Midtown Commons: $7.2 million Missoula city land sale heads to final vote

A development proposal to build hundreds of different home types on city land near the Southgate Mall could secure final approval from the Missoula City Council Monday night.

The city would sell roughly 15 acres of land to private developer Miramonte Companies for $7.2 million. Miramonte would then build market-rate townhomes, condos, apartments and detached single-family homes.

The massive development would also include 1.6-acre public park, potential building sites for businesses and an extension of Johnson Street to connect to Brooks Street.

"The city is making a strategic short-term investment in order to achieve long-term public benefit," Mayor Andrea Davis said. "This project delivers things like new housing choices, including middle-income housing."

The agreement would also allocate $10.9 million in Tax Increment Financing through the Missoula Redevelopment Agency, although the developer agreed to eventually pay back $5 million of the infrastructure costs.

The city council preliminarily approved selling the land 11-1 on Wednesday afternoon, with Ward 6 Councilor Kristen Jordan in sole opposition.

Despite the initial support, several councilors had lingering questions about the proposal, including around the final park size, and whether the proposed condos, which would be listed for sale, would possibly be used as investment properties.

"To the developer, I just want to let you know that I want to dig into the owner-occupied idea a little bit more and work with staff to discuss some ideas," City Council President Mike Nugent said at the meeting. "I think that is something a few of us share concerns about."

Some neighbors to the project also opposed the plan in part because it would likely lead to the removal of most of the existing trees in the area, affectionately called "the grove."

City parks staff noted that some of the trees in the area are nearing the end of their lives, and the cottonwood trees there could present a public safety hazard.

"It sounds like the park placement came down to a textbook formula, but we have a beautiful wild space in Missoula, and just wish that maybe we can preserve a little bit of that in Midtown," Missoula resident Sarah Giuliani said.

If the land sale goes through, it would be the latest portion of Davis's strategy to redevelop excess city lands to address housing needs.

Davis told the council Wednesday that residents need a diverse price array for homes, and the Midtown Commons proposal would address the "missing middle" for people who make the median wage but are currently priced out of the housing market.

"There is no single solution to Missoula's housing needs, and we need many types of housing, including deeply affordable housing, workforce housing, attainable homeownership opportunities and housing choices for people at different stages of their life," Davis said.

Chris Kemmerly, the CEO of Miramonte, told the council that construction could begin as soon as this summer on the first phase, which includes single-family homes and townhomes.

In total, the project would build six single-family homes, 20 townhomes, 56 multifamily apartments and 152 condos for sale.

No price requirements 

The development agreement between the city and Miramonte requires a certain level of housing density on the land by 2033, but the document does not require Miramonte sell the homes at a certain price.

Instead, Miramonte would set the price. Kemmerly has a target goal of selling a studio condo unit for approximately $350,000, roughly $200,000 below the median home price in the city.

"The lower the price, the better it is for everybody, including us," Kemmerly told the council. "My goal is to sell them in the $300,000s, and I used $350,000 on the high side."

Kemmerly said the cost of a townhome or a single-family home would be considerably higher.

Jordan questioned whether Kemmerly would commit to keeping the price of some of the condos at below a certain price point, which Kemmerly declined, citing a need to work through the development process to reach a final price.

Other councilors questioned whether the units built by Miramonte could be bought up by investment groups and then rented out to Missoula residents.

Ward 2 Councilor Justin Ponton cited a separate Miramonte development project, called Lofts on the 93, near the Wye that will build 152 townhomes.

Miramonte's website said the new construction could have "strong market fundamentals" because of Missoula's high occupancy rates and lead to "competitive rental premiums" for property investors.

Kemmerly told the council that project description is no longer accurate.

Nugent suggested the city find a way to require the new units be owner-occupied. He said he is also concerned the homeownership opportunity would be diminished by the possibility of investor purchases.

"I personally am not interested in helping a development project that has such great price points that you mentioned, well below the median price point, that could be scooped up by investors as rental properties," Nugent said.

The new condos would not be eligible to be listed as short-term rentals like an Airbnb, Kemmerly noted. The remaining multifamily apartment units would be rentals, according to the proposal.

Greenspace proposals

The 1.6-acre park would be built in the core of the new development and provide the neighborhood with several new amenities, according to City Parks and Recreation Director Marina Yoshioka.

Yoshioka told the council that a lengthy master planning process led to the final design, which includes a lawn, riparian corridor, shade structure, and new trees.

"Some of the things we heard in this public process was a strong preference for a park that is natural, flexible and neighborhood-oriented," Yoshioka said.

The proposal recently increased the size of the park from 1.3 acres to 1.6 acres in response to calls for a larger green space. Other councilors also raised concerns over the removal of wildlife habitat.

Ward 1 Councilor Betsy Craske questioned the large amount of parking spots slated for the development. New city code removed parking mandate rules, but hundreds of spots would cover much of the property.

"This phrase has been replaying in my mind as we look at the site plan, is 'they paved paradise and put up a parking lot'" Craske said, quoting the Joni Mitchell song "Big Yellow Taxi."

Kemmerly said the parking is needed for the number of residents that would live at Midtown Commons. He added that underground parking would be cost-prohibitive and drive up the price of development.

Jordan pressed the city on whether the park size should be larger to align with the city's 2040 Parks, Recreation, Open Space and Trails (PROST) plan, which calls for eight to 10 new neighborhood parks roughly 5 acres each in the next 15 years across the city.

Since the development is an infill project, Yoshioka clarified that the size does not need to be as large to align with the PROST plan, instead touting the high level of amenities planned.

The new city code also removed Miramonte's requirements to build private activity areas for the multifamily buildings, which equated to 0.75 acres, according to Yoshioka.

Several residents spoke in support of keeping as much of the space as natural as possible, where they said they often see birds of prey and other animal species.

"It does provide an incredible flyway for all kinds of species of birds, raptors and mammals, and it could truly be incorporated into the new park and be an amenity," neighbor Cathy Scribner told the council.

The Missoula Irrigation Ditch is proposed to be rerouted to be a part of the park development, although representatives from the company shared concerns that the ditch would be used recreationally in the new park.

Other topics brought up by councilors include whether the sale price for the land makes sense and whether the city could be at risk for paying additional costs for infrastructure.

The council will continue the debate on May 18 starting at 6 p.m., and Nugent told the council he expects a lengthy meeting.

"We will definitely expect to make a long conversation Monday night," Nugent said.

More information on the development can be found at the city's Engage Missoula website.