Land near Cabinet View Golf Course received new zoning last week after earning Libby City Council's overwhelming approval ahead of a proposed residential development there.

The golf club struck a deal earlier this year to sell the roughly 50 acres with a portion of the proceeds from the sale going to repay an outstanding loan to City Hall dating back nearly two decades.

As the sale neared completion in late spring, officials with the golf club and city councilors sought new zoning for the property. Concern that the land, which was previously zoned commercial, might get developed as something other than housing fueled the change.

In mid-May, the city’s zoning commission signed off on designating the area Residential B. The new zoning allows for all housing allowed under Residential A zoning as well as detached dwellings for up to four families, roominghouses, boardinghouses, dorms and apartments. Building height is capped at 45 feet or three stories. Each lot is allowed garage space for two vehicles.

At the time, City Councilor Kristin Smith, who also sits on the zoning commission, said her understanding was that the new owner planned to build condominium style housing.

From the zoning commission, the proposal took several months to end up on the city council agenda. Discussion of the change was muted during council’s Sept. 7 meeting. City Councilor Rob Dufficy asked for an explanation of the new zoning while colleague Hugh Taylor wondered if anyone had alerted the buyer.

“That was part of the requirement of the sale — it had to be changed over to residential,” City Councilor Gary Beach reminded him.

Discussion of zoning was just a small part of the controversial decision to go along with the land deal. City Hall remained a party to the sale after giving the golf club a $1.54 million loan in 2004 to pay for construction of the course’s back nine. The club agreed to develop the land to pay back the no-interest loan, but the development never came to fruition.

Early this year, club representatives approached city councilors with word of a potential buyer for the property. But to make the sale worthwhile for the club, City Hall needed to forgive a portion of the debt.

That drew opposition from several city councilors and area residents, who argued the club netted a profit after repaying the original loan. Club officials pointed out that the original loan came from the federal government and was intended to spur economic growth.

In May, the two sides reached a compromise. In return for repaying the loan, City Hall would offer the club a $541,000 grant to erect a new clubhouse. A month later, then Mayor Brent Teske announced the money had arrived in the city’s coffers.

The zoning change will require a second reading before going into effect.