Commissioners approve use of TIF funds for $8 million Civic Center repair project

City Commissioners unanimously approved the use of up to $8.8 million of tax increment financing funds to repair the Civic Center roof and façade.

The city is requesting to use the downtown TIF funds for the project that’s an estimated $5.5 construction cost and the Downtown Development Partnership voted in October to recommend approval of the use of the funds.

With contingency, underwriting costs and interest paid over time, staff estimated the total cost will be about $8.8 million.

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In early 2020, City Commissioners directed staff to explore the possible use of TIF funds to be used as a guarantee in a bond sale to fund the Civic Center repairs. That’s what the city is intending to do and use the TIF funds to pay the annual debt serve payments, an estimated $441,490.50.

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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The downtown TIF is projected to generate about $1.4 million annually, according to a new estimate from the fiscal department this week, leaving about $1 million in the fund annually to fund other eligible projects.

Commissioner Owen Robinson said that when the proposal to use TIF funds first came up, he had reservations since other entities pay taxes into the district and the city doesn’t. If the TIF district wasn’t in place, all of those tax dollars would go into the city’s general fund.

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He has since changed his stance since the Civic Center has to be fixed and “it’s an embarrassment to have the front fenced off.

Initially, city officials were considering a bond issue on the ballot for a public vote to fund the repairs, but Robinson said that likely wouldn’t pass.

The third reason he was supporting the request to use the funds for the Civic Center, Robinson said, is the amount of funds generated annually in the district.

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“I think that we’re going to have plenty of TIF funds for the projects downtown,” Robinson said.

So far, this year, only one other request submitted for downtown TIF funds for building projects has been for a total of $132,392 for reconstruction of the public sidewalk and vault along the street at 313-315 Central Avenue as well as the installation of a fire suppression system and interior demolition work.

The Downtown Development Partnership requests and has received funding for their operations and website.

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In September, the City Commission approved $25,440 of TIF funds for the public sidewalk and vault reconstruction along Central Avenue, but city staff and outside bond counsel did not recommend funding the fire suppression system under the current city and state guidelines for TIF funds.

When the city was estimating that the annual increment generated would be $1.2 million, and accounting for funds already obligated, the downtown TIF had about $924,000 available. Since the district was established in 2012, the City Commission has approved $531,931 worth of TIF funded improvements with $230,109 of approved projects not yet paid, according to city documents.

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Commissioner Mary Moe said that they’d received some comment asking that interior improvements also be made to the building, including replacing the seats, fixing the ceiling tiles and expanding the backstage rigging, while the exterior project was being completed.

Moe said that the interior improvements were being put off for now but the façade and roof repairs were a safety issue that must be addressed, and “this is the best way, I think, to address it.”

Scott Reasoner, a downtown business owner and Great Falls Area Chamber of Commerce board chair, said he wasn’t opposed to the use of TIF funds for the Civic Center and sees the importance of the project, but asked the commission to delay approving until the city can approve an updated downtown plan.

Raymond, the city planning director, said he was working with Kellie Pierce of the Downtown Great Falls Association and Joan Redeen of the Business Improvement District, on drafts to potentially expand the use of TIF funds in the downtown district. Those plans would require approval by the City Commission.

In early October, the City Commission unanimously approved an amendment to the Downtown Urban Renewal Plan to include Civic Center repairs.

Their Oct. 6 action merely updated the downtown plan and does not include any actual approval of funding for the project, contracts or use of tax increment financing dollars, but the plan amendment was needed to specify the Civic Center as a project eligible for downtown TIF funds.

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In June, City Manager Greg Doyon restricted access to the front of the Civic Center due to public safety concerns.

A piece of the back panel recently became dislodged, triggering the evaluation of other areas around the Civic Center, including “substantial cracking and buckling of the front panels,” according to the city.

As a precaution, the city is installing barricades to protect the public from falling debris.

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For years, City Manager Greg Doyon has been talking about the need to repair the Civic Center and his concerns for public safety should the façade fail.

During the June 16 City Commission work session, City Planning Director Craig Raymond said if those panels start to fall off, “that’s a very bad day for the city.”

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During that meeting, Raymond and Doyon again walked the commission through the engineering report on the Civic Center and estimated $5.5 million project that would include replacing the roof, which has been an issue for the building for years, and replacing the façade panels that have been failing, creating a potential safety hazard as they continue to deteriorate.

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Initially, city officials said they would likely need to send the project to a public vote for a bond, but have since proposed to use funds from the Downtown Tax Increment Financing District to back a revenue bond and pay the debt service.

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The Civic Center includes the Convention Center and the Mansfield Theater, and Raymond said in August that “it would be a disservice to dismiss the positive effect those facilities have on the downtown.”

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“I understand what people are saying when they express reservations about the Civic Center using those funds, but there’s no question in my mind when you look at the statutory language, it actually puts a preference and an emphasis on public infrastructure and facilities,” Raymond said during the September DDP meeting. “I don’t think anybody could argue that there isn’t a heavy emphasis on public facilities” in the statute.