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CUP Zoning Amendment Hearing Public Comment from Jeff Rowe, Warming Center November 19, 2025 Johnna Preble Kalispell City attorney jpreble@kalispell.com Re: Objections to the proposed zoning amendment concerning conditional use permits Dear Ms. Preble, We write on behalf of the Flathead Warming Center, which we represented in its recent federal lawsuit against the City of Kalispell. We are attorneys with the Institute for Justice, a nonprofit public-interest law firm that defends the constitutional rights of property owners nationwide. We are deeply concerned that the proposed amendment to Kalispell’s zoning code on conditional use permits (CUPs) violates the settlement agreement with the Warming Center, is otherwise unconstitutional, and thus threatens the rights of the Warming Center and every other CUP holder in Kalispell. It is also bad policy. We respectfully urge the City not to pass the amendment in its current form. The Warming Center has been working well with the City since the lawsuit was settled earlier this year. We’re grateful for that collaboration and want it to continue. In that spirit, after discussing the problems with the proposed amendment, we offer proposed “Quick Fixes” to resolve those concerns. We’re happy to discuss these suggestions. I. Any amendment to the CUP ordinance should not be retroactive. The first problem is retroactivity. The proposed amendment appears intended to extinguish vested property rights, including the Warming Center’s property right in its CUP. The background information of the proposed amendment indicates that “any property” in Kalispell will be affected by the amendment “with more direct changes for properties subject to a conditional use permit.” At the November 12, 2025 Planning Commission meeting, City staff represented that the amendment merely clarifies existing Kalispell law concerning CUPs. That is not correct. The amendment would fundamentally rewrite the law governing CUPs in Kalispell. Under Kalispell’s existing code, a CUP “shall run with the lot, building, structure, or use and shall not be affected by changes in ownership.” Zoning Code § 27.33.060(a). That provision guarantees that a CUP is a vested property right—a right that stays with the land and provides stability for property owners, buyers, and the community. Johnna Preble November 19, 2025 Page 2 The proposed amendment would eliminate that guarantee and replace it with language stating the opposite: that a CUP “shall not run with the lot, building, structure, or use.” Proposed § 27.33.060. It would also require every “new owner, lessee or other operator” to reapply for permission to continue an existing use allowed by a CUP. In short, the amendment would transform CUPs from stable, vested property rights into revocable personal privileges. The proposed amendment is not a clarification. It is a complete reversal of the law. Even more troubling, the proposed amendment appears intended to undermine the City’s settlement agreement with the Warming Center. Item 6 of that settlement required Kalispell to “reinstate the CUP without qualification” and incorporated the Court’s finding from its preliminary injunction order that the “Kalispell Zoning Code provides that ‘[t]he Conditional Use Permit shall run with the lot, building, structure, or use and shall not be affected by changes in ownership.’ 27.33.060(1). This language indicates the existence of a vested property right subject to the terms and conditions of the CUP.” The proposed amendment seeks to eliminate the very provision the Court relied upon. By falsely claiming that the proposed amendment merely “clarifies” existing law, it seems that the City intends to claim that the Warming Center never had a vested property right to begin with—that the Court got it wrong—and, after the amendment, the Court’s error would be fixed. Let us be clear: Changing the zoning code to destroy the Warming Center’s vested property right in its CUP violates the terms of the settlement agreement. That is not acceptable. But the retroactivity problem is not only a problem because it would cause the City to violate the terms of the settlement agreement. It would also extinguish a vested property right that all current CUP holders possess. A simplified example helps illustrate that conclusion. Suppose Kalispell amended its zoning ordinance to specify that every buyer of a home must reapply for a new occupancy permit after every sale. That hypothetical ordinance would impede everyone’s ability to sell their homes, would needlessly complicate the home sale transaction, and would therefore decrease the value of those homes. So, too, here. The proposed amendment will destroy the right to alienate property with an intact CUP, thereby adding a pointless layer of “zoning administrator” approval to every transaction and diminishing the value of property where conditional uses exist. Retroactive zoning changes are almost always prohibited because they destroy existing property rights. Montana law expressly bars such retroactivity. See, e.g., MCA § 76-2-208 (“Continuation of Nonconforming Uses”). The same rule appears in Kalispell’s own Zoning Code § 27.23, which protects existing uses from termination when the law changes. If the City now decides that future CUPs will be personal rather than tied to the land, existing CUPs should simply become nonconforming uses. The amendment cannot Johnna Preble November 19, 2025 Page 3 lawfully convert valid, vested CUPs that run with the land into personal permits that expire with ownership. The retroactivity problem also immediately implicates two constitutional rights: procedural due process and the right to just compensation for a taking. The proposed amendment raises due process concerns because it destroys a vested property right without individualized notice and an opportunity to be heard. To be sure, a law of general applicability that has only forward-looking effects generally doesn’t require notice and an opportunity to be heard. But the proposed amendment is retroactive—taking away property that people now possess, not just regulating conduct in the future. Thus, simply by passing the proposed ordinance, the City will “deprive” CUP holders of “property . . . without due process of law.” U.S. Const. amend. XIV. The proposed amendment, if passed in its current form, will likely be facially unconstitutional as a violation of procedural due process. The proposed amendment also creates a takings problem. Because a CUP permit created under the existing ordinance runs with the land, it is a vested interest in real property analogous to an easement. It is the right to engage in a particular use of property (as an overnight homeless shelter, for example) in the same way that an easement is a right to engage in a particular use of property (putting up a utility line, for example). A law that destroys rights in real property is typically a taking. If the City passed an ordinance tomorrow that purported to destroy the easements of power companies and demanded that the power companies take down their wires, that would very obviously be a taking of property. It is the exact same situation here. The proposed amendment purports to extinguish rights in real property. Enacting the proposed amendment would constitute a facial taking of property from every CUP holder in Kalispell, not just from the Warming Center. Two conclusions flow from that. If the taking is not for a “public use,” it is unconstitutional and invalid. If it is for a “public use,” then the City will owe all of its CUP holders “just compensation,” which is the fair market value of the extinguished property right. With approximately 230 CUPs in Kalispell, the City’s “just compensation” liability could easily run into the tens of millions of dollars and require years of litigation. Quick Fix: Make sure any change to the CUP ordinance applies only to new CUPs granted in the future. Include language making it clear that preexisting CUPs aren’t affected by any change in the law. II. The City should not be able to revoke a CUP simply for an unintentional error in the application. The second problem with the proposed amendment is the authority to revoke CUPs because of unintentional errors in the application materials. Overall, the procedures for revocation seem reasonable and correct past due process problems. For example, the proposed amendment requires notice of specific problems and an opportunity to cure before revocation proceedings begin. Proposed § 27.33.045(2). We support these changes. Johnna Preble November 19, 2025 Page 4 But we would strongly advise against those parts of the proposed amendment that authorize revocation simply due to an inadvertent error in a past application. E.g., id. § 27.33.045(4)(a) (“The City Council may revoke, suspend, or reconsider a conditional use permit if it determines that . . . [t]he information in the application or otherwise provided by the applicant or the applicant's agent as part of the original conditional use permit approval was false or inaccurate, whether deliberate or unintentional, and that the misrepresentation was material to the City’s decision to grant the conditional use permit.”). This provision seems to be doing work in only one situation: a property owner is complying with the conditions of the CUP and therefore is lawfully using their property, but the City wants to get rid of them anyway and needs to invent an excuse. It applies even when a property owner is causing no public harm whatsoever. Why would the City want to place a cloud over every CUP in Kalispell? Sure, if a CUP is procured by fraud, the City should be able to revoke it. Sure, if a property owner isn’t complying with CUP conditions and refuses to cure, the City should be able to revoke it. This is no different than terminating an easement procured by fraud or being used in a way contrary to the grant. But saying that you could lose your business or home (remember, people live in homes in Kalispell pursuant to CUPs) because someone might have made an innocent mistake in the past is arbitrary and dangerous. It is arbitrary and dangerous because this provision will only ever be used against lawful but politically unpopular property owners. Indeed, this is exactly what happened to the Warming Center. The Warming Center became politically unpopular. And then politically motivated city officials went through the application line by line to find erroneous “facts” that actually turned out to be opinions or aspirations. The City is drawing the exact wrong lesson from the Warming Center litigation. We wouldn’t tolerate an “inadvertent error” standard for destroying businesses or kicking people out of their homes in any other context. Why with CUPs? The proposed amendment doesn’t even restrict the “unintentional error” provision to the original CUP applicant. It specifies that the City will consider “information in the application or otherwise provided by the applicant or the applicant's agent as part of the original conditional use permit approval.” Id. So, in theory, a person could acquire a property with a CUP, stay in perfect compliance with the CUP, and then face revocation based on an allegation that the original CUP applicant made an honest mistake long in the past. It is no reassurance to say, “Oh, no, don’t worry, this won’t ever be used against you.” The whole point is that a provision like this is a tool for whoever holds power in the future to use against whoever is unpopular in the future. There is no guarantee that someone who is popular (or at least ignored) today won’t be targeted later by a completely different set of Kalispell officials. Johnna Preble November 19, 2025 Page 5 Quick Fix: Eliminate the language in the proposed amendment making unintentional errors a basis for revoking CUPs, including striking everything in Proposed § 27.33.090 after the first sentence. III. Delete references to “grace.” We recommend removing references to “grace.” The proposed amendment states that the granting and revocation of CUPs are matters of “grace.” This framing is archaic and legally wrong. In the political sense, “grace” is a concept rooted in monarchy—the unreviewable authority of a king or queen to do something (or not) for whatever reasons they want. But no American is subject to the mere grace of a ruler. Citizens form their governments themselves, which are subject to laws, regulations, constitutional constraints, and democratic elections. That is true of CUPs. There is no “grace” doctrine in the law of conditional use permits. To the contrary, the proposed amendment itself recognizes that CUP revocation decisions must be based on “findings of fact” and evidence in the record. Proposed § 27.33.100. The initial granting of CUPs is also not a matter of grace, but the result of a process done according to explicit criteria in the ordinance. Montana law next allows adverse zoning decisions to be challenged in a petition in state court “setting forth that the decision is illegal.” MCA § 76-2-327. A municipal zoning decision may be illegal as an arbitrary and capricious exercise of discretion; as a violation of local, state, or federal statutes (or regulations); or as a violation of the Montana or United States constitutions. The City of Kalispell simply doesn’t possess any “grace” to bestow or withhold in the manner of a king. That is a long obsolete way of characterizing government authority that hasn’t been true in this country since 1776. Quick Fix: Get rid of the “grace” language throughout the ordinance, including striking everything in Proposed § 27.33.090 after the first sentence. IV. It is bad policy to structure CUPs as personal privileges rather than property rights that run with the land. The proposed amendment is misguided for the additional reason that it is bad policy. Even if the City fixes the problems identified above, it would be a mistake to structure all CUPs going forward as personal privileges, rather than property rights that run with the land. As noted above, vested property rights provide long-term stability and incentivize investment. Making CUPs a personal privilege, and requiring City approval every time a property with a CUP changes hands—for sale, rent, or operation—creates needless uncertainty and bureaucracy that far outweighs any conceivable benefit. * * * Johnna Preble November 19, 2025 Page 6 The last thing the Warming Center wants is another legal dispute with the City. The Warming Center very much wants to continue its productive cooperation. That said, it also isn’t tenable to look the other way if the City enacts an ordinance that breaches the settlement agreement and facially violates the Warming Center’s due process and takings clause rights. Rather than taking another regrettable path, we hope the City will make the quick and simple fixes that we suggest above. We are happy to discuss this further. Sincerely, Jeff Rowes and Christie Hebert The Institute for Justice Counsel for the Flathead Warming Center