More details released on major downtown project

This story has been updated.

Developers of a $120 million-plus project in downtown Billings—including a skyscraper that would be the tallest building in Montana—unveiled their plans Monday afternoon.

At a press conference in Meadowlark Gallery, 118 N. 29th St., attended by nearly 80 people, the developers and local people who’ve been working with them outlined plans to build the One Big Sky Center, which would take up two-thirds of a two-block-square area on the 2900 and 3000 blocks of First Avenue North.

The project would include a 25-story building, office space, a hotel and conference center, 160 high-end apartments and a 650-space parking garage, plus a pedestrian mall containing a brewery, restaurant, coffee shop, a five-screen movie theater and 50,000 square feet of retail shopping. Plans call for breaking ground in the fall of 2017 and completing the project in 2019.

A handout distributed at the press conference said the project would create 300 construction jobs, 100 hotel and conference center jobs, 20 theater jobs, 20 jobs in the restaurant and brewery and 40 jobs in apartment and property management. It also said the project would bring 25,000 visitors and conference attendees downtown annually and put 300 to 350 new residents downtown.

The developer, MontDevCo LLC, has already purchased the parking lot at North 29th Street and First Avenue North for $840,000. Roughly a third of the project would be built on that property. Plans call for closing 29th Street between First and Second avenues north and converting it to the pedestrian mall.

The rest of the development, including the 324-foot-high building, would be on the square block between First and Second avenues and 30th Street and the new pedestrian mall.

The project involves a collaboration between MontDevCo, the city of Billings, the Downtown Billings Alliance and Big Sky Economic Development. Total construction costs would come to more than $120 million, and the city of Billings will be asked to contribute funds for the construction of the parking facility, the conference center and costs of closing 29th Street.

The development team consists of George “Skip” Ahern, president and CEO of the Denver-based Charter Realty Group; M. Burke McHugh, the founder of Malbur Properties, a Denver real estate firm; and Greg Tatham, a principal and broker with GT Property Services in Phoenix, Ariz.

Ahern said he didn’t know yet how much the city will be asked to invest in the project, but he said the developers will spend three to four times what the city will be asked to contribute.

Greg Krueger, development director for the DBA, said money for the city’s portion of the project would come from the downtown tax increment finance district. When a TIF district is created, tax revenue on any new development in the district—any new money that comes in after creation of the district—flows into a special fund for the life of the district.

That money can then be used to help finance further redevelopment in the district. Kreuger said about $3 million a year is available in the district, and payments on a 25-year bond to pay for the city’s investment in Big Sky One Center have been estimated at $2 million to $2.5 million a year.

What sweetens the pot is that the developers would be leasing the city-financed portions of the project for 20 years, meaning that 100 percent of the project would be taxable. And because this project is so big, Kreuger said, taxes on that project alone would pay for 40 percent of the annual bond payments.

That kind of payback on a project is “unheard of,” he said.

The City Council has not yet approved use of TIF money for the project. The developers are scheduled to present their plans to the council at its work session today at 5:30 p.m.

Ahern said the developers plan to use a traditional bank loan for 55 to 60 percent of the project costs and will have equity in the project valued at $15 million to $25 million. They also hope to raise $30 million to $32 million through the EB5 Immigrant Investor Program.

Under that program, foreigners who invest qualifying sums of money in U.S. projects and create or preserve at least 10 jobs can obtain green cards for permanent residency for themselves, their spouses and children under 21.

John Brewer, president of the Chamber of Commerce, opened the press conference by trumpeting Billings’ No. 1 ranking ranking in Outside magazines Best Towns 2016 contest. He also said “public-private partnerships of the magnitude … don’t come along very often.”

Lisa Harmon, DBA director, said projects like the new Billings Public Library and the new parking garage on Montana Avenue—plus years of work on countless smaller projects—helped make the downtown attractive enough to bring in a development of this size.

“We’ve really positioned ourselves for this kind of project,” she said.

The origins of this project go back nearly three years, when McHugh and Tatham bought some property in Roundup, hoping to develop a mobile-home park there. They were staying downtown Billings while they were working on that project, McHugh said, and “we’d look around and say, ‘Wow, what a cool city.'”

They saw so much potential in Billings that they dropped the Roundup project to do something here. McHugh bought the parking lot of First and 29th, originally thinking he might build a hotel, but as he talked with more and more people involved in downtown redevelopment, he learned of the need for more downtown housing, parking and conference space.

“It’s morphed into this gigantic project,” he said.

The First Interstate Tower, just a few blocks away from the planned development, is now the tallest building in Montana, at 272 feet. The Crowne Plaza Hotel, also nearby, is close, at 256 feet. The main building at One Big Sky Center would top the First Interstate Tower by 52 feet.

The project is being designed by Billings-based CTA Architects Engineers.

Most of the buildings between First and Second avenues and 30th and 29th streets would be demolished to make way for the new development. Tenants of those buildings included the Meadowlark Gallery, which hosted the press conference, Yesteryears Antique Mall, Wise Wonders Children’s Museum and Montana Vintage Clothing.

Comments

comments