Old Corvallis Road Urban Renewal Program

An Overview

May 4th, 2009

Project Sponsors– The City of Hamilton– Ravalli County– The Ravalli County Economic

Development Authority

Area Description

The City of Hamilton is embarking on an effort to develop and revitalize the area in the vicinity of the Old Corvallis Road, roughly bounded by:

– The County Fairgrounds on the south (including the Fairgrounds but not the adjacent residential area),

– The Glaxo-Smith-Kline Laboratory on the north,– Portions of the East Side Highway and the drainage ditch

on the east (at Blodgett View Drive), and – Portions of Old Corvallis Road and Highway 93 on the west.

Proposed Urban Renewal Area

Opportunities

– Additions to the Glaxo-Smith-Kline Laboratory

– Entrepreneurship Center– Proposed 800 home subdivision

adjacent to the Daly Mansion– “Area 3” planning area development– Neighborhood mixed-use/commercial

development

Proposed Action

Design and implement a development program for the Old Corvallis Road Area that addresses:

– Public improvements– Economic Development– Public-Private Partnerships

Identify associated financing mechanisms including:

– Tax Increment Financing – Other funding strategies

The Steps (Montana Urban Renewal Statute)

Identify District Boundaries Prepare a Finding of Blight and Associated Resolution for

Adoption Prepare an Urban Renewal Plan with a Tax Increment

Financing Provision Provide for Public Participation Determine Accordance with the Growth Policy Provide for Public Notice and Hearing Adopt the Plan (Ordinance) Notify the DOR and other Taxing Bodies

Prepare an Urban Renewal Plan for the Covallis Road Area

The Plan can include:– Transportation Related

Improvements– Road Improvements (Old

Corvallis Road, Fairgrounds Road (curbs, gutters and storm sewers)

– Non-Motorized Facilities (bicycle and pedestrian trails) (more)

A Workable Plan (Continued)

– Water Related Improvements (storage and transmission)

– Sewer Related Improvements (interceptors, waste water treatment plant upgrades)

– Park Development– Lighting– Communication –

Internet Services

Tax Increment Financing

The Concept

A state authorized, locally driven funding mechanism for community and economic development

A methodology for eliminating blight and infrastructure deficiencies

A strategy for stabilizing, diversifying and expanding the tax base in critical areas

What is Tax Increment Financing?

TIF is authorized in the Montana Urban Renewal Law, under 7-15-4282, MCA and enables communities to direct property taxes that accrue from new development within a designated blighted area to various development activities. A base year is established from which incremental increases in property values are measured.

The Tax Increment Calculation

Base Year ValueTaxable Valuation x Mill Value = Taxes Collected

Directed to All taxing Bodies (Local Gov, Schools, State)

Tax Increment ValueIncremental Taxable Valuation x Mil Value =

Incremental Taxes CollectedAll Directed to Tax Increment Program (except

University Levy)

BASEDeclining Property Values

TIF Start Date

Increment for Development

TIF End Date

Tax Value for

Distribution

Tax Value for Distribution

Taxable

Valu

e

Time

How a Tax Increment Finance Provision (TIF) Works

Base + Increment

Other Important Provisions

Provisions for Returning Funds

SunsetBonding

It Takes a Big Private Investment

Assume: $10,000,000 dollars of New Development

Assume: Class 4 property @3.01% (2007) Assume: A mill levy of .562140 Increment Value = $169,204

Applications

Urban Renewal Districts – Within Cities Only Industrial Districts Technology Districts Aerospace Transportation and Technology

Districts

Provide Opportunities for Public Participation

Development and Review of Planning Concepts– Public Meetings and Work Sessions with the City

Commission and Planning Board– Focus Group Meetings– Key Person and Organizational Meetings

Overall Community Planning Considerations

The Urban Renewal Plan must Conform with the Hamilton

Growth Policy Reflect and Consider

– Hamilton Transportation Plan– Economic Development and

Housing Plans– Parks and Recreation Plans– Infrastructure Plans

First Things First

The Urban Renewal Area must be entirely located within the municipal boundaries of the City of Hamilton.

Portions of the proposed Old Corvallis Urban Renewal Area must be annexed to the City of Hamilton prior to creating the district and tax increment financing provision.

The Benefits of Annexation

City Services Participation in the Urban Renewal Program

– Infrastructure Development– Taxes directed to improvements that benefit your

property through TIF

Property Value Increases

The Cost of Annexation

Current mill levy for those living outside of the city limits:

– Hamilton Rural/no fire: 453.530– Hamilton Rural/fire: 471.130

Current mill levy for properties within the city limits

– An additional levy of 128.97– Total Levy: 562.140

An increase of 24% or 19%

Questions and Answers