06-19-24 TIF Staff Report Public Projects1
STAFF REPORT KRD 24-02
WEST SIDE-CORE AREA PUBLIC PROJECTS
REQUEST FOR WEST SIDE-CORE AREA and DOWNTOWN TIF ASSISTANCE
KALISPELL COMMUNITY DEVELOPMENT
June 19, 2024
This is a report to the Urban Renewal Agency and Kalispell City Council regarding a request for Tax Increment
Finance (TIF) Assistance for public sidewalk, street, water and stormwater infrastructure projects in the West
Side-Core Area and Downtown Tax Increment Finance Districts. The Urban Renewal Agency will forward a
recommendation to the Kalispell City Council for final action.
TIF Assistance Program Overview: The City of Kalispell Development Services staff is requesting
funding for street, sidewalk, water, and stormwater infrastructure projects within the West Side-Core Area
and Downtown TIF Districts. This report will analyze the proposal in accordance with state law and adopted
city policies. On December 17, 2012, Kalispell City Council adopted the Core Area Plan as an amendment
to the City of Kalispell Growth Policy 2020 by Resolution No. 5601A. The Core Area Plan addresses needs
and priorities affecting redevelopment of the Core Area. Additionally, the Council adopted the West Side
Urban Renewal-Core Area plan by Ordinance 1717 (Original Ordinance 1259) and the Downtown Urban
Renewal Plan by Ordinance 1816. The City of Kalispell utilizes a Tax Increment Finance District (TIFD)
within the urban renewal plan boundary as part of the overall strategy to meet its needs of eliminating blight,
promoting economic development, improving area employment opportunities, improving area housing
opportunities, and expanding the community’s tax base in addition to other needs identified in the Montana
Code Annotated.
The Kalispell City Council Amended the West Side – Core Area TIF Assistance Program in 2019, by
Resolution 5955. The TIF Assistance Program was developed to support redevelopment activity and advance
the goals of the West Side-Core Area Urban Renewal Plan.
Further, the West Side - Core Area Tax Increment Financing Assistance Program identifies Public
Infrastructure Programs as recommended by the Council. Such project activities as allowed under City
policy and Montana state law include the improvement of public improvements or infrastructure, as
authorized by Title 7, chapter 12, parts 41 through 45; Title 7, chapter 13, parts 42 and 43; and Title 7,
chapter 14, part 47. It should be noted that the projects summarized below are already designated projects
within the West Side-Core Area and Downtown urban renewal plans; therefore, plan amendments and
associated urban renewal processes are not necessary.
The Downtown Tax Increment Financing District was established on December 4, 2017, with City Council
adoption of The Downtown Plan as an amendment to the City of Kalispell Growth Policy Plan-It 2035 by
Resolution No. 5846. Subsequently, the Kalispell City Council adopted the Downtown Kalispell Urban
Renewal Plan on December 3, 2018, thereby establishing an urban renewal district as part of the
City’s overall mission to meet its needs of promoting economic development, improving area
employment opportunities, improving area housing opportunities and expanding the community’s
tax base.
Implementation of the Downtown Kalispell Urban Renewal Plan includes the use of Tax
Increment Financing as provided in 7-15-4282 through 7-15-4294 MCA for appropriate public
infrastructure projects in support of redevelopment within the Urban Renewal District boundary.
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The West Side- Core Area and Downtown Kalispell TIFs are managed by the City of Kalispell Urban
Renewal Agency advisory to Kalispell City Council. In 2010, pursuant to City of Kalispell Resolution
5435, an Urban Renewal Agency (hereafter referred to as “URA”) was established for the purpose of
assisting the Kalispell City Council in evaluating and proposing TIF district plans and projects.
Applicant: City of Kalispell
201 1st Avenue East
Kalispell, MT 59901
Proposed Projects: Staff is requesting TIF Assistance for public sidewalk, road, water and storm water
projects, which are all eligible projects per the adopted City of Kalispell Public Infrastructure Program and
State Urban Renewal Law. The Montana Department of Revenue reported the 2023 Certified Incremental
Value for the Westside-Core Area TIF as $5.1 million and the Downtown TIF as $1.2 million. The projects
and estimated fiscal year of improvement consist of the following:
Proposed West Side-Core Area TIF Projects:
• Meridian North Drainage Basin-Quality Treatment Facility: $730,000
o Spring Creek is classified as an impaired waterbody for sediment and nutrients. This
project primarily consists of installation of a new stormwater treatment facility along North
Meridian Road prior to the confluence of the City’s stormwater system in Meridian Road
with Spring Creek. The city storm system and Spring Creek converge on the north side of
the current Ace Hardware property. The treatment unit will be placed north of this
confluence. The project will also include removal and replacement of curbing, asphalt, and
other surface improvements along with the installation of stormwater piping and a weir
manhole, if necessitated by design. See project limits below:
• Two Mile Drive: $520,000
o This portion of Two-Mile Drive has been impacted by stormwater issues reported by
adjacent property owners for many years. The original storm infrastructure was built
around what was originally a County Road. Development patches of Two-Mile Drive have
improved frontages, but the stormwater issues in Two Mile Drive remain. The purpose of
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this project is to extend stormwater infrastructure, reconstruct the poor condition road, and
add sidewalk along both sides of Two Mile Drive to connect into existing infrastructure in
North Meridian Road. See project limits below:
• 3RD Avenue East Rebuild/water main: $950,000
o This project is the first phase of a project identified in the Water Facility Plan Update. The
project will construct a 16” PVC transmission main in 3rd Ave E to the existing 18” cast
iron main in Center Street. Future phases will continue the installation all the way down to
Southfield Lane where it connects into a 12” PVC main. The project provides a necessary
east side transmission main. In addition to replacement of approximately 1,600 ft of
existing water main, the project will also replace 47 new water services to the right of way
line and provide water meter pits. Due to the construction impacts, the roadway will be
reconstructed with new curb and gutter and asphalt and ADA ramps at intersections.
Likewise, existing driveways and approach sidewalks will be replaced where appropriate.
Storm drainage will be brought up to City Standards within the project limits. Public
sidewalk will also be replaced as necessary to comply with ADA requirements. See project
limits below:
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These projects are eligible under MCA 7-15-4288 (4) the acquisition, construction, and improvement of
public improvements or infrastructure, publicly owned buildings, and any public improvements
authorized by Title 7, chapter 12, parts 41 through 45; Title 7, chapter 13, parts 42 and 43; and Title 7,
chapter 14, part 47, and items of personal property to be used in connection with improvements for which
the foregoing costs may be incurred; and
7-15-4283(4) "Infrastructure" means tangible facilities and assets related to water, sewer, wastewater
treatment, storm water, solid waste, and utilities systems including natural gas, hydrogen, electrical and
telecommunications lines, fire protection, ambulance and law enforcement, workforce housing, streets,
roads, curbs, gutters, sidewalks, pedestrian malls, alleys, bridges, and other transportation needs,
including but not limited to parking, park and ride facilities and services, and bus, air, and rail service.
Further, these projects fit into the adopted West Side – Core Urban Renewal Plan, including on page 31,
35 and 36 (see snippets below).
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The original, March 14, 1997, West Side Urban Renewal Plan included the following specific references to
potential projects identified in this request:
• Pg 3, North Meridian Neighborhood Plan: “…the Neighborhood Plan looks at the needs of the
neighborhood regarding infrastructure, such as roads, pedestrian access, water, sewer, and storm
drainage, and sets general policies toward supplying those services.’’
• Pg 4, North Meridian Neighborhood Plan: “Storm drains, sewer mains, and water mains should be
extended to those areas not served by such improvements. The City could possibly assist in the
construction of these improvements with tax increment funds.”
• Pg 5, Infrastructure Improvements: “Storm drainage and flood plain management are two other critical
areas that need analysis to develop and implement solutions.”
• Pg 6, Financing Options for Urban Renewal Projects: “The tax increment may be used to pay any costs
of or incurred in connection with the urban renewal projects as allowed by law….4. The acquisition,
construction, and improvement of streets, roads, curbs, gutters improvements for which the foregoing
costs may be incurred. (Section 7-15-4288, MCA).”
Location of Property:
Proposed Downtown TIF Projects:
• 3RD Avenue East Rebuild/water main: $2,557,035 (SRF Loan with $190,000 annual payment from
TIF over 20 years)
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o This project is the first phase of a project identified in the Water Facility Plan Update. The
project will construct a 16” PVC transmission main in 3rd Ave E to the existing 18” cast
iron main in Center Street. Future phases will continue the installation all the way down to
Southfield Lane where it connects into a 12” PVC main. The project provides a necessary
east side transmission main. In addition to replacement of approximately 1,600 ft of
existing water main, the project will also replace 47 new water services, and provide water
meter pits. Due to the construction impacts, the roadway will be reconstructed with new
curb and gutter and asphalt and ADA ramps at intersections. Likewise, existing driveways
and approach sidewalks will be replaced where appropriate. Storm drainage will be
brought up to City Standards within the project limits. Public sidewalk will also be
replaced as necessary to comply with ADA requirements. See project limits below:
• 3RD Avenue East Sidewalk: $300,000
o Sidewalks along both sides of the street between 1st Street East and 4th Street East will be
replaced where necessary due to existing conditions and/or ADA compliance issues.
Sidewalk not needing replacement will be left in place. ADA improvements will be made
where necessary at street intersections. See project limits below:
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• 3rd Street East Sidewalks: $200,000
o Main St to 1st Ave E
▪ Sidewalks on both sides of 3rd Street East between Main Street and 1st Avenue East.
This project includes the removal and replacement of approximately 1,450 SY of
asphalt and 700 SF of concrete. Alley approaches will be rebuilt. Existing curb and
gutter is anticipated as being left in place and reutilized. This work will be
completed primarily by City crews. See project limits below:
o 1st Ave E to 3rd Ave E
▪ This project will be bid with the 3rd Ave E water project. The project consists of
removal and replacement of approximately 3,600 SY of asphalt; the removal
replacement and/or installation of 1,060 LF of curb and gutter; and the removal and
replacement of approximately 5,080 SF of sidewalk on both sides of the street.
Portions of the existing curb and gutter require replacement. Much of the sidewalk
at intersections will be brought into compliance with ADA/PROWAG. Boulevard
will be added along the street where possible. See project limits below:
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These projects are eligible under MCA 7-15-4288 (4) the acquisition, construction, and improvement of
public improvements or infrastructure, publicly owned buildings, and any public improvements
authorized by Title 7, chapter 12, parts 41 through 45; Title 7, chapter 13, parts 42 and 43; and Title 7,
chapter 14, part 47, and items of personal property to be used in connection with improvements for which
the foregoing costs may be incurred; and
7-15-4283(4) "Infrastructure" means tangible facilities and assets related to water, sewer, wastewater
treatment, storm water, solid waste, and utilities systems including natural gas, hydrogen, electrical and
telecommunications lines, fire protection, ambulance and law enforcement, workforce housing, streets,
roads, curbs, gutters, sidewalks, pedestrian malls, alleys, bridges, and other transportation needs,
including but not limited to parking, park and ride facilities and services, and bus, air, and rail service.
Further, these projects fit into the adopted Downtown Urban Renewal Plan (see snippets below).
The Downtown Plan Goals:
The proposed projects are addressed within The Downtown Kalispell Urban Renewal Plan approved in
2018, as follows:
• Chapter 7, Blight Findings of Fact, including on page 7, “Traffic downtown makes it difficult for
pedestrians, especially the elderly and young, to navigate the streets in the downtown in order to
access business. The traffic generally discourages walking in the area of the city where walking
should be encouraged. A lack of provisions for pedestrians, bicyclists and adequate access for
those with mobility challenges can lead to unsafe conditions.”
• Chapter 8, Redevelopment Goals and Recommendations, including on page 10,
“Recommendations: a) Incorporate traffic calming techniques into design and improvements of
the local street network to enhance pedestrian safety…c) Improve pedestrian and bike access
throughout the plan area to improve safety and mobility.”
• Chapter 10, Growth Policy, including on page 19, “Policies: 7) Support redevelopment by
improving infrastructure to assist the development community…12) Encourage the design of
urban streets to provide for convenient circulation, safe pedestrian and bicycle access and avoid
excess road width that encourages speeding and makes roadway crossings difficult.”
• Chapter 11, Public Improvements, Building and Site Preparation, Demolition and Clearance, on
page 20, “The City of Kalispell is authorized to demolish, remove, and clear buildings, in whole
or in part, structures and other improvements from any real property to carry out the purpose of
this plan. The City of Kalispell is also authorized to install and construct or cause to be installed
and constructed the public improvements, public facilities and public utilities (within or outside
the district) as appropriate or necessary to carry out the plan. Such improvements, facilities and
utilities include, but are not limited to, streets, curbs, gutters, sidewalks, streetlights, sewer, water
distribution, storm sewer, ….”
• Chapter 14, Tax Increment Financing, page 21, “A TIF would allow the city to appropriately
marshal tax revenues to help fund the public infrastructure that will spur a diverse private
business base to invest there. It is the primary focus of the Downtown Kalispell TIF proposal to
develop the necessary infrastructure to encourage the location, expansion and retention of
business and housing opportunities suitable for Downtown Kalispell.”
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Further, the Downtown Plan identifies the following in support of the proposed projects:
• Chapter 3, Key Issues and Strategies, Parking Supply and Management: Monitor Curb Cuts: Curb
cuts on block faces significantly reduce on-street parking due to the driveway approach itself and
line-of-sight setbacks required for ingress and egress. Initial studies show that as many as 20
parking spaces could be added within the downtown boundary by simply right-sizing excessively
long or undefined curb cuts or by removing curb cuts that are no longer serving a purpose.
Relevant goals and recommendations from The Downtown Plan to address curb cuts.
• Chapter 3, Key Issues and Strategies, Public Infrastructure Improvements: Public infrastructure
can be an incentive or an inhibiter to future growth. Infrastructure that supports new technology,
i.e. – WIFI, Fiber-optic, etc. in the historic area has been identified as an issue; however, the single
greatest issue in downtown Kalispell is ready access to water along Main Street. A municipal
water main runs down the east side of Main Street (U.S. 93) approximately 8 feet from the curb.
The cost to tap into this line is extremely expensive for east side properties due to the cost of
traffic control and cutting into U.S. 93. For properties on the west side it is prohibitive. This issue
comes into play as basements and second floor uses are contemplated but lack adequate volumes
to meet fire codes. Other uses such as a brewery need increased water supply just to operate. Goal:
Provide for business development and redevelopment options within the downtown.
Recommendation: Upgrade inadequate infrastructure including city water mains for fire flows to
accommodate the full use of historic buildings downtown.
• Chapter 4, Implementation Goal 2: Convenient parking for business community and visitors.
Recommendation (d): Limit driveway approaches onto streets, encourage parking access onto alleys
and remove or limit existing driveway approaches that are not being used to increase the available
on-street parking.
• Chapter 4, Implementation Goal 3 (d) – Upgrade inadequate infrastructure including city
water mains for fire flows to accommodate the full use of historic buildings downtown.
• Chapter 4, Implementation Goal 4 (c) – Improve pedestrian and bike access throughout the
plan area to improve safety and mobility.
• Projects addressing ADA Compliance
XI. Public Improvements, Building and Site Preparation, Demolition and Clearance:
The City of Kalispell is authorized to demolish, remove, and clear buildings, in whole or in part, structures
and other improvements from any real property to carry out the purpose of this plan. The City of Kalispell
is also authorized to install and construct or cause to be installed and constructed the public improvements,
public facilities, and public utilities (within or outside the district) as appropriate or necessary to carry out
the plan. Such improvements, facilities and utilities include, but are not limited to, streets, curbs, gutters,
sidewalks, streetlights, sewer, water distribution, storm sewer, traffic signals, electrical distribution, parks,
plazas, playgrounds, telephone systems, fiber optic, parking facilities, landscaping and bus or pedestrian
shelters. All such improvements will be undertaken in accordance with the City of Kalispell construction
and design standards.
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Location of Property:
CONCLUSION:
The proposed public projects do comply with the expressed intent and the goals, policies, and recommendations
of the West Side – Core Area Urban Renewal Plan, The Downtown Urban Renewal Plan and the Tax
Assistance Program Policies as outlined above.
RECOMMENDATION:
Staff recommends that the City of Kalispell Urban Renewal Agency adopt staff report KRD-24-02 as findings
of fact and recommended to the Kalispell City Council that the four public projects be approved as provided.
ATTACHMENTS:
Tax Increment Assistance Program
Core Area Plan/Original West Side TIF Plan
The Downtown TIF Plan