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Hamilton considers tax increment financing district

 

By Michael Howell

Despite the questions raised by two local attorneys, the Hamilton City Council decided, at its meeting on September 18, to move forward in the process of forming a tax increment financing district (TIFD). The proposed Urban Renewal District would include industrial, commercial and residential development and cover the same area, roughly, as the Old Corvallis Road Area III plan, extending from Fairgrounds Road north along Old Corvallis Road as far as GSK and including Bitterroot Stock Farm land as far east as the Eastside Highway. Development of the area would conform with the existing Growth Policy.

Prior to the Council discussion, two attorneys voiced concerns about the process of forming the TIFD since annexation of the area would be required.

Former Hamilton City Attorney Ken Bell said he did not see any sense in continuing any discussion of a TIFD since annexation of the area would be required. He said in order for land to be annexed into the city there must be a site plan, zoning, and water rights sufficient for the site plan. He said the current owners of the land have no water rights; instead, they buy water from the Bitter Root Irrigation District.

“If you are not going to annex or be able to annex the property that would form the district, why do we continue to beat around the bush talking about that district out there?” asked Bell.

Bell said that somewhere around a year ago he and Dennis (Special Projects Director Dennis Stranger) had asked the council to back them up over questions about annexing some of the Bitterroot Stock Farm property and establish a policy about it. He said the council agreed unanimously to make a policy requiring annexation applicants file a site plan, submit to zoning at the time of annexation and come up with the water rights to support the proposed development of the land.

Former County Attorney George Corn expressed the same concerns, saying if a site plan, zoning and sufficient water rights were not first presented to the council, any attempt to annex property to form a TIFD would lead to “legal entanglements that would be very counter-productive.”

RCEDA Executive Director Julie Foster told the Council that neither of these attorneys had attended any of the numerous meetings in which concerns about establishing the TIFD had been addressed by many public officials and experts.

Foster said that a TIFD was not a development and that is why no particular development plan exists.

“It is a development tool,” said Foster. She said it was a way of encouraging development by providing funds to help build infrastructure that would attract and accommodate new development.

She said Mayor Jerry Steele had expressed concerns about the possibility of creating a liability for the city by creating the district but there is none. As a result, the Mayor supports creating a TIFD, she said. She said Councilor Nancy Valk also expressed support for economic development at the meeting. She pointed out how successful the recently established Stevensville TIFD was, already creating about $11,000 in funds in the first year that helped serve as a grant match for an $850,000 project extending town sewer service to the area.

“You are giving people hope in economic development in the future,” said Foster. “Please do what the citizens are asking you to do.”

Mayor Steele said that he was not against the TIFD.

“It can be beneficial, if it’s done properly,” he said, “but it can be bad, if it’s done improperly.” But he called any immediate effort to form the district “pre-mature.”

Steele said annexation agreements would have to be worked out that would be tight and guarantee the city gets what it needs in terms of water rights.

“I would also like to know what the development would look like,” he said. He wondered how so much residential development would fit with commercial and industrial development in the area. He said the area was covered by the Area III plan and the Growth Policy and that the council should familiarize themselves with those documents before making any decisions.

Steele said that caution was what he recommended to the council.

Councilor Joe Petrusaitis, who initially made a motion to table the issue that died without a second, said that his concern was that more legal analysis was required.

Councilor Lynette Helgeland said that she was not ready to commit the city to anything binding at the moment, “but I don’t want this to die here.” She suggested a joint committee be formed with RCEDA to move the issue forward.

No committee was formed but it was agreed unanimously to move forward with the formation of the district.

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