The Orange Street Inn has been sold to Mike Ellis and a group of investment partners who plan to convert the 80-room building into a 42-unit condominium.

Ellis, who owns the Missoula Osprey, closed this week on the deal - which, he emphasized, does not involve the Osprey in any way - but said business at the Inn will continue as usual until mid-October. Then, following city approval, the 27-year-old building at 801 N. Orange St. will begin its transformation into a “contemporary, classy” condo building.

Ellis envisions a secure building with covered parking and storage units, balconies and patios. The building's structure will be left intact and will not be enlarged, he promised.

“There will be no impacts at all on the site,” Ellis said. “But it won't look like it does now. It won't look or feel like a hotel - inside or outside.”

The building will be filled with studio and one-bedroom units, with perhaps a two-bedroom unit or two if plans call for them. It's really too early to tell - or to price them, Ellis said.

However, he said he expects them to fall in the “mid-$100,000 range.” There's currently very little housing available in Missoula in that price range, he noted.

“I like to think of it as obtainable housing,” he said.

Buyers will get a high-end, unique dwelling with apartment-level specifications and myriad amenities, he said. There will be a fitness center, and, perhaps most importantly, an elevator for those who can't manage stairs.

That's important because Ellis wants the condos to appeal to a broad range of people: everyone from young, single people buying a first home to retirees who don't want the hassle of maintaining a yard.

The remodel is meant to enhance “a living community,” he said.

“I'm a real advocate of downtown,” he explained. “As I see it right now, the vitality of downtown depends on the ability of people to live downtown 24 hours a day.”

However, there's a severe shortage of moderately priced housing in the area, a fact he'd been discussing with others for some time.

“And at first it was just a discussion,” he said, smiling.

Then, a local real estate agent told him that the Inn had been listed. Built in 1979, it's an exceptionally well-maintained structure in a vital community area, Ellis said.

He rounded up a few investment partners who also believe in strengthening the community through thoughtful development, and purchased the property for a little more than $2 million, according to another source.

The neighborhood between the Interstate 90 exit and the railroad overpass spanning Orange Street is a key area, Ellis added.

“It's the gateway to the city center,” he said. “That stretch is very important in many ways, especially to visitors.”

Not only is it a visual entry point to the city, it's also close to the interstate, to downtown and to St. Patrick Hospital - which all make the area attractive to potential buyers.

Further, Ellis expects the vacant commercial space on the other side of North Second Street, formerly a restaurant called Friends, to be filled soon with “something great” that will add to the area's convenience shopping.

“I think that it's going to be a great project for Missoula,” said Kory Mytty, the building's listing agent at Windermere Real Estate. “That seems like a great fit for that part of town.”

Orange Street Inn has been on the market since January, and at least four different parties expressed interest in it, he said.

Its former owners are a group of more than 20 investment partners, Mytty explained.

“They're pretty much the original partners since they built the building in 1979,” he said. “Over the years they've seen ups and they've seen downs, but when it came time they just decided to sell.”

Missoula has recently been experiencing something of a condo boom, with a lot of attention given to “conversion” projects, said several local real estate agents.

In fact, more condos already sold this year than in all of last year, according to the Missoula Organization of Realtors.

As of September, 166 condo units in the Missoula urban area have been sold. Of those, 49 were new construction. Last year, 138 condos sold, 29 of which were new.

Contrast that to 2002, when the condo craze first hit Missoula. That year, 74 residential condos sold, 13 of which were new. Further, the median price for a condo that year was $111,250.

Three years later, that price had increased to $124,000 - still attractively affordable in today's market of $200,000-plus houses, said Judy Wahlberg, MOR president and owner of RE/MAX Realty Consultants.

“I think they're filling a niche in our market that's been desperately needed for years,” she said.

“This is the craze across the country,” said Vickie Honzel, a Lambros agent since 2000.

Honzel is currently involved in a Human Resource Council project to convert 13 duplexes into 26 single-family townhomes, and starting the first of October, she and her husband will take over marketing for the Cottonwood condos in lower Grant Creek.

The Cottonwood condos were created from converting an apartment building property into more than 100 condo units averaging about $174,000 each, Honzel said. All but 49 of the units have sold, she said.

“I'm very interested to see what will what happen with the Orange Street Inn,” Honzel added. “It's in a good location.”

Missoula doesn't see many big projects like the Cottonwood condos, said Karen Jones, the Lambros Realtor who will be handing over the Cottonwood project to Honzel.

A real estate agent for 26 years, Jones has seen the number of condos in town increase as a consequence of rising property values and consumer demand.

Condos are in demand in a big way, she said. Buyers include everyone from college students to single parents, frequent travelers to retired couples, she explained. Some condo buyers own another home, and don't want to have to care for two exteriors. In fact, many condo buyers are people who don't want to take care of yards anymore.

Ellis plans to submit his vision for the Orange Street Inn to the city of Missoula design review board in October.

“As soon as we have our plans approved we would start (converting),” he said. “The hotel will continue operating until mid-October.”

Employees at the Inn have been told of the sale and impending changes, which Ellis hopes to have completed by early next year.

“What I don't want it to become is something lesser than it is now,” he said. “I want it to be something better than it is now.”

Source:
http://www.missoulian.com/articles/.../top/news01.txt

Mike Ellis, with the help of investors, recently bought the Orange Street Inn and plans to convert the 80-room motel to 42 condominium units, on approval of the city of Missoula.
Photo by LINDA THOMPSON/Missoulian

Attached Images