The Downtown Billings Partnership (DBP) Board has reviewed the attached application for tax increment assistance and recommends the City Council not approve the request for tax increment finance funds from the Expanded North 27th Urban Renewal District to the Cine Billings, d/b/a Art House Billings.

Due to the critical nature of needed improvements, I as City Administrator, recommend Council support staff bringing back a proposed approach to funding the improvements necessary to protect the structural integrity of the Babcock Theator property in 2024.

Cine Billings, a non-profit organization, leases and manages the Babcock Theater located at 2810 2nd Avenue North. As the property is city-owned, and operated by a non-profit, it does not generate property tax revenue. (Lease agreement attached)

Cine Billings proposes to undertake substantial exterior rehabilitation work on the Babcock Theater. The planned improvements include repairs to the historic marquee, which is over 70 years old and has drainage issues compromising its safety. Additional work involves upgrading the vault beneath the sidewalk, which is showing signs of deterioration, as well as enhancing the entry doors for improved security and efficiency. Other planned upgrades include securing an abandoned brick chimney and making interior improvements to the balcony railing, stairs, and flooring. The estimated cost for these improvements is approximately $586,929, with funding sources including a Montana Historic Preservation Grant and other contributions.

The DBP considered the application at its July 26th meeting and voted not to recommend $300,000 in TIF assistance. The DBP's decision was based on the district's financial projections and current priorities, which emphasize downtown housing, mixed-use projects, and public safety. While acknowledging the significance of the Babcock Theater's improvements, and its importance downtown, the DBP's recommendation reflects a prioritization of these goals and limited financial resources.

Should the City Council decide to fund the project, it is important to note that the requested expenditures do align with the Urban Renewal Plan and Montana Code Annotated, as noted in the table below.

Table 1. Alignment of Proposed Improvements with City TIF Policy, Expanded N. 27th Urban Renewal District Plan, and MT Code Annotated.

Qualified Improvements	DBA Strategic Plan	City TIF Policy	Urban Renewal Plan	Montana Code Annotated
Historic Marquee	A Strong Downtown Identity - P. 13	Permitted uses of TIF Funds: Public infrastructure including...sidewalks P.2 Private infrastructure with Public Benefit and Public infrastructure - P.2 Financial Assistance Through TIF - (grants may be for non-profit businesses)	Infrastructure Improvements (Part V. P 55) Expansion of Historic District Sidewalks, curbs, and gutter improvements (stabilization of vaults) Public Infrastructure to support entertainment venues and conference facilities	MCA 7-15-4288 (4)
Sidewalk
Exterior Doors
Interior Work (Railing, Stairs, Flooring)

 

City Council may:

• Approve the application for TIF funds, contrary to the DBP's recommendation; or,
• Modify the requested amount or terms for the expenditure of TIF funds; or,
• Disapprove the application for TIF funds, in line with the DBP's recommendation.

This project was not included in the FY25 budget. If approved, staff recommends that payment not occur until FY26 or later. The development agreement with the Rockman project (approved on 3/11/24), limits the ability for the TIF to fund new development projects prior to the completion of that project. The total amount requested for this project is $300,000 and will need to be budgeted in future years, as funds are available.