City’s vision for Scott Street district could include new property

Martin Kidston

(Missoula Current) While the need to replace an ancient air exchange at a city workshop hasn't changed, the city has made changes in how it plans to fund the costly yet efficient upgrade, which will partially be covered with energy savings.

This week, the city also acknowledged that it has entered into a buy-sell agreement for the Zip Beverage property off Scott Street, a move that enables them to conduct due diligence.

“We have a buy-sell on it, but it's a couple years down the road,” MRA Director Ellen Buchanan told the Missoula Current. “Building a new facility – that's going to take some time, and there will be renovations that will be necessary to the (Zip) building on Scott Street. We're probably looking at three or four years down the road, potentially.”

All the moving pieces point toward the city's plans to invest in the Scott Street Urban Renewal District, which spans much of the Northside Neighborhood and extends west to Reserve Street.

A number of large housing projects are in development, and the city owns 19 acres of land in the area. Last year, it entered into an agreement with Ravara LLC to develop nine acres into housing, including 70 units of deed-restrict housing and 200 units of market rate housing.

The city has reserved the remaining 10 acres for future use. It's there where it plans to consolidate a number of city departments including Mountain Water, and Public Works and Mobility. Doing so will enable it to sell other properties for redevelopment within the West Broadway corridor, including the old Missoula Water building.

The Zip Beverage property abuts the Scott Street property owned by the city. While few details have been offered, Buchanan said the city plans to consolidate offices in the Northside area.

“The plan is to buy the Zip Beverage building, in which case we'll move Missoula Water out there, we'll have a Parks and Recreation presence there, and all of Public Works and Mobility for the most part will be in that building,” Buchanan told the MRA board. “Ultimately, there will be 120 full-time-equivalent employees working out of that location.”

Aside from housing, the project planned next door by Ravara will also contain a “significant amount” of commercial space, including a proposed market, a pub, a bistro, childcare and other amenities.

“These (city) employees will help support that to make those businesses successful,” Buchanan said. “There's a tie back to what we're trying to accomplish in that (Scott Street) district.”

Word of the proposed Zip Beverage purchase surfaced as MRA detailed how it plans to cover roughly $760,000 in tax increment costs for a new exhaust and air-exchange system at the City Shops building in the Northside area.

Last month, MRA had proposed rolling that cost in into a roughly $4 million bond, which it plans to secure to pay for infrastructure work needed in the Scott Street district.

But on Thursday, the board agreed to pledge around $150,000 a year for five years to pay for the air exchange. It could still add lingering portions of the expense into a future bond, Buchanan added.

“We've come back with a different proposal that I think will be more palatable,” Buchanan said. “We'd take this over a series of years so it doesn't have as much as an impact.”

Buchanan said the city took a similar approach in funding the Missoula Police Department's evidence facility, as well as MRA's contribution to the Missoula Public Library.

“Any time we can help with a project in one of our tax increment districts, we try to do that, whether it was the county, the schools, Mountain Line or the city,” Buchanan said. “We always try to support those other investments. I think that's the correct thing to do.”

Scott Street investments

The Scott Street district is one of the city's fastest growing. A number of large housing projects are nearing the end of construction and will be ready for occupancy this year including the Villagio, a 200-unit affordable housing development.

Scott Street Village is also wrapping up the third phase of its development, and MRA has said earthwork will begin this spring on the Ravara project, which will add nearly 300 units of housing, along with commercial opportunities, when the work is finished.

However, the Scott Street district remains short on infrastructure, and addressing it won't be cheap. MRA plans to ask City Council to allow it to issue a bond in the coming years to fund the work.

While that's been known now for months, the city hasn't given any details on its buy-sell agreement for the Zip Beverage property, including the cost of the intended purchase, the appraisal value, the timeline and its plans for the property.

But city officials said the proposal, along with the air exchange and future investment into the Scott Street district, all align with the area's master plan.

“It's consistent with that North Reserve-Scott Street Master Plan and supports those long-term planning efforts for the highest and best use of those commercial and industrial properties there,” said Eric Hallstrom, the city's COO. “It will tie in nicely with the buy-sell project that we have with Zip, and continuing to consolidate our space out there.”