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Missoula City Council adopts MRA’s budget

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Posted at 9:17 AM, Feb 08, 2022

MISSOULA - The Missoula City Council’s lingering conservative wing and its inaugural member of the Democratic socialists tried but failed Monday night to block the adoption of the Missoula Redevelopment Agency’s Fiscal Year 2021 budget, despite the impacts doing so could have on the city’s general fund heading in 2022.

On an 8-3 vote, the Missoula City Council adopted a resolution regardless amending MRA’s budget, which includes final calculations based upon new taxable values from the state, its impacts on mill levies, anticipated grants and bond proceeds.

The vote is an annual occurrence, though the council’s new socialist member and what remains of its conservative block sided against it. The two political camps have aligned in recent weeks in opposition to a number of measures, but none have met success.

Daniel Carlino, who narrowly won election representing Ward 3 over Dori Gilels – now a member of the Consolidated Planning Board – suggested tax increment was used to build the $25 million AC Hotel in downtown Missoula.

The project brought dozens of new jobs to the city and, like the Mercantile next door, created the opportunity for business expansion and relocation. It was supported by downtown advocates and was envisioned in both the old and most recent Downtown Master Plan, which were supported by the larger public.

Still, while the project occurred years ago, Carlino voiced opposition.

“I believe Marriott should be paying for their fair share of sidewalks and utility relocation,” Carlino said in opposition to the budget. “I’m also concerned about the (funding) MRA paid Marriott for deconstruction and remediation. I think deconstruction should become the standard requirements since it’s needed to meet our city’s waste reduction goals.”

The city is not authorized under state law to mandate deconstruction over demolition. Rather, Missoula has used tax increment within qualified districts in recent years to entice the deconstruction and salvaging of materials, which has enjoyed public support.

According to a city report in 2020, tax increment financing also created 15 miles of sidewalks in Missoula, 10 miles of streets and brought a number of new businesses to the city, making it a valuable tool for completing public infrastructure and boosting economic development.

The program has been in place in Missoula since the 1970s when the Missoula Redevelopment Agency established the city’s first urban renewal district downtown after the opening of Southgate Mall.

As businesses fled the city center for the new suburban hub, MRA invested roughly $20 million in tax increment into the downtown district. Over the district’s life, that initial investment leveraged $200 million more in private funding, helping transform downtown Missoula into the center it is today and boosting the city’s general fund.

Missoula Mayor John Engen, members of the City Council and the broader business community support such investments, which are limited to public infrastructure under state law. It cannot be used for private development, though it can expand upon the investment a developer would not otherwise be required to complete.

Engen took issue with Carlino’s ill-timed attack on tax increment and suggested Monday’s vote was about the budget, not TIF financing. Other council members supported the measure.

“We have an audit that is coming up and we need to complete this so we have all the I’s dotted and T’s crossed,” said City Council president Gwen Jones, who also represents Ward 3. “These are the final numbers that come in as projects move forward. Now we have hard numbers. I’m in support of it.”

Other members of the City Council also supported the adopted MRA budget – and the work of the agency itself. Missoula would be a far different place without the agency’s focus and investment, they’ve said.

“I just want to note how significant tax increment dollars have been in the public good,” said council member Jennifer Savage. “I spent the better part of last summer doing a lot of reading about tax increment, and I now realize ultimately it’s for the public good.”