In September, 2008, the City Council approved a development agreement with Babcock, LLC and the Downtown Billings Partnership to purchase and restore the Babcock retail building and theater.  The construction was to be completed in three phases and all were complete by February, 2012.  The agreement requires Babcock, LLC to transfer the theater to the City no later than April 1, 2016.  Babcock, LLC requests delaying the transfer until March 15, 2017 in order to take full advantage of historic preservation tax credits.  Details are explained in the attached letter from Babcock, LLC.  The amendment requires DBP's consent, which was granted in May, 2012 and confirmation of that action is also attached.   

The City Council may approve or not approve the development agreement amendment.  If the Council does not approve the time extension, Babcock LLC will not be able to comply with its commitment to retain the subject property for five (5) years after putting the building into service.

There should be little or no financial impact to the City.  At the time the development agreement was approved, the City planned to contract with a theater operator, similar to the ABT, so there should be no revenue or cost to the City. Transferring the property in 2017 will allow the City to defer for one year finding an operator and negotiating an operating agreement. 

Staff recommends that the City Council approve the Babcock, LLC request to amend the development agreement with Babcock, LLC and Downtown Billings Partnership to delay transferring the Babcock Theater to the City until March 15, 2017.