City sued over business improvement district

A dozen or so businesses are filing suit against the city of Kalispell and others, claiming the Downtown Business Improvement District is illegal and discriminatory for gerrymandering and lack of procedures required in establishing the district.

The district formed in 2003 and started taxing property owners last year.

The district's intent, according to its mission statement, is "to maintain and promote the character and economic vitality of downtown Kalispell" and to be an advocate for a "unique, prosperous and healthy district that's the social, commercial, professional and cultural heart of the community."

But Kalispell attorney James Bartlett filed a lawsuit saying the business district and assessments imposed on property owners in the district are unconstitutional and illegal and should be declared void.

Bartlett represents Bud-Kal, a partnership; Malcolm Pettyjohn and Gary Fetveit; Donna Carie; James H. Handcock; Nami C. Stevens; Yaak Building; Darrel Martin; Manions; Martin Family Limited Partnership; and Collins Family Limited Partnership on behalf of themselves and all other property owners similarly situated.

Defendants include the city, its manager, finance director, mayor and council members, along with the Downtown Business Improvement District and its directors Janet Clark, Judy Larson, Rex Boller, Mark Pirrie, Ken Yachechak, Dave Rae, and Robert Schneider.

Documents say the suit is brought on behalf of the plaintiffs and "all other owners of property who have been wrongfully included in the Downtown Business Improvement District."

The district was formed after more than 60 percent of the property owners petitioned for its creation. The cost to individual property owners was expected to range from about $90 to $7,500 per year, based on a combination of their total taxable value and the size of their lots. The assessments were to be used to improve the area.

Among the allegations in the suit is that the area first identified for the district in a petition was modified without restarting the petition process. Changes were made the district to exclude property owners who would protest and to include property owners who would not protest.

Signatures on the original petitions were never validated and were reused after the boundaries changed, the lawsuit alleges.

Further, the suit alleges that the City Council failed to pass a resolution of intent to create such a business district, based on a proper petition, to designate the boundaries. The meeting to hear protests did not have proper public notice and did not disclose the taxable values of the properties in the district or projected assessments.

Bartlett alleges that the plaintiffs' property is used for professional services or not otherwise intended for retail shopping. They pay assessments without receiving any benefits, the suit says.

The district boundary runs north on Main Street to Idaho, east to First Avenue East, south to Montana Street, east again to Third Avenue East, south to Center Street, then west on Center Street. The blocks that contain Tidyman's grocery, the Dollar Store, Whitefish Credit Union, Pizza Hut, Moose's Saloon, First National Bank of Montana and Sportsman & Ski Haus also are in the district.

Kalispell City Attorney Charlie Harball said he will probably refer the case to the city's insurance company.

The lawsuit requests no damages but asks for the district to be declared invalid and any assessments already paid to be returned.

Reporter Chery Sabol may be reached at 758-4441 or by e-mail at csabol@dailyinterlake.com