MISSOULA — A development team selected by the city last summer to redevelop the old library block continues to conduct due diligence on the property as it explores potential uses.
The Missoula Economic Partnership on Thursday said it's working with Edlen & Co/deChase Miksis on finding potential businesses to occupy the ground floor of a future building while also exploring the cost and level of subsidies needed for both market-rate and income-restricted housing.
“MEP has made numerous introductions to businesses and organizations who had interest in either expanding or placing a new business on the ground floor of the old library block,” said Christine Littig with MEP.
The project was envisioned in the newest Downtown Master Plan as a mixed-used property with ground-floor retail, housing and other potential uses. Efforts to continue due diligence are intended to ensure the final proposal meets the vision of the master plan and is still relevant to the district.
“In that process, we've continued to make introductions in alignment with the Downtown Master Plan,” said Littig. “That would include introductions to grocers, to childcare providers, to artists and bakers in one form or another, and retail and restaurant owners.”
The Missoula Redevelopment Agency charged the Missoula Economic Partnership to solicit development teams that were both interested in and capable of redeveloping the property. The search landed on Edlen & Co/deChase Miksislast August.
The team was granted 180 days to complete due diligence, with options to extend that period by 30 days at least four times.
MRA on Thursday said the first 30-day extension has been granted, giving the team more time to complete a development concept, conduct outreach and complete its financial underwriting.
While it's possible that further extension will be sought, Annie Gorski, deputy director of the Missoula Redevelopment Agency, said the process is making headway.
“At the end of that period, if we have a development concept that aligns with the goals of the Downtown Master Plan and is financially feasible, they'll present that to the MRA board and ultimately to City Council,” Gorski said. “Then we start working on a development agreement, which lays out the terms of the (property's) purchase and sale.”
But like many other projects proposed in Missoula, current economic headwinds are making it hard to move forward. Material costs are high, as are interest rates, and efforts to redevelop the downtown block may take more time.
“It's a costly environment to build in. With interest rates high, they needed more time to go back and do some more due diligence on that,” said Gorski. “They're still a very interested partner, and they're excited about Missoula and entering our market.”
Other sizable projects proposed in recent years have yet to advance. The city in 2017 vacated property on Front Street and West Broadway, followed by a rezone in 2020, to accommodate plans for a mixed-use project near the Riverfront Triangle.
That project hasn't resurfaced, and neither has plans for a convention center and hotel on a city-owned lot in the Riverfront Triangle.
That project was expected to break ground in 2020, but the pandemic and the forced closure of businesses stopped plans from moving forward.
Other projects in the Riverfront Triangle also are on hold, along with plans for the 406 Commons — a 200-unit housing project in the Midtown area that was expected to break ground last summer.
Another housing project with 42 apartments proposed for First Street West in 2021 also has gone dark.
“What it costs to build is driving rents higher than what the market can absorb, whether it's residential, commercial or retail,” said MRA Director Ellen Buchanan. “It's why every mixed-use project on every property we've got is stalled right now.”
Still, Gorski said the Missoula Economic Partnership's work with Edlen & Co/deChase Miksis has turned up interest in the old library project from potential commercial occupants. Housing opportunities are also high.
“They're interested in exploring a mix-income project there, with some market-rate and some income-restricted units,” said Gorski. “They're finding the costs in Missoula are similar to Portland, but what they can rent those market-rate units for to subsidize the income-restricted units is much lower. There are those challenges to work through.”
