MISSOULA – The Missoula Redevelopment Agency isn’t going to cover unanticipated costs for the new $40 million Marriott Hotel nearing completion in downtown Missoula.
The MRA chipped in $3.5 million in Tax Increment Financing last year to help developer Andy Holloran and his Mercantile LLC partners “deconstruct” the old Missoula Mercantile and turn the site into a Residence Inn by Marriott.
The developers asked for an additional $429,000 in TIF financing in July, saying they had run into unexpected costs connected to the deconstruction of the old Merc, covering wages, utility and site work in the city right-of-way, and incorporating the historic Pharmacy Building as part of the design.
MRA staff said the extra items were eligible for TIF funding, but should have been requested in the initial application, especially since projections show that the finished project should generate enough new taxable value to cover the debt service.
MRA also pointed out it’s followed a policy of not covering cost overruns after a project has started, rejecting a similar funding request for the new Stockman Bank building on Brooks.
The decision also comes after the city council had to tap MRA’s TIF reserve funds to help balance next year’s budget.