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Item 4.
 
City Council Regular
Date: 04/26/2021
Title: EBURD Tax Increment Assistance - 1518 1st Avenue North
Presented by: Wyeth Friday
Department: Planning & Community Services
Presentation: Yes

RECOMMENDATION

The Billings Industrial Revitalization District (BIRD) Board of Directors recommends the City Council approve up to a maximum reimbursement of $63,085 from the EBURD tax increment finance district funds to J&S Properties to assist in the renovation of property for Yellowstone Ice and Water at 1518 1st Avenue North.
 

BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)

The Billings Industrial Revitalization District (BIRD) Board of Directors is presenting this recommendation to the City Council for allocating $63,085 in tax increment finance funds (TIF) from the East Billings Urban Renewal District (EBURD) to provide financial assistance to J&S Properties for renovation of property to house Yellowstone Ice and Water at 1518 1st Avenue North. The applicant is requesting TIF funding to assist in demolition, removal and replacement of asphalt, sidewalk construction, and engineering and architectural design work for the project. The total cost of property improvements for this first phase of the project is estimated at $215,000. The overall plan is for Yellowstone Ice and Water to first relocate its retail operations to this location and then ultimately relocate its manufacturing facilities to the southern half of the property off of Montana Avenue.

The BIRD Board's recommendation of $63,085 toward the improvements results in about a 3 to 1 ration of private investment to public investment. However, the BIRD Board supports varying from the City's TIF Policy recommended ratio of 5 to 1 for the following reasons:
  • This work is part of a larger project once the manufacturing facility to the south of it is also established
  • There are poorly established to non-existent pedestrian walkways and existing streetscapes in this area that need to be brought up to City standard
  • The property owner is taking on significant additional costs that are not being reported as part of the project relating to power lines, alley right of way, etc.
  • With the redevelopment of these two locations, there will be a significant return on the taxable value of these properties
The expenses for the demolition work, removal and replacement of asphalt, sidewalk construction, and engineering and design work recommended by the BIRD Board are eligible as per Section 7-15-4288 (2) (See BIRD Board Recommendation attached) and Section 7-15-4233 (m)(n). The project also is in alignment with the EBURD Urban Renewal Plan under its Business Programs and Projects goal (See page 3, item I of the Urban Renewal Plan Attached), and the EBURD Master Plan's principles of fostering economic growth, ensuring industrial operations continue, and encouraging community collaboration around public safety. Reuse and improvement of this property in the EBURD to facilitate Yellowstone Ice and Water's continued expansion in the community aligns well with the urban renewal efforts of the City and the EBURD.

The BIRD Application Review Committee reviewed the application on March 24 and made a recommendation of approval to the BIRD Board. The BIRD Board of Directors voted at its meeting on March 30 to recommend funding of this application to the City Council. This process and action of the BIRD is under its authority per the Memorandum of Understanding between the City of Billings, Big Sky Economic Development, and the BIRD, Inc. approved by the City Council on May 13, 2019.

 

ALTERNATIVES

The City Council is the final authority in disbursing TIF funding. This proposed use of TIF funds conforms to the City's TIF Policy and aligns with the EBURD Urban Renewal Plan and Montana Code for urban renewal projects and programs.

The City Council may:
  • Approve the recommendation from the BIRD Board for the expenditure of these TIF funds, or;
  • Modify and approve the recommendation from the BIRD Board for the expenditure of these TIF funds
  • Disapprove of the recommendation from the BIRD Board for the expenditure of these TIF funds.

FISCAL EFFECTS

The request is for a total of up to a maximum of $63,085 to be reimbursed to J&S Properties only upon completion of the work and submittal of the invoices for the cost incurred. While the EBURD budget has capacity to cover this payment of TIF assistance, a budget amendment would need to be completed for this project if it is approved by the City Council. It also may be that this expenditure would not impact the EBURD budget until FY22, and a budget amendment would be addressed at that time.
 

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