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1. Council Minutes - Regular Meeting - May 1, 2006A REGULAR MEETING OF THE KALISPELL CITY COUNCIL WAS HELD A7r P.M., MO AY, MAY 1, 2006, IN THE COUNCIL CHAMBERS AT CITY HALL IN KA ISPELL,, MON ANA. MAYOR PAMELA B, KENNEDY 'RESIDED. COUNCIL MEMBERS JIM A KJNSON, KAKI GA-BRIEL, Bob HAFFERMAN, BOB HERRoN, TIM KLU SNER DUANE LARSON., AND HANK OLSON WERE PRESENT, COUNCIL MEMBER RANDY KENYON WAS ABSENT. Also present: City Manager James Patrick., City Attorney Charles Har all, City Clerk Theresa White, Public Works Director Jim Macs, Pollee Chief Frank Garner, Fire Chief Randy Brodehl, Finance Department Director Amy Robertson, Parks and Recreation Director Mike Baker, Community Development Director Susan Moyer, Planning; Director Tom Jet , Senior Planner Sean Conrad, Airport Manager Fred Leist ko, and Recording ordin Secretary Judi Funk. Mayor Kennedy called the meeting; to order and led the .fledge of Allegiance. A. AGENDA APPROVAL Atkinson moved approval of the Agenda. The motion was seconded. There was no discussion. The motion carriedunanimously upon vote with Kenyon absent. CONSENT AGENDA APPROVAL 1. Council -Minutes — Re lar beet — April boo Larson moved approval of the Consent Agenda. The motion was seconded. There was .no discussion. The motion carried unanimously upon vote with Kenyon absent. C, STUDENT ISSUES None. D, PUBLIC COMMENT Stephanie Baca, 37 Bruyer Way Loop, asked Council to force the developer to put in new top soil and grass along the bike path on Grard Le because the clay that is there now runs into her and her neighbor s yards when it rains and contaminates their good soil. Phil Harris, 360 Txetra lt, Hutton Rainch Plaza, asked the Council to approve the final plat for Hutton Ranch Plaza Phase 1 and explained that even though the final approach permit has not been received from MDT it has been negotiated and they are just waiting for the formal engineering review. Kalispell City Council Minutes May 1. 2006 Page l Joe G ilba lt, Lakeside,) de, Bob voeiker's partner in the Milton Garden Inn project, spoke in support of the Hilton Garden Inn and said the economic development impact to the community will be substantial. He said this project will anchor the south entrance of the community. Rick �osiette, Missoula General Mana er of Hilton Garden Inn in Missoula, praised Gateway Hospitality Group as a class act and stated he is very impressed with the scope of the proposed project, adding it should easily provide 150 job opportunities. Linda Anderson, Executive Director of Glacier Country Tourism, stated that tourism is very important to Kalispell and Flathead County and said the Milton will help them market this area nationwide. Dori Hamilton, Flathead Convention and visitors Bureau Executive Director, stated her organization is funded 0 by the bed tax in Kalispell, which means that this project is quite significant for the organization because it will create a significant increase in tourism. She said the Milton will raise the bar and raise the level of competition in the area, Karla Uvengood, 2205 Hwy 93 South, Scotty's Bar, spoke in support of the Hilton and said it will be a great addition to Kalispell. She said it will make a beautiful entrance to town and the trickle down effect will be phenomenal. Dennis .is Beans, 126 Ridgeview Drive, Glacier Bank, stated he is impressed with voelker and his crew and spoke in favor of the Hilton project. Paul Wachhol ,183 Fairway Blvd, spoke in favor of the Hilton prJect and beautifying the southern entrance to Kalispell. He said old School Station will employ a lot of people and there will be opportunities for therm to use the convention facilities, adding; that Hilton will add a lot of value to the tax base . Jeremy Perrin, Centnryel General Manager, spoke in support of Hilton for the business traveler and said this facility will attract additional dollars. � Ie said it will be a great anchor tenant for the community and will change the way we look at the community and the service industry. Joe l nterreiner, Kalispell Chamber of Commerce Executive Director, stated the Chamber of Commerce Board of Directors strongly supports the Hilton proposal and unanimously passed a resolution in favor of the project on April 25th. (Resolution is attached hereto and made a part hereof) Andy Miller, 15 East Many Lakes give, one of the developers of old School Station, spoke in favor of the Milton project and stated that TIFs are very important to help bring in businesses. Tom Kline, 82 5th Avenue West North, also sole in support of the Milton project and said it will be a huge asset to the community. Shannon Nalty, principal in Riverview Associates (Southfield Tower), spoke of the importance of a convention center and TIF districts. Kalispell City Council Minutes May 1, 2006 Page 2 Joanne Nieman, 735 4th Avenue East, stated she is not against the Hilton, but is against the ��arran ement" that is being made with the hotel. She asked that Council take a hard look at the deal and that the City will be preparing everything for building the hotel by giving them TIF money. She said the City is making huge gifts to a company that says it grants to be here and it will be years before the City gets anything bal. Clare Beaver, Executive Director, Hope Pregnancy Center, spoke in support of their request for a conditional use permit stating they are a non-profit ministry which is solely supported by the community. Beaver expressed concern with the cost of paving the parking lot, but added they will do whatever the Council wants them to do. Clarice Gates, 426 7th Avenue West, spoke in opposition to holding the money from. the Armory sale for a community center in Resolution 5U.4. She said the money could be a. lot more useful used elsewhere. Clint Cathcart, 828 3rd Avenue East, spoke neither for nor against the Hilton Garden Inn, but asked the Council to understand that they are changing Kalispell by doing this. He spoke against using TIF money for the project and asked Council to look at other incentives. E. REPORT�JMCOMMENDATIONS AND SUBSEOUENT COUNCIL ACTION E/L RESOLUTION 511.4 — SALE OF ARMORY PROPERTY — HILTON GARDEN INN Resolution 511.4 authorizes the sale of the armory property to Gateway .hospitality Group, Inc. for a Hilton Hotel and conference center. Gateway Hospitality Group is offering to purchase the property for 1.2 million dollars which an appraisal recently determined is the fair market value. Herron roved Resolution 51-14, a resolution to sell certain real estate owned by the City o Kalispell ell .n more particularly described as Tract I or Certificate of Survey No. 17045, a tract of land, situated, lying, and being in the north half of the Northwest Quarter of Section 20, Township 28 North, Mange 21 west, .M.M., Flathead County, Montana to Gateway Hospitality Group, Inc. The motion was seconded. Patrick gave a staff report. Ha.ffenn.an commented he would be in Favor of the sale if the following e nd .tions were met: the sale was on an `�as is" basis; the casino ordinance had been changed; and the dispensation of the money received now and later was specified. He said setting aside the sale proceeds for a community center has not been a Council recommendation, yet it is in the resolution. Hafferman said Patrick noted in his rne.mo that the City will have to provide $890,000 for site improvements which can only come from one source,, the taxpayer, because this project is in the TIF district where the money cannot be spent for City services. He said he feels the hotel and convention center could be an asset to the community if the developers pay for all of their own development and buy the property 4"'as ls'�, but as it is, the City should wait because this is a valuable piece of property and other developers will come forward. Kalispell City Council Minutes May 1, 2006 'age 3 Larson. stated he was also not in favor of earmarking the money for a community center, but he has since changed his mind because the Council will have the final say on how the money is spent. He said be doesn't see any harm with earmarking the money because it gives the Council seed money if a community center is developed, and the money can be spent for something else if it isn't. Olson commented be can live with the agreement for now, but when it cores time to lower the debt he's going to be a lot .more excited where the money goes. Mayor Kennedy stated this is an important piece of the sales agreement because the Armory v as promised to the community for a CommuDity Center. She said the Council formed a committee to look into starting a community center and the Council should also be looking at ways to fund it. Atkinson .noted the Armory would have cost City taxpayers about $500,000 to make it livable for community center. He also stated the $890,000 will not come from taxpayers, but from the TIF district. The motion carried upon roll call vote with Atkinson, Gabriel, Herron., Klues er, Larson, Olson, and Mayor Kennedy voting in favor, Hafferman voting against, and Kenyon absent. E 2. ORDINANCE 1574 ZONE CHANGE REU ST — HILTON GARDEN INN — 1ST READING Robert voel er has requested a zone change from . -1, Public, t -2, General Business, and a Planned Unit Development overlay on a three and a half acre lot located on the Armory property. Herron moved first reading of Ordinance 1574, an ordinance to amend Section 27.02.010, Official Zoning Map, , City of Kalispell Zoning ordinance, (Ordinance No. 1460), by zoning certain real property more particularly described as Tract 1 of Certificate of Survey No. 17045, a tract of land, situated, lying, and being .in the north balf of the N rtbwe t Quarter o Section 20, Township 28 North, Rage 21 West, P.M.M,, Flathead County, Montana (previously zoned City P-1, Public) to City -2 (General Business), with a Planned. Unit Development overlay in accordance with the Kalispell Growth Policy 2020, and to provide a effective date. The motion was seconded. ec . Patrick gave a staff report and outlined several proposed amendments. Larson moved that the Planned Emit Development Agreement as part of ordinance 1.574 be amended to add, after Section IV. OBLIGATIONS of CITY, as follows and that the City Attorney be directed to renumber the subsequent sections as appropriate: ". TAXES AND PAYMENT IN LIEU of TAXES Payment in Lien of Taxes. It is contemplated that the completed Hilton Garden Inn are Conference Center .project [Project Property] erty] will generate annual tax revenue to the CITY i the amount of approximately TWO HUNDRED SIXTY THOUSAND AND NO/100 DOLLARS 2 0,000.00 upon completion of the Project, exclusive of City or county special assessments. Developer, therefore, covenants to pay the City any difference between the Kalispell City Council Minutes May 1, 2006 'age 4 amount of tax actually generated by the Project Property, including any portion of the Project transferred to another owner, and the amount contemplated by this Agreement for a period o TWO 2 years commencing with tax payment due November 30, ,boo . Payment under the provisions of this paragraph shall be made directly to the City, alter certifying the tax generated by the Project Property through the City finance department subject to verification, and in accordance with the following: .. For tax year 2007, a copy of the tax bill for the tax year 2007 shall be delivered to the City finance office on or before November 15, 200* . The City rinance office shall calculate the difference between the tax bill for the Zoo tax year, exclusive of special assessments, and the sum of TWO HUNDRED AN SIXTY THOUSAND AND N 100 DOLLARS 2 o,000.00 and invoice the Developer r for the difference. 3. Half of the payment for said amount calculated shall be due and payable, from the Developer, on or before December 15, 2007. The second half of the payment for said amount calculated shall be due and payable, from the Developer, on or before May ay 31, Zoo. 4. For tax year 2008, a copy of the tax bill for the respective tax year shall be delivered to the City finance office on or before November 1.5. 5* The City finance office shall calculate the difference between the tax bill for the respective tax year, exclusive of special assessments, and the sum of TWO HUNDRED AND SIXTY THOUSAND AND N0 100 DOLLARS $2 o,000;oo and invoice the Developer for the difference. . Half of the payment for said amount calculated shall be due and payable, from the Developer, on or before December 15, 2008. The second half of the payment for said amount calculated shall be due and payable, from the Developer, on or before May 3, Zoo. In tax years when the tax liability, less special assessments, equals or exceeds the sun o $260,000.00, no payment -In -lieu shall be due from the Developer, however, no credit shall be given for subsequent tax years, Payment of Taxes. Developer and his successors or assigns shall pay when due all real estate taxes and installments of special assessments payable on the Project Property." The motion was seconded. Larson explained that this would force the developers to make a payment In lieu of taxes for the first two years, of goes on the tax rl.s. He said this has been required for other projects. Ieron agreed, stating be believes Southfield Towers and ,.osaers made payments in lieu of taxes, and In defense of the City Manager, these changes are being made by the Council, not the City Manager. He said because of concems by several members of the Council, these changes are necessary to see this project happen. Hafferma . commented not one dime of the $260,000 will go into emergency services, the taxpayer ill have to pick up those costs. Atkinson asked Patrick to explain the "net proceeds" agreement. ent. Kalispell City Council Minutes May 1, 2006 Page Patric: responded the developer offered the City o of the net proceeds in ease the property is refinanced or sold and would take the place of any payment in lieu of taxes. Atkinson questioned why the developer would agree to payment in lieu of taxes on the front end, and also agree to 10 of the net proceeds on the hack end. Patrick said we don't know if the developer will agree to both. Atkinson noted if the amendment does #t pass, the majority of the Council will not vote in favor of the ordinance, and if t is passed, the developer may not agree to pay both. He said either moray, this could be a deal buster and we could lose the Hilton project. Herron agreed it's a Catch 22 because he knows without this amendment,, the previous resolution would .have failed. He said he's a poker player and he'll play this hand. Olson said he sees this as negotiating, not as a deal buster. :mayor Kennedy concurred, stating the developer has said the Hilton will be open by 2007 and if that's the ease he should be generating the full taxable value soon after opening. The amendment carried. with Gabriel, Hafferman, Herron, Klesner, Larson, Olson and Mayor Kennedy voting in favor, Atkinson voting against, and Kenyon absentO Atkinson moved to eliminate the "Nei. Proceeds Agreement". ". The motion was seconder. Larson stated he opposes this amendment because going into this, voelker had several deal breakers 1n his pocket and the City had none. He said he wants an even the playing field and he is not infavor of taking anything away from the agreement that is already there. Herron noted the net proceeds agreement is written so tightly, and guarantees the developer so many things, that he doesn't thInk the City is giving up much. He said he would rather have the money up front and sacrifice this. afferman said he doesn't see any point in the net proceeds agreement and it clouds the issue. Larson commented if the net proceeds agreement is valueless, then why did the City want it in the first place? Mayor Kennedy agreed, adding 'if itisn't going to make a large impact on the developer, then why not leave it i . Atkinson reiterated if we lose the development ecause of these extra conditions it will be a great loss to the City. Herron said if this was a gross proceeds agreement, then he'd never agree -to remove it. As it is, however, he doesn't thin it's necessary. Kalispell City Council Miuutes May 1, 2006 .gage Larson emphasized he realizes this is great for the City, but t" s also great for the developer. He said if the developer makes this is a deal breaker then he wasn't very serious about the project 1n the first place. The motion failed upon roll call vote with Atkinson, Haffer a , and Herron voting in favor, Gabriel, Kluesner, Larson, Olson, and Mayor Kennedy voting against, and Kenyon absent. Larson moved that condition #9 be added to Section 1 of ordinance 15 , and condition #8 be added to Section III of the Planned Unit Development, as follows: "Upon completion of each phase of the project to which tax increment funds are provided, the developer shall provide a letter of credit to the City of Kalispell in the amount of those tax increment funds expended to insure that the proeet is completed as agreed upon by the parties to this Agreement. t. In the event that the project is not completed as agreed upon by the parties, the City of Kalispell shall be entitled to recovery of all tax increment funds expended from either the developer or the letter of credit provider," The motion was seconded. Atkinson wanted to know the reasoning behind the amendment, adding It sounds like "'youjust don't trust the guy"'. Mayor Kennedy said it has nothing to do with a lack. o. trust. it has to do with making sure that the City of Kalispell is covered for any expenditure that goes forward and that the development en happens as the developer .has stated it will happen. Larson said it is simply a protection for the City. The amendment carried unanimously upon vote with Kenyon absent. Herron moved that Section V. of the Planned Unit Development Agreement as part o Ordinance 1574 be amended as follows: "V, AMENDMENT OR MODIFICATIONS of EVELo MEN AGREEMENT .01 This Development Agreement may be amended or modified only, by application of the owner, in accordance with the procedures set forth herein. 5.02 Application for amendment or modification may be made only to the City Council o Kalispell. # I 7k 4 f i s i i al * ■ r i PI �! r it %jr • a a 9 IL W# 0 42 VFJ 11 ftMIA t 11 11 11 11 t 1 1111,01 � y a -4-9 Is 1-d S a dr*-W-4VW lr� SCWA-� * -19 In a * ®R iq.� I 1 11 3 11A 41 s • w 9 10 W V 1# 11 s L q -VA-NLwAEL*J V I I! ! M flat * } _ a r ■ s a a #"'. w w # a i ! s # # s r MV AWAL W. I MR-F.a • # M11# oil y Kalispell City Council Minutes May 1, 2006 Page 7 * ,► a r ■ s i w s it # # s i r 7k r i iF a a t * e r~,,. . a a r � a* # s r • r r s■ a I&CM RNEW. III a a r r# JR ■ r as ■ • r ## 10111" i # . i MAJER 10 1 V 0 A W 0 8 1& qj. mL i r 14 RI i rIIIWA • 1* • • a •TV ASS446y s gth"Qs ia plar Stw • The motion was seconded, Mayor Kennedy explained that all references to the Site Review Committee e are being removed because there has been a lot of community and Council input regarding this project and she would like to see any modifications in the future, minor or otherwise, come before the Council. The amendment carried unanimously upon vote with Kenyon absent. Larson moved that Section Iv. of the Planned Unit Development Agreement as part o Ordinance 1574 be amended as follows: "'Iv. OBLIGATIONS OF CITY The CITY agrees that in consideration of the terms set forth above, the execution of a Net Proceeds Agreement with GATEWAY (attache. hereto) and for the general economic benefits to be derived by the CITY and its citizens, including the additional tax base to be realized, the redevelopment of the subject property, which has been determined to be in a blighted area, and its usage as a conference center, which is desired and beneficial to the local eco.omy, the CITY shall contribute funds in following priority order. .. Demolition of the existing structures on the subject property; and 2. Remeiatin of the site as required by Montana DeRartment of Environmental Quality* and and 3. Develojementof ublic infrastructure. The contribution of the City shall not exceed the total sum of EIGHT HUNDRED NINETY THOUSAND N N'o o HS $ o,o DOLLARS* Kalispell City Council Minutes May 1., 2006 Page The CITY shall enter into a long-term leasehold agreement with GATEWAY to provide such additional parking area to GATEWAY as may be required by the CITY and not available on the Subi Property. This parking area shall be adjacent to the Subject Property and located on CITY owned City Airport property. The specific terms of the lease agreement shall be negotiated between the parties, however the length of the term shall be of such length as required for GATEWAY to finance the project and the annual per square foot lease payment shall be equal to or greater than such payments made by other parties leasing City Airport property." The motion was seconded. Larson spoke in favor of the motion. The amendment carried upon vote with Gabriel, Herron, Kluesner, Olson, Larson,, and Mayor Kennedy voting in favor, Atkinson voting against, Hafferman abstaining, and Kenyon absent. Larson moved that Number 6 in Section II of ordinance 1574 be amended as follows: '` . All outdoor signage advertising the casino or imming activities within the Facilities shall be prohibited. J__x • 11 'l.M131 'J 'J d16 JJ thCL th 94* oI -Fxx The motion was sen, Larson also spoke in favor of the amendment. .sore stated he will oppose the amendment because all the other casinos have signs and he doesn't think it's fair. Kl esner agreed with Olson. Mayor Kennedy reminded Council that the Section 36 PUD agreement doesn't allover for outdoor signage regarding gaming. Gabriel said she feels this condition should be applied to all future casinos. Herron stated he reels we are being overly restrictive on the developer, however, since this amendment is important to certain Council. members he will support it. The motion carried upon roll call vote with Atkinson, Gabriel, Herron, Larson, and Mayor Kennedy voting in favor, Hafferma , Klesner, and Olson voting against, and Kenyon absent. Kallspell CiLy Council Minutes May 1, 2006 cr Hafferman co.r mente d a PUD has been a useful tool with past d evel opments when it has been used as defined in our zoning regulations, but this PUD agreement is being used to circumvent the regulations. The main motion, as amended five tines, carried upon roll call vote with Atkinson, Gabriel, Herron, Klesner, Larson, Olson and Mayor Kennedy voting in favor, Hafferman voting against, and Kenyon absent, E 3. CONDITIONAL USE PERMIT — CENTRAL BIBLE CHURCH Central Bible Church is requesting a conditional -use permit for the Hope Pregnancy Center to operate in a R-4 zoning district. Larson moved Council approve the conditional use permit for Hope Pregnancy Center subject to conditions. The motion was seconded. Conrad gave a stff report and answered questions. Olson moved condition #1 be amended giving the applicants two years to pave the parking lot. The motion was seconded. Atkinson said be would normally oppose the amendment, but because this is a non-profit organization he will support the extension.. Mayor Kennedy said she will also support the amendment, ent, but encouraged the applicants to actively seek donations for the pavement. The amendment carried unanimously upon vote with Kenyon absent. The main notion, as amended once, carried unanimously upon vote with Kenyon absent. E/4, I NA PLA7F — CASCADE BUSINESS PARK This is a request for final plat approval of Cascade Business Park Subdivision that plats six commercial lots on approximately acres located soot. o Two Mile Drive, west o the Gateway West Mall. Larson moved Connell accept the Subdivision Improvement Agreement and approve the final plat for the Amended Plat of Lot I of the Amended Plat of a Portion of Gateway west Addition ##3 , aka Cascade Business Park. The motion was seconded. Conrad gave a staff report and answered questions. There was no discussion. Kalispell City Council Minutes Mai. , ;6 Page 10 The motion carried unanimously upon vote with Kenyon absent, E 5. FINAL PLAT — HUTTON NCH PLAZA This is a request for final plat approval of Hutton Ranch Plaza Phase I that plats 17 commercial lots on approximately acres located on the east side of US Hwy 93 between the Flathead valley Community College and :mountain view Plaza. Atkinson moved Council accept the Subdivision mp rov me s Agreement and approve the final plat of Hutton Ranch Plaza Phase 1. The motion was seconded,, Jentz explained that staff is recommending approval of the final plat even though approach permits have not yet been received by the Montana Department of Transportation. He said a letter from MDT states approach permits will be issued as soon as five conditions are met, which should occur within 30 days. J ntz added that one of the preliminary plat conditions required access to the Home Depot to the north.. He said despite efforts by the Hutton Ranch developers, a request for cross access between the two developments was denied by SCC Development Company. There was discussion concerning the approach permits, the cross access road, and the future bypass. Olson said the developers have done everything they said they were going to do and he doesn't see any reason to delay approval. The motion carried unanimously upon vote with Kenyon absent. . TASK ORDER. #4 — WASTE WATER TREATMENT PLANT EXPANSION This task order is for the final design of the WWTP expansion project. Larson moved Council authorize the City Manager to execute the WWTP Task order #4 for final design of the ww P expansion project. The motion was seconded* Hansz gave a staff report. There was no discussion. The motion carried unanimously upon vote with Kenyon absent. ., MAYO UNC CITY MANAGER'S REPORTS No Action Mayor .Kennedy asked Council members and staff to attend the training sessions by Flathead on the Move. She also invited the public to attend the "'Are You Ready for the Next Generation" presentation on May 25. Hansz gave an update on the Santa Fe, Bismarck and Willow Glen water problems. Kalispell City Council Minutes May .1, 2006 'Page 11 There was discussion concerning the care of bike paths around .empire Estates. Hafferman asked for a workshop to discuss the Northern Lights Boulevard traffic problems. Patrick announced MDT will hold a bypass presentation on May 10 at the outlaw Inn. G. URN The meeting was adjourned a .0:03 p.m. ATTEST: Theresa White City Clerk Pamela B. Kennedy Mayor Kalispell City Council Minutes May .1.,2 0 Page 1. 2 RESOLUTION OF THE KALISPELL ARE A CHAMBER of COMMERCE April 25,2006 t its regular Board of Directors m ecting of April, 2 o 06, the Kalispell Area Chamber of Commerce adopted the following lowin resolution: It is moved that the Kalispell Chamber Board ofDirectors support the HzIton Garden Inn project as proposed by the City Manager in his memorandum the Mayor and City Moved by Jim Oliverson Seconded by Bill Sehottekor Passed on a vote of 15 in favor; - - opposed Chris Ahner, Northwest Montana Association of Realtors Susie Burch., Flathead Valley Community College Dick Buchanon., B34eSaNrNry Steve Clawson,WelsFaro � John Dudis,, Crowley Law Firm Dick Hamm, HE Simpson Lumber Company Tom Kurdy, The Daily Inter Lake Mark Lalum, CHS Tom McElwain, Stewart Title Carol Nelson, Carol Nelson Desigm Jim Oliverson, Kalispell Regional Medical Center Bill Seottelkor, Western Building Centers Mark Twichel, Merge t a er Transfer and Storage Deb Wilson, Brendan. House Jeff Wilson, Properties Northwest y2linLjnDrposition: None Recorded y: 1111IN�enerner,. President and CEO l spell Area Chamber of Commerce