State increase in market values have some Missoula businesses questioning their future

Geoff Sutton, owner of the building at 121 W. Broadway, said that if his property taxes go up do to the recent appraisal done by the Montana Department of Revenue, it may be difficult to find a new tenant for the space as Zootown Brew makes arrangements to close later this month. (Mari Hall/Missoula Current)

Missoula Office City has been selling office supplies from a downtown storefront since 1916, but steep increases in the total market value of the store’s property and a potential increase in taxes may place it at risk.

The Montana Department of Revenue sent its notice of taxable values out last week. Local governments will begin setting their annual budgets this summer, an effort that will determine next year’s taxes.

The increase in values has shocked some local business owners in Missoula, leaving many to question whether they should sell their commercial property now, or appeal the appraisal process.

“My taxes in 2016 were a little over $8,700, and now they’re projected to go up over $20,000,” said Richard Hughes, owner of Missoula Office City.

According to a notice shared with the Missoula Current, the appraisal value for Office City’s building at 115 W. Broadway jumped $430,000, from $717,000 in 2018 to $1.14 million this year.

“There’s a lot of money coming in downtown but for people who’ve been there a long time and own their buildings and try to run their small, mainstream business out of, it’s going to be a challenge to keep the doors open,” Hughes said.

Hughes’ son is taking over the store after the business has been in the family for over four generations. Hughes said he might apply for an appeal.

“History is history, so I hope we’re not history someday,” Hughes said. “But we just do the best we can and hopefully keep our heads above water.”

Geoff Sutton owns the building at 121 W. Broadway where Zootown Brew rents the space, but now that the coffee shop is closing by the end of June after a decade in business, Sutton is unsure whether to sell the building or not.

The appraisal value for the building jumped from $467,000 to $955,000.

The last time Sutton raised the rent in 2016, it increased by $300.

“Potentially, I could see an increase on top of what I just got,” Sutton said. “That would add $900 a month onto what I’d have to charge extra in rent, which could be a problem getting a tenant in there.”

Sutton used to own an art gallery in the building until 2002, and said that he began First Friday in downtown Missoula. Last week, he started getting calls from realtors offering to help him sell the building.

“I’ve worked hard all my years here to make Missoula a livable place, and now I don’t think I’m going to be able to afford to live here anymore,” Sutton said. “I’m just a little confused and I don’t know what I’m going to do.”

Sabrina Smith, owner of The Green Light downtown, said she pays 50 percent of the property taxes, which increased her rent in February to 25 percent.

While it’s hard to stay afloat with rates that high, Smith said, she understands why her landlords raised her rent for the first time in the 11 years her store has been using the space.

“I can’t say I’m going to be in retail for another 11 years,” Smith said. “I have three kids and a lot on my personal plate and if taxes and what not keep going up, then I’m not going to be able to continue with that.”

Contact reporter Mari Hall via email at mari.hall@missoulacurrent.com.