The Downtown Billings Partnership Board has reviewed this TIF application and recommends the City Council approve up to a maximum reimbursement of $665,765 from Downtown Urban Renewal tax increment finance district funds to Downtown Properties, LLC (Randy Swenson). Actual reimbursement will be based upon 100% of the actual costs incurred for demolition/renovation of the applicant's property at 2624 Montana Avenue (Stone Building), subject to the following conditions:

1. The Applicant shall sign a development contract with the City of Billings and DBP within 90 days of City Council’s approval. 
2. This TIFD reimbursement is the maximum that can be received pending satisfactory submission of all paid invoices showing the completion of expenditures related to this project.
3. If funds are not available, reimbursement can be carried over to the next fiscal year.

The DBP staff received and reviewed this TIF Application in October. It was then reviewed and recommended by the DBP Development Committee on November 12 and the full DBP Board on November 20, 2020 (See DBP Meeting Minutes attached).

The Development Committee and Board verified/clarified several issues during review, including:

• That Board was comfortable including the building acquisition cost in the total project cost calculations for the possible TIF award since the building was acquired within the past 3 years and that is a benchmark the DBP placed in its large project applications. This total recommended award aligns with the City's TIF Policy recommendation of a 5:1 private to public investment ratio (the ratio including property acquisition is 16.6% or 5:1).
• The Board discussed and was comfortable with the fact that this request for TIF fund reimbursement is to address a second phase of the Stone Building project remodel and does not include any already expended costs for the project. The entire project cost is factored into the application, including past expenditures in the first phase.
• The Development Committee and Board were very supportive of the project and found the application was a very strong match for accessing urban renewal funds because:

The application aligns with elements/goals of the DBA Strategic Plan (may be viewed through this link https://downtownbillings.com/about/about-the-dba/), City TIF Policy, MCA, and the North 27th Street District Urban Renewal Plan (See table below and attachments) For example, the adopted Urban Renewal Plan for the North 27th Street District, contemplated TIF funding assistance for business retention in its Business Programs and Projects section.
 

Qualified Improvements	DBA Strategic Plan	Urban Renewal Plan	City TIF Resolution	Montana Code Annotated
Exterior demo,  lighting, facade & brick restoration, signage, windows, fencing & landscaping, entrances & exits Interior demo, energy efficiency, electrical, plumbing, code, accessibility	Strong Downtown Identity – P.13 Vibrant & Connected Downtown – P.13   Diverse Economic Engine - P.13	Business Programs & Projects – P.54 Infrastructure Improvements (Entertainment Venues) – P.55	Permitted uses of TIF Funds: Private infrastructure with Public Benefit (Facades, Windows, – P.2 Financial Assistance Through TIF – P.2	7-15-4233 7-15-4288

 
 The Downtown Properties, LLC owns the Stone Building, which is located at 2624 Montana Avenue (the Southeast corner of 27th Street and Montana Avenue - formerly known as St. Vincent de Paul). Randy Swenson, a managing member of the Downtown Properties, LLC, has been actively recruiting tenants to occupy space in the building but without a shell built, many prospective businesses have been reluctant and non-committal. Therefore, they began construction on the building in January of 2020 with the intent to fund the project privately. DBP was not accepting applications at the time because it was revamping its TIF application, review, and selection process per the City TIF Policy and the DBP's need to update its documents and processes. However, Randy’s partner backed out after the consequences of COVID-19. Randy has been able to continue through Phase I of the construction but is in need of assistance for Phase II to complete the project. Currently, a second branch of Your Pie is confirmed to occupy the corner of this building. Further discussions are being had with an office upstairs and another street level business.
 
By restoring this historic vital corner while modernizing it, there’s a unique opportunity to address many of the goals of the Downtown Billings Strategic Plan and Urban Renewal Plan. The exterior of the building is being preserved and protected to maintain its character and history. The building is being named the “Stone” building to honor its heritage dating back to the Stone Ordean & Wells Company, which was a large wholesale grocery. It was built in 1914 and the business remained until sometime in the 1930s.Improving the perception of safety around this building is significant and this will be accomplished by providing natural surveillance - updated security on ports of entry/exit, lighting, structural reinforcement - to deter undesired activities such as graffiti and loitering. Activating this corner will eliminate a blighted space and bring new visitors to downtown. This new activity will benefit neighboring businesses by bringing more employees, more businesses, and activity in this Historic District.
 
 Downtown Properties, LLC is requesting TIF funds to reimburse it for improvements and modifications, including demolition with asbestos abatement, building structural stabilization, fire sprinkler and safety systems, public accessibility, exterior improvements including windows, doors, fencing, ramps and railings, concrete patio and surface work. The total reimbursement requested is $700,000. If the total value of cash invested ($3,306,617) and land and buildings ($680,000) are factored into the request, the private investment is 83% and the public investment is 17%, or about a 6 to 1 ratio. If the building acquisition is removed from the total project cost, bringing the project total to $3,306,617, the private investment is about 79% and public investment is about 21%, or about a 4:1 ratio. The DBP Board in its recommendation decided to stay at the City's TIF Policy recommended ratio of 5:1 and so has recommended to Council an award not to exceed $665,765. The DBP Development Committee and the DBP Board both fully supported this application request, recognizing this project will make a significant commitment and investment in Downtown Billings, anchor and revitalize the last critical corner at 27th Street and Montana Avenue, and make the area safer, more active and more valuable in the community.
 

City Council may:

• Approve the recommendation from the DBP Board for the expenditure of these TIF funds consistent with some elements/goals of the DBA Strategic Plan, North 27th Street Urban Renewal Plan, City TIF Policy and MCA, or;
• Modify the recommendation from the DBP Board for the expenditure of these TIF funds before taking action, or;
• Disapprove the recommendation from the DBP Board for the expenditure of these TIF funds. If the Council chooses not to approve this TIF application, specific reasoning for the denial is helpful to provide further direction to the DBP Board and staff, and City staff for future applications.
   

The request is for up to a maximum of $665,765 to be reimbursed to Downtown Properties, LLC (Randy Swensen) for the identified building remodel work (See TIF Application Attachment). The estimated total project cost is $3,986,617, making the private to public investment ratio for this project 5:1. The funds are payable pending satisfactory submission of all paid invoices showing actual cost incurred for the project. This project may be reimbursed in phases over several fiscal years. The current FY21 project budget for the Downtown District is $310,501, so a budget amendment would be needed to cover this project if it were all reimbursed in FY21. The Downtown District has $1,343,295 in total available TIF funds in the FY21 Budget, so this project can be covered and $677,530 would be remaining for other projects or programs. If all three Downtown District projects being reviewed by the Council at this meeting were approved and expended in FY21, the Downtown District would have $131,217 remaining in its FY21 Budget.