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MISSOULA — The former Kmart building on Brooks Street will be razed next month to make room for at least two high-profile national tenants – Kohl’s and Cabela’s – as part of a $24.5 million retail construction project.

Cabela’s, an outdoors gear store, and Kohl’s, a department store, will move onto the site after the vacant 115,000-square-foot building is demolished.

The new tenants were announced in the project description portion of a memo presented to the Missoula Redevelopment Agency board May 15 on behalf of the site’s owner, Woodbury Corp.

Demolition is set to begin June 1, Woodbury project manager Darrin Smith said Monday.

The old Kmart building will be replaced by two new structures that will house a 41,239-square-foot Cabela’s Outpost and a 55,410-square-foot Kohl’s Department Store.

The retail complex has been dubbed South Crossing, and also will include three smaller “outparcel” buildings at the north end of the parking lot abutting Brooks Street. The building immediately to the west of the Kmart building (formerly Montana Homefitters) will undergo a complete renovation and be broken into two smaller spaces, the memo said.

“It’s going to be a major facelift on the whole corner, it is such a visible corner in Missoula. It’s so dated. It’s real tired looking right now,” Smith said.

Smith wouldn’t confirm names of tenants listed in the project description memo, saying only that there are “a few national tenants lined up and we’re working on a few options.”

But Woodbury outlined the redevelopment plan and included the major tenants in the memo that helped it earn MRA board approval for $565,543 worth of tax increment expenditure funds to pay for demolition of the building and the parking lot.

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The site is part of the MRA’s Urban Renewal District III.

Woodbury’s redevelopment plan includes important elements, such as major landscaping and the addition of the smaller buildings near Brooks Street, that are crucial to revitalizing the area, according to the urban renewal plan, said Ellen Buchanan, MRA director.

MRA representatives approached Woodbury about working with the agency on a redevelopment plan after the company submitted initial project plans to the city, Buchanan said.

Woodbury representatives worked with city officials and the MRA for nearly a year developing the current plan. The work produced “a much better project than originally presented,” the public benefit portion of the memo to MRA said.

The project description calls for 217 trees to be planted across the property and estimates 439 jobs could be created. Sidewalks will be installed along Dore Lane and improved boulevard sidewalks will be put along Brooks Street.

The three outparcel buildings will help improve the aesthetics of the site, Buchanan said.

“What we’re trying to do is create more of an urban kind of design fabric, where people will actually walk and ride their bikes,” Buchanan said. “It’s going to completely transform the lot.”

MRA may approve more tax increment funds for parts of the project as it moves forward. The agency could have as much as $2.5 million of uncommitted funds in Urban Renewal District III in fiscal year 2014, the memo said.

For example, MRA could help fund a traffic light at the corner of Dore Lane and Brooks Street if it’s approved in the future. Woodbury has hired WGM Group to study a recent Montana Department of Transportation safety analysis of the intersection, which deemed a light unnecessary.

Increased traffic from the new stores could warrant a light, the memo said.

In April, the city board of adjustments approved a parking plan that includes 4.9 parking spots per 1,000 square feet, instead of the standard 4.3 spots per 1,000 square feet.

The two existing buildings at the northeast corner of the lot, which house the Best Bet Casino and a suite of other small businesses, still have leases and will remain intact for now, the memo said.

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However, progress to redevelop the Kmart site has left the future of Black Horse Coffee Brewers drive-through stand in question.

Owner Denise Spooner leases parking lot space for her business. The lease was not renewed in April, causing the shop to shut down for 2 1/2 weeks until Spooner was able to renegotiate a month-to-month lease with Woodbury.

Spooner doesn’t know how long she’ll be allowed to continue operating at her current location, 3628 Brooks St.

“They said they had a use for my spot. I’m not positive what for, which is unfortunate,” she said.

Despite the uncertainty, Spooner is excited about the traffic a store like Kohl’s could bring.

“It’d be a win-win for both of us to stay. I just don’t know the particulars,” she said. “I guess we’ll see. I hope I can get a little more information from them.”

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Woodbury has secured financing for the project through Wells Fargo Bank and plans to have site work finished in 2013. Opportunities to lease space in the buildings there could extend into 2014, Smith said.

“We’ve had a ton of interest from the tenant standpoint,” Smith said.

Salt Lake City-based Woodbury owns more than 11 million square feet of retail, office, hotel and industrial space in seven Western states.

The Missoula Kmart opened in 1973, securing a lease through Woodbury in its then-new 115,000-square-foot building. Woodbury bought out Kmart’s lease last year and has been working on plans to redevelop the property since.

Company president Randy Woodbury said in July 2012 there was great interest in the space even before Kmart closed.

In December 2012, Woodbury terminated a lease with Montana Homefitters furniture store that occupied the building west of Kmart’s location, leaving the major buildings on the site vacant.

Woodbury’s plans to refresh and reinhabit the site is exciting for the entire Brooks Street corridor, Buchanan said.

“This is huge step forward and a model for the city,” she said. “It’s just a completely different way of developing. That’s been the goal on Brooks since the urban renewal district was created.”

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