City considering TIF request for downtown event center project
The developers of Newberry, the event space coming to 420 Central Ave., have requested $171,200 of tax increment financing funds from the city for the renovation projects.
STSA Partners, which includes owners of LPW Architecture, Enbar/The Block and the Mighty Mo, submitted an application for TIF funds to offset costs for curb and sidewalk repair, fire suppression installation, structural repair, roof repair and ADA compliance.
They’ve requested funds from the downtown TIF district.
City staff is recommending that City Commissioners approve up to $9,100 specifically for reconstruction of the sidewalk, curb and construction of temporary sidewalk.
The Downtown Development Partnership is the reviewing body for requests to the downtown TIF and during their March 24 meeting, they voted to recommend that the City Commission approve the entire request.
The request is scheduled to go to the commission for first reading on April 20 and a public hearing on May 4.
The city’s current TIF program is conservative and focuses on funding public infrastructure. TIF programs are governed by state law.
City staff are currently working with representatives from the Business Improvement District and the Downtown Great Falls Association to develop new TIF programs that would expand the use of TIF funds for private development.
The city’s outside legal counsel determined the request for sidewalk and curbs funding is eligible under the city’s rules.
“Improving safe pedestrian circulation is listed as a strategy within Downtown Master Plan as well as the Downtown Urban Renewal Plan. This request of the applicant is an eligible public infrastructure expense. For the elements of the request associated with the applicant’s private property, staff and the city’s legal counsel do not view these building renovations as public infrastructure. City staff has discussed this precise issue with the City Commission and received positive direction to research and propose a legislative program that could allow for TIF funding to be allocated for fire suppression and ADA compliance upgrades to downtown buildings. Until such a legislative program is developed, staff recommends that the DDP and the City Commission limit its public infrastructure allocation to the proposed sidewalk, curb and temporary sidewalk improvements,” according to the city staff report. “The City Commission could consider funding private building improvements in advance of a legislative program being developed. However, staff recommends the commission take a more conservative TIF funding approach until more legislative guidance is adopted.”
The Newberry developers hope to host more than 90 events annually in the first year and bring more than 60,000 people downtown annually, according to the staff report.
The space was split into two commercial spaces and Central Avenue Meats is now in the space that was previously occupied by Fairway Comfort Systems.
The space that will house the event space has been vacant for longer than three years.
The renovation project is an estimated $1.5 million, according to the staff report, and generally the maximum limit for using public funds toward private development is 10 percent of the construction/rehabilitation costs, exclusive of acquisition costs.
The developer’s request of $171,200 is 11.4 percent of the total renovation cost, and $9,100 is below the 10 percent threshold according to staff.
“The City Commission has the discretion to award funding above the 10 percent threshold, but staff doesn’t recommend this approach given the eligibility question concerning the applicant’s requested private property improvements,” according to the staff report.
Commissioners approved a tax abatement for the project in August.
City staff is recommending approval of the 5-year abatement in which the developers would get a tax break on the new property taxes generated from the expansion and based on the current tax rate, estimated costs of remodeling and the post-construction appraisal value, the estimated loss of city tax revenue over five years would be $28,000.