Council extends life of West Side TIF District

The Kalispell City Council voted Monday to extend the West Side Tax Increment Finance District, passing a resolution that authorizes a $500,000 revenue note.

The debt, issued through Rocky Mountain Bank, could keep the district alive through the year 2036.

“But there is a feature where council can call this bond at any time, starting tomorrow, with a 1 percent call fee,” Charles Harball, Kalispell’s city attorney and interim city manager, told council members. “After three years it can be called without that 1 percent fee.”

Created in March 1997, the district was on track to sunset in mid-March unless the city issued new debt for a project in its boundary before then.

The $500,000 revenue note will pay for improvements to the intersection of Appleway Drive and Meridian Road — the subject of an ongoing $11,000 traffic study — and a pair of water-line projects in the West Colorado Street area that will boost water pressures and improve fire protection.

Tax increment generated each year by the district will be used to pay off the debt.

When the district was created, taxable property values inside its boundary were capped. Taxes generated beyond those caps are steered into a tax increment fund that can be used to improve infrastructure, remove blight and foster development that leads to job creation.

The district is projected to raise $480,000 this year and holds about $2 million of tax increment money collected but never spent.

Council members voted 6-2 to authorize the revenue note, with Bob Hafferman and Tim Kluesner opposed and Kari Gabriel not present.

“We’re just fishing around because they don’t want to give back the $2 million accumulated or the $400,000 we get every year,” Hafferman said. “This is a scam as far as I’m concerned and I’m not going to vote for continuing on with a scam.”

That statement was disputed by others, including Mayor Tammi Fisher, who said Kalispell has a good system in place to handle, spend and occasionally redistribute tax increment money to the various taxing entities when requested.

Fisher pointed to “across-the-board support” for the district’s extension from economic development groups in Kalispell.

The extension sets the stage for the City Council to eventually consider enlarging the district to overlay a West Side Urban Renewal Plan that was expanded last year to include a “core area” along the railroad tracks being targeted for revitalization.

Council member Tim Kluesner said he opposes extending the district to have it available for core area projects.

“I’d rather create a new TIF to provide funding needed for that revitalization,” Kluesner said. “I don’t think it’s right to save this district so we can then do projects all across the city from east to west, which really don’t have anything to do with this district.”

Council member Wayne Saverud said that approach would delay revitalization efforts, as a new district took years to build up a sizable tax increment.

“We have a chance right now to make serious, significant investment in our future and I think it would be very unwise not to seize that,” Saverud said.

The district’s detractors on City Council likely will never be convinced of its value as an economic development tool, council member Jim Atkinson said.

“The listening audience needs to know that TIF districts are probably the best or only way we have of helping Kalispell grow and helping the community infrastructure, and helping businesses that want to grow in that district,” he said.

IN OTHER BUSINESS, council voted 7-1 to let Kalispell planning staff negotiate a contract with CTA Architects Engineers to work on the Core Area Revitalization Plan taking shape.

The contact will not exceed $30,000, paid through a $175,000 planning grant from the  U.S. Environmental Protection Agency.

The planning document will lay out redevelopment goals and priorities for Kalispell’s railroad corridor. CTA will work with a steering committee that is being appointed and city planning staff to produce visual images of what the core area could look like if redeveloped.

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