Originally published in the Yellowstone County News print edition by Evelyn Pyburn.
LOCKWOOD — Boundaries for the proposed Targeted Economic Development District (TEDD) in Lockwood have been set and the process to create the special tax jurisdiction is nearing completion. The Comprehensive Development Plan for the TEDD will now go to the City/County Planning Board for review, which will forward it with their recommendation to the Yellowstone County Commissioners, for ultimate consideration in November.
About 30 people attended a public meeting last Monday evening in Lockwood to see the finished comprehensive plan that the engineering firm, Sanderson Stewart, was contracted to develop for Big Sky Economic Development Authority (EDA), the county agency that initiated the proposal.
Most of the questions posed to presenters by citizens at the meeting had to do with how the tax increment financing of the TEDD works. The financing is needed to help develop an industrial park near the Johnson Lane Interchange, which has been proposed by EDA to attract industry and manufacturing to the area.
Lauren Waterton of Sanderson Stewart explained that new tax revenues generated within the district because of new economic development are used to develop infrastructure in the district, which is necessary for businesses to locate there. With the creation of the TEDD, a base is set at the taxable value of property within it. That base generates tax revenues that flow to all regular taxing entities in the community, such as county government, schools, roads, EDA or MetraPark. Future tax revenue increases, which come from increased property values above that base, are retained by the district and applied to development within the district boundaries.
The theory is, explained Waterton, most businesses cannot afford to build the necessary infrastructure and will not locate in the area without water, sewer, and transportation systems in place. The TEDD helps to finance those systems to generate economic growth that might not occur if businesses had to pay for those improvements themselves.
The study area that was scrutinized during the process of developing the comprehensive plan involved 1,850 acres in the northwest quadrant of the intersection of Johnson Lane and Interstate 90. Of that area, 570 acres are included in the proposed TEDD. It is an area of primarily agricultural use with some industrial sites. It includes the proposed site of a private industrial park development, the Trailhead Commerce Park.
Coulson Road passes through the area, as does the BNSF railroad, which has a rail spur serving Pacific Recycling, which is within the proposed TEDD boundaries.
One of the requirements under state law for properties to qualify as part of a TEDD is that they be zoned industrial or agriculture, and that that zoning be compatible with the Growth Policy. Prior to the initiation of the TEDD and the industrial park proposal, Lockwood had no Growth Policy and most of the properties within the proposed TEDD were not zoned. Lockwood now has a Growth Policy and some of the properties within the TEDD recently underwent a zone change, with ownership approval. Those processes were undertaken by the EDA with Lockwood public involvement over the past couple of years.
Michael Sanderson, also of Sanderson Stewart, said that most of the concerns they have had about the creation of the TEDD has had to do with its impact on the taxes of property owners. Sanderson emphasized that property taxes are based on how property is used, not how it is zoned. He said that agriculture land that is zoned for an industrial use has a higher value, but does not pay taxes on that value until it is actually used for industrial purposes. As far as he could see, said Sanderson, there is no downside for property owners to be zoned industrial.
A member of the audience who wanted to know how she could be excluded from being in the TEDD was encouraged by EDA Director Steve Arveschoug to contact him regarding any questions she might have, and to make sure the County Commissioners were aware of her desire not to be included, prior to their decision, which will set the boundaries. The Commissioners will review the proposal at two public hearings set for November 22 and 29. Prior to that, the Planning Board will hold public meetings on Oct. 12 and Oct. 26.
Another question posed was whether property owners could later become part of the TEDD. There are provisions for that but it is a long process, said Arveschoug. And, he added, property owners joining the TEDD would undoubtedly be charged with fees to “catch them up” with what others had already paid to build infrastructure.
It was further asked how long would it be before activity would become evident in the TEDD if it is approved by the end of this year. Arveschoug said that given the organizational requirements and the studies and planning that must proceed any project, it would likely take as much as three years.
An advisory board would be appointed by the County Commissioners, to help administer the TEDD and to identify priorities and planning. The County Commissioners make the final decisions regarding all of its activities.
A capital improvement plan to identify infrastructure needs will be developed by the advisory board, which will include costs and timing.
The comprehensive plan states that “Once the Lockwood TEDD is established, efforts to recruit secondary, value-adding industries will be necessary.” A recruitment work plan will be developed in partnership with the county, EDA, property owners. The goal will be to expand local businesses and to assist with new business formation.
Landowners with parcels in the proposed TEDD include BKPN Properties, G2 Properties, JDW Industrial, Lockwood Irrigation District, MCL Properties, Montana Rail Link, Pacific Hide and Fur Depot, Seiffert Trust, Terry Seiffert, Roger and Peggy Webb, Town and Country Supply Association and Michael Stanhope.
The TEDD has a life span of 15 years, but it could be extended up to 25 years if bonds need to be paid off.
The fact that the tax revenues from the TEDD would be withheld from other community tax-supported entities, such as the school, for that period of time is troublesome for some people. But, said Sanderson, it should be considered that maybe that tax revenue would never materialize if it were not for the development of the TEDD.
Arveschoug explained that the tax revenues generated by the TEDD are not expected to provide all the funding that will be necessary to make the improvements that the industrial park will need. The projects will be augmented with investments from private developers, and there are opportunities to apply for other federal and state grants to help finance pubic infrastructure.
Arveschoug also stated that the comprehensive plan for the TEDD and future planning will be done in close communication with the Montana Department of Transportation, which will be in the process of building the Billings Bypass over the same time period.
“We are going to work together,” he said, about the projects that will impact one another, although they are separate.
