City hit with lawsuit over parking structure funding
<p>Construction crews work on the concrete for the basement for the new Whitefish City Hall building. Work continues on City Hall and the attached parking structure. (Heidi Desch / Whitefish Pilot)</p>
The owners of the Frank Lloyd Wright Building have filed a lawsuit against the city of Whitefish claiming it unfairly created a special assessment to fund operation and maintenance of the new downtown parking structure now under construction.
Attorney Sean Frampton, who owns the building on Central Avenue, filed the suit in Flathead County District Court claiming the city’s funding formula for the parking special improvement district is “unlawful and “inequitable” and the manor in which the district was created did not follow state law. The suit asks the court for a declaratory ruling that the city ordinances are invalid and unconstitutional.
The lawsuit was filed in September 2015. The city has yet to file a response to the complaint.
City Attorney Angela Jacobs said the city only became aware of the lawsuit when it was reported in the March 30 edition of the Pilot. According to Jacobs, the city has not yet been served with the lawsuit and is not required to file a response in district court until it has been formally served with the complaint.
The city approved an ordinance and resolution in August 2015 related to the special improvement district and prior to that approved a resolution of intent to create the district. At the time, the city said through the district the downtown business owners were directly sharing in the cost of the parking because of the benefit they would derive from the structure when constructed.
When the ordinance passed, the city estimated that businesses would face an average annual assessment of $348. The assessment is based on a number of factors, including proximity to the parking garage, square footage of each property, and credit for parking spaces provided by the business. Properties are exempt if they are residential, vacant, federal properties or outside city limits.
Frampton spoke before Council in July during a public hearing saying the assessment should take into account the use of the building.
“I don’t mind paying an assessment, but I think this is a little bit unfair,” he said at the time. “The formula uses the square footage of the building and that doesn’t mean anything unless you address the use of the building.”
He claims the Frank Lloyd Wright Building has 31 off-street parking spaces and uses only nine of those spots and therefore provides 22 parking spaces for use by the public. He pointed out that because the assessment is based on square footage, he would be paying more as part of the assessment than the Great Northern Bar, which he says generates a much larger volume of business and needs more parking.
In the lawsuit, Frampton claims the formula is unlawful because it fails to consider the square footage relative to use and the need relative to use. He also claims that the amount the city gave credit — $51 — for on-site parking is “arbitrary.”
Frampton claims the city violated state law, which says the city in creating an assessment for off-street parking, must consider a number of factors including, the benefit received by each parcel of land, the need for parking spaces for each parcel, the square footage and uses of any buildings and the availability of onsite parking space on any parcel.
During a July City Council meeting, City Manager Chuck Stearns said assessing the properties based on the usage of the building would be difficult.
“We can knock on doors and ask how people are using their property, but I think we’d meet a lot of resistance,” he said at the time. “State law says you have to consider use of the building, but you don’t necessarily have to base the assessment on it.”
Frampton also claims the city violated state law when it did not pass an ordinance setting the formula to be used in determining the assessment prior to creating the district and also “by not correcting any errors and inequities” in the formula as raised by the public during a hearing.
According to the city’s minutes from the Aug. 17, 2015 City Council meeting, Council passed an ordinance setting the funding formula and separately passed a resolution creating the district.
The SID will not be assessed until the parking structure is complete or nearly complete. Construction won’t likely be finished until the fall of 2017.
In May 2013, Council approved designating a new City Hall to be built along with an attached parking structure. At the time, council also said some kind of funding district needed to be established to fund operation and maintenance costs for the parking garage.