For nearly four years, Missoula's most prominent downtown retail space has remained vacant. While the Missoula Mercantile building has turned into little more than a billboard for art shows, what with its windows filled with posters and displays, officials say it's an exception to an otherwise healthy downtown.
The Merc, which has been empty since Macy's closed in 2010, has proven more difficult to fill than its Virginia-based owner expected. Octagon Partners bought the 80,000-square-foot building for $2.3 million in 2011 and put nearly another million into deconstructing it to its historically accurate bones—minus the lead and asbestos that contractors removed. But the owner is still looking for tenants willing to move in or someone to buy the site outright.
Several bars and restaurants wanted to move in, says Jed Dennison of Zillastate Realty, the local firm handling the property. But it's been a hard sell because the construction timeline requires signing a lease at least 15 months before a shopkeeper could even start painting the walls, let alone open for business.
"It doesn't make sense to pull the trigger on a $12 million renovation for a 2,000-square-foot tenant," says JP Williamson, of Octagon.
Plus, Dennison says the bank won't fork over the renovation loan without safe, reliable office tenants signed up on the second floor and several retailers on the ground floor.
While the rental situation is caught in a catch-22, Dennison says three local buyers have expressed interest in the building, including the Missoula Public Library. The 40-year-old library has outlived its original lifespan by a decade and outgrown its capacity. With more than 1,700 visitors a day, Executive Director Honore Bray says the library turns down 50 to 100 requests for meeting spaces weekly.
"We'd love [to move into the Merc], but we can't say yes or no yet," Bray says, noting the library is waiting for architects to assess whether the historic building, built in 1887, would be able to support the weight of the bookshelves.
If the library purchases the building, it comes with good and bad news. Bad: The city would lose roughly $1 million a year in taxes, says Missoula Downtown Association Executive Director Linda McCarthy. Good: A single owner-occupier would simplify securing funds for construction, and could finally fill the biggest hole in downtown.
"In a big-picture sense," McCarthy says, "it would be great if it was an active (retail) space and remains on the tax rolls. But having a library in that building is better than a vacant building."
McCarthy adds that while the Merc remains the elephant on the corner of Higgins and Front, downtown is largely healthy. Its 12.8-percent vacancy rate is less than half the national average and shows the area continues to attract new businesses. "But I wouldn't say it's thriving yet," McCarthy says.