Memo Hansz to Kukulski/Dasen Development AgreementON of Kalispell
Post Office Box 1997 • Kalispell, Montana 59903-1997 • Telephone (406) 758-7700 • FAX (406) 758-7758
May 22, 2001
To: Chris A. Kukulski, City Manager
From: Jim Hansz, Director of Public W
Subject: Dasen Agreement
I have reviewed the agreement revisions prepared by the City Attorney and have the
following comments.
• I am unable to locate the section that clearly specifies the date that payments must be made
by Dasen. The agreement, in Sections 5.2.d and 5.4, indicates when construction must be
done, June 1, 2002, and when the calendar starts running for the eight years of payments by
Dasen, January 1, 2003. But there is no statement when the Dasen payment is due in the
hands of the City. Further, there should be some penalty attached to a failure to pay as
required.
• Section 7.2 seems to indicate that Dasen is relieved of the payment obligation if construction
is completed by June 1, 2002. This does not seem a good idea. Dasen should remain
obligated to the minimum amount of $148,000.00 regardless whether the work is done. If the
completed work fails to generate the expected tax revenue, then Dasen should remain
obligated to pay the difference.
• Article 4 deals with the trade-off of parking on -site for new parking along the roadway. We
have begun to review this but have advised the engineer that alignment with new US 93
improvements must be verified. In addition, the curb -line bump -outs that are shown on the
current design drawings must be shown to function correctly. Therefore, I believe this section
should be qualified to reflect the need to resolve these unanswered questions.
ADDENDUM TO DEVELOPMENT AGREEMENT
This Addendum is made this day of May, 2001 by and
between the CITY OF KALISPELL, a municipal corporation, hereinafter
"City" and RICHARD A. DASEN, with his principal place of business
at 1701 Highway 93 South, Kalispell, Montana, hereinafter
"Developer:"
WITNESSETH:
WHEREAS, the parties entered into a Development Agreement
dated February 11, 1998 relative to the development of that tract
of land bounded by Eighteenth Street West on the north, Third
Avenue East on the east, Lion's Park Street on the south, and U.S.
Highway 93 on the west, all within the city limits of the City of
Kalispell; and
WHEREAS, the referenced real property was not developed as
contemplated by the parties' Development Agreement dated February
11, 1998; and
WHEREAS, the parties hereto desire to alter the obligations
imposed by said Development Agreement dated February 11, 1998 upon
Developer; and
WHEREAS, the parties intend that the terms of this Addendum
take precedence over and supplement the terms contained in the
parties' Development Agreement dated February 11, 1998 inconsistent
with the terms hereof.
NOW THEREFORE, in consideration of the foregoing premises and
mutual obligations of the parties, the parties agree as follows:
Articles 4, 5, 7 and 8 contained in the parties' Development
Agreement dated February 11, 1998 shall be amended and completely
restated as follows with the definitions set forth in Article 1 of
the Development Agreement having the same meaning as set forth in
the Development Agreement.
ARTICLE 4
Lion's Park Street
The parties acknowledge that the undedicated and undeeded
street commonly known as Lion's Park Street is included in the
Project Property due to a resurvey of the Project Property near the
time said property was conveyed to DEVELOPER. The parties
acknowledge that Article 4 contained in the referenced Development
Agreement dated February 11, 1998 may be construed as providing the
CITY some parking rights on Lion' s Park Street. The parties further
acknowledge that Lion's Park Street, pursuant to the Site Plan
attached hereto as Exhibit A, is proposed to be used b DEVELOPER or
his assigns for patron parking associated with the Professional
Office Building planned for Lot D of the Amended Subdivision Plat
of Lots 1, 2, 3 and 4 f Southfield Park, a copy of which is
attached hereto as Exhibit B. The CITY agrees to forego, waive and
relinquish any rights it may have had to parking on Lion' s Park
Street in lieu of DEVELOPER'S construction of ten (10)public
parking spaces to complement and encourage the use of Lions Park on
Third Avenue East substantially as indicated on the Site Plan
attached hereto as Exhibit A as "Lion,s Park -- Additional Parking
Plan." The costs associated with the additional parking shall be
borne entirely by DEVELOPER, and CITY shall have no financial
responsibility for the construction of said ten (10) parking
spaces. CITY agrees to execute a formal instrument suitable for
recording reflecting the foregoing.
ARTICLE 5
Construction of Project
Section 5.1. Site Plan and Construction Plans. DEVELOPER
heretofore submitted a Site Plan and Construction Plans to the CITY
for purposes of obtaining building permits. DEVELOPER'S Site Plan
is appended hereto as Exhibit A and by this reference incorporated
herein, which plan depicts the entire Project Area and shows the
infrastructure improvements to be constructed thereon. The Site
Plan appended hereto and the Construction Plans heretofore provided
to the CITY are acceptable to the CITY and are in conformity with
applicable federal, state and local laws and regulations. The CITY
hereby approves the Construction Plans as substantially conforming
to the Plans pursuant to this Addendum, conforming to the terms and
conditions of the parties' Development Agreement dated February 11,
1998 as amended pursuant hereto, conform to all applicable federal,
state and local laws, ordinances, rules and regulations, and are
adequate to provide for construction of the Project.
Section 5.2. Construction of the Project.
(a) Subject to unavoidable delays, DEVELOPER will
construct the Project without encroachment onto any other
property all in accordance with the Site Plan and the
Construction Plans. DEVELOPER or his Assignees will be
responsible for the supervision of and completion of the
on -site improvements. Neither party shall exercise any
control over the other regarding their respective areas
of work and division of responsibilities although the
parties agree to coordinate their activities to assure
maximum efficiency of the construction process.
(b) All work with respect to the Project shall be in
substantial conformity with the Construction Plans
approved by the CITY. DEVELOPER shall promptly begin and
diligently complete all on -site improvements. DEVELOPER
shall make reports, in such detail and at such times as
may reasonably be requested by the CITY, as to the actual
progress of DEVELOPER with respect to construction of the
on -site improvements.
(c) DEVELOPER shall not interfere with, or construct any
improvements over, any public street or utility easement
without the prior written consent 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. All street and utility
installations, relocations, alterations and restorations
shall be made at DEVELOPER'S expense. DEVELOPER, at its
own expense, shall replace any public facilities or
utilities damaged during construction of the Project.
(d) DEVELOPER shall complete construction of the
improvements on the Project Property as indicted on the
Site Plan attached hereto no later than June 1, 2002.
Section 5.3. Certificate of Completion.
(a) Promptly after completion of the Project, in
accordance with this Agreement, DEVELOPER should apply
for a Certificate of Completion. It will be incumbent on
DEVELOPER to provide the CITY with a certificate of
substantial completion from DEVELOPER'S architect, and
the CITY shall furnish DEVELOPER with an appropriate
Certificate of Completion as conclusive evidence of
satisfaction and termination of the agreements and
covenants of this Agreement (excepting those covenants
and restrictions which expressly survive the filing of
the Certificate of Completion, and except those
obligations of the DEVELOPER described in Section 2.2.
hereof which pertain to the obligations of DEVELOPER to
construct the Project).
(b) If the CITY shall refuse or fail to provide a
Certificate of Completion, the CITY shall, within 15 days
after the DEVELOPER provides the architect's certificate
referenced in Section 5.3. (a) , provide the DEVELOPER with
a written statement specifying in what respect DEVELOPER
has failed to complete the Project in accordance with
this Agreement, or is otherwise in default, and shall
specify what measures or acts will be necessary, in the
opinion of the CITY, for DEVELOPER to obtain the
Certificate of Completion.
Section 5.4. CITY'S Remedy for Failure to Construct. It is
contemplated that the Project Property (including without
limitation the Southfield Tower Property) will generate annual tax
revenue to the CITY in the amount of ONE HUNDRED FORTY-EIGHT
THOUSAND AND N01100 DOLLARS ($148,000.00) upon completion of the
Project, exclusive of city or county special assessments.
DEVELOPER, therefore, covenants to pay the CITY any difference
between the amount of tax actually generated by the Project
Property, including any portion of the Project transferred to
another owner, and the amount contemplated by this Agreement for a
period of eight (8) years commencing with tax year beginning
January 1, 2003. in the event BEvEieEER or his assigns -do not
hereof.complete construction contemplated herein by cTune ±, 2eE)2 as
contemplated by section 5.2 (d) Payment under the provisions
of this paragraph shall be made directly to the CITY, after
certifying the tax generated by the Project through the CITY
finance department subject to verification, and in accordance with
the following:
a. A copy of the taxes bill for the tax year 2003 shall be
delivered to the CITY finance office on or before the
November 15, 2003.
b. The CITY finance office shall calculate the difference
between the taxes bill for the tax year 2003, exclusive
of special assessments, and the sum of ONE HUNDRED AND
FORTY-EIGHT THOUSAND AND N0/100 DOLLARS ($148,000.00) and
invoice the DEVELOPER for the difference.
C. Payment for said amount calculated shall be due and
payable, from the DEVELOPER, on or before December 15,
2003.
d. For tax years 2004 through 2010, copy of the taxes bill
for the respective tax year shall be delivered to the
CITY finance office on or before the November 15.
e. The CITY finance office shall calculate the difference
between the taxes bill for the respective tax year,
exclusive of special assessments, and the sum of ONE
HUNDRED AND FORTY-EIGHT THOUSAND AND N01100 DOLLARS
($148,000.00) and invoice the DEVELOPER for the
difference.
f. Payment for said amount calculated shall be due and
payable, from the DEVELOPER, on or before December 15,
of the respective tax year.
g. In tax years when the tax liability, less special
assessments, equals or exceeds the sum of $148,000.00 no
payment -in -lieu shall be due from the DEVELOPER, however,
no credit shall be given for subsequent tax years.
Section 5.5. Cash Payment by Developer to CITY. DEVELOPER
shall pay the CITY the sum of EIGHTY THOUSAND AND N0/100 DOLLARS
($80,000.00) upon execution of this Agreement, as a compromise
payment of CITY'S claim for past due payments -in -lieu of that
certain Development Agreement between Richard A. Dasen and the City
of Kalispell, dated February 11, 1998.
ARTICLE 7
Payment of Taxes
Section 7.1. Taxes. DEVELOPER and his successors or assigns
shall pay when due all real estate taxes and installments of
special assessments payable on the Project Property.
ARTICLE 8
Assignment and Transfer
Section 8.1. Transfer of Ownership. The CITY acknowledges that
DEVELOPER heretofore transferred his interest in and to the subject
property to Northwest Investments, LLP, a Montana Limited Liability
Partnership in which DEVELOPER is a principal. CITY further
recognizes and acknowledges that Lot 5 of the amended subdivision
plat of Southfield Park on which Southfield Tower has heretofore
been constructed, has been conveyed by Northwest Investments
Partnership, LLP to Gene King of Kalispell, Montana. In addition,
CITY acknowledges that Lots A, B, C and D of the Amended
Subdivision Plat of Lots 1, 2, 3 and 4 of Southfield Park Lots
attached hereto as Exhibit B are the subject of a Buy -Sell
Agreement executed by and between Northwest Investments
Partnership, LLP as Sellers and Gene King and Elsene King as
purchasers. The subject Project Property is no longer subject to
restrictions on alienabiliity. However, notwithstanding conveyance
or assignment by DEVELOPER, DEVELOPER shall remain personally
responsible to all obligations hereunder. Further, notwithstanding,
the obligation to pay real property tax and payments -in -lieu is
binding upon the transferees and assigns of the DEVELOPER.
Date
Richard A. Dasen
Northwest Investments, LLP
a Montana Limited Liability
Partnership
By:
CITY OF KALISPELL,
a Municipal Corporation
By
Chris Kukulski, City Manager
By:
Clerk of Council
x City of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903-1997 - Telephone (406)758-7700 Fax(406)758-7758
May 21, 2001
TO: Mayor, City Council and Manag
FROM: Glen Neier, City Attorney
RE: Addendum to Dasen Agre�nt
I have attached hereto for your review a document entitled
"Addendum to Development Agreement" concerning the Southfield
Development. You have previously received correspondence regarding
a proposal by Mr. Dasen, et al. to negotiate the differences in the
Development Agreement executed January 11, 1998.
Amended Article 4 contemplates the use of an unplatted/undedicated
City easement, commonly known as Lion's Park Street, for parking
connected with a major office structure located on a portion of the
Dasen property. In exchange for surrender of the easement, Dasen,
et al. agree to replace the Lion's Park Street parking area with 10
parallel parking spaces on 3rd Avenue East at Dasen's expense.
Amended Article 5 generally requires Dasen to undertake and
complete certain development of the property on or before June 1,
2002. § 5.4 requires that the Southfield Towers Development
generate $148,000 per year in tax revenue. § 5.5 recites that Dasen
shall pay to the City the sum of $80,000 on or before September 21,
2001.
Amended Article 7 requires that Dasen pay all taxes, etc., when due
and to make the payment - in - lieu if construction is not completed by
June 1, 2002.
Amended Article 8 abrogates the restraint on alienation imposed
under the previous Development Agreement.
The draft delivered to you by this memo is the first draft received
by this office. I am aware that some alterations need to be made
prior to Council consideration.
Within the next few
days this office will be discussing
with
Dasen's attorneys
certain changes in
language which
more
specifically detail
the payment -in -lieu
of provisions.
The
previous language left
some elements open to
debate regarding
when
the payment would be
calculated and made. The second suggestion I
have made would make
the Addendum attached
as a lien on the
real
property within the Southfield complex.
As submitted, the Addendum will provide the City with the same
amount of revenue over 8 years as the original Agreement did over
10 years. It will also provide the City with a cash infusion of
$80,000 in the airport urban renewal area. With the changes
recommended herein, and perhaps others suggested, I feel we may be
able to put the Haven Field problem behind us.
This Addendum is made this day of May, 2001 by and between the CITE' OF
LISPELL, a municipal corporation, hereinafter "City" and RICHARD A. DASEN, with his
principal place ofbusiness at 1701 Highway 93 South, Kalispell, Montana, hereinafter "Developer:"
WITNESSETH: .
WHEREAS, the parties entered into a Development Agreement dated February 11, 1998
relative to the development of that tract of land bounded by Eighteenth Street West on the north,
Third Avenue East on the east, Lion's Park Street on the south, and U.S. Highway 93 on the west,
all within the city limits of the City of Kalispell; and
WHEREAS, the referenced real property was not developed as contemplated by the parties'
Development Agreement dated February 11, 1998; and
WHEREAS, the parties hereto desire to alter the obligations imposed by said Development
Agreement dated February 11, 1998 upon Developer; and
WHEREAS, the parties intend that the terms of this Addendum take precedence over and
supplement the terms contained in the parties' Development Agreement dated February 11, 1998
inconsistent with the terms hereof.
NOW THEREFORE, in consideration of the foregoing premises and mutual obligations
of the parties, the parties agree as follows:
Articles 4, 5, 7 and 8 contained in the parties' Development Agreement dated February 11, 1998
shall be amended and completely restated as follows with the definitions set forth in Article 1 of the
Development Agreement having the same meaning as set forth in the Development Agreement.
t4WIM
Lion's Park Street
The parties acknowledge that the undedicated and undeeded street commonly known as
Lion's Park Street is included in the Project Property due to a resurvey of the Project Property near
the time said property was conveyed to DEVELOPER. The parties acknowledge that Article 4
contained in the referenced Development Agreement dated February 11, 1998 may be construed as
providing the CITY some parking rights on Lion's Park Street. The parties further acknowledge that
Lion's Park Street, pursuant to the Site Plan attached hereto as Exhibit A, is proposed to be used by
DEVELOPER or his assigns for patron parking associated with the Professional Office Building
planned for Lot D of the Amended Subdivision Plat of Lots 1, 2, 3 and 4 of Southfield Park, a copy
of which is attached hereto as Exhibit B. The CITY agrees to forego, waive and relinquish any
rights it may have had to parking on Lion's Park Street in lieu of DEVELOPER'S construction of
Page 1 of 4
ten (10) parkin;. spaces on Third Avenue East substantially as indicated on the Site elan attached
hereto .as Exhi'; 1 A. as " Lion's Pa_r. _ - Additional Parking Plan." The costs associated the
additional parldng shall be borne entirely by DEVELOPER, and CITY shall have no financial
responsibility for the construction of said ten (10) parking spaces. CITY agrees to execute a formal
instrument suitable for recording reflecting the foregoing.
Construction of Project
Section 5.1. Site Plan and Construction Plans. DEVELOPER heretofore submitted a Site
Plan and Construction Plans to the CITY for purposes of obtaining building permits.
DEVELOPER'S Site Plan is appended hereto as Exhibit A and by this reference incorporated herein,
which plan depicts the entire Project Area and shows the infrastructure improvements to be
constructed thereon. The Site Plan appended hereto and the Construction Plans heretofore provided
to the CITY are acceptable to the CITY and are in conformity with applicable federal, state and local
laws and regulations. The CITY hereby approves the Construction Plans as substantially
conforming to the Plans pursuant to this Addendum, conforming to the terms and conditions of the
parties' Development Agreement dated February 11, 1998 as amended pursuant hereto, conform to"
all applicable federal, state and local laws, ordinances, rules and regulations, and are adequate to
provide for construction of the Project.
Section 5.2. Construction of the Project.
(a) Subject to unavoidable delays, DEVELOPER will construct the Project
without encroachment onto any other property all in. accordance with the Site Plan
and the Construction Plans. DEVELOPER or his Assignees -=�d11 be responsible for
the supervision of and completion of the on -site improvements. Neither party shall
exercise any control over the other regarding their respective areas of work and
division of responsibilities although the parties agree to coordinate their activities to
assure maximum efficiency of the construction process.
(b) All work with respect to the Project shall be in substantial conformity with
the Construction Plans approved by the CITY. DEVELOPER shall promptly begin
and diligently complete all on -site improvements. DEVELOPER shall make reports,
in such detail and at such times as may reasonably be requested by the CITY, as to
the actual progress of DEVELOPER with respect to construction of the on -site
improvements.
(c) DEVELOPER shall not interfere with, or construct any improvements over,
any public street or utility easement without the prior written consent 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. All street and utility installations,
relocations, alterations and restorations shall be made at DEVELOPER'S expense.
DEVELOPER, at its own expense, shall replace any public facilities or utilities
damaged during construction of the Project.
Page 2 of 4
(d) l_ 1;VELOPER shall complete construction of the improvements on the.
Projec 1 Property as indicted. o�,}i.e Site Plan attach, d hereto no later than A ne 1,
2002.
Section 5.3. Certificate of Completion.
(a) Promptly after, completion of the Project, in accordance with this Agreement,
DEVELOPER should apply for a Certificate of Completion. It will be incumbent on
DEVELOPER to provide the CITY with a certificate of substantial completion from
DEVELOPER'S architect, and the CITY shall furnish DEVELOPER with an
appropriate Certificate of Completion as conclusive evidence of satisfaction and
termination of the agreements and covenants of this Agreement (excepting those
covenants and restrictions which expressly survive the filing of the Certificate of
Completion, and except those obligations of the DEVELOPER described in Section
2.2. hereof which pertain to the obligations of DEVELOPER to construct the
Project).
(b) If the CITY shall refuse or fail to provide a Certificate of Completion, the
CITY shall, within 15 days after the DEVELOPER provides the architect's"
certificate referenced in Section 5.3.(a), provide the DEVELOPER with a written
statement specifying in what respect DEVELOPER has failed to complete the Project
in accordance with this Agreement, or is otherwise in default, and shall specify what
measures or acts will be necessary, in the opinion of the CITY, for DEVELOPER to
obtain the Certificate of Completion.
Section 5.4. CITY'S Remedy for Failure to Construct. It is contemplated that the Project
Property (i.ncluding without li-nitation the Southfield Tower Property) will gennrato annual tax
revenue to the CITY in the amount of ONE HUNDRED FORTY-EIGHT THOUSAND AND
NO/100 DOLLARS ($148,000.00) upon completion of the Project, exclusive of city or county
special assessments. DEVELOPER, therefore, covenants to pay the CITY any difference between
the amount of tax actually generated by the Project Property, including any portion of the Project
transferred to another owner, and the amount contemplated by this Agreement for a period of eight
(8) years commencing with tax year beginning January 1, 2003 in the event DEVELOPER or his
assigns do not complete construction contemplated herein by June 1, 2002 as contemplated by
Section 5.2(d) hereof. Payment under the provisions of this paragraph.shall be made directly to the
CITY, after certifying the tax generated by the Project through the CITY finance department subject
to verification.
Section 5.5. Cash Pa, m� ent by Developer to CITY. DEVELOPER shall pay the CITY the
sum of EIGHTY THOUSAND AND NO/100 DOLLARS ($80,000.00) on or before September 21,
2001. 4 t 0i000 00
Payment of Taxes
Section 7.1. Taxes. DEVELOPER and his successors or assigns shall pay when due all real
estate taxes and installments of special assessments payable on the Project Property.
Page 3 of 4
Section 7.2. In Lieu of Payment. DEVELOPRT', further agrees :t make the payment in lieu
E !axes contemplated iii Section 5.4 only in thE, eve: d the construction corgi a,.iplated herein is rk,
completed by June 1, 2002.
Assignment and Transfer
Section 8.1. Transfer of Ownership. The CITY acknowledges that DEVELOPER heretofore
transferred his interest in and to the subject property to Northwest Investments, LLP, a Montana
Limited Liability Partnership in which DEVELOPER is a principal. CITY further recognizes and
acknowledges that Lot 5 of the amended subdivision plat of Southfield Park on which Southfield
Tower has heretofore been constructed, has been conveyed by Northwest Investments Partnership,
LLP to Gene King of Kalispell, Montana. In addition, CITY acknowledges that Lots A, B, C and
D of the Amended Subdivision Plat of Lots 1, 2, 3 and 4 of Southfield Park Lots attached hereto as
Exhibit B are the subject of a Buy -Sell Agreement executed by and between Northwest Investments
Partnership, LLP as Sellers and Gene King and Elsene King as purchasers. The subject Project
Property is no longer subject to restrictions on alienabiliity. However, notwithstanding conveyance
or assignment by DEVELOPER, DEVELOPER shall remain personally responsible to all
obligations hereunder.
Date
163:LVA1)IlON
Richard A. Dasen
CITY OF KALISPELL, a Municipal Corporation
Chris Kukulski, City Manager
By:
Clerk of Council
Page 4 of 4
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