A local businessman is leading efforts to develop an industrial subdivision at the Bonner West Log Yard Targeted Economic Development District (TEDD) to attract more businesses to the area.
Eric Groenweghe, general manager of Harris Manufacturing, is also strongly considering donating a big swath of riverfront property to the public, but said he needs TEDD funds from the county for the initial capital for the entire project.
He met with the Missoula County Board of Commissioners on Tuesday for a preliminary discussion.
“We had the plans and put it on hold when the economy kind of went south,” Groenweghe said. “But now the economy is turning around and we’re looking at starting that process back up.”
He said he and his team are looking at maybe 20 to 25 lots varying in size from 2.5 to 5 acres, and he hopes to attract mainly manufacturing businesses.
“Our target is to bring in (manufacturing) people like ourselves. We make pressure vessels and heat exchangers, so we would like to bring in industries that service that industry as well.”
The property is adjacent to the Blackfoot River and is very underutilized right now. Groenweghe said they’re considering giving a big chunk of land to the county for public use if all the plans work out.
“We would donate virtually all of (the riverfront property),” Groenweghe said.
Everything is in the early planning stages right now, but Groenweghe hopes to ask the county in the near future for some Targeted Economic Development District funds to kickstart the project because his company lacks the capital to get it going.
The TEDD funds come from property tax dollars that are above and beyond what was being collected before the district was created in 2014, and are diverted from the county general fund and set aside for economic development activities that benefit the public good.
“Just to get the first phase going, we are going to need a quarter- to a half-million dollars and kind of go from there,” Groenweghe said. “I don’t have all the figures. Those are really rough numbers. But we would use it for water, fire suppression, infrastructure, roads, electric and natural gas. We would need additional lines to kind of run a dry sewer so if the county ever runs a sewer out there we could connect to the sewer system.”
Janet Cornish of Community Development Services of Montana in Butte is a paid consultant on Tax Increment Financing and TEDD funding for Missoula County, and she and her colleague Lanette Windemaker toured Bonner businesses and met with the local community council to hear their concerns. On Tuesday, Cornish presented her findings to the Board of County Commissioners.
She said business owners and residents in Bonner want to see Tax Increment Financing funds and TEDD funds used for transportation improvements, infrastructure upgrades, the removal of industrial debris, riverbank restoration and emergency services upgrades.
She said the Bonner West Log Yard TEDD and the nearby Bonner Mill Tax Increment District were formed in 2014 and 2012, respectively, to foster both urban renewal and secondary value-added industry. She said allowing private business owners to use TIF and TEDD funds, with approval and direction from the county, has many benefits.
“It allows local governments to direct property tax dollars that are derived from new development within a specific district for economic development activities that serve a public purpose,” she said. “You’re taking tax dollars that accrue from renovations, new construction, any kind of increase in the value of property that result from improvement to the taxable value are set aside in a special fund."
She said a common misperception is they are a new taxing district to increase taxes.
"It does not add any new taxes," she said. "It is not a taxing district. It affects the way those incremental increases are distributed in property taxes. The taxpayers are not paying any more than they are otherwise, it’s simply the way those monies are directed.”
Cornish told the commissioners that at least 57 of the 60 Targeted Economic Development Districts and Tax Increment Financing Industrial Districts created in Montana since the Legislature permitted them in 1974 have increased property tax values.
The county is also looking at creating a Targeted Economic Development District at the intersection of Interstate 90 and US Highway 93, an area known as “the Wye” where many industrial businesses are already located.
County commissioner Dave Strohmaier wanted to know if Cornish believed that businesses would locate to TEDD districts without the tax funding help.
Cornish responded that she believed a small amount of business activity would occur in those districts anyway, but TEDD and TIF districts help “tip the scale” for many business owners when they’re deciding where to locate a new business venture.
“It also allows governments to have a hand in planning and controlling where economic development happens,” she said.