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H.1. Old School Station Purchase Offer
City of Kalispell Post Office Box 1997 - Kalispell, Montana 59903-1997 Telephone (406) 758-7700 Fax- (406) 758-7758 Report To: Doug Russell, City Manager From: Katharine King, Assistant Director Community Development Subject: Old School Station, Lot 6 Offer to Purchase Meeting Date: February 19, 2019 BACKGROUND: On April 5, 2015, by means of Resolution 5710, the City Council elected to take assignment from Flathead County of its tax lien on six parcels of Old School Station by paying the past due taxes and assessments. On April 20, 2015, City Council passed Resolution 5712 in which Council stated its intention to retain and sell the properties and to set the concluding date and time of the period of redemption for May 4, 2015, at 7 pm. By Resolution 5717 on May 4, 2015, Council determined to retain and sell all interests in the Old School Station lots under its ownership. The properties were appraised by Clark Real Estate Appraisal in 2015 to establish listing prices for each lot. In April 2017 the City of Kalispell listed the properties for sale through Flathead Valley Brokers at the appraised values with the potential off -set of reduced Special Improvement District bond payments as calculated for each individual lot. Lot 6 of Old School Station located at 135 Schoolhouse Loop, Kalispell was appraised and then listed for sale at $166,212. Lot 6, along with the other five City -owned lots in Old School Station, has been continuously listed for sale since April 2017. Lot 6 is located in the Technology Tax Increment Finance (TIF) District at Old School Station. On January 30, 2019, the City received an offer for the purchase of Lot 6 and has worked with the purchaser to establish the proposed terms of sale as attached and explained below. RECOMMENDATION: Proceed with Counter Offer as presented. FISCAL EFFECTS: The City will receive the purchase price of $166,212 as follows: $75,000 at closing, including the $5,000 earnest money. The remaining $91,212 will be paid on a note and contract for deed to the City over a three-year term with balloon payment due at the end of the term, 5% annual rate simple interest calculated per terms of the agreement. Pursuant to the terms of a Developers Agreement, tax increment will be applied to reimbursement of SID payments and if the purchaser completes planned capital improvements to the property within 18 months of closing, the note will be reduced to $75,000. ALTERNATIVES: Identify different terms for buy -sell agreement. ATTACHMENTS: Map of Lot 6 at Old School Station Counter Offer for Lot 6 at Old School Station A Old School Station TIF - City of Kalispell NORTH OldSchoolStation TIFF - Industrial OldSchoolStation TIFF - Tech Cityl-imit LL FOYS B r 1 Ri r� J C z r LU r S. OYYLINE LN $ tV O �. Co SCHOOLHOUSE LOOP T 11� , `.. ROC12Y '-ADC31lJS'L OP Date: Sept 12th, 2017 Kalispell Planning Dept. FilePath:112017/Krista/09122017 a 0.1 0.2 .Y0A'TANA Miles Aulhentisign ID: 4DE5AA5�.�1'i13 49M BD80-2F6FC10FA4A9 PureWest CHRISTIE'S NTERNATIONAL REAL MATE COUNTER OFFER [13 121 REALTORS oP aaiuNITY 1 This Counter Offer pertains to a Buy/Sell Agreement (hereafter The "Agreement") dated 1/29/2019 2 by and between City of Kalispell (Seller) and 3 Haig J Ermoian (Buyer) concerning the 4 property described as: 135 Schoolhouse Loop Kalispell MT 59901 5 OLD SCHOOL STATION, S33, T28 N, R21 W, Lot 6 6 7 8 9 All the terms and conditions of the Agreement, except the Buyer's Commitment provision, are hereby incorporated by 10 reference except as modified by the followinq terms and provisions: 11 Line 24 - Purchase price $166,212.00 (One hundred Sixty six thousand, two hundred, 12 twelve US dollars). 13 strike lines 155-164 and replace with: 14 The balance of the purchase price $91,212.00 to be secured by a Contract for Deed and 15 a Developers Agreement. Terms to be: 3 year term with balloon payment due and payable 16 at the end of the term, 5% annual rate simple interest calculated on the principle 17 balance at the end of the month, payments to be interest only for the three year term. Buyer reserves the right to pay additional principle payment without penalty 18 and have any additional principle payments credited toward the final balloon payment. 19 20 Seller agrees to open an account with Escrow Services, buyer agrees to pay opening 21 and monthly maintenance of the escrow services account. 22 Seller agrees to subordinate his interest in the mortgage to a construction lender if 23 required. 24 In the event the Purchaser completes its planned capital improvements to the property 25 within 18 months of closing, the amount owing on the Contract for Deed shall be 26 reduced to the equivalent of $150,000. Purchase price. 27 During the term of the Contract for Deed the Purchaser shall be responsible to pay to 28 the Montana State Department of Revenue any beneficial use taxes that accrue due to 29 the capital improvements. 30 31 Any Special Improvement District reimbursement shall be pursuant to a Developers 32 Agreement written within the due diligence period and mutually approved by buyer and 33 seller with the intent to reimburse the purchaser for its payments of the specials 34 that come due annually. 35 This offer and acceptance is subject to the approval of the authority of the City 36 council. If seller accepts this counter offer, the offer will be submitted for approval when the City Council meets Tuesday, February 19, 2019. If the Council 37 approves the structured offer and acceptance, the City Manager can finalized 38 Wednesday February 20, 2019 to place lot 6 Old School Station Under Contract. 39 Buyer Initials ©2017 Montana Association of REALTORS@ Counter Offer, October 2017 ?.1L / Seller Initials This form presented by Luke Underhill PureWest Real Estate (2917) - 406-662-1772 1 luke.underhill®gmail.com Authentisign to. 4DESAA5D-D213.493D-BD80-2F6FC10FA4A9 40 ❑ The dates for performance contained in the Agreement shall be extended the same number of days that have 41 elapsed between the Agreement and the date of final Acceptance of this Counter Offer except for the closing date 42 which shall remain as set forth in the Agreement; OR 43 ❑ All performance dates contained in the Agreement shall remain the same, except as otherwise stated herein. 44 Acceptance of this Counter Offer may be made by providing a signed copy to the offering party or their 45 Broker/Salesperson prior to 02/08/19 5: OOPM (Date/Time), whether or not that deadline falls 46 on a Saturday, Sunday or holiday. Offering party may withdraw this counter offer any time prior to receiving written 47 acceptance. If acceptance is not given to the offering party or their Broker/Salesperson by expiration of the time for 48 acceptance, this offer is then null and void. 49 The parties hereto, all agree that the transaction contemplated by this document may be conducted by electronic means 50 in accordance with the Montana Uniform Electronic Transaction Act. 51 / 2 4 '/ / r,�a 1 02/06/2019 52S 53r / / Date Date Date 54 7 55 56 57 Seller Date Buyer Date NOTE: Unless otherwise expressly stated the term -Days" means calendar days and not business days. Business days are defined as all days as except Sundays and holidays Any performance which is required to be completed on a Saturday. Sunday or a holiday can be performed on the next business day. 02017 Montana Association of REALTORS@ Counter Offer, October 2017 This form presented by Luke Underhill PureWest Real Estate (2917) - : 406-662-2772 : luke.underhill®gmail.com InstanetFoarns