A “pilot project” for the expanded West Side Tax Increment Finance District saw broad support from the Kalispell City Council on Monday.

With a 6-1 vote, council opted to spend up to $72,661 of tax increment money to help Paul Roybal rehabilitate the Kelly-Main Street building for his carpet and flooring store.

The project illustrates some of the new redevelopment programs city staffers and Urban Renewal Agency members are  crafting for the mature tax increment district that holds about $2.7 million and is generating $440,000 a year. 

Council members recently voted to extend the 15-year-old district’s life for 25 more years and expand it to overlay Kalispell’s railroad corridor, tacking on a long list of new revitalization goals for the area.

“[Urban Renewal Agency members] have been working for three or four months trying to develop policies and guidelines so when applicants come in they have criteria to review projects and requests and forward recommendations [to the city council],” Planning Director Tom Jentz said. 

“Mr. Roybal came in as the URA was putting those together, so we looked at it as a pilot project.”

A grant for up to $33,757 of tax increment would pay for half the cost to rehabilitate Kelly Main-Street’s stone pillar and window facade and awnings.

“Kalispell has a phenomenal historic area and we want to encourage that,” Jentz said about the proposed facade program that would offer grants or loans for businesses in the district to improve building exteriors.

Given the age, rough appearance and high visibility of Kelly-Main Street, Urban Renewal Agency members supported a tax increment grant for 50 percent of the facade’s cost instead of a smaller grant or a loan. 

The building opened in 1924 and was designed by Kalispell architect Fred Brinkman. For almost a decade, it has stood empty at Main and East Center, one of downtown’s busiest corners.

Another grant for up to $18,533 would pay for half the cost to tap a water main under Main Street and run an oversized fire-flow water line to the building. 

In the basement, the fire-flow line would be split and run to the walls of neighboring buildings so their owners could connect to the line to install fire suppression systems without the high cost of closing and digging up the highway out front.

“This building already burned once,” Jentz said about the 1976 fire that destroyed the front of the Kelly-Main Street building. And because the shared utility extension could benefit other properties, Urban Renewal Agency members again supported a larger share of public investment.

The proposal approved on Monday also offers Roybal a loan for up to $20,000 of tax increment to make interior repairs and bring Kelly Main-Street up to code. That money likely will be used to repair the roof and install a fire suppression system.

All of the assistance would be paid out on a reimbursement basis, so if the work is never done no tax increment is spent.

Jentz said the Kelly-Main Street project meets a proposed guideline that tax increment money can amount to no more than 10 percent of a project’s total private investment. 

While it’s not clear exactly how much growth in property value the project will cause, the fire-flow line and fire suppression system will allow development in the basement and on the second floor, tripling the amount of usable space inside the 21,000-square-foot building.

“Without it, I don’t know if this building makes it another 10 years. And we don’t need another parking lot or another crater here,” Jentz said, adding that a neighboring building owner also is applying for tax increment money to improve a facade.

Some of the other redevelopment programs being explored would offer limited amounts of tax increment money in grants or loans to help property owners plant trees and put in sidewalks; demolish blighted buildings and prepare cleared sites for redevelopment; and create a bank of on-call professionals to offer limited technical assistance for small businesses that need help with building or architectural plans.

Those programs and their details still are being hashed out by city staffers and the Urban Renewal Agency. 

They are being created to help people accomplish the private redevelopment goals — as opposed to major public goals like removing the railroad tracks and opening new streets, parks and trails — that are spelled out in the core area revitalization plan that Kalispell adopted for its railroad corridor. 

“[Those programs] will be coming back to you in whole to review and comment on,” Jentz told the council on Monday. 

BOB HAFFERMAN was the only council member to vote against the tax increment project, but stressed he appreciates Roybal’s work to reopen a downtown building. 

“I would support a five-year tax break for new startup businesses or business expansion, just like the county offers,” Hafferman said. “I see we have a huge pot of money and we’re just itching to find something to use it for.”

Phil Guiffrida III said he understands that concern. But the property is in a tax increment district that was expanded to eliminate blight, raise property values and spur mixed-use redevelopment.

“The reality is, that’s our job,” Guiffrida said about spending the tax increment in eligible areas. “We do have funds to assist revitalization in this area and to enhance properties and increase value to create that increment that goes back into the TIF to fund more of these in the future.”

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