City won't make building project pay fees

Developers of a proposed 23-unit apartment building for low-income senior citizens have dodged a deal-breaking bullet.

That bullet was a proposal to require that the tax-exempt project provide payments in lieu of taxes to Kalispell.

Those payments likely would provide $3,000 annually to the city.

But the developer - Minneapolis-based Accessible Space Inc. - said the $3.5 million in federal money for the project comes with strings that forbid any property taxes or payments in lieu of taxes.

"With this condition, we'll not be able to build," Dan Billmark, the nonprofit corporation's development director, said at Monday's Kalispell City Council meeting.

Ultimately, the council postponed a final decision on the project until June 15.

But it voted 6-3 Monday to eliminate the payment-in-lieu-of-taxes requirement.

"If we demand the $3,000, we lose the entire project," said council member Duane Larson. "The benefits of the project outweigh the costs to the city."

Council member Randy Kenyon said the city government has wrung its hands for years over the lack of affordable housing in Kalispell, and this is a chance to provide such homes.

"It's time to put our money where our mouth is," he said.

Council member Tim Kluesner countered that eliminating payments for this project would set a bad precedent for other nonprofit ventures.

Mayor Pam Kennedy and council members Kenyon, Larson, Hank Olson, Jim Atkinson and Kari Gabriel voted to remove the payment requirement. Kluesner, Bob Hafferman and Wayne Saverud wanted to keep the requirement.

Accessible Space wants to obtain a conditional-use permit to construct the building on 1.9 acres at the eastern end of Indian Trail Road between Grandview Drive and Indian Trail Road.

Accessible Space hopes to break ground in 2010 and finish construction in 2011.

This would be Accessible Space's 11th such project in Montana, and first in Kalispell. Overall, the corporation has several dozen projects scattered throughout the West.

The company is using federal Housing and Urban Development money to build the two-story complex for senior citizens who earn 50 percent or less of the area's median income.

The Flathead's median income is roughly $49,000 a year -meaning the complex would target people with annual incomes of $24,500 or less.

Accessible Space last year obtained the only 2008 federal appropriation for this type of project in Montana, Colorado, Idaho, Utah, North Dakota and South Dakota.

Three neighbors opposed the project, two had reservations but did not oppose it and the site's owner Robert Ekblad supported it.

Opposition and reservations focused on increased traffic on a narrow access road, the location and direction of the long, narrow building within the site, and its height.

The council and Accessible Space agreed to lower the building's 34-foot height to 28 feet.

The council wanted the city staff and Accessible Space to discuss tweaking some other design features, so the final vote on the project was postponed.

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