Debate is flaring up over the Kalispell Business Improvement District, an entity that collects varying amounts of money from property owners within its boundaries to promote economic growth and stability in the historic heart of the city.
Established by the city council in 2004, the BID is set to expire, and its volunteer board and part-time director are seeking to renew and expand the district for another decade.
BID staff collected 104 signatures of support from downtown property owners, equaling 64 percent of the total amount in the district and surpassing the required 60 percent threshold defined by state law.
Yet the proposal has sparked pushback from others who want out of the district and say the annual assessments are cumbersome.
“To have a government tax me to improve my business makes me kind of sick,” Mike Greskowiak, who owns and operates Artistic Barbering on Second Avenue West, said at a Jan. 17 public hearing in front of the city council. “I believe I know what’s best for my business.”
The public hearing in City Hall was equally divided with proponents and opponents — seven apiece — speaking in front of council.
Supporters of the district said it promotes downtown and encourages reinvestment through grant programs, cleanup efforts and marketing.
Eric Robbins bought Aluma Glass on First Avenue West in 2014 and was encouraged to move the business to the flourishing north side. Instead he stayed put and received a $5,000 matching grant through the BID to remodel his business’ aging façade and storefront.
“We felt the downtown area wanted to see us thrive and were willing to put skin in the game,” Robbins, who serves on the BID board, said.
The BID has facilitated almost $200,000 in public and private investment on façade improvements in downtown.
Along with the grant program, the BID sponsors and assists with downtown events, such as Thursday!Fest, Taste of Kalispell, and the annual Art Walk and Holiday Stroll. It also funds an “ambassador” who cleans sidewalks, waters flowers and conducts other regular duties to keep downtown appealing.
“Everything we do is to benefit the property owners and the community of downtown Kalispell,” Jon Fetveit, a downtown property owner and volunteer chairman of the BID board, told the Beacon.
A representative with the Conrad Mansion Museum applauded the BID for supporting the creation of new wayfinding signs that lead visitors to attractions across Kalispell, including downtown. The signs likely fueled increased visitation at the museum, according to Rita Fitzsimmons from the museum.
“I would argue that a thriving downtown benefits the whole community with its presence,” she said.
Yet critics say downtown property owners — not the BID — should be responsible for maintaining quality standards through their own reinvestments. Through Jan. 20, the city had received 19 letters of opposition to the renewal and expansion of the BID. An analysis of properties for and against the expanded district shows opposition mostly lies on the outskirts away from Main Street.
Jayson Peters with Sykes’ Grocery and Market said the annual assessments create an added tax burden that does not equally benefit all businesses.
“Frankly, the BID needs Sykes more than Sykes needs the BID,” Peters said, noting that the restaurant, market and apartment building paid the fourth-highest assessment last year at $3,517.
The BID collects fees using a formula that tallies a property’s current taxable value multiplied by 0.0375 plus property square footage multiplied by 0.015.
According to an analysis of BID collections from 2016, the average contribution was $520.05.
Under the proposed expansion, the boundaries would extend out from Main Street west and east as far as Third Avenues West and East, and from Eight Street West near the Flathead County Courthouse north to Idaho Street, encompassing all commercial establishments. The expansion would add 82 new property owners and 110 new properties, hiking the new district total to 246 properties owned by 181 individuals.
»»» Click here to view a map of the proposed expanded BID district.
Under the expanded district, annual revenue would increase to roughly $115,000. Since property taxes were reappraised in recent years, the BID’s revenues have dipped from more than $100,000 to $87,740 in 2016, according to city records.
“That’s a big reason we looked at expanding,” Fetveit said.
One of downtown’s most prominent businesses — Kalispell Center Mall — would remain outside the expanded district. Fetveit acknowledged the BID sought the inclusion of the mall, but its owners did not want to join and the board agreed to draw the boundaries around the large property.
“My personal view is they are a different kind of business. A mall is a destination in itself and everything is already under one roof,” Fetveit said.
Concerns were raised at the public hearing about the BID’s finances, as Karlene Osorio Khor, a downtown property owner, outlined spending reports from recent years and claimed the organization was not providing enough transparency.
The BID has two paid employees. Pam Carbonari, the former mayor of Kalispell, has served as the organization’s part-time coordinator since 2010 and received $33,082 in fiscal year 2016. Paul Faessel, the BID’s downtown ambassador, received $19,210. Among her duties, Carbonari works with prospective and current downtown businesses and advocates for downtown-friendly policies at city council and other public meetings.
The marketing department of Flathead Beacon Productions has contracted with the BID for marketing services valued at $11,998 since 2012.
Funds were also given to other local businesses for services such as printing, advertising, event organizing, grants and beautification elements, such as flowers to display through downtown.
“We want to be fair and transparent. We have a set of rules and we stick to them,” Fetveit said.
Fetveit said the organization has awarded grants to every business that met the qualifications and has only turned down “a couple” businesses that did not submit proposals that met these qualifications.
“We spend a lot of our time trying to get property owners involved and to take advantage of the benefits of the BID because a lot of them don’t know about it,” Fetveit said.
Tensions have surrounded the BID from its inception. After the council approved its creation a decade ago, a group of 12 property owners sued. The litigation traveled through the courts before ending at the state Supreme Court, which upheld the BID creation in 2009.
Fetveit said organization plays an important role in downtown, which is experiencing renewed optimism thanks in large part to the city’s core area revitalization plan.
“The positive direction that we have right now is fragile,” Fetveit said. “When you’re trying to foster the growth of something, a lot of things can go wrong. I would be concerned that we could lose positive momentum for downtown Kalispell (if the BID went away).”
The city council is slated to review the matter at its Feb. 6 meeting.