Council discusses adding C-PACE district, changing marijuana facility ordinance

At a work session last week, the Whitefish City Council considered a plan that could help businesses and also looked at some potential changes to the marijuana facility ordinance.

Seth Lutter, Associate Director of the Montana Facility Finance Authority (MFFA), gave a presentation to the council about a new financing option for businesses called Commercial Property Assessed Capital Enhancements (C-PACE).

The program, which began in January 2022, helps commercial businesses make improvements to their property that save water, save energy or generate renewable energy.

Lutter told council that wasted energy equals wasted money and that 30% of the energy used in commercial and industrial buildings in Montana is wasted, amounting to a loss of over $353 million annually.

C-PACE financing can be used by commercial, industrial, mixed-use, agricultural and multi-family properties. Eligible projects include roofing, insulation, irrigation, lighting, solar, HVAC and water reuse.

The process starts with the local government establishing a C-PACE district. Then, commercial building owners identify projects that will save energy, water or generate renewable energy and they secure financing from a financial institution. The local government adds the assessment to the tax rolls and the owner pays the assessment over time while experiencing savings from the improvements.

Lutter explained that there are two aspects of C-PACE financing that set it apart from traditional financing.

“The savings on the improvements on the energy or the water or the renewable improvements, the savings on those have to be equal to or greater than the cost,” Lutter said. “This is an economic development program so if something isn’t penciling up properly and correctly, then it doesn’t fit what C-PACE was designed to do.

“The C-PACE financing is paying back on a special assessment on the property taxes on that particular building or property,” he added.

To participate, a city must establish a district, then bill and receive property taxes. They are not responsible for any other aspect of the plan. The MFFA serves as the local government’s agent, works with the borrowers and lenders, and disburses revenue to lenders.

While Flathead County is not choosing to participate in the C-PACE program, individual cities are taking part, including Kalispell. As of last week, 11 counties in Montana have established districts, including Yellowstone, Park, Missoula, Gallatin and Butte-Silver Bow. Five other counties are considering it and there are currently 20 potential C-PACE projects in the works.

After discussion, the council directed the staff to move forward with setting up a district.

Also discussed during the work session were potential changes to the city’s marijuana ordinance.

Whitefish City Planner Dave Taylor asked for direction concerning whether the council would like to make changes to the marijuana ordinance and was told to proceed with a few changes.

On Feb. 21, the Whitefish City Council unanimously passed an interim zoning ordinance that prohibited the approval of new applications for permits for marijuana dispensaries within city limits. The ordinance took effect immediately and would last six months so the council would have time to study the issue and weigh potential changes.

Due to concerns over the number and the location of marijuana dispensaries in Whitefish, the council thought about making changes to the permitting procedures and to the distancing requirements.

At the work session last week, council asked staff to draft changes to the ordinance that would address both the number of dispensaries and the issue of a facility’s distance from schools, churches and other dispensaries.

Currently, Whitefish’s regulations defer to the State of Montana’s Department of Revenue distancing standards from schools and churches which allows a dispensary in close proximity to a school or church if the addresses and front doors are on different streets.

Changes to the ordinance that will come up at a future council meeting include the elimination of the exemption for marijuana businesses addressed on different streets or having front doors on different streets, making a flat 500-foot distance required in all cases.

Additionally, future marijuana dispensaries would require a full conditional use permit (CUP), rather than the currently required administrative CUP.

After December 2021, when the city council passed the ordinance allowing and regulating the facilities, 11 permits were issued for marijuana dispensaries in Whitefish. Although only five facilities have opened for business, some council members voiced concerns about the number of facilities throughout the city.

Once drafted, the changes will go to the Whitefish Planning Board, then to the Whitefish City Council for consideration.