SANDPOINT — The City Council is set to decide whether Averill Hospitality should take control of the land where the City Beach RV Park sits at their next meeting Wednesday. 

In a letter sent to the city Oct. 15, Dan Averill, owner of the Whitefish-based company, said the Sandpoint Lakeside Hotel project will not continue if the RV park remains. In that letter, Averill proposed that the area be either leased or sold to the company so that it could redevelop the land. 

“To be clear, the Sandpoint Lakeside Resort cannot move forward without a binding agreement that the adjacent parcel will be reserved exclusively for parking use serving City Beach and the Marina,” Averill wrote in an email to Sandpoint officials. “This is a critical condition for the project’s success and for securing investor and lender confidence.” 

The city took control of the RV park thanks to a land swap between the former owners of the Edgewater Hotel, the Allen G. Cox Family LLC, in 2022. In return for the RV park, the Cox Family LLC received the grassy area by City Beach. 

Since then, the park has brought in at least $94,000 in revenue every year, which supports the city’s Parks Capital Improvement Fund. Planning and Community Development Director, Jason Welker wrote in the staff report that the revenue from the RV park makes up 21% of the PCIF. 

“The RV Park is one of the few fee-based revenue generating activities that benefit the park system,” Sandpoint Mayor Jeremy Grimm said. “As such, the revenue is very important for the city to maintain and support our parks system. As for the use, we will have to see what the council thinks.” 

Currently, the city is in the process of reviewing designs for a $1 million renovation of the RV park. The renovations are primarily funded by a $950,000 grant from the Idaho Department of Parks and Recreation. Welker said in the staff report that the city expects these renovations to raise revenues to $115,000 per year. 

Grimm said that what would happen to the grant, if the council moves forward with a sale or lease it “to be determined.” 

In the terms of the land exchange agreement, a covenant from 1922 may restrict what the city is able to do with the land. It states that the city owns the land as long as “the premises are used for park purposes.” If the city no longer uses the land for park purposes, the title could revert to the BNSF Railway Company, according to the staff report. 

Welker said in the staff report that an outright sale to Averill Hospitality would require BNSF to waive the clause and that leasing the land to the company would be the “most defensible” approach, if the council wants to proceed down the path of a deal. 

In an email sent to city staff  Oct. 27, Ben McGrann, representative of Averill Hospitality, said that the company’s recommendation is that the space be redeveloped into a multi-use space. The space would combine boat-trailer parking, public parking and community event space, which McGrann said the company believes would keep the space operating for park purposes. 

In that email, McGrann expressed the company’s concerns with the RV park’s proximity to the hotel project.  McGrann said that the proposed resort and RV park are “inherently incompatible” and contended that the RV park conflicts with the city’s long-term vision. 

“A four-star hotel environment requires a setting that reflects quality, comfort and aesthetic cohesion,” McGrann said. “The transient and utilitarian nature of RV operations conflicts with the resort's high-end guest experience and undermines Sandpoint’s image as a refined waterfront destination.”  

The demand from Averill Hospitality is the latest concerning the resort project. In August, McGrann warned the project would not proceed as planned if the city increased its development impact fees. 

The council decided to proceed with nearly doubling the DIFs, but gave developers until Jan. 1, 2026, to submit their building permits under the current DIFs. In the staff report, Welker said Averill indicated in July they would obtain a demolition permit by September. 

Grimm told the Daily Bee that as of Nov. 3, Averill Hospitality has not been issued or applied for building permits. 

Averill Hospitality closed the current Best Western Edgewater hotel at the end of August. McGrann told the Daily Bee in September that if the company could not get building permits before the Jan 1. deadline, the project would shift to a renovation of the current Edgewater, not a new resort. 

No matter the fate of the current hotel plan, McGrann said at the time that Averill Hospitality plans to continue operating the Edgewater moving forward. Grimm said he is supportive of the current plan and grateful for Averill’s willingness  

“I am hopeful that the Averill’s will proceed with their planned investment in Sandpoint,” Grimm said. “I understand the public sensitivity surrounding what development occurs adjacent to this crown jewel of Sandpoint- City Beach Park.” 

The staff report presents the council with three options, directing staff to draft lease terms, continuing discussions with Averill Hospitality or declining the lease or sale negations outright.  

The meeting discussing the options will be held Wednesday, Nov. 5, at 5:30 p.m. at City Hall in City Council Chambers. More information, including the staff report and emails referenced in this article, can be found on sandpointidaho.gov/meetings.