City approves PILT agreement with housing developer
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POLSON – By a 5-1 vote with Stephen Turner dissenting, the City Commission last week approved a payment in lieu of taxes, or PILT, agreement with the developer of a low-income housing project.
The agreement, which will provide $10,827 for city services such as police and fire, follows an announcement in January that Polson Landing LLLP will get $6.765 million in tax credits from the Montana Board of Housing. The value of the property at completion is estimated at $4.6 million.
PILT payments compensate local government for tax revenues lost due to tax exempt status of property or ownership.
Responding to concerns about the agreement raised by Polson resident Lee Manicke during the May 15 commission meeting, developer’s representative Alex Burkhalter said the overall property tax bill the developer would have been liable for without the tax credits was about $40,000. The city’s portion of that tax was estimated to be $10,827 with remaining taxes going to the county or school districts, among others. City officials said the developer does not have similar PILT agreements with those entities.
Burkhalter said the developer has a similar PILT agreement with Kalispell but not with Glendive and Missoula for projects it owns in those cities. He said the Missoula-based company, Housing Solutions LLC, has never had a PILT agreement with a school district or county.
Manicke expressed concern about the agreement and said it requires the city to file a lien against the property owner if it doesn’t pay the PILT.
“We haven’t missed a PILT payment (on other properties),” Burkhalter said, adding that interest accrues if the company doesn’t pay.
Dennis Duty, a co-developer of the Ridgewater Subdivision where Polson Landing would be built, said it is difficult to get affordable housing in Polson. “This is an opportunity to get housing for single mothers and others,” he said.
Turner said the development is not using local labor or materials.
City Manager Mark Shrives said he had talked with the developer about the PILT agreement over the past two years.
In response to a question from a commissioner, Shrives said that not approving the agreement would not stop the project and would leave the city without any revenue for it. He noted the city has PILT agreements with KwaTaqNuk Resort and the Confederated Salish and Kootenai Tribes for 41 tribal housing units.
The commission also approved a policy for PILT agreements with any entity receiving tax-exempt status when the entity competes with taxpaying competitors.
Quick Lube coming?
In other news, the commission unanimously approved an amended preliminary plat agreement for the South Shore Subdivision. The plat will subdivide land at 103 Rufus Lane to provide a location for a Quick Lube. The other portion of the land currently has a laundromat and car wash.
Red Nose Month
The commission proclaimed May “Red Nose Month” upon a request from Walgreen’s. Red Nose Day is Thursday, May 25, and funds raised from certain Walgreen’s purchases will benefit Boys and Girls Clubs, Feeding America and the Children’s Health Network.
