,000 Construction Entrance 1 LS @ $1,000.00 = $1,000 Silt Fence/SWPP 2000 LF @ $2.91 = $5,820 Strip Topsoil 0.6 Acre @ $5,000.00 = $3,000 Subtotal $20,820 Grading Surveying/Staking 30 HR @ $100.00 = $3,000 Earthwork-Berming 600 CY @ $5.00 = $3,000 Excavation 1000 CY @ $12.00 = $12,000 Finish Grade for Parking Lots 3000 SY @ $1.13 = $3,390 Subtotal $21,390 Utilities Surveying/Staking 20 HR @ $80.00 = $1,600 Water Line 2" Inc. Excav/Backfill 200 LF @ $10.00 = $2,000 Water Line Misc. 1 LS @ $500.00 = $500 Fountain Drain 2" Sch 40 PVC 40 LF @ $4.68 = $187 Subtotal $4,287 Paving Surveying/Staking 30 HR @ $80.00 = $2,400 Asphalt Parking 4" x 12" Base 2000 SY @ $34.00 = $68,000 Asphalt Drive Apron 4" x 10" Base 800 SY @ $34.00 = $27,200 Asphalt Pavement Sidewalk/Trail 10000 SF @ $5.00 = $50,000 Concrete Curb and Gutter 800 LF @ $30.00 = $24,000 Pavement Striping - Stalls 40 EA @ $8.80 = $352 Handicap Sign 1 41 EA I @ 1 $200.00 = 1 $800 Paint Handicap Symbols 1 41 EA I @ 1 $100.00 = 1 $400 Subtotal 1 $173,152 Buildings/Structures Picnic Shelter 1 EA @ $30,000.00 = $30,000 Bridge 1000 SF @ $90.00 = $90,000 Benches 21 EA @ $500.001 $1,000 Subtotal $121,000 Landscaping/Irrigation Topsoil Placement 850 CY @ $15.00 $12,750 Evergreen Trees 5 EA @ $200.00 = $1,000 Deciduous Trees 14 EA @ $200.00 = $2,800 Lawn/Sod 40 MSF @ $390.00 = $15,600 Native Grasses 1 Acre @ $6,000.00 = $6,000 Irrigation System 0.5 AC @ $20,000.00 = $10,000 Fertilizer (in -place) 401 MSF I @ 1 $3.89 $156 Subtotal $48,306 Amenities Drinking Fountain 1 I EA I @ 1 $4,000.00 = $4,000.00 Site Lighting 4 ea @ $4,000.00 = $16,000.00 Directional/Entry Signage 1 I LS I @ 1 $12,000.00 = $12,000.00 Subtotal $32,000 Subtotal = $420,955 Contingency @ 5% _ $21,048 Subtotal = $442,003 General Conditions @ 10% _ $44,200 Subtotal = $486,203 Contractor OH & Profit @ 10% _ $48,620 Total $534,823 Rounded $535,000 4 85 SOUTH KALISPELL Urban Renewal Plan RELOCATE CITYSHOPS/1 STAVE COMMERCIAL DISTRICT PLANNING LEVEL COST ESTIMATES 1 st Ave Commercial District 1st Ave Commercial District A Livework 12000 SF 9 $180.00 = $2,160,000 B Livework 17000 SF 9 $190.00 = $3,230,000 C Livework 22000 SF 9 $220.00 = $4,840,000 D Livework 10500 SF 9 $200.00 = $2,100,000 F Livework 12000 SF 9 $200.00 = $2,400,000 F Livework 9000 SF @ $200.00 = $1,800,000 Site Utilities 1 FA 9 $150,000.00 = $150,000 Si na e/Li htin /amenities 1 FA @ $200,000.00 = $200,000 lParking 180 pacej @ 1 $2,000.00 = $360,000 S u btota 1 $17, 240,000 Subtotal = $17,240,000 Contingency @ 5% _ $862,000 Subtotal = $18,102,000 General Conditions @ 10% _ $1,810,200.00 Subtotal = $19,912,200 Contractor OH & Profit @ 10% _ $1,991,220 Tota 1 $21, 903, 420 Rounded $22,000,000 - _ Urban Renewal Pla n �e .�1w} -Ir.. �y i .- dF It it 14-4 41, .� t vr• r r'` Sri $�; dVi qKg � �� . � •�. =,}. .ter � ]F � � ar` •"�� . ,� �'