Check out market updates

Longmont leaders throw weight behind downtown hotel incentives

LONGMONT — A proposal by a Mississippi developer to build a boutique hotel in downtown Longmont got a much-needed shot in the arm this week as the Longmont City Council voted unanimously to approve an agreement that establishes the framework for land acquisition and subsidies for the project.

The Thrash Group, the developer behind Colorado hotel projects such as the Origin Red Rocks in Golden and the Origin Westminster, is planning a $24.5 million, 84-room hotel on the site of city-owned parking at the lot northwest corner of Kimbark Street and Third Avenue. 

“Having lodging in downtown has been a long-time vision,” Longmont Downtown Development Authority executive director Kimberlee McKee said. “As we look through historical documents, this concept on this particular site has been identified for decades as a place for a hotel.”

Hotel Longmont, as it is referred to in city planning documents, would also “include approximately 4,000 square feet of commercial space at ground level, including pre-function, meeting space, retail or a combination of both, as well as an approximate 5,000 square foot rooftop restaurant with views and outdoor patio space facing to the west,” according to a memo provided to Longmont officials. “The developer also proposes to construct a one-level parking structure providing about 65 hotel-utilized spaces on the upper level and 75 public spaces on the ground level.”

A new space for events and conferences has become increasingly important for city officials since the Plaza Convention Center closed in 2018 and the adjoining Best Western Plus Plaza Hotel was purchased by a developer intent on transforming the lodge into apartments in 2021, leaving Longmont without a large convention center-hotel operation. 

An upscale hotel downtown “opens up such possibilities” for economic development in central Longmont, McKee said, in the form of increased spending by the likes of business travelers, visitors to Rocky Mountain National Park and wedding parties.

“We will hopefully introduce a lot of people to downtown Longmont,” Thrash Group partner Joe Thrash said.  

The agreement signed off on last by the Longmont Downtown Development Authority and this week by Longmont City Council transfers ownership of the city property to Thrash, and establishes an incentive package worth $4.3 million, or about 17.6% of the overall project cost estimate.  That total includes the value of publicly owned parking lot land, $2.3 million in tax increment funding, $1.2 million in lodging-tax reimbursements and $400,000 in downtown improvement program proceeds from the LDDA.

City leaders, of course, expect an economic return on public investment. 

The Longmont Economic Development Partnership, according to a City Council memo, anticipates that the hotel could generate more than $6 million in tax revenue over 10 years. The overall economic benefit to the city over that decade could top $108 million.

“It may seem alarming,” LDDA board member Chris McGilvray said of the city subsidy for the hotel project, “but the revenue that [the hotel will be] producing through the lodgers tax and other economic means covers that cost.”

Source: BizWest