City introduces team selected to redevelop old library block

Martin Kidston

(Missoula Current) The City of Missoula inherited a prized piece of downtown property four years ago from a local philanthropist with no strings attached. Now, it's ready to move forward with plans to redevelop the site.

City officials and the Missoula Economic Partnership on Wednesday introduced the team selected from a months-long process to begin exploring options for the old library property between Front and Main streets.

Edlen & Co/deChase Miksis will begin collaborating with local stakeholders to hammer out a product that meets the needs of the city, adheres to the Downtown Master Plan, and delivers on the vision officials are looking to achieve.

Dean Pape and Jill Sherman, both principals in the project, said they're viewing the property as a blank slate. The team has developed dozens of other properties in the Northwest with energy efficiency, affordable and deed-restricted workforce housing key themes in nearly all of them.

“We're here to meet community stakeholders. We'll do some market analysis and there's due diligence to be done,” said Sherman. “Eventually, we'll look at some actual development concepts and programs, and financial feasibility of the underwriting, and start having a conversation about tools and ways to accomplish together the goals of this project.”

The Downtown Master Plan envisions a five or six story building on the property that fronts both Front and Main streets. A range of potential uses have also been identified including housing, business incubation, non-profit space, retail and daycare.

While the project isn't likely to accommodate all of them, housing will be a fundamental piece of the project. However, Sherman admitted that middle-income and workforce housing can be challenging.

“That middle is often very difficult to figure out how to solve,” she said. “We've created a non-profit that allows us to use 100% tax exempt bond financing for projects that are specifically targeted to rents at that middle-income level.”

Sherman added that at today's high interest rates, projects can be difficult to pencil. The team has in other projects partnered with employers who buy bonds at below market rate in exchange for access to housing in the final product.

The developers said they may take similar approach in Missoula. Such innovation is one of the assets that prompted the city to settle on the development team, which includes members from Portland and Boise.

“This was a mission-driven team,” said Grant Keir, president of the Missoula Economic Partnership. “Their goals aligned with the goals of the city and their track record did too. They stood out for having a proven record for being innovative in financially funding projects.”

Next steps

The city contracted the Missoula Economic Partnership last year to begin soliciting potential developers interested in the downtown property. That resulted in roughly 16 qualified applications.

MEP and city officials narrowed the field down to six applications before settling on Edlen & Co/deChase Miksis.

“The thing that struck us most was the innovate approach they've taken to a variety of projects they've built throughout the northwest,” said Mayor Jordan Hess. “They can leverage funding and partnerships to bring really innovative approaches to mixed-income housing, workforce housing, and layering financing to create cool opportunities in diverse and challenging development environments.”

While a team has been selected, efforts to redevelop the property could take time. The firm doesn't yet have an architect and is looking to partner with local businesses on creating a design. It will also work with local stakeholders on identifying the goals most desired in the final project.

Dale Bickell, the city's CAO, said the city has created an exclusive negotiation agreement with the firm. That begins the process of taking the next steps, he said.

“It gives them the ability to do their due diligence knowing this is a partnership we want. Through that due diligence, it will result in a development agreement,” Bickell said. “Everything is on the table on how that might be done.”

Bickell and Hess said the city could either sell the property to the firm or lease it for a period of time. Selling the property would further feed the Affordable Housing Trust Fund, and the fund itself could help subsidize portions of the project.

The Missoula Redevelopment Agency could also play a role, Bickell said.

“We weren't looking for a specific project,” Bickell said. “We were looking for a partner who is really goal aligned with what we want to accomplish here. We can do something really new and innovative here.”

“There's a lot of ways we can stack this up,” Hess added.