What's blight got to do with it? Urban renewal district formation moves forward amid differing opinions

By CAMDEN EASTERLING, Chronicle Staff Writer

Old grain elevators are perched beside the railroad tracks in Bozeman's northeast neighborhood. From that visual high spot, small homes -- some newly restored, some a little tired but tidy -- fill block after block.

Well-groomed flower gardens sit side by side with funky lawn sculpture. Businesses dot the neighborhood, from a small gymnastics studio to a large lumberyard.

The neighborhood is a picture of originality, creativity and eclecticism - not of urban blight, say some of its residents and business owners.

"Any time (blight) has ever come up in a community, it's controversial because the word is horrible," Bozeman City Commissioner Marcia Youngman said. "Nobody wants to call part of their community that. But really what it should mean is, 'needs some fixing up.'"

Two months after the City Commission declared part of the northeast neighborhood blighted, opinions as to how the designation will affect the district are still as varied as the neighborhood.

The blight label drew crowds at city meetings and a pile of letters to the editor as the word brought to mind images of a crime-ridden hovels.

"Abandoned houses, firebombed shells, broken glass and condemned houses constitute blight," Jim Gleason of Belgrade wrote in a "Dear City Commissioners" letter to the editor. "The Feds ought to slap you silly with fines and charge you with attempted fraud."

The conditions Gleason mentioned would constitute blight under Montana state law.

But city officials and northeast-side residents don't mention such problems when they talk about the proposed district. Instead, they talk about the issues that many residents say they find irritating or worrisome.

"Streets are still gravel, if they were built at all," wrote Bobbi Clem, whose business, Strategix Vision, is in the proposed district. "Creosote-laden railroad ties are used where curbs and gutters should be. ... The water system requires frequent changes to plumbing fixtures because of the variety of pressures."

Cities often create urban renewal districts to address such problems. Sometimes cities initiate the districts, other times they're developer driven.

Why now?

A group of local investors, Mill District Partners, has announced plans to build a three-story and a four-story building near the intersection of Peach Street and Wallace Avenue. The buildings will house both commercial and residential units.

Mill District Partners -- which includes Realtor Michael Barrett of Prudential Bridger Realty; he declined to name his partners -- then hired the Bozeman-based Thinktank Design Group to create development concepts for its projects.

In June, Thinktank and Mill District asked the city to consider designating the area around Peach and Wallace as "blighted," a label state law requires for creation of an "urban renewal district."

Cities often use urban renewal districts to attract developers. The idea is to create jobs and generate tax revenue from new construction or redevelopment. Such districts establish separate taxing districts that generate money to pay for infrastructure improvements or other projects.

Brian Caldwell of Thinktank said he and partner Erik Nelson thought the district made sense as a planning and economic development tool.

"This district works for whoever is in it," he said.

Such arrangements are not tax breaks, nor should they be considered handouts to developers, said Paul Reichert, executive director of the Downtown Bozeman Partnership.

Rather they're tools to encourage economic development, he said.

But Thinktank has taken a good deal of heat for putting the idea on the table.

People have alleged that Mill District and Thinktank intend to develop the entire northeast neighborhood into an upscale commercial and residential area. Mill District owns or has options to buy about 10 percent of the property in the district and plans to develop it in the next five years.

Thinktank's Nelson said his firm and his clients have plans for development, but denied accusations that its projects will degrade the neighborhood's existing character.

The residential and commercial uses of the Mill District Partners' project fit with the area's historic mixed uses, its developers said. The architecture will have an industrial look to it, similar to that of the nearby building in which Thinktank has its offices.

Comma-Q Architecture of Bozeman designed that building and will work with Thinktank to design one of the Mill District Partners' buildings.

The city approved the blight label in August. And in September it gave Mill District Partners preliminary site-plan approval for the two buildings.

The developers declined to say specifically how much money has been invested in their plans to date.

"It's substantial," Barrett said.

But Thinktank and its clients say the projects will benefit the whole neighborhood, not just them.

The players

After approving the blight label in August, the city offered Caldwell, Nelson and Barrett seats on the Northeast Bozeman Urban Renewal Plan Committee. That 13-member group is charged with developing a plan for the neighborhood as a whole.

The developers were invited to participate because they proposed the plan and are well versed on the topic, Youngman said. City officials also wanted a mix of residents, developers and property owners.

The three have been fairly quiet at the committee meetings, which have so far been primarily brainstorming sessions.

At those meetings, residents have articulated a wide array of concerns about property condemnation and eminent domain; the risk of using taxpayer dollars to pay for items that only benefit developers; and how best to maintain and encourage diversity, whether the historic mixed uses of the area or its funky feel.

"No taste police," was a goal articulated at a recent committee brainstorming session.

Donna Edgerley, who has lived in her North Church Avenue home for nearly 40 years, said most of her neighbors don't see the need for an urban renewal district.

"We are happy with our neighborhood the way it is," she said. "And they want to make it some fancy la-dee-da that isn't our way of life."

District resident Bob Pavlic, who operates his handicapped-skiing-equipment company out of his home, doesn't particularly like the blight designation either. But he decided to serve on the committee so he could find out more.

Some of the plans -- such as repairing the aging sewer system -- could help, he said. "Nobody's going to complain about that, as long as it goes for the betterment of the neighborhood."

On the other hand, there are some ideas that shouldn't be paid for with the tax revenue the district would generate - namely those that benefit private development, Pavlic said.

Tom Noble, a builder who lives near the district, agreed.

"I think the attitude is, if you want to develop in this neighborhood, you're welcome, but pay for it yourself."

But Kirk Hewitt, who owns Silent Night Muffler at 630 E. Cottonwood St., is withholding judgment.

"I have mixed feelings, somewhat optimistic, somewhat reserved," he said.

Improvements to the neighborhood could increase the number of people driving by and noticing his shop, he said. But he also appreciates the quietness of the area and doesn't want that to change.

Where might the money go?

Urban renewal districts work because they allow public and private entities to work together, Nelson of Thinktank said. "It would be foolish for us not to try to use that."

The developer has an incentive to invest money in a particular area, he said, and the city has an incentive to increase the tax base and gain new businesses or houses for the community as a whole.

However, the committee can, in its final report, specify that the tax-district dollars not go toward any public-private projects, Reichert said.

The committee has not yet discussed that particular possibility yet. It has meetings planned in October to explain the district and collect public comment.

"I think we're going to come together and have a plan together in four weeks," committee member Marcia Kaveny said.

Getting the plan finalized quickly is important because it is a key step in allowing the city to get the most out of any tax-increment revenue that Mill District Partners' projects generate.

However, city commissioners have told committee members they can go past November if the plan isn't ready by then, Youngman said.

Clem and other committee members acknowledge that they each will have to compromise and make concessions when it comes to deciding just what goes into the final plan.

Hewitt said he believes the plan will be balanced, but added, "You know you're never going to please everybody."

Camden Easterling is at ceasterling@dailychronicle.com

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