Staff recommends that Council approve the Sixth Amendment to the Purchase and Sale Agreement between the City of Billings and Honaker Realty, LLC and JWT Capital, LLC.

On March 1, 2024, the City entered into a PSA with Honaker Realty, LLC and JWT Capital, LLC for the sale of City Hall, Park 3, and nearby parking parcels. The agreement has been amended five times to accommodate due diligence extensions, funding terms, and infrastructure considerations tied to the buyer's development plans.

The proposed Sixth Amendment addresses one remaining infrastructure issue: the 27th Street Skybridge, which connects the City’s Garage Building to the Yellowstone County Courthouse and spans a public right-of-way.
Key points of the amendment:
     If the Buyer’s future redevelopment or sale of the Garage Building requires the removal of the Skybridge, the City and Buyer will split the actual demolition and removal costs 50/50.
     The Buyer will oversee the demolition, and the City will reimburse its share based on documented expenses.
     The City’s financial obligation is capped at 36 months following the property’s closing date. If removal does not occur within that window, the City’s obligation expires.
     Any reimbursement disputes must go through non-binding mediation in Billings before litigation.

This amendment satisfies Section 14 of the original PSA, which requires a resolution if the Buyer identifies a significant structural or economic concern during due diligence that makes redevelopment of the Old City Hall Building economically unfeasible. Potential reasons for Skybridge removal include:
     The Skybridge no longer serving a functional purpose under modernization or repurposing plans.
     Design conflicts with new residential or commercial uses.
     Limitations due to third-party ownership or leases.

The amendment formalizes a shared solution to this issue, supporting the transaction's progression without needing to exclude the Old City Hall Building from the sale. It reflects mutual good faith and protects both parties from future uncertainty regarding infrastructure obligations.

City of Billings – Seller of City Hall and Park 3
Honaker Realty, LLC and JWT Capital, LLC – Buyer and prospective developer
City Facilities Division – Asset and contract oversight
Downtown Billings Partnership – Stakeholder in redevelopment of downtown core
City Council and Public – Policy oversight and fiscal responsibility

City Council may:
Approve the Sixth Amendment as recommended.
Modify the Amendment before approval.
Deny the Amendment

If the Skybridge is removed within 36 months of closing, the City will reimburse 50% of the documented costs. Staff recommends setting aside a portion of the sale proceeds in reserve to cover this potential cost without impacting other capital expenditures.

The Sixth Amendment outlines a cost-sharing agreement for the potential removal of the 27th Street Skybridge, limits the City’s financial liability to a 36-month window, and provides a process for resolving disputes. Staff recommends approval and reserving funds from sale proceeds to meet any future obligations.