Civic Center repair financing on tonight’s Commission agenda
City Commissioners will be asked to authorize the issuance and sale of up to $6 million in tax increment bonds during their Feb. 2 meeting.
The city is bonding against the Downtown Urban Renewal Tax Increment Financing District to fund the estimated $6 million project to renovate and repair the exterior façade and roof of the Civic Center and extend the tax increment district for 13 years.
The TIF funds will be used to pay the annual debt service, an estimated $441,490.50.
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In December, commissioners voted to authorize the use of up to $8.82 million in TIF funds, which includes interest on the debt for the project.
The resolution being considered Tuesday will establish the terms, conditions and documentation for the sale of up to $6 million in tax increment bonds to D.A. Davidson and Company, according to the staff report.
City Commission to consider $8 million in TIF funds for Civic Center repairs
City officials and the city’s outside bond counsel, Dorsey and Whitney, to develop those terms and conditions and the purchase price, redemption features and interest rate on the bonds will be subject to the following, according to the staff report:
- the aggregate principal amount of the bonds won’t exceed $6 million;
- the maximum true interest cost on the Series 2021 Bonds shall not exceed 4.5 percent;
- the purchase price of the Series 2021 Bonds shall not be less than 99 percent of the principal amount
thereof, exclusive of original issue premium or discount; and - the final maturity of the Series 2021 Bonds shall not be later than 20 years from their date of
issuance.
The form of the bonds and final terms and conditions will come to the City Commission for final approval under a separate resolution, according to the staff report.
City officials have for years discussed the need to repair the Civic Center façade and 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 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.
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As a precaution, the city installed barricades to protect the public from falling debris.
The Civic Center building was built in the 1930s, under the Works Progress Administration. The Works Progress Administration was renamed in 1939 to the Work Projects Administration, according to the city’s history of the building. The program was created by Franklin Delano Roosevelt’s presidential order and funded by Congress with passage of the Emergency Relief Appropriation Act on April 8, 1935.
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In recent years, some of the cast stone concrete panels have been deteriorating, there’s exposed rebar that’s corroding and “massive cracking,” Tony Houtz told commissioners in June 2019. Houtz is an architect with Cushing Terrell formerly known as CTA Architects Engineers.
They city published the request for qualifications in February 2017 and in October 2017, the City Commission approved a $494,060 professional services agreement with CTA for architectural and engineering design services for repairs to the façade of the Civic Center.
In late January 2019, most commissioners said repairing the Civic Center façade was among their top priorities.
City restricting to access to Civic Center as front panels cracking, buckling
During the June 2019 meeting, Craig Raymond, city planning director, 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.
Staff now anticipate that “COVID has had a significant effect on construction material costs as well as availability of labor. As such, we have revised the estimate to $6.2 million,” according to the staff report for the Feb. 2 meeting.
The project is currently out for bid, with a Feb. 17 opening date when staff will have a better idea of actual costs and if proposals exceed their estimates, staff will review options and update commissioners, according to the staff report.
Initially, city officials said they would likely need to send the project to a public vote for a bond, but then proposed to use funds from the Downtown Tax Increment Financing District to back a revenue bond and pay the debt service.
The use of the TIF as a funding mechanism has rankled some in the business community, particularly those downtown, but city officials hold that it’s an appropriate use of those funds as public infrastructure, which is spelled out in the state laws governing TIFs.
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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 Downtown Development Partnership meeting. “I don’t think anybody could argue that there isn’t a heavy emphasis on public facilities” in the statute.
If the TIF did not exist, those funds would have been in the general fund to support city operations and the use of the TIF prevents the city from having to go to voters for a bond, which would raise taxes on all property owners for the duration of the bond, city officials have said.
Fire stations, Mansfield seats, Civic Center repairs: odds and ends from recent public meetings
Some in the business community have asked the city to consider expanding the use of downtown TIF funds to private developers for certain code compliance, façade and crime prevention through environmental design projects. Joan Redeen of the Business Improvement District and Kellie Pierce of the Downtown Great Falls Association are presenting those proposals to commissioners during their Feb. 2 work session.
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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.”
