Developer, preservation group file opposing briefs in Missoula Mercantile case

By Martin Kidston

Attorneys representing opposing camps in the Mercantile case filed their briefs Wednesday in Missoula District Court, setting the stage for a legal hearing later this year.

One side is looking to move forward with the $35 million redevelopment of a key piece of downtown Missoula real estate while the other side, led by Preserve Historic Missoula, wants to block the project and prevent the Mercantile from being deconstructed.

In Wednesday's round of filings, attorneys representing the developer labeled the preservation group's claims as “fanciful guesswork,” saying it was using the court to wage a philosophical battle to prevent the owner from realizing the value of his property.

Attorneys representing the preservation group, however, contend that the City Council abused its discretion by overturning the Historic Preservation Commission's denial of the developer's demolition permit back in August.

“The Missoula City Council’s decision to overturn the HPC's denial of a demolition permit was an abuse of discretion by the City Council,” the group's attorney, Michael Doggett, argued in his brief. “The HPC’s findings were not granted a presumption of correctness, as required by Missoula ordinance.”

HomeBase Montana is looking to purchase the vacant Mercantile and deconstruct a portion of it to build a $35 million Marriott hotel. The property is located on the corner of Higgins Avenue and Front Street in downtown Missoula.

The building has sat vacant for more than six years and has become something of an economic anchor, dragging down the district's economy and keeping small businesses from thriving, according to area businesses.

The Mercantile is currently owned by 110 North Higgins, LLC.

“It wishes to sell its private property – something it has been trying to do for a number of years – and was just days away from closing on a $3.7 million sale,” attorneys for the developer argue in their brief.

“Then (the preservation group) filed this lawsuit,” the brief continues. “By doing so, they blocked 110 North Higgins from closing, and their legal maneuvering may very well destroy the envisioned transaction and condemn the subject property to many more years of sitting vacant while continuing to deteriorate.”

To make matters worse, attorneys for the developer contend, the facts of the case “conclusively demonstrate” that Preserve Historic Missoula has intentionally “wreaked havoc” on the case without incurring any personal harm.

While the preservation group has nothing to lose by filing suit, they said, the property's owner and the developer have millions of dollars on the line.

“The (preservation group's) abstract claims of potential future harm are not distinguishable from the common interest of the public, and are based on nothing more than fanciful conjecture and guesswork,” the brief states. “(They) may be unhappy with the City Council's decision, but they advance no credible argument that an abuse of discretion occurred.”

The case traces its roots back to March when the city received an application from 110 North Higgins and HomeBase seeking a demolition permit for the Mercantile. Over the next several months, the Historic Preservation Commission reviewed the project before voting in June to deny the permit.

But that decision was cast amid speculations of bias and allegations that nearly half of the commission's findings of fact were rooted in error. As a result, the developers appealed the decision, alleging that HPC denied them a fair hearing process and used insufficient evidence in making its decision.

The City Council spent roughly two months considering the developer's appeal before voting in August to overturn the commission's decision. The preservation group filed suit later that month and has since filed two amended petitions in District Court.

The developers are asking the court for summary judgment.

“The City Council did not abuse its discretion in sustaining (the developer's) appeal, gave the HPC's decision appropriate deference, and appropriately honored all applicable provisions of the Downtown Master Plan when it issued the partial demolition permit for the Mercantile,” attorneys for the developer argue.

A hearing date has not been set, though District Judge Dusty Deschamps stated last month that it's the court's desire to settle the case in an expeditious manner.

Contact reporter Martin Kidston at info@missoulacurrent.com