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01/11/02 Kalvig/WorkshopRE7CEI Fa. Leonard L. Kaufman James E. Vidal Daniel W. Hileman James M. Ramlow Angela M. Vaninetti Tia R. Robbin Shelly F. Brander Ken A. Kalvig Chris Kukulski Kalispell City Manager 312 1 st Avenue East Kalispell, MT 59901 LAW OFFICES OF 22 Second Avenue West P.O. Box 728 Kalispell, MT 59903-0728 January 11, 2002 Re: City Council Workshop --January 14, 2002 Dear Chris: Telephone: 406-755-5700 Fax: 406-755-5783 kalvignwcenturytel.net Thank you for scheduling Wolford Development's commercial project to be on the city council workshop agenda for this upcoming Monday, and also for scheduling your staff and department heads to meet with Wolford's representatives earlier this week. I, personally, thought the meetings were productive and informative. We now have a much better understanding of the staffs issues, concerns, and ideas relative to Wolford's proposed development, and believe we have made progress in addressing many of them. We look forward to gaining insight on Monday night into the council member's issues, concerns, and ideas relative to moving forward with the city on this project. One of the main objectives of Monday's workshop, from Wolford's perspective, is to get some sense of whether a majority of the council thinks the city should annex Wolford's property or form an annexation district as allowed by SB 359. We fully understand and respect that at the workshop the council is not taking any formal action, nor is it tying itself to any position. Bucky is merely looking for some clear feedback to help guide him as to whether he should (i) file a petition for annexation (meaning we work with the city on PUD zoning), or (ii) file a petition with the city for an annexation district (meaning we work with the county on completing a PUD zone since the property would still be part of the county). Until I spoke with you a couple of months ago, it was Wolford's very strong impression, based on existing city policy and discussions with you and certain council members up to that point, that the city most likely would not agree to annex the property at any time in the near future; thus, we fully expected to work with the county on zoning issues and to seek formation of an annexation district with the city to be able to utilize Kalispell's waste treatment plant. However, in light of the very strong, and perhaps unanimous, preference in favor of annexation recently conveyed by you and your staff, Wolford is willing to submit a petition for annexation and work with the city on PUD zoning, provided that the council on Monday indicates annexation would be preferred and would January 11, 2002 Page 2 not unexpectedly be a problem a few months from now. As discussed with you, we do not want to spend the next few months focusing on annexation, only to have council members not support annexation at a later date based upon reasons that could have been disclosed to us at the present time. Again, we are not looking to pin anyone down to a position, but our window to work with the city is only getting smaller and we do not want to waste time that should alternatively have been spent addressing annexation district agreement issues. We want to do everything possible to ensure that the steps we take moving forward are productive. Next, I want to confirm with you our understanding of some of the items that were discussed relative to services in this week's meetings. The following comments are intended to only convey our understanding of the information discussed with staff to this point (with a couple of later thoughts by Wolford on the fire station issue), and are not intended to convey any offers or commitments from Wolford Development, nor to bind the city in any way at this time. It is hoped by confirming this information in writing, that we will avoid later surprises that could cause future delays in moving this project toward completion. The following comments are not intended to be a complete recap of our discussions on these points, but rather a synopsis of where the main focus seems to be right now. Sewer: Wolford is not opposed to the idea of running a sewer line through right- of-way to the property from the city's closest connection point. We understand that the closest connection points may either be at the Home Depot site or along Whitefish Stage Road. Wolford has a set amount budgeted for bringing sewer lines to the property and cost comparison between these two, or other possible routes, may affect what Wolford is ultimately willing to do. Using the Evergreen wastewater collection system as a pass -through or engineering their own on -site waste treatment system are viable alternatives. However, since city staff has indicated a preference to running a city sewer line to the property, and it initially does not appear to be cost -prohibitive, Wolford wants to focus on that option. Water: Connecting to the Evergreen water system would be the means for Wolford to get water service to the property. Fire: City staff has indicated that the annexation of Wolford's site may create more demand for the city to have a second fire station along Reserve Drive and that such a second station would have very positive effects for the city's fire rating. Wolford understands that the construction costs for the fire station are estimated at $1.2 million. Wolford is willing to make a contribution toward assisting the city in covering the debt service obligation. In our meetings, the possibility of bonding the project was discussed. Wolford anticipates that once his mall is constructed and generating taxes for the city, that the tax revenues from the total mall project, including department stores which will be separately owned, will be sufficient for the city to retire the debt obligation on the fire station. Since, however, city taxes are not anticipated to be generated for 2-3 years, Wolford is willing to consider paying an impact fee of $50,000 annually January 11, 2002 Page 3 for the first three years to help service the debt, provided that annexation and zoning are completed within three months. If annexation and zoning are not completed within that time, Wolford is inclined to only make two payments rather than three. These payments of $50,000 per year would be placed in an escrow account by the city and restricted to paying the debt service on the fire hall. Construction on the fire hall would not start until Wolford has pulled building permits on the mall. Police: If Kalispell police is needed, they are available to respond. Wolford will have on -site security for the mall that can handle a variety of situations to reduce the need for police protection. If your understanding of my discussion on these points is different, please let me know prior to Monday's workshop and feel free to offer your understanding to the council members. Finally, neither the discussions that have taken place between Wolford Development's representatives and you, your staff, or other city officials or representatives, nor the contents of this letter, should be interpreted to mean that Wolford Development is in any way waiving or abandoning any rights it has, or its ability to proceed, because of action taken by the Flathead County Commissioners on the master plan and zoning applications Wolford filed with the Flathead County Planning and Zoning Office last year. Therefore, if we proceed forward by petitioning the city for annexation and initial zoning, it will be with the understanding that such applications and their processing do not in any way affect rights obtained by Wolford as a result of the county's actions to this point in the process. I hope the contents of this letter help to clarify where we are at and our understanding of the highlights from the meetings with you and your staff earlier this week. We look forward to observing the council in workshop on Monday. Respecting the usual procedure for workshops, we are not intending to make any statements or presentations, but Bucky and his representatives will be present to answer any questions which you, staff, or council members may have. Thank you, again, for your assistance with this project. I look forward to seeing you Monday night. Sincerely, KAUFMAN, VIDAL & HILEMAN, P.C. Ken Kalvig cc: Bucky Wolford Jean Johnson Darlene Jump-Rauthe