View Agenda Item

Item 5.

City Council Regular
Date:	10/27/2025
Title:	SBBURD - Public Hearing and First Reading of Ordinance to Expand the District
Presented by:	Wyeth Friday
Department:	Planning & Community Services
Presentation:	Yes
Legal Review:	Yes
Project Number:	N/A

RECOMMENDATION

City staff recommends the City Council conduct a public hearing and adopt on first reading an ordinance to expand the boundary of the South Billings Boulevard Urban Renewal District (SBBURD) and adopt a modified Urban Renewal Plan, including a tax increment provision. The City Council adopted a resolution of intent to expand the boundaries of the SBBURD at its meeting on September 22, 2025 and set a public hearing and first reading of the ordinance for this meeting.

BACKGROUND (Consistency with Adopted Plans and Policies, if applicable)

The existing SBBURD boundary may be modified by ordinance in accordance with the procedure described in M.C.A. § 7-15-4221. The City Council approved a resolution of intent to expand the District at its September 22 meeting as the first formal step for the City Council to move the process forward.

The District was formed and amended in 2008, the Urban Renewal Plan for the District was amended in 2019, and the District was expanded in 2021, adding 5 new properties to the SBBURD. While expanding urban renewal districts is not common, it is a tool available to communities under the urban renewal laws, and Billings has most recently used the tool in the SBBURD with the minor expansion in 2021. The process mirrors the process to create a district, with Council taking action on a resolution of intent to expand the District, updating the Urban Renewal Plan, notification of property owners both within the existing SBBURD boundary and the area to be included in the expansion, Planning Board review of expansion, legal notice of public hearing, and final Council action to expand the District.

Based on an analysis by City staff and Pioneer Technical Services completed in August 2025, it was found that properties within the proposed 903-acre expansion area (See Report with Map attached) have qualifying conditions per MCA, Title 7, Chapter 15, Part 4206, that the area requires public infrastructure improvements, and the expansion area could benefit from program recommendations in the currently adopted SBBURD Urban Renewal Plan.

DETERMINATION OF BLIGHT
As described above, the proposed SBBURD expansion area contains a number of underdeveloped properties and areas lacking complete infrastructure. The Council previously determined that the property included in the SBBURD was “blighted” in its adoption of Ordinance #08-5462, Ordinance #08-5484, Ordinance #19-5725, and Ordinance #21-5765 that (a) created the SBBURD originally, amended the urban renewal plan, and expanded the SBBURD. Deficiencies in public and private properties located in the district led to a determination of blight, as defined by state statute. As cited in the attached Review of Conditions that Contribute to Blight report completed in August 2025, the proposed expansion area meets several definitions of blight:

Deficient Structures - buildings, street infrastructure, water and sewer infrastructure, stormwater infrastructure;
Deficient Land Use - surface storage lots, vacant lots.

The City desires to improve the quality of land use, city infrastructure and economic development potential of these properties by including them in the SBBURD to construct needed public infrastructure improvements, grow the tax base, stimulate commercial development, and further implement the visions of the SBBURD Urban Renewal Plan.

PROCEDURAL HISTORY

On August 5, 2025 the South Billings Urban Renewal Association (SBURA) heard an update on the plans to expand the District.
On August 5, City staff attended a Billings School District Development Committee Meeting and provided the trustee with information about the proposed SBBURD expansion, key dates for action, and the date and location of the Community Information Meeting and Council public hearing.
On September 2, the Council at its Work Session heard a presentation on expansion of the SBBURD and directed staff to move the process forward.
On September 4, City staff attended a Yellowstone County Board of County Commission Discussion Session and provided the Commission with information about the proposed SBBURD expansion, key dates for action, and the date and location of the Community Information Meeting and Council public hearing.
On September 22, the Council approved a resolution of intent to expand the district and set a public hearing date for October 27, 2025.
On October 1, City staff attended the Elysian School District #23 Trustee meeting and provided information about the proposed SBBURD expansion, key dates for action, and the date and location of the Community Information Meeting and Council public hearing.
On October 9, a Community Information Meeting was held at Orchard Elementary School to inform property owners in the SBBURD, in the proposed expansion area, and for the community in general of the plans to expand the District.
On October 14, the Yellowstone County Board of Planning acted affirmatively on a recommendation to the City Council as to the SBBURD expansion's consistency with the 2016 City of Billings Growth Policy. Growth Policy conformance also is outlined in Section 2 of the Review of Conditions that Contribute to Blight report attached to this memo.
If the City Council approves the ordinance modifying the SBBURD on first reading at this meeting, the Council will conduct a second reading of the ordinance on November 10. The ordinance will take effect 30 days after second reading on December 10.

STAKEHOLDERS

The Billings community as a whole, property owners within the proposed expansion area and those within the current SBBURD, Yellowstone County, The City of Billings, Billings School District and Elysian School District are all stakeholders in this process.

The owners of the properties to be included in the expanded SBBURD area and those within the existing SBBURD were all notified on September 24 via US Mail of the Community Information Meeting on October 9 and the Council Public Hearing on October 27. Yellowstone County, Billings School District #2, and Elysian School District #23 were all notified via US Mail, email, and in person of the Community Information Meeting on October 9 and the Council Public Hearing on October 27. Notification of the public hearing by the City Council on October 27 was also properly advertised in the Yellowstone County News.

Comments from the various stakeholders have been summarized below:

Yellowstone County has been the only taxing jurisdiction that expressed a lack of support for the expansion of the SBBURD due to possible impacts to County property tax revenue during the life of the District.
Elysian School District Trustees asked questions and expressed some disappointment that an urban renewal project could not be awarded to their school for a campus project, as the district's school campus is outside the SBBURD while a portion of their district is within the SBBURD since it is also within the City. The trustees also asked if their district could be removed from the SBBURD by the City contracting the SBBURD boundary, however this could not be done since the City has outstanding bonds that are tied the current SBBURD area and are calculated off of the increment generated by the boundary.
Members of the public at the Community Information Meeting brought up several issues of concern and also some support for the SBBURD and the expansion. Points of concern included:
- A belief that property owners' taxes will increase when the district is expanded to include their property.
- That the City was wrong to go ahead and build a smaller scale recreation center at Amend Park after the voters defeated a levy and bond proposal to build a recreation center for the community.
- That it was wrong a recreation center was being paid for by the SBBURD increment when it was to benefit the entire City and not just the South Side.
- Wanted to know why the City wouldn't just create a new urban renewal district instead of expanding the SBBURD, since expansion would mean spreading the current increment over a larger area until the new area included began to generate its own increment.
- Wanted to know why the City does not do anything to just help the South Side residents.
- That the City should look at putting a new pool at Amend Park (as was originally planned for the recreation center) instead of build another pool at South Park and make the new pool at Amend Park indoor to be a year-round operation.

The Mayor, Council Members Kennedy and Shaw, City Administrator Kukulski, PCSD Director Friday and Finance Director Zoeller all provided responses and information to the residents and public at the meeting on all of the questions, comments and concerns.

ALTERNATIVES

City Council may:

Conduct a public hearing and approve the ordinance on first reading to expand the SBBURD, modify the Urban Renewal Plan and include the tax increment provision; or
Conduct a public hearing and not approve the ordinance on first reading to expand the SBBURD, modify the Urban Renewal Plan and include the tax increment provision.

FISCAL EFFECTS

The exact financial impact of modifying the SBBURD is unknown. There is some cost associated with City staff time and the consultant help for City staff on the expansion process, which is estimated at about $25,000 for the consultant time only. However, the real benefit of this effort is the purpose of an urban renewal and tax increment district, which is for the public to invest in infrastructure and improvements to thereby encourage private investment that increases the taxable value in the District and leaves all taxing jurisdictions and the community better off in the future that they would have been if the District never existed. In other words, without the public investment, it is assumed private investment would not occur, thus there is no “loss” of taxes from freezing the taxable value base because all taxing entities continue to collect taxes on the base value as it is today and, ultimately, realize an increase in revenue in the future.

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