Staff recommends City Council hold a public hearing and approve the discontinuance by closure of a portion of the alley within Block 191 Billings Original Townsite at no cost.

The Montana Rescue Mission (MRM) is proposing to expand its campus at Minnesota Avenue and South 29th Street.  With the expansion, MRM would like to close off one-half of the east-west alley from South 28th Street to South 29th Street.  Attached is an exhibit showing the portion of the alley proposed to be discontinued by closure.  The L-shaped portion of the alley from South 28th Street to 1st Avenue South will stay in place and continue to be operational for emergency vehicles and solid waste pickup.  The MRM is proposing to fence off the portion of the alley in order to allow free and safe pedestrian movement within the campus.  MRM is removing the existing concrete loading dock and replacing a small amount of that area with movable access stairs should the City need alley access for utility maintenance. 

MRM originally wanted to vacate the alley; however, a sanitary sewer main is located in the alley. Thus, City staff prefers to retain and own this portion of the alley as City right-of-way.  For the City to retain ownership and retain future legal right to use the alley, the proper legal mechanism is to discontinue the alley by closure per MCA 7-14-4114. Discontinuance by closure allows MRM to gate and close the alley to public access, but the alley still remains public right-of-way and allows for City maintenance of the sewer line as well as any other utility that requires use of the right of way.  Furthermore, discontinuance by closure allows the City to retain ownership of the land and retain the right to reinstate the use of the alley right-of-way for available public purposes should the alley use situation need to change in the future.  

The Council may:

• After holding a public hearing, approve the discontinuance by closure of the above-mentioned alley at no cost; or
• After holding a public hearing, approve the discontinuance by closure of the above-mentioned alley at a cost as determined by City Council; or
• After holding a public hearing, do not approve the discontinuance by closure.

Billings, Montana City Code section 22-600 describes the process for discontinuance.  The code does not provide guidance to how the cost of the discontinuance should be determined.  Historically, City Council has not required compensation for alley discontinuances.  There have been three alley discontinuances in the last 30 years. The last discontinuance was completed in 2020 for Riverstone Health at no cost to the applicant.

The value of the alley being proposed for discontinuance is valued at $6.74/square feet (sf).  The valuation was determined by Mountain West Commercial Real Estate. The attached valuation shows an area of 3,000 sf but was based on the estimated area. The actual area to be discontinued is 2,800 sf, so the total value would be $18,872.00.

It is City staff's recommendation that the alley be discontinued by closure at no cost to the applicant as the City can still maintain the sanitary sewer and the City will no longer have to maintain the alley.  Furthermore, the City will maintain ownership of the alley right-of-way and will be able to reinstate the use of the right-of-way in the future if the use situation changes.