King Management, Inc./Redevelopment Proposal for Daley FieldDaley Field
Kalispell, Montana
Proposal
This proposal is being presented to the City of Kalispell, Montana, to acquire and develop
that certain parcel of land identified as Daley Field (a six field softball complex),
comprising of approximately 15.6 acres.
King Management, Inc. and other entities would like to make a proposal to the City of
Kalispell, Montana, for the acquisition and development of Daley Field into a
development complex comprising of one to two hotels, 2 to 3 restaurants, a convenience
store, an automotive service facility and an auto retail center. Additional buildings may
be placed on the rear of the property as needed. As is described on the site plan all of the
described uses fit nicely on the subject property allowing good viability of each tenant
and cross access.
Negotiations on the first hotel are in the works. The first hotel will consist of
approximately 80 units to be under construction in 1998, with a completion date in the
same year. All construction will be predicated on the timely completion of a satisfactory
closing of the Purchase and Sale Agreement. Several restaurant companies have
expressed interest in the participation of the site plan. These are full service restaurants
offering family dining, such as, Applebee's or MacKenzie's in Missoula. Please keep in
mind that these two services compliment each other and are looking to be constructed and
opened at the same time. Negotiations with both the hotels and restaurants are predicated
on the successful acquisition of the land. At least one of the restaurants will be
completed at the approximate time as the first hotel (1998).
Projecting in late 1998 and 1999, is the placement of a second restaurant, convenience
store/casino and automotive service facility. Development of these services will come
from the south end of the property, as depicted on the attached site plan. Initial inquiries
of interest of this site plan again are predicated on the tenant placement to the north end
of the property and timely completion of a satisfactory closing of the Purchase and Sale
Agreement.
All interested parties have been looking for property in the area or are already operating
existing facilities in the Kalispell area and are interested in expansion.
Additionally, King Management, Inc. is aware of an interest in establishing a new car
dealership at the south entrance of Kalispell. The south end of the subject property would
be an ideal location for this use.
King Management, Inc. does further express interest in offering to special clientele,
access to the Kalispell City Airport. This would include small plane storage with
adjacent office or work space. This idea is proposed because of some of the inquiries we
have received and also because of the limited building height that is allowed along the
west property line. Offering a compliment of services in conjunction with the existing
airport in only prudent looking at the location of the land in relationship to the highway
access and the airport runways.
This proposal is assuming that all correct zoning is in place for the above -mentioned
development, and also that all services — i.e., water, sewer, electric, phone, etc. — are
either on the property or adjoining the property.
King Management, Inc. believes this proposed development fits nicely with the City of
Kalispell and enhances the south entrance to the city. Further development of this quality
and magnitude encourages additional development within the proposed site plan and
surrounding properties further enhancing the City of Kalispell's appeal and projected tax
base.
It is the intent of the Developer to utilize both proposed highway accesses and provide a
cross -easement between the mixed uses within the proposed development. Providing the
cross -easements between the adjacent users will eliminate traffic entering and exiting off
Highway 93 to get to adjacent tenants. As negotiations for space are determined
proposed architectural and landscaping exhibits will be provided to the City of Kalispell
for review. At this time it is too premature to provide these schedules.
Value of Improvements
At this time, placing a value on the improvements can only be a rough estimate. Based
on provided information, we anticipate the estimated values attached to the following
projects; one single hotel with approximately 80 units to value at $2.9 million including
land and FF&E, a single 5,500 S.F. restaurant to value at $1.1 million including land and
FF&E, and this initial phase of the project will total $4.0 million in 1998. Should efforts
be successful with the convenience store and automotive service facility, we project by
late 1998 or early 1999 the subject property's value will increase by $1.5 million
including land and FF&E. Additionally in 1999 a second family restaurant will be under
construction to be completed late 1999 or first part of 2000. Estimated value will be $1.0
million to include land and FF&E. It is conceivable that within this period or before the
year 2000 a second hotel will be under construction, increasing the improvement value by
an additional $2.5 to $3.0 million. The automobile dealership, anticipated to be
constructed and in use by the end of 1999, will have an estimated value of $2.0 million
including land, building and FF&E.
In total, King Management, Inc. estimates the taxable value of improvements, land and
FF&E to exceed an amount of $12 million by the end of the year 2000.
Providing a too aggressive development plan may cause the establishment of a bad tenant
mix with in the development parcel and/or poor development judgement by King
Management, Inc. The proper development and tenant mix is in the highest and best
interest of the Developer and the City of Kalispell. It is in the City of Kalispell's best
interest to encourage high sales volume development within its boundaries. All of these
projected uses offer the right tenant mix for the south entrance to Kalispell.
It has been visible from past development in Evergreen, that the City of Kalispell should
be encouraging development within its present boundaries rather than seeing
development take place outside city limits. Placing too high of expectations on the
property may discourage development rather than encourage development.
Offer
King Management, Inc. and assignees would like to offer the City of Kalispell, Montana
One Million Three Hundred Sixty -Four Thousand Dollars ($1,364,000.00) cash at
closing for that parcel of land known as Daley Fields consisting of approximately 15.6
acres.
Broker Fees
King Management, Inc. agrees to agency representation, and broker's or agent's fees will
be paid at the time of closing from the proceeds placed in escrow by the Buyer for the
proposed price of this land. The broker's fees will be paid out of and are included in the
total price offered for Daley Fields.
Exhibit "A" Site Plan
Exhibit "B" Purchase Agreement
Exhibit "C" Legal Description
Exhibit "D" Agency Disclosure Statement
EXHIBIT "A"
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EXHIBIT "B"
PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into as of this 14d' day of August 1997 by and
between the City of Kalispell, Montana (hereinafter the "Sellers"), and King Management, Inc.
and/or its assignee, a Montana Corporation with its principle office located at 2540 Phyllis Lane,
Billings, Montana (hereinafter the "Buyer").
WHEREAS, Sellers are the owners of the subject property which is located in the City of
Kalispell, Montana; and
WHEREAS, the Buyer desires to purchase from the Sellers the subject property which is
located in the City of Kalispell, Montana, for construction of various commercial buildings as
outlined in the proposal of which this Purchase Agreement is a part; and
WHEREAS, the Sellers and Buyer desire to set forth their understanding with regard to
the purchase of the land by the Buyer,
NOW, THEREFORE, the parties agree as follows:
1. Sellers agree to sell and Buyer agrees to purchase from Sellers the real estate located
in Kalispell, Montana legally described as follows:
Parcel 4 as shown on COS 912729, Flathead County, Montana. (see Exhibit "C")
(herein sometimes referred to as the "Premises").
2. Purchase Price. The purchase price to be paid by Buyer to Sellers shall be in the
sum of One Million Three Hundred Sixty -Four Thousand Dollars ($1,364,000.00),
which purchase price shall include only the Premises.
3. Payment of the Purchase Price. The purchase price shall be paid by Buyer to
Sellers at the following times and in the following manner:
A. The sum of Sixty -Eight Thousand Two Hundred Dollars ($68,200.00) as an
earnest money down payment, put in escrow upon acceptance of this Purchase
Agreement.
B. The balance of the purchase price in the amount of One Million Two Hundred
Ninety -Five Thousand Eight Hundred ($1,295,800.00) shall be due and
payable to the Sellers at closing.
4. Default. In the event of any default hereunder by Buyer which is not cured within a
period of thirty (30) days following notice from Seller to Buyer that such default
exists, Seller's sole remedy shall be to cancel this Agreement and retain all Earnest
Money paid hereunder as liquidated damages for Buyer's breach. Sellers and Buyer
agree that, in the event of breach by Buyer, the damages to Sellers will be incapable
or very difficult of accurate estimation and that there had been a reasonable endeavor
by Sellers and Buyer to fix fair compensation and the Sixty -Eight Thousand Two
Hundred Dollars ($68,200.00) Earnest Money as liquidated damages to Sellers bears
a reasonable relation to probable damages and is not disproportionate to any damages
reasonably to be anticipated. Nothing contained herein shall deprive Buyer of the
remedy of specific performance. The obligations of Buyer are intended to be non -
recourse. Time is of the essence.
If a dispute arises between the parties hereto concerning this Agreement or any
provision thereof or obligation thereunder, then the non -prevailing party shall pay any
and all costs and expenses incurred by the other party in enforcing or establishing its
rights hereunder, including without limitation, court costs and reasonable attorney's
fees and disbursements, which obligations shall survive the delivery of the Deed.
5. Closing Date. Sellers and Buyer mutually agree to close said sale within ten (10)
days of acceptance of offer, unless the parties mutually agree to extend the closing
date.
6. Possession. Possession of the Premises shall be given to Buyer by Sellers at closing.
7. Title Insurance. Sellers agree to provide to Buyer an owner's commitment for title
insurance) on ALTA Form 1990-B) insuring the Premises purchased hereunder for
the sum of One Million Three Hundred Sixty -Four Thousand Dollars
($1,364,000.00), insuring good and marketable title to be in the Seller's name;
subject, however, to easements and rights -of -way for utilities, highways and storm
sewers of record. The cost incurred in obtaining the title insurance shall be paid by
the Sellers.
8. Sellers' Representations and Warranties. As a further inducement to Buyer to
enter into this Purchase Agreement and to consummate the transaction contemplated
by this Purchase Agreement, Sellers, and each of them do hereby represent and
warrant to Buyer and agree as follows:
A. Sellers have good and insurable title to the premises and the personal property
and all other property to be transferred hereunder. The title to be granted and
conveyed shall be merchantable, fee simple title, free and clear of all matters
except those exceptions disclosed in the Title commitment, if approved, or
otherwise waived by Buyer or provided for herein;
B. Sellers have full right, power, and authority and have taken all requisite action
to enter into this Purchase Agreement and to grant, sell, and convey the
premises and the personal property and all other property to be transferred
hereunder to Buyer as provided in this Purchase Agreement and to carry out
its obligation as set forth in this Purchase Agreement;
C. Sellers have not received notice from any city or other governmental authority
of any violation affecting the premises and the personal property and all other
property to be transferred hereunder except as disclosed in writing to Buyer
prior to the execution of this Purchase Agreement, if any;
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D. There are no pending improvement liens or special assessments to be made
against the premises by any governmental authority or third parry, except as
otherwise disclosed in writing to Buyer prior to the execution of this Purchase
Agreement;
E. No work has been performed or is in progress by Sellers or at the direction of
Sellers, and no materials have been furnished to the premises or any portion
thereof, which might give rise to mechanic's, materialman's, construction, or
other liens against the premises;
F. No consent or approval of any person, entity, or government agency or
authority is required with respect to the execution and delivery of this
Purchase Agreement by Sellers and, as of the closing date, no un-obtained
consent or approval will be required with respect to the consummation by
Sellers of the transactions contemplated hereby or the performance by Sellers
of its obligations hereunder;
G. Sellers are not and have never been a "foreign person", as that term is used in
Section 1445 of the Internal Revenue Code of 1954, as amended;
H. Sellers shall not grant, sell, convey, or encumber the Premises and the
personal property and all other property to be transferred hereunder prior to
the closing date;
I. The Premises and the personal property and all other property to be
transferred hereunder are not subject to any leasehold interest and Sellers
further agree that Sellers will not enter into any lease of the Premises and the
personal property and all other property to be transferred hereunder or any
part thereof,
J. There are no disputes concerning the lines and corners of the Premises, which
lines and corners are clearly marked and there are no encroachments upon the
Premises;
K. There is not indebtedness outstanding and no outstanding or unpaid bills
incurred for labor and material in connection with the Premises, or for the
service of architects, surveyors, or engineers in connection with the Premises;
L. All streets necessary to serve the Premises are being installed and will be
dedicated and accepted for use and maintenance by the closing date by
application to governmental entities and there are no pending street changes
that will materially alter such service to the Premises;
M. There are no taxes, assessments, or liens against the Premises for any present
or past -due taxes or for paving, sidewalk, curbing, sewer, or any other street
or other improvements of any kind, with the exception of real estate taxes
which are not yet due and payable;
N. As of the closing date, there will be no outstanding, pending, or threatened
suits, judgements, executions, bankruptcies, condemnation proceedings,
zoning changes, or any other proceedings pending or on record in any court of
any nature or before or by any governmental or administrative agency which
could in any manner now affect Buyer's title to, possession of, or use of the
Premises and the personal property and all other property to be transferred
hereunder, or which could now or hereafter constitute a lien upon the
Premises and the personal property and all other property to be transferred
hereunder or materially or adversely affect or change the Premises and the
personal property and all other property to be transferred hereunder;
O. Sellers are not surety on any bond or indebtedness wherein through the default
thereof, a lien against the Premises and the personal property and all other
property to be transferred hereunder would be created without further legal
action;
P. As of the closing date, there will be no recorded or unrecorded liens, security
interests, security agreements, or UCC financing statements against the
Premises and the personal and all other property to be transferred hereunder or
any part thereof, and
Q. The Premises are not subject to any federal, state, or local "Superfund" lien
proceeding, claim, liability, or action, or the threat or likelihood thereof, for
the cleanup, removal, or re -mediation of any "hazardous substance" from the
Premises and Sellers have not caused and will not cause, and to the best of
Sellers' knowledge, there never has occurred the release, leak, discharge, spill,
disposal, or emission of any "hazardous substance" as of the date hereof. As
used in this Purchase Agreement, "hazardous substance" means any substance
that is toxic, ignitable, reactive, or corrosive and that is regulated by any local
government, the State of Montana, or the United States of America.
"Hazardous substance" includes any and all material or substances that are
defined as "hazardous waste", "extremely hazardous waste", or a "Hazardous
Substance" pursuant to state, federal, or local governmental law including
without limitation, CERCL, SARA, RCRA, the Clean Water Act, The OSHA
Act, or the Toxic Substance Control Act. "Hazardous Substance" includes,
but is not restricted to asbestos, petroleum products, nuclear fuel or materials,
known carcinogens, urea formaldehyde, foamed -in -place insulation, and
polychlorinated biphenyl (PCBs).
In the event that any of the representations and warranties set forth in this
Paragraph 8 are not true in any material respect as of the closing date or if
Sellers otherwise defaults hereunder, Buyer may terminate this Purchase
Agreement on or at any time prior to the closing date and the Earnest Money
shall be immediately returned to Buyer.
The warranties and representations set forth in this Paragraph 8 shall survive
the closing for the benefit of Buyer. Sellers shall defend, indemnify, and hold
harmless Buyer, and shall reimburse Buyer for, from, and against each and
every demand, claim, loss (including any diminution in value), liability,
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damage, fine, penalty, cost, expense (including, without limitation, attorney
fees and consultant and expert fees imposed on or incurred by Buyer) directly
or indirectly relating to, resulting from, or arising out of any material
inaccuracy in any representation or warranty set forth in this Paragraph 8.
9. Buyer's Representations and Warranties. Buyer represents and warrants as
follows:
A. That the Buyer has the right, power and authority to purchase the
Premises and the personal property subject to the terms and conditions
as provided under this Agreement, and to execute, deliver and perform
its obligations under this Agreement;
B. To the Buyer's actual knowledge, there exists no action, suit, litigation
or proceeding which would limit the Buyer's ability to purchase the
Premises and the personal property and to perform the terms and
conditions of this Agreement.
10. Closing Documentation.
A. At the closing, the Sellers shall deliver to the Buyer, a standard form
of Montana Warranty Deed conveying title to the Premises; and
B. At the closing, the Sellers shall deliver to the Buyer a Bill of Sale
transferring to the Buyer all of the Sellers' rights, title and interest in
and to the personal property.
11. Operating Expenses, Costs, Charges and Property Taxes. The Sellers shall be
responsible and shall pay for all operating expenses which have accrued or shall
become due prior to the closing date. All operating expenses shall be read and
finalized, if reasonably possible, as of the closing date. All property taxes will be
prorated to date of closing.
12. Risk of Loss. Until the closing date, Sellers shall bear the risk of loss to the Premises
and to the personal property due to fire or any other casualty. Accordingly, until said
closing occurs Sellers shall keep in full force and effect a policy insuring the
Premises and personal property against loss by all risks insured against under a
standard form of all risk coverage.
13. Zoning. The Sellers represent that the property is properly zoned for all uses outlined
in the proposal of which this Purchase Agreement is a part for the City of Kalispell,
Montana..
14. Highway Entrance. Purchase is subject to satisfactory review by Buyer of any
changes or curb cuts made by review of the highway department.
15. City of Kalispell. Purchase is subject to satisfactory review by Buyer of any changes
made by review of City of Kalispell or other governing agency.
16. Soil Tests. Purchase is subject to satisfactory review by Buyer of soil test.
17. Condition of Property. Sellers will, prior to closing, remove all improvements on
Premises, including but not limited to backstops, bleachers, etc.
18. Representation by Agency. The Buyer agrees to agency representation and is
represented by Gregg Schoh, RE/MAX Land & Lake Realty, Inc.
19. Brokerage Fees. Broker's or agent's fees will be in the amount of 8.0% of the total
purchase price paid at time of closing from proceeds place in escrow by the Buyer
with full disclosure. Brokerage fees are included in and will be paid out of the total
price offered.
20. Notices. Notices shall be given under this Agreement upon delivery to the addresses
set forth below either by certified mail or by delivery from a nationally -recognized,
overnight delivery service. Notices shall be delivered to the following addresses:
To Sellers: City Clerk of Council
Kalispell City Hall
Kalispell, MT 59901
To Buyer: King Management, Inc.
2540 Phyllis Lane
Billings, MT 59108
UIT-I
Gregg Schoh
REYMAX Land & Lake Realty, Inc.
7135 Hwy 93 South
Lakeside, MT 59922
21. Binding Effect. This Agreement shall be binding upon the parties hereto, their heirs,
successors and assigns.
Dated the year and date first above written.
SELLERS
6
EYIITTRT`I' "("'
A 681,758 square foot rectangular parcel of land (15.651
acres) corrnnencing at the northwest corner of the Southeast
114 of the Northwest 114 of said Section 20; thence along the
easterly line of said aliquot part South 00°01'58" West
148.88 feet to the POINT' Or BEGINNING of the parcel being
described; thence south 33"06' 10" East 1200.75 feet to the
northwesterly line of that parcel described as Tract II in
Document No. 92021 16120, records of Flathead County,
thence along said northwesterly line of said tract 11, North
56'55' 16" East 439.93 feet to the southwesterly right-of-way
line of U.S. Highwsy No. 93; thence along said southwesterly
right-of-way line, North 33"04' 19" West 1568.07 feet to the
southeasterly line of that parcel described in Book 372
Page 172, records of Flathead County, thence along said
southeasterly line of said parcel, South 56°52'57" West
300.01 feet to the northeasterly line of that parcel described in
Book 507, Page 116, records of Flathead County; thence along
said northeasterly line of said panel, South 33" 15'45" East
60.37 feet to the southeasterly line of said parcel; thence
along said southeasterly line of said parcel, South 56°48'58"
West 140.03 fret, thence South 33"06'10" East 306.49 feet
to the Point of Beginning, containing 15.651 Acres of land, all
as shown on Certificate of Survey No. 12729, which is
herewith incorporated and made a part of this legal description.
neserving therefrom a non-exclusive roadway and Utility
ensement, being 30 feet in width, lyinq northwesterly of and
along the most southeasterly line of the above described
Pnrcei 4.
Re'setvind therefrom a non exclusive roadway and utility
easement, being 30 fent in width, lying southeasterly of and
along the most northwesterly line of the above described
Parcel 4.
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EXI]TBIT "D"
BUYER AGENT DISCLOSURE TO THE SELLER Q
P ALTOR�
RE/MAX LAND & LAKE GREGG SCI10H is representing the buyer with respect to
the seller's property located at DALEY FIELD , KALISPELL, MT
Although the buyer agent is primarily obligated to the buyer, the buyer agent is obligated to
you as specified below.
A buyer agent is obligated to a seller as follows:
(1) to disclose to a seller any adverse material facts that concern the ability of the buyer
to perform on any purchase offer and that are known to the buyer agent;
(2) to deal in good faith with the seller; and
(3) to comply with all applicable federal and state laws, rules, and regulations.
"Adverse material fact" means a fact that should be recognized by a broker as being of
enough significance as to affect a person's decision to enter into a contract to buy or sell
real property and may be a fact that materially affects the buyer's ability or intent to
perform the buyer's obligations under a proposed or existing contract.
Date: AtAl . 1 Sly 1777
Seller:
Buyer Agent:
NOTICE: The terms appearing in this document, including but not limited to Seller Agent,
Buyer Agent, Dual Agent, Statutory Broker, Sub -Agent and Adverse Material Fact,
are specifically defined in Title 37, Chapter 51 of the Montana Code Annotated and
are not intended to create a relationship or obligations other than as so defined.
® Monk= Mockitbn of RI A MMS
March 8, 1996
(38ADSL PSI 2/96)