Several businesses in Virginia City are embroiled in a legal battle with the Montana Department of Commerce, drawing attention from state legislators and the mayor. A letter signed by 24 Montana House members expresses concern over Commerce’s plan to significantly increase lease rates in the historic and tourist-friendly town. Mayor Justin Gatewood also penned a letter on January 20, highlighting Virginia City’s annual draw of 600,000 visitors and its $75 million economic impact, with $45 million benefiting Madison County.
Mayor Gatewood’s letter requests judicial intervention to preserve the current leasing arrangements managed by the Montana Heritage Commission. “The Department of Commerce’s recent decision to terminate existing MHC leases has left the Town questioning not only our long-held partnership with the State but also the future of Virginia City,” he stated.
The Department of Commerce has not commented on the ongoing litigation. Late last year, under financial duress, the Montana Heritage Commission chose to cancel contracts with Virginia City businesses. This commission is tasked with managing historic properties like Virginia City and Reeder’s Alley in Helena.
Some businesses reportedly received more favorable terms, according to then-acting director Mandy Rambo, who noted missing legal clauses in certain contracts. On December 29, Kirk Belding and Jason Lange, business operators in Virginia City, filed a lawsuit in Madison County District Court against Commerce, the Heritage Commission, and April Armstrong, who is named as the executive director in court records.
The lawsuit seeks a preliminary injunction to prevent the termination of concession contracts and requests a hearing to argue for a permanent injunction, scheduled for February 23. Court documents reveal Belding faced a steep increase in lease rates from 15% to 20% of gross sales, a change he claims threatens his business. Attempts to negotiate with the Commission have been met with resistance.
The state contends the lawsuit lacks merit and argues the case should be moved to Lewis Clark District Court, as stipulated by the contracts, which mandate disputes be addressed in Helena. “Applicants cannot satisfy their obligation to demonstrate that they are likely to succeed on the merits,” states the state’s response, filed on January 15, urging dismissal of the structurally flawed case.
Plaintiffs Emergency Petition for Temporary Restraining Order and Preliminary Injunction
Request for Judicial Notice
