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 $123,898 of funds from the South Billings Boulevard Tax Increment Finance District (TIFD) to Ole Rentals LLC (dba Taco John’s).  Actual reimbursement will be based upon 100% of the actual costs incurred for qualified expenses for the improvements made to the property at 4720 King Ave East, 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 Ole Rentals LLC’s application for tax increment assistance for its new Taco John's Restaurant at 4720 King Avenue East at its November 8, 2021, board meeting and voted unanimously to recommend the application for $123,898.00 in TIF funds to the City Council.

Ole Rentals, LLC is a subsidiary of Pentex Restaurant Group Inc. Located in Fargo, North Dakota, Pentex owns and operates 27 HuHot Mongolian Grill and Taco John’s restaurants in six western states. Ole Rentals LLC purchased the unimproved property (located in the Miller Crossing Subdivision) in 2021 with the intent to build a Taco John’s restaurant. Ole Rentals, LLC is seeking tax increment finance assistance to construct a sidewalk on the perimeter of the property along with a concrete curb ($76,610.00), and landscaping ($47,288.00) associated with its development (See application analysis and SBURA recommendation sheet attached to this memo).

The SBURA Board supports the project and found it was a match for accessing urban renewal funds because:
The public improvements proposed for reimbursement for the overall project exceeds the 5:1 private to public matching fund recommendation of the City's TIF Policy.
The application aligns with City TIF Policy, MCA, and the SBBURD Urban Renewal Plan (See Table 1 below and attachments).
 
Table 1. Alignment of Proposed Improvements with City TIF Policy, SBBURD Urban Renewal Plan, and MT Code.

Qualified Improvements	City TIF Policy	Urban Renewal Plan	MT Code Annotated
Sidewalks Curbs Landscaping	Section 1(b) Section 1(b) Section 1(b)	Section 13 Section 13 Section 4	7-15-4288(4) 7-15-4288(4) 7-15-4288(4)

City Council may:

• Approve the recommendation from the SBURA board or the expenditure of these tax increment finance (TIF) funds that are consistent with elements of the South Billings Boulevard Urban Renewal Plan, 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 is helpful to provide further direction to the SBURA board and City Staff for future applications.

The recommendation is for a maximum of $123,898 to be reimbursed to Ole Rentals, LLC for the identified work of sidewalks and curb for $76,610.00 and landscaping for $47,288.00 (See application analysis and SBURA recommendation sheet attached to this memo).  The estimated total project cost is approximately $2,000,000, making the private to public investment ratio for this project about 16:1.  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 2021. The costs for this project were estimated and anticipated and are already incorporated into the FY22 SBBURD budget.