Regular 3.
Regular City Council Meeting
- Meeting Date:
- 08/10/2015
- TITLE
- Tax abatement application for D& M Enterprises, dba Auto Trim Design and Car-Nu
- PRESENTED BY:
- Bruce McCandless
- Department:
- City Hall Administration
Presentation:
PROBLEM/ISSUE STATEMENT
The City of Billings operates tax incentive programs under state law authority found in MCA 15-24-1401, 1501, 1502 and 1601. D&M Enterprises Inc., dba Auto Trim Design and Carnu, applied for a tax incentive under MCA 15-24-1501 and City Resolution No. 05-18377. This program encourages existing building remodeling, reconstruction, or expansion by exempting 100% of the new improvements' value from city and local school property taxes during construction and for the following four (4) tax years. In the fifth and subsequent years, the improvements are fully taxable. Minimum requirements are that the construction cost at least $500,000, it adds at least 2.5% to the property's taxable value, property tax payments are current, zoning is correct and that the applicant identify the number and type of jobs that the investment will create. The City Council must conduct a public hearing before considering adopting the attached resolution that grants the tax exemption.
ALTERNATIVES ANALYZED
City Council may:
- Approve the application for tax abatement, or;
- Disapprove the application
FINANCIAL IMPACT
D&M Enterprises, Inc. submitted an application to abate taxes on $3,100,000 of building construction that was completed in February, 2015 at 3045 King Avenue West. The company predicts adding up to twenty (20) employees at the new store. Zoning is appropriate and taxes are current. The property was valued at $870,000 prior to redevelopment, including $100,000 in building value. The properties produced $24,950 in taxes and fees in 2014. If the new improvements have a value of $3.1 million, the taxable value could increase by as much as $60,000 compared to the 2014 value. If Council approves the abatement, the owner could save approximately $28,000 annually in City and school taxes. Property assessments, such as Street Maintenance, Arterial Construction, and Storm Water Management are not affected by these tax abatements.
RECOMMENDATION
Staff recommends that the City Council conduct a public hearing and approve the resolution granting property tax abatement authorized by 15-24-1501 MCA and City Resolution 05-18377 to D&M Enterprises,Inc. for property located at 3045 King Avenue West.