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Resolution 5616 - Gateway West Mall Final Transfer Approval to FCEDAA RESOLUTION APPROVING THE CONVEYANCE BY THE CITY OF KALISPELL TO THE ♦ 1 ' COUNTY ECONOMIC DEVELOPMENT AUTHORITY ALL OF ITS PERSONAL AND REAL PROPERTY INTERESTS IN LOT I OF AMENDED PLAT OF THE MALL PORTION GATEWAY WEST ADDITION NO. 34 AND LOT I OF AMENDED PLAT OF NORTHEAST PORTION GATEWAY ADDITION PURSUANT 1 O TERMSTHE MEMORANDUM PARTIES APRILAND AUTHORIZING THE MAYOR TO EXECUTE THE PROPOSED INTERLOCAL AGREEMENT AND TRANSFER rMOCUMENTS EFFECTUATING managementWHEREAS, on the 17 1h day of February, 2000 the City of Kalispell [the CITY], the Flathead County Economic Development Authority [FCEDA] and Flathead County entered into an Interlocal Agreement setting forth the responsibilities and obligations of each with respect to the acquisition, ownership, certain real and personal property consisting of a 63,101 square foot space in the Gateway West Mall in the City, including a- commercial office facility of approximately 60,645 square feet, described as Lot 1 of Amended Plat of the Mall Portion Gateway West Addition No. 34, as well as certain furniture, fixtures and equipment, then existing, all hereinafter referred to as "the Property"; and WHEREAS, pursuant to the above described Interlocal Agreement the City and FCEDA are vested owners in the Property as tenants in common with an undivided 37% interest vested to FCEDA and an undivided 63% interest vested to the City; and WHEREAS, on the 7thday of February, 2000, the City, by Resolution No. 4536, authorized the issuance of West Side District Taxable Tax' Increment Urban Renewal Revenue Bond, Series 2000, in the amount of $2,500,000 for the purpose of financing the purchase of the Property and which bond was retired in June 30, 2010 with funds generated by the West Side Tax Increment District -as well as funds generated by a 2 mill ad valorem property tax levied under the authority of FCEDA; and on r of August, 2005 the City Council passedi'lution No.5046 I' authorized the City's 50% participation with FCEDA in the total purchase price of $312,760.80 for the acquisition of additional real property of approximately 2 acres in area described as Lot - I of Amended Plat of Northeast Portion Gateway West AdditionNo. to provide additional parking forof the as contractually required and included therefore within all references herein to Property"; and improvingWHEREAS, the City and FCEDA also shared equally in the costs of the purchased parking lot and each party's vested interest in this property is 50% undivided interest I tenants and w., HEREAS, on March 1, 2004, the City and FCEDA as Landlord, and Teletech Services Corporation, [TSC], as Tenant, entered into a Shopping Center Lease with a term of 10 years; • WHEREAS, on March 1, 2004, the City entered into a Jobs and Use Agreement with TSC in which the issues of property taxes, jobs and rent reductions are treated; and WHEREAS, on April 3, 2013 the City and FCEDA entered into a Memorandum of Understanding in which the parties agreed that it is in the best interests of the City and FCEDA that the City convey its interests and obligations in the Property, the Shopping Center Lease and the Jobs and Use Agreement with TSC to FCEDA and that FCEDA assume such ownership interests and obligations. NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL, MONTANA, AS FOLLOWS: SECTION 1. The Kalispell City Council hereby finds that the goals of the City in its acquisition and management of the above described property have been met and that it is now in the best interests of the citizens and taxpayers of the City that the City's interests in the property be conveyed to the Flathead County Economic Authority pursuant to the terms of the Interlocal Agreement attached hereto and incorporated herein fully by this reference. SECTION 2. The Mayor is hereby authorized on behalf of the City to execute the Interloc Agreement and all transfer documents for this subject property. i PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF THE CITY OF KALISPELL THIS 6th DAY OF MAY, 2013. Tammi Fisher Mayor . Theresa White City Clerk Return to: City Clerk P.O. Box 1997 Kalispell, MT 59903-1997 INTERLOCAL AGREEMENT between THE CITY OF KALI5PELL and THE FLATHEAD COUNTY ECONOMIC DEVELOPMENT AUTHORITY The CITY OF KALISPELL, hereinafter referred to as "the City", a municipal corporation duly formed and authorized pursuant to Montana state law and with business offices located at 201 First Avenue East, Kalispell, Montana, and the FLATHEAD COUNTY ECONOMIC DEVELOPMENT AUTHORITY, hereinafter referred to as "FCEDA" a corporate public body established pursuant to Montana state law and with business offices located at 314 Main Street, Kalispell, Montana hereby enter into agreement as set forth below. WHEREAS, Title 7, Chapter 11, Part 1, M.C.A., known as the "Interlocal Cooperation Act," permits governmental units to make the most efficient use of their powers by enabling them to cooperate with other local governmental units on a basis of mutual advantage and thereby to provide services and facilities in a manner and pursuant to forms of governmental organization that will accord best with geographic, economic, population, and other factors influencing the needs and development of local communities; and WHEREAS, said Act provides that an Interlocal agreement may be authorized and approved by the governing body of each party to said contract; and WHEREAS, the City is a municipal corporation of the State of Montana located within Flathead County, Montana and is duly organized and in existence pursuant to the terms of MCA Title 7 Chapter 3 Part 43; and Interlocal Agreement — Page 1 WHEREAS, FCEDA is a corporate public body duly organized and in existence pursuant to the terms of MCA Title 7, Chapter 14, Part 11 enabling the creation of a Port Authority and by Resolution No. 1346 of the Flathead County Commissioners for the stated purposes of stimulating commerce, maximizing employment opportunities and expanding the tax base; and WHEREAS, on the 17 1h day of February, 2000 the City, FCEDA and Flathead County entered into an Interlocal Agreement setting forth the responsibilities and obligations of each with respect to the acquisition, ownership, management and financing of certain real and personal property consisting of a 63,101 square foot space in the Gateway West Mall in the City, including a commercial office facility of approximately 60,645 square feet, described as Lot I of Amended Plat of the Mall Portion Gateway West Addition No. 34, as well as certain furniture, fixtures and equipment, then existing, all hereinafter referred to as "the Property"; and WHEREAS, pursuant to the above described Interlocal Agreement the City and FCEDA are vested owners in the Property as tenants in common with an undivided 37% interest vested to FCEDA and an undivided 63% interest vested to the City; and WHEREAS, on the 7 th day of February, 2000, the City, by Resolution No. 4536, authorized the issuance of West Side District Taxable Tax Increment Urban Renewal Revenue Bond, Series 2000, in the amount of $2,500,000 for the purpose of financing the purchase of the Property and which bond was retired in June 30, 2010 with funds generated by the West Side Tax Increment District as well as funds generated by a 2 mill ad valorem property tax levied under the authority of FCEDA; and WHEREAS, on the 15 1h day of August, 2005 the City Council passed Resolution No. 5046 that authorized the City's 50% participation with FCEDA in the total purchase price of $312,760.80 for the acquisition of additional real property of approximately 2 acres in area described as Lot 1 of Amended Plat of Northeast Portion Gateway West Addition No. 34 to provide additional parking for the tenants of the Property as contractually required and included therefore within all references herein to "the Property"; and WHEREAS, the City and FCEDA also shared equally in the costs of improving the purchased parking lot and each party's vested interest in this property is 50% undivided interest as tenants in common; and WHEREAS, on March 1, 2004, the City and FCEDA as Landlord, and Teletech Services Corporation, hereinafter referred to as "TSC", as Tenant, entered into a Shopping Center Lease with a term of 10 years; and Interlocal Agreement — Page 2 WHEREAS, on March 1, 2004, the City entered into a Jobs and Use Agreement with TSC in which the issues of property taxes, jobs and rent reductions are treated; and WHEREAS, on April 3, 2013 the City and FCEDA entered into a Memorandum of Understanding in which the parties agreed that it is in the best interests of the City and FCEDA that the City convey its interests and obligations in the Property, the Shopping Center Lease and the Jobs and Use Agreement with TSC to FCEDA and that FCEDA assume such ownership interests and obligations. NOW THEREFORE, IT IS AGREED by and between the City and FCEDA each a local government agency of the State of Montana, and pursuant to MCA 7-11-104, that it is to their mutual benefit to adopt this Interlocal Agreement as follows: PURPOSE: The purpose of this agreement is to set forth the terms of the transfer of the City's ownership interests in the Property to FCEDA, the assignment by the City and the assumption by FCEDA of the rights and obligations under the Shopping Center Lease and Jobs and Use Agreement with TSC. DEFINITIONS: The following terms shall be defined within this document as set forth below: "Base Portion"- Pursuant to the terms of MCA 7-15-4283 the Base Portion shall be the tax revenue generated upon actual taxable value of all taxable property within the urban renewal area prior to the effective date of a tax increment financing provision. "Beneficial Use Tax" - Pursuant to MCA 15-24-1203 there is imposed and must be collected a tax upon the possession or other beneficial use for industrial, trade, or other business purposes enjoyed by any private individual, association, or corporation of any property, real or personal, that for any reason is exempt from taxation. "Deficiency Tax Payment" - Pursuant to the Jobs and Use Agreement entered into between the City and TSC on March 1, 2004, at Paragraph 4.4, the Deficiency Tax Payment is calculated to be the difference between $140,000 and TSC's actual Property Tax Obligation. In the event that FCEDA and TSC or future Lessee enter into an agreement that amends or otherwise changes the $140,000 ceiling, the resulting difference between that amount and the actual property tax obligation shall be considered as the Deficiency Tax Payment for the purposes of this agreement and regardless of the term used between FCEDA and the Lessee to name any payment obligation of Lessee to FCEDA that is above and beyond the Lessee's Property Tax Obligation. "Increment Portion" - Pursuant to the terms of MCA 7-15-4283 the Increment Portion shall be the revenues realized from extending the tax levies, expressed in mills, of all taxing bodies in which the urban renewal area is located against the incremental taxable value. "Incremental Taxable Value" - Pursuant to the terms of MCA 7-15-4283 the Incremental Taxable Value means the amount, if any, by which the actual taxable value at any time exceeds the base taxable value of all property within an urban renewal area subject to taxation. Interlocal Agreement -- Page 3 "Property Tax Obligation" - Total annual property tax paid by Lessee of the Property, including all Beneficial Use and Personal Property Taxes. "The Property" - The Property is described in the Grant Deed in the form attached to this agreement and includes such furniture, fixtures and equipment as existed within the Property and leased to TSC as of March 1, 2004. CONSIDERATION: The consideration exchanged by the parties for this agreement is as follows: 1) So long as the Property is subject to a lease and is within the West Side Tax Increment Financing District, the Tax Base Portion of the Beneficial Use Tax and Personal Property Tax paid by TSC or any future Lessee shall continue to be paid out to the various taxing entities otherwise entitled to such revenues. Upon the sunset of the West Side Tax Increment Financing District all Beneficial Use Taxes and Personal Property Taxes paid by TSC or any future Lessee shall be paid out to the various taxing entities otherwise entitled to such revenues. 2) So long as the Property is subject to a lease and is within the West Side Tax Increment Financing District, the Increment Portion of the Beneficial Use Tax and Personal Property Tax paid by TSC or any future Lessee shall be paid into the West Side Tax Increment Financing District so long as such district is in existence. 3) So long as the Property is subject to a lease and is within the West Side Tax Increment Financing District, FCEDA shall be entitled to receive all Deficiency Tax Payments paid by TSC or any future Lessee until such time as FCEDA has received a total of $300,000 from such payments which it shall use to build up its maintenance reserve account. Thereafter, and in consideration to the City for this agreement, FCEDA shall remit to the City 25% of all funds it receives from TSC or any future Lessee as Deficiency Tax Payments. 4) The parties understand and agree that in the event the Property is not under lease there will be no tax revenues generated by the Property. TRANSFER OF REAL ESTA TE OWNERSHIP: The City shall transfer its ownership in the Property, including the parking lot, to FCEDA in the form of a Grant Deed as attached hereto as Exhibit "A". ASSIGNMENT OF SHOPPING CENTER LEASE: The City shall transfer its interests and obligations in the Shopping Center Lease with TSC to FCEDA in the form of an Assignment of Shopping Center Lease as attached hereto as Exhibit "B". Interlocal Agreement — Page 4 TRANSFER OF RIGHTS AND OBLIGATIONS UNDER THE JOBS AND USE AGREEMENT: The City hereby transfers all of its remaining rights and obligations under the Jobs and Use Agreement dated March 1, 2004, with TSC to FCEDA and hereby represents that its obligations under the CDBG Grant and parking requirements have been fulfilled. FCEDA hereby assumes any of the City's remaining obligations under the agreement with TSC. EFFECTIVE DATE: The effective date of this agreement shall be upon the execution of this document as authorized by the governing bodies of each party. SEVERABILITY: If any portion of this Agreement is held to be void or unenforceable, the balance thereof shall continue in effect. APPLICABLE LAW: The parties agree that this Agreement is governed in all respects by the laws of the State of Montana and the parties expressly agree that venue will be in Flathead County, Montana, and no other venue. AMENDMENTS: This Agreement may not be modified, amended, or changed in any respect %­1 except by a written document signed by all parties. NO THIRD -PARTY BENEFICIARY: This Agreement is for the exclusive benefit of the parties, does not constitute a third -party beneficiary agreement, and may not be relied upon or enforced by a third party. COUNTERPARTS: This Agreement may be executed in counterparts, which together constitute one instrument. AUTHORITY: Each party represents that it has full power and authority to enter into and perform this Agreement and the person signing this Agreement on behalf of each party has been properly authorized and empowered to sign this Agreement. Dated this day of May, 2013. CITY OF KALISPELL FLATHEAD COUNTY ECONOMIC DEVELOPMENT AUTHORITY WE Tammi Fisher, Mayor M Turner Askew, Chairman Interlocal Agreement — Page 5 STATE OF MONTANA ) . SS. County of Flathead ) On this day of May, 2013, before me the undersigned, a Notary Public for the State of Montana, personally appeared TA MI FISHER, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that she executed the same in her authorized capacity as Mayor of the City of Kalispell. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the date and year first above written. Printed Name: Notary Public for the State of Montana Residing at My Commission expires: STATE OF MONTANA . SS. County of Flathead ) On this day of May, 2013, before me the undersigned, a Notary Public for the State of Montana, personally appeared TURNER ASKEW, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same in his authorized capacity as Chairman of the Flathead County Economic Development Authority. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the date and year first above written. Printed Name: Notary Public for the State of Montana Residing at My Commission expires: Interlocal Agreement — Page 6 Exhibit "A" Rebirn to: City Clerk P.O. Box 1997 Kalispell, MT 59903-1993 GRANT DEED FOR A VALUABLE CONSIDERATION, rec * t of which is hereby acknowledged, the eip CITY OF KALISPELL, a municipal corporation duly formed and authorized pursuant to Montana state law and with business offices located at 201 First Avenue East, Kalispell, Montana, hereby grants to FLATHEAD COUNTY ECONOMIC DEVELOPMENT AUTHORITY, a corporate public body established pursuant*to Montana state law and with business offices located at 314 Main Street, Kalispell, Montana the following real property located in the SEI/4, Section 12, Township 28 North, Range 22 West, P.M.M., in the City of Kalispell, County of Flathead, Montana and more particularly described as: Lot I of Amended Plat of the Mall Portion Gate a West Addition No. 34 w g accordinto y 0 the map or plat thereof on file at Clerk and Recorder of Flathead County, Montana, and Lot I of Amended Plat of Northeast Portion Gateway West Addition No. 34 according to the map or plat thereof on file at Clerk and Recorder of Flathead County, Montana. Dated this day of May, 20131 am County of Flathead CITY OF KALISPELL Tammi Fisher, Mayor On this day of May, 2013, before me the undersigned, a Notary Public for the State of Montana, personally appeared TAMMI FISHER, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that she executed the same in her capacity as Mayor of the City of Kalispell. IN WITNESS WBEREOF, I have hereunto set my hand and affixed my official seal the date and year first above written. Printed Name: Notary Public for the State of Montana Residing at My Commission expires: Return to: City Clerk P.O. Box 1997 Kalispell, MT 59903-1997 1111, 111 - I Ik M F - 44 0 w%*13-11 11UT I 0-1i'll" I I M AV hL treff-U U I 1�kg V 0 N O40 For valuable consideration, the receipt of which is hereby acknowledged, CITY OF KALISPELL, hereinafter referred to as "the City", a municipal corporation duly formed and authorized pursuant to Montana state law and with business offices located at 201 First Avenue East, Kalispell, Montana, hereby assigns to FLATHEAD COUNTY ECONOMIC DEVELOPMENT AUTHORITY, hereinafter referred to as "FCEDA 15, a corporate public bod established pursuant to Montana state law and with business offices located at 314 Main Streetl Kalispell, Montana, all of its rights, interests and obligations as Lessor in the leasehold estate as fully described below. The subject agreement of this ass ignment is entitled, "'Shopping Center Lease by and between the City of Kalispell, a body politic and the Flathead Economic Development Authority, a body politic, as Landlord and Teletech Services Corporation, a Colorado corporation doing business in Montana as Teletech Services Montana as Tenant," e ' ntered into by the named parties on the I't day of March, 2004 a copy of which is on file in the office of Kalispell City Clerk. ASSUMPTION OF LEASE AND INDEMNIFICATION: FCEDA hereby agrees to assume all of the responsibilities and obligations of the Lessor in the lease identified above and therefore also 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 by the current or any I future Lessee against, recovered from or suffered by the City butonly to the extent that such clIims accrue after the execution of the Assignment. SURVIVAL: The parties' indemnification obligations shall survive the termination or expiration of this Agreement for the maximum period allowed under applicable law. SEVERABILI7T.- If any portion of this Agreement is held to be void or unenforceable, the balance thereof shall continue in effect. APPLICABLE LA W.- The parties agree that this Agreement is governed I respects by the laws of the State of Montana and the parties expressly e agree that venuwill be in Flathead County, Montana, and no other venue. AMENDMENTS: 'Ibis Agreement may not be modified, amended, or changed in any respect except by a written document signed by is NO THIRD -PARTY BENEFICIARY: This Agreement is for the exclusive benefit of the parties, does not constitute a third -party beneficiary agreement, and, may" not be rel ied upon or enforced by a third party. COUNTERPARTS: This Agreement may be executed in counter -parts, which together constitute one instrument. AUTHORITY: Each party represents that it has fu ' 11 power and authority to enter into and pelform this Agreement and the person signing this Agreement on behalf of each party has been properly authorized and empowered to sign this Agreement. I Flated this day of May, 2013. By: Tammi Fisher, Mayor FLATHEAD COUNTY ECONOMIC DEVELOPMENT AUTHORITY By* - Turner Askew, Chal*rman STATE OF MONTANA ss. County of Flathead On this day of May, 2013, before me the undersigned, a Not ar'y Public for the State of Montana, personally appeared TAMMI FISBER, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that she executed the same in her authorized capacity as Mayor of the Cifty of Kalispell. IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the date and year first above written. Printed Name: Notary Public for the State of Montana Residing at My Commission expires: STATE OF MONTANA ss. County of Flathead On this day of May, 2013, before me the undersigned, a Notary Public for the State of Montana, personally appeared TURNER ASKEW, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged to me that he executed the same in his authorized capacity as Chairman of the Flathead County Economic Development Authority. IN WITNESS WHEREOF, I have hereunto set my hand and affi ked my official seal the date and year first above written. Printed Name: Notary Public -for the State of Montana Residing at My Commission expires: