Motor Power Equipment Company, located at 4941 Midland Road, has applied for a property tax abatement under City Resolution No. 05-18377 and Montana Code Annotated (MCA) Section 15-24-1501. This program abates a portion of the property tax on commercial building expansion, remodeling or reconstruction during the construction period and for the following four (4) tax years. The owner started constructing a large building expansion in April, 2009 and plans to complete it in January, 2010. In order for the City Council to grant the abatement, it must conduct a public hearing and adopt the attached resolution that conditionally approves the abatement. Recommended conditions of approval are that the applicant provide all of the application information and approvals, complete the building expansion as described in the application, document the building completion and value with the Big Sky Economic Development Authority (BSEDA) and apply to the Montana Dept. of Revenue for the appropriate tax abatement.

The City Council may:
• Approve the resolution and the tax abatement
• Disapprove the resolution and the tax abatement

The applicant reports that the existing property is valued at $1,900,000 and the improvements will add $2,000,000 of market value to the property. If approved, this abatement applies only to the new investment. If the Montana Dept of Revenue values the property the same as the owner reported value, it would have a taxable value of approximately $47,432 (tax year 2010). This abatement program exempts the added value from city and school district levies, but not the county, state or other levies. The estimated tax on the new taxable value would be $16,900 in the first year.  The building addition's taxable value will be exempt from the specified taxes for an additional three years. The improvement’s full value is taxable in the fifth year after completion and for all subsequent years

Staff recommends that Council conduct a public hearing and conditionally approve the tax abatement for Brumar Corporation, owner and Motor Power Equipment, operator under City Resolution No. 05- and MCA 15-24-1501.