Kalispell sets TIF expansion hearing

After a brief discussion Monday, the Kalispell City Council agreed to set a public hearing next month for a proposed expansion of the West Side Tax Increment Finance District.

That’s the first hurdle for a proposal that would expand the TIF district to overlay the city’s rundown railroad corridor, a 364-acre block of land at the heart of a major core area revitalization plan being drafted.

Council voted 8-1 to set a Nov. 5 hearing on the subject.

That action was opposed by council member Bob Hafferman, who said he will not support an expansion.

Hafferman argued the City Council should have let the 15-year-old TIF district sunset back in March, as it was on track to do. That would have returned its money to the general funds of the city, county and local schools.

Instead, the council issued $500,000 in debt to pay for a water line project on West Colorado Street and improve South Meridian Road. The debt keeps the tax increment district alive for up to 25 more years.

“What is before us tonight is a sham. That is spelled with an H,” Hafferman said.

“If the council approves extending the West Side TIF to the downtown area to keep from having to return property tax money to the residents, I will change that letter H in sham to a C, because it will be a scam,” he said.

Hafferman argued that the district’s original intent has been met and that keeping it alive, expanding it and skimming in more tax dollars for the dedicated tax-increment fund leaves taxpayers on the hook to pay more for basic services.

The district’s fund holds close to $2.3 million and generated about $400,000 in tax increment last fiscal year.

That’s money that was collected above the taxable property value caps put in place when the district was created — money Kalispell can tap to improve public infrastructure, foster job creation and economic development and fight blight.

The council already has expanded the boundary of the West Side Urban Renewal Plan to include the entire railroad corridor, making projects within the corridor eligible for tax increment funding.

Expanding the district would cap taxable property values in the railroad corridor and potentially over time generate more tax increment for the TIF fund and revitalization efforts as property values in the corridor increase because of redevelopment.

Councilman Jim Atkinson said he supports the expansion and “always feels the need to support tax increment financing after Bob talks.”

“For a time the money is skimmed,” Atkinson said.

“The increment is utilized in a fund to help private enterprise build their businesses, and help with the infrastructure ... I think it’s a great private-public partnership to allow that to work. And when they sunset, and they do, then we’re sitting on a much larger tax base and a community that looks nicer, that has more value. And it works.”

IN OTHER business Monday, the council voted to:

• Keep tabled until Monday, Oct. 15, a resolution that would create a special improvement district to improve stormwater drainage in the Willows subdivision.

• Approve a two-year preliminary plat extension for three phases of the Glacier Village Greens subdivision.

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