Riverfront Hotel

Project Overview

The City of Missoula is ready to advance a transformative redevelopment project in the Riverfront Triangle Urban Renewal District (URD), a long-standing priority for revitalizing a key area of downtown. At the July 21, 2025 City Council meeting, a development agreement with Averill Hospitality for the sale and redevelopment of approximately 1.99 acres at the southwest corner of Orange and Front Streets was approved unanimously. This partnership represents a major step toward realizing the City’s vision for a vibrant, connected, and economically impactful district along the Clark Fork River.

The proposed mixed-use development includes:

The project will further key public goals identified by the City and Missoula Redevelopment Agency (MRA), including:

Developer

Averill Hospitality is a family-owned company based in Whitefish, Montana. Known for properties such as The Lodge at Whitefish Lake and the Firebrand Hotel, Averill specializes in delivering high-quality, Montana-inspired experiences. Their approach emphasizes community engagement, attention to place-based design, and exceptional guest service. Averill also currently operates the DoubleTree by Hilton Missoula - Edgewater. Averill is the successor developer from the original Fox Hotel request for proposals.

Visit the Averill Hospitality Development Website

Riverfront Triangle URD Context

The Riverfront Triangle URD was established in 2007 to revitalize a key but historically underutilized area of Missoula’s downtown. Despite its prime location—bounded by Broadway, Orange Street, and the Clark Fork River—the site has remained largely undeveloped for nearly three decades. High development costs and infrastructure gaps have long been barriers to progress. This project represents a crucial opportunity to unlock the potential of the district, which is managed by the City of Missoula's Redevelopment Agency and utilizes Tax Increment Financing (TIF) to fund public improvements.

Affordable Housing Trust Fund Voluntary Tax Donation

The developer will facilitate a 1% assessment on Room and Food & Beverage revenue generated at the property. This 1% assessment will be donated in full to the City’s Affordable Housing Trust Fund; estimated to generate $300,000 annually. Donations will last for 10 years or until $3 million has been contributed to the Trust Fund over, whichever comes first. The $4 million from the sale of the property will also be donated to the Affordable Housing Trust Fund over time, bringing the total donation to approximately $7 million.

🏗️ Follow the Dollars: How the Riverfront Triangle Hotel Is Being Financed

Let’s walk through the money trail—step by step—of how this major public-private project is coming together in Missoula.

Step 1: The Land Deal

Who pays? The developer, Averill Hospitality Group (AHG)
Who gets paid? The City of Missoula

• AHG is buying about 2 acres of city-owned land for $4 million.
  • $1.7 million is paid in cash at closing.
  • $2.3 million is paid later through a no-interest loan(called a promissory note). This is due either:
    • When AHG gets a building permit, or
    • In 5 years, whichever comes first.

💡 If AHG doesn't move forward, the City can buy back the land—and will also reimburse AHG for up to $250K in planning and design costs, plus any costs related to the trail and public plaza.

Step 2: Public Improvements – Phase by Phase

This project isn’t just a hotel. It includes new sidewalks, utilities, trails, and a public plaza. Those get built in 3 phases, and here’s how each phase gets paid for:

🛠️ Phase 1: Underground Utilities

What is it? Pipes and infrastructure below the surface that will serve the hotel and other developments in the area.

• AHG designs and builds these at the same time they’re designing the hotel.
• They only begin construction of underground utilities once they secure financing and permits.
• How it’s paid for:
  • Some of the $4M land payment is used.
  • Plus, Tax Increment Financing (TIF) from the Missoula Redevelopment Agency (MRA) budget (FY 2026–27).

🚧 Phase 2: Streets, Sidewalks, Curbs, and Street Trees

What is it? The visible infrastructure around the hotel.

• AHG builds this too, at the same time as the hotel.
• How it’s paid for:
  • TIF funds available in the district
  • TIF bonds (if the City Council decides to issue them)
  • Additional funds from the land sale (not used in Phase 1)
  • If there’s not enough money, AHG will front the costs—but will be paid back later as TIF funds become available.

🌳 Phase 3: Plaza, Trails, Riverfront Park, Greenway

What is it? Public spaces like the riverfront trail, plaza, and green areas.

• AHG, MRA, and Parks & Recreation will cooperate during the design.
• AHG will build the plaza and will be reimbursed through the use of TIF funds as they become available.
• How it’s paid for:
  • New TIF dollars generated by the hotel or nearby development
  • New bonds, if needed
  • Developer funds (with agreed-upon repayment terms)

💡 If AHG pays upfront, they’ll be reimbursed for all costs plus bank interest, but not allowed to charge any extra fees.

🧾 Reimbursement Process

For Phases 1 & 2:

• AHG gets reimbursed monthly from TIF funds and the land sale.

For Phase 3:

• AHG may use their own lender.
• City/MRA will pay them back for:
  • Design and construction
  • Interest paid to the bank
  • No developer fees added

🏞️ Public-Private Partnership in Action

• The City owns the plaza and trails.
• AHG manages the public plaza after construction through a management agreement
• AHG collaborates with City Parks & Recreation and MRA throughout the design process (from early concepts through final design).

🔁 Recap: Who Pays What, and When?

💬 When you follow the dollars, you’ll see a mix of private investment and public funding working together to build a hotel, upgrade city infrastructure, and expand public spaces—all designed to benefit the Missoula community. In this way, tax increment financing grows the tax base by improving blighted properties, helping them to contribute greater revenue to the city’s permanent tax base.