The Billings Industrial Revitalization District (BIRD) Board of Directors recommends the City Council approve up to a maximum reimbursement of $26,000 from the EBURD tax increment finance district funds to Vemco, Inc. (DDG Partnership, LLP) to assist in the exterior remodel improvements of the property at 2016 2nd Avenue North for its commercial plumbing and HVAC supply business. Actual reimbursement will be based upon 100% of the actual costs incurred for qualified expenses for the improvements made to property subject to the following conditions:

1. The Applicant shall sign a development agreement with the City of Billings and BIRD 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. If funds are not available, reimbursement can be carried over to the next fiscal year.
 

The Billings Industrial Revitalization District (BIRD) Board of Directors is presenting this recommendation to the City Council for allocating up to $26,000 in tax increment finance funds (TIF) from the East Billings Urban Renewal District (EBURD) to provide financial assistance to Vemco, Inc. (DDG Partnership, LLP) to assist in the exterior remodel improvements of the property at 2016 2nd Avenue North for its commercial plumbing and HVAC supply business. The BIRD Review Committee considered the project and recommended approval of the project to the full BIRD Board. The Bird Board recommended approval of the project to City Council at its September 10 meeting but then reconsidered the applications at its October 2 meeting after further analysis of the EBURD budget and financial position after the 2024 Department of Revenue valuation projections (See BIRD Board Agenda October 2 Attached).

Founded in 1976, Vemco, Inc. is a commercial plumbing, hydronic, heating, ventilation, and air conditioning (HVAC) equipment supplier.  It has offices and warehouses in Billings, Bozeman, Great Falls and Missoula, MT. This remodel project is to update the Billings facilities for the business and make the property more attractive for customers and the community. The project will renovate the existing building to provide remodeled office and warehouse space for Vemco at its current Billings location. The project will entail interior office remodeling, exterior storefront facade work, roof replacement and parking lot resurfacing. The TIF funds are being requested for the facade/window and door improvements to the exterior of the building. The BIRD Board's recommendation of $26,000 toward the improvements results in about a 9:1 ratio of private to public investment for the project. Total project costs are estimated to be $283,000. The payback period for the property value increase is about 9 years.

 The BIRD Board noted several reasons for its support of the project:

• With the redevelopment of this property to support an existing business in the EBURD, this project is in alignment with the EBURD Urban Renewal Plan under its Business Programs and Projects goal (See page 3-4, item I of the Urban Renewal Plan Attached). Improvement of this property in the EBURD for the business works well with the urban renewal efforts and economic development goals of the City.

Table 1.

Qualified Improvements	Recommended TIF Reimbursement	City TIF Policy	Urban Renewal Plan	MT Code Annotated
Exterior Facade, Windows and Doors Improvements	$26,000	Section 1(c)	Section 2 (I) Business Programs and Projects	7-15-4233 7-15-4288

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. originally approved by the City Council on May 13, 2019 and renewed for one year by the City Council on April 22, 2024.

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, or;
• Disapprove of the recommendation from the BIRD Board for the expenditure of these TIF funds.

The request is for a total of up to a maximum of $26,000 to be reimbursed to Vemco only upon completion of the work and submission of the invoices for the costs incurred. It is expected that this expenditure will be incurred in FY25. The East TIF fund is projected to have sufficient revenue and cash for this project. 

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