Regular 4.
Regular City Council Meeting
- Meeting Date:
- 08/27/2018
- TITLE
- Public hearing and resolution approving a property tax abatement for Rimrock II, LLC
- PRESENTED BY:
- Kevin Iffland
- Department:
- City Hall Administration
Presentation:
Yes
PROBLEM/ISSUE STATEMENT
The City of Billings operates property tax incentive programs under State Law authority found in Sections 15-24-1401, 1501, 1502 and 1601, MCA. Rimrock II, LLC, applied for a tax abatement under Section 15-24-1501, MCA, and City Resolution No. 05-18377. This program encourages property remodeling, reconstruction and expansion by exempting 100% of the increase in valuation from City and local School District taxes during the construction period and for the following four (4) years. In the fifth and subsequent years, the improvements are fully taxable. Minimum qualifications include that the investment must be at least $500,000, it adds at least 2.5% to the property's taxable value, current property taxes are paid, the zoning is correct and the applicant disclose the type and the estimated number of full-time and part-time jobs that the investment will create. The private investment meets the value criteria, taxes are paid and the zoning is correct. The applicant states that the new auto sales and service will create 19 new full-time and 2 part-time jobs. The City Council must conduct a public hearing before considering the attached resolution that grants the tax exemption. The hearing was advertised in the Yellowstone County News on August 17 and August 24.
ALTERNATIVES ANALYZED
The City Council may approve or disapprove the application and resolution. If the Council disapproves the application, it should state the incentive criteria that the applicant does not meet.
FINANCIAL IMPACT
The property formerly had a car sales building on it. The buildings had a total assessed value of $2.3 million prior to their demolition in 2017. If the Council approves the application, the owners will not pay property tax on the net, new investment value until the incentive expires after four (4) years. The property will still be subject to the City's other fees and assessments.
RECOMMENDATION
Staff recommends that the City Council conduct a public hearing and approve the application and resolution granting a tax abatement for the Rimrock II, LLC, located at 324 South 24th Street West.