NeighborWorks Great Falls, BID working to purchase and redevelop Rocky Mountain Building
The Rocky Mountain Building may be getting new life soon.
The Great Falls Business Improvement District approved a letter of intent to purchase the building that has been vacant since a 2009 fire.
If the BID is able to purchase the building, once the sale is final, they’ll turn around and give it to NeighborWorks Great Falls for $200,000.
NWGF is applying for a Federal Home Loan Bank affordable housing program grant that provides $750,000 for construction.
They’ll find out in December if they’ve been approved for the grant.
The BID’s letter of intent includes conditions, including that the loan approval.
The loan program gives extra points for a governmental agency purchasing and gifting the property to the applicant.
NWGF is proposing a $14.7 million restoration of the building with commercial and retail space on the lower and ground levels, with 37-52 apartments on floors 2-6, according to Neil Fortier of NWGF.
“We’ve become a kind of catalyst for some development, particularly the removal of blight,” said Sherrie Arey, NWGF executive director. “We’re looking at it [Rocky Mountain Building] as the removal of blight, economic development and the revitalization of downtown. That’s part of our mission. That building could probably bring a lot of people willing to invest.”
Fortier said NWGF is offering $400,000 for the 53,000 square foot building at the corner of Central Avenue and 6th Street.
The building is currently listed on LoopNet for $475,000.
The current property owners are three years behind on property taxes and a private firm has picked up their lien so that will need to be resolved.
Fortier said the State Historic Preservation Office has already toured the building and is working with the developers to submit applications through their office and preserve the facade of the building.
Fortier said they are working with Homeward out of Missoula as their partner in the project.
The group is pursuing funding from EPA Brownfields program, the Great Falls Development Authority’s remediation program, tax increment financing funds, Community Development Block Grant funds, energy credits, historic tax credits, new market tax credits and traditional loans.
The funding sources require that 20 percent of the units be restricted at 80 percent of the area median income, Fortier said, but those rates are higher than what NWGF is currently considering so they meet the requirement.
Fortier said that right now, they’re planning $995 per month for the one-bedroom units and $1,095 for the 2-bedroom units.
Garry Hackett, a BID board member who has redeveloped several downtown properties into apartments, told the NWGF team to be prepared for lower rental income based on those rates.
“I know the market rent in this area pretty well and that is way high,” he said.
Fortier said their estimates show about $600,000 in annual revenue from residential and commerical rents.
Hackett said it was more realistic to expect about $400,000 and asked if they could make loan payments and cover expenses at that level. Fortier said they could.
Hackett was otherwise supportive of the project and voted to approve the letter of intent and also suggested that the BID move into office space in the Rocky Mountain Building once the commercial space is available on the lower levels.
“That is the biggest eye sore the city has had for years,” Hackett said.
Other BID board members expressed some concern with supporting the project if it fell through, as many have before with this building, and how that might affect perception of the BID as it pursues renewal. The BID is funded by an assessment that property owners in the district vote to impose on themselves.
With conditions on the approval of the purchase, BID members voted unanimously to support the project.
Officer Adam Hunt of the Great Falls Police Department said during the BID meeting that the corner of Central and 6th has been a hotspot for police calls and asked who would take over management of the building.
Fortier said NWGF is working with Real Estate Management Specialists out of Kalispell and they’d conduct background and credit checks and there would be income requirements.
Some parking is available in the lower level of the building and NWGF is asking the city to lease 50 spots in the city-owned lot behind the building. The city has not agreed to that yet nor has an official request been made through the city process as a lease would require City Commission approval.
Some have suggested that the city demolish the building, but that requires a public process to deem a property as a public nuisance. To start that process, official complaints have to be made to the city for staff to pursue action. No official complaints have been made to the city about the Rocky Mountain Building, according to Craig Raymond.
The abatement cost to the city would likely be substantial and that cost would be paid with taxpayer dollars. Raymond said the city’s hazard abatement fund currently has about $50,000 and that amount wouldn’t be enough to abate the Rocky Mountain Building.
Raymond said that no applications from the current owners were ever submitted to the city for review for renovation.