Community Development (CD) staff recommend approval of the amended LB Lofts Development Agreement. The agreement amendment removes the City's procurement provisions, allowing the project to proceed toward construction in a timely manner while requiring the developer to comply with all applicable federal and state procurement standards per the award of CDBG and HOME funds. 

On October 13, 2025, City Council approved a $1,545,000 funding allocation for the LB Lofts Affordable Housing Development project. This memo outlines an alternative procurement process for selection of the project's General Contractor. The Montana Department of Commerce authorized the use of a Request for Proposals (RFP) process in lieu of the public sealed bid method. As a result, the Development Agreements previously approved by Council have been amended with the assistance of the City Attorney's Office to align with federal procurement requirements and allow this alternate process. 

Funding History: 

• October 18, 2024: HomeFront and Homeword submitted an Affordable Housing Development Program application to the City's Community Development Division requesting $1,545,000 in funding for the project. 
• December 19, 2024: The project was awarded $6,500,000 in Low-Income Housing Tax Credits by the Montana Board of Housing to support the development of 22 of the project’s 101 units, leaving the remaining 79 units to be funded through the City's Affordable Housing Development program. 
• April 1, 2025*: The Community Development Board recommended the project be taken to City Council for funding allocation. 
• October 13, 2025*: City Council approved an allocation of $1,545,000 for the project.
• May 11, 2026: Representatives from HomeFront and Homeword appeared before City Council to provide a project status update, discuss financing challenges and answered questions from Council members. 
• June 8, 2026: The project received a $7,000,000 loan award from the Montana Department of Commerce.
• June 29, 2026: HomeFront and Homeword submitted the attached project and budget update. 
• July 6, 2026: HomeFront and Homeword attended the City Council Work Session to provide a current financial summary, revised project schedule, and property status report. 

* The complexity of this project and the required documentation needed by the Community Development Division required extensive coordination with Homeword and HomeFront staff during 2025 as this application was processed, leading to some lengthy time frames.

Alternative Procurement Request: 
Homeword submitted a request to the City of Billings and the Montana Department of Commerce seeking approval to use an alternative procurement method for selecting a General Contractor. Homeword requested approval to use a Request for Proposals (RFP) process in lieu of the public sealed bid method, while remaining compliant with applicable federal procurement requirements. The request was initially reviewed with the City's Purchasing Division and the City's procurement requirements were upheld. As the project advanced towards construction and the Montana Department of Commerce approved the alternative procurement method request, the City reevaluated Homeword's request. To accommodate the approved procurement method, the City’s Development Agreements approved by the City Council on October 13, 2025, have been amended with assistance from the City Attorney’s Office to remove the City’s procurement provisions. The alternative procurement process will continue to comply with federal procurement standards applicable to projects utilizing the City's HUD funding. The City Legal and Purchasing staff have approved of this modification.
 

The City currently has $1.4 million in HOME and $145,000 in CDBG funding allocated to the LB Lofts project. The City has an upcoming expenditure deadline for CDBG funding (April 1, 2027) and a commitment deadline for HOME dollars (September 2027).  Unexpended and uncommitted funds may be de-obligated by the U.S. Department of Housing and Urban Development (HUD), unless the City determines an alternate project or program source in advance of this schedule. Ongoing progress and monitoring of the LB Lofts project is critical to these funding schedules.

This project serves households seeking housing they can afford in Billings; those experiencing homelessness; at-risk of homelessness. All the individuals and families served by the project will have incomes under 80 percent of the area's median income. There is a significant need for this type of housing in Billings and the success of this project would help address the housing shortage in the community.

City Council May:

• Approve the Development Agreement amendments to allow the alternative procurement method for selecting a General Contractor; or, 
• Not Approve the Development Agreement amendments to allow the alternative procurement method for selecting a General Contractor. Not enabling this approach to selecting a General Contractor may create a barrier to the project moving forward as planned, according to Homeword and HomeFront.