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03/14/00 Kukulski/Retail Development in KalispellMarch 14, 2000 Mr. Tom Barbieri G & B Real Estate Services 201 West North River Drive Suite 100 Spokane, WA 99201 RE: Retail Development in Kalispell Dear Mr. Barbieri: I would like to make you aware of an ongoing concern which is taking place in Kalispell. Where is the retail core of Flathead Valley going to be in the future? Currently, Kalispell Center Mall functions as this core, however, several big box retailers have already located northeast of town along US - 2. The City of Kalispell has been approached by a reputable mall developer who has approximately 135 acres under option in the Evergreen area. This developer appears to have built a strong working relationship with several retail mall anchors including two that currently anchor the Center Mall. It is my understanding that this is only one of roughly four developers who are actively courting mall anchors (Herberger's, JC-Penny's, Sears, etc.) in an effort to construct a 750,000 square foot indoor mall. The City is extremely concerned about the potential relocation of this core retail area. Therefore, we would like to encourage you to work with the City in your efforts to meet the needs of these retailers. I have spoken with David Peterson on two occasions regarding this issue. I appreciate David's time and efforts, but am concerned about the company's illusive nature in dealing with the City. I respect the confidential nature of your business and do not wish to interfere. However, if the City Council becomes convinced that a new mall is inevitable, I believe they will support the project provided that it is within the city limits. Currently, the Council is being swayed into believing that a new mall within Kalispell is the only way to retain its role as the business center of Flathead Valley. The City has made many mistakes over the past several decades by assuming that it would always remain the business and retail center of the Valley. Because of these mistakes, the City is not prepared to stand back and watch further development take place without the City's involvement. The bottom line is, if we (City Council and staff) become convinced that neither the Kalispell Center Mall nor other propertied within the current core area can properly accommodate the retail interest in the Valley, we will support the development of a new mall so long as it is either already within the city limits or can be annexed into the city. I know that your company has historically not had a very good relationship with the City. We have unrelated issues that may continue to cause tension between the two parties. However, I am prepared to set those differences aside as this issue is of utmost concern to the City. I sincerely believe that we have an opportunity to expand the retail core of Kalispell which will benefit both yourselves and the City if we work together. Please call me immediately upon receiving this letter so that we may set up a time to get together and further discuss this issue. I would be happy to come to Spokane at your earliest convenience if that would help speed up this process. I cannot overstate the City's concern regarding this issue. Sincerely, Chris A. Kukulski Bill Boharski City Manager Mayor cc: David Peterson City Council