Kalispell Council Approves Five-Story Downtown Charles Hotel

Development of city-owned property would include a 250-space parking garage; members of public concerned about Outlaw Convention Center development

By Maggie Dresser
The Charles Hotel. Rendering courtesy of A&E Design

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

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

TIF funds generated from the Charles Hotel would then be used to reimburse the developer for the construction costs for a portion of the parking spaces.

“What we’re looking at is a public infrastructure project for a public parking garage,” Kalispell Development Services Director Jarod Nygren said. “It would remain in city ownership.”

Compass Construction, BOND Partners and Alchemy Development have collaborated for the project and formed Montana Hotel Dev Partners, LLC. The developers for the Charles Hotel project were the sole respondents to city officials’ request for development proposal submissions last year.

Additionally, the city will transfer the Third and Main Street property, which is currently a parking lot, for the hotel construction 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, a rooftop bar and a valet parking service. The final component of the proposal is a “collection of support office spaces” to house hotel operations staff, likely in an existing building near the hotel site.

All councilmembers voted to approve the project except for Councilor Ryan Hunter, who said an affordable housing project would be more beneficial to the city and suggested using a portion of TIF funds for alternative uses.

“We are proposing to spend seven million TIF dollars on a parking structure when there’s no shortage of parking downtown and we have current city surface parking lots that we can’t fill,” Hunters said. “The question is what is the opportunity cost? What else could we spend $7 million in TIF revenue? We could dedicate it for affordable housing that we desperately need.”

But Mayor Mark Johnson said city officials were not expecting a proposal of this large of a scale and was 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 downtown,” Johnson said. “That gives us more freedom in the future … I see it as a net positive for downtown development and it will help spur more.”

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

“This will open up a bigger pool for applicants,” Councilor Sid Daoud said.

During general public comment, several individuals also spoke about a development proposal that would convert the Fairbridge Inn and Outlaw Convention Center into multifamily housing, although it was not on the council’s agenda.

The planning board recently approved the proposal, which would displace low-income tenants who are currently living 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 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 crisis, we will see an increase in emergency services in police, ambulance, emergency room visits and the detention center.”

Matt Karen, a resident at the hotel also spoke to voice his concerns about the eviction, which would displace single mothers, children, veterans and elderly and disabled individuals.

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

“I’m a framer in town and I make a fairly decent wage but I’ve been living there for a year because there’s no housing available,” he added.

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