The South Billings Urban Renewal Association (SBURA) Board has reviewed this application for tax increment assistance and recommends the City Council approve, upon project completion, a maximum of $500,000 of Tax Increment Finance funds from the South Billings Boulevard Urban Renewal District (SBBURD) to GL Development Inc.

GL Development Inc. is a Helena-based corporation that specializes in developing affordable housing.  Actual reimbursement will be based upon 100% of the actual costs incurred for qualified expenses for the improvements made to the property at 4514 Mitchell Avenue, subject to the following conditions:
1.    The Applicant shall sign a development agreement with the City of Billings and SBURA 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.    This project reimbursement will occur after construction completion (estimated 12/1/25).
4.    If funds are not available, reimbursement can be carried over to the next fiscal year.

The SBURA Board considered GL Development application at its May 20, 2024, board meeting and voted (5 for - 1 against) to recommend $500,000 of tax increment assistance. GL Development intends to purchase 2.1 acres of unimproved land at 4514 Mitchell Avenue where it plans to develop a 32-unit affordable housing complex. The complex will include 14 one-bedroom residences, 14 two-bedroom residences and 4 three-bedroom residences.  The majority of the requested TIF funds are for land acquisition and architectural & engineering design. The total cost for the Mitchell Court affordable housing complex is approximately $11.3 million, and the project leverages Low Income Housing Tax Credits (LIHTC) to make the housing affordable for low income residents of Billings, as well as funding from HUD HOME programs. The Montana Department of Housing recently awarded GL Development $5,394,461 of housing tax credits to develop the Mitchell Court complex.

The applicant requested funding of $850,000 for their project, as well as, made a request that some of the funds be paid to the developer upon purchase of the property. The SBURA board is recommending that the maximum award be $500,000 and that no funds will be paid to the applicant until the project is complete.

Table 1 below details the proposed breakdown of the recommended tax increment assistance for GL Development for Mitchell Court. The extension of the water main to the property and the construction of the drive approaches represent investments in infrastructure needed to develop and access the property. There is also a detailed breakdown of the costs for these project items in the Mitchell Court TIF Application attached to this memo.

Table 1. Alignment of Proposed Improvements with City TIF Policy, SBBURD Urban Renewal Plan, and MT Code.
 

Qualified Improvements	Estimated Costs	City TIF Policy	Urban Renewal Plan	MT Code Annotated
Preliminary & Final Planning, Studies and Design	$ 570,538.00	Sections 1(a-c)	Sections 9 & 12	7-15-4233(i) & (n)
Acquisition	$ 140,000.00	Section 1(a)	Sections 9 & 12	7-15-4288(1)
Demo & Site Clearance	$ 278,893.00	Section 1(a)	Sections 9 & 12	7-15-4288(2)
Utilities & Connections	$ 334,951.80	Section 1(b)	Sections 9 & 12	7-15-4288(4)
Vehicle Access & Surface	$ 348,607.70	Section 1(b)	Sections 9 & 12	7-15-4288(4)
Landscape Improvements	$ 135,732.50	Section 1(a)	Sections 9 & 12	7-15-4233(i)

 

City Council may:

• Approve the recommendation from the SBURA board for the expenditure of these tax increment finance (TIF) funds; or,
• Modify the recommendation from the SBURA board for the expenditure of these TIF funds; or,
• Disapprove the recommendations from the SBURA board for the expenditure of these TIF funds. If the Council chooses not to approve the TIF application, specific reasoning for the denial will be important for City staff and the SBURA Board to understand for future applications.

The recommendation is for a maximum of $500,000 to be reimbursed to GL Development for the identified work, including land acquisition ($140,000), Architectural & Engineering Design ($134,075), Demolition ($20,000), Utilities and Connections ($90,000), landscaping ($40,000), and other improvements. The estimated total project cost is about $11.3 million, making the private to public investment ratio for this project about 24:1.  The funds are payable per the conditions of approval outlined in the SBURA recommendation and pending satisfactory submission of all paid invoices showing actual cost incurred for the project.  This project proposes reimbursement occurring after construction completion (estimated 12/1/25).

This project is included in the FY25 budget.