MISSOULA - The old Sleepy Inn property could be removed and prepared for redevelopment as early as April, setting the stage for redevelopment within the West Broadway corridor, city officials said this week.
Funding from the property's sale could also help fund affordable housing elsewhere within the corridor as aspects of the West Broadway Master Plan begin to take shape.
On Wednesday, members of the City Council approved a $283,000 contract with 3 Rivers Landworks to remove asbestos and lead-based paint from the Sleepy Inn. Once the work is completed, the firm will deconstruct the buildings and level the site for redevelopment.
The work could begin as early as next month, according to Tyler Walks, a brownfields program specialist with the city.
“Once we get the cleanup done, we can hand it off to demolition and deconstruction,” he said. “It would be available for redevelopment as early as April of this year.”
Walks said the funding would have no impact on the city's general fund budget. Rather, the project will be paid for using the city's brownfields revolving loan fund.
At the request of the city, the Missoula Redevelopment Agency purchased the property in 2020 for $1.2 million. For the next two years, it served as a quarantine shelter during the COVID-19 pandemic and housed 395 people, the city has said.
During that time, FEMA provided around $1.8 million in reimbursement costs, enough to cover the property's initial purchase price.
The purchase was also made as part of the city's land banking strategy – a goal detailed in Missoula's housing policy. Sale of the property to a private developer would enable the city to recover its expenses from the initial purchase and abatement work and place the revenue into the Affordable Housing Trust Fund.
But how the site is redeveloped hasn't been finalized, though commercial uses on the ground floor and market-rate housing above are most likely, the city has said.
“We want to understand what the market would support on this site,” said Annie Gorski, deputy director of MRA. “It would be a win-win for the city if we had both a sale that provides money to the Affordable Housing Trust Fund and also places housing on the site.”
Last summer, city officials said the size and constraints of the lot could make redevelopment challenging and more costly. The current vision calls for a five-story building with ground-floor retail and roughly 35 residential units.
Other properties within the West Broadway planning area would be targeted for subsidized housing and funded in part by the sale of the Sleepy Inn.
“I don't think we've decided what's happening here yet,” said council member Amber Sherrill. “We're land banking, and whether there's affordable housing in this spot specifically or if the best use of the proceeds from this sale is to support affordable housing somewhere else is what we're talking about.”
The city has contracted a realtor to market and sell the property for redevelopment, but city officials on Wednesday said it's not yet known what the property is worth now, or what it will be worth once abatement and deconstruction are finished.
Some members of council voiced skepticism over the lack of numbers. Without them, they voted against the $283,000 cleanup contract.
“I feel pretty uncomfortable with this whole project,” said council member John Contos. “First of all, the city bought this for more than what it should have gone for, and now we're removing everything on it in order to sell it. Missoula is a pretty hot spot right now, and I have no doubt that property would sell with the things that are on it. We should have some idea what it would sell for, clean or unclean.”
But others believe the city has a responsibility to abate any contaminants before selling it to a buyer. They also believe a clean site ready for redevelopment will make the property easier to market and potentially add to its value, particularly given its prime location.
“I participated in the West Broadway Master Plan, and removing this structure from the site will make it more desirable for a buyer,” said council member Mirtha Becerra. “The sooner we can sell this property, the sooner we can start implementing that vision.”
Shortly after the pandemic hit and the Sleepy Inn began serving as a shelter, the city completed its master plan for the West Broadway corridor.
The resulting plan covers roughly 15 acres and envisions around 130 market-rate townhomes and apartments, and a goal of 70 affordable housing units targeted to a range of incomes.
It also calls for office and retail space, transit stops and other amenities. The city owns other properties within the planning area, including the Missoula Water building and an adjoining property.
The plan identified the Sleepy Inn property as having a gateway structure with stature leading into the West Broadway neighborhood.
“(The Sleepy Inn) would be one of the first properties to be redeveloped and would likely be the catalyst for other redevelopment in the area,” said Walks. “The city's realtor advised us the property would be more marketable for sale as a clean, level site with the building removed.”