Libby councilors not ready to commit to fund spending

There will be more consideration before Libby decides what its community development fund policy will be.

That was the decision following the Feb. 20 council meeting. The policy has become a hot item of discussion in the wake of two entrepreneurs seeking money for work on buildings that are listed on the National Register of Historic Places.

Decisions on how much money or if any will be granted to the developers are also on hold pending the updating of the policy.

Libby Lofts developers are seeking $138,000 to begin work on fixing the old high school. The building has set empty and unused for many years. A roof collapse due to heavy snow in 2017 left a gaping hole that will require considerable work to repair it. 

The developers, including Zach and Tracy McNew, Bruce Weatherby, Joan Oakland and Scott Curry, want to restore the 107-year-old structure, located on East Lincoln Boulevard, into apartments.

The other developer seeking money is Friends of Historic Hotel Libby’s Gail Burger. Her plan of reviving the old hotel continued to build steam in 2023 when a new roof was put on the building, located on California Avenue.

Extra work during the roof project, on the eaves specifically, resulted in work that cost $18,000 more than projected. 

"We incurred the extra bill on the project and now, it's down to $4,172.50," Burger said.

Burger wasn't pleased with the current developments.

"I think it's not right what is going on," Burger said. "The applications were applied for under current policy. Either say, 'we're going to deny them and return to the policy in a year or make a decision now.'"

The current policy was established in 2017 when the council consisted of Peggy Williams, Brian Zimmerman, Kristin Smith, Gary Beach, Angel Ford, Gary Armstrong and Mayor Brent Teske.

Kristin Smith acknowledged that trying to change the policy in the middle of the process isn't good, but, "It was only 2 1/2 years ago we granted the golf course $550,000."

Tracy McNew weighed in on the process in an email to The Western News.

"We feel that we have a proven history of giving back to and enhancing Libby and that we have a vision and path forward to transforming the historic Libby High school from a blight to a highlight," she said. "We also appreciate the conversations that council members Zimmerman and Kristin Smith have had with us. They have been open, honest and interested in learning about our plans. Public-private partnerships are a common and effective way to take on large development projects that reap community benefits and this project fits that description well. It will create a cleaner, safer and more vibrant downtown for Libby. 

Tracy McNew also said their proposal fits the requirements of the city’s policy and the city’s expert consultant, Tina Oliphant, even suggested that if the council makes changes to the policy, they should require applications to be written as the Libby Lofts proposal was. 

"This policy has been in place since 2017, providing ample time for the city to make changes if they were second guessing their intended use of the funds. The sudden change of heart is of concern to us from a perspective of ethics and professionalism," McNew said. "How can we undertake big projects, make improvements and create jobs as a city when there is so much internal conflict? 

"This project is undeniably beneficial for the city, the community that our city government serves, and the developers. It would be a win-win if the focus was truly on community development but, unfortunately, it is not. Abruptly changing course without clear justification reflects poorly on the city’s leadership and management. It also raises concerns about their fairness, transparency and future vision. Legally, if the city has established a policy for the use of community development funds, should it be obligated to adhere to that policy unless there are valid reasons for changing it?"

Tracy McNew said Libby Lofts plan to refurbish the old high school will continue, with or without city funding.

"Although the current situation is disappointing, we will continue to pursue the project even if city funding is not awarded. We are confident that it can and will get done," she said. "Zach was taken aback by the discussion about changing the rules mid-process and his comments were very passionate. We care deeply about building a vibrant, more cohesive and economically strong community and our intention is also to keep the subsidized teacher housing if we can afford it."

Many of the current councilors shared their thoughts on what the fund money, about $1.5 million, should be used for.

The fund money originated in 2001 when the city received $11.5 million from a federal earmark led by former U.S. Sen. Conrad Burns. The money was intended to assist in economic stimulation after the collapse of the timber industry and the discovery of asbestos in the community. While $3.5 million went to the hospital, the other $8 million went to the Libby Area Economic Development Company. 

It has helped pay for, among other things, the expansion of the Cabinet View Golf Course and the building of the club house. It also helped pay for new playground equipment in Fireman’s Park and the refurbishing of an old gymnasium now known as the Memorial Center.

Prior reporting in the Daily Inter Lake indicated that of the original $8 million award, only $750,000 was left at the end of 2004. There were criticisms of how some of the money was spent.

Williams asked, “What do we want the fund to do?”

The term, “infrastructure” was frequently referenced.

“I think it should be to improve our infrastructure in terms of city water and sewer lines and city buildings,” Hugh Taylor said. “I don’t think we should be building or repairing buildings.”

Ian Smith, the newest member of council, cited Montana Code Annotated 2023 that defines infrastructure.

“Tangible facilities and assets related to water, sewer, wastewater treatment, storm water, solid waste and utilities systems, fire protection, ambulance and law enforcement, roads, bridges and other transportation needs,” according to the code.

But Kristin Smith said she believes the money should be spent for, “things that add value to the community.”

She thought that the word, “infrastructure” should be removed from the policy. She also pointed out that the city has capital improvement funds for things such as repairs for city-owned buildings.

Williams countered that the new playground equipment that was installed last summer in Fireman’s Park would not have been included if the policy follows the state’s definition of infrastructure.

City attorney Dean Chisholm said council has three or four big questions that need to be answered in order to redefine the policy.

“Once you get those figured out, the rest becomes easier to figure out,” Chisholm said. “Infrastructure is defined in different ways and just because the policy gets changed, doesn’t mean there can’t be amendments to it if the needs of the city change.”

Zimmerman and Kristin Smith agreed that public-private partnerships are good and that the policy should be, “more broad-looking.”

Kristin Smith also shared her experience of opening Cabinet Mountain Brewery in 2014.

“When I started the brewery, I got a low-interest loan, but the construction costs ended up being double, so we had to suck it up, max out our credit cards, went to friends and family for money and it was years before we made a profit,” Smith said. 

Taylor said he thinks figuring out the criteria for receiving money should be the first step before council decides what the application process will be.

“I think we should be looking more at our vetting process,” Kristin Smith said.

Zimmerman agreed when Williams said councilors should come back with specific solutions when council meets again on March 4.

“It should be more than just opinions,” Zimmerman said. “We should be reaching to others, like bankers or other professionals, for their thoughts.”