Filmmakers looking at Old School Station

Council hears news during discussion of tax-increment proposal

A small movie production complex is apparently a potential tenant for the fledgling Old School Station industrial park south of Kalispell.

City Manager Jim Patrick gave a bare-bones outline of the potential complex to Kalispells City Council on Tuesday during a workshop discussion on tax-increment districts.

Paul Wachholz, one of the Old School Station developers, would neither confirm nor deny that a film production operation is considering making the industrial park its home.

However, Wachholz said four potential unnamed tenants, including one foreign company, are waiting to see if the Old School Station 55 acres of primarily farm land will get the City Councils approval for an industrial subdivision at that site, complete with a proposed special improvement district and a tax-increment district to be installed to pay for infrastructure construction.

The council has scheduled public hearings and votes on the tax-increment and special improvement districts next Monday.

On Tuesday, Patrick told the council that developers Wachholz and Andy MIller have two movie production buildings on the drawing board for a potential tenant.

One is a 58,000-square-foot building that includes a 120-seat theater, a digital animation studio, a television production studio, a radio production studio and scriptwriters rooms, Patrick said. The second is a 60,000-square-foot production building with a sound stage.

The projects investors are serious and want to proceed, and they also are being courted by Bozeman, Patrick said.

After the meeting, Patrick declined to elaborate on the companys identity, citing developer confidentiality agreements. He also declined to say how many jobs could come with such a complex, but said the salaries would range from $60,000 to six figures. The initial employees would likely come from outside of the Flathead Valley, but the ripple effects could lead to more jobs for local residents, he said.

On Wednesday, Wachholz said he could not discuss prospective tenant identities until he had signed contracts. But he said prospects are more likely to sign contracts if the Old School Station has the Citys Councils plat approval, along with special improvement and tax-increment districts set up.

Its a chicken-and-the-egg thing, Wachholz said.

On Tuesday, City Council members had no questions nor comments about the possible movie production tenants. Instead, council members discussed the pros and cons of setting up a tax-increment district.

Both the rapid development of the Old School Station and the concept of tax-increment districts have been controversial among council members.

The Old School Station is located two miles south of the current Kalispell city limits, and the city annexed it as an island surrounded by county land last summer.

While a council majority supported the annexation, some council members protested that the annexation process went faster than they could digest information on the proposed industrial park.

In a related matter, the council has also scheduled a Monday vote on extending its growth policy planning area south along U.S. 93 to Old School Station. A growth policy is a blueprint for plans to eventually extend city services and territory.

The Old School Station developers are already paying to extend the citys sewer lines to the industrial park, but council members are split about the concept of tax-increments districts. That hesitation prompted Patrick to bring up the movie production complex Tuesday as a example of an industrial park tenant that could be signed up with the aid of a tax-increment district.

A tax-increment district is a economic development tool with a legal maximum lifespan of 15 years. It is set up for a specific area, such as the Old School Station.

Normally, all property tax revenue from a geographic area is sent to the appropriate city, county and school district. A tax-increment district establishes that new tax revenue in that district is set aside to pay off the bonds that were used to build streets, sidewalks and utilities and thus theoretically encourage new development and broaden the tax base.

Proponents say this concept improves an area, which helps attract new businesses. Critics say the city, county and schools will have to increase their property taxes to compensate for the loss of some extra revenue from normal business growth within the tax-increment district.

In a special improvement districts, new businesses within a specific area such as Old School Station pay for many infrastructure improvements through special fees. A tax-increment district would provide an extra source of money for those improvements.

Reporter John Stang may be reached at 758-4429 or by e-mail at jstang@dailyinterlake.com