City approves expanded TIF programs for downtown projects

City Commissioners voted unanimously to approve an amendment to the Downtown Urban Renewal Plan that will allow the city to use tax increment financing for a wider range of projects by private developers.

The new programs will go into effect in August.

The downtown tax increment financing district is an urban renewal district that was established in 2012 with key goals including the elimination of blight and revitalization of the downtown.

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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.

TIF districts and use of those funds are governed by state law and if the districts weren’t existence, tax revenue in those areas would go into the city’s general fund.

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The city’s current downtown plan has narrow guidelines for the use of TIF funds in private development that primarily focus on public infrastructure.

Downtown organizations have been asking the city to consider a broader use of TIF funds in the downtown and staff said those uses could be eligible under the law, but they’d need to be explicitly identified in the city’s plan for the district.

In May, the Downtown Development Partnership and the city planning board voted to recommend approval of the amendment.

During the July 6 commission meeting, Brett Doney of the Great Falls Development Authority, said they support the new programs.

“It’s pretty exciting what’s going on downtown,” Doney said. “What the city has been doing in supporting downtown revitalization is working.”

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Joan Redeen of the Business Improvement District and Kellie Pierce of the Downtown Great Falls Association drafted the new programs, modeled in part after programs in other Montana cities, and worked with city staff to develop the proposal that was considered.

The plan from Redeen and Pierce will set aside up to $500,000 of TIF funds annually for eligible projects.

The plan creates three new programs within the downtown TIF.

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The Downtown Urban Renewal Area Façade Program will provide up to a $50,000 reimbursement per project for eligible façade renovation activities.

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

In October, the City Commission amended the Downtown Urban Renewal Plan to specifically mention the Civic Center façade project.

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“The Life Safety Code Compliance Program is designed to stimulate increased public safety and handicap accessibility improvement projects. Due to the historic nature of the downtown building inventory, many buildings are rife with building and fire code violations as well as features that impede the use and enjoyment of services and activities for those with physical and mobility impairments,” according to the staff report.

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The total reimbursement available for each requested project under the Life Safety Code Compliance Program is $25,000.

The Environmental Safety Program works toward the elimination of blight using the principles of Crime Prevention Through Environmental Design and other safety and security design principles. The total reimbursement for each project is $5,000 such as exterior lighting and security cameras, which must be added to the Great Falls Police Department’s registry if they get the TIF funding.

The program has funding limits of $500,000 annually and each parcel is limited to a total of $80,000 over 15 years of any combination of the categories of TIF funding.

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The remaining balance of annual TIF increment earned will either be used to cover bond debt payments, such as the roughly $440,000 annual debt service for the Civic Center façade project, or left in the account for use outside of the three new programs in the existing Downtown Urban Renewal Plan.

The current balance in the downtown TIF is about $2 million and the account generates about $1 million in increment annually.

Under the plan the new TIF program, projects will be considered on a first come-first served basis and anything under $80,000 will be reviewed by staff with the final decision being made by the city planning director, or deputy director if needed. Anything over $80,000 will go to the commission for consideration.

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If an application was denied by staff, the applicant could appeal to the commission and in the case of commission denial, it can be appealed to district court, according to City Planning Director Craig Raymond.

The discussion of the new programs has generated positive buzz, Christian Leinhauser of the Great Falls Development Authority said during the May 26 DDP meeting, and he’s had a few people call wanting to get into downtown now that they’re seeing programs like this.

Raymond said they’ve had some inquiries, including one from a property owner wanting to install a fire sprinkler system, but it wouldn’t be eligible under the proposed TIF program since it’s not a code requirement for that particular building.

GFDA is hosting workshops for businesses and property owners that might be interested in applying for the TIF funds since different rules apply for publicly funded projects and one that’s often overlooked is that it requires prevailing wages be paid to workers, which can increase costs for developers. Information on those sessions is available here.