Purchase of Sleepy Inn as COVID shelter, future housing wins MRA approval

Plans to purchase an old motel and use it as an isolation shelter for those needing quarantine during the COVID-19 pandemic won approval from the Missoula Redevelopment Agency on Thursday, bringing the proposal one step closer to reality.

Two hours after Missoula County agreed to pursue a memorandum with the city for the shelter's operation, MRA's board of commissioners approved the property's purchase using $1.1 million in tax increment financing from Urban Renewal District II.

The Missoula City Council will vote on the acquisition next week, where it's expected to win final approval. Other cities have taken similar steps, including those in Washington and Texas.

“We've got a closing set – if this is all approved – for the 27th of this month, if not sooner,” said MRA Director Ellen Buchanan. “That's going to be driven by getting these agreements in place.”

Along with county commissioners, the purchase of the property and its use as a non-congregant shelter during the pandemic has the support of several local agencies, including the Office of Emergency Management and the City-County Health Department.

Ellen Leahy, director of the health department, said FEMA has authorized such shelters nationally and will reimburse 75% of the operating costs.

The shelters must be reserved for those needing to isolate or quarantine but don't have a suitable place to do it. Nearly three-dozen individuals in Missoula could have benefited from such a facility to date, according to Leahy.

“It's not just for homeless,” said Leahy. “Our intent is to make it useful for isolation and quarantine. The main purpose is to protect the community.”

Leahy said there's no indication the need will go away any time soon, as the city remains early in its pandemic curve. The shelter would benefit a number of populations during the crisis, including the homeless, those unable to isolate at home, and those over 65 with underlying conditions.

The city's Office of Housing and Community Development also is backing the plan, saying the city's homeless population is at particular risk of contracting and spreading the virus, especially those who have no shelter and live outdoors.

Erin Pehan, officer director, said that without targeted screening, isolation and quarantine, it's estimated that up to 40% of the homeless population's unsheltered individuals could contract the virus, which would increase community spread.

“The purchase of motels and hotels is becoming more of a go-to tool for communities,” said Pehan. “King County purchased an 84-unit motel in early March when Washington state had only 70 confirmed cases. This tool ended up being really instrumental for King County in managing community transmission in this population.”

Advocates of the proposal see other benefits of the purchase. The property's location at the corner of Russell Street and West Broadway make it ideal for redevelopment as affordable housing, something lacking Missoula.

Other counties, including Travis County in Texas, have purchased similar properties to aid in their COVID response with plans to redevelop the sites as affordable housing once the pandemic passes.

“If we are going to accomplish community goals around housing, we believe we're going to need to be in the land-banking business, and in the business of using TIF dollars to ensure we're providing mixed and low income opportunities for housing for folks in our community,” said Engen.

“The short term play is addressing a critical need during crisis,” he added. “The second play is that we have an opportunity, when all of this is over, to redevelop the property for the benefit of the community over a long term.”

Despite the growing list of supporters, three conservative City Council members have stepped forward to oppose the proposal, calling it irresponsible and a waste of money.

In their opposition letter, council members Jesse Ramos, Sandra Vasecka and John Contos suggested the hotel was listed for sale six years ago for $675,000 – roughly half of what the city plans to pay for it.

In Thursday's meeting, Engen responded to that suggestion by saying “that was six years ago, and things have changed.” But the council members opposing the purchase don't agree.

“It would be wholly irresponsible of MRA to approve the purchase of this property without at the absolute very least having a complete feasibility study,” the trio wrote. “If the city is intending to operate the purchase as a motel, affordable housing, or housing for the homeless, there needs to be a business plan.”

Engen said the city and its partners have a plan to run the hotel as a shelter, along with a plan to redevelop the property down the road. That would include gathering public input on future housing uses followed by a request for proposals for redevelopment after the pandemic.

Engen said the property is fairly priced, as several local real estate experts have concluded, and the opportunity is present.

“Criticism to date is that we shouldn't be using TIF money,” Engen said. “This is exactly what TIF money is for. This benefits not only the lowest income members in our community, but protects the community as well in the short-term and will provide long-term benefits for the low-income community.”

Members of MRA's board agreed, giving it their unanimous support. They said the property's acquisition provides both short- and long-term opportunities, one on the health front and the other on the housing front.

“I'm comfortable there's been adequate due diligence around value, especially given the location of this property and its strategic importance to our community,” said MRA board member Tasha Jones.

“I'm very much interested in the opportunity for our community to have a seat at the table in the redevelopment of property at that location, and the opportunity to ensure that property is redeveloped in a manner that keeps in mind our community needs for mixed-use and low-income housing.”