Hundreds of platted lots set to expire in 2011

With the recession running into its third year, dozens of developers could see hundreds of platted units in Whitefish expire next year. The result could be the loss of millions of dollars invested in design and engineering plans, unfinished projects leaving blight on the landscape, and the loss of property tax revenue and jobs as houses are not built on the platted lots.

Developers have three years to bring a project from preliminary plat to final plat, at which point roads, curbs, gutters, sidewalks, water, sewer, bike paths, stormwater systems and other infrastructure must be in place before homes can be constructed. Preliminary plats can be extended one year for a total of four years.

Developers can gain more time by signing a subdivision improvement agreement, where they post a bond that will cover the cost of finishing the required infrastructure. The agreement lasts 18 months and can be extended for another 18 months, but the bond can be expensive.

During an Oct. 4 Whitefish City Council work session, city planner Wendy Compton-Ring noted that preliminary plats for 18 projects are set to expire next year, of which 11 have already received a one-year extension. Two subdivision improvement agreements and two planned-unit developments (similar to a preliminary plat) are also set to expire next year.

All told, 444 residential units and 17 commercial lots would be affected next year. In 2012, four preliminary plats are set to expire, accounting for 86 residential lots and one commercial lot. And in 2013, one preliminary plat with 139 residential units is set to expire. These numbers have created some concern in the building sector.

“Due to the difficult economic times and static development in the area, staff was contacted by several developers regarding their preliminary and final plat approvals set to expire,” Compton-Ring said.

Winter Sports Inc. is facing plat expirations for two projects on Big Mountain — Northern Lights West Phase 2, with 10 lots, and The Glades Phases 2-13, with 181 units. The company has a subdivision improvement agreement for Northern Lights West and for Phase 2 at The Glades, and both will expire next year.

WSI president Dan Graves told the council the company has no plans to develop more subdivisions in the near future and expects to let the plat for Phases 2-13 at The Glades to expire.

Their bigger concern is the preliminary plats for Big Mountain Village, Graves said. WSI spent $2 million creating the village’s neighborhood plan and preliminary plats for 11 lots there. One plat was for a large resort hotel estimated to cost $25 million, but raising that kind of money seems unlikely now, he noted. Compton-Ring noted that the village neighborhood plan will not expire, but the preliminary plats could.

Other plats set to expire next year include O’Brien Bluffs, the 37-lot subdivision on O’Brien Avenue headed up by city councilor Bill Kahle; the 93 LLC project developed by Reto Barrington, with 69 units on a hillside across U.S. 93 from State Park Road; the 20-unit Granite Ridge subdivision on Wisconsin Avenue, which could combine with Tom LaChance’s neighboring Swift Creek project this fall; and Dan Weinberg’s Railtown Gardens mixed-use project on Wisconsin Avenue.

Projects facing expirations down the line include Bill Foley’s 30-lot Edgewood Business-Industrial Park, at the Second Street railway crossing, which is awaiting a city sewer line extension; The Banks, Aspen Group’s condominium project at the former North Valley Hospital site; and Lookout Ridge, with 139 units between Big Mountain Road and the Iron Horse subdivision.

“There are 32 developments on the list — small ones and big ones. We need to work with everyone,” councilor Chris Hyatt said, drawing a distinction between projects with undisturbed raw land and those that are partially finished.

State law limits much of what the city can do to help developers, Compton-Ring said, laying out five options for the council to consider. The first involves adding more time between phases in larger projects. Currently the limit for each phase is two years from preliminary plat to final plat with a one-year extension. A second option is to allow developers a chance to file an amended preliminary plat, which would start the four-year clock all over.

With many developers wary of having their project falling under the city’s Critical Areas Ordinance, a “narrow and specific’ variance process could be created. The city-county planning board and city council could review these variances “on a case-by-case basis,” Compton-Ring said.

The city can refund part of a developer’s application fee if their plat expires “provided nothing has changed with the plat and no rules have changed,” Compton-Ring said. This option could prove difficult because the city has adopted new subdivision regulations and public works standards.

Lastly, the city could allow more time for subdivision improvement agreements. The public works department, however, warned that if projects were allowed to go unfinished for too long, the bond posted by developers might not be enough to cover inflated construction costs. Graves, on the other hand, pointed out that labor and fuel costs are down as a result of the recession.

Mayor Mike Jenson directed city staff to refine their five options while he and the council draft a letter to Gov. Brian Schweitzer asking for help passing legislation to help developers. Graves noted that he had asked Sen. Ryan Zinke, R-Whitefish, to carry a bill aimed at maintaining the status quo.

“We spent $2 million for a map on a piece of paper. How much have all the other developers spent across Montana?” Graves asked. “We don’t want to scare off developers to other states.”