The City of Billings operates tax incentive programs under state law authority found in MCA 15-24-1401, 1501, 1502 and 1601.  Linde Properties LC and Heights Eyecare Inc. applied for a tax incentive under MCA 15-24-1501 and City Resolution No. 05-18377.  This program encourages existing building remodeling, reconstruction, or expansion by exempting the new improvements' value from city and local school property taxes during construction and for the following four (4) tax years. In the fifth and subsequent years, the improvements are fully taxable.  Minimum requirements are that the construction cost is greater than $500,000, adds at least 2.5% to the property's taxable value, property tax payments are current, zoning is correct and that the applicant identify the number and type of jobs that the investment will create.  The City Council must conduct a public hearing before it considers adopting the attached resolution that grants the tax exemption.

City Council may:

• Approve the tax incentive; or,
• Not Approve the incentive.  The Council should identify the incentive criteria that the applicant does not meet. 

Linde Properties LC owns the property at 430 Lake Elmo Road and leases it to Heights Eyecare, Inc.  Linde submitted an application to abate taxes on a $1,050,788 investment to remodel and expand the optometry clinic.  The construction work concluded late last year.  The project allows the clinic to hire 9-12 full time employees over two years following the expansion.  Zoning is appropriate and taxes are current.  The property had a 2015 market value of $1,098,759 (before expansion) and a current value of $1,856,000.  The 2015 property tax was $16,312.  If the City Council approves the abatement, the owner may save up to $6,500 per year in City and local school taxes until the improvements are fully taxable in the 5th and subsequent years.  Property assessments, such as Street Maintenance, Arterial Construction, and Storm Water Management are not affected by these tax abatements.

Staff recommends that the City Council conduct a public hearing and approve the resolution granting a 5 year tax abatement for Linde Properties, LC.