The South Billings Urban Renewal Association (SBURA) Board has reviewed this application for tax increment assistance and recommends to the City Council, upon project completion, a maximum of $215,170 of Tax Increment Finance funds from the South Billings Boulevard Urban Renewal District (SBBURD) to Service Pro Express Lube (DBA 5 Polacks Inc.) for development of a new express vehicle oil and lube business at 743 Calhoun Lane. Actual reimbursement will be based upon 100% of the actual costs incurred for qualified expenses for the improvements made, subject to the following conditions:
1.) The Applicant shall sign a development agreement with the City of Billings and SBURA within 180 days of City Council's approval.
2.) This TIFD reimbursement is the maximum amount that can be received pending satisfactory submission of all paid invoices showing the completion of expenditures related to this project.
3.) The project reimbursement will occur after construction is completed.
4.) If funds are not available, reimbursement will be carried over to the next fiscal year.

The SBURA Board considered the Service Pro Express Lube (DBA 5 Polacks Inc.) application at its November 5, 2024 board meeting and voted unanimously to recommend $215,170 of tax increment assistance. Service Pro Express Lube has acquired property at 743 Calhoun Lane to build and operate a vehicle oil and lube express business. The proposed project will build a new Service Pro Express Lube business at the northeast corner of King Avenue East and Calhoun Lane. The business will include a 3-bay auto service facility, operate 7 days a week and employ 18-20 people. Site preparation has started for the project as the applicants were informed that as long as the TIF application was submitted and under review by the SBURA Board, the project could begin as long as the applicant understood it was at its own risk since the Council had not acted on the final approval of the TIF award.

Total project costs are estimated to be $1,084,541 less the property acquisition. The total recommended amount from the SBURA Board of $215,170 is for demolition and site clearance, utilities to the site and landscape improvements and is approximately a 1:5 ratio of investment of public vs private funds. This is right at the ratio recommended by the City TIF policy, which is a minimum of 1:5.

Table 1 below details the proposed expenses that qualify for tax increment assistance to Service Pro Express Lube. The funds being requested will go specifically toward the public utility connections, landscaping and site preparation portions of the project. There is also detailed information relating to the project costs included in the Service Pro Express Lube TIF Application, attached to this memo.

TABLE 1. 

Qualified Improvements	Estimated Costs	City TIF Policy	Urban Renewal Plan	MT Code Annotated
Site Preparation	$216,750	Section 1(a)	Section 13,14	7-15-4233(i), 7-15-4288(4)
Utilities	$131,500	Section 1(b)	Section 13,14	7-15-4288(4)
Landscaping	$38,000	Section 1(b)	Section 13,14	7-15-4288(4)

TABLE 2.

The property tax value is expected to increase with the improvements and redevelopment and is estimated at a 10-year payback. The subject property sits at a high-profile intersection in the SBBURD. There has been interest for many years to have this property become a more viable contributor to the District, including a past zone change to make it fit with the commercial development along King Avenue East. But it has sat for many years without being developed. This property meets the definition of blight as a mostly vacant property that is positioned well for improvements and future redevelopment to take advantage of goals of the District and meet the intent of the Urban Renewal laws (See Table 1). The redevelopment of this property will increase the tax base for the SBBURD and make it a contributor to commercial development in the area.


 

Stakeholders for this application include the property owners in the SBBURD, the applicant and the general public in Billings. The SBURA Board meeting is a public meeting and the City Council meeting is a public meeting as well, so the public has multiple opportunities to comment on this application as it is reviewed and acted upon. The Planning and Community Services Department did not receive any public comments on this application before this memo was completed. The SBURA Board minutes of when this application was reviewed and recommended for approval to the City Council are attached to this memo.

City Council may:

• Approve the recommendation from the SBURA board for the expenditure of these tax increment finance (TIF) funds; or,
• Modify the recommendation from the SBURA board for the expenditure of these TIF funds; or,
• Disapprove the recommendations from the SBURA board for the expenditure of these TIF funds. If the City Council chooses not to approve the TIF application, specific reasoning for the denial will be important for City staff and the SBURA Board as consideration for future applications occurs.

The recommendation is for a maximum of $215,170 to be reimbursed to Service Pro Express Lube for qualifying elements of constructing a new vehicle service business at the northeast corner of the intersection of King Avenue East and Calhoun Lane in South Billings. This project is expected to be completed in late FY25 or early FY 26 and there were sufficient funds budgeted in FY25 and funds will be anticipated in FY26 to cover this reimbursement.