By Joseph T. O’Connor Explore Big Sky Managing Editor
BIG SKY – The effort to bring Targeted Economic Development Districts to the Big Sky area is inching forward, but off the mark from an ambitious timeline set last fall.
The original goal was to have the districts in place by the end of 2014, but financing – along with the inherent complications of proposing two TEDDs in Big Sky – has slowed progress. Despite $25,000 in private funding and a $45,000 September reallocation of Big Sky Chamber of Commerce resort tax funds, the Big Sky TEDD Committee is short approximately $25,000 to pay for the project.
“We’ve had [some] internal timelines,” said Ryan Hamilton, a member of the TEDD committee, and also Big Sky Town Center’s Project Manager. Hamilton said that once the Dec. 31, 2014 timeline passed, “it became clear that we needed to do some more homework.”
A subcommittee of the Big Sky Chamber, the TEDD committee formed last July to explore the option of establishing two TEDDs – Big Sky straddles Gallatin and Madison counties – which could provide support for public infrastructure development.
The TEDD committee is currently awaiting a decision by the Montana Department of Commerce on a $25,000 planning grant, which would allow the committee to reach an estimated $95,000 financing goal.
If approved, the Big Sky Trust Fund money would help pay for attorney and consultant fees, mapping, a third-party economic impact study, and writing an infrastructure deficiency report to present to Gallatin and Madison county commissioners, among other project expenditures.
“A lot of this will get fleshed out as the plan develops and if funding is approved for this grant,” said TEDD committee member Kevin Germain.
The committee plans to continue forward progress with alternative planning options if the grant is denied, which could include a request for Big Sky resort tax funds, Hamilton said.
A decision on grant funding is expected by mid-March, according to Rob Gilmore, Executive Director for the Northern Rocky Mountain Economic Development District, a nonprofit working closely with the committee.
The committee now hopes to convince commissioners to put TEDDs in place by the end of 2015, and plans to hold town hall-style meetings for public engagement this spring and summer. The group has held meetings with a number of area boards, as well as with both county commissions.
The Board of Madison County Commissioners on Feb. 23 held a meeting in Big Sky to learn more about tools that could generate infrastructure development in the area.
During the meeting, Chris Naumann, Executive Director for the Downtown Bozeman Partnership, presented a slideshow identifying ways in which tax increment financing – or TIF – has bolstered downtown Bozeman’s tax base over the 20 years the Downtown Bozeman Tax Increment Finance District has been in place. Since 1995, the value of the tax base in downtown Bozeman has grown by 84 percent.
Naumann addressed two of three Madison County commissioners James P. Hart and Ronald E. Nye – David Shultz was absent from the meeting – as well as area community members hoping to learn more about TEDDs and TIFs.
“I was impressed with [Naumann’s presentation],” said Nye, who stepped in as a Madison County Commissioner on Jan. 2. “It’s going to take some time, [but] we’re open minded and haven’t closed the gate on anything.”
While a TEDD structure would differ from the four TIF districts that currently exist in Bozeman, Nuamann made parallels to the benefits of each.
“They create this powerful funding source to address the needs of the district,” Naumann said. “And that big hammer in the toolbox … is tax increment financing.”
TIF is a state-authorized funding tool that can support TEDDs by keeping incremental property tax increases in the specified districts, as opposed to sending these tax dollars to entities including state and respective counties. A relatively recent amendment to Montana’s Urban Renewal Law allowed counties to implement the use of TIFs for TEDDs.
In April 2013, Montana Senate Bill 239 became law, allowing certain infrastructure-deficient areas in the state to form TEDDs and harness a portion of existing property taxes for public improvements to encourage private investment.
“The private investment, in turn, increases the tax base,” said Naumann explaining that, statewide, every dollar of TIF money reinvested in the district leverages between $5 and $8 of private investment. “It’s kind of like a loan that pays back principle plus interest. And it pays back really nicely.”
If Big Sky TEDDs are approved, both county commissions would appoint a board of directors to oversee the TEDD, said Hamilton, adding that community members can participate in the public process.
“I don’t think it ever goes to the ballot, but it’s not a new tax either,” he said. “We’ll have to make it a win, win, win, win for taxpayers, the community, the county and the state.”