Urban Renewal Agency pans Kidsports plan

It was envisioned to be a “parade,” but is off to a rocky start.

Several weeks ago, the city of Kalispell proposed spending the $2.3 million sitting in its Airport Tax Increment Financing District fund to buy a permanent school trust land easement for the Kidsports youth athletic complex.

The city would have to do so over blanket objections raised Wednesday by its advisory Urban Renewal Agency.

“I would not support airport TIF dollars going toward any component of that permanent easement purchase,” agency member Tom Lund said.

The agency’s four other members agreed, rejecting the expenditure as a case of urban renewal plan mission creep and a push to use tax increment money raised in south Kalispell and meant to improve that end of the city to pay for a tax-exempt facility in north Kalispell.

If Kalispell wants to buy the easement, all of the city should pay for it with a bond or levy put before voters, they said.

“Kidsports is a broad benefit to the whole community and we’re asking one part to pay for it,” agency member Shannon Nalty said. “I just hope we have a vision for the south end of town more than allocating its money to other areas.”

Kalispell officials continue to see the permanent easement purchase as a valid and permissible use of the tax increment funding.

One goal in forming the Airport Tax Increment Financing District was to relocate the sports fields on city land in south Kalispell away from the adjacent city airport.

About $1.2 million from the sale of the old city sports fields helped launch the Kidsports facility in the 1990s and buying a permanent easement would finalize that relocation goal, City Manager Doug Russell said.

Urban Renewal Agency members said that would not be a proper use of tax increment funding. But since they serve only in an advisory role, they could be overridden by the Kalispell City Council.

MONTANA’S STATE Land Board approved purchase terms for the school trust land easement in mid-October.

That was after four years of negotiations between the Department of Natural Resources and Conservation, Kalispell and Kidsports.

The terms give Kidsports five years to raise $2.3 million for the easement but require payments of at least $100,000 a year. The state also is charging “option fees” that range from 1 to 2 percent of the total unpaid balance each year and do not count as payment for the easement.

Kalispell has been considering buying the easement for Kidsports with one payment made before the end of this year.

That level of expenditure would drain an Airport Tax Increment Financing District that holds $2.275 million and generates about $500,000 a year.

The district also is being eyed as a way to fund some unresolved level of maintenance or improvements at the city airport before the district sunsets in 2020. That’s the subject of a future referendum asking city voters if they want to upgrade and maintain the airport with federal money or continue to keep it entirely on the city’s dime.

THE UP-FRONT easement purchase would save Kidsports as much as several hundred thousand dollars in option fees and otherwise unnecessary annual lease payments.

In exchange, Kidsports would raise money to continue to improve its facility with things such as new fields, new parking and better entrances. The facility draws thousands of athletes and their family members to Kalispell every spring, summer and fall.

Some other deal between the city and Kidsports still could be hashed out.

The easement would give Kidsports a permanent home on 123 of the 136 acres of school trust land it has leased from the state through the city since 1996. It also would avert a mandatory mid-lease reappraisal in 2016 that threatens to make Kidsports’ annual lease payment to the state unaffordable.

The school trust land appraised for about $7,000 an acre when Kidsports entered its lease in 1996.

It was reappraised this summer at $18,500 an acre, with land along the highway and Reserve Loop appraising for nearly six times that amount, Kalispell Planning Director Tom Jentz said.

Jentz told the Urban Renewal Agency that without an easement, Kidsports’ lease payment of $43,000 a year now could “triple or worse” if updated to reflect 20 years of commercial development and property value growth in north Kalispell.

“That’s not a bump or a speed bump. That’s a pretty big hole,” Jentz said. “Kidsports is sitting there saying, ‘Can we absorb that, or is it over?’”

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