After taking what legal authorities described as an initial risk, Missoula County can now relinquish its financial role in ensuring that a hillside subdivision installs the necessary infrastructure, saying the developers have completed the work.
Missoula County initially secured interest in Phase 1 of the West Point subdivision in the spring of 2018. The $962,000 promissory note was held to ensure the project’s new developer, Circle H Investments LLC, installed the infrastructure required as part of the approval process years earlier.
The subdivision is located north of Interstate 90 and east of Butler Creek.
“We’re letting the trustee know we no longer need or want to have an interest in that property,” said deputy county attorney John Hart. “While this was risky for Missoula County, it worked out and we have a success story with the West Point Phase 1 subdivision.”
Hart said the subdivision received preliminary approval from Missoula County in 2001 and was platted in 2004, but not all the infrastructure was installed at the time.
The former developer brought the county an improvement agreement and guarantee that the work would be completed, but then the recession hit and the developer went bankrupt. The property remained in foreclosure by an entity of Wells Fargo, Hart said.
Circle H Investments purchased the West Point subdivision from bankruptcy in 2015. Since then, Hart said, the firm has worked to revive the project.
“It’s a good subdivision. It’s on city water, it’s on city sewer,” Hart said. “The lots are somewhat affordable. It’s the kind of development Missoula County wanted to continue to support, even though it had some financial difficulties earlier in the century.”
Wanting to see the project succeed, county officials in 2016 met with Circle H Investors to craft a plan to get the project moving forward. The county opted to take security interest in several lots associated with the development’s first phase.
“That’s somewhat of a more risky guarantee, because there’s never an exact value we can place on those lots year to year, and it’s not always clear that the value of the lots – if we had to sell them – would be satisfactory to raise the money that Missoula County would then be obligated to if it had to put in the necessary infrastructure if the developer was unable to do it,” Hart said.
But Hart said the risk made sense from a public policy and safety standpoint. The county took enough lots to secure an estimated value of around $960,000. That equaled the estimated cost of placing infrastructure in the event that Circle H was unable to do it.
County commissioners agreed this week to relinquish that interest, saying the infrastructure has been installed and inspected.
“I’m glad the risk panned out and we didn’t have to dive into the real estate market to attempt to get this money back,” said Commissioner Josh Slotnick. “I’m glad they did the $900,000 plus of infrastructure improvements. We can give up our interest and security on this property because the work has been done.”