The Downtown Billings Partnership (DBP) Board has re-reviewed this TIF application and recommends the City Council approve up to a maximum reimbursement of $320,000, starting in the fiscal year following the year in which the project is completed, from Downtown Urban Renewal tax increment finance district funds to DB 10, LLC for its mixed-use project at 14 North 29th Street. Actual reimbursement will be based upon 100% of the actual costs incurred for qualified expenses for renovation, subject to the following conditions:

1. The Applicant shall sign a development agreement with the City of Billings and DBP within 180 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

DB 10, LLC submitted an application on October 11, 2021 to the DBP requesting TIF assistance to rehabilitate its recently acquired property located at 14 North 29th Street. The application was vetted by staff and presented to the Development Committee on October 14, 2021. The Development Committee vetted the proposal and made a recommendation to the DBP Board for $320,000. The recommendation was presented to the DBP Board on October 22, 2021 and the DBP Board made its recommendation to City Council.

The DBP Board supports the project and found it was a very strong match for accessing urban renewal funds because:

• The renovation and restoration project meets the 5:1 private to public matching fund requirements of the DBP Large Project Incentive Grant criteria (including the property acquisition in the calculation but not reimbursing any acquisition cost) and address blight remediation (MCA 7-15-4282 through 7-15-4294 and Ordinance 12-5590) through the transformation and adaptive reuse of a property that has been in downtown Billings since 1912.
• The project further enhances the vibrancy of Downtown Billings through increased public activity along North 29th Street, enhanced pedestrian experience, revitalization of a building and improved public safety through modern upgrades for fire, electrical, plumbing and HVAC systems.
• 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 1 below and the DBP Board Recommendation document attachment).

  Table 1.

Qualified Improvements	DBA Strategic Plan	City TIF Policy	Urban Renewal Plan	Montana Code Annotated
Exterior site work and safety - facade work, lighting of the street frontage/sidewalk area, new windows and doors Public area improvements - replace and repair masonry, sidewalk and stabilize vault under sidewalk Building Safety and Utility work to code - Mechanical, plumbing, electrical, HVAC	Strong Downtown Identity –P.13 Vibrant &Connected Downtown – includes downtown living P.13 Diverse Economic Engine -P.13	Permitted uses of TIF Funds: Private infrastructure with Public Benefit and Public infrastructure (parking, sidewalks, sewer lines, utility connections) –P.2 Financial Assistance Through TIF– (grants may for profit businesses) P.2	Business Programs &Projects –P.54 Infrastructure Improvements– includes improvements to support workforce housing and loft and condo housing development - P.55 Crime Prevention and Public Safety -P.55	7-15-4233 (i)(m) 7-15-4288 (2) (4)

 
NAI Business Properties has entered an agreement with Hannesson Home to form a local investment group, DB 10, LLC, who purchased the Historic Sturm & Drake Building located at 14 N 29th Street. The Sturm & Drake building was built in 1912 for Leon Henry Drake and George Sturm Grocery and upstairs was the Harvard Hotel. Safeway moved into the storefront in the 1920’s. Then, it became the Barbizon Hotel for women in the 1970’s. In recent years, the retail space on the first floor has been partially or fully vacant and the apartments upstairs are in need of upgrades as well as overall building safety and code updates for a mixed-use structure. A great asset of this building is that it has secure underground parking for tenants accessed off of the alley. DB 10 purchased the building for $800,000 and will spend $1.121M to remodel it, bringing the total project investment to $1.921 million. The project has nearly $500,000 worth of qualified expenses (not including the building acquisition) but DB 10 requested TIF assistance in the amount of $320,000 in alignment with the City's TIF Policy for the recommended ration of private investment to public investment as well as the improvements that will benefit the property, the public and the downtown.

DB 10, LLC envisions three areas of improvements within the building; modernizing the 10 apartments that have not been remodeled, improved, or maintained since the 1970s; revitalizing a blighted facade, and adding retail activity in a neglected and partially vacant storefront. The new retail space and apartment investments will bring new energy to N 29th Street, and increase the taxable value of the property. Not to mention that added security features, the natural surveillance of the tenants, and the street level bustle will contribute positively to public safety. This block of North 29th has and is seeing other investments with the relocation of the Billings Army Navy Surplus Store a few years ago to the southwest corner of 29th and Montana Avenue, the continued success of the Athenian restaurant, and the recent urban renewal funding participation in updates to the Monte Bar and Casino.

The DBP Development Committee and the DBP Board both supported this application request, recognizing this project will make a significant commitment and investment in Downtown Billings by adding to existing redevelopment along this block of North 29th Street and stabilizing and giving new life to a historic property.
 

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 necessary to provide further direction to the DBP Board and staff, and City staff for future applications.

The recommendation is for up to a maximum of $320,000 to be reimbursed to DB 10, LLC for the identified building demolition, exterior repair and renovation and plumbing and electrical work. The estimated total project cost is about $1.9 million (building purchase included), making the private to public investment ratio for this total project about 5:1. The funds are payable per the conditions of approval outlined above in the DBP recommendation and pending satisfactory submission of all paid invoices showing actual cost incurred for the project. This project is proposed to be reimbursed starting the fiscal year after the project is completed. If approved, payments will be incorporated into future year budgets, the earliest is expected to be FY24. Current estimates of the Downtown District revenues are able to cover this project.