Development project with Zinke connection comes under scrutiny

A proposed Whitefish development project in the crosshair of a recent national story alleging impropriety by Secretary of the Interior Ryan Zinke was vetted through the city’s planning process before winning City Council approval in late 2017.

Politico, a Virginia-based political journalism company, published a story last week that questioned the relationship between Zinke and Halliburton executive Dave Lesar, a financial investor in the 95 Karrow limited liability company that is seeking to redevelop the former Idaho Timber mill site off West Second Street in Whitefish.

The crux of the alleged conflict of interest is a shared-use agreement between 95 Karrow and the Great Northern Veterans Peace Park Foundation for a parking lot to be built on the private park land.

The Great Northern Veterans Peace Park located next to the 95 Karrow development site was a proposal pushed by Zinke about 10 years ago. BNSF Railway donated the land for what Zinke envisioned as a public sledding hill, to Zinke’s Great Northern Veterans Peace Park Foundation, but the park property remains undeveloped open space.

Zinke, however, is no longer affiliated with the Veterans Peace Park Foundation. According to Whitefish attorney Sean Frampton, legal representative for the Great Northern Veterans Peace Park Foundation, Zinke resigned as an officer and director in 2017. In April the foundation’s annual report was renewed electronically, but due to a clerical error Zinke’s name was not removed as a director.

Frampton said his office corrected the oversight on June 19.

95 Karrow LLC and its developer Casey Malmquist, a longtime Whitefish builder and general manager of SmartLam, a cross-laminated timber manufacturer, have a shared-use agreement by which 95 Karrow will construct a shared parking lot on a portion of the Peace Park property. In exchange, 95 Karrow will grant the Peace Park a right-of-use easement through its property.

At the request of the Whitefish Fire Department the Peace Park and 95 Karrow will have a second access that will cut through the Peace Park and go out to Birch Point Road, according to Whitefish Planning Board minutes.

Whitefish Senior Planner Wendy Compton-Ring, who wrote the planning staff report for 95 Karrow LLC’s proposed mixed-use project, said because the Peace Park land on which the shared parking lot will be built is on land not zoned by the city, a condition of approval for use in the 95 Karrow project will require the parking lot meet city landscaping, paving and stormwater requirements.

Compton-Ring said she doesn’t recall any Planning Board or City Council member questioning the relationship between Zinke and the developer. Meeting minutes also don’t mention any questions about the shared-use parking lot, other than concerns about it being on land outside of city zoning authority.

“They (95 Karrow) needed a certain amount of parking and decided to share with [the Peace Park],” Compton-Ring said.

She said Dave Lesar and his son attended a pre-application meeting, but Malmquist always has been the “main point of contact.”

Malmquist and Lesar, who retired as CEO of oil-services giant Halliburton and remains executive chairman through December 2018, have been close associates for many years since Malmquist built a home for Lesar in Whitefish. During the recession and economic downturn that brought construction activity nearly to a standstill for several years staring around 2008, Malmquist started building homes for Halliburton Energy Services to help provide workforce housing during the Bakken oil boom during that same time period.

Following the national news attention over the 95 Karrow proposed development and alleged conflict of interest, ranking House Democrats called for an ethics investigation to determine any impropriety on Zinke’s part.

In his statement to Politico, Zinke stated, “The mission remains to provide a children’s sledding park and community open space in a setting that recognizes the contributions of the railroad and the veterans to the community. ... The subject LLC you mention has been in contact with Lola (Zinke’s wife) with the intent of expanding their parking requirements on park property. I understand a concept was provided but no formal proposal or documents have been submitted or agreed upon. I also understand by reading the paper is their proposal is supported by the City Council.”