Bozeman commission rejects boutique hotel deviation that would encroach on Bozeman Creek setback

Mayor Terry Cunningham and the Bozeman City Commission on May 20 rejected a request to approve a six-story boutique hotel and a deviation to encroach into the 35-foot watercourse setback for Bozeman Creek on a vacant lot at 240 E. Mendenhall Street.

City staff presented the project as a 71-room, roughly 65,000-square-foot hotel on a 0.41-acre parcel with no on-site parking, an off-site parking agreement proposed, and an outdoor patio, awning and supporting utilities planned within the creek setback. Brian Krueger, development review manager for the Department of Community Development, told the commission the building footprint itself would remain outside the 35-foot setback but the applicant sought permission for hardscaping, a patio, utilities and a 4-foot awning inside that setback.

The staff report noted the site sits in the neighborhood conservation overlay district and that, because the requested encroachment exceeded director-level thresholds, the commission was the review authority. Krueger said the application included a concurrent floodplain permitting process and that staff had concluded the deviation criteria were met, subject to conditions including that the patio be a public use area and that archaeological monitoring be performed if historically significant materials are encountered.

Applicant representatives described the design and mitigation measures. Rob Pertzborn of Intrinsic Architecture, representing the Pain Group, said the project includes pervious pavers and an underground stormwater facility intended to treat runoff before it reaches the creek. "This project could very well be the finest hotel built in Bozeman since the Baxter," Pertzborn said during the applicant presentation, emphasizing materials and flood-proofing measures.

Attorney Susan Swimley, representing the applicant, and other team members reiterated that off-site parking would be secured before building permits are issued and noted the applicant had shown a draft long-term parking license in the staff packet. Krueger confirmed the city code requires any off-site parking agreement to be executed prior to building permit issuance.

Dozens of residents and nearby property owners testified. John Amston, speaking for the Bozeman Hotel Owners Association, asked the commission to delay action so the association could be involved in any agreement over a nearby surface parking lot that the Bozeman Hotel has historically used. "Every bit of asphalt there, every striping has been paid for the past 50 years by the Bozeman Hotel," Amston said.

Supporters and opponents of the project addressed different issues. David Loesseff, owner of the Baxter Hotel, called the proposal "a lovely addition" and praised the applicant for securing long-term parking. Opponents, including speakers who cited environmental and historic concerns, urged the commission to deny the deviation because it would set a precedent for encroaching on watercourse setbacks and would not restore the creek's natural functions. Daniel Carty spoke for the creek itself in his remarks, calling for denial and asking whether independent ecological review had taken place.

Commissioners questioned the applicant and staff about public access and the meaning of "public use area," the floodplain permitting process, tree removals, building mass and scale, and what would happen if construction started and stopped. Krueger and the city attorney explained that the floodplain permit review and building permit requirements would address life-safety issues and that the city's enforcement tools are limited on private property if construction is abandoned; the city could secure the site for public safety but could not compel private completion.

During deliberations, Commissioner Boddy moved to approve the application and the deviation with staff-recommended conditions. After discussion, the motion failed on a 1-3 vote. The tally reported in the record showed Commissioner Fisher voting yes and at least two commissioners and the mayor voting no; the motion did not receive the commission's approval.

The commission's decision leaves the site in its current status as a vacant parcel used informally for parking. Staff noted that denial of the deviation would require the applicant to submit a new site plan if it wished to propose a project that eliminated the encroachment, and it reiterated that any building permit would require the executed off-site parking agreement and applicable state streambed (310) and floodplain permits before construction could proceed.

The meeting record shows staff received about 33 written comments on the project and that the city had proposed, as conditions of approval, interpretive signage recognizing local history and an on-site public use area. The commission did not adopt those conditions because the deviation request failed. The commission also discussed advisory-board roles and plans to revisit policy and review processes in later work sessions.

The vote closed a contentious local debate about balancing downtown infill and redevelopment with watercourse protection, public access and historic neighborhood character. The developer and the city may revise the proposal and return it for future review, including any floodplain and state streambed permitting required by law.