05/24/99 Hagood/Rosauers Supermarket, Kalispell, MontanaMay 24, 1999
Mr. Glen Neier
Interim City Manager
City of Kalispell
P. 0. Box 1997
Kalispell, MT 59903
RE: ROSAUERS SUPERMARKET, KALISPELL, MONTANA
Dear Glen:
Our Rosauers Supermarket project in Kalispell is now on a fast track. The onsite and
offsite improvement portion of the contract has been awarded, and construction should
start any day now. Kiemle & Hagood Company is completing the finalization of the
Kalispell Investment Group, L.L.C. which will be acquiring the Rosauers site from RSI,
L.L.C. on July 30, 1999, and construction of the supermarket itself should begin in early
August of this year, with opening scheduled for approximately mid -May, 2000.
Enclosed with this letter is a letter I have written to Ian Bailey with a copy to you requesting
that his firm, TDH, Civil Engineers, complete a cost estimate for both the sanitary sewer
and private road projects based on the construction contract and other related costs, and
that those amounts be shared with you. As you may recall under the Development
Agreement, the sanitary sewer main had to be extended, and under the Reciprocal
Easement & Maintenance Agreement, a private street is to be installed. Hopefully the
enclosed copy of the letter to Bailey is self-explanatory.
On another matter within the Development Agreement, Section 8.1 and subsection (a)
anticipate the transfer of this project to an investment entity formed by Kiemle & Hagood
Company. As noted above, we expect this to occur on July 30. It is my interpretation of
this provision that all RSI, Rosauers, and Kiemle & Hagood Company have to do is
develop some sort of certification of the fact that Rosauers has entered into a long-term
lease and will be the occupant on the property, and that my investment entity has, in fact,
secured its equity and has in place its financing to complete the project. As opposed to a
substitution of members in RSI, L.L.C., our legal counsel has requested that K&H set up
its own limited liability company, which is what we are doing. Thus, RSI, L.L.C. will be
deeding the property to Kalispell Investment Group, L.L.C. We trust this is acceptable to
the City of Kalispell. Please let Kit Querna and me know if you see the need for further
documentation than that.
Professional Real Estate Services
Washington Mutual Financial Center, 601 West Main Avenue, Suite 400, Spokane, Washington 99201-0674 (509) 838-6541 FAX (509) 458-4014
Mr. Glen Neier
May 24, 1999
Page 2
Finally, reviewing your Lot 1 Daley Field Subdivision prospectus, I either overlooked it or
it was not clear within that documentation that the successful bidder on Lot 1 will have to
pay a portion of the sewer cost as well as half of the road cost, and that a "Restrictive
Covenant" agreement was entered into between RSI and the City of Kalispell wherein Lot
1 and Lot 3 of Daley Field have certain use restrictions. It occurs to me that these points
might need to be clarified or expanded upon to prospective bidders as to your Lot 1
brochure.
Please feel free to give me a call regarding any aspect of the matters addressed herein.
look forward to seeing you when I come over to Kalispell this summer as this project
continues to build momentum.
Sincerely,
KIEMLE & HAGOOD COMPANY
Gerald L. Hagood, President
bja
cc: Kit Querna
HAG®® Washington Mutual Financial Center, 601 West Main Avenue, Suite 400, Spokane, WA 99201-0674 (509) 838-6541
C 0 M P A N Y
Part of Development Agreement
DESIGN AND CONSTRUCTION OF PRIVATE ROAD;
SHARING OF COSTS OF CONSTRUCTION
3.1 The owners of the City Property and RSI Property, or their representatives,
shall meet and collaboratively design a private road within the easement area.
Recognizing that the development of either the City Property or the RSI
Property might occur before the development of the other property, the owner
of the first property to seek a building permit (the "Initiating Party") shall
construct the private road, the center line of which shall be on the boundary
line between Lots 1 and 2, Daley Field Subdivision, the owner of the other
property thereafter reimbursing such party as set forth in this Agreement. For
purposes of this Agreement, the private road shall be deemed to stop at each
party's curb (said curb, and curb cuts, to be included within the costs of the
private road to be shared herein); neither party shall be obligated to pay for
the construction or maintenance of the sidewalks or other structures
appurtenant to the other parry's side of the private road.
3.2 The Initiating Party shall, prior to the commencement of construction, provide
an estimated the cost of construction of the private road to the other party.
Upon completion of construction of the private road, the Initiating Party shall
provide to the other party an accounting of all direct costs of constructing such
private road, including but not limited to costs of design, engineering,
permitting, and construction, to which shall be attached documentary evidence
of such costs. The other party shall pay one-half (1/2) of such documented
costs within fifteen (15) days of receipt of such accounting.
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SHARING OF COSTS OF MAINTENANCE AND REPAIR;
MAINTENANCE AND REPAIRS DEFINED
4.1 The owners of Lots 1 and 2, Daley Field Subdivision, shall each pay one-half
(1/2) of all expenses incurred to maintain and repair the private road; provided
that, subject to paragraph 4.4, neither shall be required to contribute to the
maintenance and repair of such road unless and until such party, or its
lessee(s), begin to conduct retail activities on and from such party's property.
EASEMENT AND AGREEMENT - 3