5. City of Kalispell and DNRC Supplemental Lease Agreement - KidsportsCfT1, OF
_ City of Kalispell
OFFICE OF THE CITY MANAGER
MONTANA
TO: Mayor Fisher and Kalispell City Council
FROM: Doug Russell, City Manager
SUBJECT. Supplemental Lease Agreement between the State of Montana and the
City of Kalispell
MEETING DATE: December 17, 2012
Attached to this memo is the Supplemental Lease Agreement with Kidsports.
BACKGROUND: As part of the acquisition a permanent easement for Kidsports, the State of
Montana has agreed to a Supplemental Lease Agreement that maintains approximately 13 acres
of the currently leased site outside of the permanent easement. This land will be made available
for commercial development with the potential for a monetary contribution as compensation for
the release of the leased parcel. Until the time that the property is released to a prospective
developer, Kidsports will continue to lease the property and have use of it for respective
activities.
FINANCIAL IMPACT: The City will continue to lease this portion of the land for the
approximate cost of $4,000 annually and will be reimbursed by Kidsports. This is necessary for
the time being and until the property is developed as this portion of the original Kidsports
footprint is not included in the permanent easement.
RECOMMENDATION: It is recommended the City Council authorize the City Manager to
enter into the Supplemental Lease Agreement with the State of Montana for the approximately
13 acres of School Trust Land in Section 36 for the reasons set forth above.
Respectfully Submitted,
1-)-�2 &
ug ussell, City Manager
www.kalispell.com
SECOND SUPPLEMENTAL LEASE AGREEMENT
TO
SPECIAL LEASE OF STATE LANDS NO.3053189
This Second Supplemental Lease Agreement (SLA) is made and entered into this
day of , 2012, by and between the State of Montana, Department of Natural
Resources and Conservation, Trust Land Management Division, whose address is P.O. Box
201601, 1625 11a` Avenue, Helena, Montana 59620-1601, (hereinafter referred to as the
"Department") and THE CITY OF KALISPELL, whose address is P.O. Box 1997, Kalispell,
MT 59903 (hereinafter referred to as "the City").
WHEREAS, the City and the Department are parties to Special Lease of State Lands
#3053189 comprising approximately 134.45 acres located within the S 1/2 of Section 36,
Township 29 North, Range 22 West, MPM, and such lease is currently utilized as public
recreational facility for youth sports;
WHEREAS, the Department is interested in commercially developing approximately
13.5 acres of these lease premises directly adjacent to the former DNRC agency office site, and
is willing to authorize use of approximately 3 acres of additional lands to the City (see Exhibit 1
attached) for a net reduction of approximately 10.5 acres;
WHEREAS, the Department proposes the issuance of, if necessary, a minimum of three
Requests for Proposals -Leasing (RFP), including the July, 2012 RFP effort, through February,
2018. The goal of these RFP efforts will be to obtain a commercial ground lessee (hereinafter
referred to as "the developer') who will develop this approximately 13.5 acre parcel combined
with the former DNRC agency office site, and the developer will enter into negotiations with the
City of Kalispell for any improvements upon the same. Each of these RFP's will be issued
consistent with terms and conditions of the July 30, 2012 RFP-Leasing.
WHEREAS, the City is willing to relinquish the approximately 13.5 acre part from the
leasehold premises to allow the Department to enter into a commercial lease agreement with a prospective
developer.
WHEREAS, the City is willing to waive any right, title, or interest in the property upon
Department successfully completing any Diligence Phase and entering into the Development
Phase of a commercial lease.
WHEREAS, the Department is willing to cooperate with the City of Kalispell on any
future Supplemental Lease Agreement as may be necessary to amend the boundary of the lease
area to include the previously released approximately 13.5 acre area back into this lease if any
commercial lease is terminated prior to development.
WHEREAS, in the event that the Department has not successfully secured a commercial
developer for the 13.5 acres by February 28, 2018, the NWLO Area Manager shall convene a
task force to include the Department and representatives from the City of Kalispell and Kidsports
and reassess the project. At its sole discretion the Department will determine if the Special
Lease of State Lands #3053189 will remain in force on the approximately 13.5 acres of land.
NOW, THEREFORE, the City and the Department hereby agree to amend State Lease No.
3053189 as follows:
1. Effective upon execution of a new commercial ground lease between the Department and the
developer, the actual leased area will be approximately 122.09 acres and generally depicted
as KIDSPORTS PROPOSED EASEMENT PARCEL on attached Exhibit 1 titled: CITY OF
KALISPELL/KIDSPORTS PROPOSED EASEMENT.
2. The following language is inserted into paragraph 3 of the Lease, concerning rental:
Should the Lessee submit a complete application to purchase Public Park Easement on
any portion of the Lease premises described hereinabove, on or before December 31 s` of
any year during the term of this Lease, the annual rental payable on the succeeding
March 1 S` and each year thereafter shall be proportionately reduced by a fraction
representing the acreage purchased divided by the total acreage originally committed to
this Lease.
3. The Fee Schedule in Paragraph 3, "Rental Rate" of the Original Lease, and as modified by
Supplemental Lease Agreement dated February 5, 2003, is hereby further modified to include
the following statement:
Notwithstanding anything contained in the Original Lease or as modified by the
Supplemental Lease Agreement dated February 5, 2003 to the contrary, the lease fee will
be recalculated as appropriate each year prior to the end of the billing period to account
for any changes in acreage due to lease area amendments. Partial years may be pro-
rated, however, no lease payments made will be refunded.
4. The provisions of this Supplemental Lease Agreement supersede and control over any
conflicting provisions of the above -described lease. However, the remainder of the terms of
the above -described lease, as previously amended, shall remain unchanged.
5. This Supplemental Lease Agreement shall be binding upon the Department and the Lessee,
and their heirs, executors, successors, and assigns.
6. The validity, construction, interpretation, and administration of this agreement shall be
governed by the substantive laws of the State of Montana.
DATED this day of , 20
CITY OF KALISPELL
2
Doug Russell, City Manager
STATE OF MONTANA
ss
County of Flathead
This instrument was acknowledged before me on , 2012 by Doug Russell, as
City Manager of the City of Kalispell, on behalf of whom this instrument was executed.
(Signature of notary public)
(Seal, if any)
(Name - typed, stamped, or printed)
Residing at:
My commission expires:
MONTANA DNRC
Mary Sexton, Director
Montana Department Of Natural
Resources and Conservation
By:
Steve Frye, Area Manager
Northwestern Land Office
EXHIBIT I
CITY OF KALISPELL/ KIDSPORTS
PROPOSED EASEMENT
Section 36, T.29N., R.22W., P.M.,M.
Flathead County, Montana
500' 0 250' 500'
1 " = 500'
m
RESERVE LOOP
S 89'681N"E
589'S8'06"E
D"3'50'46" 226.5W
1081.68, 5 89'58'O6' E
R=420.00'
L=14.62'
D-21°00'15" 1249.19' S 0'09'13"W
�35.04' Rz 47.74•
L=3 S 14'02'47" E
COMMERCIAL o
51.56
s
REMAINDER °
N89,58.06,w
(3 LOTS) "
400.00'
361380 SgFt
8.296 Acres
VICTORY COMMONS
d
COMMERCIAL LOT 3 b
rn
z n a601.3 ' N e
601.33'
200.14' zo
00.14' w 1229857 SgFt `"
Q
z o
ti 28.234 Acres
5 89'48'52" E
24.85'
C6
S 90"00'00"W S 14"16'60"W
.11
363.66• 41.19'
KIDSPORTS PROPOSED
EASEMENT PARCEL
5388271 SgFt m
95 r21" W
N 8a6.o7
122.083 Acres a m
o 6 a°o9
w
z 99.93''z7°
N 89'49'63' W
Z 225.04'
o v
m
y
5 89'48'23"E
305.04'
S O'11'01"W
135.00,
S 4'00'45" W
150.33'
3
f`
� m
5 89'S5'39' a�S O'04'33' E
N43W SO'04'33"E 36fi S28'0' 4'25" W
46
FOUR MILE DRIVEarw
F & H Land Surveying, Inc.
144 Second Street East
P.O. Box 114
Whitefish, Mt. 59937
406-862-2386