WC Commercial, owner of the Stillwater Building (former Battin Federal Courthouse), requested tax increment assistance in the amount of $1.5 million. WC Commercial purchased the building in 2016 and has since completed a significant asbestos abatement. This building site is mentioned specifically in the amended 2008 Urban Renewal Plan. The Downtown Billings Partnership (DBP) board reviewed the application at its September 22, 2017 meeting and made a recommendation to City Council on October 23, 2017 for approval of the expenditure. Council approved the expenditure for the Stillwater Building Project as an Urban Renewal project with the following conditions:

1. Fund 203 will encumber no more than $500,000.00 per fiscal year, beginning January 1, 2019 (FY19), and again on January 1, 2020 (FY20), and finally on January 1, 2021 (FY21) This is defined as the reimbursement period.
2. Actual reimbursement cannot begin before January 1, 2019. And the building is certified, by the City Planning Department, to be occupied.
3. During the three years of reimbursement the Stillwater Building must have and maintain no less than 50% occupancy. Further, at least 50% of the building must be owned by taxable private sector entity or entities. No more than 50% of the building may be owned by the public sector or non-taxable entities.
4. If at any time during the reimbursement period, tax revenue is held back due to an evaluation appeal, the reimbursement payments will be “on hold” and will resume, in full, when the appeal is resolved and tax payments are released.

The reimbursement amount is based on actual dollars invested by the developer and will not be reduced due to any adjustment of taxable value. A development agreement was transmitted to WC Commercial after approval by City Council. A minor change was thereafter made by the DBP which required that no more than 50% of the building may be owned by the public sector or non?taxable entities for a period of twenty one years, rather than permanently.

Despite several inquiries by the DBP, the development agreement was not signed or returned by WC Commercial. The DBP sent letters to WC Commercial on April 26, 2019 and September 26, 2019. The DBP's letters requested the May 15, 2019 Development Agreement be executed and returned by October 31, 2019. This matter was presented to the Council during its March 23, 2020 meeting as Regular agenda item # 5 for withdrawal of the offered development agreement and approved TIFD expenditure. During the discussion on this item Mayor Cole recommended that the item be removed from the agenda and further discussion among City staff and the DBP occur concerning the reason(s) for not achieving a signed Agreement and to investigate any legal issues that could arise if the recommended withdrawal of the Agreement was approved.

City staff and DBP representatives have discussed this matter and believe that there are no legal issues or negative consequences to the City should withdrawal of the agreement be approved. The Development Agreement and its terms were based in part upon the conditional approval noted above by the Council on October 23, 2017.The Agreement remains executory-i.e. unsigned and not agreed upon by WC Commercial. The conditions for the grant of TIFD funds has therefore not been met by WC Commercial.

City Council may:

• Approve, the DBP recommendation of the withdrawal of the unsigned Development Agreement with WC Commercial, or;
• Disapprove the DBP recommendation of the withdrawal of the proposed Development Agreement with WC Commercial and provide staff and the DBP with further direction.