On November 14, 2016, the City Council approved a Memorandum of Understanding (MOU) with MontDevCo, LLC and MontDevCo II, LLC (MontDevCo) regarding the proposed One Big Sky Center (OBSC) project.  The MOU expresses the City's willingness to negotiate a development agreement for the project that could eventually commit up to $35 million of tax increment for the project's public components (parking, conference center and plaza).  The MOU terminates on June 30, 2017 unless extended by mutual agreement.  MontDevCo requested a six (6) month extension at the June 19 work session.  The City Council directed staff to add the request to the next available City Council meeting agenda.  Staff prepared a one page MOU amendment and amended and republished the June 26 meeting agenda so that it includes this item.

City Council may:

• Approve the recommended MOU term extension until December 11, 2017, or;
• Approve a termination date that is sooner than December 11, 2017 or;
• Disapprove a term extension.

Approving an extension of the MOU term will allow staff to continue working with the developers to craft a development agreement that will satisfy both parties.  The only restriction on the City is that during the MOU term, it must refrain from negotiating with any other developers regarding the properties owned or controlled by MontDevCo.  Approving a shorter term or not approving an extension may cause MontDevCo to withdraw from the negotiations, but it would be free to continue working on the project and approach the City about public funding when the development partners and plans are better established.     

The primary City expenditure is for the staff time involved in the negotiations.  The City also uses legal and financial consultants as needed to help craft and analyze development agreement terms.  The consultants' costs for the year are nearly $40,000, but staff will try to minimize on-going costs by requesting the consultants' assistance only when their involvement is critical to the negotiation's and project's success.  The source of funding for the legal and financial advisors is the Downtown Tax Increment District; not the City's General Fund.   

Staff recommends that the City Council approve a new MOU termination date of December 11, 2017 for the MontDevCo - One Big Sky Center project.