City looks to include affordable housing in private downtown development

Plans to redevelop the Riverfront Triangle in downtown Missoula started with a hotel and conference center. It has since grown to a seven-acre, master-planned development that includes retail, office and housing. The city has placed a list of requirements upon the developers, and it will add another this Monday with a requirement for affordable housing.

By Martin Kidston/Missoula Current

Members of the City Council placed a long list of requirements on the development team looking to transform a blighted downtown property into a new city gateway, including design expectations, parking mandates and how to address storage.

The conditional agreement, drafted by the city and Hotel Fox Partners, will also rezone the seven-acre tract of land to accommodate downtown-style development, and it will vacate one alley and an internal street.

A final vote is expected Monday night at the regular City Council meeting, where issues of affordable housing are expected to surface. How those issues play out could dictate the outcome of the project, which is now years and millions of dollars in the making.

“There’s been a lot of work by a lot of people putting together this land-use agreement,” said Ward 4 council member John DiBari. “All of the parts have to work, or none of it works.”

Several years ago, after issuing a request for proposals, the city granted Hotel Fox Partners exclusive rights to develop a small piece of city-owned land on the corner of Orange and Front streets.

Since then, however, Hotel Fox Partners have expanded its vision to include a seven-acre master development valued at an estimated $200 million. To accommodate the project, the partnership has purchased surrounding properties and has worked with the city to create the Riverfront Triangle Special Zoning District.

As planned, the development will include a 200-room hotel, a city-owned conference center and a blend of office and retail space. In accordance with the 2009 Downtown Master Plan, the development will also include a mix of housing.

But while the hotel and conference center will sit on city land, the rest of the project will occupy private property bought by the developers. That has raised questions over how far the city can go in dictating certain elements of the project.

On Wednesday, members of the City Council and Hotel Fox Partners, along with Development Services, breezed through much of the conditional agreement as it relates to zoning and other requirements.

But the debate over affordable housing, which surfaced near the end of the 90-minute meeting, ended the session on a potentially sour note. The issue surfaced when DiBari announced his plans to place an affordable housing requirement upon the developers during the next City Council meeting.

DiBari is pushing for an agreement that would require an “appropriate mix of multi-income housing” that the developers will be required to provide in the residential portion of their project.”

Unless public funds are directed to that portion of the development, it could mark the first time the city will attempt to force a private developer to provide affordable housing in an otherwise private project.

“The intent of the agreement is to set standards for the proportion of the housing units that will serve median-income households in the Missoula area, and the time frame or duration that these houses will be priced to serve median-income households,” DiBari said.

Jeff Crouch with CTA Architects and Engineers said his client, Hotel Fox Partners, feels strongly that affordable housing is needed in Missoula, particularly the downtown district, and they’re willing to help provide it.

However, he said, building affordable housing brings challenges, primarily surrounding costs. Without a public-private partnership, affordable housing may not be an option. Hotel Fox Partners is currently working with HomeWord and the Missoula Housing Authority to see if a partnership is possible.

“With a private developer, with a nonprofit and with city’s participation, we could do something really good here,” Crouch said. “Our understanding is, however, that those other entities will be working with us throughout this process – that this won’t be a one-sided expectation that an entirely private developer on an entirely private piece of land is going to deliver a large amount of low-income housing.”

While the City Council’s Land Use and Planning Committee approved the conditional agreement and zoning request, the issue still faces a vote on Monday night, when DiBari plans to introduce his housing amendment.

Some suggested that incentives and not city mandates would be a better approach to the challenge. So far, however, the city hasn’t offered those incentives.

“I feel strongly that affordable housing is needed in downtown, and I’d like to incentivize developers to do that,” said Ward 5 council member Julie Armstrong. “Their margins are quite small when they build those affordable units, and I would be looking to staff for a statement that if someone builds low- and median-income housing, that we don’t charge them impact fees for the portion of those units considered affordable.”

While the city created an Office of Housing and Community Development last year, it has not released a city-wide housing policy, nor has it offered any incentives to developers who include affordable housing in larger and costlier projects.

But Ward 1 council member Heidi West suggested that such a measure could be forthcoming. She urged DiBari “keep the door open” when looking to place housing requirements on a private development.

“We’re working on housing policies with the city,” West said. “We don’t have any incentives or polices in place yet, which we desperately need. We need to keep a placeholder for that without eliminating anything.”

Contact reporter Martin Kidston at info@missoulacurrent.com