Development AgreementThis Agreement made as of L-KrLk Z4 , 1997, by and between the City of
Kalispell, a municipal corporation, hereinafter CITY, and RSL L.L.C., a Washington
limited liability company, being qualified to do business in Montana, the sole initial
member of which is Rosauers Supermarkets, Inc., a Washington corporation, with its
principal place of business at W. 1815 Garland Avenue, Spokane, Washington,
hereinafter DEVELOPER:
WITNESSETH:
Whereas, the CITY is a general powers city, existing and organized under the
constitution of the State of Montana; and
Whereas, the CITY has elected to exercise the powers of an urban renewal agency,
pursuant to Title 7, Chapter 15, Parts 42 and 43, Montana Code Annotated as amended
and Ordinance No. 1242, as adopted by the City Council on July 1, 1996;
and
urban renewal area known as the Kalispell City Airport/Athletic Complex Redevelopment
Area (the Redevelopment Area); and
Whereas, Ordinance No. 1242 states that in order to implement and effectuate the
Redevelopment Plan, it will be necessary for the CITY to take certain actions with
reference to minimizing hazards to navigation, developing the airport in accordance with
an airport layout, plan, increasing development opportunities on nearby properties,
promoting compatible land use in and around the airport, establishing a funding
mechanism for airport properties, and establishing a priority schedule for plan
implementation; and
Whereas, the Redevelopment Plan, as adopted and implemented, contains a tax
increment financing provision coextensive with the Redevelopment Area; and
Whereas, Ordinance No. 1242 approved as an urban renewal project the sale of
all or a portion of Daley Field, to be located- within the Redevelopment Area (the Project,
as described in Section 2.2.) and authorized entering into a development agreement with
a developer in order to accomplish the development of the Project, upon terms and
conditions consistent with the Act, the Redevelopment Plan, and Ordinance No. 1242;
and
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Whereas, DEVELOPER submitted a proposal to purchase, pursuant to Resolution
No. 4366, a portion of said Daley Field and develop said property in accordance with the
Redevelopment Plan.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
obligations set forth in this Agreement, the parties hereto agree as follows:
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"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.
port Influence Area" means all land in the proximity of the Kalispell City
Airport the use of which may be affect by the airport's existence.
IoLateuNg7aTt
which real property tax is imposed.
"City" means the City of Kalispell, Montana, and for purposes of administering
this agreement shall also an 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 plan; (2) foundation plans; (3) basement plans if
any; (4) elevations on all sides; (5) landscaping plan; (6) grading plan; and (7)
utility plan. Such plans shall be in accordance with the Uniform Building Code,
Uniform Plumbing Code, Uniform Mechanical Code, Uniform Fire Code, and National
Electrical Code then in effect in the City.
"Developer" mans RSI, L.L.C., a Washington limited liability company, being
qualified to do business in Montana, the sole initial member of which is Rosauers
Supermarkets, Inc. a Washington corporation.
"Project" means the Project described in Article 2.2.
"Project Area" means that tract of land descrNIIN'l as Daley Field Subdivision,
located in the NW 1/4, Section 20, T28N, R21W, P.M.M., Kalispell, Flathead County,
Montana.
"Project Property" means Lot 2, Daley Field Subdivision on which the Project will
be constructe--A.
"Redevelopment Area" means that area comprising the Kalispell City
Airport/Athletic Complex Redevelopment Area.
"Redevelopment Plan" means the CITYS overall plan for promoting rehabilitation
of the Redevelopment Area.
"'Section" means a Section of this Agreement, unless used in reference to Montana
Code Annotated.
"Site Plan" means the plan to be submitted by the DEVELOPER showing the
Project Property and the Project which will include all on -site improvements, off -site and
infrastructure improvements, as set forth in Section 3.2. (a), (b) & (c). Recognizing that
DEVELOPER will not commence construction for some time and that such "Site Plan"
may necessarily change, both parties currently contemplate and are contracting with the
expectation that the "Site Plan" will be materially like that which attached hereto as
Exhibit "A" to this Agreement.
"State" means the State of Montana.
"Tax Increment" means that portion of the real estate taxes paid with respect to
the increase in taxable valuation of the Project Property which is remitted to the County
Treasurer 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
incorporated into the Kalispell City Airport/Athletic Complex Redevelopment Plan for
Tax Increment Financing by the City Council and dated July 1, 1996.
"Unavoidable Delay" means a failure or delay in a party's performance of its
obligations under this Agreement, or during any ewe 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
ten (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 ten (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
tbligation unless the notices required in this definition are given as herein required.
Section 2. 1. By CITY, CITY makes the following representations to
DEVELOPER:
(a) The CITY, under the Act and Ordinance No. 1242 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. 1242.
(c) The Urban Renewal Plan, as approved by Ordinance No. 1242,
contains a provision for tax increment financing for the Redevelopment
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property within the area after the 1996 base year shall be collected,
segregated by the County Treasurer, and transferred to the CITY for the
benefit of the Redevelopment Area.
W The CITY has funds on hand in its Tax Increment Fund, or the
ability to obtain sufficient funds, to complete its obligations under this
r-
(e) The CITY has detern-tined that the following infrastructure
improvements: traffic signal at intersection of private drive between Lots
1 and 2, Daley Field Subdivision (or realigned 3' Avenue East) and U.S.
Highway #93, storm drain system, and sanitary sewer extension are
necessary and essential to the development of the Project, and the same
shall be constructed in accordance with the terms of this Agreement. - *
M The CITY acknowledges the representations of the DEVELOPER
with regard to estimated costs associated with the development of the
DEVELOPER'S portion of the property. The CITY agrees that it shall
accept the Assessed Valuation of the improved real property, inclusive of
furniture, fWitires, equipment and other taxable personal property, as
determined by the State of Montana, Department of Revenue.
1 -.1
W The CITY advises 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-pren-tises signs and will be subject in the future to an airport
influence zone.
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(b) DEVELOPER is ready, willing and able to acquire the Project
Property from the CITY.
( c) DEVELOPER will, subject to unavoidable delays, construct, for lo%y
term lease to Rosauers Supermarket, Inc., a Washington corporation
authorized to transact business in Montana, and within such lease, shall
cause Rosauers Supermarket, Inc. to operate and maintain on the Project
Property an approximately 50,000 square foot grocery store/pharmacy,
--�ogether with all related on -site improvementsincludin but not limited to..
off-street parking, landscaping and on -site utilities; and certain off -site
utilities, set forth in this Agreement. The parties agree that
change in both tin-dng and occupancy during the development process;
however, any and all changes shall be subject to approval by the CITY,
which shall not be unreasonably withheld or delayed.
(d) DEVELOPER estimates that the cost of constructing the Project as
described in (c) is $5,000,000.00 based on the following estimates:
Descripfion of Project Estimated Cost
Land Acquisition $ 744,234.00
Site Improvements, Building Construction
Cost of Fixtures, Furniture, Equipment 4,255,766.00
(e) DEVELOPER estimates, based upon information available to it an.91
the projected cost of constructing the Project, that the Project Developme
Cost of the improved real property constituting the Project, inclusive•
furniture, fixtures, equipment, and other taxable personal property win
at least $5,000,000.00. The parties understand that the actual Assesses
�1r
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.
M DEVELOPER has obtained, or has available to it, sufficient funding
to complete the construction of the Project.
(g) DEVELOPER understands that the CITY will pay the cost of
installing traffic signalization at the intersection of the private drive, located
upon the boundary of Lots I and 2, Daley Field Subdivision, and U.S.
Highway #93, as a condition of DEVELOPER'S obligation hereunder.
Installation of traffic signalization at the intersection of Kelly Road and
U.S. Highway #93 will be accomplished after development of Lot 3, Daley
Field Subdivision, based upon "warrants" found by the Montana
Department of Transportation.
Infrastructure Improvements
Section 3.1. Sequencing of Events, CITY. The CITY shall cause plans and
specifications to be prepared for signalized intersections (referenced in § 2.2 (g), above)
in conjunction with the reconstruction of U.S. Highway #93 South, which will include
a realignment of 3' Avenue East, scheduled to be in 1999 by the Montana Department
of Transportation. In the event the Montana Department of Transportation does not
reconstruct U.S. Highway *93 as anticipated the CIT'Y shall cause to be constructed
temporary traffic signalization at the private drive and U.S. Highway #93, only, on or
before September 30, 1999. Construction contracts for said lights shall be let in
accordance with Montana law and the State will supervise the construction and installation
of said lights in the same manner as other public improvements within the CITY. CITY
will use its best efforts to secure realignment of 3' Avenue East with the reconstruction
of U.S. Highway #93. In the event 31 Avenue is not relocated the CITY will pursue
alternative financing methods for the relocation.
Section 3.2. If CITY has completed or provided to DEVELOPER satisfactory
assurances that it will timely complete the infrastructure improvements for which the
CITY is responsible under Section 3. 1, above, DEVELOPER will commence construction
of its on -site and off -site improvements, after July 15, 1998 (when the property will cease
to be used as ballfields) and on or before September 30, 1999. The CITY and
DEVELOPER will coordinate the design and construction of their respective
improvements and will require their respective engineers and contractors to coordinate
design and construction to ensure maximum efficiency to the CITY and DEVELOPER
in the construction • the Improvements. Off -site public infrastructure improvements, to
be installed at DEVELOPER'S expense, shall be as follows:
(a) Storm Water Retention —Pond. DEVELOPER shall design and build, in
accordance with the City's Standards for Design and Construction, a •' water
retention pond for storm water runoff from the Project Property, within an
easement granted by CITY on Kalispell City Airport property, pursuant to Section
4.1.
(b) Sanitary Sewer Main. DEVELOPER shall design and build an 8"
sanitary sewer main, entirely within an easement granted by the CITY along the
Easterly boundary of City Airport Property, together with an easement for access
to and egress from such main. Said main shall be installed from the location of
the • main on Lots I and 2, Certificate of Survey # 3981, Records •
Flathead County, Montana, to the North boundary of the Project Property, or to
that point short of said boundary where gravity flow requirements can no longer
be maintained with a 3' cover of earth allowing for a sewer main depth of not less
than 3' below ground level. Said main shall terminate in a manhole with additional
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(c) Other Utilitio. Water, electrical, natural gas, telephone and .• TV
shall be installed at DEVELOPER'S expense from available locations adjacent to
the Project Property.
(d) Late Comer's Agreement. CITY and DEVELOPER recognize that because
DEVELOPER'S construction of the Project is to be deferred for a limited period
of time, DEVELOPER may be the first to construct off -site infrastructure
improvements described herein, which might thereafter be shared by other
developers of sites within Daley Field, or other developers may be the first to
construct such improvements. DEVELOPER agrees to negotiate and enter into a
Late Comer's Agreement with CITY, binding upon other developer(s) of sites
within Daley Field, providing that which ever developer first constructs such
improvements shall, to the extent such improvements are used by other
developer(s), including the DEVELOPER, be reimbursed, on an equitable basis,
by other developers using such improvements.
(e) The CITY shall have the option to design and construct the Sanitary Sewer
Main referenced in Section 3.2.(b), provided that the design and construction is
commenced prior to the firne design and construction of said Sanitary Sewer Main
is commenced by the Developer. In the event, CITY designs and constructs the
Sanitary Sewer Main, in accordance with this paragraph, 3.2.(d) shall have no
effect, as to the Sanitary Sewer Main, and DEVELOPER agrees to pay to the
City an aliquot part of the construction based upon the square footage of Lot 2,
Daley Field Subdivision.
Section 4.1. Storm Drain. CITY shall grant an easement for a storm water
retention pond, adjacent to the Project Property, on Kalispell City Airport property,
together with an easement for access to and egress therefrom. Size of the easement shall
be determined by calculating all of the drainage from the Project based on a 10 year-6
TxL-ks-1 ARet �_-Oi+x piixl
shall be a minimum of 30 feet from the sanitary sewer line easement established along
the east property line of the City Airport. The Westerly edge of the easement shall be no
closer than 150 feet to the center line of existing runway, with no land configuration
higher than the elevation of the runway.
Section 4.2. Sanitafy &wer. Natural Gas and Electrical. CITY shall grant an
easement 30 feet in width, along the Easterly boundary of Kalispell City Airport, for the
entire length of Daley Field, for the purpose of installing a sanitary sewer main, natural
gas and electrical.
Section 4.3. Crossover Easement. CITY and DEVELOPER recognize and
agree that the Daley Field Redevelopment will prove most successful if the purchaser of
the portion of Daley Filed to the south of the Project Property undertakes or develops one
or more uses of such property which are compatible with DEVELOPER'S use. They
further recognize however, that such uses could be incompatible and antagonistic to
DEVELOPER'S use. DEVELOPER therefore agrees that at such time as the CITY sells
the southern portion of the Daley Field property, the CITY installs (or causes to be
installed) a signal at Kelly Road, and the purchaser of such southern portion identifies its
intended use(s) of the property, DEVELOPER will negotiate in good faith with the
purchaser of such southern portion with respect to a crossover easement, granting to
DEVELOPER access to the Kelly Road signal across the southern portion of the Daley
Field property and granting to the purchaser of such southern portion access to the 3'
Avenue East signal across the Project Property.
ARTICLE 5
Construction of Project
Section 5. 1. Site Plan and Construction Plans. DEVELOPER shall
submit Site Plan and Construction Plans to the CITY prior to obtaining any building
permits. Site Plan shall depict the entire Project Property and shall show the location of
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the Project, the Infrastructure Improvements and other items required by this Agreement
to be shown therein. The Construction Plans shall provide for the construction of the
Project in conformity with the Redevelopment • the Site • this Agreement, and
all applicable federal, state and local laws and regulations. The CITY shall approve the
Construction Plans in writing if, in the reasonable discretion of the CITY, the
Construction •
(a) conform to the to and conditions of this Agreement;
JIM�:111 I :
'111111111111ill�� I i• Jill IMMM
Q conform to all applicable federal, state and local laws, ordinances, rules and
•
No approval by the CITY of the Construction Plans shall relieve the DEVELOPER
of the obligation to comply with the terms of this Agreement, the terms of the
Redevelopment Plan, applicable federal, state and local laws, ordinances, rules and
regulations, or to properly construct the Project. No approval by the CITY shall
constitute a waiver of an Event of Default. Any disapproval of the Site Plan and
Construction Plans shall set forth the reasons therefore. and shall be made within thirty
(30) days after the date of their receipt by the CITY. If CITY rejects the Site Plan or
Construction Plans in whole or in part, DEVELOPER shall submit corrected Site Plan
and Construction Plans within 30 days or, if necessary, new Plans, within 90 days, after
written notification to DEVELOPER of the rejection.
Section 5.2. Construction of the E[gjLcA.
(a) Subject to unavoidable delays, and subject to completion of the
infrastructure improvements by the CITY as described in Section 3.1,
DEVELOPER will construct the Project without encroachment onto any
other property, except as otherwise provided herein, all in accordance with
the Site Plan and the Construction Plans. DEVELOPER will be responsible
for the supervision of and completion of the on -site improvements. Neither
party shall exercise any control over the other regarding their respective
areas of work and division of responsibilities although the parties agree to
coordinate their activities, specifically including, but not limited to,
excavation work, elevations, and grading of adjacent parcels, to assure
maximum efficiency of the construction process.
(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 shafl •, interfere with, • • any
improvements over, any public street or utility easernent without the prior
written consent •' 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 installations, 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 • the Project.
(d) CITY and DEVELOPER acknowledge and agree that the Project wi
be sited in an Airport Influence Area, and that development within su
Area will be controlled and constrained by one or more Ordinances. CITY h
began drafting, but has not yet finalized, an Ordinance For Designation of
Airport Influence Area for Kalispell City Airport and an Ordinance to L*
Height of Objects Around Kalispell City Airport. Notwithstanding the facit th
those Ordinances are merely in the draft stage, CITY appreciates the sco
height, infrastructure, and other characteristics of DEVELOPER'S inten0d
Project, and •,.. that such Project wW satisfy such • as eventuall
considered and passed by the Kalispell City Council. Based upon curre
information • to the •. the elevation • the building, at the 20' We
set -back, to be constructed pursuant to this Agreement shaH not exceed 2957. 8
feet above sea level, and the elevation, at a point not less than 21' East of th-
Western set -back line shall not exceed 2960.82 feet above level. No equipme
shall protrude above, the greater of, 2960-82 above sea level or the transition
surface slope for a B-H, visual airport. (7 to I starting from a point 125 feet fro
Center Line of the Kalispell City Airport •
Section 5.3. Certificate of Completion.
(a) Promptly after completion of the Project, in accordance with this
Agreement, DEVELOPER should apply for a Certificate of Completion.
It will be incumbent on DEVELOPER to provide the CITY with a
certificate of substantial completion from DEVELOPER'S architect, and the
CITY shall furnish DEVELOPER with an appropriate Certificate of
Completion as conclusive evidence of satisfaction and termination of the
agreements and covenants of this Agreemnt.
(b) If the CITY shall refuse or fail to provide a Certificate of
Completion, the CITY shall, within fifteen (15) days after the
DEVELOPER provides the architect's certificate referenced in Section
5.3.(a), provide the DEVELOPER with a written statement specifying in
what res[�� DEVELOPER has failed to comu--dete the Pro�ect in �-!Tmoctw#',irvc�
with this Agreement, or is otherwise in d�fault, and shall specify what
measures or acts will be necessary, in the opinion of the CITY, for
DEVELOPER to obtain the Certificate of Completion.
Section 5.4. CITY'S Remedy for Failure to C"onstruct. DEVELOPER
recognizes that the CITY intends to utilize ad valorem tax revenue generated by the
Kalispell City Airport and other infrastructure improvements which win be of public
benefit. It is contemplated that the Project property will generate annual tax revenue to
the City of Kalispell in the amount of $142,000. upon completion of the Project,
exclusive of city or county special assessments. If CITY satisfies its obligation under
Sections 3.1 and 5.1. above, DEVELOPER, therefore, covenants to pay to the CITY
any difference between the amount of tax actually generated by the Project Property,
including��artion of the Pro[iect transferred to another owner, if liz;,irmitted as hereaiteFi
set forth in Section 8, and the amount contemplated by this Agreement for a period of
ten (10) years commencing January 1, 2001. Payment under the provisions of this
paragraph shall be made directly to the CITY, after certifying the tax generated by the
Project through the City Finance Department.
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Section 6.1. Defense of Claims, By DEVELOPER. A) 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
contractors, 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 6.1., 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 the 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. The 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
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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.
B) By Ci . CITY shall indemnify and hold harmless the DEVELOPER ar
their respective officers, employees and agents for any loss, damages, and expens(
(including attorney's fees) in connection with any chtim. or proceeding arising froi
damages or injuries received or sustained by any person or property by reason of ar,
actions or omissions of CITY or its contractors, agents, officers, invitees, or employe(
under this Agreement, other than claims or proceedings arising from any negligent (
unlawful acts or omissions of the DEVELOPER, its member, or their contractors, agent,
officers, or employees. Promptly after receipt by the DEVELOPER of notice of t1l
commencement of any action in respect of which indemnity may be sought against th
CITY under this Section 6. 1, the DEVELOPER will notify the CITY in writing of th
commencement thereof, and subject to the provisions hereinafter stated, the CITY sha
assume the defense of such action (including the employment of counsel, who shall b
counsel satisfactory to the DEVELOPER, and the payment of expenses) insofar as suc
action shall relate to any alleged liability in respect of which indemnity may be sougi
against the CITY. 'Me DEVELOPER shall have the right to employee separate counm
in any such action and to participate in the defense thereof, but the fees and expenses C
such counsel shall not be at the expense of the CITY, unless the employment of suc
counsel has been specifically authorized by the CITY. The omission to notify the CIT.
as herein provided will not relieve it from any liability which it may have to an.
indemnified party pursuant hereto, otherwise than under this section.
Section 6.2. Insurance.
(a) DEVELOPER will provide, or cause to be provided, the following
insurance at the time it applies for the necessary building permits for the
project and will maintain such insurance at all times during the process of
constructing the Project, and at the request of the CITY will furnish the
CITY with copies of and proof of payment of premiums on the following
insurance:
W Builder's Risk Insurance, wTitten on the so-called "Builder's
Risk —Completed Value Basis", in an amount equal to 100% of the
replacement cost of the Project at the date of completion, naming the
CITY as an additional insured, with coverage on the so-called "all
risk," non -reporting form of policy;
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9 1 . 0
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for each person of $750,000 and $1,500,000 for each occurre
cndorsed to show the CITY as an additional insured; and
(iii) Worker's Compensation Insurance in compliance with all
statutory requirements.
The policies of insurance required under clauses (i), 00, and (iii) above
shall be in form and content satisfactory to the CITY and shall be placed
with financially sound and reputable insurers licensed to transact business
in the State of Montana. The policies shall contain an agreement of the
insurer to give not less than 30 days advanced written notice to CITY in the
event of cancellation of such policy or change affecting the coverage.
(b) The provisions herein with respect to insurance of the Project shall
terminate at such time as DEVELOPER has received a Certificate of
Completion under Section 5.3.
•
Section 7.1. Taxes. DEVELOPER shall pay when due all real estate
taxes and installments of special assessments payable on the Project Property and any
other property the DEVELOPER owns within Flathead County; provided however,
DEVELOPER and the Project Property shall not bear any special or other assessment for
the realignment of 31 Avenue East, signalization at 31 Avenue East or Kelly Road or
widening of U.S. Highway #93; or any storm sewer costs imposed by the city, county
or state, other than annual storm sewer assessment made against all property within the
CITY. DEVELOPER further agrees not to contest the assessed valuation of the Project
Property, inclusive of land, building, furniture, fixtures, equipment, and other taxable
personal property up to $5,000,000.00 and further not to protest the taxes on such
property for the first ten (10) years after completion, so long as the valuations of said
property upon which said taxes are based are in accordance with the rules of the Montana
Department of Revenue.
Section 7.2. In Lieu of Payment. DEVELOPER further agrees to make the
payment in lieu of taxes contemplated in Section 5.4.
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Section 8. 1. Transfer • Ownership. The DEVELOPER •, that a
transfer of a controlling interest in the DEVELOPER or any other act of transaction
resulting in a significant change in the ownership are •: particular concern to the CITY.
Subject to subsection (a), below, prior to completion of the Project as certified by the
CITY, except in the case of the death or incompetency of the shareholders of
DEVELOPER, (a) there shall be no transfer of any interest of a member in
DEVELOPER, (b) nor shall any • • member suffer any such transfer to •- made,
(c) nor shall there be or be suffered to be by DEVELOPER, any other similarly
significant •' in the ownership • DEVELOPER • in the relative distribution
r-• thereof, by any other method • means, without consent • the CITY, which shall
not unreasonably withheld.
Notwithstanding Section 8.1 to the contrary, the CITY recognizes that
Rosauers Supermarket, Inc., the sole initial •- of the DEVELOPER,
• to transfer its membership in the DEVELOPER to an investment
group organized by Kien-de & Hagood Company, or one or more of the
principals thereof. CITY hereby consents to such transfer without the need
for disclosure of the identity or financial strength • the participants in such
investment group, provided that i) Rosauers Supermarket, Inc. shall remain
the long term lessee on the Project Property, ii) Rosauers Supermarket ,
Inc. shall guaranty, and by its signature hereon, hereby guarantees, all
obligations of the DEVELOPER to the CITY under this Agreement, and
such guarantee shall not be affect by any change in control of the
DEVELOPER, and iii) Kiemle & Hagood Company, or one or more of the
principals thereof, shall continue in control of the DEVELOPER.
Section 8.2. Transfer of Property and Assignment. DEVELOPER has not made
and will not make, or suffer to be made, any total or partial sale, assignment,
conveyance, lease, or other transfer, with respect to this Agreement or the Project or
Property or any part thereof or any interest therein, or any contract or agreement to do
any of the same, without the prior written approval of the CITY, which approval shall
not be unreasonably withheld or delayed; provided however, DEVELOPER may enter
into a long term lease of the Project Property to Rosauers Supermarket, Inc., and CITY
hereby consents to such Lease, and DEVELOPER may place a mortgage or Deed of
Trust upon the Project Property to secure construction financing and takeout financing
and CITY hereby consents to such mortgage or Deed of Trust. The CITY shall be
entitled to require as conditions to any such approval that: W the proposed transferee
have the qualifications and financial responsibility, as reasonably determined by the
CITY, necessary and adequate to fulfill the obligations undertaken in this Agreement by
DEVELOPER, 00 the proposed transferee, by recordable instrument satisfactory to the
0M �
CITY shall, for itself and its successors and assigns, assume all of the obligations of
DEVELOPER under this Agreement. No wansfer of, or change with respect to,
ownership in the Project Property or any part thereof, or any interest therein, however
consummated or occurring and whether voluntary or involuntary, shall operate legaBy
or practically, to deprive or limit the CITY of or with respect to any rights or remedies
or controls provided in or resulting from this Agreement with respect to the Project
Property and the construction of the Project that the CITY would have had, had there
been no such transfer or change. 'Mere shall be submitted to the CITY for review of all
legal documents relating to the transfer.
In the absence of specific written agreement by the CITY to the contrary to relieve
DEVELOPER, or any other party bound in any way by this Agreement, or otherwise
with respect to the construction of the Project, from any of I with respect
thereto.
Section 8.3. Information as to Ownership of DEVELQPER. Except as provided
in Section 8.1 (a) , above, DEVELOPER will promptly notify the CITY of any
changes in the ownership of DEVELOPER, or with respect to the identity of the parties
in control of DEVELOPER or the degree thereof, of which it has been notified or
otherwise had knowledge. Except as provided in Section 8.1 (a), above, DEVELOPER
shall, at such time or times as the CITY may request, furnish the CITY with a complete
statement, subscribed and sworn to by an officer of the DEVELOPER, setting forth all
of the owners of DEVELOPER and the extent of their respective holdings.
Section 8.4. Termination of Limitations on Transfer. All provisions
contained in this Article 8 with respect to limitations on the ability of the DEVELOPER
to transfer the Project Property or the Project, or any portion thereof, as well as any
information as to ownership under Section 8.3. shall terminate with respect to the Project
at such time as a Certificate of Completion has b�en issued by the CITY under Section
5.3 of this Agreement with respect to the Project. All provisions contained in this Article
8 with respect to limitations on the DEVELOPER making changes in its ownership
structure shall terminate at such time as a Certificate of Completion has been issued
pursuant to Section 5.3 with respect to all the Project.
Events of Default
Section 9.1. 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
under Section 5.3 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 to
0
"default" shall mean any event which would with the passage of time or giving of notici
-tir both, be an "Event of Default" hereunder):
(a) Failure of DEVELOPER to construct the improvements as required
hereunder.
(b) Failure of DEVELOPER to furnish the Site Plan or Construction
Plans as required hereunder.
(c) Failure of DEVELOPER to pay real estate taxes or in lieu thereof,
the payment contemplated in Section 5.4.
• Failure • DEVELOPER to • and perform any • •
condition, obligation or agreement on its part to be observed or perform,;4,
•
(e) If DEVELOPER shall adn-dt in writing its inability to pay its debes,
generally as they become due, or shall rile a petition in bankruptcy, or shall
make an assignment for the benefit of its creditors, or shall consent to the
,••• • a receiver • itself • • the whole • any • par)
•` the DEVELOPER, its successors • assigns.
(f) If DEVELOPER shall rile a petition or answer seeking reorganization
or other arrangement under the federal bankruptcy laws.
(g) If DEVELOPER, on a petition in bankruptcy filed against it, be
adjudicated a bankrupt, or a court of competent jurisdiction shall enter an
order or decree appointing, without the consent of the DEVELOPER, a
receiver of all or substantially all of its property, or approve a petition
seeking reorganization or arrangement under the federal bankruptcy laws,
and such adjudication, order or decrees not be vacated or set aside or
stayed within sixty (60) days from the date of entry thereof.
(h) If DEVELOPER is in default, under any Mortgage on the Project
Property, and fails to cure any such default within the time period provided
for in the Mortgage.
Section 9.2. Remedies on Default. Whenever any Event of Default referred
to in Section 9.1 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 ! •underthan rights • • ownership of - Project Property.
III Milli
(d) Take whatever action at law or in equity may appear necessary
desirable to the CITY to enforce performance and observance of
obligation, agreement, or covenant of the DEVELOPER under t
Agreement. I
• 9.3. No Remedy _ No remedy herein • - -r upon or
otherreserved to the CITY, or available to the DEVELOPER is intended to be exclusive of
any ,•le remedy or - .r but each • every _ .• be
exercisedcumulative and shall be in addition to every other remedy given under the Agreement or
now or hereafter existing at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon any default shall miipair any such right or
power or shall be construed to be a waiver hereof, but any such right and power may be
from time to time and as often as may be deemed expedient.order to entitle
the CITY or DEVELOPER to exercise any remedy reserved to it, it shall not be
necessary to give notice, other than such notice as may be required under this Agreement.
Section 9.4. Waivers. All waivers by the CITY shall be in writing. If any
provision of this Agreement is breached by either party and thereafter 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 concurrent, previous or subsequent breach hereunder.
weMGM• i i t
Section 10.1. Conflict of Interests: the City Representatives Not Individually
Liable. No member, official, employee, or consultant or employees of the consultants
of the CITY shall have any personal interest, direct or indirect, in this Agreement, nor
shall any such member, official, consultant or the consultant's employees or employee
participate in any decision relating to this Agreement which affects his or her personal
interests or the interests of any corporation, partnership, or association in which he or she
is directly or indirectly interested. No member, official, consultant or the consultant's
employees, or employee of the CITY shall be personally liable to DEVELOPER, or any
successor in interest, in the event of any default or breach by the CITY or for any
amount which may become due to DEVELOPER or successor or on any obligations
under the terms of this Agreement.
Page 17 of 21
Section 10.3. Restrictions on Use. DEVELOPER agrees for itself, and its
successors and assigns, and every successor in interest to the Project Property, or any
7,-77V41e
Property to, and only to and in accordance with, the uses specified in the Redevelopment
Plan and this Agreement, and shall not discriminate upon the basis of race, color, creed,
sex or national origin in the sale, lease, or rental or in the use of occupancy of the
Redevelopment Property or any improvements erected or to be erected thereon, or any
r•-art thereof.
Section 10.4. Titles of Articlgs and Sections. Any titles of the several
parts, Articles, and Sections of this Agreement are inserted for convenience of refereno,-
only and shall be disregarded in construing or interpreting any of its provisions.
Section 10.5. Notices and Demands. Except as otherwise expressly
provided in this Agreement, a notice, demand, or other communication under this
Agreement by either party to the other shall be sufficiently given or delivered if it is
dispatched by registered or certified mail, postage prepaid, return receipt requested, or
telivered personally; and
(a) in the case of the DEVELOPER, addressed to or delivered
personally to DEVELOPER, c/o Rosauers Supermarkets, Inc., P.O. Box
9000, Spokane,
Washington 99209-9000 AND Kiemle & Hagood Company, Attn. Jerry
Hagood, W. 601 Main Avenue, Suite 400, Spokane, Washington 99201.
(b) in the case of the CITY, addressed or delivered personally to the
City Manager, City of Kalispell, PO Box 1997, Kalispell, Montana 59903-
1997, or at such other address with respect to either such party as that party
may, from time to time, designate in writing and forward to the other as
provided in this Section.
Section 10.6. Counterpails. This Agreement is executed in any number
counterparts, each of which shall constitute one and the same instrument.
Section 10.7. Guarimly. By its signature hereon, Rosauers Supermarkets, Inc.
hereby guarantees all obligations of the DEVELOPER hereunder.
111 ''! 1 V! I I! 11�1111 plil I
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=�- - �#- �- t I
FSTAMiM niumil
B
City Maniger''
By
AG4erk-ef-G-Guneil
Ass� FNI Pf*r&&r
1:11111 )Viiii •
By
Its:. PresidentZ
In his capacity as President of ROSAUERS
SUPERMARKETS, INC., a Washington
corporation
By
Its:
STATE OF MONTANA
ss
County of Flathead
On this day of y0p(-ep�er 1997, before me, a Notary Public in and
for the State of Montana, personally appeared Cl nce W. Krepps, and D4tt!W4WftW c4I L--
known to me to be the City Manager and NUORaAof the City of Kalispell, a'
municipality, that executed the within instrument, and acknowledged that such City
Manager and Clerk of Council subscribed, sealed and delivered said instrument as the
free and voluntary act of said municipality, for the uses and purposes therein set forth,
and that he was duly authorized to execute the same on behalf of said municipality.
Page 19 of 21
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial
Seal, the day and year first above written.
9—ot�y )� iblic, State of M4jon
ttT siding at Kalispell, MonZtana
My Conu-nission Expires
State of
:ss
-'ounty of
On this 2-4, day of 1997, before me, the undersigned, a
Notary Public for the State of tk))�i personafly appeared
known to me t President of Rosauers Supermarket,
Inc, 1--Washington corporation which is the sole member of RSI, L.L.C., a Montana
limited liability company, whose name is subscribed to the foregoing instrument and
acknowledged to me that such Corporation executed the same.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year last above written. 1%
K. 1pe; z
0 T AR y
Z PUBLr-
'C
YZ
STATE OF WASHIN&*'�"
ss
a �=
Notary Public, State of LQA4,, L"
Residing at: fot-r-,t-
My Commission Expires: U - t-ZzD
*n this 2q day of December, 1997, before me, a Notary Public in and for the Stat,-2r
of Washington, personally appeared LARRY D. GELLER, known to me to be the
Presidgn of Rosauers Supermarkets, Inc., a corporation, that executed the within
instrument, and acknowledged that such President subscribed, sealed and delivered said
instrument as the free and voluntary act of said corporation , for the uses and purposes
therein set forth, and that he was duly authorized to execute the same on behalf of said
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial
Seal, the day and year first above written.
z
i09-dft.�OT AR),
PUBILVIG %
lilt
6A Ca- -
Notary Public, State of Washington
Residing at-5x)v-n�
MYCornmissidnExpires: _Lj--?��.
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