The South Billings Urban Renewal Association (SBURA) Board has reviewed this application for tax increment assistance and recommends to the City Council, upon project completion, a maximum of $843,502.05 of Tax Increment Finance funds from the South Billings Boulevard Urban Renewal District (SBBURD) to Torgerson's, LLC for development of its new heavy equipment implement dealer. Actual reimbursement will be based upon 100% of the actual costs incurred for qualified expenses for the improvements made, 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 amount that can be received pending satisfactory submission of all paid invoices showing the completion of expenditures related to this project.
3.) The project reimbursement will occur after construction is completed.
4.) If funds are not available, reimbursement will be carried over to the next fiscal year.

The SBURA Board considered the Torgerson's, LLC application at two of its meetings, first at its February 4, 2025 meeting and again at its April 1, 2025 meeting. At the February meeting, the SBURA reviewed the application and recommended $307,045 in TIF funds for the project. The SBURA Board recommended this amount in part because members stated they did not think they had adequate funds to make a larger recommendation based on the recreation facility expenses the City is to bond for the project. Torgerson's is moving its Billings operation and building a new headquarters from its current location in the SBBURD on the Laurel Frontage Road to this new location on the South Frontage Road.

Torgerson's and its consultant for the project decided to pursue bringing the application back to the SBURA Board for further consideration. SBURA consultant Dick Zier also revisited the SBBURD budget in consultation with City Finance staff and determined that there was expected to be more funds available in addition to the recreation center bonding. The SBURA Board reconsidered the Torgerson's application at its April 1 meeting and recommended to the City Council that $843,502.05 in TIF funds be awarded to the project.

The location of this project is in an area that has seen significant investment in the past 5 years, with businesses including Mobile-Stor, TPA Warehouses, and Magnum Trucking. This development has been due in large part to actions and investments by the City in terms of annexation, zoning, inclusion of the property in the SBBURD, and extension of a main water line in the South Frontage Road. The City in March 2022 utilized about $845,000 in TIF funds to complete the water line extension to serve this and the other properties in this area. The water line project was funded by TIF funds with agreements with property owners to complete the project to City specifications as there was significant interest at the time to complete the extension quickly. Significant investment by the business and property owners in this area also made this work possible.

Site work and some foundation work started for the Torgerson's project in January. The applicant had begun discussions with Dick Zier in August of 2024 and had submitted the application in December 2024. At the time, the applicant was informed that as long as the TIF application was submitted and under review by the SBURA Board, the project could begin. The applicant understood it was at their own risk since the Council had not acted on the final approval of the TIF award. Since this time, the City's position has been clarified that applications for TIF awards must go through the review process up to and including the City Council before projects start construction. The applicants stated at the SBURA Board meeting in April that if the TIF award is less than what has been requested and recommended in this second round, the project scope may have to be adjusted as it moves forward to meet the available funding.

Total project costs are estimated to be $9.8 million less the property acquisition. The total recommended amount from the SBURA Board of $843,502.05 is for Grey Eagle Ditch relocation, utilities, curb and gutter improvements at the access and customer parking area, landscape improvements, and installation of the multi-use path along the South Frontage Road. This is approximately a 1:11 ratio of investment of public vs private funds. This is well above the ratio recommended by the City TIF policy, which is a minimum of 1:5.

Table 1 below details the proposed expenses that qualify for tax increment assistance to Torgerson's, LLC. There is also detailed information relating to the project costs included in the Torgerson's TIF Application and additional financial documents attached to this memo.
TABLE 1. 

Qualified Improvements	Estimated Costs	City TIF Policy	Urban Renewal Plan	MT Code Annotated
Grey Eagle Ditch relocation	$275,765	Section 1(a)	Section 13,14	7-15-4288
Utilities	$49,185	Section 1(b)	Section 13,14	7-15-4288
Landscaping	$278,524	Section 1(b)	Section 13,14	7-15-4288
Multi-use path and curb and gutter improvements	$240,028	Section 1(b)	Section 13,14	7-15-4288

The property tax value is expected to increase with the improvements and redevelopment and is estimated at a 7-year payback. This property is positioned well for improvements and future redevelopment to take advantage of goals of the District and meet the intent of the Urban Renewal laws (See Table 1). The redevelopment of this property will increase the tax base for the SBBURD and make it a contributor to commercial development in the area.


 

Stakeholders for this application include the property owners in the SBBURD, the applicant and the general public in Billings. The SBURA Board meeting is a public meeting and the City Council meeting is a public meeting as well, so the public has multiple opportunities to comment on this application as it is reviewed and acted upon. The Planning and Community Services Department did not receive any public comments on this application before this memo was completed. The SBURA Board minutes of when this application was reviewed and recommended for approval to the City Council are attached to this memo.

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.

The recommendation is for a maximum of $843,502.05 to be reimbursed to Torgerson's, LLC for qualifying elements of constructing a new for development of the new location for its new heavy equipment implement dealer at 3508 South Frontage Road. This project is expected to be completed in FY26 and there are sufficient funds budgeted in FY26 to cover this reimbursement.