2. Core Area Grant Funded Marketing - Feasibility Plan ContractCity of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903
Telephone: (406) 758-7701 Fax: (406) 758-7758
MEMORANDUM
To: Doug Russell, City ManagerT)R_
Cc: Tom Jentz, Planning Director
From: Katharine Thompson, Community Development Manager
Re: Core Area Market Analysis and Feasibility Study contract award
Meeting Date: October 15, 2012
BACKGROUND: The City is conducting an extensive planning process in the Core Area of
Kalispell. The area to be redeveloped is bordered to the north by Washington Street and First
Street to the south, east and west by city limits. It is bisected by the final section of the Mission
Mountain Short Line Rail track which is owned by Burlington Northern Santa Fe and leased to a
short line management company, WatCo. In addition to the extensive work conducted in-house
to date, the City contracted for conceptual design renderings for the plan and now is looking to
complete the effort with a market analysis and feasibility study specific to the redevelopment of
the Core Area.
Under the proposed contract Willdan Financial Services will deliver to the City a Core Area
Feasibility Study that will allow community stakeholders to make informed decisions about the
redevelopment of the Core Area. The Core AreaFeasibility Study, through well -designed
implementation strategies, will assist in the creation of new development and employment
opportunities in the Core Area of Kalispell. Willdan shall develop a comprehensive Feasibility
Study that incorporates an exhaustive evaluation of current strengths, weaknesses and
opportunities for development, as well as clear guiding parameters for the attraction of
development within the Core Area while addressing the needs of the existing businesses and
property owners.
Based on the results of the fieldwork, stakeholder interviews, and other primary market research,
Willdan will prepare a financial feasibility analysis of the proposed Core Area redevelopment
including costs associated with railroad track removal, business relocation, community amenities
(linear park), and any potential development financial assistance given various development
scenarios. Willdan will discuss with staff and the City Council how project concept,
development strategy, development program structure, absorption assumptions, pricing, and
other project components relate to the financial feasibility and redevelopment potential of the
Core Area.
The financial feasibility will also address the financial returns to the City with respect to job
creation, increased property values and other revenues.
The scope of work is anticipated to require approximately 3 to 4 months. Upon completion, it is
to be included as a component of the Core Area Revitalization Plan.
The City of Kalispell proposes to leverage the Big Sky Trust Fund grant with the 2010
Brownfields Area Wide Planning Pilot Program to fund market analysis and feasibility studies of
the Core Area for economic redevelopment.
FISCAL IMPACT: The Willdan Financial Services contract will be paid entirely by two grant
award sources: EPA Brownfields Area Wide Planning Pilot Program funds in the amount of
$30,000 and a Montana Department of Commerce, Big Sky Trust Fund award of $30,000.
RECOMMENDATION: City Council award a contract for services to Willdan Financial
Services in an amount not to exceed $60,000.
Respectfully submitted,
Katharine Thompson I
Community Development Manager
Community & Economic Development
r..: f •
CITY OF KALISPELL
CORE AREA FEASIBILITY STUDY
THIS AGREEMENT is made and entered into this day of October, 2012, by and
between the CITY OF KALISPELL, MONTANA, a municipal corporation organized and
existing under the laws of the State of Montana, 201 First Avenue East, Kalispell, Montana
59901, hereinafter referred to as "City," and WILLDAN FINANCIAL SERVICES, 27368 Via
Industria, Suite 110, Temecula, CA 92590, hereinafter referred to as "Consultant."
In consideration of the mutual covenants and agreements herein contained, the receipt
and sufficiency whereof being hereby acknowledged, the parties hereto agree as follows:
1. Purpose: City agrees to hire Consultant as an independent contractor to perform
for City services described in the Scope of Services attached hereto as Exhibit "A" and by this
reference made a part hereof for the project generally described as the City of Kalispell Core
Area Feasibility Study.
2. Effective Date: This Agreement is effective upon the date of its execution and
will terminate on the 30` day of June, 2013.
3. Scope ofWork: Consultant will perform the work and provide the services in
accordance with the requirements of the Scope of Services.
. Payment: City agrees to pay Consultant no more than SIXTY THOUSAND
AND NO/100THS Dollars ($60,000.00) for services performed pursuant to the Scope of
Services. Any alteration or deviation from the described work that involves extra costs will be
performed by Consultant after written request by the City, and will become an extra charge over
and above the contract amount. The parties must agree upon any extra charges in writing.
5. Independent Contractor Status: The parties agree that Consultant is an
independent contractor for purposes of this Agreement and is not to be considered an employee
of the City for any purpose. Consultant is not subject to the terms and provisions of the City's
personnel policies handbook and may not be considered a City employee for workers'
compensation or any other purpose. Consultant is not authorized to represent the City or
otherwise bind the City in any dealings between Consultant and any third parties.
Consultant shall comply with the applicable requirements of the Workers' Compensation
Act, Title 39, Chapter 71, MCA, and the Occupational Disease Act of Montana, Title 39,
Chapter 71, MCA. Consultant shall maintain workers' compensation coverage for all members
and employees of Consultant's business, except for those members who are exempted by law.
Professional Services Agreement
Consultant shall furnish the City with copies showing one of the following: (1) a binder
for workers' compensation coverage by an insurer licensed and authorized to provide workers'
compensation insurance in the State of Montana; or (2) proof of exemption from workers'
compensation granted by law for independent contractors.
6. Indemnity and Insurance: For other than professional services rendered, to the fullest
extent permitted by law, Consultant agrees to defend, indemnify, and hold the City harmless
against claims, demands, suits, damages, losses, and expenses connected therewith that may be
asserted or claimed against, recovered from or suffered by the City by reason of any injury or
loss, including but not limited to, personal injury, including bodily injury or death, property
damage, occasioned by, growing out of, or in any way arising or resulting from any intentional
or negligent act on the part of Consultant or Consultant's agents or employees.
For the professional services rendered, to the fullest extent permitted by law, Consultant
agrees to indemnify and hold the City harmless against claims, demands, suits, damages, losses,
and expenses, including reasonable defense attorney fees, to the extent caused by the negligence
or willful misconduct of the Consultant or Consultant's agents or employees.
For this purpose, Consultant shall provide City with proof of Consultant's liability
insurance issued by a reliable company or companies for personal injury and property damage in
amounts not less than as follows:
® Workers' Compensation - statutory
® Employers' Liability - $1,000,000 per occurrence; $2,000,000 annual aggregate
® Commercial General Liability - $1,000,000 per occurrence; $2,000,000 annual aggregate
® Automobile Liability - $1,000,000 property damage/bodily injury; $2,000,000 annual
aggregate
• Professional Liability - $1,000,000 per claim; $2,000,000 annual aggregate
The City shall be included or named as an additional or named insured on the
Commercial General and Automobile Liability policies. The insurance must be in a form
suitable to City.
7. Professional Service: Consultant agrees that all services and work performed
hereunder will be accomplished in a professional manner.
8. Compliance with Laws: Consultant agrees to comply with all federal, state and
local laws, ordinances, rules and regulations, including the safety rules, codes, and provisions of
the Montana Safety Act in Title 50, Chapter 71, MCA.
Professional Services Agreement
9. Nondiscrimination: Consultant agrees that all hiring by Consultant of persons
performing this Agreement will be on the basis of merit and qualification and will not
discriminate on the basis of race, color, religion, creed, political ideas, sex, age, marital status,
physical or mental disability, or national origin. Consultant agrees to comply with all terms and
requirements of any and all grant documents funding this project.
10. Default and Termination: If either party fails to comply with any condition of
this Agreement at the time or in the manner provided for, the other party, at its option, may
terminate this Agreement and be released from all obligations if the default is not cured within
ten (10) days after written notice is provided to the defaulting party. Said notice shall set forth
the items to be cured. Additionally, the non -defaulting party may bring suit for damages,
specific performance, and any other remedy provided by law. These remedies are cumulative
and not exclusive. Use of one remedy does not preclude use of the others. Notices shall be
provided in writing and hand -delivered or mailed to the parties at the addresses set forth in the
first paragraph of this Agreement.
11. Modification and Assignability: This document contains the entire agreement
between the parties and no statements, promises or inducements made by either party or agents
of either party, which are not contained in this written Agreement, may be considered valid or
binding. This Agreement may not be enlarged, modified or altered except by written agreement
signed by both parties hereto. The Consultant may not subcontract or assign Consultant's rights,
including the right to compensation or duties arising hereunder, without the prior written consent
of City. Any subcontractor or assignee will be bound by all of the terms and conditions of this
Agreement.
12. Ownership and Publication ofMaterials: All reports, information, data, and
other materials prepared by the Consultant pursuant to this Agreement are the property of the
City. The City has the exclusive and unrestricted authority to release, publish or otherwise use,
in whole or part, information relating thereto. Any re -use without written verification or
adaptation by the Consultant for the specific purpose intended will be at the City's sole risk and
without liability or legal exposure to the Consultant. No material produced in whole or in part
under this Agreement may be copyrighted or patented in the United States or in any other
country without the prior written approval of the City.
13. Liaison: City's designated liaison with Consultant is Katharine Thompson and
Consultant's designated liaison with City is Jose Ometeotl.
14. Applicability: This Agreement and any extensions hereof shall be governed and
construed in accordance with the laws of the State of Montana and the venue for any disputes
shall be the 1 lch District Court of Flathead County, Kalispell, Montana.
Professional Services Agreement
IN WITNESS WHEREOF, the parties hereto have executed this instrument the day and
year first above written.
By
WILLDAN FINANCIAL SERVICES
CONSULTANT
LM
Doug Russell, City Manager
Professional Services Agreement
WMEW.-M
Willdan will deliver to the City a Core Area Feasibility Study that will allow the community stakeholders
to make informed decisions about the redevelopment of the Core Area. The Core Area Feasibility Study,
through well -designed implementation strategies, will assist in the creation of new development and
employment opportunities in the Core Area of Kalispell. Willdan shall develop a comprehensive
Feasibility Study that incorporates an exhaustive evaluation of current strengths, weaknesses and
opportunities for development, as well as clear guiding parameters for the attraction of development
within the Core Area while addressing the needs of the existing businesses and property owners.
Scope of services described in detail by task.
StudiesLM: Market and Feasibility a.Core Area
The Strategy will incorporate elements that will support the goals of the Core Area, establish new
opportunities for future retail success, and integrate with current and future development plans.
this study seeks to provide the City with a strategy for sustaining and strengthening Kalispell's role as the
retail, professional, medical, and governmental center of the Flathead Valley via the redevelopment of the
Core Area. The Strategy focuses on several key issues includingAssessment and analysis of development
opportunities amongst the following sectors:
o Retail
o Office
o Business Park
o Hotel and Hospitality
o Institutional
o Single and Multi -Family Housing
o Retention of existing retailers;
o Strategy for the recruitment of new commercial uses;
o The impact of any recent and proposed development projects; and
o Ways in which public policy can encourage appropriately scaled new development that will
positively shape and reinforce the Core Area of Kalispell.
Specifically, the Strategy will be structured to identifyApparent strengths and weaknesses in Kalispell for
the following development sectors:
o Retail
o Office
o Business Park
o Hotel and Hospitality
o Institutional
o Single and Multi -Family Housing
)Professional Services Agreement
o Elements that may now (or in the future) support or constrain the goals of the Core Area Strategy;
o The consumers experience within Kalispell and the Core Area;
o Characteristics in within Kalispell that have the greatest impact on development;
o Voids and opportunities in the marketplace that will affect local retailers and national chains; and
o Public improvements and public and private investment strategies to reinforce project goals and
objectives.
GUIDING PRINCIPLES
Willdan's strategy to support development in Kalispell will be based on a number of guiding principles.
Willdan will create a Strategy that will be driven by these principles:
o Protect and not detract from existing developments (Commercial/Office/Institutional/Hospitality
and Residential);
o Expand the Size of the Local Market through market analysis and data analytics;
o Create distinctiveness in the marketplace with particular focus on the Core Area;
o Investigate the use of retail streets to serve as connectors within the Core Area and greater
Kalispell;
o Exploit existing amenities and investigate the introduction of new amenities; and
o Aggressive marketing and recruitment.
The consultant team will facilitate discussion group meetings and coordinate one open house session to
secure public input for this assignment. In addition to providing feedback to the consultant team, these
sessions will provide information to members of Kalispell's community. At each meeting, we will
describe the goals of the project and the expected project timeframe. A list of challenges and assets
developed will be distributed to participants, and a summary of the resulting discussion will be
incorporated into the Strategy. We will also include maps of Kalispell illustrating active retail edges, land
uses, transportation framework and location of curbside parking. Project information proposed to be
available at the Open House will include:
o A Project Overview Fact Sheet;
o A one -page Core Area Strategy Framework highlights summary; and
o A one -page Trade Area Market Analysis highlights summary.
MARKET ANALYSIS
Before examining Kalispell's future development opportunities, an understanding of current conditions is
essential. For purposes of establishing a baseline for analysis, the defined area has been provided and
detailed by the City in the RFQ. Willdan will conduct a market analysis of Kalispell to develop a
comprehensive strategy. The marketing analysis process can be broken down into six steps:
1. Defining the objective;
2. Analysis of the situation;
3. Obtaining data that is specific to the problem;
4. Analyzing and interpreting the data;
5. Fostering ideas and problem solving; and
6. Designing a plan.
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Willdan will conduct an exhaustive evaluation of the Core Areas current strengths, weaknesses and
opportunities. The evaluation will include stakeholder interviews, field survey, cataloging all land uses in
the Core Area and utilizing digital photos and video to provide a multimedia element to the analysis.
Task 2: Conceptual Infrastructure
Willdan will consult with staff to identify all railroad track proposed for removal within the Core Area.
Within the Strategy, Willdan will identify all land ownerships and easements pertaining to the track
proposed for removal. A cost estimate for the removal of the track will be prepared. Our rail related
experience extends across the country and we are quite adept at identifying the potential issues and
developing accurate cost estimations for the track removal. Willdan does not propose to secure formal
bids for the removal of the track nor do we propose to prepare demolition/removal plans.
Willdan will work with City staff in identifying appropriate projects and public improvements needed in
the Core Area, to ensure that they are consistent with the goals and objectives of the redevelopment. The
Core Area Strategy will identify potential funding sources for the public improvements and track removal
as well as assess the viability of pairing multiple funding sources.
Task 3: Financial Feasibility
Based on the results of the fieldwork, stakeholder interviews, and other primary market research, Willdan
will prepare a financial feasibility analysis of the proposed Core Area redevelopment including costs
associated with railroad track removal, business relocation, community amenities (linear park), and any
potential development financial assistance given various development scenarios. We will discuss with
staff and the City Council how project concept, development strategy, development program structure,
absorption assumptions, pricing, and other project components relate to the financial feasibility and
redevelopment potential of the Core Area.
The financial feasibility will also address the financial returns to the City with respect to job creation,
increased property values and other revenues.
Task 4: Business Relocation Feasibility
Willdan's extensive experience in the relocation of property owners and tenants to facilitate development
will allow us to accurately assess the relocation needs of the targeted properties. Willdan will look to City
staff to assist in identifying suitable rail served property. Relocation cost estimates will be prepared and
based upon the preferred relocation option. The Core Area Strategy will identify potential funding sources
for the relocation, including private sources, as well as assess the viability of pairing multiple funding
sources.
Task 5: Linear Park Feasibility
Willdan will, in consultation with staff and stakeholders, provide development options and a financial
feasibility analysis for the development of a linear park within the Core Area. The identification of
potential funding sources for the linear park will be identified and investigated.
Professional Services Agreement
Willdan will also develop a quantitative and qualitative treatment of the potential benefits of the proposed
Core Area redevelopment. Willdan will also estimate the number of one-time construction and ongoing
permanent jobs and associated wages generated by the project. Jobs will be expressed in terms of annual
full-time equivalents as determined by the absorption assumptions associated with the proposed Core
Area redevelopment. Willdan's multivariate fiscal modeling will develop estimates of the project -based
fiscal revenues, job creation/payroll, and indirect spending that would benefit the City of Kalispell. This
analysis will also evaluate environmental, social, and other public benefits that are difficult to quantify
but that will have a positive impact on the community of the City. The treatment of these project benefits
will be developed with collaborative input from the client.
Additional Optional Tasks
Willdan is available to attend additional meetings with City staff and the public, as necessary, on a time
and materials basis.
Required information to be provided by the client (Microsoft Office file format preferred), includes, but is
not limited to:
1. Any Core Area redevelopment proposals detailing all residential and commercial uses under
consideration, as applicable, including units (by size and type), square footage, and corresponding
proposed sales prices/rental rates.
2. A copy of any past completed market analyses for the Core Area, or other source that would
provide local area occupancy, sales, lease rates, or other data that may be available.
3. Phasing / construction timeframe assumptions from any past Core Area studies (Year 1 through
buildout).
4. Assumptions regarding any component of the project site that will convert to public management
or maintenance (linear feet or miles of public roads, size and type of public facilities, open space
acreage, etc.).
5. City of Kalispell assumptions regarding potential developer contributions (type and cost of capital
improvements), impact fees, or other potential private project investments.
6. Description of the City of Kalispell's assumptions regarding "Other Project Benefits" including,
but not limited to, environmental mitigation effort, potential social benefits, and anticipated on -
and off -site infrastructure investments.
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The work schedule below outlines the estimated number of weeks to complete each task identified in the
Project Approach section.
Professional Services Agreement