Missoula’s opportunity zone off West Broadway and tax increment financing could be combined in creative ways to achieve a number of goals around retail and housing, the Missoula Economic Partnership said this week.
MEP’s top executives recently toured four cities to explore how they’re applying regulations adopted by the Trump administration to bring investment to underserved areas, including portions of Missoula’s Northside and Westside neighborhoods and the West Broadway corridor.
MEP’s tour included Portland, Redmond, Bend and Hood River.
“We learned how deals are being structured and incentivized to achieve public benefit in the opportunity zone,” Julie Lacey told the Missoula Redevelopment Agency’s Board of Directors. “We also learned how developers are approaching opportunity zone development to both maximize their profit and meet community goals.”
Lacey, the economic development director at MEP, said the organization will take what it learned to adopt best practices at the local level to achieve projects that align with the city’s goals.
“We specifically looked at some urban renewal district projects as well, and talked to city managers and officials to learn how projects are being financed, along with creative uses of tax increment financing,” Lacey said. “We toured affordable housing mixed-use projects, and even some unique commercial projects that have some layered incentives.”
The first development to capitalize off Missoula’s opportunity zone broke ground at Maple and Broadway in May. Several other projects have followed, including a medical office. To this point, however, all have been commercial or professional services.
Projects identified as ideal in Missoula would include a mix of ground floor retail with a blend of workforce and affordable housing stacked above. Lacey said other cities struggling with affordable housing have found creative ways to finance such projects.
MEP is working to bring those ideas home to Missoula.
“It’s tricky for all these projects to pencil out, and developers recognize that,” Lacey said. “They want to meet the needs, but how it all stacks up to become a project that’s truly a model for a community is trickier than what we had originally believed. It’s something we’re trying to bring back to Missoula.”
The Trump administration included opportunity zones in the Federal Tax Cuts and Jobs Act of 2017 to encourage long-term private investment in low-income census tracts. The program itself provides tax incentives to those who invest in opportunity funds.
MEP has compiled an inventory of people interested in investing in the opportunity zones, along with businesses looking to relocate and property owners interested in selling or purchasing within the zone.
The organization also plans to hold a developer’s showcase next June. It announced plans to do so in October and has been working with the city and other experts to identify properties that offer the highest potential for redevelopment.
The inventory will include vacant lots and properties already on the market within the opportunity zone, as well as other locations around the city.
“We’d like to showcase more than what lies within the opportunity zone, and we’re thinking strategically in terms of what that looks like,” said Lacey. “We feel on track with all these goals, and we’re excited about the engagement we’ve received.”