Mall redevelopment may be a gamble worth taking

Developers have proposed an intriguing plan for Kalispell Center Mall that promises a bright future for the town’s Parkline and downtown areas. But a key question looms large: How much should the public invest in a private development?

Texas-based developer SHOP Companies is requesting $16.9 million in tax-increment financing funds to help pay for a $65 million project that would replace the outdated, largely vacant mall with a mix of public and private spaces. The preliminary vision is ambitious, with an event space, an additional hotel, restaurants and retail, housing, a park area and potentially a new home for the county library.

The project clearly qualifies for public funding. Tax-increment financing exists to aid in the redevelopment of underperforming properties like the mall, with the intent that the investment spurs future economic development.

But qualifying for funding doesn’t always mean it’s warranted.

Tax-increment financing often funds infrastructure — such as sidewalks, roads or utilities — to attract new development. Other times, the funds go directly to development costs. For the mall, developers are proposing a mix of both.

It is important to note that the public funding isn’t generated by a new property tax. Rather, it’s a bet on the future that redevelopment will lead to an increase in property tax revenue within the district, which is then used to pay down the initial investment.

And that’s the gamble. If the project receiving the funds doesn’t meet its expected potential, the city is left with an empty investment.

That uncertainty is what Kalispell’s Urban Renewal Agency must consider as it weighs the developer’s request.

The roughly $17 million ask represents about a quarter of the total project cost. The developers insist that without public support, the project likely won’t happen. Whether that’s a negotiation tactic or reality, it does raise questions about the viability of the proposal. If this project can’t stand on its own, why should taxpayers give it a boost?

Yet, inaction carries its own risk that may be more detrimental to the downtown’s long-term relevance.

Without a bold renewal of the mall property, developers will continue to view North Kalispell as the best prospect for new commerce. That’s a one-way ticket to a dying Main Street.

A public investment may very well lead to a significant payoff that propels the mall property toward its fullest potential, ultimately lifting up the entire Parkline and downtown area.

The city should not write a blank check. But it should not dismiss a rare chance to reshape the heart of Kalispell, either.