When the Kalispell Center Mall's redevelopment starts, what will you actually see change? Your first guess might be new storefronts, a hotel or a fresh façade on the side facing downtown. Under the plan now in front of the city, the answer is none of those. The first visible change is a demolition crew at the old Herberger's building, followed by a new street cut through the spot where the department store stood.
That order matters for anyone who drives Main Street, parks at JCPenney or bikes the Parkline Trail. The public money now being requested pays almost entirely for streets, sidewalks, utilities and a trailhead. The redevelopment's retail and hospitality parts are planned for later phases, and a new library on the property is on an even longer timeline.
Phase One Is a Road Project With a Mall Attached
In mid-October, the City of Kalispell's Urban Renewal Agency voted unanimously to recommend a $13.9 million Tax Increment Financing request from Parkline Partners, an affiliate of Texas-based SHOP Development Company, according to the Flathead Beacon. Here is what that first phase covers, with the Beacon's cost estimates:
- Extending 3rd Avenue West through the mall property. This means demolishing the Herberger's building and filling the hole it leaves. It is the largest piece, at about $10.9 million.
- Utility extensions to the property's west side to prepare for future buildings.
- Streetscape work on West Center Street and 5th Avenue West: new paving, trees, lighting and sidewalks built to ADA standards. Together, the utilities and streetscape come to about $2.9 million.
- A new Parkline Trail trailhead at 3rd Avenue West with bike racks, a bike repair station, seating and a drinking fountain.
The development team expects about 18 months of construction for the 3rd Avenue West, Center Street and 5th Avenue West work and the site utilities. For more than a year after work begins, then, the changes you'll see are mostly in the public right of way around the mall.
Why the Street Comes Before the Stores
The road already appears in the city's own planning documents. Kalispell Chamber of Commerce CEO Lorraine Clarno told the agency that the city's Core Area Plan, transportation plan and downtown plan all call for better connections in this area. Some of those plans specifically name a 3rd Avenue West extension as an alternative route to Main Street and Highway 93.
"The question in front of you this afternoon is not whether we want the street," Clarno said at the meeting, as reported by the Flathead Beacon. "It's how do we pay for it and whether we take the opportunity that avails us today and is in front of us, or wait for potentially another decade, who knows."
The Northwest Montana Association of REALTORS and the Kalispell Downtown Business Improvement District also spoke in favor. A third-party financial analysis found the project needs public funding to be feasible.
TIF funds come from property taxes collected in Kalispell's four TIF districts. The program supports projects that remove blight, create housing or expand the tax base. The mall sits in the Westside/Core Area and Downtown TIF districts. The Beacon reports the redevelopment would generate an estimated $20.35 million in tax revenue over the next 24 years and would take about 14 years to repay the $13.9 million.
How the Request Got Smaller
The current request is the third version, and how it shrank explains why phase one looks the way it does.
| When | What happened |
|---|---|
| March 2026 | SHOP outlines a mixed-use "Parkline District" and first floats a TIF request of roughly $23 million |
| May 27, 2026 | The application, by then cut to $16.9 million, is withdrawn |
| Sept. 17, 2026 | Revised plans go to the Urban Renewal Agency, with a request of about $13.9 million |
| Mid-October 2026 | The agency unanimously recommends the $13.9 million request to City Council |
The main savings came from the west wall that would be left exposed once Herberger's comes down. SHOP Companies founding partner Daniel Fuller told the Beacon the team redesigned the proposed west entry after city staff pushed to lower costs. The new proposal is a temporary "like-for-like" rebuild of Herberger's existing wall. "We completely reimagined the west side, and it removed $3 million of cost out of the project," Fuller said in the Daily Inter Lake's September coverage.
The mall's exterior façade has also moved out of phase one. It is now grouped with the interior renovation in phase two.
What Phase Two Is Supposed to Become
The longer-term vision is much bigger than the first ask. According to the Daily Inter Lake, the west side of the property would be split into five separate buildings so storefronts are visible from outside. The building meant for a new hotel would likely get an attached multilevel parking structure. The existing Red Lion Hotel is also part of the redevelopment. The Beacon's October report says the full redevelopment is expected to include reimagined retail, outdoor green space, a hotel, a bank and an event center.
The green space is the least settled piece. The Inter Lake reported in September that an earlier design's park space had since been replaced by another retail building.
The scale makes it clear why the work is split into phases. The Beacon puts the mall's initial project cost at $65.3 million. Future development is estimated to add about $62 million, for a total of $127.3 million. Against that total, the $13.9 million request is roughly a ninth. SHOP's local track record includes Larch House, a luxury boutique hotel in Whitefish.
Inside the Mall While the Streets Are Built
Herberger's has been empty a long time. The company confirmed the Kalispell store's closure in April 2018, the Beacon reported at the time. Much of the rest of the building is still open. SHOP's Parkline District property page lists JCPenney, U.S. Bank, Starbucks, Bath & Body Works, LensCrafters, Claire's and the Red Lion Hotel as notable tenants.
Phasing matters most for those businesses. The first-phase work is outside the building and in the surrounding streets. The disruptive part for tenants is the later interior renovation, which the Daily Inter Lake reported in May could close some spaces temporarily. The developer said it expected to offer affected tenants three to nine months of free rent while closed. Since the interior is now in phase two, that disruption sits beyond the 18-month street-and-utility window.
The Northwest Corner Runs on the Slowest Clock
A new Kalispell branch of the Flathead County Library is the longest-range piece on the property. The library has been negotiating for the northwest corner, next to Fifth Avenue West and the Parkline Trail. In late May, trustees updated their offer to $2.9 million for 2 buildable acres plus a restricted easement, the Daily Inter Lake reported in June. The Parkline Trail along the property's north edge and a triangular easement just south of it are both excluded from development.
Construction on a proposed 40,000-square-foot library is planned to begin in 2030 and finish by 2033. As of the Beacon's Oct. 17 report, the library was still in talks with Parkline Partners. If the purchase goes through, the part of the development generating future tax dollars would drop to about $121 million, since a library doesn't pay property tax.
The Parkline Trail Is Where the Pieces Meet
Taken together, phase one and the library site point toward the Parkline Trail. The linear park replaced the downtown railroad tracks in 2022, and the land next to it is already zoned B-3, Core Area Business. That zoning allows buildings up to 60 feet tall by right, has no minimum lot size or setbacks, and cuts minimum parking requirements in half.
On Oct. 13, the Kalispell Planning Commission discussed whether to add design standards for buildings along the trail. No vote was taken, the Daily Inter Lake reported. Board President Rory Young said the city's vision for the trail most closely matches the current feel around SunRift Beer Company and Mountain Berry Bowls. He added that the layout may not work everywhere along the corridor.
The proposed 3rd Avenue West trailhead would be the mall project's first direct connection to that corridor. Bike racks, a repair station, seating and a water fountain would sit where the new street meets the trail.
Where the Decision Stands
Nothing has been approved yet. The Beacon reported that the request goes to the Kalispell City Council "in the coming weeks." It wasn't on the Oct. 19 council agenda, which lists Nov. 2 as the next regular meeting. Council agendas are posted on the city's site ahead of each meeting, so you can see there when the mall request is scheduled.
If council approves it, the funds would be paid out over several fiscal years. The first visible work would be the Herberger's demolition and the start of the new 3rd Avenue West.
If you own a home near the mall, the Parkline Trail or the 3rd Avenue West corridor and want to talk through what this project could mean for your block over the next few years, I'm always glad to share what I'm watching. Reach out to Heidi Lane and let's connect.
