11/26/03 Johns to Kukulski/Heine Appraisal(-'Ile(ids
erts
cos
a„® n„ori
ht'm Kids & Sports M1`2
UILDIN6 THE DREAm ToCETHER FOR THE YOUTH OF FLATHEAD VALLEY
November 26, 2003
Mr. Chris Kukulski
City Manager
City of Kalispell
P. O. Box 1997
Kalispell, MT 59903
RE: Section 36
Dear Chris:
Enclosed is a copy of the Dave Heine appraisal that was received from David Greer. Please
provide copies to the Mayor and City Attorney. I called Dave's office and requested a meeting the week
of December 15, but have not received a response.
As discussed during our recent meeting, we appreciate the City offering to join Kidsports in
efforts to convert the current leased property in Section 36 to a permanent easement. I understand that
the City, which has the leasehold interest, prefers not to associate this goal with the pending Goldberg
request for a PUD overlay. We are concerned that recent valuation of the property may jeopardize our
acquiring a permanent easement or the ability of Kidsports to pay annual lease payments during the final
twenty years of the lease.
Thank you, the Mayor and City Attorney for taking time to meet, and we look forward to
successfully achieving our objective.
Enclosure
Sincerely,
KIDSPORTS
DANIEL D. JOHNS, President
(406) 752-6644
P.O. Box 1205 o KALISPELL, MT 59903 s e-mail: kidsports@fati.com
SpringAPPRAISAL
OF THE
Prairie
Kalispell,•
For
Mr. David Greer
D.N.R.C.
2250 Hwy 93 N.
Kalispell, MT 59901
DAVID J. HEINE, M.A., ARA
Accredited Rural Appraiser
Montana Certified General Real Estate Appraiser
Effective Date —
7/10/03
�iOV -4 4 :F
TABLE OF CONTENTS
1. INTRODUCTION
A. AUTHORIZATION, FUNCTION AND SCOPE OF THE APPRAISAL ................ 1
B. SUMMARY, SALIENT FACTS AND CONCLUSIONS ........ 2
C. OWNERSHIP AND RIGHTS APPRAISED ................... ..... 3
D. OWNERSHIP HISTORY AND OFFERING INFORMATION 3
E. DEFINITION OF MARKET VALUE ...................... ... 3
F. DISTRIBUTION OF MARKET VALUE ............................... 4
G. LEGAL DESCRIPTION AND ACREAGES ......................... 4
H. PROPERTY DESCRIPTION........................................................................... 4
I. HIGHEST AND BEST USE................................................................................. 5
J. VALUATION .................... 6
....................................................................
K. CONCLUSION OF VALUE................................................................................. 6
L. EXPOSURE/MARKETING TIME........................................................................ 7
ADDENDUM
CERTIFICATION
LIMITING CONDITIONS
QUALIFICATIONS OF APPRAISER
GGG�GG' eG1�te
a�sd rga2c�ciaz`ed, ,�..�. e.
1701 Hwy 93 South Suite 1 Kalispell, MT 59901
Phone (406) 756-8300 Fax (406) 756-8377 www.westernbroker.com
July 16, 2003
Mr. David Greer
DNRC
2250 Hwy 93 N.
Kalispell, MT 59901
Dear Mr. Greer:
Enclosed is a Reduced Scope appraisal assignment per your request. The intended use
of this appraisal is for you and your personnel to determine a likely market value range of
the subject for the purposes of negotiating leases or rents for the property.
This assignment is based on the premise that we are estimating the market value of the
property as if it was available on the open market with a typical buyer and a typical seller.
The property does meet the market value test. It is important to remember the scope of
this assignment, which was to estimate a likely value range without doing the level of
research, inspection and analysis involved in an assignment where a high level of
accuracy is required.
The Likely market value range , as a result of this valuation, is $7,500,000 to $8,000,000.
If you have any questions, please contact me.
Sincerely,
/ 1 \
David J. Heine, M.A., ARA
Accredited Rural Appraiser
Montana Certified General Appraiser - License #149
Broker
INTRODUCTION
A. Authorization, Function and Scope of the Appraisal
The appraiser was authorized on July 7, 2003 by Ms. Jeannie Holmgren to appraise the
subject property. The purpose of this appraisal is to estimate the cash value of the fee
simple ownership rights associated with the subject property. This is based on the
application of accepted USPAP appraisal standards. This analysis is communicated in
a summary report format.
It is the appraiser's understanding that the function of this analysis is to estimate the
current market value to assist the client for leasing/rental related decisions. As stated in
the limiting conditions of this report, value as assigned in this report is not contingent on
any disclosed values.
Background property information was gathered from several sources that includes a
personal inspection and numerous governmental offices as well as a personal knowledge
of the local and surrounding area. Extensive research with local brokers, appraisers and
multiple listing services were also made.
The local and surrounding real estate market has personally been searched over the past
twelve years for comparable sales and comparable income and lease data. The
researched area is generally defined as Northwestern Montana and, more specifically; as
Flathead Valley Commercial market. This research yielded a sufficient quantity of sales
data, which shall be utilized throughout the analysis. The sales used in this analysis have
been inspected over the current marketing cycle and other properties that are indicators of
value have been inspected as the general market area has been inspected and
researched on an ongoing basis.
The Cost Approach was not used as it was not deemed applicable because there are no
improvements contributing utility to the site. The Income Approach was not utilized as
rental data on raw land is difficult to obtain. Some sites are owner occupied and others
are purchased as assemblage for future resale. This is not considered a departure for this
reason and this is within the scope of the assignment. The Direct Sales Comparison
Approach was utilized in this appraisal to determine a likely value for the subject property
considering the "in-house" use.
Sales were inspected to the highest degree possible, as were other properties in the area
where market transactions have occurred. Trespass laws were obeyed and the requests
of sellers or buyers have been honored.
!)acid �. �feu4e a�sd Spring Prairie " 75"
7/1 nm:I
B. Summary, Salient Points and Conclusions
Client/Intended User(s): MT. Dept. of Natural Resources Personnel.
Appraisal Type:
Report Format:
Legal Description:
Property Interest
Under Consideration:
Complete — Reduced Scope.
Summary.
Portion of NE1/4 Section 36 T29N R22W.
Fee simple.
To estimate a likely market value range
Use: This report is intended to be used by you for
lease/rent making decisions. This report and the
analysis both were made in the scope of work, which
was for a property a likely value range was needed.
Value Considered: Market Value.
Effective Date: July 10, 2003
Report Date: July 10, 2003
Current Use of Property: Leased cropland, 7 acres as State Lands office
headquarters.
Highest and Best Use: Commercial Development.
Approaches to Value Utilized: Direct Sales Comparison Approach.
Appraiser/
Consultant's Role: My role in this assignment is to provide unbiased
market value opinions relating to the subject property.
Extent of Assignment: This report is not the result of the depth of research,
analysis and inspection typically involved in a full
scope appraisal assignment. This report is less than
what would be generally completed when there exists
a dispute or challenge of value. Court cases and
condemnation are examples of this. The subject was
analyzed and reported in the context of an "in-house"
use for D.N.R.C. real estate personnel.
Daawd �, gcl,fe aadZ,Z.0 2 Spring Prairie 75"
7 , A n Il
C. Ownership and Rights Appraised
The owner of record is The State of Montana. Sub -surface mineral rights are not
appraised nor has the title to such rights been researched or ascertained. Mineral rights
do not appear to have a measurable effect on land values in this market. Fencing,
irrigation systems, access to public roads and other improvements to the land are included
and are inherent in the valuation, and conclusions of this analysis. Value to be assigned is
Market Value.
D. Ownership History & Offering Information
The site has been in Montana ownership for many years. The site is not offered for sale,
but is offered for lease/rent and the market is aware of this intention.
E. Definition of Market Value
"Market Value means the most probable price which a property should bring in a
competitive and open market under all conditions requisite to a fair sale, the buyer and
seller each acting prudently and knowledgeably, and assuming the price is not affected by
undue stimulus. Implicit in this definition is the consummation of a sale as of a specified
date and the passing of title from seller to buyer under conditions whereby:
1) Buyer and seller are typically motivated;
2) Both parties are well informed or well advised, and acting in what they
consider their own best interests;
3) A reasonable time is allowed for exposure in the open market;
4) Payment is made in terms of cash in U.S. dollars or in terms of financial
arrangements comparable thereto; and
5) The price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions granted by
anyone associated with the sale.'
'Rules and Regulations, Federal Register, Vol. 57, No, 225, Subpart F
Section K.
f)aca �. ge4w z.z 6 3 Spring Prairie 75"
""�", """
Stillwater View
Estates
Estates H I 4
25 —>5! —30
Drive
-31
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I
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Mountain
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s;
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��y�ass ® ♦ M I
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♦
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I U5
amity
e
Sports Field
Detention
Ponds
FVCC
7th Standard
36 36 31 Paralia North
i T29N
Four Mile Drive 1 1 1
6 T28N
F. Distribution of Market Value
Value as assigned in this report applies to the real estate as described and is based on
unencumbered value. It does not consider the value of growing crops or personal
property. Unless noted, a separate contributory value analysis of'any existing mineral
rights, timber rights or water rights is not made. These property rights are considered as
part of the overall values as assigned the real estate, and their values are reflected by the
land values exhibited in the market. In other words, water rights and mineral rights,
whether existing or not, are a part of the assigned land values overall.
Inherent in the land values assigned is basic land improvements such as roadways,
fences, ditches, irrigation structures and field preparation. Irrigation equipment is
considered appurtenant to the land. Structural improvements may be assigned specific
contributory value within the Cost Approach as evidenced by the market; however, these
values apply only under the existing highest and best use assigned, unless otherwise
noted, and may be subject to market correction in the final reconciliation of value.
G. Legal Description and Acreages
A portion of NE1/4 Section 36 Township 29N Range 21W.
H. Property Description
The subject consists of 75 acres. There is approximately 3,300 feet of frontage on
Highway 93. There are three driveway approaches onto the Highway. There is a traffic
light that is used by Mountain View Shopping Center that is located on one of the driveway
approaches. The other two approaches are to the south and one looks as though it could
share a future light with the south Mountain View Shopping Center access.
The Bonneville Power Administration (BPA) has a powerline easement across the
northern portion of the site. Parking and other non-structural uses are usually allowed
within the easement area.
The subject site is development friendly as the soils, slopes and elevations are not
prohibitive to commercial/shopping center type development.
The site should be attractive for a "mirror -type" development of what is occurring at
Mountain View.
The subject could have two or three national credit anchors with mixed retail throughout
the site.
David �. qeu4e aad 4 Spring Prairie " 75"
The D.N.R.C. has 7 acres with multiple buildings that are used in the administration and
management of state lands. These buildings do not contribute utility to the overall plan of
the typical developer/market participant. Since most developments occur in phases, it
would be logical to assume that this development would start near the existing stoplight
and move southward. The D.N.R.C. buildings would likely be demolished or removed in
the future, but it is difficult to estimate when.
I. Highest And Best Use
The highest and best use of a property may be defined as "the reasonably probable and
legal use of vacant land or an improved property, which is physically possible,
appropriately supported, financially feasible, and that results in the highest value." 2
Real Estate is valued in terms of its highest and best use. The highest and best use of the
land or site, if vacant and available for use, may be different from the highest and best use
of the property if improved.
The criteria for determining highest and best use are:
1. Is it legally permissible?
2. Is it physically possible?
3. Is it financially feasible?
4. Is it maximally productive?
The subject property has a probable use that meets the four tests. This use is a
commercial/development use.
2The Appraisal of Real Estate, Eleventh Edition. A.I. Chicago, 1996. pg. 297
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J. Valuation
Attached is a chart of recent sales that would be in the localized competitive market for the
subject property. Sale #1 is located to the northeast of the subject property and does not
have the highway frontage where the "stand alone" potential that the subject property has.
It is currently zoned residential, but is a likely candidate for a zone change. This property
ties in with the buyer's other holdings in the area. It appears to be in a unique large block
that would have frontage on Reserve Drive, Whitefish Stage Road and Highway 93. This
sale is not considered be directly competitive to the subject property, but is a property that
was purchased for assemblage purposes.
Sale #2 is located south of the subject and was a May 2003 sale of 45 acres commercial
zoned ag. It was purchased for the future site of the North Valley Hospital. Sale #3 is a
Whitefish purchase of a smaller parcel for a car dealership. Sale #4 is in the Evergreen
District and has not closed. It is a large unit in an area of smaller (.5 to 1-acre) tracts.
Sale #5 is the sale of the Pack & Co. site to Mountain View. As I understand it, the sale
was "as -is" and the buyer incurred site preparation costs. Sale #6 did close the same time
as Sale #5 and is a resale of a portion of Sale #5 with a building pad, a guarantee of
parking and a fully developed shopping center. Sale #7 was the sale to Target and was
under similar conditions as the Home Depot sale. Both sales reportedly had a land
component with costs to prepare the site. Sale #5 is the most similar to the subject in
traffic, exposure, location and size. The main difference is that Sale #5 required
substantial site preparation. I was not able to verify exact costs, but $1.5 million appears
to be close to the costs. Just west of Home Depot, an area did not compact properly and
required a total redo. This cost was just under one half million dollars. When these are
added to the sale to make it more comparable to the subject, the indicated value is in the
$100,000 per acre range.
K. Conclusion of Value
This would lead me to conclude that the most likely raw site value of the Spring Prairie 75"
would be in the $2.30 - $2.45 per square foot range, which would be a total value range of
$7,500,000 - $8,000,000. This is just for the land. The improvements one way or the
other are not a major item. I do not believe anything needs to be deducted for removing
them. I am not aware of any buried storage tanks or other issues that would be a problem.
There may even be some salvage value given the market today and the way that people
are moving houses from site to site and other structures as well.
va"ud �, zz C 6 Spring Prairie 75"
7/10/03
L. Exposure/Marketing Time
As part of the valuation process, an opinion of a reasonable exposure time must be
developed. Exposure time may be defined as follows:
The estimated length of time the property interest being appraised would have been
offered on the market prior to the hypothetical consummation of a sale at market value on
the effective date of the appraisal; a retrospective opinion based upon an analysis of past
events assuming a competitive and open market.
Exposure time is different for various types of real estate and under various market
conditions noted that the overall concept of reasonable exposure encompasses not only
adequate, sufficient and reasonable time but also adequate, sufficient and reasonable
effort. This statement focuses on the time component.
The fact that exposure time is always presumed to occur prior to the effective date of the
appraisal is substantiated by related facts in the appraisal process: supply/&)mand
conditions as of the effective date of the appraisal, the use of current cost information the
analysis of historical sales information (sold after exposure and after completion of
negotiations between the seller and buyer); and the analysis of future income expectancy
projected from the effective date of the appraisal.
The reasonable marketing time is an opinion of the amount of time it might take to sell a
property interest in real estate at the concluded market value level during the period
immediately after the date of value.
It is important to realize that it is assumed that the subject property is competently and
aggressively marketed.
The market value of the subject property is estimated based upon an exposure time of 24
months or less.
Damd �. ge,4e "drw, 2,Z e. 7 Spring Prairie "75"
7/10/03
ASSUMPTION AND LIMITING CONDITIONS
It is assumed:
1. that the subject property's fee simple estate is marketable and that the property is free and clear of all liens,
encumbrances, easements, and restrictions unless otherwise noted.
2. that there is no liability for matters legal in nature.
3. that property ownership and management will be in competent and responsible hands:
4. that the property will not operate in violation of any applicable government regulations, codes, ordinances, or statutes.
5. there are no concealed or dubious conditions of the subsoil or subsurface waters including water table and flood plain.
The appraiser further assumes there are no regulations of any government entity to control or restrict the use of the
property unless specifically referred to in the report.
The following limiting conditions are submitted with this report:
1. All of the facts, conclusions, and observations contained herein are consistent with the information available as of the
date of valuation. The value of real estate is affected by many related economic conditions, local and national. The
appraiser therefore, assumes no liability for any unforeseen precipitous change in the economy.
2. The appraiser has made no survey of the property. Any and all maps, sketches, and site plans are assumed to be
correct, but no guarantee is made as to their accuracy.
3. Information furnished by others is presumed to be reliable and, where so specified in the report, has been verified; but no
responsibility, whether legal or otherwise, is assumed for its accuracy, and it cannot be guaranteed to be certain. No
single item of information was completely relied upon to the exclusion of other information. The comparable data relied
upon in this report has been confirmed with one or more parties familiar with the transaction or from affidavit or other
source thought reasonable; all are considered appropriate for inclusion to the best of our factual judgment and
knowledge. An impractical and uneconomic expenditure of time would be required in attempting to furnish
unimpeachable verification in all instances, particularly as to engineering and market -related information. It is suggested
that the client consider independent verification as a prerequisite to any transaction involving sale, lease, or other
significant commitment of funds or subject property.
4. The signatories herein shall not be required to give testimony or attend court or be at any governmental hearing with
reference to the subject property unless prior arrangements have been made with the client.
5. Disclosure of the contents of this report is governed by the Bylaws and Regulations of the American Society of Farm
Managers and Rural Appraisers. Neither this report nor any portions thereof shall be disseminated to the public through
public relations media, news media, advertising media, sales media, or any other public means of communication without
prior written consent and approval of the appraiser.
6. No responsibility is taken for changes in market conditions after the date of valuation, or for the inability of the property
owner to find a purchaser at the appraised value.
7. No effort has been made to determine the impact of possible energy shortages or the effect on this project of future .
possible federal, state, or local legislation including any environmental or ecological matters or interpretations thereof.
8. The date of valuation to which the value conclusions apply is set forth in the letter of transmittal and within the body of the
report. The value is based on the purchasing power of the U.S. dollar as of that date.
9. The liability of David J. Heine and Associates, LLC is limited to the client and to the fee collected. Further, there is no
accountability, obligation, or liability to any third party. If this report is placed in the hands of anyone other than the client,
the client shall make such party aware of all limiting conditions and assumptions of the assignment and related
discussions. The appraiser assumes no responsibility for any deficiencies of any type present in the property --physically,
financially, or legally.
10. In this assignment, the existence of buried fuel storage tanks or potentially hazardous material used in the construction or
maintenance of the buildings, such as the presence of urea -formaldehyde foam insulation, and/or the existence of toxic
waste, which may or may not be present on the property, was not observed by this appraiser; nor does he have any
knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect
such substances. The existence of urea -formaldehyde foam insulation or other potentially hazardous waste material may
have an effect on the value of the property. I urge the client to retain an expert in this field if desired.
11. The assignment is based on the premise that there is full compliance with all applicable federal, state, and local
environmental regulations and laws unless otherwise stated in the report; furthermore, all applicable zoning, building, and
use regulations and restrictions of all types have been complied with unless otherwise stated in the report; further, it is
assumed that all required licenses, consents, permits, or other legislative or administrative authority, local, state, federal
and/or private entity or organization have been or can be obtained or renewed for any use considered in the value
estimate.
)acid �. ';?-1e&c atd,41�, �,�.C, 8 Cllient Summary Appraisal
Effective Date
CERTIFICATION -
I certify that, to the best of my knowledge and belief ...
the information contained in this appraisal report upon which the opinion of value is based, is true and
correct, and no important facts have been knowingly withheld or overlooked.
that I am competent to perform this assignment.
the reported analyses, opinions, and conclusions are limited only by the reported Assumptions and
Limiting Conditions, and are my personal unbiased, professional analyses, opinions, and conclusions.
I have no undisclosed interest in the subject property, present or contemplated, and no personal interest
or bias with respect to the parties involved.
my analyses, opinions, and conclusions were developed, and this report has been prepared, in
conformity with the Uniform Standards of Professional Appraisal Practice.
my compensation for completing this assignment is not contingent upon the development or reporting of
a predetermined value or direction in value that favors the cause of the client, the amount of the value
opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to
the intended use of this appraisal.
- my engagement in this assignment was not contingent upon developing or reporting predetermined
results.
my analyses, opinions, and conclusions were developed and this report has been prepared in conformity
with the requirements of the Code of Professional Ethics and the Standards of Professional Practice of
the American Society of Farm Managers and Rural Appraisers.
the use of this report is subject to the requirements of the American Society of Farm Managers and Rural
Appraisers relating to review by its duly authorized representatives.
I have personally inspected the subject property.
- I do not authorize the out -of -context quoting from or partial reprinting of this appraisal report. Further,
neither all nor any part of this appraisal report shall be disseminated to the general public by the use of
media for public communication without prior written consent of the appraiser signing this report,
no one provided significant professional assistance to the person(s) signing this report.
David J. Heine, M.A., ARA
Accredited Rural Appraiser
Montana Certified General Appraiser #149
Broker
Dated P. `reuse aad,4ddoczaew, Z, e. 9 Client Summary. Appraisal
Effective Date
e
I hold the Accredited Rural Appraisal (A. R.A.) designation which is awarded by the American Society of Farm
Managers and Rural Appraisers to those members who have had years of experience, are technically trained,
have passed a rigid examination and subscribe to a high code of ethics.#1083
➢ Montana Board of Real Estate Appraisers - General Certification -- #149
➢ Montana Licensed Real Estate Broker — Partner in Western Brokers
Western Montana Stockgrowers Association — Member of Board of Directors
➢ Montana Stockgrowers Association — Member
➢ Land Trust Alliance — Sponsor Member
`r Montana Board of Real Estate Appraisers — Board Member
➢ State Approved Real Estate Instructor
EDUCATION:
Montana State University, Bozeman, MT - B.S. in Agricultural Economics, March 1983
Washington State University, Pullman, WA - M.A. in Agricultural Economics, December 1986
RECENT CONTINUING EDUCATION:
American Society of Farm Managers and Rural Appraisers:
February 4-5, 2003
Code of Ethics, USPAP Uddate
January 23-24, 2001
Conservation Easement Seminar
November 4, 1998
Code of Ethics
November 3, 1998
Conservation Easement Course
March 4-5, 1996
Appraisal Accreditation Examination
April 20-22, 1995
Eminent Domain Course
March 4-6, 1995
Report Writing Course
April 18-24, 1993
Advanced Rural Appraisal Course
Jan. 28-30, 1993
Highest and Best Use Course
May 17-23, 1992
Principles of Rural Appraisal Course
Oct.30-Nov.1,1991
Certification Training Course
Oct. 24-26, 1990
Standards and Ethics Course
November 3, 1988
CRP Contract Seminar
March 6-11, 1988
Fundamentals of Appraisal Course
May 18-22, 1987
Prin. of Farm Management Course
Montana State University Cooperative Ext. Service:
May 19-23, 1986 Farm Financial Analysis Course
Appraisal Institute:
Sept_ 15-16, 1993 Standards and Ethics Seminar
March 30-31, 1989 Livestock Ranch Valuation. Seminar
January 10-11, 2002 U.S.P.A.P. Course
National. Association of Independent Fee Appraisers:
March 5, 1999 Limited Scope & U.S.P.A.P.
March 11-14, 1992 Market Data Analysis of Residential Real Estate and Exam.
Feb. 12-15, 1992 Prin. of Residential Real Estate Appraisal and Exam.
MT Appraisal Assessment Association:
November 16-17, 1998 U.S.P.A.P. Course
Master's Thesis Washington State University August 1986
"An Economic Evaluation of Different Feeding Systems in the Western Washington Dairy Industry. "
Magazine Feature Article - Two Part
-"Look at all options when considering commodities, "
by D. J. Heine, G. S. Willett, J. K. Hillers and R. L. Kincaid.
Hoard's Dairyman March 10, 1988.
-"Partial budget analysis helps determine best action,"
by D. J. Heine, G. S. Willett, J. K. Hillers and R. L. Kincaid.
Hoard's Dairyman March 25, 1988.
Appraisal of Rural Property,
2nd Edition, contributing author. Published by ASFMRA in December 2000.
MT REAL ESTATE CONTINUING EDUCATION, Instructor
Conservation Easement Valuation & Issues 1999 - present
WESTERN BROKERS, LLP. Partner Kalispell, MT July 1997 to present
Real Estate Broker— Specializing in Farms, Ranches & Recreational Sites.
DAVID J. HEINE AND ASSOCIATES, LLC. Owner Kalispell, MT June 1986 to present
Economic Consulting, Fee Appraisals
MZK REAL ESTATE
Licensed Real Estate Agent
Kalispell MT May 1994--July 1997
MT DEPT. OF AGRICULTURE, Financial Consultant Helena, MT June 1986 -- June 1993
Agricultural Assistance Program, included financial analysis, partial budgeting, debt restructuring options.
Appraisal and Real Estate Experience
Assignments have included specialized agricultural properties, rural recreational properties, residential properties,
subdivision analysis, conservation easements, fractional interests, and special use studies.
Other Agriculture Related Experience
Heine's Hay Service, Foreman - Kalispell, MT 1978 -- Present
Commercial dairy hay, peppermint, and other irrigated crops.
Dairy heifers and commercial beef cattle.
11.19.03
FOR DISCUSSION PURPOSES ONLY
SE 1/4 Section 26 (KIDSPORTS)
Method of calculating annual lease payment:
134.35 acres x $2750 per acre appraised value (1997) x 10%
2003 lease payment: $38,901.00
2004 est. lease payment: $39,485.00
The 2004 lease payment will amount to $293.90 per acre.
Note: Kidsports generates these funds from the various youth user groups, each of which
assesses their individual participants $20.00 annually as a "user fee."
APPARENT PRESENT LAND VALUES FOR NE 1/4 SECTION 36
Goldberg project:
Newspaper reports quote Dave Greer as saying the initial appraised value of the 54 acres
is $3.00 per square foot, which translates to $130,680.00 per acre. The project will
generate an annual lease payment of $6534 per acre, apparently once the project is built.
54 acres x $130,680 per acre appraised value (2003) x 5% _ $352,836.00 annual lease
payment.
KIDSPORTS COMPLEX LEASE PAYMENTS YEARS 21-40
To be determined by Department Director after consultation with City.
Value that will attach to SW 1/4 Sec. 36 as basis for making lease calculations is unknown
at this time.
Some hypotheticals: Per acre appraised value
$ 10,000.00
$ 20,000.00
$130,680.00
Annual lease payment
$ 134,350.00
$268,7000.00
Heaven forbid
Based on 2003 participant levels of approximately 2500 youngsters, a $10,000 per acre
appraised value means each group would have to assess individual participants $53.74
annually, at $20,000 the assessment increases to $107 per individual. This does not
include fees each program assesses for its operations.
DSL SF101 Sept, 1985(Rov, S-15-9S)
AGREEMENT NO. 10.51199
SPECIAL LEASE OF STATE LANDS
`this Lease is entered into by the.State ofMontana, as Lcssor, and the person herein named, as the Lessee.
Date this Lease takes effect: May 9, y 997
NamcofLessce• CitxofKalisplell
Address or Box No.: P.O. B gx 1997
City/stawzip: Kalispell, MT 59903
Land Located in Flathead County.
DESCRIPTION Rve. Acres
Part ofSL'1/4 36 29N. 22W. 138+/-
Told number of leased acres 138 more or less belonging to Common Schools , Sole purpose for which die land is leased: Athletic Comnler
includingminor and major Pee Wee baseball, softball, t-boll, [Babe Ruth League, soccer and ice rink
Term of Lcasc: 411 cars Dateofcxpiration: Fcbnra 28 2037
In consideration o he rents s to paid and covenants to a per omrc y t he esscc, is a ministralors, executors and assigns, the Lcssor hereby cases to Uhc
Lessee the above described land only for the purpose set forth above.
Lease is subject to the terms, conditions and restrictions set forth hcrcin.
i` MUTUALLY UNDERSTOOD, AGREED AND COVENANTED BY AND BE TWEEN TIME PARTIES TO TEIS LEASE AS FOLLOWS:
::..,:.ti
1. RENTAL•The Lessee shall pay to the Lessor nn annual money rental as spceiGchl in Section Three (3), At �CaIV��Qtlgj�;(i7UY1U tine end of the first -period
.
ntnr,(�nkli:ycas, the rental shall be reviewed and may be adjusted at the discretion of die Director of the Department ofNatural Resources and Conservation, pij�t
eg irulf g i {1 i;.t i'c ssc , and any adjustment of the rental rate necessary to secure a fair return to the Slate shall be made at that time. r4-the-maynt-the
rt mentof3dahrrnH2esovrecs.and -Eonserration-bcmade-at-five(f)-yearintervatstltercafier: Aijiixua[rarrial jjlcicascd
u»plell pp led >ar year;• 9;`,tiiSau(ti 4 ((t1vt„y�10'@ `� ey�i ` ?�o nr)p v;Illap. 5!�gA lliG prtn�sus'years �eii(At Failure to pay each years rental on or before due daft
automatically cancels this Leasc.V G.'c((_ .
2. PLACE OF PAYMENT -All payments required by this Lease shall be made to [lie Department ofNatural Resources and Conservation, 2705 Spurgin Road,
Missoula, MT 59801.
3. RENTAL RATE -Rental at the rate of 1997 appraised value will be used for the first 20 years to calculate the annual payment. Years one, two three and
S38.524.32. Yr.7439,102.18. Yr. 8—$39,689.72, Yr, 9440284.05. Yr. 10440,888.31. Yr. i 1441501.63. Yr. 12—S42.124.16. Yr. 13— $42,756.02 . Yr.
14443,397.36, Yr. 15444,048.32, Yr. 16444,709.05, Yr. 17445,379.68, Yr. I R—S46,060.38, Yr. 19446.751.28 shall be due and payable by March
of each year beginning with year 1997 . FAILURE"• TO PAY BY APRIL 1 AUTOMATICALLY CANCELS TIES LEASE.A NOTICE OF RINTAL DUE
WILL 13E SENT TO THE ABOVE ADDRLSS ONLY, UNLESS A CHANGE OF ADDRESS IS RECORDED.
4. RENEWAL LEASE -If all rentals duc [lie Slate under this Lease have been paid and the terms ofthis Lease have not been violated, the Lessee may make
application to die Lessor, within thirty (30) days prior to its expiration, for an additional lenn not to exceed Five (S) years at such rental as the Director of
Natural Resources and Conservation may dclemhinc is a fair return to the Stale, and subject to periodic reviews of the rental as herein provided; however, should
the Director of Urc Department of Natural Resources and Conservation in his/her discretion decide it is in the best interests of the State not to renew this Lcasc and
notify the Lessee at lead six (6) months prior to the expiration of pile Lease of such decision, the Lcssce shall have no renewal rights.
5. RESERVATIONS -The State reserves all rights and interests to the land under this Lease other than Uhose specifically granted by this Lease. These
reservations include, but are not limited to, the following:
(a) MINERAL AND TIMBER RESERVATION -All coal, oil, gas and other minerals and all deposits of stone, gravel, sand, gems, and other non-mincrals
valuable for building, mining or other commercial purposes, and all limber and trees, arc excepted from the operation of this Lease. The Lcssec shall not open any
mine or quarry or work or dig any of the minerals or non-mincrals mentioned above from any mine or any quarry, pit or diggings situated on the said land whether
-nine, quarry, pit or diggings was open at the date of this Lease or nol.The Lessee shall not cut, remove, use or destroy any such limber or standing trees, and
of allow or permit any other person to cut, use, remove or destroy such timber or standing trees unless such person is authorized by the Lessor.
-- (b) ADDITIONAL RESERVATIONS -The Slate reserves a right-of-way to the United States over the land above -described for ditches, canals, tunnels,
telephone and telegraph, and power lines now constructed, or to be constructed by the United States Government in furtherance of the reclamation ofarid lands.
The State also reserves die right of granting rights -of -way on the above -described land for other purposes. The State also reserves to itself and its representatives
and Lessees the right to enter upon the lands embraced by [his Lease for purpose of prospecting and exploring for minerals and for file purpose of mining, drilling
for, developing and removing such minerals and for carrying on all operafions related thereto; it also reserves to itself and its permiltccs the right to enter upon the
said lands for the purpose of cutting and removing limber, wood and other forest products, and for removing gravel, sand, building stone, and other non-mincrals.
ThcStatc -sc, v— the i ght-to gnat-permits-foradvcrtising-such as and billboards The State or its authorized representative may from time to time, at any
reasonable hour, enter upon and inspect the pc cc mist , sd r any portion thereof or Improvements thereon to ascertain compliance with this Lease, but
without obligation to do so or liability lhcrcof.
6. RIGHT TO ENTRY -Representatives of dhc State Historical Society of the State of Montana shall at all reasonable limes, upon written notification to the
Department ofNatural Resources and Conservation prior to entry, have the right to enter into and upon the premises for the purpose of carrying out the duties
assigned the historical Society by the State Antiquities Act, 22-34, MCA.
t7 WATER RIGHTS -Any water right appropriated or secured on Stale land by any individual or party for use on or off such Stale land shall be appropriated or
hrsec
urcd,in-the name of the'SlslooW9A!lana,:unlcss prior written permission to do otherwise is granlcd by the Department ofNatural Resources and Conservation.
The Department ofNatural Resources and-' Conservation shall be notified prior to such development or appropriation of water right
— '—ANCELLATiON-Thc Lessor shall have the power and authority in his discretion to cancel the Lease for any of the following causes: for fraud or
uesentation, or for concealment of facts relating to its issue, which if known would have prevented its issue in the form or to the party issued; for using the
. for other purposes than those authorized by die Lease, and for any other reasonable cause which in thejudgmcnt of the Lessor makes the cancellation of die
Lease necessary in order to do justice to all parties concerned and to protect the interest of the State. Such cancellation shall not cntillc the Lcsscc to any refund of
rentals paid or exemption from the payment of any rents, penalties or other compensation due the State. • Lease cancellation is subject to appeal as provided in
Section 77-6-211, MCA.
9. UNLAWFUL USE -If any part of the lands or premises under this Lease arc used or allowed or permitted to be used for any purpose contrary to the laws of
this State or the United States, such unlawful use shall, in the discretion of the Lessor, constitute sufficient reason for the cancellation of the Lcasc.
10. it1 t1UEST FOR 1MPR01fCM1sN=FS 7lnclesseezhalhhaveihcright topinctsnch-improvcmentson-the-leased-premises-ns-are-reasonabIHaking-into
considcratimrthcpmpcse(s)-for-Zvhieh-thc-landis-leased-.A-rctmrto£-proposcdimprovcmcnts-containing-such-informationmas thelcssor may rcpucst inctudinr the
,.,.. .. .,) .,,......o.,,,au"n 1... ln vcmcros-%vui oc'occntco propert"t-thc-Stat� 6Z!
1 L `?ASSOR LIEN -The Lessor shall haven lice, —on all buildings, structures and other improvements r' "' ayment ofthe rentals sp cified herein.
rums improret 'ots lawfully i mainingtlic.con,on which flicSiatchas no lien to, rentatrerpcnaltiesand�vhieh-the-lessee dc� r� R land disposeof such
ha 11-parihe-formerfessee-the , casonabk tntlutthereof�rt the timctttcttetivicssecorpnrchssertal es possessionthcreoElrt ease t' h
lessee le�ser are unabl leroakrte of such improvcmenfsmbitrafiotrsheillake plai n a m anecwith
If the former Lessee far s to remove the movable improvements on the land ar dispose of the same to the new Lessee or purchaser or to parties other than the
new Lessee or purchaser within sixty(60) days from the date of the expiration or termination of this Lease for any cause, then all such improvements shall
become the property ofthe State unless the Lessor for good cause shown shall grant the additional time necessary for the removal thereof.
13. ASSIGNMENT -Ifni[ rentals due have been paid and the terms ofthe Lease have not been violated, the Lease may be assigned on forms provided for [hat
purpose by the Department ofNatural Resources and Conservation , but no such assignment shall be binding on the State unless the assignment is filed with the
Department, approved by it, and payment made ofthe assignment fee.
14. SUBLEASE -The Lessee shall have the right to sublease the land to another party upon the same terms and conditions as those upon which he losses it from
the State, provided that no such sublease shall be legal until a copy thereof has been filed with the Department ofNatural Resources and Conservation and
approved by the Director of the Department of Natural Resources and Conservation. If a Lessee subleases State land on terms less advantageous to the sublessee
than the terms given by the State, the Director shall cancel the Lease subject to the appeal procedure provided in Section 77.6-211, MCA. Furthermore, subleasing
may cause loss of the preference right to renew this Lease. (The Departmenfs surface management rules concerning subleasing should be consulted.)
15. REQUEST TO CANCEL LEASE -The Lessee may request the right to surrender and relinquish the Lease, in whole or in part, by writing to the
Department ofNaturat Resources and Conservation,at least thirty (30) days prior to the termination of any rental year. The Director of the Department ofNaturat
Resources and Conservation may grant or deny the request and may condition the right to surrender and relinquish upon the payment to the State of reasonable
damages caused by the surrender.
16. LAWS AND RULES -The Lessee agrees to comply with all applicable laws and regulations in effect at the date of this Lease, or which may, from time to
time, be adopted, and which do not impair the obligations of this contract and which do not deprive the Lessee of an existing property right recognized bylaw.
17. LEASE WITHDRAWAL -All or any portion of the land under lease maybe withdrawn from this Lease by the State upon reasonable notice, except through
special agreement with Lessee. The Lessee shall be entitled to reasonable compensation for any improvements thereon. The lands may be withdrawn to promote
the duties and responsibilities of the Board of Land Commissioners.
18. EXTENT -All covenants and agreements herein set forth between the parties hereto shall extend to and bind their successors, assigns and legal
representatives.
19. UTILITY INSTALLATION -The Lessee, at its solo cost and expense, shall determine the availability of, and shall cause to be installed in, on, and about the
leased prcmises,all facilities necessary to supply thereto all water, sewer, gas, electricity, telephone and other like services required in Lessee's operations
hereunder. Lessee agrees to pay all connection or nereage assessments or charges levied by any public utility, agency or municipality with respect to their services.
Notwithstanding the foregoing, Lessee shall not enter into any contract or agreement with any city, county, or other governmental agency or body or public "'hy
with reference to sewer lines or connections, water lines or connections, or street improvements relating.to the leased premises without the prior written c
the State,which consent shall not reasonably be withheld.
20. TAXES -The Lessee shall pay all taxes, special assessments, levies, feesAnd other governmental charges orcvcry kind or nature that may be levied by any
and all federal, state, county, municipality, and any other taxes or assessing authority upon the improvements and property owned by Lessee on or about the leased
premises during the term of this Lease. Payment shall be made not later than ten (10) days prior to delinquency of taxes, special assessments, levies, fees, and
other governmental charges. Lessee shall cause all taxes imposed upon all improvements situated in, on or about the premises, to be levied or assessed separately
from said leased promises and not as a lien thereunder.
21. FIRE PREVENTION AND SUPPRESSION -The Lessee assumes all responsibility for performing at his own cost and expense all fire prevention and
suppression work necessary or required to protect the forage, trees, buildings and structures on the land to the same extent as if the land was owned by Lessee.
22. NOXIOUS WEEDS AND PESTS -The Lessee agrees, at his own expense and cost, to keep the land free from noxious weeds and to exterminate posts to
the same extent as a private owner is required to do. In the event the land described in this Lease shall be included in a weed control and weed seed extermination
district, the Lessee shall be required to comply with the provision of 77-6-114, MCA, which provides as follows. "It shall be the duty ofthe Board in leasing any
agricultural State land to provide in such Lease that the Lessee of lands so leased lying within the boundaries of any noxious weed control and weed seed
extermination district shall assume and pay all assessments and taxes levied by the Board of County Commissioners for such district on such State lands, and such
assessment and tax levy shall be imposed on such Lessee as a personal property tax and shall be collected by the County Treasurer in the same manner as regular
personal property taxes are collected."
23. INDEMNIFICATION -The Lessee agrees to save harmless and indemnify the Stale of Montana for any losses to the State occasioned by the levy orany
penalties, fines, charges or assessments made against the above lands or crops grown upon the lands, by the U.S. Government because of any violation ofor
noncompliance with,any federal farm program or other acts by the Lessee.
24. MULTIPLE -USE MANAGEMENT -Pursuant to the obligations imposed by law to administer State lands under a multiple -use management concept, the
State reserves the right to dispose of any and all interests in the aboveAcscribed land, subject, however, to such specific interests granted to the Lessee under the
terms of this Lease.
25. SURRENDER OF PREMISES UPON TERMINATION OF LEASE -The Lessee shall upon the termination of this Lease peaceably yield up and
surrender the possession ofthe land to the State ofMontana or its agents or to subsequent lessees or grantees."00°
26. LESSEE LIABILITY -This Lease is made upon the express condition that the Lessee shall assume all liability for any injury, property damage or loss by any
persons and for any injury, property damage or loss to any employee or property orLessee, its agents or employees, or third persons, or to the Lessee, from any
cause or causes whatsoever while in or upon the said premises or any parts thereof during the terms of this Lease, or occasioned by the occupancy for use of said
premises or any activity carried on by the Lessee in connection therewith. Lessee shall indemnify Lessor and save, protect, defend, and hold Lessor harmless from
any and all liability, loss, damage, expense (including legal expenses and reasonable attorney fees), causes of action, suits, claims orjudgmcnis arising fror
based upon Lcssoes ownership of the properly, which is the subject of this Lease, from any cause or causes whatsoever while in or upon said premises or
thereof during the terms of This agreement or occasioned by any occupancy and all suits which may be brought against Lessor, either alone or in conjunctio....... r
others, upon any such liability or claims(s). Lessee shall satisfy, pay and discharge any and all judgments and fines that may be recovered against Lessor in any
such nefion(s) provided, however, that Lessor shall have given Lessee written notice of any such claim or demand promptly after receiving notice thereof. Not
withstanding anything to the contrary in this paragraph, Lessee shall have no liabiily for losses to the extent they arc caused by or result from the actions or
omissions of'Lessor.
27. T he atheched Gabinsiteitalcsond Regu3ations an -made apartoEt},ier4grecmc,
29. LIVESTOCK -Livestock will not be kept on the area described in this Special Lease of Stal ands.
29. GARBAGE -Ares must be kept free of all litter, garbage, debris, and unsightly objects.
' I I lands e.logo.ict+l 7irherebygrantcd-andmo-furthcrpermissiorr'rmluirc&
31. PLANS -Plan including, but not limited to, development, layout, parking, landscaping, construction, reconstruction, drainage and slorrn water runorr, or
alteration of improvements or revision of npproved plans for this area must be approved in advance and in writing by the Lessor prior to beginning construction.
Plapa must accommodate handicapped individuals.
V3`2. SURFACING4It parking lots will be paved; roads and traibs•will be treated with materials approved by the Lessor. All •infields must include at all times an
acceptable Qgf a tdltioneethatis`dustfree, All surface materials must be maintained in good condition at all times. Four -Mile Drive to the fourth exit/entrance
ofthe athletic'eomplex wrlf be'pavcd with the initial construction phase,
33. RESOURCE CONSIDERATIONS -Lessee shall conduct all activities associated with the operation orthe authorized use in a manner that will avoie
minimize degradation ofair, land and water quality. In the construction, operation, maintenance, and reclamation of the authorized use, Lessee shall perfor
activities in accordance with all applicable State and Federal air and water quality standards. Lcssce shall develop a surface and/or subsurface water drainage limn
by August 1,1997. Plan will provide for above normal surface water flow and spring runoff to the existing MDOT retention pond and the natural pond behind
the Department complex. The plan must be approved in advance of construction and inwriting by the Lessor
34. HISTORICAL PRESERVATION -lessee shall construct a protective ba i erd interpretive sign for the landmark pine tree known as the Spring Prairie r
Tree. The baricr and interpretive sign must be at the dircction ofthe Departmeh .
35. PUBLIC ADDRESS SYSTEM -Use of a public address systems will be limited to slate and regional tournaments between the hours of 7 a.m. and 10 p.m.
U/36. LiGH77NG,Ali lighting for ilia complex must be approval by the Deparunent, however review of proposed lighting will be timely and approval shall not br
unreasonably withheld.
37. PARKING -The Lessee will be required to hi., ndc sulTicicnt parking associated with activities conducted at tic complex. Al no time will associated parking
be allowed outside of tic complex. Scheduled athletic aclivitics shall not exceed existing parking within thelleasc area.
38. BICYCLE PAT1i-Thc Lessee shall construct a bicycle path providing access to the entrance of die complex when funding becomes available'
`.-19. FENFNG-Thc 'south side and 'A mile adjacent to the socccr.ticld on the west of the complex will be fenced with initial devetopmetit. The remainder of the
andynorth Lease boundaries will be fenced at the completion of atdctic field development. Completion, type and height of fence must be approved by
Alucnt prior to installation.
\ Nu. LANDSCAPING-Lcsscc will be rcquircd to provide landscaping along paths and each Geld complex, within parks and on perimeters of the parcel within 12
months of completion of caeh phase of devclopmcntL The south and north perimeters of [lie complex will be landscaped as the site is developed. Extensive
landscaping (trees 8 to 10 fact in height growing to 30 to 50 fact tall, as well as windbreak shrub species) will be planted along Pour -Mile Drive.tHowcvcr,
landscaping will be situated to avoid causing drifting snow to pile up on Four -Milo Drive. As the remainder ofthe athletic fields arc developed, the Lessee will
complete similar landscaping for noise and sight mitigation on the norti perimeter of the tract. Plans must be approved in advance and in writing by the Lessor.
l 41. TRAFFIC-Thc Lcsscc will be required to construct and reconstruct ingress and egress locations to Highway 93 that provide for safe traffic flow at all times.
prior to use the Lessee will reconstruct Four Mile Drive to provide a shared through and left turn lane 12 feet in width, and construct a right turn lane 12 feet in
width and 250 feet in length from Ihighway 93, west on Four Mile Drive.
The Lessee will be responsible for a protected heft turn signal at the intersection of hlighway 93 and Four Mile Drive. The signal must be installed when
necessary to safely'complele a left turn movement off of U.S. tt93 as determined by the Montana Department orTransportation.
The Lessee will develop an agreement within G months with the City of Kalispell and Flathead County to accommodate road maintenance and snow removal
at all times. A copy of ilia agreement will be provided to the Department.
42. LEABILITY-Therefore, in consideration for the Lease of the above -described lands, Ilia parties hereby agree as follows:
The Lessee shall be required to obtain and maintain general liability insurance with a minimum coverage for each occurrence of.
Property Damage S 50,000
Injury or Death (One Person) $250,000
Injury or Death (Moro than One Person) $500,000
The politics and certificate of insurance shall name the Stale of Montana and Department as insured. No use pursuant to this Lease is allowed until a copy
of the insurance certificate has been submitted to the Department.
43. CONSTRUCTION SAFETY -The Lessee shall carry on all operations in a skillful manner, having due regard for [lie safely of cmpioyces, and shall
safeguard with fences, barriers, fills, covers, or other effective devices all pits, cuts, and other excavations which otherwise would unduly imperil the life, safety,
or property of other persons.
44. BUILDING AND SERVICE SYSTEM PLANS -All plans and specifications for buildings shall be in accordance with the MCO (Uniform) Building Code.
Building plumbing shall be in accordance with the National Plumbing Code. The electrical system shall be designed in accordance with recognized
••dards.
l WRVEY-Within I (one) year of issuance of thhis Lease the Lessee shall survcy the leased area. Thc land survey shall be prepared by a licensed surveyor or
tied engineer. 'A metal cap monuument will be permanently located at the center %. comer for boundary location. The Lessee assumes all responsibility for the
,-filing ofthe survey and complying with jurisdictional zoning requirements.
46. NONDISCRIMINATION (EMPLOYMENT AND SERVICES) -During the term of this Lease the Lessee agrees that the performance of work under this
authorization (including construction, maintenance, and operation of the facility) the Lessee shall not discriminate against any employee or applicant for
employment because of race, color, religion, sex, national origin, age or handicap.
47. CONDITION-Lcsscc has examined the physical condition of the Parcel, is familiar with it, and takes it "as is." Lessor makes no express or implied
warranties as to the physical condition of ilia Parcel.
48. CONFORMITY TO LAW-Lcsscc shall maintain the Parcel in a clean and safe condition. Lessee shall not use or permit lire Parcel to be used in any
manner that is not in conformity with all applicable federal, state, county and municipal laws, statutes, ordinances, pertits and regulations.
49. SURRENDER-Lcsscc shall surrender peaceable possession of the Parcel upon the expiration date of the Lease.
50. IMPROVEMENTS DEFINED All buildings, streets, curbs, sewers, drainage and food control structures, sidewalks, fences, utilities, landscaping, signs,
and other structures of cvcry kind and nature which exist, at any time, on, above or below the parcel or a portion thereof, and which arc not portable in nature, arc
considered "Improvements" under this Lease.
5 ►i. DEVELOPM ENT OF ATHLETIC COMPLEX-Lcsscc has entered into this Lease in order to develop, grade and construct an athletic complex for minor
and major Pee Wee baseball; softball, t-ball, Dabe Ruth League, soccer fields, and a future indoor ice rink and other athletic activities on the parcel and certain
other improvements that arc incidental to, related to, or otherwise from timo4o tmc used in conjunction with ilia above activities. Lessee may make such other
timprovcmcnls, additions or alterations to the Parcel as arc reasonably necessary or appropriate to maintain, rehabilitate and operate ilia athletic complex. Lessee
shall not, without Lessor's prior written consent, remove, demolish, replace or substantially alter all or any part of the Improvements upon the Parcel if the athletic
complex would be substantially and detrimentally affected as a result ofLessce's action.
52. TIMETABLE -Lessee shall commence work on the development of the athletic complex no later than 30 days after written approval of plans by Lessor, and
shall diligently pursue die completion of such improvements.
53. COMPLIANCE WITH LAWS -Construction ofall approved Improvements on the Athletic Complex shall be completed in substantial accordance with the
plans and specifications submitted to Lessor and in compliance with all applicable governmental permits, laws, ordinances and regulations, and requirements for
permits or approvals from various governmental agencies and bodies having jurisdiction over tic Parcel, including, but not limited to, grading permits, building
permits, and zoning and planning requirements provided that Lessee reserves the right to make changes in the plans and specifications to comply with applicable
governmental laws, ordinances and regulations applicable thcrcto.
11 54:" IMPROVEMENTS-Lcsscc shall not place any Improvements upon the Parcel without first receiving prior written permission from the Lessor. Lessor
not intend to allow any additional permanent Improvements on the Parccl and any Improvements placed without Lessor's prior written approval shall not be
irsablo. Lessor hereby authorizes Lessee to construct, without further approval ofLessor, temporary Improvements so long as they arc consistent with the
of this Lease. All temporary Inprovcmcnts shall not be reimbursable. Al the end of the fifth lease year, and every five year period thcreafcr, Lessee,
following the receipt of written request thereof from Lessor, shall provide Lessor with notice of substantial changes to the Improvements, together with a revised
Site Plan of such Improvements.
55. AMORTIZATION OF IMPROVEMENTS-Lcsscc and Lessor agree that the purpose of this Lease upon expiration may not be the highest and best use
for this Parcel. Therefore, it is agreed that all Improvements placed by Lessee for the purpose of the Lease shall be amortized by Lessee over tic Tenn of tic
Lease and upon expiration tic value of those Improvements shall be zero.
56. OWNERSHIP OF IMPROVEMENTS -All Improvements constructed on the Parcel by Lessee pursuant to the terms of this Lease shall be owned by
Lessee until expiration of the term or earlier termination of this Lease. Lessee shall not, however, remove any Improvements from the Parcel or waste or destroy
such Inprovcments, except as permitted by ilia Lease. NI Improvements and alterations or additions thereto on the Parcel at ilia expiration or earlier termination
of this Lease shall become the property of Lessor and shall remain upon the Parcel and be surrendered to Lessor with the Parcel,
57. REMOVAL -With the approval of Lessor, ilia Owner of the hnprovcmenls shall have the right, from time to lime, to remove or demolish all or any part of
such Improvements on the Parcel without obligation to reconstruct Improvements thereon; provided, however, that ilia Lessee shall confine to be obligated to
pay the annual rent as set forth in Section 3. Further, with the prior written permission ofLcssor, the Owner shall be entitled, but not obligated, to remove or
demolish all or any part of t e Improvements from the Parccl at any time within 90 days afar the temhination of [his Lease without any obligation to reconstruct
improvements thereon.
___,...58, UTILITIES -Gas, electric, power, telephone, water, sewer, cable television and other utility or service lines of cvcry kind shall be placed and kept
ground unless Lessor grants prior written approval otherwise. .
XPAIR AND MAINTENANCE -Lessor shall be under no obligation to maintain, repair, rebuild or replace any Improvement on tic Parcel. Lcsscc shall,
-at its sole cost, maintain the Parcel in accordance with approved plans. At its own expense Lessee shall keep and maintain the Parcel in good order, condition and
repair in accordance with all applicable laws, ordinances, rules, orders and regulations of: (a) federal, state, county, municipal, and olhcr govemmental agencies
and bodies having or claiming jurisdiction over the Parcel; (b) any insurance underwriting board or insurance inspection bureau having or claiming jurisdiction
over the Parcel; and (a) all insurance companies insuring all or any part of the Parcel. Lessee shall promptly and diligently repair, restore and replace all or any
part of the Parcel in order to comply with the maintenance obligations specified herein. In the event of damage to or destruction of all or any part of the
Improvements, which damage or destruction is covered by insurance required to be maintained under the terms of this Lease, Lessee shall, prior to the cxpir lion
__ — ._...-, .,_-. ..........v . 11. I --I IIUII Ul II IU I HII U QIIICIIts eCIOte smC
daprige or destruction. After expiration or termination of the cn+ Lease, Lessee shall have no obligation to rcstruct, repair and/or replace the Improvements. An;
damage to adjacent parcel caused by Lessee's u:i'~ the Parcel shall be repaired at the sole cost and expe if Lessee.
60. CONTEST -Not -withstanding anything contained herein to the contrary, afler written notice to Lessor, Lessee may contest by appropriate legal proceeding.
conducted in good faith and with due diligence, the amount, validity, or application, in whole or in part, of any imposition, legal requirement, lien, encumbrance,
charge or any other adverse claim against the Parcel provided that: (a) the fee interest of Lessor shall not thereby be encumbered; (b) such proceeding shall
operate to suspend the collection of any fine, fee, charge, assessment or imposition from Lessor and the Parcel; and (c) Lessor shall not thereby become
any civil or criminal liability whatsoever for Lessor or Lessee's failure to comply.
61. LOSSES -Lessee hereby expressly agrees to indemnify and hold Lessor harmless, or cause Lessor to be indemnified and held harmless, from and age Al
liabilities, obligations, damages, penalties, claims, causes of actions, costs, charges and expenses, including attorneys' fees and costs, collectively "losses:' which
may be imposed upon or incurred by or asserted against Lessor by reason of the following: (a) any accident, injury or damage to any person or property oecurrin
on or about the Parcel or any portion thereof, (b) any use, nonuse or condition of the Parcel or any portion thereof, and (c) any failure on the part of Lessec to
perform or comply with any of the provisions of this Lease. Lessee agrees to indemnify Lessor for any such losses except such matters caused by or resulting
from Lessor's willful misconduct, misfeasance, or active negligence.
62. DEFENSE -In case any action or proceeding is brought against Lessor by reason of any such occurrence, Lessee, upon Lessor's request and at Lessee's
expense, will resist and defend such action or proceeding, or cause the same lobe resisted and defended either by legal counsel designated by Lessee or, where
such occurrence is covered by liability insurance, by legal counsel designated by the insurer if so required by such insurer.
63. DAMAGE -If the Parcel or any portion thereof are damaged or destroyed during the term of this Lease, Lessee may arrange, at its expense, for the repair,
restoration and reconstruction of the same substantially to its former condition, or upon approval by the Commissioner, which will not be unreasonably withheld
or delayed, for development and construction of a new project. In any event, such damage or destruction shall not terminate this Lease or relieve Lessee from its
duties and liabilities hereunder.
64. AMENDMENTS -Lessor and Lessee expressly agree that his Lease may be subject to amendments which are neither material nor substantial from time to
time by mutual consent in writing, provided that the Department determines that: (a) such amendment does not materially and substantially impair the interest e
the Lessor, and (b) the amendment can be legally affected without conducting a public hearing or advertising and offering this Lease as so amended at any public
auction. Amendments which are material and substantial include, but are not limited to, the rent provisions, the term of the Lease and Lessor's remedies.
65. COOPERATION -The parties hereto agree to fully and reasonably cooperate so as to allow Lessee to develop the Parcel consistent with this Lease and the
applicable zoning. The parties also agree to execute such other and further documents as may be reasonably required by any party thereto. Lessor's cooperation
shall not include any obligation on the part of Lessor to expend any monies on behalf of Lessee.
66. NOTICES -Any notice to be given or other document to be delivered by one party to the other shall be in writing and served by personal service or by
depositing same in the United States Mail, postage prepaid, return receipt requested and addressed as follows: Department of Natural Resources and Conservalie
2250 Highway 93 North, Kalispell, MT 59901-2557
67. INTEGRATION -This Lease, together with the Exhibits appended hereto, embodies the whole agreement of the parties. There are no other agreements or
terms, oral or written. This document superseded all previous communications, representations and agreements, oral or written, between the parties.
68. LITIGATION —VENUE AND CHOICE OF LAW -In the event of litigation concerning this agreement, venue shall be in the First Judicial District in and
for the County of Lewis and Clark, Montana, and this agreement shall be governed by the laws of the State of Montana both as to interpretation and performance
IN WITNESS WHEREOF, the State ofMontana and the Lessee have caused this Lease to be executed in duplicate and the Director of the Departr.
Natural Resources and Conservation, pursuant to the authority granted him by the Board of Land Commissioners of the State ofMontana, has hereunto set ins
hand and affixed the seal of the Board ofLand Commissioners this
17th day of July 19�.
ARTHUR R. CLINCH 09—= Z :
Di p ItNatura sources & Conservation Lessee -CLARENCE W. PS, City Manager
City of$alispell
By J NA. DAHLBERG, Area Mana
orthwestcruLand Office
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