Board recommends that City Council approve hotel proposal at old armory site

How close should casinos be to Kalispell's parks, schools and churches?

The Kalispell Planning Board wrestled Tuesday with two aspects of that question, deciding to recommend that the City Council:

-Keep the current legal 300-foot buffer and have the city staff explore creating exemptions if a four-lane highway, river, airport or other barriers are located between a casino and a church, park or school.

-Set up a planned-unit-development zone at the old Montana National Guard armory to allow a Hilton Garden hotel-conference-restaurant-casino complex to be built there.

The City Council likely will discuss both recommendations Monday.

Both recommendations have an intertwined history with the Hilton Garden project.

The city is seriously considering selling the 3.4-acre armory site to an Ohio development company, Gateway Hospitality Group, for $1.216 million.

The company is a regular franchisee of Hilton Garden. Gateway's business plan is to build complexes consisting of a hotel, an upscale restaurant and a conference center on single sites. The company has such complexes in Ohio, Texas and Montana.

Gateway's problem is that Montana allows a limited number of liquor licenses in the state and in Kalispell.

The state licenses are allocated according to population.

Kalispell is allowed 14 liquor licenses, but years of annexing lands with taverns on them has put 31 liquor licenses within the city limits - 17 over quota. By contrast, unincorporated Flathead County is allocated 71 licenses, with 49 rural establishments actually having them, and five more applying for licenses.

Consequently, new liquor-serving establishments in Kalispell must buy existing licenses from places willing to give up their licenses. That has led to new Kalispell businesses paying $500,000 to $800,000 for a liquor license.

As a result, most liquor-serving establishments also contain casinos - which are low-overhead ways to recover the costs of obtaining liquor licenses.

So Gateway wants a small casino in its complex to help defray its liquor-license costs and contends the absence of a casino would be a deal-breaker on buying the armory site.

However, most of Lions Park - across U.S. 93 South - is within 300 feet of the armory site.

That prompted the City Council to tell its staff to explore ways to allow the Hilton Garden complex with a casino at the armory site without violating the city zoning law's 300-foot-buffer requirement.

Two potential ways are to eliminate the 300-foot buffer rule and to set up a planned-unit-development zone. Such as zone is essentially a contract in which the city would exempt the owner from some zoning rules if the owner takes other actions to accomplish what those rules are supposed to do.

Planning Board members unanimously did not want to eliminate the 300-foot buffer, saying such an action would be a slippery slope to removing protections of Kalispell's small-mountain-town character. They said gambling should not become a priority over those protections.

"By taking out the 300 feet, we're really gutting the ordinance," said Planning Board member John Hinchey.

However, board members thought barriers such as airports, four-lane highways and rivers would provide the same protections as a 300-foot buffer. So they told the city staff to explore rewriting the zoning laws so those barriers could replace the 300-foot buffers on a case-by-case basis. The staff is supposed to bring recommendations to the board in one or two months.

Meanwhile, the Planning Board unanimously liked the Hilton Garden complex plan and recommended that the City Council adopt a planned-unit-development approach to that project.

In return for an exemption to the 300-foot rule, Gateway would have to eliminate an outside entrance to the casino - with patrons having to enter it through the hotel or restaurant. Outdoors casino signs would have to be toned down.

Also, the hotel's four-story height exceeded a 40-foot limit set by the city's zoning laws, and flirted with a 56-foot height limit because of a new law - expected to be adopted Monday by the City Council - governing heights of structures up to 10,000 feet from the Kalispell City Airport.

Under the recommended planned-unit development, the hotel could exceed 40 feet but not exceed 55 feet in height.