Whitefish is considering creating two new tax increment finance districts that would allow the city to capitalize on future growth saving funds for public projects.
The city’s TIF district was established in 1987. The amount of revenue from property taxes going to the city’s general fund was fixed at that time and additional revenue as property values increase or development occurs was then diverted to the TIF fund where it was saved for future use on urban renewal projects.
Once the current district sunsets, then the city can establish new districts.
City Manager Adam Hammatt said it makes sense for the city to create additional TIF districts to begin building funds for future projects.
“Tax incremental financing is one of, if not the best, tools municipalities have to make headway on needed capital projects,” Hammatt said. “Our current TIF has enabled the city to accomplish so many projects which would have otherwise fallen to the general tax payer.”
TIF money has assisted a number of projects, including the construction of the Emergency Services Center and City Hall and attached parking structure, it allowed for the purchase of land for the Whitefish Community Library and O’Shaughnessy Center, and assisted with infrastructure for the WAVE, library and O’Shaughnessy. It has funded street reconstruction projects and improvements to Depot Park. It also assisted in lowering the bond for the construction of Whitefish High School.
Working as an independent contractor Chuck Stearns, former city manager, provided the city with a feasibility study of future TIF districts in Whitefish.
The current TIF district encompasses almost all of the commercial areas and some residential areas in the city. The current TIF is budgeted to receive about $7.5 million in property tax revenue in Fiscal Year 2020 and the district has seen growth in property tax revenues over 10% on average since fiscal year 2000.
Stearns evaluated the potential for two new TIF districts — the U.S. Highway 93 South urban renewal area and the Railway District and U.S. Highway 93 North urban renewal area. Most of the property in the proposed districts is commercial.
The Highway 93 South area would extend from the Whitefish River south to the intersection with Montana 40, and out east and west of the corridor.
“Transportation problems and circulation improvements along with the existence of some blighted properties pointed to the need for some redevelopment in this area,” Stearns said. “Of particular interest is the future need to extend Baker Avenue and Columbia Avenue southward through this district to provide less congestion on Highway 93 South and improve traffic circulation.”
The total land area is about 432 acres and valuation of land and buildings is $172 million.
The Railway and Highway 93 North area, would extend along Highway 93 from Baker Avenue downtown west to State Park Road. This would include the former Idaho Timber site approved for a project to include residential units and professional offices along with some retail.
Stearns said the Railway District seems to be unfinished, but a desirable new urban renewal area would need to be larger in size to be successful. However, adding the commercial area on Highway 93 North would make it a good size and scope for successful redevelopment, he noted.
The total area is about 208 acres of land with a land and improvements value of $106 million.
Including the former Idaho Timber site on Karrow Avenue would increase the redevelopment potential and enable the city to do any desirable infrastructure investments along with redevelopment there, Stearns noted.
Stearns pointed out that both potential districts, meet several of the items in the state criteria for conditions of blight to create a TIF district.
The city can’t create a new TIF until the current one runs out, but Hammatt said staff would begin work on some of the related steps ahead of time estimating it would take about three to four months.
To create a TIF urban renewal area, the city would have to create an urban renewal plan by meeting with property owners in the district and creating a goal and strategies to address those goals. The city would also have to meet with Flathead County and Whitefish School District regarding its plans.
The urban renewal plan would have to be reviewed by the city’s planning board, and Council would have to hold public hearings to adopt resolutions and ordinances creating the TIF districts.
With TIF funds, the city can do certain types of projects — land acquisition, demolition and removal of structures, relocation, planning and analysis, general redevelopment, and work related to infrastructure.
Once the current TIF district sunsets all the value added from development will be split among the various taxing jurisdictions.
Editor’s Note: City Manager Adam Hammatt resigned from his position on Sept. 6 after this story was written by the Pilot.