Missoula housing project moving toward deal; Sleepy Inn developer sought

MISSOULA – With the sale of the Sleepy Inn property set in motion for future redevelopment, the city is also working on a purchase and sale agreement for an income-qualified housing project planned off Scott Street.

Ellen Buchanan, director of the Missoula Redevelopment Agency, said that once the agreement with Ravara is solidified, a development agreement will follow. At the same time, she said, WGM Group is moving forward with engineering the project’s infrastructure.

Utility work could begin as early as fall, Buchanan said, even as architectural work goes on.

“The market-rate piece is substantially ahead of the income-qualified piece in terms of design and architecture. But they’re far enough along that they’re getting some good pricing on that,” Buchanan said. “Trying to make the numbers work in this environment is challenging.”

Ravara entered into a contract with the city last year to develop nine acres of city property off Scott Street. Plans have advanced slowly but are beginning to take shape and will see the North Missoula Community Development Corp. manage the portion of the project that will sit on a community land trust.

That portion of the project will cover around three acres and provide at least 70 for-sale units of permanently affordable housing. While making the land trust portion of the project pencil in today’s economy is challenging, Buchanan said it can be done.

“It can be done, but it may not be done exactly the way everyone envisioned from the outset,” she said. “We may end up with a much better project as a result of it. In my mind, it’s not limited by any means.”

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The other six acres will be developed into market-rate housing, providing as many as 200 units. It will also include other amenities such as parkland, retail services and a daycare.

“Most of the current effort is being focused on the architectural and engineering for both the land trust and the market-rate portions of the project so that realistic pricing can be determined,” Buchanan said.

As project planning advances, the city is also working to hire a realtor and begin seeking development proposals for the old Sleepy Inn property. The city purchased the property in 2020 for $1.1 million and used the old motel as a quarantine shelter during the pandemic.

It’s now looking for a developer to redevelop the property into a mix of housing and retail. Last week, the City Council praised the purchase and the city’s redevelopment plans.

“Publicly, it set the standard for our expectations around redevelopment there, because we have some pretty high expectations,” said Buchanan. “When you look at the recommendations in the master plan, some of the locations they had suggested be used for affordable housing are way more desirable than that (Sleepy Inn location) if you’re living there.”

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The Sleepy Inn property is located at a busy intersection and marks the entry to the West Broadway corridor — an area master planned by the city. The plan covers around 15 acres and envisions around 130 market-rate townhomes and apartments and a goal of 70 affordable housing units.

While the Sleepy Inn property may not pencil for redevelopment as affordable housing, sale of the property to a developer will help bolster the city’s Affordable Housing Trust Fund, leading to affordable housing development elsewhere in the Broadway corridor.

“We provided an analysis of that (Sleepy Inn) property, what can go there, massing, square footage, residential units and how to park it,” Buchanan said. “It’s in the hands of the realtor really to go find potential developers and bring them back.”