The irony of penning this letter as a Lewis and Clark County district judge is currently deciding the fate of a Montana Department of Commerce (DOC)/Montana Heritage Commission (MHC) employee and a Reeder’s Alley contractor for embezzling and laundering, hundreds of thousands of dollars appropriated for the preservation and betterment of our Town is not lost on us.

Hopefully Judge Seeley issues stiff sentences to these criminal perpetrators for all the damage they have done and orders all the restitution to go back to the MHC so it can be used for its originally intended purpose: the preservation and management of its historic resources FOR THE PEOPLE OF MONTANA.

Since the state of Montana’s acquisition of the Bovey estate in 1997, there has been an implicit agreement between the state and the Town of Virginia City: through the MHC, the State would protect, preserve and manage its nationally recognized historic real properties and collections. And in exchange, the town would provide a vibrant community (5-star utility infrastructure, public safety apparatus (Fire, Police, Roads), Town boards and committees, building codes and regulations, etc.) necessary in order for a major tourist destination to flourish. The social contract has resulted in decades of success, the likes of which the State and Town could never have imagined.

According to the MHC’s very own most recent economic report, Virginia City and Nevada City (VC/NC) continue to be the number one-state owned destination with total visitors of almost 600,000 from May-September.

Moreover, the economic footprint for VC/NC was nearly $75 million with more than $45 million staying in Madison County. The reported 1,226 total jobs generated from VC/NC  obviously have a huge impact on our SW Montana local economy.
The DOC’s recent decision to terminate existing MHC leases and the reissuance of new leases has left the town questioning not only our long held partnership with the State but also the future of Virginia City.

About 65 businesses operate in Virginia City. In 2025, the Town of Virginia City received about $160,000 in resort tax remittances from those businesses. These tax resort remittances are the lifeblood of the Town and allow us the financial ability to operate. The seven businesses in the food and entertainment industry that recently had their leases abruptly terminated by the DOC accounted for more than 40% of that figure.

If the DOC refuses to see the error of their way (like they have done for their Reeder’s Alley food and beverage concierge who received a new lease with a fair market flat rate rent instead of a percentage of revenue based rent model) and does not offer new, reasonable leases to these business owners and these essential businesses get shuttered for a season (or longer), it will have a devastating effect on the Town’s ability to function.

The Town of Virginia City is requesting the DOC immediately do the following:

• Extend the termination notice time period for all these lease holders until Friday, February 27th, 2026, at a minimum.

• Follow a Montana Code Annotated (MCA) 22-3-1002 and have the director of the Department of Commerce be a member of the MHC. And not in current violation of the code, the Deputy Director of the Department of Commerce.

• Per Montana Code Annotated 22-3-1003, engage in negotiations with the existing VC/NC concessionaires.

Although crimes were committed by a State employee that have severely impacted our Town, we are willing to continue work with the State in what had been a very successful 30-year partnership that has been benefited the PEOPLE OF MONTANA. We hope the state is prepared to do the same.

Sincerely,
Justin Gatewood, Mayor
David Bacon, Council President
Kacey Smart, City Commissioner
Amy Grice, City Commissioner
Chris Leonard, City Commissioner