A local nonprofit that empowers people with disabilities has won approval to use nearly $2.5 million in Tax Increment Financing to replace an aging warehouse on Third Street with 24 units of income-restricted housing.
Opportunity Resources, Inc. has operated a wood products business, which employs individuals with disabilities, at 901 S. Third Street W. for about 30 years. They are proposing to sell and relocate the wood products business to a more appropriate location on the Northside, then they would build two different buildings at the Third Street site.
One would be a two-story, 3,350-square foot commercial space that would house the “Artists of Opportunity” initiative and host programming with local schools and community artists. The other building would be a three-story, 24-unit apartment building that would be ADA-accessible and would be income restricted for households earning between 40% and 80% of Area Median Income. It would be income-restricted for 50 years.
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Renderings show Opportunity Resources’ plans for its Third Street site.
“ORI has long recognized a lack of affordable housing options for its workforce and individuals with disabilities and would like to redevelop its Third Street property into a mixed-use facility,” explained Annette Marchesseault, a senior redevelopment project manager for the city.
The total project cost including fees, environmental remediation and all construction costs is $10,044,587.
Opportunity Resources requested the TIF assistance to help demolish the aging warehouse, clear the site, bury overhead utilities and pay for site improvements like sidewalks, asphalt, storm drains, curbs, landscaping, and electrical infrastructure. The project would also include 18,500-square feet of green space that could be developed at some point in the future.
The site design includes 37 vehicle parking spaces, including 22 spaces for the residential units, and 48 bike parking spaces. Vehicle parking will include a combination of on-street and off-street spaces.
The apartment building will include nine one-bedroom units and 15 two-bedroom, two-bathroom units. Each floor of the building will include a common area and units will include covered patios. An exterior courtyard on the ground floor will provide an additional amenity for residents. The building façade will include fiber cement, corrugated metal, and natural wood siding.
Eight of the units would be designed to accommodate tenants in wheelchairs.
The expected maximum rental rates, if rented in 2024 and accounting for an estimated monthly utility allowance of $106-$136, would range from $866-$1,420 per month. The Area Median Income will probably rise in the next few years, so the rents may change by the time the buildings are completed. According to the Missoula Organization of Realtors, the average rental rate for a one-bedroom unit in Missoula in the first quarter of 2024 was $1,171, and the average rental rate for a two-bedroom unit was $1,463.
“These are average rents for older and new units on the rental market,” Marchesseault said.
The wood products business would be sold to Tripp Lumber and relocated to the Northside neighborhood of Missoula, where it would continue to operate and employ people with disabilities. The current wood-products business operates as a tax-exempt entity, but it would be transformed into a for-profit business when it is sold.
“The new development (on Third Street) can be expected to generate more than $50,000 annually in (property) taxes,” Marchesseault explained.
She said the project is very complex.
“There are a lot of different funding sources,” she explained. “The TIF request is a key source of funding.”
“This is so impressive how many pieces you’ve pulled together,” said MRA board member Melanie Brock. “What a great project.”
The units would be rented on a first-come, first-served basis and would be available to everyone who qualifies, but Opportunity Resources managers on Monday told the MRA board they hope that some of their staff and clients could live there.
The three developers of the project are Josh Kendrick, the CEO of Opportunity Resources, Jenn Clary of Encompass Design in Missoula, and Mike Bouchee of Bouchee Development.
Kendrick said the three have a shared passion for providing safe, quality housing in the community. They have also applied for federal Low Income Housing Tax Credits, which are distributed by the state in October.
The board voted unanimously to approve the TIF request. The site sits within an Urban Renewal District, where developers may be eligible to apply for Tax Increment Financing.
David Erickson is the business reporter for the Missoulian.