Kidsports seeks permanent easement

Kidsports President Dan Johns said “the stars seem to be aligning” for the organization to acquire a permanent easement at the sports complex, a part of Section 36 school trust property along U.S. 93 North.

That’s a relief for the youth-sports organization, which has been concerned that rising property values in that area eventually could affect its ability to afford the lease on the school trust land.

“We have the potential for a win-win-win for all the players,” Johns said of ongoing talks between Kidsports, the city of Kalispell and the Montana Department of Natural Resources and Conservation.

The state agency manages the roughly 600-acre Section 36 property to raise money for public schools around the state.

On behalf of Kidsports, the city entered a 40-year lease for 138 acres in Section 36 in 1996.

The cost of that lease reached $42,910 for 2011, and increases by 1.5 percent a year.

Because the state is mandated to capture full market value with all of its leases on school trust property, the city and Kidsports face a midlease property reappraisal in about five years.

Given surrounding commercial development in north Kalispell and on Section 36 over the last decade, the fear is that Kidsports will not be able to afford its lease going forward.

“At this point the lease is affordable and we’re making that payment and there’s no undue strain. ... Halfway through the lease, the property is subject to being reappraised, and that will increase significantly the payment. And that concerns me,” Johns said.

When the city and Kidsports entered into the lease in 1996, there was nothing but alfalfa fields on surrounding Section 36 land, Johns said.

In the years since then, Kidsports has raised nearly $5 million to build an array of sports facilities that draw thousands of young athletes and their families to Kalispell from surrounding areas and states.

The nonprofit runs youth baseball, softball, soccer and football programs. As many as 3,500 children in and around Kalispell participate each year, and the user fees from those programs generate money for Kidsports to pay the lease.

The Kidsports facilities also are used by area high schools. Its latest facility, Miracle Field, which is dedicated for use by athletes with disabilities, opened in June 2009.

Kidsports hasn’t been the only growing development in north Kalispell.

Surrounding development in Section 36 by businesses such as Lowe’s, Costco and McDonald’s — all of which have 99-year leases that weren’t available back in 1996 — has driven up land values in the area and proven to be a financial boon for the city and school trust fund coffers.

But that development threatens to make it hard for a small nonprofit like Kidsports to afford its lease in the neighborhood.

“Those [land] values have increased. Even with the downturn in the market it still hasn’t gone down to what it was when it was last appraised,” Johns said.

The goal is to secure a permanent easement in Section 36 for Kidsports as soon as possible, Johns said.

That request must be made by the city of Kalispell, and entails Kidsports raising enough money to make a one-time payment to the state that would cover the full market value of the land based on a current appraisal.

“That’s our first priority. Second would be a long [99-year] lease, but I think that would be quite expensive. When you add the totals it would exceed what we would pay for a permanent easement,” Johns said.

Like any other school trust property dealings, the permanent easement must also be approved by the State Land Board.

Johns ventured an early guess that a permanent easement for the Kidsports land could cost $2.5 million to $3 million. A fundraising drive will hopefully be up and running by next year at the latest, he said.

“That would be the single largest fundraising project we’ve ever undertaken, but I think Kidsports’ success is evident. Hopefully we’ll be able to gather the forces to make sure it is there for generations to come.”

That fundraising effort could get a boost from more development on Section 36.

Later this month, the state plans to put out a request for proposals to solicit ideas from developers interested in 21 to 29 acres of Section 36 land fronting U.S. 93 North.

The request has been several years in the making, and is an idea put together by Kidsports, the city of Kalispell and DNRC.

If a developer is interested in using it, that land being offered for development could include up to 11 acres that Kidsports has agreed to release from its lease for the project.

Including that acreage would reduce the total amount of land Kidsports leases and remove some of the highway frontage, potentially reducing the appraised value. It would provide a one-time payment to Kidsports that could then be used to help pay the state for the permanent easement.

Additional development on Section 36 would generate more revenue for the school trust and taxes for the city of Kalispell.

Another aim of the request for proposals is to find a developer willing to work directly with Kidsports in some fashion.

“There may be some intriguing opportunities for a developer to realize there is this adjoining sports complex that certainly could provide value,” said Bob Sandman, area manager at the DNRC office in Kalispell.

The hope, Sandman said, is to have a solid development proposal everyone likes in place by the end of the year. A second request would then go out for someone to actually build the proposal.

“What I’ve joked about more than once with city council is you know how there’s a Super Walmart, well we’re looking for a super Dairy Queen, where they give a kickback because they’re getting a thousand kids coming through the door who all want an ice cream after they play,” Sandman said.

“I’m tongue-in-cheek with that. But this [sports] complex is really valuable to this community and that has to be an opportunity for someone.”

Reporter Tom Lotshaw may be reached at 758-4483 or by email at tlotshaw@dailyinterlake.com.