The Billings Industrial Revitalization District (BIRD) Board of Directors recommends the City Council approve up to a maximum reimbursement of up to $82,600 from the EBURD tax increment finance district funds to Undammed Distillery to assist in the re-purposing of property at 116 North 11th Street for a new tasting room, production and sales facility. Actual reimbursement will be based upon 100% of the actual costs incurred for qualified expenses for the improvements made to property subject to the following conditions:

1. The Applicant shall sign a development agreement with the City of Billings and BIRD within 180 days of City Council’s approval.
2. This TIFD reimbursement is the maximum that can be received pending satisfactory submission of all paid invoices showing the completion of expenditures related to this project.
3. If funds are not available, reimbursement can be carried over to the next fiscal year.
 

The Billings Industrial Revitalization District (BIRD) Board of Directors is presenting this recommendation to the City Council for allocating $82,600 in tax increment finance funds (TIF) from the East Billings Urban Renewal District (EBURD) to provide financial assistance to Undammed Distillery for construction of a new tasting room, production and sales facility at 116 North 11th Street. The BIRD Review Committee considered this application on October 7 and on November 14 recommended approval to the full BIRD Board. The BIRD Board reviewed and recommended approval of this project to the City Council at its board meeting on November 14.

The Undammed Distillery property for redevelopment is located in an area seeing other redevelopment in the EBURD. The subject property is the former location of the Burtell Fire Protection Business that was vacated. Examples of this redevelopment activity include the Toucan Gallery’s new space on 1002 2nd Avenue North and Ritch Rand Designs at 213 North 10th Street. Existing manufacturing facilities and discussion for shared transportation needs is also being assessed with neighboring businesses in this area as new types of development and business uses consider the area. The total cost of fees, site improvements, site work and building improvements for the project is $873,208.  The BIRD Board has been aware of this project since it began a property search for the project. The BIRD Board found that this project was in line with the EBURD Master Plan and Urban Renewal Plan, particularly in the areas of economic growth, industrial development, infrastructure improvements and increasing land use in the district. The project will result in 4.5 construction positions during the project and add 2 new full time positions for the distillery.

The BIRD Board's recommendation of $82,600 toward the improvements results in about a 10:1 investment in private to public funds for the project based on a total project cost of $873,208 that includes the land cost (there is no reimbursement for land expenses). If the land cost is removed from the project total, the private to public funding ratio is 5:1, meeting the recommended level in the City's TIF Policy. The payback for this investment based on property tax increases is estimated at about 9 years. The BIRD Board noted several reasons for its support of the project:

• With the reuse and redevelopment of this property, this project is in alignment with the EBURD Urban Renewal Plan under its Business Programs and Projects and Infrastructure Improvements goals (See Pages 3 and 4, item I and IV of the Urban Renewal Plan Attached), and the EBURD Master Plan's principles of fostering economic growth, and ensuring industrial operations continue. Reuse and improvement of this property in the EBURD aligns well with the urban renewal efforts of the City and the EBURD.

Table 1.

Qualified Improvements	Recommended TIF Reimbursement	City TIF Policy	Urban Renewal Plan	MT Code Annotated
Demolition Facade Improvements Landscaping Fencing, Lighting and Signage Life Safety Systems	$82,600	Section 1(b)	Section 2 (I) Business Programs and Projects Section 2 (IV) Infrastructure Improvements Section 13 Section 14	7-15-4233 7-15-4288

This process and action of the BIRD is under its authority per the Memorandum of Understanding between the City of Billings, Big Sky Economic Development, and the BIRD, Inc. approved by the City Council on May 13, 2019.
 

The City Council is the final authority in disbursing TIF funding. This proposed use of TIF funds conforms to the City's TIF Policy and aligns with the EBURD Urban Renewal Plan and Montana Code for urban renewal projects and programs. The City Council may:

• Approve the recommendation from the BIRD Board for the expenditure of these TIF funds, or;
• Modify and approve the recommendation from the BIRD Board for the expenditure of these TIF funds
• Disapprove of the recommendation from the BIRD Board for the expenditure of these TIF funds. If the Council does not approve of this TIF expenditure, providing reasons for the denial to the BIRD Board and staff and City staff will be helpful for future TIF applications.

The request is for a total of up to a maximum of $82,600 to be reimbursed to Undammed Distillery only upon completion of the work and submittal of the invoices for the cost incurred. It is expected that this project will be completed in late FY24 and this expenditure will not negatively impact the current EBURD budget for FY24. The FY24 budget included $643,226 for development projects, which included $352,576 for projects not yet identified. If this award is approved, and the project is completed in FY24, there will be sufficient budget available.