An Evolving Parking Garage Proposal

Through a public and private partnership between the City of Kalispell and local developers, a proposal to build a $9.2 million, eight-story public parking garage that would include 78 multifamily housing units and 6,200 square feet of commercial space continues to see changes as it makes its way through city council.

If approved, the parking structure will be built on the current Eagles parking lot property at the southeast corner of First Street West and First Avenue West, which is owned by the city, and will require a transfer of property that the city council voted on after the Beacon went to print on Oct. 3.

Initially, the parking garage was intended to stay within the city’s ownership, but following changes in the last few months, the developing company, Montana Hotel Development Partners, has proposed taking ownership of the structure. With the transfer of property, the city will no longer be responsible for maintaining the garage.

The parking structure development is part of a multi-million-dollar project within the city called the Charles Hotel, which as proposed is an 86,000-square-foot boutique hotel on the corner of Third Street West and Main Street and will generate significant tax revenue for the city.

While the parking garage will be entirely financed and constructed by the developer, the city is proposing to reimburse the cost of the property using TIF funds generated from the hotel’s revenue.

The Charles Hotel and Eagles lot development projects were officially introduced to the Kalispell City Council last year as part of the Downtown Urban Renewal Plan. In December 2020, city staff advertised a request for proposal (RFP) to develop the city parking lot as an avenue to incentivize downtown development while adding more parking to the city. Following the deadline in July 2021, Montana Hotel Development Partners submitted the only proposal.

“This was the vision laid out in the Downtown Urban Renewal Plan,” Kalispell Development Services Director Jarod Nygren said at a September city council work session. “This particular developer brought it to light. I don’t think anyone could have imagined exactly what would come in but certainly when you start talking about funding a parking garage there has to be some creativity.”

Since the company’s initial proposal, several changes have been added to the projects, which includes transferring the Eagles lot to private ownership, adding a housing component, and the request for a conditional use permit to allow the building height to be more than 60 feet.

“There were some changes related to financing for private development, which was a requirement of that initial project,” City Manager Doug Russell said. “But without ownership it was hard to get financing related to it.”

Since the parking garage will likely turn to private ownership, the city is no longer required to manage or maintain the facility. The developers plan to lease out 90 private parking stalls to generate revenue for maintenance.

“That is no longer a city burden,” Russell said. “The changes that are being made make this a better project than what was put on those first development agreements.”

The project has drawn significant criticism from members of the public and some city councilors, who say the project leaders should have been more transparent while giving more opportunity for the public to weigh in on the parking garage component.

Some local business owners are concerned the 242-space parking garage will not be managed to address parking for the general public.

“If you look at the lease as it’s currently drafted, there’s language that there will be public parking but there’s no guarantees that they will do so or how that’s going to be administered,” Kalispell Grand Hotel owner John Barr said. “There needs to be parking provided for all of the patrons of the businesses in downtown Kalispell, otherwise this isn’t going to work. Nobody is going to invest money in downtown Kalispell if you don’t have parking.”

City staff reiterated that the parking garage would be public and although the specifics surrounding public and private spaces have not been determined yet, the facility would provide additional parking for the city that might not otherwise be possible.

“The parking structure would not exist without a private development,” Russell said.