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06/10/98 Gallagher to Neier/Rosauers' Sanitary Sewer & Storm Drain Installationinteroffice M E M O R A N D U M To: Glen Neier, Interim City Manager From: Lawrence Gallagher, PECDD Director Subject: Rosauers' Sanitary Sewer and Storm Drain Installation by the City of Kalispell and May 22, 1998, Letter from KIEMLE & HAGOOD COMPANY Date: June 10, 1998 When I returned to the office on the afternoon of June 1, 1998, 1 reviewed a May 22, 1998, letter form Gerald L. Hagood, President of Kiemle & Hagood Company. Mr. Hagood will continue to represent the owner/developer of the site and had also expressed interest in at least one of the remaining parcels held by the City. A copy of Mr. Hagood's letter is attached. As you recommended, I have obtained detailed preliminary cost estimates for the City to install the Sanitary Sewer and Storm Water Retention System for all three lots as a project to be undertaken and paid for by the City of Kalispell. The City could elect to do the work in-house or contract it out. Upon completion of the installation at the City's expense, the City would assess Lot 2, the Rosauers' lot, for its pro rata reimbursement of the cost of providing the infrastructure. I have included the amount estimated by Public Works in the PECDD budget request for the Kalispell City Airport/Youth Athletic Complex Project budget for FY 1999 and also estimated the revenue recapture of Rosauers' pro rata share of the cost. The anticipated cost of the City installing the traffic signal at the new intersection of 3rd Avenue East and Hwy 93 South is also in the budget and, in my opinion, Rosauers has every right to expect that the signal at Kelly Road will be installed sooner rather than later because we told them the City's plans were to offer Lots 1 and 3 for sale this year. Mr. Hagood's letter did not mention the cost of providing the Lot 1 and Lot 2 access road from Hwy 93 South to the westerly edge of Lots 1 and 2. Half of the cost of this internal access road was to be born by Lot 1 which it appears will remain unsold and undeveloped by the time the road and utilities are needed by Rosauers. They can build the road and assess the City its pro rata share of the cost attributable to Lot 1 to the City. Glen Neier, Interim City Manager Page 2 June 8, 1998 Mr. Hagood has requested a response from the City before July 21, 1998, if the City • • intends to develop the • for the sewer main (and storm water retention system) or if Rosauers should anticipate having to complete the plans. Please let me know how and what you want me to respond. Without the sale of Lots 1 and 2 of Daley Field (10.394 acres = 452,763 sq feet of land) at a minimum value in excess of the price paid by Rosauers (more than $1,472,000), there is no money or source of revenue to pay for the improvements specified in the agreement with Rosauers • for other capital and safety improvements to the Kalispell City Airport, nor is there any money available for land acquisition. Should the City elect to continue postponing offering the sale of the real estate it will have to borrow from other City reserves or on the public market to meet its financial obligations of the Rosauers transaction. I am also concerned about the saleability or absorption of almost Y2 million square feet of B-2 highway commercial property at a reasonably high price if there are hundreds of acres of • B-2 zoned property available along • • • at Reserve Street. Please let me know how you want me to proceed on these issues. KIEMIX,10 & UD C O M P A N Y May 22, 1998 Mr. Lawrence Gallagher Director, Planning & Economic Development CITY OF KALISPELL P.O. Box 1997 Kalispell, MT 59903-1997 RE: DALEY FIELD Dear Larry: I recently read the article in The Daley Inter Lake wherein the Kalispell City Council voted to postpone any sale of the two commercial lots adjoining the 5+ acres Rosauers Supermarkets acquired from the City of Kalispell this past winter. Obviously, this decision.is disappointing to both us and Rosauers as it most probably will delay the development of the remaining 10+ acres adjoining Rosauers' new 50,000 square foot super store to be completed in June, 2000. We understand the Council's right to make this decision, but had hoped that they, too, would recognize the opportunity and timing to develop a greater retail base in the southern portion of the City of Kalispell. It has been my experience that developers and property investors will either walk away or significantly discount a real estate project wherein the land is leased vs. owned fee - simple. Speaking only for my own company, Kiemle & Hagood Company has no interest in developing buildings on either of these two parcels on leased land. I am hopeful the City Council remembers the two rather significant financial obligations it has committed to with regard to our Rosauers store. One is the traffic signalization at 31 and Highway 93, which must be completed by June, 2000. The City also agreed to either install or allow Rosauers to install a sanitary sewer main along the entire length of Daley Field with the City paying for its prorata share. Finally, anticipating that the balance of Daley Field would be developed with commercial and retail uses compatible to Rosauers, there would be the need to also signalize the intersection of Kelly Road and Highway 93. In order to maintain our development time line, we would appreciate knowing within the next sixty (60) days if the City of Kalispell intends to develop the plans for the sewer main or if Rosauers should anticipate having to complete the plans. We do wish to have the planning aspect completed and this project bid timely for work to be completed Professional Real Estate Services Washington Mutual Financial Center, West 601 Main Avenue, Suite 400, Spokane, Washington 99201-0674 (509) 838-6541 FAX (509) 458-4014 Mr. Lawrence Gallagher May 22,1998 Page 2 no later than the early Summer of 1999. We would appreciate being kept appraised of any decisions or events that would effect or impact our project. i 9= KIEMLE & HAGOOD COMPANY raid agorident fH. /gr pc/ Larry D. Geller KIEMU& HAGOOD Washington Mutual Financial Center, 601 West Main Avenue, Spokane, Washington 99201 (509) 838-6541 C C) U P A N V MEMORANDUM April 29,1998 To: Larry Gallagher From: Jilt Hance, Director of Public orks Subject: Improvements for Rosauers Dick Amerman has prepared the at ched preliminary design and opinion of probable eo$;t in response to your nquest. Ras it been finally determined that the City will The doing this Installation aaad brining Rosaners for the work? Please let mire know if this meets your needs for the present, Please kip us informed as a schedule is dcvcloped for making these improvements. Post Office Box 1997 6 Kalispell, Montana 59903-1997 Telephone (406) 758-7700 * F. (406) 758-7758 MOEMO, Daley Field Subdivision Utilities, (cont.) Stom Water Retention Systetn for Lot 2: V A, Excavation, 7:50 CY @ $5/C'Y. B. Stmm Dr6n; 500 LF 18" CNP @ $20/LF- C. Storm Drain Manhole- I EA @ $21,000- SUB-TOTAL confinsency Engineering and Inspection @ 10% TOTAL STORM WATEX LOT 2 April 29,1998 ;9-IM ' IF11111.b Storm Water Retention System for All Three (3) Lots: Excavation; 1,500 CY @ S5/CY- $7,2500 B. Storm Dmin; 500 LIP 18" CMP @ $20/LF. $1050000 C. Swim Drain Mwffiole; I EA @ S2,000- $2000 Contingency @ 15% En&eening and InRx*lion @ I OP/9 TOTAL STORM WATE14 ALL LOTS . 46-46 • 7, 1 16 • • -tit. !,� Ir� � 7.� 16, 16 „16 •L- rl46 jr -,.tar t 1 ?� - rrll.nrl..+,••�11�r14r•+AIY•.•1� t - 5/Jt.i E1o• 2-54. 1°• �-'�a. t•• :' � 1 Wit•, ..' •• ..• . • . , ' . •' � .:! ' � � � r � r • •• .16 �•. eJ'+• .• �• � ,•r•�'• 4is ' / ••a°� 'ti,- \ !1'ti .ti.1-1. - °' .�•, 1•.:"•- ;i. •r.'�'rr • •r '+.My' ,�. •' r •'• , 4 '' 1 ••��r �{ '.•�• .1'• •r �!+ 1».1•� �y�'�.�'• 1• -;�'%'r�-`�' w T'1 ��'a+•• ,• •••7(r':� }•��'j�•r�•' ',,. 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