Gallagher calls EPA's appeal ruling on $20M Butte center 'deeply disappointing'

A federal agency is standing by its decision to cancel a $20 million grant awarded to Butte-Silver Bow to build a community recreation and wellness center.

The Environmental Protection Agency announced in January that the proposed facility, also dubbed a “resiliency hub,” would receive the money from the agency’s Environmental and Climate Justice Community Change Grants Program.

But the EPA Region 8 Office canceled the grant on May 2 as part of the Department of Government Efficiency spending cuts nationwide under the Trump administration. It said the grant was not in line with spending priorities.

The county filed an appeal with the EPA but the agency rejected it, J.P. Gallagher, Butte-Silver Bowy’s chief executive, told The Montana Standard on Wednesday when asked about the outcome.

In a missive to Gallagher dated Aug. 28, the EPA said the “One Big Beautiful Bill” enacted on July 4 “rescinds unobligated balances from all EPA Inflation Reduction Act accounts except funding for grants to reduce air pollution at ports.”

The grant was funded entirely with money that was terminated under the July 4 law so funds for the wellness center were cut, minus allowable termination and close-out costs, the letter from an EPA Region 8 official says.

“As a result the EPA cannot offer reinstatement as a remedy,” the letter said.

The so-called “Big Beautiful Bill” was a major funding and tax bill passed solely by congressional Republicans in July and signed by Republican President Donald Trump. No Democrat supported it.

The Inflation Reduction Act was a $739 billion package passed by congressional Democrats in August 2022 and signed by then-Democratic President Joe Biden. No Republican supported it.

Gallagher said he told commissioners about the denial during a recent council meeting and county attorneys were exploring possible next steps.

He told the Standard on Wednesday the denial was not a surprise but “it is nonetheless deeply disappointing” the grant was canceled. The decision reflects priorities of President Trump and framework of the Big Beautiful Bill, he said.

The Dennis and Phyllis Washington Foundation announced in March it was giving a $15 million grant to support construction of the so-called Butte CommUNITY Hub and potentially another $2.5 million.

Gallagher has said the foundation funds were “matching money” to supplement the project and provide more programs, not fund it outright. In other words, they were contingent on the federal grant going through.

He told the Standard on Wednesday that despite the setback, “our commitment to the Community Hub remains unwavering.”

“We are profoundly grateful to the Dennis & Phyllis Washington Foundation & Montana Resources for their continued support and belief in this transformative project,” he said. “Their partnership is a testament to the power of community-driven investment.

“Butte-Silver Bow will continue to pursue every available avenue — through grants, funding sources, and strategic partnerships — to bring this vital resource to life,” Gallagher said. “The Community Hub is more than a building; it will serve as an inclusive community space that everyone can benefit from.”

As planned, the center would serve a host of functions, ranging from providing recreation and wellness programming and facilities to a shelter during times when wildfire smoke diminishes air quality and threatens health.

County officials knew earlier this year the funding was in jeopardy, but Gallagher had previously expressed optimism it would still come through and the center would be built near the Civic Center in the next three years.

The cancellation notice on May 2 came only hours after county officials were given the OK to start drawing and spending the money.

“It’s a kick in the stomach for sure,” Gallagher said at the time.

He said Butte-Silver Bow was considering a legal challenge, saying the county had signed a contract for the grant. He noted that numerous lawsuits have been filed across the country in response to spending cuts under the new administration.

The county filed an appeal with the agency in June seeking to have the funds reinstated — the appeal the EPA turned down in August.

Gallagher says Butte-Silver Bow can file a lawsuit against the federal government within six years of the grant cancellation and might decide to do so when a new presidential administration comes in.