MISSOULA — Calling it a community investment that will provide long-term benefits, Missoula County on Thursday gave final approval to a new development district, one that could support dense urban infill and meet a wide range of needs.
The approval makes Grant Creek Crossing and its 86 acres off North Reserve and Interstate 90 the county's newest Targeted Economic Development District, where tax increment will fund the public infrastructure needed to develop the site.
Andrew Hagemeier, the county's director of Community and Economic Development, called future redevelopment of the property "a unique opportunity."
“There aren't many large properties left in the urbanized area for infill on this scale,” he said. “The size of the property enables different types of uses to be located there that might need larger lots. Those types of opportunities are typically limited to greenfield development.”
While the parcel sits in a prime location near an existing commercial district, it lacks any form of infrastructure. It formerly served as a gravel pit but now sits vacant, less a small storage facility.
Without the addition of public infrastructure, such “low-intensity uses” would likely continue, reducing the property's potential taxable value and squandering an opportunity to redevelop the property to its greatest potential.
“When a site like this develops at a low intensity, it's often the case that the tax revenue isn't high enough to cover the cost of that area's own infrastructure, maintenance and service,” said Jeff Smith with WGM Group. “Undeveloped land of this size in the urban core is exceedingly rare. This is an opportunity where larger land uses within the City of Missoula might relocate here and open up opportunities for dense, urban infill-style development elsewhere in the city core.”
Funding Infrastructure
Like an urban renewal district in the city, a Targeted Economic Development District caps the existing taxes generated from a parcel and collects any future tax increment to pay for the cost of infrastructure.
The diversion of that increment can have impacts on tax-reliant jurisdictions, including Missoula Rural Fire District and Hellgate Elementary School. Both have expressed concerns that the new district could flat line their tax revenue, placing an additional burden on their operations.
To address those concerns, the county included several outlets within the new district. Among them, both Missoula Rural Fire and Hellgate will keep a set percentage of their total mills, ensuring that their revenue will grow alongside any development within the district.
Hagemeier said the formula will reduce the tax increment collected by the county by around 12%. But he said that was an “acceptable risk” to ensure the fire and school district receive additional funding.
“When we exclude mills from these TEDDs, it reduces our ability to fund public infrastructure,” he said. “But both taxing jurisdictions will receive more money if the development occurs. They'll receive nothing if it sits vacant.”
The fire district opposed the creation of the TEDD while the school district described the funding formula as a “small win.” County officials agreed that it wasn't a perfect tool, but it's the only one they have when eyeing an estimated $10 million in public infrastructure costs, they said.
“The cost of bringing infrastructure to this area is so expensive, the area has resisted development,” said Commissioner Josh Slotnick. “But this area is right next to a highly urbanized area of our community. If there is a spot that should have this kind of high-intensity, diverse urban development, it's this. Our only tool to fund infrastructure in this way is the TEDD.”
Development Opportunities
While a number of potential projects have already been envisioned for Grant Creek Crossing, nothing has been publicly confirmed.
A portion of the property went on the market last year and was listed as a build-to-suit joint venture, in which the development team was seeking potential partners. At the time, a conceptual site plan suggested a number of commercial or retail pads, along with multi-story housing.
The county's new comprehensive development plan envisions redevelopment that brings in value-added industries that support both economic growth and workforce housing. The county in September declared the area infrastructure deficient.
“The properties of this size that are left haven't been developed because they're either dirty or difficult. This property isn't dirty, but it's a little difficult to develop,” said Hagemeier. “It lacks sewer and water, storm water, and the roads that access the property are in poor condition. We're looking at somewhere north of $10 million in infrastructure costs to build the public infrastructure that's necessary.”
While a member of the group Let's Improve Missoula's Reserve Street opposed the district's creation, the Missoula Economic Partnership supported it. Grant Kier, president and CEO of the organization, said the opportunities for redevelopment are high and the property could meet a range of community needs.
“We are growing. Yet many businesses looking to grow in the community are struggling to find places to do that," he said. "This is a great place for many of the businesses in our community to grow. We're also a community that does need more housing. This could relieve pressure in other places where housing is suitable in a high-density format.”
