City closes on $4M sale of Riverfront parcel

Martin Kidston

(Missoula Current) After years of negotiating, failed starts and other hurdles, the City of Missoula has finally closed on the sale of a high-profile property in the downtown district.

The city and Averill Hospitality last Friday signed the documents needed to transfer ownership of the 2-acre parcel from the city to the developer. The city described the sale – now decades in the making – as a milestone in reviving the riverfront lot.

The city announced Friday's closing in a press release.

“More than three decades have passed since the city became the owners of this site,” Mayor Andrea Davis said in a statement. “After years of effort, we are thrilled to see the private sector create a new destination in the heart of Missoula and to add an important new element to our riverside parks and trails system.”

According to the closing documents, Averill Hospitality purchased the property for $4 million. The sale, in combination with a voluntary contribution from the developer, is expected to generate $7 million for the city’s Affordable Housing Trust Fund over time.

City officials expect a first contribution of more than $350,000 to the Trust Fund by September. The developer's voluntary agreement is the first of its kind in Missoula and will inject the fund with far more money than it has historically had.

Last June, Averill's head of development, Brian Averill, stood on the vacant lot with city officials and announced his plans for the site. Estimated at roughly $100 million (in last year's figures), the project will include a new parking facility, 180 hotel rooms and roughly 15,000 square feet of conference space.

It may also include residential condominiums and a sweeping public plaza on the riverfront, the latter being in partnership with the city.

The Missoula Redevelopment Agency will also apply tax increment to the district to place the public utilities, along with public street improvements and other public amenities. The work will help lay the foundation for further development of the larger 7-acre riverfront parcel and coincide with plans to transform the downtown transportation grid – a project known as SAM.

Closing on the Riverfront Parcel ends years of starts and stops, some brought about by the pandemic and soaring interest rates. Averill expects to break ground next year.

“I give heartfelt thanks to former MRA staff member Chris Behan, who carried this project for more than 30 years for the MRA,” said MRA director Ellen Buchanan. “This important milestone will begin the process of expanding the downtown to the west across Orange Street and will be a catalyst for redevelopment of this underutilized land located between the Clark Fork River and Broadway.”

The neglected Riverfront Triangle property was first used by early European founders as a city garbage dump in 1895. By 1920, it was designated as the city's official landfill.

By the 1930s and the advance of the automobile, a gas station was constructed at the corner and the Orange Street bridge went up in 1935. The Fox Theater – for years the property’s namesake – opened in 1949 and was donated to the City in 1984.

The old Fox Theater sign sits near Marshall Mountain.

Ever since the city took ownership of the property, it has sat maligned ever since, despite the city's efforts to sell it.

“Through the 1990s, the city solicited proposals in four nationally advertised efforts for development of the property without success,” the city said in its announcement. “In 2007, the city created the Riverfront Triangle Urban Renewal District and continued to seek proposals.”

Averill's design phase is now underway and will likely last about one year, followed by construction.

The parcel's sale marks the second such closing under Mayor Davis's tenor as mayor. Upon her election, the city held several parcels that remained on the market and unsold.

However, Davis adopted a new policy suggesting the city had been “overly prescriptive” in what it hoped to achieve on its parcels. Earlier this year, the city closed on 13 acres near Southgate Mall which will be developed into a mixed-use neighborhood.

The Riverfront transaction marks the city's latest real estate success, which will help pad the Affordable Housing Trust Fund.