Developer sues City of Whitefish over U.S. 93 hotel denial

A lawsuit has been filed against the City of Whitefish regarding the recent denial of a proposed hotel just off Highway 93 on the south end of town.

Rimrock Companies, the Florida-based company that proposed the project, filed a lawsuit last month in Flathead County District Court claiming the city unlawfully denied the proposal. It’s a claim that the city denies.

The developer is asking that the court reverse the decision and approve the hotel, claiming that the city’s decision was not based in fact.

In the request first submitted in August, Rimrock proposed to construct an 85-room hotel on the property in a recently created commercial subdivision just north of the First Baptist Church. Whitefish City Council ultimately denied the proposal in October, stating concerns over traffic congestion on Highway 93 as well as saying the hotel does not fit with the community’s vision for the area.

According to court documents, Rimrock says that Council members did not have the facts to support making statements on those potential issues. The developer claims that prior to making the final decision Council did not obtain new data on traffic and did not ask city staff if the hotel complied with the city Growth Policy, therefore making baseless claims.

Whitefish City Attorney Angela Jacobs last week filed an answer to the complaint in district court, asking that the case be dismissed. At this time the city has no other comment, Jacobs told the Pilot last week.

According to court documents, the city admits that Council did not obtain new data on traffic prior to turning down the proposal, but denies that Councilors made baseless claims. The city also denies that Council unlawfully denied the project.

Rimrock’s request for a conditional use permit for the hotel just off Highway 93 stated the hotel would also provide 93 parking spaces and be accessed off Hedman Lane. Representatives from the company said that the plan would be to construct a brand-name extended-stay hotel on the property.

Previously in 2019 the city had approved a commercial subdivision requested by Rimrock for the same property, according to court documents. The five-lot property is zoned WB-2 secondary business which allows for hotels as a conditional use.

When the proposal for the new hotel went before the Whitefish Planning Board on Sept. 16, city planning staff recommended approval. The Planning Board did not show enthusiasm for the project, but with a 3-2 vote recommended the hotel.

City Councilor Steve Qunell, who serves on the planning board, voted against the plan.

“I find it hard to agree that we need another hotel in our town,” Qunell said during the meeting.

In the lawsuit, Rimrock says Qunell’s comments were made despite the Whitefish Growth Policy that identifies hotels as a use in the WB-2 district.

In early October, City Council decided to table the decision on the hotel with the intent to come back with reasons for denial. In the second meeting, Council unanimously voted to deny the project.

Through both meetings, Councilors discussed concerns over Whitefish not needing more hotel rooms, traffic congestion and the hotel not complying with the city’s growth policy.

Qunell commented in the first meeting that he would vote to deny because of a concern over traffic. However, in court documents, Rimrock says he made this comment “despite the fact that he is not a traffic engineer, he lacks professional expertise in the field of traffic engineering, he had no data to support his comment,” as well as a traffic impact study conducted by a professional engineer found the subdivision would have minimal impact on transportation.

As part of the subdivision approval process in 2019, a traffic study was conducted and concluded that the impact on the transportation system caused by the subdivision would be minimal, according to the documents.

In the second meeting, Councilor Ben Davis said the proposed hotel does not meet the portion of the city’s growth policy that says good growth should address community needs and challenges such as affordable housing, infrastructure, and development while not exacerbating them.

“If you ask the citizens of Whitefish if this matches our community vision in this location, I believe 99 out of 100 would tell you no,” he said. “If you allow any hotel here that would allow one on every corner and I believe that’s not in line with our community vision.”

Rimrock, however, states that in Whitefish’s Growth Policy hotels are designated as a proper use of the property, the WB-2 zoning allows hotels as a proper use in the area, and during public comment periods in each meeting no residents spoke against the project in its alignment with the community vision.

Rimrock alleges that statements made by Qunell and Davis were not factual or based on data, but the city denies those claims.

According to a staff report presented to Council at the second meeting, “the project is compatible with the neighborhood and community because the proposed building’s scale and mass will be similar to surrounding buildings…” Additionally the report said the building height is within zoning requirements and the project appears to be compatible with the surrounding community character.

Throughout both meetings Council cited concerns about traffic noting the over 700 vehicle trips per day the hotel is expected to generate, the hotel is supporting tourism in excess of what can be supported by the community and its infrastructure, and that the hotel is not compatible with the surrounding neighborhood.

According to court documents, Rimrock Companies claims that none of the reasons Council stated in the meetings were based on fact and the city abused its discretion in denying the project.

The city denies those allegations in court documents.