The city of Great Falls paused some funding programs that benefit the downtown area after seeing a sharp reduction in the taxable values in the district.
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It’s not that property values are dropping at an alarming rate across downtown. Rather, the change is largely attributed to NorthWestern Energy’s acquisition last year of Energy West and to that utility’s historic train depot building that had contributed millions to the downtown tax rolls.
Last week, Great Falls Strategic Development Officer Brock Cherry told members of an advisory committee that the city manager paused new applications for a $500,000 program that funds upgrades addressing safety (such as fire sprinklers), environmental issues and building facade improvements. The money comes from the city’s downtown tax increment finance district, which captures growth in tax revenue and reinvests it into the district.
What has alarmed city officials is that the value of property contributing to projects supported by the downtown fund has substantially decreased over the last year, from $2.1 million in 2025 to $832,000 in 2026.
The historic train depot building, which was home to Energy West until NorthWestern Energy acquired it last year, accounts for a large share of that decrease. A NorthWestern spokesperson said in an emailed statement that the value associated with that building dropped from $1.5 million to $213,000.
The pause in funding represents just a portion of the overall project funding in the TIF. The fund had a nearly $6 million balance in 2025 and can still meet all annual debt payments and previously approved funding obligations, according to Cherry and city documents. But going forward, the city may have less money available to fund new projects that downtown property owners apply for.
“We’re just going to have to see what’s happening, but I think the biggest thing is, in short, over the last several years we have become accustomed to that TIF generating over $2 million in taxable increment revenue,” Cherry said.
“We’re probably entering a new era in that downtown TIF where that isn’t going to be the case,” he added.
The reason for the sharp decrease in property values following NorthWestern Energy’s acquisition of Energy West is not entirely clear. It’s related to a complex valuation process for “centrally assessed” properties. Those kinds of properties have one owner but span long distances across Montana. These are commonly electrical transmission lines, railroads and gas pipelines that transcend normal taxing jurisdictions.
Once the Montana Department of Revenue determines the property’s value, there is another formula for allocating tax revenue to local cities, counties and school districts.
“Say the value of the whole company is a billion dollars,” Bob Story, executive director of the Montana Taxpayers Association, told MTFP earlier this month. “Then they apportion that out to all the taxing jurisdictions based on the share of value that’s in that jurisdiction.”
When Energy West owned the downtown train depot, its centrally assessed value and the corresponding property tax revenue benefited the downtown Great Falls district. When the utility was acquired by NorthWestern, which has a much different network of centrally assessed property, it no longer contributes to the same degree.
There are multiple methods for valuing centrally assessed properties across multiple cities and counties. NorthWestern Energy spokesperson Jo Dee Black said in an emailed statement that a change in that method between Energy West and NorthWestern ownership accounts for the change in valuation.
The method appears to have changed in the past, as well as during Energy West’s ownership. From 2018 to 2019, the taxable value in the downtown district drastically increased. The change was also largely attributed to the valuation method for Energy West’s centrally assessed property, according to city leaders and statements from NorthWestern.
During that time, the revenue generated in the downtown TIF jumped from $267,000 to $1.3 million, Cherry told the advisory committee earlier this month.
The Montana Department of Revenue did not respond to MTFP inquiries about how centrally assessed property caused these valuation swings in downtown Great Falls.
Ultimately, the impact on downtown Great Falls is likely to be fewer dollars filling the downtown TIF fund each year. The downtown area has been viewed as one of the most successful revitalization districts in the city. Not only will property tax revenue be affected, but the Business Improvement District will be as well, which is funded in part through special assessments on downtown properties.
Kellie Pierce, director of Downtown Great Falls and the Business Improvement District, said the estimated reduction in assessment revenue is $26,000. The district receives about $379,000 in total from assessments, which makes up a majority of its operational budget. The BID also uses TIF funds for tree maintenance and its hallmark ArtsFest event, which includes the Great Walls Montana murals.
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