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Item 1.P.
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| City Council Regular | |
| Date: | 11/10/2025 |
| Title: | SBBURD - Second and Final Reading of Ordinance to Expand the District |
| Presented by: | Wyeth Friday |
| Department: | Planning & Community Services |
| Presentation: | No |
| Legal Review: | Yes |
| Project Number: | N/A |
RECOMMENDATION
The City Council at its meeting on October 27, 2025 conducted a public hearing and approved the ordinance on first reading 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. Ordinances require two readings and so the Council is scheduled to complete 2nd reading of this ordinance at this meeting. City staff recommends the City Council adopt on second reading the ordinance to expand the boundary of the South Billings Boulevard Urban Renewal District (SBBURD).
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, 2025 meeting as the first formal step for the City Council to move the process forward. And the City Council at its meeting on October 27 conducted a public hearing and approved the ordinance on first reading 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 District was formed and amended in 2007-2008, 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:
The District was formed and amended in 2007-2008, 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 formally.
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 September 24, City staff mailed a notice to all property owners in the existing SBBURD and in the proposed expansion area to notify them of the date and location of the Community Information Meeting and Council public hearing.
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.
On October 27, the City Council conducted a public hearing and approved the ordinance on first reading 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.
If the City Council approves the ordinance modifying the SBBURD on second reading at this meeting, the ordinance will take effect 30 days after second reading on December 10. City staff also will complete the process of Department of Revenue approval of the expansion process and setting 2025 as the base year for the expanded area of the SBBURD, by providing the required documentation to DOR and communicating with DOR to finalize the process.
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 formally.
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 September 24, City staff mailed a notice to all property owners in the existing SBBURD and in the proposed expansion area to notify them of the date and location of the Community Information Meeting and Council public hearing.
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.
On October 27, the City Council conducted a public hearing and approved the ordinance on first reading 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.
If the City Council approves the ordinance modifying the SBBURD on second reading at this meeting, the ordinance will take effect 30 days after second reading on December 10. City staff also will complete the process of Department of Revenue approval of the expansion process and setting 2025 as the base year for the expanded area of the SBBURD, by providing the required documentation to DOR and communicating with DOR to finalize the process.
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:
City Council Public Hearing on October 27
There was limited public comment at the hearing from the public. Comments provided were as follows:
- 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.
City Council Public Hearing on October 27
There was limited public comment at the hearing from the public. Comments provided were as follows:
- Billings School District #2 Trustee Tanya Ludwig commented in support of the expansion and pointed to several school projects that were funded with TIF funds in the existing SBBURD since it was created in 2008.
- Southside resident Paul Clark spoke in favor of the expansion, noting that the South Park Pool needed to be renovated, there were other park facilities that also needed to be improved, and that having the Western Sugar complex in the expansion area might help with addressing what he alleged was water pollution from the factory affecting areas of the Southside.
- SBBURD resident Kevin Nelson spoke in opposition to the expansion, accusing the City of taking "other people's money" to do projects in the expansion area. He said there was no economic advantage to improve the South Park Pool. Mr. Nelson also continued allegations he had emailed to the Council earlier in the day that the City had not followed the process properly per State Law to inform the other taxing jurisdictions and provide them an opportunity to comment on the propose expansion process.
- SBBURD resident Nancy Talcott (sp?) asked for more information on what the expansion would mean for her property. The Mayor provided a brief synopsis of how Urban Renewal and TIF works, to help her understand what was going on.
- Downtown District property owner Gene Culver asked if his property at South 27th Street and Minnesota Avenue was included in the expansion area. It was clarified with Mr. Culver after the meeting that his property was actually in the existing Downtown District.
- Brad Archibald, of Pioneer Technical Services, the firm that has assisted the City in the expansion process, stated that in his experience working on urban renewal districts around Montana, the City of Billings process to notify property owners and taxing jurisdictions about the expansion was a best practice approach in his opinion.
ALTERNATIVES
City Council may:
- Not approve the ordinance on second reading to expand the SBBURD. Not approving the ordinance on second reading would be in conflict with Council's action on October 27 to approve the ordinance on first reading.
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.
Attachments
- SBBURD Modification Ordinance
- SBBURD Urban Renewal Plan
- SBBURD Expansion - Conditons that COntribute to Blight Report
- Planning Board Conformance Letter to City Council