City planning board gives initial OK to amend downtown plan to include Civic Center for TIF funding

The city’s proposed amendment to the Downtown Urban Renewal Plan is moving forward.

The amendment would specifically list the Civic Center as a project in the plan, allowing the city to use downtown tax increment financing funds to help finance the estimated $5.5 million façade and roof repair project.

During the Aug. 11 planning board meeting, City Planning Director Craig Raymond said the city has clear limitations on how much debt can be taken on without going to the voters for a specific request.

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“And in this climate, who knows how successful that would be,” Raymond said.

City staff are proposing to us $405,000 to $440,000 for annual debt service payments on a 20-year bond that would fund the Civic Center repairs.

Using TIF funds would allow the city to avoid asking the voters to approve a tax increase to fund the repairs.

The city has also applied for a $500,000 grant from the state to use for the project and if successful, those funds could be used to offset some of the cost.

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Tax increment financing districts are designated areas of the city where the base taxes on properties go into the general fund, but the tax revenue generated by improvements to properties in the district go into a fund that is used to fund public improvements in the district with the idea of spurring development.

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When a district expires, those funds go back into the general fund. If the district wasn’t in place, those funds would be in the general fund.

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The revenue collections for the fiscal year that ended June 30 was $1.2 million and the district is projected to generate $1.2 million to $1.3 million during this fiscal year, according to city officials.

Some downtown TIF funds have already been committed to the wayfinding project, city parking system improvements and operational costs for the Downtown Development Partnership, leaving an estimated $700,000 available annually for downtown developers to request.

During the Aug. 11 meeting, Raymond said that historically, the downtown TIF didn’t have a large account balance, but that changed recently when the Montana Department of Revenue changes how the Energy West property was assessed and some tax abatements ended so there was an influx of revenue in the fund.

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The item before the planning board on Aug. 11 was simply an amendment to the Downtown Urban Renewal Plan, which hasn’t been updated since the TIF district was created in 2012.

City staff will then submit the TIF application through the normal process, which requires review by the Downtown Development Partnership and the City Commission.

Some downtown groups and developers are asking the city to amend the Urban Renewal Plan further to allow TIF funds to be used for fire suppression and ADA improvements in privately owned buildings.

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So far, city staff have said their exploring options for that and whether it’s allowable under the state TIF laws. City Commissioners said earlier in August that they wanted staff to move forward with the Civic Center project as an immediate need and then have further conversations about expanding the use of TIF funds downtown.

Pete Fontana, planning board chair, said he would prefer that the plan be amended to include all publicly owned buildings downtown so that the city, county or school district could use TIF funds for those buildings.

“I think you set a precedent here for public buildings,” Fontana said.

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TIF funds are intended for public infrastructure and facilities but Raymond said the city’s TIF and bond counsel advised that the plan should be specific in identifying the Civic Center.

Joe Cik, assistant city attorney, said that the Civic Center needed to be specifically mentioned to comply with state tax revenue reporting or risk losing the city’s entitlement share.

Charles Pankratz, planning board vice chair, said it didn’t appear too difficult for a government agency to request an amendment to the Urban Renewal Plan if they had an eligible project and wanted to request TIF funds.

Brett Doney of the Great Falls Development Authority said the agency supports the use of TIF “primarily because we see it as the only way politically possible at this time to move forward with the renovation of the façade of the Civic Center which is the heart of the city.”

But, Doney said the change also includes other items for the Civic Center, though none of those have been identified for short term project by city officials.

He said that the Urban Renewal Plan also include about 80 other strategies for development that had not yet been implemented. Those items also identified other agencies, nonprofits and organizations as key partners, including the Great Falls Development Authority, Business Improvement District and Downtown Great Falls Association, among others.

Doney said they’re also advocating the use of TIF to help private property owners with certain improvements in order to grow the tax base.

If the city bonds the Civic Center using the TIF funds, it will extend the life of the district from 2027 to 2041, according to the city.