City approves $68K TIF funding for downtown renovation
In a 3-2 vote, City Commissioners approved a $68,560 request for downtown tax increment financing funds.
The request is for a portion of the cost to install a fire suppression system in the Metropolitan building at 313-315 Central Ave., which is owned by Keith Cron.
Staff recommended denial of the request since the applicant is required to install the system as part of the building renovation and believes it’s more appropriate to use private rather than public funding, according to the staff report.
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The request exceeded the $25,000 limit for life-safety projects in the TIF programs that were adopted by commissioners in 2021.
In November, the Downtown Development Partnership, a group comprised of multiple downtown related agencies, said there were extraordinary circumstances to justify the City Commission approving the full amount, which exceeds the $25,000 limit for life-safety projects in the TIF programs that were adopted by commissioners in 2021.
When the new TIF building programs were added in 2021, there was an option for commissioners to approve requests that don’t comply with program eligibility requirements.
That provision states, “notwithstanding anything herein to the contrary, the city commission reserves the right and discretion, upon the demonstration of extraordinary circumstances, to approve grants in excess of the above referenced aggregate limits.”
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But despite the DDP recommendation, city staff doesn’t view the application as a special or unique opportunity or that extraordinary circumstances support the request for funding.
“In this instance, the need to install a fire alarm and sprinkler system is a code requirement that is automatically triggered with the renovation project. This is not the type of request that was envisioned when the life-safety code compliance program was originally developed. Instead, the program was developed to address existing buildings that did not comply with current code requirements,” according to the city staff report.
The adopted life safety program includes an eligibility requirement that states a project is defined “as the remedial actions with respect to existing life safety code violations per building on commercial properties located within the district.”
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Since renovations or new construction requires compliance with current code, staff said this particular project doesn’t meet that requirement.
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.
In 2020, Cron requested $132,392 to reconstruct the public sidewalk and vault along Central, as well as for fire suppression and ADA compliance.
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Commissioners approved $25,440 since at the time fire suppression and ADA weren’t eligible for TIF funding at the time.
The combined approved funding is $94,000, which is also over the limit per parcel, under the rules adopted by commissioners last year.
During the Jan. 3 commission meeting, Deputy Planning Director Tom Micuda said since it’s the first request over the program limit and one in which the applicant was arguing had extraordinary circumstances to warrant commission approval, “staff has to be naturally cautious.”
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He told commissioners that staff doesn’t believe those extraordinary circumstances are present, but “this is a decision that you have to make.”
Micuda said that while it’s a good project, it’s not “transformative” for the downtown.
Micuda told commissioners that they need to discuss changing the existing program rules or approve the exception.
Craig Raymond, planning director, had told commissioners several months ago that they may want to consider adjusting the programs based on the low number of applicants for the funds.
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Micuda said they recommended denial since it’s their job to follow rules set by the commission and “we’re trying to protect the program.”
Cron told commissioners that they had to decide what that special threshold is to approve a request over the program limit. He said he believed the distillery project planned for the space is unique.
Micuda told commissioners they hadn’t received any other requests for fire suppression or ADA projects.
Commissioner Rick Tryon said they had already approved a safety project over the limit when they approved TIF funding in October to the downtown Business Improvement District for mural lighting.
Micuda said that application wasn’t through the specific safety program and the $150,000 request included lighting on 10 different buildings.
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Staff said that when the program was created, the intent from their perspective, was for property owners to add or improve fire suppression or ADA compliance in older buildings that were already in use.
Since a renovation and a new tenant automatically requires a property to be brought up to current code, staff said the Metropolitan project didn’t fall into the intent of the program.
Micuda told commissioners that when they adopted the program, they created the framework but still had a balancing test on funding general infrastructure to benefit the downtown and investing in private development and also the precedent of approving projects over the limits.
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Kellie Pierce, head of the Downtown Great Falls Association and BID and chair of the DDP, told commissioners that they were an integral part of creating the TIF programs and set the funding limits as a start but are seeing a need in the community for larger amounts.
She said they set caps so that TIF funds wouldn’t be expended on one project but that they should revisit those numbers based on current projects.
Brett Doney of the Great Falls Development Authority said that he had cautioned commissioners when they approved the programs about boxing themselves in and that they should revisit the program funding limits.
He said that they created the program with a “very generous” 50-50 match for developers and hopes to see more funding applications.
Staff has said that one of the challenges is that a developer has to follow government contracting rules, which requires getting multiple bids, to use public funding.
Mayor Bob Kelly said that in recent years the TIF program has come under scrutiny at the Legislature and Great Falls has always been held up as a community that does it well.
Kelly said that he’s supportive of the project but concerned that they hadn’t gone through the public process to change the program they had created.
He said he didn’t think it was a transformative project and that to change the program details, they should go through the public process, but he would support funding the project at the cap of $25,000.
Commissioners Susan Wolff, Eric Hinebauch and Rick Tryon said they were okay with funding the project outside the limits and then going back and revisiting the program rules.
Commissioner Joe McKenney said he was on the fence about it and wanted to support the developer’s request but was “uncomfortable” with setting that precedent before they updated the program rules through the public process.