Labor of love: McDermid’s $10M Holiday Inn renovation could end with rooftop bar
When Charles McDermid arrived in the lobby at the Holiday Inn in downtown Missoula, he came well rested and casually dressed, and paid little mind to the flurry of construction activity swirling around him.
Two years after purchasing the hotel, McDermid is now midway through a $10 million remodel that’s already seen changes to the lobby and rooms on the fourth floor. When the project is finished some time in the next two years, the 34-year-old structure will bear little resemblance to its former self.
“I’d been watching this hotel for some time,” he said. “It was in escrow because the absentee owners had milked it dry for 10 years, and it had fallen into disrepair. It wasn’t worth what a normal Holiday Inn might be worth, especially given the advantages of its location, its parking lot and its proximity to the river.”
Despite the building’s needs, primarily surrounding infrastructure and cosmetics, it was exactly what McDermid had been looking for. When the property fell out of escrow, he called the owners and stated his interest in buying it.
They named a price and he made the purchase.
“The land was valuable, but the building was not,” he said. “We had to make the building valuable.”
While much of the work has been reserved for unseen infrastructure needs, such as new boilers and life-safety upgrades, visitors to the downtown property have observed a handful of welcome cosmetic changes.
The pool and fitness room are new, and the lobby has undergone a sleek renovation, though a portion of it remains under wraps, precisely where the new breakfast bar will sit, followed in the evening by a cocktail hour.
The 77 rooms on the fourth floor have also been remodeled, giving them a five-star feel capable of competing with the Ritz Carlton.
“I dare say the rooms we have on the fourth floor are slightly better than Intercontinental Hotels,” he said. “I just stayed at the Four Seasons in Las Vegas, and I know it’s better than that. We’re calling that the executive floor.”
This November, McDermid said, the work will move to rooms on the second floor, followed a year later by renovations to the third floor. Seven other projects are also on tap for next year, including an exterior renovation and other upgrades.
Plans to improve the park area south of the hotel by the river are in the works, and the final project, he said, may include a rooftop bar and grill, though that will depend on financing.
“My passive investors call it Charlie’s Folly,” said McDermid. “I’m determined to build a rooftop restaurant, bar and pizza oven on top of the hotel with a commanding view of the river. It will be the last of the projects, and it would give us a competitive edge with the other hotels.”
McDermid, who once served as a professor of psychology, is now in what he describes as his third career. He retired in 1977 before entering the hotel business and owns a number of properties in Colorado, Nebraska and Wyoming, as well as the Hampton Inn in Helena and the La Quinta Inn in Bozeman.
But it’s the downtown Missoula property that he refers to as his baby – his pet project. The facility originally opened in 1984 as a Sheraton, though it’s now part of the International Hotel Group, which includes such brands as the Holiday Inn, Staybridge Suites and Crown Plaza.
“Missoula itself is coming alive and downtown is good and it’s getting better,” McDermid said. “I supported the Residence Inn (Mercantile), and I’m glad to see the (Roam) student housing being built, the new pub and brewery up the street (Confluence) and the library. Things are going well for downtown Missoula.”
The project’s timing comes at the height of a downtown building boom, one that includes a Residence Inn by Marriott, which is under construction across the street. A third hotel is planned on the Riverfront Triangle, though that project has yet to break ground.
“There’s always a delicate balance between supply and demand,” McDermid said. “Adding 177 rooms across the street is a lot of extra supply, so it will take time to catch up with demand. If they go forward with the Embassy Suites or its equivalent on the Riverfront Triangle, by its very nature that will be so high priced that it will be kind of a different competitive set.”
For the Montana market, McDermid believes most guests are conscious of cost, though that’s not the case in New York or San Francisco, where a room can fetch a hefty price. But in the nation’s interior, guests don’t smile upon San Francisco prices.
“The cost of construction today is astronomical,” McDermid said. “I know this from other projects I’m involved in. To build a new hotel is so much more expensive than it was just three years ago.”
Despite the construction activity, McDermid said revenues have been stable and the guests haven’t been deterred. Summer bookings are strong and by then, he said, the heavy lifting will be done.
“By that time, much of the discomfort associated with the construction – the heavy equipment and man lifts – most of that should be gone,” he said. “Now we’re going into the cosmetic phase and people will see the difference.”