Donors threaten to pull support over housing project, officials say decision can’t be based losing donations

A set of recent emails sent to Whitefish city officials reveal that some wealthy donors have threatened to cease support of nonprofits in the community, and more specifically the construction of proposed future affordable housing projects, if a large-scale development is approved at the base of Big Mountain Road.

At the center of the issue is the request by Arim Mountain Gateway LLC for a planned unit development that would allow for 318 residential units on 32.7 acres at the intersection of Big Mountain Road and East Lakeshore Drive. City Council is set to vote on the request on Feb. 7.

In an email to City Council, Whitefish Community Foundation President Linda Engh-Grady relayed concerns regarding foundation donors potentially ending support if the project goes forward. Donors of the foundation that consistently contribute to organizations such as the North Valley Food Bank, CASA for Kids, Whitefish Firefighters Association, Whitefish Legacy Partners, Logan Health, schools and several additional nonprofits, tell Engh-Grady that the development of Mountain Gateway will be a reason to pull their contributions.

She said at the recent Jan. 18 council meeting, she counted more than 34 foundation donors speaking in opposition to the project — which she estimated would total to over $600,000 in annual program funding retracted from the foundation and create a serious impact on their work in the community.

“I am hearing from donors right and left that they are very concerned about the potential negative impacts on our community as a whole from the Gateway Project,” she wrote in an email to council. “I just heard from yet another donor that called me and said ‘this is not a threat, just a fact, but if we stop donating you will know why.’”

One part-time Whitefish resident who is a major donor to the Whitefish Community Foundation and has made significant donations to projects around the state, also sent an email to City Council saying that if the city approves the Mountain Gateway his family would no longer donate to any affordable housing projects.

Despite the threat of private donors withdrawing support for projects like affordable housing and other nonprofit causes, Whitefish Mayor John Muhlfeld said in an email response that the city legally cannot base its decision on possible private funding.

“As council, we are required to apply the criteria set forth in the Whitefish city code and state law when making land use decisions,” Muhlfeld wrote. “This council cannot, and will not, make decisions based upon a promise of support, or threat to withdraw support, financial or otherwise, for a future project. To do so would be a grave breach of our legal and ethical duties, and our oaths of office.”

AS PART OF their project the developers behind the Mountain Gateway project are proposing a donation of 8 acres of land that could be used to develop future affordable housing at an estimated 48 units, and they are also planning to construct 32 deed-restricted affordable housing units as well.

The development faces opposition from residents who are concerned about worsening traffic and safety issues in an already congested area of town, potential impacts to wildlife and high-density development in an area near the Whitefish Lake watershed.

However, those that are in favor of the 318-unit planned residential and commercial development say the project could have a positive impact on the lack of long-term housing in Whitefish.

The project has increased discussions about preserving the community character of the town while also providing what Whitefish needs — housing for people at all income levels.

Now, another component of the complex discussion surrounding this development is coming to light as emails reveal that donors who contribute philanthropic funding to a variety of causes in Whitefish will likely pull their donations should the Mountain Gateway development be approved.

Engh-Grady emphasized that foundation supporters threatening to pull their financial support are not against developing affordable housing projects, but that they believe this particular development is not the right circumstance.

“I think it is important to note that Whitefish Community Foundation is very much in favor of building affordable housing in a good location that can be developed in a manner that provides a long-lasting asset to the community,” she told the Pilot last week. “Affordable housing should be owned and managed by a nonprofit with a mission of developing housing where the rents are truly affordable in perpetuity.”

ONE MAJOR community donor, Mark Jones, also wrote to the City Council regarding the potential development. Jones and his wife Robyn own roughly 200 acres off Big Mountain Road where they are building a home, and have made significant financial donations to various Whitefish organizations.

Jones stated in his email to the city that he is interested in supporting affordable housing projects, including planning major contributions to a proposed workforce housing project being explored on Monegan Road. However, if the city approves Mountain Gateway his family would no longer donate to any affordable housing projects.

Despite the developer of Mountain Gateway offering up 8 acres of land to designate for an affordable housing project, Jones wrote that the land would contribute less than 50 affordable units while the entire development will increase traffic congestion and impede access to Big Mountain Road.

“We anticipate being a major contributor to funding an affordable housing project in Whitefish,” Jones wrote in the email to the city. “We understand that the city is considering an affordable housing project on Big Mountain Road on 8 acres of land to be donated by the developer of the ill-advised Gateway Project. I am familiar with that property and consider it significantly inferior to the Monegan Road property…”

“If the Gateway Project proceeds, we will be withdrawing our support for affordable housing in Whitefish and will not participate financially in any project. We would like to help with a very real problem but only under the right circumstances,” he added.

In replying to Jones, Muhlfeld thanked him for his interest in supporting the future affordable housing project on city property off Monegan Road, but noted that council can’t make decisions based upon whether donors may withdraw support.

“As you are aware, the city is facing an unprecedented housing crisis that significantly impacted our local residents and workers,” he said. “We as a city are committed to working to find solutions so that all who wish to live and work in our community can do so.”

“I also understand that you will withdraw your offer to assist with securing affordable housing for Whitefish residents and workers if council ultimately approves the development,” he added. “Mountain Gateway is considered a quasi-judicial matter, and our council is unable to participate in ex parte communications regarding the merits of this, or other development projects within city limits.”