Kalispell OKs core area revitalization study

What would it take for Kalispell to remove the railroad tracks that run through town and free up a large swath of formerly industrial land for redevelopment? 

The city could have an answer to that question soon.

Over the next three to four months, Willdan Financial Services will explore various redevelopment opportunities in Kalispell’s railroad corridor and the feasibility of pulling out the tracks, a major revitalization goal.

The City Council awarded a study contract to the Temecula, Calif.-based firm Monday.

“This is just the next step in the core area redevelopment work we have going on,” City Manager Doug Russell said about the study and the larger Kalispell Core Area Revitalization Plan being finalized for adoption.

Willdan will evaluate the railroad corridor’s economic strengths, weaknesses and redevelopment opportunities. 

The 364-acre planning area runs along the railroad tracks and is bordered by Washington Street to the north, First Street to the south and city limits to the east and west.

Part of Willdan’s task is to look for ways to retain existing businesses and attract new businesses, housing and institutions and strengthen Kalispell’s position as the economic hub of Flathead Valley through core area revitalization efforts.

The firm also will study the feasibility of removing the railroad tracks, relocating the last two businesses that use the tracks to the Flathead County Rail Park taking shape at the former McElroy and Wilken gravel pit and building a “linear park” through the corridor.

That part of the study includes working with stakeholders to develop cost estimates and a track-removal and business-relocation strategy, identifying possible funding sources and estimating returns on investment in terms of job creation and increased property values and tax revenues.

The study is being funded by up to $60,000 in grant money from the Environmental Protection Agency and Montana Department of Commerce. The City Council voted 8-0 to award the study contract, with council member Randy Kenyon not present.

“It’s a great idea to go out and find someone to give us an idea of how this will work and what it will take to make it work. And it’s not taking any money out of our pockets,” council member Tim Kluesner said.

The only downside, Kluesner said, is how long the study will take. He suggested Kalispell wait for the study’s findings before expanding the West Side Tax Increment Finance District boundary to overlay the railroad corridor. 

That suggestion did not gain traction, in part because the City Council already has scheduled a public hearing for the proposed tax-increment district expansion on Monday, Nov. 5. Turning back now would result in duplicated efforts and costs.

In anticipation of the expansion, city officials asked the Montana Department of Revenue to establish baseline property values for the railroad corridor and would have to go through that process again if the expansion is not done by year’s end, City Attorney Charlie Harball said. The city also sent out mailings to notify property owners in the area, and would have to do that again.

Kalispell is targeting the tax-increment district as a potential funding source for revitalization efforts in the railroad corridor. Extended this spring for up to 25 more years, it holds about $2.3 million and generates about $400,000 a year of tax increment that can be used to improve public infrastructure, foster economic development and job creation and reduce blight.

The City Council already has expanded the West Side Urban Renewal Plan to include the railroad corridor, making projects in that area eligible for tax increment funding.

Expanding the TIF district boundary would cap taxable property values in the railroad corridor and steer taxes collected above and beyond those caps into its dedicated fund as property values increase over time. That would potentially make more money available for revitalization efforts there and in other parts of the city, but limit the ability of the city, county and schools to levy taxes for basic services.

Council member Bob Hafferman, who is staunchly opposed to any extension or expansion of the TIF district, said this study will provide “all-important” information for core area planning activities under way for the last 18 months. 

“I think this should have been the first step two years ago when we started doing this,” he said. “Numbers, feasibility is the first thing you do when you enter the project, and seems to be the last thing we’re doing.”

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