Kalispell Council approves five-story downtown Charles Hotel

In an 8-1 vote on Tuesday, Kalispell City Council approved at first reading a five-story, $34 million downtown hotel development and 250-space parking lot, as well as a land transfer of the large city-owned parking lot located at Third Avenue and Main Street.

The parking lot, which would use tax increment financing (TIF), is expected to cost about $7 million and would be located on the city’s Eagles lot at the southeast corner of First Street West and First Avenue West. The developers will design, finance and construct the city-owned parking structure using a public tender process for construction. Commercial space on the ground floor is also planned for the parking garage with 90 spaces leased by the developer for the hotel’s parking demand, all of which will be owned by the city.

The TIF funds generated by the Charles Hotel would then be used to reimburse the developer for the construction costs of part of the parking spaces.

“What we are looking at is a public infrastructure project for public parking,” said Jarod Nygren, director of development services at Kalispell. “It would remain the property of the city.”

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 respondents to the city authorities’ request for development proposal submissions last year.

In addition, the city will transfer the Third and Main Street property, which is currently a parking lot, for construction of the hotel and the city’s general fund will be reimbursed for the appraised value.

Named after Charles Conrad, the Charles Hotel would feature 79 units, a full-service restaurant, rooftop bar, and valet parking. The final element of the proposal is a “cluster of support office space” to house hotel operations staff, likely in an existing building close to the hotel site.

All council members voted to approve the project, with the exception of councilor Ryan Hunter, who said an affordable housing project would be more beneficial to the town and suggested using some of the TIF funds to alternative uses.

“We are proposing to spend seven million TIF dollars on a parking structure when 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 revenue on? We could spend it on desperately needed affordable housing.

But Mayor Mark Johnson said city officials did not expect such a large proposal and were eager to see its tax revenue.

“What we looked at was a proposal for anybody to come forward and develop this parcel so we could add additional tax revenue to downtown,” Johnson said. “It gives us more freedom in the future… I see it as a net positive for the development of the city center and it will help stimulate more of it.”

In addition, the board unanimously voted to repeal previous ordinances and a resolution limiting the age range of first responders and requiring city employees and firefighters to live within Kalispell city limits.

“It will open up a bigger pool of candidates,” Councilor Sid Daoud said.

During general public comment, several people also spoke of a development proposal that would convert the Fairbridge Inn and Outlaw Convention Center into multi-family housing, although this was not on council’s agenda.

The town planning council recently approved the proposal, which would displace low-income tenants who currently live at the hotel.

“These evictions will affect our entire community,” Flathead Warming Center Director Tonya Horning said. “Our understanding is that this eviction affects 60 homes and around 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 people in crisis, we will see an increase in emergency services in the police, ambulance, emergency room visits and detention center.

Hotel resident Matt Karen also spoke to express concerns about the eviction, which would displace single mothers, children, veterans, and the elderly and disabled.

“It’s definitely not a good situation there… There are about 30 kids in that whole building ranging from one month to 17 years old,” Karen said.

“I am a supervisor in town and I earn a fairly decent salary but I have been living there for a year because there is no accommodation available,” he added.

Kalispell City Council will discuss this project at its February 7 business meeting. Community members can send public comments to [email protected] or attend a meeting.

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