A new $5.8 million office building with plans for a ground-floor restaurant space in the Westside neighborhood will be Missoula’s first Opportunity Zone project.
A company called Engineering Support Services has purchased a 6.5-acre plot of land at 1900 West Broadway and plans to build a three-story, 24,000-square-foot building. It will house the growing DJ&A Engineers, Planners and Surveyors company as it adds 12 to 18 new full-time jobs over the next three years. There will be restaurant, service and small office space for lease. The building is expected to be complete sometime next year, and the developers are using the new Opportunity Zone legislation to finance the project.
Also on Thursday, the Missoula Redevelopment Agency’s board approved $301,431 in Tax Increment Financing, or TIF, for public right-of-way improvements to the site, including new curb, gutter, sidewalk and landscaping along Maple Street. The building will have 57 new parking spaces to accommodate a planned restaurant, but the developers didn’t say if they have secured a restaurant tenant yet.
“This project will take advantage of being located in Missoula’s only Opportunity Zone and should raise awareness of that new economic development tool,” said MRA director Ellen Buchanan. “A new, as opposed to relocated, restaurant on the ground floor will also generate new service industry jobs. Investment in this portion of the 6.57-acre tract is already generating interest in the area and possibly attracting new investment on the corner of Broadway and Maple.”
Opportunity Zones were created as part of the federal Investing Opportunity Act of 2017, and thousands of “economically distressed” areas across the United States were designated, including one in Missoula. The goal is to create an incentive for private investors to revitalize these economically slow-growing areas.
The federal government designated Missoula’s Westside, Northside and the North Scott Street/Reserve neighborhoods as the Opportunity Zone here. It runs from the Clark Fork River to Interstate 90, essentially. In that area, developers and investors can now get large capital gains tax breaks by building or financing housing or commercial projects, as long as the money runs through an Opportunity Fund first. In this case, the Broadway Opportunity Fund will be the owner of the new building.
Buchanan said the ultimate goal for the plot of land is to develop a “technology-based campus” with cooperation from Blackfoot Communications and the Montana Department of Transportation. Both companies have offices nearby and own adjacent properties.
The new building is expected to generate almost $82,000 per year in new property taxes. That money will not go to the city’s general fund, but will instead go back into Urban Renewal District II to pay back the TIF assistance.
Buchanan said the fact that the area is located within both an Urban Renewal District, where developers can get TIF assistance for projects that benefit the public, and an Opportunity Zone means there is likely to be a lot of investment soon.
“We’re going to see some major acquisitions around there,” she said.