By Jerome Tharaud/Havre Daily News/jtharaud@havredailynews.com
City officials say they are interested in taking another look at the possibility of a tax increment finance district in downtown Havre after an hour-long information session about the urban renewal tool Monday night.
The city last took up the issue in 1999 but took no action.
After Monday's meeting, city officials expressed interest in the idea and cautious optimism.
Havre Mayor Bob Rice said he would like to see the city begin the process, but that it is up to the Havre City Council how and when that starts.
"I just think that whatever help we can give the economy and the residents is in order," Rice said.
"We do have some empty stores downtown," he added.
Council member Woody Woodwick agreed that the idea is worth looking into.
"On the surface it sounds like a good idea," he said. "If we can divert some funding to improve our community, that's a plus, especially if it's not going to raise any taxes."
Woodwick said the council will have to look into concerns of a few community members who questioned Monday whether an urban renewal drive would force homeowners and business owners in low-income areas out.
Several people said they are worried that developers could buy up property in the district and force others there to move.
"I don't see the city going out and taking anybody's private property," Woodwick said, but he said the council will need to make sure "nobody gets the short end of the stick."
City Council member Emily Mayer said today that she needs more information.
"The tax increment finance district is something that needs to have some very serious study," she said. "This isn't something that can take place overnight."
She said the council will need to speak with other communities that have used the strategy to find out firsthand how successful it was. The council also will have to talk to the other local players that would be involved, including the Hill County Commission and Havre Public Schools. She said she probably won't begin to consult with any of the groups about the district until after the general election in November.
Mayer said that a group that included business community members, the City Council, the county commissioners and Havre Public Schools met four years ago to discuss the issue, and that at that time Havre Public Schools Superintendent Kirk Miller expressed concerns about the effect the strategy would have on school district revenue. That was part of the reason the group decided not to continue with the tax increment finance district, she said.
"It was decided that since the school district had very valid concerns, that at that time we would not pursue a tax increment finance district," she said, adding that there are other tools cities can use for downtown revitalization.
Miller said today he did not oppose creation of the district, and that the school district was not behind the group's decision not to pursue it; it just did not materialize, he said.
Under federal law, communities that demonstrate a need for urban renewal can draft a plan to establish a tax increment finance district, said Larry Gallager, an operations specialist with the U.S. Department of Housing and Urban Development in Helena. Gallager gave the presentation on Monday.
Once a district is established, any increase in tax revenue that results from an increase in property values goes into a separate account that is then used to help finance development and encourage private investment in the business area and, in some cases, surrounding residential areas, Gallager said.
Miller today acknowledged that when a district is established, it may hold tax revenue level for up to 20 years, so that local entities like the school district and the county would not get additional tax revenue if property values rise.
"The city, county, and all of the other taxing entities would have that kind of concern, but that doesn't mean we would turn away from development opportunities for our town," Miller said.
"It sounds like a good idea," City Council member Jack Brandon said. "We really need to look into it. If there's some benefits we can gain from it, we shouldn't let that opportunity pass."
City Council president Rick Pierson said establishing a finance district is a long process, and that he hopes a local group like Bear Paw Development Corp. or the Havre Area Chamber of Commerce would put together more detailed plans to bring to the council.
City Council member Doug Larson said the presentation was interesting and that he will have to study the issue more.
Local business owners said today a district would be good for the downtown.
Local business owner Janine Donoven said she was involved in the push for a district in 1999, and brought it before the City Council that year.
"I think they're a unique opportunity to utilize a funding tool that's directly available to many cities across Montana," she said.
She said businesses can apply for the money collected in the district and use it to replace sidewalks, siding, facades and make other improvements.
Donoven said the biggest challenge is to educate the public about the district. She said that often people think their taxes will go up automatically if they are part of the district. Their tax bills will go up only if the value of their properties increases, she said.
