The Downtown Billings Partnership (DBP) Board has reviewed this TIF application and recommends the City Council approve up to a maximum reimbursement of $1,693,050, starting in the fiscal year following the year in which the project is completed, from Downtown Urban Renewal tax increment finance district funds to Griffin Development for its mixed use project at 2316 1st Avenue North.

Actual reimbursement will be based upon 100% of the actual costs incurred for qualified expenses for renovation, subject to the following conditions:

1. The Applicant shall sign a development agreement with the City of Billings and DBP within 180 days of City Council’s approval.
2. This TIFD reimbursement is the maximum that can be received pending satisfactory submission of all paid invoices showing the completion of expenditures related to this project.
3. This TIFD reimbursement is approved per the condition that it be broken down into to five disbursements of $338,610 each within five continuous fiscal years following the year in which the project is completed.
4. If funds are not available, reimbursement can be carried over to the next fiscal year

Griffin Development submitted an application on September 30, 2021 to the DBP requesting TIF assistance to remove an old blighted building and construct a new five-story, mixed use 32-unit residential apartment building with some retail on the groundfloor. The property is located at 2316 1st Avenue North and would be the first phase of a development that would ultimately include two mixed use buildings on the half block property between North 23rd Street and North 24th Street. The application was vetted by staff and presented to the Development Committee on October 14, 2021. The Development Committee vetted the proposal and made a recommendation to the DBP Board for $1,693,050. The recommendation was presented to the DBP Board on November 19, 2021 and the DBP Board made its recommendation to City Council. City staff reviewed this application, worked closely with the DBP staff to clarify and add detail from the applicant, and supports the DBP recommendation. Staff notes that the project expense summary in the original application from September 2021 that is attached has been updated to the one also attached to this memo per further analysis and coordination with City staff, DBP staff, and the applicant. The reasoning for support of the application by DBP and City staff are its alignment with the elements/goals of the DBA Strategic Plan, North 27th Street Urban Renewal Plan, City TIF Policy and MCA.

The DBP Board and City staff supports the project and found it was a very strong match for accessing urban renewal funds because:

• The project addresses blight remediation (MCA 7-15-4282 through 7-15-4294 and Ordinance 12-5590) through the demolition of the existing old building on the site that has been vacant for several years and exceeds (@7:1) the 5:1 private to public matching fund requirements of the DBP Large Project Incentive Grant criteria (not including the property acquisition).
• The project further enhances the vibrancy of Downtown Billings through revitalization of this half block along 1st Avenue North; increased public activity along 1st Avenue North, North 23rd and North 24th streets; enhanced pedestrian experience and safety in this area of 1st Avenue North; and improved public safety through modern construction of structural, fire, electrical, plumbing and HVAC systems.
• The application aligns with the issue of addressing housing in Downtown Billings and city-wide, as well as other elements/goals of the DBA Strategic Plan (may be viewed through this link https://downtownbillings.com/about/about-the-dba/), City TIF Policy, MCA, and the North 27th Street District Urban Renewal Plan (See Table 1 below and the DBP Board Recommendation document attachment).

  Table 1.

Qualified Improvements	DBA Strategic Plan	City TIF Policy	Urban Renewal Plan	Montana Code Annotated
Site work and safety - Demolition and Site Prep; Concrete work for sidewalks, driveways, front patio areas, exit stairways; Alley improvements Utility Connections and Improvements - water and sewer trunk line from street; storm sewer system; gas and electrical main service connections from utility mains;  Building Exterior and Facade and work - groundfloor metal and glass siding, safety and emergency lighting of the street frontage/sidewalk areas Public access and area improvements - ADA compliance for parking areas, groundfloor patio areas, elevator and entrance areas. Building Safety and Utility work to code - Mechanical, plumbing, electrical, HVAC	Vibrant &Connected Downtown – includes downtown living P.13 Strong Downtown Identity –P.13 Transformative Initiative - P. 15 - Increase Downtown Residential Population Through Targeted Downtown Housing Initiatives	Permitted uses of TIF Funds: Demolition and structure removal - P.2 Private infrastructure with Public Benefit and Public infrastructure –P.2 Financial Assistance Through TIF – (grants may be for for-profit businesses) P.2	Infrastructure Improvements– includes improvements to support workforce housing and loft and condo housing development - P.55 Crime Prevention and Public Safety -P.55	7-15-4202 (3) 7-15-4233 (i) 7-15-4288 (2) (4)

 
This property was purchased by Griffin Development in August 2019 with the intent to start construction much earlier. However, the arrival of COVID-19 delayed the project. Phase One of this project will consist of the demolition of the existing structure on the eastern half of the half-block site. The western half of the site will be used as a staging area for Phase One. Phase One is the portion of the project that is the subject of this TIF request. The Phase One first building will be a five-story structure with an enclosed first floor of a 24-space parking garage, and 13 additional individual garages located off the alley for tenant or public rental. The first floor will also have 2,000 square feet of retail/restaurant space along 1st Ave North, with terrace seating on the structure’s roof. The second through fifth floors will house 32 two-bedroom apartments with individual balconies. This project accomplishes many priorities of the Urban Renewal Plan, DBA Strategic Plan, Downtown Housing Study, and the City’s Growth Policy. The new build of the structure will increase the property value and generate more taxable value in the building itself as well as the surrounding neighborhood. Buildings adjoining the property to the South are Ciao Mambo, Uberbrew, Nova theater, and Buffalo Block. To the East is Cushing Terrell and the Griffin Sawyer building that was rehabilitated with TIF funds a few years ago (formerly the Antique Depot or the Spaghetti Depot prior to that). To the West is the Buchanan Capital building. Ultimately, the two buildings of Phase One and Phase Two will take up the entire block frontage from North 23rd street to North 24th Street, and back to the existing alley.

The DBP Development Committee and the DBP Board both supported this application request, recognizing this project will make a significant commitment and investment in Downtown Billings by adding to existing redevelopment along this block of 1st Avenue North, as well as along North 23rd Street and North 24th Street, adding needed housing units to the Downtown Core, and building where City services and infrastructure already exist.  
 

City Council may:

• Approve the recommendation from the DBP Board for the expenditure of these TIF funds consistent with some elements/goals of the DBA Strategic Plan, North 27th Street Urban Renewal Plan, City TIF Policy and MCA.
• Modify the recommendation from the DBP Board for the expenditure of these TIF funds before taking action, or;
• Disapprove the recommendation from the DBP Board for the expenditure of these TIF funds. If the Council chooses not to approve this TIF application, specific reasoning for the denial is necessary to provide further direction to the DBP Board and staff, and City staff for future applications.

The recommendation is for up to a maximum of $1,693,050 to be reimbursed to Griffin Development for the identified building demolition, site preparation and construction of portions of a new mixed use building on the site.  The estimated total project cost is about $11.3 million (property purchase included but not reimbursed), making the private to public investment ratio for this total project about 7:1. The funds are payable per the conditions of approval outlined above in the DBP recommendation, pending satisfactory submission of all paid invoices showing actual cost incurred for the project, and per the reimbursement being broken down into to five disbursements of $338,610 within five continuous fiscal years following the year in which the project is completed. If approved, payments will be incorporated into future year budgets, the earliest is expected to be FY25. Current estimates of the future Downtown District revenues are able to cover this project in FY25 as well as support known future planned projects and bonding.