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Fourth Street East development

This Google Maps photo from 2015 shows the houses built circa 1908 and 1910 that are contributors to the 2000 University Area Historic District. Cole Berquist is proposing a 40-48 condominium project that will replace the six houses 

48-unit riverfront condo project near the Hip Strip moved closer to reality this week, with the Missoula City-County Planning Board signaling approval of the project despite numerous concerns from neighbors.

The high-end condo development close to downtown would see a series of century-old houses that were built for Milwaukee Railroad workers, which one resident described to the planning board as affordable housing, removed in favor of condos potentially retailing into the high six figures. The project, located on South Fourth Street East, a block behind Bridge Pizza, includes plans for a 75-stall underground parking garage for the condos.

Tuesday, the planning board voted in favor of the rezone 4-2. The board serves in an advisory capacity to the Missoula City Council, and the council's Land Use and Planning committee will discuss the proposal on Dec. 11. A rezone would allow the housing density to rise from the current limit of 18 dwelling units to 48 dwelling units and be built potentially up to six stories tall.

The planning board heard Tuesday from the developers and neighbors of the project. 

Nick Kaufman, an engineer representing WGM Group, toned down what his colleague Jeff Smith had presented to the Public Works committee in November. Smith had presented the condos as aimed at “empty nesters,” explicitly noting there was essentially no chance of having affordable units due to a number of high-cost building factors. Kaufman told the board the condos would be for “a diverse cross-section of the population." Neither presentation included estimated condo costs.

Neighbors to the project were less concerned about the increasing density as they were about the loss of affordable housing and historic character, speculating that the three single-family brick houses in the middle of the property were likely the only affordable rental houses in the entire University District.

Rena Hansen, who co-owns and works at the Ditchstone Building, a commercial building next to the proposed condos, told the board she couldn’t square Missoula’s stated commitment to affordable housing with a decision allowing the project, and pointed out how the development team’s framing of the project had shifted following public backlash.

“At the previous meeting it was, 'We’re looking for empty-nesters,'” Hansen said. “This price range is somewhere north of $500,000 to $1 million. That is directly against the growth policy and the intent of the growth policy.”

Missoula’s growth policy, adopted in November 2015, lays out standards for how to intentionally grow Missoula in an ideal way, which includes adding higher density housing near the downtown urban core. But other affordable housing policies and city-adopted codes prioritize preserving existing affordable housing whenever possible.

Cole Bergquist, the owner of the property seeking the rezone to build the condos, said he didn’t know where Hansen would have come up with the $500,000 to $1 million price range for the condos, saying no pricing was finalized or publicized.

“Could be speculation due to the location being incredibly desirable,” Bergquist said in a text message. “I’d say it’s the best location in all of Missoula.” 

He said the entry level condos would be well below the $500,000 to $1 million range, but he did not elaborate on the rest of the project.

The buildings aren’t protected by the National Historic Preservation Act of 1966 because they aren’t individually listed, according to Emy Scherrer, Missoula’s historic preservation officer, though they are considered contributing structures to the University Neighborhood Historic District.

Meghan Biggs, who owns a home and lives next to the project on Ronald Avenue, said the development wouldn't add to the "richness" of the neighborhood, as suggested by city staff supporting the project, but that it would add to the "rich," noting only wealthy people stood to benefit from it.

"I get that Missoula wants to grow and be better, but I feel like we’re only getting better for the wealthy," Biggs said. "I have three different jobs, plus I rent out the better part of my house and live in the basement to be able to afford to live in this neighborhood. And that's not right."

Kaufman said the developers were exploring a few options for moving the historic buildings offsite intact, with two entities reaching out to them about doing it, or to incorporate the bricks or other material from the demolition into the new condos if no one can move the houses.

Eran Pehan, director of the city's Housing and Community Development Office, wrote in favor of the project despite the loss of housing that the public has been calling affordable.

"The primary benefit we see is the number of units and the base housing supply that will come from that site," Pehan said Wednesday. "The nine units there are often referred to as affordable, but really they’re market rate. They’re not subsidized or rent-controlled, and not affordable by any specific definition. We do see some housing rented on the lower end of the market rate when it is older or in disrepair, and I think some of these fit that category."

Pehan said that with 25% of the 48 new units dedicated as rentals as proposed, rather than owned condos, that would represent an increase in the number of market-rate rental units even if the houses are demolished. She noted that housing is needed at all income levels as people move to Missoula looking for different options, and as any locals change housing types, they leave open the previous, often more affordable home they were in before.

Peter Bensen, who with board member Dudley Improta ultimately voted against the rezone, expressed skepticism of how beneficial adding high-priced condos to the market would really be for the housing market as a whole.

“I keep trying to figure out who benefits from this. And I think too few Missoulians benefit from this,” Bensen said. “I think this complex, if built as intended, will benefit wealthy people from out-of-state and AirBnB-ers who use the facility when the owners are not home. There may well be people who live in Montana who buy these places and then provide their homes for sale. But, I just don’t think that the final equation includes that much added value for Missoulians or Montanans.”

The council will hold a public hearing and vote on both the rezone and a right-of-way vacation for the project on Dec. 16.

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