Council supports industrial park

The ball on developing the Old School Station industrial park is back in the private sectors court.

Citing a need to diversify the local economy, the Kalispell City Council overwhelmingly approved several measures Monday that backed Montana Venture Partners efforts will build an industrial park on a 55-acre plot two miles south of the Kalispell. The city annexed the site last summer.

Those approved measures included:

-Setting up a special improvement district at Old School Station in which the new tenants will pay for infrastructure improvements in the park. Those improvements would include water and sewer lines, streets and sidewalks.

-Preliminary approval of a tax-increment district at the park, in which surplus property tax revenue above a determined amount will be used for infrastructure projects not covered by the special improvement district. A vote on final approval is set for Nov. 21.

-Extending the citys growth policy boundaries south along U.S. 93 to Old School Station, encompassing roughly four square miles. This begins mapping out a blueprint to extend the citys utilities and territory essentially a first step to push the city limits to Old School Station, which is now an island of city land surrounded by unincorporated Flathead County.

-Preliminary approval to zone the park for light industrial use. The final zoning vote is Nov. 21.

The council passed each measure 7-1. Council member Jim Atkinson was absent because he is recovering from back surgery.

Council member Bob Hafferman dissented each time, arguing that public money either directly or set aside as surplus tax revenue should not be used to boost private developers.

If they dont invest their own money, theyll cut and run at the opportune time, Hafferman said.

Mondays decisions allows Kalispell-area developers Andy Miller and Paul Wachholz to offer a more substantial industrial park proposal to prospective tenants. However, numerous details still have to be worked out, including pinning down tenants, setting development schedules and working out construction cost estimates.

Were trying to move as quickly as we can, Miller said Tuesday.

Wachholz and Miller hope to extend water and sewer lines from the city limits to Old School Station in three or four months and theyre paying the $3.1 million to $3.5 million to do so. They hope to build streets, sewer and water lines within Old School Station by next summer. That work will be funded by the parks future tenants

and their taxes through the special improvement and tax-increment districts. The estimated cost will be at least $4 million.

The parks first and only confirmed tenant is Fun Beverage Inc., which plans to move there from its present location on U.S. 2 West. Miller and Wachholz expect construction of the $8 million to $9 million, 105,000-square-foot Fun Beverage building to begin next spring.

Construction is expected to take 10 to 12 months, meaning Fun Beverage would move to its new location in 2007.

The biggest prospective facility is a proposed entertainment center with two buildings: A 58,000-square-foot facility consisting of a administrative hub with six spoke-like wings sticking out of it and an 18,000-square-foot sound-stage building.

The hub-and-spokes building would hold a 120-seat theater, a digital animation studio, video and Internet game design facilities and scriptwriters rooms, plus movie, television and radio production facilities. Wachholz and Miller plan to build the administrative hub and theater as soon as possible. The other facilities, especially those in the spokes, will be added as tenants are signed.

Miller and Wachholz do not have other potential tenants signed, construction timetables or a budget mapped out for building. They are wooing several prospects. These prospects are not major studios but instead are smaller, newer ventures, the pair said, declining to elaborate.

Montana Venture Partners has needed a Kalispell facility solid enough in its development before it can realistically convince prospects to move to Old School Station, the pair said.

Its gotta be there, and not pie-in-the-sky, Wachholz said.

Miller added: Its a chicken-and-the-egg kind of thing.

The pair see the Flathead Valley, with its significant part-time population of film and music artists, as a potential television, film and video hub.

Outside of the entertainment center, the partnership is courting at least three other potential tenants, including one or more Israeli companies that would be involved with U.S. Department of Homeland Security work. Wachholz and Miller declined to elaborate on those ventures, other than to say the Israeli prospect requires a 15,000-square-foot high-tech facility.

The chance to diversify Flathead Valleys economy beyond the service and construction industries prompted much of Mondays public and council support of Old School Station.

At Mondays public hearings, 10 people independent of the developers spoke in favor of the Old School Station plus a tax-increment district to support it. Supporters included representatives from the Kalispell Area Chamber of Commerce, Flathead Valley Community College, Montana West Economic Development and the Flathead Economic Development Authority.

Three people opposed setting up a tax-increment district or providing significant city help to the developers. Kalispell resident Curt Hafferman said: Youre taking away the risks from them.

Supporters pointed to the park potentially creating high-paying technological jobs, which will attract newcomers and retain the areas youths in the valley to buy homes and contribute to the areas tax base.

The diversification of our job market is not that great … We need to bring more technological jobs to the valley, council member Tim Kluesner said.

Council member Hank Olson added: Unfortunately, we cant do that because were pretty. We have to do something about it.

Evergreen resident Jack Fallon argued that rerouting Old School Station surplus tax revenue through a tax-increment district would force the county, city and schools to raise their own property taxes to compensate for the lost extra income.

On Monday, School District 5 told council member Randy Kenyon it is neutral on creating an Old School Station tax-increment district.

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