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Missoula gets closer to acquiring downtown federal building
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Missoula gets closer to acquiring downtown federal building

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Post Office Relocation 1

The U.S. Postal Service might look to relocate its Hellgate station in downtown Missoula due to a loss of its lease from the General Services Administration, which owns the federal building. 

The citizens of Missoula County are one step closer to gaining ownership of a 120,000-square-foot historic downtown building for free, although it would need about $40 million worth of work to upgrade.

On Wednesday, the Missoula City Council’s administration and finance committee voted unanimously to direct mayor John Engen to take the steps necessary to acquire the Missoula Federal Building from the United States government.

The U.S. Postal Service has an office in the three-story building at 200 E. Broadway, but most of the facility has been vacant since the U.S. Forest Service moved about 600 employees out to Fort Missoula in 2015.

The federal government declared the building surplus property about a year ago, and the city and the county were the only entities to express interest in acquiring it.

If the entire city council approves the move, the mayor will submit an application to the National Park Service’s Historic Surplus Property Program. Essentially, the city and the county would gain joint ownership of a building worth $15 million for free, according to John Adams, the city’s project administrator.

In exchange, the city and county would commit to rehabilitating and preserving the building, which was built in phases starting in 1911 and is listed on the National Register of Historic Places.

“I think this is a remarkable and unique opportunity for us to meet the needs of the city and county over the long term in terms of needs of facility,” Engen told the committee.

The mayor said the move would save the city money in the long run.

“And on top of that we’re preserving a pretty remarkable building that is a downtown icon and should continue to serve the public in the way that it has for many, many years," he said.

Many of the details have yet to be worked out, but the city and the county would plan to remodel the building while preserving its historical features. Then, the building would become the city’s new downtown campus as well as the county’s new administrative center. It would also become the new city council chambers and new municipal courtrooms would be built inside to accommodate rising demand.

“Ultimately we see 400 employees contributing to the economic vibrancy downtown,” Adams said.

He noted that would mean the current city hall, the city council chambers, various city satellite offices and the county administrative building downtown could all be sold and redeveloped into housing, office space, parking or other uses.

A 2018 city-commissioned study found that there’s an immediate need for 30,000 square feet of additional office space, Adams said, because of increased city staff to accommodate a growing population.

Also, the city currently pays about $180,000 annually to lease office space around downtown for employees.

If the federal building isn’t acquired by the city and the county, it will sell at auction to the highest bidder and could be demolished.

“We don’t know what could happen to the building if it goes to auction,” Adams said. “We’re skeptical that someone could rehab it and maintain the historic character. We would receive the building for free.”

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The building is in decent condition but needs quite a bit of work in order to be a functioning center of government. Adams said it could take $30 million to get the building ready to move in, and there would also be another $10 million worth of historic preservation work required. The city and county haven’t yet identified a funding source to rehab the interior, but city manager Dale Bickell has been charged with looking into that. 

Bickell told the committee there are federal funds available, and the city could expand one of the downtown urban renewal districts. 

"We have all kinds of opportunities to fund this building," he said.

Adams said it could cost about $31 million to build a new city hall or about $28 million to rehab the current city hall and expand it.

Several city council members expressed concern about what would happen to the U.S. Post Office that currently serves the surrounding neighborhoods.

Adams said it's quite possible the Post Office could simply lease their current spot and stay in place.

"We would need a meeting of the minds on lease costs to keep the Post Office in the building," he said. "It's all up in the air. It's a community discussion as well."

Bickell said the current conceptual design "does contemplate having the Post Office in the building."

City council member Gwen Jones also noted that the U.S. Postal Service might not want to be there or might find a better lease elsewhere.

Linda McCarthy, the executive director of the Downtown Missoula Partnership, said her organization wants the acquisition to happen.

"We are very supportive of this initiative, this opportunity to preserve a very valuable and beautiful building in the heart of this community," she said. "It's been challenging to have this building be vacant."

McCarthy said losing the 600 U.S. Forest Service employees was harmful to the downtown business community because every government employee spends an average of between $5,000 and $6,000 downtown every year.

City council member Bryan von Lossberg said there's an opportunity to build solar panels and make the federal building highly energy-efficient.

"I intend to be a fierce advocate for aggressive work on that front," he said.

Council member Sandra Vasecka said she hopes the city sells off assets to pay for rehab of the building rather than taking on more debt, but she supports the move.

Council member Gwen Jones said the acquisition is a plan that's been evaluated for several years.

"We continue to put more and more people into city hall and subdivide cubicles and we clearly have a need that's been heightened by the COVID," she said. "To have this building offered up for free is fantastic. Whatever we do it's going to cost money in the future. Clearly this is the most cost-effective route."

The county commission will discuss the initiative at 2 p.m. on Thursday. County commissioner Dave Strohmaier said it's something they've been working on for years.

"I would love to see if we can play a role in the adaptive reuse of this downtown Missoula icon," he said.

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