Staff recommends City Council approve the North Parking Lot Lease with Honaker Realty, LLC, allowing use of the City-owned North Lot beginning April 15, 2025, and terminating upon the closing or termination of the Purchase Agreement, whichever occurs first.

Purchase and Sale Agreement (PSA):On March 1, 2024, the City of Billings entered into a PSA with Honaker Realty, LLC and JWT Capital, LLC for the $2.8 million sale of City Hall, Park 3, and associated parking lots on North 27th Street. The project supports redevelopment in the downtown core, including a proposed hotel development.

Amendments to PSA:
First Amendment (Aug. 27, 2024): Extended contingency deadlines and allowed City to vacate by April 1, 2025.

Second Amendment (Oct. 30, 2024): Extended contingencies to Dec. 6, 2024.

Third Amendment (Dec. 18, 2024): Extended to Jan. 31, 2025, confirmed May 15, 2025 closing.

Fourth Amendment (Jan. 21, 2025): Extended contingencies to March 31, 2025, emphasized importance of timely closing.

Fifth Amendment:
Extended contingency period to June 16, 2025
Finalized Parking Management Agreement terms for Parcels A and B
Addressed sky bridge encroachments
Extended financing contingency to closing
Established June 16, 2025 as the updated closing date

Lease Purpose:The Lessee requests temporary use of the North Lot (Lots 8–10, Block 92, Original Townsite) for off-street parking and demolition of adjacent structures as part of their site preparation. Lessee is permitted to remove all existing improvements, including asphalt and signage. If the Purchase Agreement does not close, Lessee is required to restore the site to the same or better condition.
 

City of Billings: Owner of North Lot.
Honaker Realty, LLC & JWT Capital, LLC: Developers pursing a substantial downtown revitalization project.
Downtown Business Partnership (DBP): Active in contingency approvals and development incentive discussions.
 

City Council may:

• Approve the Parking Lot Lease with Honaker Realty, LLC; or
• Not Approve the Parking Lot Lease with Honaker Realty, LLC.

Lessee will pay monthly rent of $1,887 for the use of the lot, and will terminate upon the property's closing.  This amount reflects the equivalent monthly revenue the City would typically generate from 23 parking spaces.  Standard monthly parking rates are $85 per space, with three groups receiving a discounted rate of $81 per space.  The lease rate was calculated using this rate structure to ensure the City continues to receive comparable revenue during this temporary arrangement.

The City entered into a Purchase and Sale Agreement (PSA) on March 1, 2024, with Honaker Realty, LLC and JWT Capital, LLC for the $2.8 million sale of City Hall, Park 3, and associated parking lots, supporting a larger downtown redevelopment effort that includes a proposed hotel. A series of amendments have extended contingency deadlines and adjusted the closing timeline, with the current target closing date set for June 16, 2025. As part of pre-development activity, the Buyer—acting as Lessee—is requesting the utilization of the site for off-street parking and demolition of select structures. The Lessee will pay monthly rent of $1,887, and the lease will terminate upon closing. If the sale does not proceed, the Lessee is responsible for restoring any removed or damaged improvements. This temporary use supports the project while generating short-term rental revenue for the City Parking Division.