Rezoning Southgate Mall key to city’s “focus inward” growth policy

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Construction crews clean up the remains of Paxson Plaza near Southgate Mall. The mall plans to break ground on the construction of a new 9-plex movie theater in the coming months. (Photo by Martin Kidston)

By Martin Kidston/MISSOULA CURRENT

Amid snow flurries last month, construction crews quietly dismantled a portion of a dated strip mall near Southgate Mall. The year before, they took down Curley’s Broiler and the old Val-U-Inn.

Work to transform Southgate Mall’s 64-acre property into a vibrant neighborhood hub will gain momentum this March as crews relocate utility lines for the construction of Mary Avenue and its connection with Brooks Street. Construction of a new 9-plex movie theater will follow in the spring.

Both projects mark another step in Southgate Mall Associates’ efforts to reinvent the retail hub. The mixed-use vision, which could take a decade to realize, includes new shopping and dining opportunities, and a chance at loftier Midtown living.

“We’re hoping to break ground on the theater in late April or May,” said Jeremy Keene with the WGM Group. “It’s about a nine-month construction job. We hope to have the theater open for business in January 2017.”

A decade from now, Southgate Mall and the surrounding properties may be unrecognizable to those who’ve been away from Missoula for any period of time. But to get there, Southgate Mall Associates is asking the city to bring the mall into the same zoning district as the properties that surround it – a move that would permit greater infill and building heights.

Drew Larson with the city’s Development Services said the proposed rezone includes 10 properties in the Southgate Mall area covering roughly 64 acres. Larson said the request fits with the city’s newly adopted growth policy, and it represents the city’s efforts to grow inward and make better use of underutilized land close to city services.

“The recently adopted Our Missoula Growth Policy recommends both regional commercial service and mixed-used land designations for the property,” Larson said. “The proposed rezone will encourage Missoula to make thoughtful land-use planning decisions that encourage mixed-use development and high residential density, which will promote more walkable neighborhoods and higher quality of life.”

Larson said the surrounding zoning districts already allow building heights of up to 125 feet. The colorful apartment building on Dearborn Avenue rises 51 feet, while the five-story office building on South Avenue stands at 84 feet.

But a zoning overlay placed on the mall in 1974 caps building heights to 40 feet. The overlay was written during a different time in the city’s growth, and the approach to development and land use has changed over the past 40 years as the population increases and city properties become limited.

“The livability section of Our Missoula envisions a compact and sustainable city with walkable neighborhoods and a high quality of life for all residents,” Larson said. “The economic health section calls for diversifying the city’s economic base by attracting and supporting new-economy businesses that remain resilient to changing times and conditions.”

Changing with the times has served as Southgate Mall Associates’ battle cry for the past year. Backers have navigated a series of board approvals and City Council votes in an effort to carry out their vision for the property’s future.

The economic outlook for American malls is anything but bright, with Business Insider predicting that roughly 15 percent of U.S. malls will fail within the next 10 years. While Southgate Mall remains viable, it’s owners are eager to head off any setbacks by ensuring the property remains a viable destination.

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Housing remains part of the long-term vision for property surrounding Southgate Mall. (WGM Group)

The vision goes beyond mere shopping. Southgate Mall Associates looks to create a vibrant mixed-use neighborhood hub filled with housing, entertainment and services – all placed with walking distance to city services.

“There’s going to be high-density residential planned for down here, though they can begin to add residential above the mall as they redevelop other areas,” Larson said. “The increased building height will enable future development and high residential densities.”

Keene, a project engineer who has represented the mall throughout the approval and design process, said Southgate Mall Associates is asking the city to bring the mall into the same zoning district as the properties that surround it.

The City Council recently approved adding the mall to Urban Renewal District III, allowing it to contribute to the district’s tax increment. It also approved $7.1 million in bonding to build the eastern portion of Mary Avenue – the first of what’s expected to become a new public street grid.

“In the short run, changing the zoning allows us to build the theater to a height of about 50 feet when the current limit is 40 feet,” Keene said of the zoning request. “In the long run, it would allow the mall to do more densities if it continues to evolve. In the long-range plan, the mall would be broken up into a more traditional street grid, and it would go up with opportunities for office and and residences above the mall.”

Such redevelopment projects are popular in other other cities, including The Streets at Southglenn in Littleton, Colorado. That project transformed a dated 1970s mall into something of a city center complete with shopping, dining and residential opportunities.

Over the past two years, Southgate has invested more than $25 million to carry out its vision, a move that included $18 million in land acquisition and $7.5 million in new additions and renovations. The initial phase of the larger project includes a $71 million investment, one that’s expected to benefit surrounding properties.

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Construction of a new theater is expected to begin in April and open in January 2017. (WGM Group)

Along with an estimated 700 new construction jobs and 325 permanent jobs, the mall’s investment could increase commercial property values on Brooks Street by 15 percent. Backers also believe the project could bring up to $70 million in future private investment, generation nearly $1 million in new property taxes for the city.

“We feel the proposed rezone will support and provide economic development efforts that provide for business retention and expansion to ensure our businesses remain viable options in Missoula,” Larson said. “This fits the city’s growth policy by focusing inward and limiting sprawl.”

The City Council is expected to consider the zoning change next week. Notices have been issued to surrounding property owners, and the hearing has been posted.

“The efforts the mall is putting forward is an additional commitment to our inward focus that was articulated through the growth policy,” said Ward 4 council member John DiBari. “Having a strategic view of how to make use of that land is a great opportunity to enhance that section of Midtown and make it a more vibrant place. I think it’s a step in the right direction, improving how Midtown functions.”