City considers adding “tourism infrastructure” to aging Front Street district’s plan

The original plan for the Front Street Urban Renewal District didn’t include tourism development, such as the new Mercantile Hotel set to open early next year. Unless the language is changed, the city can’t sell the bonds needed to reimburse such projects for public improvements. (Martin Kidston/Missoula Current)

Efforts to amend a plan for the Front Street Urban Renewal District to aid the expansion of tourism development won preliminary approval from the Missoula City Council last month, though the decision wasn’t unanimous.

What is generally agreed upon, however, is that much has changed in downtown Missoula since the plan was adopted 11 years ago, followed shortly after by a wider Downtown Master Plan.

The city has grown in that time. Macy’s has closed and the deteriorating building it once occupied has been replaced with new jobs in a new hotel – likely the first of others to come. The district has added tech businesses, museums and housing.

And it all feeds what business advocates see as a revival and a hot Missoula market.

“When the plan was written in 2007, Macy’s was a center of commerce in downtown, and there was no way to anticipate that it wouldn’t be there for years to come,” said Ellen Buchanan, director of the Missoula Redevelopment Agency. “The (Front Street) plan didn’t address redevelopment of that specific area, and it didn’t anticipate development of tourism infrastructure.”

While the Front Street Urban Renewal Plan didn’t speak to tourism infrastructure directly, the Downtown Master Plan did. Adopted in 2009, it identified a need for 300 new hotel rooms in the downtown district over the coming years.

The new Mercantile Marriott hotel, set to open next year, will add roughly 150 rooms. Under state law, it’s eligible for tax increment financing for a portion of the costs associated with redeveloping the property – costs primarily associated with improvements to public infrastructure.

The city plans to sell bonds to cover those costs, though Buchanan said it can’t until the Front Street plan is amended to include the hotel as an urban renewal project.

“What we’ve chosen to do is acknowledge tourism development as a commercial goal in the plan, and approve a project as an urban renewal project, and that would be the Merc itself,” said Buchanan. “This opens the door if we have other hotels come through that need assistance. They’ll already be recognized in the plan, along with other things that would support tourism infrastructure.”

Tourism in Missoula pumps more than $329 million into the local economy, with 4 million visitors stopping in the city each year. The industry creates 3,300 local jobs, and provides other benefits as well, according to Destination Missoula. (Martin Kidston/Missoula Current file photo)

Other projects that follow a similar tourism thread are already in the planning phase or are rumored on the horizon. That includes a smaller hotel nearby and a larger redevelopment project at the Riverfront Triangle.

As last presented, the Riverfront project would include 198 hotel rooms, 405 parking stalls in an underground garage, and a 60,000-square-foot conference center – something advocates believe will go far in boosting the local economy.

“Primarily, it’s hospitality related business,” Buchanan said of the proposed amendments to the Front Street plan. “It could also be something that brings tourists to Missoula as an attraction. It’s fairly broad and we want it to be broad. You can’t anticipate everything that might occur in a URD when you’re creating the district and writing the plan.”

Amending the plan won preliminary approval from the City Council’s Administration and Finance Committee on Nov. 28. It’s set for a public hearing in early January and has the support of key community backers, including Destination Missoula and the Missoula Downtown Partnership.

Tourism in Missoula pumps more than $329 million into the local economy, with 4 million visitors stopping in the city each year. The industry creates 3,300 local jobs, and provides other benefits as well, according to Destination Missoula.

Linda McCarthy, executive director of the Missoula Downtown Partnership, said tourism is a vital part of economy and is worth investing in.

“I can certainly understand the need and desire to include tourism development as a goal for urban redevelopment,” McCarthy said. “We are a community that values tourism as a major economic driver, and the original Downtown Master Plan included a full tourism sub-strategy with seven primary goals.”

Those goals cover a range of topics, from stronger marketing of local businesses to enhanced arts and cultural programs. They also seek to enhance transportation opportunities, bring a conference center online, and support the development of tourism-related businesses, including hotels.

McCarthy said the emphasis on tourism is evident throughout the district. The Wilma and the Holiday Inn have both undergone extensive remodeling, and a new Missoula Public Library is under construction.

Plans are taking shape for other downtown properties that will likely be redeveloped in the coming two years. By making tourism development a primary goal in the district’s urban renewal plan, McCarthy said, MRA can invest tax increment back into future projects that support business and job creation.

“Missoula was historically more of a logging community,” McCarthy said. “With the closure of the Champion Mill, Bonner mill and the Frenchtown paper mill, Missoula is adapting to the new economies of tourism and entrepreneurship. It makes sense that the urban renewal plans connect to and support other community plans.”

Tourists and residents alike dine at one of Missoula’s downtown restaurants. (Martin Kidston/Missoula Current file photo)

But not everyone favors changes to the plan, including Missoula City Council members Michelle Cares and Jesse Ramos. Both voted against the measure in late November during a preliminary hearing in committee.

Ramos believes changing the plan to incorporate tourism development would allow for other “pet” projects, such as a downtown conference center and a new recreational wave on the Clark Fork River.

“I don’t think that you necessarily have to be a small-government Libertarian like myself to think that putting a wave in the river is not a role of government,” Ramos said. “It’s easier to get pet projects like waves in the river or pedestrian bridges passed when it is done by the MRA board.”

While his figures couldn’t be confirmed Friday, Ramos said the city brought in roughly $35 million in tax revenue and just over $8 million of tax increment financing last year. He said that latter pool of funding represents just under one-quarter of the total property tax for the city’s General Fund.

Ramos said that money isn’t controlled by the City Council, but rather MRA.

“It is controlled by the MRA board, all of whom are appointed by the mayor and all of whom have donated to his campaign,” Ramos said. “I am not saying anything illegal is going on, because this is legal to do. What I am saying is that I do not believe it is what the taxpayers want, nor is it something I agree with.”

Council member Gwen Jones disagreed with that perspective when voting to support changes to the Front Street Urban Renewal Plan. She said tourism development goes far in supporting local businesses and jobs, and it feeds a thriving economy.

“Having sat through the Mercantile hearings a couple of years ago, the level of discussion was focused on the value of having a hotel downtown, and the tourism dollars that would boost our restaurants and shops,” she said. “I’m sure that will be greatly discussed in a future downtown master plan.”