Meetings
 


City of Helena, Montana
 
May 12, 2020
To: Melinda Reed, Interim City Manager
From: Sharon Haugen, Community Development Director
Subject: Consider a resolution granting property tax benefits for Seeley Building, LLC, for reconstruction of a building at 630 N. Last Chance Gulch in the City of Helena, Montana.
Present Situation:

Seeley Building LLC has purchased the property located at 630 N. Last Chance Gulch from the City of Helena and is planning to reconstruct a new residential and commercial building on the property.  The property was most recently the site of the old Bus Depot by the City and  had been used for the 24/7 program.  The owner has  applied for a tax abatement under the provisions of (MCA 15-24-1502 et seq.). The application is for the future building to be located on 630 N. Last Chance Gulch, the former bus depot. Under these provisions of MCA 15-24-1502, if approved, the property taxes are abated during construction and for up to five years. The taxes are then gradually phased in at a rate at 20 percent each year. Upon local approval of tax abatements, the Department of Revenue determines eligible improvements and applies the abatement to the property.

 

If granted, the applicant must keep all taxes current for the property that receives tax benefits. Failure to pay taxes will void the tax abatement for the next ten years. Property taxes abated from the reduction in property taxes allowed by this section are subject to recapture by the local governing body if the ownership or use of the property does not meet the requirements of this section of law.

 

Seeley Building LLC  plans a $12-$13 million reconstruction of this site into a three story tall mixed-use building with an underground parking garage. The first 2 floors will provide commercial space. The top floor will offer residential condominiums and are not eligible for the tax abatement.

 

The previous taxable market value of the property is $0 because it was owned by the City of Helena. The Department of Revenue has not determined the new increase in taxable value after the reconstruction but given that the property will be new to the tax rolls, it is a given that the 5 percent criteria will be met by the applicant.

 

To be eligible for the property tax exemption and the property tax reduction, the commercial building may not have been used in a business for at least 6 months immediately preceding the date of application to the governing body for approval. The building was used by the Sheriff’s Office for the 24/7 program and is not considered a commercial use. The applicant is also current on all their property taxes.

 

 

Background Information:

The intent of the tax abatement is to allow local communities to encourage new and/or expanding businesses by making available tax benefits for future expansion and development. The tax abatement helps the company to better afford improvements and expansion of their existing operation and to enable the expansion to better cash flow.

Proposal/Objective:

The intent of the tax abatement is to allow local communities to encourage new and/or expanding businesses by making available tax benefits for future expansion and development. The tax abatement helps the company to better afford improvements and expansion of their existing operation and to enable the expansion to better cash flow.

Advantage:

The granting of property tax benefits is one of the tools the City Commission has for encouraging economic development and the redevelopment of an area. This redevelopment project is located in the Downtown Urban Renewal District and reconstruction could serve as a catalyst for other redevelopment in that area. 
Notable Energy Impact: None noted
Disadvantage: The property tax benefits will result in a decrease in the total revenue realized until the property tax benefits period is complete and due to Helena School District No. 1, Lewis and Clark County, and the City of Helena. If approved by both the City and the County, the total tax exemption and reduction over ten years is approximately $889,682, $194,836 of which would be due to the City. This reduction would also impact the revenue of the Downtown Urban Renewal District.
Notice of Public Hearing: Attached
Staff Recommendation:
 
ATTACHMENTS:
Resolution
Application
Application Signature
Tax Calculation for Seeley Building LLL