Flathead County Growth Begins to Cool

Since the scale of development peaked in 2021, local officials say they've received fewer applications for building permits even as the valley continues to grapple with growing pains

By Maggie Dresser
Stillwater Crossing apartment complex under construction at the intersection of Stillwater Road and Four Mile Drive in Kalispell on Oct. 27, 2022. Hunter D’Antuono | Flathead Beacon

After a growth surge in 2021, when a slew of new residents relocated to the Flathead Valley and a wave of tourism pushed the region’s infrastructure to the brink, development has since cooled off, according to local officials, developers and business leaders, who on April 12 told an audience at the Kalispell Chamber of Commerce Growth Summit that a range of economic factors have blunted the spike even as growing pains persist.

City managers in Kalispell, Whitefish and Columbia Falls say construction remains strong but there are fewer applications for building permits rolling through their offices since the peak in 2021.

“We definitely had that peak in ’21 … There’s no doubt we’re seeing a cooling of the residential industry and there are numerous factors going into it,” Kalispell City Manager Doug Russell said.

Russell said labor shortages, supply chain issues and interest rates are slowing the building process down.

In Whitefish, City Manager Dana Smith said 2020 was a peak year with almost 300 housing units permitted through the city. During that year, 138 units of those were multifamily units and 92 permits were single-family. But in 2021, there were 129 single-family permits.

“We’re seeing more high-end homes, which results in more affordability issues,” Smith said.

Columbia Falls City Manager Susan Nicosia said developers have been focusing on commercial construction, which includes $24 million in new school buildings and the $17 million Glacier Gateway Elementary School.

“Our bread and butter has been commercial projects … in terms of economic development and stability, investment in schools is one of the best tools for our community,” Nicosia said.

Flathead County officials are also working to build infrastructure and government buildings to accommodate the growth. County Administrator Pete Melnick highlighted the North Complex renovation, located at 290 A North Main Street in Kalispell, which houses the Department of Motor Vehicles (DMV), family court and the Flathead County Superintendent of Schools.

The new Flathead County Justice Court relocated to the former DMV building west of the Justice Center on 935 First Avenue West. The new justice court is part of a multi-phase project to expand county services and to make room in the justice center for a fifth district court judge. The new district courtroom will be on the second floor on the former justice court floor.

As part of the project, county officials are also planning to expand the Flathead County Detention Center to accommodate 180 to 200 beds, but Melnick said they are still working to iron out the details. He said voters will likely determine whether the county needs a new jail when they cast their ballots in November.

“I feel confident that you will have the ability to make that decision on the November ballot about whether or not this county wants to move forward with a new detention facility,” Melnick said.

Following a recent decision by Flathead County commissioners to reject the purchase of a new septage site at a Lower Valley property, Melnick told audience members that officials were working to find a new location.

“It was a little bit of a setback – we decided not to move forward with a property that we identified in the Lower Valley, but I am confident that we will get this done,” Melnick said.

The county has $22 million in ARPA funds and other resources to pay for the new septage facility, which health officials say is urgently needed to address the county’s growth.

Additionally, local and out-of-state developers Frank Astor, Bill Goldberg and James Williamson spoke during a panel about the challenges of construction in the Flathead Valley, with concerns ranging from zoning to the public’s negative sentiment about growth.

“Anytime you bring forth a new project that might be different, you’re going to find a very motivated and organized group of people that start pushing back, and communication is very important to address that,” said Astor, the president of the single family home division of Coral Gables, Florida-based Location Ventures, who proposed a high-density development east of the Flathead River that the Columbia Falls Planning Board recently rejected. The Columbia Falls City Council is expected to make a decision on the development at an April 17 meeting.

Goldberg, the owner of Compass Construction, relocated his business from Whitefish to Kalispell in recent years and is a partner in the future Charles Hotel, as well as an eight-story parking garage, agreed with his fellow developer.

“As developers, you’re always going to deal with the folks that don’t want it in their backyard,” Goldberg said.