Gallatin committee advances $1.5 million infrastructure grant for Westside Markets development; 5-1 to send to council

The Gallatin City Council committee voted 5-1 on May 13 to send to the full council a resolution authorizing a $1,500,000 grant to the Industrial Development Board (IDB) to support public infrastructure upgrades for the Westside Markets shopping center, a development that would include a Target anchor and other outparcels.

City economic-development staff and the developer presented an economic-impact memorandum from Younger & Associates and described the grant as an incentive to bridge site-development costs that the developer says are preventing anchors from committing. Rosemary Bates, the city’s executive director of development, said the report shows a strong return on investment and that the grant agreement and supporting documents were reviewed by the city attorney and outside counsel prior to the meeting.

Why it matters: the package would be a one-time public contribution to private development, routed through the IDB because the city cannot make a direct grant to a private developer. Supporters said the center would generate sales and property tax revenue citywide; opponents warned of precedent-setting and urged guardrails such as job or revenue thresholds.

Details of the plan and debate Jake Wilson and Bates summarized materials supplied to the committee, including two Younger & Associates economic-impact memoranda. Bates said the reports estimate first-year tax revenue tied to the Target site and the overall shopping-center phase and project a multi-year return on the city’s investment; the staff packet included a short summary and two full reports provided to councilmembers that evening.

Mike McGuff of CHM Development, the project developer, said the $1.5 million would be used to reduce the developer’s site costs so the anchor and other tenants will proceed. McGuff described the arrangement as the developer taking construction and lease-up risk; the grant would be disbursed after the developer meets the contract conditions and the city accepts required infrastructure work.

City staff and the developer described the payment timing and structure differently at points in the discussion. Bates and others noted the grant is structured to flow through the IDB; the IDB and the city would be party to the grant agreement and to any enforcement remedies therein. Bates said the grant agreement has been vetted by the city attorney’s office and by outside counsel.

Council members pressed for specifics on timing, enforcement and precedent. Several asked whether the city could instead waive fees or return a share of new sales tax to the developer; staff explained state reporting rules limit the city’s ability to identify sales by single retailers and described alternative structures (TIFs, PILOTs, percentage-based sharing) as carrying different tradeoffs. City staff and some council members recommended including summary findings from the Younger & Associates analysis in the resolution to document why leadership considered the incentive appropriate.

Vote and next steps A motion to move the resolution to the council passed 5-1. Motion: Councilman Fennell; second: Councilman Alexander. Councilman Givant cast the lone opposing vote. The item will appear on the next city-council agenda for final action and for possible amendments to the grant language before final approval.

What the committee did not decide The committee did not finalize a specific disbursement schedule in open session; members asked staff and the city attorney to refine contract terms, consider guardrails and attach the economic-impact summary to the council resolution so that the full council would have the supporting analysis when it takes the final vote.

Ending note Developers and staff told the committee they regard the project as the catalyst for additional development on the site; council members who voted to advance the measure emphasized that final safeguards and contract language will be resolved at the full council meeting.