by Travis Mateer
Otis LLC is looking to develop a 39-unit apartment building on the corner of Scott and Otis streets. The project was intended to provide housing deemed affordable with a target hitting 68% of the area median income.
Project manager Adam Hertz said it’s a well-designed and needed project but was now on the verge of becoming nonviable due to escalating costs and unexpected delays in permitting.
“It’s really challenging to hold those rents and make this project viable with such drastic increases in construction costs, in addition to an interest-rate environment that hasn’t been friendly to us. This project is on the verge of viability.”
An even bigger cringe-factor for this former critic of TIF handouts is the fact this puppy of a project, Otis LLC, already got a nice chunck of TIF change last year. And now they want more.
Last August, MRA approved Otis LLC’s request for funding in the amount of $315,000 to aid in the construction of public infrastructure, including water and sewer extensions, sidewalks and other necessities.
But on Thursday, the developer sought an additional $275,000 to cover rising market costs. Transportation costs for the project have increased 30%, PVC needed for plumbing is hard to obtain, and contractors are busy elsewhere in the city and hard to get bids from, according to Kody Swartz of Woith Engineering.
He added that the lift station that serves the area doesn’t have the capacity to support the Otis apartment project. That wasn’t known until the permitting process began, and it would add another $45,000 to the project.
“I think it was an oversight by city engineering due to the capacity caused by the Vallagio, which is a great project and a project I support, but not a project we want to pay upgrades for,” Hertz said. “That’s a big elephant in the entire area and all of the projects going on in the area.”
Great attempt to scapegoat the city, but the reality is EVERYONE is dealing with shit costing more money. The amount of money I’m burning through in just gas alone really pisses me off, but I’m not expecting other people to pay my gas bill for me.
This isn’t just another development project looking for a TIF handout, it’s a glaring example of where the rubber meets the road when it comes to supposed principles. I guess being a fiscal conservative taking a stand against an out-of-control TIF-sniffing regime just evaporates when one’s own project is facing “viability” problems.
Speaking of rubber meeting roads, the Missoula Redevelopment Agency is throwing more money at its master-plan obsession to change some one way roads downtown into TWO WAY roads. Isn’t that exciting? (emphasis mine)
A long-planned but highly complex effort to convert two of Missoula’s major downtown streets from one-way to two-way traffic got a big boost in public funding on Thursday.
The Missoula Redevelopment Agency’s board of commissioners voted unanimously to commit $233,563 in Tax Increment Financing for design work to figure out how to convert Front and Main streets to two-way traffic. Essentially, the money is for a “scope change and amendment” to the original contract the city has signed with a local engineering firm.
The entire project is estimated to cost between $8 million and $9 million, and some of the planning funds will come from three Urban Renewal Districts that encompass portions of the downtown area. The agency has the discretion to use new property taxes in those districts generated by new development. To pay for the entire project, the city will have to use a combination of sources, including federal infrastructure funds. No exact timeline on the project is set in place yet because the designs aren’t completed.
Yes, after TWO disbursements of public money, this design firm is, like, you know, REALLY close to completing the design. That’s pretty damn funny, considering the DENIAL the Otis puppy project received.
I wonder why some projects can get MORE money, but other projects can’t? Hmmm. That sounds like a Monday kind of problem.
Have a great weekend!