Commissioners clash over tax increment funding request for downtown

A funding request from the Downtown Development Partnership caused some City Commissioners to air frustrations during their Dec. 19 meeting.

The DDP was seeking $10,000 in tax increment financing funds, half for operations and half for the development of a downtown website.

The requests were ultimately approved, each with a 3-2 vote, with Commissioners Bill Bronson and Fred Burow dissenting.

The DDP has 11 permanent members: Downtown Great Falls Association, Business Improvement District, Great Falls Development Authority, the city’s Neighborhood Council 7, City of Great Falls Parking Commission, City of Great Falls, Cascade County, City-County Historic Preservation Advisory Commission, Great Falls Area Chamber of Commerce, Great Falls School District 1 and NeighborWorks Great Falls.

The requested funds are from the Downtown Urban Renewal District TIF and require approval from the City Commission.

Bronson said that the requests met the legal requirements for TIF funds, but given the legislative attacks on TIFs, he had reservations about using the funds for something other than public infrastructure.

Thirteen bills were introduced during the last legislative session that would modify TIFs in one or more ways, according to the Montana League of Cities and Towns. The bills were strongly opposed by the League, which organized a coalition of the private sector, TIF communities and the Governor’s Office of Economic Development to resist the proposals. Most of the bills failed, but some were approved and the League worked with the House Taxation Committee to get a TIF interim study that will be coordinated with the TIF performance audit that was launched in the spring by the Legislative Audit Division.

The downtown TIF generally encompasses the central business district and periphery properties. In the TIF district, city taxes on improvements to properties in the district goes into the TIF fund for use on items that benefit the public good. The downtown TIF district was established in 2012 in an effort to improve the downtown. To do so, the city determined that blight, as described in state law, existed in the downtown.

According to a 2012 commission resolution, an analysis of building permits issued in the city from 2005 to 2010 showed a lack of investment within the district. Of the 1,760 building permits issued city-wide during that period, only 96 were issued for construction in the district. The value of projects for which the building permits were issued resulted in a $369 million investment city-wide compared to $13 million in the district.

Since the district was created in 2012, there have been 147 permits issued within the district with an estimated $19.9 million in value, according to city records.

But whether operations and websites were the best uses of TIF funds was up for debate among commissioners.

Brett Doney with GFDA said that six of the DDP members are exempted from paying membership dues. Those the members that are government agencies. The other five member groups each give about $1,000 annually.

“We’ve been making progress,” Doney said, but acknowledged there is more work to do. “The partnership is working.”

Doney said the DDP is sensitive to the stateside attack on TIFs, but believed the modest request would support downtown and benefit the community.

The $5,000 in TIF funds toward DDP operations, would give the organization more financial flexibility and free up membership money to be used for other purposes, such as to create matching funds for grants, liability insurance, etc., according to the city staff report. The $5,000 would be used more strategically, staff wrote, to promote the development objectives that are shared by both the TIF and the DDP.


Sheila Rice, with the DDP and director of NeighborWorks Great Falls, said the projects need to get done for the downtown and it would be a “small measure of support” from the city. She said DDP operations and the website aren’t brick and mortar but they’re building the foundation for the growth of downtown.

As for the website, in today’s world, she said, everything is on the web.

“If you’re not on the web, you don’t exist,” Rice said.

The website would facilitate the concept of “One Downtown” by joining all downtown groups together on one website that would encourage individuals to shop, play and live downtown, according to the staff report. The website would also provide information to developers looking to bring new projects downtown using a single point of entry so the developer, business or retailer can find the resources and information needed to bring their project downtown.

Shane Etzwiler, president of the Great Falls Area Chamber of Commerce, said the website would “show what a great area we have downtown.”

Bronson said he wanted to wait until after the new year since he’s been participating in working groups on TIFs and has met with counterparts in other communities and seen how they’re leveraging TIF funds.


He said that when TIF districts start getting into areas other than infrastructure, it starts to raise red flags at the legislature, even if it shouldn’t. Up to this point, he said Great Falls has enjoyed one of the best reputations in the state for managing TIF districts.

Bronson said that other Montana cities are leveraging their TIF funds to buy blighted buildings in their downtown to spur development and he suggested saving the TIF funds for bigger projects like the Rocky Mountain Building. He said he’d heard that property might go on the market in the next year or so, presenting opportunities.

Mark Cappis, one of the building’s owners, said they are working on a bid to get a roof put on and are going to start closing it in to keep it dry and keep the birds out. He said they’ve also engaged a commercial real estate agent to help find tenants, additional partners or another developer to purchase if they are so inclined.

“We are still trying to move the project forward,” he told The Electric.

The Downtown TIF Fund currently has a balance of $284,736.96 and funds for the 2018 fiscal year have not yet been received, according to the city fiscal services department.

Commissioner Tracy Houck asked if Bronson had addressed his concerns with the DDP prior to the meeting. Bronson said he sent his questions to city staff and also received some additional information the day of the commission meeting.

Houck expressed frustration that it was the second consecutive meeting when Bronson had brought up new information about actions when the commission was set to vote. She said she’s prefer to have the information sooner to make good decisions.

Bronson said that commissioners are limited by open meeting laws and he’d prefer to share information and have discussions in public meetings. He said he’d rather postpone the vote and have a work session on the DDP.


Doney said that the projects have been discussed for months at DDP meetings and that “it’s just a little frustrating,” to hear the reservations at the commission meeting.




Commissioner Bob Jones, at his last meeting as commissioner, said “I want to move forward with this.”

Jones said that Bronson could have more discussions if he wanted to, but that he wanted to vote that night. Bronson said he often attends DDP meetings.

Commissioner Fred Burow, also in his last meeting as commissioner, said he also had reservations and felt TIF should be used for infrastructure.

“I would like to see those tax dollars spent on brick and mortar,” he said.

He also questioned the need for a website promoting the downtown to developers when he thought GFDA should already be doing that work.

Mayor Bob Kelly said the legislature has creating a moving target and that Bronson is in the weeds with a lot of other people to figure out the details.

“The legislature is looking to put a stake through the heart” of what TIFs do, Kelly said.

But he said the commission has to deal with what’s in front of them and that he’d support the request since it meets the current requirements. Kelly said that if the legislature wants to take TIFs away in the future, that the city would fight against it since it’s viewed by most city officials as an economic development tool.