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
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