2016/2017 Tax Increment Finance (TIF) Annual ReportCity of Kalispell
Tax Increment Financing Districts
Annual Report
2016-2017
Prepared by:
Kalispell Urban Renewal Agency &
Community & 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 2016 through August 2017.
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.
The Montana Department of Revenue 2017 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 2, 2017. 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 saw significant changes in valuation from 2014 to 2015, with
values becoming more comparable from 2015 to 2016 and due to the the addition of the
Glacier Rail Park Targeted Economic Development District (TEDD) TIF base values increased
from 2016 to 2017.
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 2016-2017:
2
Member
Position
Term Expires
Marc Rold
Chairman
04/30/2018
Jeff Zauner
Member
04/30/2018
Dave Girardot
Member
04/30/2021
Shannon Freix
Member
04/30/2020
Matt Venturini
Member
04/30/2020
The URA held five meetings and attended one public meeting from January 2017 through
August 2017. 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 2016 to August 2017
follows:
Meeting Date
Attendance
Action
01/10/2017
Rold, Zauner, Venturini
Discussion of proposed dog park in the South
Kalispell/Airport TIF District, acceptance of duties as
Kalispell Brownfields Committee, Northwest Drywall
Memorandum of Understanding overview
03/01/2017
All Members
City Manager, Doug Russell, gave an overview of 2017
TIF/URA legislative proposals, acceptance of 2015-2016
TIF Annual Report, Brownfields Program update,
timeline for construction at Glacier Rail Park shared
05/17/2017
All Members
Discussion of 18th Street and Airport Road intersection,
Brownfields Program update, TIGER/Kalispell Core & Rail
Redevelopment Project update
07/19/2017
Rold, Zauner, Freix, Venturini
City Manager shared details possible airport users group
management of city airport, 18th Street and Airport
Road intersection and 13th Street and Airport Road at
the Hwy 93 South intersection modification discussion,
Brownfields Program briefing, TIGER/Kalispell Core &
Rail Redevelopment Project update
08/16/2017
All Members
Public Works Director, Susie Turner, provided details
regarding possible modification of the 18th Street &
Airport Road and/or 13th Street & Airport Road at Hwy
93 South intersection modifications, Board moved to
make a recommendation to City Council for a traffic
study of the two intersections, invitation to
TIGER/Kalispell Core & Rail Redevelopment Project
groundbreaking ceremony shared
El
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 Core Area 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
The table shows decrease in both the current taxable value and the total incremental value
from 2016 to 2017. 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 facade 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
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and rehabilitation of the building facade comparable to historic standards, this project was
completed in June 2016. The recently restored property was recently purchased by a local
business owner and will soon be opening as Noble Dance studio with long-term lease
apartments on the 211 floor.
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 Kalispell 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, these funds were obligated and construction on the Glacier
Rail Park site began in August 2017. This project begins with the construction of the new Glacier
Rail Park at the reclaimed gravel pit on the east side 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:
h 1:L&ww.kal{L ellcoireandirail.coirn
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
z
2016
Fuel Fitness
$1,700,000
1305 Hwy 2 W
2017
Herberger's Addition
$2,000,000
20 N Main St
2017
7 Main Street — Noble Dance Studio
$50,000
7 Main Street
2017
NW Automotive Expansion
$45,000
20 2nd Ave W
2017
Rivals Sports Bar
$50,000
1250 Hwy 2 W
2017
McDonalds Rebuild
$815,000
1110 Hwy 2 W
2017
Sunrift Beer Company
$117,500
409 11 Ave WN
TOTAL
$11,669,038
The West Side TIF District will expire on January 1, 2037.
West Side TIF Fiscal Year 2016 Revenue (7/1/16-6/30/17)
West Side TIF beginning cash July 1, 2016: $4,002,943
Tax Increment Revenue: $528,471
Investment Earnings Revenue: $41,119
Fiscal Year 2017 Available for Expenditures: $4,572,533
West Side TIF Fiscal Year 2017 Expenditures and Commitments:
Personal Services: ($50,216)
Contract Services: ($2,192)
Administration Transfer: ($3,464)
Debt Service: ($34,016)
Pre -TIGER ($418,160)
Redevelopment Activity: ($9,700)
Total Expenditures and Commitments: ($517,748)
Uncommitted Cash as of 6/30/2017: $4,054,785
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 2016 to 2017, showing an increase 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 $1,191,058 resulting in a 163% 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,
X
through public outreach, identified 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, 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 South Kalispell Urban Renewal Plan.
As a result of the plan, a recently established airport users group has approached the City of
Kalispell with a proposal to take over management of the airport, details are currently in
negotiation and will go before City Council for consideration.
The South Kalispell/Airport TIF District will expire July 1, 2020.
South Kalispell/Airport TIF Fiscal Year 2016 Revenue (7/1/16-6/30/17)
South Kalispell/ Airport TIF beginning cash July 1, 2016:
Tax Increment Revenue:
$1,441, 237
$600,745
Investment Earnings Revenue: $18,304
Fiscal Year 2016 Available for Expenditures: $2,060,286
South Kalispell/Airport TIF Fiscal Year 2017 Expenditures and Commitments:
Personal Services: ($23,902)
Contract Services: ($1,939)
Administration Transfer: ($9,243)
Debt Service: ($178,483)
Redevelopment Activity: ($0)
Total Expenditures and Commitments:
($213,567)
Uncommitted Cash as of 6/30/2017: $1,846,719
1101
Old School Station, Industrial
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
The table above shows a decrease in current taxable value or incremental value from 2016 to
2017. It should be noted that the current assessed value of property within the Old School
Station —Industrial District increased from $126 to $18,877, a 14,882% 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 2017 $15,000 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 both the
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 r s„kaUusp Oaoca�o a �vroo uP"!ty c in c development/
The Old School Station —Industrial TIF is scheduled to terminate on the fifteenth year following
its creation on January 1, 2020.
IN
Old School Station Industrial Fiscal Year 2017 Revenue (7/1/16-6/30/17)
OSS TIF beginning cash July 1, 2016: $10,279
Tax Increment Revenue: $9,840
Investment Earnings Revenue: $146
Fiscal Year 2017 Available for Expenditures:
$20,265
Old School Station Industrial Fiscal Year 2017 Expenditures and Commitments:
Personal Services: ($0)
Contract Services: ($15,000)
Administration Transfer:
Debt Service:
Redevelopment Activity: ($0)
Total Expenditures and Commitments:
($15,000)
Uncommitted Cash as of 6/30/2017: $5,265
W
14
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
$390
$390
0
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$107277
12.6%
%i 94 851
106 887
12.7%
The table above compares the values for year 2016 to 2017, showing an increase 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 27,307%
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.
15
Old School Station Technology Fiscal Year 2017 Revenue (7/1/16-6/30/17)
OSS TIF beginning cash July 1, 2016: $9,731
Tax Increment Revenue: $62,938
Investment Earnings Revenue: $150
Fiscal Year 2017 Available for Expenditures:
$72,819
Old School Station Technology Fiscal Year 2017 Expenditures and Commitments:
Personal Services: ($0)
Contract Services: ($56,123)
Reimbursements/other:
Debt Service:
Redevelopment Activity: ($0)
Total Expenditures and Commitments:
($56,123)
Uncommitted Cash as of 6/30/2017: $16,696
16
Glacier Rail Park Targeted Economic Development District
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.
Current City Council Ward: Ward 2 Council Members: Wayne Saverud and Chad Graham
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 utilize Tax Increment Financing as part of the overall strategy to provide
infrastructure in support of value -adding industry pursuant to the 2013 Targeted Economic
Development District Act, embodied in 7-15-4279, Montana Code Annotated. 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 is 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;
17
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.
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 October 18, 2017:
Date
Mar(Rold, Urban Renewal Agency Chairman
arine Thompson, Assistant Dfrector of Community
& Economic Development
Krista"'miners, C*munity Development Coordinator
20
Submit Inquiries To:
Katharine Thompson
Assistant Director of Community
& Economic Development
201 First Avenue East
Kalispell, MT 59901
406/758.7713
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