Director of Urban Planning and Community Development, Craig Raymond, joked during Tuesday’s commission meeting that they would call it “Tax Cut Night”.
The commissioners passed two tax breaks, one for the soon-to-be-renovated property, renamed The Gibson Boutique Hotel, formerly the Greystone Inn on Central Ave; the other for an expansion of the Great Falls Clinic. The projects would pay 0% property taxes for the first year of construction, adding another 20% each year until they pay 100% in year five and beyond.
“It’s kind of unusual that we have so many in a meeting,” Raymond said. “It’s just a sign of progress and a lot of things that are going on.”
The agenda report for both projects cites annotated Section 15-24-1501 of the Montana Code, which gives local government the ability to provide tax benefits for the remodeling, reconstruction, or expansion of existing buildings or structures.
Greystone Inn becomes The Gibson
Applicant for the abatement, Starry Night Hospitality, had to delay construction for the remodel by two years due to the pandemic after first purchasing the property in the fall of 2019.
Commissioner Rick Tryon asked if the schedule could be extended should construction delays occur, to which Raymond said it could be adjusted if needed.
Raymond said there would be a little over $320,000 in impact to the Downtown Tax Increment Financing (TIF) district, which would “essentially hurt the potential TIF fund itself.” He added that the applicant felt this was their preferred incentive and after reviewing it, the staff felt it was an excellent fit.
The staff report noted that the TIF fund is healthy, there would be no impact on the general fund, and the total cost of the project would be over $5.8 million.
“It’s also not entirely unprecedented that we’re doing tax breaks at the TIF,” Raymond said. “We don’t always recommend it, but this is a project we definitely think is appropriate.”
Joan Redeen, director of the Great Falls Business Improvement District, said the BID has historically supported tax breaks within the downtown TIF limits. She said BID will award $62,500 in grants for this project, which will be paid out upon completion.
“We support this application for this project and hope that you support it as well. It’s a fantastic project for our downtown area,” said Redeen.
The Gibson will be a boutique hotel and part of the Ascend Collection of Choice Hotels, an international hotel franchise.
Great Falls Development Authority President and CEO Brett Doney said the tax breaks will help, especially in the early years as they attract customers. He said the GFDA had approved a $950,000 loan for the project.
“We place a strong emphasis on downtown revitalization, but we also support our tourism industry’s efforts to attract cultural tourists who want a unique property and are willing to spend money on a unique property,” Doney said.
Expansion of the Great Falls Clinic
The Great Falls Clinic plans to add a three-story tower to the hospital at 3010 15th Ave S, which the agenda background says will include:
- Cardiac diagnostic and intervention suite
- intensive care unit,
- medical-surgical station,
- and outpatient area
The overall project is expected to cost $55 million, with the clinic anticipating completion in 2024. The reduction will delay property tax collection for the city’s general fund by five years, with Raymond saying the total cost is estimated at $397,168.
That lot isn’t in the downtown TIF district, and Raymond explained that the clinic could also apply for a rebate of up to $1.5 million from Cascade County, which is why the rebate is similar in price to the Gibson project , although they have a completely different construction estimates.
The employees stated that the city will generate long-term tax revenue from the property with the added value of the property. The for-profit clinic expects to create 150 new full-time jobs at an average hourly wage of $24 to $26 per hour upon completion of the project. The clinic has presented an economic impact study by consulting firm McGuire Sponsel, which found the impact of these new jobs to range from $1.5 million to $2.4 million in the community.