Transfer terms for Gateway West set
In coming weeks, Kalispell will turn its stake in Gateway West Mall over to the Flathead County Economic Development Authority.
The Kalispell City Council approved a memorandum of understanding to guide the terms of that property transfer with a 6-0 vote on Monday.
Mayor Tammi Fisher and Tim Kluesner were not present at the meeting. Phil Guiffrida III did not vote because of a family friendship with the site director of TeleTech.
Kalispell and Flathead County Economic Development Authority worked together in 2000 to buy and refurbish 60,000 square feet of space in the languishing retail property on West Idaho Street.
They first leased the mall space to Stream International, which opened a call center there and brought 300 jobs to Kalispell. Since 2004 the space been leased to TeleTech, which has a call center with about 500 employees there.
Council member Wayne Saverud asked if it’s accurate to say Kalispell has recouped its initial investment of $2.5 million in bonds issued to buy and refurbish the property.
That debt was paid in large part with the West Side Tax Increment Finance District and retired in 2010.
City Manager Doug Russell did not have exact figures for how much of that debt was paid off by the economic development authority. But the mall space has generated $140,000 a year in property taxes since the project launched, a portion of which is paid to the city, “plus the jobs created and maintained,” he said.
The lease with TeleTech says the company must pay at least $140,000 a year in taxes.
TeleTech has paid about $90,000 a year in beneficial use and personal property taxes for the tax-exempt mall space as dictated by Montana law as well as a negotiated “deficiency tax payment” of about $50,000 a year to make up the shortfall in the total tax amount.
Going forward, Flathead County Economic Development Authority would keep any money TeleTech or another company pays beyond those beneficial use and personal property taxes until it builds up a $300,000 maintenance reserve fund for the Gateway West Mall space. It then would pay 25 percent of that additional money back to Kalispell.
TeleTech’s lease for the mall space is up for renewal in March 2014.