Late bloomer 

Pared down Garden District finally breaks ground

A half-dozen excavators and bulldozers started to dig up dirt and asphalt at the former Intermountain Lumber site on Russell Street March 6, marking the long-awaited start of the Missoula Housing Authority’s (MHA) latest affordable housing project.

But the current project pales in comparison to what MHA envisioned years ago. Developers balked, affordable housing funding came late and reconstruction of Russell Street remains in limbo. Local officials now believe the struggles to get the so-called Garden District off the ground cast doubt on the viability of urban, mixed-use development in Missoula.

“It was the kind of development everybody wishes we would do in Missoula, but nobody is able to do,” says Geoff Badenoch, formerly of the MHA.

MHA bought the property in 2003 and planned to partner with a private developer to transform the 12-acre industrial blight into a community hub. The proposal included 270 residential units (72 considered affordable housing) mixed with commercial and retail space, a one-acre park and underground parking. MHA imagined the project as an anchor for the redevelopment of Russell Street, a key north-south artery through town.

Six years later, MHA has subdivided the site and scaled back to 37 affordable housing units in three buildings. Two empty lots fronting Russell Street await commercial buyers. MHA holds an option on a third lot and may build additional affordable housing in the future.

“It’s too bad, in a way, that such an opportunity to do something that comprehensively has slipped past us, because there are no other sites like that around,” says Chris Behan of the Missoula Redevelopment Agency.

A number of other Missoula developments face similar delays and downsizing. Ambitious plans conceived during Missoula’s economic heyday remain unbuilt, from the Old Sawmill District on the former Champion mill site to the Riverfront Triangle on the southwest corner of Orange and Front streets. Regardless of the myriad reasons for each project’s specific delays, they’re now mired in a market where prudence reigns and progress slows.

The MHA searched for private developers to build the market-rate portion of the Intermountain Lumber site but never found a partner. Three expressed interest, including a Minnesota-based firm with vast experience building mixed-use developments. “And then this thing called the housing market started to tank in 2007, and the handwriting was on the wall,” says Badenoch. The developer pulled out by the end of the year.

“It became clear we weren’t going to be able to create the original vision,” says Lori Davidson, MHA’s interim director.

Russell Street itself complicated negotiations. Planners thought reconstruction of the notoriously congested street could occur in conjunction with the Intermountain Lumber site redevelopment. But the environmental review process drags on and reconstruction of Russell Street won’t begin until summer 2012 at the earliest, says Missoula Public Works Director Steve King. The work will cost upwards of $40 million and continue into the 2020s.

“The uncertainty about the Russell Street development certainly, we think, has affected our ability to sell those street-front properties,” Davidson says, “because it’s difficult for a retail buyer not knowing if they’re going to have to put in sidewalks and everything.”

On top of the Russell Street issues, MHA and homeWORD competed for the same Montana Board of Housing tax credits in 2007. HomeWORD won out, which is why its affordable housing project on the corner of Broadway and Russell is near completion. MHA was awarded credits in 2008 and broke ground just two weeks ago. They expect to begin leasing units in November.

“While it was a perfect storm in terms of delaying things, it came together in the end,” Davidson says, “and we couldn’t be happier with the way it turned out.”

Missoula architects MacArthur, Means & Wells drew up both the 2003 and current plans for the Intermountain Lumber site. Don MacArthur says the development “harkens back to neighborhoods where we really understood what it was like to have a street that you’d want to both drive down and walk down.”

But by the MHA putting the two adjacent commercial lots up for sale—listing for about $1.3 million and $850,000 by Properties 2000—it potentially jeopardizes that concept.

“We have lost that ability to do it in a consistent manner if we sell it to other folks who have a different vision of what to do,” MacArthur says. “That’s where the loss has been.”

That loss points to how Missoula has failed to build the type of mixed-use, transportation-oriented development architects and planners advocate. Missoula’s barriers, MacArthur says, include relatively low wages and high construction costs, high urban land costs, and the necessity of owning a car and having a place to park it. It adds up to a “fairly high risk proposition for the developer,” he says. “Since relatively few mixed-use projects are available in Missoula, the comps aren’t there to use in evaluating the risk and most of the projects are fairly large so the dollars involved are big.”

What pencils out for developers, then, may not be what architects are drawing.

“We are tending to do a lot of ‘prescribing’ for potential developers in how we plan for sites, before they even look at a site,” says Larry Swanson, an economist with the Center for the Rocky Mountain West. “Some of this is good, but too much and we may simply drive them away…I think that Missoula will learn sometime in the near future that we need to let private developers look at property and, based upon their experience, figure out what kind of development might work well.”
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