Downtown Bozeman Boutique Hotel on Mendenhall: Plans and Status

Summary: The boutique hotel approved for 302 East Mendenhall Street, behind Open Range in downtown Bozeman, has asked the City of Bozeman to add a seventh story and grow from 71 to 91 guest rooms. The City Commission approved the original six-story plan 3-2 on August 5, 2025, excavation has started on the site, and the city's public comment period on the proposed changes ran from September 28 to October 20, 2026.

Originally published August 8, 2025. Updated October 2026. Rendering courtesy of Intrinsik Architecture.

What's being built on East Mendenhall behind the Bozeman Hotel?

A six-story boutique hotel with 71 guest rooms is being built at 302 East Mendenhall Street, near Rouse Avenue. The lot sits behind the historic Bozeman Hotel building and the stretch of East Main Street that includes the Pour House, PreShift, the Legion and the Rocking R Bar. The lot had sat empty for about 40 years, developer Matt Paine of the Paine Group told the Bozeman Daily Chronicle. It covers 0.44 acres along Bozeman Creek in the city's B-3 Downtown Mixed-Use zoning district.

The plan the City Commission approved in 2025 includes:

• 71 guest rooms
• A ground-level lobby, restaurant and event space
• A rooftop bar on the sixth floor
• Sidewalk, landscaping and creek access improvements
• 57 parking spaces in long-term leases across two nearby sites

Intrinsik Architecture designed the building and posts renderings on its Mendenhall Hotel project page.

Is the Mendenhall boutique hotel under construction?

Yes, excavation has started on the lot at 302 East Mendenhall, which we saw firsthand in October 2026. No opening date has been announced. City planning records don't list a construction timeline, and the lawsuit over the project's approval, covered below, has no reported ruling.

Will the downtown Bozeman boutique hotel get a seventh story?

The owner has asked for one, and the city hasn't made a final decision. In September 2026, 302 East Mendenhall Hotel LLC submitted a modification to the approved plan, according to City of Bozeman Application 26351. If approved, the hotel would grow from 71 to 91 rooms. The proposed changes:

• Add a seventh story, raising the building from 68 feet to 78 feet
• Move a smaller rooftop restaurant up to the new seventh floor
• Make minor exterior material changes along the alley side

The footprint, main facades, site design, parking location, landscaping and lighting would stay the same, according to the city's notice. Bozeman's updated development code, which took effect February 1, 2026, raised the downtown B-3 height limit to 90 feet.

The Director of Community Development made an initial determination that the request is in "substantial compliance" with the original approval, and public comment ran from September 28 to October 20, 2026. Before the change can be finalized, the city's review letter requires a water rights fee of $8,641 for the added rooms.

How the boutique hotel on Mendenhall got approved

The Bozeman City Commission approved the hotel on its second try, after a creek-side redesign. The first vote was a denial.

• May 20, 2025: Commissioners voted 3-1 to deny the application.
• June 24, 2025: The Commission voted to reconsider the project.
• August 5, 2025: After reviewing revised plans, the Commission voted 3-2 to approve the site plan.

The sticking point was Bozeman Creek, which carries a 35-foot setback on both sides under city rules. The first plans had a patio and utility infrastructure reaching 30 feet into that setback, according to the Chronicle, even though the building itself sat outside it. The revised plans shrank the patio to open up more of the creek to the public, added a natural fines path, and adjusted design elements to fit the historic context and limit impacts on neighboring properties.

Why was the Mendenhall hotel challenged in court?

The Bozeman Hotel Owners' Association sued the City of Bozeman on September 3, 2025, alleging the site plan approval was "arbitrary and capricious," according to the Chronicle. The suit also argues the hotel would take parking leased to tenants. The association operates the historic Bozeman Hotel building at 321 East Main Street, and its suit asks that the city be stopped from issuing building permits for the project until the challenge is resolved.

Paine is not named in the suit. "We're confident that nothing will change as a result of that lawsuit," he told the Chronicle at the time.

A related case brought by the same plaintiffs, along with the Bozeman Multi-Level Shopping Complex, was moved to federal court in October 2025 and sent back to Gallatin County District Court in January 2026, according to the federal court docket. As of October 2026, we have not found a reported ruling in either case.

What other hotels are being built in downtown Bozeman?

The Mendenhall hotel is one of several hotel projects underway in and around downtown Bozeman:

• A six-story, 190-room Canopy by Hilton is under construction at the former Salvation Army site, across Main Street at S. Rouse Avenue and Babcock Street, with work expected to run into early 2028
• The Baxter is being renovated to reopen as a boutique hotel, with about 32 rooms and completion estimated in 2027
• A new hotel is under construction at W. Main Street and N. 5th Avenue, according to the city's street report

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This article is based on City of Bozeman planning records, public development applications and local news coverage. Project details may change during review.

Rendering of the approved six-story plan, courtesy of Intrinsik Architecture. The proposed seventh story is not shown.

Sources

• City of Bozeman, Application 26351 (Boutique Hotel MOD): Application Summary, Notice and Review Letter, Initial Determination (Sept. 22 to 25, 2026)
• Bozeman Daily Chronicle, Lawsuit filed over hotel site plans approved in downtown Bozeman (Sept. 2025)
• NBC Montana, Lawsuit filed against city of Bozeman over approved 6-story hotel site plans (Sept. 15, 2025)
• Bozeman Daily Chronicle, Developer considers next steps after downtown Bozeman hotel plans shot down (June 3, 2025)
• Intrinsik Architecture, Mendenhall Hotel
• City of Bozeman Weekly Street Report (May 29, 2026)