Maintenance of Gateway center an ongoing challenge

Three years ago Northwest Montana United Way took on a project of monumental proportions when it made a deal to purchase the Gateway Community Center in Kalispell for $2.4 million from American Capital Management.

Along with the 100,643 square feet of building space in the former shopping mall came decades of deferred maintenance, both for the building and the expansive parking lot that has deteriorated.

Westside Center for Community Change, known as Westside CCC, was created to hold the asset of the property apart from United Way’s assets.

Another 60,000-square-foot portion of the building is owned by the Flathead County Economic Development Authority and occupied by TTEC, formerly known as TeleTech. It operates separately, though it relies on the Gateway Community Center for common-area maintenance, including walkways, the parking lot and building interior.

In recent months, questions have arisen from citizens about United Way’s ability to invest in building and parking-lot improvements.

“The biggest thing FCEDA (Flathead Economic Development Authority) is trying to work with United Way on is making sure maintenance is being done correctly,” said Phil Mitchell, who represents the Flathead County commissioners on the FCEDA board. “We’re concerned about how Gateway Community Center is being managed with all the partners involved.”

Chany Reon Ockert, a certified fundraising executive who offers consulting services to nonprofits, said it’s “important and reasonable” for donors, board members and the community to ask questions.

“A legitimate question is whether the Gateway Community Center has a sustainable business model; that is, to generate sufficient funds for the building with funds meant to be used for the building without neglecting their primary work of supporting member agencies and basic needs in our community,” Ockert said. “All nonprofits have to have a business model that generates enough revenue to have a surplus beyond expenses every year.”

Jim Oliverson, board chairman for the Westside CCC, said there is “no co-mingling of funds” between United Way and Westside CCC. The two entities keep separate bank accounts and are audited separately.

All of the donations made to United Way go to donor-designated nonprofits or are distributed among the agency’s community impact partners that traditionally have received annual allocations from United Way.

United Way and other building tenants to pay rent, plus common-area maintenance and utility fees to Westside CCC, which, in turn, makes the mortgage payments on Gateway Community Center.

Nonprofits housed at Gateway Community Center pay rent for their space, ranging from $250 a month for the smallest organizations, to $900 to $1,200 for the mid-sized nonprofits and $2,500 for those using the biggest amount of space.

There are currently 18 nonprofit groups that rent space in the center or use the center as incubator space, along with one for-profit business, The Mail Room. At full build-out the center will accommodate 25 or more nonprofits.

Northwest Montana United Way, which is the fiscal agent and project facilitator for Gateway Community Center, pays rent for its office space and portion of the utility bill, according to United Way Executive Director Sherry Stevens. United Way also pays for the six conference rooms at the center that are used by 74 nonprofit groups.

Loan payments made in 2016 totaled $193,140, which includes interest.

“We’ve never missed a loan payment,” Stevens emphasized.

She said having the cash flow to make loan payments is a “balancing act,” though, because not all of the nonprofit spaces are yet filled, and it takes money to be able to build out those spaces.

Tamara Williams, a member of the advisory council for Gateway Community Center, acknowledged that “there’s only so much money to go around.

“Payments for the building are substantial [but] we’re turning a corner financially,” Williams said. “Gateway Community Center is all but full and we’re starting to see that steady revenue stream.”

Property taxes on the building were paid late for the 2016 tax year, and the 2017 taxes, the second half of which were due May 31, had not been paid as of Aug. 24, according to the Flathead County Treasurer’s Office. Stevens said a check has been written and will be hand-delivered on Monday. The current total of the 2017 taxes is $42,803, which includes a $799 penalty and $2,005 in interest.

Stevens said the reason the taxes were paid late for the 2016 tax bill is because the tax valuation “came in as if we were a private-sector business.” She explained that Gateway Community Center at one time had three for-profit businesses as tenants, but now only has one.

“We went through a lengthy process,” she said. “A huge packet of documentation was sent to Helena. We had an assessment; we did a walk-through and they revalued our property.”

Stevens said she talked to the state Department of Revenue on Friday and learned Westside CCC will have to submit only minimal documentation for 2017 regarding the building reconfiguration of nonprofit and for-profit tenants. The state will alert Westside CCC of any adjustment for 2017, she said.

The Montana Department of Revenue confirmed that the Westside CCC value adjustment was finalized in 2016 and said the 2017 tax amount levied was correct, according to the Treasurer’s Office.

“There was a tax lien purchased in August of 2017 (for the 2016 taxes) and that lien was redeemed that same month,” county Treasurer’s Office Chief Deputy Sue Waggener said. “The only additional fees other than the penalty and interest accrued were costs in the amount of $28.84.”

Stevens said a delinquent water bill with the city of Kalispell last year also was due to the changing tenant configuration.

“We didn’t get the bill for one of the units in the reconfiguration,” she said, adding that once the late-payment notice arrived “we ran a check down that day. It was a one-time occurrence.”

Gateway Community Center was under pressure to address a number of electrical issues with the building and parking-lot safety by July 31 or lose its insurance, Stevens said.

The northwest portion of the parking lot recently was blocked off because motorists would drive around the north end of the building at high speeds, Stevens said. Access to Financial Drive also was blocked because up to 400 cars a day were using the Gateway parking lot as a cut-across.

The center is now an Eagle Transit transfer site, which required stepped up safety requirements in the parking lot, she added.

As for the deteriorating condition of the aging parking lot, Stevens said potholes have been fixed twice this year.

United Way is preparing to launch a low-key capital campaign for building improvements that will be separate from United Way’s annual campaign.

“We’ll look at grants,” she said. “We’ve started looking behind the scenes, at outside foundations.” The agency also is pursuing large donations that can help pay off the mortgage.

The goal is to pay off the mortgage in five years, she said.

The transformation of the mall into a community center and hub of nonprofit agencies materialized in 2009. Since then volunteers, businesses, service groups and builders have poured more than $1 million into the facility in building materials and donations of time and labor. Preserving that community investment was a key reason why United Way felt compelled to buy the building, Oliverson said.

“There are pages of things that have been done to make the building safe,” he said. “I’m most proud of the things we’ve taken care of [since] we took over.”

Oliverson said Stevens has been “very forthcoming with the board … We go through all of these things at the Westside CCC board meetings.”

He’s excited about a couple of new programs that will further enhance the center. One is a childcare center that’s expected to be up and running at Gateway Community Center this year. Another is a disability training program that will use the mall food court as a food-service training site for people with disabilities.

Features Editor Lynnette Hintze may be reached at 758-4421 or lhintze@dailyinterlake.com.