F. 2015-2016 TIF Annual Reports
City of Kalispell
Tax Increment Financing Districts
Annual Report
2015-2016
Prepared by:
Kalispell Urban Renewal Agency &
Community and Economic
Development Department
Introduction
The intent of this report is to provide a comprehensive understanding of existing Tax Increment
Financing (TIF) Districts. Knowledge of TIF projects and other actions related to TIF in addition to
financial reports serve to improve TIF management and implementation on behalf of the community.
This report documents Kalispell Tax Increment Financing Districts for the period September 2015
through August 2016 and to provide sufficient information for review.
Summary
Tax Increment Financing District law is found at Title 7, Chapter 15, Parts 42 and 43, of the Montana
Code Annotated. In Kalispell, applications for Tax Increment Financing are accepted through the
Community and Economic Development Department, reviewed and considered by the Urban Renewal
Agency and ultimately decided by City Council.
>38,953,059
$39,229,175
.7%
$8,387,046
$8,387,046
0%
$8,117,731
$9,598,211
18%
$1,000,265
$1,211,165
21%
The Montana Department of Revenue 2016 Certified Taxable Valuation Information annual report is
the source of all current taxable, base taxable and incremental values utilized in this report. The
Department of Revenue's information for the Kalispell City taxing jurisdiction was certified August 1,
2016. Note that certification of values is determined on a single day in the calendar year and therefore
provides a "snapshot" of value. it is not uncommon for values to vary between the time of the
certification and the actual collection of taxes by the Department of Revenue. It should be mentioned
that due to changes in the Department of Revenue's valuation method in 2015 readers will see
significant changes in valuation from 2014 to 2015, with values becoming more comparable from 2015
to 2016.
Further, it is important to note that the West Side TIF boundary was expanded by City Council action in
December 2012 to include the Core Area leading to a recalculation of the base taxable value. The
recalculation together with the significant variations in taxable values experienced throughout the City
creates year to year calculations that can be counter -intuitive.
The City of Kalispell Tax Increment Financing Districts are overseen by a five -member volunteer board,
the Urban Renewal Agency (URA). Board members are appointed by City Council to serve four-year,
staggered terms. Members and board terms for 2015-2016:
OA
Member
Position
Term Expires
Marc Rold
Chairman
04/30/2018
Murphy McMahon
Vice Chairman
04/30/2016
Jeff Zauner
Member
04/30/2018
Dave Girardot
Member
04/30/2017
Shannon Freix
New Member
04/30/2020
Matt Venturini
New Member
04/30/2020
Filled McMahon Vacancy
Filled Vacant Board Seat
New board members Shannon Freix and Matt Venturini filled the existing vacant board position and
the board opening left upon Murphy McMahon's term expiration.
The URA held six meetings and attended one public meeting from September 10, 2015 and August 12,
2016. The Urban Renewal Agency receives staff support from the City of Kalispell, Community and
Economic Development Department.
The Urban Renewal Agency meeting history for the period September 2015 to August 2016 follows:
Meeting Date
Attendance
Action
01/13/2016
All Members
Wayne Freeman and Stephanie Ray of CTA joined
committee to provide updated information on the South
Kalispell Urban Renewal Plan —gave presentation and
provided information regarding Board inquiries
01/13/2016
All Members
CTA South Kalispell Urban Renewal Plan presentation for
public
02/10/2016
All Members
Members of the public Dave Hoerner and Scott Richardson
in attendance - South Kalispell Urban Renewal Plan
discussion and board's plan suggestions and modifications
to CTA in addition to public member comment
02/22/2016
All Members
Discussion and suggested plan revisions with Wayne
Freeman of CTA regarding South Kalispell Urban Renewal
Plan
04/27/2016
All Members
Visited CTA's second South Kalispell Urban Renewal Plan
Community Open House in lieu of meeting at City Hall
05/11/2016
All Members &
New member introductions, South Kalispell Urban Renewal
New Members
Plan discussion and recommendation to Council
06/08/2016
Rold, Freix
Tour of Westside TIF project at 7 Main Street
City of Kalispell Tax Increment Finance [districts
September to, ZU12
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Kalispell City Limits Boundary
Westside TIF
Airport TIF % s
Old School Station TIF - Industrial
Old School Station TIF - Technology, ,
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West Side/Core Area Tax Increment Financing District
In accordance with provisions of Montana State Law, City Council adopted Ordinance No. 1259 on
March 17, 1997, establishing the West Side Urban Renewal Tax Increment Financing District and
adopting the urban renewal plan. The ordinance also established January 1, 1997, as the base year for
calculating the tax increment of the district.
The enabling legislation documents the following purpose of the West Side TIF:
Whereas, the Plan [West Side Urban Renewal Plan] for the project area requires, among other
things:
a. setting a pattern of land use incorporating sensitivity to neighboring uses;
b. creating a circulation pattern that maintains a separation of incompatible uses;
c. creating a street system that can accommodate increase in traffic safety; and
d. providing a full range of services to area.
In November 2012, City of Kalispell Ordinance No. 1717 modified the boundaries of the Westside TIF
District to include an area referred to as the "Core Area." The Core Area encompasses 365 acres and is
focused along the major roadways of Idaho Street, Main Street, Center Street, Meridian Street, and 5th
Avenue West North.
In February 2013, Kalispell City Council Resolution No. 5605 was adopted as an amendment to the
West Side Urban Renewal Plan, the Core Area Plan. The intent of the plan is to eliminate blight and
encourage redevelopment in the district through the use of TIF as specified by State Law.
Current City Council Ward: Ward 1 Council Members: Kari Gabriel and Sandy Carlson
West Side TIF District
JFV. Chan&e.Since 2015
West Side Base Taxable Value
West Side Current Taxable Value �' ..
:. •
Total West Side T&I-ncremental- alien .
The table shows increases in both the current taxable value and the total incremental value from 2015
to 2016. The current assessed value of property within the West Side TIF District increased from
$7,932,918 to $8,332,869 resulting in 5% growth from the base assessed value established in 2012 at
the time of the District's expansion.
On September 10, 2014 the URA approved a 6-month extension of the 11 Main Street Developer's
Agreement to accommodate street and sidewalk closure required for the extension of the fire line to
the building as well as fagade improvements, the project was completed in November 2015. The URA
also approved Historic Fagade Improvement Grant funding for 7 Main Street to accompany the already
approved Westside TIF Technical Assistance funding for repair and rehabilitation of the building fagade
comparable to historic standards, this project was completed in June 2016.
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In April 2015, City Council approved Resolution No.5719, accepting the recommendation by the City of
Kalispell Urban Renewal Agency to identify the project known as the Core and Rail Redevelopment
Project as an urban renewal project that may be financed by West Side Tax Increment Funds. The funds
identified are considered match for the Transportation Investment Generating Economic Recovery
(TIGER) grant and will be used to fund a portion of the Kalispell Core and Rail Redevelopment Project.
In October 2015, the City of Kalispell and its partner Flathead County Economic Development Authority
(FCEDA) were awarded $10 million in TIGER VII grant funding for the Kalispell Core and Rail
Redevelopment Project. This project begins with the construction of the new Glacier Rail Park at the
reclaimed gravel pit east of Kalispell, allowing the two businesses currently using rail services to
relocate to the new rail park. Following the relocation of those businesses the old rail line, currently
dissecting the center of Kalispell, will be converted into a bike and pedestrian trail, creating a safe,
alternative transportation corridor that connects citizens of this economically disadvantaged section of
the community to work and education opportunities. This project allows for redevelopment of
approximately 44 acres of vacant, blighted, brownfields properties within the area, creating new
vitality in the epicenter of the community. For more information and updates on this project please
visit: http:/Lwww.kalispelicoreandrail.com
This project has become an economic catalyst within the Kalispell Core Area and has led to a number of
redevelopment projects in the area from 2012 to present:
Year of
Completion
Project Name
Permit Amount
Location
2012
A to Z Engineering
$210,000
138 E Center St
2012
Loading Dock/Brannigan's Renovation/
Addition
$700,000
101 E Center St
2013
Depot Place Senior Living
$2,741,438
249 E Center St
2013
Flathead Liquor
$119,600
1121 Hwy 2 W
2013
River Church
$587,500
1275 Hwy 2 W
2014
Starbucks
$750,000
10 N Main St
2014
Kalispell Kidds Dental
$1,300,000
1252 N Meridian
2016
7 Main Street
$83,000
7 Main St
2016
Papa Murphy's
$400,000
238 E Center St
2016
Fuel Fitness
$1,700,000
1305 Hwy 2 W
2017
Herberger's Addition
$2,000,000
20 N Main St
TOTAL
$10,591,538
b
The West Side TIF District will expire on January 1, 2037.
West Side TIF Fiscal Year 2016 Revenue (7/1/15-6/30/16)
West Side TIF beginning cash July 1, 2015: $3,995,240
Tax Increment Revenue: $282,012
Investment Earnings Revenue: $28,073
Fiscal Year 2015 Available for Expenditures: $4,305,325
West Side TIF Fiscal Year 2016 Expenditures and Commitments:
Personal Services: ($45,541)
Contract Services: ($2,192)
Administration Transfer: ($3,198)
Debt Service: ($32,340)
Pre -TIGER ($126,377)
Redevelopment Activity: ($233,689)
Total Expenditures and Commitments: ($443,336)
Uncommitted Cash as of 6/30/2016: $3,861,989
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Westside Urban Renewal Plan & Tax Increment Finance District
September 16, 2012
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West Side/Core Area TIF Projects 2015-2016
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South Kalispell/Airport TIF
In accordance with provisions of Montana State law, City Council adopted Ordinance No. 1242 on July
1, 1996, establishing the City Airport/Athletic Complex Urban Renewal District and adopting the
"Kalispell City Airport/Athletic Complex Redevelopment Plan Analysis" establishing January 1, 1996, as
the base year for calculating the tax increment of the district.
The enabling legislation documents the following purpose of the Airport Tax Increment Finance
District:
Whereas, among the identified goals and objectives of the Urban Renewal Plan are:
a. Minimizing hazards to navigation;
b. Developing the airport in accordance with an airport layout plan;
c. Increasing development opportunities on nearby properties;
d. Promoting compatible land use in and around the airport;
e. Establishing a funding mechanism for airport properties; and
f. Establishing a priority schedule for plan implementation.
Ordinance No. 1541 was adopted by Council on July 18, 2005, amending the City Airport/Athletic
Complex Redevelopment Plan, authorizing an urban renewal project and approving revenue bonds.
Current City Council Ward: Ward 4 Council Members: Tim Kluesner and Phil Guiffrida
The table above compares values from year 2015 to 2016, showing a slight decrease in both the
current taxable value and the total incremental value. It should be noted that the current assessed
value of property within the South Kalispell/Airport TIF District has increased from $453,612 to
$1,149,21 resulting in a 153% increase above the base assessed value established in 1996 at time of
District's creation.
As a result of project bonding issued in September 2005, beginning January 1, 2006, and continuing
each year through July 1, 2020, up to $500,000 of the annual increment will be utilized to pay debt
service.
In the November 2013 election the city electorate, by referendum, voted to reject a City Council
proposal to undertake significant upgrades at the city airport. In response to the referendum vote City
Council retained the services of CTA Architects/Engineers to provide planning services for updating the
South Kalispell/Airport Urban Renewal Plan. This update, through public outreach, identified key
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development and redevelopment concepts in the South Kalispell Corridor, to specifically develop a
series of short term and long term options for the airport, airport lands and surrounding affected
neighborhoods. City Council approved Ordinance No. 5764 on August 1, 2016 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.
The South Kalispell/Airport TIF District will expire July 1, 2020.
South Kalispell/Airport TIF Fiscal Year 2015 Revenue (7/1/15-6/30/16)
South Kalispell/ Airport TIF beginning cash July 1, 2015:
Tax Increment Revenue:
$1,025,557
$ 714,382
Investment Earnings Revenue: $9,820
Fiscal Year 2016 Available for Expenditures: $1,749,759
South Kalispell/Airport TIF Fiscal Year 2016 Expenditures and Commitments:
Personal Services: ($22,307)
Contract Services: ($1,648)
Administration Transfer: ($8,674)
Debt Service: ($179,573)
Redevelopment Activity: ($18,354)
Total Expenditures and Commitments: ($230,556)
Uncommitted Cash as of 6/30/2016: $1,519,203
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Old School Station, Industrial
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In accordance with provisions of Montana State Law, City Council adopted Ordinance No. 1557 on
November 21, 2005, establishing the Old School Station Industrial Tax Increment Financing District,
identifying its boundaries and establishing January 1, 2005, as the base year for calculating the tax
increment of the district.
Current City Council Ward: Ward 4 Council Members: Tim Kluesner and Phil Guiffrida
$126 $126 0
$20,890 $20,890 0
$20,764 1 $20,764 1 0
The table above shows no changes in current taxable value or incremental value from 2015 to 2016. It
should be noted that the current assessed value of property within the Old School Station —Industrial
District increased from $126 to $20,890, a 16,479% over the base assessed value established in 2005 at
time of District's creation. This high percentage of increase in value is the result of the TIF being
created while the properties were still undeveloped sites.
A portion of the annual increment from this TIF is pledged for repayment of Special Improvement
District bonds, as needed and as funds are available, over the life of the bond, January 1, 2007, through
July 1, 2026. In fiscal year 2016 $10,000 was transferred for this purpose.
City Council took action by means of Resolution No. 5710 on April 6, 2015 to take assignment from
Flathead County of its tax liens on the six parcels of Old School Station, for the both Technology and
Industrial Districts, by paying past dues taxes and assessments, subsequently, Council passed
Resolution No. 5712 on April 20, 2015 to retain and sell the properties. City Council selected Flathead
Valley Brokers to list and market the properties. For additional information on the properties for sale,
please visit the following webpage: http:jjwww.kalis2g�ll..com/communit economic_ development;
The Old School Station —Industrial TIF is scheduled to terminate on the fifteenth year following its
creation, meaning January 1, 2020.
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Old School Station Industrial Fiscal Year 2016 Revenue (7/1/15-6/30/16)
OSS TIF beginning cash July 1, 2015: $12,928
Tax Increment Revenue: $9,416
Investment Earnings Revenue: $84
Fiscal Year 2016 Available for Expenditures: $22,428
Old School Station Industrial Fiscal Year 2016 Expenditures and Commitments:
Personal Services: ($0)
Contract Services: ($10,000)
Administration Transfer: ($0)
Debt Service: ($0)
Redevelopment Activity: ($0)
Total Expenditures and Commitments: ($10,000)
Uncommitted Cash as of 6/30/2016: $12,428
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Old School Station Tax Increment Finance District
September 15, 2012
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Old School Station TIF - Industrial
Old School Station TIF - Technology
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Old School Station, Technology
In accordance with provisions of Montana State Law, City Council adopted Ordinance No. 1558 on
November 21, 2005, establishing the Old School Station Technology Tax Increment Financing District,
identifying its boundaries and establishing January 1, 2005, as the base year for calculating the tax
increment of the district.
Current City Council Ward: Ward 4 Council Members: Tim Kluesner and Phil Guiffrida
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Old School Station —Technology Bas
Old School Station —Technology Current Taxable Valu
Total Old School Station —Technology TIF Incremental
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The table above compares the values for year 2015 to 2016, showing a slight decrease in current
taxable value and total incremental value. The current assessed value of property within the Old School
Station —Technology TIF District increased from $390 to $95,241, a 24,321% increase over the base
assessed value established in 2005 at the time of the District's creation. This high percentage of
increase in value is the result of the TIF being created while the properties were still undeveloped sites.
A portion of the annual increment from this TIF is pledged for repayment of Special Improvement
District bonds, as needed and as funds are available, over the life of the bond, January 1, 2007, through
July 1, 2026. In fiscal year 2015, $60,000 was transferred for this purpose.
The Old School Station —Technology TIF is scheduled to terminate on the fifteenth year following its
creation on January 1, 2020.
16
Old School Station Technology Fiscal Year 2016 Revenue (7/1/15-6/30/16)
OSS TIF beginning cash July 1, 2015: $25,430
Tax Increment Revenue: $65,981
Investment Earnings Revenue: $172
Fiscal Year 2016 Available for Expenditures: $91,583
Old School Station Technology Fiscal Year 2016 Expenditures and Commitments:
Personal Services: ($0)
Contract Services: ($81852)
Reimbursements/other: ($0)
Debt Service: ($0)
Redevelopment Activity: ($0)
Total Expenditures and Commitments:
($81852)
Uncommitted Cash as of 6/30/2016: $9,731
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Glacier Rail Park Targeted Economic Development District (TEDD)
Established May 2, 2016
Glacier Rail Park Targeted Economic Development District
Current City Council Ward: Ward 2 Council Members: Wayne Saverud and Chad Graham
In accordance with provisions of Montana State Law, City Council adopted Ordinance No. 1770 on May
2, 2016, establishing the Glacier Rail Park Targeted Economic Development District, identifying its
boundaries and establishing January 1, 2016, as the base year for calculating the tax increment of the
district.
The Glacier Rail Park Development Plan embraces a 104-acre area under multiple ownerships located
in the heart of Flathead County in and adjacent to the City of Kalispell. The City of Kalispell in
conjunction with the Flathead County Economic Development Authority (FCEDA) sought to foster the
development of secondary, value adding industries within the Glacier Rail Park Plan Area as part of the
City's overall mission to meet its needs of promoting economic development, improving area
employment opportunities and expanding the community's tax base. This effort was made possible
through the creation of a Targeted Economic Development District (TEDD) on 49 acres of land within
the larger Glacier Rail Park Plan Boundary. The City of Kalispell will to utilize Tax Increment Financing as
18
part of the overall strategy to provide infrastructure in support of value -adding industry pursuant to
the 2013 Targeted Economic Development District Act, embodied in 7-15-4279, Montana Code
Annotated (MCA). The TEDD provides the City of Kalispell with the ability to employ tax increment
financing as provided in 7-15-4282, MCA for appropriate public infrastructure projects in support of
"value -adding industry or secondary value-added products or commodities" within the Glacier Rail
Park Plan Boundary.
The Glacier Rail Park TEDD allows the City to appropriately marshal tax revenues to help fund the
public infrastructure that will spur a diverse private business base to invest in the area. It is the primary
focus of the Glacier Rail Park TEDD to develop the necessary infrastructure to encourage the location,
expansion and retention of diverse value added industries suitable for an industrial Rail Park.
The goal of the Glacier Rail Park TEDD are to assist the Flathead Valley to recover from being an
Economically Distressed Area by accomplishing the following:
a) To foster economic vitality in the Valley and increase employment opportunities
through infrastructure development in support of secondary value -adding industry;
b) To provide support for business and industries that preserve the quality of life for all
residents;
c) To facilitate the creation of a diversified tenant base of multiple independent tenants
within the TEDD;
d) To encourage secondary, value -adding industries that take advantage of the Valley's
resources for the purpose of engaging in interstate commerce; and
e) To encourage the orderly growth and development of the community.
Investment in this project allows for the redevelopment of the former McElroy/Wilson gravel pit into
an active industrial rail park creating a long term boon to the local economy. The Glacier Rail Park
transforms acres and decades of disinvestment and decay into a robust and vibrant economic hub.
Even with the infusion of fund from the TIGER grant, such funds must be properly focused and
leveraged with economic tools such as a TEDD to bring the Glacier Rail Park and the Kalispell Core and
Rail Redevelopment Project to successful completion.
The Glacier Rail Park TEDD is scheduled to terminate on the fifteenth year following its creation on
January 1, 2031.
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This report reviewed and approved by the Urban Renewal Agency on March 1, 2017.
05. 01 O1
Date
Mar old, Urban Renewal Agency Chairman
Katharine Thompson, Assistant 6irector of Community
& Economic Development
C__ �V�V�
Kr' to rs, Co unity Development Coordinator
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Submit Inquiries To:
Katharine Thompson
Assistant Director of Community
and Economic Development
201 First Avenue East
Kalispell, MT 59901
406/758.7713