Development Project at Old School Station201 1st Avenue East
Kalispell, MT 59901
406.758.7740
Fax: 406.758.7758
City of Kalispell • www.kalispell.com
Office of Community & Economic Development
MEMORANDUM
To: Honorable Mayor Kennedy and City Council Members
CC: Myrt Webb, Interim City Manager
From: Kellie Danielson, Director, Community & Economic Development Department
Date: April 29, 2009
RE: Workshop Item: Development Project at Old School Station
Background
In July 2008 our office was contacted by an out of state real estate firm representing a multi-
national corporation. We were asked to assist in providing Greenfield site data with applied
specifications in a certain geographical area of the City of Kalispell. We contacted property
owners and provided the data to the firm. We also assisted in identifying available buildings that
met certain specifications for the client. Once all the data was collected from various sources the
broker matched up their selected sites and provide to their client.
Out of the Kalispell opportunities the broker informed me that Old School Station business park
best suit the needs of the client. We were then asked what resources are available to the project to
assist in upfront development costs, i.e. incentives to reduce or offset development costs to keep
the project competitive.
The one incentive that the City controls is the tax increment financing district (TIF) at Old School
Station Business Park. As stipulated in the City's resolutions regarding Old School Station TIF
funds can be utilized to offset the special improvement district costs assessed to each lot in the
park. It is our recommendation that the developer, Devron Property Services Inc., receives
funding from the TIF to offset the special improvement district assessments.
Description of Project
Devron Property Services Inc. is a private sector developer that was recently awarded the
development contract from FedEx Ground. The developer will provide a turn -key building
around 18,000 square feet on Lot 2 to lease to FedEx. FedEx will provide the furniture, fixtures
and equipment for internal operations. The initial lease agreement is for 10 years. FedEx Ground
provides the employment.
Investment Scenario
Building and land Approximate investment $2.8 million
Furniture, fixtures and equipment $TBD
Emplgyment
Retained jobs 2 full-time, 7 part-time
Net, new jobs 1 part time
Average wage is $13.81/hour + Benefits
This facility will provide an opportunity for 10 delivery routes for independent contractors in the
Kalispell area who can make upwards in the six figures.
Timm
The full approval of the development contract to Devron Property Services is anticipated by June
1, 2009. The construction phase is planned to begin august or September 2009. Move in date is
May 2010.
Fiscal Impact
As of today's date the tool(s) to calculate an impact analysis are not immediately available to our
department. Unfortunately we cannot present an analytical statement of the impact to you. What
we can express subjectively is the current FedEx Ground facility is not within city limits, the
investment is new to the City in terms of tax revenues, and the construction will add to the
purpose of the park.
Our department will provide a proforma during the workshop on the development costs
associated with Old School Station business park and why staff supports' the TIF funds be used
to offset development fees.
Future Action Recommended
Staff will present the proforma during the workshop to support the recommendation TIF funds be
utilized to offset a small portion of the developer's site development costs. Because this is a work
session the approval will be requested at the May 11 `h Council meeting.
About FedEx Ground
FedEx Ground is a small -package transportation service that connects global buyers to suppliers
with the world's most innovative supply chain and information technology ever created. FedEx
provides its customers access to real time information on the logistics services; each delivery
driver is equipped with intelligent mobile computers that provide the basis for real time delivery
confirmation and tracking services. Additionally, FedEx facilities are equipped with cutting -edge
material handling, automation, and mobile wireless technologies that provide a foundation for
efficient package handling and sophisticated supply chain visibility.
Respectfully submitted,
%\
Kelh ,Danielson
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