The Tracy Lofts is located at 2600 Montana Avenue.  The project converted a vacant warehouse building into 19 rental housing units.  When the Downtown Billings Partnership (DBP) Board reviewed the project in 2012, it agreed that if/when funding became available, it would recommend to Council a $125,000 grant to reimburse the developers for property improvements that are eligible under the Montana Urban Renewal Act and Tax Increment Financing (TIF).   The eligible expenses are documented in the attached exhibit, page 9 of 13.  At that time, all available funding was committed to the Empire Parking Garage and reimbursement agreements with the Northern Hotel and Stockman Bank.  
The $2 million Tracy Lofts project was financed in part by a Revolving Loan Fund (RLF), one year term loan of $125,000 that the Council approved in July, 2014.  The Empire project is completed, plus the values of the hotel and bank are now set, so the reimbursement amounts are known.  Accounting for those commitments leaves enough money in the downtown TIF account to fund the grant.  The DBP Board recommends that Council approve the grant and the developers plan to repay the RLF loan after submitting documented expense reports.

City Council may:

• Approve the DBP Board's recommendation for a $125,000 grant for the Tracy Lofts project, or;
• Disapprove the recommendation.  The developers will have to refinance the RLF loan when it becomes due in 2015.

The downtown TIF generates about $2 million per year.  Commitments to debt and two development agreements equal $1.25 million.  The DBP operating agreement and other commitments equal $270,000, leaving a current year estimated balance of $480,000, which is more than is needed for this grant.  In addition, the TIF account has a prior years' cash balance of $3.6 million.  

The DBP Board of Directors recommends that the City Council approve a $125,000 downtown TIF grant for the Tracy Lofts project.