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City Council members sign off on agreements binding $80M downtown development

The project traces its roots back nearly 30 years when the Mann Corporation donated to the city what’s become known as the Fox site, an underutilized parcel of land located on the corner of Orange and Front streets.

Calling it a transformational project that will benefit the wider community, members of the City Council on Wednesday unanimously approved a series of agreements guiding the development and use of a hotel and conference center planned in downtown Missoula.

The agreement, which also includes a parking garage, brings a project now years in the making closer to reality. Hotel Fox Partners will have up to 18 months to complete construction documents, and construction financing must be arranged prior to November 2019, though it could happen sooner.

“I’ve sat on the working group for two years and have seen this project go through numerous phases as they close in on how best to use this property and make this deal work,” said Ward 3 council member Gwen Jones. “We’ve had a parking lot and vacant lot for decades with extremely minimum income from leased parking. We have this opportunity to do something or do nothing.”

The project traces its roots back nearly 30 years when the Mann Corporation donated to the city what’s become known as the Fox site, an underutilized parcel of land located on the corner of Orange and Front streets.

The city spent nearly 10 years seeking a visionary developer to redevelop the site. After issuing a request for proposals six years ago, it granted Hotel Fox Developers exclusive rights to build on the property, though the project’s complexities have taken time to navigate.

“This is not a simple deal at all,” said Jones. “I feel like we’re fulfilling our fiduciary obligations to our constituents. We’ve got a long-term plan to create an economic engine and anchor on this side of downtown, and we’ll be compensated for the actual ownership of the land.”

The land deal and the project’s subsequent agreements have taken the better part of the past year to finalize. Under those agreements, Hotel Fox will purchase the property from the city for $2.3 million and construct a seven-story hotel, along with three additional floors of condominiums.

The developers will also construct a 60,000-square-foot conference center attached to the hotel, along with a 405-stall parking garage located below. The city will then purchase a portion of the conference center back from the developer and pay for it using tax increment revenue bonds.

Chris Behan, assistant director of the Missoula Redevelopment Agency, said the conference center’s targeted price is roughly $16 million. The hotel management will be responsible for all upkeep and repairs, further protecting the city’s general fund from unexpected costs.

“There’s no impact to the general fund or general obligation taxes to the community,” said Behan. “General taxes of the community will not be impacted.”

The agreement will also see the city purchase 309 units of public parking within the underground garage, which will include a total of 405 stalls. The 96 private stalls will generate tax increment while the public spaces will generate parking revenue.

Both funding streams will be used to pay for the city’s portion of the garage.

“The money for this project is coming from this project,” said Ward 4 council member John BiBari. “The value of this project is paying for the value of this project.”

An earlier rendering of the larger downtown development.

As he has in past weeks, Jeff Crouch of CTA Architects in Missoula billed the project as a game-changer for the city and one that’s part of a larger project. A study conducted two years ago estimated that the center and its surrounding amenities would draw 100,000 visitors a year to the downtown district.

The economic spinoff is expected to be substantial, as is the project’s architectural statement.

“This is the first opportunity architects have had in this community to build something on the river facing the river in 50 years,” said Crouch. “We’re very much in flux and have a lot of work to do moving forward. It’s important that our projects and our architecture move the community forward.”

Others advocated for the project’s downtown location, citing the $14 million annual economic impact it will bring to the city once open. It also fulfills a portion of the downtown master plan by extending the Front Street corridor to the west, where there’s room for new development.

“It will be good for downtown property values and commerce,” said Linda McCarthy, executive director of the Downtown Missoula Partnership. “It’s a project that’s been a long time in the making. It’s the start of something big that will be transformational for our community.”

In supporting the project, Ward 1 council member Bryan von Lossburg said the city has a proven need for the project. Quoting Missoula Mayor John Engen, he said it promises to “lift all boats.”

“We have a choice to make whether this exists in our downtown area or out in the periphery somewhere,” von Lossburg said. “This partnership enables us to locate it downtown and there are numerous benefits associated with that.”