MISSOULA — Plans to include a daycare facility in a northside housing project as part of an agreement between the city and a private developer will no longer move forward due to economic changes in the market.
Members of the City Council on Wednesday released Ravara LLC from a letter of intent signed in 2021 to include a daycare facility in a larger housing and commercial project under construction on Scott Street.
At the time of the initial agreement, the need for daycare was high and it was one of the amenities sought by the neighborhood.
“Childcare is a struggle for so many families in Missoula. It was something that people in the neighborhood requested,” said John Adams, the city's strategic projects administrator. “But the daycare environment has changed quite a bit in the last 18 months, with a substantial number of school-aged kids shifting to after-school care with Missoula County Public Schools.”
The development covers three primary elements including income-qualified workforce housing on a three-acre community land trust. Phase 1 of that project, valued at roughly $18 million, is under construction.
The project also calls for 30,000 square feet of commercial space fronting Scott Street and around 200 additional housing units. The commercial space was initially planned to include a daycare, though city officials and the developer said that doing so is no longer economically viable.
“We're at the point where holding on to that requirement is hindering Ravara's ability to complete design and solve for financing on the market-rate parcel,” said Adams. “That means we're delaying or missing out on the other benefits the project will deliver. We think we need to let go of the daycare idea in order to get those 200 plus homes.”
The daycare provider Ravara had been working with in planning the facility went from a waitlist when the planning began to now having surplus capacity, Adams said. As a result, the provider was no longer interested in building a new daycare space.
“They basically found no demand for a new purpose-built facility,” Adams said.
Kiah Hochstetler, who is a member of the development team, said other changes have diminished the need for traditional daycare. Among them, the state created an early childhood education program and MCPS placed additional resources into its after-school programs.
“It really evacuated the 4-year-old population from private and for-profit daycare provider space,” Hochstetler said. “The economics don't support another facility.”
The City Council's Housing, Redevelopment and Community Programs Committee on Wednesday voted nearly unanimously to release Ravara from the daycare requirement. But even so, committee members noted the need to include other neighborhood amenities in the project.
“There were quite a few services they (the neighborhood) were interested in,” said council member Sierra Farmer. “It would help the neighborhood not come over the bridge to do everything. It's a desert out there in terms of services.”
Hochstetler said the project will include other commercial offerings and honor the intent of the agreement signed with the city. He said a number of commercial proposals are currently being pursued.
The development off Scott Street includes 30,000 square feet of commercial space.
“The scope of the project still includes 30,000 square feet of commercial space,” he said. “We are hoping to not directly operate any of those businesses. We're looking for business operators who are looking to lease commercial space for the project.”
Among them, Hochstetler said the development team is working with a small-scale grocery operator to provide basic services to the neighborhood. Other proposals include a potential dentistry, a salon and barber shop, and other businesses.
“That neighborhood in general, there are no additional services,” he said. “The intent is to identify both food and beverage operates to create space for people to go.”
Most members of the City Council supported the absence of a daycare due to the economic challenges but reiterated the need to include other services.
“A lot of work has gone in to meet this (daycare) requirement. But if it can't be done, it can't be done,” said council member Gwen Jones. “The fact that there's 30,000 square-feet of commercial space, I think it will provide a lot of other services to that neighborhood.”
Council member Bob Campbell ultimately supported the change but voiced skepticism.
“Market conditions are what they are. I believe in the free market, and if it doesn't support daycare, so be it,” he said. “But daycare there was touted as one of the things that would be a benefit to the neighborhood. Quite frankly, it has the feeling of bait-and-switch to me.”
