The Downtown Billings Partnership (DBP) Board has reviewed this TIF application and recommends the City Council approve up to a maximum reimbursement of $110,200, with payment as specified below in the fiscal year following the year in which the project is completed, from Downtown Urban Renewal tax increment finance district funds to MJShanks, LLC for its residential rehabilitation project at 122 and 124 North 22nd 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 approval of this TIF award.
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 or when funds are available based on prior District bonding and debt obligations.

MJShanks, LLC submitted an application on September 15, 2022 to the DBP requesting TIF assistance to renovate and rehabilitate residential property at 122 and 124 North 22nd Street. The DBP Development Review Committee considered the application at a meeting on September 12 and recommended approval to the full DBP Board. The DBP Board met on September 23 and voted unanimously to recommend the City Council award this project a TIF funding grant. 

The project involves exterior and interior rehabilitation efforts of residential properties located on the southwest corner of N 22nd Street and 2nd Ave N. There are a total of 13 units spread among two properties (five buildings). About 50% of the units are currently uninhabitable and have attracted undesired activities for a long time. A review of the past 10 years of Code Enforcement complaints include a total of 7 cases that included open storage of junk and debris; junk vehicles, RV storage, people living in campers, unmaintained weeds & garbage in the alley, and alley blockages. A review of the past 10 years of calls for service of the Police Department reveal 13 calls for service that have included vandalism, suspicious activities, burglaries, disturbances, parking complaints, abandoned vehicles, trespassing. A review of EMS and Fire calls for the same period showed 49 EMS calls logged and two structure fires. Mitigation of blight on this property will be a positive move to reduce the demand for City services for the property while also providing 13 housing units that are clean and safe in the downtown area.

Safety, beautification landscaping, facade and roof repairs as well as utility upgrades make the majority of the work that’s needed. This rehab project is expected to be relatively fast and provide affordable market rate housing by April 2023 with rental rates ranging from $650 to $950. The total TIF request is $110,200. The Board of Directors of the DBP as well as the Development Committee support this project and recommend approval.

This project complies with the Montana Code Annotated as well as City’s TIF Policy in regards to the 5:1 preferred threshold of private to public investment & eligibility of qualified expenses. Furthermore, this project conforms with goals of the Urban Renewal Plan as well as the Downtown Billings Strategic Plan such as housing, safety, and activation of vacant property. Unlike some of the recent mixed-use urban developments that have applied for TIF funds recently, this project offers the character of studio and small-scale multifamily housing in a residential neighborhood area on the border of the Downtown Urban Renewal District and East Billings Urban Renewal District.

The total renovation project, including the recent property acquisition is estimated at about $1.1 million. The application was vetted by staff and presented to the Development Committee on September 12 with a TIF request of $110,200. The Development Committee reviewed the proposal and made a recommendation to the DBP Board for the TIF grant. The recommendation was presented to the DBP Board on September 23 and the DBP Board made its recommendation to City Council (See attached Minutes of DBP Board discussion). The reasoning for support of the application by DBP are its alignment with its current goal of support of additional housing in the downtown core and the clear blight mitigation the project will achieve. Furthermore, this project conforms with many goals & elements of the Urban Renewal Plan as well as the Downtown Billings Strategic Plan such as housing, safety, and activation of vacant residential units. This housing will also add more natural surveillance to enhance safety in the neighborhood.

  Table 1.

Qualified Improvements	DBA Strategic Plan	City TIF Policy	Urban Renewal Plan	Montana Code Annotated
Site work and safety - Some interior and exterior demolition; landscape improvements Building Exterior and Facade and work - driveway, fencing, siding, windows, gutters, roofing, structural improvements. Building Safety and Utility work to code - Roof; plumbing, electrical	Vibrant & Connected Downtown – includes downtown living P.13 Strong Downtown Identity –P.13 Transformative Initiative - P. 15 - Increase Downtown Residential Population Through Targeted Downtown Housing Initiatives	Permitted uses of TIF Funds: Demolition and structure removal - P.2 Private infrastructure with Public Benefit and Public infrastructure –P.2 Financial Assistance Through TIF – (grants may be for for-profit businesses) P.2	Infrastructure Improvements– includes improvements to support workforce housing development - P.55 Crime Prevention and Public Safety -P.55	7-15-4288

 


 

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.
• 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 $110,200 to be reimbursed to MJShanks, LLC for the identified existing site and building renovations at122 and 124 North 22nd Street. The estimated total project cost is about $1.1 million, making the private to public investment ratio for this total project about 10:1.

The funds are payable per the conditions of approval outlined above in the DBP recommendation, pending satisfactory submission of all paid invoices showing actual cost incurred for the project following the year in which the project is completed. If approved, the payment will be incorporated into a future year budget, the earliest is expected to be FY24. Current estimates of the future Downtown District revenues are expected to be able to cover this project in FY24 and later as well as support known future planned projects and bonding. However, ongoing monitoring of the budget based on annual valuation of the District could delay payments to future years per the conditions of approval for this TIF grant award.