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03. Developers Agreement with City Service - Westbrook SquareDEVELOPER'S AGREEMENT This Developer's Agreement, made this day of , 1999, is by and between Northwest Investments Partnership, L.L.P., a Montana Limited Liability Partnership, hereinafter PARTNERSHIP or DEVELOPER, and the CITY OF KALISPELL, a municipal corporation, hereinafter CITY: W I T N E S S E T H: WHEREAS, the City of Kalispell, pursuant to Title 7, Chapter 15, Parts 42 and 43, Montana Code Annotated, has enacted the Kalispell West Side Urban Renewal Project, Ordinance #1259 on the 17th day of March, 1997; and, WHEREAS, as part of the Kalispell West Side Urban Renewal Project the City Council of the City of Kalispell determined that the "project area" was blighted and that extensive rehabilitation was necessary within the "project area" to facilitate proper development within the area; and, WHEREAS, under Title 7, Chapter 15, Part 42 and 43 MCA, and the Kalispell West Side Urban Renewal Project, the City is authorized to eliminate and prevent the spread of blight by encouraging the redevelopment of land by private enterprise; and, WHEREAS, PARTNERSHIP has made a request to utilize funds available to the City under the Kalispell West Side Urban Renewal Project to improve infrastructure and landscaping and make certain on -site improvements to property referred to as Westbrook Square, located near the intersection U.S. Highway #2 West (West Idaho Street) and Meridian Road, Kalispell, Montana; and, WHEREAS, the assistance requested and granted pursuant to this Agreement shall consist of reasonable expense reimbursements for infrastructure and landscaping improvements, inclusive of architectural, engineering and other costs, more particularly described in this agreement, in an amount not to exceed Fifty -Three Thousand Thirty -Five Dollars ($53,035.00); and, WHEREAS, PARTNERSHIP'S proposal has been reviewed by the Community Development Department and the City Council. NOW, THEREFORE, in consideration of the premises and mutual covenants hereinafter contained, the parties hereto agree as follows: NIP Developers Agreement 1 I. DEVELOPMENT AGREEXENT SECTION 1.1. Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means Montana Code Annotated Title 7, Chapter 15, Parts 42 and 43, as amended. "Agreement" means this Agreement, as the same may be from time to time modified, amended or supplemented. "Assessed Valuation" means the value of real property as determined by the Department of Revenue in accordance with Montana Code Annotated against which real property tax is imposed. "City" means the City of Kalispell, Montana and for purposes of administering this agreement shall also mean the City Manager. "Construction Plans" means the plans, specifications, drawings, and related documents for the construction work to be performed by the DEVELOPER on the Project Property, which (a) shall be at least as detailed as the plans, specifications, drawings and related documents which are submitted to the building official of the CITY and (b) shall include at least the following: (1) site plans; (2) foundation plans; (3) basement plans; (4) elevations on all sides; (5) landscaping plan; (6) grading plan; and (7) utility plan. "Developer" means Northwest Investments Partnership, L.L.P. "Project" means the Project described in Section 1.3. "Project Area" means that -retail and commercial development referred to as Westbrook Square, Kalispell, Montana. "Redevelopment Area" means those areas of Kalispell which have been designated by CITY as blighted and therefore desirable for rehabilitation. "Redevelopment Plan" means the CITY'S overall plan for promoting rehabilitation of CITY areas fecund to be blighted. "Section" means a Section of this Agreement, unless used in reference to Montana Code Annotated. "Site Plans" means the plans to be submitted by the DEVELOPER showing the Project Area and the Project which will include all on - site improvements, off -site improvements, and the infrastructure improvements. NIP Developers Agreement 2 "State" means the State of Montana. "Tax Increment" means that portion of the real estate taxes paid with respect to the Redevelopment Property which is remitted to the CITY as tax increment pursuant to the Tax Increment Financing provisions of the Montana Urban Renewal Law. "Tax Increment Financing Plan" means the Tax Increment Financing Plan for Tax Increment Financing by the City Council. "Unavoidable Delay" means a failure or delay in a party's performance of its obligations under this Agreement, or during any cure period specified in this Agreement which does not entail the mere payment of money, not within the party's reasonable control, including but not limited to acts of God, governmental agencies, the other party, strikes, labor disputes, fire or other casualty, or lack of materials, provided that within 10 days after a party impaired by the delay has knowledge of the delay it shall give the other party notice of the delay and the estimated length of delay, and shall give the other party notice of the actual delay within 10 days after the cause of the delay has ceased to exist. The parties shall pursue with reasonable diligence the avoidance and removal of any such delay. Unavoidable delay shall not extend performance of any obligation unless the notices required in this definition are given as herein required. SECTION 1.2. Representations by CITY. CITY makes the following representations to DEVELOPER: (a) The CITY, under the Act and Ordinance No. 1259, has the power and authority to enter into this Agreement and carry out the obligations hereunder. (b) The Project is an "urban renewal project" within the meaning of the Act and has been approved by the City Council in accordance with the .terms of the Act and Ordinance No. 1259. (c) The Urban Renewal Plan, as approved by Ordinance No. 1259, contains a provision for tax increment financing for the Redevelopment Area and the incremental increase in taxes based on the value of ad valorem property within the area after the base year shall be collected, segregated by the County Treasurer, and transferred to the City for the benefit of the Redevelopment Area. (d) CITY has on hand, in its Tax Increment Fund or has the authority to borrow, at least sufficient funds to complete it obligations under this Agreement. NIP Developers Agreement 3 (e) CITY has determined that the infrastructure and landscaping improvements described in Section 1.3(h) are necessary to the development of the Project, at a cost not to exceed Fifty -Three Thousand Thirty -Five Dollars ($53, 035. 00.) . (f) The costs of designing, engineering, acquiring, and constructing said infrastructure are costs that can be financed through tax increments pursuant to Section 7-15- 4288, of the Act, and the City Council has authorized the use of the tax increment to finance those improvements, subject to Sections 1.4 and 1.5. SECTION 1.3. Representations by DEVELOPER. DEVELOPER represents and warrants that: (a) DEVELOPER, Northwest Investments Partnership, L.L.P. is a limited liability partnership, duly organized under the laws of the State of Montana, has the power to enter into this Agreement, and has duly authorized the execution, delivery and performance of this Agreement. (b) DEVELOPER will, subject to unavoidable delays, construct, operate and maintain on the Project Property a retail and commercial development described in the Site Plans, together with all related on -site improvements, including, but not limited to, off-street parking, landscaping, on -site utilities and any off -site infrastructure improvements necessary to properly serve the Project Area (the Project). The parties agree that the Project is not yet completed and there may be changes in both timing and occupancy during the development process; however, any and all changes shall be subject to approval by the CITY. (c) DEVELOPER estimates that the final cost of constructing the Project as described in Section 1.3(b) is $904,302.00 based on the following estimates: Description of Project Foundation Construction Building Construction TOTAL Estimated Cost $ 38,500.00 $ 865,802.00 $ 904,302.00 (d) DEVELOPER estimates, based upon information available to it and the projected cost of constructing NIP Developers Agreement 4 the Project, that the Assessed Valuation of the improved real property constituting the Project, inclusive of furniture, fixtures, equipment, and other taxable personal property will be at least $904,302.00. The parties understand that the actual Assessed Valuation of the DEVELOPER'S portion of the Project as determined by the Montana Department of Revenue may be greater or lesser than the estimate. (e) DEVELOPER has obtained, or has available to it, sufficient funding to complete the construction of the Project. (f) DEVELOPER has been advised that the Redevelopment Area is subject to building and use restrictions imposed pursuant to the Kalispell Zoning Ordinance, including, but not limited to, prohibitions on the display of billboards and/or off -premises signs. (g) DEVELOPER is aware of the Infrastructure and Landscaping Improvements which are subject to actual expense reimbursement by CITY described in Section 1.3(h) and the on -site improvements associated with this Agreement and represents and acknowledges that the construction of such improvements are necessary to the development of the Project. (h) DEVELOPER has requested that CITY reimburse the costs of designing, engineering, acquiring, and installing the following infrastructure and landscape improvements: utility trenching; sidewalk, curbing and gutters, all on the north side of West Idaho adjacent to Westbrook Square; four (4) light poles, lamps, and electrical bases, with conduit and wiring; three (3) seating benches; landscaping, extension and repair of irrigation; demolition and removal of certain existing improvements, including :asphalt underlay; reasonable contractor overhead; and topsoil and grass sod; all within CITY right-of-way, or on real property more particularly described in an easement granted by DEVELOPER to the CITY, a copy of which is attached hereto as Exhibit "A." SECTION 1.4. Sequencing of Events. (a) DEVELOPER shall proceed with the design and/or construction of the Infrastructure and Landscaping Improvements utilizing personnel and/or contract services selected by them. Infrastructure and Landscaping NIP Developers Agreement 5 Improvements shall be installed on or before 311t day of July, 1999, when DEVELOPER plans on having its complex completed and open for business. (b) DEVELOPER, upon completion of all or identifiable portions of the Infrastructure and Landscaping Improvements, listed in 1.3(h), and upon review and approval by the CITY, shall submit proof of expenditures for work accomplished and items purchased, and CITY shall then reimburse DEVELOPER based on the invoices and proof of payment so submitted. SECTION 1.5. Limitations on City's Commitment. CITY shall use its tax increment revenues to reimburse DEVELOPER for the cost of only those infrastructure and landscaping improvements listed in Section 1.3(h). In the event other public infrastructure improvements other than those listed in Section 1.3(h) are required, said improvements shall be the responsibility of DEVELOPER. SECTION 1.6. Construction of the Project. (a) Subject to unavoidable delays, DEVELOPER will construct the Project without encroachment onto any other property all in accordance with the Site Plans, the Construction Plans. DEVELOPER will be responsible for the supervision of and completion of the on -site improve- ments. (b) All work with respect to the Project shall be in substantial conformity with the Construction Plans approved by the CITY. DEVELOPER shall promptly begin and diligently complete all on -site improvements. DEVELOPER shall make reports, in such detail and at such times as may reasonably be requested by the CITY, as to the actual progress of DEVELOPER with respect to construction of the on -site improvements. (c) DEVELOPER shall not interfere with, or construct any improvements over, any public street or utility easement without the prior written consent of the CITY. All connections to public utility lines and facilities shall be subject to approval of the CITY and any private utility company involved. All street and utility instal- lations, relocations, alterations and restorations shall be made at DEVELOPER'S expense. DEVELOPER, at its own expense, shall replace any public facilities or utilities damaged during construction of the Project, and DEVELOPER shall be responsible for maintenance of the improvements after construction and installation. NIP Developers Agreement 6 SECTION 1.7. Defense of Claims. DEVELOPER shall indemnify and hold harmless the CITY and their respective officers, employees and agents for any loss, damages and expenses (including attorney's fees) in connection with any claim or proceeding arising from damages or injuries received or sustained by any person or property by reason of any actions or omissions of DEVELOPER or its contractors, agents officers or employees under this Agreement, other than claims or proceedings arising -.from any negligent or unlawful acts or omissions of the CITY or their agents, officers, or employees. Promptly after receipt by the CITY of notice of the commencement of any action in respect of which indemnity may be sought against the DEVELOPER under this Section, the CITY will notify the DEVELOPER in writing of the commencement thereof, and, subject to the provisions hereinafter stated, the DEVELOPER shall assume the defense of such action (including the employment of counsel, who shall be counsel satisfactory to CITY, and the payment of expenses) insofar as such action shall relate to any alleged liability in respect of which indemnity may be sought against the DEVELOPER. CITY shall have the right to employ separate counsel in any such action and to participate in the defense thereof, but the fees and expenses of such counsel shall not be at the expense of the DEVELOPER unless the employment of such counsel has been specifically authorized by the DEVELOPER. The omission to notify the DEVELOPER as herein provided will not relieve it from any liability which it may have to any indemnified party pursuant hereto, otherwise than under this section. SECTION 1.8. Payment of Taxes. DEVELOPER shall pay when due all real estate taxes and installments of special assessments payable on the Project Property. DEVELOPER and CITY recognize that the State of Montana, Department of Revenue shall utilize calculator or segregated cost methods to determine the Assessed valuation of the improved real property and the DEVELOPER shall utilize an income approach to value to protest the Assessed Valuation of said property for a period of five (5) years from the date of this agreement. SECTION 1.9. Events of Default. The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement (unless the context otherwise provides), any one or more of the following events which occurs prior to the issuance of the Certificate of Completion'by the CITY of this Agreement with respect to the Project and continues for more than 30 days after notice by the CITY to DEVELOPER of such default (and the term "default" shall mean any event which would with the passage of time or giving of notice, or both, be an "Event of Default" hereunder): NIP Developers Agreement 7 (a) Failure of DEVELOPER to .construct the Project or furnish the Site Plans or Construction Plans. (b) Failure of DEVELOPER to pay real estate taxes and special assessments as contemplated in Section 1.8. (c) Any event of default otherwise provided by local, State or federal law. SECTION 1.10. Remedies on Default. Whenever any Event of Default referred to in Section 1.8 or Section 1.9 occurs, the CITY may take any one or more of the following actions: (a) Suspend its performance under this Agreement until it receives assurance from DEVELOPER, deemed adequate by the CITY, that DEVELOPER will cure its default and continue its performance under this Agreement. (b) Terminate all rights of DEVELOPER under this Agreement. (c) Take whatever action at law or in equity may appear necessary or desirable to the CITY to enforce performance and observance of any obligation, agreement, or covenant of the DEVELOPER under this Agreement. II. GENERAL PROVISIONS SECTION 2.1. Manner of Exercise. No remedy herein conferred upon or reserved to CITY is intended to be exclusive of any other available remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this agreement for now or hereinafter existing at law or in equity or by statute. No delay or admission to exercise any right or power shall be considered to be waived thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. SECTION 2.2. Attorney's Fees and Expenses. In the event of any controversy, claim or dispute arising out or relating to this Development Agreement, or the method and manner of performance thereof or the breach thereof, the prevailing party shall be entitled in addition to any other relief, a reasonable sum as attorney's fees and litigation expenses. In the event neither party wholly prevails, the party that substantially prevails shall be awarded a reasonable sum as attorney's fees and litigation expenses. In determining what is a reasonable sum for attorney's fees and litigation expenses, the actual amount of the attorney's fees the party is obligated to its attorney or attorneys shall be NIP Developers Agreement 8 presumed to be reasonable, which presumption is rebuttable, and actual expenses incurred in the proceedings including all expenses of a party for travel, etc., shall be presumed to be reasonable, which presumption is rebuttable. SECTION 2.3. Effect of Waiver. In the event any agreement contained in this agreement should be breached by either party and thereafter be -waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. No waiver, amendment, release or modification of this agreement shall be established by conduct, customer course or dealing, but solely by an instrument in writing duly executed by CITY, its successors or assigns. SECTION 2.4. Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when mailed by certified or registered mail, postage prepaid, with proper addresses indicated below. CITY and PARTNERSHIP may by written notice given by each to the other, designate any other address _or addresses to which notices, certificates or other communications to them shall be sent when required as contemplated by this agreement. Until otherwise provided by the respective parties, all notices, certificates and communications to each of them shall be addressed as follows: To the City: City of Kalispell City Hall Drawer 1997 Kalispell, Montana 59903-1997 Attention: City Clerk To the Developer: Northwest Investments Partnership, L.L.P. P.O. Box 1 Kalispell, Montana 59903 Attention: Matthew J. Waatti SECTION 2.5. Binding Effect. This agreement shall inure to the benefit of and shall be binding upon CITY and PARTNERSHIP and their respective successors and assigns. SECTION 2.6. Entire Agreement. All understandings and agreements previously existing between the parties, if any, are merged into this Agreement including all schedules and exhibits, which alone fully and completely expresses their agreement, and the same is entered into after full investigation, neither party relying on any statement or representations made by the other not embodied herein. This Agreement may not be changed or terminated orally. NIP Developers Agreement SECTION 2.7. Severability. If any term, condition or provision of this agreement or the application thereof to any person or circumstance shall, to the extent, be held to be invalid or unenforceable, the remainder thereof and the application of such term, provisions and conditions to persons or circumstances other than those as to whom it shall be held valid or enforceable shall not be affected thereby, and this agreement and all the terms, provisions and conditions hereof shall, in all other respects, continue to be effective and to be complied with to the full extent permitted by law. SECTION 2.8. Amendments, Changes and Modifications. Except as otherwise provided in this agreement, this agreement may not be effectively amended, changed and modified or altered without prior written consent of the CITY. SECTION 2.9. Execution In Counterparts. This agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute one and the same instrument. SECTION 2.10. Limitations on City's Liability. No agreement or provision contained in this agreement, nor any other agreement, covenant or undertaking by CITY contained in any document executed by CITY in connection with this agreement shall give rise to a general liability of the municipality or a charge against its general credit or taxing powers, or shall obligate the CITY financially in any way except with respect to this agreement. No failure of CITY to comply with any term, condition, covenant or agreement herein shall subject CITY to liability for any claim for damages, costs or other financial pecuniary chargeexceptto the extent that the same can be paid or recovered from or under this agreement; and no execution of any claim, demand, cause of action or judgment shall be levied upon or collected from the general credit, general funds or taxing powers of CITY. IN WITNESS WHEREOF, THE CITY HAS CAUSED THIS AGREEMENT TO BE EXECUTED IN ITS NAME AND ON ITS BEHALF AND ITS OFFICIAL SEAL TO BE HEREUNTO FIXED AND ATTESTED BY ITS DULY AUTHORIZED OFFICERS, AND THE PARTNERSHIP HAS CAUSED THIS AGREEMENT TO BE EXECUTED IN ITS NAME AND ON ITS BEHALF, ALL AS OF THE DATE FIRST HEREIN ABOVE WRITTEN. CITY OF KALISPELL By: Mayor NIP Developers Agreement 10 ATTEST: City Clerk Northwest Investments Partnership, L.L.P. By: Its: Authorized Representative NIP Developers Agreement 11