The Downtown Billings Partnership (DBP) has been working for many months with a prospective property developer who is planning a large redevelopment project in the vicinity of N. 29th Street and 1st Avenue North.  The developer owns property in the project area and has purchase options for others, including the subject property.  The developer plans to transfer the option to the DBP if Council approves purchasing this property.  The DBP Board of Directors requests that the City Council approve purchasing the property with downtown tax increment funds (TIF) for a price and expenses not to exceed $850,000.  Additional explanations and justifications for the purchase are contained in the attachments provided by the DBP.
City Resolution #93-16740 establishes the requirements for property purchases.  According to the resolution, property with value exceeding $200,000 should be appraised by two qualified appraisers and a third appraiser should review them and determine the final appraised value.  The Resolution's Paragraph H allows the City Administrator to request a variance to that policy if the project demands it. There isn't enough time to perform two long form appraisals and a review before the purchase option's expiration on May 9. The DBP obtained one appraisal for the property and the appraiser substantiated the proposed purchase price.  Therefore, if the Council allows the DBP to purchase this property, it should waive the appraisal requirements of Resolution No. 93-16740.

City Council may:

• Approve the DBP's request to use TIF funds to purchase property, including expenses, for up to $850,000 and waive Resolution No. 93-16740 appraisal guidelines; or,
• Not approve the request, or
• Request additional information from the DBP and delay a final decision until a future meeting.

The downtown Tax Increment District (TID) has sufficient funds for the purchase.  The 2015 statewide property re-appraisal and continued strong downtown business activity increased the downtown district's taxable value by almost $2 million; from $3,067,000 in tax year 2014 to $4,960,000 in tax year 2015.  The TID Fund has about $2 million of un-obligated cash and the County Treasurer will collect and distribute second half property taxes in June.

The Downtown Billings Partnership Board of Directors recommends that the City Council authorize the DBP to purchase property at 1st Ave. North and North 29th Street for a price and expenses not to exceed $850,000.  Staff recommends that Council waive the appraisal requirements of Resolution No. 93-16740.