Solution for Longstanding Downtown Vacancy Worth the Wait

After standing vacant for nearly a decade, the final lot leveled by a 2009 natural gas explosion is bringing new community benefits to downtown Bozeman. The new Osborne Building at 233 E. Main St. will be an innovative reflection of Bozeman’s modern economy, with restaurant space, rental office space for nonprofits that serve low-income communities, and flexible office space for startups and small businesses. The concept for the new 33,000-square-foot building was developed by local businessmen Bryan Klein, Casey Durham, Chad Bottcher and Jamie Bottcher, who wanted to find a solution for the lot that would not only address a longstanding vacancy but also help meet community needs. The building is designed by Locati Architects and construction is scheduled to begin in September.

The new building is taking shape after several attempts by investors to develop the space since 2009. Even with property in Gallatin County being developed at a rapid rate in recent years, this lot proved difficult.

“We got to roll up our sleeves and address some unique challenges,” said Klein. “It can be tricky to build on a historic site, and there are existing buildings on both sides, so you have to make your project fit in that tight square. In addressing these challenges, it was also important to us to design a solution that provides community benefits and good jobs.”

“We’ve tried to be mindful of making the building fit with the rest of downtown and, most importantly, repair the disconnect you feel when you see the vacant lot on Main Street. It feels like we’re helping the community get past the devastation from the explosion 10 years ago,” said Durham.

To address financing challenges, Klein and Durham approached the nonprofit financing company MoFi to discuss solutions.

“This project definitely would not be happening without the help of New Markets Tax Credits, and MoFi and First Security Bank were instrumental in that,” said Klein.

The New Market Tax Credit Program is an innovative federal program that helps incentivize and finance economic development projects in low-income census tracts around the country. MoFi works with investors to turn the credits into cash, and then uses that cash to fund catalytic development projects in Montana, Idaho and Wyoming.

“The new Osborne Building will complete Bozeman’s Main Street, help create jobs and address the shortage of commercial lease space downtown,” said Dave Glaser, MoFi President. “Since 2009, we’ve used New Markets Tax Credit financing to catalyze over $525 million in investments across Montana, Idaho and Wyoming. It’s been 10 years in the making, but this building is the right solution for Bozeman’s changing economy. It’s been worth the wait.”

The NMTC financing from MoFi came with some exciting community benefits. First and foremost, the project will create over 150 stable, quality jobs that are accessible to low-income people. The third floor will be leased to nonprofit organizations that have a primary mission of serving low-income communities and will be leased at 50% of the market rate. The fourth floor’s flexible office space, with an emphasis on creative collaboration and business incubation, will provide room for Bozeman’s growing entrepreneurial and startup economy.

U.S. Sens. Jon Tester and Steve Daines have been supportive of the NMTC Program’s ability to leverage federal dollars to support projects that are identified and completed at the local level. Both senators are excited to see the program’s latest investment in Montana.

“New Markets Tax Credits provide Montanans with the opportunity to redevelop buildings to best fit the needs of the community,” Tester said. “This investment will create jobs in downtown Bozeman and increase opportunities for local businesses. I will continue to strongly support New Markets Tax Credits so that Montanans can continue to use these job-creating tools to push our communities forward.”

“The New Markets Tax Credit is important to creating Montana jobs,” Daines said. “The Osborne Building will be a wonderful addition to downtown Bozeman, and I’m glad to see this project go forward.”

Additional examples of businesses funded with New Markets financing include the new Missoula Food Bank, the Great Falls Rescue Mission’s Cameron Family Center, the Copper King Hotel in Butte, the tribal government building on the Fort Peck Reservation in Poplar, and the Universal Athletic Service headquarters and the Town and Country Grocery on 11th Avenue in Bozeman.

High-resolution architectural renderings of the new Osborne Building are available for download here, courtesy of Blackridge Companies.

Products Used: New Markets Tax Credits