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City Council has delayed a decision allowing a rooftop hot tub at the Firebrand Hotel after the city received a letter from an attorney representing the developers of the hotel.

The hotel is asking the city to amend its conditional use permit to install a hot tub on the roof’s patio. It is a request that was first denied by Planning Director Dave Taylor, who also serves as zoning administrator, and the Board of Adjustment. The Planning Board also recommended denial of the hot tub on the roof of the hotel that opened in August. Neighbors have voiced concerns related to noise from activities on the roof.

Missoula attorney William VanCanagan sent a letter to the city Nov. 2 explaining the hotel's legal position noting that the Montana Development Group “has claims against the city for substantial monetary damages.”

The Averill family, which owns The Lodge at Whitefish Lake, does business along with other partners as the Montana Development Group, Averill Hospitality, and the Whitefish Hotel Group, which has been listed as the developer of the Firebrand.

After receiving the letter, Council on Nov. 7 unanimously voted to continue the issue until its Nov. 21 meeting. Council members noted that prior to making a decision they felt it was necessary to speak with City Attorney Angela Jacobs, who was absent from the meeting.

In a four-page letter to the city, VanCanagan claims that the hotel never should have been required to obtain a conditional use permit to operate. He alleges that Taylor, through a series of emails with land use planners, said a conditional user permit would not be required unless the hotel exceeded 15,000 square feet because it is outside the Old Town Central District.

VanCanagan says the absence of a conditional use permit requirement was key in the developer's decision to purchase the property at the corner of Spokane Avenue and East Second Street.

In September 2014, a private planner emailed Taylor saying the developer was interested in constructing a “flagship” or chain hotel on the property. Taylor responded saying city code does not contain any “formula/chain restrictions” that would apply to a hotel, the letter stats.

VanCanagan said then just a couple months later Taylor “completely altered his position” saying the site of the hotel was within the Old Town Central district.

“Not only did Mr. Taylor recant his prior representations to our client, but his analysis is wrong,” VanCanagan said noting that Taylor altered his decision after the developer purchased the property.

VanCanagan says the developer completed a marketing and feasibility study for the project, applied for financing and entered into a contract with a contractor for the construction of the hotel.

“All of this had to be redone when the city changed its position and suddenly demanded that our client go through the CUP process and construct an independent boutique hotel that includes a corner promenade and designating parking.”

VanCanagan claims the city's alleged misrepresentations cost the developers $3 million.

When the dispute first came to a head in 2014, the letter says, the developer hesitantly elected to go through the CUP process in order to mitigate costs and avoid the significant delays associated with litigation.

“At the time, the city recognized that [Montana Development Group] probably would prevail in court but also pointed out that obtaining a favorable ruling would likely take many years,” VanCanagan said. “Our client therefore agreed to apply for a CUP despite having no obligation to do so.”

“Beyond subjecting itself to the burdensome and costly CUP process, our client also agreed to cut ties with the Marriott and instead to construct a non-chain/formula hotel,” VanCanagan adds in the letter.

The city agreed to the hotel's offer of dropping the name-brand affiliation by including in the conditions of approval that the hotel could not operate as a franchise.

VanCanagan said not being able to construct a hot tub on the roof would detrimentally affect the hotel's occupancy and may call into question the economic viability of the project. He claims that if the developer were to prevail in litigation that the CUP and its restrictions would be void.

“Our client would consider all options for the project, including revisiting a partnership with a ‘name brand' hotel company,” he said.

During the Nov. 7 public hearing before council, Brian and Sean Averil spoke about the hotel's need to have a hot tub.

Sean Averill noted that the city's downtown master plan calls for a hotel.

“We can't have a flag hotel,” he said “Now we don't have the amenities to make a boutique hotel successful.”

Averill claimed that a “flagship” hotel would attract 40 percent more guests because of the brand and that a boutique hotel needs to have special amenities that would attract guests to make up for not being a brand hotel.

Brian Averill outlined a sound engineering study completed to determine if the noise from a rooftop hot tub would impact the residential neighborhood adjacent to the hotel.

He said the study tested noise levels in the normal range and at a rock concert level on the roof and then compared it with an average amount of background noise measure in the area. The test found that enclosures the hotel proposes for the hot tub would mitigate the noise from the hot tub, he noted.

The rooftop hot tub is proposed to be enclosed with a 5-foot glass wall on two sides and an 8-foot tall wood fence on two sides to reduce any noise toward the residential areas. The hot tub would located on the northwest corner of the roof.

Averill said that a consulting company hired by the hotel noted that an outdoor hot tub is typically ranked as the most important amenity of a ski town hotel. Without one, the hotel could expect to lose up to about 20 percent of its revenue, he noted.

He also mentioned the economic impact of the Firebrand on Whitefish. He said the hotel is expected to bring in $26.5 million annually, which is expected to be spent in the community.