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Billings City Council delays Stillwater Building purchase for two weeks

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Posted at 11:38 PM, Sep 27, 2021

BILLINGS — At its Monday meeting, the Billings City Council voted unanimously to delay a deal to purchase the Stillwater Building for two weeks to allow time to clean up errors in buy/sell documents.

“We have identified some technical corrections that need to be made to the buy/sell agreement and some of the exhibits. These technical corrections are, for the most part, small things. It may be the spelling of a word, it may be the wrong word. There’s one place where the number is wrong," said Doug James, the city's attorney on the deal.

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The Stillwater Building (left) is connected across North 26th Street via skybridge to a parking garage.

The city has had its eye on the Stillwater Building since December 2019, voting to form a negotiating committee to discuss the sale with the building's owner, Alaska-baced WC Commercial.

The current buy/sell agreement for the five-story, 213,000 square foot former federal courthouse expires on Thursday. The seller would have the option not to engage in negotiations with the city further after that point.

"The changes that I have reviewed, I don't think they would really have troubles with. I think they're within the scope and course of what's been negotiated, but you don't know until you put the language in front of them," James said.

The negotiating committee recommended the Council approve an agreement to purchase the building for $13.5 million. The price is lower than a previous offer made in August of $17 million. The city negotiated lower after building inspections found $7 million in needed repair work.

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The Billings City Council meets for its regular meeting at City Hall on Sept. 27, 2021.

The eventual plan is to turn the Stillwater Building into a law and justice center, housing the city courts, legal department, and police department along with others.

Other than about 35,000 square feet of third floor office space currently leased by the county, the remainder of the building will have to be built out for the city's needs. Architecture and build out costs are estimated at $14.7 million, according to the Council agenda.

All together, the cost to the city would be $29 million to purchase and build out the Stillwater Building.

A large chunk of the money would be paid for, thanks to money freed up in the city's budget from multiple federal COVID-19 relief bills. The city is expected to end 2021 with an excess of $20 million in its general fund. The excess along with $5.8 million from the American Rescue plan act would help purchase the property.

“18 months ago, the issue of this project or this facility was one that we assumed that we would need to go into debt for. We would need to ask the voters for a 20 year bond to pay for, but it is because of the past 18 months and the pandemic and the sharing of resources from the federal government and the state of Montana has put us in this position to be able to use this one-time money," said Chris Kukulski, Billings city administrator.

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The exterior of the south side of the Stillwater Building in downtown Billings.

RELATED: Billings could purchase $17 million Stillwater building for law and justice center