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Charles McDermid, Jennie Klann

Charles McDermid and Jennie Klann stand in the atrium of the Holiday Inn Missoula Downtown in 2016. 

To: The mayor and members of the Missoula City Council.

Re: AC by Marriott Missoula; request for tax increment funding.

When Andy Holloran presented his plan for the Merc — a plan to deconstruct the Mercantile building and develop a first-class hotel on that site — I was the first one to stand up at the Wilma Theatre and publicly support his plan, including the use of tax incentive financing (TIF) to facilitate the project. I thought it would be good for Missoula then, and I still think so today.

Now I am eager to see three classy new restaurants open at the Residence Inn this summer which will add vitality and energy to downtown Missoula.

I am, however, just as vigorously opposed to using any TIF to help develop the AC by Marriott in downtown Missoula — or, for that matter, any other new hotel in town.

Of course, developers and owners have every right to build new hotels as they see fit, but the government should not give them an unfair advantage by providing an uneven playing field vis-à-vis current hotels and their owners.

Currently there are 16 lodging properties on Broadway alone, including such major hotels as the Comfort Inn, Red Lion Inn and Broadway Inn. Many of these properties are locally owned; they provide stable, long-term employment for local residents; their cumulative property taxes are well into seven figures. Their continued success is important to the city, but some are already falling below the national average of 66% annualized occupancy. Their occupancy rates and room rates will be further damaged by an oversupply of rooms in their market — and eventually they will become blighted.

Seasoned hoteliers know it’s a myth that “if you build it, they will come." Government subsidies for new hotels may increase room supply, but they do little to increase room demand.

Requests and recommendations:

1. Please do not provide TIF for the AC by Marriott or for the boutique hotel planned for the Days Inn site.

2. Please authorize a traffic study for the intersection of Pattee and Front streets which, hopefully, would result in a traffic signal to provide safety and control for all the additional traffic being generated by new hotel rooms and new restaurants.

3. Please provide an updated analysis of the parking available for employees, customers and guests near the Pattee/Front intersection — including the Millennium, First Interstate Bank, ROAM, Residence Inn, AC by Marriott, boutique hotel, Conflux, and the nine food and beverage establishments along Front Street — six now open for business and three more scheduled to open soon.

Thank you.

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Charles D. McDermid owns the Holiday Inn in downtown Missoula.

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