In an 8-1 vote on Tuesday, the Kalispell City Council approved a first reading of a $34 million five-story downtown hotel development and 250-space parking garage, as well as a land transfer of the prominent city parking lot at Third Avenue and Main Street.
The parking garage, which would use tax increase financing (TIF), is expected to cost around $7 million and is located on the city’s Eagles lot at the southeast corner of First Street West and First Avenue West. The developers are designing, financing and building the municipal parking garage through a public bidding process for construction. Commercial space for the multi-storey car park with 90 parking spaces for hotel parking spaces rented by the client, all of which are owned by the city, are also planned in the basement.
The TIF funds generated from the Charles Hotel would then be used to reimburse the developer for the cost of building part of the car park.
“We are looking at a public infrastructure project for a public parking garage,” said Kalispell Development Services Director Jarod Nygren. “It would remain city property.”
Compass Construction, BOND Partners and Alchemy Development collaborated on the project and formed Montana Hotel Dev Partners, LLC. The developers of the Charles Hotel project were the only responders to city officials’ requests for development proposals last year.
In addition, the city will assign the lot at Third and Main Street, currently a parking lot, for hotel construction, and the city general fund will reimburse the appraised value.
Named for Charles Conrad, The Charles Hotel has 79 units, a full-service restaurant, rooftop bar and valet parking. The final component of the proposal is a “collection of supportive office space” to house hotel operations staff, likely in an existing building close to the hotel premises.
All council members voted to approve the project, with the exception of council member Ryan Hunter, who said an affordable housing project would be more beneficial to the city and suggested some of the TIF funds be used for alternative purposes.
“We are proposing to spend TIF$7 million on a parking garage if there is no shortage of parking spaces downtown and we currently have surface parking lots that we cannot fill,” Hunters said. “The question is, what is the opportunity cost? What else could we spend $7 million in TIF earnings on? We could dedicate it to affordable housing that we desperately need.”
However, Mayor Mark Johnson said city officials did not expect a proposal of this magnitude and are excited about the tax receipts.
“What we were looking at was a suggestion for everyone to come forward and develop this package so that we can bring additional tax revenue downtown,” Johnson said. “It gives us more freedom going forward… I see it as a net positive for downtown development and it will help spur more.”
In addition, the Council unanimously voted to repeal previous ordinances and a resolution restricting the age range of first responders and requiring city employees and firefighters to live within Kalispell city limits.
“This will open up a larger pool of applicants,” said Councilor Sid Daoud.
During the public comments, several people also spoke about a development proposal that would convert the Fairbridge Inn and Outlaw Convention Center into multi-family homes, although it wasn’t on the council’s agenda.
The planning committee recently approved the proposal, which would displace low-income tenants currently living in the hotel.
“These evictions will affect our entire community,” said Tonya Horning, director of the Flathead Warming Center. “As we understand it, this eviction affects 60 units and approximately 200 people. Our community cannot take such a blow. Homelessness is a crisis and homelessness in the middle of winter is an emergency. When we see individuals in a crisis, we will see an increase in emergency services in police, ambulance, emergency room visits and detention center visits.”
Matt Karen, a resident of the hotel, also expressed concern about the eviction, which would displace single mothers, children, veterans, the elderly and the disabled.
“It’s definitely not a good situation down there… There are about 30 kids in the whole building ranging in age from a month to 17 years old,” Karen said.
“I’m a framer in town and I make pretty decent money, but I’ve been living there for a year because there’s no apartment,” he added.
Kalispell City Council will discuss this project at its working session on February 7th. Community members can send public comments to [email protected] or join a meeting.