The idea of a boutique hotel in downtown Whitefish has been talked about for years, with more than one location eyed for such a development.

The latest proposal, an $11.9 million, 80-room hotel complex spread over a city block south of Whitefish Middle School, seems to be gathering steam. Eighty rooms would seem like more than a “boutique” hotel, but the project meets the industry definition of such a hotel — one that offers luxury facilities with full-service accommodations in an intimate setting.

Local developer Orlan Sorensen of Landmark Builders is under contract to purchase the entire Block 46 for his project that would include some retail shops along Spokane Avenue, a restaurant and bar, and open-air cafe along with the luxury hotel.

Eyebrows have been raised at Sorensen’s request to have the city invest more than $540,000 in tax-increment revenue for infrastructure improvements that include a sewer line, sidewalk and parking infrastructure. People want to know why should the city foot part of the bill for private development.

It’s a good question, and there’s a good answer.

Tax-increment finance districts are established to fund urban renewal projects in blighted areas exactly for the purpose of promoting economic development.

When Block 46 was considered for redevelopment several years ago a few run-down homes were either relocated or removed, along with an aging commercial facility that once housed Stacey Oil Co.

Building a hotel on the block seems like an ideal use of tax-increment money. Close to $1 million in new tax-increment revenue could be generated from the hotel by the time the tax district sunsets in 2020, so the city would double its money back from its initial investment.

Just a block away from Block 46, tax-increment revenue was used for infrastructure that led to the construction of the Whitefish Library and the O’Shaughnessy Cultural Arts Center. What followed was substantial retail investment through the years, including Great Northern Brewery, several restaurants and a row of upscale shops on Railway Street.

Supporting the infrastructure for this proposed hotel with tax-increment revenue is a wise investment for Whitefish.

Editorials represent the majority opinion of the Daily Inter Lake’s editorial board.