The Texas-based developer who owns Kalispell Center Mall has backed out of a request for funds from the city’s Tax Increment Financing (TIF) district after beginning the application process earlier this year. TIF funds are generated through property taxes in four TIF districts in Kalispell to help with projects improving blighted properties. The Kalispell Center Mall falls within the Westside/Core Area District.
The city’s Urban Renewal Agency board oversees TIF fund requests and was still in the early stages of working with the developer, the SHOP Development Company, on the request when it pulled the application May 27. In between work sessions on the project, SHOP shrank the TIF request from $23 million to $16.9 million, still a notably large ask compared to most TIF applications the city has approved. A 2024 application for a number of public infrastructure projects received just over $5 million in TIF funds from two TIF districts.
SHOP Development Company purchased the mall in 2024, renaming it the Parkline District after the adjacent Parkline Trail. Developers with SHOP Development and Parkline Partners, the name on the TIF application, proposed reinventing the space to include an events center or entertainment venue, a hotel, freestanding multi-tenant retail buildings, and potentially a new Flathead County Library space, though details were still in the early phases.
In the TIF application, Parkline Partners proposed to reposition and “right size” the mall to be more attractive to prospective tenants, including demolishing Herberger’s. Other tenant spaces would be reconfigured and demolished, reducing the mall’s footprint to around 108,000 square feet, not including the Red Lion Hotel. Only 55% of the mall’s existing tenant space is currently occupied.
The project’s total price tag is currently estimated at $65.3 million, with the majority of costs coming from buying the property, as well as materials and labor for construction. Development fees and design costs made up just under a quarter of associated costs.
The $16.9 million TIF fund request did not fully meet the project’s financial gap, which was estimated to still be around $27.2 million after TIF funding. A third-party analysis by Economic & Planning Systems, Inc. noted that the developer would need to fill the remaining gap through other sources, and that the requested TIF funds would not “unreasonably inflate the developer’s return beyond market-based expectations” for real estate return rates.
Community Development Manager Nelson Loring said the URA did not receive an explanation for the developer’s TIF application withdrawal. SHOP Development Company and Parkline Partners did not respond to a request for comment before publication time.
The developer would be allowed to resubmit an application for TIF funding.