Groups detail requests for $1.5 million from city

Two groups looking to improve two west-side Kalispell malls past their retail days - Ashley Square and Gateway West - asked the Kalispell City Council for a total of nearly $1.5 million from the Westside Tax Increment Finance District fund before it closes out next June.

The district has about $1.6 million now and should accumulate about $1.75 million by the time it sunsets.

Owners of Ashley Square Mall, where government agencies such as the Department of Motor Vehicles, Social Security Administration and the Internal Revenue Service now operate, want about $640,000 for a parking lot upgrade, landscaping, faade demolition and the like. That number is pared back from an original $1 million request.

Gateway Community Center, a one-stop nonprofit center for people needing human services in the valley, is asking for $844,220 to upgrade the building's infrastructure and beef up the capacity of the Flathead Food Bank and Meals on Wheels in the former Gateway West Mall.

Representatives from the groups presented their proposals at a work session of the council Monday night. No votes are taken in work sessions.

Montana West Economic Development is working with the Ashley Square owners, real estate managers BlumCo Partners of Whitefish, in their application. Kim Morisaki of Montana West and owner David Blumhardt both spoke at the work session.

Ashley Square encompasses 63,000 square feet of retail and office space, but the portion Blumhardt bought last year includes 40,000 square feet, he said. Its strategic location at Kalispell's west entrance and its core of government-agency tenants - with a new 15-year lease just signed by Social Security - were attractive in the deal.

Bob Peterson of Stellar Recovery, a debt collection company now located in The Forum in south Kalispell, recently bought the building north of Blumhardt's. Peterson expects to add 60 employees by the end of December and another 30 later. Workers start at $10 an hour and move up to $12 or $15 after training. He urged the council to help upgrade infrastructure with this funding request.

One criteria for funding requests, Interim City Manager Myrt Webb wrote in a memo to the council, is the creation of new good jobs - those that pay a minimum of $15 hourly including benefits. Other criteria include revenue coming from out of state and an improved tax base.

Blumhardt said the upgrade would benefit the city by turning an eyesore into an attractive entrance when the U.S. 93 bypass is built.

Council member Tim Kluesner questioned whether a private parking lot could be considered public infrastructure, and stressed that the prime criteria should be job creation. Mayor Pam Kennedy argued for accountability on that point, and City Attorney Charles Harball said an agreement could include a job creation clause.

Council member Hank Olson said taxpayers will benefit when the project begins paying more taxes on a higher property valuation, but bemoaned timing of the request during city budget restraints.

Council member Wayne Saverud argued on the other side, saying that now is the right time to create a new life cycle for an old building. Council member Jim Atkinson backed that up, urging a long-term view of "our future and generations of tax dollars that a TIF is designed to create."

Gateway Community Center board president Mark Johnson, assistant manager for Flathead Electric Cooperative, noted that the co-op's unprecedented difficulty in collections right now illustrates the need for the center's services.

"We try to make it easier for people to get the help they need," he said. It's a vision "Earl Bennett dreamed up 12 years ago, and now it's happening. It's ground-breaking."

The nonprofit center for human and social services in the Flathead operates under the financial auspices of Northwest Montana United Way Inc. It has a 10-year lease with American Capital Group to use the space, with a pre-negotiated 10-year renewal and an option to buy at any time. During the lease and after any purchase, it will stay on the city's tax rolls.

Four tenants have moved into the building now and another 15 have plans to follow. All tenants will benefit if the city approves funding for telephone and computer systems, carpet and tile, changing out 14 toilets at the request of the city building department, and changing out ballasts for energy conservation and functional use. Those total nearly $354,000.

Two agencies - the Flathead Food Bank at just over $27,000 and Meals on Wheels at just under $423,000 - were a focus for improvements. Both agencies will be able to drastically increase the numbers of people they serve. The numbers are pared back from the center's original request.

The funding request, supplemented by appropriations requests to Montana's Congressional delegation and to the Flathead County commissioners, would support plans to make the Gateway Community Center one of a three-part human-services array in that area.

And it would build on the city's $3.56 million investment to purchase and upgrade a portion of the old Gateway West Mall. American Capital Group has made significant investments in the building, United Way's Sherry Stevens Wulf said. Upgrades from the tax-increment money would improve appearance for a more attractive west entrance to the city, proponents said, and could attract future tenants that would create jobs.

"This is a community development project," economic development consultant Susan Moyer said. "It is consumer-oriented and it benefits the community."

The council will study the requests, but indicated that neither one was likely to be fully funded. It will make a decision at a future council meeting.

Reporter Nancy Kimball can be reached at 758-4483 or by e-mail at nkimball@dailyinterlake.com