Kalispell studies options for Old School Station

The Kalispell City Council is considering new options to finance a $3.1 million project at a proposed industrial park south of town.

The council Monday night discussed a combination of three economic-development tools to pay for part of developing the Old School Station industrial park.

Kalispell has agreed to work with Montana Venture Partners on the project.

"I want to stress this isn't a 'help the developer thing,'" City Manager Jim Patrick told the council. "It's a 'help the companies locate here.'"

The city anticipates that installing infrastructure (such as sewer, curbs, gutters and streetlights) in the park will draw high-tech companies to the area.

The developers will spend $3 million to run sewer lines to the property.

The council during its work session Monday night tentatively approved a plan to use two kinds of tax-increment-fund districts (industrial and technology districts) and a special-improvement district.

The council will vote formally on the funding plan during a later meeting.

The districts would be within the 55-acre Old School Station property and would not affect nearby properties.

The land for the industrial park is 1.9 miles south of town at the intersection of Demersville and Rocky Cliff roads, southeast of Snow Line Tree Co. Old School Station takes its name from the old Demersville School that still stands near the park.

The city initially planned to create an industrial tax-increment-fund district to fund infrastructure installation.

But industrial tax-increment funds apply only to businesses such as lumber mills or oil refineries that use and add value to raw materials from Montana.

The industrial park likely will have some of those kinds of businesses as well as others that fall under the technology tax-increment-fund guidelines, Patrick said.

Developer Andy Miller of Montana Venture Partners said during a previous meeting that the industrial park would have 16 lots available to high-tech businesses.

Kalispell initially would establish a special-improvement district to fund the infrastructure, because the properties in that district would pay off the bonds. Additional money collected from the tax-increment funds in the special-improvement district also could be used to repay those bonds, City Attorney Charlie Harball said.

Other businesses that don't meet either the industrial or the technology specifications could locate in the park and would be subject only to the special-improvement-district assessments.

Taxpayers outside the district would not pay for the project.

Miller's background is in commercial industrial development. His partner is Paul Wachholz, who founded Coldwell Banker Wachholz & Co. and Fun Beverage, for which he is the chairman.

In June, the council annexed the park. It will review the developers' zoning request Monday during a regular council meeting. The planning board last month unanimously recommended the council grant an industrial-commercial zoning designation.

The council also heard Monday from a couple who inadvertently were affected by the annexation. Tim Quigley said the park's proximity to his and his wife's property means they won't get the liquor license for which they are applying.

They plan to open a pub this season in Somers.

During June, the couple received conditional approval from the state Department of Revenue for their liquor license. But they recently found out the industrial park (now part of the city) is within five miles of the pub site, so they must purchase a city license.

They would have to buy a license from a current license holder, which can be a pricey venture because city licenses are scarce, Quigley told the council.

Mayor Pam Kennedy told the couple she sympathizes with their plight but that the city has no control over liquor licenses.

She suggested that city officials might speak with the Revenue Department about whether Quigley's license could be grandfathered in, because the couple started the process before the annexation.

Reporter Camden Easterling can be reached at 758-4429 or by e-mail at ceasterling@dailyinterlake.com