Tenants are still being lined up and the exact size of the One Big Sky Center development is still to be determined.
But Skip Ahern, one of three partners with MontDevCo, which is developing the $165 million office, apartment, hotel, convention center, retail, senior living and entertainment space downtown, told the Billings City Council Tuesday that he’s still optimistic that One Big Sky Center will indeed be built.
“This is not a slam dunk,” he said. “But we’re making really good progress, and proving there is demand in the Billings market.”
Developers have a June 30 deadline to sign a development agreement with the city. That agreement will include how much in tax increment financing the city will commit to the project.
Among the developments since Ahern last updated the city council:
• Depending on tenant needs and wants, office space could be 85,000 square feet – or it could be up to 115,000 square feet. An anchor tenant, which seeks 50,000 square feet or more, will sign a lease in the next few weeks, Ahern said.
• A hotel management company “with a strong focus on convention center management” has been signed. The convention center will be about 45,000 square feet.
• A 120-unit senior living facility is now planned for the development. A separate apartment building with 160 units will be constructed, with rents ranging from $1,400 for a studio apartment to $2,300 for a two-bedroom apartment.
• Swank Enterprises and a company that Ahern has worked with on past developments, PCL Construction, will be involved in the project’s construction. PCL Construction does about $8 billion in construction annually, Ahern said.
• Retail space at One Big Sky Center was to have been 35,000 square feet, but could be as large as 60,000 square feet. A brewpub and restaurant, bowling center, multi-screen theater, fitness center and retail bank have all expressed interest in the development.
• A 650-stall parking garage is still in the mix, “but that may go up,” Ahern said.
Ahern said that putting together components of the development has precluded his team from securing what he called “guaranteed financing.”
“We had to put the pieces together,” he said, “before people will listen to us.”
Developers are working with a national bank that has a local presence, but have decided not to seek financing from local banks offering syndication deals, he said.
“One national bank likes the project and may buy the (tax increment financing) bonds,” Ahern told the council.
The project is still valued at $165 million, “but once we know what kind of building components we’re using, we think we may find 10-20 percent savings,” Ahern said.
He said he’s not sure what Congress will do with one proposed funding source, the EB-5 program that awards a green card to foreign investors who produce American jobs.
“Right now I’m optimistic this will be financed,” he said. “It won’t be easy, but I’m optimistic we will get it done.”
A handful of residents urged the city council to do its due diligence before approving up to $35 million in tax increment financing to support public facilities included in the project, including the parking garage, convention center and a pedestrian greenway.
“It’s a wonderful idea and a great concept, and I want to see it come to fruition,” said Mike Nelson, owner of the Northern Hotel. “I do ask you to be cautious about awarding the ownership of the convention center. If it’s run to benefit the hotel at One Big Sky Center, that could cause ripples for other hotels.”