First construction work begins in Helena's Capital Hill Mall site redevelopment

Posted at 2:17 PM, Aug 24, 2020
and last updated 2020-08-24 20:40:53-04

The former site of Helena’s Capital Hill Mall has sat empty for more than a year. Now, crews are on site with heavy equipment, marking the first major progress toward redeveloping the 13-acre site.

Last week, they began construction on two new roads that will cross the west end of the mall site. Sanders Street will be extended through the site, and the new Vandelay Place will be built connecting Sanders and Roberts Streets.

“We just wanted connectivity between the two one-way streets, better traffic flow for folks that’ll be building buildings in the future,” said Mark Esponda, a partner with D&M Development, which is leading the redevelopment effort.

Esponda said they will be installing a water main and the city of Helena will be working on a sewer project, before the new streets are paved and curbs and gutters installed. He said the streets could be completed and opened to the public around mid-October.

D&M, led by Esponda and Helena developer Dick Anderson, is planning to turn the mall site into the “Capital Hill Town Center,” a mixed-use development.

“We have several different parties interested in purchasing lots, building buildings,” said Esponda. “We probably around four to five buildings that will start next year – spring, summer time frame.”

Esponda said they are not yet ready to confirm any of the new tenants, but he has previously said they have looked at including apartments on the east end and businesses – including restaurants and possibly a hotel – to the west. He said they expect to have the entire site built out in the next two to three years.

“I think the development projects we have going on right now will help revitalize this area,” Esponda said. “With this being the main entry corridor into Helena, I think this is the first step in expanding some more development in the area.”

The city of Helena is also taking steps to prepare for new development around the mall site. On Monday night, the Helena City Commission is voting on a “statement of blight” for the area – the first step toward creating an urban renewal district.

“The statement of blight tells the city, basically, that there are conditions that exist in this general area that would warrant the creation of an urban renewal district,” said Sharon Haugen, Helena’s community development director.

The proposed district would include the mall site and several blocks on all sides of it. It would run generally from Butte Avenue in the north to 9th Avenue in the south, and from Montana Avenue in the west to Washington Street in the east. It would also include the Helena Housing Authority’s Stewart Homes, north of Butte Avenue.

If the commission votes to move forward with creating a URD, the city will put together an urban renewal plan. Haugen said they would likely take final action on the district in October.

Once the district is created, the city could use tax increment financing – which sets aside some of the tax revenue collected within a URD for redevelopment, if property values in the district go up. Haugen said creating the district now would mean a large increment once the mall site is fully developed.

“What we’re also hoping is, because people will be seeing that investment, they’ll also be looking at some of those other parts and looking to reinvest in some of those underutilized properties or maybe do some sprucing up or maybe reinvent some of those sites,” she said.