The first place where hundreds of thousands of service members stayed when they first came to Monterey was turned into a Holiday Inn Express early Wednesday.
The two temporary-stay lodges on the Presidio of Monterey, built in the 1950s and 60s, will now be operated by the InterContinental Hotels Group.
The 76 rooms will still only be for military, their families, and official guests of the Army, but the move is expected to increase the quality of stay.
Room rates previously started at $66 for single rooms. The new hotel rates will be based on 75 percent of the federal government's daily per diem for lodging — which fluctuates from $134 to $149 each day until the end of the federal fiscal year.
"I think most of the services have recognized two facts," Presidio spokesman Dan Carpenter said. "It is a difficult fight to get the money to upgrade facilities and, two, we aren't the experts on running housing ... There are experts out in the business world that can do it better than we can."
The Army decided in 2009 it would make more sense for a private group to take over its transient housing to save money and allow them to focus on core functions, according to its website.
The Privatization of Army Lodging, or PAL, program aims to privatize all 42 of its installations in 24 states by 2013. Hotel operators are given 50-year leases to maintain and renovate the properties.
IHG said in a news release on Tuesday it would work to "deliver improved guest service and quality of on-post lodging" at all the locations it was taking over.
Australian property developer Lend Lease will construct and renovate the buildings.
Robert T. Emanuel, the director of the Presidio's Family and Morale, Welfare and Recreation command, said IHG's plans to replace carpet and light fixtures, improve walls and, in general, create a "very contemporary decorating scheme."
Ten of the 15 Army employees who worked at the hotel have been rehired, three decided to retire and two moved on to other jobs, Emanuel said.
IHG hired five new employees, he said.
The money used to refurbish the Army hotels would come from IHG and real estate company Lend Lease's income from the hotels, according to The New York Times.
Little taxpayer money was used to maintain the property, with profits used for its upkeep, Emanuel said.
"We've done the best we can with the little money we were able to raise," he said.
Phillip Molnar can be reached at 646-4487 or email@example.com.