The Billings Industrial Revitalization District (BIRD) Board of Directors recommends the City Council approve up to a maximum reimbursement of up to $475,000 from the EBURD tax increment finance district funds to Billings Animal Family Hospital (ERB Properties, LLC) to assist in the construction of a 6,943 square foot veterinary hospital at 1616 1st Avenue North. 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 $475,000 in tax increment finance funds (TIF) from the East Billings Urban Renewal District (EBURD) to provide financial assistance to Billings Animal Veterinary Hospital for construction of a new 6,943 square foot veterinary clinic at 1616 1st Avenue North. The property is at the northeast corner of the intersection of North 17th Street and 1st Avenue North. This new hospital will be a second companion hospital to the existing Billings Animal Family Hospital located at 1321 North 27th Street across from the MSU-B campus north of the intersection of Poly Drive and North 27th Street. The BIRD Review Committee considered this application and 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 September 10 and then reconsidered it on October 2 due to a re-evaluation of the EBURD financial projections after receiving the MT Department of Revenue annual values for the District.

The subject property is vacant and the new veterinary clinic will include a new building, site work, parking, sidewalks, landscaping, fencing and water and sewer utility connections. The total cost of fees, site improvements, site work and building construction for the project is $3,378,413 less the land cost and $4,053,413 with the land cost included. 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, infrastructure improvements and increasing land use in the district. The project will result in 6 construction positions during the project and add 6 new full time positions for the new veterinary hospital.

The BIRD Board's recommendation of $475,000 toward the improvements results in about a 14:1 investment in private to public funds for the project based on a total project cost of $3,378,413 that does not include the land cost (there is no reimbursement for land expenses). This 14:1 ratio exceeds the 5:1 recommended ratio in the City's TIF Policy. The payback for this investment based on property tax increases is estimated at about 17 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
Facade Work Site Work Electrical and Mechanical Systems Water and Sewer Utility Connections Landscaping Fencing	$475,000	Section 1(c)	Section 2 (I) Business Programs and Projects Section 2 (IV) Infrastructure Improvements	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 nd renewed for one year on April 22, 2024.
 

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 $475,000 to be reimbursed to Billings Family Veterinary Hospital 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 FY26 and this expenditure will be programmed in the FY26 EBURD Budget. If this award is approved, and the project is completed in FY26, there will be sufficient budget available.