City continuing effort to expand downtown TIF program

The city is continuing the discussion about expanding the use of tax increment financing funds in the downtown district for certain projects by private developers.

The proposed expansion for the use of downtown TIF funds, which are specifically regulated by state law, was drafted and presented by Kellie Pierce of the Downtown Great Falls Association and Joan Redeen of the Business Improvement District, with assistance from Craig Raymond, city planning director and input from the city’s outside TIF counsel.

Pierce and Redeen, with support from other downtown entities, are proposing to allow the use of downtown TIF funds for private commercial development for code compliance, facade improvements and crime prevention through environmental design projects.

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TIF districts create specific areas of targeted development or urban renewal where a base tax level is set and the tax increment on improvements within the district go into a special fund to be used for public improvements within that district. Great Falls currently has five TIF districts.

Their proposal would set aside up to $500,000 of TIF funds annually for eligible projects.

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Initially, they proposed that the Downtown Development Partnership would be responsible for reviewing, approving and administering funding for eligible projects. City Commissioners expressed concern about that during their Feb. 2 work session since it’s made up of stakeholders and many of the board members are involved with groups that would potentially be requesting the funds.

Raymond worked with Redeen and Pierce to revise the proposal that would have city planning staff administering the program.

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“I do believe it will probably have some staffing considerations to think about” and the long-term impact that Raymond said will be addressed in the upcoming budget season.

They’re proposing that, similar to the current Community Development Block Grant program, city staff would review and make funding decisions up to normal cap amounts. Any project or application that exceeds funding caps or is unique or high impact would come to the City Commission for consideration.

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Raymond said that would make the process more efficient and expedient, versus bringing every application to the commission, which is the current process.

It will still take several months for the plan to be finalized and before any property owner could apply for TIF funding through this new program. It’s a lengthy process to update the Downtown Urban Renewal Plan due to the required public hearings and notification requirements.

Raymond that for now, his office will handle reviewing the applications, and monitoring their compliance if approved, with existing staff, but into the future, if there’s a higher volume of applications, it will likely require more staff. Raymond said the city can also potentially use TIF funding for staffing the administration of the program.

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Commissioner Rick Tryon said that at first blush he’s in favor but isn’t convinced that having staff make the decision would be the best process. He asked what staff would say to a business outside the district who isn’t eligible for the TIF funding and has to pay for their own projects. He asked the same question in February and Raymond addressed it the same both times saying the downtown TIF district was specifically created to promote revitalization and that many downtown buildings are old and in need of significant improvement. Raymond also said there are other TIF districts in the city that have supported private businesses that develop in those areas to include West Bank, the industrial park on the northern end of the city that includes ADF and Malteurop, and the industrial park near Malmstrom Air Force Base that includes Helena Chemical.

Currently, the proposal does not address whether a project that was approved for tax abatement could be eligible for TIF funding.

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Examples of eligible projects in the code compliance category include new elevator installation, ADA compliance and fire suppression. Under the proposal from downtown groups would allow the TIF to provide up to 50 percent matching funds for eligible projects not to exceed $50,000.

Raymond said the city would like to promote mixed use and more residential on upper levels of downtown buildings and while it’s happening in some buildings, the cost of adding elevators and ADA access has been a hindrance for many projects.

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Pierce and Redeen are proposing a façade program, similar to what BID had in place until Feb. 2020, with the objective of encouraging voluntary repair of existing commercial properties in the downtown core.

That program would also allow matching funds of up to 50 percent, not to exceed $25,000.

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It would include window upgrades and installation, masonry and more but all improvements must be permanent in nature to be eligible.

Raymond said that for a lot of people, façade improvements would be the most obvious, visible change and “we feel it will help stimulate further downtown improvement.”

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In February, Pierce cited the Mighty Mo Brew Pub, Central Avenue Meats and the upcoming Newberry event center as examples of projects that have improved the look of downtown and spurred other improvements.

The crime prevention through environmental design program would allow matching funds up to $5,000 for items like exterior lighting and security cameras, which must be added to the Great Falls Police Department’s registry if they get the TIF funding.

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As proposed, the program would have funding limits of $500,000 annually and each parcel would be limited to a total of $80,000 over 15 years of any combination of the categories of TIF funding.

Under the current proposal, the Downtown Development Partnership would administer the program and have autonomy over the $500,000 to review and award funds.

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Currently, the DDP reviews and makes recommendations to the City Commission for TIF requests in the downtown, but all projects require commission approval. Staff would provide assistance under the current proposal.