Now that the asking price has dropped by more than $1 million, the city of Whitefish may make another attempt at buying a lakefront lot just west of City Beach on Whitefish Lake.

Three years ago Whitefish voters rejected a $3.19 million bond issue to expand the resort town’s popular beach by purchasing a .44-acre wooded lot on the western edge.

The property, with 99.7 feet of lakefront, was appraised at about $3.56 million, or $36,000 per lakefront foot in 2007. At the time the city negotiated a sale price of $3.1 million.

The property is still for sale and now is listed at $2 million.

The Whitefish Park Board on Jan. 12 unanimously voted to recommend to the City Council that the city once again pursue acquisition.

“The Park Board concluded that this property is of unique value to the city and crucial to the eventual expansion of City Beach,” City Manager Chuck Stearns said. “The Park Board identified the acquisition of this property as its highest-priority capital acquisition.”

Located on the south shore of Whitefish Lake, the beach has been used for swimming and boating since Whitefish was founded more than 100 years ago. Today it’s considered one of the nicest municipal beaches in the region.

Stearns will ask the council on Monday to consider a motion to pursue negotiations with the property owner.

THIS TIME around, the city may not have to rely on a voter-approved bond issue to push the property purchase forward.

Ironically, the recent statewide property reappraisal that left many Whitefish Lake homeowners reeling from higher taxes has padded Whitefish’s tax-increment fund with extra money.

“Despite the difficult position of the city’s general fund, the city’s tax-increment fund is healthy,” Stearns said, “and the city anticipates continued growth in the tax-increment fund.”

Tax-increment revenue, however, can’t be used to supplement the general fund.

Tax-increment districts typically are created to restore blighted areas of the city where physical deterioration of buildings and utilities exists.

Once the tax-district boundaries are established, property values are frozen at that level, and any increase in taxes within that district goes into the tax-increment fund and is used for projects to improve the value of property within the district.

Whitefish’s tax-increment district began in 1987. One of the first projects funded with tax-increment revenue was a major renovation of City Beach.

A decade ago the City Council had the foresight to bond the district to provide millions of dollars up front that largely has been used for street reconstruction projects.

Stearns said that if the council dubbed the beach property acquisition a priority, and if the owner is willing to provide financing, “it might be possible to acquire the property and pay off the purchase price over the next two to four years.”

There are other projects vying for tax-increment money, though. A new City Hall and redevelopment of the current City Hall site were the next major projects on the priority list for tax-increment funding.

 Features editor Lynnette Hintze may be reached at 758-4421 or by e-mail at lhintze@dailyinterlake.com