Committee begins plan for tax increment finance district

City officials and business leaders in Havre are revisiting plans today to implement a tax increment finance district in downtown Havre.

Havre City Council members are meeting with Bear Paw Development Corp. and other community members at noon today to work on a draft proposal for the district. It will be the committee's first meeting in three months.

"A lot of leg work has gone into this so far, and a lot of work still needs to be done before we can present an idea to the council," City Council member Terry Schend, who chairs a committee formed to gather information on TIFDs, said Thursday. He said committee members have used the last three months to investigate the pros and cons of a finance district.

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. A TIFD would provide a financing mechanism to facilitate redevelopment in a designated area, like downtown Havre.

"It's been a tool that's been a benefit to several cities across the United States," Schend said. "We're hoping it can help us here in Havre."

Tax increment finance districts have proven successful in several Montana cities, including Missoula, Butte, Billings and Kalispell.

The idea was first discussed by the City Council in 1999, but it was not pursued. Interest in creating a district was renewed last fall and in February, 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.

Chuck Wimmer, Havre Area Chamber of Commerce president and branch manager of Stockman Bank in Havre, said he's supportive of creating a finance district to help downtown Havre.

"It could definitely help downtown," he said. "After an area is designated, the district can help fund projects ranging from sidewalk improvements to restoring old buildings. It can have a big impact."

Council member and finance district committee member Tom Farnham said a district could help stimulate economic growth and attract new businesses to downtown Havre.

"If a business wanted to come in from out of town and needed help to establish themselves - whether they're looking for a new roof or sidewalks or they simply want to spruce up their space, a district could provide them a loan to help hem do that," he said.

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.

Schend said he hopes to form two committees at today's meeting - one to look into creating an urban renewal plan for the city, and the second to determine the boundaries of a finance district.

"We need to decide where we want the district to be, maybe one block, or 10 blocks," he said. "You don't want the district to be too big or too small. You really want to encompass an area that can benefit from a finance district."

Even if a district is established and approved by the council, Schend says it's impossible to know how successful it will be at boosting redevelopment and economic growth.

"A lot of the possible success of a finance district hinges on the people in the district recognizing the value of the area, and realizing long-term the benefits the district could bring," he said. "But it's not going to happen overnight. It's going to take a lot of work and commitment to get a district going."

Schend said he hopes to have a plan to submit to the council by early next year.