H1. Charles Hotel DocumentsCITY OF City of Kalispell
KALISPELL Post Office Box 1997 -Kalispell, Montana 59903
Telephone: (406) 758-7701 Fax: (406) 758-7758
MEMORANDUM
To: Mayor and City Council
From: Doug Russell, City Manager
Re: Charles Hotel Development Agreements and Land Transfer
Meeting Date: January 18, 2022
BACKGROUND: In the fall of 2021, the Charles Hotel was the sole respondent to the Request
for Qualifications that was submitted in accordance with guidance from the Downtown Plan for
development of an existing city -owned parking lot. Since that time, efforts have been undertaken
to work with the applicant to identify the structure of the project, financing, etc. The use of Tax
Increment Financing for the parking structure (anticipated at $7,000,000) was presented to the
Urban Renewal Agency (URA) on November 17. The URA unanimously adopted the findings
in the attached staff report with the recommendation to forward it to Council. A work session
was held by Council in December to review the basic details of the agreement.
At the regular meeting on January 18, action is requested to approve three separate items for this
proj ect:
1) The Developer's Agreement for the hotel to be located at 3rd and Main:
The city -owned land (existing parking lot) at 3rd and Main would be
transferred to the developer. When the financing of the parking structure is
completed, the tax increment in the Downtown TIF District fund will
reimburse the general fund for the appraised price of the parking lot
($270,000). The remaining components of the hotel will be privately
financed.
2) The Developer's Agreement for the Parking Structure
• The developer will design, finance, and build a city -owned parking structure,
using a public bidding process for the construction
• The parking structure will include commercial space on the bottom floor
which will also be city -owned
• The parking structure would contain approximately 250 spaces and be built on
the city -owned parking lot at 1st Street West and 1st Avenue W.
• Of the 250 spaces, approximately 90 spaces will be leased by the developer
for hotel parking demand for an initial period of 50 years, 112 spaces will
account for spaces from the existing lots that will be removed with the
construction, and 48 spaces will be added to the structure to add parking
capacity and provide additional flexibility for future development on other
surface parking lots
• Tax increment from the Charles Hotel will be used to reimburse the developer
for the costs of construction for the 202 spaces that will be needed to support
the hotel and replacement of the existing surface parking spaces. Existing tax
increment from the Downtown TIF District will reimburse the developer for
the additional 48 spaces (dependent upon availability of the increment).
3) Transfer of city -owned property to the Developer of the Hotel
• The City will transfer the property at 3rd and Main to the developer for the
construction of the Hotel project in accordance with the terms of the two
development agreements. The transaction will be contingent upon the
completion of the items contained within the buy/sell agreement. The City's
general fund will be reimbursed the appraised value of $270,000 by the
Downtown Tax Increment District after reimbursement commitments for the
Parking Structure have been fulfilled
RECOMMENDATION: At the meeting, it is recommended that Council take the following
actions:
1) Move to approve and authorize the City Manager to execute the Developer's Agreement
for Hotel project at 3rd and Main
2) Move to approve and authorize the City Manager to execute the Developer's Agreement
for the Parking Structure which will be located on City -owned property at 1st Street West
and 1st Avenue West
3) Move to approve as to form and authorize the City Manager to execute the buy/sell
agreement for the parking lot, as described in the buy/sell agreement
ATTACHEMENT:
Developer's Agreement for the Charles Hotel
Developer's Agreement for the Parking Structure
Buy/Sell Agreement for the property at 3rd and Main
Staff Report from the URA meeting
Charles Hotel response to the Request for Proposals
CONTRACT FOR PRIVATE DEVELOPMENT
between
CITY OF KALISPELL, MONTANA
and
KALISPELL URBAN RESORT PARTNERS, LLC
Dated as of January 12, 2022
CONTRACT FOR PRIVATE DEVELOPMENT
THIS CONTRACT FOR PRIVATE DEVELOPMENT (this "Agreement") is made as of the 12th day
of January, 2022, by and between the CITY OF KALISPELL, MONTANA, a Montana municipal
corporation (the "City"), with offices at 201 IS' Ave E, Kalispell, MT 59901, and KALISPELL URBAN
RESORT PARTNERS, LLC, (the "Purchaser") of 208 1 ST Ave East, Kalispell, Montana 59901.
44Yti:��
WHEREAS, on July 3, 2017, and pursuant to MCA 76-1-604, the Kalispell City Council passed
Resolution No. 5821 amending the Kalispell Growth Policy which, among other things, called for the
development of a Downtown Plan as a key project to have a tangible positive impact on the citizens of
Kalispell; and
WHEREAS, on December 4, 2017, and pursuant to MCA 76-1-604, the Kalispell City Council
passed Resolution No. 5846A, thereby amending the Kalispell Growth Policy with the adoption of a
Downtown Plan; and
WHEREAS, on December 18, 2018, and pursuant to the Montana Urban Renewal Act, MCA Title
7, Chapter 15, Part 42, the Kalispell City Council, after making all necessary investigation and establishing
the appropriate findings of fact, passed Ordinance No 1816 thereby creating the Downtown Kalispell Urban
Renewal District; and
WHEREAS, on February 4, 2019, and pursuant to Montana Code Annotated, Title 7, Chapter 15,
Part 42, as amended (the "TIFAct"), the Kalispell City Council passed Ordinance No. 1820 establishing
a tax increment financing district as an overlay to the Downtown Kalispell Urban Renewal District, naming
it the Downtown Kalispell Urban Renewal Tax Increment Financing District (hereinafter referred to as the
"District") and set January 1, 2020, as the base taxable year for the District; and
WHEREAS, pursuant to Section 7-I5-4288 of the TIF Act, eligible costs to be paid by the City
include assemblage of land for redevelopment by private enterprise, including sale by the local government
of real property it owns at its fair value as well as use of tax increment derived from the District for
reimbursement of the costs for public improvements authorized to be made pursuant to the TIF Act; and
WHEREAS, the City of Kalispell owns unimproved real property, currently used for surface
vehicle parking and located within the District at 3"d Street and Main Street and legally described as being
situated in Section 18 Township 28 North, Range 21 West, P.M.M. Flathead County, Montana and
described more particularly as Lots 8, 9, 10, 11, and 12 of Block 55 of the Kalispell Original Townsite Map
of record in the Office of Clerk and Recorder for Flathead County; and
WHEREAS, consistent with the purposes set forth in the Downtown Plan to eliminate blight and
increase the tax base within the District, the Kalispell City Council approved the solicitation of a Request
for Proposals for the private development of the above -described real property beginning in December
2020; and
WHEREAS, on September 7, 2021, the Kalispell City Council accepted the recommendation of
the selection committee to approve the proposal submitted by Montana Hotel Development Partners, LLC
for the development of a hotel/hospitality complex to be located upon the above -described real property
and directed that a development agreement be negotiated between the parties; and
WHEREAS, the Request for Proposals issued by the City granted a greater priority for proposals
that would provide the additional off-street parking need generated by the proposed use, which was included
in the Purchaser's proposal as set forth below in these recitals; and
WHEREAS, the City shall enter into a separate Contract for Development with a third party for the
purposes of privately funding and constructing an off-street public parking structure within the District and
to be located on unimproved City owned real property currently used for surface parking situated in Section
18 Township 28 North, Range 21 West, P.M.M. Flathead County, Montana and located at the corner of I`
Street West and I" Avenue West and more particularly described as Lots 17, 18, 19, 20, 21, 22, 23, and 24
of Block 46 of Kalispell Original Townsite Map of record in the Office of Clerk and Recorder for Flathead
County; and
WHEREAS, the above -described Contract for Development shall provide for the future Available
Tax Increment derived from the real property at 31 and Main Streets to be pledged and applied to the project
costs of developing the off-street parking structure described above; and
WHEREAS, the development of the above -described off-street parking structure shall meet the
Purchaser's proposal to provide for the surface parking displaced by the project (112 spaces) and additional
off-street public parking need generated by the proposed use (90 spaces); and
WHEREAS, all other funding for the Project shall be financed by the Purchaser and no other public
funds shall be utilized; and
WHEREAS, the Purchaser shall further commit to leasing a minimum of 90 parking spaces within
the above -described public parking structure to serve the parking needs of the Project of a hotel/hospitality
complex for a period of no less than 50 years, at the initial rate of $20 per month, with the amount to be
reestablished on every fifth anniversary thereafter set at the average monthly price for public parking spaces
within public parking structures located in Missoula, Bozeman, and Whitefish; and
WHEREAS, the City has determined that the application of Available Tax Increment generated
from the Hotel project contemplated herein and the fulfillment generally of this Agreement, are in the vital
and best interests of the City and the health, safety, morals, and welfare of its residents, and in accord with
the public purposes and provisions of applicable State of Montana laws and local laws and requirements.
NOW, THEREFORE, in consideration of the mutual obligations contained in this Agreement, the
parties agree as follows:
ARTICLE I
Definitions, Exhibits, Interpretation
Section 1.1. Definitions. The following terms shall have the meanings given in this Agreement,
unless a different meaning clearly appears from the context:
"Administrative Expenses" means expenses incurred by the City with respect to management of
the District or the administration of the Project or this Agreement.
"Affiliate" means with respect to the Purchaser (a) any corporation, partnership, limited liability
company or other business entity or person controlling, controlled by or under common control with the
Purchaser, and (b) any successor to such party by merger, acquisition, reorganization, or similar transaction
involving all or substantially all the assets of such party (or such Affiliate). For the purpose hereof the
words "controlling", "controlled by" and "under common control with" shall mean, with respect to any
corporation, partnership, limited liability company or other business entity, the ownership of fifty percent
(50%) or more of the voting interests in such entity possession, directly or indirectly, of the power to direct
or cause the direction of management policies of such entity, whether ownership of voting securities or by
contract or otherwise.
"Agreement" means this Contract for Private Development, as the same may be from time to time
modified, amended, or supplemented.
"City" means the City of Kalispell, Montana.
"City Representative" means the City Manager or other City official or staff so designated in
writing by the City Manager.
"Construction Plans" means the plans, specifications, drawings and related documents on the
construction work to be performed by the Purchaser on the Development Property, including the Minimum
Improvements and the related site improvements, which (a) shall be as detailed as the plans, specifications,
drawings and related documents which are submitted to the appropriate building officials of the City, and
(b) shall include at least the following: (1) site plan; (2) foundation plan; (3) floor plan for each floor; (4)
cross sections of each (length and width); (5) elevations (all sides); (6) landscape plan; and (7) such other
plans or supplements to the foregoing plans as the City may reasonably request to allow it to ascertain the
nature and quality of the proposed construction work.
"County" means the County of Flathead, Montana, its successors and assigns.
"Purchaser" means KALISPELL URBAN RESORT PARTNERS, LLC, or its permitted successors
and assigns.
"Development Property" means the real property described in Exhibit A of this Agreement.
"District" means the Downtown Kalispell Urban Development Tax Increment Financing District,
established by the City Council of the City pursuant to the TIF Ordinance.
"Event of Default" means an action by the Purchaser listed in Article VIII of this Agreement.
"Holder" means the owner of a Mortgage.
"Maturity Date" shall be the later date of the issuance of a Certificate of Occupancy for either the
Minimum Improvements in the Project subject to this Agreement or the issuance of the Certificate of
Occupancy for the Minimum Improvements defined in the Development Agreement for the public off-
street parking structure at Is' Street West and 151 Avenue West described above in the Recitals.
"Minimum Improvements" means the construction on the Development Property on Lots 8, 9, 10,
11, and 12 of Block 55 of the Kalispell Original Townsite Map of record in the Office of Clerk and Recorder
for Flathead County, Montana, including related site improvements, according to the set of plans approved
by the City, all in compliance with the requirements pertaining thereto as set forth in this Agreement and
generally consistent with the Proposal offered to the City by the Purchaser.
"Mortgage" means any mortgage made by the Purchaser which is secured, in whole or in part, with
the Development Property and which is a permitted encumbrance pursuant to the provisions of Article VII
of this Agreement.
"Project" means the Development Property as improved by the Minimum Improvements.
"State" means the State of Montana.
"TIF Act" means Montana Code Annotated, Title 7, Chapter 15, Part 42, as amended.
"TIF Ordinance" means Ordinance No. 1820, adopted by the City Council on February 4, 2019.
"Unavoidable Delays" means delays beyond the reasonable control of the party seeking to be
excused as a result thereof which are the direct result of strikes, other labor troubles, prolonged adverse
weather or acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by third
parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal,
State or local governmental unit (other than the City in exercising its rights under this Agreement) which
directly result in delays. Unavoidable Delays shall not include delays (except those attributable to
government -imposed moratoria) in the obtaining of permits or governmental approvals necessary to enable
construction of the Minimum Improvements by the dates such construction is required under Section 4.4
of this Agreement.
Section 1.2. Exhibits. The following exhibits are attached to and by reference made a part of this
Agreement:
Exhibit A Legal Description of Development Property
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the City. The City makes the following representations and
warranties as the basis for its covenants herein:
(a) The City is a municipal corporation duly organized and existing under the laws of the State.
Under the provisions of the TIF Act, the City has the power to enter into this Agreement and carry out its
obligations hereunder.
(b) The City owns an unencumbered fee interest in the Development Property with the full
authority and legal right to convey the property for private development upon publicly advertising a request
for proposals of development and receiving and accepting the Purchaser's proposal which meets the criteria
set forth by the City for a project that would increase the tax base and create employment opportunities on
the Development Property.
(c) In order to realize the fair market value of the Development Property which is being
transferred to the Purchaser, the City proposes to pay $270,000 into the City's General Fund from the
Available Tax Increment generated by the Project after the security pledge for the off-street public parking
structure has been released.
(d) There is no litigation pending or, to the actual knowledge of the City, threatened against
the City questioning the validity or enforceability of this Agreement or the due execution and delivery of
this Agreement by the City.
(e) To the actual knowledge of the undersigned officials of the City, the execution and delivery
of this Agreement does not materially violate any agreement or any court order or judgment in any litigation
to which the City is a party or by which it is bound.
Section 2.2. Representations and Warranties by the Purchaser. The Purchaser makes the following
representations and warranties as the basis for its covenants herein:
(a) The Purchaser is (i) a Limited Liability Company, duly organized and in good standing
under the laws of the State, (ii) not in violation of any provisions of its articles of organization or
membership agreement, and (iii) duly authorized to transact business within the State.
(b) The Purchaser has the power to enter into this Agreement and has duly authorized the
execution, delivery, and performance of this Agreement by proper action of its members.
(c) The Purchaser has received no notice or communication from any local, State or federal
official that the activities of the Purchaser may be or will be in violation of any environmental law or
regulation (other than those notices or communications of which the City is aware, if any). The Purchaser
is not aware of any facts the existence of which would cause it to be in violation of or give any person a
valid claim under any local, State, or federal environmental law, regulation or review procedure.
(d) Neither the execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement
is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any
corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which
the Purchaser is now a party or by which it is bound, or constitutes a default under any of the foregoing,
which default or breach might prevent the Purchaser from performing its obligations under this Agreement.
(e) The Purchaser shall promptly advise the City in writing of all litigation or claims affecting
any part of the Development Property owned by the Purchaser and all written complaints and charges made
by any governmental authority materially affecting any part of the Development Property owned by the
Purchaser or materially affecting the Purchaser or its business which may delay or require changes in
construction of the improvements thereon.
(f) The Purchaser will secure adequate financing for construction of the Minimum
Improvements and will provide adequate evidence to the City of said financing for the construction of the
Minimum Improvements.
(g) The Purchaser will construct, operate, and maintain the Minimum Improvements in
accordance with the terms of this Agreement and all local, State, and federal laws and regulations including,
but not limited to, environmental, zoning, building code and public health laws and regulations.
(h) The proposed development of the Minimum Improvements would not occur but for the tax
increment financing assistance being provided hereunder.
(i) The Purchaser will construct the Minimum Improvements as provided herein in accordance
with all local, State, and federal energy -conservation laws and regulations.
0) The Purchaser will obtain, in a timely manner, all required permits, licenses and approvals,
and will meet, in a timely manner, all requirements of all applicable local, State, and federal laws and
regulations which must be obtained or met before the Minimum Improvements may be lawfully
constructed.
ARTICLE III
Financing of Minimum Improvements; Available Tax Increment
Section 3.1. Status of the Development Property. The City currently owns the fee interest title to
the Development Property. The City shall convey the Development Property to the Purchaser by means of
a Warranty Deed. The City has no obligation to reacquire the Development Property.
Section 3.2. Environmental Conditions. (a) The Purchaser acknowledges that the City makes no
representations or warranties as to the condition of the soils on the Development Property or the fitness of
the Development Property for construction of the Minimum Improvements or any other purpose for which
the Purchaser may make use of such Development Property, and that the assistance provided to the
Purchaser under this Agreement neither implies any responsibility by the City for any contamination of the
Development Property or poor soil conditions nor imposes any obligation on the City to participate in any
cleanup of the Development Property or correction of any soil problems.
(b) Without limiting its obligations under this Agreement, the Purchaser further agrees that it
will indemnify, defend, and hold harmless the City and its governing body members, officers, and
employees from any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants
existing on or in the Development Property, unless and to the extent that such hazardous wastes or pollutants
are present as a result of the actions or omissions of the indemnitees. Nothing in this Section shall be
construed to limit or affect any limitations on liability of the City under any State or federal law.
Section 3.3. Application of Increment. The parties have determined that, in order to assure that
the off-street public parking need generated by the proposed use is created (202 spaces), the City will
annually apply One Hundred percent (100%) of the Available Tax Increment generated by the property
subject to this agreement. Following reimbursement for the project costs related to the parking structure,
increment generated by the project shall be applied to the appraised purchase price ($270,000), payable to
the City of Kalispell general fund.
Section 3.4. Financing Contingency_. Financing Contingency. This agreement shall be
contingent upon Purchaser's ability to obtain financing for the Minimum Improvements, and if Purchaser
is unable to obtain financing by March 31, 2022, this Agreement shall be terminated, of no further force
and effect, and the parties shall have no further obligation to each other. The property shall not be
transferred to the Purchaser until this Contingency has been satisfied. The signatories to this agreement
may extend dates within the agreement through mutual agreement.
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Improvements. The Purchaser agrees that it will construct
the Minimum Improvements on the Development Property in substantial accordance with this Agreement
and the approved Construction Plans and, at all times, during which the Minimum Improvements are owned
by the Purchaser, will operate and maintain, preserve and keep the Minimum Improvements or cause such
improvements to be maintained, preserved and kept with the appurtenances and every part and parcel
thereof, in good repair and condition. The City shall not have an obligation to operate or maintain the
Minimum Improvements.
Section 4.2. Criteria for Minimum Improvements. The Minimum Improvements must be used for
projects that are eligible to be located within the District under the terms of the TIF Act.
Section 4.3. Construction Plans. (a) Generally. Before commencing construction of the Minimum
Improvements, the Purchaser shall submit the Construction Plans to the City. The City will approve the
Construction Plans in writing if: (i) the Construction Plans conform to the Purchaser's responsive proposal
to the City's RFP and the terms and conditions of this Agreement; (ii) the Construction Plans conform to
all applicable federal, State and local laws, ordinances, rules and regulations; (iii) the Construction Plans
are adequate to provide for construction of the Minimum Improvements.
(b) Changes to the Construction Plans. If the Purchaser desires to make significant changes
in the Construction Plans, in the discretion of the City Representative, after their approval by the City, the
Purchaser shall submit the proposed changes to the City's building officials for their approval.
Section 4.4. Commencement and Completion of Construction. Subject to Unavoidable Delays, the
Purchaser shall commence construction (submission of building plans) of the Minimum Improvements no
later than September 30, 2022. Subject to Unavoidable Delays, the Purchaser shall have substantially
completed the construction of the Minimum Improvements no later than October 31, 2024. The
signatories to this agreement can extend dates within the agreement through mutual agreement. All work
with respect to the Minimum Improvements to be constructed or provided by the Purchaser on the
Development Property shall be in conformity with the Construction Plans. The Purchaser shall make
such reports to the City regarding construction of the Minimum Improvements as the City deems
necessary or helpful in order to monitor progress on construction of the Minimum Improvements.
Section 4.5. Certificate of Occupancy. (a) After completion of the Minimum Improvements in
accordance with the Construction Plans and all terms of this Agreement, the City will furnish the Purchaser
with a Certificate of Occupancy. Such Certificate shall not constitute evidence of compliance with or
satisfaction of any obligation of the Purchaser to any holder of a Mortgage, or any insurer of a Mortgage,
securing money loaned to finance the Minimum Improvements, or any part thereof.
(b) The construction of the Minimum Improvements shall be deemed to be complete at such
time as the Purchaser is legally entitled to the issuance of a Certificate of Occupancy by the City with
respect thereto.
Section 4.6. Restrictions on Use. The Purchaser, for itself and its successors and assigns, agrees
to devote the Project only to such land use or uses as may be permissible under the City's land use
regulations.
ARTICLE V
Insurance
Section 5.1. Insurance. (a) The Purchaser agrees to provide and maintain at all times during the
process of constructing the Minimum Improvements and, from time to time at the request of the City,
furnish the City with proof of payment of premiums on:
(i) Builder's risk insurance, written on the so-called "Builder's Risk -- Completed
Value Basis," in an amount equal to one hundred percent (100%) of the insurable value of the
Minimum Improvements at the date of completion, and with coverage available in nonreporting
form on the so called "all risk" form of policy;
(ii) Comprehensive general liability insurance (including operations, contingent
liability, operations of subcontractors, completed operations and contractual liability insurance)
together with an Owner's Contractor's Policy with limits against bodily injury and property damage
of not less than $1,000,000 for each occurrence (to accomplish the above required limits, an
umbrella excess liability policy may be used); and
(iii) Workers' compensation insurance, with statutory coverage.
The policies of insurance required pursuant to clauses (i) and (ii) above shall be placed with financially
sound and reputable insurers licensed to transact business in the State. The policy of insurance delivered
pursuant to clause (i) above shall contain an agreement of the insurer to give not less than thirty (30) days'
advance written notice to the City in the event of cancellation of such policy or change affecting the
coverage thereunder
(b) Prior to the Maturity Date, the Purchaser shall maintain, or cause to be maintained, at its
cost and expense, and from time to time at the request of the City shall furnish proof of the payment of
premiums on, insurance as follows:
(i) Insurance against loss and/or damage to the Minimum Improvements under a
policy or policies covering such risks as are ordinarily insured against by similar businesses,
including (without limiting the generality of the foregoing) fire, extended coverage, vandalism and
malicious mischief, heating system explosion, water damage, demolition cost, debris removal,
collapse and flood, in an amount not less than the full insurable replacement value of the Minimum
Improvements. No policy of insurance shall be so written that the proceeds thereof will produce
less than the minimum coverage required by the preceding sentence, by reason of coinsurance
provisions or otherwise, without the prior consent thereto in writing by the City. The term "full
insurable replacement value" shall mean the actual replacement cost of the Minimum
Improvements and shall be determined from time to time at the request of the City, but not more
frequently than once every three years, by an insurance consultant or insurer, selected and paid for
by the Purchaser and approved by the City; and
In lieu of any of the foregoing, the Purchaser may provide evidence to the City that the Purchaser has self -
insured for the amounts and terms satisfying this Section.
(c) The parties agree that all the provisions set forth in this Article shall terminate upon the
Maturity Date.
Section 5.2. Notification, Repair, Reconstruction and Restoration. So long as the Purchaser is the
owner thereof and until the Maturity Date, the Purchaser agrees to notify the City immediately in the case
of damage exceeding $50,000 in amount to, or destruction of, the Minimum Improvements, or any portion
thereof resulting from fire or other casualty. Subject to the rights of lenders, in such event the Purchaser
shall forthwith repair, reconstruct, and restore the Minimum Improvements to substantially the same or an
improved condition or value as it existed prior to the event causing such damage and, to the extent necessary
to accomplish such repair, reconstruction, and restoration, the Purchaser will apply the net proceeds of any
insurance relating to such damage received by the Purchaser to the payment or reimbursement of the costs
thereof. In the event the Purchaser does not repair, reconstruct or restore the Minimum Improvements, the
City shall have no further obligation to allocate Initial Increment and Supplemental Increment under the
terms of this Agreement.
The Purchaser shall complete the repair, reconstruction, and restoration of the Minimum
Improvements, whether or not the net proceeds of insurance received by the Purchaser for such purposes
are sufficient to pay for the same. Any net proceeds remaining after completion of such repairs,
construction and restoration shall be the property of the Purchaser.
Section 5.3. Subordination. Notwithstanding anything to the contrary herein, the rights of the City
with respect to the receipt and application of any insurance proceeds shall, in all respects, be subordinate
and subject to the rights of any holder under a Mortgage allowed pursuant to Article VII of this Agreement.
ARTICLE VI
Security
Section 6.1 Creation of Contingency Account. The Purchaser shall create and fund a
contingency account within its construction budget that shall be sufficiently funded to address the
contingencies of providing the finding to pay the costs of demolishing the improvements and bringing the
surface parking lot back to its functional purpose in the event the project fails, for whatever reason. The
City shall be designated as the secured party for these funds. The determination of whether to demolish
the improvements, in the event of such a crisis, shall be made, within a reasonable period of time, by
agreement between the City, the other secured parties in the project, and the Purchaser or its assigns or
successors. Upon issuance of a Certificate of Occupancy, the City shall release any interest in the
contingency account.
Section 6.2 Detennination of Contingency Requirements and Reporting_ The Purchaser shall
employ the appropriate professionals to determine the amount of funds necessary to hold within the
contingency account and shall provide a report of this account to the Office of the City Manager at its
initial funding, including the amount and the methodology employed to determine the amount. Thereafter,
upon any changes in the balance of the account, reports shall be made to the City Manager's Office,
setting forth the balance of the account along with the reasons therefore.
ARTICLE VII
Prohibitions Against Assienment and Transfer, Indemnification
Section 7.1. Representation as to Development. The Purchaser represents and agrees that its
undertakings pursuant to this Agreement are and will be for the purpose of development of the Development
Property and not for speculation in land holding.
Section 7.2. Prohibition Against Purchaser's Transfer of Property and Assignment of Agreement.
The Purchaser represents and agrees that prior to issuance of the Certificate of Completion for the Minimum
Improvements:
(a) Except only by way of security for, and only for the purpose of obtaining financing
necessary to enable the Purchaser or any successor in interest to the Development Property, or any part
thereof, to perform its obligations with respect to making, owning and/or operating the Minimum
Improvements under this Agreement, and any other purpose authorized by this Agreement, the Purchaser
has not made or created and will not make or create or suffer to be made or created any total or partial sale,
assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form of or with
respect to this Agreement or the Development Property or any part thereof or any interest therein, or any
contract or agreement to do any of the same (collectively, a "Transfer"), without the prior written approval
of the City, unless the Purchaser remains liable and bound by this Agreement, in which event the City's
10
approval is not required. In the absence of a specific written agreement by the City to the contrary, no such
transfer or approval by the City thereof shall be deemed to relieve the Purchaser or any other party bound
in any way by this Agreement or otherwise with respect to the construction of the Minimum Improvements
from any of its obligations with respect thereto. The provisions of this Section 7.2(a) shall not limit transfers
to Affiliates of the Purchaser.
(b) In the event the Purchaser, upon Transfer or assignment of the Development Property or
any portion thereof, seeks to be released from its obligations under this Agreement as to the portions of the
Development Property that are transferred or assigned, the City shall be entitled to require, except as
otherwise provided in this Agreement, as conditions to any such release that:
0) Any proposed transferee shall have the qualifications and financial responsibility,
in the reasonable judgment of the City, necessary and adequate to fulfill the obligations undertaken
in this Agreement by the Purchaser as to the portion of the Minimum Improvements or the
Development Property to be transferred.
(ii) Any proposed transferee, by instrument in writing satisfactory to the City and in
form recordable among the land records of the County, shall, for itself and its successors and
assigns, and expressly for the benefit of the City, have expressly assumed all of the obligations of
the Purchaser under this Agreement as to the portion of the Minimum Improvements or
Development Property to be transferred and agreed to be subject to all the conditions and
restrictions to which the Purchaser is subject as to such portion; provided, however, that the fact
that any transferee of, or any other successor in interest whatsoever to, the Minimum Improvements
or Development Property, or any part thereof, shall not, for whatever reason, have assumed such
obligations or so agreed, and shall not (unless and only to the extent otherwise specifically provided
in this Agreement or agreed to in writing by the City) deprive the City of any rights or remedies or
controls with respect to the Development Property or any part thereof or the construction of the
Minimum Improvements; it being the intent of the parties as expressed in this Agreement that (to
the fullest extent pennitted at law and in equity and excepting only in the manner and to the extent
specifically provided otherwise in this Agreement) no transfer of, or change with respect to,
ownership in the Minimum Improvements or Development Property or any part thereof, or any
interest therein, however consummated or occurring, and whether voluntary or involuntary, shall
operate, legally or practically, to deprive or limit the City of or with respect to any rights or remedies
or controls provided in or resulting from this Agreement with respect to the Minimum
Improvements or Development Property that the City would have had, had there been no such
transfer. In the absence of specific written agreement by the City to the contrary, no transfer or
approval by the City thereof shall be deemed to relieve the Purchaser, or any other party bound in
any way by this Agreement or otherwise with respect to the construction of the Minimum
Improvements, from any of its obligations with respect thereto.
(iii) Any and all instruments and other documents involved in effecting the Transfer of
any interest in this Agreement or the Minimum Improvements or the Development Property
governed by this Article shall be in a form reasonably satisfactory to the City.
(c) The City's approval of any Transfer shall not be unreasonably withheld. Any notice of
rejection of a Transfer by the City shall contain detailed reasons for the rejection. In the event the foregoing
conditions are satisfied, the Purchaser shall be released from its obligations under this Agreement as to the
portion of the Minimum Improvements or the Development Property that is transferred, assigned or
otherwise conveyed.
(d) After issuance of the Certificate of Occupancy for the Minimum Improvements, the
Purchaser may transfer or assign any portion of the Development Property or the Purchaser's interest in
this Agreement without the prior written consent of the City, provided that prior to the Maturity Date the
transferee or assignee is bound by all of the Purchaser's obligations hereunder. Prior to any such Transfer
or assignment, the Purchaser shall submit to the City written evidence of any such Transfer or assignment,
including the transferee or assignee's express assumption of the Purchaser's obligations under this
Agreement. If the Purchaser fails to provide such evidence of Transfer and assumption, the Purchaser shall
remain bound by all of its obligations under this Agreement.
Section 7.3. Release and Indemnification Covenants. (a) The City and the governing body
members, officers, agents, servants and employees thereof (the "Indemnified Parties"), except for any
willful misrepresentation or any willful or wanton misconduct or negligence of the Indemnified Parties,
shall not be liable for and the Purchaser shall indemnify and hold harmless the Indemnified Parties against
any loss or damage to property or any injury to or death of any person occurring at or about or resulting
from any defect in the Development Property or any improvements constructed thereon, but only to the
extent that such defects were caused or committed during the periods that the Purchaser owned the
Development Property.
(b) Except for any willful misrepresentation or any willful or wanton misconduct or negligence
of the Indemnified Parties, and except for any breach by any of the Indemnified Parties of their obligations
under this Agreement, the Purchaser agrees to protect and defend the Indemnified Parties, now and forever,
and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding
whatsoever by any person or entity whatsoever arising or purportedly arising from this Agreement, or the
transactions contemplated hereby or the acquisition, construction, installation, ownership, maintenance and
operation of the Development Property or any improvements constructed thereon.
(c) Except for any willful misrepresentation or any willful or wanton misconduct or negligence
of the Indemnified Parties, the Indemnified Parties shall not be liable for any damage or injury to the persons
or property of the Purchaser or its Affiliates, officers, agents, servants or employees or any other person
who may be about the Development Property or any improvements constructed thereon.
(d) All covenants, stipulations, promises, agreements and obligations of the City contained
herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of such
entities and not of any governing body member, officer, agent, servant or employee of such entities in the
individual capacity thereof.
Section 7.4 Right of Holder to Cure Defaults. City agrees to give notice to the Holder of any
Mortgage of any event of default by Purchaser under this Agreement, specifying the nature of such default,
and thereupon the Holder shall have the right, but not the obligation, to cure such default, and City shall
not exercise its remedies by reason of such default until it has afforded the Holder thirty (30) days after
Holder's receipt of such notice to cure such default and a reasonable period of time in addition thereto (i) if
the circumstances are such that said default cannot reasonably be cured within said thirty (30) day period
and Holder has commenced and is diligently pursuing such cure, or (ii) during and after any litigation action
including a foreclosure, bankruptcy, possessory action or a combination thereof.
12
ARTICLE VIII
Events of Default
Section 8.1. Events of Default Defined. The following shall be "Events of Default" under this
Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement, any one or
more of the following events:
(a) failure by the Purchaser or an Affiliate to observe or perform any covenant, condition,
obligation or agreement on its part to be observed or performed under this Agreement;
(b) commencement by the holder of any Mortgage on the Development Property or any
improvements thereon, or any portion thereof, of foreclosure proceedings as a result of default under the
applicable Mortgage documents for the Purchaser or an Affiliate;
(c) if the Purchaser or an Affiliate shall:
(i) file any petition in bankruptcy or for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under the United
States Bankruptcy Act or under any similar federal or State law; or
(ii) make an assignment for benefit of its creditors; or
(iii) admit in writing its inability to pay its debts generally as they become due; or
(iv) be adjudicated a bankrupt or insolvent
(d) failure by the City to observe or perform any material covenant, condition, obligation or
agreement or its part to be observed or performed under this Agreement.
Section 8.2. Remedies on Default. Whenever any Event of Default referred to in Section 8.1 of
this Agreement occurs, the non -defaulting party may exercise any of the following rights under this Section
after providing thirty (30) days written notice to the other of the Event of Default, but only if the Event of
Default has not been cured within said thirty (30) days or, if the Event of Default is by its nature incurable
within thirty (30) days, the defaulting party does not, within such thirty (30) day period, provide assurances
reasonably satisfactory to the party providing notice of default that the Event of Default will be cured and
will be cured as soon as reasonably possible:
(a) suspend its performance under this Agreement until it receives reasonably satisfactory
assurances that the defaulting party will cure its default and continue its performance under this Agreement;
(b) cancel and rescind or terminate its obligations under this Agreement or any portion thereof,
including without limitation the obligation to apply and allocate Available Tax Increment pursuant to
Section 3.3 hereof as to any portion of the Project owned by the Purchaser, or an Affiliate, as of the date of
the notice of default;
(c) withhold the Certificate of Occupancy with regard to the uncompleted portion; or
(d) if the default occurs prior to completion of the Minimum Improvements and the Purchaser
and/or the Holder of any Mortgage securing financing for the Project is unable to complete the Project or
obtain an Assignee or buyer to purchase the Property and Project, the Property and improvements thereon
13
shall be transferred to the City and the City may exercise its option to take over management of the Project
to insure completion of the Minimum Improvements or to abandon the Project and demolish the Minimum
Improvements, provided that the City's determination to take title to the Property and improvements
and whether to demolish the improvements, shall be made, within a reasonable period of time, by
agreement between the City, the other secured parties in the Project, and the Purchaser or its
assigns and successors; or
(e) take whatever action, including legal, equitable or administrative action, which may appear
necessary or desirable to collect any payments due under this Agreement, or to enforce performance and
observance of any obligation, agreement, or covenant of the defaulting party under this Agreement.
City agrees not to suspend its obligations under the Agreement or terminate or rescind the
Agreement as a result of the Holder of a Mortgage initiating or continuing foreclosure proceedings, upon
the Holder taking possession of the Development Property or following a sale of the Development Property
by the Holder or as a result of any foreclosure proceedings so long as the Holder and/or subsequent
purchaser agrees to assume all of the obligations of the Purchaser under the Agreement.
Section 8.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to any party in
this Agreement is intended to be exclusive of any other available remedy or remedies, but each and every
such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement
or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or
power accruing upon any default shall impair any such right or power or shall be construed to be a waiver
thereof, but any such right and power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the City to exercise any remedy reserved to it, it shall not be necessary to give
notice, other than such notice as may be required in this Article.
Section 8.4. No Additional Waiver Implied by One Waiver. In the event any agreement contained
in this Agreement should be breached by any party and thereafter waived by another party, such waiver
shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent,
previous, or subsequent breach hereunder.
ARTICLE IX
Additional Provisions
Section 9.1. Conflicts of Interest; Representatives Not Individually Liable. The City and the
Purchaser, to the best of their knowledge, represent and agree that no member, official, or employee of the
City shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member,
official, or employee participate in any decision relating to this Agreement which affects his or her personal
interests or the interests of any corporation, partnership, or association in which he or she is, directly or
indirectly, interested. No member, official, or employee of the City shall be personally liable to the
Purchaser, any Affiliate, or any successor in interest, in the event of any default or breach by the City or for
any amount which may become due to the Purchaser or successor or on any obligations under the terms of
the Agreement.
Section 9.2. BindingEffect. ffect. This Agreement shall inure to the benefit of and shall be binding upon
the City, the Purchaser, any Affiliates, and their respective successors and assigns.
14
Section 9.3. Severability. In the event any provision of this Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
Section 9.4. Equal Employment Qpportun&. The Purchaser agrees, for itself and any Affiliate,
successors, and assigns, that during the term of this Agreement it will comply with all applicable federal,
State and local equal employment and non-discrimination laws, regulations, and ordinances as they relate
to the development of the Project.
Section 9.5. Covenant to Pay Property Taxes and Assessments. The Purchaser agrees for itself, its
Affiliates, successors and assigns, in addition to the State law to pay real estate taxes and special
assessments, that it is also obligated by reason of this Agreement to pay before delinquency all real estate
taxes and Assessments against the Development Property during any period while the Purchaser holds title
to any portion of the Development Property. The Purchaser acknowledges that this obligation creates a
contractual right on behalf of the City to sue the Purchaser or its successors and assigns to collect delinquent
real estate taxes, Assessments, and any penalties or interest thereon and to pay over the same as a tax
payment to the County Auditor. In any such suit, the City shall also be entitled to recover its costs, expenses
and reasonable attorney fees.
Section 9.6. Provisions Not Merged With Deed. none of the provisions of this Agreement are
intended to or shall be merged by reason of any deed transferring any interest in the Development Property
and any such deed shall not be deemed to affect or impair the provisions and covenants of this Agreement.
Section 9.7. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections
of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or
interpreting any of its provisions.
Section 9.8. Notices and Demands. Except as otherwise expressly provided in this Agreement, a
notice, demand, or other communication under this Agreement by either party to the other shall be
sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return
receipt requested, or delivered personally to the following addresses:
To the Purchaser: Kalispell Urban Resort Partners, LLC
208 111 Ave. E.
Kalispell, MT
Attention:
To the City: City of Kalispell
201 1 st Ave. E.
PO Box 1997
Kalispell, Montana 59903-1997
Attention: City Manager
The City or the Purchaser may, by notice given hereunder, designate any further or different addresses to
which subsequent notices, requests, or other communications shall be sent.
Section 9.9. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall constitute one and the same instrument.
Section 9.10. Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Montana.
15
Section 9.11. Recording. The City may record this Agreement and any amendments thereto with
the County Recorder. The Purchaser shall pay all costs for recording this Agreement.
Section 9.12. Gender, Etc. Words of any gender include the correlative words of the other gender.
The terms "hereof," "hereby," "herein," "hereto," "hereunder," "hereinafter," and similar terms refer to this
Agreement; and the term "hereafter" means after, and the term "heretofore" means before, the date on which
this Agreement was fully executed.
Section 9.13. Entire Agreement. This Agreement constitutes the entire agreement between the
parties pertaining to its subject matter and it supersedes all prior contemporaneous agreements,
representations, and understandings of the parties pertaining to the subject matter of this Agreement. This
Agreement may be modified, amended, terminated, or waived, in whole or in part, only by a writing signed
by all of the parties.
IN WITNESS WHEREOF, the City and the Purchaser have caused this Agreement to be duly
executed by their duly authorized representatives as of the date first above written.
CITY OF KALISPELL, MONTANA
M.
STATE OF MONTANA )
) ss.
County of Flathead )
Doug Russell, City Manager
On this day of , 2022, before me, a Notary Public for the State of
Montana, personally appeared Doug Russell, proved to me to be the person whose name is
subscribed to the within instrument, and acknowledged to me that he executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year hereinabove first written.
SEAL
NOTARY PUBLIC for the State of Montana
Printed Name:
Residing at:
My Commission expires:
16
KALISPELL URBAN RESORT PARTNERS, LLC
By Montana Hotel Development Partners, LLC
Its Manager
By Alchemy Development Group, LLC
Member of Montana tel D elo nt Partners, LLC
By:
John osta
Memb f Alchemy Development Group, LLC
STATE OF MONTANA }
) ss.
County of Flathead }
On this tzL-1 day o6,ua4!�,A, 2022, before me, a Notary Public for the State of
Montana, personally appeared John P. Costa, as Member of Alchemy Development Group,
LLC, which is a Member of Montana Hotel Development Partners, LLC, which is the
Manager of Kalispell Urban Resort Partners, LLC, proved to me to be the person whose
name is subscribed to the within instrument, and acknowledged to me that he/she executed the
same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year hereinabove first written.
! — LISR K P00LEA
: ul `,'-kRY PUBLIC for the
I � . SFA'ta'e of Moritana
hr ::;sirq at Kalis poll. MT
J w, Commission Expires
_.- klay u5, 2025.
ARY PUBLIC for the State of Montana
Printed Name: SC�-
Residing at: t ; s N - T
My Commission expires: ()ntoi 2QS
17
EXHIBIT A
LEGAL DESCRIPTION OF THE DEVELOPMENT PROPERTY
Real property being situated in Section 18 Township 28 North, Range 21 West,
P.M.M. Flathead County, Montana and described more particularly as Lots 8, 9,
10, 11, and 12 of Block SS of the Kalispell Original Townsite Map of record in
the Office of Clerk and Recorder for Flathead County.
CONTRACT FOR DEVELOPMENT
between
CITY OF KALISPELL, MONTANA
MONTANA HOTEL DEVELOPMENT PARTNERS, LLC
Dated as of January 12, 2022
CONTRACT FOR DEVELOPMENT
THIS CONTRACT FOR DEVELOPMENT (this "Agreement") is made as of the 12 day of January,
2022, by and between the CITY OF KALISPELL, MONTANA, a Montana municipal corporation (the
"City"), with offices at 201 1" Ave E, Kalispell, MT 59901, and Montana Hotel Development Partners,
LLC, (the "Developer") of 208 1 S' Ave. E., Kalispell, MT 59901.
RECITALS
WHEREAS, on July 3, 2017, and pursuant to MCA 76-1-604, the Kalispell City Council passed
Resolution No. 5821 amending the Kalispell Growth Policy which, among other things, called for the
development of a Downtown Plan as a key project to have a tangible positive impact on the citizens of
Kalispell; and
WHEREAS, on December 4, 2017, and pursuant to MCA 76-1-604, the Kalispell City Council
passed Resolution No. 5846A, thereby amending the Kalispell Growth Policy with the adoption of a
Downtown Plan; and
WHEREAS, on December 18, 2018, and pursuant to the Montana Urban Renewal Act, MCA Title
7, Chapter 15, Part 42, the Kalispell City Council, after making all necessary investigation and establishing
the appropriate findings of fact, passed Ordinance No 1816 thereby creating the Downtown Kalispell Urban
Renewal District; and
WHEREAS, on February 4, 2019, and pursuant to Montana Code Annotated, Title 7, Chapter 15,
Part 42, as amended (the "TIFAct'), the Kalispell City Council passed Ordinance No. 1820 establishing
a tax increment financing district as an overlay to the Downtown Kalispell Urban Renewal District, naming
it the Downtown Kalispell Urban Renewal Tax Increment Financing District (hereinafter referred to as the
"District") and set January 1, 2020, as the base taxable year for the District; and
WHEREAS, the City is entering into this Contract for Development with Developer for the
purposes of privately funding and constructing an off-street public parking structure within the District and
to be located on unimproved City owned real property currently used for surface parking situated in Section
18 Township 28 North, Range 21 West, P.M.M. Flathead County, Montana and located at the corner of I`
Street West and 11 Avenue West and more particularly described as Lots 17, 18, 19, 20, 21, 22, 23, and 24
of Block 46 of Kalispell Original Townsite Map of record in the Office of Clerk and Recorder for Flathead
County; and
WHEREAS, pursuant to Section 7-15-4288 of the TIF Act, eligible costs to be paid by the City
include the acquisition, construction, and improvement of public improvements or infrastructure, publicly
owned buildings, and any public improvements authorized by Title 7, chapter 12, parts 41 through 45; Title
7, chapter 13, parts 42 and 43; and Title 7, chapter 14, part 47 as well as use of tax increment derived from
the District for reimbursement of the costs for public improvements authorized to be made pursuant to the
TIF Act; and
WHEREAS, it is the purpose of this Contract for Development to set forth the respective
commitments, rights, and obligations of the City and the Developer in which the Developer privately
finances, designs, and constructs a parking structure with street level storefront spaces upon the City owned
real property, described above, for which the City shall give to Developer a Note secured by a pledge of
Available Tax Increment derived from the District; and
WHEREAS, the City has determined that the application of Available Tax Increment contemplated
herein and the fulfillment generally of this Agreement, are in the vital and best interests of the City and the
health, safety, morals, and welfare of its residents, and in accord with the public purposes and provisions
of applicable State of Montana laws and local laws and requirements.
NOW, THEREFORE, in consideration of the mutual obligations contained in this Agreement, the
parties agree as follows:
ARTICLE I
Definitions; Exhibits; Interpretation
Section 1.1. Definitions. The following terms shall have the meanings given in this Agreement,
unless a different meaning clearly appears from the context:
"Affiliate" means with respect to the Developer (a) any corporation, partnership, limited liability
company or other business entity or person controlling, controlled by or under common control with the
Developer, and (b) any successor to such party by merger, acquisition, reorganization, or similar transaction
involving all or substantially all the assets of such party (or such Affiliate). For the purpose hereof the
words "controlling", "controlled by" and "under common control with" shall mean, with respect to any
corporation, partnership, limited liability company or other business entity, the ownership of fifty percent
(50%) or more of the voting interests in such entity possession, directly or indirectly, of the power to direct
or cause the direction of management policies of such entity, whether ownership of voting securities or by
contract or otherwise.
"Agreement" means this Contract for Development, as the same may be from time to time
modified, amended, or supplemented.
"City" means the City of Kalispell, Montana.
"City Representative" means the City Manager or other City official, or staff so designated in
writing by the City Manager.
"Construction Plans" means the plans, specifications, drawings and related documents on the
construction work to be performed by the Developer on the Development Property, including the Minimum
Improvements and the related site improvements, which (a) shall be as detailed as the plans, specifications,
drawings and related documents which are submitted to the appropriate building officials of the City, and
(b) shall include at least the following: (1) site plan; (2) foundation plan; (3) floor plan for each floor; (4)
cross sections of each (length and width); (5) elevations (all sides); (b) landscape plan; and (7) such other
plans or supplements to the foregoing plans as the City may reasonably request to allow it to ascertain the
nature and quality of the proposed construction work.
assigns.
"County" means the County of Flathead, Montana, its successors and assigns.
"Developer" means Montana Hotel Development Partners, LLC, or its permitted successors and
"Development Property" means the real property described in Exhibit A of this Agreement.
"District" means the Downtown Kalispell Urban Development Tax Increment Financing District,
established by the City Council of the City pursuant to the TIF Ordinance.
"Environmental Laws and Regulations" means and includes the Federal Comprehensive
Environmental Compensation Response and Liability Act ("CERCLA" or the "Federal Superfund Act") as
amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), 42 U.S.C. §§ 9601
et seq.; the Federal Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. §§ 6901 et
seq.; the Clean Water Act, 33 U.S.C. § 1321 et seq.; and the Clean Air Act, 42 U.S.C. §§ 7401 et seq., all
as the same may be from time to time amended, and any other federal, state, county, municipal, local or
other statute, code, law, ordinance, regulation, requirement or rule which may relate to or deal with human
health or the environment including without limitation all land use, zoning, and stormwater control
regulations as well as all regulations promulgated by a regulatory body pursuant to any statute, code, law,
ordinance, regulation, requirement or rule.
"Event of Default" means an action by the Developer listed in Article VIII of this Agreement.
"Maturity Date" shall be the date of the issuance of a Certificate of Completion for the Minimum
Improvements defined in the Development Agreement for the public off-street parking structure at 15t Street
West and 11 Avenue West described above in the Recitals.
"Minimum Improvements" means the construction on the Development Property on Lots 17, 18,
19, 20, 21, 22, 23, and 24 of Block 46 of Kalispell Original Townsite Map of record in the Office of Clerk
and Recorder for Flathead County, including related site improvements, according to the set of plans
approved by the City, all in compliance with the requirements pertaining thereto as set forth in this
Agreement.
"Prevailing Wage Rates" means the Montana Prevailing Wage Rate for public works projects as
published from time to time by and available from the Montana Department of Labor and Industry,
Research and Analysis Bureau, P.O. Box 1728, Helena, Montana 59624, telephone number (800) 541-3904.
"Project" means the Development Property as improved by the Minimum Improvements.
"State" means the State of Montana.
"TIF Act" means Montana Code Annotated, Title 7, Chapter 15, Part 42, as amended.
"TIF Ordinance" means Ordinance No. 1820, adopted by the City Council on February 4, 2019.
"Unavoidable Delays" means delays beyond the reasonable control of the party seeking to be
excused as a result thereof which are the direct result of strikes, other labor troubles, prolonged adverse
weather or acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by third
parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal,
State or local governmental unit (other than the City in exercising its rights under this Agreement) which
directly result in delays. Unavoidable Delays shall not include delays (except those attributable to
government -imposed moratoria) in the obtaining of permits or governmental approvals necessary to enable
construction of the Minimum Improvements by the dates such construction is required under Section 4.4
of this Agreement.
Section 1.2. Exhibits. The following exhibits are attached to and by reference made a part of this
Agreement:
Exhibit A Legal Description of Development Property
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the City. The City makes the following representations and
warranties as the basis for its covenants herein:
(a) The City is a municipal corporation duly organized and existing under the laws of the State.
Under the provisions of the TIF Act, the City has the power to enter into this Agreement and carry out its
obligations hereunder.
(b) The City owns an unencumbered fee interest in the Development Property.
(c) There is no litigation pending or, to the actual knowledge of the City, threatened against
the City questioning the validity or enforceability of this Agreement or the due execution and delivery of
this Agreement by the City.
(d) To the actual knowledge of the undersigned officials of the City, the execution and delivery
of this Agreement does not materially violate any agreement or any court order or judgment in any litigation
to which the City is a party or by which it is bound.
Section 2.2. Representations and Warranties by the Developer. The Developer makes the
following representations and warranties as the basis for its covenants herein:
(a) The Developer is (i) a Limited Liability Company, duly organized and in good standing
under the laws of the State, (ii) not in violation of any provisions of its articles of organization or
membership agreement, and (iii) duly authorized to transact business within the State.
(b) The Developer has the power to enter into this Agreement and has duly authorized the
execution, delivery, and performance of this Agreement by proper action of its members.
(c) The Developer has received no notice or communication from any local, State or federal
official that the activities of the Developer may be or will be in violation of any environmental law or
regulation (other than those notices or communications of which the City is aware, if any). The Developer
is not aware of any facts the existence of which would cause it to be in violation of or give any person a
valid claim under any local, State, or federal environmental law, regulation or review procedure.
(d) Neither the execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement
is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any
corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which
the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing,
which default or breach might prevent the Developer from performing its obligations under this Agreement.
(e) The Developer will secure adequate financing for construction of the Minimum
Improvements and will provide adequate evidence to the City of said financing for the construction of the
Minimum Improvements.
(f) The Developer will construct and maintain the Minimum Improvements while it is under
its control in accordance with the terms of this Agreement and all local, State, and federal laws and
regulations including, but not limited to, environmental, zoning, building code and public health laws and
regulations.
(g) The Developer will construct the Minimum Improvements as provided herein in
accordance with all local, State, and federal energy -conservation laws and regulations.
(h) The Developer will obtain, in a timely manner, all required permits, licenses and approvals,
and will meet, in a timely manner, all requirements of all applicable local, State, and federal laws and
regulations which must be obtained or met before the Minimum Improvements may be lawfully
constructed.
ARTICLE III
Financing of Minimum Improvements; Available Tax Increment
Section 3.1. Status of the Development Property. The City currently owns the fee interest title to
the Development Property upon which it proposes improvements to be constructed consisting of a multi -
deck parking structure and storefronts on the street level. The Developer shall develop plans for the
Minimum Improvements according to the City's direction and present them to the City for its approval.
Section 3.2. Construction Financing, Note and Application of Available Tax Increment. The
Developer shall privately finance the construction of the Minimum Improvements. In an addendum to this
Agreement, the parties shall agree upon 1) the construction plans for the Minimum Improvements, 2) the
costs and cost breakdowns for the construction of the Minimum Improvements, 3) the form of the security
agreement in which the City shall pledge Available Tax Increment to secure the City's payments on the
Note, and any other guarantee that may be required of the City for the financing and construction of the
Minimum Improvements
(a) 100 % of the tax increment generated by the Hotel project at 31 and Main will be available to
reimburse the Developer for costs of the Minimum Improvements of the parking structure that
are required for the Hotel development at Yd and Main (including displaced parking) on an
annual basis.
(b) Tax increment generated by other properties in the Downtown Tax Increment district will be
used to reimburse the Developer for costs associated with additional parking in the structure as
requested by the City of Kalispell.
(b)(i) Reimbursement payments will be made over a 12-year period as tax increment
becomes available beginning January 1, of the Is' year after completion. The City, at its
discretion may pay a portion, or all, of this obligation in advance.
a. Example 202 spaces are required for the project, under 3.2.(a). 48 parking spaces are
being added to the structure under 3.2.(b). Thus 81% of the minimum improvements
will be reimbursed by tax increment developed by the Hotel, and 19% of the minimum
improvements will be funded through additional available tax increment generated by
properties in the district.
Section 3.3. Records. The City and its representatives shall have the right at all reasonable times
after reasonable notice to inspect, examine all books and records of the Developer relating to the Project.
Such records shall be kept and maintained by the Developer until the Maturity Date. The Developer shall
also use its best efforts to cause its contractor or contractors, all sub -contractors and their agents and lenders
to make their books and records relating to the Project available to the City, upon reasonable notice, for
inspection, examination and audit.
Section 3.4. Financing Contingency. This agreement shall be contingent upon Developer's ability
to obtain financing for the Minimum Improvements, and if Developer is unable to obtain financing by
March 31, 2022, this Agreement shall be terminated, of no further force and effect, and the parties shall
have no further obligation to each other. The Parties, by mutual agreement, may extend this date.
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Improvements. The Developer agrees that it will construct
the Minimum Improvements on the Development Property in substantial accordance with this Agreement
and its Addendums and, at all times prior to the issuance of the Certificate of Occupancy, will preserve and
keep the Minimum Improvements or cause such improvements to be preserved and kept with the
appurtenances and every part and parcel thereof, in good repair and condition.
Section 4.2. Contractor's Bonds. Developer's Construction Agreement with the general contractor
shall include the following requirement: "The General Contractor shall purchase and maintain performance
and payment bonds each in an amount at least equal to the total Contractor's Compensation as security for
the faithful performance and payment of all of Contractor's obligations under this Agreement. All bonds
shall be obtained from a surety that is duly licensed and authorized to transact business within the state of
Montana and to issue bonds for the limits so required. All bonds shall remain in effect throughout the life
of this Agreement and for a minimum of one (1) year following the date of expiration of Contractor's
warranties. A certified copy of the agent's authority to act must accompany all bonds signed by an agent.
If the surety on any bond furnished by Contractor is declared bankrupt or becomes insolvent or its right to
do business within the state of Montana is terminated, Contractor shall promptly notify City and shall within
twenty (20) days after the event giving rise to such notification, provide another bond and surety, both of
which shall comply with all requirements set forth herein."
Section 4.3. Construction Plans. (a) Generally. Before commencing construction of the Minimum
Improvements, the Developer shall submit the Construction Plans to the City. The City will approve the
Construction Plans in writing if. (i) the Construction Plans conform to the terns and conditions of this
Agreement; (ii) the Construction Plans conform to all applicable federal, State and local laws, ordinances,
rules and regulations; (iii) the Construction Plans are adequate to provide for construction of the Minimum
Improvements; (iv) the Construction Plans do not provide for expenditures in excess of the funds available
to the Developer from all sources for construction of the Minimum Improvements; and (v) no Event of
Default has occurred under this Agreement.
(b) Changes to the Construction Plans. If the Developer desires to make significant changes
in the Construction Plans, in the discretion of the City Representative, after their approval by the City, the
Developer shall submit the proposed changes to the City's building officials for their approval.
Section 4.4. Prevailing Wage Rates, Competitive Bidding. The Developer understands that the
City is obligated to follow certain laws with respect to the expenditure of public funds, which includes
Tax Increment. The Developer agrees to comply with laws that govern City contracting obligations,
including public procurement laws relating to all the Minimum Improvements, such as, without
limitation, laws and rules regarding prevailing wage and solicitation of work on a competitive basis.
Without limitation of the foregoing, the Developer agrees that in the awarding of contracts for the Public
Parking Unit (i) it will, and it will cause its contractor to, publicly bid competitively contracts for each
component of the Public Parking Unit, and (ii) through its contract with its contractor, it will, require its
contractor to pay the Prevailing Wage Rates on all such contracts related to the Minimum Improvements.
The Developer will provide to the City all documentation requested to verify the compliance of the
Developer and its contractor with the foregoing requirements. Failure of the Developer or its contractor to
bid competitively contracts for each component of the Minimum Improvements or to require contracts
entered into directly with contractors or sub -contractors to include provisions requiring the contractor or
sub -contractor to pay the Prevailing Wage Rates on the work related to the Minimum Improvements will
be considered a breach of this Agreement and the City will be entitled, at its discretion and without
obligation, to exercise any and all measures to assure compliance and retroactive compensation plus interest
to workers not paid in accordance with this Agreement, and recovery of any penalty or fine assessed by the
State attributed to any failure to pay the Prevailing Wage Rates
Section 4.5. Commencement and Completion of Construction. Subject to Unavoidable Delays, the
Developer shall commence construction of the Minimum Improvements no later than March 1, 2023 . Subject
to Unavoidable Delays, the Developer shall have substantially completed the construction of the Minimum
Improvements no later than March 31, 2024. The signatories by mutual agreement, may extend these dates.
All work with respect to the Minimum Improvements to be constructed or provided by the Developer on the
Development Property shall be in conformity with the Construction Plans. The Developer shall make such
reports to the City regarding construction of the Minimum Improvements as the City deems necessary or
helpful in order to monitor progress on construction of the Minimum Improvements.
Section 4.6. Utilities. The Developer shall not interfere with, or construct any improvements over, any
public street or utility easement without the prior written approval of the City. All connections to public utility
lines and facilities shall be subject to approval of the City and any private utility company involved. The
Developer at its own expense shall replace any public facilities or utilities damaged during construction of the
Projects or the Public Parking Unit by the Developer or its agents or by others acting on behalf of or under their
direction or control of the Developer.
Section 4.7. Permits and Compliance With Laws. The Developer will obtain, in a timely manner, all
required permits, licenses and approvals, and will meet all requirements of all local, state and federal laws, rules
and regulations which must be obtained or met in connection with the acquisition and construction of the
Minimum Improvements. Without limiting the foregoing, the Developer will request and seek to obtain from
the City or other appropriate governmental authority all necessary land use, zoning, and building permits. The
Developer will comply in all material respects with all Environmental Laws and Regulations applicable to the
construction, acquisition, and operation of the Minimum Improvements, will obtain any and all necessary
environmental reviews, licenses or clearances under, and will comply in all material respects with,
Environmental Laws and Regulations. In addition, the Developer shall comply fully with all applicable state
and federal laws, regulations, and municipal ordinances related to worker safety including but not limited to
the Occupational Safety and Health Act (OSHA), the safety rules, codes, and provisions of the Montana Safety
Act in Title 50, Chapter 71, MCA, all applicable City, County, and State building and electrical codes, and the
Americans with Disabilities Act.
Section 4.8. Non -Discrimination and Equal Pay Affirmation. The Developer agrees to require its
contractor(s) to be in compliance with Title 49 Human Rights, Montana Code Annotated, regarding activities
related to the Minimum Improvements. The Developer agrees that in its contracts with its contractors the
Developer's contractor will be required to require its subcontractors to comply with Title 49 Human Rights,
Montana Code Annotated, regarding activities related to the Minimum Improvements. The Developer agrees
to provide copies of all such contracts upon request by the City.
Section 49. Worker's Compensation Insurance. The Developer shall provide in its construction
contracts related to the Minimum Improvements with all of its respective contractors that such contractors are
to be covered by a Worker's Compensation insurance program with the State, a private insurance carrier, or an
approved self-insurance plan in accordance with State law.
Section 4.10. Certificate of Completion. (a) After completion of the Minimum Improvements in
accordance with the Construction Plans and all terms of this Agreement, the City will furnish the Developer
with a Certificate of Completion, a form of which is attached hereto as Exhibit B.
(b) The Certificate of Completion will be in recordable form in the proper County office for
the recordation of instruments pertaining to the Development Property. If the City refuses or fails to provide
the Certificate in accordance with the provisions of this Section 4.10, the City shall, within 30 days after
written request by the Developer, provide the Developer with a written statement, indicating in adequate
detail in what respects the Developer has failed to complete the Minimum Improvements in accordance
with the provisions of the Agreement, or is otherwise in default, and what measures or acts will be
necessary, in the opinion of the City, for the Developer to take or perform in order to obtain such Certificate.
(c) The construction of the Minimum Improvements shall be deemed to be complete at such
time as the Developer is legally entitled to the issuance of a certificate of occupancy by the City with respect
thereto.
ARTICLE V
Insurance
Section 5.1. Insurance. (a) The Developer agrees to provide and maintain at all times during the
process of constructing the Minimum Improvements and, from time to time at the request of the City,
furnish the City with proof of payment of premiums on:
(i) Builder's risk insurance, written on the so-called "Builder's Risk -- Completed
Value Basis," in an amount equal to one hundred percent (100%) of the insurable value of the
Minimum Improvements at the date of completion, and with coverage available in nonreporting
form on the so called "all risk" form of policy;
(ii) Comprehensive general liability insurance (including operations, contingent
liability, operations of subcontractors, completed operations and contractual liability insurance)
together with an Owner's Contractor's Policy with limits against bodily injury and property damage
of not less than $1,000,000 for each occurrence (to accomplish the above required limits, an
umbrella excess liability policy may be used); and
(iii) Workers' compensation insurance, with statutory coverage.
The policies of insurance required pursuant to clauses (i) and (ii) above shall be placed with financially
sound and reputable insurers licensed to transact business in the State. The policy of insurance delivered
pursuant to clause (i) above shall contain an agreement of the insurer to give not less than thirty (30) days'
advance written notice to the City in the event of cancellation of such policy or change affecting the
coverage thereunder. The City shall be named as an additional insured under the policies of insurance
referred to in (i) and (ii) above.
(b) Prior to the Maturity Date, the Developer shall maintain, or cause to be maintained, at its
cost and expense, and from time to time at the request of the City shall furnish proof of the payment of
premiums on, insurance as follows:
(i) Insurance against loss and/or damage to the Minimum Improvements under a
policy or policies covering such risks as are ordinarily insured against by similar businesses,
including (without limiting the generality of the foregoing) fire, extended coverage, vandalism and
malicious mischief, heating system explosion, water damage, demolition cost, debris removal,
collapse and flood, in an amount not less than the full insurable replacement value of the Minimum
Improvements. No policy of insurance shall be so written that the proceeds thereof will produce
less than the minimum coverage required by the preceding sentence, by reason of coinsurance
provisions or otherwise, without the prior consent thereto in writing by the City. The term "full
insurable replacement value" shall mean the actual replacement cost of the Minimum
Improvements and shall be determined from time to time at the request of the City, but not more
frequently than once every three years, by an insurance consultant or insurer, selected and paid for
by the Developer and approved by the City; and
(ii) Such other insurance, including worker's compensation insurance respecting all
employees of the Developer, in such amount as is customarily carried by like organizations engaged
in like activities of comparable size and liability exposure.
In lieu of any of the foregoing, the Developer may provide evidence to the City that the Developer has self -
insured for the amounts and terms satisfying this Section.
(c) The parties agree that all the provisions set forth in this Article shall terminate upon the
Maturity Date.
Section 5.2. Notification; Repair, Reconstruction and Restoration. Until the Maturity Date the
Developer agrees to notify the City immediately in the case of damage exceeding $50,000 in amount to, or
destruction of, the Minimum Improvements, or any portion thereof resulting from fire or other casualty.
Subject to the rights of lenders, in such event the Developer shall forthwith repair, reconstruct, and restore
the Minimum Improvements to substantially the same or an improved condition or value as it existed prior
to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction,
and restoration, the Developer will apply the net proceeds of any insurance relating to such damage received
by the Developer to the payment or reimbursement of the costs thereof.
The Developer shall complete the repair, reconstruction, and restoration of the Minimum
Improvements, whether or not the net proceeds of insurance received by the Developer for such purposes
are sufficient to pay for the same. Any net proceeds remaining after completion of such repairs,
construction and restoration shall be the property of the Developer.
ARTICLE VI
Financing
Section 6.1. Generally. (a) Before commencement of construction of the Minimum Improvements,
the Developer shall submit to the City Representative evidence of one or more commitments for financing
which, together with committed equity for such construction, is sufficient for payment of costs of
construction of the Minimum Improvements
(b) If the City Representative finds that the financing is sufficiently committed and adequate
in amount to pay the costs specified in paragraph (a) then the City shall notify the Developer in writing of
its approval. Such approval shall not be unreasonably withheld and either approval or rejection shall be
given within thirty (30) days from the date when the City is provided the evidence of financing. A failure
10
by the City to respond to such evidence of financing shall be deemed to constitute an approval hereunder.
If the City rejects the evidence of financing as inadequate, it shall do so in writing specifying the basis for
the rejection. In any event the Developer shall submit adequate evidence of financing to the City within
ten (10) days after such rejection.
Section 6.2. Limitation Upon Encumbrance of Development Property. The Developer agrees not
to engage in any financing creating any mortgage or other encumbrance or lien upon the Development
Property or the Minimum Improvements, whether by express agreement or operation of law, or suffer any
encumbrance or lien to be made on or attached to the Development Property or the Minimum
Improvements.
ARTICLE VII
Prohibitions Against Assignment, Indemnification
Section 7.1. Representation as to Development. The Developer represents and agrees that its
undertakings pursuant to this Agreement are and will be for the purpose of development of the Development
Property for the use and ownership of the City.
Section 7.2. Prohibition Against Developer's Assignment of Agreement. The Developer
represents and agrees that except for the purpose of obtaining financing necessary to enable the Developer
to perform its obligations with respect to constructing the Minimum Improvements under this Agreement,
and any other purpose authorized by this Agreement, the Developer has not made or created and will not
make or create or suffer to be made or created any total or partial assignment or transfer in any other mode
or form of or with respect to this Agreement or any part thereof or any interest therein, or any contract or
agreement to do any of the same (collectively, a "Transfer"), without the prior written approval of the City,
unless the Developer remains liable and bound by this Agreement, in which event the City's approval is
not required. In the absence of a specific written agreement by the City to the contrary, no such transfer or
approval by the City thereof shall be deemed to relieve the Developer or any other party bound in any way
by this Agreement or otherwise with respect to the construction of the Minimum Improvements from any
of its obligations with respect thereto. The provisions of this Section 7.2(a) shall not limit transfers to
Affiliates of the Developer.
Section 7.3. Release and Indemnification Covenants. (a) The City and the governing body
members, officers, agents, servants and employees thereof (the "Indemnified City Parties"), except for any
willful misrepresentation or any willful or wanton misconduct or negligence of the Indemnified Parties,
shall not be liable for and the Developer shall indemnify and hold harmless the Indemnified City Parties
against any loss or damage to property or any injury to or death of any person occurring at or about or
resulting from any defect in the Development Property or any improvements constructed thereon, but only
to the extent that such defects were caused or committed during the periods that the Developer controlled
the Development Property prior to and up to the issuance of the Certificate of Completion.
(b) Except for any willful misrepresentation or any willful or wanton misconduct or negligence
of the Indemnified City Parties, and except for any breach by any of the Indemnified City Parties of their
obligations under this Agreement, the Developer agrees to protect and defend the Indemnified City Parties,
now and forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or
other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this
Agreement, or the transactions contemplated hereby or any improvements constructed upon the
Development Property.
(c) Except for any willful misrepresentation or any willful or wanton misconduct or negligence
of the Indemnified City Parties, the Indemnified City Parties shall not be liable for any damage or injury to
the persons or property of the Developer or its Affiliates, officers, agents, servants or employees or any
other person who may be about the Development Property or any improvements constructed thereon.
(d) All covenants, stipulations, promises, agreements, and obligations of the City contained
herein shall be deemed to be the covenants, stipulations, promises, agreements, and obligations of such
entities and not of any governing body member, officer, agent, servant, or employee of such entities in the
individual capacity thereof.
ARTICLE VIII
Events of Default
Section 8.1. Events of Default Defined. The following shall be "Events of Default" under this
Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement, any one or
more of the following events:
(a) failure by the Developer or an Affiliate to observe or perform any covenant, condition,
obligation or agreement on its part to be observed or performed under this Agreement;
(b) if the Developer or an Affiliate shall:
(i) file any petition in bankruptcy or for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under the United
States Bankruptcy Act or under any similar federal or State law; or
(ii) make an assignment for benefit of its creditors; or
(iii) admit in writing its inability to pay its debts generally as they become due; or
(iv) be adjudicated a bankrupt or insolvent
(c) failure by the City to observe or perform any material covenant, condition, obligation or
agreement or its part to be observed or performed under this Agreement.
Section 8.2. Remedies on Default. Whenever any Event of Default referred to in Section 8.1 of
this Agreement occurs, the non -defaulting party may exercise any of the following rights under this Section
after providing thirty (30) days written notice to the other of the Event of Default, but only if the Event of
Default has not been cured within said thirty (30) days or, if the Event of Default is by its nature incurable
within thirty (30) days, the defaulting party does not, within such thirty (30) day period, provide assurances
reasonably satisfactory to the party providing notice of default that the Event of Default will be cured and
will be cured as soon as reasonably possible:
(a) suspend its performance under this Agreement until it receives reasonably satisfactory
assurances that the defaulting party will cure its default and continue its performance under this Agreement;
(b) cancel and rescind or terminate its obligations under this Agreement or any portion thereof;
(c) if the default occurs prior to completion of any portion of the Minimum Improvements, the
City may withhold the Certificate of Completion with regard to the uncompleted portion; or
12
(d) take whatever action, including legal, equitable or administrative action, which may appear
necessary or desirable to collect any payments due under this Agreement, or to enforce performance and
observance of any obligation, agreement, or covenant of the defaulting party under this Agreement.
Section 8.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to any party in
this Agreement is intended to be exclusive of any other available remedy or remedies, but each and every
such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement
or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or
power accruing upon any default shall impair any such right or power or shall be construed to be a waiver
thereof, but any such right and power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the City to exercise any remedy reserved to it, it shall not be necessary to give
notice, other than such notice as may be required in this Article.
Section 8.4. No Additional Waiver Implied by One Waiver. In the event any agreement contained
in this Agreement should be breached by any party and thereafter waived by another party, such waiver
shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent,
previous or subsequent breach hereunder.
Section 8.5. City's Attorney Fees. Whenever any Event of Default occurs by the Developer and
if the City shall employ attorneys or incur other expenses for the collection of payments due or to become
due or for the enforcement of performance or observance of any obligation or agreement on the part of the
Developer under this Agreement, the Developer shall, within twenty (20) days of written demand by the
City, pay to the City the reasonable fees of such attorneys and such other expenses so incurred by the City.
ARTICLE IX
Additional Provisions
Section 9.1. Conflicts of Interest; Representatives Not Individually Liable. The City and the
Developer, to the best of their knowledge, represent and agree that no member, official, or employee of the
City shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member,
official, or employee participate in any decision relating to this Agreement which affects his or her personal
interests or the interests of any corporation, partnership, or association in which he or she is, directly or
indirectly, interested. No member, official, or employee of the City shall be personally liable to the
Developer, any Affiliate, or any successor in interest, in the event of any default or breach by the City or
for any amount which may become due to the Developer or successor or on any obligations under the terms
of the Agreement.
Section 9.2. Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon
the City, the Developer, any Affiliates, and their respective successors and assigns.
Section 9.3. Severability. In the event any provision of this Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
Section 9.4. Equal Employment Opportunity. The Developer agrees, for itself and any Affiliate,
successors, and assigns, that during the term of this Agreement it will comply with all applicable federal,
State and local equal employment and non-discrimination laws, regulations, and ordinances as they relate
to the development of the Project.
13
Section 9.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections
of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or
interpreting any of its provisions.
Section 9.6. Notices and Demands. Except as otherwise expressly provided in this Agreement, a
notice, demand, or other communication under this Agreement by either party to the other shall be
sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return
receipt requested, or delivered personally to the following addresses:
To the Developer: MONTANA HOTEL DEVELOPMENT PARTNERS, LLC
208 1 s' Ave. E.
Kalispell, MT 59901
Attention: Robert Watson
To the City: City of Kalispell
201 1 st Ave. E.
PO Box 1997
Kalispell, Montana 59903-1997
Attention: City Manager
The City or the Developer may, by notice given hereunder, designate any further or different addresses to
which subsequent notices, requests, or other communications shall be sent.
Section 9.7. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall constitute one and the same instrument.
Section 9.8. Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Montana.
Section 9.9. Recording. The City may record this Agreement and any amendments thereto with
the County Recorder. The Developer shall pay all costs for recording this Agreement.
Section 9.10. Gender, Etc. Words of any gender include the correlative words of the other gender.
The terms "hereof," "hereby," "herein," "hereto," "hereunder," "hereinafter," and similar terms refer to this
Agreement; and the term "hereafter" means after, and the term "heretofore" means before, the date on which
this Agreement was fully executed.
Section 9.11. Entire Agreement. This Agreement constitutes the entire agreement between the
parties pertaining to its subject matter and it supersedes all prior contemporaneous agreements,
representations, and understandings of the parties pertaining to the subject matter of this Agreement. This
Agreement may be modified, amended, terminated, or waived, in whole or in part, only by a writing signed
by all the parties.
14
IN WITNESS WHEREOF, the City and the Developer have caused this Agreement to be duly
executed by their duly authorized representatives as of the date first above written.
CITY OF KALISPELL, MONTANA
a
STATE OF MONTANA )
) ss.
County of Flathead )
Doug Russell, City Manager
On this day of , 2022, before me, a Notary Public for the State of
Montana, personally appeared Doug Russell, proved to me to be the person whose name is
subscribed to the within instrument, and acknowledged to me that he executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year hereinabove first written.
NOTARY PUBLIC for the State of Montana
Printed Name:
SEAL Residing at:
My Commission expires:
is
MONTANA HOTEL DEVELOPMENT
PARTNERS, LLC
By Alchemy Development Group, LLC
Member of ont a Hat Dev pment Pa rs, LLC
By: '
J9 n . Costa
Meg r of Alchemy Development Group, LLC
STATE OF MONTANA )
) ss.
County of Flathead )
On this i2- day of , 2022, before me, a Notary Public for the State of
Montana, personally appeared John P. C sta, as Member of Alchemy Development Group,
LLC, which is a Member of Montana Hotel Development Partners, LLC, proved to me to be
the person whose name is subscribed to the within instrument, and acknowledged to me that
he/she executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year hereinabove first written.
4R'Y PUBLIC for the State of Montana
Printed Name: L;!SA
SEAL Residing at:l;
K Poo LISA K POOLER
NOTARY PUBLIC for the
N°T — State of Mordana
UA SEAL a Residing at Kalispell. MT
My Commission Expires
May 05, 2025.
My Commission expires: 0 [ 5 IWZS
16
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LEGAL DESCRIPTION OF THE DEVELOPMENT PROPERTY
Real property being situated in Section 18 Township 28 North, Range 21 West,
P.M.M. Flathead County, Montana and described more particularly as Lots 17,
18,19, 20, 21, 22, 23, and 24 of Block 46 of Kalispell Original Townsite Map of
record in the Office of Clerk and Recorder for Flathead County Montana.
C.5
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT ("Agreement") is entered into this
day of , 2022, by and between CITY OF KALISPELL, a municipal
corporation ("Seller"), of P. O. Box 1997, Kalispell, Montana 59901, and KALISPELL URBAN
RESORT PARTNERS, LLC, a Montana limited liability company, and/or its assigns,
("Purchaser"), with mailing address of 208 First Avenue East, Kalispell, Montana 59901.
THE PARTIES AGREE AS FOLLOWS:
1. Real Property. Purchaser agrees to purchase, and Seller agrees to sell the
following described real property located at 3rd Avenue West and Main Street, Kalispell, Flathead
County, Montana, herein referred to as the "Property," and more particularly described below:
Lots 8, 9, 10, 11, 12, Block 55, Kalispell Original Townsite, according to the map
or plat thereof on file and of record in the office of the Clerk and Recorder of
Flathead County, Montana.
Together with all interest of Seller in vacated streets and alleys adjacent thereto, all easements and
other appurtenances thereto, and all improvements on the Property. All existing permanently
installed fixtures and fittings that are attached to the Property are included in the purchase price.
2. Purchase Price. The total purchase price for the Property is $0.00 Dollars.
3. Closing. The date of closing ("Closing Date") shall be
. Purchaser and Seller shall deposit with the closing agent all instruments and funds
necessary to complete the purchase in accordance with this Agreement.
4. Possession. Seller shall deliver to Purchaser possession of the property and allow
occupancy when the closing agent is in receipt of all required, signed documents and all funds
necessary for the purchase.
5. Contingencies. The contingencies set forth in this Agreement or attached addenda
shall be deemed to have been released, waived, or satisfied, and the Agreement shall continue to
closing, unless by 5:00 PM (Mountain Time) on the date specified for each contingency, the party
requesting the contingency has notified the other party in writing that the contingency is not
released, waived, or satisfied. If a party has notified the other party on or before the release date
that a contingency is not released, waived, or satisfied, this Agreement is terminated, unless the
parties negotiate other terms or provisions.
Inspection Contingency: This Agreement is contingent upon Buyer's acceptance of the
Property conditions identified through any inspections or advice requested below.
Buyer agrees to acquire, at Buyer's expense, independent inspections or advice from
qualified inspectors or advisers of Buyer's choice, provided that the cost for a phase I
environmental inspection may, if eligible, be paid with funds available to the City.
Initials
Buyer agrees that any investigations or inspections undertaken by Buyer or on their
behalf shall not damage or destroy the property, without the prior written consent of
Seller. Further, Buyer agrees to return the Property to its original condition and to
indemnify Seller from any damage or destruction to the Property caused by the Buyer's
investigation or inspections, if Buyer does not purchase the Property.
1. Inspection;
2. Seller's Property Disclosure;
3. Roof Inspection;
4. Structural/Foundation Inspection;
5. Electrical Inspection;
6. Plumbing Inspection;
7. Heating, ventilation, cooling system -Inspection;
8. Pest/Rodent Inspection;
9. Well Inspection for condition of Well and Quantity of Water;
10. Accounting Advice;
11. Survey or Corner Pins located;
12. Access to Property;
13. Verification of # of code compliant bedrooms;
14. Review and Approval of Protective Covenants;
15. Easements;
16. Flood Plain Determination;
17. Water Sample Test;
18. Septic, sewer, or Cesspool Inspection;
19. Mineral Rights Search;
20. Radon;
21. Asbestos;
22. Wild Fire Risk;
23. Legal Advice;
24. Toxic Waste/Hazardous Material;
25. Underground Storage Tanks;
26. Sanitary Approval/Septic Permit;
27. Mold;
28. Zoning Determination;
29. Verification of lot size; and
30. Road Maintenance.
Unless Buyer delivers written notice of Buyer's Disapproval of the Property conditions
within 15 days from the date of this Agreement, this contingency shall be of no further
force or effect. If Buyer disapproves of the Property condition, Buyer shall deliver
written notice to Seller on or before the date specified above, together with a copy of
that portion of the inspection or report upon which the disapproval is based. Buyer
shall also state whether Buyer elects to immediately terminate the Agreement or
negotiate a resolution of the conditions noted. If Buyer elects to negotiate a resolution
of the conditions noted, the notice must contain all of Buyer's objections and requested
remedies. If the parties enter into a written agreement in satisfaction of the conditions
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noted, this contingency shall be of no further force or effect. If the parties cannot come
to a written agreement in satisfaction of the conditions noted or if the Buyer does not
withdraw in writing their disapproval of the condition noted within 20 days after the
date of this Agreement, the Agreement shall terminate.
b. Title Contingency: This Agreement is contingent upon Buyer's receipt and approval
(to Buyer's satisfaction) of the preliminary title commitment. The release date for this
contingency shall be 10 days from Buyer's receipt of the preliminary title commitment.
c. Insurance Contingency: This Agreement is contingent upon Buyer's ability to acquire,
at a rate acceptable to Buyer, hazard insurance on the Property. The release date for
this Contingency shall be 15 days from the date of this Agreement.
d. Development Agreement: This Agreement shall be contingent upon Buyer and Seller
entering into a Development Agreement regarding construction of a hotel on the
Property and Seller and Montana Hotel Development Partners, LLC entering into a
Development Agreement regarding construction of a parking garage on separate real
property owned by Seller.
6. Conveyance. The Seller shall convey the Property by General Warranty Deed, free
of all liens and encumbrances except those set forth in the preliminary title commitment, as
approved by Purchaser.
7. Water Rights. All water, surface water or ground water, any legal entitlement to
water, including statements of claim, certificates of water rights, permits to appropriate water,
exempt existing rights, decreed basins or any ditches, ditch rights, or ditch easements appurtenant
to and/or used in connection with the Property are included with the Property.
8. Water Rights Disclosure. Under Montana Law, failure of the parties at closing or
transfer of real property to pay the required fee to the Montana Department of Natural Resources
and Conservation for updating water right ownership may result in the transferee of the property
being subject to a penalty. Additionally, in the case of water rights being exempted, severed, or
divided, the failure of the parties to comply with § 85-2-424, MCA could result in a penalty against
the transferee and rejection of the deed for recording.
9. Closing Fees. Closing agent's fee will paid by the Seller.
10. Title Insurance. Seller, at Seller's expense and from a title insurance company
chosen by Seller, shall furnish Purchaser with an ALTA Standard Coverage Owners Title
Insurance Policy (as evidenced by a standard form American Land Title Association title insurance
commitment) in an amount equal to the Purchase Price. Purchaser may purchase additional
owner's title insurance coverage in the form of "Extended Coverage" or "Enhanced Coverage" for
an additional cost to the Purchaser. It is recommended that Purchaser consult with a title company
for details.
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11. Condition Of Title. All mortgages, judgments, and liens shall be paid or satisfied
by the Seller at or prior to closing unless otherwise provided in this Agreement. Seller agrees that
no additional encumbrances, restrictions, easements, or other adverse title conditions will be
placed against the title to the Property subsequent to the effective date of the preliminary title
commitment approved by the Purchaser.
12. Special Improvement Districts and Special Assessments. All Special
Improvement Districts (including rural SIDs), including those that have been noticed to Seller by
City/County but not yet spread or currently assessed shall be assumed by Seller at Closing. Any
special or non -recurring assessments of any non -governmental association, including those that
have been approved but not yet billed or assessed, shall be assumed by Purchaser at Closing.
13. Proration of Taxes and Assessments. Seller and Purchaser agree to prorate taxes,
Special Improvement District assessments for current tax year, as well as prepaid rents, water and
sewer system charges, heating fuel and tank rental, irrigation assessments, homeowners'
association dues and/or common maintenance fees, as of the date of closing unless otherwise
provided in this Agreement.
14. Condition of Property. Seller agrees to sell the Property to Purchaser As -Is.
15. Noxious Weed Disclosure. Purchasers of property in Montana should be aware
that some properties contain noxious weeds. Montana law requires owners of property within this
state to control, and to the extent possible, eradicate noxious weeds. For information concerning
noxious weeds and the obligations of property owners, contact either your local County extension
agent or Weed Control Board.
16. MEGAN'S LAW DISCLOSURE. Pursuant to the provisions of the Title 46,
Chapter 23, Part 5 of the Montana Code Annotated, certain individuals are required to register
their address with the local law enforcement agencies as part of Montana's Sexual and Violent
Offender Registration Act. In some communities, law enforcement offices will make the
information concerning registered offenders available to the public. If you desire further
information, please contact the local County Sheriff office, the Montana Department of Justice in
Helena, Montana, and/or the probation offices assigned to the area.
17. Radon Disclosure Statement. The following disclosure statement is provided
pursuant to the Montana Radon Control Act, § 75-3-606, MCA. RADON IS A NATURALLY
OCCURRING RADIOACTIVE GAS THAT, WHEN IT HAS ACCUMULATED IN A
BUILDING IN SUFFICIENT QUANTITIES, MAY PRESENT HEALTH RISKS TO PERSONS
WHO ARE EXPOSED TO IT OVER TIME. LEVELS OF RADON THAT EXCEED FEDERAL
GUIDELINES HAVE BEEN FOUND IN BUILDINGS IN MONTANA. ADDITIONAL
INFORMATION REGARDING RADON AND RADON TESTING MAY BE OBTAINED
FROM YOUR COUNTY OR STATE PUBLIC HEALTH UNIT. If the Property has been tested
for radon, the Seller shall provide a copy of the test results concurrent with an executed copy of
this Agreement. If the Property has received radon mitigation treatment, the Seller will provide
the evidence of mitigation treatment concurrent with an executed copy of this Agreement.
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18. Seller's Remedies.
a. Seller's Remedies. If the Seller accepts the offer contained in this
Agreement and Purchaser refuses or neglects to consummate the transaction contemplated by this
Agreement within the time period provided in this Agreement, the Seller may:
1. Declare the earnest money paid by Purchaser be forfeited; OR
2. Demand that Purchaser specifically perform Purchaser's duties and
obligations under this Agreement; OR
3. Demand that Purchaser pay monetary damages for Purchaser's
failure to perform the terms of this Agreement.
b. Purchaser's Remedies. If the Purchaser accepts the offer contained in this
Agreement and Seller refuses or neglects to consummate the transaction contemplated by this
Agreement within the time period provided in this Agreement, the Purchaser may:
1. Declare the earnest money paid by Purchaser be returned to
Purchaser; OR
2. Demand that Seller specifically perform Seller's duties and
obligations under this Agreement; OR
3. Demand that Seller pay monetary damages for Seller's failure to
perform the terms of this Agreement.
19. Purchaser's and Seller's Certification. By entering this Agreement, each person
or persons executing this Agreement, as Purchaser or Seller, represents that he/she is eighteen (18)
years of age or older, of sound mind, and legally competent to own or transfer real property in the
State of Montana; and, if acting on behalf of a corporation, partnership, or other non -human entity,
that he/she is duly authorized to enter into this Agreement on behalf of such entity.
20. Foreign Person or Entity. Section 1445 of the Internal Revenue Code provides
that a Purchaser of a U.S. real property interest may be required to withhold tax if the Seller is a
foreign person. Seller acknowledges and agrees that unless the purchase price of the Property does
not exceed $300,000.00 and Purchaser is purchasing the Property for use by Purchaser as a
personal residence, Seller shall deliver to Purchaser a certificate of non -foreign status and any
other certificate, affidavit, or statement as may be necessary to meet the requirements of Section
1445 of the Internal Revenue Code, in a form reasonably acceptable to Purchaser. In the event
Seller does not deliver such documents to Purchaser at or before closing, Seller acknowledges and
agrees that Purchaser or the closing agent may withhold 10% of the Purchase Price and submit this
amount to the Internal Revenue Service, pursuant to Section 1445 of the Internal Revenue Code.
21. Consent to Disclose Information. Purchaser and Seller hereby consent to the
procurement and disclosure by Purchaser and Seller, and Salespersons and their attorneys, agent,
and other parties having interests essential to this Agreement, of any and all information reasonably
necessary to consummate the transaction anticipated by this Agreement, specifically including
access to escrows for review of contracts, deeds, trust indentures, or similar documents related to
the Property or any underlying obligations.
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22. Risk of Loss. All loss or damage to any of the above -described Property or
personal property to any cause shall be assumed by Seller through the time of Closing unless
otherwise specified.
23. Time. Time is of the essence to the terms of this Agreement.
24. Assignment This Agreement is binding upon the heirs, successors, and assigns of
each of the parties to this Agreement. The Purchaser's rights under this Agreement may not be
assigned without the Seller's prior written consent.
25. Attorney's Fees. In any action brought by either party to enforce any of the terms
of this Agreement, the prevailing party in such action shall be entitled to such reasonable attorney
fees as the court or arbitrator shall determine just.
26. Choice of Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Montana. Further, the parties agree, if there is a lawsuit, that
jurisdiction and venue shall be in the county in which the Property, subject of this Agreement, is
located.
27. Severability. If a court of competent jurisdiction finds any provision of this
Agreement to be invalid or unenforceable as to any person or circumstance, such finding shall not
render that provision invalid or unenforceable as to any other persons or circumstances. If feasible,
any such offending provision shall be deemed to be modified to be within the limits of
enforceability or validity; however, if the offending provision cannot be so modified, it shall be
stricken and all other provisions of this Agreement in all other respects shall remain valid and
enforceable.
28. Counterparts. This Agreement may be executed in any number of counterparts,
each of which when executed and delivered shall be an original, but all such counterparts shall
constitute one and the same instrument. As used herein, "counterparts" shall include full copies
of this Agreement signed and delivered by email or facsimile transmission, as well as photocopies
of such email or facsimile transmissions.
29. Entire Agreement. This Agreement, together with any attached exhibits and any
addenda or amendments signed by the parties, shall be the entire agreement between Seller and
Purchaser, and supersedes any other written or oral agreements between Seller and Purchaser. This
Agreement can be modified only in writing, signed by the Seller and Purchaser.
30. Purchaser's Acknowledgment. Purchaser acknowledges that prior verbal
representations by the Seller do not modify or affect this Agreement. Purchaser acknowledges
that by signing this Agreement they have examined the subject real and personal Property, has
entered into this Agreement in full reliance upon their independent investigation and judgment,
and has read and understood this entire Agreement.
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CITY OF KALISPELL
"SELLER"
"PURCHASER"
KALISPELL URBAN RESORT PARTNERS, LLC
BY: Montana Hotel Development Partners, LLC, Manager
BY: Bond Partners, LLC, Member
By:
Robert Watson, Member
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STAFF REPORT
KALISPELL DOWNTOWN PUBLIC PARKING GARAGE PROJECT
REQUEST FOR DOWNTOWN TIF ASSISTANCE
KALISPELL COMMUNITY DEVELOPMENT
November 17, 2021
This is a report to the Urban Renewal Agency and Kalispell City Council regarding a request for Tax Increment
Finance (TIF) Assistance in the amount of approximately $7,000,000 for the construction of an estimated 250-
space parking structure with main floor retail space structure located at First Street West and First Avenue
West (125 First Avenue West). A public meeting on this matter has been scheduled before the Urban Renewal
Agency for November 17, 2021, beginning at 4:00 PM, at Kalispell City Hall. The Urban Renewal Agency
will forward a recommendation to the Kalispell City Council for final action.
TIF Assistance Program Overview: The Kalispell City Council created the Downtown Kalispell TIF
Assistance Program in 2019, by Resolution 5955. The Downtown Kalispell TIF Assistance Program was
developed to support redevelopment activity and advance the goals of the Downtown Kalispell Urban Renewal
Plan. These goals, as required by state statute, focus on mitigating blighted conditions within the Downtown
Kalispell Urban Renewal Plan Boundary. The primary objective of the TIF assistance program is to
encourage investment in development and redevelopment of mixed -use, commercial and multi -family (four
units or more) within the district in accordance with the provisions of Montana Urban Renewal Law.
Additional objectives within the urban renewal district include:
• Expand the property tax base in the district through private investment in income producing
properties;
• Stimulate economic and business development within the district by improving public infrastructure
deficiencies; and
• Reduce blighted properties within the district.
Further, the Downtown Kalispell Tax Increment Financing Assistance Program identifies Public
Infrastructure projects as recommended by City Council. Such project activities as allowed under Montana
state law include the acquisition, construction, and improvement of public improvements of infrastructure,
including streets, roads, curbs, gutters, sidewalks, pedestrian malls, alleys, parking lots and off-street
parking facilities. Sec. 7-15-4288(4), MCA.
Proposed Project: The proposal before the City consists of two parts. The first part is the construction of a
$47 million boutique hotel on the northwest corner of Main Street and Third Street West in response to the
City's December 2020 Request for Proposals. The proj ect allows the transfer of the city -owned surface parking
lot site (appraised at $270,000) to the Montana Hotel Development Partners LLC for this purpose. The hotel is
proposed as a five -story development with full -service restaurant, bar and casino, some executive conference
space and ground floor retail space. The business model requires valet parking. To meet the valet parking
requirement the Partners additionally propose construction of a parking garage approximately two blocks north
at the southeast corner of First Avenue West and First Street West. While the RFP did not require the
replacement of the existing 40 parking spaces at the (formerly) Valley Bank lot, the hotel project is required to
provide parking for its own demonstrated demand estimated at 90 spaces. The hotel partners request to lease
these spaces from the parking garage at the same market rates charged to the public permit holders.
The City of Kalispell is proposing to use Downtown Kalispell TIF for an approximately 250-space public
parking garage with approximately 7,000 sq ft of retail lease space on the ground floor. The garage qualifies
as a public infrastructure program within the Downtown Kalispell Tax Increment Financing Assistance
Program, as parking lots and off-street parking facilities are identified as an allowable redevelopment
activity per Montana Code Annotated noted above (Sec. 7-15-4288(4)). The proposed building is 4-story
with retail space on the first floor. Currently, the building site is City owned and consists of a City -owned
surface parking lot with 69 parking spaces, primarily permit parking. Construction onsite will consist of
site preparation and slab concrete structure. The new building will be located at 125 First Avenue West at
the southwest corner of First Avenue West and First Street West. The City is requesting TIF assistance in
the amount of approximately $7,000,000 to be revised based on final engineering and construction bid. The
funds to finance and construct the parking structure are to be TIF generated by the related Charles Hotel
development to be constructed in the Downtown TIF.
As proposed, the parking garage would provide parking as follows: 90 spots for Charles Hotel lease; 69 spaces
to replace those existing at the current Eagles lot (site of the proposed parking structure), 43 as (unrequired)
replacement of former Valley Bank lot permit parking and an additional 48 spaces allowing for future parking
demand in downtown Kalispell. An additional aspect of the proposed parking structure is the inclusion of
roughly 7,000 sq ft of ground floor retail space to be owned and managed by the City of Kalispell. This space
meets goals outlined in the Downtown Plan for a pedestrian -scale, pedestrian -friendly downtown and offers
the further benefit of a revenue stream that can support ongoing management and maintenance costs for the
garage.
No residents are being displaced by the proposed project as the current use is public permit surface parking.
Applicant: City of Kalispell
201 1st Avenue East
Kalispell, MT 59901
Location and Legal Description of Property: The subject property is located at the southwest corner of
First Avenue West and First Street West with the address listed as 125 First Avenue West. The property is
within the Downtown Kalispell Urban Renewal Plan Boundary. The property can be legally described as:
Lots 17, 18, 19, 20, 21, 22, 23, and 24 of Block 46 of Kalispell Original Townsite, as shown on the map or
plat thereof on file and of record in the Office of the Clerk and Recorder, Flathead County, Montana.
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Size: The subject property is 14,000 sq ft or .321 acres.
Existing Land Use: The property is currently owned by the City of Kalispell and is paved and striped in
use as a public permit surface parking lot.
Adjacent Land Uses: The land uses surrounding the subject property are as follows:
West: Office space
North: Fraternal Order of Eagles
East: Alley Connection Restaurant/Kalispell Grand Hotel
South: The Interim Bar
A. EVALUATION OF THE REQUEST
Public infrastructure projects must demonstrate that they are allowable activities within Sec.7-15-4288 (4),
MCA, as this project does because it is for the construction of an off-street parking facility. The proposed
parking structure additionally addresses the policies and criteria required of private development requests as
follows. Private developer requests for TIF Assistance are predicated on satisfactorily meeting the policies and
criteria listed below and may be granted only if the proposal, as submitted, conforms to all the following
Downtown Kalispell TIF assistance policies and criteria:
POLICIES
1. TIF assistance will be given to projects that do not have the financial feasibility to proceed without
the benefits of the TIF fund assistance.
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The application would not be able to proceed as proposed without TIF Assistance. The Montana
Hotel Development Partners responded to the City ofKalispell's Request for Proposal at the 3Yd &
Main lot July 9, 2021, with a boutique hotel project including full -service restaurant, bar, casino,
conference space and ground floor retail. This $47 million project is to be completed in fall 2024
and requires allocated parking. The "Charles Hotel" is projected to generate $516, 000 in annual
revenue at completion to the Downtown TIF. But for the hotel development there would be no
impetus nor funds available to construct a parking garage.
2. The applicant shall provide market and feasibility studies, appraisals, etc. provided to private lenders
of the project as well as any other information the URA, or Kalispell City Council may require in
order to review the need for TIF assistance.
The applicant has submitted preliminary financial proforma demonstrating the partnership's
business strategy for holding the hotel property for seven years. The Charles Hotel and the Parking
Structure are to be privately funded through separate funding groups. The City would work with a
second but related development group on the parking structure. The model outlined indicates a
projected nine -month build out on the parking structure with its completion to coincide with that of
the proposed Charles Hotel. The parking structure development group would finance, design and
engineer the parking structure. The Development group, in cooperation with the City would then
utilize City procurement procedures relating to bidding, selection, prevailing wages and any other
relevant procurement stipulations for construction of the garage. Upon completion the City would
thereafter own, maintain and manage the garage as a public benefit.
3. Applicant's requesting more than $100,000 in TIF assistance shall provide a third -party analysis to
ensure project assumptions provided by developer align with current market conditions and industry
standards.
The City is requesting approximately $7, 000, 000. The approximate $7, 000, 000 of TIF funds
represents the expected cost of construction and financing for the parking structure and, per the
Developer's Agreements for both the Charles Hotel and the City Parking Structure the annual TIF
generated from the Charles Hotel is to be pledged to payment of the Parking Structure debt as held
by the developer.
4. The applicant shall be able to demonstrate their ability to construct, operate and maintain the
proposed project based on past experience, general reputation and credit history.
The Montana Hotel Development Partners, LLC Have collectively demonstrated extensive
experience in the fields of construction, high -end hotel development and marketing as outlined in
their proposal (see attached).
5. TIF assistance will not be used for projects that place an extraordinary demand on the district
infrastructure.
The parking structure (as well as the Charles Hotel development) will be reviewed per standard
City requirements including the demonstration of traffic studies, design review and adherence to
Public Works and Zoning requirements. In the event any mitigation is identified that will also be
addressed through City processes as part of the project.
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6. The relationship of private investment to public investment of a project shall be significant enough
to ensure prudent investment of public funds within the TIF District. A prudent expenditure would
equate to $1 of public money for every $9 of private money invested in a project.
No TIFfunds are requested for the Charles Hotel project. The City's Request for Proposal stipulated
in simple terms that in exchange for an approved investment of private funds at the site (former
Valley Bank lot or 3Yd & Main) the developer would receive the subject property appraised at
$270, 000. The Montana Hotel Development Partners LLC project proposal adds the construction
of an approximately $7 million parking garage to be paid for with TIF revenue generated by their
hotel project. Again, the Charles Hotel requests to lease 90 permit parking spaces to address its
required parking (or an exact number based on final calculations).
In simple terms this proposal is for the City to provide a $270, 000 parcel on Main Street and receive a
parking garage with retail lease space at an approximate value of $7, 000, 000 as paid for by the Charles
Hotel projected TIF revenues.
7. The applicant shall retain ownership of the project long enough to complete it, occupy it, establish
property management, and initiate payment of taxes based on the increased project value.
The developer will finance and construct the project that will be owned by the City has a public
parking garage.
CRITERIA
1. Each project must achieve each of the following criteria (PROPOSAL MEETS ALL CRITERIA):
Tax Generation — In order for the Downtown Kalispell TIF District to stay economically healthy
for the maximum benefit to the district and community, a project is expected to generate new
taxes. The increase in taxable value due to new construction & rehabilitation is estimated by the
County Assessor's office or State Department of Revenue to determine tax increase generation.
The Montana Hotel Development Partners have submitted a tax generation model for the
Charles Hotel project. The proposed project will generate $516, 000 in new taxes. This new tax
revenue would go to the Downtown TIF and be used on an annual basis to pay down the
financing and construction costs of the public parking garage. In that scenario, the request of
approximately $7, 000, 000 would pay for itself in roughly 14 years. The garage itself will not
generate tax revenue as it will be City -owned.
Elimination of Blight The project's direct and indirect impact on the physical deterioration
within the TIF.
The development site is currently underutilized as surface parking. The development group will
prepare the site and build a new four-story parking structure meeting current codes. As part of
the development there will be significant pedestrian level improvements with leasable retail
space at the ground level, consolidated permit parking with portions covered parking, tax base
increase and overall aesthetic improvements to the area.
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• Project Feasibility — A determination of feasibility is made based on the strength of the
applicant's demonstration of market demand for the project as contained primarily on the pro
forma and financing commitments.
As mentioned previously, the development group has provided detailed market and financial
statements associated with the proposed development. Both the Charles Hotel and the parking
garage are to be privately funded. The Montana Hotel Development Partners LLC have
provided a seven-year proforma and provided the basis for the lending for that project.
• Applicant's ability to perform — An assessment of the applicant's capability to undertake the
relative complexities of the project based on past performance and the project design and
management team on similar projects based on the complexity of the project.
The Montana Hotel Development Partners has a history of successful development, ownership
and management of those facilities. Partners include:
• Bill Goldberg, Owner Compass Construction builder of multiple Flathead area projects
including: The Quarry, Riverview Trails Apartments, The Highline Apartments, 334 Central
Avenue Condominiums, 519 Skyles Place and others;
• Robert Watson, CEO & President Bond Partners: previously in leadership roles at Solage
Hotels and Resorts, Kimpton Hotel and Restaurant Group, W Hotels, Starwood Hotels and
Resorts, and Four Seasons Hotels and Resorts.
• John Costa, Owner & CEO Alchemy Development Owner of The Interim Bar located at First
Avenue West, Managing Partner of Hi Tech Honeycomb
• Timely Completion — The feasibility of completing the project according to the applicant's
proposed project schedule.
The Montana Hotel Development Partners has demonstrated the ability to construct similar
projects and has submitted a timeline of the project, which has a completion schedule within the
next 24 months (once onsite work has commenced) for the Charles Hotel project. Construction
of the parking structure is estimated at 9 months with completion to coincide with that of the
Charles Hotel.
• Plan Goals — The project's ability to significantly further specific goals found in the Downtown
Kalispell Urban Renewal Plan, The Downtown Plan, and Kalispell Growth Policy Plan -It 2035
goals and policies. The request is consistent in the following ways:
Kalispell Growth Policy Plan -It 2035 - Chapter 6 Historic Downtown and Core Area
Policy (8) Encourage development and redevelopment by creating incentives for
developers to offset infrastructure and other site costs.
The Downtown Plan Goals - Chapter 3, Key Issues and Strategies Goal 2 Parking Supply
and management. (7) Parking Structure: a. Potential Parking Structure Design Concepts:
1) A new parking structure should be designed with a greater vision in mind. It should not
solely be a utilitarian structure. It must be architecturally designed and sited properly to fit
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into, augment and enhance the downtown. 2)The structure should incorporate retail on the
ground floor to avoid dead spots in our downtown (stretches of street frontage which are
dark, offer no goods or services or that offer nothing to the walking public). 3)The
structure could be publicly financed or be a private/public partnership. 4)The City could
donate an existing public surface parking lot to an entity in exchange for an agreement
from the entity to construct a multi -story building within a reasonable period and provide
at least as much parking as the existing surface parking lot was providing. 5) Potential
parking structure sites include: The Valley Bank surface parking lot on Main and Third;
The west side of First Avenue East and 3Yd Street East.
Downtown Kalispell Urban Renewal Plan:
1) Development of underutilized city -owned surface parking lots. Allow city surface
parking lots to be leveraged for more appropriate uses.
2) Development of a parking structure to allow for more densities downtown, where it is
most economical for the city to provide services.
2. Each project must achieve at least 2 out of the 5 criteria (PROPOSAL MEETS ALL 5 CRITERIA):
• Investment The project's potential for subsequent investment within the TIF district.
The project allows for subsequent investment as the design includes water, sewer and street
improvements. The improvements will improve the traffic flow in the area and increase
adjoining properties development potential as sewer and water mains will be extended allowing
for increased development potential. The investment of $47 million for the Charles Hotel on
Main Street and approximately $7 million in a parking garage with ground floor retail space on
First Avenue East will positively impact neighboring property values. Construction of the
parking garage will consolidate downtown parking and allow for future redevelopment in
downtown.
• Unique Opportunities — The project's potential to present a unique opportunity, meet a special
need, or address specific TIF district or community goals such as filling a market niche or
providing an un-met community need.
Throughout the planning process there was a desire in the community for the development of a
more exciting downtown. The proposal includes small-scale retail uses that are designed to
create an environment that will attract more people to the downtown. The inclusion of the
parking structure into the building takes a significant step in addressing local perception of
limited parking dampening downtown growth.
• Environmental Impacts — The project's ability to positively impact the environment in terms of
brownfields cleanup, noise, dust, and traffic reduction, pollution reduction, etc.
The project positively impacts the environment as parking structure are demonstrated to reduce
the actual number and use of parking spaces while allowing more efficient allocation of
resources with significant reduction in employee hours expended in parking management.
Downtown visitors will have the opportunity to lease permits for parking in this structure and
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with a known, predictable parking location reduce traffic, emissions and time spent searching
for available and appropriate parking.
Building The quality of development, construction and overall aesthetics are beyond that
which is minimally required by the International Building Code (IBC) currently in use as well
as other applicable City codes.
The parking structure development group has initial architectural renderings of the building
which includes development and aesthetics beyond what is minimally required. Ground floor
retail spaces are proposed to increase the quality and design of the project.
Job Creation— Projects that create opportunities for new employment contribute to the economic
vitality of the district and community in a variety of ways. Projects creating five or more full-
time equivalent jobs would be considered to have a significant positive impact on the economic
well-being of the district and will be given greater priority. Additionally, new jobs that pay at or
above the median county income level will be given priority.
Other than during construction, the proposed project will not in and of itself create any new
long-term jobs. The building itself will include an additional approximate 7, 000 square feet of
retail commercial space that will have tenants and associated employees at some point. The
parking garage itselfwill allow for more employee parking in downtown with the waterfall effect
of attracting additional business to the downtown area. At 250 parking spaces, the parking
garage will address future parking needs in anticipation of need.
3. Each project must achieve at least 3 out of the 6 criteria (PROPOSAL MEETS AT LEAST 4 OUT
OF 6 CRITERIA):
• Housing Increases housing units, including integrating a variety of residential housing types
to accommodate people of different age groups and income levels.
The parking garage may provide parking for future housing units thereby supporting the infill
and increased density prioritized in the Downtown Plan.
Urban Development — Redevelopment that considers the downtown's character and promotes a
mix of uses emphasizing retail uses on the main floor and offices or residential uses on upper
floors.
The design ofthe buildings is consistent with the historic downtown and the building is designed
as a mixed -use building with retail on the first floor and off-street parking on the upper floors.
The parking structure itself is an urban amenity only feasible with high density development.
Further, the parking garage will be required to meet recently adopted downtown historic
guidelines.
Parking Recognize that there are special parking considerations downtown which differ from
other areas. A project should use innovative parking management and shared parking provisions,
including for general public use.
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The project itself is a parking structure to include an estimated 250 parking spaces.
Recreation Incorporates amenities into the development such as pocket parks, activity nodes
and gathering spaces.
Not applicable.
Facilities Public Health and Mobility Project will construct or improve sidewalks, including
ADA access to buildings.
The project includes redevelopment of a surface parking lot with ADA accessibility
improvements within the garage. It will also include ADA improvements on adjacent sidewalks.
• Alternative Transportation — Project promotes the use of bicycling, transit, ride sharing, car
sharing, etc.
The project may promote ride sharing as it provides downtown parking intended primarily for
downtown workers. Additionally, the Charles Hotel project includes the provision of bike racks
to support a more urban living workforce. The inclusion of bike racks is a factor in calculating
parking utilization in turn resulting in a 5% reduction in required parking spaces to meet Hotel
needs.
B. EVALUATION BASED ON STATUATORY CRITERIA
This report evaluates the request in accordance with local and state regulations. The statutory basis for
reviewing Urban Renewal Projects is set forth by Sec. 7-15-4217 M.C.A., which states that following a hearing
the local governing body may approve an urban renewal project if it finds that:
1) A workable and feasible plan exists for making available adequate housing for those persons being
displaced by the project;
• No persons are being displaced by the proposed project.
2) The urban renewal plan conforms to the comprehensive plan or parts thereof for municipality as a
whole;
The Downtown Kalispell Urban Renewal Plan adopted by the Kalispell City Council made
findings that included the inclusion of funding assistance in order to assist in housing and
business development. The Downtown Plan specifically calls for the construction of a parking
garage to address current and future needs of visitors, businesses, workers, residents, retail
and restaurants recognizing all these aspects of a vibrant downtown environment.
3) The urban renewal plan will afford maximum opportunity, consistent with the sound needs of the
municipality as a whole, for rehabilitation or redevelopment of the urban renewal area by private
enterprise; and
• The project includes a request for tax increment financing assistance that makes the proposed
9
redevelopment project feasible to be undertaken by private enterprise. The parking garage
itself supports the Downtown Plan 's goal of eliminating blight through the redevelopment of
surface parking lots into higher and better uses.
4) A sound and adequate financial program exists for the financing of said project.
• The public parking garage will be funded by the tax increment associated Charles Hotel
project.
C. SUMMARY
The Downtown Kalispell Tax Assistance Program allows for payment of eligible costs of development to
incentivize development that meets the policies and criteria outlined herein and goals of the Downtown
Kalispell Urban Renewal Plan. The City of Kalispell has identified the construction of a public parking
structure in downtown Kalispell as an eligible cost totaling approximately $7,000,000. Staff has reviewed the
application materials based on the Downtown Kalispell Assistance Program Public Infrastructure Objectives
and the Private Investment policies and criteria. Based on our review, and outlined above, the project meets the
required policies and criteria. The project eliminates blight and advances the TIF District goals of creating off-
street parking consistent with urban density land uses, providing increased commercial/retail space and tax
base and parking. Vertical mixed -use buildings support neighborhood commercial uses and typically produce
more value per acre. The lack of private parking structure projects in Kalispell suggests the market is untested,
which increases the degree of risk for developers, and furthers the argument of this as a public infrastructure
project which will serve as a catalyst increasing private investment projects.
D. RECOMMENDATION
The Downtown Kalispell Urban Renewal District needs catalyst projects to drive growth in taxable value to
create demand for market -driven redevelopment; therefore, staff recommends that the Urban Renewal Agency
adopt staff findings of fact and recommend to the Kalispell City Council that the TIF Project be awarded.
10
M4- J,'4-
07/09/21
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3RD ST WEST & MAIN ST
DEVELOPMENT PROPOSAL
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TABLE OF CONTENTS
1. GENERAL INFORMATION
01
2. CONCEPT TO DEVELOP THE SITE 09
3. QUALIFICATIONS, EXPERIENCE, & FINANCIALS 27
4. BUSINESS PLAN
31
5. LEVEL OF RETURN & BENEFIT TO THE CITY 33
GENERAL INFORMATION
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COVER LETTER
RE: REQUEST FOR PROPOSALS FOR
THE PRIVATE DEVELOPMENT OF THE
CITY OWNED 3RD & MAIN LOT
07/09/2021
Attn: City Clerk
201 1st Ave E
Kalispell, MT 59901
MONTANA HOTEL DEV
PARTNERS, LLC
208 1st Ave E
Kalispell, MT59901
CONTACT
Bill Goldberg
EMAIL
bill@compassmt.net
Thank you for the opportunity to review and submit a proposal to the city of
Kalispell to develop the lot located at 3rd Street West and Main Street. Herein is
a comprehensive vision for the development as well as private financing, project
construction, and operations and management details.
Compass Construction, Bond Partners, and Alchemy have joined forces as Montana
Hotel Dev Partners, LLC. Together, our combined knowledge and experience
will produce an exemplary product for the city and Flathead Valley communities.
Our proposal is the collective result of multifaceted visionaries who are excited
to participate in the redevelopment of the Kalispell downtown area. We have
spent hours casting the vision, fine-tuning details, and preparing this proposal.
We are pleased to present a proposal backed with our intricate knowledge of
the hospitality industry, real estate development, and construction management.
We value and are fully committed to assisting the city in achieving its mission to
promote economic growth, improve area employment opportunities, and expand
its tax base.
Thank you for your thoughtful consideration. Should you need any clarifications,
please do not hesitate to reach out to us.
Sincerely,
Montana Hotel Dev Partners, LLC
ROBERT WATSON
BILL GOLDBERG
R
JOHN COSTA
Partner
Partner
Partner
GENERAL INFORMATION 1
NORTHWEST MONTANA
HISTORICAL SOCIETY
Buffalo Block, Kalispell
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EXECUTIVE
SUMMARY
Montana Hotel Dev Partners, LLC, comprises many
years of experience in construction, development,
and hospitality management. Together with local
lead Bill Goldberg of Compass Construction, our
regional presence and familiarity is enhanced by
national knowledge and experience. We worked
alongside Montana -based firm A&E Design,
leveraging their skills and talent in architecture,
interior design, branding, and environmental
graphics to craft a vision for this project. We feel
the resulting proposed development best suits
the needs of downtown Kalispell and its market.
This property shares an important touchstone
with the founder of Kalispell. Charles Conrad and
his herd of bison (the namesake of "Buffalo Hill"
on many local places) have specific relevance
to the site. Mr. Conrad owned Conrad National
With respect to the history of this site, our
proposed project is comprised of three primary
elements. The main component of our proposal
focuses on the development of an 86,000-square-
foot boutique hotel on the property at the
northwest corner of 3rd Street West and Main
Street. Amenities on the building's first floor and
portions of the second engage both the public
and hotel guests. A three -meal restaurant, bar,
lounge, retail pads, and conference space will
appeal to both audiences. We envision a total
transformation of this site from a quiet surface
parking lot to a busy Main Street attraction.
The second component of the project is a
parking structure to accommodate increased
parking demand. We propose to construct this
on what is currently the city -owned Eagles lot
Bank where the south wing of Glacier Bank stands at the intersection of 1st Avenue West and 1st
today. His daughter Alice used the proceeds
from the sale of her father's herd to construct the
building that previously occupied this lot. The
original mixed -use Buffalo Block building stood
handsomely in 1910 before becoming a grocery
store. Later, it became Hillstead Department Store,
with predominately medical offices on the floor
above. Sadly, the historic building was destroyed
by a fire in September of 1976.
Street West. The proposed structure is sized to
accommodate displaced city -leased parking for
both lots in addition to the hotel and restaurant
parking demands. With attention to good urban
design principles, we also propose additional
retail or restaurant space on the street -facing
main floor of this structure.
GENERAL INFORMATION 3
The final component of our proposal is a collection
of support office spaces. These spaces will house
staff that can support hotel operations off site. This
will likely be a tenant improvement project within
an existing building near the hotel site.
We worked with Northwest Montana History
Museum to resurface historic photos of the
original Buffalo Block building. We referenced
design cues from the precedent building's form,
openings, mass, and structural rhythm of the
fagade, but chose not to replicate them. Rather,
we reimagined these distinctive characteristics
to support the historic context while designing a
concept reflective of the current era. Naming the
building the Buffalo Block while branding the hotel
as The Charles Hotel honors the site's rich history
and brings the project full circle.
Our team shares enthusiasm for the future
of Kalispell. That excitement resonated so
significantly with our investor group that they have
already committed capital for the entire project.
We are eager to see the results of the vision
seeded approximately a decade ago in the city.
As the work on projects like the Kalispell Bypass,
Parkline Trail, Glacier Rail Park, Downtown Plan,
and TIF Districts materialize, we are inspired to
invest our time, money, expertise, and ideas.
The Charles Hotel at the Buffalo Block advances
the city's and region's positive trajectory by
attracting people to this area. Having already
secured a liquor license, we see our restaurant
and bar creating additional dining and social
options downtown. Hotel guests support
extended hours for downtown business and
activities. As a result, the money they spend in
restaurants, bars, and retail will benefit the local
economy.
The people employed by our local firms know
that Kalispell is a special place. These stakeholders
have long been invested in downtown and
visualizing redevelopment opportunities.
The downtown plan, Kalispell Urban Renewal
Plan, and Kalispell Growth Policy have been
adopted and continue to be implemented every
day. Traffic and parking studies support the vision
and reinforce functionality of an urban core in an
otherwise rural corner of Montana. The city center
sees new businesses coming to market while
gaining walkability, placemaking, and population
density —all positive economic drivers.
We have detailed opportunities within our plan
to host local artists and makers in our building.
Not only will these creatives provide an authentic
experience for our guests, but they will also enjoy
a growing market share and regional recognition.
From the hotel check -in environment to our dining
experience, we intend to curate a feel that is
authentic to the Flathead Valley while establishing
an environment of casual sophistication. Through
our restaurant and bar, we plan to support local
farms and ranches as well as businesses that
produce desserts and spirits. These strategies
further support the local economy and reflect
the place we love. From plated meals to an iconic
corner building, we hope to enhance the qualities
that already make Kalispell great.
Our team is inspired and motivated by the
upcoming redevelopment of the core area and
what that means for downtown. We envision more
TIF revenue, better parking in the downtown TIF,
and ultimately more synergy within the district.
Preserving the past while infusing forward -thinking
elements creates a place we can continue to
love and enjoy; one that stays true to its history
while taking advantage of present and future
potential. Our plan shares a pathway to that
vision, becoming a reality in the third quarter of
2023. Thank you for this incredible opportunity
to partner with the city of Kalispell to propel the
region toward a bright future ahead.
4 THE CHARLES HOTEL
1C
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CITY OF Kalispell
Development Services Department
V & Main Development RFP
Attachment A
AFFIDAVIT
Assurances
The undersigned proposer hereby submits to the City of Kalispell (City) the enclosed proposal
based upon all terms and conditions set forth in the City's Request for Proposals (RFP) and
referenced materials. Proposer further specifically agrees hereby to provide services in the
manner set forth in the proposal submitted by the proposer.
The undersigned proposer acknowledges and states, under penalty of perjury, as follows:
1. The City is relying on proposer's submitted information and the representation that proposer
has the capability to successfully undertake and complete the responsibilities and obligations
submitted in its proposal and in the resulting agreement.
2. The City has the right to make any further inquiry it deems appropriate to substantiate or
supplement information supplied by proposer.
3. Proposer has read and fully understands all the provisions and conditions set forth in the RFP
documents, upon which its proposal is based.
4. The forms and information requested in the RFP are complete and made part of theproposal.
The City is not responsible for any proposer errors or omissions.
5. This proposal may be withdrawn by requesting such withdrawal in writing at any time prior to
the proposal deadline but may not be withdrawn after such date and time.
6. The City reserves the right to reject any and all proposals and to accept the proposal that, in
its judgment, will provide the best quality development to the City.
7. This proposal is valid for a minimum of 120 days after the RFP proposal submission
deadline.
8. All costs incurred by proposer in connection with this proposal shall be borne solely by
proposer. Under no circumstances shall the City be responsible for any costs associated with
proposer's proposal or the RFP process.
9. Proposer has not in any manner, directly or indirectly, conspired with any person or party to
unfairly compete or compromise the competitive nature of the RFP process.
10. The contents of this proposal have not been communicated by the undersigned nor by any
employee or agent to any other person engaged in this type of business prior to the official
opening of this proposal.
11. To the best of the proposer's knowledge, the information provided in its proposal is true and
correct and neither the undersigned proposer nor any partner, corporate officer or managing
employee have ever been convicted of a felony or a crime involving moral turpitude.
GENERAL INFORMATION 5
CITY OF Kalispell
Development Services Department
V & Main Development RFP
Legal Status
1. Proposer intends to operate the business as (check one):
Corporation* () Non -Profit 501(c)(3) ( )
Government Entity () Partnership* ( )
Limited Liability Corporation* (x) Sole Proprietorship ( )
Other (Please describe: ) ( )
Identify the members, if LLC, partners, if a partnership, or officers, if a corporation, of the
proposer (add lines as needed).
Members: Bill Goldberg, John Costa, Robert Watson
For the purpose of this RFP, addenda and exhibits, any questions regarding the principals are
referring to the officers, partners and members as disclosed.
2. In the past 10 years, have you personally, or any business with which you have been involved,
been declared bankrupt, filed a petition in any bankruptcy court, filed for protection from
creditors in bankruptcy court, or had involuntary proceedings filed in bankruptcy court? If
"Yes," provide date, court jurisdiction, case name, case number, amount of liabilities, amount
of assets and the status of each occurrence. Yes ( ) No ( x )
3. Has the proposer or any of its principals or its principal's affiliates been declared to be in
default under any obligation to or contract with the City? If "Yes," please provide details
concerning the nature of the default, including the City contract number. Yes ( ) No( x )
4. Are there any pending liens, claims or litigation in excess of $500,000 involving proposer, or
any corporation or other entity that has, directly or indirectly, a controlling interest in the
proposer, or any subsidiary of the proposer or other entity in which the proposer has a
controlling interest or any of the proposer's principals, officers, or directors? If "Yes,"provide
detailed information regarding complaints. Yes ( ) No ( x )
5. Has the proposer, or any corporation or other entity that has, directly or indirectly, a controlling
interest in the proposer, or any subsidiary of the proposer or other entity in which the proposer
has a controlling interest or any of the proposer's principals, officers, ordirectors, been
involved in any lawsuits in the past 10 years? If "Yes," provide list.
Yes( ) No (x )
6. Has the proposer's or any of its principals or its principals' affiliate's contracts been terminated
prior to their expiration terms, voluntarily or involuntarily, within the last 10 years?If "Yes,"
provide name, location, and date of the contract(s). Yes ( ) No ( x )
7. Has the proposer, or any corporation or other entity that has, directly or indirectly, a
6 THE CHARLES HOTEL
CITY OF Kalispell
Development Services Department
3rd & Main Development RFP
controlling interest in the proposer, or any subsidiary of the proposer or other entity in which
the proposer has a controlling interest or any of the proposer's principals, officers, ordirectors
ever been barred from bidding on federal, state, or local government contracts? If "Yes,"
provide the current status of such suspension or debarment proceedings.
Yes( ) No
References
Proposer shall furnish the names and contact information for 3 clients for whom the proposer is furnishing
or has furnished services similar to those described in this RFP. Do not list City of Kalispell employees or
officials as references.
1. Company and Reference Name:
Telephone and E-Mail:
Multiple Companies, John Hagg
702-540-1001 hagg.john@icloud.com
2. Company and Reference Name:
Telephone and E-Mail:
MKay Enterprises, Steven Kay
415-254-1201 sk@stevenkay.com
3. Company and Reference Name:
Telephone and E-Mail:
Rim Rock Development, Micah Linton
386-867-1403 micah@rimrockcompanies.com
Signature(s)
Billy Goldberg
Proposer's Legal Name':
'The proposer must be authorized to transact business in Montana and be in good standing prior to
submitting this proposal.
Printed Name of Authorized Representative*: Billy Goldberg
Title:
Member
Business Mailing Address: 208 1st Ave E, Kalispell, MT 59901
Telephone
Address: 406-253-0544 bill@compassmt.net
Signature:
Proposal m be signed by an
Name of Joint Venture Partner (if a
Printed Name of Authorized Representative*
Title:
to contractually bind the proposer.
Business Mailing Address:
Telephone and Email Address:
Signature:
*Proposal must be signed by an individual authorized to contractually bind the joint venture partner.
NOTARIZED
Signed and sworn bef a me this - day c
r
Notary Signature;
My Commission Expires: H 2-02-
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20.E 1
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Affix Seal: 0SEAL
AMY L MCGE%EE
NOTARY PU 9 L1C to r the
Slote of montaoa
Residing at Columtia Falls, Ll awa
My Commission E:PireS
Fe mazy 14, 2024
GENERAL INFORMATION 7
CITY OF Kalispell
Community & Economic Development Department
3rd & Main DEVELOPMENT RFP
Attachment B
DEVELOPMENT DETAILS
Name of proposer: Montana Hotel Dev Partners, LLC
Each proposer must complete and submit this form with its proposal.
• Gross Square Footage (SF): 86,100 gross SF
• Commercial SF: 14,054 SF retail and restaurant
• Office SF: 2,860 SF
• Residential SF: N/A
• Other SF (detail): 42,852 SF hotel rooms, 26,334 space and SF other (see program)
Number of Residential Units: N/A
Number of Units by Residential Type:
o Rental Units:
o For Sale Units:
Number of Units by Market Type:
o Affordable:
o Workforce:
o Market Rate:
• Number of Hotel Rooms: 79
• Number of Parking Spaces: 95 hotel + 58 public + 12 shared (165 total)
• Number of Buildings: (1) one on subject property + (1) one parking structure on nearby property
• Building Height(s) (feet and stories): 5 stories + basement 1 58'-10" abv grade
• Estimated Number of Construction Jobs: 600
• Estimated Number of Permanent Jobs: 135 FTE
• Estimated Value of Project: $47M hotel total project cost / $34M construction cost
8 THE CHARLES HOTEL
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NARRATIVE
THE CHARLES HOTEL AT THE BUFFALO BLOCK
The new 86,000-square-foot hotel at the corner of 3rd Street West and Main Street will
engage area visitors and locals alike, bolstering the downtown Kalispell restaurant and
entertainment scene. This property has high visibility, attracting passersby both on foot
and driving through the area. Guests will receive truly generous service, rooted in the
philosophy of saying "yes." Our philosophy is reflected from within; we are internally
committed to providing a fun and supportive work environment for staff. Their satisfaction
translates to personal, welcoming touches extending through the boutique hotel to its
world -class restaurant and business event center.
Our passion for downtown Kalispell is real and we want to be a part of it. We feel strongly
that a successful project on this property is one which incorporates regionally appropriate
and historically relevant materials within the Main Street Historic District. Additionally,
attention to scale, rhythm, and the fabric of downtown is critical to being authentic to the
site in its redevelopment. By translating our passion to this project, we know future guests
will want to visit and see all that downtown Kalispell and the Flathead Valley have to offer.
BRAND STATEMENT
Storytelling is a critical component of the plan for The Charles Hotel development. In every
corner, we emphasize the property's historic attributes and infuse it with contemporary
craftsmanship. By sourcing regional materials and curating collections from local artisans,
we will tell Kalispell's story while writing the pages of a new one. This highly stylized
boutique hotel is designed to be both casual and sophisticated, luxurious yet approachable.
We will maintain downtown's hallmark rustic characteristics, ensuring the space is
reminiscent of Montana and the western lifestyle. By enhancing its authentic environment
with outstanding amenities and unrivaled service, our development will elevate the modern
hospitality experience.
FOOD & BEVERAGE
Unlike other hotel groups that outsource food and beverage programs to celebrity chefs
and restaurateurs, we remain committed to developing strong community partners. By
operating a standalone, three -meal restaurant, our independent operations will attract
outstanding culinary talent inspired by local culture and products. This approach elevates
the level of hospitality service and amenities in the region, resulting in a unique and
authentic hotel brand. Our team has already secured a liquor license for use in the bar
and restaurant, lounge, and potential rooftop patio.
The Charles Hotel will be operated by an entity owned and controlled by BOND Partners.
The partners have 50-plus years managing properties with Four Seasons Hotels and Resorts,
Kimpton Hotels and Restaurants, W Hotels, and Auberge Resorts.
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CONCEPT TO DEVELOP THE SITE 9
With hotel security personnel already on staff,
we plan to assist the city of Kalispell in the effort
to monitor the parking structure's security. Using
CCTV cameras and routine patrol, we will ensure
that our guests and all parking structure users
are safe within the facilities and while traveling
between the hotel and parking structure.
PARKING
The paradox of parking is widely recognized
and debated in downtown Kalispell. Some feel
there is not enough parking available, and there
is an expectation to be able to park adjacent
to downtown destinations. The downtown plan
highlights 18 acres of parking in this core district.
The downtown TIF is starved for fund generation
through renewal and redevelopment of surface
parking to achieve greater densities, placemaking,
and good urban design.
Initially, the design team reflected on the
requirement of the RFP to provide parking for the
proposed building users per the Kalispell Zoning
Ordinance, which exempts the requirement of
providing any off-street parking in the
downtown core.
Several early parking concepts were explored
site parking strategy; one that ideally included
developing a parking structure on a nearby site
that is currently being used as surface parking.
Potential neighboring sites that met the criteria
for an off -site parking structure were both
privately and publicly owned property. Possible
locations included the private surface parking lot
south of the KM Building; the private Valley Bank
surface parking lot south of 3rd Street West; a
combination of privately held Valley Bank & Glacier
Bank surface parking lots along 1st Avenue West;
the city owned Eagles lot at 1st Street West and
1st Avenue West; and the private First Interstate
Bank surface parking lot at West Center Street
and 1st Avenue West. Assessment of these
properties concluded that few were appropriately
sized for an efficient parking structure. Some
options were complicated by their ownership.
Other sites were nicely sized and proportioned
but located outside of the downtown TIF district.
In the end, the city owned Eagles lot proved to
be the most likely candidate to support such
development.
In designing a parking solution for this proposal,
we reviewed the hotel's uses per the letter of the
Minimum Parking Standards by Use as outlined
at the surface. These options ranged from in the Kalispell Zoning Ordinance. Our design
providing no off-street parking to limiting the
size of the building. We considered a single
level of parking below grade, which amounted
to a meek, two-story building on the subject
property. That concept would be limited to
office and retail due to the parking requirements
of dining establishments and housing. Other
iterations included mixing construction types
and proportions on the subject property. We
geared the front portion toward the public and
human scale, while the rear site lent itself to
parking and navigating vehicles. These poor
and underwhelming solutions pointed to an off -
team determined that the hotel would require 171
parking stalls. We also quantified the combined
existing surface parking stalls at both the Eagles
lot and Valley Bank lot, identifying 105. We then
began determining the actual utilization of both
the required hotel parking and city owned lots.
A significant piece of the hotel requirement was
dedicated to parking employees and potential
conference -goers. Desiring not to overbuild the
parking structure, the developer has committed
to leasing local surface spaces for hotel employees
and making valet accommodations at other
existing surface parking on private lots in the
event of large conferences.
10 THE CHARLES HOTEL
With regard to the city owned lots, we reviewed
the 2015 parking study. Applying an average
peak utilization rate to the two public lots, we
determined that their actual use is a combined
70 stalls. Our team also considered the shared
use of parking between downtown businesspeople
and hotel guests. From 8 am-5 pm weekdays,
downtown professionals typically lease spaces
in the public lots. Since nights and weekends are
dominated by hotel guests, we desired to convey
an efficient parking scheme by sharing parking
between the symbiotic user groups. This strategy
would further reduce the total parking counts of
the targeted parking structure design. Considering
that the hotel has factored valet parking and
security monitoring into the operational pro forma,
the strategy appears achievable.
Our team engaged the city Planning Department
to comment on the logic behind this parking
scheme. We received feedback that while the
utilization approach is actually a preferred
method of determining an entity's parking needs,
the shared use approach in our scheme is not
without some flaw. Overlapping evening hours
between hotel check -in and end -of -business as
well as morning hours between beginning of the
business day and hotel check-out were potentially
problematic. In the end, the 165-stall count that is
achieved on this lot by developing a three -level
parking structure strikes the right balance for the
project. The parking breakdown of the projected
165 stalls includes: 95 dedicated hotel stalls, 58
public stalls for either leasing or hourly parking,
and 12 spaces shared between both
user groups.
At the time of submission of this RFP response,
we see the pro forma and construction cost of
the hotel at the 3rd and Main site improving the
taxable value of the property within the downtown
TIF. Our projections show that bonding against
the future TIF funds offsets the construction costs
of the parking structure in approximately nine
years of increased taxable value. Additionally, the
development team has engaged Glacier Bank
and First Interstate Bank as parties that could
potentially commit to additional parking spaces
within the structure. We have conducted some
informal parking utilization studies of their lots
in addition to engaging in initial conversations
with their corporate leadership. If either or both
banks commit, it would effectively increase the
size of the parking structure. Further, those parties
would be responsible for their portion of the
total construction costs. The prospect of their
inclusion in the parking structure is exciting for the
community as it begins to paint the future vision of
redeveloping their current surface parking, which
will only further increase the downtown TIF and
the vitality of Kalispell's core district.
CONCEPT TO DEVELOP THE SITE 11
BUILDING
SITE / ROOF PLAN
■
LANDSCAPE DESIGN
Our project team feels strongly about the benefits
While our proposed concept is early in design,
of trees and landscaping design on a project site.
we plan to present to Architectural Review
Vegetation helps reduce noise, soften edges, filter
Committee, Site Review, and Urban Forestry for
light, introduce color, indicate seasonal changes,
their comment and feedback. Well before that
tie the architecture to its place, and influences
the natural ecosystem by introducing small
wildlife. Although landscaping provides many
benefits, an urban site with zero lot lines provides
limited options for introducing vegetation. This
makes any opportunity for street trees and other
plants that much more important in downtown.
time, we will work through the design to ensure
we have the appropriate species selection,
infrastructure, and other relevant details. We
plan to develop those items with the city urban
forester or arborist, parks and recreation, street
tree commission, public works, and Montana
Department of Transportation. We will engage a
12 THE CHARLES HOTEL
licensed landscape architect for the development
and completion of a landscape design and plan for
bid as well as to lead these design conversations.
The success of this landscaping project is rooted
in details and thoughtful planning. Design must
consider maintenance of plant material and the
surrounding surfaces; irrigation; size of planters;
plant species' resistance to de-icer; and the
ability for both street sweeping and leaf and snow
removal to commence regularly and easily. Our
renderings currently reflect a non -city standard
tree well and planter with an integrated bench.
These are preliminary design ideas as are the
locations shown in the site plan. We will work
through maintaining a sight triangle at the
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intersection in the final design. Further, continuing
traffic light and crossing operations as well as
coordinating with city street standard lighting
and planting patterns are primary considerations.
There is tremendous potential for Main Street in
the context of the Kalispell Bypass completion,
work on the Parkline Trail, and the various
opportunities and ideas shared in the Downtown
Plan, Urban Renewal Plan, and recent traffic
studies. A more walkable downtown with wider
sidewalks allowing dining to spill out of the
building will activate the street and extend
downtown activity. This plan benefits businesses
and the public as Kalispell becomes an even
greater destination.
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HOTEL FLOOR PLANS
■ LIVING ROOM
■ RESTAURANT & BAR I GAMING
■ RETAIL
■ EVENT SPACE
HOTEL ROOMS
3
a
a
0
■ FITNESS & MASSAGE
■ BACK OF HOUSE
CIRCULATION
■ OFF -SITE BACK OF HOUSE
EXISTING BUILDING
3RD STREET
MAIN FLOOR
EXISTING BUILDING
11IIIIIIIIII ROOM
I ROOM ol
OPEN TO
BELOW
- SECOND FLOOR -
u
EXISTING BUILDING
THIRD FLOOR
EXISTING BUILDING
-FOURTH FLOOR - N
O
CONCEPT TO DEVELOP THE SITE 15
HOTEL FLOOR PLANS
EXISTING BUILDING
- FIFTH FLOOR -
_ BASEMENT _ _ OFF -SITE
PROGRAM PROGRAM -
16 THE CHARLES HOTEL
PARKING STRUCTURE CONCEPT
LEVEL 1
1STST WEST
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----------------------- —
ADJACENT
BUILDING
----------------------------
SURFACE PARKING
2ND ST WEST
UPPER LEVELS
IA.
n
1; ADJACENT
BUILDING
-----------------------------
SURFACE PARKING
L
±257 1
ZONING FORMULA
FOR RE(ZD PARKING
MIN SIMPLE
142
QUANTITY OF
EXISTING CITY
STALLS
115
GUEST ROOMS 79
EAGLE LOT 69
O 1 1 CONFERENCE 25
F' 4
OF
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of
RESTAURANT 20 VALLEY BANK LOT 46
W
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O BAR & CASINO 10
u7
RETAIL 3
u
REQUIRED STALLS ±177
3RD & MAIN ± 107
PUBLIC ± 70
PARKING STRUCTURE RETAIL 0
PROVIDED STALLS
BASEMENT, LEVEL 1, LEVEL 1.5
±54 STALLS
6800 SF RETAIL
EACH ADDITIONAL LEVEL
±74 STALLS
2.5 LEVELS
± 128 STALLS
3 LEVELS
± 165 STALLS
3.5 LEVELS
± 202 STALLS
4 LEVELS:
± 239 STALLS
4.5 LEVELS:
± 276 STALLS
5 LEVELS:
± 313 STALLS
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* reduction up to 5 % of total stall count permit-
ted in exchange for bike parking
AUGUST 19 2021 17
MATERIALS & COLOR SAMPLES
Historic photos of the original Buffalo Block were
consulted for simplified, historically accurate
details, such as corbeling, archways, and prismatic
glass. The building massing and structural rhythm
draws inspiration from the historic structure,
while subtle details imply that its architecture
is of a current era. The massing has two major
divisions: a lower base that pays homage to
historic structures, and a modern element
stepped back above the datum established by
the adjacent historic buildings. The lower element
uses historically appropriate brick masonry, while
the upper form uses contemporary metal panel.
Blackened steel and wood detailing tie the two
forms together. This division in massing honors
the height of the existing main street buildings
while allowing for increased density in a growing
urban environment.
of the two forms, the lower breaks down into
tripartite building form with an open ground floor
with large glazed windows, punched openings
on the middle floors, and a unique top cornice
that creates a simplified interpretation of historic
brick details common on Main Street. The fagade
creates a historically sensitive rhythm with multiple
openings to Main Street and 3rd Street West. These
encourage pedestrian interactions with shops, a
restaurant and bar, and The Charles Hotel lobby.
Multiple canopies also help create a human scale
experience from the sidewalk, further contributing
to rhythm and building breakdown. The upper
mass has recessed balconies and touches the sky
with a graceful cap with wood soffits.
18 THE CHARLES HOTEL
LOCAL ARTISTS
Local artists have a certain bent to the history and culture of a place. Their work
reimagines or retells an otherwise lost story about how this place came to be
and why it is still cherished.
1
hK
CONTEXT
The project site sits at the west edge of the Main Street Historic District, which gained most of its
architectural and historical importance during a period of significance between 1891 and 1960. The entire
block across Main Street consists of buildings contributing to the Main Street Historic District, as do the
two directly north of the project site, and the Whipps Block diagonally across the intersection. The Knight
& Twining Block, directly to the north of the site, is on the National Historic Registry. We see that paying
respect to this building's scale and stature at Main Street is vital even as buildings downtown are designed
with more than two stories in mind.
CONCEPT TO DEVELOP THE SITE 19
SIGNAGE
I i'E FLAN
OCHARLES HOTEL BLADE SIGN
OCHARLES HOTEL AWNING SIGN
OBUFFALO BLOCK WALL SIGN
TBUILDING RELIEF DETAILS
3 0 "
BUILDING RELIEF DETAILS T
4 TOTAL LOCATIONS
0" 0"
1/4„ 1/4„
+ 3/4" 1/4"
+ 1 /2"
1/4"
+1/2"
+3/4"
0"
1/4"
CROSS CROSS
SECTION SECTION
DETAIL
20 THE CHARLES HOTEL
DRAWING OF SIGNS
ALL SIGNAGE DESIGN IS PRELIMINARY AND SUBJECT TO CITY
REVIEW FOR CONFORMANCE WITH THE SIGN ORDINANCE
BLADE SIGN O
TOTAL SQUARE FOOTAGE PER SIDE: 14.5
PLAN ELEVATION ELEVATION ELEVATION
VIEW VIEW LEFT VIEW VIEW RIGHT
(Yj
7"r19" I
THE
HOTEL
AWNING SIGN O
TOTAL SQUARE FOOTAGE: 28.8
21'7"
WALL SIGN O
TOTAL SQUARE FOOTAGE PER SIDE: 7.7 (2 TOTAL SIGNS)
BUFFALO BL
110"
u
OPAQUE ACRYLIC
INTERIOR LED ILLUMINATED ACRYLIC FACES
POWDERCOATED BLACK STEEL INSET
1/2" STAND OFFS
WHITE POWDERCOATED 2" METAL RETURN
INTERIOR LED ILLUMINATED ACRYLIC FACE
STEEL MOUNTS
O 6.
BRUSHED ALUMINUM
DIRECT LAG BOLT MOUNTING TO BRICK
1" STAND OFF FROM WALL
,1
CONCEPT TO DEVELOP THE SITE 21
SIGNAGE MATERIALS & COLOR SAMPLES
Signage materials are intended to be complimentary to the architecture
and fabric of historic downtown Kalispell. We intend them to be thoughtful
with refinement and subtlety, yet effective for wayfinding and user interface,
through appropriate detailing, material, mounting, lighting, and scale.
CA41DICK. BLOCK
22 THE CHARLES HOTEL
TIMELINE
202j 2023
CONCEPT TO DEVELOP THE SITE 23
CONSTRUCTION
MITIGATION PLAN
SITE PLAN
4
S
SIDEWALK NOTIFICATION SIGN
VEHICULAR NOTIFICATION SIGN
POTENTIAL STAGING AREA
& CONTRACTOR PARKING
CONSTRUCTION FENCING / GATE
LBASEMENT EVACUATION
"//// LOADING ZONE
/X MAINTAIN PEDESTRIAN CROSSING
MMAINTAIN TRAFFIC SIGNAL
TEMPORARY LOSS OF
PARALLEL PARKING
MAINTAIN SERVICE ACCESS
,IR 01►r1.1r
—
Building in urban areas often involves construction
challenges impacting city infrastructure and
patterns of the public. Compass Construction
understands potential pitfalls and is experienced
with addressing them in sites like the 3rd Street
West and Main Street lot. We have a long success
record working in urban environments like this in
and around Flathead Valley.
Communication and planning is key to overcoming
construction obstacles. Planning for construction
methods and mitigating impact on city
infrastructure and public traffic patterns starts
during building design. We will communicate
often with necessary parties at the city of
Kalispell Public Works Department and Montana
Department of Transportation. Proactive and
consistent communication will help us implement
24 THE CHARLES HOTEL
a game plan well in advance of construction
commencing. Only with early engagement can
we properly execute the plan while combating
expected logistics during construction. Compass
and the City of Kalispell can communicate the
adopted plan to stakeholders through flyers, social
media, and email. Additionally, we suggest that
Compass creates a website, maintained by our
public relations staff, to share project updates.
This PR person will also serve as the point of
contact for citizens and businesses to direct
questions and concerns.
Navigating a site with essentially no yard limits
the laydown and working space adjacent to
the new building. Considering pedestrian
diversion and protection at adjacent sidewalks
and nearby laydown space elsewhere in the city
will be crucial. Consequently, we preliminarily
contacted several downtown -area landowners
and considered our KM Building parking lot
for temporary material laydown and staging.
Even with additional space, it will be necessary
to strategically order and sequence material
deliveries to the construction site. This approach
will lessen the disruption on the 3rd & Main
intersection, but not entirely eliminate it.
There is still a need to create an effective, efficient
delivery zone at the project site. Closing a lane
of Highway 93 is an unlikely consideration, as this
solution would be the most disruptive to traffic.
Our best delivery opportunity is the westbound
lane of 3rd Street West. While it is possible this
delivery area will not entirely close a lane, it will
temporarily displace adjacent on -street parking.
Compass plans to coordinate closely with public
works for traffic control and proper signage to
clearly mark diverted lanes or parking. Signs
placed ahead of the nearby intersection will
prepare drivers for road modifications and alert
pedestrians on the sidewalks. However, we will
u
maintain pedestrian crossings and access to
neighboring businesses. Similarly, we need to
ensure the continuation of city services, deliveries,
and garbage pickup through the alleys.
Jobsite safety is one of the pillars of our company,
and Compass takes particular care when it comes
to pedestrian safety. We suggest small diversions
of pedestrian pattens in order to allow for working
space adjacent to the building construction.
In some cases, we strongly suggest providing
covered walkways built by Compass; they
may or may not temporarily impact some on -
street parking.
Compass influenced the building design by
limiting basement sizes at both 3rd & Main and
the parking structure site. This strategy alleviates
concerns about undermining existing neighboring
building foundations and eliminating sheet
piling at the back of sidewalk for more extensive
excavation. Completing basements quickly affords
workspace around the building perimeter and
material storage below the first elevated deck of
the building.
Construction sites frequently evolve to support
the trades and equipment necessary for each
phase. Tasks that deviate most from normal
day-to-day activity will be most disruptive to
traffic and existing patterns of behavior due to
the extra precautions during these instances.
However, with sewer in the alley, we anticipate
a common connection with limited disruption.
Storm also appears relatively straight -forward
with infrastructure in both the alley and 3rd
Street West. Dry utilities, such as power, gas, and
telecommunication, are all currently buried and
located in the alley as well. This condition makes
for easy service connections and more easily
hiding unsightly meters and services.
CONCEPT TO DEVELOP THE SITE 25
The domestic water and fire connections will prove to be the most challenging and
expensive. However, we may either tie into the water line in the northbound lanes of Main
Street or defer to extending the main from 1st Avenue West down 3rd Street West to the
project site. These are solutions we will need to discuss with public works and allow all
parties to weigh the options accordingly.
26 THE CHARLES HOTEL
PROPOSER'S QUALIFICATIONS, EXPERIENCE, & FINANCIAL CAPACITY
p�
KEY INDIVIDUALS
MONTANA HOTEL DEV PARTNERS
COMPASS - LEAD LOCAL CONTACT; WILL OVERSEE PROJECT MANAGEMENT & CONSTRUCTION
At Compass Construction, we are transforming
the Flathead Valley one construction project
at a time. Located in scenic Kalispell, Montana,
Compass has been a premier construction and
development firm since 2004. We specialize
in residential, multi -family, and commercial
construction.
Owner Bill Goldberg founded Compass after
years of experience in residential construction.
He consistently chased a vision for smart
development, growth, and the revitalization
of area communities. Over the past 17 years,
Bill's dream has expanded, and so has our team.
Collectively, we have extensive construction
experience and project management skills,
united under our purpose to grow, reach,
and be bold together.
Client satisfaction is paramount at Compass.
Values of integrity and professionalism are
fundamental to our work, and we strive
to embody them in every interaction and
project. We are attentive to detail, never take
shortcuts, and are committed to superior
quality and craftsmanship.
The outstanding service we provide is
evidenced by a multitude of projects
throughout the Flathead Valley. We work
within all types of construction projects and
have been instrumental in the rehabilitation of
multiple businesses, mixed -use projects, and
multi -family developments. Vibrant downtown
areas, including those in Kalispell, Whitefish,
and Columbia Falls, reflect the value our
service brings to local communities.
BILL GOLDBERG SETH SIMONSON AMY McGEHEE
Owner Project Manager Project Manager
BOND PARTNERS - HOTEL CONCEPT, DEVELOPMENT, AND OPERATIONS
BOND Partners is a San Diego -based, BOND Partners was created to exceed the
diversified hospitality and real estate
development company. We specialize in
developing, opening, and operating highly
serviced, uniquely stylized, architecturally
significant lifestyle hotels and residences,
destination restaurants and lounges, and
other mixed -use retail offerings.
BOND Partners is a lifestyle company with a
deliberate growth strategy, backed by a sound
business model and solid financial support.
ROBERT WATSON PAUL GUCCINI
CEO & President CFO
expectations of a highly sophisticated clientele
and to develop, own, operate, and asset
manage lifestyle hospitality assets. We prefer
to see the world for what it can be, rather than
for what it is. We admire trends but possess a
style of our own. We are always after that thing
that waits to be discovered, just beyond the
obvious and the well-known. We take pride
in our honesty, wit and more importantly, our
approachability.
u
QUALIFICATIONS, EXPERIENCE, & FINANCIAL 27
ALCHEMY DEVELOPMENT
Alchemy Development was founded under the precept of taking something ordinary and making it
extraordinary. This development will reflect Montana's culture and lifestyle in a community hub for libations
and conversations. The establishment and its owner, John Costa, embodies his motto: "Leave it better."
JOHN COSTA
Owner & CEO
DESIGN TEAM
A&E DESIGN
A&E Design is a multidisciplinary design firm with four offices in Montana (Billings, Bozeman,
Missoula, and Kalispell), as well as Seattle, Washington.
As a collection of innovators, we are united for a single purpose: to create impactful experiences
for our clients. We offer architecture, interior design, historic preservation, graphic design, and
construction administration in one comprehensive package. Together, we are a team of over 80
diversely talented professionals with a strong commitment to client satisfaction, quality design,
and improving the world around us.
CHRIS MARTISON SHANE JACOBS
Principal Project Manager
ABIGAIL KNAB
Environmental
Graphics
OTHER CONSULTANTS
KEN STONE
Procurement
Manager
LINCOLN MURPHY ELIZABETH LOCKWOOD
Project Architect Interior Designer
JON SEARS
Construction
Manager
Pending selection from the city of Kalispell, we have kept our design team limited to the
architectural, interior design, graphic design, and creative writing staff ofA&E Design for the
development of the concept design and content within this submittal. If selected, we will continue
to work with A&E Design through the remaining design phases, and they will solicit proposals from
local, qualified, licensed engineers and design consultants for a complete scope of design and permit
documents for both the hotel and the parking structure. They will intentionally team with consulting
firms with experience in these projects types, Kalispell, and sites in a downtown setting.
28 THE CHARLES HOTEL
EXPERIENCE
COMPASS CONSTRUCTION
u
Our design and construction teams have a proven track record and local knowledge to deliver a project
of this magnitude. A list of recent and local mixed -use commercial and multi -family residential projects
completed by Compass Construction include: 334, 317, and 309 Central Ave. in Whitefish, 223, 225, and 237
Baker Ave. in Whitefish, 20 Spokane Ave. in Whitefish, and 527, 519, and 638 Nucleus Avenue in Columbia
Falls, as well as The Highline Apartments, 519 Skyles Apartments, and the Glacier Courtyard Apartments.
These projects have provided experience of working on tight sites, amongst operating businesses, near
U.S. highways and city thoroughfares, as well as amongst customers and visitors to our community.
Compass has a dedicated commitment to the revitalization of the downtown area of Kalispell and it is
personal. Bill Goldberg, owner of Compass Construction, at the helm of his other entities, has recently
purchased the KM and Montgomery Ward Buildings, in addition to developing several other renewal
projects in the works at this time. Compass has recently shown their commitment to Kalispell by moving
their business from Whitefish to downtown Kalispell. Compass maintains a solid subcontractor base in
which they have developed a long-standing relationship they will utilize to drive quality, schedule, and
coordination throughout construction.
REFERENCE CONTACT INFORMATION AVAILABLE THROUGH:
Bill Goldberg
406.253.0544
bill@compassmt.net
BOND PARTNERS
BOND Partners executives have over 30 years of hotel and resort conception, branding, project finance,
development, and operations. We specialize in creating lifestyle hotel projects that are architecturally
significant, highly curated, and fully serviced. Led by founder and CEO Robert Watson, some of the
projects BOND Partners has been responsible for are: Tower 23 Hotel in San Diego, 21c Museum Hotel
in Louisville, The Modern Hotel in Honolulu, Northblock Hotel in Napa Valley, and the Chileno Bay Resort
in Cabo San Lucas. A sampling of other projects BOND Partners has been responsible for include: Hotel
Monaco, San Francisco, Hotel Monaco, Seattle, Hotel Monaco, Chicago, W San Francisco, W Seattle, W
New York, Union Square, and WTimes Square. BOND Partners is establishing an office in Western Montana
to create a portfolio of upscale boutique hotels in the state. We are committed to Kalispell and making this
hotel the flagship for our company's growth direction.
REFERENCE CONTACT INFORMATION AVAILABLE THROUGH:
Robert Watson
310.795.2993
rwatson@bondpartners.us
ALCHEMY DEVELOPMENT
Alchemy Development Group was founded under the precept of taking something ordinary and making
it extraordinary. Owner and CEO John Costa has 32 years of entrepreneurial experience in business
QUALIFICATIONS, EXPERIENCE, & FINANCIAL 29
development and operations. Through his ownership of Hi Tech Honeycomb, a leading honeycomb
manufacturer in the aerospace industry, John successfully developed international business relations.
His product now services all engine manufactured for General Electric, Raytheon Technologies'
subsidiary Pratt & Whitney, Rolls-Royce plc, and major airlines worldwide. He excels at program
development and implementation, with strategic skills in team building and process management.
John and his wife moved to Montana in 2016 and recently purchased First Avenue Taphouse and
Casino in Kalispell. They are passionately committed to being productive members of the Flathead
Valley community.
REFERENCE CONTACT INFORMATION AVAILABLE THROUGH:
John Costa
858.395.4645
john@costa.net
3C
FINANCIAL
Bond, Compass, and Alchemy have a proven track record of successfully developing, financing, and
completing projects similar to the proposed Charles Hotel at the Buffalo Block. Our substantial combined
development success is demonstrated by the cumulative body of work represented in the previous
section. We have clearly identified funding sources, equity, and debt, and retrieved letters of interest
from multiple lenders. These letters are provided for your reference in the enclosed confidential envelope.
LITIGATION
BOND PARTNERS
BOND Partners holds a strong reputation for ethical business practices and serving our partners fairly
and respectfully to achieve long-term relationships and successful projects. However, in the last 15
years, BOND has experienced a single litigation issue:
In 2019, BOND brought action against a landowner who hired the firm as developer of the land.
Agreement between plaintiff (BOND) and Defendant was unlawfully terminated and parties went
to Arbitration. Plaintiff was awarded a payment as settlement.
COMPASS, ALCHEMY, AND A&E DESIGN:
There have not been any litigation/arbitration/claims filed
against the firm in the past three years.
30 THE CHARLES HOTEL
z
a
a
BUSINESS PLAN
�Rk �r
fl
DOCUMENTATION �
PROPERTY OPPORTUNITY
The city of Kalispell is undergoing a 25-year urban renewal plan to revitalize its downtown historic
and entertainment districts. A downtown Tax Increment Financing (TIF) district was established to
oversee the plan's implementation and see it to completion. Robust with attractions, like museums,
restaurants, and boutique shops, this area infuses 1900s Western charm with vibrant, modern
entertainment and surrounding beauty. As Flathead Valley tourism and housing industries continue
to rise, The Charles Hotel will be a catalyst for the city's resurgence. Offering unparalleled luxury
amenities amid expansive views of the Swan Mountain Range, this hotel will be a destination in itself.
With extensive exploration and vetting processes, Bond is adept at identifying areas with
significant potential to advance the hospitality industry. We realized that such an opportunity
is present in Montana where travel and tourism is a leading industry. Several Montana cities,
such as Bozeman, Missoula, and Helena, have experienced notable success with similar hotel
developments. However, the City of Kalispell does not yet offer boutique hotel accommodations,
despite its many visitors to the area each year. We see a tremendous need yet unmet, and believe
we can elevate hospitality amenities and experiences for locals and tourists alike. By mirroring
other successful hotel development strategies in Montana's travel destinations, we believe The
Charles Hotel's unique accommodations and aesthetic will translate to success for the city and
hospitality industry.
4B
BUDGET
The contents of this section are provided for your reference in the enclosed confidential envelope.
Lis]
OPERATING PRO FORMA
The contents of this section are provided for your reference in the enclosed confidential envelope.
BUSINESS PLAN 31
COMPLETION ABILITY
The partnership between Montana Dev Partners, LLC, and A&E Design pairs local knowledge and
talent with national expertise. Together, we are committed to enhancing efforts at a local level in
Kalispell using our collective specialized skills and knowledge. Our extensive references and proven
track record exemplify not only our quality work, but also our ability to complete projects within
any constraints. Our team has thoughtfully curated the proposed project schedule and pro forma to
adhere to the city of Kalispell's two-year timeline. We are dedicated to delivering this project within
the city's expectations and will modify our strategy to align with the city's needs, even as
they potentially evolve.
�
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LEVEL OF RETURN & BENEFIT TO THE CITY
W0.1
k;% 4
PAR'
5A
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PUBLIC BENEFITS
Construction of The Charles Hotel and a and parking demand in the downtown core,
parking structure has tremendous short- and we thoroughly explored opportunities to
long-term benefits for Kalispell residents and increase available options. Our exhaustive
visitors. From enhancing the sense of place in
the downtown core to improving parking and
city circulation, propelling the local economy
and creating jobs, these benefits are tangible
and positively impact the city's future while
respecting its rich history.
Our design thoughtfully conveys the historical
architecture and heritage ingrained in the
downtown Kalispell community. With careful
attention to design integration within the
surrounding context, we celebrate the area's
historical significance. However, we build
efforts identified the city owned Eagles lot
as the most viable location for a new parking
structure. Here, we plan to provide ample
spaces to accommodate demand without
compromising safety or security.
Our plan alleviates the strain of the downtown
parking situation by replacing the parking
we are displacing with the hotel. We are
also working with other financial parties that
own a substantial amount of surface parking
downtown for a stake in the parking structure.
This strategy moves those cars to the
upon that history to improve the experience structure and creates more on -street parking
for current and future visitors. They receive opportunities for others that do business and
luxury amenities, scratch -made food and play in our city center.
craft cocktails, and superior service all in
a casual, sophisticated, and approachable
hospitality environment. This effective mix of
contemporary and traditional will appeal to
locals and travelers of all demographics.
Adding parking and increasing property
value is paralleled by a revenue inflow to
the downtown TIF district that is critically
needed. We anticipate the annual tax revenue
generated by our project will amount to over
We will improve walkability and the visual $516K allocated to the TIF. Additionally, if our
impact on the sidewalk surrounding this
building, too. By adding trees and vegetation,
we will expertly infuse nature into the urban
setting. Despite allowing dining to transcend
the building facade, we are able to do so
without impeding on foot traffic. Our design
expands sidewalks and creates a vibrant feel
in downtown, sparking engagement between
the building, its users, and passersby.
Parking has been a longtime point of
contention for visitors to downtown Kalispell
Knowing that our hotel will increase traffic
community banks can commit to the parking
structure and allow their surface parking lots
to be redeveloped as other tax -generating
properties, we'll see the catalyst that is the
city's creation of the 3rd and Main RFP really
gain momentum.
The financial implications of this project go
beyond tax revenue. As travel and tourism
increases in Kalispell due to the added
attractions at The Charles Hotel, the local
economy can only benefit. Hotel guests,
tourists, and regional residents will be
LEVEL OF RETURN & BENEFIT TO THE CITY 33
attracted to the new downtown amenities our underutilized space in the west elevation of Main
Buffalo Block project creates. They will reserve
rooms, shop in retail spaces, and dine in our bar
and restaurant. While they visit, these benefits
will inevitably translate to other downtown and
Flathead Valley businesses. Our guests will likely
desire expanded business hours and community
activities, and they will seek outdoor recreation,
shopping, dining, and other opportunities to
influence the Kalispell economy.
The spaces we plan to shape in this historic
district will also create jobs for local residents.
Hotel support staff and service industry
professionals will be critical to the continued
operation of the hotel, retail stores, and the bar
and restaurant we envision for this property. We
have listed the short-term and long-term jobs
created in attachment B. Additionally, we feel
that a building and business like this in Kalispell
helps other businesses thrive. It supports local
restaurants and retail and begins to address
key factors needed to bring more vibrancy to
downtown Kalispell.
This development will not only impact the
downtown core district, it will transform
the Kalispell community. Our hope is to
add a relevant building and businesses to
the downtown skyline that is otherwise an
Street. By investing in infrastructure, hospitality,
and retail, we create a catalyst for future growth
and improvement. Our project begins to reshape
the downtown area, making it an even more
attractive destination for tourists and business
travelers who are already captivated by the allure
of Northwest Montana scenery and activities.
34 THE CHARLES HOTEL
CITY ASSISTANCE �
A project of this magnitude is a significant investment and we have worked in advance of team selection
for this public RFP to secure financing from private investors. It would be appreciated if the city would
consider possibly offsetting impact fees for the hotel development by utilizing TIF funds. When we study
the desire to address parking for this project, it initially appears to be financially unviable. However,
when considering how the hotel improvement at 3rd and Main and transfer of the land to private hands
augments the downtown TIF district, the potential to bond against future TIF monies to offset the cost
impact of the parking structure resolves a significant component of the financial puzzle. Hopefully, the
City of Kalispell agrees that there is a benefit to the public by expanding public parking infrastructure
in addition to what impact fees accomplish for our police, fire, water, storm, and sewer services.
r
3. l
LEVEL OF RETURN & BENEFIT TO THE CITY 35
THANK YOU
bond partners
cco�
COMPASS