Redevelopment projects boosting downtown Great Falls

Downtown Great Falls is starting to blossom, but it is nowhere near full bloom.

According to downtown advocates, the effort to revitalize downtown Great Falls for residential, commercial and professional use is making steady headway, but nowhere near done.

"It is going well, but there is still a ways to go," Great Falls Development Authority business strategist Lillian Sunwall said. "We need to celebrate our successes while sharing opportunities and tools to make other redevelopment projects happen."

"We always seem to have new projects starting up," agreed Joan Redeen, community development director of the Great Falls Downtown Improvement District. "Downtown redevelopment is constantly progressing."

Redeen is armed with statistics to document that progress:

•Around 175 building permits were obtained for downtown projects valued at $18.6 million between 2012 and 2014.

•Forty-one businesses opened or relocated during that three-year span as a result of redevelopment projects, creating or retaining 282 full- and part-time jobs. Just eight of those businesses have closed.

•The vacant upper floors of several downtown buildings have been renovated and converted to 28 condominium and 145 apartment units over the last eight years.

It's vital for downtown to have an assortment of residential, retail and office uses, Redeen and Great Falls Development Authority President Brett Doney said. Downtown residents and shop and office workers support retail stores, restaurants and bars, helping them grow and prosper so they can draw even more customers.

About 25 developers, real estate agents, property owners and other business folks took part recently in the first Downtown Developers Showcase, a walking tour of a dozen downtown buildings that either have been upgraded or are good prospects for renovation.

"We wanted to highlight our successes to potential developers in order to springboard forward with more redevelopment projects," Redeen said. "Besides looking at completed upgrades, the tour included a look at some vacant buildings and a discussion of the economic development tools that can boost such projects."

Three of the first stops involved residential development projects.

Mauri Novak, who already upgraded eight upper-end apartments in the Cory Building at 426 Central Ave., above a Subway restaurant, led observers up a steep flight of stairs at the Oxford Building at 512 and 514 Central.

It's rough looking and dimly lit upstairs, with bed frames lying in the hallway and a broken skylight above.

Novak hasn't started work converting small, former hotel rooms into what he described as 12 or 13 "very nice apartments on two floors in which people will want to live."

"If you look at the physical appearance now, it's in bad shape," he said. "But the building has a good foundation and real possibilities. This structure, like a lot of downtown buildings with vacant upper floors, has a lot of potential and is awaiting redevelopment."

"I enjoy the challenge of redevelopment projects and like to see these neat old buildings come back to life," Novak said.

"It's like putting a puzzle together; you need to find all the missing pieces," he said, adding that the GFDA has helped with advice and a supplementary loan backing up one from Stockman Bank. BID grants also helped, Novak said.

Fellow residential developer Gary Hackett, who sometimes compares redeveloping ideas over coffee with Novak, said the Margaret Building apartments across the street that he completed refurbishing late last year "were just as rough" to start as the Oxford Building floors Novak is focusing on now.

Hackett led a tour through an upper floor hallway of the Margaret at 413 and 415 Central Ave., but couldn't provide a tour of the completed apartment units because the $700- and $800-a-month units were rented out as soon as completed "to hardworking folks, such as air traffic controllers, bartenders and military members."

It cost almost $750,000, plus a lot of sweat equity, to convert 45 decrepit boarding rooms into 13 nice apartments.

"The project will pan out as long as tenants keep renting apartments," Hackett said.

Earlier, Hackett redeveloped the Hastings Building at 609 and 611 Central into upper-floor apartment units and ground-floor retail space.

Real estate broker/owner Beth Schoenen showed the group around one of 19 elegantly decorated condominium units that Coeur d'Alene, Idaho, developer Todd Stam developed in the Montana Building at 503 1st Ave. N.

The project took five years to complete, starting about the time the recession hit Great Falls, she said. But the developer decided, "You can't say, 'Whoa,' in a mudhole," and instead, successfully persisted.

"I'd definitely urge other people to consider developing downtown because there are a lot of solid, historic buildings down here," Schoenen said. But she cautioned they might need "a big pocketbook and plenty of patience," because such projects can be more expensive than projected, slow to get off the ground and sometime require backup contingencies to meet city rules and grant and loan requirements.

Seth Swingley, co-owner of the Mighty Mo Brewery, which opened in late 2013 at 412 Central Ave., praised the GFDA and its staff for business plan coaching and a backup, gap loan.

It also really helped that the property already was redeveloped by a previous owner, architect Bill Stuff, he said.

"We just had to chop up half the building to make room for the brewery, which took six months and was quite expensive," he said. "I can't imagine a retail business going into an older building and redeveloping it from scratch."

Swingley said he and his partner always leaned toward establishing their microbrewery downtown and found a good landlord to work with, Montana Landworks.

"A lot of our customers work downtown or like to shop and spend time here," he said. "Our target market is people who support locally owned businesses."

Dennis Peterson, development vice president for Easter Seals-Goodwill, gave a tour of the nonprofit's large facility at 425 1st Ave. N. The former First Interstate Bank building was restored and converted to a regional headquarters office and program training space with the help of a federal brownfields environmental cleanup grant.

The building has 90 employees, with programs that help 2,000 special-needs clients learn life and work skills.

Easter Seals long considered raising money for a new building, but ultimately decided to rebuild its eastside facility and develop the downtown building, at considerably less cost than new construction on vacant land, Peterson said.

"We could remodel the existing downtown building to fit our needs," he said, adding that the central downtown location was conveniently close to where many program participants live.

NeighborWorks Director Sheila Rice pointed out that businesses such as First Interstate that sell buildings at a discount to nonprofit organizations can get a sizable charitable tax deduction.

"They don't get the full price of the building, but get some good compensation," she said.

The showcase touring group also discussed what Redeen called "two buildings that need special attention."

A building at 511 Central Ave. with a shiny black exterior is owned by an elderly Oregon man, carved into several smaller spaces and has been vacant for two years, Redeen said. That's lucky for one reason, she said, because no occupants were hurt when a drunken driver plowed his vehicle into the building last autumn.

Real estate agent Kelley Arnold serves as property manager for the Strain Building at 410 Central Ave. that once housed the Sears department store. He gave a tour of the large, potentially promising space.

The first two floors of the six-story building are ripe for development, with 40,000 square feet apiece, he said, while all but four of the 50 office spaces on the upper floors are occupied.

The first floor, last used by City Mortgage three years ago, is divided into cubicles and would make a great call center, Arnold said. The second floor was last occupied two years ago by Cable Technology, which did light manufacturing. It's wide open for development.

Another selling point, besides the building's large space, is the built-in parking garage in the back that has 150 unused spaces.

Arnold said he's had some preliminary interest from an out-of-state development company that might use part of the building for a light-manufacturing company that could employ 50 workers.

The Church, Harris, Johnson & Williams law firm is the latest professional firm to move into a historic downtown building that is redeveloped. Office manager Scott Rubino proudly showed the group around the building at 114 3rd St. S. with the aging white owl cigar promotion painted on the outside.

The firm was looking for more space as its lease in a downtown bank building was expiring, he said. The partners looked at 14 properties and considered constructing a new building, but kept coming back to the older building because it was the right size, between courthouses and had the right historic feel, Rubino said.

"Interest rates were good, so we pulled the trigger and bought it," he said. "But it was in pretty tough shape and required a vision of what to do and a lot of work."

The first floor was renovated earlier by an insurance company, so it primarily needed a conference room and an elevator, Rubino said. "But upstairs was nothing but junk, with floorboards giving way and the ceiling falling in, creating a leaky roof and a home for pigeons."

The law firm spent $1.6 million in buying and renovating the building, aided greatly by a $300,000 federal tax credit for restoring a building of historic value.

"It was quite a process to apply for the tax credit, with an application form and project description of more than 160 pages that might scare off some potential developers," he said.

Through the historic review process, the firm was able to restore a long stairway that had been walled off but was required to place upper-floor offices on the opposite wall they'd planned in order to be historically accurate.

Rubino said firm members were tickled that contractors could reuse and refinish much of the original floorboards, window trim and baseboard — although workers had to scrape off four layers of paint from the baseboard.

One partner made a great online find, a set of historic doors with upper transom windows that were being discarded from a New Hampshire parochial school. They look great on the doorways of the second floor offices that look like they belong in offices from the early 20th century.

"Everybody on the staff really enjoys working in these historic, but modern surroundings," Rubino said.

Partners in the Downtown Developers Showcase were the Great Falls Development Authority, the Business Improvement District, NeighborWorks Great Falls and Great Falls Association of Realtors.

Sponsors were pleased with the interest the event sparked and discussed repeating the walking tour, showcasing different projects for other interested parties.