The Missoula City Council agreed to rules detailing the path forward in determining a demolition permit for the Mercantile, adhering to strict legal statute in hopes of avoiding the conjecture and bias that some believe infiltrated the Historic Preservation Commission when it denied the permit last week.

Straying from the guidelines presented to the Land Use and Planning Committee on Wednesday could leave the city and its taxpayers vulnerable to a costly lawsuit regarding the taking of private property.

“Private property rights that are decided in public bodies like this are considered quasi-judicial,” City Attorney Jim Nugent advised members of the council. “I urge you to be sure not to be making any communications or conclusions, or taking any actions to cause anyone to be concerned that you're not remaining neutral.”

Last week, six members of the preservation commission eliminated more than 20 findings of fact while retaining others to support its decision to deny HomeBase a deconstruction permit for the Mercantile, effectively killing a $30 million downtown redevelopment project.

Four members of the commission recused themselves from voting out of prior accusations of bias. But in their appeal, attorney's representing HomeBase believe those four members continued to play a hand in leading others to deny the permit.

Attorneys also contend that the preservation commission denied HomeBase its due process rights throughout the 90-day hearing process and otherwise failed to provide a fair and objective process of review. The commission also failed to support its decisions with factual information, the appeal states.

Under advice from the city attorney, Ward 3 council member Emily Bentley spearheaded the parameters for considering the demolition application over the next six weeks. Several meetings are planned throughout the process with a public hearing set for June 27.

“It's very important we have sufficient planning and organization over the next six weeks,” Bentley said. “Having off-the-cuff, disorganized conversations won't be helpful for us in this process.”

Nugent and Ward 3 council member Gwen Jones, who also is an attorney, guided other members of the council through the legal standards by which the review process must adhere. Any future decision must be based firmly in fact, they stated.

Conjecture, opinion and speculation won't count as factual evidence.

“There is some guidance for you to determine what is evidence,” said Nugent. “It's something that tends to prove or disprove the existence of an alleged fact. It has to be probative evidence and relevant evidence. You can't be distracted by irrelevant evidence.”

Nugent also advised the council to communicate in ways that can be entered into the public record. He advised against sideboard conversations with constituents or “liking” comments on Facebook, as did several member of the preservation commission.

“Communications must be in a form that's going to be in the public record,” Nugent said. “It's not fair to either side for anyone to be talking to a council member away from the public record. You should inform people you can't talk specifically about this application or appeal individually. That's important, so everyone else has an opportunity to know what might be influencing you.”

Nugent and Jones also detailed what constitutes a finding and fact under state and city law, as well as the appearance of fairness. As is any applicant, HomeBase is entitled to a fair review under city law, Nugent said.

Nugent offered similar advice to members of the preservation commission last week after several members attempted to insert language into city law to achieve a certain outcome. At the time, he said, “You cannot insert language into any law in order to achieve a desired result.”

Nugent offered similar advice Wednesday to members of the council.

“You have to work with the language that's actually in your ordinance,” Nugent said. “When you try to interpret, you can't insert language that isn't there, or omit language that is there.”

While setting the parameters, council members left open the possibility of placing conditions upon a future demolition permit, were such a permit granted. Exactly what shape such conditions would take weren't immediately clarified, though some suggested they could include reuse of certain building materials in a new project.

Early rendition of proposed $30 million downtown Missoula hotel.

HomeBase has proposed building a $30 million branded hotel on the property, and has already pledged to incorporate reusable materials into the new project, including an historic “mews” where the city's early merchant history would be displayed. Some, however, want the developers to go farther and incorporate the facade into the project.

Nugent also provided council members legal opinions crafted by the Montana Supreme Court regarding private property rights. If the city were to deny the permit, it could constitute a taking of private property, unless factual evidence were used to deny the permit – evidence that can stand up to the scrutiny of a court of law.

The developers believe the preservation commission failed to apply such evidence. Nugent said city zoning laws already allow any developer, including HomeBase, to erect a multi-story building on the site.

“This is private property, it's not public property,” Nugent said. “It is property that's currently in compliance with the zoning classification, and in this instance, the proposed use is in compliance with the applicable zoning,” Nugent said.

“There was some comments early on that (HomeBase) is not entitled to their highest and best use,” he added. “That's a rezoning concept – it's not applicable in this instance. It's a significant thing to be aware of.”

Bentley also ordered a records request from Missoula Public Library to clarify why it didn't pursue purchase and renovation of the building. She also asked city staff to provide details regarding the uses called for in the Greater Downtown Master Plan. The plan envisions at least two new hotels and 300 additional rooms in the downtown district.

At a future meeting, both HomeBase and members of Preserve Historic Missoula will present to the committee. Both sides will have 45 minutes followed by 30 minutes of questions from the committee.

“This is going to take a lot of time, but it's very important,” said Jones. “It's a multi-million-dollar building and it's all very important to the community. We have a responsibility toward that.”