State Supreme Court rules for Whitefish in hotel denial

The Montana Supreme Court has ruled Whitefish City Council was within its right to deny a proposed hotel along U.S. 93.

The state Supreme Court upheld a previous Flathead County District Court decision that ruled in favor of the city in denying a conditional use permit for an 85-room hotel in a subdivision just south of the intersection with the highway and Park Knoll Lane. 

While Whitefish city code places the burden on the applicant to demonstrate the permit complies, the Supreme Court noted in its decision that the granting of a CUP is a “matter of grace, resting in the discretion of the City Council and refusal is not the denial of a right, conditional or otherwise.” 

Whitefish 57 Commercial, LLC and Rimrock Companies, LLC filed the lawsuit against the city after Council in October 2021 shot down the proposal while stating concerns over traffic congestion on the highway and that a hotel would not fit with the community’s vision of the area.

Rimrock claimed Council did not have the facts to support making statements on potential issues and that as hotels are listed in the city’s growth policy as a use in that area, the hotel should be allowed.

Justice Ingrid Gustafson in September delivered the opinion for the court saying that the Council did not abuse its discretion in deciding to deny the hotel. 

“Thus, the City Council did not abuse its discretion in this regard,” the decision says. 

Rimrock submitted an engineer’s report to the city that said there would be minimal impact on traffic on U.S. 93 as a result of the hotel. The Montana Department of Transportation concluded that the subdivision did not warrant a traffic impact study. 

Rimrock said Council did not base its decision on the facts presented by traffic experts. 

The court said Council members are not “bound by expert testimony if it conflicts with their personal experience.” Council relied on its own observations to conclude the hotel would exacerbate traffic, especially because of heavy tourism traffic in the summer, and that vehicles leaving the hotel would have to cross two lanes of traffic, which would be dangerous, the decision points out. 

Rimrock argued that a hotel complies with the city’s growth policy because Whitefish’s economy is largely based on tourism. 

While Rimrock claims that Council based its denial on a single phrase of the growth policy that calls for “maintaining a small-town feel” the court points out that while the Council did look at that section it also relied on language in the policy that says good growth provides the means to address community needs and challenges such as affordable housing and infrastructure development, and does not exacerbate them. 

In addition, the court notes that Council relied on several written comments from community members who expressed concern with the proposed development.

Backed in its decision by community input and the growth policy, the court said it could not conclude denial of the application was “so lacking in fact and foundation that it was clearly unreasonable.” 

Features Editor Heidi Desch may be reached at 758-4421 or hdesch@dailyinterlake.com.