There is no formal recommendation for this item on the Work Session, but staff does see a preferred option to develop a small open space and community garden at the site. Staff is expecting direction from the City Council on redevelopment options for 802 Yellowstone Avenue so the City can move forward with improving the property in 2026.

The property at 802 Yellowstone has been a nuisance property for the neighborhood and the City for over 20 years. Code Enforcement has a record of cases for the property dating back to 2005. These cases included violations of graffiti, open storage, nuisance weeds, boarded building, and a nuisance structure. In 2024, the City filed in district court to get the property into compliance. Ultimately through mediation, the owner agreed to deed the property to the City as he was not able to meet the compliance requirements. The City also saw this as an opportunity to utilize the US EPA Brownfields program to access clean up resources both professional and financial. The City also wants to ensure the property is redeveloped in a way that fits the neighborhood and the neighbors' interest in having a property that contributes to the area again as it did decades ago.

Since late 2024, Big Sky Economic Development (BSED) and the city have been working on the assessment and cleanup of 802 Yellowstone Avenue (former Meat House and Lockers). The City obtained ownership of the property in December 2024. With the cooperation of the previous owner, Granite Peak Environmental (BSED's consultant for the Brownfields program) assessed the presence and extent of hazardous building materials in the structure, developed an Analysis of Brownfield Cleanup Alternatives (ABCA), and conducted a public meeting with City staff at City Hall on February 27, 2025 to discuss the findings. Through the Brownfield Revolving Loan Fund, BSED can provide funding for the abatement and demolition of the building.

Staff began discussion in Summer 2025 with Community Development staff, Parks staff and Finance staff to evaluate options for redevelopment, consider further neighborhood engagement, and preparation to bring options to the City Council for direction on moving ahead with redevelopment activity. Based on staff analysis, a community survey that was conducted in Summer/Fall 2025, City staff is bringing the Council information and options for redeveloping the property. Staff has developed the following concepts and refined them further for Council review, discussion and direction. The options are noted below and outlined further in the attached presentation that will be shared at the Work Session: 

Initial Concepts

• HOME and CDBG Program funds for siting a Single Family Modular Home on the property for an owner through the First Time Homebuyer Program - there are Program and HUD challenges with this scenario as HUD will not allow use of CDBG  funds for "new residential construction" on the property. The City would need to utilize mostly HOME funds, which are currently allocated for the LB Lofts project in the Heights that is slated to start construction in 2026. Availability of HOME funds would have to be evaluated in mid 2026 and might not be a predictable funding source if other projects were drawing on City HOME funds at that time. 
• Private development approach (Implementation concerns) - The City has little to no experience in preparing RFPs for specific development concepts where a developer would be required to meet certain stipulated requirements of a development project, and then be conveyed the land in a way that would incentivize the project's success. The City should become familiar with this kind of approach, especially if it decides to convey surplus park land, but completing a process like this has many challenges and hurdles. 
• Small Open Park Space  (Parks supportive) - This option was well supported by the survey respondents and has relatively clear access to CDBG funds, while creating as limited impact to the Parks Department budget and ongoing maintenance. 
• Open Space/Community Garden (Parks supportive) - This option like the one above was well supported by the survey respondents and access relatively clear access to CDBG funds, while creating as limited impact to the Parks Department budget and ongoing maintenance. 

Refined Concept Recommendation

• Open space/community garden could be started now with CDBG/CPTED funds available now and into 2026. Survey results strong in favor of open space/garden.

 

The Billings community is a stakeholder in this effort, but the neighbors in the area around 802 Yellowstone have finally received some significant benefit from having this nuisance property completely cleaned up so that it is ready for future redevelopment in the neighborhood. The neighborhood will also benefit from the redevelopment of the property and a community survey conducted by City staff showed that small open space with a community garden or a single residential unit were clearly preferences for the neighbors in the area. The residents of Billings also benefit from the City's use of the US EPA Brownfields program administered by Big Sky Economic Development and the option to utilize the revolving loan fund (RLF) for this project. Approaching cleanup of this property through this program, after years of challenges in getting it addressed, benefits the City by funding the cleanup work and flexibility in what the City may reimburse the RLF program in the future. 

There are no action alternatives for City Council since this is a Work Session. Formal action may occur later in the redevelopment process, if there are applicable action items.

There is no financial impact to the City's budget at this time. There will be staff time and various budget impacts depending on what redevelopment option the City chooses. For example, if the City decides to develop a small open space/community garden on the property, Community Development and the Parks Department will be involved, with CDBG funding being applied for some of the property improvements and Park staff spent on coordinating the community garden and some amount of maintenance to the open space areas.

Future redevelopment of the property, guided by the City, that benefits the community and meets the US EPA Brownfields program goal of remediating a property to enable redevelopment, means the City would not be obligated to pay back the loan based on the redevelopment scenario. If any portion of the loan were to be paid back, it would come in two cases:

• From profit the City made from selling the property outright and not insuring community benefit.
• If the City ensures the property is redeveloped to achieve community benefit through possible residential, commercial or open space uses of the property, loan repayment would be limited to any profit the City made after carrying out one of these redevelopment scenarios.