The developer of a workforce housing project off U.S. 93 S. has asked the Whitefish City Council to consider accepting cash in lieu of 10 affording housing units that were to be included in the development.

Mark Panissidi, managing member of Alta Views — a 166-unit housing development under construction — has asked the city to consider an amendment to a 2018 affordable housing agreement between the city and Alta Views, and proposes a $45,000 per affordable unit fee in lieu, or a total of $450,000 for the 10 required units. The $45,000 per unit would be paid to the city upon the sale and closing of each of the 10 affordable units, Panissidi stated in a letter to the city.

Panissidi originally intended to build and deed-restrict the 10 units as affordable housing. The current agreement calls for five of the affordable townhome units to be sold for $240,000 apiece and five at $250,000 each.

The Whitefish Housing Authority has also written to the city, saying it finds the 2018 agreement “problematic.”

When the inclusionary zoning program was created, the housing authority elected to have a price cap for all units in the program at 80 percent of the market value of the units, Whitefish Housing Authority Board Chairman Ben Davis said in a letter to the City Council.

“This is an important safety measure relating to the deed restrictions which are placed on them,” Davis wrote. “The purchaser of one of these units is sacrificing certain financial opportunities in exchange for purchasing a discounted unit.”

When the housing authority got an appraisal for one of the designated affordable units, the value was $285,000. Using an average of the sales price agreed to with the developer, of $245,000, the sales price reflects about 86 percent of market value.

In the proposed inclusionary zoning program, the 80 percent cap would put the sales price at $228,000 per unit, but this particular project agreement wasn’t passed under the inclusionary zoning regulations.

“The Housing Authority believes that while we very much would like to have affordable housing units, with the current agreement in place our community would receive a greater benefit by allowing the developer to pay a cash-in-lieu of providing the 10 units,” Davis said. “Put simply, we believe it would be better to have five units at a lower price point than 10 units at a marginal price point. Cash-in-lieu would allow the housing authority to deploy the funds to better effect.”

Whitefish Planning Director David Taylor said after discussing the matter with the city attorney, rather than the cash-in-lieu being an arbitrary number, it was determined it should be based on what would have been required of the original developer at the time of the planned-unit development approval. That agreement set the cash-in-lieu fee at $3,000 per unit for the total development. In this case, the 166 lots being created by Alta Views would be $498,000. That’s the figure being recommended for City Council approval.

In other business, the council will hold a public hearing to consider the city-initiated rezoning of 22 acres of land north of JP Road and west of U.S. 93 S. from county one-family residential to Whitefish one-family limited residential zoning.

A second public hearing will consider a request from Henry Roberts of Half Full, LLC, for a conditional-use permit to construct a professional office building that exceeds 4,000 square feet in gross floor area at 643 Denver St.

The council will consider an application from Brett Wrathall for a Whitefish Lakeshore variance at 430 Parkway Drive for placement of large boulders and a standard permit for stone stairs and gravel application.

The Whitefish Convention and Visitors Bureau will present its marketing plan and budget for fiscal year 2020.

At a work session from 5:30 to 7 p.m. the council will first discuss an update to the city’s small wireless facilities ordinance, and then will conduct the council’s annual goal-setting session.

Both the work session and regular meeting at 7:10 p.m. will be held at Whitefish City Hall.

News Editor Lynnette Hintze may be reached at 758-4421 or lhintze@dailyinterlake.com.