Council upholds approval of planned condo project

For the second time Whitefish City Council on Monday approved a 60-unit condo project along Highway 93 South.

However, Council this time added a condition that management of the property for short-term rentals should be on-site.

Council in May reluctantly approved a planned unit development overlay for the project, known as Eagle Lake, and then on June 4 said it wanted to take another look at the issue after concerns were raised about the condos being used for vacation rentals.

Councilor Frank Sweeney made a motion to approve the project, but added the condition for on-site management.

“This is consistent with what they have represented,” he said. “I appreciate the commitment by the developer that they intend to do this, but I would like something further in the conditions.”

Council voted unanimously to approve the request from Schumacher Interests Inc. for a PUD to develop the property that is located south of the Mountain Mall pond. The plan calls for constructing 10 buildings on the 7.163-acre site and the developer has said the project will likely be used for short-term rentals.

During its meeting earlier in June, Council heard from folks claiming that the project should not be allowed because they disagreed that the WB-2 zoning on the property allows short-term rentals as a permitted use.

Attorney Lindsey Hromadka, speaking on behalf of the South Whitefish Neighborhood Association, said that her client disagrees that short-term rentals would be allowed under WB-2 zoning. She took issue with a previous staff report on the project that said the WB-2 zoning district “permits all hospitality uses, including short-term rentals.”

“Staff interpreted the definition of ‘hospitality’ as including ‘short-term rentals,’” she wrote in a letter to Council. “However, the definition of ‘hospitality’ does not include short-term rentals.”

Attorney Sean Frampton, representing the developer, disagreed with the assessment. In a letter to Council he said there is no explicit language prohibiting short-term rentals in the WB-2 and that the uses are defined as catering to the needs of the “visitor and resident alike including hotels, motels, and various types of lodging accommodations.”

“This proposed Eagle Lake project is a type of lodging accommodation for a visitor or resident,” he said.

City Senior Planner Wendy Compton-Ring outlined the issue for Council noting that the definition of hospitality and entertainment in the zoning code says “various types of lodging accommodations.”

“The fact that short-term rentals are specifically defined in the code does not mean they do not fall within the category of various types of lodging accommodations,” she said. “The purpose of the definition is to make clear the regulations relating to short-term rentals do not apply to commercial lodging.”

Compton-Ring also noted that while recent changes to the city’s short-term rental standards included removing WB-2 from a list of noted zones where short-term rentals are permitted, the zoning code has not been changed. In order to remove short-term rentals from the WB-2, the list of permitted uses for the zone needs to be modified.

“We didn’t change the permitted uses in the WB-2 zone [which allows short-term rentals],” she said.

A hotel could be developed on the property as a use-by-right. In exchange for the PUD for a residential development the developer is providing as a community benefit funds of $30,000 toward a future signal at Highway 93 and Akers Lane, along with public access to open space and an on-site trail.

Compton-Ring told Council it could prohibit short-term rentals as a condition of the PUD, however, that would run the risk of the property being modified into a hotel and the city may not get any of the community benefits associated with the PUD request.

While Council also previously heard concerns from the public that the development would only compound the lack of affordable housing in the city, Compton-Ring told council that because the developer hadn’t requested a density bonus for the project, the city could not require affordable housing as part of the project.