Loading...
05/24/99 Hagood/Rosauers Site ImprovementsKffi"MLE & HAGOOD C O M P A N Y May 24, 1999 Mr. Ian J. Bailey, P.E. Thomas Dean & Hoskins, Inc. 690 N. Meridian, Suite 101 Kalispell, MT 59901 RE: ROSAUERS SITE IMPROVEMENTS, KALISPELL, MONTANA Dear Ian: When RSI, L.L.C. purchased Lot 2 of Daley Field Subdivision from the City of Kalispell for the new Rosauers Supermarket, the parties entered, into a Development Agreement and a Reciprocal Easement and Maintenance Agreement. Each of these agreements has a provision within them wherein the two parties will share certain costs. The Development Agreement provides under Article 3, Section 3.2(b) that the developer shall design and build an eight -inch sanitary sewer main on airport property extending northerly from the south end of Lot 3 to the point that the sewer will no longer gravity flow. Subparagraph (d) of the same section provides for a Late Comers Agreement wherein the developer (RSI or Rosauers or an entity formed by Kiemle & Hagood Company) will be reimbursed on an equitable basis for the value that the extended sewer line provides to the owner(s) of Lots 1 and 3 of Daley Field. Subparagraph (e) of that same section gave the City the option of designing and constructing this sewer system; however, as we now know, the City opted to allow the developer to do so. While this section is part of the agreement, it really has no further affect. It is my interpretation that the intent of the cost to be shared between the developer and the City or subsequent parties to whom they might sell Lots 1 and 3 is that, in addition to the pure construction cost, the cost of the sanitary sewer main would include all required civil engineering fees and reimbursables, together with other appropriate and necessary costs such as permits, inspection fees, geotechnical testing, surveying, etc, and should also include the contractor's mobilization charge. As you know, Doug Crockett Excavating and Trucking, Inc. did not break mobilization out on its onsite and offsite construction bid as between the sewer line, the street improvements, and the onsite components of the project. Hopefully you can, on behalf of RSI and the City, equitably allocate that mobilization cost and any other element of costs that may not have been allocated in the contractor's bid. Finally, as it related to the sewer project, we need an allocation of resulting value to each of Lots 1, 2, and 3. Professional Real Estate Services Washington Mutual Financial Center, 601 West Main A"'CRUe, Suite }00, Spokane, Washin,,ton N201-06; # (509) 838-6541 FAX (509) 433-40I4 Mr. Ian J. Bailey, P.E. May 24, 1999 Page 2 Regarding the private street, the agreement between the City and RSI is within the Reciprocal Easement and Maintenance Agreement under Section 3. Rosauers is the initiating party in this case, and again we need to provide for both RSI and the City your best estimate of all appropriate costs that are to be shared between those two parties. Those costs, in addition to the contractor's direct charge, should again include their fair share of the mobilization charge as well as the other costs referenced for the sewer project. Please note that the sidewalk on the Rosauers side should not be part of the cost to be shared between RSI and the City. Ian, if you have any questions on this request, please feel free to give me a call. Also, please note that a copy of this letter has been sent to Glen Neier, Interim City Manager, reminding him of the City's participation. I have no problem with you discussing any aspect of these two agreements with Glen, and at the time that you have completed your estimate of what these costs are, to share them with me, for the benefit of RSI, and with Glen for the City. Obviously, when the two referenced projects are completed, we will then need to finalize these costs. It may well be that the City will request some sort of certification from you to add further legitimacy to the City's obligation. Thanks for your fine service on the Rosauers project. bja cc: Sincerely, KIEMLE & HAGOOD COMPANY Gerald L. Hagood, President Glen Neier Kit Querna Dik Salsbury Ferman Pasold KIEMLE & HAGOOD C 0 M P A N Y Washington IVlutl131 Financial Center, 601 West'vlain Avenue, Suite 400, Spokane, WA 99201-0674 (509) 838,6341 Part of.Development Agreement design and construction to ensure maximum efficiency to the CITY and DEVELOPER in the construction of the Improvements. Off -site public infrastructure improvements, to be installed at DEVELOPER'S expense, shall be as follows: (a) Storm Water Retention Pond. DEVELOPER shall design and build, in accordance with the City's Standards for Design and Construction, a storm water retention pond for storm water runoff from the Project Property, within an easement granted by CITY on Kalispell City Airport property, pursuant to Section 4.1. (b) Sanitary Sewer Main. DEVELOPER shall design and build an 8" sanitary sewer main, entirely within an easement granted by the CITY along the Easterly boundary of City Airport Property, together with an easement for access to and egress from such main. Said main shall be installed from the location of the existing main on Lots 1 and 2, Certificate of Survey # 3981, Records of Flathead County, Montana, to the North boundary of the Project Property, or to that point short of said boundary where gravity flow requirements can no longer be maintained with.a 3' cover of earth allowing for a sewer main depth of not less than 3' below ground level. Said main shall terminate in a manhole with additional manholes every 450' from the southerly terminus of the main to the northerly end. (c) Other Utilities. Water, electrical, natural gas, telephone and cable TV shall be installed at DEVELOPER'S expense from available locations adjacent to the Project Property. (d) Late Comer's Agreement. CITY and DEVELOPER recognize that because DEVELOPER'S construction of the Project is to be deferred for a limited period of time, DEVELOPER may be the first to construct off -site infrastructure improvements described herein, which might thereafter be shared by other developers of sites within Daley Field, or other developers may be the first to construct such improvements. DEVELOPER agrees to negotiate and_ enter into a Late Comer's Agreement with CITY, binding upon other developer(s) of sites within Daley Field, providing that which ever developer first constructs such improvements shall, to the extent such improvements are used by other developer(s), including the DEVELOPER, be reimbursed, on an equitable basis, by other developers using such improvements. (e) The CITY shall have the option to design and construct the Sanitary Sewer Main referenced in Section 3.2.(b), provided that the design and construction is commenced prior to the time design and construction of said Sanitary Sewer Main is commenced by the Developer. In the event, CITY designs and constructs the Sanitary Sewer Main, in accordance with this paragraph, 3.2. (d) shall have no effect, as to the Sanitary Sewer Main, and DEVELOPER agrees to pay to the Page 7 of 21 City an aliquot part of the construction based upon the square footage of Lot 2, Daley Field Subdivision. ARTICLE 4 Easements Section 4.1. Storm Drain. CITY shall grant an easement for a storm water retention pond, adjacent to the Project Property, on Kalispell City Airport property, together with an easement for access to and egress therefrom. Size of the easement shall be determined by calculating all of the drainage from the Project based on a 10 year-6 hour storm per Montana Department of Transportation Hydraulic Manual. Retention pond shall be a minimum of 30 feet from the sanitary sewer line easement established along the east property line of the City Airport. The Westerly edge of the easement shall be no closer than 150 feet to the center line of existing runway, with no land configuration higher than the elevation of the runway. Section 4.2. Sanitary Sewer. Natural Gas and Electrical. CITY shall grant an easement 30 feet in width, along the Easterly boundary of Kalispell City Airport, for the entire length of Daley Field, for the purpose of installing a sanitary sewer main, natural gas and electrical. Section 4.3. Crossover Easement. CITY and DEVELOPER recognize and agree that the Daley FiVO fjedevelopment will prove most successful if the purchaser of the portion of Daley FileAo the south of the Project Property undertakes or develops one or more uses of such property which are compatible with DEVELOPER'S use. They further recognize however, that such uses could be incompatible and antagonistic to DEVELOPER'S use. DEVELOPER therefore agrees that at such time as the CITY sells the southern portion of the Daley Field property, the CITY installs (or causes to be installed) a signal at Kelly Road, and the purchaser of such southern portion identifies its intended use(s) of the property, DEVELOPER will negotiate in good faith with the purchaser of such southern portion with respect to a crossover easement, granting to DEVELOPER access to the Kelly Road signal across the southern portion of the Daley Field property and granting to the purchaser of such southern portion access to the 3' Avenue East signal across the Project Property. ARTICLE 5 Construction of Project Section 5.1. Site Plan and Construction Plans. DEVELOPER shall submit Site Plan and Construction Plans to the CITY prior to obtaining any building permits. Site Plan shall depict the entire Project Property and shall show the location of Page 8 of 21 Part of Reciprocal Easement & Maintenance Agreement ARTICLE 8 Prohibitions Against Assignment and Transfer Section 8.1. Transfer of Ownership. The DEVELOPER reco sizes that a transfer of a controlling interest in the DEVELOPER or any other act ;i transaction resulting in a significant change in the ownership are of particular concern to the CITY. Subject to subsection (a), below, prior to completion of the Project as certified by the CITY, except in the case of the death or incompetency of the shareholders of DEVELOPER, (a) there shall be no transfer of any interest of a member in DEVELOPER, (b) nor shall any officer or member suffer any such transfer to be made, (c) nor shall there be or be suffered to be by DEVELOPER, any other similarly significant change in the ownership of DEVELOPER or in the relative distribution thereof, or with respect to the identity of the parties in control of DEVELOPER or the degree thereof, by any other method or means, without consent of the CITY, which- shall not unreasonably withheld. Notwithstanding Section 8.1 to the contrary, the CITY recognizes that Rosauers Supermarket, Inc., the sole initial member of the DEVELOPER, intends to transfer its membership in the DEVELOPER to an investment group organized by Kiemle & Hagood Company, or one or more of the principals thereof. CITY hereby consents to such transfer without the need for disclosure of the identity or financial strength of the participants in such investment group, provided that i) Rosauers Supermarket, Inc. shall remain the long term lessee on the Project Property, ii) Rosauers Supermarket , Inc. shall guaranty, and by its signature hereon, hereby guarantees, all obligations of the DEVELOPER to the CITY under this Agreement, and such guarantee shall not be affect by any change in control of the DEVELOPER, and iii) Kiemle & Hagood Company, or one or more of the principals thereof, shall continue in control of the DEVELOPER. Section 8.2. Transfer of Propery and Assignment. DEVELOPER. has not made and will not make, or suffer to be made, any total or partial sale, assignment, conveyance, lease, or other transfer, with respect to this Agreement or the Project or Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the CITY, which approval shall not be unreasonably withheld or delayed; provided however, DEVELOPER may enter into a long term lease of the Project Property to Rosauers Supermarket, Inc., and CITY hereby consents to such Lease, and DEVELOPER may place a mortgage or Deed of Trust upon the Project Property to secure construction financing and takeout financing and CITY hereby consents to such mortgage or Deed of Trust. The CITY shall be entitled to require as conditions to any such approval that: W the proposed transferee have the qualifications and financial responsibility, as reasonably determined by the CITY, necessary and adequate to fulfill the obligations undertaken in this Agreement by DEVELOPER, (ii) the proposed transferee, by recordable instrument satisfactory to the Page 14 of 21 CITY shall, for itself and its successors and assigns, assume all of the obligations of DEVELOPER under this Agreement. No transfer of, or change with respect to, ownership in the Project Property or any part thereof, or any interest therein, however consummated or occurring and whether voluntary or involuntary, shall operate legally or practically, to deprive or limit the CITY of or with respect to any rights or remedies or controls provided in or resulting from this Agreement with respect to the Project Property and the construction of the Project that the CITY would have had, had there been no such transfer or change. There shall be submitted to the CITY for review of all legal documents relating to the transfer. In the absence of specific written agreement by the CITY to the contrary to relieve DEVELOPER, or any other party bound in any way by this Agreement, or otherwise with respect to the construction of the Project, from any of its obligations with respect thereto. Section 8.3. Information as to Ownership of DEVELOPER. Except as provided in Section 8.1 (a) , above, DEVELOPER will promptly notify the CITY of any changes in the ownership of DEVELOPER, or with respect to the identity of the parties in control of DEVELOPER or the degree thereof, of which it has been notified or otherwise had knowledge. Except as provided in Section 8.1 (a), above, DEVELOPER shall, at such time or times as the CITY may request, furnish the CITY with a complete statement, subscribed and sworn to by an officer of the DEVELOPER, setting forth all of the owners of DEVELOPER and the extent of their respective holdings. Section 8.4. Termination of Limitations on Transfer. A 1 l provisions contained in this Article 8 with respect to limitations on the ability of the DEVELOPER to transfer the Project Property or the Project, or any portion thereof, as well as any information as to ownership under Section 8.3. shall terminate with respect to the Project at such time as a Certificate of Completion has been issued by the CITY under Section 5.3 of this Agreement with respect to the Project. All provisions contained in this Article 8 with respect to limitations on the DEVELOPER making changes in its ownership structure shall terminate at such time as a Certificate of Completion has .been issued pursuant to Section 5.3 with respect to all the Project. ARTICLE 9 Events of Default Section 9.1. Events of Default. The following shall be "Events of Default" under this Agreement and the term "Event of Default" shall mean, whenever it is used in this Agreement (unless the context otherwise provides), any one or more of the following events which occurs prior to the issuance of the Certificate of Completion by the CITY under Section 5.3 of this Agreement with respect to the Project and continues for more than 30 days after notice by the CITY to DEVELOPER of such default (and the term Page 15 of 21