Missoula City Council members had a few questions about the transaction but ultimately gave their unanimous approval Monday to providing $723,514 for infrastructure and street improvements at a workforce housing project on the Northside.

The money will come to developers David and Mark Edgell after the city issues and sells tax increment urban renewal revenue bonds – which will increase taxes for no one except the developers.

The infrastructure and street improvements will set the stage for phases II and III of Scott Street Village, a workforce housing project at the former site of Clausen Manufacturing.

Phase I was recently completed and includes 24 single-family homes and four townhomes at the corner of Rodgers and Scott streets. All the units are sold or committed, with a list of backup offers. The single-family home prices have reached as high as $272,000, according to online realty listings.

Phase II will see the construction of six single-family homes and 18 townhomes, at a development cost of $4.2 million. Work there will begin soon.

Phase III, tentatively slated for completion in 2020, is planned as a 60-unit apartment complex, a $5.5 million project. Work on the final phase depends on demand once a number of other local apartment buildings open for tenants.

Chris Behan, assistant director of the Missoula Redevelopment Agency, told council members Monday that Scott Street Village – along with Consumer Direct’s new national headquarters building and the expansion of Bretz RV – are exactly what the master plan for the North Reserve/Scott Street Urban Renewal District envisioned.

To provide affordable housing – “as much as that can exist today in Missoula” – Edgell Building needs the tax increment financing, Behan said.

In a memo to the City Council, he elaborated:

“The urban renewal plan for the North Reserve/Scott Street, the NRSS area master plan adopted in 2016, and the Northside/Westside Neighborhood Plan all advocate for expansion of the Northside neighborhood to the west of Scott Street. Until the possibility of outside assistance such as TIF, the cost of addressing significant infrastructure deficiencies and soils cleanup made most development in the area infeasible. The escalating cost of land everywhere in Missoula coupled with rising construction costs, the high expense of installing basic infrastructure, and often the need to remediate and remove buildings has made construction of homes affordable even to median-income families increasingly difficult.”

This three-bedroom, two-bath Scott Street Village home design is listed online for $272,500.
This three-bedroom, two-bath Scott Street Village home design is listed online for $272,500.
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Behan added: “The overall Scott Street Village project is the type of development long advocated and hoped for by the Northside neighborhood. The development is in keeping with community goals stated in the growth policy, urban renewal plan and NRSS area master plan, for adding housing affordable for the moderate income or workforce families of Missoula’s population.”

Ward 4 Councilman John DiBari led off the questioning, focusing on details of the bonds themselves and how they will be secured.

Behan explained that because the North Reserve/Scott Street Urban Renewal District is relatively new, it has little track record or built-up reserves so cannot solicit buyers on the traditional market for TIF revenue bonds.

Therefore, financing for the debt has been arranged through First Security Bank.

The $723,514 total will finance infrastructure and streets for both Phase II and Phase III, Behan said, even though Phase III is still a few years away. The larger financing package is more efficient and controls bond-related costs, he said.

Bonds totaling $518,320 were previously sold and issued to help undergird Phase I of the project. For the sake of efficiency, those bonds were sold in a bundle with similar TIF bonds for the Consumer Direct and Bretz RV projects, Behan said.

Ward 1 Councilman Bryan von Lossberg endorsed the Scott Street plan – and the tax increment financing.

“We’ve got an affordable housing project here that would not work if we weren’t helping with the infrastructure,” he said.

All nine council members at Monday’s meeting voted for the funding. Absent were council members Emily Bentley, Julie Armstrong and Jon Wilkins.

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