3. Community and Economic Development Mission/StructureN's y
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Post Office Box 1997 Kalispell, Montana 5990w 997 Telephone 406758-7040 Fax -- 406
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REPORT TO. Honorable Mayor and City Council
FROM: Kellie Danielson, Community & Economic Development
James H. Patrick, City Manager
SUBJECT: Introduction and recommendation to reconstruct the Economic and
Community Development Department
MEETING DATE: July 17, 2008, Work Session Agenda Item
The opportunity to reconstruct the department is now upon us for two reasons. First, the 100%
turnover in personnel with specific skill sets in housing and lending and secondly due to the
diminishing funding of the department. It is important to note what the department has mainly
focused on the past few years per position.
Former Director Position
Focused on supporting housing projects and programs, community liaison to various community
organizations, applicant for CDBG and HOME grants, grant administrator, supported the BID
process, managed TIF and urban renewal districts, participated with Montana Nest on
Stream/Teletech project, secured revolving loan program through Rural Development (IRP) and
managed the Community D eve l opment Revolving Loan Fund.
Redevelopment Manager
Managed the Rural Development Revolving Loan Program, Participated on the BEAR program
(Business Expansion And Retention) administered by the Chamber of Commerce, assisted other
positions in the department to achieve the department goals.
Housin _Mg alter
Part-time position for the city but served the Glacier Affordable Housing Foundation part-time.
Provided the writing, developed and assembled the applications, submitted the applications for
HOME and CDBG grants. This positron also provided the administration services to the grants
awarded to community organizations. As a founding member of HAL, this position was
responsible for implementing HAL ideas.
Administration
Supported the department's positions.
There were many successes with the City partnering with developers providing housing for
seniors with the latest partnership dating to 1993, Centre Court. Today the funding for these
projects has diminished. The department has been able to assist developers with letters of support
and suggestions of ideal locations for specific projects.
The buzzword and priority today leans towards "affordable housing" or workforce housing.
Affordable housing is not attributed to "low income" earners in our Valley. It means the same for
middle income earners. There is affordable housing for sale in Kalispell. According to Jinn
Kelley of Kelley Appraisal, there were 12 listings of homes for sale in the 0 to $ l 00,000 range;
234 listings in the 100,001 to $200,000 range, and 340 homes for sale in the 200,001 to 300,000
range. (2007 data). The root cause of individuals and families not being able to `afford" a home
1s based on two causes:
1) income limitations and 2) credit liabilities.
The 2006 housing statistics and projections for Flathead County look like this:
Median Home Cost: $263,033
Home affordable to Median Household income: $144,279
Median Household income: $41,554
The projections for 2020 look like this:
Median Home Cost: 520,787
Horne affordable to Median Household income: $182,492
Median Household income: $51,751
Source: Montana Department of Commerce, Housing Coordinating Team, April 2008
The priorities then are 1) raising the incomes through economic development and 2) keeping an
emphasis on community development.
Our department has taken notice of what the community expects from the department and where
the department can continue to be effective to the two priorities referenced above with limited
resources. More materials will be provided at Monday night's work session.
Respectively submitted,
l �
Kel ie Danielson James H Patrick
Community &Economic Development Director City Manager
City of Kalispell d www.kalispell.com
City of Kalispell Economic Development Marketing Plan
Objectives
To assist business grow and prosper for the creation of new, quality jobs and new investment into the
community by providing support in streamlining assistance to businesses and connecting the decision
makers.
The emphasis is on value added growth such as manufacturing, distribution, and technology type office
projects.
Definition of quality job by the Ford foundation: "jobs are those that pay sustainable wages and offer
employment with career advancements, allowing workers to accumulate financial assets." The Upjohn
Institute for employment research defines "good" jobs as "jobs that will ensure a steady improvement in
the standard of living for the middle class and that will offer a way out of poverty for low-income
Americans."
Goa Is
1. Create the components internally to assist in succeeding in economic development business
attraction and expansion;
2. Build a staff focused on economic development activities that are results oriented;
3. Develop a marketing plan, Implement the marketing plan and evaluate every 3 to 6 months with
performance measures.
Tactics
® Evaluate and construct the department website to focus on economic development and
community development resources and data that is easily accessible and understood;
i Identify local, state and federal resources that are accessible and support the effort;
0 Introduce a business incentive policy that is business friendly;
® Evaluate and create what the area can support in terms of business attraction such as target
industry sectors; (custom firearm equipment, software development);
0 Identify the available properties and facilities suitable for our target clients;
Develop an achievable marketing plan;
0 Prepare marketing materials and a plan to focus on the targeted sectors;
■ Design a budget to implement the activities;
Be a proponent of business friendly ideals in regards to the regulatory environment;
0 Establish a technology roundtable geared towards senior leadership for social networking
purposes.
Meet established manufacturers and technology oriented business to discuss expansion
opportunities and other needs;
Internal & External
* Produce a focused objectives profile on the advantages of doing business in the area along with
specific profiles geared towards the target industry sectors;
• Conduct specialized market research to study the algorhtymns of business firms (prediction
factors of those businesses most likely to expand) in the target industry sectors and identify
"qualified" suspects external to Montana that "fit" Kalispell;
• Begin the effort of contacting the target business firms;
a Build on and sustain relationships with consultants and brokers (internal and external)
Who represent expansion oriented clients;
• Implement, along with our partners, a "red carpet tour" for targeted allies that have
connections with business considering expansion opportunities.
• Create an electronic newsletter to be shared with the partners, businesses, stakeholders
Strategies
Support two identified industry clusters that meet the value-added criteria:
Custom firearm industry cluster and businesses utilizing technology in their operations.
The sector strategies/cluster-based initiatives create a natural career ladder and a range of jobs. The
sector strategies tactic attributes four characteristics to sustainability:
They focus intensively on a specific industry over a sustained period of time, customizing
solutions for multiple employers in the region;
® They strengthen economic growth and industry competitiveness, benefit low-income individuals
by creating new pathways into the industry and up to good jobs and careers, and sustain middle
income jobs;
e -They are led by a strategic partner with deep industry knowledge;
0 They promote a systemic change that achieves benefits for the industry, workers, and the
community.
One of the most important objectives the city can do to support the custom firearm industry cluster is to
facilitate and support a test range for the products being manufactured. One of the objectives is to
continue to explore the following:
Next to the proposed and conceptual Northwest Montana Public Safety Training and Testing
center construct an outdoor range for the testing of firearm equipment by local manufacturer's.
® Explore funding opportunities for the training and Testing Center.
® Identify businesses in the sector that may be influenced by local factors to relocate or expand
and market Kalispell to those companies.
The City organized and continues to manage a Technology Roundtable that benefits the City as well as
the participants with:
0 A social network, sharing of ideas, solutions
0 Formation of local strategic partnerships
0 Relationship building
A Serves as ambassadors and technical assistance advisors to expansion and attraction
opportunities.
Proposed Community & Economic Development Department
Structure 7i18i08
Estimated beginning balance for 200E-2009 $593,080
(Includes revenues of approximately $78,000)
Estimated expenditures for 2008-2009 $113 5460
Estimated redevelopment/grants costs 705000
Salaries, benefits, contingency for three-quarters 191,040
Total $ 374,500/annually
Beginning balance for June 30, 2009-2010 budget year $218,580
The 2009-2010 personnel budget for a full year is 2171884
Therefore in July 2009 the department will require funding for materials and operating
costs $113,460
In July 2010 for the fiscal year 2010/2011 the department will require the full amount of
funding of $374,500
(Revenues are derived from interest on remaining loans and from administration fees for administering
grants)
Personnel for Scenario #1
Director, na Comuni .o & Econmic Development Focus on "economic gardening;"
business expansion and attraction strategies and activities; administer and empower
department programs.
Manager, Community .Develoment Focus on downtown revitalization
activities, implement City's "core" housing plan, organize informal neighborhood
councils, champion historic preservation, assist in managing TIF activities, assist
community organizations with workforce housing support, champion brown field
redevelopment activities leveraging federal funding for remediation, and assists with
business expansion activities.
Community Investments Officer Identify funding opportunities for all
city departments; writes, submits and administers grants awarded to city departments.
Executive Assistant and Loan Mana er Part-time, 5 hours/4 days a week
Support all functions in the department as well as utilize experience in commercial
lending to market and manage USDA Rural Development Revolving Loan Program.
Current CD/ED Department Housing Activities
Housing anger
A description of what has occurred in the past few years:
Obtained facilities grant for Youth Home, Head Start, CDBG Planning Grant for
downtown housing study; attending HAL meetings as a representative of the City;
organizing efforts on behalf of HAL which were formation of a Community Land Trust
(CLT) organizational structure, working with local realtors in identifying property
suitable for constructing a CLT, writing and providing letters of support on housing
developments that impacted low to moderate incomes, administering Glacier Affordable
Housing Foundation's first time home buyer's subsidies.
Why focus on a Community Land Trust? To keep "some" of the housing stock
affordable.
Who is the entity to administer a Community Land Trust? A locally formed Community
Development Corporation. (CDC)
The Northwest Montana Human Resources organization operates a CDC for Flathead
County. The organization provides the following services to Kalispell residents as it
pertains to home ownership education. -
Foreclosure prevention
Financial literacy
Horne buyer/owner education
Credit counseling, literacy
The Northwest Montana Human Resources organization will announce in the near future
a name change more in tune with a housing title. The agency is also in discussion with
the Whitefish Housing Authority, whitefish Area Land Trust and the City of Kalispell
CD/ED department about providing management and space to a "centralized housing
resource center" to serve the immediate area. The resource center would have a staff
person to act as a "connection" to housing resources in the area. In the planning stage is
to have the staff connected closely with the Great Falls Neighborworks organization to
ensure first time home buyers subsidies from Glacier Affordable Housing Foundation in
Great Falls are accessed for Flathead valley residents.
As the CD/ED department explored the CLT models it became apparent anot-for-profit
entity with affordable housing as a core responsibility needed to administer and manage
CLT's with the City as a partner. The City turned to Northwest Montana Human
(NWMHR) Resources and inquired if the City were to donate land would the NWMHR
administer and manage the CLT? The answer is yes providing the City assist in financial
support of the administration of the CLT project.
The CD/ED department recommends that the City support the adrnin of the CLT with an
annual contribution of funds rather than to hire a full -tinge housing manager. The full-
time housing manager annual salary plus benefits is estimated at $63,278 and is a
reoccurring cost annually. The department recommends grant Writing duties that formerly
fell under the housing manager's duties Will in the future be fulfilled by the community
Investments Officer. The important connection to housing Will be fulfilled by the
Community Development Manager.
Communily Development Co oration CDC
Community development corporations are non-profit, community -based organizations that anchor
capital locally through the development of both residential and commercial property, ranging from
affordable housing to developing shopping centers and even owning businesses. First formed in the
1960s, they have expanded rapidly in size and numbers since. An industry survey published in 2006
found that 4,600 CDCs promote community economic stability by developing over 86,000 units of
affordable housing and 8.75 million square feet of commercial and industrial space a year.
No sector of the expanding community wealth -building economy is more celebrated for its success
than community development corporations (CDCs). From humble beginnings, the CDC movement
today has grown to an estimated 4,600 CDCs spread throughout all 50 states and in nearly every
major city. Community development corporations are typically neighborhood -based, 501(c)3 non-
profit corporations, with a board composed of at least one-third community residents, that promote
the improvement of the physical and social infrastructures in neighborhoods with populations
significantly below the area median income. (Lincoln Land Policy Institute).
Abstract (Lincoln Land Policy Institute)
The City-CLT Partnership (publication) www.lincolninst.edu/
The community land trust (CLT) movement is young but expanding rapidly. Nearly 20 CLTs are started
every year as either new nonprofits or as programs or subsidiaries of existing organizations. Fueling this
proliferation is a dramatic increase in local government investment and involvement. Over the past decade,
a growing number of cities and counties have chosen not only to support existing CLTs, but also to start new
ones, actively guiding their development and sponsoring their affordable housing initiatives.
Two key policy needs are driving this new interest in CLTs, particularly in jurisdictions that put a social
priority on promoting homeownership for lower --income families and a fiscal priority on protecting the public's
investment in affordable housing.
o Long-term preservation of subsidies. With local governments now assuming greater responsibility for
creating affordable housing, policy makers must find ways to ensure that their investments have a sustained
impact. CLT ownership of the land, along with durable affordability controls over the resale of any housing
built on that land, ensures that municipally subsidized homes remain available for lower -income homebuyers
for generations to come.
• Long-term stewardship of housing. Preserving affordability requires long-term monitoring and enforcement
an administrative burden that local governments are neither equipped for nor generally interested in taking
on. CLTs are well positioned to play this stewardship role by administering the municipality's eligibility,
affordability, and occupancy controls, while also "backstopping" lower -income owners to protect subsidized
homes against loss through deferred maintenance or mortgage foreclosure.
Municipal support comes in a variety of forms, depending on how well established the CLT is. For example,
local governments may offer administrative or financial support during the planning and startup phase,
followed by donations of city -owned land and grants or low --interest loans for developing and financing
projects. They may help a CLT acquire and preserve housing provided by private developers to comply with
inclusionary zoning, density bonuses, and other mandates or concessions. As the CLT builds its portfolio,
municipalities may provide capacity grants to help support its operations. Finally, local jurisdictions may
assist CLTs by revising their tax assessment practices to ensure fair treatment of resale -restricted homes
built on their lands.
As welcome as their support has been, local governments may inadvertently structure CLT funding and
oversight in ways that undermine the effectiveness of the very model they are attempting to support. The
challenge ties in finding the most constructive ways of putting municipal resources to work in pursuit of
common objectives.
Based on a review of three dozen municipal programs and in-depth interviews with local officials and CLT
practitioners, this report describes the mechanisms and methods that cities across the country are using to
structure their investment in CLT startups, projects, and operations. In addition to describing the full range of
options for providing municipal support, the report highlights specific model practices for rendering that
assistance. These practices have the most potential to balance the interests of all parties by:
• protecting the public's investment in affordable housing;
• expanding and preserving access to homeownership for households excluded from the market;
• stabilizing neighborhoods buffeted by cycles of disinvestment or reinvestment; and
• ensuring accountability to funders, taxpayers, and the communities served by the CLT.
The city—CLT relationship continues to evolve. This report ends with a discussion of three emerging trends:
shifts in the city's role from supporter to instigator, and from participant to governor; and a deepening of the
CLT's primary role as a steward of affordable housing created with municipal assistance. While posing new
challenges, these changes also present new opportunities for tomorrow's city—CLT partnerships.
Historic Preservation and
Community and Economic Development
Strategic Need:
I:Dn March 1, 2008 the Kalispell City Council met with senior staff to discuss strategic
goals for the City of Kalispell in the corning year. At this meeting "workforce housing",
"city funding", an "urban renewal area" and "encouraging downtown reinvestment"
were identified goals. Additionally, there was discussion of the vision of Kalispell with some
emphasis placed on the desire to keep Kalispell special, to maintain its small town, rural
America feel even in the face of rapid growth. Preserving the cultural and historic heritage of
this community is an integral part of the achievement of multiple and diverse City goals when
historic preservation is implemented as economic development strategy.
Historic preservation is not to be viewed as an end in itself but is instead a means to economic
development in the form of downtown revitalization, job creation, housing, tourism
development, etc. Donovan Rypkema of PlaceEconomics commented in 1999 to the Leadership
Conference on Conservancy and Development:
Utilizing historic preservation in this fashion, however, requires the recognition of certain
verities:
• Major landmarks and monuments need to be identified and protected, BUT
® Historic resources are far more than monuments and often are vernacular buildings
® Groups of buildings rather than individual buildings of "historic importance" have their
importance defined by their local significance, not national or international
0 Adaptive reuse of buildings is central to an effective historic preservation as economic
development strategy
Authenticity is an important element in sustainable historic preservation based success.
From this perspective, historic preservation as economic development requires leadership and
community participation. To be successful any efforts will depend upon community support
and engagement from the earliest planning stages and must meet the needs of the community.
Benefits to the City:
he strategy of historic preservation as a function of economic development has
measurable benefits including:
0 Housing in an historic area often is comparatively dense and thereby addresses a
feature of affordability;
• Rehabilitation of historic buildings increases the value of these properties thereby
increasing the City's revenue base with virtually no need for new public infrastructure;
• Typically jobs are created for skilled craftsmen to rehabilitate historic structures. This
work is most often locally based utilizing local materials, labor and expertise. Historic
rehabilitation therefore creates a greater positive impact on local jobs and wages than
does new construction which is usually done with outside experts, materials and labor.
® small business is a significant component of the economic diversity of Kalispell and
often historic buildings offer smaller size, high visibility locations with lower occupancy
costs which help small businesses succeed;
0 To the extent that tourism is an important aspect of Kalispell's economy the
identification, protection and enhancement of Kalispell"s historic buildings and districts
will support tourism.
Finally, just as Kalispell envisions itself as an unique dace in which to raise a family, to live, work
and play, it must continue to build and protect its character to differentiate itself from other
communities as a great place to do business in order to attract capital and investment.
Action items:
Fhe world of historic preservation is wide with endless possibilities. The City will need to
start somewhere and manageable increments of implementation seem the most
reasonable place. To that end the following three steps are recommended:
1. Become a Certified Local Government th4 ough the Montana State Historical
Preservation Office. This requires that the City:
® Enforce appropriate federal, state or local heritage resource legislation for the
designation and protection of historic properties within its jurisdiction.
• Establish a volunteer historic preservation Commission.
• Appoint and retain a local Historic Preservation Officer (ideally, at least half
time).
2. Create a local historic preservation awards program to recognize and celebrate
exemplary residential and commercial preservation, renovation and new construction
within the City.
3. Share historic and cultural information regarding Kalispell through the City website.
Begin Historic Preservation page including:
i. Historic and Cultural Preservation Council ordinance
if. Related building codes
iii. walking tour brochure
iv. Links to all three City -owned museum websites (and vice versa): The
Central School Museum, The Hockaday Museum of Art, The Conrad
Mansion
v. information on historic preservation awards program, if applicable
vi. Highlight May as national Historic Preservation month
vii. Provide link to Montana Historical Society and other resource websites
The action items may be treated as an a la carte menu, but would be best taken together as the
beginnings of a comprehensive plan and can be accomplished simultaneously. These three
steps will require the dedication of some City resources, primarily staff time.
Prepared by Katharine Thompson July 17, 2008