Preservation commission loses quorum and frustrates Mercantile developer

HomeBase is proposing to deconstruct the vacant Mercantile in downtown Missoula and build a $30 million hotel and retail center. (Photo by Martin Kidston)


A meeting set for Tuesday night by the Missoula Historic Preservation Commission saw just four of 11 members in attendance, leaving the board without a quorum as it discussed the known facts surrounding a permit to deconstruct the Mercantile.

The lack of a quorum left the developers with HomeBase frustrated.

“The process was given to us and we’re doing our best to follow the (city) ordinance,” said Andy Holloran of HomeBase. “I’ve got to tell you how disappointed I am in the process, and in particular, the actions of this commission. You have 11 commission members, and four of you are here.”

Tuesday night’s meeting follows two weeks after the commission held a public hearing that lasted nearly four hours. The commission made no decision at the time, citing a need to explore additional facts on the application submitted by HomeBase.

Commission members agreed to set Tuesday’s hearing to discuss the facts, but only four members showed up to do so.

“This was a meeting that you all set and you all agreed to, and I agreed to come back for,” Holloran said. “The issue is a serious issue, and there’s 11 active commission members, and four of you are here tonight. We want to provide information, answer your questions and provide dialogue, but we can’t even do that because there’s not a quorum here.”

Members of the commission expressed equal surprise by the lack of attendance.

“You might be preaching to the choir,” said commission member Steve Adler. “We’re disappointed as well there’s so few of us here.”

Despite the lack of a quorum, the four members worked through the findings of fact upon which the commission must base its decision to approve or deny the applicant’s permit to deconstruct the Mercantile.

On most accounts, the four agreed that the property’s owners had met the required criteria, though they had questions regarding reasonable economic use of the property. They also asked HomeBase how its project evolved over the past year.

Holloran said the team approached the property intending to renovate the building with ground-floor retail and offices on the second floor, while building a hotel on the adjoining parking lot. However, he added, the financing didn’t pencil out.

“The cost was uneconomic to attract a tenant who could pay those kinds of rents, but most importantly, there weren’t any tenants,” said Holloran. “That’s the challenge each user or buyer has struggled with – to find a tenant to go into that building that would meet basic financing needs.”

Holloran, who has given a similar presentation several times before, said HomeBase also explored a partial renovation, which also proved uneconomic for similar reasons. The team also looked at saving the Mercantile’s facade, though its engineers deemed the brick unsuitable for reuse.

“It was through a lot of cost estimates, analysis, market study and collaboration with our team that we came to the realization this winter, that for us to move forward, we’d need to look at a deconstruction,” Holloran said. “It wasn’t a decision we came to lightly.”

Commission members also asked why HomeBase had chosen the Mercantile property to construct a proposed $30 million custom hotel. Holloran said the city’s net migration, job growth, vitality and opportunity make it an attractive market.

The corner of Higgins Avenue and Front Street in downtown Missoula is one of the city’s prime locations, he added.

“These developers have studied Missoula and determined this is community worthy of development,” Holloran said. “That process for us has taken a couple years. I can’t imagine any developer just saying they want to invest $30 million in Missoula without going through extensive research, study and analysis.”

The four members present at the meeting agreed they had enough information to make a motion on the permit at next week’s regularly scheduled meeting. However, commission member Mike Monsos was unsure if the other seven commission members felt the same way.

“We owe these guys (HomeBase) an idea,” said Monsos. “But no one else is here, so they can’t speak for it.”