City studies backup plans for rail-park funding

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The Kalispell City Council and Flathead County Economic Development Authority on Monday discussed a hypothetical situation in case funding pieces fall through in building the new Glacier Rail Park.

The rail park is a key phase of the Core and Rail Redevelopment plan.

With a $10 million

grant from the U.S. Department of Transportation, the groups are moving forward with relocating CHS, one of the two rail-served businesses currently in central Kalispell, to the new Glacier Rail Park east of town.

The piece of funding that is not 100 percent secure is the cost of relocating CHS.

The Flathead Economic Development Authority is planning to use new market tax credits and the rental fees from other tenants moving into the new rail park to assist the relocation. The $10 million transportation grant can’t be used to relocate CHS.

To show that the project could be completed if funding falls through, City Manager Doug Russell gave a presentation outlining just one of the worst-case scenarios: no tenants move into the new rail park aside from CHS, and the project is not awarded the new market tax credits.

“In a nutshell, that’s what I wanted to hit tonight,” Russell said. “We’re about a month away from signing the grant acceptance. We just want to know we can get this project done if things fall through.”

In that scenario, the Economic Development Authority, a quasi-county entity, would issue an industrial development bond worth $4 million. The development group would then issue another $2 million in revenue bonds and contribute another $2 million in cash currently in hand. That, along with $4 million already pledged by CHS, would cover the cost of relocating.

To supplement the money used to relocate CHS, the authority and the city would use a $2 million loan from the Federal Rail Administration to add to the money for the entire Core and Rail project. The groups would also apply for $800,000 in new market tax credits, but the authority would apply for these credits for the use of the new trail laid out in the Core and Rail plan, rather than relocating CHS.

In addition to the Rail Administration loan and the new market tax credits, Russell suggested creating a tax increment-financing district in the new rail park to produce another $775,000.

“I think it would be very wise to put it in place,” Russell said. “If we don’t need it or don’t want it, we can make that decision six months from now.”

Russell said since there was no opposition to the idea, the city will move forward with creating a tax increment-financing district in the rail park.

This presentation was not an outline of future steps toward completing the rail park, but just an example of what could be done in the worst-case scenario. Kim Morisaki, a spokeswoman for the Economic Development Authority, said there are currently three parties, aside from CHS, that have expressed some level of interest in the rail park.

“There’s going to be changes to these numbers,” Russell said. “Bids will change, quotes will change. The most important thing is we can make this project work in the worst-case scenario.”

In fact, this scenario would result in a $450,000 surplus by the end of the project.

In other business, the City Council sought to its vision for Kalispell in light of the recent major developments, including the Core and Rail Redevelopment plan, the Kalispell U.S. 93 bypass project and the growth of Spring Prairie off U.S. 93 North.

The discussion centered around how to better market Kalispell as a destination for both tourists and residents. One issue pointed out by council member Rod Kuntz is there are several events near Kalispell to entice visitors, such the annual Spartan Race and the Montana Dragon Boat Festival, but few events inside the city to promote Kalispell itself.

“There’s a gap, and as leaders of the city of Kalispell we could provide some sort of vision to make them all coalesce,” Kuntz said.

Several ideas came out, including branding the town with a flag, creating connectivity with an intercity trail system and working with the Kalispell Convention and Visitor Bureau to help market the town.

The next City Council meeting is scheduled for 7 p.m. on Monday, Dec. 21, at City Hall, 201 First Ave. E.


Reporter Seaborn Larson may be reached at 758-4441 or by email at slarson@dailyinterlake.com.

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