Urban Renewal Agency Advances Kalispell Center Mall TIF Request to City Council
Parkline Partners is seeking $13.9 million to connect 3rd Avenue West, demolish Herberger’s, improve Center Street and 5th Avenue West and extend utilities to the west side of the mall’s property
By Zoë Buhrmaster
The Texas-based developer who owns Kalispell Center Mall is back with a request for city funds to transform the shopping center.
Parkline Partners, an affiliate of the SHOP Development Company, pulled its original application for Tax Increment Financing (TIF) district funds earlier this year after shrinking the request from $23 million to $16.9 million. The new application, which the city’s Urban Renewal Agency (URA) unanimously recommended Thursday, asks for $13.9 million.
TIF funds are generated through property taxes in Kalispell’s four TIF districts and support redevelopment projects that eliminate blight, create housing opportunities, and expand the tax base.
The proposal would extend 3rd Avenue West through the mall property, demolish the Herberger’s building and fill the resulting hole. It would also extend utilities to the property’s west side to prepare for future redevelopment and improve the right of way on West Center Street and 5th Avenue West with new paving, trees, lighting, and sidewalks that meet Americans with Disabilities Act standards.
A new trailhead at 3rd Avenue West would tie into the Parkline Trail and include bike racks, a bike repair station, seating and a drinking fountain.
The project would be an asset to the city, said Lorraine Clarno, CEO of the Kalispell Chamber of Commerce. The city’s Core Area Plan, transportation plan and downtown plan all call for improvements to connectivity in the area, and some specifically identify extending 3rd Avenue West as an alternative route to Main Street and Highway 93.
Representatives of the Northwest Montana Association of REALTORS and the Kalispell Downtown Business Improvement District also spoke in favor of the proposal.
“The question in front of you this afternoon is not whether we want the street,” Clarno said. “It’s how do we pay for it and whether we take the opportunity that avails us today and is in front of us, or wait for potentially another decade, who knows.”
The request covers only the first phase of the mall’s redevelopment. Daniel Fuller, founding partner of SHOP Companies, said they pulled the original TIF application to redesign the proposed entry on the west side of the mall, per feedback from city staff to cut down costs. The new proposal is a temporary ‘like-for-like’ remediation of Herberger’s existing wall.
“This effort did result in significantly lower estimated costs for this part of the scope set forth in our TIF application,” Fuller said.
The mall’s exterior façade has moved to phase two, along with the interior. Full redevelopment is expected to include reimagined retail spaces, outdoor green space, a hotel, bank and an event center.
“There is so much potential for this property that is unrealized given its current condition,” Fuller said in an email to the Beacon. “This is an opportunity to remake an outmoded mall into a very special mixed-use environment, that everyone can be proud of.”
The 3rd Avenue connection is the largest piece of the request at roughly $10.9 million. Utility extensions and the Center Street/5th Avenue streetscape improvements would cost about $2.9 million.
The mall’s initial project cost is $65.3 million. Investment from future development would add an estimated $62 million, for a total project cost at $127.3 million. If the Flathead County Library, which is in talks with Parkline Partners to buy the property’s northwest corner for a new location, completes that purchase, the portion of the development generating future tax dollars would fall to about $121 million.
The redevelopment would generate an estimated $20.35 million in tax revenue over the next 24 years and take about 14 years to repay the $13.9 million request. The project is in the Westside/Core Area and Downtown TIF districts, and if approved, the funds would be paid out over several fiscal years.
The development team anticipates 18 months of construction for the improvements on 3rd Avenue West, Center Street and 5th Avenue West, and for site utilities.
A third-party financial analysis found the project needs public funding to be feasible. SHOP Development Company has developed other retail shopping centers, including Larch House, a luxury boutique hotel in Whitefish.
The project now goes to the Kalispell City Council for approval in the coming weeks.
“Awesome,” Fuller said after the URA’s vote. “We’re super, super excited, and there’s more hard work to come.”