Whitefish City Council officially gave notice last week of its intention to create a parking special improvement district to offset the cost of constructing a downtown parking garage.

The concept for creating an SID is so downtown business owners would directly share in the cost of the parking because of the benefit they derive from the structure.

Council July 20 unanimously approved a resolution of intent to create the district. A public hearing is set for Aug. 17 before voting on the SID.

Downtown businesses face an average annual assessment of $348 if the district is approved. The district would provide $750,000 over 20 years for operation and maintenance costs for the garage.

The district includes 491 properties. Of that, 194 would be assessed and 297 are exempt.

The assessment is based on a number of factors, including proximity to the parking garage, square footage of each property, and credit for parking spaces provided by the business. Properties are exempt if they are residential, vacant, federal properties or outside city limits.

One building owner is raising issue with the way the assessment was created. Attorney Sean Frampton, who owns the Frank Lloyd Wright building on Central Avenue, said the assessment should take into account the use of the building.

“I don’t mind paying an assessment, but I think this is a little bit unfair,” he said. “The formula uses the square footage of the building and that doesn’t mean anything unless you address the use of the building.”

He said his office building has 31 parking spots with seven used consistently, meaning his building provides extra parking in downtown.

But because of the square footage of his building, he will pay $5,000 annually for the assessment. However, the Great Northern Bar, which he says generates a much larger volume of business and needs more parking, will be about $3,000.

“I’m not even using parking and I’m paying more than somebody that’s using it,” he said. “When you consider the retail, restaurants and bars compared to the office space the formula doesn’t work.”

City Manager Chuck Stearns said assessing the properties based on the usage of the building would be difficult.

“We can knock on doors and ask how people are using their property, but I think we’d meet a lot of resistance,” he said. “State law says you have to consider use of the building, but you don’t necessarily have to base the assessment on it.”

Tier one forms a square of about 1/8-mile from City Hall. The northern boundary line is Depot Street and the southern line East Fourth Street. Properties between O’Brien Avenue and Spokane Avenue would be included.

Tier two is a square about 1/4-mile from City Hall. The northern boundary is Depot Street and the southern is Fifth Street. Properties between Miles Avenue and Kalispell Avenue are included in the second tier. Tier one properties would pay double those in tier two.

The city will mail notices to property owners that includes each owner’s estimated assessment amount.

Affected property owners can prevent the SID if those owners bearing more than 50 percent of the cost protest. There is a protest period of 15 days after the initial public notice is published in the newspaper.

The SID will not be assessed until the parking structure is complete or nearly complete. It likely won’t be built until the fall of 2017.

The current downtown parking SID, which was used to create some of the surface parking lots downtown, will expire after the fall of 2015.

In May 2013, council approved designing a new City Hall to be built at the current site along with an attached parking structure. At the time, council also said some kind of funding district needed to be established to fund operation and maintenance costs for the parking garage.