Preservation group files suit against city to block permit for Mercantile deconstruction

Merc crop
Members of the city’s preservation community have filed an appeal in Missoula County District Court to stop a partial demolition permit for the Mercantile building. (file photo by Martin Kidston/Missoula Current)

By Martin Kidston

Members of the city’s preservation community have filed an appeal in Missoula County District Court to stop a partial demolition permit for the Mercantile building, one granted by the City Council in August.

In court documents, Michael Doggett, the attorney representing Preserve Historic Missoula, claims the City Council’s vote to approve the permit was made “arbitrarily, capriciously, and contrary to regulations applicable to the Missoula City Council.”

The group is seeking a court order staying the Mercantile’s partial demolition, which was set to begin next month with work to abate hazardous materials, including asbestos. Preserve Historic Missoula also is seeking costs and attorney fees.

The group names Mayor John Engen and the City Council as defendants, including Ward 1 council member Heidi West, who was the only member of the council who voted to deny the permit.

Doggett didn’t return calls seeking comment on Tuesday, nor did Preserve Historic Missoula respond to an email request for this story.

In a response filed with the court last week, City Attorney Jim Nugent argued that Preserve Historic Missoula doesn’t posses any ownership in the Mercantile building and lacks the standing to pursue its lawsuit.

Nugent said the group has not experienced any adverse impacts from the city’s decision to grant HomeBase a demolition permit, adding that Preserve Historic Missoula failed to join the actual property owner to its case, that being HomeBase and Octagon Capital Partners.

HomeBase is in the process of purchasing the property from Octagon, which has attempted to sell the vacant downtown building for several years. HomeBase is looking to construct a new five-story hotel on the lot.

In its response to the suit, the city also states that Preserve Historic Missoula is not a tax-paying organization, nor does it own any real interest in the Mercantile property, or any adjacent property. The City Council’s decision was both valid and legal, Nugent contends.

“(The) City Council conducted numerous public meetings, including multiple public hearings consisting of nearly 16 hours pertaining to the (HomeBase) application for a demolition permit,” Nugent said in his response. “(Preserve Historic Missoula) lacks standing to pursue this lawsuit.”

The City Council issued roughly 55 pages of findings and facts related to the permit on Aug. 30. Nugent said the findings resulted from numerous committee meetings and public hearings regarding the HomeBase permit.

Nugent contends that all sides were represented during the hearings. His response to the lawsuit states that members of Preserve Historic Missoula actively participated in those meetings and throughout the public process.

“(Preserve Historic Missoula) was well aware that the findings of fact were about to be issued or might already have been issued when (it) filed this lawsuit,” Nugent contends. “A stay affects (HomeBase) for the demolition permit who has been proceeding in good faith in reliance on the City Council decision.”

Andy Holloran of HomeBase said Tuesday he was surprised by the lawsuit but remains committed to the project. He said the design has evolved since it was initially unveiled in March. With community input, he said the results are better now than they were several months ago.

“We think the collaboration, the effort, the untold hours put into this project to get it where it is today, has made it a better project,” he said. “We remain excited to move forward, and we hope to do so with a lot of community support.”

While the initial timeline envisioned the project being further along than where it currently stands, Holloran said the process continues to move forward. Design work is ongoing, he said, along with the research and analysis into what remains of the historic Mercantile, as required by the city.mercantile hotel

“We’re having the entire building scanned in 3-D imaging, which will produce some incredible imagery we can reuse for generations, not only in the mews but for the public to have and study,” Holloran said. “A lot of effort is being made by a lot of people to do what was asked, and that’s part of the development agreement.”

The city finalized its development agreement with HomeBase in August. Among other things, it required the developer to post a surety bond as a guarantee that it will follow through as promised once deconstruction of the Mercantile begins.

It also required HomeBase to carry risk insurance to provide coverage against damage or loss to the pharmacy building – that portion of the historic Mercantile that will be incorporated into the new $30 million Marriott hotel.

“Our goal is still to begin environmental abatement this fall and the deconstruction process shortly thereafter,” Holloran said. “We’d hope that people respect the hours and effort that went into the decision, and to work on a collaborate effort to move the project forward.”

Contact reporter Martin Kidston at