The South Billings Urban Renewal Association (SBURA) Board has reviewed this application for tax increment assistance and recommends the City Council approve, upon project completion, a maximum of $547,305 of Tax Increment Finance funds from the South Billings Boulevard Urban Renewal District (SBBURD) to GL Development Inc. GL Development Inc. is a Helena-based corporation that specializes in developing affordable housing.  Actual reimbursement will be based upon 100% of the actual costs incurred for qualified expenses for the improvements made to the property at 510 Jackson Street, subject to the following conditions:

1.    The Applicant shall sign a development agreement with the City of Billings and SBURA 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.

The SBURA board considered GL Development’s application at its October 5, 2021, board meeting and voted unanimously to recommend $547,305 of tax increment assistance. GL Development recently purchased 3.6 acres of unimproved land at 510 Jackson Street where it plans to develop a 38-unit affordable housing complex. The complex will include 20 one-bedroom residences, 12 two-bedroom residences and 6 three-bedroom residences.  The development plans include the construction of a neighborhood park, known as Jackson Green Park, that will include a paved community plaza, paved seating areas with tables and benches, a fenced dog park and lighting for the park area.  While the Jackson Green Park will be maintained by the Jackson Court housing complex and be on private property, the use of this park will be available for all residents of the neighborhood. The public use and access to the park will be called out in the development agreement executed between the City and GL Development for allocation of the TIF funds. The majority of the requested TIF funding for this application is for development of the Jackson Green Park. The total cost for the Jackson Court affordable housing complex is approximately $12.6 million, and the project leverages Low Income Housing Tax Credits (LIHTC) to make the housing affordable for low income residents of Billings. The Montana Department of Housing recently awarded GL Development $6,435,000 of housing tax credits to develop the Jackson Court complex.

Table 1 below details the proposed breakdown of the recommended tax increment assistance for GL Development for Jackson Court.  The extension of the water main to the property and the construction of the drive approaches represent investments in infrastructure needed to develop and access the property.  Jackson Green Park represents a public amenity, and the various fees are eligible redevelopment preparatory fees. There is also a very detailed breakdown of the costs for these project items in the Jackson Court TIF Application attached to this memo.

Table 1. Alignment of Proposed Improvements with City TIF Policy, SBBURD Urban Renewal Plan, and MT Code.

Qualified Improvements	Estimated Cost	City TIF Policy	Urban Renewal Plan	MT Code Annotated
Extend Water Mains Drive Approaches on Jackson St. Jackson Green Park Geotechnical, Site Survey &    Lot Aggregation Filing	$85,160 $41,097 $403,508 $17,540	Section 1(b) Section 1(b) Section 1(b) Section 1(b)	Section 12 Section 12 Section 14 Section 14	7-15-4288(4) 7-15-4288(4) 7-15-4288(4) 7-15-233(i)(n)

GL Development's founder and representative is Gene Leuwer. Mr. Leuwer is the former executive director of the Rocky Mountain Development Council Inc., a non-profit community action agency whose mission is to improve the quality of life and promote self-sufficiency for individuals and families, particularly low-income citizens.  Mr. Leuwer owns and operates LIHTC housing throughout Montana, including in Helena, Havre, Wolf Point, Belgrade, Culbertson and Deer Lodge. The developers of LIHTC housing are obligated to rent the properties to qualifying lower income individuals.  The developers are also obligated to maintain the properties in accordance with a host of regulations and are subject to periodic on-site inspections.  Failure to comply with these regulations results in the recapture of the tax credits from the project investors.
 

City Council may:

• Approve the recommendation from the SBURA board for the expenditure of these tax increment finance (TIF) funds that are consistent with elements of the South Billings Boulevard Urban Renewal Plan, City TIF Policy, and MCA, or;
• Modify the recommendation from the SBURA board for the expenditure of these TIF before taking action, or;
• Disapprove the recommendations from the SBURA board for these expenditures of these TIF funds.  If the Council chooses not to approve the TIF application, specific reasoning for the denial will be important for CIty staff and the SBURA Board to understand for future applications.

The recommendation is for a maximum of $547,305 to be reimbursed to GL Development for the identified work, including water main extension ($85,160), Jackson Street access ($41,097), Jackson Green Park improvements ($403,507), geotechnical work, site survey and lot aggregation ($17,540).  The estimated total project cost is about $12.6 million, making the private to public investment ratio for this project about 22:1.  The funds are payable per the conditions of approval outlined in the SBURA recommendation and pending satisfactory submission of all paid invoices showing actual cost incurred for the project.  Currently, the project is estimated for completion in late 2022.  These payments are already incorporated into the FY22 budget but may be reimbursed in FY23.