Missoula council gives initial nod to $6.3M Scott Street purchase for housing, consolidation

The city of Missoula is looking to purchase 19 acres of former industrial land of Scott Street, pictured, half of which would be used to develop affordable housing. The other half would enable the city to consolidate several departments, freeing up other city properties for redevelopment as well. (Missoula Current file photo)

With an eye on affordable housing and redevelopment, members of the City Council on Wednesday backed the purchase of 19 acres of former industrial land off Scott Street, calling it a strategic investment in the city’s future.

The $6.3 million purchase, which still requires a vote by the full council next week, could free up a number of other city properties for a range of uses, including housing and commercial redevelopment.

The measure passed the Public Works Committee on an 8-2 vote. Opponents of the purchase believe it will drive up the cost of housing elsewhere in Missoula and artificially inflate the market. But supporters held the majority and praised it as a strategic and necessary move.

“The imperative to preserve land for homes in appropriate places is as real as the open space imperative has been over the past couple decades,” Mayor John Engen said. “This purchase is a thoughtful, strategic, reasonable and exciting chance for all of us to make our place better.”

The property along Scott Street formerly housed White Pine Sash, though it has sat abandoned for nearly 30 years pending environmental cleanup associated with the former industry.

Area residents and community leaders pushed the Montana Department of Environmental Quality for years to ensure that a portion of the defunct site was cleaned to residential standards. Of the 19 acres, roughly half was cleaned to such standards, and it now presents an opportunity for housing and commercial development.

“It’s pretty amazing to see this come full circle,” said council member Heidi West. “I think it was monumental that we got any of it switched to residential standards. I can’t think of a better way forward than to have this in city ownership and have public input around what the future of the site holds for us.”

Supporters described the opportunity to redevelop nine acres of abandoned industrial land with affordable housing as a rare and strategic opportunity, especially given Missoula’s housing crisis.

But the other half of the property holds potential as well and could enable the consolidation of Public Works. That would then free up at least two other city parcels totaling around 35 acres.

One of those parcels sits north of the Scott Street property while the other sits on West Broadway where Missoula Water is currently housed. Both parcels would be redeveloped for housing and a mix of other uses.

“If we realize something along those lines, there would be a number of really important benefits,” said John Adams with the city’s Office of Housing and Community Development. “It would likely free up other properties for higher and better uses. Acquisition of those nine acres going to Public Works should free up these other dominoes and open up new opportunities that are really exciting for the city.”

The city’s new housing policy identifies “land banking” as a strategy to help build affordable housing, in part by removing the cost of land that would otherwise make affordable housing impossible to build.

The city recently purchased the old Sleepy Inn and currently owns the Missoula Water building. Both are located on West Broadway and will likely be redeveloped.

The city also owns the old library block in downtown Missoula, along with several acres in the Midtown district near MRL Park. Given their prime location, both lots will be redeveloped with a blend of commercial and housing uses.

“In our housing policy, land banking is called out as one of the tools necessary to match the community’s values around safe and decent affordable homes,” Engen said. “The biggest barrier to the construction of affordable housing in Missoula is the cost of land in appropriate locations.”

While no one disputed the need for affordable housing, two members of the City Council voted against the Scott Street purchase on Wednesday, including Jesse Ramos and Sandra Vasecka.

Both were united in their belief that land banking drives up the cost of housing by subsidizing affordable homes. That artificially inflates the rest of the market, making homes across the city more expensive, they said.

“The city has been participating in land banking over the years, and now we’re going to participate in more land banking,” said Ramos. “That’s a classic case of the government starting the fire and selling a hose to put it out. Land banking in the first place is what has caused prices to go up.”

Other members of the council disagreed, however, calling it a philosophical difference.

“I believe local government must intervene to save our housing market,” said council member Jordan Hess. “That is a philosophical conviction that I have, that it’s our duty to intervene and take measures that can address our housing shortage. It’s good, strategic, long-term thinking. This is a major investment in a very important project.”

Under the purchase proposal, the city would issue two bonds – one taxable and one tax exempt. While the purchase price sits at $6.3 million, principal and interest on the bonds amount to around $10.6 million, according to the Missoula Redevelopment Agency.

MRA director Ellen Buchanan said the property presents a number of possibilities given its location in a tax increment financing district and the city’s only Opportunity Zone.

“We’ve been working with Missoula Economic Partnership for a while now to look for projects that can take advantage of both TIF financing, the Opportunity Zone tax advantage and perhaps use some of our federal entitlement funds,” Buchanan. “We have perhaps the best tool chest we’ve ever had.”

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