City continuing discussion of new TIF district

City officials will continue their discussion of a proposal to create a new tax increment financing district on the west side.

Commissioners only left about 20 minutes for the discussion during their Feb. 21 meeting and will continue it during the March 7 extended work session.

The city received a request to reimburse the developer of a proposed 513-unit apartment complex for $24 million in December 2022.

The request was for TIF reimbursement from a TIF district that doesn’t exist and was dated June 2022, but was not submitted to the city for six months, according to staff.

According to city staff, they met with Craig Development in April 2022 but there was no mention or discussion of a TIF district or rezoning at that time.

The first mention of a possible TIF need for the project came from the Great Falls Development Authority in May 2022, according to staff.

That lead to a proposal from the developer to create a new urban renewal district off the corner from the intersection of 10th Avenue South and 6th Street and toward the river, including the former Dick’s RV Park that now goes by Great Falls RV Park.

Craig Raymond, city planning director, said commissioners need to consider some specific items.

The proposed district would be an urban renewal district, which is specific to blight, “as opposed to merely capitalizing on opportunity.”

Raymond said that blight has specific definitions in the law and that there’s a difference between eliminating blight and redeveloping a property to a higher and better use.

Raymond mentioned a newspaper article that raised issues of blight in the area due to homelessness and a trailer with an eclectic mix of stuff outside, both of which would be resolved by the property owner and “doesn’t require a $24 million expenditure of taxpayer funds to remedy those issues.”

Craig Development, which has planned a 513-unit apartment complex at the RV park, had submitted a request to the city last year for $24 million in reimbursements from a TIF district that doesn’t exist and staff indicated there were only about $2 million to $3 million of reimbursable expenses in their proposal.

TIF districts and eligible expenses are set by state law and the city has developed specific programs for each of its TIF districts based on their focus.

Raymond said that this request is different from the other areas of urban renewal district, which are downtown and West Bank, and that other projects have been successful without a TIF district.

In a TIF district, the city sets a base level when it’s created and the taxes on the improvements above that level go back into the district for public improvements. Those funds do not go into the general fund, which supports public safety and other city operations.

Tom Micuda, deputy planning director, told commissioners it was important to understand what revenue TIF districts have been generating and their impact to the general fund budgets.

In fiscal year 2022, which ended June 30, 2022, there was about $4.6 million generated in TIF districts that was not available to the general fund.

For comparison, the police request in the proposed public safety levy is about $4.5 million.

Micuda said the city would have to follow a specific process under state law to create the district and it would have to determine that the area is blighted.

Staff has said that they don’t believe the area meets the definition of blight and that part of the area is within the county jurisdiction.

The proposed area is about 69 acres and smaller than the downtown and West Bank TIF districts.

The RV park is about 23 percent of the proposed area and is a “single-user request versus an area with true blight that needs to be addressed,” according to staff.

Micuda said that if the city believes there’s evidence of blight, the city must conduct a blight study and develop an urban renewal plan through a public process, notify the other taxing jurisdictions and be reviewed by the state.

The city last went through the process is 2012.

Micuda said that determining blight “is a serious decision with a number of criteria.”

The downtown and West Bank districts had precursors for the activity.

In downtown, it was a community wide effort for the downtown master plan, which was a yearlong process with significant community involvement, followed by a five month blight study conducted by city staff, Micuda said.

In the West Bank, the commission directed staff to conduct a blight study, which took a month, and that emerged from the Missouri River Corridor Plan and the the TIF plan was done by a consultant, according to staff.

During the meeting, Mayor Bob Kelly referenced the same newspaper story that had inferred staff was holding the request back despite commission support.

Kelly said that “could not be further from the truth” and that commissioners supported the staff process to address the request.

The property owner pulled the request to rezone the RV park for the development of a 513-unit apartment complex, but pulled the request a few hours before the commission was scheduled to hold a hearing on the rezone request.

The city has not had any further contact from the property owner or developer, according to staff.