Questions answered about TEDD proposed area

by Evelyn Pyburn – For the Yellowstone County News

More question were answered and recommendations given about a proposed Targeted Economic Development District (TEDD), at a public hearing last Thursday evening, at the Sturdevant Gym, in Lockwood.

To make the TEDD smaller rather than bigger seemed to be the gist of the recommendations from public comment, regarding a tentative boundary for the TEDD, which includes almost 1000 acres, in an area east of Johnson Lane and north of the Interstate.

It was also suggested that a phased approach, over a period of year, would also be better than establishing a very large area at the beginning.

It was stated that Yellowstone County Commissioners, who must eventually decide about advancing the proposal, might be more receptive to a smaller footprint, as they consider the impact of a tax increment finance district, which would be part of the TEDD. The Commissioners are expected to make a decision about advancing the proposal on March 3.

Big Sky Economic Development (BSED) has spearheaded the effort to create the TEDD as a “tool” to develop an industrial park, which would have the infrastructure needed to attract manufacturing or other value-added businesses to Billings. The Lockwood site was the preferred option of three prospective locations identified in a study conducted by BSED, last year. A TEDD would allow for planning, and provide a vehicle to fund the roads, rail spurs, utilities, etc. that an industrial park would normally offer.

Without an industrial park, explained BSED Director, Steve Arveschoug, Yellowstone County loses out to other communities which do have them, as civic leaders try to persuade businesses to locate here. A TEDD not only would include a TIF, but could seek out and accept state or federal grants to help fund projects, as well as facilitate potential public-private partnerships to build infrastructure and entice businesses.

A TIF is provided for in state law and it allows for the creation of a district, within which any new property taxes generated after its start-up date, are set-aside with the purpose of helping to fund infrastructure within the designated area of the TIF. The new-growth taxes can sometimes be used to match grants or to mitigate needs that arise outside the TIF boundaries if they can be attributed to activity within the TIF (or TEDD). The level of property taxes the area generated before the creation of the TIF/TEDD continue to be distributed as normal to the various taxing jurisdictions.

Regarding the size of the TEDD, Arveschoug said, “There is an optimal size.”  “If you think too small you may limit your opportunities.”

Arveschoug underscored that no boundary has yet been set for the proposed TEDD. That was in large part the purpose of the hearing held on Thursday. He said that they had met earlier in the day with utility representatives, other public officials and stakeholders to gather as much input as possible to help establish permanent boundary lines.

The 25, or so, people attending the hearing sat in chairs arranged in a large circle on the gym floor, facing the speakers, who were flanked by a large map of the proposed TEDD area. Later in the meeting the group broke into four discussion groups which assembled around tables with copies of the map, to make specific recommendations and provide information.

The group raised a wide range of questions.

Some were concerned about the loss of tax revenues over the life of the TEDD, which could range from 15 years to 30 years. It was pointed out that Lockwood is largely dependent upon one commercial property taxpayer, ExxonMobil, to fund schools, fire district, etc. and to expand that base is important to the fiscal security of the community. A TEDD might stall that expansion.

There seemed to be considerable confidence that Lockwood is likely to grow and will attract substantial new business because of the building of the Northend Bypass, which would connect the Johnson Lane interchange with Highway 312 north of the Heights. If most of those businesses were to locate in the TEDD there would be no broadening of the tax base for as long as those new businesses were in the TEDD.

Janet Cornish, of Community Development Services of Montana, a firm engaged by BSED to assist in the process of establishing the TEDD, responded, “We have found that in general the tax base of the entire community goes up.” She said that support businesses such as restaurants and retail stores are likely to establish outside the TEDD because of the activity in the TEDD. There would also be the building of new homes for those people employed in the TEDD.

Others suggested that the growth would come even without a TEDD.  Arveschoug agreed that it could, but it would probably be at a slower pace and draw different kinds of business. The growth would also happen without the same level of planning and development that would enhance the community and its attractiveness for even more growth. The improvements would also add value for existing property owners.

There was concern about how to get water and sewer to the area. The Lockwood Water and Sewer District would have to approve an expansion of both its water and sewer systems to serve the TEDD. Also, the City of Billings would have to approve the expansion of the sewer district since Lockwood’s sewage is treated at the city’s facility under a contract that restricts the District from expanding.

Arveschoug said that the City had passed a resolution indicating that they would be willing to consider amending the agreement to allow for an expansion, but that if they didn’t allow for the change, that could be problematic.

There was concern that should the TEDD fail to grow as anticipated any bonding or loans held to finance infrastructure would have to be paid for by the rest of the taxpayers in the county. Arveschoug said that the bonding would only happen as revenue flows were established to repay the loans. “It is a high risk bond,” he said, but it would fall only to those property owners within the TEDD boundaries.