By Martin Kidston/Missoula Current
The Missoula Redevelopment Agency’s Board of Directors on Thursday signed off on the terms of a long-anticipated development agreement, pushing a major project planned for the downtown district one step closer to reality.
Under the terms of the draft agreement, Hotel Fox Partners would purchase a parcel of city-owned property in the Riverfront Triangle for $2.3 million, where it will build a 200-room hotel and a 29,000 square foot conference center atop two levels of structured parking.
Once the project is finished, the city would purchase the conference center and parking garage back from the developer for $6.5 million $8.8 million, respectively. The city would pay the debt using new tax revenues and parking dues generated by the facilities.
The agreement helps bring clarity to a project now four years in the making.
“This project recognized for that vision to happen, the public and private sector would have to be very closely involved,” said Chris Behan, assistant MRA director. “Over the past four years, as we’ve been talking about this project with the selected developer, it’s become very evident that if this project is going to work, the public and private sector can’t be in competition.”
The agreement spells out the execution of several other underlying agreements and the basic terms for those agreements. Among them, it includes the disposition of land within the project area, along with construction and leasing of the conference center.
Behan said Hotel Fox Partners will pay a purchase price of $2.3 million for property owned by the city – a figure based upon a recent appraisal. The sale will include a 15 year amortization starting from the date of closing, and payments will be interest-only for the first six years.
“Sometime in the first five years, it’s anticipated the developer may offer to put in land for a parking garage not on the Fox site,” Behan said, noting another phase of the project. “The agreement does not demand, but gives the opportunity to credit the value of that (land) back into this purchase price.”
Under the agreement, Hotel Fox Partners would build a 200-room, full-service hotel with 10,000 square feet of meeting space upon the piece of city-owned land. At the request of the city, they would also build a 29,000 square foot conference center that would then be sold back to the city.
Behan said the city would issue tax increment bonds to buy the conference center. It would pay the debt using tax revenues generated by both the hotel and conference center.
“They have to pay property tax,” Behan said. “The new taxes, based upon the construction of those two pieces, would pay the debt service to buy the conference center.”
The agreement would also see Hotel Fox manage the conference center and assume the liability for any operating deficits. Hotel Fox would also conduct standard maintenance and standard furnishings. The city would be responsible for any major repairs, Behan said.
The agreement also covers parking. As proposed, the project includes two levels of parking with 400 spaces below the conference center. The Missoula Parking Commission would manage the site as a public parking structure.
“The city would purchase the parking structure from Hotel Fox Partners upon completion of the project and would own the structure,” Behan said. “The source of the city’s financing to purchase it would be future parking dues. If they aren’t sufficient, then additional TIF would be applied from tax revenues.”
If parking dues exceed the cost of the garage, they would be applied to reduce the overall debt. That, Behan said, would free up tax increment to complete other projects, such as a proposed pedestrian bridge linking the development to McCormick Park across the Clark Fork River.
“This project includes the vision of a hotel and a larger-scale conference center that’s far and above what a hotel would build on its own,” Behan said. “This maximizes the use on the property, influences the redevelopment of the rest of the property around it, has the greatest amount of impact on downtown and for the rest of the community, and has led to an excellent design in the conceptual stage.”
The hotel and conference center are just one piece of the larger vision for the Riverfront Triangle, which lies on the western edge of downtown Missoula.
Jeff Crouch, the project’s lead architect with CTA, has been working on the project for several years. As it currently stands, the vision has expanded beyond the old Fox Theater site owned by the city to cover roughly seven downtown acres.
“We have a much larger development with multiple buildings on a much larger parcel of land that’s now owned by the developers,” said Crouch. “They’ve purchased all the Providence-owned property, as well as the corner of Broadway and Orange. That led to a much bigger vision, and a much bigger opportunity to effect the entire downtown.”
The project includes the full-service hotel, including a full-service restaurant with riverside seating and ancillary retail. The design also includes a public plaza connecting to the river, along with an extended riverfront trail.
Other buildings planned for the property include an urban-sized box store, not unlike those in Portland or Seattle, along with small-scale retailers. A blend of housing across a variety of price points is planned, along with an office building likely reserved for medical use, given its proximity to Providence St. Patrick Hospital.
Without the blend of uses, Crouch said, the development wouldn’t succeed.
“We’re creating a bookmark to downtown,” said Crouch. “With the new library on the other side of downtown and this, we’re creating a very strong east-west hub to our downtown, which really doesn’t exist right now. We get this new dynamic corridor. We hope to create an expansion of downtown by creating dynamic access.”
While portions of the agreement will require further negotiation, Thursday’s decision by the board pushes the process forward. Once the agreements are finalized and the designs are finished, Hotel Fox Partners plans to start booking the conference center.
“We needed a full-service, four-star hotel, and we have that,” said Dieter Huckestein, who’s spearheading operations at the hotel and conference center. “The Triangle development is critical for these projects to go hand in hand.”
Completing the vision, Huckestein said, will create a unique destination, along with the influx of new spending into Missoula that comes with it.
“It’s convincing enough to bring new visitors to Missoula,” he said of the project. “If we have a first-class convention center, there’s an economic value of $14 million with a multiplier. The benefits out of that are enormous.”
Contact reporter Martin Kidston at email@example.com