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Billings Business

Louisiana and Minnesota companies building Billings hotels

June 9th 2013

At least two more hotels are in the works for Billings, with one of them almost ready to go and the other still in negotiations.

A family-owned Louisiana company has purchased land directly across from the Billings Hilton Garden Inn, behind Home Depot, for its first Montana hotel, a TownePlace Suites by Marriott.

InterMountain Management, LLC, of Monroe, La., will begin construction this fall on the TownePlace project, worth $10 million to $11 million including land and furnishings.

And a Stillwater, Minn., developer wants to build a luxury lodge on land south of Zoo Drive owned by Pierce RV and Diamond B Companies.

"I'm just in the process of developing an 80-room hotel there," said Minnesota developer/owner Peter Stalland. "We anticipate it will be a Red Lion franchise called Trailhead Lodge, but nothing is final until you close."

Stalland has signed a buy/sell agreement with contingencies he must meet to buy 2 acres at 3838 Zoo Drive, for a lodge with 80 rooms, all with fireplaces.

Ron Pierce, one of the owners of Pierce RV, said he likes the looks of the Trailhead Lodge.

"It will certainly enhance our subdivision and it's the only hotel at this time slated for our side, the south side, of Zoo Drive," Pierce said.

Stalland also is building a hotel in Minot, N.D., and a mobile home park in Killdeer, in the heart of the oil boom, which influenced his decision to build in Billings.

"It's a regional hub for many things," he said. "In addition, I believe the Billings market is going to be a recipient of the Bakken oil growth."

InterMountain's developer, Stan Jones of Lake Oswego, Ore., said his company chose Billings based on expectations of old-fashioned growth.

Having one of America's most prolific energy plays just hours away could be the "cream on the top" for its Billings hotel, Jones said, but the Bakken played no role in the decision to build.

"Typically, we look for healthy lodging markets that have a variety of business and leisure travel, and Billings fit that bill with a stable and growing economy," he said.

In April, InterMountain broke ground on its first Wyoming hotel in Cheyenne, Wyo., also a TownePlace Suites.

"This is considered an upscale hotel with food and beverage service," Jones said.

The 94-room, four-story hotel is designed for extended-stay guests wanting one or two-bedrooms with full kitchens.

The TownePlace Suites at 963 S. 25thSt. W., should be open by the fall of 2014.

Why locate two extended stay hotels right across the street from each other?

The Hilton Garden Inn is short-term extended stay, Jones explained, while Marriott's TownePlace is designed for longer-term guests.

A group of 20 nurses opening a hospital in Redding, Wash., booked TownePlace rooms there for seven weeks, Jones said.

"And we had someone check in in Redding for two years, if you can believe that," he said. "It's a place you can stay for a long time and a place that feels like home."

Jack Gray sold the land to InterMountain through his company, Rimrock Properties LLC.

"Based on their reputation, I think they'll do well. They are quite a large hospitality, management company and owner, so I felt pretty good about selling to them," he said.

After reviewing several offers from different industries, Gray said he thought that a hotel was the highest and best use for his 2.6 acres.

Both parties signed nondisclosure agreements, so no sales price was available. But Gray said West End commercial real estate is fetching $8 to $14 per square foot.

"A year or two ago, you could buy it for a lot less, but not my piece," he said. "I was happy to hold it and build something myself."

The developer is best known around Billings for razing the old Odegaard's Hardware and Ernst Home & Nursery on Grand Avenue in 1998 and developing the Evergreen Midtown Plaza.

"From 13th to 15th or 16th Street West, there's been a complete rejuvenation of that part of the inner city and I think I started it," Gray said, listing some of the new businesses along Grand, including Stockman Bank, Walgreens, CVS and a rejuvenated West Park Promenade.

As for the West End construction boom, Gray said, "The Hilton Garden Inn and the Marriott across from my property are doing extremely well."

Billings-based Sanderson Stewart is engineering TownePlace's sewer, storm sewer and water infrastructure. Myhre Group Architects of Portland, Ore., is completing the architectural plans.

Philip Stewart, an associate architect at Myhre, said InterMountain has constructed about two dozen TownePlace Suites. Last year, the company won Marriott's developer of the year award.

"His company has built and managed more TownePlace Marriotts than anyone else. They really know the brand," Stewart said.

InterMountain will build and own the Billings hotel, while the Cheyenne hotel will be owned by a third party, Jones said.

"We build what is successful and proven. We're one of few chains that built through the recession," he said.

InterMountain owner Dewey Weaver takes "a very conservative approach to hotels," Jones said.

The Louisiana hotel chain owns other franchises, including Super 8, Holiday Inn, Hyatt House and Homewood Suites. The company owns more than 30 hotels in 25 states and is building 18 more.