A new hotel is one step closer to opening in downtown Whitefish.

The Whitefish City Council on Monday unanimously approved a conditional use permit for an 86-room hotel at the corner of Spokane Avenue and Second Street.

“We have for years wanted a downtown hotel,” council member Frank Sweeney said. “This is a good fit.”

Whitefish Hotel Group — which includes local developers Sean Averill, his brother Brian and an unnamed partner in Florida — plans to build the $10 million, three-story hotel. On Monday they announced an early concept for the name of the hotel — The Empire Hotel. While the name is not definite, developers said they want a name that reflects the town’s railroad history and looked to the Empire Builder as inspiration for a name.

The permit is required because the proposed footprint of 15,000 square feet doubles the city’s 7,500 square-foot “big box” limit for downtown buildings.

“We think this is the only chance to have a hotel downtown,” Sean Averill said.

The hotel would have a facade of natural stone, tumbled brick and brick accents. The plan also includes 15-foot setbacks along Spokane Avenue to allow for a future bike and pedestrian path.

Concerns arose when the project was before the Whitefish Planning Board that developers planned to construct a chain hotel. Developers said Monday that they now plan to develop an independent hotel.

“This will not be a franchise,” Brian Averill told the council.

The council codified that promise, including in the conditions of approval that the hotel could not operate as a franchise. Any retail shop or restaurant inside the hotel also can’t be franchises under city code.

“That’s one thing that makes this more palatable,” Sweeney said.

Still, some people questioned the overall mass of the project and several cited concerns about parking.

Leo Rosenthal, who lives one block from the project, said he is worried about the impact on the surrounding homes.

“This is the neighborhood where you take your kids trick-or-treating,” he said. “This is the neighborhood that is going to be degraded.”

Lauren Walker said Whitefish needs a hotel, but that corner would be better suited for an affordable housing project.

“This is one of the worst locations in town,” she said. “Why not do something excellent — not just something for cash.”

Council member Andy Feury said he is sympathetic to concerns about the project’s impact on the neighborhood. He noted, however, that the new City Hall building is going to be larger than the hotel and it would be hypocritical for the council to say developers can’t put a large building downtown.

“Everybody says we need a hotel downtown and they say this size is economically viable,” he said. “We can say 80 rooms is huge, but I don’t see anything in the regulations that says how many rooms there should be. I do have something that says a building this size is an allowable use. We see all sides of the issue.”

The project seemed to have the support of the business community.

Jeff Raper, representing the Whitefish Chamber of Commerce, said the chamber’s board of directors supports the project.

In a letter to the council, Rhonda Fitzgerald praised the project and the decision not to operate it as a franchise.

“Visitors to Whitefish are seeking an authentic place,” she said. “I believe an independent hotel is the right choice for downtown.”

The council placed a handful of additional conditions onto the project.

Among changes from the original hotel proposal are elimination of the pool, a decrease of three rooms and an increase of two parking spaces.

The council added a requirement that the hotel will maintain off-site employee parking and bus staffers during the summer months. Council also directed city staff to look into creating a residential parking area in the neighborhood adjacent to the project.

A total of 74 parking spaces are planned for the hotel. The developers are entering into a lease agreement for a dozen off-site spaces for employee parking and plan to shuttle employees to the hotel during peak seasons.

“Not one business in town has to have parking,” Sean Averill said.

About 37 employees are anticipated at the hotel, with 10 to 15 on duty at a time. Access to hotel parking is proposed be from alleys off Third Street and Kalispell Avenue. The alley access onto Spokane Avenue will be closed.

Neighbors also voiced concerns about a planned rooftop patio. Brian Averill said the rooftop space would be used as a sun deck for guests and would have limited hours of use.

The council decided that the rooftop patio could not be used for a bar or as an entertainment space.

Even the name drew criticism from those opposing the hotel.

“The Empire Hotel — I’d rather call this the emperor’s hotel,” Jeffrey Anderson said. “This isn’t a hotel for the people, it’s a hotel for the tourists.”