Staff recommends the City Council provide an extension for the time to execute the TIF Assistance Development Agreement with the Halsten Holdings, LCC (Burger Dive) until Halsten Holdings receives approval from the National Park Service of its tax credit application or no later than December 31, 2022.

The City Council in December 2020 approved up to a maximum reimbursement of $466,373 from Downtown Urban Renewal tax increment finance district funds to the Halsten Holdings, LLC (Burger Dive) for demolition/renovation of the applicant's property at 2712 Minnesota Avenue. One of the conditions of approval was that the applicant sign a development agreement (DA) with the City of Billings and Downtown Billings Partnership (DBP) within 90 days of City Council’s approval. The applicant has been unable to execute the DA as required because of delays in completing its historic tax credit application process with the National Park Service who oversees the historic tax credit program. The project cannot start until Halsten Holdings receive the tax credit approval because all the other funding mechanisms for the project are contingent on the Historic Tax Credits.

Given that it is not known exactly when the tax credit process will be completed for the project, staff is recommending the City approve an extension of execution of the DA until Halsten Holdings receives approval from the National Park Service of its tax credit application or no later than December 31, 2022. Nothing else has changed with the project plans or the content of the original TIF application the DBP and City acted upon.

The Burger Dive plans to revitalize the Western & Wheel Bars Building, which is located at 2712/2714 Minnesota Avenue, a key section of Minnesota Avenue in downtown Billings that has been vacant for several years. This project eliminates blight by rehabilitating four buildings that have come under serious disrepair, addressing concerns of dilapidation, unsanitary conditions, and a deteriorating site.The Burger Dive is an award-winning and nationally known and reputable local gourmet burger restaurant that is looking to expand after 10 years at its present location on 27th Street. The new location will increase the seating capacity by 2 & ½ times, expand the kitchen, add a retail shop, outdoor dining area, “speakeasy-like” basement bar, and an event space. There will be commercial space for a tenant to offer more business or retail at the street level, and above the Burger Dive portion of the project, the old boarding house rooms will be re-purposed and combined into six new, energy efficient residential apartments. Two additional new apartments also will be built in a new, second-story addition above the old Wheel building making it a total of eight new apartments as part of the project.

The Burger Dive plans to use the approved TIF funds to reimburse it for improvements and modifications, including some demolition, building structural stabilization, infrastructure (water and sewer replacement/connections), safety and accessibility for the public, and exterior improvements including removing old stucco, repairing the brick, rehabilitating and improving existing windows, and restoring the overall historic character. The total reimbursement approved was $466,373. If the total value of cash invested ($3,119,497) and land and buildings ($292,000) are factored into the request, the private investment is 85% and the public investment is 15%, or about a 7 to 1 ratio. Even if the building acquisition is removed from the total project cost, bringing the project total to $2,831,497, the private investment remains at about 84% and public investment is about 16%, or about a 6:1 ratio.

The City Council and DBP Board both supported this application request, recognizing this project will make a significant commitment and investment in Downtown Billings and transform another portion of Minnesota Avenue, making the area safer, more active and more valuable as an asset in the community.

City Council may:

• Approve the extension of the time to execute the TIF Assistance Development Agreement with the Halsten Holdings, LCC (Burger Dive); or
• Not approve the extension of the time to execute the TIF Assistance Development Agreement with the Halsten Holdings, LCC (Burger Dive). If the extension is not approved, the applicant will have to re-apply for TIF funds through the process as the condition of executing the DA may not be met.

The City has already approved the expenditure of TIF funds for this project up to a maximum of $466,373 and the City and DBP have this reimbursement request factored into the Downtown District budget for FY22.