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Gambling with other people’s money is easy, Mercantile attorneys argue in brief

By Martin Kidston

The “undisputed facts” in the Mercantile case prove that the Missoula City Council did not abuse its discretion in approving a deconstruction permit for the building, attorneys representing the property owner argued in a court brief filed Thursday.

Representing 110 N. Higgins, attorneys from Boone Karlberg filed their latest brief in Missoula District Court, rebutting claims made in a lawsuit filed by Preserve Historic Missoula, which hopes to block redevelopment of the downtown Missoula property.

Gambling with other people’s money is easy for PHM, as it has nothing at stake, the brief argues.

“When (PHM) filed this lawsuit, 110 N. Higgins was days away from closing on a $3.7 million sale of the subject property,” the brief states. “Now the fate of that transaction is in grave doubt, and if the plaintiffs have their way, the property will continue to sit vacant for the foreseeable future.”

In July, the Historic Preservation Commission denied Mercantile LLC a permit to deconstruct the building, effectively blocking plans to erect a $35 million Marriott hotel with ground floor retail and restaurant space.

The developer appealed to the City Council, which ultimately reversed the commission’s decision.

In doing so, the City Council found that the preservation commission erred by denying the permit, and that it had violated the developer’s due process rights by failing to “fairly and objectively” consider the permit.

Michael Doggett, representing PHM, filed suit shortly after, contending that the City Council abused its discretion by overturning the commission’s decision. Attorneys representing the property owner, however, argue that PHM’s lawsuit doesn’t stand up to case law, particularly in its claims that the City Council abused its discretion.

“This requires a showing that ‘the information upon which the municipal entity based its decision is so lacking in fact and foundation that it is clearly unreasonable,’ ” attorneys argue in the brief. “This high standard is consistent with the rule that, in reviewing a local government’s discretionary zoning decision, a district court may not ‘substitute its discretion for that of the local government.’ ”

The latest brief states that 110 N. Higgins purchased the Mercantile in 2011 and spent six years working to adapt and reuse the vacant building. In doing so, it spent “hundreds of thousands of dollars” on its initial plan to use the building for retail and office space.

However, 110 N. Higgins was unable to obtain the necessary tenants and, as a result, could not secure financing. It listed the property for sale in 2013.

“Although more than 20 prospective buyers expressed interest over the following years, every one concluded that adapting and using the existing building was not economically feasible,” the brief notes. “Only then did 110 N. Higgins apply for an historic preservation permit to deconstruct the building.”

The brief contends that despite the facts, PHM believes the property owner has not done enough and, as a result, the permit should be revoked.

If the permit were revoked, Mercantile LLC would be forced to walk away from its purchase, leaving 110 N. Higgins with an empty, deteriorating building, the brief adds.

“(PHM) may have all kinds of good ideas about what others should do with their money, but (PHM) has made no offer to purchase the property themselves, and without a willing buyer, the status quo will be maintained,” the brief notes.

“The undisputed facts demonstrate, as a matter of law, that the City Council did not abuse its discretion in issuing a partial demolition permit.”

Contact reporter Martin Kidston at info@missoulacurrent.com