The Zoning Commission recommends approval and adoption of the findings of the 10 review criteria for Zone Change 1005. The City Council approved this zone change on first reading on February 28, 2022. A second reading public hearing is required to finalize the approval.

This is a zone change request from CMU1 (Corridor Mixed Use 1) to CMU1, NX1 (Mixed Residential 1) and NX3 (Mixed Residential 3), on Parcel 1 COS 2474, an 8.02 acre parcel located at 934 Lewis Ave (Elks Lodge & Tennis Center property). A pre application neighborhood meeting was held on December 16, 2021.

APPLICATION DATA
OWNER: Billings Elks Lodge BPOE #394
AGENT: Dave Goodridge, Goodridge Real Estate and Jeff Lee, Thrive Corporation
LEGAL DESCRIPTION: Parcel 1 of C/S 2474
ADDRESS: 934 Lewis Avenue
CURRENT ZONING: CMU1
EXISTING LAND USE: Elks Lodge and Tennis Center
PROPOSED USE: Apartments and fitness center
SIZE OF PARCEL: 8.2 acres

Concurrent Applications: None

SURROUNDING LAND USE & ZONING
NORTH: Zoning: N2 - Mid-Century Neighborhood Residential
Land Use: Single family, 2-family and multifamily dwellings
SOUTH: Zoning: P3- Civic Campus, N1 - First Neighborhood Residential, NX2 - Mixed Residential 2  
Land Use: YWCA Campus, single family & two-family dwellings, Midway Townhomes
EAST: Zoning: N1 and N2
Land Use: Single family and 2-family dwellings
WEST: Zoning: NO - Neighborhood Office, NMU - Neighborhood Mixed Use, NX3 - Mixed Residential 3
Land Use: Accountant office, Apex Fitness, The Art of Play children's center, Family Support Network, Stoneridge Apartments

The Elks Lodge, in the heart of the Mid-town neighborhoods of Billings, put its property up for sale in 2019. Membership in the lodge was not robust and declining revenues from the facility required the sale of the property. The lodge itself will move to another smaller location. The lodge has filed for bankruptcy protection. A buyer, Thrive Corporation from Utah, has come forward and proposed to build residential apartments and re-use the entire property for new development.

Prior to the zoning update in 2021, the property was partially zoned Residential 7,000 (R-70) and partly Community Commercial. The north 200 feet was zoned R-70 and the eastern 100 feet was also zoned R-70. The remaining five acres of Community Commercial took up the southwest portion of the property. During the map update in 2021, the parcel was zoned as CMU1 to better match the current and future uses of the land. The parcel has received previous approvals to have on-premise liquor service and events and gatherings were held in the Elks Lodge building. The Elks Lodge was built here in 1967. About 10 years ago, a tennis center was constructed in partnership with the local tennis association. The plan is to leave this large recreational facility in place and re-purpose it if possible as an amenity for the new residents and for the community.

The current zoning of CMU1 requires a mixed use building for any residential development. Single family, two-family or multifamily dwellings would have to be within a building with a ground-floor commercial use. The proposed zoning keeps the CMU1 zoning around the tennis center (~1. 5 acres), and down-zones the remaining 6.5 acres to NX1(1 to 4-family dwellings - ~ 2acres) on the Lewis Avenue frontage and NX3 in the southwest 4.5 acres of the property. A Master Site Plan approval will be required for the new residential development. This will include adjacent street improvements and on-site improvements to accommodate the development. The developer is financially responsible for these improvements. No adjacent owners will be asked or required to participate in improvements required to accommodate this development.

The applicant conducted a pre application neighborhood meeting as required on December 16, 2021, at the Elks Lodge. Twelve surrounding owners or interested citizens attended the pre app meeting. There were questions on tenancy of the proposed units (unit-owned or developer-owned), the development of 10th St West to be a complete street, the number of dwellings units (200-250 estimated) and the type of units allowed in the NX1 zone district. The pre-app meeting notes are included as an attachment. In addition, Planning staff received a few phone inquiries from surrounding owners about the zone change process and how to participate. One owner asked for information on filing a valid protest petition. 

The Zoning Commission received several written public comments just prior to the public hearing on February 1. This included comments from nine surrounding property owners. Those public comments are attached to this Zoning Commission report. The concerns expressed included the potential development density, the traffic that could be generated and how the developer planned to deal with the new traffic, as well as issues related to compatibility with adjacent zones and land uses. 

The Zoning Commission conducted its public hearing on February 1, and received the staff report and recommendation, the testimony of the applicant represented by Jeff Kanning of Collaborative Design (for the buyer) and Dave Goodridge (for the Elks Lodge) and testimony from 20 individuals. These include Merry Lee Olson director of the YWCA (campus directly south of subject property), John Peart of 828 Yellowstone Ave, Rebecca Noelle of 1109 Lewis Avenue, Jerry Kessler of 237 Avenue E, Anna O'Donnell of 131 Avenue B, Tom Romine of 1128 N 32nd St, Matt Langman of 935 Avenue F, Sharon Wetsch who owns property at 814 Alderson Ave, Richard Thayer of 844 Lewis Avenue, Michael Kittson of 630 Custer Avenue, Ernie Dutton of 2046 Mariposa Lane who owns a commercial property at 1002 10th St West, John Halverson of 239 Avenue F, Desiree Miller of 1005 Lewis Avenue, Laverne Petersen of 744 Yellowstone Avenue, Lauren and John Wright of 511 Yellowstone Avenue, Rita Harding of 123 Alderson Avenue, Dan Berry of 835 Yellowstone Avenue, Kyle Trafton of 531 Clark Avenue, and Larry Ferro of 845 Yellowstone Avenue.

Mr. Kanning stated he was representing the buyers, Thrive Corporation of Utah, on this proposed zoning and project development. He stated Collaborative Design has been working in Billings for over 40 years and has designed and helped build many similar projects. He state the current CMU1 zoning would not fit with this buyer's vision for the development that primarily includes dwellings in small to large apartment structures with on site parking and amenities for the residents. He stated the NX1 zone proposed for the Lewis Ave frontage is to make these units more in scale with the housing on the north side of Lewis. He stated the NX3 zoning to the south and west will have the larger apartment buildings that meet the new zone requirements to have parking to the rear and side yards. The CMU1 zone to remain around the tennis center is to preserve this as an amenity if at all possible. He stated the property has great access to collector streets and arterial streets in every direction. He stated there is no firm number yet on the number of units. He stated parking is likely the limiting factor for the number of potential units. The new code requirement is 1.5 spaces per dwelling unit plus 1 guest space for each 10 dwelling units. All of those must be provided on the property and not on the surrounding streets.

Ms. Olson from the YWCA stated she was not opposed to the new development or zoning but was concerned with the safety and security of the women and children who are in the shelter spaces that are part of the YWCA campus. She stated she would like the developers to commit to buildings of 3 stories or less in height to protect the privacy of her clients and their families. Mr. Peart testified he was offended by the zone change application and requested the Zoning Commission require the applicant to submit a traffic study before the application moves forward. He stated any re-development would appear to be putting lipstick on a pig. Ms. Noelle stated she understood the need to adjust the zoning but did not believe the property could support a zone district like NX3 that allows a much higher density of development than the other NX zone districts. Mr. Kessler stated he was opposed to the zone change due to its implied density and the likelihood none of the units would be affordable. He stated Billings already has enough unaffordable housing at this time.

Anna O'Donnell spoke in opposition to the zoning request. She stated her primary concern was the additional traffic loading to Lewis Ave that provides a primary bike route to and from downtown Billings. She stated she is on the Bicycle and Pedestrian Advisory Committee (BPAC) and is concerned the new traffic from this development would damage the safety of bicyclists and pedestrians on Lewis Avenue. She stated she observes children darting across 8th St West at Lewis Avenue already and any additional traffic would make this situation worse. She stated she was also concerned the developer did not have a community-wide meeting before the application was submitted and there was no traffic study available. Mr. Romine stated he owns the 6-plex apartment across the street and does not support the proposed zone change. He stated leaving the tennis center in a CMU1 zone could also allow that property to have many inappropriate uses in the future including a liquor store or a restaurant with the drive through service. He stated he would be in support if the zone change made the tennis center a nonconforming use. He stated the north side of Lewis Avenue was mostly one or two-family dwellings and the Elks property zoning should reflect the same type of housing and not the mixed residential zone proposed. He stated multifamily dwellings tend to lower property values of adjacent single family and two-family dwellings. Mr. Langman stated he was in favor of the zone change because it will bring a much-needed housing choice to the mid-town area. He stated there were many amenities nearby and Lewis Avenue can handle the additional traffic. He stated the proposed zoning was preferred to the existing CMU1 zoning. Ms. Wetsch stated there was no demand for this type of housing in this area. She stated the area needs more single family homes and the multifamily housing would reduce the surrounding property values. Mr. Thayer stated he has witnessed a lot of traffic accidents at 9th St West and Lewis Avenue. He state the YWCA does a good job as a neighbor but is concerned this new developer will not provide the same sort of consideration. Mr. Kittsons stated he was opposed primarily because of the traffic including the construction traffic that will destroy the surrounding streets. He stated his neighborhood has tried to get the City Engineer to put in place traffic controls to slow traffic but the city has refused to address the current problem. He stated off-street parking will be a problem by displacing the tennis center parking with new housing. He stated the Elks Lodge has been there a very long time and an environmental assessment should be required in addition to a traffic study. He stated renters don't pay taxes so none of these new residents will contribute to the community.

Mr. Dutton stated the city will not be able to force the new owners to dedicate the east 1/2 of the right of way for 10th St West and this will endanger his tenants by forcing all the new traffic on to a half-developed street. He stated most of the traffic from the Midway Townhomes at Yellowstone and 10th St West and the Stoneridge Apartments uses 10th St West to access Lewis Avenue. He stated Yellowstone Avenue is a completely destroyed street with no remaining pavement between 9th St West and 10th St West. He stated there is not enough off-street parking right now for the Stoneridge Apartments and many of those tenants and guests use the Elks Lodge parking lot. He stated the Zoning Commission should not be seduced into believing the city can require any street improvements through the traffic study process. Ms. Petersen stated she is a daily walker and passes through this area on a regular basis. She state Yellowstone Avenue south of the Elks Lodge is a terrible road and most people only use 9th St West or Lewis Avenue to drive in the area. She stated Lewis and 9th St W already has too much traffic and is not safe for pedestrians. She stated she was also concerned about school overcrowding. Ms Wright stated this application came as a surprise to her and more should be aware of this development. She stated she supports infill but the proposed zoning is too much density for this property. She stated the zoning would allow buildings that are too tall for the area. She stated the mixed residential zone does not require any landscaping, open space or other improvements. She stated she was concerned about a stormwater detention area on the southeast corner of the property and how this development may cause this to overflow. She stated there should be a master plan submitted and a traffic study submitted before the zoning is approved.

Ms. Harding stated she is also a daily walker and that traffic is a big concern for her. She stated many drivers on Lewis Avenue speed and this has resulted in more accidents than ever before. She stated there should be a traffic study first and it should include the accident history of all the surrounding area. She also stated she would like to have more traffic enforcement in the area. Mr. Berry stated he has lived in the same place for over 30 years and has watched the number of kids in the neighborhood increase steadily. He stated there are a lot of kids who walk to school and the speeding on Lewis has gotten worse. He stated he was concerned about adding to the traffic and the number of children who have to walk to school. Mr. Trafton stated a traffic study should be done first and should include a wide area all the way down to Clark Avenue. He stated he understood the need for more multifamily housing but was not in support for this location. Mr. Wright stated he was primarily concerned with the stormwater drainage from the property and the catchment basin on the southeast corner of the property. He wondered whether the developer has even considered this storm water and how to control it when the development occurs. He stated there is significant established architecture in the area and believes a master plan and traffic study should come before the zoning is approved. Mr. Ferro stated he was concerned with the value of his property if this site is built with multifamily apartments. He stated he was stunned the developer thought 200 units would fit on this property. He is concerned that many renters will increase parking issues, crime and other problems. Mr. Halverson stated he was in favor of the zone change because it will bring a much-needed housing choice to this area. He stated it is often the argument that people understand the need for apartments but never support them in an infill situation. He compared this dichotomy to children who tell their parents they can agree that vegetables are good for them, but for this meal they don't want any vegetables.

Mr. Kanning responded to the comments. He thanked everyone for the input and appreciates their concerns. He stated the traffic study literally cannot be done until the site plan, including the arrangement of the buildings, access points and other details are finalized. The traffic study is based on actual numbers of dwelling units. He stated some comments on-line have stated the Avenue C apartments are not affordable and so these apartments will also not be affordable dwelling units. The Avenue C apartments was an example of a recent project by Collaborative Design and is not owned by Thrive Corporation. He stated these apartments will be market rate apartments. These units will not be subsidized to make them affordable to a certain market segment for low to moderate income families. He stated the zoning regulations dictate the mailed notification area for this application (300 feet from the boundary) as well as notice to the neighborhood task force for this part of town (Central Terry). He stated there is an existing stormwater trunk line that runs down 10th St. West and connects to the larger stormwater drainage system owned by the city. He stated this builder as do all builders, has to comply with the stormwater regulations adopted by the city and enforced through engineering. He stated the NX1 zoning is in character with the existing N2 zoning on the north side of Lewis Avenue. He stated NX1 zoning has a lower height limit that matches the N2 and the buildings will be compatible with the existing homes. He stated all development is required to provide street frontage landscaping, off-street parking and control of stormwater. 

Mr. Goodridge also provide testimony in favor of the proposed zone change. He stated he is representing the Elks Lodge and the existing CMU1 zoning is the same zoning as Shiloh Commons at Central Ave and Shiloh Rd. He stated this probably same style of development is not a viable option for most of this property. He state every neighborhood supports kids who walk to and from school and this development will not be detrimental to walkability. He stated the 2016 City Growth Policy supports and encourages this type of infill. He stated the most common word in response to the question of "where should we grow" in 2016 was "infill". The 2016 growth policy adopted guidelines to encourage infill and the zoning code update implemented these guidelines through Project ReCode. He stated not all property generates the same amount of tax revenue per square foot of land. He stated the Shiloh Commons development generates about 83 cents per square foot while the Avenue C apartments generates about $1.18 per square foot of land. He stated this property will have higher tax revenue per square foot when it is re-developed. 

Mike Larson, Chair of the Zoning Commission, closed the hearing. Commission member Greg McCall made a motion to forward a recommendation of approval and adoption of the findings of the 10 criteria for Zone Change 1005. The motion was seconded by David Goss. The Commission voted 3-0 to approve the motion. 

City Council Hearing
The City Council held a public hearing for the first reading of this zone change on February 28, 2022. The Council received the Zoning Commission recommendation, testimony from the applicant and agent and testimony from interested parties. These include the following individuals: Jeff Kanning, Collaborative Design Architects for the prospective buyer, Thrive Corporation; Jeff Isom, Special Representative of the Elks Lodge; Kolten Knatterud, IMEG Corporation and past president of the Home Builder's Association; Greg McCall of McCall Homes and Development and member of the Zoning Commission; John Halverson of 239 Avenue F and land use planner; David Goodridge, agent for the Elks Lodge property; Merry Lee Olson, Director of the YWCA at 909 Wyoming Avenue; and Linda and James Healow of 312 Clark Avenue.

Mr. Kanning presented information on the proposed re-development of the property, the pre-application neighborhood meeting and how the new development will be required to comply with all city regulations and requirements for any new development including storm water control, traffic control and mitigation of traffic impacts as required by City Engineering, building, off-street parking and landscaping at a minimum. Mr. Kanning stated this was a great location to encourage infill development. The proposed zoning is essentially down-zoning from the CMU1 zone district to neighborhood zones that will only allow residential uses. The new owner intends to keep and re-purpose the existing tennis center. The center really is only 4 indoor courts with no audience area or extra space. Mr. Kanning stated the new development will be compatible with the existing surrounding neighborhood including the multifamily apartments on 10th St W and the apartments on the YWCA property.

Mr. Isom stated the Elks Lodge started 60 years ago at this location with over 5,000 members. The current membership cannot support the existing lodge building and property. He stated the re-development will be a good infill project.

Mr. Knatterud stated there is a housing affordability crisis in Billings and Montana. He stated this project will provide the type and range of housing choices the city should be encouraging to alleviate this issue. He stated it is difficult to recruit new staff for his firm when there is a 6-8 month waiting list to get into an apartment in Billings. He stated this included any type or price range of apartments.

Mr. McCall stated he has also been a member and past president of the HBA and there is clearly a housing crisis in Billings - and not just supply but also types of housing choices. He stated he did some background checking on Thrive Corporation before tonight's hearing and they have a good background in this type of development. He stated this project will be a good project and the Planning staff will ensure all the buildings and the development will fit in the area.

Mr. Halverson stated it was his experience as a young professional in Billings there are not enough housing choices. He stated public safety and traffic safety is important. He stated the city should look at the design of the streets first since the problem is not capacity but speeding and uncontrolled intersections. He stated the Growth Policy for the city supports and encourages infill development and this application certainly fits that policy. He stated there are at least 44,000 renters in Billings and these renters deserve more choices.

Mr. Goodridge state he is a commercial real estate broker for the past 17 years in Billings. He has listed the Elks Lodge property for the past two years and the only contract to purchase the property has been from Thrive Corporation. He stated development under the current zoning of CMU1 would not allow just multifamily development - it has to be within a mixed use building. He stated for a site this size, that would equal about 50 to 60 thousand square feet of ground-floor commercial space. He stated the triple net price for this space would have to be about $25/sf to make financial sense. He stated this location on Lewis Avenue, 2 blocks north of a major arterial street, with only 5,000 vehicle trips per day, could not lease these spaces for that amount of money. He stated if the city is in favor of infill, then this is the place to support infill. He urged the Council to approve the Zoning Commission recommendation and to trust the city staff and the volunteer boards who have worked on this application.

Ms. Olson stated she has worked well with the Elks and the other surrounding property owners to help keep the YWCA's shelter residents safe over the years. She stated she was not opposed to the zoning per se, but had several concerns. First, there is no concept plan to review, second, the multifamily buildings at 4-stories tall would not be compatible with the YWCA's campus, third, the density of the development is too high and last, public safety has not been addressed. She stated they serve a very vulnerable population of women and children. She is concerned the new apartments will not keep these residents safe. She asked the Council to delay action on the zoning and request the applicant to consider a Planned Development zone, so all the site details can be done as part of the public process.

Mr. & Mrs. Healow stated concerns regarding school children who will be walking to school from this development and the increased traffic that will impact the safe route to school. Mrs. Healow stated the Broadwater Elementary school may not have the capacity to accept more students. Mr. Healow asked the Council to just say no to the zone change. He stated Thrive Corporation is not licensed to do business in Montana. Their activity here reeks of dark money and defiance of Montana law. Mr. Healow stated there are ridiculous gaps in the findings for the zone change. He stated that zoning is not the key to affordability for housing on the property - the sales price is the key to housing prices. He stated he was curious if any of the neighbors would be here to support the zone change. He stated the current zoning could allow a rendering plant - Billings does not have one right now so the owners would be filling a need. He stated the application reeks of spot zoning and is not compatible with the area. He stated the one reason there is a traffic signal at 14th St W and Lewis Avenue was a student that got run over and killed trying to cross Lewis Avenue to get to school. He urged the Council to vote against the zone change.

Mayor Cole closed the public hearing. Council member Shaw made a motion to approve the zone change and adopt the findings of the 10 criteria as recommended by the Zoning Commission. The motion was seconded by Council member Joy. The Council debated the discussed the merits of the motion and asked staff questions for clarification of the findings and the criteria for zone changes. Questions were related to district requirements specific to building heights, building location, and parking requirements. Council members also had transportation oriented questions ranging from existing road conditions, connectivity, how future improvements are triggered, and requirements related to traffic studies. After significant discussion and questions and answers with CIty staff, the Council voted 10 to 1 in favor of the motion. The zone change was approved on first reading.

 

The City Council may:

• Approve and adopt the findings of the ten review criteria for Zone Change 1005 on 2nd reading; or,
• Deny and adopt different findings of the ten review criteria for Zone Change 1005 on 2nd reading; or,
• Delay action on the zone change request for up to 30 days; or,
• Allow the applicant to withdraw the zone change request.

The City Council voted 10 to 1 to approve the zone change and adopt the Zoning commission's recommended findings of the ten review criteria at the first reading on February 28, 2022. Unless the Council is prepared to submit different findings of the ten review criteria, staff recommends the Council approve the zone change on second reading.

Approval or denial of the proposed zone change will not have an effect on the Planning Division budget.
 

Fire and Police: The subject property is served by city public safety services. The Police and Fire Departments had no concerns with the zone change.

5) Will the new zoning provide adequate light and air?
The proposed zoning provides for sufficient setbacks and building separations to allow for adequate separation between structures and adequate light and air.

6) Will the new zoning effect motorized and non-motorized transportation?
Non-motorized travel -- walking and biking -- is an essential part of this area of Billings. There are some deficiencies in the surrounding road network including half-built or under-built roads. Connecting this property to a full mobility network will be essential. Completion of the roadway and walking infrastructure usually only happens with new development. The property is within walking distance to Grand Avenue (1/4-mile north) and Broadwater Avenue (2 blocks south) - two major commercial corridors connecting to the rest of Billings. Fixed bus routes on MET transit are available on Grand and Broadwater. Lewis Avenue is a major bikeway corridor connecting this property to the downtown core.

7) Will the new zoning will promote compatible urban growth?
The proposed down-zoning from CMU1 to the NX1 and the NX3 zone districts is compatible with urban growth and the provision of city level services to the new residents. The proposed zone district boundaries are consistent with the urban growth in this area and will be compatible with the surrounding neighborhoods. The CMU1 zone can allow up to a 4-story structure with ground-floor commercial uses and 3 stories of apartment above. The proposed NX1 zoning for the Lewis Avenue frontage will be height limited to 27 feet, and all garages will be rear-loading to allow a compatible residential frontage. The NX3 zone can allow taller structures - up to 4 stories - but also requires rear loading garages or surface parking/detached garages to the rear of a building space. The NX3 also requires provision of some usable open space for each 3 acres of development. Except for a small portion in the southeast corner, the proposed NX3 zone is not across the street from any single-family or two-family zone districts.

8) Does the new zoning consider the character of the district and the peculiar suitability of the property for particular uses?
The proposed zoning does consider the character of the district and the suitability of the property for the proposed use. This area between Lewis Avenue and Broadwater is an under-developed are of the Central Terry Neighborhood. Geographic challenges are in the area including Spring Creek, a large underground drain and dramatic changes in topography from north to south. The property is suitable for the proposed uses for multi-family development.

9) Will the new zoning conserve the value of buildings?
The property has an older structure that will be difficult to re-purpose as is. The new zoning will place this building in a zone that does not allow the use by right. It will become legally non-conforming. The buyer does not intend to keep this structure. The newer tennis center will be in the remaining area of the CMU1 zone district. This will preserve the value of this building. Approval of the zone change will provide certainty for the intended development to surrounding landowners and may help to maintain property values of adjacent buildings. In general, new construction tends to raise surrounding property and building values.

10) Will the new zoning encourage the most appropriate use of land throughout the City of Billings?
The proposed down-zoning from CMU1 to NX1 and NX3 for 6.5 acres of the 8-acre parcel will encourage the most appropriate use of this land in Billings.