Kalispell, FCEDA Reach Agreement with Northwest Drywall on Relocation

The city of Kalispell and Flathead County Economic Development Authority have reached a tentative agreement with Northwest Drywall and Roofing Supply to relocate the rail-served business from downtown to the future site of a nearby industrial rail park, marking another step toward redeveloping the core area.

The tentative deal, which requires approval from the Kalispell City Council, aims to settle lingering tensions over the proposed removal of railroad tracks in downtown, a move that will usher in the city’s core area revitalization plan but would have dislocated the operations of Northwest Drywall at its facility on Eighth Avenue West North.

Kalispell and FCEDA are helping Northwest Drywall relocate to the Glacier Rail Park by covering an estimated $850,000 of the $1.6 million cost, which includes land, infrastructure and facility construction. FCEDA, which owns the 43-acre property where the rail park is being developed, is giving 2.1 acres to the city, which will then lease the land to Northwest Drywall. To build its new facility, Northwest Drywall is receiving a $750,000 loan with a 3 percent interest rate through the city of Kalispell. According to City Manager Doug Russell, Kalispell would pay its immediate costs through the West Side Tax Increment Finance fund.

“This is a classic win-win,” Jerry Meerkatz, CEO of FCEDA, said.

“It took a good amount of effort on everyone’s part to put it together. We’re delighted with the way it came out.”

The FCEDA board unanimously approved the agreement on Jan. 11 and the Kalispell City Council is slated to vote on the memorandum of understanding at its Jan. 17 meeting.

The agreement would settle a complicated, and somewhat contentious, process that is vital to the success of the city’s core area revitalization project. FCEDA and the city have worked together to shepherd in a redevelopment plan that would include developing a centralized rail park off Whitefish Stage Road and removing the tracks in downtown. Two businesses utilize the downtown tracks — CHS and Northwest Drywall — and project leaders have worked for several years to move the companies’ operations to the future rail park. CHS reached a tentative plan for relocating its three sites to the rail park, but Northwest Drywall was initially unable to reach an agreement with FCEDA and Kalispell.

In the fall of 2015, tensions spiked after the company wrote a letter to federal officials and Montana’s congressional delegation voicing its opposition to the rail park and Kalispell’s application for a sizable transportation grant to help fund the project. Attorney Tom Esch, on behalf of Northwest Drywall, said at the time that the business felt it was being unfairly forced to move its facility, which would lead to outsized expenses for the family-owned company.

On Jan. 12, Esch applauded the efforts of FCEDA and Kalispell in reaching a “fair” agreement for Northwest Drywall.

“I think both the city and FCEDA, by embracing this deal, have made a commitment to treat these people fair,” Esch said.

“We’re on the right track now.”

Pam and Mike Mower opened Northwest Drywall in Kalispell in 1988. The business provides drywall and roofing material for residential and commercial building developments and employs roughly 30 people across the state. The company, which receives its product via rail, also operates businesses in Helena and Belgrade.

“The rail component of their business is huge,” Esch said.

The new building in the rail park will encompass the same footprint as its present location, Esch said. Northwest Drywall will continue to own the current property.

FCEDA leaders said the rail park should break ground on infrastructure this spring. Kalispell will begin the process of removing the railroad tracks in downtown at the Jan. 17 meeting by asking Burlington Northern to abandon the 1.5-mile section. Project leaders hope to remove the track by 2019 and replace it with a trail system.