Martin Kidston/Missoula Current

Two triangular pieces of property divided by Sussex Avenue in the Midtown District will be combined into a single lot after the Missoula City Council on Monday voted to vacate a stretch of road.

Doing so will clear the way for a $30 million privately-funded housing project by Casa Loma LLC – a business that specializes in affordable and workforce housing.

Funding provided by the Missoula Redevelopment Agency also will pay for a roundabout at South and Stephens avenues.

Under the terms of the agreement approved by the city, the developer will reserve roughly 20% of the 107 units as affordable housing. Members of the council praised the developer for putting “chips on the table” in planning the project and said it fit Midtown's housing goals, transportation needs and plans for redevelopment.

“This is a really good example of how different agencies at the city can collaborate to develop permanently affordable housing in Missoula, which is much needed,” said council member Mirtha Becerra.

The project also will include around 19,000 square feet of retail space and sit near a transit line. Plans for the Midtown area call for redevelopment that offers housing across a range of incomes and a district that is more amenable to non-motorized transportation such as walking, biking and busses.

The project meets those goals while also delivering needed housing, including more than 20 affordable units. But affordability for one unit may mean higher costs paid by another. The recipe is needed to subsidize the affordable housing units, suggested council member Sandra Vasecka.

“The more affordable housing you have in on side of the project, the more it raises rent on the other side. You've got to pick one,” she said. “You lower it here and raise it there. It's basic economics.”

The project is planned by BlueLine Development, a group that specializes in affordable and workforce housing and has its fingerprint on a number of affordable projects taking place across Missoula, including the Trinity project and Villagio.

Plans for the property and reconfigured traffic patterns at South and Stephens avenues.
Plans for the property and reconfigured traffic patterns at South and Stephens avenues.

The organization has crunched the numbers and adhered to national standards on ensuring the units in Casa Loma are affordable for a period of at least 35 years. At that point in time, most modern buildings are in need of repair and the loans needed to cover the expense would be hard to secure if the terms were extended beyond that point.

Still, and despite the expert opinion of the city's housing officials and the developers, council member Daniel Carlino attempted to extend the terms of affordability to 65 years.

Other council members described that duration as unreasonable and said the issue had already been discussed at length in committee meetings.

“This is a good way to kill a project,” council president Gwen Jones said after Carlino's failed motion. “And then not only do we not get the affordable housing, we don't get the extra housing stock, either. There's a lot of expertise that goes into this. I'm not at the midnight hour going to come in and make any kind of unrealistic requirement, via an amendment, that would basically kill this project.”

Housing experts agreed, saying the term of 35 years was national standard and straying from it would potentially thwart affordable housing projects across the city.

“The loan is typically for 40 years and (anything longer) may make the refinancing challenging,” said Emily Harris-Shears, the city's housing policy coordinator. “It would be harder most likely to get a loan in the beginning, and it would impact the viability of this project, as well as the cost to the developer for the income-restricted units.”

The Missoula Redevelopment Agency also has committed funding to complete public improvements around the project, including trails and a new roundabout at South and Stephens avenues.

Malfunction Junction, completed back in the late 1990s, was completed with the thought that it would make the Sussex lot eyed by Casa Loma easier to develop. However, the opposite occurred, and little interest has been shown in the barren property, until now.

The redevelopment potential and changes to transportation make the reconfigured traffic patterns beneficial to both the public and Mountain Line, council members said.

“From a traffic functionality standpoint, I think it's going to work very well,” said council member Jordan Hess.