After winning final approval from the Missoula City Council on Monday night, a Montana developer set to break ground on a new downtown hotel detailed the project’s anticipated tax value and its boon to the wider community.
HomeBase Partners said its $22 million private investment, coupled with $1.8 million in tax increment financing, will generate more than $200,000 in annual property taxes.
That’s roughly 13 times the $15,000 in property taxes now being collected on the Firestone property at 139 East Main Street. It’s there where HomeBase plans to construct its new AC Hotel, a six-story project set to break ground this summer.
“Through our partnership with the community, the AC Hotel Missoula project will drive economic development in the area,” said developer Andy Holloran. “This investment is what gives back to the community, revitalizes neighborhoods and is the economic catalyst for continued partnerships.”
HomeBase also developed the new Mercantile hotel and opened the project in March after years navigating political red tape. The project received roughly $3.6 million in tax increment financing, though the finished product more than amplified the property’s taxable value.
“Pre-development property taxes for the Mercantile were $20,000 per year,” Holloran said. “Current assessments upon the property’s completion are $501,000 in property taxes per year. TIF financing helped make this project possible.”
While TIF financing has been criticized by some, others have praised the state-authorized program for its ability to boost the city’s tax base, provide new jobs and bring economic vitality to nearby businesses.
Both the old Mercantile and Firestone buildings were vacant when HomeBase proposed its two projects. That put a pinch on nearby business and left a sector of downtown in blighted condition.
The two hotels will offer a combined 280 rooms and include nearly a dozen new restaurants, shops and pubs. They’ll also bring hundreds of tourists into the district each night, advocates have suggested.
Many of those guests will infuse Missoula with new spending.
“HomeBase Partners is a strong supporter of the TIF program and its significant benefits for projects like the Mercantile,” Holloran said. “Without this funding mechanism through our partners at the city of Missoula, this project would not be possible.”
The $1.8 million in TIF funding provided to the AC Hotel will go to improve the public right-of-way at Spruce and Main. It will also be used to upgrade underground utilities and offset demolition costs.
“We love seeing funds going back to Missoula businesses and residents to improve the corridor for years to come,” Holloran said