Revenue bonds OK'd for CHS relocation

Economic development leaders on Wednesday cleared a major final hurdle for the development of Glacier Rail Park when the Flathead County commissioners unanimously approved a resolution for port authority revenue bonds needed to finance the relocation of CHS to the rail park.

The Flathead County Economic Development Authority and city of Kalispell have embarked on a five-year, multifaceted economic development initiative that includes removing 2.7 miles of rail line through Kalispell, developing the rail park and relocating CHS and Northwest Drywall to the new rail facility off Whitefish Stage Road.

In the relocation agreement, CHS agrees to relocate its current operations at three city properties to new facilities that will be built at the rail park. The economic development authority will give CHS an $11 million relocation grant, a portion of which will be financed through the issuance of revenue bonds. CHS, in turn, will agree to lease land in the rail park and will use the grant to pay for the construction of replacement facilities on the leased rail park land.

The agreement also calls for CHS to sell its existing properties to the economic development authority for future redevelopment in the city core.

When the commissioners recently voiced concerns about county liability if environmental issues were to surface at the current CHS properties, the authority, represented by Missoula law firm Dorsey and Whitney, and CHS renegotiated the relocation agreement.

“Dorsey and Whitney has done an outstanding job in renegotiating some significant provisions that provide protection for FCEDA (Flathead County Economic Development Authority) and Flathead County,” Deputy County Attorney David Randall told the commissioners, adding “there’s no way to 100 percent eliminate liability.”

Commissioner Phil Mitchell said he could support the resolution, given the addition of conditions that better protect the county.

“It creates a business environment that both Kalispell and Flathead County can live with,” Mitchell said.

Commissioner Gary Krueger, however, told representatives of the economic development authority he still has concerns about potential environmental issues, even though he intended to vote in favor of the resolution.

“The environmental concerns … and how it could affect future Flathead County taxpayers should there be an environmental issue that wasn’t known at the time, that Flathead County would be responsible for paying, put up a red flag for me,” Krueger said. “I don’t believe that Flathead County taxpayers should be held liable for anything that FCEDA has negotiated, even though FCEDA is an entity of Flathead County.”

In addition to commenting during the commissioner proceedings on Wednesday, Krueger individually approached economic development representatives before the meeting began to explain his concerns.

Jerry Meerkatz, president and chief executive officer of FCEDA and Montana West Economic Development, said a Phase 1 Environmental Site Assessment has been completed on the three CHS properties, and the state Department of Environmental Quality has been doing some level of monitoring as far back as 2008.

“DEQ is well aware of these sites,” Meerkatz said. “They’ve been monitoring for some contaminants that are known ... and the Phase 1 ESA indicated very similar findings.”

Given the documentation already in place about the CHS properties, “we feel very comfortable that we do not anticipate any unforeseen discoveries in the ESA Phase 2,” Meerkatz said, adding that the economic development authority will be able to tap into environmental cleanup grants should any remediation be necessary.

As part of the renegotiation of the relocation agreement with CHS, language was added that creates a cost-sharing scenario for any environmental remediation that may be required at CHS’s existing properties. Meerkatz said CHS’s willingness to cooperate and a federal law that requires those responsible for environmental contamination to be “on the hook” for cleanup are further backstops to ensure the county won’t be held liable for any cleanup.

Krueger later told the Daily Inter Lake the commissioners had been brought into the relocation agreement discussions only a couple of months ago. He feels the commissioners should have kept in the loop of the relocation details.

The county does have a commissioner representative on both the FCEDA and Montana West Economic Development board of directors.

Meerkatz said the concerns pointed out by the commissioners in earlier discussions “made the definitive agreements better.”

Features editor Lynnette Hintze may be reached at 758-4421 or lhintze@dailyinterlake.com.