An ambitious core area revitalization plan for Kalispell’s run-down railroad corridor is on track to be finalized by year’s end.

And this fall, the City Council will consider expanding the West Side Tax Increment Finance District to overlay the entire planning area.

That process starts on Monday, with a resolution that would set a Nov. 5 public hearing.

The eventual outcome will determine how much money Kalispell has available to help make the plan’s goals a reality before the tax district sunsets 25 years from now.

Last fall, the council expanded a West Side Urban Renewal Plan to include the railroad corridor. So projects within the corridor already are eligible for tax increment funding.

The district generated about $400,000 of tax increment revenue last year, and nearly $155,000 of additional entitlement money from payments in lieu of taxes and a larger-than-usual share of gambling revenue from the state. Its dedicated fund ended last year with close to $2.3 million.

Only about $40,000 is needed to make annual principal and interest payments on a $500,000 bond the City Council approved this year to pay for a water line project on West Colorado Street and improvements to South Meridian Road. That bond extended the district’s life, which otherwise would have sunset in mid-March after languishing for years without any projects.

Expanding the district’s boundary would likely generate more tax increment to help pay for revitalization goals, but has ramifications for general funds of the city, county and schools and their ability to levy taxes for basic services.

That’s because it would cap taxable property values for 1,100 parcels that together make up 364 acres of land in the city. Any taxes collected beyond those caps would be plowed into the TIF fund, which Kalispell can tap to improve public infrastructure, foster job creation and economic development or reduce blight.

Balancing those interests — the ability to levy taxes for services and the ability to help spur reinvestment in a rundown part of town — is expected to be a key part of discussions.

DEVELOPED OVER 18                              months with federal Environmental Protection Agency grant funds and extensive public input, a draft core area revitalization plan was unveiled in August. The plan is set to go before the Kalispell Planning Board and then the City Council for adoption by year’s end.

It aims to lay out a community vision for the railroad corridor and spark investment, inspiring and guiding the private sector to transform an underutilized area into a thriving urban core with dense mixed-use development.

But no one expects the private sector to do all of the heavy lifting.

One of the plan’s biggest goals is to remove the railroad tracks in Kalispell and relocate the last two major businesses that use them to a Flathead County Rail Park being developed at the former McElroy and Wilken gravel pit.

Other major goals are to replace aging water and sewer lines, clean up potential Brownfield sites, extend sidewalks, create new north-south street connections and build a “linear park” in place of the tracks.

The corridor could include east and west gateways to welcome people to the city and major anchors at either end, such as a new conference, community, fine-arts or fitness center.

“We’re laying out the vision, and if there’s public buy-in, private entities will build and develop it. The question is how we as a city can help facilitate that, and help the private market do it,” Kalispell Planning Director Tom Jentz said.

Jentz stressed that the plan still must be adopted by the City Council, but acknowledged that several of its goals could qualify for tax increment funding.

COUNCIL member Jim Atkinson said the revitalization plan is the “best thing since sliced bread” for Kalispell and said he supports expanding the district as a tool to help private investors make its visions reality.

“Yes it will take time, and yes it will take money. But first it takes a dream. And that’s where we are at this point,” he said.

Council member Phil Guiffrida III agreed the plan is shaping up to be a great vision for Kalispell. “We have an old, rundown industrial railroad corridor and the potential to get positive growth and really spruce up the city.”

Guiffrida said he also supports the district as an incentive to help the private sector.

One of the biggest concerns is making sure the city, county and schools have access to the taxes they need to provide basic services as land in the railroad corridor is built on or redeveloped.

“Schools are already claiming they’re struggling,” Guiffrida said.

“If we have high-density housing go in there, that will put more children in the schools and they won’t see any increase in their taxes if the TIF is in there. Those are some of the catches.”

Kalispell could occasionally or regularly send tax increment money back to the city, county and schools. And Guiffrida and Atkinson both agreed that’s something to discuss.

“I recognize [the TIF district] as a business incentive tool to help start putting some of these ideas into action. But we need to be careful, get all the options on the table and make an informed decision,” Guiffrida said.

OTHER AGENDA items Monday include:

• Creation of a special improvement district to fund stormwater drainage upgrades in the Willows.

• A two-year preliminary plat extension for three phases of Glacier Village Greens.

• A presentation of Kalispell’s 2012 architectural awards, recognizing Sykes’, Immanuel Lutheran Communities and The Forge.

Monday’s meeting starts at 7 p.m. in Kalispell City Hall, 201 First Ave. E. It is open to the public.

Reporter Tom Lotshaw may be reached at 758-4483 or by email at tlotshaw@dailyinterlake.com.