Commissioners OK port plan

The Lincoln County Board of Commissioners approved a resolution Wednesday declaring an “infrastructure deficient area” on the 400-acre Lincoln County Port Authority property. The resolution is a required step in the creation of a targeted economic development district (TEDD) for the area and use tax increment financing (TIF) to help develop the property and make it attractive to business interests.

If the creation of the TED district is successful, the port authority board will be able to use tax increment financing to reinvest in infrastructure improvement projects, such as roads, water and sewer to improve the property. Tax increment financing is a development tool that reserves potential increases in taxable property values within the specified geographic district for use only within that district for a period of 15 years. The time window can be extended for up to 25 additional years should bonds be issued on the property, but only as long as it takes to retire the bonds.

The port authority board contracted consultant Janet Cornish to help prepare a statement of infrastructure deficiency, which provided the commissioners with an overview of the infrastructure problems at the port.

“In December of 2015, on behalf of the Lincoln County Commission, the port authority initiated a review of infrastructure deficiencies within the Kootenai Business Park, as a first step in establishing a targeted economic development district or ‘TEDD’ within the area,” the report presented to the commissioners Feb. 24 read.

Cornish’s report detailed several deficiencies in the area’s infrastructure, beginning with the transportation infrastructure.

“The heavy truck traffic creates a need for substantial maintenance and repairs over time have been deficient,” the report read. “The paved sections were not constructed per the current Lincoln County road standards. Consequently, the pavement does not efficiently drain storm water and does not provide a reasonable driving surface for loaded tractor trailer vehicles. The graveled portions generate dust and are costly to maintain.”

Other transportation deficiencies include the out-of-use railroad spur and the pedestrian/non-motorized trails in the area.

The water and sewer systems on the property were also areas listed as structurally deficient. The report cited issues with potable water delivery from the city as well as problems with sewage collection, treatment and the sewage lift station, which was labeled as insufficient to sustain any reasonable level of growth. The utility service to the area, including electrical distribution and broadband connectivity were also cited as fundamentally incapable of supporting business growth in the area.

The review concluded that the infrastructure at the site met Montana’s statutory definition of deficient.

“Based on these findings, the Kootenai Business Park can be described as infrastructure deficient per Montana statute and that this deficiency impedes the ability of Lincoln County to engage in activities to encourage the location and retention of secondary value added projects and industries,” the report read.

Lincoln County Port Authority board member Kevin Peck said the deficiencies in the port’s infrastructure can be basically attributed to money. The port, he said, has not had sufficient resources to fix the problems it inherited when the property was deeded to the county from Stimson Lumber.

Peck said the board is focused on three primary issues at the moment, all related to its ability to attract new business to the park and stimulate more economic activity for the area: delisting the site from the two Superfund designations, refurbishing the rail spur to attract new rail business and resolving the ongoing legal battle with Stinger Welding. All of these issues, he said, create difficulties when trying to attract new business to the port authority site.

The property is currently listed as part of two separate Superfund sites, the Libby Asbestos site and the Libby groundwater site. Removal of the property from those sites, or delisting, opens up the possibility of Brownfields grants. Brownfields grants are part of an EPA reclamation program, designed to help communities rehabilitate and reuse blighted areas, or brownfields. Active Superfund areas are not eligible for the grants, so removal of the property from those Superfund sites is necessary.

Another focus area for the port board is the renovated rail spur on the property. The current rail line is out of use and unusable. Port staff have been working on plans to rehabilitate the line, which would not only make it usable for tenants to ship products, but also make it attractive to Burlington Northern Santa Fe Railroad as a possible hub. Proper renovation of the spur, Peck said, would make the business park very attractive to potential manufacturing tenants and others who would ship large quantities of products.

The third focus, he said, is the ongoing legal battle with Stinger Welding regarding ownership of a large building on the property as well as several cranes. The legal fight has been going since 2012, with both sides claiming ownership of the property in question. Peck said the fight has proven to be a drain on the port’s resources as well as on the energy of the board, but the appointment of a new judge, who has recently retired, should help bring the matter to a speedy conclusion.

“We feel comfortable that this is going to move forward now,” he said.

The formation of a TEDD, using tax incement financing, Peck said, could help the port overcome the structural deficiencies. He said the port has a nest egg of about $2 million the board is prepared to invest in the infrastructure. The port, he said, will also continue looking at grants as methods of financing the necessary improvements.

Tax increment financing will allow the port authority board to capture any property tax revenue generated on the port property over and above the base year and to use those monies to provide further infrastructure improvements. If revenues do not exceed the base year, no additional monies will be available for the port’s use.

Peck said he understands there might be some resistance to the idea of the port authority board directing the expenditure of those monies, given some of the problems of the past. The port, however, he said, is changing direction. The funds will be restricted to infrastructure improvement use and those are the areas to which the board is dedicated.

“If we don’t do this, there’s no money anway,” he said. “So why not try it?”

The difference, he said, is short-term versus long-term investment. The additional investment in the infrastructure won’t cost the taxpayers of Lincoln County any money, he said, with a potential upside of creating valuable taxable property that will be of benefit to the county after the district expires in 15 years.

The commissioners passed the resolution of necessity, which enables the process to move forward. The next step is for the port to create a comprehensive development plan, which must then be reviewed by the planning board and presented for comment at a public hearing. Once that occurs, the county can adopt the plan by ordinance and certify the base year.