Old School? What would Bob say?

The solution is anything but “old school,” but turning the city of Kalispell into a property broker to “flip” a development south of Kalispell may be the only solution. 

Old School Station was approved for annexation into Kalispell as an island development far south of town in 2005. The city had to spend millions on infrastructure for the project, which was to be paid back by assessments on a special improvement district. The investment was touted as a lure for high-tech development, but only a few of the 17 lots were ever developed successfully. Now, 11 of the 17 lots are held by private owners who are delinquent in their assessment payments, leaving the city on the hook for bond payments.

Come June, Kalispell faces a $285,000 payment and the council is worried that money won’t be available short of something drastic — namely, the city buying the delinquent lots, paying off their debt, and then selling them to new owners.

Like we say, that may be the only practical solution, but it’s a bit scary because it’s reminiscent of the “creative financing” that got us into this problem in the first place.

In 2005, the Inter Lake, just like the City Council, was overly optimistic about the outcome. “ ...[T]he city will reap immediate rewards from being able to offer city services along the highway and thus have a chance to annex valuable commercial property along the corridor,” we wrote cheerily, praising the council for being forward-looking.

As it turns out, the only one who was being forward-looking (or fiscally prudent) was council member Bob Hafferman. He and two other council members, Bob Herron and Randy Kenyon, voted against the initial annexation of Old School Station, but it was Hafferman alone who voted against the complex bonding structure that accompanied the plan once it was approved.

He argued that public money should not be used to boost private developers. “If they don’t invest their own money, they’ll cut and run at the opportune time,” he predicted.

Today, in retrospect, it is easy to esteem the fiscal conservatism of Hafferman, who in a 2005 op-ed in the Inter Lake explained how “Orderly growth like Old School Station could have occurred without putting any costs of the development on the backs of city taxpayers and ratepayers.”

He also recounted how the City Council had been teased into quick action with the promise of “1,000 jobs” that would be supported by Old School Station.

The question now is whether the city’s proposal to purchase the troubled lots and sell them to new developers is realistic, or just another risky venture. We wish we knew, but frankly we’re afraid that the city could wind up with a long-term investment, rather than a short-and-sweet solution. Are we just getting in deeper?

Maybe the city manager should call Bob Hafferman and ask him what he thinks.