With an eye on renovating the historic federal building in downtown Missoula and streamlining government services, the City Council this week approved a number of initial funding tools to move the effort forward.
Among them, council approved the Fiscal Year '26 budget for the special district that manages the building, and also approved a $1.9 million Brownfields agreement to abate hazardous materials.
John Adams, the city's strategic project administrator, said total asbestos costs are estimated at $2.8 million, with $1.9 million coming from the city's Brownfields fund and the remaining $857,000 from state funding.
The abatement work begins what's likely to be a slow push to renovate and eventually occupy the 112-year-old structure.
“We had a pretty good idea of what we were getting into,” said Adams. “We knew we had our work cut out for us and we took that into account when we judged this as the least expensive way to go.”
The city and county of Missoula received the building for free in 2023 from the federal government's Good Neighbor Program and agreed to preserve the facility in perpetuity.
But the federal government would only give the building to a single entity, which prompted the city and county to create a special district.
The district has no authority beyond the building itself and the agreement has the city and county splitting most costs evenly. The building's annual operational costs stand at around $300,000 a year.
“We cover half of that with our postal service lease. The rest is split between the city and county,” Adams said.
While abatement work is likely to begin with funding from the Brownfields program, the city has also budgeted $345,000 to make the building ADA accessible, and it has allocated $927,000 to begin the design process for the overhaul to come.
If the design is approved roughly 15 months from now, Adams said construction could start during FY 27. Work would include replacing the 1929 roof with solar panels, updating seismic stability, modernizing the restrooms, and addressing security and data infrastructure, among other things.
“We think the best way forward is to take a phased approach,” Adams said. “The decision to move to construction would come to City Council and the Board of County Commissioners.”
In 1989, when the city last updated City Hall, Missoula's population was only 43,000 people. It now stands at around 80,000 — or 120,000 countywide. The city and county are both facing spatial constraints and spend thousands of dollars annually leasing downtown office space.
Before accepting the federal building, the city and county also explored other options, including a new building. Renovating the existing federal building carried the lowest cost.
Still, funding a $16 million project may take time and include a variety of creative sources, including federal and state grants, the sale of City Hall and City Council chambers, lease revenue, tax credits and bonds, Adams said.
“We still need to solidify that funding plan. We'd like to do that during the design phase,” Adams said. “These are the kinds of creative solutions we're looking for. We're going to look for creative ways to fund this project.”
Portions of the building were constructed back in 1913. It served as the headquarters for the U.S. Forest Service for more than 100 years. It underwent an expansion in the 1930s and was listed on the National Register of Historic Places in 1979.
At one time, it housed 700 employees and served as a boon for the downtown district. But it has been largely empty for the past decade and downtown advocates are eager to see the building reactivated.
The cities of Helena and Billings have completed similar projects.
“We're excited to see this project moving,” said Linda McCarthy, executive director of the Downtown Missoula Partnership. “The federal building is an important historic building in the downtown district, but it hasn't been an economic contributor for about 10 years. This project is important for the district.”
