Staff recommends that the City Council approve the Second Amendment to the Purchase and Sale Agreement (PSA) between the City of Billings and Honaker Realty, LLC & JWT Capital, LLC. The amendment extends certain contingency deadlines and the wavier of the contingency for suitable loading and unloading areas. Approval will facilitate the ongoing transaction and ensure compliance with agreed timelines.

Initial Agreement: On March 18, 2024, the City of Billings entered into a PSA with Honaker Realty, LLC & JWT Capital, LLC for the sale of City Hall, Park 3, and adjacent parking lots located on North 27th Avenue. The transaction valued at $2.8 million was initiated to further economic growth within the Central Business District and includes terms for phased development of the properties with provisions for due diligence, contingency periods, and an overall goal to support revitalization efforts in downtown Billings.

First Amendment:The initial PSA contained contingency clauses which required extensions. Signed September 25, 2024, the first amendment to the PSA extended the contingency period for certain items until November 15, 2024. It allowed flexibility for the City to vacate the property by April 1, 2025, accommodating structural improvements and modifications to property use agreements.

Second Amendment: This Second Amendment, would further extend certain contingency deadlines to December 6, 2024, without additional consideration, focusing on the approval of the DBP for removal or use of the portable restroom, franchise agreements for hotel operations, providing for an agreement for management of the parking on Parcel A & B, and sky bridge encroachments. Additionally, it finalizes the loading area requirements for 2nd Avenue North, which were completed as of October 30, 2024.

The key stakeholders involved in this project include:
City of Billings: Manages the transaction on behalf of the City, ensuring that the sale aligns with city goals and regulations.
Honaker Realty, LLC & JWT Capital, LLC: The purchasing entities responsible for the redevelopment of City Hall and adjacent properties. Their development plan aims to contribute to the economic and aesthetic revitalization of the downtown area.
Downtown Business Partners (DBP): Role in the portable restroom agreement
Local Businesses and Community Members: Potential beneficiaries of increased economic activity and aesthetic improvements in the Central Business District.
 

City Council may:
Approve the Second Amendment to the PSA, allowing the transaction to proceed with revised timelines and terms.

Not approve the amendment, which may affect the City’s ability to meet obligations in the existing contract and delay the project schedule.

The fiscal impact remains aligned with the initial agreement, with no additional costs associated with the contingency extensions. The amendment does not alter the purchase price or financial terms of the PSA.