Yellowstone County’s newest Industrial Park, the Lockwood Targeted Economic Development District (Lockwood TEDD) will be home to valued-added industries with over 600 developable acres of prime, planned industrial space. Yellowstone County Commissioners have approved both the Lockwood TEDD Strategic Plan and the Lockwood TEDD Infrastructure Master Plan, initiating the development of an industrial park between I-90/I-94 and the Yellowstone River north of Lockwood. The Lockwood Industrial Park offers acres of planned industrial space. It has excellent access to the Interstate, railroad, and Logan International Airport. It abuts the I-90/I-94 Interchange; it will be bisected by the Billings Bypass; and it straddles the BNSF mainline railroad tracks. It is conveniently located near Billings, the regional hub and the largest city in a 500-mile radius. The Industrial Park is envisioned as a catalyst to stoke the economic vibrancy of Yellowstone County by spurring the expansion of existing industry and facilitating the recruitment of new, value-adding industry to the region.
Development plans call for:
- The enhancement of existing roads and the addition of new roads to the network to facilitate access to the parcels.
- Two intersections with the Billings Bypass to avoid traffic congestion.
- Additional rail sidings and spurs to serve the delivery and shipping needs of the park occupants.
- The enhancement and extension of water, sewer, and storm drainage systems throughout the industrial park area.
- A variety of parcel sizes available, up to 40 acres or more.
The Lockwood Industrial Park project is a Targeted Economic Development District (TEDD), meaning Tax Increment Financing (TIF) will be used to develop the infrastructure of the area. TIF provides that the increase in property taxes associated with the development of the area is funneled back into the area to finance the infrastructure needed to serve the district. This “increment” is available for this purpose for the duration of the TEDD – 15 years unless extended by bonding.
The Increment is the result of increasing property values because of development within the district. In the early years of the TEDD, there may not be sufficient increment available to finance infrastructure for the initial Industrial Park occupants. It may be necessary for these early-adopters to install and pay for certain infrastructure improvements. However, development agreements can be arranged for these businesses which will provide for reimbursement of qualifying infrastructure expenses once the amount of tax increment is sufficient.
About the TEDD
- Targeted Economic Development Districts (TEDDs) assist local communities in addressing infrastructure deficiencies in order to support the retention, expansion and location of value-adding businesses and industries.
- Tax Increment Financing or “TIF” is a funding mechanism which can be used to help fund public infrastructure and associated services in Targeted Economic Development Districts (TEDDs).
- A TEDD creates a partnership with private industry to address the needed public infrastructure that then supports private investment
- TIF is authorized under Montana Code Annotated § 7-15-4282 and enables communities to direct property taxes from new development within a designated infrastructure-deficient geographic area to various public development activities.
- A base year is established from which incremental increases in property values are measured.
- Providing required matching funds to secure local, state and federal grants
- Expenditures based on existing cash
- Debt financing
- Leveraging funds from other sources
- Revolving loan fund
- Bridge funding
- Land and Infrastructure Development
- Rail Services
- Sewer, Water and Stormwater Drainage
- Land improvements and Site Preparation
- Connecting to Services Outside the District
- Public Services
- Business and Technical Assistance Programs
- State and Federal Loans and Grants, for example:
- US EDA Public Construction Grants,
- MDT Transportation Alternatives Grants,
- MT Department of Commerce Big Sky Economic Development Trust Fund Grants,
- MT Department of Commerce Treasure State Endowment Program (TSEP) Funds,
- MT Department of Commerce Board of Investments InterCap Loans,
- MT Department of Natural Resources and Conservation State Revolving Loan Funds,
- MT Department of Fish, Wildlife and Parks’ Recreational Trails Program,
- USDA Rural Development Loans (RD) Water and Environmental Loans, and
- Gas and Diesel Tax Distributions to Counties, among others.
- Special Improvement Districts
- Public-Private Partnerships
- Developer-Financed Infrastructure Improvements
- Each taxing jurisdiction continues to receive property taxes levied against the TEDD’s base taxable value.
- Only the incremental tax dollars received from new development are placed in a separate fund for making public improvements within the TEDD for 15 years.
Assume: $2,000,000 dollars of appraised NEW value (above the base taxable value)
Assume: Class 4 property (residential, commercial, industrial) @ 2.20% (2015)
Calculate: $2,000,000 x .022 = $44,000 in taxable value
Assume: A mill levy of 721.78 (Total mill levy for Lockwood, less the 6 mill university levy)
Calculate: $44,000 x 0.72178 = $37,758.32 Tax Increment
So: $37,758.32 is available to invest in public infrastructure every year until the TEDD expires. This also means that the private sector had to FIRST invest $2,000,000 to generate that increment.
- The TEDD is a tool to grow the tax base. When the TEDD sunsets, for every $2,000,000 of new appraised value, Lockwood School will receive an additional $6,852.36 per year of new tax revenue. [$37,758.32 x 0.18148 (Lockwood School District mill levy) = $6,852.36]
- There is no financial impact on taxpayers.
- The TIF provision ONLY affects the WAY in which new property tax dollars (based on new value) are distributed.
- As always, taxes paid are based on the value of your property including new improvements.
- Property owners benefit, however, because infrastructure improvements are made in the area in which their properties are located.
- The TEDD tool can be used to plan growth. Should the Yellowstone County Commission elect to adopt the Resolution of Necessity with the Statement of Infrastructure Deficiency presented to them on March 6, then BSED, our consultants, and the Lockwood community will move forward to develop a Comprehensive Development Plan for the Lockwood TEDD.
- That Plan will address at minimum: a TIF provision; a description of the District; the TEDD’s goals; an analysis of infrastructure deficiencies and priorities; potential targeted industries; a list of activities and projects; District and program administration and management; funding strategies; TEDD Plan amendment procedures; and documentation of public comments made throughout the planning process. This allows Lockwood to plan for growth within and, to a certain extent, around the Targeted Economic Development District.
- BSED will ask the Planning Board to review the Growth Policy to determine:
- Whether the Comprehensive Development Plan conforms with the adopted Growth Policy, and
- That the area of the TEDD is zoned in accordance with the adopted Growth Policy.
- The Yellowstone County Commission will then hold a public hearing on the TEDD Plan following notification by mail of all property owners in the District and through the placement of a legal advertisement.
- BSED will ask the Yellowstone County Commission to consider adopting the Ordinance that creates the TEDD, which, if adopted, will be effective 30 days after passage.
- BSED will submit materials to the Montana Department of Revenue for Certification.