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City of Missoula to explore impact fees for Mullan area ahead of new development

The Mullan area west of Reserve Street is poised for future growth, the pace of which could hinge on the outcome of a second federal grant sought by the city and county of Missoula. The city also is exploring impact fees on new development in the area. (Missoula Current file photo)

The city approved a contract on Wednesday to study the creation of impact fees proposed for an area west of Reserve Street that’s set to benefit from millions of dollars in road and infrastructure work.

Whether the fee will be implemented or not, and in what amount, will depend in part on the outcome of a second federal grant to help fund work planned in the Mullan BUILD project.

Missoula County, in partnership with the city, received $13 million from the grant last year, though it sought around $23 million in its request, leaving a funding gap of around $10 million. The county applied for a second grant this spring in hopes of securing that remaining amount.

“When we looked at the BUILD grant area, we were trying to figure out a way to make up the difference between what we requested and what we actually received,” said Public Works Director Jeremy Keene. “This (impact fee) is one way we can make up that remaining amount. We also applied for a second round of BUILD and we’re waiting to hear on that. These are parallel strategies.”

The city contracted TischlerBise earlier this year to study existing impact fees across the city and make recommendations for adjustments needed to keep pace with the cost of infrastructure and maintenance.

The agreement approved on Wednesday represents an extension of that contract, which comes with a $23,000 cost and is specific to the Mullan area. Members of the City Council’s Public Works Committee passed the contract on an 7-3 vote.

“This BUILD grant development area, everything that’s going on out there is in the spirit of cooperation, collaboration and partnership, and cost share is part and parcel of collaborative development,” said council member Jordan Hess. “We’ve been able to secure around $13 million of federal money that will buy down the cost of development, but we do have a gap to fill.”

Plans for the Mullan area include new roads and infrastructure.

Hess and council member Jesse Ramos both suggested that the latest application for $10 million more in federal funding had “a pretty good chance” of getting approved, though both admitted the outcome was not written in stone.

Ramos voted against the impact fee contract, saying he wanted to wait until the outcome of the BUILD grant was announced.

“I’ve been talking to the (Missoula Chamber of Commerce) and it sounds like we are going to get a substantially larger amount of BUILD grant, which I hope is true,” Ramos said. “We don’t know that for sure. I’d rather to wait until then.”

Ramos also expressed concerns that impact fees placed upon new development drive up the cost of housing – the last thing Missoula needs at this point in time, he said.

But other members of the council said impact fees are the most equitable way for new development to contribute to the cost of maintaining infrastructure, and the impact that new development has on that infrastructure.

“It’s important we study the development potential of an area and assess what those fees need to be,” said council member Mirtha Becerra. “I do see development paying its way as a more equitable way to pay for not only the cost of infrastructure, but also the maintenance of that infrastructure.”

The Mullan BUILD project, which the county has said will likely take more than $100 million to complete in its entirety, includes the completion of Mary Jane Boulevard to the north and south, and George Elmer Drive to the north and south.

It also includes the extension of England Boulevard to the west along with stream and trail work, including the realignment of Grant Creek, the extension of Milwaukee Trail, Tipperary Way Trail, and Flynn Lane and Mullan trails.

Those projects will take place in phases over time, and several will likely happen sooner than others. A second parallel process of master planing the area’s future is also taking place.

“Even though we may get the grant, we need to figure out into the future what we’ll need to maintain that infrastructure,” said Becerra. “Not having that impact fee means that everyone, not just the new residents of the area, would have to pay for it, (including) the ones who have lived there a long time.”

The city and county expect to learn in October the outcome of their second BUILD grant application.