Contamination could complicate downtown development district

Environmental contamination - both real and perceived - could be an obstacle to the creation of a tax increment finance district in downtown Havre, community leaders said.

In the second meeting to discuss the possibility of creating a tax increment finance district, Bear Paw Development Corp. deputy director Annmarie Robinson on Monday told the group about the risks contamination could pose to a district's success.

A tax increment finance district is an urban renewal tool that allows communities to set aside tax dollars to use for improving an area. Once a district is established, any additional tax revenue that results from an increase in taxable value in the district goes into a separate account that is then used to help finance development and encourage private investment in the area. Establishing a district does not raise taxes for the people in the district.

The idea was discussed in Havre in 1999, but it was not pursued. Last fall the Havre City Council said it was interested in examining the idea again. In February council member Terry Schend was put in charge of forming an ad-hoc committee of city officials, local leaders and members of the public to put together a plan to submit to the council for a vote later this year.

Robinson said contamination can range from soil tainted by underground gasoline tanks to asbestos in buildings in need of remodeling.

"There's a lot of sites scattered throughout this area," Robinson said, passing around a list of about 50 sites in Havre where soil is contaminated from underground storage tanks that have leaked or, in some cases, still are leaking. Many of the sites were gas stations at one time.

There is also a perception of contamination where none has actually been confirmed, she said. Some people may perceive that properties on First Street have contamination from the railroad even though there is no documented contamination from the railroad south of the railroad tracks.

That perception may cause lending institutions to be unwilling to make loans to fix up those properties because of the potential liability involved. If a business fails, the property becomes the responsibility of the bank, she said.

"It's a big problem," said committee member Chuck Wimmer, president of the Havre Area Chamber of Commerce and branch manager of Stockman Bank in Havre. "I know some banks that don't loan on anything on First Street."

Paul Tuss, executive director at Bear Paw Development, said the perception of contamination could qualify as an instance of "blight" that must be documented before a tax increment finance district can be set up.

Funds from the district can be used for assessment and cleanup, Robinson said, but it is not cheap. The committee will need to decide whether to use those funds to deal with contamination, she added.

Soil contamination may not be as big a problem as asbestos, Robinson said. If asbestos is discovered, contractors are required to clean it up, greatly increasing the costs of urban renewal.

"So if you're going to go downtown to remodel an old building, asbestos is going to be an issue," she said.

Bear Paw Development Corp. planner Craig Erickson and Tuss said they want to go to Butte this month to talk to people running Butte's tax increment finance districts about how that city dealt with the issue of contamination.

"We'll get those questions answered," Erickson said.

"I'd like to know what happened behind the scenes to get them to that point," he said.

Schend said the committee will plan to meet again at the end of March, after Erickson and Tuss get some answers.

The committee also resolved a question about whether the city's comprehensive plan was adequate for creating a tax increment finance district.

Before a district can be created, a city must have a written urban renewal plan that is compatible with its comprehensive plan, a document that details a community's development strategies and contains maps and figures on economic conditions and other characteristics of the community.

Hill County planner Clay Vincent told the committee that even though Havre's plan is more than 30 years old, it is still valid.

A town that is booming like Bozeman needs to update its plan about every 10 years, he said, but Havre doesn't need to. Most of the zoning in town is the same, Vincent said, and natural obstacles like the dike to the south and east of town make changes in development unlikely in the next 10 or 15 years.

The City-County Planning Board would write a new comprehensive plan if one were needed. Vincent estimated that would cost about $150,000.

Tuss said he thought it might be substantially cheaper than that. Fort Benton wrote one for about $30,000, he said.

Whatever the cost, creating a new comprehensive plan would slow down the process of forming a tax increment finance district. Last week Erickson estimated that if the plan needed to be redone, it might take two years to set up the district. If the plan was adequate, he said, it could be set up in a year.

The consensus was that the plan won't be an obstacle.

"We can move ahead with the urban renewal plan based on the comprehensive plan," Erickson said.