A Texas-based developer has withdrawn its application for nearly $17 million in tax increment financing tied to a proposed overhaul of the Kalispell Center Mall, leaving the project’s future uncertain. SHOP Development Company pulled the $16.9 million request on May 27, with no explanation provided to city officials.
The TIF Request and Redevelopment Plan
SHOP Development Company acquired the Kalispell Center Mall in 2024 and rebranded the property as the Parkline District, a nod to the adjacent Parkline Trail. The company had ambitious plans for the site: an events center or entertainment venue, a hotel, retail buildings, and potentially a new home for the Flathead County Library. The redevelopment also called for demolishing the former Herberger’s space and shrinking the mall’s footprint to roughly 108,000 square feet, not counting the Red Lion Hotel.
The total estimated cost for the project stands at $65.3 million. The developer had initially sought $23 million from the Westside/Core Area District tax increment financing fund before reducing that figure to $16.9 million during the review process. Even with that funding, the project would have faced an estimated $27.2 million financial gap.
The mall currently sits at 55 percent occupancy among existing tenant spaces — a figure that underscores the urgency of redevelopment but also the challenge of attracting the investment needed to make it viable.
City Left Without Answers
The withdrawal went unexplained. Community Development Manager Nelson Loring confirmed that the city’s Urban Renewal Agency board, which oversees TIF fund requests, was given no reason for the pullback. The URA board had approved a separate $5 million TIF award for public infrastructure on the property in 2024, but the larger redevelopment financing request is now off the table — at least for now.
SHOP Development is permitted to resubmit an application in the future, leaving open the possibility of renewed negotiations. Whether the company intends to do so, or on what timeline, remains unknown.
What’s Next for the Parkline District
The withdrawal doesn’t necessarily kill the redevelopment vision, but it removes the financial mechanism that would have helped bridge a substantial funding gap. TIF districts work by capturing growth in property tax revenue within a designated area and using it to fund improvements that are expected to spur further development. Without that tool, a project of this scale would face a steep uphill climb to pencil out financially.
Kalispell officials will likely watch whether SHOP Development continues to move forward with any portion of the Parkline District plans independently, pursues alternative financing, or ultimately returns to the URA with a revised application. The city has not announced any formal next steps in response to the withdrawal.
Broader Economic Context
The Kalispell Center Mall situation is playing out against a relatively strong backdrop for Montana’s broader economy. Montana recently posted the second-highest hourly wage growth in the nation, according to the Governor’s office — a sign of labor market strength that can complicate development economics by driving up construction costs even as consumer demand grows.
Large-scale mixed-use redevelopments like the Parkline District proposal are increasingly common in mid-sized Western cities as enclosed malls continue to lose retail tenants to e-commerce and changing shopping habits. Converting those spaces into experiential, hospitality, and civic uses is one of the more viable adaptive reuse strategies — but the financing structures required are complex, and the gap between project costs and available public subsidy often proves difficult to close.
For Kalispell, the mall property represents one of the more prominent redevelopment opportunities in the city’s urban core. How SHOP Development and city leaders navigate the next phase will likely shape the character of downtown Kalispell for years to come.
