CAPITAL HILL MALL URBAN RENEWAL PLAN 1100 Country Hills Dr

Adopted by Helena City Commission on December 7, 2020 per Ordinance No. 3285

Picture 1 - Capital Hill Mall from helenahistory.org, courtesy of John and Rosie Crocker

Prepared by Better City CAPITAL HILL MALL URBAN RENEWAL PLAN 1100 Country Hills Dr. Suite 100 Ogden, UT 84403 City of Helena, MT February 9, 2021

CONTENTS Unsanitary or Unsafe Conditions ...... 17 Figures, Tables, Pictures, and Maps ...... iii Other Considerations and Potential Risks ...... 17 Acknowledgements ...... iv Underutilized Properties ...... 17 Executive Summary ...... 1 Employment Concentrations ...... 19 Background and Statement of Purpose ...... 2 SFD Rental Housing & Multi-family ...... 19 Overview ...... 2 Grocer Consolidations ...... 19 Statement of Purpose ...... 2 Pedestrian and Bike Connectivity...... 19 Location and Attributes ...... 2 Streetscape ...... 20 Plan Creation ...... 4 Commercial Market Pressures and COVID-19 ...... 20 Description of the Capital Hill Mall URD ...... 7 Assemblage ...... 21 History ...... 7 Opportunities ...... 21 Capital Hill Mall ...... 7 Redevelopment / Revitalization / Re-Tenanting ...... 21 Retail ...... 7 Heritage Museum ...... 22 Office ...... 8 Streetscape Improvements ...... 23 Residential ...... 8 Connectivity...... 23 Hotels ...... 9 Capital Hill Mall URD Plan: Vision and Goals ...... 24 Existing Building Types and Zoning ...... 10 2019 Helena Growth Policy ...... 24 Issues in the Capital Hill Mall Urban Renewal District ...... 15 Future Land Use Map ...... 24 Blight Study Considerations...... 15 Neighborhood Centers ...... 25 Property Valuations ...... 15 Infill, Rehabilitation & Redevelopment ...... 28 Age Obsolescence...... 15 Goals ...... 28 Defective or Inadequate Street Layout ...... 16 Objectives ...... 28 Faulty Lot Layout in Relation to Size, Adequacy, Capital Hill Mall Urban Renewal District Goals and Accessibility, or Usefulness / Defective Arrangement of Objectives ...... 31 Buildings or Improvements ...... 16 Goal #1: Improve Streetscape and Connectivity ...... 31 i

Goal #2: Improve Infrastructure for Redevelopment ..... 31 Creating the Plan ...... 48 Goal #3: Neighborhood Center Area ...... 32 Conformance with Approval Criteria ...... 48 Goal #4: Redevelop, Rehabilitate, and Re-Tenant Housing for Displaced Persons...... 49 Underutilized and Underperforming Properties ...... 32 Conformance to the Comprehensive Plan ...... 49 Goal #5: Housing ...... 33 Maximum Opportunity for Rehabilitation or Capital Hill Mall URD Plan Implementation ...... 34 Redevelopment of the Urban Renewal Area by Private Tax Increment Financing ...... 34 Enterprise ...... 49 Property Tax Collections ...... 34 Sound and Adequate Financial Program Exists ...... 49 Baseline Property Taxes ...... 34 Appendix A - Key Stakeholder Interviews ...... 50 Tax Increment ...... 35 Appendix B – Public Comment ...... 51 Other Funding Sources ...... 38 Appendix C - Governing Statutes ...... 52 Tax Credits ...... 38 7-15-4206. Definitions...... 52 Infrastructure Funding ...... 39 7-15-4212. Preparation of Urban Renewal Plan...... 54 Other Funding ...... 40 7-15-4213. Review Of Urban Renewal Plan By Planning Commission ...... 54 Timeline and Implementation ...... 42 7-15-4214. Hearing On Urban Renewal Plan Required ..... 54 State Reporting Requirements ...... 42 7-15-4215. Notice Of Hearing On Urban Renewal Plan ... 55 TIF Lifetime ...... 42 7-15-4217. Criteria for approval of urban renewal project. 55 Administration, Implementation Efforts, and Next Steps ... 43 7-15-4282. Authorization for tax increment financing ...... 55 Administration ...... 43 Appendix D – Administrative Rules ...... 57 Implementation Efforts ...... 45 42.19.1401 DEFINITIONS ...... 57 Leverage Resources ...... 46 42.19.1403 NOTIFICATION REQUIREMENTS FOR THE Reduce Development Risk ...... 46 CREATION OR AMENDMENT OF AN URBAN Create Momentum ...... 46 RENEWAL DISTRICT (URD) WITH A TAX INCREMENT FINANCING PROVISION...... 57 Provision for Displaced Residents ...... 47 42.19.1407 DETERMINATION OF BASE AND Conformance ...... 48 INCREMENTAL TAXABLE VALUES OF URBAN ii

RENEWAL DISTRICTS (URD) OR TARGETED Table 7 - TIF Timeframe Provided by Montana Department of ECONOMIC DEVELOPMENT DISTRICTS (TEDD) ..... 59 Revenue...... 42 42.19.1412 LOCAL GOVERNMENT REPORTING REQUIREMENTS ...... 60 Picture 1 - Capital Hill Mall from helenahistory.org, courtesy of John and Rosie Crocker ...... 0 Appendix D – Blight Study...... 61 Picture 2 - Eastbound at the Intersection of 11th Street and Appendix E – Legal Description and Boundary ...... 62 Lamborn Street ...... 4 Picture 3 - Underutilized Property at 607 N Lamborn Street . 19

Picture 4 - Underutilized Property at 1820 Prospect Avenue . 19 FIGURES, TABLES, PICTURES, AND MAPS Picture 5 - Vista Square Apartments ...... 21 Picture 6 - Helena City Plaza ...... 21 Figure 1 - E-Commerce Sales vs. Y/Y Growth, USA from Bond Picture 7 - 1518 Prospect Avenue ...... 21 Internet Trends ...... 20 Picture 8 - 607 N Lamborn Street ...... 22 Figure 2 - Neighborhood Center Diagram from Helena Growth

Policy ...... 27 Map 1 - Topographical Excerpt from USGS Map ...... 4 Figure 3 - Property Tax Allocations ...... 34 Map 2 - Study Area used in the Blight Study ...... 5 Figure 4 - Baseline Property Tax Revenue Designation within a Map 3 - Building Types by Category ...... 10 URD Area ...... 34 Map 4 – Building Types by Category with Exempt Properties Figure 5 - Baseline Tax Revenue and Incremental Tax Revenue Shaded Black ...... 13 Allocations within a URD Area ...... 35 Map 5 - Zoning within the URD Area ...... 14 Figure 6 – Once the TIF Sunsets all Tax Revenues are Allocated Map 6 - Samuel V. Stewart Homes Development Defective to the Taxing Entities ...... 36 Street Layout ...... 16 Figure 7 - Tax Increment Financing Methods ...... 36 Map 7 - Former Capital Hill Mall Site Faulty Lot ...... 17 Figure 8 - Tax Increment Financing Mechanism ...... 37 Map 8 - Underutilized Properties by Location and Building Type Figure 9—Interview Word Cloud ...... 50 from Blight Study ...... 18

Map 9 – Location of Montana Heritage Museum ...... 22 Table 1 - Inventory of Hotel Properties in the URD Area ...... 9 Map 10 - Site Layout of Montana Heritage Museum ...... 23 Table 2 – Building Types by Category Including Parcels, Map 11 - Transit Stops. Source: Capital Transit Website ..... 23 Acreage, and Valuation ...... 11 Map 12 - Future Land Use Framework From Helena Growth Table 3 - Taxable and Exempt Land Use by Category ...... 11 Policy ...... 24 Table 4 - Taxable Properties by Building Type Subcategory . 12 Map 13 - Helena Growth Policy Neighborhood Centers ...... 25 Table 5 - Taxable Value Trends ...... 15 Map 14 - Novogradac Mapping Tool for NMTC ...... 38 Table 6 - Underutilized Properties from Blight Study ...... 18

iii

ACKNOWLEDGEMENTS

City of Helena: Community Development Public Works Transportation Systems City Commission

Helena Housing Authority

Helena Citizens Council

Montana Business Assistance Connection

Avenue, and Roberts Street. Also included are a number of areas EXECUTIVE SUMMARY to the east of Washington Street. See the map below on page 9.

The Capital Hill Mall Urban Renewal District (“URD”) area is Besides the Capital Hill Mall URD, the City of Helena has two considered a gateway into the City of Helena, being a corridor additional URD’s that are currently active. These are the Railroad defined by the two one-way couplets of Prospect Avenue and 11th District and Downtown Helena URD’s, which were adopted in Street that provide access to and from I-15. Certain components 2019 and 2016, respectively. The Capital Hill Mall URD boundary within this corridor, including buildings and transportation does not overlap with these other two URD boundaries. infrastructure, date back to the 1960’s when the interstate was constructed. The primary mechanism used to create the financial capacity to implement the Plan is Tax Increment Financing (TIF). TIF is Although some areas have seen more recent investment, such as permitted under State law and allows municipalities to redirect the former site of the Capital Hill Mall and expansion of a casino property tax increment within an Urban Renewal Area. These site on the 1600 block of Prospect Avenue, a holistic approach is funds can be used to correct infrastructure deficiencies and fund needed to improve the corridor by eliminating blight, preserving improvements, as well as incentivize private sector investment. real estate values, improving visual aesthetics and pedestrian and bicycle connectivity, and enhancing public safety and housing. This URD Plan conforms to prior plans conducted by the City The issues facing the corridor are more fully described in the including the 2019 Helena Growth Policy. The URD plan also Statement of Blight that was prepared prior to this Plan. meets the statutory provisions for approval by the Helena City Commission. The City Commission looks forward to utilizing TIF This Urban Renewal Plan (the “Plan”) provides the vision, goals, to improve public infrastructure and encourage private sector and objectives the City of Helena can follow to ameliorate the investment in the Capital Hill URD area. unfavorable conditions within the Capital Hill Mall area. The vision of the URD is:

“To encourage the revitalization of the Capital Hill Mall area by investing in public infrastructure and incentivizing private investment to improve the quality and values of properties.”

The URD area is of a general rectangular shape beginning one block north of Prospect Avenue, extending one block south of 11th Street, bounded to the west by Montana Avenue and to the east by Washington Street. It also includes the Samuel V. Stewart Homes development managed by the Helena Housing Authority, located on a block bounded by Billings Avenue, Butte Avenue, Montana

ACKGROUND AND TATEMENT OF URPOSE hospitality uses closer to the freeway outside of the eastern B S P boundary of the URD area. In between these two bookends are a mix of commercial uses including restaurants, retail OVERVIEW establishments, gas stations, banks and credit unions, and This chapter provides a background on how the Plan was medical, government, non-profit, and commercial offices. created, a description of the area, and purpose of the Plan. Notable commercial and hospitality establishments within the URD area include Safeway, CVS, Walgreens, Jorgensen’s Inn & Suites, Days Inn, La Quinta Inn, and Shilo Inn. A developer STATEMENT OF PURPOSE also has plans for redeveloping the former site of the Capital Hill The purpose of this document is to establish a plan for the Mall. Capital Hill Urban Renewal District that includes the vision, goals, and objectives the City of Helena can follow to ameliorate The State Complex, which includes the State Capital building the unfavorable conditions within the Capital Hill Mall area. and other administrative offices, are located three blocks to the The Plan includes enabling the City’s use of TIF as a funding south of the Safeway and former Capital Hill Mall site. This tool to implement infrastructure improvements and incentivize area sees an influx of visitation when the State legislators are in private sector investment within the URD area. session which occurs for no more than 90-days in every odd- numbered year. The State Complex area also includes the new LOCATION AND ATTRIBUTES home of the Montana Heritage Center, a $50M+ project that is In simple terms, the URD area’s character is mostly defined by anticipated to begin construction in 2021. Although the State the presence of two one-way couplets of Prospect Avenue and Complex, State Capital, and Heritage Center are outside the 11th Street and its proximity to the State Complex and Capital. boundary of the URD area, the activity generated by these uses These couplets provide access to and from I-15, connecting the will influence investment within the URD area. residential neighborhoods to the west with commercial uses along the corridor and those that have been developed east of the The URD area is of a general rectangular shape beginning one freeway. These couplets are separated by a city block including block north of Prospect Avenue, extending one block south of the former site of the recently demolished Capital Hill Mall. On 11th Street, bounded to the west by Montana Avenue and to the the west end of the URD area and three blocks to the south, east by Washington Street.. It also includes the Samuel V. which is outside of the URD boundary, is the State Complex. Stewart Homes development managed by the Helena Housing This transportation infrastructure has driven land use Authority, located on a block bounded by Billings Avenue, determinations and investment within this corridor has been Butte Avenue, Montana Avenue, and Roberts Street. Although predominately commercial. There are some residential uses in some areas of the URD do not align neatly with the City’s grid adjacent neighborhoods mostly on the western side and system, the area can be described as being roughly equivalent to 44 City blocks and encompassing roughly 138 acres.

Map 1 - Topographical Excerpt from USGS Map As shown on the 40-ft contour map above, the URD area is generally flat with some grade separation being evident along Prospect Avenue and the former Capital Hill Mall site. A gentle slope begins at Prospect Avenue and extends southward, Picture 2 - Eastbound at the Intersection of 11th Street and Lamborn Street continuing outside the URD area through the residential neighborhoods and the State Complex to the South Hills and Mt. PLAN CREATION Ascension foothills. According to FEMA flood maps, the area Better City was hired in March 2020 to assist the City of Helena is generally void of hydrology concerns and flood risk. in the creation of a URD Plan. Prior to the creation of the URD Plan, a Statement of Blight was prepared in June 2020, which As a result of the two couplets that have been engineered to incorporated input and suggestions from interviews conducted accommodate the safe and efficient flow of traffic, the area is with a number of community stakeholders. See Appendix A for auto-centric and not particularly conducive to pedestrian a summary of interview comments. The Study Area boundary activity. Active transportation improvements have been made used in the Statement of Blight was determined through to accommodate bicycles with some sections of Prospect conversations with stakeholders, as well as zoning, land uses, th Avenue and 11 Street having bike sharrows within their location, and geographic attributes. Consideration was also shoulders. given to the Prospect Avenue and 11th Street couplets serving as the gateway to the community and the area also being the primary location for visitation, having the highest concentration of hotels in the City.

Map 2 - Study Area used in the Blight Study

Note: The URD boundary area was adjusted from the Study Area boundary to exclude the properties south of 11th Avenue between Fee Street and I-15.

After reviewing the recommendations from the Community Development Department staff, the City Commission voted on August 24, 2020 to accept the Statement of Blight and to adopt a “Resolution of Necessity”. The Commission adjusted the URD boundary as presented in the Statement of Blight to the boundaries noted above on page 8.

A draft of the URD Plan was released on [INSERT DATE] and a public meeting was held on [INSERT DATE] with comments received during the comment period included in Appendix B. On October 20, 2020 the Planning Board reviewed the URD Plan, comments were addressed, and the Plan updated accordingly. The Board reviewed the URD Plan and found that it was in conformance with the City of Helena’s 2011 Growth Policy. Following the Board’s review and approval, the Helena City Commission held a first reading on November 13, 2020 and a public hearing on December 7, 2020 and the Commission adopted the final plan on [INSERT DATE].

5 ESCRIPTION OF THE APITAL ILL ALL to decline at or near 2010, which is when Dillards closed. An D C H M URD article by TIME referring to the boom and later bust of enclosed malls states: HISTORY Limited information is available regarding the history of the “Like all booms, this one couldn’t last. The decline began Capital Hill Mall URD area. Historical records mostly focus on slowly, in the mid-2000s. The rise of online shopping and the the most prominent commercial development within the area - blow of the Great Recession led to a drop in sales and foot traffic the Capital Hill Mall. at big-brand retailers like JCPenney and Macy’s that anchored many of the country’s malls. Between 2010 and ’13, mall visits Capital Hill Mall during the holiday season, the busiest shopping time of the year, 6 Built in 1965, the Capital Hill Mall was one of 1,500 enclosed dropped by 50%.” malls developed in the country, driven by the expansion of the Interstate Highway System. In the last few years, the mall was acquired by a local developer and demolition began in February 2019. As of the date of this When the mall first opened, it was only 20,000 square feet and report, the site of the former mall has been demolished and was anchored by Hennessey’s Store (later acquired by Dillard’s) planning is underway for its redevelopment. and an Albertsons Food Center.1 It had seen numerous additions and renovations over the years growing to 120,000 square feet RETAIL by 1980.2 At that time, Clark Financial Corp. of Salt Lake City Grocery stores / pharmacies represent the largest retail submitted plans to the City of Helena to add 110,000 square feet, establishments in terms of land use, both individually and almost doubling the size of the mall. The addition extended the collectively, within the URD area. These properties include mall’s footprint across Sanders Street and included 80,000 Albertsons, Safeway, and CVS. The Safeway is the largest square feet for a department store.3 The mall was renovated in single land use within the URD area, being built in 1961. The 19924 and the 213,000 square foot property was later acquired Albertsons property was built in 1978. by Westfield Properties, who owned it in 2007. Like many enclosed malls around the country, The Capital Hill Mall began

1 http://www.helenahistory.org/buildings_of_note.htm 5 https://helenair.com/news/local/past-and-present-photos-of-helena-s- 2 https://mtstandard.com/gallery/the-capital-hill-mall-used-to-be-full-and- capital-hill-mall/collection_b3b28934-5cc3-5f5a-9175- thriving/collection_f95d3238-3b46-5479-8767-98f5697d3baa.html#16 11353e37d654.html#5 3 https://mtstandard.com/gallery/the-capital-hill-mall-used-to-be-full-and- thriving/collection_f95d3238-3b46-5479-8767-98f5697d3baa.html#2 6 https://time.com/4865957/death-and-life-shopping-mall/ 4 https://helenair.com/news/local/past-and-present-photos-of-helena-s- capital-hill-mall/collection_b3b28934-5cc3-5f5a-9175- 11353e37d654.html#5

While grocery stores / pharmacies represent the largest land use, banks and credit unions comprise the highest valued property within the retail category. There are five financial institutions within the URD area: First Security Bank of Helena, American Federal Savings Bank, Glacier Bank, Bank of the Rockies, Helena Community Federal Credit Union, and Rocky Mountain Credit Union. Restaurants are the third most valued retail subcategory and include fast food national chains such as McDonald’s, Dairy Queen, and Taco Johns and local offerings like Melaque Mexican and Steve’s Café. There appears to be a lack of sit- down national chain restaurants that are customarily found in areas with a concentration of hotels. This may represent an opportunity to increase the tax base within the URD area. There are a number of strip malls that are located within the URD area as well as a few stand-alone general commercial.

OFFICE There are a number of Class B and C office buildings within the URD area, the largest of which is a privately -owned office building occupied by a number of State agencies. The State of Montana is the single largest office user within the URD area. The State owns and occupies five buildings and is a tenant in a number of buildings as well.

RESIDENTIAL Excluding any exempt or partially exempt properties, there are approximately 50 single family detached (SFD) properties within the URD and 1 duplex. Of the SFD’s, 19 out of the 50, or 38% appear to be rental units as the owner address differs from the property situs address. The remaining properties appear to be owner occupied as the owner address is the same as the property situs address.

HOTELS There are five hotels located inside the URD area, which collectively represent the second largest land use and value per acre within the URD area. The first hotel was a 44-unit motel built in in 1954: the Jorgenson’s Inn and Suites. Over the next few decades, a number of new products were built and opened, adding 266 rooms to the market in the economy, midscale, and upper midscale categories. Over time, some properties have been operated under different brands, with a current inventory of properties and operating brands shown in the table below:

# Name Parent Brand STR Chain Scale Year Built # of Rooms Address Type Year Renovated 1 Jorgensons Inn and Suites Independent Economy & Midscale 1954 & 1988 44 & 63 1714 11th Avenue 3-story Hotel np 2 Shilo Inns Shilo Inns Upper Midscale 1976 48 2020 Prospect Avenue 3-story Hotel np 3 Days Inn Wyndham Hotels & Resorts Economy 1981 89 2001 Prospect Avenue 2-story Hotel np 4 Baymont Wyndham Hotels & Resorts Midscale 1991 55 750 Fee Street 2-story Hotel np 5 La Quinta Inn & Suites Wyndham Hotels & Resorts Midscale 1994 74 701 N Washington St. 3-story Hotel 2011 Total 373 Table 1 - Inventory of Hotel Properties in the URD Area

EXISTING BUILDING TYPES AND ZONING Building types are comprised of retail, hospitality, residential, office, medical, utility, and vacant land. There are no vertical mixed-uses within the URD area. A summary by building type category, valuation, and acreage is shown on the map and table below. Note that in the aerial photo below, the site of the Capital Hill Mall still shows the building as being intact but it has since been demolished. The site has been cleared which is why it is included in the vacant land category. Also shown as vacant land is the casino expansion currently under construction on the Butte Avenue block between Harris St. and Oakes St. Other vacant properties shown are consistent with those shown in the 2019 Helena Growth Policy. The Jorgensens’ Inn & Suites parcel includes hotel and multi-family uses. On this parcel is the Vista Square Apartments consisting of 41 units comprising 48,600 of gross square footage. Vista Square offices consists of 15,600 square feet and occupies the ground floor of the Vista Square building. The Montana State Public Service Commission has been a long-standing tenant of the office space.

Map 3 - Building Types by Category

% of Total % of Total Description # of Parcels Acres Acres Value Value Value / Acre Retail 42 32 33% 41,882,541 37% 1 ,313,692 Residential 57 26 27% 27,214,137 24% 1 ,049,178 Hotel 7 8 9% 18,765,745 17% 2 ,279,713 Office 22 12 13% 18,136,933 16% 1 ,499,694 Vacant Land 13 16 17% 4,291,791 4% 2 67,637 Medical 1 1 1% 2,484,552 2% 2 ,580,186 Utility 1 1 1% 296,645 0% 2 31,045 Grand Total 143 96 100% 113,072,344 100% 1 ,172,607 Table 2 – Building Types by Category Including Parcels, Acreage, and Valuation

Each building type category is broken down further into taxable and exempt property types in the table below, sorted by property valuation. Within the taxable property classification, office uses have the highest value per acre, followed by hotels, and retail. Of developed building types, residential use has the lowest value per acre, likely as a result of the preponderance of single-family detached (SFD) product types. The development of vacant land (13 of the 16 acres of vacant land is attributable to the former Capital Hill Mall site) and redevelopment of SFD would likely have a large impact on the overall tax valuation within the URD area.

% of Total % of Total Description # of Parcels Acres Acres Value Value Value / Acre Taxable Properties Retail 42 32 44% 41,882,541 48% 1,313,692 Residential 50 9 12% 10,253,803 12% 1,146,857 Hotel 7 8 11% 18,765,745 22% 2,279,713 Office 14 7 9% 10,996,760 13% 1,618,600 Vacant Land 13 16 22% 4,291,791 5% 267,637 Utility 1 1 2% 296,645 0% 231,045 Grand Total 127 73 100% 86,487,285 100% 1,182,041 Exempt Properties Residential 7 17 73% 16,960,334 64% 997,799 Office 8 5 23% 7,140,173 27% 1,347,262 Medical 1 1 4% 2,484,552 9% 2,580,186 Total Exempt Properties 16 23 100% 26,585,059 100% 1,142,930 Grand Total 143 96 113,072,344 1,172,607 Table 3 - Taxable and Exempt Land Use by Category

Taxable property uses are broken down further into building type subcategories in the table below. Note that banks or credit unions comprise the largest property value component followed by grocery store / pharmacy (Albertsons, Safeway, and CVS).

% of Total % of Total Description # of Parcels Acres Acres Value Value Value / Acre Taxable Properties Auto Repair 2 1 1% 748,000 1% 7 72,195 Bank or Credit Union 6 5 7% 13,278,883 15% 2 ,500,901 Car Wash 1 0 0% 279,583 0% 1 ,152,579 Casino 5 2 3% 2,275,015 3% 9 77,934 Gas Station 3 3 3% 2,758,053 3% 1 ,085,551 General Commercial 5 1 2% 1,668,032 2% 1 ,223,141 Grocery Store / Pharmacy 4 8 11% 8,478,966 10% 1 ,070,106 Multi-Tenant 7 6 8% 6,797,840 8% 1 ,178,975 Restaurant 9 5 7% 5,598,169 6% 1 ,028,973 Retail 4 2 32 44% 41,882,541 48% 1 ,313,692 Baymont Inn & Suites 1 1 1% 1,973,180 2% 2 ,233,651 Days Inn 1 2 3% 3,218,100 4% 1 ,747,323 Jorgensen's Inn & Suites 2 4 5% 9,946,026 11% 2 ,592,152 La Quinta 2 1 1% 2,565,995 3% 2 ,519,271 Shilo Inn 1 1 1% 1,062,444 1% 1 ,632,063 Hotel 7 8 11% 18,765,745 22% 2 ,279,713 Condo Master 2 1 1% 238,130 0% 3 08,848 General Commercial 12 6 8% 10,758,630 12% 1 ,786,267 Office 14 7 9% 10,996,760 13% 1 ,618,600 Single Family Detached 50 9 12% 10,253,803 12% 1 ,146,857 Residential 50 9 12% 10,253,803 12% 1 ,146,857 Under Construction 7 1 2% 423,356 0% 3 29,506 Vacant Land 6 15 20% 3,868,435 4% 2 62,249 Vacant Land 13 16 22% 4,291,791 5% 2 67,637 Power 1 1 2% 296,645 0% 2 31,032 Utility 1 1 2% 296,645 0% 2 31,032 Total Taxable Properties 127 73 100% 86,487,285 100% 1 ,182,040 Table 4 - Taxable Properties by Building Type Subcategory

Below is a map showing the location of exempt properties, shaded in black. Exempt properties are primarily comprised of State, County, and local government buildings and residential facilities owned and operated by the Helena Housing Authority. The largest of these being the Stewart Homes development, which is located on one, 13.5-acre parcel.

Map 4 – Building Types by Category with Exempt Properties Shaded Black

The map below shows the current zoning within the URD area, taken from the City of Helena Zoning Map. Definitions of each zone are: • The R-1/R-2 (residential) districts provide for residential dwellings and limited nonresidential development that protects and enhances the residential nature of the area. • The R-3 (residential) district provides for the development of a mixture of residential structures to serve varied housing needs and allows limited compatible nonresidential uses. • The R-4/R-O (residential-office) districts provide for a compatible mix of higher density residential development with professional and business offices and associated service uses. • The B-2 (general commercial) district provides for compatible residential uses and a broad range of commercial and service uses that serve large areas of the City and that are normally required to sustain a community. • The PLI (Public Lands and Institutions) District provides for and applies only to public and quasi-public institutional uses and lands, and recreational, educational, and public service activities for the general benefit of the citizens of the City.

Map 5 - Zoning within the URD Area

SSUES IN THE APITAL ILL ALL RBAN (m) improper subdivision or obsolete platting; I C H M U (n) the existence of conditions that endanger life or property RENEWAL DISTRICT by fire or other causes; or (o) any combination of the factors listed in this subsection (2). BLIGHT STUDY CONSIDERATIONS The Blight Study that was previously performed as part of the Example of blight identified in the Blight Study include the process to establish the Urban Renewal District and adopted on following: August 24, 2020 identified a number of issues within the URD area, which are summarized in this section. For the complete Property Valuations Blight Study, see Appendix D. Of the fifteen factors that Outside of Study Area Inside Study Area constitute blight described in the Urban Renewal Law, the Blight Description # of Parcels % of Total # of Parcels % of Total Study identified six (in bold below) factors that were determined to be present and applicable to the URD. These include: No Change 2 ,310 18% 32 16% (a) the substantial physical dilapidation, deterioration, age Increasing Value 9 ,652 74% 31 16% obsolescence, or defective construction, material, and Declining Value 1 ,070 8% 136 68% arrangement of buildings or improvements, whether residential Total 1 3,032 100% 199 100% or nonresidential; Table 5 - Taxable Value Trends (b) inadequate provision for ventilation, light, proper sanitary facilities, or open spaces as determined by competent appraisers As shown in the table above, 68% of parcels within the Study on the basis of an examination of the building standards of the Area declined in taxable value during the period from 2010 to municipality; 2019 compared to only 8% of parcels outside the Study Area. (c) inappropriate or mixed uses of land or buildings; This data suggests that properties within the Study Area are (d) high density of population and overcrowding; experiencing dilapidation, deterioration, or impairment at (e) defective or inadequate street layout; greater rates than those properties outside the Study Area. (f) faulty lot layout in relation to size, adequacy, accessibility, or usefulness; Age Obsolescence (g) excessive land coverage; The URD Study Area includes ten hotel properties, all (h) unsanitary or unsafe conditions; constructed prior to 1998, half of which were built in the 1970’s. (i) deterioration of site; The most prevalent hotel type is economy (5), followed by upper (j) diversity of ownership; midscale (3), midscale (2), and upper upscale (1). The (k) tax or special assessment delinquency exceeding the fair prevalence of old facilities and hotel inventory in the economy value of the land; chains scale along with structures and improvements showing (l) defective or unusual conditions of title; signs of age and deferred maintenance, indicates that “age

obsolescence” is present in some of the hotels within the conditions contribute to a defective or inadequate street layout boundary area. See Table 1 - Inventory of Hotel Properties in within the northwest area of the Study Area. the URD Area for additional information.

Remodeling or renovating aged properties requires compliance with current codes and may represent a significant cost to the building owner. Redevelopment of older properties is also expensive due to acquisition costs. These compliance and economic costs represent impediments to reinvestment within the study area.

Defective or Inadequate Street Layout As previously mentioned, Prospect Avenue is a westbound, three-lane, one-way street, that is coupled with 11th Street, running parallel one block to the south as an eastbound, two- lane, one-way street. These streets were designed together to segregate directional traffic and reduce congestion. This one- way circulation on Prospect and 11th has remained unchanged over the last 30 years. One-way traffic couplets are engineered to provide an efficient traffic flow with greater capacity, higher Map 6 - Samuel V. Stewart Homes Development Defective Street Layout automobile speeds, and reduced travel time. However, they also create unintended consequences for the built environment by Faulty Lot Layout in Relation to Size, Adequacy, Accessibility, or limiting business visibility, pedestrian safety, restricting access Usefulness / Defective Arrangement of Buildings or to certain destinations, and introducing confusion to infrequent Improvements street users. These conditions contribute to a defective or As shown below, the Capital Hill Mall site is a large parcel that inadequate street layout along the couplets which extend through encompasses three City blocks with no internal roads. In 1980, much of the Study Area. one public road (Sanders St.) was vacated by the City to accommodate an expansion of the Mall. As a result of the City In addition, the Samuel V. Stewart Homes development is vacating Sanders Street the site has no connectivity to the comprised of four city blocks with an internal configuration as neighborhoods to the north and south. This layout reflects the opposed to the City grid system. The lack of a traditional block enclosed mall development model of one large building pattern prohibits east- and westbound through traffic and comprised of connected stores and anchored by major tenants. circulation is more challenging within the development. These With the decline of enclosed malls, the resultant lot is too large

to accommodate a single development and there is too much green strips between the curb and sidewalk. This lack of buffer, land in relation to commercial market demand. The lot is faulty along with narrow sidewalks, reduces pedestrian safety and in relation to size, accessibility, and usefulness as it will require creates unsafe conditions. reconfiguration in order to accommodate redevelopment. In comparing the number of safety and service calls to the Study Area with the rest of Helena outside of the Study Area reveals a highly disproportionate use of municipal services including fire, police, and ambulance. The Study Area is responsible for seven times more service calls than the rest of the City of Helena, which indicates a propensity for unsafe conditions.

OTHER CONSIDERATIONS AND POTENTIAL RISKS In addition to the items identified in the Blight Study, there are a number of other considerations and potential risks, that impede Map 7 - Former Capital Hill Mall Site Faulty Lot or may impede the stabilization of and increase in, the property tax base in the Capital Hill Mall area. These include underutilized In addition, the blocks between Prospect Avenue and Butte properties, employment concentrations, a high percentage of SFD Avenue to the north, have lots that are faulty in relation to size, rental housing & multi-family, grocer consolidations, pedestrian adequacy, and usefulness. The lots do not have adequate depth and bike connectivity, streetscape improvements, commercial to accommodate commercial uses using conventional market pressures and COVID-19, and needed assemblage. development approaches such as parking in front or behind the facility. This has resulted in buildings being oriented sideways Underutilized Properties and parking lots with frontage along the corridor resulting in a Underutilized properties are defined as those where the vertical defective arrangement of buildings or improvements. improvements are valued less than the land upon which they were built. Within the URD area, there are approximately 20 Unsanitary or Unsafe Conditions individual parcels that fit this description but upon closer There are streets within the study area where sidewalks have not examination many of these parcels are parking lots that serve been installed. These include residential areas along Butte adjacent uses. When combined with the adjacent parcels, the Street, 9th Avenue, N Dakota Street, Fee St., Hannaford St., cumulative building values are greater than the land values and Lamborn St., Oakes St., Harris St., Washington St., and Oregon do not meet the definition of being underutilized. When St. The lack of sidewalks is an unsafe condition that may force removing these parcels from the subset, the adjusted number of pedestrians into the public right of way and conflict with properties that fit the description of being underutilized is 15, on vehicular traffic. In addition, almost the entire study area lacks 5.33 acres.

Map 8 - Underutilized Properties by Location and Building Type from Blight Study

Description # of Parcels Acreage Land Value Building Value Total Value Auto Repair 2 1 465,755 282,245 748,000 Car Wash 1 0 148,443 131,140 279,583 General Commercial 3 1 516,330 382,747 899,077 Multi-Tenant 1 0 179,820 83,320 263,140 Restaurant 4 2 762,427 642,708 1,405,135 Single Family Detached 4 1 455,849 298,651 754,500 Total 15 5 2,528,624 1,820,811 4,349,435 Table 6 - Underutilized Properties from Blight Study

policies could expose many properties in the URD area to significant vacancies.

SFD Rental Housing & Multi-family The high percentage of single family detached rental properties within the URD area indicates that the area is in transition. There is a risk associated with rental properties that are not professionally managed including deferred maintenance, lower

Picture 3 - Underutilized Property at 607 N Lamborn Street income potential, and impaired property values on neighboring properties. Transient housing also may create negative Source: Google Earth externalities in discouraging social interaction and a sense of community, reducing the desirability of a neighborhood, and placing downward pressure on property values.

Grocer Consolidations In 2015, Albertsons Companies, Inc., the second-largest grocery store operator in North America, acquired Safeway, Inc.7 The

Picture 4 - Underutilized Property at 1820 Prospect Avenue property that Safeway is located in is a corporate owned property while the Albertsons store is owned by a third-party and would Source: Google Earth be subject to a lease. The grocery store subcategory is the second largest valued property type within the URD area. Employment Concentrations Although no announcements have been made, there is the The largest office use employer in the Capital Hill Mall URD are is possibility that a store consolidation would occur, seeing as how the Montana State Government. A concentration in government these two stores are within a 0.5 mile of each other. A vacated employment, although stable, also means fewer opportunities for big box would likely decline in value and would have a large entrepreneurial endeavors, spin-offs, business starts, intellectual impact on the taxable value within the URD area. property development, and private sector investment. There are also a number of office facilities that are owned by the State in the Pedestrian and Bike Connectivity URD which are not contributing to the property tax base. th Although no announcement or plans have been discussed, there is Much of Butte Avenue, 9 Avenue, and many of the side streets a risk that a change in State facility leasing and procurement within the URD area lack sidewalks and parking strips (also referred to as a boulevard, i.e. the strip of grass between the

7 https://en.wikipedia.org/wiki/Albertsons

sidewalk and curb). Many sections of Prospect Avenue and 11th improves, broadband and smartphones become ubiquitous, and Avenue have sidewalks that are adjacent to the road and retail store lease agreements expire. These market forces have separated from the travel lane by an asphalted shoulder. created development challenges, particularly in auto-centric Streetscape commercial areas where retail establishments have become Stakeholders have indicated a desire to see the street cross- scarce. sections improved to create a more pedestrian and bicycle friendly environment. Many have referenced Bozeman’s streetscape improvements along the 7th Avenue gateway area (funded through a URD) as similar to what they would like to see along Prospect Avenue and 11th Avenue.8 A continuous inviting streetscape could include greenery, trees, lighting, and adequate spacing between pedestrian, bike, and vehicular traffic.

Commercial Market Pressures and COVID-19 As previously mentioned, the decline of indoor malls, shifting consumer preferences, and unfavorable market conditions have led to the closure, sale, and demolition of the Capital Hill mall. Pre-COVID-19, retail stores were seeing a decline referred to as the “retail-pocalypse”, with more than 9,300 stores closing including the closure of Payless Shoe Stores, Gymboree, Figure 1 - E-Commerce Sales vs. Y/Y Growth, USA from Bond Internet DressBarn, Shopko, Forever21, Jared, Pier 1 Imports, Kmart, Trends Sears, Bed Bath & Beyond, Office Depot, Party City, The Children’s Place, Abercrombie & Fitch, and more across the COVID-19 has accelerated the consumer shift to e-commerce. county.9 Shifting consumer preferences include the double- This will likely result in less demand for traditional real estate, digit, year-over-year growth in e-commerce sales and a doubling vacant big box stores transitioning to fulfillment centers for of sales in the last five years from $70B to $140B, as shown in online platforms, and smaller building footprints. These factors the chart below. will likely result in a shift away from traditional commercial with developers focusing on other land uses such as multi-family Purchasing trends will continue to shift from brick and mortar within the URD area, which is a permitted use within the B-2 stores to online as logistics and distribution infrastructure zoning district.

8 https://www.bozemandailychronicle.com/news/city/midtown-to-see-5-3- 9 https://moneywise.com/a/retailers-closing-stores-in-2019 million-in-upgrades/article_04253770-eca5-527e-a43f-d69cb93704df.html

Assemblage 1415 – 1433 11th Avenue), 1518 Prospect Avenue, and 607 N The area has a number of challenges associated with small lots Lamborn Street. and dispersed ownership. A revitalization project would likely require assembling parcels from different property owners. This can be a challenge for the private sector as a deployment of capital requires a clear return on investment. Property acquisitions are often unpredictable, challenging to negotiate, and may require many years to implement. This is likely an impediment to private sector interest in redeveloping within the URD area.

OPPORTUNITIES The Capital Hill Mall URD area has a number of opportunities including redevelopment, revitalization, and re-tenancy and Picture 5 - Vista Square Apartments streetscape improvements. Being located next to I-15 and a gateway to the community with surrounding residential uses, the URD area can support highway, regional, local, and neighborhood commercial uses. As the gateway to the State Capital, the area sees an influx of visitation for a 3-month period, every two years. 6th Street and Roberts Street is also the site of the new Montana Heritage Museum, which borders an area to the south of the URD boundary and will create new visitation in Picture 6 - Helena City Plaza the area. These factors contribute to favorable location characteristics for private sector businesses.

Redevelopment / Revitalization / Re-Tenanting There are a number of properties, some of which are currently listed and available for sale that are good candidates for redevelopment, revitalization or re-tenanting. According to CoStar, properties that are actively listed as of the date of this report include the Vista Square Apartments (on the same parcel as the Jorgensen’s Inn & Suites), Helena City Plaza (8 suites at Picture 7 - 1518 Prospect Avenue

the existing Montana Historical Society. The project will be approximately 10.7-acres and span three city blocks bounded by 9th Avenue to the north, 5th Avenue to the south, Roberts Street to the west, and Sanders Street to the east. The cost to renovate the Historical Society and build the new Heritage Center is estimated at $52.2M and is currently in the design phase.10 Although not located with the URD area, the Montana Heritage Museum will drive visitation and vibrancy to the area. Picture 8 - 607 N Lamborn Street Current redevelopment projects include the 13-acre former site of the Capital Hill Mall which has been purchased by a developer and is being planned for redevelopment. Opportunities exist at this site to create connectivity enhancements to the Montana Heritage Museum site to the north. These improvements are currently in the planning stages with the developer of the former Capital Hill Mall site having already received approval from the City to extend Sanders Street through that parcel. The extension of Sanders Street increases the accessibility of not only motorized vehicles but is an opportunity to also increase pedestrian access in and out of the Capitol grounds A casino has also purchased and demolished property adjacent to its current location to accommodate an expansion on a half Map 9 – Location of Montana Heritage Museum city block of approximately 1.3 acres.

Heritage Museum The State of Montana is developing a new Heritage Museum at the intersection of 6th Avenue and Roberts Street, across from

10 https://helenair.com/news/state-and-regional/govt-and-politics/site- chosen-in-helena-for-montana-heritage-center/article_2f42dbcf-9982-56d7- ae9f-8c0bcc18d590.html

strips, installing sidewalks, bulb-outs, raised pedestrian crosswalks, lighting, greenery, trees, etc. As the Prospect Avenue and 11st Street couplets are Montana Department of Transportation roads, the City / URA will need to coordinate with them regarding any alterations or improvements to these corridors.

Connectivity There are a number of bus stops within the URD area as shown in the map below:

Map 10 - Site Layout of Montana Heritage Museum Map 11 - Transit Stops. Source: Capital Transit Website

Streetscape Improvements Another transit stop could be added along the Prospect Avenue The Prospect Avenue and 11th Street corridors, as well as side and 11th Street corridors to improve access to the redevelopment streets throughout the URD, present an opportunity for project at the former Capital Hill Mall site. streestscape enhancements. During the interview process, improving the streetscape within the URD area was the most frequent comment and desired outcome communicated by stakeholders. Streetscape improvements come in a variety of configurations, including reducing rights of way, adding parking

CAPITAL HILL MALL URD PLAN: VISION AND GOALS 2019 HELENA GROWTH POLICY

Future Land Use Map The Capital Hill Mall URD plan is guided by the 2019 Helena Growth Policy, adopted by the City on 29 Jun 2020.

Map 12 - Future Land Use Framework From Helena Growth Policy

Neighborhood Centers As shown in the map below, the Capitol Mall has been designated as a Neighborhood Center in the Helena Growth Policy:

Map 13 - Helena Growth Policy Neighborhood Centers

Neighborhood Centers are defined in the Helena Growth Policy The concept of mixed-use development is an important growth as follows: management strategy for Helena. If properly planned and developed, Neighborhood Centers will enjoy higher densities, a “Neighborhood Centers are envisioned to differ by scale, mix of activities, more transportation options, and convenient attributes and experience, planned and designed to fit within the shopping and services. When combined with improved multi- neighborhoods in which they are located. Some may be quite modal transportation opportunities, Neighborhood Centers can large, becoming centers of regional prominence, with large- reduce reliance on automobile travel and the need for costly scale shopping, institutional uses of open spaces. Others will be street improvements while benefiting air quality, slowing smaller, developing at either a community or neighborhood sprawl, and providing a greater variety of housing types. scale, with a mix of housing, retail, office, open space or medical Neighborhood Centers located at the west, north, and east areas uses, serving a more localized population and integrating of town may also enhance the experience of entering the city. seamlessly with surrounding neighborhoods…will adapt to and influence existing neighborhoods, fitting new projects within the Specific to the Capital Hill Mall area, the Helena Growth Policy context of existing street, buildings and community patterns. In states: all cases, the evolution of neighborhood centers will need to be guided by design standards that ensure growth is fully “Things are changing here with the mall already demolished. complementary with existing patterns and community The replacement development concept calls for a mix of expectations. housing, retail and office, and will likely have a ripple effect on the surrounding commercial and residential properties. It may Overall, development in these centers will be a denser pattern also influence the future of the Prospect/11th Avenue couplet, than what surrounds it to achieve a unified, functional, efficient, potentially arguing for pedestrian-friendly revisions to each and aesthetically appealing physical setting, providing arterial to maximize the attractiveness and viability of this opportunities for each connections, public transportation, and evolving center.” walkability.

Figure 2 - Neighborhood Center Diagram from Helena Growth Policy

With just over 13 acres available for development, the former expected growth in the area, and are supported by this site of the Capitol Mall would fit in the “Community” scale. plan.” However, with regional drivers present in adjacent areas such as the State Capitol and Campus, new Heritage Museum, and Goals nearby hotels, the development could accommodate some The 2019 Helena Growth Policy includes a number of areas of regional components. emphasis and relevant goals to the URD Plan including:

Infill, Rehabilitation & Redevelopment “[G.05] Establish and maintain a strong multi-modal The 2019 Helena Growth Policy identifies a number of vacant transportation system for Helena, providing opportunity for all properties within the URD area that are good candidates for to travel safely and efficiently, on-pace and in concert with redevelopment. It also identifies the practices of infill, demand and overall Growth Policy objectives.” rehabilitation & redevelopment as being supported by the plan: [G.10] Plan for and establish types and quantities of land uses in “These options [infill, rehabilitation & redevelopment] Helena supporting community needs, neighborhood centers, have their place in a community’s economic development program and the neighborhood planning process, and are aesthetics and the City’s long-term sustainability.” key to this Growth Policy’s recommendations for Neighborhood Centers scattered throughout the city. Objectives These techniques could provide a number of new housing units and mixed-use development. They also can Pertinent objectives from the Helena Growth Policy include the strengthen a neighborhood’s viability and stability. following organized by section:

Recent changes to the Zoning Ordinance allow more units Housing per lot and smaller minimum lot size requirements. As previously mentioned, the Helena Housing Authority owns Allowing residential uses by right in commercial areas the Stewart Homes development and other property within the also encourages mixed-use and should encourage infill, URD. The following objectives from the 2019 Helena Growth rehabilitation, and redevelopment. In future review of Policy are applicable: regulations, allowing taller residential and commercial developments and mixing compatible uses could increase housing and commercial opportunities while using “[O.14] Support the development of housing located in services and infrastructure more efficiently… proximity to necessary services and quality of life assets, including generalized physical, technological, social and …Providing residential and commercial options within economic infrastructure. Helena through infill development, rehabilitation, and redevelopment could help reduce some impacts of

[O.15] Support and expand the supply of housing for lower [O.43] Require street development or improvement projects to income, senior citizens, persons with disabilities, homeless, and include facilities allowing persons of all ages and abilities to others with special needs. travel by automobile, foot, bicycle, and public transit.

[O.16] Support the preservation and rehabilitation of the existing [O.45] With local and regional jurisdictions, identify key housing stock. transportation corridors and work to differentiate arterial roadway design, emphasizing neighborhood centers as points of [O.18] Encourage the maintenance of housing in an attractive, community importance and focus. safe and sanitary condition, helping extend the service life of housing and enhancing the general appearance of the city and its [O.46] Require that subdivisions and other developments neighborhoods.” provide a transportation system that: • Promotes connectivity where adjacent to Pedestrian and Bike Connectivity / Streetscape developed areas; As many stakeholders have indicated the need to improve • Provides for future connectivity with pedestrian and bike connectivity and the overall streetscape anticipated development; within the URD area, the following objectives from the 2019 • Incorporates ‘traffic calming’ measures Helena Growth Policy are applicable: where appropriate; • Supports non-motorized transportation. “[O.39] Develop and enhance a transportation system in Helena that: [O.47] Maintain and improve the continuity of sidewalks, trails, • Facilitates the safe, efficient movement of and bicycle paths in Helena, improving conditions for non- people, goods and services; motorized transportation across the city and between future • Supports non-motorized and recreational needs; neighborhood centers. • Promotes livable neighborhoods; • Supports the needs of Helena’s elderly, disabled, [O.48] Work to improve street connectivity in all areas of and disadvantaged populations; Helena, improving walkability, public health and safety, and • Improves safe pedestrian and bike routes. transportation efficiency.

[O.41] Coordinate transportation investment with efficient land [O.56] Encourage use of technologies and techniques that direct use patterns, making cycling and walking a practical light downwards, minimizing intrusive or excessive glare, transportation alternative. reducing energy use and optimizing “dark sky” conditions in Helena.

[O.60] Promote the planting and protection of trees citywide, • Goals and objectives of the growth policy, helping: related master plan and/or facility plans. • Beautify and enhance community value; • Provide shade and comfort; [O.78] Encourage infill development on vacant and under- • Affirm Helena’s association with the outdoors utilized land within the city, directing growth to areas currently and its historic origins; served by, or in close proximity to, existing infrastructure and • Provide wildlife habitat. that harmonizes with the character of existing neighborhoods.

[O.61] Promote landscaping guidelines that: [0.80] Promote development of varied and compatible types of • Maintain or restore native trees and vegetative mixed-use neighborhood centers in Helena, servicing to enhance cover; neighborhood identity, address community need, and support • Support locally-compatible species diversity; more compact land use patterns. • Re-vegetate disturbed areas; • Beautify streets, entry corridors, roadways, and [O.85] Reduce functional and visual impacts of entry corridors and commercial development on abutting residential parking lots; neighborhoods, considering buffering uses, design standards • Help calm traffic; and other methods.” • Help treat and address stormwater issues.

Revitalization As revitalization, redevelopment, and re-tenancy within the URD area is necessary, the following objectives from the 2019 Helena Growth Policy are applicable:

“[O.77] Apply or revise zoning designations with careful consideration of factors including: • Future land use mapping; • Compatibility with surrounding land uses; • Infrastructure and service plans; • Development of vacant and under-utilized buildings; • Existing and future traffic patterns;

CAPITAL HILL MALL URBAN RENEWAL DISTRICT GOALS AND 4. Develop design standards for City streets throughout the URD to include “complete streets” concepts that will OBJECTIVES accommodate and create safe separation between

The following goals for the Capital Hill Mall Urban Renewal pedestrian, bike, and automobiles, improve aesthetics, District were informed from interviews conducted by key and include streetscape components such as lighting, stakeholders, applicable goals and objectives noted above from greenery, and trees; the Helena Growth Policy, conditions identified in the Statement 5. Work with the State of Montana to create permeable, of Blight, public comments received, and urban renewal statutes walkable corridors that improve connectivity between designed to encourage private sector investment to improve the the State Campus, new Heritage Museum, and the district. commercial uses in the URD area. 6. Adopt landscaping approaches that promote water conservation efforts and lighting technologies and Goal #1: Improve Streetscape and Connectivity techniques to optimize a “dark sky” environments. 1. Consider developing a brand for the Capitol Mall URD 7. Consider adding a transit stop in the area. A new clinic area that reflects it as: may be part of the Capitol Mall redevelopment, which a. an entryway into the community; may generate new customers for bus service. b. designated as one of three “neighborhood

centers” in the Helena Growth Policy; c. a tourism center being the location of the Goal #2: Improve Infrastructure for Redevelopment majority of hotels in the community; 1. Identify public infrastructure improvements that can d. the gateway to the State Capital and State help facilitate new private sector investment such as the Campus; and extension of Sanders Street and Vandelay Street through e. the gateway to the new Heritage Museum. the former site of the Capital Mall. Utilize URD funds 2. Evaluate whether converting Prospect Avenue and 11th to make improvements. Street from one-way couplets to two-way streets would 2. Sewer and water mains, storm water retention, improve public safety, connectivity, and access to the sidewalks, curb gutter and streets, landscaping. The City built environment; is enhancing storm water infrastructure through a project 3. Work with the Montana Department of Transportation to called the Davis Gulch Basin project. Locations for improvements include but are not limited to Montana develop design standards for a street cross-section and th streetscape elements for the Prospect Avenue and 11th Avenue and Washington Drive, 11 Avenue, and Street arterial couplets that will include continuous Sanders Street involving rerouting, increasing line sidewalks and bike paths throughout the corridor, capacity, inlet improvements, and reducing surcharge, improve connectivity between neighborhood centers, among others. and enhance aesthetics;

3. Entry corridor 11th and Prospect retaining walls, e. an aesthetically appealing physical setting and sidewalks, street scape to welcome visitors through the enhanced experience of entering the city; and corridor. f. integration with surrounding properties to give 4. Helena Housing Authority’s Stewart Homes public the area a true neighborhood feel housing campus, a four-city block parcel currently with 2. Development of updated zoning and/or development 132 residences, was originally developed in two phases: standards that will help implement the concept of mixed- 1939 and 1952. At the time of its original construction it use and provide flexibility in the type and mix of uses for was located at the far edge of the city of Helena, and property located in the Neighborhood Center district. subsequently the city grew out and around the campus. Due to its age and history, Stewart Homes has significant infrastructure needs that will need to be addressed Goal #4: Redevelop, Rehabilitate, and Re-Tenant Underutilized during any future major housing rehabilitation, possible and Underperforming Properties new development, and other redevelopment activity on 1. Encourage infill development on vacant and under- the site. These infrastructure needs could include street utilized land within the city, directing growth to areas repair/replacement, curb and gutters, storm water, currently served by, or in close proximity to, existing sewer, accessibility and safety improvements, and infrastructure and that harmonizes with the character of possible street realignment. URD funds will provide a funding source to address infrastructure needs in this existing neighborhoods by: area. a. Coordinating with current property owners to determine their willingness to sell, contribute property into a redevelopment, or undertake Goal #3: Neighborhood Center Area redevelopment themselves and secure 1. Work with the developer of the former site of the Capital agreements; Hill Mall and other property owners to achieve the b. Aligning incentives to offset the cost of objectives in the Helena Growth Policy for a assemblage, demolition, and infrastructure Neighborhood Center area, including: improvements to ensure redevelopment projects a. higher densities and compact land use patterns utilizing those properties identified in (a) above that allow a mix of housing, retail, office, open meet investment parameters; and space or medical uses; c. Soliciting interest from the development b. a mix of activities; community by issuing RFQ’s/RFP’s to undertake c. more transportation options to improve redevelopment projects. connectivity, public transportation, and 2. Provide a number of new housing units and mixed-use walkability; developments to strengthen a neighborhood’s viability d. a variety of housing types; and stability by:

a. Identifying single family detached rental properties that could be assembled and redeveloped to provide higher density rental housing or mixed-use development; b. Identifying commercial properties that are underutilized, with low occupancy, or vacant that can be assembled and redeveloped; 3. Consider allowing taller residential and commercial developments and mixing compatible uses to increase housing and commercial opportunities while using services and infrastructure more efficiently.

Goal #5: Housing 1. Support and expand the supply of housing for lower income, senior citizens, persons with disabilities, homeless, and others with special needs by: a. Purchasing property with URD funds, preparing sites for redevelopment, and discounting the sale of land to developers of low-income properties; 2. Support the preservation and rehabilitation of the existing housing stock, in particular the Stewart Homes development and other Helena Housing Authority properties as well as the Rocky Mountain Development Councils’ Eagle Manor Residences; 3. Encourage the maintenance of housing in an attractive, safe and sanitary condition, helping extend the service life of housing and enhancing the general appearance of the city and its neighborhoods; 4. Adopt policies to ensure single family detached rental properties are maintained and provide quality accommodations for Helena residents within the URD area;

CAPITAL HILL MALL URD PLAN IMPLEMENTATION

TAX INCREMENT FINANCING Under URD statutes, Urban Renewal Districts are given authority to utilize Tax Increment Financing (TIF). TIF is a powerful tool that can be used to ameliorate conditions identified in the Statement of Blight and encourage private sector investment to enhance property values within the URD area.

Property Tax Collections Typically, property tax revenues are collected and allocated to the County, City, School District, and other taxing entities based on their approved tax rates and assessed valuations:

Figure 3 - Property Tax Allocations

Baseline Property Taxes When a TIF is adopted in a URD area, the annual property tax revenues from the prior year that have been collected and allocated to the taxing entities are identified as the “base year” or “baseline”. Taxing entities will continue to receive an amount of property taxes each year the TIF is in place equal to the baseline tax revenue. That is, taxing entities do not lose or give up any existing tax revenues that have been generated within the URD area:

Figure 4 - Baseline Property Tax Revenue Designation within a URD Area

Tax Increment When TIF is adopted within a URD area, incremental tax revenues that are generated from newly constructed taxable improvements can be captured and utilized by the Urban Renewal Authority (URA) to pay for eligible project costs. Notice in the figure below that the taxing entities continue to receive an amount equal to the baseline tax revenue, it is only the tax increment that is being captured by the URD:

Figure 5 - Baseline Tax Revenue and Incremental Tax Revenue Allocations within a URD Area Tax increment financing does not involve imposing a new tax: all property owners within the URD area continue to pay the same tax rates, subject to changes in annual tax assessments as is typical practice. Additionally, taxing entities do not lose any baseline tax revenue. In some cases, the amount of incremental tax revenue that is captured by the URD is negotiated with the taxing entities and a portion of the incremental taxes may continue to “flow-through” to these taxing entities. In Montana, TIF districts collect the incremental tax revenue from all the local and state mills except the statewide six-mill levy that is used to fund the university system.11

The economic theory behind TIF is a “but for” argument: private sector investment would not occur “but for” the taxing entities recontributing incremental taxes back into the project area. Without the tax increment being made available for public infrastructure improvements and to offset eligible project costs, new construction within the URD area would not be a compelling investment to the development community as it would be too costly and would not maintain its value. The use of tax increment is restricted to within a URD boundary, identified as an area that has blighted conditions. Taxing entities benefit by restricting TIF to a URD area so they can capture any increase in property tax revenues outside of the URD. As blighted conditions are ameliorated within the URD boundary and private sector investment occurs in the surrounding area, any tax revenue generated on new investments outside of the URD boundary will continue to be collected and allocated to the taxing entities.

11 https://mtrevenue.gov/property/tax-increment-financing-tif/

Once the TIF sunsets, or goes away, all property taxes within the URD area are released to the taxing entities. Absent the provision of TIF within the URD area, the incremental value would not exist, and property valuations and their attending tax revenues would have continued to stagnate or decline.

Figure 6 – Once the TIF Sunsets all Tax Revenues are Allocated to the Taxing Entities At a project level, TIF can take the form of a public-private partnership that allows the public and private sector to invest alongside each other to facilitate a project that would not otherwise happen. In some cases, incremental taxes are used by an URA to fund eligible project costs directly or to service a bond payment where the bond proceeds are used to fund eligible project costs. Another approach involves incremental taxes being provided to a developer to fund project costs (typically through a reimbursement agreement) or to service debt payments (if the debt proceeds are used to fund eligible project costs). As tax increment is received over time a bond issuance or loan can “capitalize” the TIF up-front to fund capital improvements, allowing the recurring revenue to service the Figure 7 - Tax Increment Financing Methods debt payments.

Another way to illustrate tax increment and how it works is through the figure below:

Figure 8 - Tax Increment Financing Mechanism

Note how the tax revenues within the URD boundary are declining, prior to the establishment of the URD. Once the URD is established and tax increment is authorized, the baseline tax revenue continues to be received by taxing entities, while the tax increment is used within the URD area to fund eligible project costs. Once the URD sunsets, the growth in the tax base now flows through to the taxing entities.

OTHER FUNDING SOURCES

Tax Credits In addition to tax increment financing there are a number of other financing sources that can be used within the URD area. These include tax credits, which allow for investors to claim a credit on their Federal tax return to offset tax liabilities if they invest in an eligible tax credit project.

New Markets Tax Credits Certain census tracts qualify for Federal programs and within the URD area, one of the census tracts meets eligibility requirements for the New Markets Tax Credits program. Projects located with the red area below qualify for this program.

Map 14 - Novogradac Mapping Tool for NMTC

The New Markets Tax Credit (NMTC) was established in 2000. equal to 20 percent of the qualified rehabilitation expenditures Congress authorizes the amount of credit, which the Treasury (QRE) to developers of income producing properties such as then allocates to qualified applicants. Since 2003, the program office buildings, retail establishments, rental apartments, and has parceled out credits worth nearly $23 billion. The NMTC others. In the year a property is “placed in service,” an owner of has supported more than 4,800 projects in all 50 states, the a qualified rehabilitated building is eligible to begin receiving District of Columbia, and Puerto Rico. Some 43 percent of the the tax credits. The tax credit of 20 percent of the QREs is US’s roughly 73,000 census tracts qualify for NMTC allocated ratably over a 5-year period. State Historic investments; by 2015, approximately 3,300 had received NMTC Preservation Offices (SHPO’s) review Historic Tax Credit projects. In recent years, all applicants have pledged to place at projects to assure their consistency with the Secretary of the least 75 percent of their NMTC projects in “severely distressed” Interior’s Standards and the National Park Service provides the census tracts. The credit is currently set to expire at the end of final “certification” necessary for each project. 2020, but Congress has extended it several times. Low-Income Housing Tax Credit (LIHTC) The NMTC program is administered by the Community The Low-Income Housing Tax Credit program, which is Development Financial Institutions Fund in the U.S. Treasury. included as Section 42 of the Internal Revenue Code, is an Community Development Entities (CDE’s) apply to the CDFI incentive program created to encourage the construction or Fund each year for an "allocation authority" (the authority to rehabilitation of buildings for low-income tenants. These tax raise a certain amount of capital, known as Qualified Equity benefits can also be used by developers to attract investors who Investments (QEIs), from investors). CDE’s then look to place commit their dollars to a project in return for a share of the tax their tax credit allocation into projects in qualifying census credits and other benefits. The program is administered by the tracts. Project sponsors apply to CDE’s for an allocation of their U.S. Department of the Treasury. Section 42 stipulates that the tax credit. credit will be allocated on the state level and requires each state to designate an agency to administer the program. This agency Historic Tax Credits (HTC) is called the “allocating agency”. The Montana Housing is the The U.S. Departments of the Interior and the Treasury jointly designated allocating agency for the state of Montana. administer the HTC program. The National Park Service (NPS) acts on behalf of the Secretary of the Interior, in collaboration Infrastructure Funding with the State Historic Preservation Officer (SHPO) in each US Department of Transportation has a variety of programs that state. can be pursued to fund transportation improvements. This includes the: The IRS acts on behalf of the Secretary of the Treasury. The HTC program encourages the rehabilitation of certified historic • Better Utilizing Investments to Leverage Development buildings through the provision of tax credits to property owners (BUILD) grants (formerly TIGER grants)

• Urban Highway System Funds; and Home Investment Partnerships Program (HOME) • Surface Transportation Block Grant for Transportation Alternatives The Home Investment Partnerships Program (HOME) Program is a federal block grant program directed by the U.S. Department Other infrastructure funding includes municipal sources such as of Housing and Urban Development (HUD) and is designed to the general fund, capital improvement funds, and bonds. In create affordable housing for low-income households. The addition, Community Development Block Grants (CDBG) Montana Department of Commerce is responsible for the funds can be used to invest in infrastructure if it will benefit low- administration of HOME within the state of Montana. income populations. Commerce provides HOME funds to units of local government (counties and incorporated cities and towns) throughout the Other Funding state.

Community Development Block Grant (CDBG) Program The purposes of the HOME Program include expanding the According to the HUD Exchange website: supply of affordable housing for low- and very low-income “CDBG provides annual grants on a formula basis to states, persons; improving the means of state and local governments to cities, and counties to develop viable urban communities by implement strategies to achieve adequate supplies of decent, providing decent housing and a suitable living environment, and affordable housing; and providing both financial and technical by expanding economic opportunities, principally for low- and assistance to participants to develop model programs for moderate-income persons. The program is authorized under affordable, low-income housing. Title 1 of the Housing and Community Development Act of 1974, Public Law 93-383, as amended 42 U.S.C.-530.1 et seq.12 Housing Trust Fund Program (HTF) The Housing Trust Fund Program (HTF) is an affordable CDBG funding can be used in support of low-income housing housing production program that complements existing federal, providers such as the Helena Housing Authority to assist with State, and local efforts to increase the supply of decent, safe, and maintaining and rehabilitating the Stewart Homes development. sanitary affordable housing for extremely low income (ELI) The City of Helena is not an entitlement city and as such has to households, including special needs households, homeless compete on a statewide basis. The Montana Department of households, and those at risk of homelessness. The State of Commerce administers the statewide program. Montana receives and administers an annual allocation of federal funds from HUD for HTF grants and conducts program administration through the Montana Department of Commerce. The HTF program will help qualified sub-recipients’ direct

12 https://www.hudexchange.info/programs/cdbg/

funds for the construction, rehabilitation, and preservation of State of Montana INTERCAP Loan Program affordable rental housing for ELI families. According to the Montana Board of Investments website:

Big Sky Trust Fund (State of Montana) • “The INTERCAP program only loans funds to The Big Sky Economic Development Trust Fund provides eligible government units as defined under 17-5- financial assistance in two categories: Economic Development 1604, MCA. Job Creation Projects and Planning Projects. • The INTERCAP program is a variable rate loan program… “Job Creation funding is awarded to create good paying jobs for • Use of loan funds has significant flexibility, e.g. new residents in basic sector businesses, in the form of grants or and used equipment and vehicles, real property loans. Local and tribal governments can apply on behalf of a improvements, cash flow, preliminary engineering basic sector business to create at least one net new eligible job costs, grant writing… in Montana. • Maximum term of the loan is 15 years* or useful life of the project, whichever is less.” Planning Projects funding is awarded to Certified Regional Development Corporations (CRDCs), tribal or local These funds could be used to fill financing gaps for public governments, or other economic development organizations infrastructure improvement projects undertaken within the (EDO) not part of a CRDC region, to support economic URD. development planning activities, including but not limited to support for business improvement districts; central business Montana Business Assistance Connection district redevelopment; industrial development; feasibility For the City of Helena, the certified Regional Development studies; creation and maintenance of baseline community Corporation is Montana Business Assistance Connection profiles; matching funds for federal funding; preproduction (MBAC), a local non-profit economic development group. The 13 costs for film or media; and administrative expenses.” MBAC was created with the expressed purpose of improving the economy and livability of Lewis and Clark, Broadwater, and This funding source may be a good mechanism to complement Meagher counties. They help businesses start up, improve, private sector investment in job creation projects as well as expand, relocate or transition to new ownership. feasibility studies for proposed redevelopment projects within the URD area.

13 https://marketmt.com/CRDC

TIMELINE AND IMPLEMENTATION

STATE REPORTING REQUIREMENTS There are a number of reporting requirements to the Montana Department of Revenue (DoR) that the City of Helena is to follow when creating a URD. These deadlines fall on the 1st day of the months of August, December, and February. The August 1st and December 1st deadlines require local governments to notify the DoR of any proposed TIF districts. On or before February 1st of the calendar year following the creation or amendment of the district, the local government must submit formal notification and supporting documentation for the creation or amendment of any TIF district. 14

TIF LIFETIME The Montana Department of Revenue website states: “TIF districts expire on the 15th year following its adoption, or upon the full payment of all bonds for which tax increment revenue have been pledged, whichever is later. TIFs may extend their expiration date by securing bonds that pledge post-15th-anniversary-increment as repayment. No term extensions are allowed for bonds secured after the 15th anniversary of tax increment provisions. For example, if a TIF was authorized January 1, 2000, it has until January 1, 2015 (its 15th anniversary) to pass bonds secured by future increment to extend the expiration date. Additional bonds may be passed after the 15th anniversary but these would not extend the life of a TIF.”15

Table 7 - TIF Timeframe Provided by Montana Department of Revenue

14 https://mtrevenue.gov/property/tax-increment-financing-tif/ 15 https://mtrevenue.gov/property/tax-increment-financing-tif/

ADMINISTRATION, IMPLEMENTATION EFFORTS, AND NEXT STEPS (i) to improve, clear, or prepare for redevelopment any real or personal property in an urban renewal area; The following are critical elements and next steps that should be (j) to insure real or personal property as provided in 7-15- pursued in implementing the plan to revitalize the URD area. 4258; (k) to effectuate the plans provided for in 7-15-4254; Administration (l) to prepare plans for the relocation of families displaced from an urban renewal area and to coordinate public and private The Capital Hill Mall Area Urban Renewal District will be agencies in such relocation; administered by the Helena City Commission supported by (m) to prepare plans for carrying out a program of voluntary or Community Development Department and the Administrative compulsory repair and rehabilitation of buildings and and Financial Services Department staff. improvements; Currently the Community Development Department and the (n) to conduct appraisals, title searches, surveys, studies, and Financial Services Department support the City Commission and other preliminary plans and work necessary to prepare for the City staff is currently responsible for: undertaking of urban renewal projects; (o) to negotiate for the acquisition of land; (a) to formulate and coordinate a workable program as (p) to study the closing, vacating, planning, or replanning of specified in 7-15-4209; streets, roads, sidewalks, ways, or other places and to make (b) to prepare urban renewal plans; recommendations with respect thereto; (c) to prepare recommended modifications to an urban renewal (q) to organize, coordinate, and direct the administration of the project plan; provisions of this part and part 43; (d) to undertake and carry out urban renewal projects as (r) to perform such duties as the local governing body may required by the local governing body; direct so as to make the necessary arrangements for the exercise (e) to make and execute contracts as specified in 7-15-4251, 7- of the powers and performance of the duties and responsibilities 15-4254, 7-15-4255, and 7-15-4281, with the exception of entrusted to the local governing body. contracts for the purchase or sale of real or personal property; (2) Any powers granted in this part or part 43 that are not (f) to disseminate blight clearance and urban renewal included in subsection (1) as powers of the urban renewal agency information; or a department or other officers of a municipality in lieu thereof (g) to exercise the powers prescribed by 7-15-4255, except the may only be exercised by the local governing body or other power to agree to conditions for federal financial assistance and officers, boards, and commissions as provided under existing law. imposed pursuant to federal law relating to salaries and wages shall be reserved to the local governing body; Redevelopment Agency Formation Formatted: Font: Italic, Underline (h) to enter any building or property in any urban renewal area The City of Helena is currently in the process of creating a in order to make surveys and appraisals in the manner specified Redevelopment Agency (RDA), which will be responsible for in 7-15-4257; overseeing the activities of this newly formed district, as well as the Railroad URD and the Downtown URD. Once created, the

Redevelopment Agency will take over these duties and amended during the course of the fiscal year, in light of responsibilities. This plan will be amended to reflect this change funding and program changes. All budgets and revised in administration when it occurs. budgets shall be reviewed and approved by the City and administered in accordance with City policies. Project Selection Process and Criteria The administering entity of the URD (City staff or once an RDA 2. Work Plan. This shall describe ongoing and projected is formed, RDA staff) will accept applications from the real projects and activities during the upcoming year. It shall estate development community for TIF participation. Staff will address:16 review the applications to determine compliance with project a. any land acquisition, demolition, and removal of criteria, to include: structures; redevelopment; improvements; and • Project is located within the URD boundary; rehabilitation that is proposed to be carried out in the • Achieves the vision, goals, and objectives of the URD urban renewal area; Plan; b. zoning and planning changes, if any, including changes • Meets the statutory criteria for use of TIF funds; to the growth policy if one has been adopted pursuant • Incentivizes private investment; and to Title 76, chapter 1; • Provides a good return on investment. c. changes to land uses, maximum densities, building requirements; and Staff will provide recommendations to the URD Advisory d. the plan’s relationship to definite local objectives Committee, which in turn provides their recommendations to the respecting appropriate land uses, improved traffic, Helena City Commission. The City Commission will determine public transportation, public utilities, recreational and whether the application is approved or denied. This process for community facilities, and other public improvements. reviewing applications may change if an RDA is formed. 1.3.Financial Report. A report of the financial activities related Annual Reports to the tax increment financing provision of this URD shall The Administrative and Financial Services Department will be included in the annual financial report submitted to the 17 prepare an Annual Work Plan and Report with four components: Montana Department of Administration.

1. Budget. The annual budget lists the activities and costs of 2.4.Evaluation of Progress. The Administrative and Financial activities for the coming fiscal year, as well as the method of Services Department shall provide to the City Commission financing those activities. This program and budget may be an annual program evaluation of progress on achieving intended goals.

16 17 The list includes items identified in 7-15-4206(19)(b), MCA Financial reporting for the previous year as required by 2-7-503(1)(b), MCA

Amendment opportunities that could increase the tax base. Ideally, public The Capital Hill Mall District may be amended or modified by infrastructure investments should be made in lockstep with the City Commission in accordance with Montana Code planned private sector investments. This deliberate approach Annotated 7-15-4221.18 can create a virtuous cycle of investment that increases the URD’s capacity and ability to maximize its resources. Implementation Efforts A URD and TIF is not a panacea. Continual interactions with Former Capital Hill Mall Site Project Priority the development and brokerage communities to identify The former site of the Capital Hill Mall has been acquired by a real potential projects, define roles and responsibilities, and align estate development company and redevelopment efforts are incentives are needed approaches to identify and create currently in the planning stages. This redevelopment project will opportunities for redevelopment. Project-level feasibility, result in private sector investment that will generate tax capital stack creativity, assemblage strategies, and site plan increment within the URD area. This investment and its attendant coordination can unlock potential at many vacant and tax increment will provide financial capacity for the URD to fund underutilized sites. public infrastructure improvements. Determining the TIF participation will be one of the initial priorities of the URD. Conversely, a laissez-faire approach to redevelopment often Zoning Evaluation Priority results in URD’s that are less effective with their time horizon The City Commission has expressed interest in evaluating the expiring, little improvements to show, and a tax base that has zoning within the URD area. This evaluation will determine if continued to stagnate. Whereas URD’s and TIF’s are far from zoning changes are necessary in order to achieve the City’s visions laissez-faire capitalism, so too should be the URD plan for and goals for the URD area. This will be an initial priority of the implementation. City. Housing Authority and Non-Profit Housing Providers Ongoing Private Sector Coordination Coordination Coordination with the private sector is paramount in creating Coordination with the housing providers within the URD area successful URD areas. As private sector investment will be will also be important to execute the objectives of the Helena largely responsible for investments in the URD area that Growth Policy. This includes supporting and expanding the increase taxable valuations, the participation of the real estate supply of housing for lower income, senior citizens, persons development and brokerage community is critical. with disabilities, homeless, and others with special needs. In addition, working with housing providers to support the Infrastructure investments that do not directly lead to private preservation and rehabilitation of the existing housing stock, sector investments should be carefully weighed against other

18 See MCA 7-15-4221,

encouraging the maintenance of housing in an attractive, safe and CDBG are powerful tools that can make many projects and sanitary condition, and helping extend the service life of economically feasible that otherwise would not merit housing and enhancing the general appearance of the city and its consideration. Utilizing these financing tools in addition to neighborhoods. Housing providers include: private sector equity, debt, and mezzanine financing elements, can round out a capital stack, allowing TIF to be a Helena Housing Authority (HHA) complementary tool rather than a primary financing source. To In addition to coordinating with the private sector, another that end and to the extent possible, TIF funds should be included critical party within the URD is the Helena Housing Authority in projects as part of a larger capital investment. (HHA). HHA owns and operates the Stewart Homes development, comprised of 366 units on 13.5 acres as well as the Reduce Development Risk Roadrunner Residence comprised of 16 units. In Montana, TIF can be used for land acquisition, demolition and Rocky Mountain Development Council (RMDC) removal of structures, relocation of occupants, and infrastructure 19 In addition to the HHA is the Rocky Mountain Development costs. According to State Statute, TIF can be used for: Council (RMDC) which owns and operates the Eagle Manor “assemblage of land for development or redevelopment by Residences, comprised of 3 separate buildings connected by private enterprise or public agencies, including sale, initial common space on approximately 2.5 acres. This development leasing, or retention by the local government itself at its fair 20 accommodates seniors at least 62 years of age and disabled value;” persons. If a project does not have to take the time to perform many of Other Non-Profit Housing Providers these predevelopment activities, URD’s utilizing TIF can In addition to the HHA and the RMDC is the Spring Meadows mitigate and address project elements that would otherwise Resources group home on Harris Street, housing disabled reduce investor returns and increase project risks. By persons. performing those predevelopment activities noted above,

shovel-ready sites can be prepared for the private sector to Leverage Resources redevelop. As previously mentioned, there are a number of funding sources, in addition to TIF, that can be pursued to fund eligible project Create Momentum costs within the URD area. In particular, tax credits such as the It’s important for an implementation effort to show continual New Markets Tax Credits, Low-Income Housing Tax Credits, forward momentum as investors will want to understand how the

19 https://mtrevenue.gov/property/tax-increment-financing-tif/ 20 https://leg.mt.gov/bills/mca/title_0070/chapter_0150/part_0420/section_088 0/0070-0150-0420-0880.html

value of their investment will be protected and increase over If actions directly related to projects of the Capital Hill Mall time. Demonstrating that a single project is part of a larger, URD, as administered by the City Commission, result in comprehensive redevelopment effort instills confidence in the displacement, the City of Helena shall work with public and development community and creates a virtuous cycle of private agencies to assist those individuals and families to find investment. As investor returns can be demonstrated on initial comparable housing within the URD or elsewhere within city projects, follow-on investment will follow. The URD limits if no comparable housing is available. administration should work towards creating a pipeline of development projects that are lined up in succession.

Provision for Displaced Residents As mentioned above in the section pertaining to URD goals, Goal #5 for the URD includes improvements to the housing stock within the URD boundary. Improvement to housing stock within the URD area may include the rehabilitation and/or redevelopment of properties owned and operated by the Helena Housing Authority. This may result in some units being temporarily removed from available supply as they are being renovated or replaced with newly constructed units. Federal regulations govern the advanced noticing to, eligibility of, and assistance to, tenants that may be permanently or temporarily displaced from Federally subsidized housing developments. The Helena Housing Authority will be subject to conformance with these requirements.

State statutes stipulate that “every municipality shall have power to prepare plans for the relocation of families displaced from an urban renewal area and to make relocation payments and to coordinate public and private agencies in such relocation, including requesting such assistance for this purpose as is available from other private and governmental agencies, both for the municipality and other parties.”21

21 7-15-4253. Relocation of displaced families.

ONFORMANCE investment in projects that meet the goals of this C URD Plan; • identifies a plan for implementation including: CREATING THE PLAN o sources to fund improvements including This document establishes a plan for the URD, a requirement property taxes and other funding sources; that must be met prior to establishing a URD for the Capital Hill o timeline and reporting requirements; and Mall area. The Plan document also: o Administration. • establishes and describes the URD area; • identifies issues within the URD area including CONFORMANCE WITH APPROVAL CRITERIA conditions identified in the “Statement of Blight” State statute establishes the criteria for approval of urban as well as other considerations, and potential renewal project, which include:22 risks; • identifies opportunities: “(1) a workable and feasible plan exists for making available o for redevelopment, revitalization, and re- adequate housing for the persons who may be displaced by the tenanting within the URD area; project; o arising from uses and new development adjacent to the URD area including the (2) the urban renewal plan conforms to the comprehensive plan State Campus and Heritage Museum; or parts thereof for the municipality as a whole; o to improve streetscape and connectivity o to coordinate with the private sector, (3) the urban renewal plan will afford maximum opportunity, Housing Authority, and non-profit consistent with the sound needs of the municipality as a whole, housing providers; for the rehabilitation or redevelopment of the urban renewal area • describes how the Plan was developed including by private enterprise; and analysis that was performed, public outreach, and public comment; (4) a sound and adequate financial program exists for the • establishes vision, goals, and objectives; financing of said project.” • describes conformance with the 2019 Helena Growth Policy; This Plan meets the statutory requirements for approval by the • establishes a provision for Tax Increment Helena City Commission as follows: Financing (TIF) to facilitate private sector

22 7-15-4217 Criteria for Approval of Urban Renewal Project

Housing for Displaced Persons23 the most advantageous uses of TIF revenues is as leverage for The Plan includes provisions for making available adequate additional private sector (and grant) funding. housing for persons who may be displaced by URD projects as follows: Sound and Adequate Financial Program Exists This URD plan lists potential funding sources including using “If actions directly related to projects of the Capital Hill Mall TIF as a complementary tool to other private and public funding URD, as administered by the City Commission, result in sources. The Plan also discusses responsibilities of managing displacement, the City of Helena shall work with public and the URD and TIF-funded project. private agencies to assist those individuals and families to find comparable housing within the URD or elsewhere within city limits if no comparable housing is available.”

Conformance to the Comprehensive Plan24 The Plan is in conformance with the 2019 Helena Growth Policy as it follows the future land use and builds on the goals and objectives established therein.

Maximum Opportunity for Rehabilitation or Redevelopment of the Urban Renewal Area by Private Enterprise This Capital Hill Mall URD Plan’s vision statement is: “To advance Capital Mall URD revitalization by incentivizing private investment and funding public infrastructure that improves the quality and value of properties (bold italics emphasis added).”

This Plan identifies goals and objectives intended to stimulate private investment within the URD area. The Plan also identifies a TIF program as one of the primary tools for private sector investment. TIF is widely-used across Montana as a successful economic tool to finance public infrastructure and stimulate private investment in urban renewal districts. One of

23 7-15-4253. Relocation of displaced families. 24 7-15-4253. Review of Urban Renewal Plan by Planning Commission

APPENDIX A - KEY STAKEHOLDER INTERVIEWS • It would be great if Prospect were two way. One-way streets are designed only to move traffic; they really Better City conducted interviews with a variety of key don’t fit what a city is about. Also, two-way streets are stakeholders to learn about a variety of local stakeholder much safer than one-way.” perspectives on community issues and goals and find and • “The City of Helena has a serious lack of indoor facilities understand the community’s local strategic assets. Feedback for recreation. There is a lack of gym space. The Y is a from these interviews include: great organization, but the building is horrific. • “The front door to Helena is shockingly ugly now, not Somewhere along Prospect Avenue it would be good to appealing nor inviting” have a nice county recreation facility.” • “The entry to Helena looks blighted, with casino signs, a • “There is very little public domain in that area. Private blighty-looking mall, and too many dumpy-looking developers have not shared their master plan. In general, buildings. We need to make it more appealing.” we could draft a document containing guidelines— • “Blighted is a good word—Helena seems stuck in the welcoming signage, discouraging infill, make it an 50s, 60s, 70s.” enhanced entry corridor, for example. So would a • “I think this entire corridor should be upgraded or welcome sign bigger that the little one we have now.” renewed. It’s not a good entry into Helena.” • “It would be great if Helena had a great entry point for people coming from the east.” • “One would prefer to put best foot forward. The thinking really needs to change towards making the gateways into Helena beautiful. For example, change to being traffic- calming, more bike-friendly, more walkable. Make sidewalks wider, Prospect Ave with trees lining the road, curb appeal. It would be a huge win if we could dress up the area to make it more attractive.” • “We could launch a façade improvement program with grants from the city for, say $5,000, which could do a lot. There are two aspects – Prospect very busy in morning, 11th busy at late afternoon. If we could dress up both SOURCE: Wordclouds.com, Better City streets with green and fewer cheap-looking eyesores, Figure 9—Interview Word Cloud people would feel good and this might draw businesses to face the street

APPENDIX B – PUBLIC COMMENT

PPENDIX OVERNING TATUTES (g) excessive land coverage; A C - G S (h) unsanitary or unsafe conditions; The following applicable sections are taken directly from the (i) deterioration of site; 2019 Annotated Montana Code, Title 7. Local Government, (j) diversity of ownership; Chapter 15. Housing and Construction, Part 42. Urban Renewal: (k) tax or special assessment delinquency exceeding the fair value of the land; 7-15-4206. DEFINITIONS. (l) defective or unusual conditions of title; The following terms, wherever used or referred to in part 43 or (m) improper subdivision or obsolete platting; this part, have the following meanings unless a different (n) the existence of conditions that endanger life or property meaning is clearly indicated by the context: by fire or other causes; or (1) "Agency" or "urban renewal agency" means a public (o) any combination of the factors listed in this subsection (2). agency created by 7-15-4232. (3) "Bonds" means any bonds, notes, or debentures, including (2) "Blighted area" means an area that is conducive to ill refunding obligations, authorized to be issued pursuant to part health, transmission of disease, infant mortality, juvenile 43 or this part. delinquency, and crime, that substantially impairs or arrests the (4) "Clerk" means the clerk or other official of the sound growth of the city or its environs, that retards the municipality who is the custodian of the official records of the provision of housing accommodations, or that constitutes an municipality. economic or social liability or is detrimental or constitutes a (5) "Federal government" means the United States of America menace to the public health, safety, welfare, and morals in its or any agency or instrumentality, corporate or otherwise, of the present condition and use, by reason of: United States of America. (a) the substantial physical dilapidation, deterioration, age (6) "Local governing body" means the council or other obsolescence, or defective construction, material, and legislative body charged with governing the municipality. arrangement of buildings or improvements, whether residential (7) "Mayor" means the chief executive of a city or town. or nonresidential; (8) "Municipality" means any incorporated city or town in the (b) inadequate provision for ventilation, light, proper sanitary state. facilities, or open spaces as determined by competent appraisers (9) "Neighborhood development program" means the yearly on the basis of an examination of the building standards of the activities or undertakings of a municipality in an urban renewal municipality; area or areas if the municipality elects to undertake activities on (c) inappropriate or mixed uses of land or buildings; an annual increment basis. (d) high density of population and overcrowding; (10) "Obligee" means any bondholder or agent or trustee for any (e) defective or inadequate street layout; bondholder or lessor conveying to the municipality property (f) faulty lot layout in relation to size, adequacy, accessibility, used in connection with an urban renewal project or any assignee or usefulness; or assignees of the lessor's interest or any part of the interest and

the federal government when it is a party to any contract with itself, at its fair value for uses in accordance with the urban the municipality. renewal plan. If the property is condemned pursuant to Title 70, (11) "Person" means any individual, firm, partnership, chapter 30, the private enterprise or public agencies may not corporation, company, association, joint-stock association, or develop the condemned area in a way that is not for a public use. school district and includes any trustee, receiver, assignee, or (17) (a) "Rehabilitation" may include the restoration and other person acting in a similar representative capacity. renewal of a blighted area or portion of the area in accordance (12) "Public body" means the state or any municipality, with an urban renewal plan by: township, board, commission, district, or other subdivision or (i) carrying out plans for a program of voluntary or public body of the state. compulsory repair and rehabilitation of buildings or other (13) "Public officer" means any officer who is in charge of any improvements; department or branch of the government of the municipality (ii) acquisition of real property and demolition or removal of relating to health, fire, building regulations, or other activities buildings and improvements on the property when necessary to concerning dwellings in the municipality. eliminate unhealthful, unsanitary, or unsafe conditions, to lessen (14) "Public use" means: density, to reduce traffic hazards, to eliminate obsolete or other (a) a public use enumerated in 70-30-102; or uses detrimental to the public welfare, to otherwise remove or (b) a project financed by the method provided for in 7-15- prevent the spread of blight or deterioration, or to provide land 4288. for needed public facilities; (15) "Real property" means all lands, including improvements (iii) installation, construction, or reconstruction of streets, and fixtures on the land, all property of any nature appurtenant utilities, parks, playgrounds, and other improvements necessary to the land or used in connection with the land, and every estate, for carrying out in the area the urban renewal provisions of this interest, right, and use, legal or equitable, in the land, including part; and terms for years and liens by way of judgment, mortgage, or (iv) subject to 7-15-4259(4), the disposition of any property otherwise. acquired in the urban renewal area, including sale, initial leasing, (16) "Redevelopment" may include: or retention by the municipality itself, at its fair value for uses in (a) acquisition of a blighted area or portion of the area; accordance with the urban renewal plan. (b) demolition and removal of buildings and improvements; (b) Rehabilitation may not include the development of the (c) installation, construction, or reconstruction of streets, condemned area in a way that is not for a public use if the utilities, parks, playgrounds, and other improvements necessary property is condemned pursuant to Title 70, chapter 30. for carrying out in the area the urban renewal provisions of this (18) "Urban renewal area" means a blighted area that the local part in accordance with the urban renewal plan; and governing body designates as appropriate for an urban renewal (d) making the land available for development or project or projects. redevelopment by private enterprise or public agencies, (19) "Urban renewal plan" means a plan for one or more urban including sale, initial leasing, or retention by the municipality renewal areas or for an urban renewal project. The plan:

(a) must conform to the growth policy if one has been adopted 7-15-4213. REVIEW OF URBAN RENEWAL PLAN BY PLANNING pursuant to Title 76, chapter 1; and COMMISSION (b) must be sufficiently complete to indicate, on a yearly basis (1) Prior to its approval of an urban renewal project, the local or otherwise: governing body shall submit the urban renewal project plan to (i) any land acquisition, demolition, and removal of structures; the planning commission of the municipality for review and redevelopment; improvements; and rehabilitation that is recommendations as to its conformity with the growth policy or proposed to be carried out in the urban renewal area; parts of the growth policy for the development of the (ii) zoning and planning changes, if any, including changes to municipality as a whole if a growth policy has been adopted the growth policy if one has been adopted pursuant to Title 76, pursuant to Title 76, chapter 1. chapter 1; (2) The planning commission shall submit its written (iii) land uses, maximum densities, building requirements; and recommendations with respect to the proposed urban renewal (iv) the plan's relationship to definite local objectives respecting plan to the local governing body within 60 days after receipt of appropriate land uses, improved traffic, public transportation, the plan. public utilities, recreational and community facilities, and other History: En. Sec. 6, Ch. 195, L. 1959; amd. Sec. 2, Ch. 38, L. public improvements. 1965; amd. Sec. 2, Ch. 210, L. 1969; amd. Sec. 18, Ch. 158, L. (20) (a) "Urban renewal project" may include undertakings or 1971; R.C.M. 1947, 11-3906(part); amd. Secs. 3, 34, Ch. 582, activities of a municipality in an urban renewal area for the L. 1999. elimination and for the prevention of the development or spread of blight and may involve redevelopment in an urban renewal area, rehabilitation or conservation in an urban renewal area, or 7-15-4214. HEARING ON URBAN RENEWAL PLAN REQUIRED any combination or part of redevelopment, rehabilitation, or (1) The local governing body shall hold a public hearing on an conservation in accordance with an urban renewal plan. urban renewal plan prior to adoption as provided in 7-1-4131. (b) An urban renewal project may not include using property Notice of the hearing must be published as provided in 7-1-4127, that was condemned pursuant to Title 70, chapter 30, for and mail notice as provided in 7-1-4129 must be given to anything other than a public use. property owners of the district. (2) Upon receipt of the recommendations of the planning 7-15-4212. PREPARATION OF URBAN RENEWAL PLAN. commission or if no recommendations are received within 60 The municipality may itself prepare or cause to be prepared an days, then without such recommendations, the local governing urban renewal plan, or any person or agency, public or private, body may proceed with the hearing on the proposed urban may submit such a plan to the municipality. renewal project plan. History: En. Sec. 6, Ch. 195, L. 1959; amd. Sec. 2, Ch. 38, L. History: En. Sec. 6, Ch. 195, L. 1959; amd. Sec. 2, Ch. 38, L. 1965; amd. Sec. 2, Ch. 210, L. 1969; amd. Sec. 18, Ch. 158, L. 1965; amd. Sec. 2, Ch. 210, L. 1969; amd. Sec. 18, Ch. 158, L. 1971; R.C.M. 1947, 11-3906(part).

1971; R.C.M. 1947, 11-3906(part); amd. Sec. 1, Ch. 374, L. 7-15-4217. CRITERIA FOR APPROVAL OF URBAN RENEWAL 2011. PROJECT. Following the hearing required by 7-15-4214, the local 7-15-4215. NOTICE OF HEARING ON URBAN RENEWAL PLAN governing body may, by ordinance, approve an urban renewal (1) The notice required by 7-15-4214(1) must be given by project if it finds that: publication as provided in 7-1-4127 and by mailing a notice of the hearing, not less than 10 days prior to the date of the hearing, (1) a workable and feasible plan exists for making available to the persons whose names appear on the county treasurer's tax adequate housing for the persons who may be displaced by the records as the owners, reputed owners, or purchasers under project; contracts for deed of the property, at the address shown on the (2) the urban renewal plan conforms to the comprehensive plan tax record. or parts thereof for the municipality as a whole; (2) The notice must: (3) the urban renewal plan will afford maximum opportunity, (a) describe the time, date, place, and purpose of the hearing; consistent with the sound needs of the municipality as a whole, (b) specify the proposed boundary of the urban renewal area for the rehabilitation or redevelopment of the urban renewal area affected; by private enterprise; and (c) outline the general scope of the urban renewal plan under (4) a sound and adequate financial program exists for the consideration; financing of said project. (d) specify the goals the municipality has in the rehabilitation and renewal of the area; and 7-15-4282. AUTHORIZATION FOR TAX INCREMENT FINANCING (e) indicate the method of financing the urban renewal area and (1) An urban renewal plan as defined in 7-15-4206 or a targeted whether the municipality intends to use tax increment financing economic development district comprehensive development and bonds to be paid from tax increment financing. plan created as provided in 7-15-4279 may contain a provision History: En. Sec. 6, Ch. 195, L. 1959; amd. Sec. 2, Ch. 38, L. or be amended to contain a provision for the segregation and 1965; amd. Sec. 2, Ch. 210, L. 1969; amd. Sec. 18, Ch. 158, L. application of tax increments as provided in 7-15- 1971; R.C.M. 1947, 11-3906(part); amd. Sec. 8, Ch. 526, L. 4282 through 7-15-4294. 1983; amd. Sec. 54, Ch. 354, L. 2001; amd. Sec. 2, Ch. 374, L. (2) (a) Before adopting a tax increment financing provision as 2011. part of an urban renewal plan or a comprehensive development plan, a municipality shall provide notice to the county and the school district in which the urban renewal district or targeted economic development district is located and provide the county and school district with the opportunity to meet and consult in a public meeting with the opportunity for public comment

regarding the proposed tax increment financing provision and its effect on the county or school district. (b) Before adopting a tax increment financing provision as part of a comprehensive development plan, a county shall provide notice to the school district in which the targeted economic development district is located and provide the school district with the opportunity to meet and consult in a public meeting with the opportunity for public comment regarding the proposed tax increment financing provision and its effect on the school district. (3) The tax increment financing provision must take into account the effect on the county and school districts that include local government territory.

PPENDIX DMINISTRATIVE ULES manufacturing in the North American Industry Classification A D – A R System Manual prepared by the United States Office of 42.19.1401 DEFINITIONS Management and Budget; and The following definitions apply to this subchapter: (ii) that, through a technological process, transform materials, (1) "Levy district" means a geographically distinct area where substances, or information into new products. all of the properties are subject to the same combination of (b) Value-adding economic projects do not include projects taxing jurisdiction's mill levies. Levy districts are created for undertaken by service-based businesses or industries including, administrative purposes and do not have any taxing authority. but not limited to, hotels, restaurants, automobile dealerships, (2) "Targeted economic development district (TEDD)" means a and other similar businesses or industries. district created pursuant to 7-15-4279, MCA, that contains a (c) Nothing in this section precludes service-based businesses or provision for tax increment financing as provided for in 7-15- industries from being located within a targeted economic 4282, MCA. development district (TEDD), provided the primary purpose of (3) "Tax increment financing district (TIFD)" means the area the TEDD is the development of infrastructure to encourage the within the external boundaries of an urban renewal district location and retention of value-added economic projects. (URD) or a targeted economic development district (TEDD) that: 42.19.1403 NOTIFICATION REQUIREMENTS FOR THE (a) has been legally created pursuant to the provisions of 7-15- CREATION OR AMENDMENT OF AN URBAN RENEWAL 4282, MCA; and (b) contains a provision for the use of tax increment financing. DISTRICT (URD) WITH A TAX INCREMENT FINANCING (4) "Taxing jurisdiction" means a government entity authorized PROVISION to impose tax on property. A taxing jurisdiction may include the (1) A local government may create or amend a URD containing properties in one or more levy districts. a tax increment financing provision pursuant to Title 7, chapter (5) "Urban renewal district (URD)" means a district created 15, parts 42 and 43, MCA. pursuant to 7-15-4202 through 7-15-4218 and 7-15- (2) Before the department can certify the base taxable value of 4280 through 7-15-4284, MCA, that contains a provision for tax property located within a newly created or amended district, the increment financing as provided for in 7-15-4282, MCA. local government must notify the department of the intent to (6) "Value-adding economic projects" means projects that, create or amend a URD containing a tax increment financing through the employment of knowledge or labor, add value to provision. The notification must include: industrial or technological products, processes, or export (a) the contact information for the person designated to interact services resulting in the creation of new wealth. with the department; (a) Value-adding economic projects include projects: (b) the name of the district; (i) that mechanically or chemically transform materials or (c) the desired base year; substances into new products in the manner defined as

(d) a legal description accompanied by a map illustrating the (b) a copy of the executed resolution of necessity required by 7- district's proposed boundary; 15-4210, MCA. The executed resolution must contain: (e) GIS data files that include locational information in the form (i) an effective date prior to the date on which the URD is of coordinates, points, lines, polygons, etc., if available; and created; (f) confirmation that the property within the proposed district is (ii) the finding of blight, as required by 7-15-4210(1), MCA; and contiguous and not included within an existing URD or TEDD (iii) a statement of necessity regarding the interest of public district. health, morals, or welfare of the residents, as required by 7-15- (3) If the local government wants the department to provide a 4210(2), MCA; list of the affected real, separately assessed improvements, (c) a copy of the local governing body's resolution adopting the personal and centrally assessed properties within the district, the growth policy pursuant to 76-1-604, MCA; local government must provide the notification information (d) a copy of the municipality's planning commission's written required in (2)(a) through (c), and preliminary versions of the recommendation to the local governing body that the urban notification information described in (2)(d) and (e), to the renewal plan conforms with the local government's growth department no later than August 1 of the desired base year. policy that attaches: Within 60 days after receiving the notification, the department (i) supporting documentation upon which the conformance is will provide the following to the designated contact: based; and (a) confirmation that no issues were identified with the (ii) supporting documentation upon which the exercise of a local preliminary district boundary; and governing body's zoning powers is based; (b) a list of the affected properties. (e) if the documentation in (d) is not available, a copy of the (4) If the local government does not need the department to document affirming that the local governing body received no provide a list of the affected real, separately assessed written recommendation from the planning commission and improvements, personal and centrally assessed properties within scheduled the public hearing on the urban renewal plan as the district, the local government must provide the notification permitted in 7-15-4214, MCA; information required in (2)(a) through (c), and preliminary (f) a copy of the published notice of public hearing required versions of the notification information described in (2)(d) and under 7-15-4215, MCA; (e), to the department no later than December 1 of the desired (g) a copy of the letter that was sent to all property owners in the base year. district; (5) By no later than February 1 of the calendar year following (h) a list of all addresses to which a copy of the letter was sent; the creation of the district, the local government must provide (i) a list of all the geocodes, assessor codes, and centrally the department with the following: assessed property within the district; (a) final versions of the notification information described in (j) a copy of the local government's urban renewal plan pursuant (2)(d) and (e), if not previously provided; to 7-15-4212 and 7-15-4216, MCA, containing the tax increment provision under 7-15-4216, MCA; and

(k) a copy of the ordinance adopting the urban renewal plan with 42.19.1407 DETERMINATION OF BASE AND the tax increment provision; pursuant to 7-15-4216 or 7-15- INCREMENTAL TAXABLE VALUES OF URBAN 4284, MCA. (6) Within 20 business days after the department receives the RENEWAL DISTRICTS (URD) OR TARGETED ECONOMIC documentation required in (2) and (5), the department will send DEVELOPMENT DISTRICTS (TEDD) notification to the local government whether the documentation (1) The department will determine the: is complete and correct for the desired base year. (a) base taxable value for a URD or TEDD as the taxable value (a) If supporting documentation submitted with the application of all property located within the district, exclusive of any Title is deficient, the department will notify the local government and 15, chapter 24, MCA, locally approved abatement reductions, as request additional information. of January 1 of the base year established in accordance with (b) By March 1, the department must receive the local ARM 42.19.1403(6) and 42.19.1404(6); and government's complete and corrected documentation to (b) incremental taxable value by subtracting the base taxable establish a base year effective January 1 of the previous year. value identified in (1)(a) from the total taxable value of all (c) If supporting documentation submitted with the application property within the district. is complete and correct, the department will notify the local (2) The incremental value of a district cannot be less than zero. government and will report the base, actual, and incremental (3) The department will report the base, actual, and incremental taxable values to the taxing jurisdictions by the first Monday in taxable values to all affected taxing jurisdictions by the first August of the calendar year following receipt of the notification Monday of August each year when the department certifies in (2). values pursuant to 15-10-202, MCA. (d) If supporting documentation submitted for creation or (4) A URD or TEDD may include one or more levy districts. If amendment of a URD is not complete and correct, the a URD or TEDD includes more than one levy district, the department will report the base, actual, and incremental taxable department will apportion the base taxable value and the values to the taxing jurisdictions by the first Monday in August incremental taxable value between the levy districts by of the calendar year following the year which the complete and apportioning the base taxable value and the incremental taxable correct supporting documentation is submitted to the value to each levy district according to its contribution to the department. total taxable value of the URD or TEDD. (7) All correspondence and documentation must be mailed to the (5) A local government that amends the boundaries or makes Department of Revenue, Property Assessment Division at P.O. changes within a valid URD or TEDD, pursuant to the Box 8018, Helena, MT 59604-8018, or e-mailed to provisions of Title 7, chapter 15, parts 42 and 43, MCA, shall [email protected]. follow the process described in ARM 42.19.1403 or 42.19.1404. (a) In cases where a boundary amendment removes property from an existing URD or TEDD:

(i) the removed property shall be considered newly taxable (iv) the incremental value of the URD or TEDD after the pursuant to 15-10-420, MCA; boundary amendment will be calculated using the new base (ii) the base year of the original URD or TEDD will not change; taxable value determined in (iii). (iii) the total value of the URD or TEDD will be reduced by the value of the property that has been removed from the district. 42.19.1412 LOCAL GOVERNMENT REPORTING The value of the property being removed will be the value REQUIREMENTS determined by the department for ad valorem tax purposes as of (1) No later than October 1 of each year, the local government January 1 of the year in which the department certifies the must provide the department with a copy of each bond resolution amendment; and or ordinance required under 7-15-4301, MCA, and on a form (iv) The reduced base value of the URD or TEDD will be provided by the department, must report the following determined by the following formula: information:

(a) contact for the district; (b) year the district expires; (c) details on any bonds secured by the tax increment, if applicable, including the: (i) dollar amount of the bond(s) issued; (ii) term of year on the bond(s) issued; and

(iii) retirement of any bond(s); (b) In cases where a URD or TEDD boundary amendment adds (d) details on remittance agreements including: new property to an existing URD or TEDD: (i) whether the district has a remittance agreement; (i) the base year and base taxable value of the properties located (ii) the names of the agreements; and within the original URD or TEDD will not change; (iii) the dollar amount remitted; and (ii) the base taxable value of the property being added to the (e) a description of changes or amendments, if any, made to the URD or TEDD by the boundary amendment will be the actual district in the previous fiscal year. taxable value determined by the department for ad valorem tax (2) All correspondence and documentation must be mailed to the purposes as of January 1 of the year in which the department Department of Revenue, Property Assessment Division at P.O. certifies the amendment; Box 8018, Helena, MT 59604-8018 or e-mailed to (iii) the base taxable value calculated pursuant to (ii) of the [email protected]. property being added to the URD or TEDD will be added to the existing base taxable value of the URD or TEDD to create the new base taxable value that shall be used to calculate the incremental taxable value of the URD or TEDD; and

APPENDIX D – BLIGHT STUDY

APPENDIX E – LEGAL DESCRIPTION AND BOUNDARY

CAPITOL HILL MALL URD BOUNDARY LEGAL DESCRIPTION ALL THOSE LOTS, PARCELS AND TRACTS OF LAND AND STREET RIGHTS-OF-WAYS IN SECTION 29 TOWNSHIP 10 NORTH, RANGE 3 WEST, PRINCIPAL MERIDIAN, MONTANA, LEWIS AND CLARK COUNTY, MONTANA, WITHIN THE CITY LIMITS OF HELENA, MONTANA, AND BEING WITHIN THE BOUNDARY DESCRIBED BELOW: BEGINNING AT THE CENTERLINE-CENTERLINE INTERSECTION OF MONTANA AVE AND BILLINGS AVE; THENCE EAST ALONG THE CENTERLINE OF BILLINGS AVENUE TO CENTERLINE-CENTERLINE INTERSECTION OF BILLINGS AVENUE AND ROBERTS STREET; THENCE SOUTH ALONG THE CENTERLINE OF ROBERTS STREET TO THE CENTERLINE- CENTERLINE INTERSECTION OF ROBERTS STREET AND BUTTE AVENUE; THENCE EAST ALONG THE CENTERLINE OF BUTTE AVENUE TO THE CENTERLINE-CENTERLINE INTERSECTION OF BUTTE AVENUE AND FEE STREET; THENCE NORTH ALONG THE CENTERLINE OF FEE STREET TO THE CENTERLINE-CENTERLINE INTERSECTION OF FEE STREET AND MISSOULA AVENUE; THENCE EAST ALONG THE CENTERLINE OF MISSOULA AVENUE TO THE CENTERLINE- CENTERLINE INTERSECTION OF MISSOULA AVENUE AND WASHINGTON STREET; THENCE SOUTH ALONG THE CENTERLINE OF WASHINGTON STREET TO THE CENTERLINE- CENTERLINE INTERSECTION OF WASHINGTON STREET AND BUTTE AVENUE; THENCE EAST ALONG THE CENTERLINE OF BUTTE AVENUE TO THE WESTERLY RIGHT-OF-WAY LINE OF THE WESTERLY RIGHT-OF-WAY OF INTERSTATE HIGHWAY NUMBER 15; THENCE SOUTHWESTERLY ALONG THE WESTERLY RIGHT-OF-WAY LINE OF THE SAID RIGHT- OF-WAY TO THE CENTERLINE OF WASHINGTON STREET;

THENCE SOUTH ALONG THE PROJECTED CENTERLINE OF WASHINGTON STREET TO THE SOUTHERLY RIGHT-OF- WAY LINE OF THE WESTERLY ROAD RIGHT-OF-WAY OF INTERSTATE HIGHWAY NUMBER 15; THENCE SOUTHWESTERLY ALONG SAID SOUTHERLY RIGHT-OF-WAY TO THE CENTERLINE OF FEE STREET; THENCE SOUTH ALONG THE CENTERLINE OF FEE STREET TO THE CENTERLINE-CENTERLINE INTERSECTION OF FEE STREET AND NINTH AVENUE; THENCE WEST AND SOUTH ALONG THE CENTERLINE OF NINTH AVENUE TO THE CENTERLINE- CENTERLINE INTERSECTION OF NINTH AVENUE AND MONTANA AVENUE;

THENCE NORTH ALONG THE CENTERLINE OF MONTANA AVENUE TO THE INTERSECTION OF MONTANA AVENUE AND BILLINGS AVENUE, SAID INTERSECTION ALSO BEING THE POINT OF BEGINNING. CONTAINING 136 ACRES, MORE OR LESS, ALL AS SHOWN ON THE ATTACHED “EXHIBIT 1 - CAPITOL HILL MALL URD BOUNDARY” WHICH IS HEREWITH INCORPORATED IN AND MADE A PART OF THIS LEGAL DESCRIPTION. NOTE: ALL SUBDIVISION PLATS, CERTIFICATES OF SURVEY, AND RIGHTS-OF-WAY REFERENCES ARE FILED IN THE LEWIS AND CLARK COUNTY CLERK AND RECORDER’S OFFICE, HELENA, MONTANA.