SOUTH KALISPELL Urban Renewal Plan
APRIL 2016 TABLE OF CONTENTS I. INTRODUCTION...... 1 Airport Alternatives ...... 24 A Plan and a Vision...... 1 Introduction ...... 24 Description of District Boundaries...... 1 Alternative 1 – Keep Airport As-Is...... 26 Alternative 2 – Close the Airport...... 30 Urban Renewal District...... 1 Alternative 3 – FAA Compliant Airport in Current Alignment .34 Tax Increment Financing District (TIFD)...... 1 Alternative 4 – Incorporation into an Airport Authority ...... 36 History of the Airport...... 4 Alternative 5 – Privatize the Airport...... 37 History of Prior Planning Efforts...... 4 Summary – Comparison of Alternatives...... 38 1996 Airport Layout plan (ALP)...... 5 1996 Kalispell City Airport/Athletic Complex Redevelopment Plan5 Endnotes Assumptions and Sources...... 40 1999 Phase I Master Plan Airport Feasibility Study...... 5 IV. DEVELOPMENT RECOMMENDATIONS AND STRATEGIES.....42 2012 Final Master Plan...... 5 Land Use Strategies ...... 42 II. SUMMARY OF PUBLIC PARTICIPATION...... 7 Development Guidelines...... 43 Meetings and Workshops...... 7 Improvement Projects and Opportunity Sites...... 45 2015 Project Kick Off...... 7 Airport Redevelopment Opportunity...... 59 Public Outreach Process...... 7 Tax Increment Financing...... 63 Summary of Public Outreach from the 2012...... 7 Tax Increment Financing Projects...... 63 Project Website ...... 8 Minimizing Hazards to Navigation...... 63 News and Media...... 8 Increasing Economic Development Opportunities...... 64 Public Open Forums...... 9 Financing Methods...... 65 Comment Boards and Surveys...... 9 Tax Increment Financing...... 65 Emerging Trends and Themes...... 11 Industrial Development Bonds...... 65 Summary...... 12 General Obligation Bonds...... 65 III. ANALYSIS OF OPTIONS...... 15 Private Financing...... 65 Public/Private Partnerships ...... 65 Executive Summary...... 15 State of Montana ...... 65 Introduction ...... 16 Community Development Block Grants...... 65 Existing Conditions ...... 17 Federal Grant Administration...... 66 Prior Airport Studies...... 17 Local Funding...... 66 Airport and Airfield Configuration...... 17 City/County Partnerships...... 66 Airport Role...... 17 Brownfields...... 67 Other Area Airports...... 18 Aviation Activity at the Airport...... 18 V. APPENDIX A...... 68 Traffic Patterns...... 19 Airport Alternatives Detailed Financial Tables and Pro-Formas..68 Airport Constraints...... 19 Alternative 3 as Previously Proposed...... 70 VI. APPENDIX B...... 78 Improvement Project Planning Level Cost Estimates...... 78 LIST OF FIGURES
Figure 1: District Boundaries...... iv Figure 43: Land Use Alternative 2 for Airport Closure...... 61 Figure 2: Regional Context Map...... 2 Figure 44: Concept for a New T-Hangar Complex ...... 62 Figure 3: Public/Private Airport Lands and Flood Hazard Areas...... 3 Figure 45: 1990 and 2015 Aerial Imagery...... 64 Figure 4: Planning Timeline...... 4 Figure 46: Starbucks Brownfields Project...... 67 Figure 5: Schedule of Public Outreach Events...... 6 Figure A1: Alternative 3 Revenue and Expense Summary...... 71 Figure 6: Comparison Between 2012 and 2015 Public Comments...... 7 Figure A2: Alternative 3 Comparison to Baseline...... 71 Figure 7: Project Website Homepage...... 8 Figure A3: Alternative 3 Capital Costs and Resulting Revenues...... 71 Figure 8: A Comment “Tag Cloud”...... 9 Figure 9: Public Open House Flyer...... 10 Figure 10: Example of an Informational Handout...... 10 Figure 11: Public and Stakeholder Opinion on the Three Alternatives...... 11 Figure 12: Recreational facilities...... 13 Figure 13: Aviation and Non-aviation Development Opportunities...... 14 Figure 14: Airport Development Alternatives Financial Summary...... 17 Figure 15: Airport Financial History...... 25 Figure 16: Baseline Financial Projections...... 25 Figure 17: Existing Airport Capital Improvement Plan...... 26 Figure 18: Alternative 1 Capital Costs and Resulting Revenue...... 27 Figure 19: Alternative 1 Revenue and Expense Summary...... 27 Figure 20: Alternative 1 Comparison to Baseline...... 29 Figure 21: Alternative 2 Capital Costs and Resulting Revenues...... 32 Figure 22: Alternative 2 Revenue and Expense Summary...... 32 Figure 23: Alternative 2 Comparison to Baseline...... 32 Figure 24: Airport Management Structure Comparison ...... 36 Figure 25: Alternative Summary...... 38 Figure 26: Baseline and Alternative Returns on Investment...... 39 Figure 27: Existing Land Use Map...... 41 Figure 28: Improvements Projects and Opportunity Sites Table...... 45 Figure 29: Improvements Projects and Opportunity Sites Map...... 46 Figure 30: Cemetery Road Improvement Concept...... 47 Figure 31: New Elementary School Concept...... 48 Figure 32: Dog Park Concept...... 49 Figure 33: Community Park Concept...... 50 Figure 34: Trail Expansion Concept...... 51 Figure 35: Welcome to Kalispell Sign Concept...... 52 Figure 36: Highway 93 Business Park Design Example...... 53 Figure 37: Highway 93 Business Park Concept...... 54 Figure 38: Aviation Business Park Concept...... 55 Figure 39: Park-N-Ride Trailhead Concept...... 56 Figure 40 : Relocated City Shop Complex Concept...... 57 Figure 41: 1st Ave Commercial District Concept...... 58 Figure 42: Land Use Alternative 1 for Airport Closure...... 60 S. Kalispell Urban Renewal District
Tax Increment Finance District
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230 Acres (TIF Dist.)
720 Acres (Urban Renewal Dist.)
Figure 1: The South Kalispell Urban Renewal District and TIFD Boundaries April 2016 INTRODUCTION A PLAN AND A VISION
The City of Kalispell contracted with CTA in December of 2014 to further the and southern boundary, and to the Stillwater River just outside the area’s planning effort within the South Kalispell Urban Renewal Planning Area. eastern boundary. Elevations range from about 2,950 to 3,000 feet above The Plan is a result of the failed referendum in November of 2013 related to sea level. The roughly triangular district itself is bound by Airport Road on the FAA funding opportunity and upgrades to Kalispell City Airport. the west, Cemetery Road on the south, Willow Glen Road on the south and east, 3rd Avenue and US Highway 93 on the north and east and extending The City’s Growth Policy and Tax Increment Financing District (TIFD) outline north the intersection of 13th Street, US Highway 93 and Airport Road. the City’s goals and objectives for this planning area. The Growth Policy encourages efficient use of space, orderly growth consistent with high Due to the relatively flat terrain in comparison to the surrounding mountain quality of life, fiscal soundness, environmental conservation and community peaks, the Urban Renewal District area is subject to flooding and FEMA vitality; while the TIF District encourages ‘increasing development Flood Insurance Rate Maps indicate a flood hazard area exists around the opportunities, funding mechanism for the Airport, minimizing hazards to Ashley Creek drainage. navigation, developing an airport layout plan, and establishing a priority schedule for plan implementation’. There are an estimated 450 parcels of land within the Urban Renewal District boundaries, with the smallest being 100 square feet and the largest being Facing unprecedented growth, the area faces a variety of issues such as 27 acres. Average parcel size in the Urban Renewal District is 1.6 acres, traffic congestion along Highway 93, lack of pedestrian facilities, parks, and much larger than that of the City of Kalispell (0.39 acres, or 17,000 square an uncertain future with the Airport, and a need for additional police and feet). Historically, the district was platted as Bakers Southside Addition, fire services. While these challenges can seem overwhelming, they can Browns Addition, Poston Addition, Purdys Addition, Ryker Addition and also provide an opportunity to create a vision unique in character to South Daley Field Subdivision, with Courtyard Subdivision and Diamond Lils Kalispell. Condo Subdivision being two of the newer subdivisions. Approximately 46% of the Urban Renewal District is in the City of Kalispell with the The South Kalispell Urban Renewal Plan will incorporate the work done in remaining 54% in Flathead County. prior planning efforts and will be consistent with the City’s Growth Policy while providing new ideas, guidance, and strategies for implementation. Most of the land in the Urban Renewal District is privately owned, many of the largest parcels are public: about 36% is owned by the city, county, DESCRIPTION OF DISTRICT BOUNDARIES federal government or school district. Roughly 31% of the Urban Renewal District is in commercial use, 17% is vacant and 11% is used for residential. Urban Renewal District Tax Increment Financing District (TIFD) The South Kalispell Urban Renewal District is an approximately 720-acre area partially within the southern corporate limits of the City of Kalispell The TIFD comprises approximately 266 parcels over roughly 230 acres and Flathead County. The area lies in the broad plain of the Stillwater and including and surrounding the Kalispell City Airport. Average parcel size Flathead Rivers and their tributaries, lending its topography to be generally within the TIFD is 0.87 acres. There are an estimated 103 individual property flat or gently sloping. The land drains water to Ashley Creek on the western owners in the TIFD, with the largest being the City of Kalispell, which owns about 58% of the total land area.
1 US Hwy 2
SOUTH KALISPELL Urban Renewal Plan
State Hwy 35
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i LATHEAD l F l w C OUNTY a t e r R iv er Foys Lake South Kalispell Urban Renewal District
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Figure 2: Regional Context Map 2 April 2016
14th St
3rd Ave S. Kalispell Urban Renewal District (722 Ac)
City-Owned Airport Parcels: 9.9% (71.4 Ac) City- and Privately-Owned Airport Parcels: 12.2% (87.4 Ac) 18th St Flood Hazard Area
0 1/8 Miles 1/4 Miles 1/2 Miles N
Kelly Rd
US Hwy 93
Twin Acres Dr Airport Rd
US Hwy 93 Bypass
Cemetery Rd Lower Valley Rd
Figure 3: Public/Private Airport Lands and Flood Hazard Areas 3 SOUTH KALISPELL Urban Renewal Plan
HISTORY OF THE AIRPORT HISTORY OF PRIOR PLANNING EFFORTS
The Kalispell City Airport (Airport) has a long and rich history nestled in the 1960’s and 1970’s back country of Northwest Montana. Kalispell is the only city in Montana that has two public use airports (2012 Master Plan Update pg. 121). In the mid 1960’s, the Kalispell Airport Association was a few private aircraft Kalispell City Airport is a city owned public use general aviation airport that owners and interested business men who entered into a lease with the City is located south of the downtown central business district of Kalispell and to manage the Airport. By 1986, management was turned back over to the encompasses approximately 71+ acres of property. The Airport has been in City. (T. Jentz chronological history). operation since 1911 when the first known flight from the immediate area Beginning with the 1979 Mini-Master Plan the City recognized the need of Kalispell was made on June 21, 1911 from the fairgrounds by Eugene Ely to address Airport operation and maintenance as well as necessary in a Curtis bi-plane (1979 Kalispell City Airport Mini-Master Plan; Montana safety upgrades and day to day management procedures. Some of the and the Sky, Frank W. Wiley, 1966). The airport has been in its present recommendations included overlaying the Airport runway, acquiring location for more than 83 years and is one of the oldest and largest General additional property to extend the Airport clear zone, and fencing the Aviation airports in the State of Montana (City of Kalispell website). The Airport. history of the Airport is summarized in Chapter 3 of the 2012 Final Master Plan. 1993 Kalispell City Airport Neighborhood Plan
The planning history for the Kalispell City Airport started back in 1928 In 1993, Montana Planning Consultants of Kalispell, MT prepared when the City purchased 135 acres from various property owners on the the Kalispell City Airport Neighborhood Plan. This plan had similar south end of Kalispell. Of the 135 acres purchased in 1928 approximately recommendations to extend the runway, remove hazards from the runway 71 acres remain in city ownership as the other land parcels have been clear zone, and recommended airport zoning regulations for compatible sold for various city projects throughout the years (1999 Phase I Master land use be adopted. City Council adopted the plan on September 19, Plan Airport Feasibility Study prepared by Morrison – Maierle, Inc.). The 1994. following summary of studies shows that the City has recognized the need to keep the Airport and the subsequent development of south Kalispell in the forefront as the City continued to grow.
Figure 4: Planning Timeline 1978: Airport “Mini-Master Plan” 1960s: Kalispell Airport 1986: Airport management turned back to city from Kalispell Airport Association 1928: City purchases 135 acres of land for the airport Association formed 1994: Kalispell City Airport Neighborhood Plan 1911: First flight from current airport location 1996: Kalispell City Airport/Athletic Complex Redev. Plan 1996: Airport Layout Plan 1999: Phase I Master Plan 2012: Final Master Plan 2013: Airport Referendum 2015: S. Kalispell Urban Renewal Plan
4 1911 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2015 April 2016
1996 Airport Layout Plan (ALP)
The city council directed Pecia and Associate to develop an Airport Layout The Plan recommended that airport improvements be financed by a Plan (ALP) that would comply with FAA standards to assist the City in future combination of a TIFD and by the sale of airport properties (ball fields, planning. The Plan completed in August 1996 reiterated many of the same under used Highway 93 frontage, etc.). The redevelopment plan was projects: relocate the runway 900 feet to the south; provide for a B-2 design; adopted by the City Council in July, 1996 along with the South Kalispell widen the runway from 60 to 75 feet; lengthen the runway to 4,300 feet. Airport TIFD, which expires July 1, 2020.
A March 28, 1998 council action limited the City to no more than $1 million 1999 Phase I Master Plan Airport Feasibility Study dollars in local funds for airport activities - either as matching funds with FAA or to be used for local improvements. (T. Jentz chronological summary). The Phase I Master Plan prepared by Morrison – Maierle, Inc. was partially funded by a FAA planning grant. The plan developed 5 alternatives and 1996 Kalispell City Airport/Athletic Complex Redevelopment Plan provided conceptual costs for each. Alternatives included upgrading the Airport, moving the runway, rotating the runway, extending the runway, The Kalispell City Airport/Athletic Complex Redevelopment Plan prepared acquiring land for redevelopment, and relocating the Airport. by Kalispell Planning, Economic & Community Development Office took the 1993 Neighborhood Plan and suggested the following goals such as The plan recommended Alternate 2. This included a five-degree rotation minimizing hazards to airport navigation; developing an Airport Layout of the runway, moving the runway south 900 feet and construction a B-2 Plan; increasing development opportunities on nearby properties; airport with an initial 3,600 foot runway. The plan was adopted November promoting compatible land uses in and around the Airport; establishing 1, 1999. funding mechanisms for airport operations; and establishing a priority for plan implementation. Projects included: extend runway to the south 2012 Final Master Plan to obtain 4,700 feet and purchase property; remove objects within the In 2012, Stelling Engineers, Inc. prepared a 2012 Final Master Plan. The plan Runway Protection Zone (RPZ) and purchase private property located was an extensive process which included a detailed analysis of the Airports within the protection zone; fence the Airport; relocate 16 baseball and inventory, forecasted use, facility requirements, improvement alternatives, soccer fields in the vicinity of the Airport. development constraints, and a capital improvement program. The planning process also included an extensive public 1978: Airport “Mini-Master Plan” outreach component. City Council adopted 1960s: Kalispell Airport 1986: Airport management turned back to city from Kalispell Airport Association the plan in April of 2012. 1928: City purchases 135 acres of land for the airport Association formed 1994: Kalispell City Airport Neighborhood Plan 1911: First flight from current airport location 1996: Kalispell City Airport/Athletic Complex Redev. Plan 1996: Airport Layout Plan 1999: Phase I Master Plan 2012: Final Master Plan 2013: Airport Referendum 2015: S. Kalispell Urban Renewal Plan
1911 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2015 5 2015 MEETING DATES JAN FEB MAR APR DESCRIPTION Project Kick-o Meeting JANUARY 12
Primary Stakeholder Meetings FEBRUARY 11-13
Launched Project Website/Survey FEBRUARY 16
Mass mailing of public open forum invitation to all FEBRUARY 23 property owners within a 100 foot boundary of the airport Advertisements regarding the project and the FEBRUARY 2015 public open forum were placed in the Flathead Beacon and Daily Interlake KGEZ Radio Interview MARCH 3
Community Open House Forum MARCH 10
Media interviews with the Flathead Beacon, Daily MARCH 10 Interlake, and local TV stations
Personal telephone calls and interviews with MARCH 11-12 additional primary stakeholder contacts, including all hangar lessees/owners Mass email group was created to keep all MARCH 13 interested parties connected to the project
Community Open House Forum Design APRIL 7 Charette/Workshop
Presentation to City Boards on Preliminary APRIL 29 Findings Report
Figure 5: Schedule of Public Outreach Events April 2016 2SUMMARY OF PUBLIC PARTICIPATION MEETINGS AND WORKSHOPS
2015 Project Kick Off Summary of Public Outreach from the 2012 Airport Master Plan Update January 12th, 2015 kicked off the official South Kalispell Urban Renewal planning effort with team members from the City of Kalispell, CTA, and The 2012 Airport Master Plan Update included public open house workshops Mead & Hunt meeting to discuss the goals and strategies for this large land where 89 comments were received from the public (2012 Master Plan pg. planning exercise. The table top planning exercise included looking at the 124). Responses included those that represented businesses as well as larger picture of South Kalispell with the goal to create a unique character individual responses from within and around the surrounding community. and design by creating a distinction between the developments north of Kalispell and the Core Area Downtown Plan. South Kalispell desires to be The responses in 2012 were overwhelming in favor of keeping and a uniquely identified destination that meets the needs of South Kalispell upgrading the Airport. The public responses were in contrast to the failed residents as well as the larger Flathead Valley area including the tourism referendum in 2013 which negated the council’s decision to accept FAA economy. money and upgrade the Airport per the recommendations in the Master Plan. The primary focus of this large land planning exercise was to discuss goals and strategies for the current and future development opportunities The 2015 public outreach process has yielded similar results, with the within the South Kalispell Urban Renewal District, while creating a unique public in favor of keeping the Airport and upgrading it to meet safety and character and livability to the South Kalispell area. compliance standards for general aviation airports. The question on how to fund these improvements remains. Public Outreach Process Figure 6: Comparison Between 2012 and 2015 Public Comments Early in the planning process, the project team identified several primary stakeholder groups representing a large and diverse constituent of 74% 2015 Kalispell businesses and residents as the target audience for the first public 70% outreach effort. During the week of February 11th–13th, 2015, CTA staff 2012 met individually with members from this group including the Chamber of Commerce, Kalispell Downtown Association, Montana West Economic Development, Kalispell Convention & Visitors Bureau, Kalispell School District, Kalispell Quiet Skies, City Airport Advisory Board and Urban Renewal Committee, public works and parks departments, Flathead Valley 30% Community College, Glacier Park International Airport, Red Eagle Aviation, 26% Kalispell Regional Medical Center, Hilton Garden Inn, and Aero Inn.
Additional personal telephone contacts were made to individual airport hangar owners/lessees, and other business enterprises including REMAX Real Estate Developers, Fun Beverage, Greg Goode Trailer Sales, Flathead County Fairgrounds, Flathead Valley Hockey Association, and Flathead Area Young Professionals. Keep Airport Do Not Keep Airport 7 SOUTH KALISPELL Urban Renewal Plan
Figure 7: Project Website Homepage
The week of February 23rd, 2015 individual mailers were sent to all property The survey and public outreach effort had over 100 responses and owners within the 100 foot boundary of the City of Kalispell Airport inviting comments and the results have been combined with the primary them to the public open forum on March 10th, 2015 at the Hilton Garden stakeholder interviews and public open forum interviews and included on Inn and providing information regarding the project website and survey. the Public Input Survey Response Board.
Project Website Project Website Link: http://southkalispellurbanrenewal.com/ As social media becomes the new ‘norm’ for keeping a large part of a communities constituency connected, CTA created a project specific News and Media website for the South Kalispell Urban Planning effort. This project website was launched the middle of February and remained updated and active Both of Kalispell’s local newspapers (the Flathead Beacon and Daily through the planning process. The website provided a key public outreach Interlake) do a great job engaging in local community issues. Our project component by providing a survey specific to South Kalispell and the urban team was in contact with the local papers regarding the planning effort planning effort. including placing advertisements for the March 10th, 2015 open house and staying in contact regarding the Plan’s progress and milestones. Questions were asked in a manner that would provide holistic feedback on Newspaper articles covered the planning efforts. the development of South Kalispell and also gauge the temperature of the community’s commitment to the Kalispell City Airport. Local radio host John Hendrix did a radio spot on March 3rd, 2015 covering the open forum and continues to follow the plan and progress of the plan. Local TV stations also took an interest and covered the public open forum on March 10th, 2015. 8 April 2016
COMMENT BOARDS AND SURVEYS
Public Open Forums During the public meetings, several comment boards were introduced to gather broad comments and opinions. An online survey provided further There were two public forums held at the Hilton Garden Inn. The first opportunity to gather comments, themes and opinions. public forum on March 10th, 2015 yielded a large turnout with interactive participation using post-it note boards maps and surveys. The second The following are examples of the questions posed on the boards and public open forum held on April 7th yielded a smaller turnout however online survey: most of the attendees were engaging for the first time. QQ What do you like the most/least about the Airport? The public outreach process yielded a dynamic yet consistent theme of QQ What environmental issues most concern you? comments that are weighted in response shown on the Public Results Survey Board. Priorities seem to be increasing the quality of livability in QQ What is the biggest change (good or bad) you have seen in the past 5 the South Kalispell area that includes connectivity of streets, bike and years? pedestrian pathways, and increased park and trail use. Comments related QQ Name some recreational facilities you would like to see? to the Kalispell City Airport were mixed with slightly more opinions favored QQ What kinds of public services, infrastructure, housing or commerce in keeping the Airport and making it more sustainable. would you like to see in the South Kalispell area? Response highlights included: Agriculture Coffee/Restaurants/Grocery Convention Center Clean It Up • “I am neutral and sympathize with both sides” Dog Park Commercial • “We like watching the planes take off and land” EntranceDowntown Connection Helicopters are a Nuisance Helicopters are Not a Nuisance • “Noise and danger from airplanes is unacceptable”
Fitness FAA Compliance/Funding • “The Airport is critical to this community” Incompatible Use Housing & Mixed Use • “It is a tax pit, close it!” Water Office & Industrial Air Keep Airport • “Economic driver for Kalispell” Phase Out Airport Pilot Accessibility Parks & Trails
Schools Traffic Plane Watching One of the key pieces of input gathered regarded the general notion of Noise Tourism Tax Burden the Airport’s future. Three alternatives were presented: 1) keep the Airport Walkability as currently configured, 2) bring the Airport into FAA compliance, and 3) Figure 8: A Comment “Tag Cloud” that emphasizes the most phase out airport operations. frequently mentioned issues, topics or concerns from the public comment posting boards. The size of the word correlates to the number of times that topic was mentioned.
9 SOUTH KALISPELL Urban Renewal Plan
infrastructure transportation financial stability developmentopen patterns space inter-agency coordination transportation development patterns Figure 9: Public coordination tourism preservation land use agricultural land Open House Flyer local services open space historic resources affordable housing natural resources development patterns economiccultural development resources view corridors Please join us for a Guide Growth in Your Community! Community OPEN HOUSE South Kalispell Urban Renewal Plan
The City of Kalispell has hired CTA to assist in creating the future vision for South Kalispell. This effort includes determining the future of the City of Kalispell Airport. The time is now to be part of the http://southkalispellurbanrenewal.com/
7TH AVE E solution and help 7TH AVE E create the future vision of your community. Please join us, we want to hear from you. 6TH AVE E 6TH AVE E
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5TH AVE E 5TH AVE E 13TH ST E 13TH ST E 4TH AVE E 4TH AVE E
3RD AVE E 3RD AVE E 2ND AVE E 2ND AVE E Please visit the project website for more information:
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1ST AVE E 1ST AVE E th 1ST AVE W 1ST AVE W S WOODLAND DR S WOODLAND DR Urban Renewal Plan QUINCY LOOP QUINCY LOOP 17TH ST W 17TH ST W , From 2:00pm to 7:00pm
RIVER GLEN CT RIVER GLEN CT 18TH ST E 18TH ST E 18TH ST E 18TH ST E SOUTHFIELD DR SOUTHFIELD DR Tuesday APRIL 7
PROJECT BACKGROUND BISON DR BISON DR
Since the late 1970’s there have been a number of studies completed SOUTHFIELD LN SOUTHFIELD LN HAVEN DR Stephanie Ray HAVEN DR regarding the future of the City of Kalispell Airport. These studies have Senior Planner [email protected] included a thorough analysis of the existing condition of the Airport STAG LN STAG LN Hilton Garden Inn, 1840 US Hwy 93 | Kalispell ,MT 406.222.0104 ext. 1606 as well as identified significant barriers related to the redevelopment EAGLE DR EAGLE DR
AIRPORT RD AIRPORT RD BEGG PARK DR BEGG PARK DR of the Airport. Over the years, basic operation and maintenance of the KELLY RD KELLY RD
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US HWY 93 S US HWY 93 S MALLARD DR Airport has allowed it to remain in operation, however, the current con - MALLARD DR
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CONDOR DR CONDOR DR dition of the Airport does not meet the minimum FAA design standards MUSKRAT DR MUSKRAT DR
TEAL DR TEAL DR and therefore is not eligible to receive federal funding via grants or low S WOODLAND DR S WOODLAND DR RUSSELL DR RUSSELL DR interest loans.
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WIDGEON CT With minimal capital investment over the last several decades, the MERGANSER DR MERGANSER DR
Airport is facing a future that will require significant financial capital to TWIN ACRES DR TWIN ACRES DR mitigate these current barriers.
MEADOWLARK MEADOWLARK
WILLOW GLEN DR PREVIOUS STUDIES WILLOW GLEN DR • 1979 Kalispell City Airport Mini-Master Plan prepared by T.A.P., Inc.; Avia - tion & Economic Consultants • 1993 Kalispell city Airport Neighborhood Plan SHEFFERD LN SHEFFERD LN • 1996 Kalispell City Airport/Athletic Complex Redevelopment Plan Analy - WELF LN WELF LN sis prepared by the Kalispell Planning and Economic & Community CEMETERY RD CEMETERY RD Development Department. • 1999 Feasibility Master Plan Study prepared by Morrison – Maierle, Inc. Existing Land Use SOUTH KALISPELL URBAN RENEWAL DISTRICT Growth Policy Land Use SOUTH KALISPELL URBAN RENEWAL DISTRICT
• 2001 Site Selection Study prepared by Robert Peccia & Associates, Inc. Residential Government Facility South Kalispell/Airport Redevelopment Area Urban Residential Industrial South Kalispell/Airport Redevelopment Area / Federal Aviation Administration and Montana Aeronautics Division Commercial Professional Office or Health Care Current Airport Tax Increment Finance District High Density Residential City Airport Current Airport Tax Increment Finance District Mobile Home Park Sewer Treatment Plant City Limits Commercial Public Open Space, City Limits Sewer Treatment Plant, Cemetery • 2002 Final Environmental Assessment prepared by Robert Peccia & As - Open Space Industrial
0 330 660 1320 FT N 0 330 660 1320 FT N sociates, Inc. Airport, Golf Course, Fairgrounds • 2012 City of Kalispell Airport - Master Plan Update - Final
HISTORY OF AVIATION CURRENT The Kalispell City Airport has a long and rich history with the first CTA has been hired by the City of Kalispell to provide the City of The effort will include a ‘live’ project website that will encourage public known flight from the immediate area of Kalispell made on Kalispell, Airport Advisory Board, and Community with guidance for the comment as well as keep the planning process as dynamic as possible. June 21, 1911 from the fairgrounds by Eugene Ely in a future development of South Kalispell. The objective of this plan is to Public outreach, input, and feedback are critical to the successful Curtis bi-plane (Source: 1979 Kalispell City Air- assist the Community with the future planning and vision of South outcome of the South Kalispell Urban Renewal Plan. port Mini-Master Plan; Montana and the Sky, Kalispell that includes an analysis of the Airport’s future development Frank W. Wiley, 1966) and has been options. The final document will be the South Kalispell Urban Renewal in its present location for more Plan. FUTURE than 83 years. It is one of The future of the Airport will be influenced by feedback received from Figure 10: Example of an the oldest and larg- One of CTA’s primary roles is to collect public input from as many stake - the community. This plan is an interactive process. Be part of the est General Aviation holders as possible. CTA will be meeting individually with stakeholders solution and help create the future vision of your community! Informational Handout airports in the State as well as larger forum public meetings to facilitate feedback regarding of Montana (Source: the future of the Airport and vision for South Kalispell. CTA Architects Engineers City of Kalispell web- Project Stephanie Ray site). Contact: Ph. 406.222.0104 ext. 1606 Em. [email protected]
10 Trend or Theme No. of Times Mentioned Trails/parks/bike paths 7 Clean up existing businesses 6 Bring airport into FAA compliance 6 Sightseeing/plane watching 5 April 2016 More walkability in S. Kalispell 5 Tourism destination 4Figure 11: Public and Stakeholder Opinion on the Three Alternatives Alternatives Schools 4 Mixed use housing 3 Phase out airport operations 2 Keep Airport Phase Out Amusement park 2 as Currently Airport Tra c 2 Operations • COMMERCIAL DEVELOPMENT South Kalispell Entrance 2 Accessibility for local pilots 1 26% The public commented that uses such as fitness centers, coffee, Connect to downtown core 1 42% restaurants, grocery, light industry, and office were desired commercial Preserving agriculture 1 uses in the neighborhood. Convention center 1 Entrance signage 1 Light industry, o ce 1 • CITY AND AIRPORT ENTRANCE/SIGNAGE ISSUES Co ee, restaurants, grocery 1 Fitness center 1 32% South Kalispell lacks a defined entrance into the City. The public Commercial development 1 supported an entrance sign. The airport entrance and access also Dog park 1 Bring Airport lacks visibility and could be improved. Hotel district 0 into FAA Keep airport as currently con gured 0 Compliance Recreation ball parks/ elds/ice rink 0 • TRAFFIC Improve Airport Rd 0 Improve Cemetery Rd 0 Figure 11 above illustrates the breakdown of opinion. Citizens considered that increased development would intensify History and heritage of aviation 0 traffic on south Kalispell’s streets. Airport entrance signage 0 Outside of meetings, workshops and forums, the public and stakeholders had access to the online survey creating an opportunity for a larger reach of the public. The survey generally yielded more detailed comments, as • SCHOOLS participants could submit responses on their own time. Noted was the importance of quality neighborhood schools, as well as their school’s ability to serve new students in the future. EMERGING TRENDS AND THEMES Comments also centered around the school spurring new residential developments which would increase traffic. The following represents the trends and themes that emerged from the various input and public participation sessions: • CONVENTION CENTER Additional conference or convention space would increase the area’s • TRAILS/PARKS/BIKE PATHS OR DOG PARK strength as a commercial district. Recreational facilities like bike and pedestrian trails or dog parks attract people to an area from nearby neighborhoods. This idea was • PRESERVING AGRICULTURE widely supported by the public. Agriculture will remain a key contributing factor to the region’s economy and should be preserved to maintain existing community • MIXED USE HOUSING character. Housing provides the rooftops needed to support various commercial retail or office uses. New amenities can also be introduced when • ALTERNATIVES designed with a mixed use component. There was interest in offering The three main alternatives emerged as follows: 1) Keep Airport as different housing types and levels of affordability. Currently Configured, 2) Bring Airport into FAA Compliance, and 3) Phase out Airport Operations.
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• IMPROVE LOCAL ROADS • HOTEL AND TOURISM DISTRICT The degradation of existing roads such as Airport Rd and Cemetery Rd An opportunity exists to promote South Kalispell as a tourism is seen as a concern. destination complete with abundant hotels and commercial amenities. Most of the hotel accommodations for the City of Kalispell • CLEAN UP EXISTING BUSINESSES are located in the south urban renewal area. Having a clean and uncluttered commercial environment is important to keeping and attracting new business as well as promoting quality of life. Some comments centered around cleaning up blighted properties and incentivizing businesses to improve their business frontage and curb appeal.
• RECREATION: BALL FIELDS, ICE RINK, SUMMARY AMUSEMENT PARK, SIGHTSEEING, PLANE The public outreach process for the South Kalispell Urban Renewal Plan WATCHING prompted concerned business groups and citizens alike to look specifically at the South Kalispell area. While being one large land mass, there are two Numerous and diverse active recreational facilities promote the public very unique opportunities within this area. South Kalispell as a whole offers health and welfare. People desired being able to recreate where they a combined mix of industrial, commercial, residential and City uses with live. Less travel time to recreational areas such as parks and ballfields the stronger theme being commercial and industry. was desired. The second distinct use within this larger area is the operation of the Kalispell • WALKABILITY AND CONNECTIONS TO S. City Airport. The general consensus was weighted in favor of keeping the KALISPELL AND DOWNTOWN CORE Airport, with the concern focusing on the Airport becoming more fiscally constrained and able to support annual operation and maintenance as Attracting neighborhood amenities like local commercial uses well as reinvestment projects. It was clear that the community did not want complements promoting bike/pedestrian facilities in creating the Airport to become a tax burden. a well-connected, walkable environment. Creating a walkable community was a very popular comment. Strong public opinion supported a walkable community with trails and parks; an entrance sign into South Kalispell; mixed use development • HERITAGE OF AVIATION AND ACCESSIBILITY including commercial and residential as well as light industry was also very popular. There was also interest in incentivizing existing businesses to FOR LOCAL PILOTS make their business more attractive. Maintaining the small neighborhood airport activities will continue to allow ease of access for local pilots, a long-standing amenity in the area.
12 April 2016
Figure 12: Recreational facilities, like the Begg Park baseball fields, were mentioned as a valuable community asset in south Kalispell. (Photo: K. Brady)
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Figure 13: Aviation and Non-aviation Development Opportunities 5th Ave E
Southfield Ln 3rd Ave E
Bison Dr
Stag Ln
US HWY 93 S Kelly Rd
BLUE: Aviation compatible business development opportunities GREEN: Non-aviation business development opportunity (city could
Airport Rd Airport repurpose for commercial development) Teal Dr CITY OF KALISPELL FLATHEAD COUNTY City Limits
14 April 2016 3ANALYSIS OF OPTIONS EXECUTIVE SUMMARY
As we have seen in the public outreach process there was no clear If the city wishes to keep the Airport an active and viable community overwhelming desire from the community to close the Airport. The public asset there will need to be a concerted political decision and financial seems to support continued operation of the Airport if two goals are met: commitment from the City. Efforts to reinvest in capital projects and create 1) the Airport is not expanded to take additional commercial aircraft; 2) additional long term revenue generating sources will need to be a priority. the Airport does not become a tax burden to the community. The only Revenue options include: increased business opportunities, taxation, and definitive decision made by the public was to vote down FAA funding to FAA funding. expand the Airport. The option of selling and redeveloping the Airport is a potential alternative During the “analysis of options” exercise, each of the alternatives presented for the City as a long term program to eliminate a financial and managerial below contained a series of decisions that would need to be made by commitment. When making this decision the City should weigh the the political body. There was no alternative clearly directing a decision to discernible value of the Airport and its broader reaching impacts to the continue operating the Airport in the future, nor to close the Airport. What community. Additional considerations should include the large amount of was made clear during the analysis is that this general aviation airport available developable land in the greater Kalispell area. At this time, there cannot sustain itself without full development of available property, is no shortage of developable properties within the North or South areas and FAA participation in capital improvement projects. Without FAA of Kalispell. If the Airport is closed for redevelopment, the redevelopment participation in capital projects, the Airport operates at a loss even with of this large land mass could create a long-term blighted property that full development of revenue producing property. may sit vacant for many of years until development pressure increased. It should be noted however that there is a considerable amount of existing Airports are an essential public facility, meaning that they provide benefit to infrastructure in the form of water and sewer mains within the Airport the community beyond their core function. General aviation (GA) airports property making it attractive for development. support recreational, business and flight training aviation activities on a regular basis. They provide jobs for those that work at the airport, and the This report analyzes the financial, community and aviation-related impacts services and products purchased by airport businesses contribute to the of three improvement /reorganization alternatives for the Kalispell City local economy. Business GA users may come to the region in support of Airport (S27 or “the Airport”) and provides two additional alternatives that other industries (such as business managers and owners), and although would require further research and analysis. Improvement alternatives are their economic contribution may not be directly tied to the Airport, their being considered because the City operates the Airport at a net loss, and activities in the region make a substantial economic contribution and improvement projects are needed to extend the life of the Airport, and the Airport facilitates their access to the community. Beyond day to day to comply with Federal Aviation Administration (FAA) design standards activities, airports play a vital role in emergency response, law enforcement, should the Airport desire to accept FAA money in the future. and disaster management when needed.
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EXECUTIVE SUMMARY (CONT.)
The report looked at near-term (five-year) capital costs and near-and are that Alternative 2 eliminates the Airport and the financial obligation of long-term (five years and beyond) operating cost and revenue projections. running it, while Alternative 3 will require the City to operate the Airport The goal of this analysis is to weigh the needed and recommended for at least 20 years beyond the date of the last grant received. Alternative airport improvement projects against the financial feasibility and return 2 will likely use up most, or all, of the available tax increment finance (TIF) on investment of their implementation. The five alternatives include the district funding that is available while Alternative 3 will make substantial following: use of FAA funds. Alternatives two and three generate positive valuations, and it is expected that full development of airport property will produce 1. Keep the Airport as it is using City funding a self-sustaining enterprise (with the assistance of FAA funds for future 2. Close the Airport development). Alternative 1 does not produce a positive valuation. Alternative 2 eliminates the Airport as a transportation asset for the City 3. Request FAA funding for the Airport in its current alignment which may have economic impacts beyond airport finances. Should the City be able to convert airport property to a revenue producing land use, 4. Incorporation into an Airport Authority either via tax revenue or a city-owned use that generates more revenue 5. Privatization of the Airport than the Airport, then Alternative 2 may provide additional financial benefit over the other alternatives. Additional research will be needed on A “baseline” financial forecast was also prepared to show what it would cost Alternative 2 to make this assessment. to keep the Airport running ‘as-is’ with only the necessary improvements. The financial analysis includes a discounted cash flow analysis (DCFA) and projections of capital costs. Operating costs and revenues grow in INTRODUCTION proportion with the level of investment in infrastructure at the Airport. In 2013, after years of airport studies, a plan was in place to bring the There are too many unknowns and political uncertainties associated with Kalispell City Airport (S27 or “the Airport”) up to current Federal Aviation Alternative 4 and Alternative 5 so they are not included in the financial Administration (FAA) standards with 90% of the funding provided by the analysis. FAA. The City Council voted to move forward with the planned projects; however, a local voter referendum was passed which reversed the City Alternatives 1 and 3 both make the necessary improvements to keep the Council decision and ended the planned updates to the Airport. Since that Airport operational while Alternative 2 closes the Airport and allows the time the future of the Kalispell City Airport has been uncertain and the City to use this property for other uses, some of which could produce Airport has lacked a long-term plan. revenue that is not accounted for in this analysis. Given what is known today, both Alternative 2, Close the Airport, and Alternative 3, Request FAA In late 2014 the City of Kalispell selected a consultant team to assist the Funding, provide the same valuation in the long term, but for considerably City with gathering public opinion and providing a long-term plan for the different levels of investment. In terms of capital investment, Alternative 2 southern area of Kalispell, including the Airport. As approximately 10% costs $2 million more than Alternative 3. Key differences between the two (71.4 acres) of the study area is occupied by the Airport, the future of the entire south Kalispell area is closely tied to the future of the Airport.
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EXISTING CONDITIONS
Stakeholder and public outreach meetings were conducted in February and Prior Airport Studies March of 2015. Over one hundred people provided input over the course Major airport planning efforts and studies that have been completed over of these public outreach sessions and 17 stakeholders met individually the past two decades include the following studies. with the consultant team. • 1999 Airport Master Plan This report is organized into two sections; Existing Conditions and • 2001 Site Selection Study Alternatives and Financial Implications. The intent of this report is to • 2002 Environmental Assessment provide sufficient information on airport development options so that • 2008 Airport Economic Impact Study decision makers can make a decision about the future of the Airport which • 2009 Airport Layout Plan Update best reflects the future considerations of the City. • 2012 Final Master Plan Update and Environmental Assessment A discounted cash flow analysis tries to work out the value of an investment A recurring theme of these Studies is the Airport’s lack of compliance today, based on projections of how much money the investment will make with FAA standards. The Master Plans and subsequent Environmental in the future. Comparing the Alternatives using a discounted cash flow Assessment (EA) identified areas of the airfield which do not comply with analysis allows the City to consider the present value of an investments current FAA design standards. The Master Plans and EA provided a series of future cash flow in order to arrive at a current fair value estimate for the programmatic approaches for compliance with FAA standards. investment. Airport and Airfield Configuration The Airport is located immediately south of the Kalispell city core, 7 miles Figure 14: Airport Development Alternatives Financial Summary north of Flathead Lake, 16 miles south of the City of Whitefish, and 23 miles Net Present Value (2015 $, 7% Rate) southwest of Glacier National Park. The Airport is a general aviation (GA) Alternative facility with one 3,600 foot long runway (designated as Runway 13-31) DCFA Valuation Capital Costs with a full length parallel taxiway on the east side and a partial parallel Baseline ($1,400,000) $900,000 taxiway on the west. The runway has no visual landing aids other than an 1 ($1,300,000) $900,000 airport beacon and non-standard runway edge lights. The Airport has no 2 $300,000 $3,100,000 instrument landing procedures. Jet fuel and 100LL (100 low lead is the common fuel for piston powered aircraft) are available at the Airport, as well as major airframe and power plant repair. DCFA valuation equals sum of five year cash flows and ongoing (beyond five years) income.
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Airport Role Should ground transportation routes be blocked or impassable, air transportation may be the only The FAA’s National Plan of Integrated Airport Systems (NPIAS) classifies access point for these services. Kalispell City Airport as a “local/basic airport.” The NPIAS defines a local/ A runway’s number reflects basic airport as follows:: Other Area Airports the magnetic heading of that runway. The magnetic Local: Supplements local communities by providing access to local Glacier Park International Airport (KGPI) heading is rounded to the and regional markets. These airports have moderate levels of activity is located eight miles to the northeast. nearest ten degrees and the with some multiengine propeller aircraft. These airports average KGPI is a non-hub primary airport which zero is omitted. For example: runway 13-31 reflect magnetic about 33-based propeller-driven aircraft and no jets. accommodates commercial air carrier headings of 130 and 310 service, military and general aviation degrees respectively. Basic: Supports general aviation activities, often serving aeronautical activity for the region with its 9,007 foot functions within the local community such as emergency response long primary runway and 3,504 foot and access to remote communities. These airports have moderate long crosswind runway. Other GA airports within 50 miles of Kalispell City levels of activity with an average of 10 propeller-driven aircraft and Airport that have paved runways include: no jets. • Polson (8S1) - 30 miles The Airport plays many roles in the community, which are explained in greater detail below. • Hot Springs (S09) – 36 miles • Ronan (7S0) – 38 miles A Base for Pilots. Kalispell City Airport is a convenient general aviation airport for pilots who live or work in Kalispell and the greater Flathead • Libby (S59) – 48 miles Valley. Aviation Activity at the Airport An operation refers A Point of Air Access for Visitors to the Region and Community. Kalispell City Airport is a non-towered airport, to one take off or Kalispell City Airport is a gateway for general aviation visitors to meaning that it does not have an air traffic one landing. A touch - and - go northwest Montana and the nearby Glacier National Park. The region control tower. It is difficult to obtain accurate draws tourists and business people alike. is counted as two counts of aircraft activity at non-towered operations. airports because there is not a system in place A Place for Commerce and Business. Kalispell City Airport is used as a to count every flight. The 2012 Final Master gateway to the region for commerce and business, bringing additional Plan Update used 15,800 annual operations for the baseline, increasing revenue and economic activity to the region. to 27,686 annual operations within the years 2023-2032. This equates A Base for Aviation-Related Community Emergency Services. Kalispell to approximately 42 operations per day on average. These numbers are City Airport is an important access point for emergency medical typical of a single runway GA airport of this size. transportation, search and rescue operations, law enforcement operations, and other emergency services. Following natural disasters, As is commonly the case with non-towered GA airports, the FAA Terminal airports which are not damaged are utilized as a point of access for Area Forecast (TAF) projections show no change in aviation activity from emergency and disaster relief services. 2015 levels. The reason for this is that FAA forecasters lack sufficient local knowledge to predict changes. A more realistic forecast scenario is
18 April 2016
that airport activity will respond to local economic and social changes. Noise abatement procedures are intended to reduce the level and duration According to County records 1, Flathead County experienced a 22% of aircraft noise exposure by noise sensitive land uses, such as schools and increase in population between the years 2000 and 2010, or about 2% per educational facilities, residences, and places of worship. year on average. The City of Kalispell grew at 40% over the ten year period from 2000 to 2010, or 4% per year on average. Population growth does not • The preferred “No Wind” take-off runway is Runway 13. directly correlate to demand for aviation; however, if population is growing • The preferred “No Wind” full stop landing runway is Runway 31. as a result of economic growth, then the region may experience growth in • When departing RWY 13, and leaving the traffic pattern, aircraft aviation activity as well. should climb straight out, avoiding the KGEZ radio towers, and Traffic Patterns proceed enroute. • When departing RWY 31, and leaving the traffic pattern, if Although the Airport only has one runway, there are two runway ends practicable, aircraft should make a 60 degree turn left or right and which may be used for takeoffs and landings. Left traffic patterns are used climb to cruise altitude. to serve both Runway 13 and 31. This means that aircraft can be expected to fly on both the east and west sides of the Airport when arriving, departing • After take-off, reduce power to recommended climb settings as soon or performing touch-and-goes. Aircraft will also likely be arriving and as practical. Slight power reductions will significantly reduce noise departing using straight-in and straight-out procedures aligned with the levels. runway. • When practicing touch and go landings at night, pilots are When conditions warrant pilots are encouraged to observe the following encouraged to use the facilities at KGPI. local noise abatement procedures and instructors are requested to • In constant-speed-propeller aircraft, if safety and the operators emphasize these procedures to their student pilots. Noise abatement manual permits, avoid using high rpm settings in the traffic pattern. procedures are voluntary – not regulatory. The Airport encourages pilots to use noise abatement procedures as part of its good neighbor Airport Constraints policy with surrounding land uses; however, there is no way of tracking The Airport has a series of existing constraints. Some of these are related to compliance, incentivizing compliance, and punishing non-compliance. off-airport land uses, while others are safety and setback standards which are not met. This section focuses on those constraints related to the Airport in its existing configuration, not the planned developments recommended in the 1999 and 2012 Master Plans.
Part 77 Obstructions Title 14 of the Code of Federal Regulations, Part 77, is titled Safe, Efficient Use, and Preservation of the Navigable Airspace. Part 77 specifies the details of a series of three-dimensional airspace surfaces which radiate from an airport. Part 77 provides the FAA with standards for designating penetrations to these surfaces as airspace obstructions.
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The 1999 Airport Master Plan and 2012 Final Master Plan Update identify • Underground facilities, as long as they meet other design criteria, two broadcast antenna towers as being penetrations to the Part 77 airspace such as RSA requirements, as applicable. surfaces and the FAA has designated these towers as airspace obstructions. • Unstaffed NAVAIDs and facilities, such as equipment for airport The two towers penetrate the existing horizontal surface and the Runway facilities that are considered fixed-by-function in regard to the RPZ. 31 approach surface. If left unresolved, the obstructions would continue to pose a hazard to air navigation and could prevent the Airport from ever Land uses other than those specified above require additional compatibility obtaining instrument approach procedures. evaluation by the FAA. The Airport currently has multiple land uses located within the RPZs for Runway 13 and 31 that the FAA would likely consider Runway Protection Zones incompatible such as residential uses and public roads. The FAA requires closer analysis of incompatible land uses when a “triggering event” occurs. Runway Protection Zones (RPZ) are an FAA design standard aimed at Triggering events that would warrant closer analysis are: protecting people and property on the ground from an aircraft accident • An airfield project (e.g., runway extension, runway shift) • A change in the critical design aircraft that increases the RPZ dimensions • A new or revised instrument approach procedure that increases the RPZ dimensions • A local development proposal in the RPZ (either new or reconfigured). Additional Improvements Identified The 1999 and 2012 Airport Master Plans identified the following improvement projects in order to bring the Airport into compliance with FAA standards in its current configuration.
• Increase separation between runway and parallel taxiways from 130 feet to 150 feet occurring prior to, or beyond the end of a runway. FAA standards for what • Widen taxiways from 20 feet to 25 feet is considered a compatible use have changed over time. FAA Advisory • Acquire property needed for 250 foot wide Runway Object Free Area Circular 150/5300-13A (change 1) specifies what land use are permissible within the RPZ without further evaluation. Those uses are: • Installation of a complete perimeter fence system • Runway lighting system upgrades • Farming that meets airport design standards. • Replacement of the existing airport beacon • Irrigation channels that meet the requirements of AC 150/5200-33 and FAA/USDA manual, Wildlife Hazard Management at Airports. • Installation of Precision Approach Path Indicators, a lighted segmented circle and windsock, and reflectors along the edge of the • Airport service roads, as long as they are not public roads and are taxiway and apron directly controlled by the Airport operator. 20 April 2016
• Airport Business and Lease Structures • Chester - $0.12 per square foot per year for ground lease, $250 per The 2012 Master Plan notes that Kalispell City Airport did not have a year for hangar pavement survey completed as part of the 2012 “State Survey of General • Eureka - $0.05 per square foot per year for ground lease Aviation Airports” due to the absence of FAA funded pavements at S27. The • Fairview - $0.06 per square foot per year for private ground lease Master Plan notes that there is some cracking, weathering, and oxidation occurring at the Airport during the inventory in 2012. The Master Plan • Fort Benton - $75 - $140 per month for hangars capital improvement plan recommended runway reconstruction occur in • Glasgow - $0.12 x 1.2 square foot for commercial, $0.10 x 1.2 square the 2016-2018 grant years, with taxiway reconstruction to follow in 2019. foot for private ground lease $70-$100 per month for T-Hangars Due to the absence of pavement condition data, this analysis relies on the Master Plan as the most recent assessment of pavement condition and • Lewistown - $0.09 per square foot for ground lease, $55 - $90 per schedules improvement projects according to the City of Kalispell’s capital month for hangars improvement plan. • Livingston - $0.16 per square foot for private hangar ground lease, According to a 2012 Rates and Charges Survey conducted by the Montana $103 per month for T-Hangar Aeronautics Division, the ground lease rates at Kalispell City Airport are • Malta - $0.10 per square foot for private ground lease, $0.20 per some of the most expensive in Montana and T-hangar lease rates are on square foot for commercial, $100 per month for T-Hangars. the higher side of average. As of March 2015, there are 16 leaseholders on • Plentywood - $0.08 per square foot for private ground lease, $0.10 the Airport. The terms of the leases vary from 1 year lease for a T-hangar to a 99 year lease for the Hilton Garden Inn. Lease rates vary depending on per square foot for commercial ground lease the type of lease: • Stevensville - $0.06 per square foot of ground lease, $150-$210 per month for hangars. • Rates for private ground leases are $0.16 per square foot of hangar space per year. • T-hangar units are owned by two private entities and are rented 2013 Airport Improvement Voter Referendum at $200- $250 per year. There are 20 T-hangar units on the airport parking apron (Gross), and 10 additional T-hangar units on the In 2013, a plan was in place to bring the Airport into compliance with FAA northwest side of the Airport (Billmayer). The Airport collects 50 design standards. The FAA had allocated funding for the majority of the percent of T-hangar rent from the private entities, and is guaranteed projects and the Kalispell City Council voted to move forward. However, a minimum payment of $500 a month per T-hangar building (not per opponents of the Airport improvement projects took the issue to the voters T-hangar unit) regardless of occupancy. in the form of a voter referendum to overturn the City Council’s decision. • The Airport charges a $0.06 per gallon fuel flowage fee. The voter referendum passed, ending efforts to move forward with the Airport improvement projects and rejecting FAA funding. For comparison, the following rates and charges are included for other Montana GA airports. These rates are as reported in the 2012 Rates and The passage of this voter referendum brought into question the long-term Charges Survey conducted by the Montana Aeronautics Division: viability of the Airport. These circumstances have left the Airport in a state of uncertainty. Ambiguity about the future has discouraged private investment • Big Timber - $0.15 per square foot for commercial, $0.10 per square at the Airport. Private investment and revenue generating projects are foot for private ground lease needed in order for the Airport to be a viable, contributing aviation facility.
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FAA Funding Mechanisms and Obligations Consideration of Local Interest.
Airport owners always have the option to maintain and fund projects It has given fair consideration to the interest of communities in or through local means, but most of the 3,345 public-use-airports contained near where the project may be located. in the National Plan of Integrated Airport Systems (NPIAS) accept some amount of financial assistance from the FAA. The FAA has several different Consultation with Users. mechanisms for funding airport improvement projects depending on the type of project and the type of airport. For GA airports like Kalispell In making a decision to undertake any airport development project City Airport, a majority of projects are funded through the Airport under Title 49, United States Code, it has undertaken reasonable Improvement Program (AIP). The AIP fund assists with capital projects/ consultations with affected parties using the Airport at which project expenses at eligible airports. In order to be eligible for AIP funds, an airport is proposed. must first be included in the NPIAS. The AIP is funded separately from the FAA operating budget. The funds are generated from a variety of aviation Public Hearings. related fees such as aviation fuel taxes, commercial airline ticket fees, and In projects involving the location of an airport, an airport runway, cargo shipment fees. Monies in the AIP are not funded through general or a major runway extension, it has afforded the opportunity for U.S. treasury funds. This is an important distinction that the FAA makes in public hearings for the purpose of considering the economic, social, an effort to emphasizes that AIP funds originate, and remain in, the aviation and environmental effects of the Airport or runway location and its system. consistency with goals and objectives of such planning as has been As a condition for receiving AIP grants, the FAA has a series of grant carried out by the community and it shall, when requested by the assurances or obligations that the Airport sponsor (owner) must abide by Secretary, submit a copy of the transcript of such hearings to the for twenty years from receipt of funds. It is important to note that these Secretary. Further, for such projects, it has on its management board grant assurances do not currently apply to the Kalispell City Airport because either voting representation from the communities where the project it has not accepted federal funds. However, the FAA grant assurances is located or has advised the communities that they have the right to would apply in Alternative 3, or any variation of the project which includes petition the Secretary concerning a proposed project. receipt of federal funds. Key grant assurances that pertain to the Airport are summarized below. The full list of airport sponsor assurances can be Operation and Maintenance. found on the FAA website at the following link: http://www.faa.gov/airports/aip/grant_assurances/ The airport and all facilities which are necessary to serve the aeronautical users of the Airport, other than facilities owned or Good Title. controlled by the United States, shall be operated at all times in a It, a public agency or the Federal government, holds good title, safe and serviceable condition and in accordance with the minimum satisfactory to the Secretary, to the landing area of the Airport or site standards as may be required or prescribed by applicable Federal, thereof, or will give assurance satisfactory to the Secretary that good state and local agencies for maintenance and operation. It will not title will be acquired. cause or permit any activity or action thereon which would interfere with its use for airport purposes. It will suitably operate and maintain the Airport and all facilities thereon or connected therewith, with due regard to climatic and flood conditions.
22 April 2016
Any proposal to temporarily close the Airport for non-aeronautical Airport Revenues. purposes must first be approved by the Secretary (of transportation). All revenues generated by the Airport and any local taxes on aviation Hazard Removal and Mitigation. fuel established after December 30, 1987, will be expended by it for the capital or operating costs of the Airport; the local airport system; It will take appropriate action to assure that such terminal airspace as or other local facilities which are owned or operated by the owner is required to protect instrument and visual operations to the Airport or operator of the Airport and which are directly and substantially (including established minimum flight altitudes) will be adequately related to the actual air transportation of passengers or property; or cleared and protected by removing, lowering, relocating, marking, for noise mitigation purposes on or off the Airport. or lighting or otherwise mitigating existing airport hazards and by preventing the establishment or creation of future airport hazards. Hangar Construction.
Compatible Land Use. If the Airport owner or operator and a person who owns an aircraft agree that a hangar is to be constructed at the Airport for the aircraft It will take appropriate action, to the extent reasonable, including at the aircraft owner’s expense, the Airport owner or operator will the adoption of zoning laws, to restrict the use of land adjacent to grant to the aircraft owner for the hangar a long term lease that is or in the immediate vicinity of the Airport to activities and purposes subject to such terms and conditions on the hangar as the Airport compatible with normal airport operations, including landing and owner or operator may impose. takeoff of aircraft. In addition, if the project is for noise compatibility program implementation, it will not cause or permit any change in These grant assurances in effect create a more ridged management land use, within its jurisdiction, that will reduce its compatibility, with structure and less flexibility for the City. They also protect the aviation respect to the Airport, of the noise compatibility program measures users’ interest and any federal financial contribution. Contrary to some upon which Federal funds have been expended. public perception, the City would not “lose control” of the Airport. The City must consider these grant assurances, and the twenty year Exclusive Rights. encumbrances when weighing options for the future of the Airport.
It will permit no exclusive right for the use of the Airport by any person This first section of the report presented the relevant existing providing, or intending to provide, aeronautical services to the public.. conditions surrounding the Airport in an effort of preparing the reader Fee and Rental Structure. with an understanding of the Airport’s circumstances. The following section of this report outlines the aviation and financial implications It will maintain a fee and rental structure for the facilities and services of the alternatives which arose from the public outreach sessions. at the Airport which will make the Airport as self-sustaining as possible under the circumstances existing at the particular airport, taking into account such factors as the volume of traffic and economy of collection.
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AIRPORT ALTERNATIVES to be eligible for FAA AIP funds. The long term plan for THP includes using AIP funds for Airport relocation. Introduction • Catalina Airport - California (AVX): AVX is a privately owned Five high level concepts for the future of the Airport were considered and public-use GA airport which does not receive AIP funding. The further developed through February and March 2015 stakeholder and runway is in severe disrepair and repair costs exceed available funds. public outreach meetings. The owner is in the process of finding an eligible sponsor for the AVX with the objective of qualifying for and receiving FAA funds. 1. Keep the Airport as it is using City funding • W. K. Kellog Airport - Michigan (BTL): BTL is a publicly owned GA 2. Close the Airport airport which uses a variety of funding sources. BTL uses AIP funds for capital projects, and funds from the local Tax Increment Finance 3. Request FAA funding for Airport in its current alignment (TIF) District to aid with the local match requirements. Although BTL is not entirely self-sufficient and relies on AIP funds, the combination 4. Incorporation into an Airport Authority of TIF funds and general funds support operational costs. 5. Privatize the Airport • Other private airports: Throughout the country there are many small This section provides an analysis of Alternatives 1 and2 from a financial GA airports that are privately owned and funded by their owners. impact perspective. Cost assumptions and sources are included as endnotes. Ownership can be a single entity or a consortium type partnership Where appropriate, alternatives use TIF funding to pay for development, with multiple owners. In most all of these scenarios the owners are but not for operations and maintenance expenses. TIF funding availability responsible for all funding requirements. assumes $1.325 million available in 2016 and $415,000 of additional In the United States, the vast majority of GA airports are not entirely funding available per year until the TIF sunsets in 2020. Unused TIF funds self-sufficient. Most receive operating and capital funds from a variety are carried forward to subsequent years; however, when the TIF sunsets, of sources including city, county, state and federal sources. The Kalispell unused funds must be returned to taxing authorities. Recommendations City Airport requires significant capital investment from outside sources are provided for alternative implementation. A summary of the alternatives to pay for much needed improvements. Cash flow generated by airport and a discounted cash flow analysis are included at the end of this section. operations is not sufficient to pay for needed capital improvements. Examples of GA airports in similar scenarios are included below to illustrate Airport Financial History: As shown in Figure 15, the Airport operated at an the inherent difficulties of long term self-sufficient GA airport operations average net loss of $99,499 per year from 2010 to 2014. If depreciation is not included, the Airport has had positive cash flow in 2010 and 2013 and • Hot Springs County – Thermopolis Municipal Airport - Wyoming operated at an average net loss of $124 from 2010 to 2014. Positive cash (THP): THP is a publicly owned GA airport. THP is operated and flows were caused by irregular events (contract legal services expense being maintained through a contract between the County and the local lower in 2010 than in previous years and a one-time contribution from a local Fixed Base Operator (FBO). The County pays the FBO annually and government fund of $92,625 in 2013), not by normal revenues exceeding the FBO is responsible for operations and daily maintenance. Airport expenses. It is recommended that the City not include depreciation in financial revenues (fuel sales, hangar leases) are retained by the FBO; therefor, analysis because depreciation represents the decline in value of an asset that the County operates THP at an annual loss. As of 2015, the County has already been paid for, and not a cash expense paid by the Airport. This will is planning for THP to be incorporated into the FAA NPIAS in order present a more accurate picture of operating expenses and revenues.
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Figure 15: Airport Financial History
Airport Cash Flow 2010 2011 2012 2013 2014 Average Airport Cash Flow 2010 2011 2012 2013 2014 Average Airport Revenue 86,622 90,566 88,940 169,752 79,303 103,037 Airport Revenue 86,622 90,566 88,940 169,752 79,303 103,037 Airport Expenses 176,702 214,636 217,616 225,974 177,751 202,536 Airport Expenses 176,702 214,636 217,616 225,974 177,751 202,536 Minus Deprecia�on 100,832 100,832 100,832 97,918 96,461 99,375 Minus Deprecia�on 100,832 100,832 100,832 97,918 96,461 99,375
Net Profit (Loss) (90,080) (124,070) (128,676) (56,222) (98,448) (99,499) Net Profit (Loss) (90,080) (124,070) (128,676) (56,222) (98,448) (99,499) Net Profit (Loss) w/o Deprecia�on 10,752 (23,238) (27,844) 41,696 (1,987) (124) Net Profit (Loss) w/o Deprecia�on 10,752 (23,238) (27,844) 41,696 (1,987) (124) Figure 16: Baseline Financial Projections Airport Cash Flow 2015 2016 2017 2018 2019 2020 Airport Cash Flow 2015 2016 2017 2018 2019 2020 Revenue (+) 93,200 95,400 96,700 98,600 99,900 101,500 Revenue (+) 93,200 95,400 96,700 98,600 99,900 101,500 Opera�ng Expenses (-) 179,195 185,300 188,300 194,200 202,400 214,300 Opera�ng Expenses (-) 179,195 185,300 188,300 194,200 202,400 214,300 Construc�on Expenses (-) 0 0 386,794 311,242 402,286 56,000 Construc�on Expenses (-) 0 0 386,794 311,242 402,286 56,000 Less Deprecia�on (+) 95,100 94,000 92,900 91,900 90,800 89,700 Less Deprecia�on (+) 95,100 94,000 92,900 91,900 90,800 89,700
Net Profit (Loss) w/o Deprecia�on 9,105 4,100 (385,494) (314,942) (413,986) (79,100) Net Profit (Loss) w/o Deprecia�on 9,105 4,100 (385,494) (314,942) (413,986) (79,100) Figure 16 re p re s e n ts a irp o r t c a s h fl o w s a n d e x p e n s e s s h o u ld th e A irp o r t c o n tin u e o p e ra tin g “a s-is.” In order to assess airport development alternatives, a pro-forma financial RevenueC a p ita l im growth p ro v e m eis n tlimited c o s ts byb e ythe o n d existingw h a t cnumber a n b e cof o v erevenue-producing re d b y a irp o r t re v e n u e s a re p a id fo r b y th e C ity o f Kalispell. Operating expenses and revenues are projected to grow over tim e based on trends observed statement has been prepared for a baseline scenario. In this scenario, properties on the Airport, and is expected to grow through lease rate o v e r th e p a s t fi v e y e a rs . the Airport continues to operate as it does today. Investment is limited increases (e.g. increasing lease rates to reflect the true value on the to needed maintenance and repair. Financial projections for the baseline market).R e v e n u e Expensesg ro w th is are lim expected ite d b y toth e growe x is tinat g ninen u m percent b e r o f perre v e nyear, u e -p rodriven d u c in g p ro p e r tie s o n th e A irp o r t, scenario are presented in Figure 16, and the airport capital improvement bya n dcontracted is e x p e c telabor d to andg ro materials w th ro u g hthat le a ssupport e ra te thein c re capital a s e s (e .gimprovement . in c re a s in g le a s e ra te s to re fl e c t th e tru e v a lu e o n th e m a rk e t). E x p e n s e s a re e x p e c te d to g ro w a t n in e p e rc e n t p e r y e a r, d riv e n b y c o n tra c te d plan is presented in Figure 17. program. lab o r an d m a te rials th a t su p p o rt th e ca p ital im p ro v e m e n t p ro g ra m . Construction expenses in Figure 16 are ineligible for TIF funding because Figure[F ig u re 17: 1 Existing 7 : E x is tinAirport g A irp Capital o rt C aImprovement p ita l Im p ro v ePlan m e n t P la n ] these expenses are considered maintenance of existing facilities, not Capital Improvement Projects 2016 2017 2018 2018 2020 development of new facilities. Main Runway Overlay 372,000 Figure 16 represents airport cash flows and expenses should the Airport Road and Parking Lot Crack Seal 14,794 continue operating “as-is.” Capital improvement costs beyond what can be West Taxiway Overlay 255,516 covered by airport revenues are paid for by the City of Kalispell. Operating North Fuel Island Overlay 14,280 Main Hangar Taxiway Overlay 41,446 expenses and revenues are projected to grow over time based on trends East Taxiway Overlay 362,167 observed over the past five years. Ryan Lane Overlay 40,119 Airport Road Overlay 56,000 Total 0 386,794 311,242 402,286 56,000 S o u rc e : C ity o f K a lis p e ll
Tax Increm ent Finance Options: In J u ly 1 9 9 6 th e C ity e s ta b lis h e d a T IF D is tric t fo r th e S o u th K a lis p e ll/ A irp o r t D is tric t w ith a s u n s e t d a te o f J u ly 1 , 2 0 2 0 . T h e T IF D is tric t h a s a n a n n u a l b o n d paym ent of approximately $500,000 and generates approximately $631,000 in25 revenue per year. This T IF D is tric t is o n e o f tw o ta x in g ju ris d ic tio n s a v a ila b le fo r th e C ity to u s e a s a n A irp o r t fu n d in g s o u rc e (th e o th e r b e in g tra d itio n a l p ro p e r ty ta x re v e n u e s ). T h e re w ill b e $ 1 ,3 2 5 ,0 0 0 in T IF fu n d s in 2 0 1 6 , a n d a n a d d itio n a l $ 4 1 5 ,0 0 0 in T IF fu n d s p e r y e a r u n til 2 0 2 0 . T IF fu n d s c a n b e u s e d fo r n e w c o n s tru c tio n a n d a c tio n s th a t s u p p o r t d e v e lo p m e n t (e .g . b u y in g o u t le a s e s ), b u t n o t to c o v e r m a in te n a n c e o r fo r o p e ra tin g e x p e n s e s . T IF fu n d s m u s t b e u s e d p rio r to th e T IF s u n s e t d a te in 2 0 2 0 .
14 SOUTH KALISPELL Urban Renewal Plan
Tax Increment Finance Options: In July 1996 the City established a TIF guarantees $500 a month per T-hangar building, or ½ of rents owed District for the South Kalispell/Airport District with a sunset date of July to the developer. After a certain level of occupancy it is expected 1, 2020. The TIF District has an annual bond payment of approximately that ½ of rents owed will exceed $500 a month, which explains the $500,000 and generates approximately $631,000 in revenue per year. This increase in revenue from 2018 to 2019 and 2020. The City will not TIF District is one of two taxing jurisdictions available for the City to use as an develop hangars because of the cost, slow payback period, and Airport funding source (the other being traditional property tax revenues). low rate of return (and potential loss), but instead continue to lease There will be $1,325,000 in TIF funds in 2016, and an additional $415,000 in property to private developers. TIF funds per year until 2020. TIF funds can be used for new construction • Identify areas on airport/city property for future development. and actions that support development (e.g. buying out leases), but not to In order for additional users to relocate to the Airport, a land use cover maintenance or for operating expenses. TIF funds must be used prior development plan needs to be in place. Areas for non-aviation uses to the TIF sunset date in 2020. (e.g., industrial park, self-storage facility) should be located in areas Alternative 1 – Keep Airport As-Is that are already separated from the airfield. Aviation related uses (additional hangars, FBOs, and other aviation service providers) Approximately three-quarters of the stakeholders, airport users and the public should be located in areas with access to the airfield. Much of the responded with the desire to keep or expand the Airport. In Alternative 1, airfield area has been developed already; however, several areas of necessary capital improvements are made, and available property is leased to infill exist. If the City chooses Alternative 1, a land use development private developers with the intent of generating new revenue in support of plan should be prepared for the development of surplus property the long term viability of the Airport. As revenue increases, the City should consider undertaking projects to Alternative 1 requires similar capital investment as the baseline scenario. bring the airfield into compliance with FAA standards, even if the Airport is Improvement projects are considered maintenance of existing facilities not obligated to do so by FAA grant assurances. Since this alternative would and are therefore ineligible for TIF funds to pay for improvements. Without not utilize FAA funds, no requirement would exist to comply with FAA grant FAA involvement, financial responsibility for capital projects, maintenance assurances. As a liability precaution, the City should also consider publishing a activities, and operating costs that are not covered by airport revenues will fall continuous Notice to Airmen (NOTAM) specifying the areas which do not meet on the City. The City will rely on increased airport revenues to cover airport FAA standards. costs. Several avenues exist for the City to implement capital projects that will Capital expenditure and associated revenue projections are shown in Figure increase revenues. 18. Over time, new hangars come online and help provide additional income • Invest now in much needed maintenance projects. This will send for the Airport. Figure 18 includes capital expenses programmed by the City a signal to the aviation community and prospective users, tenants of Kalispell, and additional capital expenses required to increase revenue, and business that the City is serious about the long term viable such as maintaining airfield facilities in a condition that will attract private operation of the Airport. The east and west taxiways are in need of investment. Figure 19 shows the resulting revenues and expenses associated maintenance, which should be a high priority item for the City to with Alternative 1. Detailed revenue and expense projections are included in address. Appendix A. • Attract a developer for a new 18-unit T-hangar complex. Enter into a lease agreement similar to the existing T-hangar lessees which
26 April 2016
Figure 18: Alternative 1 Capital Costs and Resulting Revenue The 18 unit T-hanger building is expected to be in place by 2019 and revenue Alterna�ve 1 projections assume the minimum of $500 a month ($6,000 a year) is paid to Revenues 2016 2017 2018 2019 2020 Total the City in the first year while the developer markets the units to tenants. This T-Hangar Ground Lease 0 0 6,000 13,200 23,760 42,960 fee structure is identical to existing T-hangar building leases. If the developer is Hangar Site Leases 1,200 4,120 8,760 11,840 15,000 40,920 AlternativeGround Leases 1 0 30,000 31,000 32,000 33,000 126,000 successful in leasing more than five spaces, then the City will receive ½ of the RevenuesExpenses 20162016 20172017 20182018 20192019 20202020 TotalTotal TIF rent due per month in line with the other T-hangar lease agreements, which T-HangarMain Run Groundway Overlay Lease 0 0 372,0 000 6,000 0 13,200 0 23,760 0 42,960 372,000 No will provide up to $23,760 a year in revenue at full hangar occupancy. Hangar Hangar Site Leases 1,200 4,120 8,760 11,840 15,000 40,920 Road and Parking Lot Crack Seal 0 14,794 0 0 0 14,794 No development in Alternative 1 represents a “maximum development” scenario, GroundNorth Fuel Leases Island Overlay 0 0 30,000 0 31,000 14,280 32,000 0 33,000 0 126,000 14,280 No ExpensesMain Hangar Taxiway Overlay 2016 0 2017 0 2018 41,446 2019 0 2020 0 Total 41,446 TIFNo where all available airport property is developed to produce revenue. MainWest RunwayTaxiway Overlay Overlay 0 0 372,000 0 255,5 016 0 0 0 0 372,000 255,516 NoNo No RoadRyan andLane Parking Overlay Lot Crack Seal 0 0 14,794 0 0 0 40,119 0 0 0 14,794 40,119 No Additional Avenues for Increasing Airport Revenue: North Fuel Island Overlay 0 0 14,280 0 0 14,280 No East Taxiway Overlay 0 0 0 362,167 0 362,167 No Main Hangar Taxiway Overlay 0 0 41,446 0 0 41,446 No Airport Road Overlay 0 0 0 0 56,000 56,000 No • “True-up” Existing Ground Lease Rates: The City should consider West Taxiway Overlay 0 0 255,516 0 0 255,516 No RevenuesRyan Lane Overlayin Figure 18 represent a new0 revenue 0 only. A comprehensive 0 40,119 revenue 0 and 40,119 expense No bringing existing ground leases up to true market rates. This will proEast forma Taxiway is Overlay included in Appendix A.0 0 0 362,167 0 362,167 No require additional analysis to determine the true market rate for the Airport Road Overlay 0 0 0 0 56,000 56,000 No ground leases. Depending on the ground lease structure, this may not Revenues in Figure 18 represent new revenue only. A com prehensive revenue and expense pro form a is Alterna�ve 1 2016 2017 2018 2019 2020 included in Appendix A. be possible for several of the sites for many years. As ground leases Opera�ng Revenues (+) 90,800 125,520 139,960 153,340 170,860 [FigureFigureOpera � 19:19:ng Expenses AlternativeAlternative (-) 1 Revenue1 Revenue133,8 00and andExpense 143,6 Expense00 Sum m 154,2 ary]Summary00 167,500 185,300 expire or come up for renewal, the City should include an escalation AlternativeCapital Expenses 1 (-) 0 386,7942016 311,242 2017 402,286 2018 56,000 2019 2020 clause which allows lease rates to grow at the expected rate of OperatingSurplus (Shor Revenues�all) (+) (43,000) (404,874)90,800 (325, 48 125,5202) (416, 44 139,9606) (70 ,44 153,3400) 170,860 inflation (at a minimum). Operating Expenses (Except Depreciation) (-) 133,800 143,600 154,200 167,500 185,300 Capital Expenses (-) 0 386,794 311,242 402,286 56,000 • To remain competitive with off-airport sites, the City could provide Surplus (Shortfall) (43,000) (404,874) (325,482) (416,446) (70,440) “shovel ready” sites. “Shovel ready” generally means any environmental work and field investigations have been completed and the project R e v e n u e a s s u m p tio n s a re th a t 1 5 n e w h a n g a r s ite le a s e s (fi v e 1 0 0 ’x 1 0 ’ a n d te n 6 0 ’x 6 0 ’ h a n g isa rsready ) will for design work. Sewer, water and power infrastructure are c o m e o n lin e b e tw e e n 2 0 1 6 a n d 2 0 2 0 . T h e le a s e ra te s a s s u m e $ 0 .1 6 p e r s q u a re fo o t p e r y e a r fo r 2 0 1 6 , thRevenue e n g ro w inassumptions g a t 2 .2 % p e r arey e athat r in 15lin e neww ith hangarth e U .S . sitera te leases o f in fl(five a tio n 100’x100’fo re c a s t. T hand e C ity w ill generallyn e e d to available throughout the Airport property. These utilities inten c lu d60’x60’ e s u c h hangars)e s c a la tio n willin n ecome w le a sonline e s , a n d betweena d ju s t e x is2016 tin g leand a s e s 2020.w h e n Thep o s s iblease le to ratesre fl e c t tru e mcould a rk e t be extended to specific project sites in advance in an effort v a lu e fo r th e p ro p e r ty . A b s o rp tio n ra te o f th e n e w d e v e lo p m e n t a re a s w ill d e p e n d o n m a rk e t d e mto a n dencourage development. While this approach should incentivize aassume n d th e $0.16c o m p le tioper n squareo f o th e r foota irp oper r t im year p ro v efor m e n2016, t p ro je then c ts th growing a t w ill h eat lp 2.2%g ro w perd e v eyear lo p e r c o n fi d e n c e . Ain lte line rn a tiv with e 1 thep ro je cU.S. tio n srate a s s uof me inflation a to ta l oforecast. f tw o u n itsThe w illCity b e willb u iltneed b y to2 0include 1 6 ; a to tasuch l of fi v e w illdevelopment, b e b u ilt b y it comes at a cost to the City. These costs are not 2 0 1 7 ; a to ta l o f n in e w ill b e b u ilt b y 2 0 1 8 ; a to ta l o f 1 2 w ill b e b u ilt b y 2 0 1 9 ; a n d a ll 1 5 includeds p a c e s will in bthe e financial projections. builtescalation by 2020. in new leases, and adjust existing leases when possible to reflect true market value for the property. Absorption rate of the new development T h e 1 8 u n it T -h a n g e r b u ild in g is e x p e c te d to b e in p la c e b y 2 0 1 9 a n d re v e n u e p ro je c tio n s a• s s u mConsider e th e establishing a new TIF District for the Airport beyond 2020. mareas in im u mwill o f depend$ 5 0 0 a mon o n thmarket ($ 6 ,0 0 0 demanda y e a r) isand p a idthe to completionth e C ity in ofth e otherfi rs t airporty e a r w h ile th e Althoughd e v e lo p er this might be a less desirable action politically, it would mimprovement a rk e ts th e u n its projects to ten a n that ts. Th will is fe ehelp stru cgrow tu re is developer id e n tica l to confidence. ex istin g T-h a n g aAlternative r b u ild in g le1 a se s. If th eprovide the City with a sustained source of revenue for the Airport. d e v e lo p e r is s u c c e s s fu l in le a s in g m o re th a n fi v e s p a c e s , th e n th e C ity w ill re c e iv e ½ o f th e re n tduepr mprojections o n th in lin eassume w ith th ea totalo th e r ofT -htwo a n g a runits le a s e willa g rebe e m ebuilt n ts , wby h ic h2016; w ill ap rototal v id e ofu pfive to $ 2will 3 ,7 6 0 a y e aEstablishing r in a TIF District would be a significant undertaking, requiring rebe v e nbuilt u e a by t fu 2017; ll h a n a g atotal r o c c uof p anine n c y . Hwill a n g abe r dbuilt e v e lo pby m e n2018; t in aA ltetotal rn a tiv of e 121 rewill p re sbe e n ts built a “mby a x im u m time and expense from the City. developm2019; and ent” allscenario, 15 spaces where will all beavailable built airportby 2020. property is developed to produce revenue. Additional Avenues for Increasing Airport Revenue:
16 27 SOUTH KALISPELL Urban Renewal Plan
Available options but not recommended: When comparing cash flows from different time periods, it is critical to account for the time-value of money. Due to changes in inflation and • Establish landing fees and/or overnight tie-down fees. This could purchasing power, the value of $1 in 2015 is more than it is in 2016, and discourage use at the Airport and drive aviation activity to other much more than it is in 2020. One way to look at it is that a good or service airports. The following airports in Montana have established such that costs $1 today will cost $1.40 in 2020 dollars. The good or service does fees: not change, only the amount of money required to pay for it. Revenues and -- Glasgow - $25/night single-engine, $50/night multi-engine expenses in the pro-forma statements are presented in the dollar values -- Stevensville - $3/night single-engine, $5/night multi-engine for the years that they occur (e.g. 2017 revenues are in 2017 dollars, and 2020 revenues are in 2020 dollars), but when the costs and benefits of the -- No airports in Montana charge landing fees for non-commercial alternatives are compared to each other, all dollars are adjusted to present GA aircraft. value, which is 2015 dollars. An example of a busy GA airport which has additional fee structures is Montgomery Field, San Diego, California: The present value adjustment uses the “discount rate” of 7% that the White House Office of Management and Budget (OMB) recommends for evaluating -- Overnight transient parking: $5/night for aircraft with a Maximum long term financial performance of government-funded projects, which are Takeoff Weight (MTOW) of 10,000 lbs or less, or $1 per 1,000 lbs not subject to the same market risks and tax implications and private sector for aircraft over 10,000 lbs MTOW. For example, a Cessna 172 = $5/ investments. This discount rate accounts for inflation, changes in purchasing night. A King Air 200 = $13/night. power, and risk. With all dollar values having the same purchasing power, -- Landing Fees apply to all aircraft operating under a Part 135 expenditures and revenues occurring in different years or across many years certificate, regardless of how an individual flight is operated. $10 can be compared. for aircraft 10,000 lbs MTOW or less, or $1 per 1,000 lbs for aircraft A discounted cash flow analysis (DCFA) for Alternative 1 provides insight over 10,000 lbs MTOW. For example, a Cessna 421 = $10/landing. on net present value (NPV) of five year costs and revenues, and expected A Citation Excel = $20/landing. long-term financial gain. The DCFA uses a 7% discount rate to bring future Fiscal Impacts: There would be immediate costs to the City for overdue monies into 2015 dollars, and assumes that revenues will grow in pace with maintenance projects. Ru nways and taxiways are the main areas reported inflation at 2% annually. The DCFA for Alternative 1 is presented in Appendix by users as needing immediate attention. The City should adhere to their A. Capital Improvement Plan for the near-term high priority projects to enhance tenant and user confidence, and facilitate capital planning. A detailed pro Alternative 1 requires capital investment of $900,000 over the next five years, forma, capital costs, and revenues and expenses are included in Appendix A. which includes the capital projects in Figure 19, adjusted to present value at a 7% discount rate. The Airport valued at negative $1.3 million after these There would be immediate costs to the City for overdue maintenance improvements are made (negative $1 million in cash flow over the five years, projects. Runways and taxiways are the main areas reported by users as and negative $300,000 in ongoing loss over the life of the Airport). This means needing immediate attention. The City should adhere to their Capital that the City will need to invest more money than the Airport is expected to Improvement Plan for the near-term high priority projects to enhance tenant return. After improvements for Alternative 1 are complete, it is expected that and user confidence, and facilitate capital planning. A detailed pro forma, the Airport will provide economic benefit for the community by way of jobs capital costs, and revenues and expenses are included in Appendix A. and local tax base, however, economic benefits are not reflected in airport finances.
28 April 2016
The DCFA assumes that the expenses in Alternative 1 after five years due to additional lease revenue from Meeting FAA Design Standards City of Kalispell will finance private hangar sector development. Due to the high level of assumptions • Alternative 1 does not meet FAA design the initial $900,000 investment involved in the DCFA valuation, there is little difference between Alternative 1 standards. in pavement rehabilitation, and the baseline scenario. A comparison between Alternative 1 and the baseline • FAA design standards for either ARC I or and that the T-hangars and is presented in Figure 20. ARC II facilities require additional capital box hangars will be built by a projects as described in Alternative 3 and private developer. The City will Aviation Impacts: Alternative 1 is not the ideal scenario from an aeronautical Appendix A receive rent from the private perspective because it does not comply with FAA design standards. The • The cost to the City of meeting FAA funding developer for these newly Recommended Airport Plan in the 2012 Final Airport Master Plan was full is up to ten times more than with FAA developed hangars. compliance with FAA standards. However, Alternative 1 is a reasonable funding. compromise given the history and political environment surrounding the • The NPV of capital costs to meet FAA Design Spending $900,000 to receive Airport. Alternative 1 does provide a way for the Airport to voluntarily meet S p e nstandards d in g $using 9 0 0 ,0City 0 0 funds to is $3.2re c emillion iv e n e g a tivnegative e $ 1 .3 $1.3m illiomillion n in in valuev a lu e mFAA a y standardsn o t lo o kas fundslik e aare wavailable is e in v by e s tmincreasing e n t; revenue opportunities over five years h o w e v e r, c itie s d o n o t o p e ra te lik e mayfo r-pnot ro fi tlook e n telike rp risa e s .wise M a n yand e encouraging s s e n tia l c ity private fu n cinvestment. tio n s , s u c h a s s c hols, em ergency services, and parks and recreation,investment; do however, not generate cities do profit. These services increase value of pnot riv aoperate te e n telike rp risfor-profit e s th a t enterprises.u s e th e m ,Many w hessential ic h c o mcity e s functions,b a c k to such th e CommunityC ity in th Impacts: e fo rm Alternative o f ta x 1a keeps n d lic the e n sAirport u re as the City’s financial responsibility. Although the community will continue to receive the economic revenueas schools, and emergency quality services,of life andand parks emergency and recreation, preparedness. do not generate Jobs and econom ic output are generated benefits from the presence of the Airport (e.g. jobs, spending within the thprofit. ro u g hThese tem services p o ra ry increaseco n stru c tiovalue n joof bprivate s an d enterpriseslo n g -te rm that jo buse s othem, n airp o rt, an d o ff -a irp o rt th a t u se av iatio n community, and taxes), the financial investment needed to maintain a safe awhich s p acomes r t o f backth e irto theb u sCity in e sin s theo r forms u p of p ly tax thand e licensurea v ia tio n revenues e c to r. and quality of life and emergency preparedness. Jobs and economic output are operating environment at the Airport is considerable. It is expected that the Wgenerated h e n c o mthrough p a re d temporaryto th e bconstruction a s e lin e s c ejobs n a rio andw hlong-term ic h h a s jobsn o onin v e s tmCity e n will t oneed r im to p rosupport v e m e n this t b investment e y o n d s a fewith ty - its general fund. Should the cairport, ritic a l andite moff-airport s a n d othat n g o inuse g aviationm a in te nas a npart c e , ofA their lte rn abusiness tiv e 1 orh supply a s a DCity C F A needv a lu to a tiotake n moneyth a t fromis $ 6other 1 ,9 6 9city g departments, re a te r then the community may have to wait longer for needed improvements in areas. overthe aviation the long-term sector. . The num bers are sim ilar because the baseline scenario still requires substantial m a in te n a n c e o v e r th e n e x t fi v e y e a rs ju s t to k e e p th e A irp o r t o p e ra tio n a l. T h e A irp o r t o p e ra te s at When compared to the baseline scenario which has no investment or Findings for Alternative 1 - Keep Airport As-Is loimprovement s s in b o thbeyond s c e n a riosafety-critical s , b u t c o vitems e rs mand o re ongoingo f its maintenance,o p e ra tin g e x p e n s e s in A lte rn a tiv e 1 a fte r fi v e y e a rs d u e to additional lease revenue from private hangar sector developm ent. DueKeeping to the the highAirport level open of in an as-is configuration without seeking Alternative 1 has a DCFA valuation that is $61,969 greater over the long-term. external funding does not produce a profitable enterprise. Challenges to aThe s s u numbers m p tio n s arein similar v o lv e dbecause in th the e baselineD C F A scenariov a lu a tio still n , requiresth e re substantialis little d iff e re n c e b e tw e e n A lte rn a tiv e 1 a n d th e producing sustained profit include limited property available for revenue baselinemaintenance scenario. over the A next com five parison years justbetween to keep Alternativethe Airport operational.1 and the The baseline is Figurepresented 20. in producing development due to the Airport being surrounded by roads, Airport operates at a loss in both scenarios, but covers more of its operating [Figure 20: Alternative 1 Com parison to Baseline] other development, and aviation clear areas; limited ability to raise lease [Figure 20: Alternative 1 Comparison to Baseline] rates due to competition from other airports nearby and existing leases; and Net Present Value (2015 $, 7% Rate) DCFA the costs associated with airfield maintenance. Across the country, some GA Alternative 5 Year Cash Flows Ongoing Income Valuation airports have secured additional revenue by leasing available property to Baseline (890,729) (471,240) (1,361,969) non-aviation large-lot commercial development. Due to the site constraints 1 (1,000,000) (300,000) (1,300,000) mentioned above, it is not expected that there is sufficient property at S27 to support aviation development and large lot commercial; therefore, the Difference (109,271) 171,240 61,969 Airport will be dependent on aviation-related rents to offset costs.
A v ia tio n Im p a c ts : A lte rn a tiv e 1 is n o t th e id e a l s c e n a rio fro m a n a e ro n a u tic a l p e rs p e c tiv e b e c a u s e it 29 d o e s n o t c o m p ly w ith F A A d e s ig n s ta n d a rd s . T h e R e c o m m e n d e d A irp o r t P la n in th e 2 0 1 2 F in a l A irp o r t M a s te r P la n w a s fu ll c o m p lia n c e w ith F A A s ta n d a rd s . H o w e v e r, A lte rn a tiv e 1 is a re a s o n a b le c o m p ro m is e g iv e n th e h is to r y a n d p o litic a l e n v iro n m e n t s u rro u n d in g th e A irp o r t. A lte rn a tiv e 1 d o e s p ro v id e a w a y fo r th e A irp o r t to v o lu n ta rily m e e t F A A s ta n d a rd s a s fu n d s a re a v a ila b le b y in c re a s in g revenue opportunities and encouraging private investm ent.
Community Impacts: A lte rn a tiv e 1 k e e p s th e A irp o r t a s th e C ity ’s fi n a n c ia l re s p o n s ib ility . A lth o u g h th e c o m m u n ity w ill c o n tin u e to re c e iv e th e e c o n o m ic b e n e fi ts fro m th e p re s e n c e o f th e A irp o r t (e .g . jo bs, spending within the com m unity, and taxes), the financial investment needed to maintain a safe o p e ra tin g e n v iro n m e n t a t th e A irp o r t is c o n s id e ra b le . It is e x p e c te d th a t th e C ity w ill n e e d to s u p p o r t th is in v e s tm e n t w ith its g e n e ra l fu n d . S h o u ld th e C ity n e e d to ta k e m o n e y fro m o th e r c ity d e p a r tm e n ts , th e n th e c o m m u n ity m a y h a v e to w a it lo n g e r fo r n e e d e d im p ro v e m e n ts in a re a s .
19 SOUTH KALISPELL Urban Renewal Plan
While the pro forma in Appendix A shows Alternative 1 with a loss of Alternative 2 – Close the Airport $70,440 in 2020, this level of loss is largely dependent on private investment generating additional lease revenue for the Airport. Without this investment, Closing the Airport is an option that is available to the City, but it has the or if it takes longer to materialize than planned, the loss will likely be greater. possibility of being a complicated and costly alternative. Closure would From a capital investment perspective, Alternative 1 is less expensive from a be made in the form of a distinct and deliberate action from the City. If capital investment perspective than the Airport closure option (Alternative 2), no action is taken by the City and the Airport continues to deteriorate to and more expensive than getting FAA involvement and having to meet FAA the point where it is operationally deficient, the City may at some point standards (Alternative 3). Consideration must be given to how the expenses become liable for failure to maintain the pavement. will be paid, as capital projects in Alternative 2 and some capital projects The following are the financial and aviation impacts associated with an in Alternative 3 are eligible for TIF funding, whereas none of the capital airport closure: projects in Alternative 1 are eligible for funding. Although Alternative 3 is less expensive purely in terms of capital costs, Alternative 3 will require a new Lease Buyout: The following planning effort, negotiation with the FAA, and local politically wrangling. As section regarding lease contents, The City currently has both ground leases and building leases on the financial conditions improve with future aviation and non-aviation growth implications to the City and the Kalispell City Airport. at the Airport, continuing to invest in the airfield and meet FAA standards lease summary table in Appendix where practical will support the viability of the Airport. A, is included as planning level • In a ground lease, the tenant information only and does not leases the ground for a fixed term and may build a structure at If the City chooses to move forward with Alternative 1, a publicity campaign constitute a legal analysis of the should immediately occur to make existing and prospective users, tenants, their own cost. If these leases are leases. As the lease languages terminated early the City may be and business aware of the City’s dedication and plan for continued read, lease buyout would be operation of the Airport. The ability of an airport to obtain financial responsible for paying the tenant required at “a point when the the unamortized portion of the self-sufficiency depends on increasing user confidence in the Airport and City discontinues aviation building cost. attracting demand and revenue generating uses. operations on the Kalispell • In a building lease, the tenant Alternative 1 – Action Plan Airport site.” leases a building owned by the City. 1. Invest in the east and west taxiway maintenance projects. Figure 21 and Figure 22 show a strong increase in revenue in 2. Hire a full-time Airport Manager. 2019 and 2020 as a result of the land sale and TIF funding offsetting capital expenses. It is expected that the 3. Consider attracting private development for new T- and box hangar City will have sold off interest in the property by 2020, and will not receive projects. future revenue, meaning that revenue and expenses beyond 2020 will 4. Prepare a land use development plan for vacant airport lands. equal $0. Should the City choose to lease and not sell the property, the cash flow will be much lower in 2019 and 2020; however, the City will continue 5. Engage in a publicity campaign to provide information on how the City to receive revenue from the property into the future. In this scenario, the plans to continue funding and maintaining the Airport. City will also continue to incur expenses associated with upkeep.
6. As funds are available, strive to meet FAA standards even if not required.
30 April 2016
Seven of the sixteen leases currently in effect at the Kalispell City Airport new hangars at KGPI or attracting investors to do so. Commercial service have clauses stating that if the City discontinues aviation operations at airports like KGPI typically focus their efforts on commercial and business the Airport, the lease shall terminate and the City shall pay the fair market aviation investment opportunities. Alternatively, the FMAA could choose value at the existing usage of the improvements constructed on the site. to do nothing about new hangar construction and plane owners would At least one lease has clauses requiring appraisal of the fair value of the need to go elsewhere for services outside of the City of Kalispell. remaining term of the lease and payment of that amount to the lessee. Others require the unamortized portion of the cost of the hangar to be Fiscal Impacts: Costs associated with this alternative include immediate paid to the tenant. In order for the City to close the Airport and buyout costs of lease buyout and a loss of economic activity generated by Airport the existing leases, official appraisals would be required (in some cases businesses that choose not to relocate within the region. It should be two appraisals) to determine the appropriate dollar amount. The City will assumed that some of the reported jobs, payroll and total activity/output need to pay for property appraisal and lease buy-out. This option carries would be lost with the Airport closure. This report does not attempt to a risk of litigation depending on the results of the appraisal. Note: the quantify that loss, nor does it quantify potential economic gain associated cost of ground lease buyouts will decrease overtime as the lease term nears with reuse of the Airport site. expiration and building near the ends of their useful lives; however, the buyout A detailed five year pro-forma analysis, capital costs, and detailed revenues costs associated with hangars at fair market value will likely increase due to and expenses of Alternative 2 are included in Appendix A. inflation and general value increases. A critical element that is missing from the Alternative 2 pro-forma is the Potential Impacts at KGPI: Relocation of users to KGPI in the event of future revenue potential of the property. If the City chooses to re-purpose Kalispell City Airport’s closure has been suggested at public meetings the property for another civic use, there will be costs and revenue by those in favor of closing the Airport. An important impact to consider implications. If the City sells the property and it is re-developed, there is the comingling of GA and air carrier aircraft. The mixing of small GA will be taxes and jobs generated. Due to the unknowns about the future aircraft with air carrier, and corporate jets is possible, but not necessarily of the property, the on-going revenue is listed as $0 to the City. In order a desirable scenario. The FAA, airport operators and air traffic controllers to accurately compare Alternative 2 to Alternative 1, it is recommended prefer to separate these two user groups when possible. Difference in sizes that more research be done on what the property could be re-purposed and operating speeds of air carrier and small GA aircraft adds a level of for. Within this report two general options are depicted from a land use complexity to the Airport environment and the potential for airfield delays perspective but no detailed analysis has been contemplated. as larger aircraft have to wait for smaller aircraft to clear the runways and airspace. Currently, there is adequate capacity at KGPI to accommodate The DCFA for Alternative 2 uses the same 7% discount rate as Alternatives 1 additional general aviation activity. and 3. What is different between Alternatives 1 and Alternative 2 is that the DCFA for Alternative 2 assumes no long-term income from the property The Flathead Municipal Airport Authority (FMAA) owns and operates once it is sold. Depending on what the City does with the property, it may KGPI and two other GA airports where it can separate operations and become taxable. Tax revenue will depend on what types of uses are built infrastructure requirements of the two different user classes of aircraft (small on the site. It is recommended that the City of Kalispell develop an area GA and air carrier/business jet). A sudden influx of small GA aircraft into an plan for the site should Alternative 2 be pursued in order to calculate the airport that is not prepared to accommodate their permanent relocation future tax revenue. The DCFA for Alternative 2 is presented in Appendix A. could be problematic. Since hangars are not eligible for FAA AIP funds, FMAA would be responsible for either paying directly for construction of
31 SOUTH KALISPELL Urban Renewal Plan
The NPV of the cash flows for Alternative 2 is $300,000, a positive result proceeds from the land sale to cover some expenses in 2019 and 2020 if it largely due to TIF funding and proceeds from the sale of the property desires to use the TIF funds for other purposes. offsetting the expense of the lease buy-outs. If the City chooses not to sell the property it is recommended that the DCFA be re-run to better assess As shown in Figure 23, Alternative 2 is $1.7 million less expensive to the long-term property tax income from the site. City than continuing to operate the Airport as-is in the long-run. However, Alternative 2 requires $2.2 million more in upfront capital investment ($3.1 The present value of capital projects and lease buy-outs associated with million in Alternative 2 compared to $900,000 in the baseline scenario). Alternative 2 is $3.1 million in 2015 dollars at a 7% discount rate. There is a The reason behind this is that the City can use TIF funds to cover closure negative return on investment because the City does not generate enough expenses in Alternative 2, and cannot use TIF funds in the baseline revenue from the sale of the land to cover the costs associated with selling scenario. As stated previously, the City could see a more positive return it (even with the use of TIF funds); however, this loss could be smaller, or with Alternative 2 if there was a plan to redevelop the property into a even a net gain should the City be able to produce tax revenue from the revenue producing land use, through lease or property tax. Using TIF site over the long-term. If the site is converted to another civic use, then funds for airport closure means that these funds will not be used for other property tax income is not expected; however, there may be economic improvement projects in the South Kalispell area. benefits associated with new jobs. [Figure 23: Alternative 2 Comparison to Baseline] As shown in Figure 21 and Figure 22, Alternative 2 has high up-front costs; however, if these costs are spread over time, there should be sufficient TIF funding to cover buy outs. The opportunity cost here is that this improvement alternative uses all available TIF funds, and it is possible that the City may want to use TIF funds to pay for improvements in the 300,000 300,000 South Kalispell area that are not related to the Airport. The City can use the 1,190,729 471,240 1,661,969
Figure 21: Alternative 2 Capital Costs and Resulting Revenues Aviation Impacts: This alternative is the least desirable of the three AlternaAlterna�ve� 2ve 2 Revenue 20162016 20172017 20182018 20192019 20202020 Total Total alternatives from an aviation perspective. New airports are exceedingly Property SaleSale 0 0 0 0 0 0 887,5887,500 00 887,5887,500 001,77 5,1,007705, 000 difficult and costly to site. It is expected that displaced aircraft would TIF FuFundndss 0 0 756,5756,550 50 1, 251,5,25205,020 0 558,2558,250 50 415,0415,000 002,98 5,2,009805, 000 relocate to other area airports. Expenses 20162016 20172017 20182018 20192019 20202020 Total Total TIF TIF Groundund LeaseLease Buy Buy Out Out 0 0 279,8279,800 00 223,8223,800 00 447,6447,600 00 167,8167,800 001,11 9,1,001109, 00Yes0 Yes Yes Hangar PurchasePurchase 0 0 476,7476,750 50 381,4381,400 00 762,8762,800 00 286,0286,050 501,90 7,1,009007, 000 Yes Community Impacts: Alternative 2 removes the Airport which takes away a Red Eagle Buy Out 0 0 650,000 0 0 650,000 Yes Red Eagle Buy Out 0 0 650,000 0 0 650,000 Yes transportation asset; however, there are other facilities in the area that can Phase I Environmental 0 0 0 22,000 0 22,000 Yes Phase I Environmental 0 0 0 22,000 0 22,000 Yes Building Demo 0 0 0 0 196,000 196,000 Yes support the displaced airport users. Given that there is surplus capacity Building Demo 0 0 0 0 196,000 196,000 Yes Pavement Demo 0 0 0 5,000 0 5,000 Yes Pavement Demo 0 0 0 5,000 0 5,000 Yes (in terms of runway capacity and developable land for aviation uses) at Figure 22: Alternative 2 Revenue and Expense Summary other airports, removal of the Kalispell City Airport does not cause overly negative impact the area’s airport system. Alterna�ve 2 2016 2017 2018 2019 2020 OperaAlterna�ng�ve Reve 2 nues (+) 82,1752016 829,5652017 1,290,2018595 1,465,2019450 1,302,5020200 Opera��ngng Expenses Revenues (- )(+) 147,90082,175 179,100829,565 186,4001,290,59 5 57,9001,465, 450 36,0001,302, 500 Removal gives the City a chance to replace the Airport with a facility or CapitalOpera� Expensesng Expenses (-) (-) 147,9000 756,550179,100 1,255,186,400200 1, 242,4057,9000 649,85036,000 facilities that benefit the community in other ways, such as a school or a SurplusCapital (ShorExpenses�all) (-) (65,725) 0 (106,756,550085) (151,1,25005,5)20 0 165,1501,242, 40 0 616,650649,8 50 Surplus (Shor�all) (65,725) (106,085) (151,005) 165,150 616,650
32 April 2016
park, or another civic facility. It also allows the City to develop the property which produces short-term construction economic impacts, and longer term industry economic impacts such as new jobs and increased tax base.
Findings for Alternative 2 - Airport Closure – Not recommended due to the high cost of lease buyouts and negative aviation implications, in addition to the loss of services and economic activity that would occur for the City of Kalispell. Losing an access point for emergency medical transportation, search and rescue operations, law enforcement operations, and other emergency services would be a significant loss which is not quantifiable in terms of City finances.
Alternative 2 – Action Plan
Should the City decide to move forward with Alternative 2, the following steps should be taken:
1. Consult legal counsel on the best path forward for closure and lease buyout.
2. Plan for a date, in the future, on which the City will no longer provide for aviation operations.
3. Begin a conversation and dialogue with leaseholders on decision to close and the date which closure will occur.
4. Begin lease appraisal process.
5. Conclude lease buyout process with legal counsel.
6. Advertise closure date and provide adequate time for users to relocate.
7. Close the Airport and demolish the runway.
8. Sell or lease the property.
33 SOUTH KALISPELL Urban Renewal Plan
Alternative 3 – FAA Compliant Airport in Current Runway Alignment The FAA has indicated to the City of Kalispell that there is not The Airport Reference Code (ARC) Another alternative suggested during the public outreach process was one funding available for ARC B-I has two components relating to that would re-engage the FAA in the Airport’s future. This proposal would airports. Although B-I is a FAA the Airport design aircraft. The first involve using FAA funding for improvement projects to bring the Airport design standard, and upgrading component, depicted by a letter, is the aircraft approach category into compliance with FAA design standards. The Airport will remain in its the airfield to B-I standards would existing location, with the same runway configuration and alignment. The and relates to aircraft approach meet FAA design criteria, B-I speed (operational characteristic). feasibility and success of Alternative 3 depends on FAA willingness to fund airports are such a low priority for the necessary improvement projects. In the early stages of this project, The second component, depicted the FAA Helena Airports District by a Roman numeral, is the FAA staff at the Helena Airport District Office were contacted about the Office it is unlikely that the level airplane design group and relates possibility of re-involvement with the Kalispell City Airport. The FAA said of capital investment needed to to airplane wingspan or tail that it is still possible for the City to become eligible for and receive FAA perform the upgrades would ever height (physical characteristics), funds. A re-validation analysis and discussion would be required between become available. A pro forma for whichever is the most restrictive. the City and the FAA but the possibility is not off the table. Alternative 3 will Alternative 3 was prepared, and is implement the airfield development plan “Site 1 – Option D” from the 2012 included in Appendix A. Final Airport Master Plan Update. A graphic of the project components is located at the end of this document. Project components included in the The FAA indicated that if the City 2012 Final Airport Master Plan Update are as follows: chose to construct the Airport to ARC B-II standards, which would require larger safety areas and setbacks, then funding may become • Airport facilities constructed to Airport Reference Code (ARC) available. The City voted against funding an ARC B-II Airport and this B-I design standards (60 feet runway width, 150 feet separation option is not explored further. between runway and taxiway, 25 feet wide taxiways). • Runway reconstructed to its current length of 3,700 feet but could be Due to the severe challenges associated with its implementation, extended to a length of 4,300 feet. Alternative 3 is removed from consideration. • No shift or offset of runway centerline. • No rotation, orientation remains 13/31. • Requires the relocation of five hangars and three shops on Airport property. • Requires the full or partial acquisition of approximately 16 land parcels (no residential)
34 April 2016
35 SOUTH KALISPELL Urban Renewal Plan
Alternative 4 – Incorporation into an Airport Authority A second airport authority option is that the Kalispell City Airport forms its own airport authority independent of the FMAA. This option would There is a possibility that the Kalispell City Airport could be incorporated increase costs in the short-run as additional airports or revenue generating into an airport authority. Airport authorities are independent, public facilities would need to be acquired and a new taxation zone would need agencies created by state legislation. Many different forms of authorities to be established to support the new airport authority’s operations. In the exist. Some have the power to levy taxes and the use of eminent domain, absence of a tax, and without an airport with strong revenue generating and some do not. Airport authorities of some type make up approximately potential in the authority, it is unlikely that this option would be financially 39% of airport ownership structures nationwide. advantageous to the City or the new airport authority. City legal council should be consulted on the potential for taxing authority if two independent Figure 24 presents generalized advantages and disadvantages of an airport authorities existed within the same county. authority - exceptions exist in all cases. If Kalispell City Airport was to be incorporated into the FMAA or other Figure 24: Airport Management Structure Comparison authority, the City of Kalispell would likely lose control of decisions regarding Authority Municipality airport management, operations and finance. The City would also lose • Provides focused leadership • Access to other city resources potential revenue generated through airport improvements; however, it would benefit from spill-over economic growth associated with on-airport • Insulates elected officials • Power to tax & eminent businesses. • Better serves a larger domain community • Issue bonds Fiscal Impacts: Depending on the agreement made between the City and the future Airport Authority, any sale proceeds would go to the City of Advantages • Provides a business focus Kalispell. The new Airport Authority would then assume responsibilities for • Money may not be available • Financial and political financial obligations as well as collection of any revenue. to support the Airport constraints Due to the absence of facts about Alternative 4 costs and revenues, no • Greater exposure to liability • Airport competes for DCFA was performed. The City will need to do additional analysis before a (need to purchase insurance) attention/resources DCFA can be performed. • Leadership may not focus on
Disadvantages airport exclusively Findings for Alternative 4: Incorporation into an Airport Authority – If the City chooses to explore the Airport Authority path, the City would need to The Flathead Municipal Airport Authority (FMAA) operates Glacier Park hold a meeting the FMAA on the topic to gauge interest and benefits for International Airport and two GA airports (Ferndale and Whitefish). Some both parties. comments at public outreach events asked what potential exists for the Airport to join the FMAA, and what potential exists for creating a new authority for the Airport and perhaps others nearby? Inclusion of the Airport into the FMAA would require an agreement between the City of Kalispell and the FMAA. Considering that the FMAA already operates two GA facilities, it is unlikely that they would need to acquire a third; however, there may be operational benefits and economies of scale for the FMAA which increase interest. It is recommended that the City approach the FMAA Board of Directors to discuss the practicality of joining FMAA.
36 April 2016
Alternative 5 – Privatize the Airport Municipal Airport Authority to consider its options in acquiring and operating the airport. The City would want to make its intentions clear Within the contents of this study the airport is shown to lose money in and give ample time for development, or groups entertaining the option all of the primary three financial alternatives. If the City of Kalispell keeps of continuing to operate the airport, traction to put together deals to the airport as is, it continues to lose money. If the City takes FAA funding, respond to the RFP. keeping the runway orientation in-place, it continues to lose money. Based on the findings of this study, the City also loses money if the airport Minimum elements the City will want to consider if it chooses this option is closed in the near future and is sold for alternative uses. For purposes include the following: of this report, sale values for the airport property are $25,000/acre when looking at the airport land on a gross sale basis. • Conduct a true detailed real estate appraisal of airport property prior to accepting RFP results, Often municipalities and counties are faced with decisions of operational • Set minimum return expectations, shortfalls or looking to transfer services and even infrastructure to the private sector. Across North America it is quite common for governmental • Establish a schedule for due diligence during the RFP (Minimum 180 entities to privatize services and infrastructure of all types, including water, days), sewer, sanitary and landfill services. Some toll roads are examples of • If the airport is to continue to operate, is there a minimum time private or public-private partnerships in transportation. Over the past 25 frame for its operation (ie. 10 years) and minimum time frame to years the federal government has privatized tens of thousands of acres of bring airport up to FAA standards, land across the country in dozens of military base closure operations, many • If the airport is to be repurposed, a transition should identify holding of which include airports. In fact, if there is a service being provided by a the City harmless for hanger lease termination occurring prior to government entity it generally can be provided by the private sector as airport closure. well. • Explore all available legal angles of privatizing city owned land. If the City of Kalispell wanted to explore the true value of the airport Exploring a Privatization option is really a combination of the previous property and set some conditions in its transfer of the land, the City could four options as each of them could actually become a part of the results of establish and issue an airport acquisition request for proposal (RFP). From any RFP. The major issue herein is that the City of Kalispell gets out of the a land development standpoint the airport does offer some attractive General Aviation airport business. In privatizing, any scenario may come conditions including readily available utilities and vehicular access, as forward including: well as surrounding services. As previously stated, the existing airport hangar leases and required buy-out pose confusing conditions for the next • Keeping the airport operating in its current configuration, many years. However, often the private sector can do things the public sector cannot including negotiating lease buyouts for cash or non-cash • Closing and repurposing the airport for other land uses, considerations in relation to a greater development. The old adage that • Utilizing FAA funds if the airport were to be acquired by another the private sector can move faster than the public sector is often, but not governmental entity or airport authority, always, true. • Acquisition by an existing or newly established airport authority. If the City chose to issue an acquisition RFP it could also choose to favorably If at the end of the RFP period the City is unhappy with the results of any weigh continued use as an airport for a minimum number of years as a key offers received, the council could move forward with any option it chose. decision factor in any transfer of land. This would send the signal to the It would have a clearer understanding at that time of what the private or private sector aviation industry to investigate a private sector operation quasi private sector thought of the value of the land as a viable airport or of the airport, as well as give time and possible initiative to the Flathead alternative real estate development potential.
37 SOUTH KALISPELL Urban Renewal Plan
SUMMARY – COMPARISON OF ALTERNATIVES Alternatives presented require investment from the City. Potential funding what alternative is best depends greatly on the community’s vision for the sources include the FAA, the Montana Department of Transportation, the Airport. Alternative 1 gives the City flexibility to close the Airport in the TIF fund (for certain improvements) and the City’s general fund. The City future should private development not arrive; however, the capital costs could also issue a revenue bond or look for private investors. Regardless of for Alternative 1 are $900,000. The capital costs associated with Alternative the funding source, the City will need to make an investment in the Airport 2 are nearly three and a half times as expensive as Alternative 1 over the in order to generate additional revenues necessary to make the Airport next five years; however, 96 percent of these expenses can be covered with profitable. Without additional funding over the next five years the Airport TIF funds and the remaining can be covered from property sale proceeds. will continue to lose money and facilities will degrade to a point where Alternative 2 provides the City with an opportunity to convert the Airport they may become inoperable. The same is true for the investment required to a land use that provides greater civic or economic benefit. Alternative 2 to close the Airport, as leases will need to be bought out and the property also frees the City of on-going airport maintenance beyond five years. Key will need to be redeveloped. benefits and drawbacks of each alternative are summarized in Figure 25.
The alternatives presented above contain aeronautical, community, and Financial analysis was run for two of the five alternatives and the baseline financial implications to the City. The aeronautical factors of the alternatives scenario. Financial considerations and ranking is based on return on [F ig u reare not3 0 : quantifiableA lte r n a tiv e inS uthe m m away r y ]that the economic factors are. Ultimately, investment and what the investment provides the City and the surrounding community .
[Figure[F ig u re 325: 0 : AAlternative lte r n a tiv e S u mSummary] m a r y ] A lte rn a tive 5 Year Cash O ngoing D C FA Benefits D ra w b a ck s C a pA itallte rn a tiveC o sts5 Year CashF loO w ngoing s D CIn FA c o m e ValuationBenefits D ra w b a ck s C a p ital C o sts F lo w s In c o m e Valuation P ro v id e s s a fe , e ffi c ie n t a irp ort DP o ro e s vn id o t e sm e e ts aF feA A , s tae n dffi a rd s c ie n t a irp ort D o e s n o t m e e t F A A s ta n d a rd s A lte rn a tive 1 G re a te r fl e x ib ility if c lo s u re s o u g h t CG ity re am teu s t r s e lf-fufl n e d x ibfu ility tu re c a p itaif l c lo s u re s o u g h t C ity m u s t s e lf-fu n d fu tu re c a p ita l ($1,000,000) ($300,000) (1,300,000) in long-term improvem ents and maintenance A lte$900,000 rn a tive 1 ($1,000,000) ($300,000) C ity in v e s tm (1,300,000) e n t m a y in s p ire p riv a te Nin o t elong-term lig ib le fo r T IF fu n d s improvem ents and maintenance $900,000 investm ent A b ility to re u s e s ite fo r p o te n tia l ConsiderableC ity in vup-front e s tm efinancial n t m a y in s p ire p riv a te N o t e lig ib le fo r T IF fu n d s greater econom ic benefit investminvestm ent ent P o te n tia l fo r C ity to p ro fi t in s te a dL oo s s f o f a v ia tio n fa c ility a n d A lte rn a tive 2 o p e ra tin g fa c ility a t a lo s s associationA b ility emergencyto re u s e s ite fo r p o te n tia l Considerable up-front financial $400,000 $0 $400,000 $2,900,000 O th e r fa c ilitie s in a re a to ta k e m anagem ent / disaster relief d isplaced users benefitsgreater econom ic benefit investm ent A b le to u s e T IF fu n d s MP any o te unknow n tia l ns foabout r futureC ity to p ro fi t in s te a dL o o s s f o f a v ia tio n fa c ility a n d A lte rn a tive 2 revenueo p e ra potential tin g fa c ility a t a lo s s association emergency $300,000$400,000 $0P ro v id e s s a fe , $300,000 $400,000e ffi c ie n t a irp ort L o s s o f fl e x ib ility if c lo s u re s o u g h t in L o w e r c a p ita l c o s ts d u e to F A A long-termO th e r fa c ilitie s in a re a to ta k e m anagem ent / disaster relief $2,900,000$3,100,000 fu n d s M ore substantial capital A lte rn a tive 3 O ngoing FAA entitlem ent funding improvem ents needed to meet FAA ($200,000) $400,000 $400,000 d isplaced users benefits $400,000 A b le to u s e T IF fu n d s fo r s o m e standards p ro je c ts ContraryA b le toto voter udecision s e T IF fu n d s M any unknow ns about future C ity a n d F A A in v e s tm e n t m a y A irp o r t w ill c o n tin u e to lo s e m o n e y revenue potential in s p ire p riv a te in v e s tm e n t P ro v id e s s a fe , e ffi c ie n t a irp ort L o s s o f fl e x ib ility if c lo s u re s o u g h t in
N o te : C a p ita l c o s ts a re fa c to re d in to 5 Y e a r C a s h F lo w s , a lo n g w ith o p e ra tin g re v e n u e s a n d oL p oe ra w tin e gr e xc p a e pn s ita e s . l c o s ts d u e to F A A long-term fu n d s M ore substantial capital D C F A V a lu a tio n = 5 Y e a r C a s h F lo w s + O n g o in g In c o m e A lte rn a tive 3 O ngoing FAA entitlem ent funding improvem ents needed to meet FAA ($200,000) $400,000 $400,000 $400,000 A b le to u s e T IF fu n d s fo r s o m e standards p ro je c ts Contrary to voter decision 38 C ity a n d F A A in v e s tm e n t m a y A irp o r t w ill c o n tin u e to lo s e m o n e y in s p ire p riv a te in v e s tm e n t 34
N o te : C a p ita l c o s ts a re fa c to re d in to 5 Y e a r C a s h F lo w s , a lo n g w ith o p e ra tin g re v e n u e s a n d o p e ra tin g e x p e n s e s .
D C F A V a lu a tio n = 5 Y e a r C a s h F lo w s + O n g o in g In c o m e
34 April 2016
Alternative 2 has higher capital costs than Alternative 1 and produces a [Figure 26: Baseline and Alternative Returns on Investment] positive cash flow over the five years as TIF funds and proceeds from the sale of land cover closure costs. Should the City sell and allow development on the property, the tax revenue will improve the DCFA valuation and make Alternative 2 even more competitive than Alternative 1 from a DCFA perspective. It is recommended that the City investigate what the development potential is on this piece of property and whether the City can afford to pay the closure fees and wait for years to be reimbursed 300,000 3,100,000 through property taxes. Alternative 2 has higher capital costs than the baseline “do nothing” scenario, but the return on investment (through land sale and elimination of ongoing airport maintenance costs) is more promising than continuing to operate the Airport at a loss.
Of the two scenarios, Alternative 2 provides a positive DCFA valuation of $300,000; however, the capital costs are higher. The key difference is whether the City wishes to keep the property as an airport or not. Alternative 2 removes the aviation asset, freeing the City from the expense of operating the Airport but potentially eliminating associated economic benefit in the process.
39 SOUTH KALISPELL Urban Renewal Plan
ENDNOTES ASSUMPTIONS AND SOURCES
1. County data https://flathead.mt.gov/about_flathead_county/index. of the Hilton lease was incorrect and inflating that number. The 25% php estimate was based subtracting out the more expensive highway frontage and more substantial investment in the Hilton property. 2. Cash flow information provided by the City of Kalispell. 12. Demolition of runway assumes two days of work (16 hours) by two 3. East Taxiway - Assumed cost of $38 per sq. yard of asphalt overlay pieces of heavy earthmoving equipment at $156/hr. applied to an area of 8,000 sq. yards. 13. Assumes the FAA would be willing to negotiate and come to an 4. West Taxiway - Assumed cost of $38 per sq. yard of asphalt overlay agreement on the future configuration of the Airport applied to an area of 5,078 sq. yards. 14. Typical cost for ALP update 5. Estimated salary including benefits. 15. Alternative 3 cost assumptions brought forward from 2012 Airport 6. Hangar site lease revenue estimates based on $0.16/sq. ft. for ten (10) Master Plan 60’x60’ and five (5) 100’x100’ box hangars with progressive ground lease structures. Range in revenue reflects initial lease year and end 16. Obstruction removal refers to the relocation of five hangars and lease year. three shops on airport property. Source 2012 Airport Master Plan.
7. Ground lease non-aviation revenue assumes $0.16/sq. ft. for a large 17. Source: Airport Council International (180,000 sq. ft. leasehold) non-aviation related development on the City owned compost site.
8. Assumes $1 million for site work/paving/utilities and $1.5 million for buildings. Based on engineers planning level estimate. Results in 18 new t-hangars with lease rates of $500 per month.
9. Calculated based on remaining ground lease terms. Assumes initial hangar construction costs of $130/sq. ft. See Lease Summary Table for compiled lease information.
10. $1.9m estimate brought forward from 2012 Airport Master Plan estimates. Assumes fair market buyout of seven (7) hangar leases. See Table 6-2 contained in 2012 Airport Master Plan.
11. Estimate assumes 25% of the 2012 Airport Master Plan $2.6 million buyout estimate for both Red Eagle and the Hilton lease. Inclusion
40 7TH AVE E
6TH AVE E
S MAIN ST
5TH AVE E 13TH ST E 4TH AVE E
3RD AVE E
2ND AVE E
1ST AVE E 14TH ST E WOODLAND AVE
LEHI LN
1ST AVE E
1ST AVE W S WOODLAND DR QUINCY LOOP
7TH AVE E
6TH AVE E 17TH ST W S MAIN ST
5TH AVE E 13TH ST E 4TH AVE E
3RD AVE E 2ND AVE E RIVER GLEN CT 18TH ST E 1ST AVE E 18TH ST E SOUTHFIELD DR 14TH ST E WOODLAND AVE BISON DR LEHI LN
SOUTHFIELD LN 1ST AVE E
1ST AVE W S WOODLAND DR HAVEN DR QUINCY LOOP
17TH ST W
STAG LN RIVER GLEN CT 18TH ST E 18TH ST E SOUTHFIELD DR
EAGLE DR BISON DR
AIRPORT RD 7TH AVE E BEGG PARK DR 6TH AVE E
S MAIN ST KELLY RD
5TH AVE E 13TH ST E 4TH AVE E
3RD AVE E
2ND AVE E BLUESTONE DR SOUTHFIELD LN 1ST AVE E 14TH ST E HAVEN DR US HWY 93 S MALLARD DR
EAGLE DR
WOODLAND AVE CONDOR DR MUSKRAT DR
LEHI LN
TEAL DR STAG LN 1ST AVE E S WOODLAND DR 1ST AVE W S WOODLAND DR QUINCY LOOP RUSSELL DR 17TH ST W EAGLE DR
AIRPORT RD RIVER GLEN CT BEGG PARK DR 18TH ST E 18TH ST E SOUTHFIELD DR KELLY RD
BLUESTONE DR BISON DR
US HWY 93 S COOT CT
WIDGEON CT MALLARD DR
EAGLE DR
MERGANSER DR CONDOR DR MUSKRAT DR SOUTHFIELD LN HAVEN DR TWIN ACRES DR TEAL DR S WOODLAND DR
STAG LN RUSSELL DR
EAGLE DR MEADOWLARK
AIRPORT RD BEGG PARK DR KELLY RD April 2016
BLUESTONE DR
WILLOW GLEN DR
7TH AVE E
6THCOOT CT AVE E
WIDGEON CT US HWY 93 S S MAIN ST MALLARD DR
5TH AVE E EAGLE DR MERGANSER DR CONDOR DR 13TH ST E MUSKRAT DR 4TH AVE E
3RD AVE E
2ND AVE E
1ST AVE E 14TH ST E TEAL DR WOODLAND AVE S WOODLAND DR TWIN ACRES DR
RUSSELL DR LEHI LN
1ST AVE E
1ST AVE W S WOODLAND DR QUINCY LOOP MEADOWLARK 17TH ST W SHEFFERD LN
COOT CT
WIDGEON CT MERGANSER DR RIVER GLEN CT 18TH ST E 18TH ST E WILLOW GLEN DR SOUTHFIELD DR
TWIN ACRES DR WELF LN
BISON DR CEMETERY RD
SOUTHFIELD LN MEADOWLARK Figure 27: Existing Land Use Map HAVEN DR
WILLOW GLEN DR STAG LN Existing Land Use SOUTH KALISPELL URBAN RENEWAL DISTRICT SHEFFERD LN EAGLE DR Residential Government Facility South Kalispell/Airport Redevelopment Area
AIRPORT RD BEGG PARK DR KELLY RD Commercial Professional Office or Health Care WELF LN Current Airport Tax Increment Finance District BLUESTONE DR CEMETERY RD Mobile Home Park Sewer Treatment Plant US HWY 93 S MALLARD DR City Limits
EAGLE DR
CONDOR DR MUSKRAT DR SHEFFERD LN Open Space Industrial
TEAL DR 0 330 660 1320 FT N S WOODLAND DR Airport, GolfWELF LN Course, Fairgrounds
CEMETERY RD RUSSELL DR Existing Land Use SOUTH KALISPELL URBAN RENEWAL DISTRICT
Residential Government Facility South Kalispell/Airport Redevelopment Area
COOT CT
WIDGEON CT MERGANSER DR Existing LandCommercial Use Professional OfficeSOUTH or Health KALISPELL Care URBANCurrent RENEWAL Airport Tax DISTRICT Increment Finance District Residential Government Facility South Kalispell/Airport Redevelopment Area Mobile Home Park SewerTWIN ACRESTreatment DR Plant City Limits Commercial Professional Office or Health Care Current Airport Tax Increment Finance District Open Space Industrial Mobile Home Park Sewer Treatment Plant City Limits 0 330 660 1320 FT N Airport, Golf Course, Fairgrounds MEADOWLARK Open Space Industrial 0 330 660 1320 FT N Airport, Golf Course, Fairgrounds
WILLOW GLEN DR
SHEFFERD LN
WELF LN
CEMETERY RD
41 SOUTH KALISPELL Urban Renewal Plan 4DEVELOPMENT RECOMMENDATIONS AND STRATEGIES LAND USE STRATEGIES
The goal of the South Kalispell Urban Renewal Plan is to integrate sustainable, socially responsible, and economically sound recommendations and implementation strategies to improve the quality of life for residents of Kalispell and the greater region.
Land use planning is a political and iterative process that needs to remain flexible and open to changing conditions. Decisions made with active participation, using a consensus building process, have a greater chance of implementation and success.
This plan will incorporate smart growth policies such as promoting infill development, mixed use development, protecting natural resources, encouraging walkability, and redevelopment opportunities.
Existing land use in the South Kalispell Urban Renewal District include a variety of commercial, industrial, mixed use, and residential properties, as well a large amount of undeveloped open space (see Figure 25). One of the major land holders in the Planning Area is the Kalispell City Airport, which occupies approximately 10% of the larger 720-acre planning area.
Developing partnerships between public entities and private development can maximize limited resources and provide for a more robust investment opportunity and create a better outcome for the long term health of the community. These agreements can also ensure a more consistent development standard and pattern between cities and counties increasing the levels of service for health, safety, fire, and general livability.
42 April 2016
DEVELOPMENT GUIDELINES Promote a Transportation Network that is Safe for Pedestrians, Bikes, and Vehicles The following Development Guidelines are general policy statements that inform land use decisions within the Urban Renewal District. Increased traffic volumes related to urban development have raised significant concerns about vehicular and pedestrian safety. Public officials and agencies should strive to provide a network of streets that are safe and accessible for all modes of travel, and where possible, implement urban Attract the Right Type and Size of Development design elements that encourage reduced speeds in high traffic areas. A city can influence where and what kind of growth happens by pointing out locations where public services and other environmental factors make the most sense for new development. Once these locations are indicated A South Kalispell for Everyone on a map, the City can make it easier to develop a project with various incentives. Kalispell is home to people of all means, but across the region rising costs of services, goods and housing is driving out long-time residents and preventing new residents from moving to town. Supporting development that provides affordable housing and a mix of uses and services should be Provide the Highest Level of Public Services and Facilities a priority in the Urban Renewal District. Growing without subsequently expanding public infrastructure impairs the City’s ability to provide a high level of public service to Kalispell’s taxpayers. Within their limits, the City should make decisions based upon A Sustainable South Kalispell the impacts a project has on their ability to provide services such as water, sewer, emergency services, roads and other customer services. A sustainable city is one that is structured to survive a potential bust, and one that considers impacts to the environment as it grows. Economic growth in the region will one day stop, and the City can prepare by making sustainable fiscal and land use decisions now. The City must institute Attract High Quality Projects careful planning to avoid overbuilding or overextending infrastructure. Supporting environmentally-sensitive development is also a priority. Higher quality development can cost more, however low quality projects Encouraging builders to use locally-sourced materials is an example of become a burden on the City and its residents over time. The City can only sustainable development that saves on transportation costs and supports afford to move forward by approving and building the best projects the local businesses. market will bear.
43 SOUTH KALISPELL Urban Renewal Plan
Promote a Family-Oriented Community
Families have and will continue to move into South Kalispell because of the existing family-oriented character. Ensuring there are resources that support the health, safety, convenience and livelihoods of families young and old will improve the quality of life for all area residents. Neighborhood amenities, such as local businesses, parks, community activity centers (churches, schools or clubs), grocery stores and banks, for example, build a strong family-friendly community.
Keep the Small Town Character
Part of the attraction of living in Kalispell is the small town character, which is derived from the rural lifestyle, close-knit and friendly neighbors and quiet neighborhoods. Within the commercial area of town, a welcoming, pedestrian-scaled environment with local businesses and slow traffic speeds contributes to the unhurried, small town atmosphere.
Keep South Kalispell Beautiful
Sweeping vistas, plentiful natural open space and local culture all contribute to South Kalispell’s beauty. Maintaining these elements for future generations to enjoy is a goal that requires tremendous foresight on the part of local leaders. Enacting policies that preserve open space and views, and require native, drought-tolerant plantings that are appropriate for this region will help achieve this goal. Also, encouraging new construction that is compatible with the town’s historic fabric is a great example of how local character contributes to a beautiful city.
44 April 2016
IMPROVEMENT PROJECTS AND OPPORTUNITY SITES The following list describes some examples of high-level projects intended to implement the long-term redevelopment vision expressed in this plan. Specific capital projects are categorized into broader improvement categories.
These projects are reflective of a series of capital projects that the city might implement unilaterally and in conjunction with private development interests to strengthen the urban fabric of South Kalispell.
Figure 28: Improvements Projects and Opportunity Sites Table Improvement Projects or Opportunity Sites Acres Ownership 1. Cemetery Road Project 5 Public
2. New Elementary School 25 School District 5
3. Dog Park 2 to 5 1 Private Owner
4. Community Park 15 1 Private Owner
5. Highway 93 Trail Expansion — Public Right-of-Way
6. “Welcome to Kalispell” Sign — Public Right-of-Way
7. Highway 93 Business Park 7.5 City of Kalispell, 1 Private Owner
8. Aviation Business Park 3 Whitefish Credit Union
9. Park-N-Ride/Trailhead 4.4 MT Dept. of Transportation
10. Relocate City Shops for Mixed-Use Development 4.9 City of Kalispell
45 SOUTH KALISPELL Urban Renewal Plan
10
8
10
1 Cemetery Rd Project 2 2 New Elementary School 7 3 Dog Park 4 Community Park 5 HWY 93 Trail Expansion 1 6 Welcome to Kalispell Sign 5 7 Business Park 8 Aviation Business Park 9 Park-N-Ride/Trailhead 10 Mixed-Use Development 4 City of Kalispell 3 South Kalispell Urban Renewal District 9 6 0 1/8 1/4 1/2 Mile N
Figure 29: Improvements Projects and Opportunity Sites Map 46 April 2016
Improvement 1. Improve Cemetery Road from Airport Road to Highway 93
Currently constructed to county road profiles, Cemetery Road is more and southern boundary of the Airport. The roadway is narrow and lacks more undersized for the increasing amount of traffic. While not in the confines adequate shoulders and pedestrian and bicycle separation. Specifically, of this study, we recommend a Traffic Study be conducted for Cemetery there needs to be a new bridge or major pipe arch over the Ashley Creek. Road to determine current traffic counts and projected traffic counts due to The current culvert is undersized and increases the potential for flooding the new school programmed at Airport Road north of Cemetery Road. upstream of the crossing.
Even without an increase in expected traffic volume, the current roadway With the eventual addition of an elementary school on the south west side is in substandard shape for a major east-west corridor bordering the of the Urban Renewal District, additional vehicle and pedestrian traffic will be evident along Cemetery Road. Figure 30: Cemetery Road Improvement Concept
47 SOUTH KALISPELL Urban Renewal Plan
Improvement 2. New Elementary School
The Kalispell School District has purchased land along Airport Road directly The school district will plan and develop the new school. Figure 31 depicts south of the City’s wastewater treatment plant. This plan does not propose how a proposed school might fit in the site. Specific concerns include to develop the new elementary school, but rather intends to proactively setback of the school from Airport Road and enabling a sense of arrival to identify potential opportunities and challenges, with the assumption that the school. Significant components to the site plan include a perimeter road the new school will be constructed within a five-year period. around the school with accessibility to future residential development areas to the south and east. Figure 31: New Elementary School Concept
48 April 2016
Improvement 3. Dog Park
Perhaps one of the most positively discussed recommendations during verification of current veterinary records and licensing. It is also common the course of the public outreach process was the concept of a dog park for an entry fee to be utilized for a dog park that would include a card located within the South Kalispell Urban Renewal District. Dog parks can reader access pass for entry. be an incredibly utilized public gathering space where adults, children, and dogs can recreate. In the proposed location shown in Figure 32 the dog park is part of the proposed community park. A future cost estimate can be found in This environment requires thoughtful planning around regulations for Appendix B. public health and welfare. Dog parks should be fenced and should require
Figure 32: Dog Park Concept
DOG PARK 0 62.5’ 125’ 250’
49 SOUTH KALISPELL Urban Renewal Plan
Improvement 4. Community Park
As part of the overall Urban Renewal District a 15 to 30 acre community Studies show that community revitalization can happen when cities invest park is recommended. Possible locations include a 15-acre parcel south of in parks. Community engagement, economic development, tourism, and Cemetery Road and west of Highway 93. This community park will offer green infrastructure are just a few of the benefits of a healthy community an opportunity to relocate Begg Park and provide a large open space park system. Detailed cost estimates can be found in Appendix B. recreational park with various opportunities for diverse uses such as disc golf, adult exercise classes, painting classes, community gardens, and family or community gatherings.
Figure 33: Community Park Concept
50 April 2016
Improvement 5. Highway 93 Trail Expansion
As new development occurs along the east side of Highway 93, there is an The city is encouraged to approach Montana Department of Transportation opportunity to construct a bike tail bordering the property. While slowly (MDT) to help facilitate the trail system along the right-of-way. As this trail linkage is taking shape, it is too slow to be useful, leaving large gaps currently envisioned, the bike trail could be equally split between MDT, of unconstructed trail. Recommended as part of the South Kalispell Urban the City of Kalispell, and private funding sources. The trail construction is Renewal District Plan is to create a ‘bridge the gap’ wholesale development approximately 1.5 miles in length connecting it to the northern part of the of a bike trail, uniting the district along its most visible corridor. City’s street system. Detailed cost estimates can be found in Appendix B.
Figure 34: Trail Expansion Concept
51 SOUTH KALISPELL Urban Renewal Plan
Improvement 6. Welcome to Kalispell
Located at the intersection of Highway 93 and the Highway 93 Bypass, on In 2013 the City undertook a Way Finding Project to develop a common the east side of the highway, is a proposed location for an official Welcome city entrance sign and way finding plan that would tie the various sectors to Kalispell entry monument. This feature must make a statement that you of Kalispell together under one unifying vision. The effort included an are entering the City of Kalispell. As one of the more straightforward projects extensive public outreach process with the end result being the Welcome to be proposed in the Plan, this feature will provide visitors to Kalispell firm to Kalispell sign as seen in Figure 35. Also included was way finding acknowledgement that they have arrived. City entry monuments are a signage for identifying the historic downtown district, museums, Kidsports traditional means to identify a city’s location and character. Complex, parks, and other public facilities.
Figure 35: Welcome to Kalispell Sign Concept
52 April 2016
Improvement 7. Highway 93 Business Park
The predominant land use in the South Kalispell Urban Renewal District is a mixture of light industrial and commercial. The majority of the light industrial is individually developed along Highway 93 and as a whole is somewhat random. Still the opportunity exists to create a catalyst project south of Cemetery Road on the west side of Highway 93 for a business park featuring a combination of light industrial and commercial developments. A Business Park featuring development opportunities such as can be developed in phases and become a catalyst for new development types in the renewal district. Figure 36: Highway 93 Business Park Design Example
53 SOUTH KALISPELL Urban Renewal Plan
Figure 37: Highway 93 Business Park Concept
54 April 2016
Improvement 8. Aviation Business Park
Should the City elect to keep or expand the General Aviation airport, ancillary The example shown in Figure 38 doubles as an enhanced entry to the development compatible with zoning and aviation uses could greatly Airport capitalizing on a new entry sign and better definition to – and improve the sustainability of the Airport. Given the location of the Airport identification of – the Airport. and the existing infrastructure at the Airport (roads, electrical service, gas, water, sewer, fiber optic), the investment for an Aviation Business Park could Should the Airport remain, a concerted effort should be made to embrace be highly marketable. These highly flexible warehouse and office space can the Airport as a part of the South Kalispell urban fabric. The location of provide technologically advanced turnkey business opportunities. the site is in a privately-owned tract of land south of the Hilton Hotel and bordering Highway 93. Figure 38: Aviation Business Park Concept
55 SOUTH KALISPELL Urban Renewal Plan
Improvement 9. Park-N-Ride Trailhead
Located off the US Highway 93 Bypass directly south of the Urban Renewal District, a roughly 4.4 acre MDT-owned parcel has potential to be used for a trailhead and to provide needed parking for recreational uses. Being adjacent to Ashley Creek and the regional bicycle trail, this site has potential for various recreational and open space activities should MDT choose to develop or transfer the land. Detailed cost estimates can be found in Appendix B.
Figure 39: Park-N-Ride Trailhead Concept
56 April 2016
Improvement 10. Relocate City Shops for Mixed-Use Development
The City of Kalispell Shops are located on an approximately 4.9 acre site A new 1st Avenue Commercial District development (Figure 40) could also located on 1st Avenue West adjacent to Legends Stadium. Relocating the potentially provide evening and weekend parking for the stadium, which shops to other city-owned land on the Airport property would provide currently has no parking. a strategic site for new mixed use development. The value of a land sale could aid in relocation costs.
Figure 40 : Relocated City Shop Complex Concept
57 SOUTH KALISPELL Urban Renewal Plan
Figure 41: 1st Ave Commercial District Concept
58 April 2016
AIRPORT REDEVELOPMENT OPPORTUNITY may be a need for future fairground space. Recognizing that County Commissioners have made a concerted effort to reinvest in existing Redevelopment of the Airport property is an alternative the City needs to fairground facilities, and recognizing the difficulty in replacing the existing consider if the decision is made not to continue airport operations. level of infrastructure, one option for future expansion may be the use of a portion of the redeveloped airport property to support ancillary Historical planning efforts have mainly focused on keeping and maintaining fairground uses. Current City zoning supports this land use at this location, the Airport. These comprehensive plans have laid out deficiencies and however, this opportunity would require a significant effort on the City’s improvements required along with the necessary capital required to and County’s part to work together to meet these larger regional goals. complete these improvements, but very little planning effort has been spent on what potential redevelopment options could happen at the Figure 42 shows a redevelopment option that includes a new High School Airport and what the possibilities might look like. as well as County Fairground Facility.
Over the last several decades, extensive development has occurred in and Another alternative the City could consider for repurposing the Airport is to around the Airport reflecting a mixture of land use and zoning such as convert the property to private land use. The land use plan shown on Figure government facilities, commercial, residential, open space, and industrial. 43 depicts a possible land-use alternative that includes: light industrial Redevelopment could occur using a number of these development on the southernmost portion of the Airport, transitioning to mixed use options. and multifamily moving north. An investment of a new commercial collector roadway with cul-de-sacs has been identified within the central The South Kalispell Airport TIF encompasses a total of 230 acres of which north-south core of the west taxi way and provides a central spine access the Airport is approximately 71 acres. In perspective to the entire SKURD through the site, as well as enhances the development opportunity of the planning area of 720 acres, the Airport represents about 10% of the overall new repurposed airport. planning area. Kalispell City Airport is part of this TIF District and as such has been the beneficiary of some of the TIF funds. Some of these funds If the City chooses to sell the Airport property and allow for redevelopment have been used to reinvest in Airport infrastructure and maintenance. the City would begin to realize additional tax revenue as the property developed. Redevelopment of this property would create additional jobs The airport property has extensive infrastructure available for and would spur additional economic activity throughout South Kalispell redevelopment purposes including: sewer, water, fiber optic, gas, telephone, by becoming a destination location. The increase in additional traffic and underground power. With a heavy investment in infrastructure already would benefit existing businesses within the urban renewal area, however, in place, developers may find this property as having a built in incentive the City would need to plan for increased demand on City utilities such and ripe for redevelopment. as water, sewer, storm water and roadways. A traffic study would be needed to assist with the future development of this area so that careful Through the public outreach process community comments included consideration and planning are done regarding accessibility, walkability, creating an anchor for the South Kalispell area that would help spur connectivity, infrastructure, and design. additional economic interest and development. Moreover, with the redevelopment option, the City would not have the Preliminary discussions with Flathead Valley Fairgrounds staff identified continued financial commitment of labor, operation and maintenance limited expansion opportunities at the current fairground location. As costs, and capital reinvestment costs associated with the Airport. additional growth and changing demands of the community occur, there
59 SOUTH KALISPELL Urban Renewal Plan
Figure 42: Land Use Alternative 1 for Airport Closure
Land Use Alternative 1 Developable Area Relocated Fairgrounds 8.6 Acres Kalispell South High School 9.2 Acres Relocated City Shops 1.8 Acres Parking 28.4 Acres Recreational Ball Fields 10.2 Acres
1
60 April 2016
Figure 43: Land Use Alternative 2 for Airport Closure
Land Use Alternative 2 Developable Area Multifamily Residential 9.3 Acres Mixed Use Commercial/Residential 17.8 Acres Light Industrial 23.2 Acres Relocated City Shop Buildings 9.2 Acres
2
61 SOUTH KALISPELL Urban Renewal Plan
[Figure 44: Concept for a New T-Hangar Complex]
62 April 2016
TAX INCREMENT FINANCING Tax Increment Financing Projects South Kalispell is the beneficiary of one of the City’s Tax Increment Ordinance No. 1541 in 2005, authorized a $2,000,000 urban renewal Finance Districts (TIF’s). The Kalispell City Airport/Athletic Complex and revenue bond for the Airport projects listed in Resolution 4978 providing a Redevelopment Plan Analysis was originally adopted by Ordinance No. funding mechanism to complete the projects. 1242 in July, 1996 setting the basis for the subsequent approval of a Tax Resolution No. 5602 adopted in 2012 authorized the purchase of a Increment Financing District. Subsequently, Ordinance No. 1260 amended permanent easement and a 40 year lease on State of Montana School Trust Ordinance 1242 and established January 1, 1996 as the base year for the Lands annexing the land in to the City and allowing for the relocation of TIF. The primary goals associated with the original 1996 Urban Renewal youth athletic fields in the amount of $2,260,496.00. Plan and use of TIF monies still remain intact. Minimizing Hazards to Navigation Specific goals include: Ordinance No. 1745 adopted in October of 2014, focused on addressing • Minimize hazards to navigation many of the navigational safety issues, including the establishment of • Develop the Airport in accordance with an airport layout plan airport land use zones, height restrictions, airport runway protection zones, • Increase development opportunities on nearby properties use restrictions, administrative procedures, airport influence notification zones, and enforcement. • Promote compatible land use in and around the Airport • Establish funding mechanisms for airport operations In conjunction with Ordinance No. 1745, the City completed and adopted a 2012 Master Plan for the Airport that included an Airport Layout Plan • Establish a priority schedule for plan implementation and a variety of alternatives for FAA and Non-FAA compliance upgrades. Since the adoption of the 1996 Urban Renewal Plan and TIF, several of the The failed referendum in 2013 precluded the City from accepting FAA above goals have been addressed. funding to bring the Airport into full FAA B2 Standard requirements and subsequently has left the Airport again with an undecided future. Resolution 4978 proposed to use tax increment finance district monies in the amount of $1,900,000 for capital projects at the Airport using tax The current TIF expires July 1, 2020. It is recommended that the City look increment urban renewal bonds. into a new and expanded TIF district within the larger South Kalispell Urban Renewal Area as a mechanism for future funding. These improvements included: purchase of land and improvements currently owned by Red Eagle Aviation; construction of the northwest ramp and taxiways; construction of the northwest utilities; construction of an internal vehicle access road; purchase and installation of automatic vehicle security gate. These projects were referred to as Phase I of the Airport Master Plan.
63 SOUTH KALISPELL Urban Renewal Plan
INCREASING ECONOMIC DEVELOPMENT OPPORTUNITIES New development opportunities have included commercial development such as Murdochs’, Hilton Garden Inn, Rosauers, and Penco. Located There has been an increase in development opportunities since the directly on Highway 93 these improvements can spur additional economic adoption of the 1996 Urban Renewal Plan. The relocation of the ball fields development within the planning area. to KidsSports Complex allowed for the redevelopment of some of the Airport’s commercial properties.
Figure 45: 1990 and 2015 Aerial Imagery
US HWY 93 US HWY 93
AIRPORT RD AIRPORT RD
CEMETERY RD CEMETERY RD 1990 N 2015 N
Land developed between 1990 and 2015
64 April 2016
FINANCING METHODS General Obligation Bonds Funding for capital improvement projects has always been a complex and General Obligation Bonds, Title 7, Chapter 15 Parts 4301 & 4302 MCA. These competitive process. Needs always exceed available funds and priorities bonds can be issued for water and sewer projects as well as urban renewal must be set. It is important that the City leverage its funding using projects and require voter approval. http://www.leg.mt.gov/bills/mca_toc/7_15_43.htm creative grants, funding leverage, and public/private partnerships to help implement the capital improvement projects in the Plan. The projects Private Financing listed in the Plan have been identified as the higher priority projects supported by prior planning documents, growth policies, public input, Private Financing can contribute significant capital infrastructure and best management planning practices. The goal of the project list is to improvements as properties develop. The ‘growth pays for growth’ policy help spur economic development using smart growth planning policies allows Cities to require new development to mitigate impacts to schools, thereby increasing the livability of the community. transportation systems, water, wastewater services, and environmental impacts. Creating a consistent city standard for development within the Tax Increment Financing Urban Planning Area will provide opportunities as new properties develop.
Tax Increment Financing Districts Title 7, Chapter 15, Parts 42 and 43, Public/Private Partnerships Montana Code Annotated (MCA), are a way for government agencies to collect revenue and facilitate needed improvements within a specifically Public/Private Partnerships are another innovative way to leverage capital designated area. The Montana Urban Renewal Law requires the project reinvestment dollars. Developer agreements between public entities and to be in an area of blight and that the urban renewal project is done in private development to upgrade, or further improvements can benefit conjunction with an urban renewal plan. Improving social welfare, public both the economy and the livability of the community. safety, and public health by reinvesting into urban renewal projects are key State of Montana components in creating a successful TIF District. TIFD’s are 15 year financing tools and can be leveraged with revenue bond financing. Montana State Community Transportation Enhancement Grant is another http://www.leg.mt.gov/bills/mca_toc/7_15.htm area of capital funding that is designed to increase multi-modal transpor- Industrial Development Bonds tation methods and community walkability. http://www.citiesthatwork.com/mdt/m1/ftools.shtml Industrial Development Bonds (IDB’s), Title 90, Chapter 5, Part 1 MCA Community Development Block Grants provide an additional financing tool, although, not as commonly applied and TIFD’s. IBD’s can promote industrial development without an undue Community Development Block Grants (CDBG), administered by the burden to the tax payer. State of Montana, can be of assistance for communities that are focusing http://www.leg.mt.gov/bills/mca_toc/90_5.htm improvements to benefit low to moderate incomes, create jobs, prevent blight, redevelopment opportunities, and/or create new jobs. CDBG funds again are best utilized in an urban renewal area and can be combined in conjunction with other funding tools. http://comdev.mt.gov/CDBG/cdbgplanninggrants.mcpx
65 SOUTH KALISPELL Urban Renewal Plan
Federal Grant Administration The US Environmental Protection Agency supports the Brownsfields Assessment Program; Brownfield Economic Development Initiative; Federal grants can sometimes be leveraged with state grants and local Brownfields and Lands Revitalization; building blocks for sustain funds. Federal grants come with a number of grant assurances that communities; smart growth technical assistance programs. can make the application and administration of the grants somewhat http://www.epa.gov/brownfields/ cumbersome but do provide a variety of opportunities for improvements. Brownfield redevelopment, transportation, bike/pedestrian trail facilities US Department of Health and Human Services offers the Community are good applications for federal granting sources. Transportation Grants – Small Communities Program.
The Federal Aviation Administration (FAA) is a funding source for general http://www.hhs.gov/grants/index.html aviation airports. The FAA funds airports throughout the state to assist US Department of Housing and Urban Development assists with integrated with keeping them in compliance with FAA safety regulations and planning and investment planning grants. standards. General aviation airports are also able to receive annual Airport http://www.usa.gov/directory/federal/department-of-housing-and-urban- Improvement Program (AIP) funding to assist with a programmed capital development.shtml improvement list. http://www.faa.gov/about/office_org/headquarters_offices/ato/service_units/ Local Funding acquisition/grants/?CFID=160792860&CFTOKEN=d322f3d7710aa530-53B06F86- B9A5-BBAB-6E4CB7E06DAD7752&jsessionid=97F925109B87911252DD761738 Local Funding is always a mechanism to complete capital improvement F7DBBA.www projects. Local funding can be generated through impact fees, tax increment financing districts, resort and local option taxes, urban transportation US Department of Agriculture offers rural business opportunity grant districts, parking benefit districts, and transportation utility fees. Local program, rural economic development loan and grant and community funding is commonly used more for match requirements of other funding facilities grants. agencies (grant sources) versus fully funding capital projects. http://www.usda.gov/wps/portal/usda/usdahome?navid=GRANTS_LOANS City/County Partnerships US Department of Commerce invest in Strong Cities, Strong Communities Visioning Challenge as well as planning and local technical assistance City/County partnerships via Inter-Local Agreements are sometimes programs. used for capital projects that may cross jurisdictional boundaries or have http://search.commerce.gov/search?query=grants&affiliate=commerce. significant benefit or impact to each agency. Partnerships can include gov&submit.x=0&submit.y=0 water/wastewater utilities, transportation, bike/pedestrian projects, as well as others.
66 April 2016
BROWNFIELDS
The term Brownfield Site applies to real property that may be compromised It is recommended that the City encourage Brownfield applications and unable to develop due to the perceived or real presence of a hazardous within the South Kalispell Urban Renewal District and encourage the use substance, pollutant, or contaminant. If eligible, federal funding may be of TIF funding as an opportunity for Brownfield reinvestment projects. available to conduct an environmental assessment which identifies the The site below in Figure 46, formerly a service station and a parking lot, contaminant and extent of contamination on these sites. was redeveloped into a Starbucks near the Kalispell Center Mall using The City of Kalispell has been proactive in creating a successful Brownfields Brownfield redevelopment funds. program and in the past has been awarded Brownfield funding for community wide assessments and clean up. There are potential properties within South Kalispell that may benefit from this program. The City is After a willing partner in this process and can work with concerned property owners or developers that may be interested in this program. Reinvesting in Brownfield properties is another way to spur economic vitality. Developers are more interested in reinvestment and community members are more apt to spend their time and resources within an area that has been redeveloped with Brownfield dollars. TIFD funding can also be utilized to leverage Brownfield development projects.
Figure 46: Starbucks Brownfields Project
During construction
67 SOUTH KALISPELL Urban Renewal Plan January 2016 AAPPENDIXAPPENDIX AA AAIRPORT ALTERNATIVES DETAILED FINANCIAL TABLES AND PRO-FORMAS AIRPORT ALTERNATIVES DETAILED FINANCIAL TABLES AND PRO-FORMAS
AlternativeAlternative 1 1 Pro Pro Forma Forma 2015 2016 2017 2018 2019 2020 Category Revenues $ 93,200 Δ % of Rev $ 90,800 Δ % of Rev $ 125,520 Δ % of Rev $ 139,960 Δ % of Rev $ 153,340 Δ % of Rev $ 170,860 Δ % of Rev Rents and Fees Comercial Fees $ 13,400 1% 14%$ 14,800 10% 16%$ 16,300 10% 13%$ 18,000 10% 13%$ 19,800 10% 13%$ 21,800 10% 13% Rents and Fees Tie Down Fees A$ lte rn 600 a tive-22% 1 P ro 1%Fo$ rm a 800 33% 1%$ 800 0% 1%$ 800 0% 1%$ 800 0% 1%$ 800 0% 0% Rents and Fees Hangar Leases $ 12,000 4% 13%$ 11,600 -3% 13%$ 11,500 -1% 9%$ 17,600 53% 13%$ 24,700 40% 16%$ 35,260 43% 21% Rents and Fees Hangar Site Leases $ 24,100 38% 26%$ 18,800 -22% 21%$ 21,420 14% 17%$ 26,360 23% 19%$ 29,140 11% 19%$ 32,300 11% 19% Rents and Fees FBO Lease $ 17,900 0% 19%$ 18,300 2% 20%$ 18,600 2% 15%$ 18,900 2% 14%$ 19,200 2% 13%$ 19,600 2% 11% Rents and Fees Ground Leases $ 16,600 37% 18%$ 17,000 2% 19%$ 47,400 179% 38%$ 48,800 3% 35%$ 50,200 3% 33%$ 51,600 3% 30% Rents and Fees Fuel Tax $ 4,800 -15% 5%$ 5,700 19% 6%$ 5,700 0% 5%$ 5,700 0% 4%$ 5,700 0% 4%$ 5,700 0% 3% Grants FAA Airport Improvement Program $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% Grants Contribution from Local Gov. Fund $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% Misc. Earnings Investment Earnings $ 900 39% 1%$ 900 0% 1%$ 900 0% 1%$ 900 0% 1%$ 900 0% 1%$ 900 0% 1% Misc. Earnings Misc. Earnings $ 2,900 0% 3%$ 2,900 0% 3%$ 2,900 0% 2%$ 2,900 0% 2%$ 2,900 0% 2%$ 2,900 0% 2%
Expenses $ 179,195 Δ % of Exp $ 227,800 Δ % of Exp $ 622,294 Δ % of Exp $ 557,342 Δ % of Exp $ 660,586 Δ % of Exp $ 327,000 Δ % of Exp Salaries and Benefits Salaries - Full Time $ - -100% 0%$ 55,000 0% 24%$ 56,000 2% 9%$ 57,000 2% 10%$ 58,000 2% 9%$ 59,000 2% 18% Salaries and Benefits Salaries - Seasonal $ 1,600 50% 1%$ 1,700 6% 1%$ 1,800 6% 0%$ 2,000 11% 0%$ 2,200 10% 0%$ 2,500 14% 1% Salaries and Benefits Health Insurance $ - -100% 0%$ 10,000 0% 4%$ 12,500 25% 2%$ 15,600 25% 3%$ 19,500 25% 3%$ 24,400 25% 7% Salaries and Benefits Retirement $ - -100% 0%$ 4,000 0% 2%$ 4,500 13% 1%$ 5,000 11% 1%$ 5,500 10% 1%$ 6,200 13% 2% Salaries and Benefits Travel, Dues, and Training $ - -100% 0%$ 800 0% 0%$ 800 0% 0%$ 800 0% 0%$ 800 0% 0%$ 900 13% 0% Equipment and Supplies Office Supplies $ - -100% 0%$ 500 0% 0%$ 1,300 160% 0%$ 1,400 8% 0%$ 1,600 14% 0%$ 1,800 13% 1% Equipment and Supplies Electricity $ 1,900 3% 1%$ 2,100 11% 1%$ 2,300 10% 0%$ 2,500 9% 0%$ 2,700 8% 0%$ 3,000 11% 1% Equipment and Supplies Telephone $ - -100% 0%$ 800 0% 0%$ 800 0% 0%$ 800 0% 0%$ 800 0% 0%$ 800 0% 0% Equipment and Supplies Equipment Rental $ 800 -46% 0%$ 1,800 125% 1%$ 1,900 6% 0%$ 2,100 11% 0%$ 2,400 14% 0%$ 2,700 13% 1% Contract Services CS-Labor+Materials $ 36,000 89% 20%$ 8,500 -76% 4%$ 9,000 6% 1%$ 9,800 9% 2%$ 10,800 10% 2%$ 12,200 13% 4% Contract Services CS-Snow $ 5,395 6% 3%$ 5,500 2% 2%$ 5,800 5% 1%$ 6,300 9% 1%$ 7,000 11% 1%$ 7,900 13% 2% Contract Services CS-Legal $ 21,300 526% 12%$ 21,700 2% 10%$ 22,800 5% 4%$ 24,600 8% 4%$ 27,000 10% 4%$ 30,300 12% 9% Contract Services Equipment Mantenance $ 1,500 434% 1%$ 7,900 427% 3%$ 8,300 5% 1%$ 9,000 8% 2%$ 9,900 10% 1%$ 11,100 12% 3% Contract Services Property Insurance $ 8,600 -31% 5%$ 6,700 -22% 3%$ 7,100 6% 1%$ 7,700 8% 1%$ 8,500 10% 1%$ 9,600 13% 3% Government Transfer Maintenance by Public Works $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% Government Transfer Administrative Transfer $ 1,500 -65% 1%$ 3,000 100% 1%$ 2,900 -3% 0%$ 2,300 -21% 0%$ 1,800 -22% 0%$ 1,500 -17% 0% Government Transfer Data Processing Transfer $ 5,500 51% 3%$ 3,800 -31% 2%$ 5,800 53% 1%$ 7,300 26% 1%$ 9,000 23% 1%$ 11,400 27% 3% Depreciation Depreciation $ 95,100 -1% 53%$ 94,000 -1% 41%$ 91,900 -2% 15%$ 91,900 0% 16%$ 90,800 -1% 14%$ 85,700 -6% 26% Construction Construction-In-Progress $ - 0% 0% $ - 0% 0%$ 386,794 0% 62%$ 311,242 -20% 56%$ 402,286 29% 61%$ 56,000 -86% 17%
Net Revenue (Loss) - Accounting $ (85,995) $ (137,000) $ (496,774) $ (417,382) $ (507,246) $ (156,140) Net Revenue (Loss) - Cash Flow $ 9,105 $ (43,000) $ (404,874) $ (325,482) $ (416,446) $ (70,440) Alternative 1 2015 2016 2017 2018 2019 2020 Operating Revenues (+) 93,200 90,800 125,520 139,960 153,340 170,860 Operating Expenses (Except Depreciation) (-) 84,095 133,800 143,600 154,200 167,500 185,300 Capital Expenses (-) 0 0 386,794 311,242 402,286 56,000 Surplus (Shortfall) 9,105 (43,000) (404,874) (325,482) (416,446) (70,440) 68 71 36 April 2016
Alternative 2 Pro Forma 2015 2016 2017 2018 2019 2020 Revenues $ 93,200 Δ % of Rev $ 82,175 Δ % of Rev $ 829,565 Δ % of Rev $ 1,290,595 Δ % of Rev $ 1,465,450 Δ % of Rev $ 1,302,500 Δ % of Rev Comercial Fees $ 13,400 1% 14%$ 14,800 10% 18%$ 16,300 10% 2%$ 17,900 10% 1%$ 19,700 10% 1% $ - -100% 0% Tie Down Fees $ 600 -22% 1%$ 450 -25% 1%$ 330 -27% 0%$ 90 -73% 0% $ - -100% 0% $ - 0% 0% Hangar Leases $ 12,000 4% 13%$ 9,000 -25% 11%$ 6,600 -27% 1%$ 1,800 -73% 0% $ - -100% 0% $ - 0% 0% Hangar Site Leases $ 24,100 38% 26%$ 18,075 -25% 22%$ 13,255 -27% 2%$ 3,615 -73% 0% $ - -100% 0% $ - 0% 0% FBO Lease $ 17,900 0% 19%$ 17,900 0% 22%$ 17,900 0% 2% $ - -100% 0% $ - 0% 0% $ - 0% 0% Ground Leases $ 16,600 37% 18%$ 12,450 -25% 15%$ 9,130 -27% 1%$ 2,490 -73% 0% $ - -100% 0% $ - 0% 0% Fuel Tax $ 4,800 -15% 5%$ 5,700 19% 7%$ 5,700 0% 1%$ 5,700 0% 0% $ - -100% 0% $ - 0% 0% FAA Airport Improvement Program $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% Contribution from Local Gov. Fund $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% Investment Earnings $ 900 39% 1%$ 900 0% 1%$ 900 0% 0%$ 900 0% 0% $ - -100% 0% $ - 0% 0% Misc. Earnings $ 2,900 0% 3%$ 2,900 0% 4%$ 759,450 26088% 92%$ 1,258,100 66% 97%$ 1,445,750 15% 99%$ 1,302,500 -10% 100%
Expenses $ 179,195 Δ % of Exp $ 241,900 Δ % of Exp $ 1,028,550 Δ % of Exp $ 1,533,500 Δ % of Exp $ 1,391,100 Δ % of Exp $ 685,850 Δ % of Exp Salaries - Full Time $ - -100% 0%$ 45,000 0% 19%$ 46,000 2% 4%$ 47,000 2% 3% -100% 0% 0% 0% Salaries - Seasonal $ 1,600 50% 1%$ 1,700 6% 1%$ 1,800 6% 0%$ 2,000 11% 0% $ - -100% 0% $ - 0% 0% Health Insurance $ - -100% 0%$ 8,200 0% 3%$ 10,300 26% 1%$ 12,900 25% 1% $ - -100% 0% $ - 0% 0% Retirement $ - -100% 0%$ 3,300 0% 1%$ 3,700 12% 0%$ 4,100 11% 0% $ - -100% 0% $ - 0% 0% Travel $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% Dues and Training $ - -100% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% Office Supplies $ - -100% 0%$ 500 0% 0%$ 800 60% 0%$ 400 -50% 0% $ - -100% 0% $ - 0% 0% Electricity $ 1,900 3% 1%$ 2,100 11% 1%$ 2,300 10% 0%$ 2,500 9% 0% $ - -100% 0% $ - 0% 0% Telephone $ - -100% 0%$ 800 0% 0%$ 800 0% 0%$ 800 0% 0% $ - -100% 0% $ - 0% 0% Equipment Rental $ 800 -46% 0%$ 1,800 125% 1%$ 1,500 -17% 0%$ 1,000 -33% 0%$ 400 -60% 0% $ - -100% 0% CS-Labor+Materials $ 36,000 89% 20%$ 36,600 2% 15%$ 29,700 -19% 3%$ 18,300 -38% 1%$ 5,800 -68% 0% $ - -100% 0% CS-Snow $ 5,395 6% 3%$ 5,500 2% 2%$ 4,500 -18% 0%$ 2,800 -38% 0% $ - -100% 0% $ - 0% 0% CS-Legal $ 21,300 526% 12%$ 21,700 2% 9%$ 28,700 32% 3%$ 34,500 20% 2%$ 31,100 -10% 2%$ 28,000 -10% 4% Equipment Mantenance $ 1,500 434% 1%$ 7,900 427% 3%$ 6,400 -19% 1%$ 5,500 -14% 0%$ 4,200 -24% 0% $ - -100% 0% Property Insurance $ 8,600 -31% 5%$ 6,700 -22% 3%$ 6,900 3% 1%$ 7,500 9% 0%$ 7,500 0% 1% $ - -100% 0% Maintenance by Public Works $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% Administrative Transfer $ 1,500 -65% 1%$ 2,700 80% 1%$ 19,100 607% 2%$ 21,200 11% 1%$ 7,400 -65% 1%$ 6,600 -11% 1% Data Processing Transfer $ 5,500 51% 3%$ 3,400 -38% 1%$ 16,600 388% 2%$ 25,900 56% 2%$ 1,500 -94% 0%$ 1,400 -7% 0% Depreciation $ 95,100 -1% 53%$ 94,000 -1% 39%$ 92,900 -1% 9%$ 91,900 -1% 6%$ 90,800 -1% 7% $ - -100% 0% Construction-In-Progress $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0%$ 5,000 0% 0% $ - -100% 0% Closure Costs $ - 0% 0% $ - 0% 0%$ 756,550 0% 74%$ 1,255,200 66% 82%$ 1,237,400 -1% 89%$ 649,850 -47% 95%
Net Revenue (Loss) - Accounting (85,995)$ $ (159,725) $ (198,985) $ (242,905) $ 74,350 $ 616,650 Net Revenue (Loss) - Cash Flow $ 9,105 $ (65,725) $ (106,085) $ (151,005) $ 165,150 $ 616,650
Alternative 2 2015 2016 2017 2018 2019 2020 Operating Revenues (+) 93,200 82,175 829,565 1,290,595 1,465,450 1,302,500 Operating Expenses (-) 84,095 147,900 179,100 186,400 57,900 36,000 Capital Expenses (-) 0 0 756,550 1,255,200 1,242,400 649,850 Surplus (Shortfall) 9,105 (65,725) (106,085) (151,005) 165,150 616,650 69 SOUTH KALISPELL Urban Renewal Plan
ALTERNATIVE 3
Alternative 3- FAA Compliant Airport in Current Runway Alignment but instead continue to lease property to private developers as in Alternative The Airport Reference Code (ARC) has two components relating to Another alternative suggested during the public outreach process was one 1. It is expected that private developers will have lower overhead costs and be the Airport design aircraft. The first that would re-engage the FAA in the Airport’s future. This proposal would component, depicted by a letter, is able to more efficiently and flexibly involve using FAA funding for improvement projects to bring the Airport the aircraft approach category into compliance with FAA design standards. The Airport will remain in its manage leases, set lease rates, and keep and relates to aircraft approach existing location, with the same runway configuration and alignment. The hangars full while returning a profit. speed (operational characteristic). The second component, depicted feasibility and success of Alternative 3 depends on FAA willingness to fund Considering that Alternative 3 involves the necessary improvement projects. In the early stages of this project, by a Roman numeral, is the FAA funds, there are political concerns airplane design group and relates FAA staff at the Helena Airport District Office were contacted about the which are not as pronounced in to airplane wingspan or tail possibility of re-involvement with the Kalispell City Airport. The FAA said Alternatives 1 and 2. The City will have height (physical characteristics), that it is still possible for the City to become eligible for and receive FAA to determine if accepting FAA funds (in whichever is the most restrictive. funds. A re-validation analysis and discussion would be required between a more limited role than the previous the City and the FAA but the possibility is not off the table. Alternative 3 will Master Plan project) and operating implement the airfield development plan “Site 1 – Option D” from the 2012 in accordance with FAA grant obligations is something that would be Final Airport Master Plan Update. A graphic of the project components is acceptable to the public. The general public voted against this approach located at the end of this document. Project components included in the in 2013; therefore, the City will need to provide additional documentation 2012 Final Airport Master Plan Update are as follows: that supports this approach.
• Airport facilities constructed to Airport Reference Code (ARC) Fiscal Impacts: Although 90% of this alternative would be funded through B-I design standards (60 feet runway width, 150 feet separation FAA Airport Improvement Program grant funds, the City would still be between runway and taxiway, 25 feet wide taxiways). responsible for the “matching” 10%. Some of these funds could come • Runway reconstructed to its current length of 3,700 feet but could be from the TIF (for development projects) while maintenance projects are extended to a length of 4,300 feet. ineligible for TIF funding. Additional expenses would likely be incurred for • No shift or offset of runway centerline. a coordination/planning effort (updated Airport Layout Plan) to determine a course of action with FAA. • No rotation, orientation remains 13/31. • Requires the relocation of five hangars and three shops on Airport If the Airport becomes eligible for FAA funding, it will receive $150,000 per property. year in FAA Entitlement Funds to support capital improvement projects. The FAA will fund 90% of major future capital projects, such as a runway • Requires the full or partial acquisition of approximately 16 land reconstruction or overlay, with these entitlement funds, and will provide parcels (no residential). additional “discretionary” funds when deemed appropriate and necessary. Alternative 3 assumes that the City and FAA investment will make the Discretionary funds are only provided when available, and when entitlement Airport an attractive location for private developers, which will increase funds are fully used. Capital expenses are lower than Alternatives 1 and 2 airport ground lease revenue. The City will not develop hangars because of because the FAA would fund the majority of capital projects 13. A five year the cost, slow payback period, and low rate of return (and potential loss), pro-forma analysis, capital costs, and detailed revenues and expenses in this Appendix.
70 Fiscal Im p acts: A lth o u g h 9 0 % o f th is a lte rn a tiv e w o u ld b e fu n d e d th ro u g h F A A A irp o r t Im p ro v e m e n t P ro g ra m g ra n t fu n d s , th e C ity w o u ld s till b e re s p o n s ib le fo r th e “m a tc h in g ” 1 0 % . S o m e o f th e s e fu n d s could com e from the TIF (for developm ent projects) while maintenance projects are ineligible for TIF fu n d in g . A d d itio n a l e x p e n s e s w o u ld lik e ly b e in c u rre d fo r a c o o rd in a tio n / p la n n in g e ff o r t (u p d a te d A irp o r t L a y o u t P la n ) to d e te rm in e a c o u rs e o f a c tio n w ith F A A .
If th e A irp o r t b e c o m e s e lig ib le fo r F A A fu n d in g , it w ill re c e iv e $ 1 5 0 ,0 0 0 p e r y e a r in F A A E n title m e n t F u n d s to s u p p o r t c a p ita l im p ro v e m e n t p ro je c ts . T h e F A A w ill fu n d 9 0 % o f m a jo r fu tu re c a p ita l p ro je c ts , s u c h a s a ru n w a y re c o n s tru c tio n o r o v e rla y , w ith th e s e e n title m e n t fu n d s , a n d w ill p ro v id e a d d itio n a l “d is c re tio n a r y ” fu n d s w h e n d e e m e d a p p ro p ria te a n d n e c e s s a r y . D is c re tio n a r y fu n d s a re o n ly p ro v id e d w h e n a v a ila b le , a n d w h e n e n title m e n t fu n d s a re fu lly u s e d . C a p ita l e x p e n s e s a re lo w e r th a n A lte rn a tiv e s 1 a n d 2 b e c a u s e th e F A A w o u ld fu n d th e m a jo rity13 . o fA c afi p itav e l py ro e a je cr ts p ro- fo rm a a n a ly s is , c a p ita l c o s ts , a n d d e ta ile d re v e n u e s a n d e x p e n s e s a re in cApril lu d e d in2016 A p p e n d ix A .
A D C F A fo r A lte rn a tiv e 3 p ro v id e s in s ig h t o n N P V o f fi v e y e a r c o s ts a n d re v e n u e s , a n d e x p e c te d long- te rm fi n a n c ia l g a in . T h is D C F A u s e s th e s a m e 7 % d is c o u n t ra te a s A lte rn a tiv e s 1 a n d 2 a n dthesam2% g ro w th ra te o f p o s itiv e c a s h fl o w s a s A lte rn a tiv e 1 . T h e D C F A fo r A lte rn a tiv e 3 is p re s e n te d in Apendix A. A DCFA for Alternative 3 provides insight on NPV of five year costs and [FigureFigure 26:A3: AlternativeAlternative 3 Capital3 Capital Costs Costs and andResulting Resulting Revenues] Revenues revenues, and expected long-term financial gain. This DCFA uses the same Alternative 3 7% discount rate as Alternatives 1 and 2 and the same 2% growth rate of Revenues 2016 2017 2018 2019 2020 Total T-Hangar Lease Revenue 0 0 6,000 13,200 23,760 42,960 positive[Figure 27:cash Alternativeflows as Alternative 3 Revenue 1. and Expense Sum m ary] Hangar Site Leases 1,200 4,120 8,760 11,840 15,000 40,920 Ground Leases 0 30,000 31,000 32,000 33,000 126,000 TIF Funds for Capital Projects 8,000 102,500 150,500 70,000 50,000 381,000 Figure[FigureAlternative 27:A1: Alternative 3 3 3Revenue Revenue and and Expense Expense Sum Summary m ary] 2016 2017 2018 2019 2020 CapitalRevenues Expenses 2016 2017 2018 2019 2020 Total TIF AlternativeOperating 3 Revenues (+) 2016 2017 201898,800 2019 228,020 2020 290,460Update ALP 223,340 220,860 8,000 0 0 0 0 8,000 Yes OperatingOperating Revenues Expenses (+) (Except Depreciation)98,800 228,020 (-) 142,400 290,460 223,340 166,700 220,860 229,100Land Purchase, 173,300 Obstruction 189,500Removal 0 87,500 87,500 0 0 175,000 Yes Operating Expenses (Except Depreciation) (-) 142,400 166,700 229,100 173,300 189,500 Capital Expenses (-) 102,294 118,624Environmental 110,119 Permitting 106,000 0 15,000 15,000 0 0 30,000 Yes Capital Expenses (-) 102,294 118,624 110,119 106,000 Design 0 0 48,000 0 0 48,000 Yes SurplusSurplus (Shortfall) (Shortfall) (43,600) (40,974)(43,600) (57,264) (60,079) (40,974) (74,640) (57,264)North Fuel (60,079)Island Overlay (74,640) 0 0 1,428 0 0 1,428 No Main Hangar Taxiway Overlay 0 0 4,145 0 0 4,145 No Airport Road Overlay 0 0 0 0 56,000 56,000 No AsA s wwith ith A lteAlternative rn a tiv e 1 , th e1, lothe n g -te rmlong-term c a s h fl o w scash a re flows h ig h ly v aare ria b lehighly d e p e n d invariable g o n w h a t d is c o u n t ra te is usedA s andw ith future A ltevaluation rn a tiv is e contingent1 , th eon privatelo n g -teinvestment rm c ain s h hangars.fl o wUsing s athe re 7% h discount ig h ly ratevRoad a ria and b le Parking d eLot p eCrack n d in Seal g o n w0 h 14,794a t d is c o 0u n t ra 0 te is 0 14,794 No dependingfo r p u rp o s e s ono f whatc o m p a risdiscount o n , A lte rn rate a tiv e is3 usedis v aand lu e d futurea t $ 4 0 valuation 0 ,0 0 0 inFigure 2 0is 1 5 contingent28 ).d o llaT h rse (s e e Ryan Lane Overlay 0 0 0 40,119 0 40,119 No onNused P V privateo f andc o n sinvestment trufuture c tio n in vvaluation e s tm in e nhangars. ts is is$ 4 0 0contingentUsing ,0 0 0 in the2 0 17% 5 ond discount o lla rsprivate ; a n d rate A lteinvestment rn for a tiv epurposes 3 p roin d u c e shangars. a nWest e v Taxiway e n Using Overlay the 7% discount0 rate 0 25,552 0 0 25,552 No refo tu r rn po un rpin o v e s stm e s e n t.o f c o m p a ris o n , A lte rn a tiv e 3 is v a lu e d a t $ 4 0 0 ,0 0 0Runway inFigure Rehabilitation2 0 1 528 ).d o llaT h rs e (s e e 0 0 0 70,000 0 70,000 Yes of comparison, Alternative 3 is valued at $400,000 in 2015 dollars (see East Taxiway Reconstruction 0 0 0 0 50,000 50,000 Yes [Figure 28: Alternative 3 Com parison to Baseline] FigureN P V o A1 f ).c oThe n s tru NPV c tio nof constructionin v e s tm e n ts investmentsis $ 4 0 0 ,0 0 0is $400,000in 2 0 1 5 ind 2015 o lla rs ; aC n a p d ita l Ac olte s ts rnth a a tiv t ea re 3e lig ibp le rofo d r u cF eA As fua n nd in g ea v re e n lis te d a t 1 0 % o f th e ir c a p ita l c o s ts . It is a s s u m e d th a t th e dollars;re tu rn ando n NetAlternativein Present v e stm Value e n t.3 (2015 produces $, 7% Rate) an evenDCFA return on investment. F A A w ill fu n d e lig ib le im p ro v e m e n ts a t 9 0 % . Alternative 5 Year Cash Flows Ongoing Income Valuation [FigureBaseline 28: Alternative($890,729) 3 Com ($471,240) parison to ($1,361,969) Baseline] Figure3 A2: Alternative($200,000) 3 Comparison$600,000 to Baseline $400,000 Difference $690,729 Net Present Value $1,071,240 (2015 $, $1,761,969 7% Rate) DCFA Aviation Impacts: This alternative would provide the best outcome from Alternative 5 Year Cash Flows Ongoing Income Valuation an aviation perspective. Anything that moves the Airport closer to27 full A lte rn a tiv e 3 re p a irs th e a ir fi e ld a n d m a in ta in s it s im ila r to A lte rn a tiv e 1 , th e m a jo r dcompliance iff e re n c e b e twwith en FAA standards is beneficial. th e s eBaseline tw o a lte rn a tiv e s is th a($890,729) t th e C ity m u s t b e a r ($471,240)m o re o f th e c a p ita ($1,361,969) l c o s ts in A lte rn a tiv e 1 d u e to th e a b s e n c e 3o f F A A fu n d in g a n d($200,000) b e c a u s e p ro je c ts a re in$600,000 e lig ib le fo r T IF fu n d $400,000 in g . F o r th is re a s o n , th e s c a le o f im p ro v e m e n t p ro je c ts is le s s in A lte rn a tiv e 1 th a n in A lte rn a tiv e 3 . A c o m p a ris o n is p re sCommunity e n te d in Impacts: Alternative 3 continues to provide the community AppendixDifference A. $690,729 $1,071,240 $1,761,969 with an aviation facility, and takes advantage of FAA funding to reduce the
A v ia tio n Im p a c ts : T h is a lte rn a tiv e w o u ld p ro v id e th e b e s t o u tc o m e fro m a n a v ia tio n p e rs p e c tivlocal e . share of improvement projects. Revenue-producing improvements, AlternativeA n y th in g th a t 3m repairs o v e s th e theA irp airfield o r t c lo s e r andto fu llmaintains c o m p lia n cit e similarw ith F A Ato s taAlternative n d a rd s is b e1, n e fi c iaincluding l. hangars, are not eligible for FAA funding; however, these A lte rn a tiv e 3 re p a irs th e a ir fi e ld a n d m a in ta in s it s im ila r to A lte rn a tiv e 1 , th e m a jo r d iff e re n c e b e tw en theCommunity major Impacts: difference A lte rn a tiv e between3 c o n tin uthese e s to twop ro v idalternatives e th e c o m m uis n ity that w ith the a n Citya v ia tiomust n fa c ilityprojects , a n d can be seen as an investment to make the Airport more financially bearthta k e s s e morea d v atw n ta o gof e theao flte Fcapital rnA A a tivfu n e d sincosts g isto inreth dAlternative ua c t e thth e e lo cC a l1 ity dues h a rem too u f sthe tim p babsence ro e v ea m r e n tm p oof ro re jeFAA c ts . o fR e v eth nsustainable u e e - c a p ita l in thec o s tsfuture, in andA lte most rn a tiv of e the 1 expense d u e ofto building th e these facilities aproducing b s e n c eimprovem o f F ents, A A includingfu n d inhangars, g a n dare notb e celigible a u s e forp roFAA je cfunding; ts a rehow ever,in e ligthese ib leprojects fowill r Tbe IF bornefu n d by in g the . Fprivate o r th issector. re a Short-term s o n , th e communitys c a le o f impacts include fundingc a n b e s eand e n abecause s a n in v eprojects s tm e n t to arem a ineligible k e th e A irp for o r t TIFm o refunding. fi n a n c ia llyFor thiss u s ta inreason, a b le in th e fu tu re , a n d m ost theimo f pth scale ro e ve x m pof e en simprovement n e t o f p rob u ildje in c gts th projects eis s e fale c silitie s is s lessinw ill inAb lteAlternative e rnb o rna tiv e eb y 11th than e thp riv ain a n te Alternative sin e c to r.A lteS h o rn r t-te a tivrmconstruction ec o m3 m . u n ityA cjobs o m p and a ris omaterial n is salesp re s e that n te d support in construction; and longer 3.Appendixim pA a ccomparison ts in clu d eA. co n struis presented c tio n jo b s an in d Figurem a te rial A2.sa le s th a t su p p o rt co n stru c tio n ; an d lo n g e r termterm impacts include less reliance by the Airport on the City’s general fund, im p a c ts in c lu d e le s s re lia n c e b y th e A irp o r t o n th e C ity ’s g e n e ra l fu n d , w h ic h fre e s u p whichm o n e y freesfo r o thup e r money for other City programs. AC ity v iap tio ro g n ra m s.Im p a c ts : T h is a lte rn a tiv e w o u ld p ro v id e th e b e s t o u tc o m e fro m a n a v ia tio n p e rs p e c tiv e . A n y th in g th a t m o v e s th e A irp o r t c lo s e r to fu ll c o m p lia n c e w ith F A A s ta n d a rd s is b e n e fi c ia l.
Community Impacts: A lte rn a tiv e 3 c o n tin u e s to p ro v id e th e c o m m u n ity w ith a n a v ia tio n fa c ility , a n d ta k e s a d v a n ta g e o f F A A fu n d in g to re d u c e th e lo c a l s h a re o f im p ro v e m e n t p ro je c ts . R e v e n u e - producing improvem ents, including hangars, are not eligible for FAA funding; how ever, these projects 71 c a n b e s e e n a s a n in v e s tm e n t to m a k e th e A irp o r t m28 o re fi n a n c ia lly s u s ta in a b le in th e fu tu re , a n d m ost o f th e e x p e n s e o f b u ild in g th e s e fa c ilitie s w ill b e b o rn e b y th e p riv a te s e c to r. S h o r t-te rm c o m m u n ity im p a c ts in clu d e co n stru c tio n jo b s an d m a te rial sa le s th a t su p p o rt co n stru c tio n ; an d lo n g e r term im p a c ts in c lu d e le s s re lia n c e b y th e A irp o r t o n th e C ity ’s g e n e ra l fu n d , w h ic h fre e s u p m o n e y fo r o th e r C ity p ro g ra m s.
28 SOUTH KALISPELL Urban Renewal Plan
Findings for Alternative 3 - Request FAA funds for Airport Improvements in Current Runway Alignment – If the City has the political willingness to pursue Alternative 3, it would be the recommended course of action. The City could choose to proceed with this alternative, and if an agreement cannot be reached with the FAA, the City can revert to Alternative 1.
The downside of this approach would be the potential for more time to pass without a clear direction for the Airport, and completion of high [F ig u repriority 3 0 : maintenanceA lte r n a tiv e projects.S u m m a r y ]
Alternative 3 – Action Plan
ShouldA lte the rn a tiveCity decide5 toYear move Cash forwardO ngoingwith AlternativeD 3, C FAthe following Benefits D ra w b a ck s stepsC a pshould ital C be o sts taken: F lo w s In c o m e Valuation P ro v id e s s a fe , e ffi c ie n t a irp ort D o e s n o t m e e t F A A s ta n d a rd s 1. A1City lte rn arepresentatives tive 1 organize and attend a meeting with FAA G re a te r fl e x ib ility if c lo s u re s o u g h t C ity m u s t s e lf-fu n d fu tu re c a p ita l representatives to discuss($1,000,000) potential for ($300,000) project. (1,300,000) in long-term improvem ents and maintenance $900,000 C ity in v e s tm e n t m a y in s p ire p riv a te N o t e lig ib le fo r T IF fu n d s 2. With FAA agreement, prepare an updated ALP and CIP. investm ent A b ility to re u s e s ite fo r p o te n tia l Considerable up-front financial 3. Coordinate with FAA on timing on process moving forward. greater econom ic benefit investm ent [F ig u re 3 0 : A lte r n a tiv e S u m m a r y ] P o te n tia l fo r C ity to p ro fi t in s te a dL o o s s f o f a v ia tio n fa c ility a n d A lte rn a tive 2 o p e ra tin g fa c ility a t a lo s s association emergency $400,000 $0 $400,000 $2,900,000 O th e r fa c ilitie s in a re a to ta k e m anagem ent / disaster relief d isplaced users benefits A lte rn a tive 5 Year Cash O ngoing D C FA A b le to Benefitsu s e T IF fu n d s M any unknowD ra w b ns a ckabout s future C a p ital C o sts F lo w s In c o m e Valuation revenue potential P ro v id e s s a fe , e ffi c ie n t a irp ort DL o o s e s s on f o t flm e x ibe e ility t F A Aif s c ta lo n ds u a re rd s s o u g h t in A lte rn a tive 1 GL o re w a e te r r c afl p itae x ib l ilityc o s ts if d uc elo s uto re F As oA u g h t Clong-term ity m u s t s e lf-fu n d fu tu re c a p ita l ($1,000,000) ($300,000) (1,300,000) infu n dlong-term s improvemM ore substantial ents and capital maintenance $900,000 A lte rn a tive 3 CO ity ngoing in v e sFAA tm e nentitlem t m a y entin sfunding p ire p riv a te Nimprovem o t e lig ib ents le foneeded r T IF tofu nmeet d s FAA ($200,000) $400,000 $400,000 $400,000 investmA b le to ent u s e T IF fu n d s fo r s o m e standards Ap rob ility je c ts to re u s e s ite fo r p o te n tia l ConsiderableContrary to voterup-front decision financial greaterC ity a n deconom F A A ic inbenefit v e s tm e n t m a y investmA irp o r t entw ill c o n tin u e to lo s e m o n e y Pin o s te p ire n tia l p rivfo a r te C ityin v e sto tm ep n ro t fi t in s te a dL o o s s f o f a v ia tio n fa c ility a n d A lte rn a tive 2 o p e ra tin g fa c ility a t a lo s s association emergency $400,000 $0 $400,000 $2,900,000 O th e r fa c ilitie s in a re a to ta k e m anagem ent / disaster relief N o te : C a p ita l c o s ts a re fa c to re d in to 5 Y e a r C a s h F lo w s , a lo n gd isplacedw ith ousers p e ra tin g re v e n u e s a n d obenefits p e ra tin g e x p e n s e s . A b le to u s e T IF fu n d s M any unknow ns about future D C F A V a lu a tio n = 5 Y e a r C a s h F lo w s + O n g o in g In c o m e revenue potential P ro v id e s s a fe , e ffi c ie n t a irp ort L o s s o f fl e x ib ility if c lo s u re s o u g h t in L o w e r c a p ita l c o s ts d u e to F A A long-term 72 fu n d s M ore substantial capital A lte rn a tive 3 O ngoing FAA entitlem ent funding improvem ents needed to meet FAA ($200,000) $400,000 $400,000 $400,000 A b le to u s e T IF fu n d s fo r s o m e standards p ro je c ts Contrary to voter decision C ity a n d F A A in v e s tm e n t m a y A irp o r t w ill c o n tin u e to lo s e m o n e y in s p ire p riv a te in v e s tm e n t 34
N o te : C a p ita l c o s ts a re fa c to re d in to 5 Y e a r C a s h F lo w s , a lo n g w ith o p e ra tin g re v e n u e s a n d o p e ra tin g e x p e n s e s .
D C F A V a lu a tio n = 5 Y e a r C a s h F lo w s + O n g o in g In c o m e
34 January April 20162016
AlternativeAlternative 33 ProPro FormaForma
2015 2016 2017 2018 2019 2020 Category Revenues $ 93,200 Δ % of Rev $ 98,800 Δ % of Rev $ 228,020 Δ % of Rev $ 290,460 Δ % of Rev $ 223,340 Δ % of Rev $ 220,860 Δ % of Rev Rents and Fees Comercial Fees $ 13,400 1% 14%$ 14,800 10% 15%$ 16,300 10% 7%$ 18,000 10% 6%$ 19,800 10% 9%$ 21,800 10% 10% Rents and Fees Tie Down Fees $ 600 -22% 1%$ 800 33% 1%$ 800 0% 0%$ 800 0% 0%$ 800 0% 0%$ 800 0% 0% Rents and Fees Hangar Leases $ 12,000 4% 13%$ 11,600 -3% 12%$ 11,500 -1% 5%$ 17,600 53% 6%$ 24,700 40% 11%$ 35,260 43% 16% Rents and Fees Hangar Site Leases $ 24,100 38% 26%$ 18,800 -22% 19%$ 21,420 14% 9%$ 26,360 23% 9%$ 29,140 11% 13%$ 32,300 11% 15% Rents and Fees FBO Lease $ 17,900 0% 19%$ 18,300 2% 19%$ 18,600 2% 8%$ 18,900 2% 7%$ 19,200 2% 9%$ 19,600 2% 9% Rents and Fees Ground Leases $ 16,600 37% 18%$ 17,000 2% 17%$ 47,400 179% 21%$ 48,800 3% 17%$ 50,200 3% 22%$ 51,600 3% 23% Rents and Fees Fuel Tax $ 4,800 -15% 5%$ 5,700 19% 6%$ 5,700 0% 2%$ 5,700 0% 2%$ 5,700 0% 3%$ 5,700 0% 3% Grants Contribution from Local/Federal Gov. Fund $ - 0% 0% 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% Misc. Earnings Investment Earnings A$lte rn 900 a tive 39%3 P ro 1%Fo$ rm a 900 0% 1%$ 900 0% 0%$ 900 0% 0%$ 900 0% 0%$ 900 0% 0% Misc. Earnings Misc. Earnings $ 2,900 0% 3%$ 10,900 276% 11%$ 105,400 867% 46%$ 153,400 46% 53%$ 72,900 -52% 33%$ 52,900 -27% 24%
Expenses $ 179,195 Δ % of Exp $ 236,400 Δ % of Exp $ 360,894 Δ % of Exp $ 439,624 Δ % of Exp $ 374,219 Δ % of Exp $ 381,200 Δ % of Exp Salaries and Benefits Salaries - Full Time $ - -100% 0%$ 55,000 0% 23%$ 56,000 2% 16%$ 57,000 2% 13%$ 58,000 2% 15%$ 59,000 2% 15% Salaries and Benefits Salaries - Seasonal $ 1,600 50% 1%$ 1,700 6% 1%$ 1,800 6% 0%$ 2,000 11% 0%$ 2,200 10% 1%$ 2,500 14% 1% Salaries and Benefits Health Insurance $ - -100% 0%$ 10,000 0% 4%$ 12,500 25% 3%$ 15,600 25% 4%$ 19,500 25% 5%$ 24,400 25% 6% Salaries and Benefits Retirement $ - -100% 0%$ 4,000 0% 2%$ 4,500 13% 1%$ 5,000 11% 1%$ 5,500 10% 1%$ 6,200 13% 2% Salaries and Benefits Travel, Dues, and Training $ - -100% 0%$ 800 0% 0%$ 800 0% 0%$ 800 0% 0%$ 800 0% 0%$ 900 13% 0% Equipment and Supplies Office Supplies $ - -100% 0%$ 600 0% 0%$ 2,300 283% 1%$ 3,000 30% 1%$ 2,300 -23% 1%$ 2,300 0% 1% Equipment and Supplies Electricity $ 1,900 3% 1%$ 2,100 11% 1%$ 2,300 10% 1%$ 2,500 9% 1%$ 2,700 8% 1%$ 3,000 11% 1% Equipment and Supplies Telephone $ - -100% 0%$ 800 0% 0%$ 800 0% 0%$ 800 0% 0%$ 800 0% 0%$ 800 0% 0% Equipment and Supplies Equipment Rental $ 800 -46% 0%$ 1,800 125% 1%$ 1,900 6% 1%$ 2,100 11% 0%$ 2,400 14% 1%$ 2,700 13% 1% Contract Services CS-Labor+Materials $ 36,000 89% 20%$ 16,500 -54% 7%$ 24,000 45% 7%$ 72,800 203% 17%$ 10,800 -85% 3%$ 12,200 13% 3% Contract Services CS-Snow $ 5,395 6% 3%$ 5,500 2% 2%$ 5,800 5% 2%$ 6,300 9% 1%$ 7,000 11% 2%$ 7,900 13% 2% Contract Services CS-Legal $ 21,300 526% 12%$ 21,700 2% 9%$ 22,800 5% 6%$ 24,600 8% 6%$ 27,000 10% 7%$ 30,300 12% 8% Contract Services Equipment Mantenance $ 1,500 434% 1%$ 7,900 427% 3%$ 8,300 5% 2%$ 9,000 8% 2%$ 9,900 10% 3%$ 11,100 12% 3% Contract Services Property Insurance $ 8,600 -31% 5%$ 6,700 -22% 3%$ 7,100 6% 2%$ 7,700 8% 2%$ 8,500 10% 2%$ 9,600 13% 3% Government Transfer Maintenance by Public Works $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% $ - 0% 0% Government Transfer Administrative Transfer $ 1,500 -65% 1%$ 3,200 113% 1%$ 5,300 66% 1%$ 4,800 -9% 1%$ 2,700 -44% 1%$ 1,900 -30% 0% Government Transfer Data Processing Transfer $ 5,500 51% 3%$ 4,100 -25% 2%$ 10,500 156% 3%$ 15,100 44% 3%$ 13,200 -13% 4%$ 14,700 11% 4% Depreciation Depreciation $ 95,100 -1% 53%$ 94,000 -1% 40%$ 91,900 -2% 25%$ 91,900 0% 21%$ 90,800 -1% 24%$ 85,700 -6% 22% Construction Construction-In-Progress $ - 0% 0% $ - 0% 0%$ 14,794 0% 4%$ 31,124 110% 7%$ 110,119 254% 29%$ 106,000 -4% 28% One-Time Expenses Acquisition Costs $ - 0% 0% $ - 0% 0%$ 87,500 0% 24%$ 87,500 0% 20% $ - -100% 0% $ - 0% 0%
Net Revenue (Loss) - Accounting $ (85,995) $ (137,600) $ (132,874) $ (149,164) $ (150,879) $ (160,340) Net Revenue (Loss) - Cash Flow $ 9,105 $ (43,600) $ (40,974) $ (57,264) $ (60,079) $ (74,640)
Alternative 3 2015 2016 2017 2018 2019 2020 Operating Revenues (+) 93,200 98,800 228,020 290,460 223,340 220,860 Operating Expenses (Except Depreciation) (-) 84,095 142,400 166,700 229,100 173,300 189,500 Capital Expenses (-) - - 102,294 118,624 110,119 106,000 Surplus (Shortfall) 9,105 (43,600) (40,974) (57,264) (60,079) (74,640)
73
39 SOUTH KALISPELL Urban Renewal Plan
Kalispell City Airport ‐ Existing Lease Buyout Summary City payment Estimated Lease Number Lease Name Lease Term Lease Rate Lease Start Payout Assumptions due on City Payout closure $8,064 (office) 20 years ‐ and $9,600 $650,000 Termination by city requires appraisal of fair plus two 5 (hangars) per (estimate, not 1 Red Eagle Yes Oct‐05 value of the remaining term of the lease and year year, and $3,600 included in payment of that amount to the lessee extensions fee for fuel total below) system Lease is subject to termination by lessee if Hangars 1 & 9 ‐ 2 No 1 Year $500 per month Jul‐06 $0 airport is abandoned. No closure payment Peter Gross clause in lease Contained in the total Lease clause requires payment of "fair Condo Hangar $0.16 per square 3 Yes 20 years Feb‐07 Master Plan market value at the then existing usage of the A‐3‐1 Sands foot per year number of improvements constructed on the site" $1.9 million Contained in Condo Hangar the total Lease clause requires payment of "fair $0.16 per square 4 A‐3‐2 Mount Yes 20 years Apr‐07 Master Plan market value at the then existing usage of the foot per year Cleveland number of improvements constructed on the site" $1.9 million Contained in the total Lease clause requires payment of "fair Condo Hangar $0.16 per square 5 Yes 20 years Feb‐07 Master Plan market value at the then existing usage of the A‐3‐3 Pierce foot per year number of improvements constructed on the site" $1.9 million Contained in the total Lease clause requires payment of "fair $0.16 per square 6 Site A‐4 T&L Yes 20 years Aug‐07 Master Plan market value at the then existing usage of the foot per year number of improvements constructed on the site" $1.9 million Contained in the total Lease clause requires payment of "fair Site A‐5 Mount $0.16 per square 7 Yes 20 years Nov‐08 Master Plan market value at the then existing usage of the Cleveland foot per year number of improvements constructed on the site" $1.9 million $130/ sq. ft. assumed for original construction cost, times approximate 88'X75' bldg. = $858,000. Residual value assumes $0.16 per square 8 Site A‐5 Gross Yes 20 years Oct‐06 $343,200 straight‐line depreciation and 15 year useful foot per year life (858,000/15=57,000 per year). Payout value equal to remaining six years (57,200/year x6 = 343,200)
$130/ sq. ft. assumed for original construction cost, times approximate 60'x60' bldg. = $470,000. Residual value assumes Site A‐7 Goose $0.16 per square 9 Yes 20 years Oct‐04 $125,333 straight‐line depreciation and 15 year useful Bay foot per year life (470,000/15=31,333 per year). Payout value equal to remaining four years 74 (31,333/year x4 = 125,333)
$130/ sq. ft. assumed for original construction cost, times approximate 60'x60' bldg. = $470,000. Residual value assumes $0.16 per square 10 Site A‐8 HC‐60 Yes 20 years Jul‐06 $188,000 straight‐line depreciation and 15 year useful foot per year life (470,000/15=31,333 per year). Payout value equal to remaining six years (31,333/year x6 = 188,000)
Site A‐8 North 11 Country Part of Above Lease Holdings
$0.17 per square City payment clause only refers to Site A‐11 12 No 20 years foot per year ‐ Feb‐08 $0 unamortized portion of the cost of a hangar. Padilla empty site No hangar on this site.
$130/ sq. ft. assumed for original construction cost, times approximate 60'x80' bldg. = $624,000. Residual value assumes Site A‐12 $0.16 per square 13 Yes 10 years Oct‐06 $249,600 straight‐line depreciation and 15 year useful Strand foot per year life ($624,000/15=$41,600 per year). Payout value equal to remaining six years ($41,600/year x6 = $249,600) Contained in the total Lease clause requires payment of "fair $0.16 per square 14 Site A‐1,2,3 Yes 20 years N/A Master Plan market value at the then existing usage of the foot per year number of improvements constructed on the site" $1.9 million
Lease is subject to termination by lessee if T‐Hangar ‐ 15 No 1 year $500 per month N/A $0 airport is abandoned. No closure payment Billmayber clause in lease
$0.16 per square 16 Hilton No 99 years N/A $0 None foot per year Total City Payments $906,133 Kalispell City Airport ‐ Existing Lease Buyout Summary City payment Estimated Lease Number Lease Name Lease Term Lease Rate Lease Start Payout Assumptions due on City Payout closure $8,064 (office) 20 years ‐ and $9,600 $650,000 Termination by city requires appraisal of fair plus two 5 (hangars) per (estimate, not 1 Red Eagle Yes Oct‐05 value of the remaining term of the lease and year year, and $3,600 included in payment of that amount to the lessee extensions fee for fuel total below) system Lease is subject to termination by lessee if Hangars 1 & 9 ‐ 2 No 1 Year $500 per month Jul‐06 $0 airport is abandoned. No closure payment Peter Gross clause in lease Contained in the total Lease clause requires payment of "fair Condo Hangar $0.16 per square 3 Yes 20 years Feb‐07 Master Plan market value at the then existing usage of the A‐3‐1 Sands foot per year number of improvements constructed on the site" $1.9 million Contained in Condo Hangar the total Lease clause requires payment of "fair $0.16 per square 4 A‐3‐2 Mount Yes 20 years Apr‐07 Master Plan market value at the then existing usage of the foot per year Cleveland number of improvements constructed on the site" $1.9 million Contained in the total Lease clause requires payment of "fair Condo Hangar $0.16 per square 5 Yes 20 years Feb‐07 Master Plan market value at the then existing usage of the A‐3‐3 Pierce foot per year number of improvements constructed on the site" $1.9 million Contained in the total Lease clause requires payment of "fair $0.16 per square 6 Site A‐4 T&L Yes 20 years Aug‐07 Master Plan market value at the then existing usage of the foot per year number of improvements constructed on the site" $1.9 million Contained in the total Lease clause requires payment of "fair Site A‐5 Mount $0.16 per square 7 Yes 20 years Nov‐08 Master Plan market value at the then existing usage of the Cleveland foot per year number of improvements constructed on the site" $1.9 million April 2016 $130/ sq. ft. assumed for original construction cost, times approximate 88'X75' bldg. = $858,000. Residual value assumes Kalispell City Airport$0.16 per ‐ Existingsquare Lease Buyout Summary 8 Site A‐5 Gross Yes 20 years Oct‐06 $343,200 straight‐line depreciation and 15 year useful City foot per year life (858,000/15=57,000 per year). Payout payment Estimated Lease Number Lease Name Lease Term Lease Rate Lease Start value equalPayout to Assumptions remaining six years due on City Payout (57,200/year x6 = 343,200) closure $8,064 (office) $130/ sq. ft. assumed for original 20 years ‐ and $9,600 $650,000 constructionTermination cost,by city times requires approximate appraisal 60'x60' of fair plus two 5 (hangars) per (estimate, not 1 Red Eagle Yes Oct‐05 valuebldg. of = the$470,000. remaining Residual term valueof the assumes lease and Site A‐7 Goose year $0.16year, and per $3,600square included in 9 Yes 20 years Oct‐04 $125,333 straightpayment‐line ofdepreciation that amount and to 15 the year lessee useful Bay extensions footfee perfor fuelyear total below) life (470,000/15=31,333 per year). Payout system value equal to remaining four years Lease is subject to termination by lessee if Hangars 1 & 9 ‐ (31,333/year x4 = 125,333) 2 No 1 Year $500 per month Jul‐06 $0 airport is abandoned. No closure payment Peter Gross $130/ sq.clause ft. assumed in lease for original Contained in construction cost, times approximate 60'x60' the total bldg.Lease = $470,000.clause requires Residual payment value assumesof "fair Condo Hangar $0.16 per square 103 Site A‐8 HC‐60Yes 20 years FebJul‐‐0607 Master $188,000 Plan marketstraight value‐line depreciationat the then existing and 15 usageyear useful of the A‐3‐1 Sands foot per year number of lifeimprovements (470,000/15=31,333 constructed per year).on the Payout site" $1.9 million value equal to remaining six years Contained in (31,333/year x6 = 188,000) Condo Hangar the total Lease clause requires payment of "fair $0.16 per square 4 SiteA‐3 ‐A2‐ 8Mount North Yes 20 years Apr‐07 Master Plan market value at the then existing usage of the foot per year 11 ClevelandCountry Part of Abovenumber Lease of improvements constructed on the site" Holdings $1.9 million Contained in $0.17 per square the total LeaseCity clausepayment requires clause payment only refers of "fairto CondoSite AHangar‐11 $0.16 per square 125 YesNo 20 years foot per year ‐ Feb‐0708Master $0 Plan marketunamortized value atportion the then of the existing cost ofusage a hangar. of the A‐3Padilla‐3 Pierce foot per year empty site number of improvementsNo hangar constructed on this site. on the site" $1.9 million Contained in $130/ sq. ft. assumed for original the total constructionLease clause cost, requires times approximate payment of "fair60'x80' $0.16 per square bldg. = $624,000. Residual value assumes 6 SiteSite A ‐A4‐ 12T&L Yes 20 years $0.16 per square Aug‐07 Master Plan market value at the then existing usage of the 13 Yes 10 years foot per year Oct‐06 $249,600 straight‐line depreciation and 15 year useful Strand foot per year number of improvements constructed on the site" $1.9 million life ($624,000/15=$41,600 per year). Payout Contained in value equal to remaining six years the total Lease($41,600/year clause requires x6 payment= $249,600) of "fair Site A‐5 Mount $0.16 per square 7 Yes 20 years Nov‐08 ContainedMaster Plan in market value at the then existing usage of the Cleveland foot per year numberthe total of improvementsLease clause requires constructed payment on the of "fairsite" $0.16 per square 14 Site A‐1,2,3 Yes 20 years N/A Master$1.9 million Plan market value at the then existing usage of the foot per year number of improvements$130/ sq. ft. constructed assumed for on original the site" $1.9 million construction cost, times approximate 88'X75' Leasebldg. =is $858,000.subject to Residualtermination value by assumes lessee if T‐Hangar ‐ $0.16 per square 158 Site A‐5 Gross YesNo 20 1 yearyears $500 per monthOct N/A‐06 $343,200 $0 straightairport‐ lineis abandoned. depreciation No and closure 15 year payment useful Billmayber foot per year life (858,000/15=57,000clause in lease per year). Payout value equal to remaining six years $0.16 per square (57,200/year x6 = 343,200) 16 Hilton No 99 years N/A $0 None foot per year $130/ sq. ft. assumed for original Total City Payments $906,133 construction cost, times approximate 60'x60' bldg. = $470,000. Residual value assumes Site A‐7 Goose $0.16 per square 9 Yes 20 years Oct‐04 $125,333 straight‐line depreciation and 15 year useful Bay foot per year life (470,000/15=31,333 per year). Payout value equal to remaining four years (31,333/year x4 = 125,333) 75
$130/ sq. ft. assumed for original construction cost, times approximate 60'x60' bldg. = $470,000. Residual value assumes $0.16 per square 10 Site A‐8 HC‐60 Yes 20 years Jul‐06 $188,000 straight‐line depreciation and 15 year useful foot per year life (470,000/15=31,333 per year). Payout value equal to remaining six years (31,333/year x6 = 188,000)
Site A‐8 North 11 Country Part of Above Lease Holdings
$0.17 per square City payment clause only refers to Site A‐11 12 No 20 years foot per year ‐ Feb‐08 $0 unamortized portion of the cost of a hangar. Padilla empty site No hangar on this site.
$130/ sq. ft. assumed for original construction cost, times approximate 60'x80' bldg. = $624,000. Residual value assumes Site A‐12 $0.16 per square 13 Yes 10 years Oct‐06 $249,600 straight‐line depreciation and 15 year useful Strand foot per year life ($624,000/15=$41,600 per year). Payout value equal to remaining six years ($41,600/year x6 = $249,600) Contained in the total Lease clause requires payment of "fair $0.16 per square 14 Site A‐1,2,3 Yes 20 years N/A Master Plan market value at the then existing usage of the foot per year number of improvements constructed on the site" $1.9 million
Lease is subject to termination by lessee if T‐Hangar ‐ 15 No 1 year $500 per month N/A $0 airport is abandoned. No closure payment Billmayber clause in lease
$0.16 per square 16 Hilton No 99 years N/A $0 None foot per year Total City Payments $906,133 SOUTH KALISPELL Urban Renewal Plan
76 April 2016
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1 Cemetery Rd Project 2 2 New Elementary School 7 3 Dog Park 4 Community Park 5 HWY 93 Trail Expansion 1 6 Welcome to Kalispell Sign 5 7 Business Park 8 Aviation Business Park 9 Park-N-Ride/Trailhead 10 Mixed-Use Development 4 City of Kalispell 3 South Kalispell Urban Renewal District 9 6 0 1/8 1/4 1/2 Mile N
77 SOUTH KALISPELL Urban Renewal Plan BAPPENDIX B IMPROVEMENT PROJECT PLANNING LEVEL COST ESTIMATES
Improvement 1 Estimate Cemetery Rd Improvements $9,100,000 Improvement 2 Estimate Elementary School N/A Improvement 3 Estimate Dog Park $400,000 Improvement 4 Estimate Community Park $6,400,000 Improvement 5 Estimate Expand Highway 93 bike and pedestrian trail network $650,000 Improvement 6 Estimate “Welcome to Kalispell” sign $260,000 Improvement 7 Estimate Highway 93 Business Park $16,700,000 Improvement 8 Estimate Aviation Business Park $5,000,000 Improvement 9 Estimate Park-N-Ride Trailhead $535,000 Improvement 10 Estimate Relocate City Shops/1st Ave Commercial District $22,000,000 TOTAL $61,045,000
78 April 2016
CEMETERY ROAD PLANNING LEVEL COST ESTIMATES
Cemetery Road Improvements
Demolition/Design/Prep Surveying/Staking 80 HR @ $100.00 = $8,000 Engineering/Design 1 LS @ $800,000.00 = $800,000 Asphalt Demo 6000 LF @ $30.00 = $180,000 Silt Fence/SWPP 12000 LF @ $2.91 = $34,920 Strip Topsoil 9 Acre @ $5,000.00 = $45,000 Subtotal $1,067,920
Grading/Roadways Surveying/Staking 400 HR @ $100.00 = $40,000 Earthwork - Bulk 33000 CY @ $10.00 = $330,000 Finish Grade 27000 SY @ $2.00 = $54,000 Curb/Gutter 12000 LF @ $35.00 = $420,000 4" Asphalt/12" Base/18" Subbase 46' wide 6000 LF @ $312.00 = $1,872,000 Subtotal $2,716,000
Utilities Surveying/Staking 500 HR @ $100.00 = $50,000 Storm Sewer w/Manholes 12000 LF @ $80.00 = $960,000 Sanitary Sewer w/Manholes 6000 LF @ $45.00 = $270,000 Water Line 12" Inc. Excav/Backfill 6000 LF @ $54.00 = $324,000 Subtotal $1,604,000
Landscaping/Irrigation Landscaping/Seeding 1 LS @ $200,000.00 = $200,000 Subtotal $200,000
Amenities Site Lighting 100 EA @ $4,000.00 = $400,000.00 signage 1 LS @ $20,000.00 = $20,000.00 Subtotal $420,000
Subtotal = $6,007,920 Contingency @ 25% = $1,501,980 Subtotal = $7,509,900 General Conditions @ 10% = $750,990.00 Subtotal = $8,260,890 Contractor OH & Profit @ 10% = $826,089 Total $9,086,979 Rounded $9,100,000 79 SOUTH KALISPELL Urban Renewal Plan
DOG PARK PLANNING LEVEL COST ESTIMATES
Dog Park
Demolition/Design/Prep Surveying/Staking 20 HR @ $100.00 = $2,000 Engineering/Design 1 LS @ $10,000.00 = $10,000 Site Demo 1 LS @ $500.00 = $500 Silt Fence/SWPP 120 LF @ $2.91 = $349 Strip Topsoil 2 Acre @ $5,000.00 = $10,000 Subtotal $22,849
Grading Surveying/Staking 20 HR @ $100.00 = $2,000 Earthwork - Bulk 1000 CY @ $10.00 = $10,000 Finish Grade 10000 SY @ $2.00 = $20,000 Subtotal $32,000
Utilities Surveying/Staking 500 HR @ $100.00 = $50,000 Water Line 2" Inc. Excav/Backfill 1500 LF @ $34.00 = $51,000 Subtotal $101,000
Landscaping/Irrigation Landscaping/Seeding 1 LS @ $50,000.00 = $50,000 Subtotal $50,000
Amenities Site Lighting 1 LS @ $10,000.00 = $10,000.00 Fencing 4000 LF @ $25.00 = $100,000.00 Subtotal $110,000
Subtotal = $315,849 Contingency @ 5% = $15,792 Subtotal = $331,642 General Conditions @ 10% = $33,164.17 Subtotal = $364,806 Contractor OH & Profit @ 10% = $36,481 Total $401,286 Rounded $400,000
80 April 2016
COMMUNITY PARK PLANNING LEVEL COST ESTIMATES
Community Park Community Park Community Center 1 LS @ $1,500,000 = $1,500,000 Splash Park 1 LS @ $400,000 = $400,000 Pavilion 1 LS @ $50,000 = $50,000 Volleyball 1 LS @ $30,000 = $30,000 Horseshoes 1 LS @ $4,000 = $4,000 Playground 1 LS @ $30,000 = $30,000 Parking 300 spaces @ $2,000 = $600,000 Covered Basketball Courts 1 LS @ $100,000 = $100,000 Tennis Courts 2 EA @ $90,000 = $180,000 Picnic Area 1 LS @ $50,000 = $50,000 Event Lawn/Amphitheatre 1 LS @ $500,000 = $500,000 Soccer Fields 6 EA @ $50,000 = $300,000 Event Lawn 1 LS @ $30,000 = $30,000 Football Field 1 LS @ $400,000 = $400,000 Maintence Facility 1 LS @ $150,000 = $150,000 Skate Park 1 LS @ $100,000 = $100,000 Trail 4000 LF @ $80 = $320,000 Signage 1 LS @ $50,000 = $50,000 Road 1 LS @ $250,000 = $250,000 Subtotal $5,044,000
Subtotal = $5,044,000 Contingency @ 5% = $252,200 Subtotal = $5,296,200 General Conditions @ 10% = $529,620.00 Subtotal = $5,825,820 Contractor OH & Profit @ 10% = $582,582 Total $6,408,402 Rounded $6,400,000
81 SOUTH KALISPELL Urban Renewal Plan
HIGHWAY 93 TRAIL EXPANSION PLANNING LEVEL COST ESTIMATES
Through-Connection of HWY 93 Trail System
Demolition/Design/Prep Surveying/Staking 40 HR @ $100.00 = $4,000 Engineering/Design 1 LS @ $10,000.00 = $10,000 Site Demo 1 LS @ $5,000.00 = $5,000 Silt Fence/SWPP 400 LF @ $2.91 = $1,164 Strip Topsoil 3 Acre @ $5,000.00 = $15,000 Subtotal $35,164
Grading/Pavement Surveying/Staking 20 HR @ $100.00 = $2,000 Earthwork - Bulk 5500 CY @ $10.00 = $55,000 3" Asphalt/12" base/Geogrid 5000 LF @ $60.00 = $300,000 Finish Grade 11000 SY @ $2.00 = $22,000 Subtotal $379,000
Utilities Surveying/Staking 20 HR @ $100.00 = $2,000 Incidental Utility Removal 1 LS @ $5,000.00 = $5,000 Subtotal $7,000
Landscaping/Irrigation Landscaping/Seeding 1 LS @ $50,000.00 = $50,000 Subtotal $50,000
Amenities Site Lighting 1 LS @ $10,000.00 = $10,000.00 Benches 2 EA @ $800.00 = $1,600.00 Subtotal $11,600
Subtotal = $482,764 Contingency @ 10% = $48,276 Subtotal = $531,040 General Conditions @ 10% = $53,104.04 Subtotal = $584,144 Contractor OH & Profit @ 10% = $58,414 Total $642,559 Rounded $650,000
82 April 2016
HIGHWAY 93 BUSINESS PARK PLANNING LEVEL COST ESTIMATES
HWY 93 Business Park HWY 93 Business Park A Commercial 16400 SF @ $180.00 = $2,952,000 B Commercial 15700 SF @ $190.00 = $2,983,000 C Light Industrial 11200 SF @ $140.00 = $1,568,000 D Light Industrial 15600 SF @ $140.00 = $2,184,000 E Light Industrial 8400 SF @ $140.00 = $1,176,000 F Light Industrial 10500 SF @ $140.00 = $1,470,000 Future Road 1 EA @ $150,000.00 = $150,000 Entry Feature 1 EA @ $60,000.00 = $60,000 Parking 290 spaces @ $2,000.00 = $580,000 Subtotal $13,123,000
Subtotal = $13,123,000 Contingency @ 5% = $656,150 Subtotal = $13,779,150 General Conditions @ 10% = $1,377,915.00 Subtotal = $15,157,065 Contractor OH & Profit @ 10% = $1,515,707 Total $16,672,772 Rounded $16,700,000
83 SOUTH KALISPELL Urban Renewal Plan
AVIATION BUSINESS PARK PLANNING LEVEL COST ESTIMATES
Aviation Business Park Aviation Business Park Aviation Repair 12000 SF @ $125.00 = $1,500,000 Airport Operations 10000 SF @ $190.00 = $1,900,000 Site Utilities/Lighting 1 LS @ $150,000.00 = $150,000 Site Improvements/Parking 150 spaces @ $2,000.00 = $300,000 Misc. landscaping/Site Amenities 1 LS @ $50,000.00 = $50,000 Subtotal $3,900,000
Subtotal = $3,900,000 Contingency @ 5% = $195,000 Subtotal = $4,095,000 General Conditions @ 10% = $409,500.00 Subtotal = $4,504,500 Contractor OH & Profit @ 10% = $450,450 Total $4,954,950 Rounded $5,000,000
84 April 2016
PARK-N-RIDE TRAILHEAD PLANNING LEVEL COST ESTIMATES
Park 'N' Ride Trailhead
Demolition/Design/Prep Landscaping/Irrigation Surveying/Staking 10HR @ $100.00 = $1,000 Topsoil Placement 850 CY @ $15.00 $12,750 Engineering/Design 10 % @ $1,000.00 = $10,000 Evergreen Trees 5 EA @ $200.00 = $1,000 Construction Entrance 1 LS @ $1,000.00 = $1,000 Deciduous Trees 14 EA @ $200.00 = $2,800 Silt Fence/SWPP 2000 LF @ $2.91 = $5,820 Lawn/Sod 40MSF @ $390.00 = $15,600 Strip Topsoil 0.6Acre @ $5,000.00 = $3,000 Native Grasses 1Acre @ $6,000.00 = $6,000 Subtotal $20,820 Irrigation System 0.5 AC @ $20,000.00 = $10,000 Fertilizer (in-place) 40MSF @ $3.89 $156 Grading Subtotal $48,306 Surveying/Staking 30HR @ $100.00 = $3,000 Earthwork - Berming 600CY @ $5.00 = $3,000 Amenities Excavation 1000 CY @ $12.00 = $12,000 Drinking Fountain 1 EA @ $4,000.00 = $4,000.00 Finish Grade for Parking Lots 3000 SY @ $1.13 = $3,390 Site Lighting 4 ea @ $4,000.00 = $16,000.00 Subtotal $21,390 Directional/Entry Signage 1 LS @ $12,000.00 = $12,000.00 Subtotal $32,000 Utilities Surveying/Staking 20HR @ $80.00 = $1,600 Subtotal = $420,955 Water Line 2" Inc. Excav/Back ll 200LF @ $10.00 = $2,000 Contingency @ 5% = $21,048 Water Line Misc. 1LS @ $500.00 = $500 Subtotal = $442,003 Fountain Drain 2" Sch 40 PVC 40LF @ $4.68 = $187 General Conditions @ 10% = $44,200 Subtotal $4,287 Subtotal = $486,203 Contractor OH & Pro t @ 10% = $48,620 Paving Total $534,823 Surveying/Staking 30 HR @ $80.00 = $2,400 RoundedSay $535,000 Asphalt Parking 4" x 12" Base 2000 SY @ $34.00 = $68,000 Asphalt Drive Apron 4" x 10" Base 800 SY @ $34.00 = $27,200 Asphalt Pavement Sidewalk/Trail 10000 SF @ $5.00 = $50,000 Concrete Curb and Gutter 800 LF @ $30.00 = $24,000 Pavement Striping - Stalls 40EA @ $8.80 = $352 Handicap Sign 4EA @ $200.00 = $800 Paint Handicap Symbols 4EA @ $100.00 = $400 Subtotal $173,152
Buildings/Structures Picnic Shelter 1 EA @ $30,000.00 = $30,000 Bridge 1000 SF @ $90.00 = $90,000 Benches 2 EA @ $500.00 = $1,000 Subtotal $121,000
85 SOUTH KALISPELL Urban Renewal Plan
RELOCATE CITY SHOPS/1ST AVE COMMERCIAL DISTRICT PLANNING LEVEL COST ESTIMATES
1st Ave Commercial District 1st Ave Commercial District A Livework 12000 SF @ $180.00 = $2,160,000 B Livework 17000 SF @ $190.00 = $3,230,000 C Livework 22000 SF @ $220.00 = $4,840,000 D Livework 10500 SF @ $200.00 = $2,100,000 E Livework 12000 SF @ $200.00 = $2,400,000 F Livework 9000 SF @ $200.00 = $1,800,000 Site Utilities 1 EA @ $150,000.00 = $150,000 Signage/Lighting/amenities 1 EA @ $200,000.00 = $200,000 Parking 180 spaces @ $2,000.00 = $360,000 Subtotal $17,240,000
Subtotal = $17,240,000 Contingency @ 5% = $862,000 Subtotal = $18,102,000 General Conditions @ 10% = $1,810,200.00 Subtotal = $19,912,200 Contractor OH & Profit @ 10% = $1,991,220 Total $21,903,420 Rounded $22,000,000
86 SOUTH KALISPELL Urban Renewal Plan
APRIL 2016