Interest building in downtown Kalispell parking garage

The Kalispell City Council anticipates voting on a proposed downtown parking structure during its first meeting of the new year, on Jan. 3.

During a work session on Monday, the council took public comment and discussed a proposal to build a parking structure on the city-owned parking lot at First Street and First Avenue West.

The parking garage is part of Montana Hotel Dev Partners' proposal to build a boutique hotel in downtown Kalispell. The Charles Hotel would go into place at Third Street West and Main Street, and the proposed parking structure would replace the parking spots that would disappear to make way for the hotel.

The city approved Montana Hotel Dev Partners LLC’s proposal for the $47 million project in September, but the exact plans are yet to be finalized.

The parking garage, as it’s currently envisioned, would contain 250 total spaces: 90 leased for hotel guests, 112 to replace the spots being displaced by the hotel and 48 additional spaces.

The parking structure is anticipated to cost approximately $7 million. Tax increment funding, including funds generated by the hotel, would be used to finance the parking structure.

Once it’s constructed, the parking structure would be city-owned.

HOWEVER, SOME council members on Monday brought up concerns about the funding mechanism for the proposed project.

Council member Sid Daoud, an outspoken opponent of government financing, reiterated his disapproval of the Tax Increment Financing District and the concept of governments owning property.

“I’m not a fan of this whole process,” Daoud said.

He offered a solution that could make the project more “palatable” to critics like him — adding housing into the parking structure plans.

Karlene Kohr, a nearby property owner, supported Daoud’s suggestion during the public comment period of the work session. Kohr has been an opponent of the project since the developer responded to the city’s request for proposals, and she doubled down on her concerns about construction impacts to the historic buildings on Main Street during the work session. But she was more supportive of a vision for the parking structure that would include housing.

Other concerns about the plans were raised by council member Tim Kluesner, who suspected the math estimating the taxes that would be generated by the hotel was inaccurate. He turned to the example of the Hilton Garden Inn to explain a potential shortfall in the city’s predictions for tax generation from the project.

Bill Goldberg, one of the developers behind Montana Hotel Dev Partners LLC, said he had been advised The Charles Hotel would generate approximately $1 million in taxes every year.

Additionally, City Manager Doug Russell explained the city would not be “on the hook” for outstanding costs if the hotel underperformed on tax generation. The city would simply agree to pay tax increment funding generated by the project to the project developer, whatever that amount ultimately came to.

Despite these concerns about the project, there was a lot of support during the work session for a downtown parking structure. Multiple people spoke about the longstanding interest in developing a parking garage in downtown Kalispell.

“Our biggest issue downtown is long-term employee parking,” Planning Director Jarod Nygren said.

Reporter Bret Anne Serbin may be reached at 406-758-4459 or bserbin@dailyinterlake.com.