MISSOULA — Citing the public benefits and economic opportunities, the Missoula Redevelopment Agency on Monday approved several agreements around a plan to build a hotel and conference center on a blighted downtown parcel owned by the city.
The board's endorsement of the city's buy-sell agreement with Averill Hospitality was unanimous, along with the development agreement and land-use agreement. Approval brings the project one step closer to reality after decades of failed efforts.
“This has been decades in the making,” said Mayor Andrea Davis. “The terms negotiated and plans moving forward will be fantastic for the community and are achievable. We have an opportunity to do what we set out to do.”
The agreement has the city selling the property to Averill for $4 million. The agreement also calls on Averill to create up to 180 hotel rooms and a 15,000 square-foot meeting space to accommodate conferences and events.
The project carries an estimated cost of more than $100 million in private investment.
But the project also comes with a public component. Averill will design and construct a public plaza along the river and make improvements to the Riverfront Trail, with the costs being reimbursed by the city.
The developers will also construct the required public infrastructure, including streets and utilities.
The city will reimburse those costs as well, using tax increment from the Riverfront Triangle Urban Renewal District.
The new public infrastructure is expected to make the surrounding vacant properties more enticing for redevelopment, further extending the downtown district to the west.
“The infrastructure investment we make will ensure the redevelopment of that entire triangle,” said Ellen Buchanan, executive director of the Missoula Redevelopment Agency. “Downtown has almost stopped at a dead spot on Orange Street for decades now. We're going to finally move beyond that.”
Under the agreement, Averill will purchase the property in two phases, with $1.7 million due upon closing with the city.
The remaining $2.3 million is due when the building permit is issued, or no later than five years after the agreement's execution.
The city will retain the right to buy the property back if the project stalls or doesn't move forward.
A portion of the city's infrastructure costs will be extended over time as the project goes vertical and begins generating new taxes within the district.
At some point, the project may enable the city to fund a pedestrian bridge connecting the public plaza to McCormick Park across the river.
“They're going to design and build the plaza. We will reimburse them for that,” said Buchanan. “You have a much more efficient operation and it allows this to be phased over time as increment begins growing.”
The city will also have an opportunity to purchase parking within the project. The project remains in a conceptual phase, but parking opportunities may lie underground given the site's topography.
“There is a parking garage with both below-grade and above-grade,” said Justin Doll with Avery Hospitality. “It's a large number (of parking spots).”
The agreement also has Averill contributing to the city's Affordable Housing Trust Fund. The developers will add a 1% assessment to rooms, food and beverages within the hotel. That's expected to generate $3 million over roughly 10 years.
The city will also contribute most of the funding from the property's sale to the housing trust.
“We are proposing that the $4 million from the land purchase go to the Affordable Housing Trust Fund. That will happen in increments over the course of time,” said Davis. “It's the totality of $7 million going into the trust fund, and it's the first time we've ever had an opportunity for such a substantive investment in that fund.”
With MRA's recommended approval now in the books, the agreements will go to the City Council for final approval.
Council member Mike Nugent said most council members have been updated through the process. Five members of council were present last week when the city first announced the project.
“The public investment in this is going to be the public benefits,” said Nugent. “That plaza and that riverfront trail will be more valuable than anything we could extend.”
