Opponents of Whitefish Housing Development Threaten to Pull Charitable Donations

Emails to city council reveal wealthy residents will withdraw philanthropic support of future affordable housing projects if controversial development at base of Big Mountain Road proceeds

By Tristan Scott
The site of the proposed “Mountain Gateway" development at the intersection of Big Mountain Road and East Lakeshore Drive in Whitefish on Oct. 15, 2021. Hunter D’Antuono | Flathead Beacon

Wealthy Whitefish residents are threatening to withdraw their charitable contributions from a variety of community causes — including future affordable housing projects — if city council members approve a 318-unit residential development at the bottom of Big Mountain Road, where opponents say traffic leading to and from the ski resort is already untenable, and that a project of this magnitude and density will only exacerbate the congestion.

The chorus of objections raised over the embattled Mountain Gateway development project has largely centered on traffic and safety concerns along the Wisconsin Avenue corridor, a narrow state highway connecting the railroad viaduct north of downtown Whitefish to the intersection at Big Mountain Road. The corridor serves as the primary gateway to the Whitefish Mountain Resort ski area, and becomes choked with gridlock on busy weekends, holidays and powder days, a problem that has worsened due to the influx of new residents.

However, potential community benefits include the developer’s pledge to construct some affordable housing units and donate acreage for the development of additional affordable housing by a local nonprofit organization if the request is approved. The developer’s request for approval of a planned unit development (PUD) and conditional zoning change from city council comes as the resort town grapples with the pandemic’s transformative effects on the Whitefish housing market and to local members of its workforce, who in some cases have effectively been priced out of the community by the prohibitive costs of living here.

Tensions over the project’s fate escalated at a Jan. 18 Whitefish City Council meeting that saw overwhelming opposition to the project, including from property owners in upscale neighborhoods flanking the site of the proposed development.

According to emails obtained by the Beacon through a public records request, the opponents include community philanthropists who say their charitable contributions will cease if the Mountain Gateway project moves forward. Those donations include support for the nonprofit Whitefish Community Foundation, which helps finance the North Valley Food Bank, the Abbie Shelter, CASA for Kids, the Whitefish Firefighters Association, Big Mountain Firefighters, the Whitefish Community Library, Whitefish Legacy Partners, Glacier Nordic Club, the Whitefish Theatre Company, Whitefish Lake Institute, and more.

“I am hearing from donors right and left that they are very concerned about the potential negative impacts on our community as a whole from the Gateway Project. I just heard from yet another donor that called me and said ‘this is not a threat, just a fact, but if we stop donating you will know why,’” Linda Engh-Grady, president and CEO of the Whitefish Community Foundation (WCF), wrote to Whitefish City Council in a Jan. 20 email. “It is unfortunate that WCF has to take the brunt of the fallout. When I listened in online to the past council meeting, I counted 34 of our major donors on the remote call or speaking out against the project in the chamber. This amounts to over $600,000 in annual program funding and [would have a] serious impact on our work.”

While Engh-Grady acknowledged that prospective “donations are not the city’s concern,” she also ticked off a range of community-wide projects that have been funded largely by philanthropic donations meted out by WCF, including conservation easements that have furnished Whitefish Lake and the surrounding watershed with permanent protections and low-density zoning regulations.

“We should be thinking about future generations, conservation, and preservation of our ski and lake resort town,” Engh-Grady wrote. “The above donations and sacrifices to our community mean nothing if we allow a high-density development to be built on the Big Mountain Road in a critical watershed area.

“Donations and donors have shaped our town for the better,” she continued. “You have heard from many about the public-private partnerships. Projects like these come about by donors who live here and invest here. They may be primary residents or this may be their second home away from home. Regardless, they give to make good things happen, not to get something back in return.”

In another email to Whitefish City Council from Mark Jones, a self-made billionaire whose mansion sits on a 260-acre property off Big Mountain Road, adjacent to the ski area, the businessman said approval of the “ill-advised” Mountain Gateway project would result in the loss of his financial support for a different affordable housing project. Jones wrote that he and his wife, Robyn, intended to donate up to $1 million to the Whitefish Community Foundation to foster support for an affordable housing project on Monegan Road, on city-owned property near the wastewater treatment plant.

“We anticipate being a major contributor to funding an affordable housing project in Whitefish,” Jones wrote. “If the Gateway Project proceeds, we will be withdrawing our support for affordable housing in Whitefish and will not participate financially in any project. We would like to help with a very real problem but only under the right circumstances.”

Indeed, the six-member council faces one of the most difficult decisions in recent memory in terms of weighing the volume of opposition to a project that adds needed housing to Whitefish’s depleted inventory against the potential pitfalls of increased development and its strain on infrastructure. Moreover, because a zoning protest has been certified by the Whitefish Planning Department following the receipt of signatures from more than 25% of adjacent landowners within 150 feet of the proposed Mountain Gateway site, “an amendment may not become effective except upon favorable vote of two-thirds of the present and voting members of the city council.”

That means a vote to approve the project’s PUD and zoning amendment will require a supermajority vote by council, and that Whitefish Mayor John Muhlfeld can’t serve as a tiebreaker in the event of a deadlocked 3-3 vote, as he can under normal circumstances.

In an email included in the Beacon’s records request, Muhlfeld’s response to Jones articulates an affirmation of council’s oath of office, as well as an appreciation of the resident’s willingness to help alleviate the affordable housing crisis. However, Muhlfeld notes that council “cannot, and will not, make decisions based upon a promise of support, or threat to withdraw support, financial or otherwise, for a future project.”

“As you are aware, the City is facing an unprecedented housing crisis that has significantly impacted our local residents and workers. We as a City are committed to working to find solutions so that all who wish to live and work in our community can do so. We appreciate your willingness to be part of the solution,” Muhlfeld wrote. “I understand from your email that you, like many others, oppose the proposed Mountain Gateway development that is currently before City Council. I also understand you will withdraw your offer to assist with securing affordable housing for Whitefish residents and workers if Council ultimately approves the development.”

He continued: “Mountain Gateway is considered a quasi-judicial matter, and our Council is unable to participate in ex parte communications regarding the merits of this, or other development projects within City Limits. As Council, we are required to apply the criteria set forth in the Whitefish City Code and state law when making land use decisions. This Council cannot, and will not, make decisions based upon a promise of support, or threat to withdraw support, financial or otherwise, for a future project. To do so would be a grave breach of our legal and ethical duties, and our oaths of office.”

A rendering of the proposed Arim Mountain Gateway Project at the intersection of Big Mountain Road and East Lakeshore Drive. Courtesy image

At the Jan. 18 city council meeting, which was so inundated with public comment that city leaders continued the proceedings until Feb. 7 for further consideration, many of those who spoke in opposition echoed concerns brought up at previous meetings, including the issue of traffic as it relates to fire evacuations, medical emergencies and quality of life. Those who spoke included residents, as well as attorneys, and a traffic engineer hired by the nonprofit Flathead Families for Responsible Growth, which has organized opposition against the project, including circulating a petition that generated more than 3,000 signatures.

The project’s applicant, Arim Mountain Gateway, is proposing a Residential Planned Unit Development (R-PUD) overlay to develop 318 residential units (270 rental apartments, 36 townhouses and 12 condominiums) on 32.7 acres on the north side of the intersection of Big Mountain Road and East Lakeshore Drive. On the west side of Big Mountain Road, the proposal calls for a 270-unit rental community with 460 parking spaces. Two buildings with common-connected open space would be clustered in the center of the property in order to provide a buffer of existing trees around the apartments. Two vehicle access points to the apartments would be allowed via Big Mountain Road, with another access point on East Lakeshore Drive near the north end of the project.

Upon approval of the PUD, the properties in the county would be annexed into the city.

In November, the Whitefish Planning Board voted 3-1 to deny the project in a move that ran counter to the recommendation of city staff who compiled a 21-page report advising the planning board to recommend the development to city council, contingent on additional conditions being met. Planning board chair and city council member Steve Qunell cast the only vote against the motion to deny the Mountain Gateway project, explaining that its inclusion of affordable housing made it too precious to deny.

“It’s hard for me to vote no against this project because of the affordable housing,” Qunell said at the Nov. 21 planning board meeting. “Are there problems, are there issues? Yes. Is our community already different from the community I moved to 20 years ago? Heck yes it is. I couldn’t move here today. I teach high school. I was fortunate that I moved here when I could save to buy a home. I couldn’t live here now and frankly I’m not sure if I’d want to. Because what’s happened? This place is only accessible to people from big cities out of state.”

James Barnett, the lead developer on the project, told the council he’s made changes to the original plan in order to address the community’s concerns, including offering to donate 8.8 acres to a nonprofit organization such as WCF for the purpose of developing 36 townhomes and 12 condominiums for a total of 48 permanently affordable housing units. The project also includes a proposal for 32 deed-restricted affordable rentals through the Legacy Homes program for people earning between 60% to 80% of the area’s median income. It sets aside acreage for a future fire station and a bike path, and calls for the construction of a roundabout at the intersection of East Lakeshore Drive and Big Mountain Road. At the northeast corner of the intersection, Barnett has proposed a neighborhood commercial development he says will reduce the volume of cross-town vehicle trips for groceries, gas and other errands.

If the project is denied, Barnett, who now owns the property, may still go ahead and develop the site by right, which under the city’s zoning regulations would allow up to 374 units (12.4 dwelling units per acre); however, it would still require annexation of the county properties into the city. Under a PUD, the developer must also demonstrate a clear community benefit as part of the project’s conditions.

Barnett characterized the development request as a pivotal decision for the city, and told council members at the Jan. 18 meeting that a revised development by right, which could include subdividing the lots, would mean sacrificing the proposal’s numerous community benefits.

“I’ll make a prediction. If we don’t complete the project in the next five to 10 years, traffic will continue to be a problem, Whitefish will get more popular as the ski area expands and advertising continues. There will be more multimillion-dollar homes and condos built in the area, more hotels, more tourists,” Barnett said at the meeting. “But we won’t have any of the community benefits you could have had on this piece of land, no fire station, no traffic improvements, no bus stops, no affordable housing. We’re offering solutions. I haven’t heard much more of that. At this point there’s nothing more we can do or give, this is all there is.”

Proponents of the project say it provides necessary affordable housing units and complies with the city’s growth policy, the 2018 Wisconsin Avenue Corridor Plan and the city’s own housing needs assessment. According to Whitefish Housing Authority board members, who discussed the agency’s slate of future housing projects at a Jan. 26 meeting, where they also raised the specter of funding challenges if charitable donations were to dry up, the agency’s projects will move forward regardless.

Ed Docter, who owns two businesses on Wisconsin Avenue and lives on Big Mountain Road, said he understands the anxieties of community members who worry about spikes in traffic congestion. However, as he and other businesses struggle to retain employees, Docter said the consequences of not adding new affordable housing to the city’s scarce inventory outweigh the costs of adding pressure on the corridor.

In an email to the Beacon, Jones said he appreciates the gravity of the affordable housing crisis affecting Whitefish and its workforce, but emphasized that the proposed site of Mountain Gateway is not equipped to handle such a large-scale development.

“The Mountain Gateway project is a horrible development for the people of Whitefish, particularly those who live off Big Mountain Road or patronize Whitefish Mountain Resort,” Jones wrote. “Traffic is already very heavy at the bottom of Big Mountain Road during ski season and the high-density development contemplated by Mountain Gateway will greatly exacerbate this problem. It also imposes additional risk to people who may need emergency services that could be delayed due to traffic. I oppose the development and want the city to understand that a decision to approve it will come with collateral costs.”

Reporter Mike Kordenbrock contributed to this story.