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2. Resolution 4535 - Approving Stream DocumentsCity of Kalispell Post Office Box 1997 • Kalispell, Montana 59903-1997 • Telephone (406) 758-7700 • FAX (406) 758-7758 Honorable Mayor and City Council FROM: Chris A. Kukulski, City Manager SUBJECT: Resolution 4535 MEETING DATE: February 7, 2000 BACKGROUND: The attached resolution approves the Location, Development and Use Agreement, Interlocal Agreement; Lease Agreement and all other documents related to the Stream Project. The resolution also authorizes the Mayor, City Manager, Finance Director, and City Attorney to make any non -substantive (minor) changes, if necessary to the agreements. I did not realize that this, all inclusive resolution could be created and as a result have developed memos for each of the attached documents. I apologize if this confuses you as you review this document. I will be home Saturday evening and Sunday if I can help you with anything. RECOMMENDATION: The City Council approve the attached Resolution 4535 which approves the Stream International project. FISCAL EFFECTS: The direct impact of this project on the City's tax revenues will be offset by the expenses paid out in order to complete the project. However, the indirect impact of creating 500 full time jobs will definitely help to strengthen our economy and spur economic growth. ALTERNATIVES: As suggested by the Council. Respectfully submittted�,�, lc_�� s��'�1'� �" ` _ Chris A. Kukulski City Manager Report compiled February 4, 2000 Page 1 of 1 RESOLUTION NO. RESOLUTION RELATING TO STREAM INTERNATIONAL SERVICE CORP. PROJECT; DESCRIBING AND APPROVING THE PROJECT; APPROVING THE LOCATION, DEVELOPMENT AND USE AGREEMENT BETWEEN THE CITY AND STREAM INTERNATIONAL SERVICE CORP.; AUTHORIZING THE EXECUTION OF AN INTERLOCAL AGREEMENT BETWEEN THE CITY, FLATHEAD COUNTY AND THE FLATHEAD VALLEY ECONOMIC DEVELOPMENT AUTHORITY; AND APPROVING AND AUTHORIZING THE EXECUTION AND DELIVERY OF DOCUMENTS RELATED THERETO BE IT RESOLVED by the City Council (the "Council") of the City of Kalispell, Montana (the "City"), as follows: WHEREAS, Montana Code Annotated, Title 7, Chapter 15, Parts 42 and 43, as amended (the "Act"), authorizes the City to issue and sell its taxable tax increment industrial infrastructure revenue bonds for the purpose of financing all or a portion of the costs of the acquisition, construction and installation of urban renewal projects and related financing costs; and WHEREAS, the City has, pursuant to the Act, established its West Side Urban Renewal District (as hereinafter defined, the "District") and has provided for the segregation of the tax increment derived therefrom as permitted by the Act; and WHEREAS, pursuant to Flathead County Commissioners' Resolution No. 1346, Flathead County (the "County") created the Flathead County Economic Development Authority as a port authority (the "Authority") on July 22, 1999; and WHEREAS, the County has appointed the Commissioners of the Authority and has pursuant to Resolution No. 1346 delegated certain powers, duties and responsibilities to the Authority; and WHEREAS, the City and the Authority requested all interested firms and agencies to submit a proposal ("RFP") for the lease of a 50,000 square foot office facility in the Gateway West Complex in the City (the "Project"), all in accordance with the provisions of Section 7-15- 4263, M.C.A. The proposals were required to include information on the nature of the business to be conducted, organizational structure, key officers of the firm, a description of the ability of the firm to respond, financial strength and stability, and any specific requirements the firm may have for the leased space; and WHEREAS, upon reviewing the proposal submitted by Stream International Service Corp. (the "Company") on January 6, 2000 (the "Company Proposal"), the City and the Authority accepted the Company Proposal for the Project (as herein defined) and authorized the entering into of negotiations with the Company to finalize plans and documents for implementing the Company Proposal; and WHEREAS, in the process of negotiating plans and documents with the parties involved, it has become apparent that the City should acquire approximately 59,000 square feet rather than 50,000 square feet to provide all necessary space to the Company; and WHEREAS, pursuant to an Agreement for Conveyance of Real Property between the City and American Capital Group, LLC, a California limited liability company ("American Capital Group"), the City has agreed to purchase and American Capital Group has agreed to sell to the City approximately 59,000 square feet of the Gateway West Complex suitable for lease to the Company (the "Property"); and WHEREAS, the City Council has approved the Project as an Urban Renewal Project within the meaning of the Act; and WHEREAS, the Authority has approved the Project as an authorized corporate activity of the Port Authority under the Port Authority Act; and WHEREAS, Montana Session Laws 1995, Chapter 477 (codified in part as Montana Code Annotated, Sections 17-6-309 and 17-6-316) (the "Board of Investments Loan Act") authorizes the Board of Investments of the State of Montana (the "Board of Investments") to make a loan to a local government entity for the purpose of financing infrastructure improvements to enhance economic development and create jobs in the basic sector of the economy, if the loan will result in the creation of a business estimated to employ at least 50 people in Montana on a permanent full-time basis and further authorizes such local government to charge use fees and to pledge such fees to the repayment of such loan; and WHEREAS, the Board of Investments has determined that the Project is eligible for financing and is consistent with the policies and purposes of the Board of Investments Loan Act and has agreed to loan the City $2,500,000 to finance a portion of the Project, namely the acquisition of the Property upon the satisfaction of certain conditions and requirements; and WHEREAS, to acquire the Property and to encourage the location and development of the Project in the District, the City will issue its West Side District Taxable Tax Increment Urban Renewal Revenue Bond, Series 2000 (the "Series 2000 Bond"), in the aggregate principal amount of $2,500,000, to evidence the Loan from the Board of Investments; and WHEREAS, pursuant to an Interlocal Agreement, dated as of February 8, 2000 (the "Interlocal Agreement"), the City, the Authority and the County have set forth their responsibilities and obligations with respect to the acquisition, ownership, management and financing of the Property and other obligations with respect to the Project; and WHEREAS, the City and Authority have conducted negotiations with the Company as well as other parties to arrive at final terms and conditions satisfactory to the Company, the City and the Authority for the Project. -2- Section 1. Draft Forms of Documents. Draft forms of the following documents relating to the Project have been prepared and submitted to this Council, and are hereby directed to be filed with the Clerk of Council: (a) Agreement for Conveyance of Real Property between the City and American Capital Group; (b) Location, Development and Use Agreement between the City and the Company, with the following Exhibits: Exhibit A —Description of the Improvements Exhibit B—Description of Personal Property and Equipment Exhibit C—Description of the Property Exhibit D—Form of Lease Agreement Exhibit ECompany Certificate as to Job Credit Certification Exhibit F—Form of Flathead Electric Agreement Exhibit G—Form of CenturyTel Agreement Exhibit H—Form of the Company's Job Audit Certificate; (c) Interlocal Agreement between tl ity, t e t ity and the County; (d) Lease Agreement between '' �nthe Company; (e) Declaration of Restrictions and Establishment of Easements Affecting Land between the City and ACG - I ; and (f) Development Agreement between the City and American Capital Group. Section 2. Final Approval of Project. The Project as described in the Location, Development and Use Agreement is hereby found, determined and declared to be in the public interest of the City and its citizens and the carrying out and complying with the terms, conditions, obligations and duties of and by the City is in furtherance of the purposes and pursuant to its authority under the Act. The Council specifically approves and confirms that the Property to be acquired and leased to the Company shall be approximately 59,000 square feet in the Gateway West Mall, rather than the approximate 50,000 square feet previously approved. The additional 9,000 square feet will be financed through a prepayment of lease amount by the Company and will not result in the City incurring any additional indebtedness. Section 3. Authorization and Approval of the Agreement for Conveyance of Real Property; Location, Development and Use Agreement, Interlocal Agreement; Lease Agreement, Declaration of Restrictions and Establishment of Easements Affecting Land; and Development Agreement. The forms of the Agreement for Conveyance of Real Property; Location, Development and Use Agreement; Interlocal Agreement; Lease Agreement; Declaration of Restrictions and Establishment of Easements Affecting Land; and Development Agreement referred to in Section 2 are approved. The Mayor, the City Manager and the Finance Director are authorized and directed to execute and deliver each of the aforementioned documents as may be required. The Mayor, City Manager, Finance Director and City Attorney are also authorized to execute such -3- other instruments as may be required to give effect to the transactions contemplated herein and in the Location, Development and Use Agreement. Section 4. Modifications, Absence of Officers. The approval hereby given to the various documents referred to above includes an approval of such modifications thereto, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the Mayor, City Manager, Finance Director and the City Attorney. The execution of any instrument by the appropriate officer or officers of the City herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. In the absence or disability of the Mayor or City Manager, any of the documents authorized by this resolution to be executed, may be executed by the acting Mayor and in the absence or disability of the Finance Director by such officer of the City who, in the opinion of the City Attorney, may execute such documents. Section 5. Effective Date. This resolution shall become effective immediately upon its passage and approval. PASSED AND APPROVED by the City Council of the City of Kalispell, Montana, this 7th day of February, 2000 Attest: Clerk of Council 0 Mayor