No Shortage of Incentives for Downtown Development
Daily Inter Lake | 2/20/2019 | Heidi Gaiser
Three speakers outlined new, emerging and often overlapping incentives for Kalispell development at the Chamber’s monthly luncheon Tuesday at the Red Lion Inn.
City Manager Doug Russell, Bryson Pelc with Jordahl & Sliter, and Libby Adlington of MoFi in Missoula described how tax breaks and financial assistance make investment in downtown Kalispell increasingly desirable for investors and businesses.
Russell said multiple programs near the Kalispell downtown core can help ideas become reality.
“These facilitate development in areas that otherwise might be lacking,” he said. “These give a push over the next hurdle to get developments in place.”
Kalispell city government is doing its part to drive development with tax increment financing districts. There are currently five TIF districts in Kalispell and another will be added when the district to support the new Downtown Urban Renewal Plan goes into effect.
Policies for the West Side TIF district in Kalispell, for example, include loan programs for facade improvement and code compliance, and grants for historic facade restoration, technical assistance, site-demolition preparation, shared utilities, and tree and sidewalk placement.
“There may be other credits — historic credits or affordable home credits,” Russell said. “If you’re looking at potential projects, the key is to start the discussion. There are things that may be able to fit your individual project.”
Pelc, a CPA at Jordahl & Sliter, discussed the Opportunity Zone designation given to a horseshoe-shaped tract around downtown Kalispell. Opportunity Zones were created as part of the 2017 Tax Cuts and Jobs Act.
“It takes underutilized areas and makes them attractive to investors,” Pelc said. “The aim is downtown revitalization and workforce development and expansion.”
The program includes tax deferrals, reductions in capital gains taxes and permanent tax exclusions of gain on appreciation, depending on how long an investor sticks with a property.
“If the property is held for 10 years, there are no capital gain taxes on the increased value of the property,” Pelc said.
He said one key to making the Opportunity Zone program live up to its full potential is to make investments in an area with potential for property-value increases.
“Kalispell’s Opportunity Zone is attractive because of the upcoming surrounding development,” he said. “If you’re doing new construction, it’s worth looking at locating within the zone.’
He emphasized that the Opportunity Zones, for which final regulations have not yet been released, are another tool in the developer’s toolbox.
“This will be a great fit in certain situations,” he said. “It takes a certain kind of investor to do what is intended. Our goal is to educate so people are aware this exists and that this zone is here.”
Adlington, MoFi director of marketing, discussed the New Markets Tax Credit program, which provides project capital for businesses, developers and nonprofits. New Markets is a federal program to spur and incentivize investment and economic activity in designated areas, Adlington said.
Projects located in zones in Kalispell, Evergreen and Columbia Falls are eligible for a 20 percent subsidy of total project costs.
“It’s truly a cash subsidy, not a tax credit,” she said.
New Markets helped finance the remodel of the Kalispell Albertson’s and construction of the Mission Valley Aquatic Center in Polson.
For more information about Opportunity Zones:
http://comdev.mt.gov/programs/opportunityzones
For more information about New Markets Tax Credits:
https://www.mofi.org/business-financing/new-markets-tax-credit/
Reporter Heidi Gaiser may be reached at 758-4438 or .