Preservation Commission questions decision over Mercantile’s future


The historic Missoula Mercantile has sat empty for six years. A team of developers is looking to purchase the property and build a $30 million hotel on the site, incorporating materials from the historic building. (Photo by Martin Kidston)


The corner of Higgins Avenue and Front Street in downtown Missoula may undergo a modern transformation later this year if the city approves a Bozeman-based developer’s plan to deconstruct the Missoula Mercantile and build a new $30 million branded hotel its place.

Architects announced the project on Thursday night during a raucous meeting of the Historic Preservation Commission. While developers praised the Mercantile’s 144-year history, they said the building could not be salvaged in a way that made economic sense.

More than 20 potential buyers have looked at the property over the past three years and walked away for similar reasons, developers said.

“It may seem counter intuitive to come before a preservation commission asking for a demolition permit, but that’s what we’re asking for,” said Andy Holloran, founder of the Bozeman real estate firm HomeBase. “We recognize, appreciate and respect those who have a tremendous passion for the Mercantile. It’s a building that’s been here for 144 years. Unfortunately, it has passed its useful life.”

Developers presented a brief history of the building, though members of the Preservation Commission took issue with that history. At times, members of the commission mocked developers for what they said was a distortion of the past.

What is known is that the building has sat empty for the past six years and has been looked at by nearly two-dozen prospective buyers. Developers said it would take upwards of $4 million to bring the building up to standard occupancy, though other costs would remain after that.

“The brick is deteriorating as it sits there,” said Nichole Nathan, principal with JNS Architects. “To bring this building up to code is really not feasible. From a seismic standpoint, structurally, it’s prohibiting the reuse of this building. The reality is, it’s uneconomic for redevelopment.”

Members of the Historic Preservation Commission questioned the proposal, saying they didn’t believe the building was past its useful life. They didn’t believe developers had considered all options.

“It’s a beautiful design, it’s a nice building, I just don’t think it belongs there,” preservation member Nikki Manning said of the proposed hotel. “That building (Mercantile ) defines our community – it’s what established our community. I find it hard we’re being asked to let that building go.”

Other board members agreed.

“I have a really tough time that we as a preservation board, which has been put here for historic preservation, should consider demolition right off the bat,” said preservation member Steve Adler. “It would take a heck of a lot of convincing for me to believe it’s beyond its usable life.”

If a demolition permit is issued, the project would start with the careful deconstruction of the Mercantile, a process that would take three or more months to complete and add additional costs to developers.

Still, developers said they were willing to invest in the added costs and pledged to incorporate many of the Mercantile’s historic elements into a new 154-room hotel carrying the Marriott brand.

The project proposed for Higgins Avenue and Front Street.

As proposed, the project would include 24,000 square feet of ground floor retail and restaurant space. The second floor would include a terrace and pool. Developers called it a customized approach and said they believed the project blended well with the fabric of downtown Missoula.

“We believe we can capture the spirit of the Mercantile by creating a hub of exchange and attracting hundreds of people downtown every night,” said Holloran. “This can infill and invigorate a vital corridor and gateway into downtown Missoula.”

Holloran said the new hotel would bring 200 new jobs to the community with an average annual payroll of $6 million. It would bring $13 million in new revenue to the community with $8 million in direct tax benefits.

“We believe the Mercantile is and can be a driver for not only downtown, but in particular, this neighborhood,” said Holloran. “When you have 300 to 400 visitors a night coming to downtown Missoula, it has a tremendous impact on our businesses.”

More than a dozen people spoke against the project during public comment. During the course of the meeting, attendees cheered for those who opposed the project and laughed when they criticized the developers’ proposal.

At one point in the hearing, Mike Haynes, director of Development Services, handed the commission’s chairman a note. The chairman later asked attendees to hold their applause, though the rule was not enforced.

Holloran told the commission the project wasn’t a “done deal.” He added that the presentation to the commission wasn’t enjoyable.

“We’re a prospective buyer,” he said. “(ZillaState realty) has had the property listed for years. There has been more than 20 prospective buyers. For some reason, everyone comes to the same conclusion. It’s not salvageable. That’s a tough reality.”