Kalispell city officials plan to meet with local business interests over the next month to seek proposals on using the approximately $1.8 million in funds from the Westside tax increment finance district. The decision comes following the April 19 city council meeting where members voted unanimously to delay for a month plans to dissolve the fund and distribute the money to taxing entities that could use it, like schools and the city health levy.
Kellie Danielson, president and CEO of Montana West Economic Development, and Denise Smith of the Flathead Business and Industry Association both urged council members to wait and see if any viable projects emerge as a result of the Kalispell alternate truck route, also known as the bypass, now under construction on the west side of town.
“It does not make sense to distribute these funds early,” Smith said. “Though there may not be viable projects currently in the pipeline, that could easily change with the truck route coming into fruition.”
The Westside tax increment finance district (TIF) was created in 1997 and has paid for improvements along Meridian Road and Two Mile Drive. The district, which extends from U.S. Highway 2 west to U.S. 93 and Heritage Way, is scheduled to sunset March 11, 2012.
A TIF is a development tool where once the district is designated, tax revenue for entities is capped, and additional revenue from new buildings or increasing property values is set aside for capital improvements in that specific area, thus encouraging further development in that area.
The council has the authority to sunset the district, and with no viable projects on the horizon to use the money for, City Manager Jane Howington and Finance Director Amy Robertson suggested distributing $1.5 million of it to taxing entities, which would leave about $730,000, when anticipated payments later this year are taken into account.
Howington emphasized that any money the city received would go straight into strengthening Kalispell’s cash reserve, an idea some council members liked, especially those typically skeptical of TIFs, believing they divert tax money that would otherwise go toward improving the city’s economic health.
“The only thing I’ve heard is people coming forward and wanting a handout,” Councilman Bob Hafferman said. “We ought to go ahead and distribute the money and get it in the coffers.”
But Councilwoman Kari Gabriel said since the possibility of the Westside TIF dissolving has become public, she has heard from people willing to put forth ideas, and she questioned whether there was any downside to waiting a few months to see if any good development projects come forward.
Other council members agreed to delay dissolving the Westside TIF, but with the caveat that they would prefer development proposals that could lead to job creation.
“I don’t like TIF districts but I am very willing to make a hail-mary pass at this point in our economic lifetime to try to get some jobs going,” Councilman Tim Kluesner. “They should be heavy-hitter job projects, not just putting in nicer sidewalks.”