The City Council is asked to approve a Transfer Agreement between the City, the Downtown Billings Partnership (DBP) and The Babcock, LLC that would give the City ownership of the Babcock Theater (Unit 1A of the Babcock Building, 115 N. Broadway) and  includes a recommendation from its Ad-Hoc Committee on the Babcock to acquire a green room and associated personal property for both, at a cost of $127,977.

The three entities entered into a previous development agreement on September 22, 2008, in which the City was to receive title to the theater in exchange for the City and DBP approving a tax increment financing grant of $1.9 million to The Babcock LLC for the improvement of the historic Babcock Building.  The theater originally was scheduled to be transferred to the City by April 1, 2016, but that was delayed  with City Council approval until March 15, 2017, to allow The Babcock  LLC to take full advantage of historic preservation tax credits.

As part of the theater renovation, The Babcock LLC created a green room traditionally used as a dressing room by theater performers in Unit 1B, a basement space adjacent to the theater, rather than in the traditional location of the theater basement, because the basement slants in the rear to a height in which today's average person cannot stand up.  The basement of the theater also was partly renovated to store water from the roof to help in the cooling of the building. 

The transfer has been delayed while the City, DBP and The Babcock LLC negotiated the price for the transfer of the green room and the acquisition of personal property both in the theater and the green room.  The City Council has instructed staff to simultaneously issue both a request for proposals (RFP) for management of the theater by an outside group and an invitation to bid for the purchase of the theater. Those options will be advertised as soon as the Transfer Agreement is approved.   Entertainment professionals have recommended that the green room and personal property be acquired whichever option is exercised.

The Council's Ad-Hoc Committee on the Babcock Theater voted unanimously at a meeting on August 28, 2017, to recommend that the Council acquire the green room and personal property for the green room and Babcock Theater at the cost of $127,977.

Attached is a draft Transfer Agreement, which will be finalized and sent to the City Council in the Sept. 8, 2017, Friday Packet.

 

City Council may:

• Approve the Transfer Agreement to satisfy the terms of the Development Agreement approved by the Council on September 22, 2008;
• Postpone action, which would delay the transfer; or
• Disapprove the Transfer Agreement and instruct staff to renegotiate the transfer of the Babcock Theater and acquisition of the green room and personal property.

The City Council approved $500,000 for capital improvements to the Babcock Theater in its Fiscal Year (FY) 2018 budget, which would be used in part for the green room and personal property acquisition. 

The proposed costs of $127,977 include the following:
Green room estimated value:                                                                $63,249
Green room personal property and improvements (see attachment):   $48,648
Theater personal property (see attachment):                                         $16,080

Due to time constraints and the difficulty of obtaining appraisals, a Brokers Property Evaluation of the green room was conducted by NAI Business Properties in June 2017, and resulted in an estimated market value of $60,237.  City policy allows an increase of up to 5% for bargaining purposes, bringing the total to $63,249.  A copy of the Brokers Property Evaluation is available from City Administration as requested.

Staff recommends that the City Council approve the Transfer Agreement for the Babcock Theater, which includes the Ad-Hoc Committee on the Babcock's recommendation to acquire its green room and associated personal property at a cost of $127,977.