3. Resolution 4597 - Acquisition of Keno InnCity of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903-1997 - Telephone (406)758-7700 Fax(406)758-7758
January 19, 2001
TO: Mayor, City Council and Mana e
FROM: Glen Neier, City Attor(%L! ,
RE: Purchase of Keno Inn
The purchase of the Plaza West Lot necessitates the City acquiring
replacement parking. On November 9, 2000, Hampstead entered into a
Purchase and Sale Agreement with Mike and Mary McFarland for
approximately 2j� lots in Block 54 (Keno Inn Site) for $207,500.00.
Hampstead has agreed to assign the purchasers, interest and
McFarland has agreed to execute an Offer to Sell to the City.
The Offer to Sell document, included in your packet, sets forth the
terms and conditions under which McFarland agrees to sell the Keno
Inn site to the City. The purchase price has been raised to
$208,500.00 because in the original deal with Hampstead, McFarland
was not responsible for closing costs. Under the Offer to Sell ,
McFarland will receive $148,000.00 on or before February 28, 2001,
and execute a Grant Deed to the property. The Deed and the balance
of the purchase price will be placed with an Escrow Agent. Once
the Keno Inn has been vacated, after notice from the City, the
Escrow Agent will release funds to McFarland and record the Deed
(Close of Escrow). McFarland will be entitled to all rents prior to
Close of Escrow. However, the City will assume no responsibility
for the building or tenants, and will not have liability for
accidents etc. that might occur prior to vacation of the building.
The City has agreed that McFarland will receive an easement for
four parking spaces in the Southeast corner of the parking lot
anticipated to be built on the property.
Resolution No. 4597 authorizes the purchase of the property. A
motion and vote approving the Resolution is appropriate.
kenopurchasememo
City of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903-1997 - Telephone (406)758-7700 Fax(406)758-7758
REPORT TO: The Honorable Wm. E. Boharski and City Council
FROM: Susan Moyer, Community Development Director
Chris A. Kukulski, City Manager
SUBJECT: Acquisition of The Annex aka the Keno Inn
MEETING DATE: January 11, 2001
BACKGROUND:
The City Council has advertised for proposals for the redevelopment of the Plaza West Parking Lot on
Second Avenue West. One of the stipulations by Council for allowing this site to be utilized for
redevelopment was that a suitable replacement -parking site be acquired and constructed. Another
stipulation was that the proceeds from the sale of Plaza West Parking Lot would be utilized in
developing the replacement parking.
The City, as part of its overall evaluation and exploration of parking needs, had previously
commissioned appraisals on five sites being considered for possible development as city -owned
parking lots. The Annex, aka The Keno Inn, located at 215 Second Avenue West, was one of the five
sites and had an appraised value of $194,000 set on it by Mr. James A. Kelly, a local appraiser in June
of 1999. The Parking Commission has subsequently acknowledged that the location and potential
number of spaces are acceptable as replacement parking for the Plaza West site.
The Annex, aka the Keno Inn, was built in 1928. This 72 year old, wood frame structure currently
contains twenty-three (23) individual rental rooms occupied by very low income residents with a
highly transient life style. The structure is in high disrepair and considered dilapidated beyond being
economically feasible to rehabilitate. The life/safety issues of this structure are such that in June of
1999 the city deviated in its Commercial Loan Program to allow a low -interest loan to the owner of
this residential facility to install a code -complying fire detection system.
The current owner is offering the property for sale for $207,000. This amount not only takes into
consideration the appraised value, but will also compensate the owner for loss of revenue while he
allows the building to naturally empty prior to a suggested closing date of April 1, 2001. Thus, the
City would not be placed in a position of displacing any remaining tenants during the winter months.
If Council so instructs, staff will be prepared to contract for demolition and site clearance immediately
following the closing. Liability for a derelict, vacant building will then be minimized for the City.
In the event, the redevelopment of the Plaza West Parking Lot site does not occur, the Council will
have two options for the new site. One would be to go ahead with the construction of a new parking
lot on the site and utilize it for permit -parking. The Post Office has expressed an interest in leasing
space should this option occur. The second option would be to advertise the site for sale for
redevelopment and infill and generate additional tax base.
17 �IK�)u lui�Ci17:11 YI�AF
The elimination of blight and blighting structures as well as urban density infill and job creation are
primary goals of a tax increment district. Not only does the acquisition and demolition of The
Annex/Keno Inn comply with the statutes pertaining to redevelopment, the elimination of a derelict
residential structure addresses a serious health/safety issue that could ultimately cost lives if it
continues in its present use.
Staff recommends the City Council approve the acquisition of The Annex/Keno Inn and the
construction of replacement parking immediately thereafter.
FISCAL EFFECTS:
Sandon Construction, a local contractor having worked for the city on various projects, estimates that
the demolition and new construction costs will run somewhere between $36,000 and $46,000. This
estimate is in keeping with costs the Community Development Department has incurred on previous
demolition activities as well as the construction of the Central School Parking Lot.
Estimated Revenue to Cover Acquisition, Demolition, and New Construction Costs
TIF Funds currently budgeted for: Unallocated Redevelopment Activities $
Downtown Parking Activities $
Remainiu Landscaping Activities
After 2° Avenue West Project
Proceeds From the Sale of Plaza West
Estimated Costs For Acquisition, Demolition and New Construction Costs
Acquisition of The Annex/Keno Inn
Demblition Estimate
Construction of Replacement Lot
ALTERNTIVES: As suggested by Council.
Respectfully Submitted,
Susan Moyer, Director
Community Development
Date Report Prepared: January 8, 2001
C is A. Kukulski,
City Manager
69,638
75,000
$ 21,000
$139.000
$304,638
$207,000
$ 10,000
36,000
$253,000
RESOLUTION NO. 4597
A RESOLUTION RELATING TO THE ACQUISITION OF CERTAIN REAL PROPERTY
WITHIN THE DOWNTOWN URBAN RENEWAL AREA, DESCRIBED IN EXHIBIT "A"
FROM MICHAEL T. MCFARLAND AND MARY L. MCFARLAND, ESTABLISHING A
FAIR MARKET VALUE, AND IDENTIFYING THE INTEREST TO BE ACQUIRED.
WHEREAS, the City of Kalispell, by Ordinance No. 1065 passed on
November 14, 1985, designated the acquiring and
construction of off street parking facilities as a
"Project" to be pursued within the Downtown Urban Renewal
Area, and
WHEREAS, the City of Kalispell has received, pursuant to the Urban
Renewal Law (Title 7, Chapter 15 MCA) a proposal to build
approximately 40 low income, senior apartments on a
portion of Block 47, Kalispell, currently occupied by a
parking lot known as the Plaza West Parking Lot, and
WHEREAS, in the event the proposed apartments are built, it will
become necessary for replacement parking to be located
within the general vicinity, and
WHEREAS, certain real property described in Exhibit "A", located
approximately one block south of Plaza West, is occupied
by a structure which meets the "blight" definition under
the Urban Renewal Law, and
WHEREAS, said property if purchased could be converted into a
parking lot servicing at least as many automobiles as the
Plaza West Lot currently serves, and
WHEREAS, the Community Development Department has caused an
appraisal to be made of said property by James A. Kelly
in June, 1999, who appraised the value of said property
at $194,000, and
WHEREAS, the owners, Michael T. and Mary L. McFarland, have
offered to sell said property to the City for the sum of
$208,500.00, and
WHEREAS, the Community Development Department has received said
appraisal and has made a recommendation as to the fair
market value of said property.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
KALISPELL, MONTANA, AS FOLLOWS:
SECTION I. That the fair market value of the real
property described in Exhibit "A" owned by
Michael T. and Mary L. McFarland is Two
Hundred and Eight Thousand, Five Hundred
Dollars ($208,500.00).
SECTION II. That the creation of replacement parking
resulting from the sale of the Plaza West
Parking Lot will require the acquisition of a
fee simple estate in the name of the City of
Kalispell from the respective owners.
SECTION III. That the City Manager is authorized and
directed to purchase from Michael T. and Mary
L. McFarland that certain real property
described in Exhibit "A" for the sum of Two
Hundred and Eight Thousand, Five Hundred
Dollars ($208,500.00) in accordance with the
Offer to Sell attached hereto as Exhibit "B".
SECTION IV. That the City Finance Officer is authorized
and directed to pay said amount to Michael T.
and Mary L. McFarland in accordance with the
Offer to Sell from funds properly appropriated
under the Tax Increment Budget and from the
proceeds of the funds made available from the
Tax Increment Cash Flow.
SECTION V. That the City Attorney is authorized and
directed to prepare any documents necessary to
effect this Resolution and the City Manager is
authorized and directed to accept and properly
record on behalf of the City of Kalispell the
deed to said property.
PASSED AND APPROVED BY THE CITY COUNCIL AND SIGNED BY THE MAYOR OF
THE CITY OF KALISPELL, THIS 22ND DAY OF JANUARY, 2001.
Duane Larson
Mayor Council President
ATTEST:
Theresa White
City Clerk
Tract 1:
Exhibit "A"
Lots 16 and 17 of Block 54 of Kalispell, Montana,
according to the map or plat thereof on file and
of record in the office of the County Clerk and
Recorder of Flathead County, Montana.
EXCEPTING THEREFROM from said Lot 17 the following
described tract:
Beginning at the Northeast corner of said Lot 17;
thence Southerly along the Easterly line of said
Lot 17, a distance of 17 feet to a point; thence
Westerly parallel with the Northerly boundary of
said Lot 17, a distance of 25 feet to a point;
thence at right angles
Northerly a distance of 17 feet to the Northerly
boundary of said Lot 17; thence
Easterly along the Northerly boundary of said Lot
17 a distance of 25 feet to the Place of
Beginning.
Tract 2:
The West Forty-seven feet Three inches (471311) of
Lot 18, Block 54 of Kalispell, Montana, according
to the map or plat thereof on file and of record
in the office of the County Clerk and Recorder of
Flathead County, Montana.
Exhibit "B"
Michael T. McFarland and Mary L. McFarland
636 Third Avenue West
Kalispell, MT 59901
OFFER TO SELL
For and in consideration of the sum of
($), paid by the City of Kalispell, Montana,
hereinafter CITY, the receipt and sufficiency of which is hereby
acknowledged, we, Michael T. McFarland and Mary L. McFarland, the
legal owners with authority to enter into this Agreement,
hereinafter SELLER, hereby make the following Offer to Sell:
1. SELLER, the legal owner of certain real property located
in Kalispell, Flathead County, Montana, being more
particularly described as follows:
Tract 1:
Lots 16 and 17 of Block 54 of Kalispell, Montana,
according to the map or plat thereof on file and of
record in the office of the County Clerk and
Recorder of Flathead County, Montana.
EXCEPTING THEREFROM from said Lot 17 the following
described tract:
Beginning at the Northeast corner of said Lot 17;
thence Southerly along the Easterly line of said
Lot 17, a distance of 17 feet to a point; thence
Westerly parallel with the Northerly boundary of
said Lot 17, a distance of 25 feet to a point;
thence at right angles
Northerly a distance of 17 feet to the Northerly
boundary of said Lot 17; thence
Easterly along the Northerly boundary of said Lot
17 a distance of 25 feet to the Place of Beginning.
Tract 2:
The West Forty-seven feet Three inches (47,311) of
Lot 18, Block 54 of Kalispell, Montana, according
to the map or plat thereof on file and of record in
-1-
the office of the County Clerk and Recorder of
Flathead County, Montana
does hereby agree and Offer to Sell to the City of
Kalispell, Montana, the above described real estate,
together with all improvements thereon, in and for the
consideration of the sum of Two Hundred and Eight
Thousand Five Hundred Dollars ($208,500.00).
2. Title to such property shall be conveyed by Grant Deed
upon full payment of the above consideration. SELLER
will furnish a preliminary commitment for SELLER's
Extended Coverage Title Policy at least thirty (30) days
prior to closing, the cost of which shall be paid by the
SELLER, subject to the following conditions:
a. On or before February 28, 2001, the CITY shall
deliver to SELLER, subject to the provisions of
paragraph # 3 the sum of Sixty Thousand Five
Hundred Dollars ($60,500.00). The balance of the
purchase price, or the sum of One Hundred Forty-
eight Thousand Dollars ($148,000.00) shall be
deposited with Escrow Services, P.O. Box 294,
Kalispell MT 59903-1997 with instructions to
release said sum upon notice from the CITY that the
property has been vacated (Close Escrow).
b. On or before February 28, 2001, SELLER shall
deliver to Escrow Services a Grant Deed with
instructions to record said deed on the date the
balance of the purchase price is delivered to
SELLER (Close of Escrow).
C. In addition to other conditions to CITY'S
obligations contained elsewhere in this Offer to
Sell, CITY shall not be obligated to Close Escrow
unless and until the apartment building located on
the above described real property is vacant of all
tenants.
3. In the event the City accepts this offer to sell, it
shall be authorized to withhold, at the time of delivery
of the initial funds on February 28, 2001, such sums as
are necessary to clear all encumbrances, including the
sum of Ten Thousand Dollars ($10,000.00) paid by
Hampstead Partners, Inc. under a Purchase and Sale
Agreement, herein assigned, charged to such property to
obtain clear title in the name of the CITY.
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4. Cost of this transaction (Title Company Fees and Escrow
Fees) shall be shared equally between SELLER and BUYER.
5. Real estate taxes, existing city special improvement
district payments shall be prorated as of July 1, 2001.
6. Prior to Close of Escrow, SELLER shall obtain final
readings for all water, sewer, electricity, gas,
telephone and other utility charges at the property.
Seller shall pay for all such charges based on the final
invoices or final meter readings. The utility accounts
shall be transferred to CITY at the Close of Escrow.
7. SELLER shall keep all personal property associated with
the property. Said personal property shall be removed by
the SELLER prior to the Close of Escrow.
B. Prior to the Close of Escrow, SELLER shall be entitled to
retain all income from the Property and shall be
responsible for all expenses related to the Property.
9. SELLER shall maintain insurance coverage for fire and
other casualty losses through the Close of Escrow.
10. SELLER shall maintain liability insurance on the property
through the Close of Escrow. SELLER shall protect,
indemnify, defend and save CITY, its elected or appointed
officials, agents and employees, while acting within the
scope of their duties as such, harmless from and against
all claims, liabilities, demands, causes of action and
judgements (including costs and reasonable attorneys'
fees) arising in favor of or asserted by SELLER'S
employees or agents, or third parties on account of
personal injury or death or on account of damage to
property, which injury, death or damage is the result, in
whole or in part, of the negligent acts or omission of
the willful misconduct of the SELLER, his employees or
agents, through the Close of Escrow.
11. SELLER represents and warrants that to the best of
SELLER'S knowledge and belief, the subject property is
free from any environmental contamination and nothing is
present on the subject property which constitutes an
environmental hazard or pollutant as defined by state or
federal law. SELLER is not making or extending to the
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CITY any other warranties or representations regarding
this Property.
12. A complete and detailed closing statement shall be
furnished by the Title Company to the SELLER and BUYER
prior to February 28, 2001.
13. SELLER shall not, during the period of time between
February 28, 2001 and the Close of Escrow, enter into any
contract, lease with respect to or encumber said
property, which will survive the Close of Escrow or
otherwise affect the possession, use, operation or
enjoyment of the property after the Close of Escrow.
14. SELLER acknowledges and agrees that this Offer to Sell
replaces and supplants that certain "The Annex - Purchase
and Sale Agreement" dated November 9, 2000, between
Hampstead Partners, Inc. and SELLER, and that the CITY
has been assigned the Purchaser's interest created by
said Agreement, as set forth below.
15. SELLER shall be entitled to four (4) permanent parking
spaces in the new parking lot anticipated to be
constructed on the Property, together with ingress and
egress to such parking spaces. CITY understands and
agrees that such parking spaces shall be an easement
which is appurtenant to certain property which is
adjacent to the Property herein described, and which
Seller intends to acquire. The property which SELLER
intends to acquire is described as Lot 6 of Block 54,
Kalispell Original Townsite, according to the map or plat
thereof on file and of record with the Flathead County
Clerk and Recorder, Flathead County, Montana. At closing,
CITY agrees to execute any documents reasonably necessary
to document and effectuate SELLER'S interest and right in
and to such parking spaces. In the event CITY is able to
designate four specific spaces as SELLER'S parking spots,
but is unable to designate parking spaces in the
southeast corner of Property, then in such event CITY
agrees to seek SELLER'S approval regarding the exact
location of such parking spaces, which approval SELLER
shall not unreasonably withhold.
16. No other reservations, exceptions or considerations have
been made and the fulfillment of the terms and conditions
of this offer to sell shall constitute the full
settlement offer herein set forth.
17. Should any litigation be commenced between the parties
hereto concerning this Offer to Sell or subject matter
hereof or the rights and duties of the Parties in
relation hereto or thereto, the party prevailing in such
litigation (whether at trial or on appeal) shall be
entitled, in addition to such other relief as may be
granted, to its costs and expenses of suit, including
without limitation a reasonable sum as and for its
attorney's fees in such litigation, which shall be
determined by the court in such litigation or in a
separate action brought for that purpose.
18. All notices, requests, demands, or other instruments
required or contemplated to be given or furnished under
this agreement to Seller or shall be directed to Seller
and SELLER as the case may be at the following addresses:
If to Seller: Michael and Mary McFarland
836 Third Avenue West
Kalispell, MT 59901
Phone: 406.752.3745
Kent Saxby, Esq.
Warden, Christiansen, Johnson & Berg, PLLP
221 First Avenue East
Kalispell, MT 59903-3038
Phone: 406.755.5535
Fax: 406.756.9436
If to CITY: City Manager
City of Kalispell
P.O. Box 1997
Kalispell, MT 59903-1997
Phone: 406.758.7703
Fax: 406.758.7758
19. If this agreement is terminated by the fault of either
SELLER or CITY, both SELLER and CITY shall have all
rights available to them to seek damages through law or
equity.
20. CITY understands and acknowledges that SELLER may wish to
dispose of the Property as part of a tax -deferred
exchange under Section 1031 of the Internal Revenue Code
of 1986. CITY agrees to cooperate fully with SELLER in
connection with any such tax -deferred exchange; provided
that CITY shall not incur any additional cost, expense or
liability related to such tax -deferred exchange and that
such exchange shall not extend the closing dates herein
-5-
this Agreement. SELLER agrees to indemnify and hold CITY
harmless from any such costs, expense or liability
related to their tax -deferred exchange. In connection
with such tax -deferred exchange, CITY understands and
agrees that SELLER shall have the right to assign this
Agreement and the rights hereunder to an intermediary for
purposes of facilitating SELLER'S tax -deferred exchange.
21. This Offer, when accepted and following execution by
Hampstead Partners, Inc. of the Assignment which follows,
shall be binding upon and inure to the benefit of the
heirs, successors and assigns of the parties hereto.
SELLER shall have the right to withdraw their Offer to
CITY following CITY'S acceptance of such Offer if
Hampstead Partners fails or refuses to execute the
following Assignment.
DATED this
STATE OF MONTANA
day of January, 2001.
: ss
County of Flathead )
On this _ day of
Public in and for the State of Montana,
and Mary McFarland known to me to be
subscribed to the foregoing instrument,
they executed the same.
Michael T. McFarland
Owner
Mary L. McFarland
Owner
2001, before me, a Notary
personally appeared Michael
the persons whose names are
and acknowledged to me that
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
Notarial Seal, the day and year first above written.
Notary Public, State of Montana
SEAL Residing at
My Commission expires
ASSIGNMENT
For value received Hampstead Partnership, Inc., 1205 Prospect
Street, Suite 459, La Jolla, California, hereby assigns unto the
City of Kalispell all Purchaser's rights under that certain "The
Annex - Purchase and Sale Agreement" dated November 9, 2000, by and
between Hampstead Partners, Inc. and Michael and Mary McFarland.
Date
STATE OF
ss
County of )
HAMPSTEAD PARTNERS, INC.
By:
Principal
On this _ day of 2001, before me, a Notary
Public in and for the State of , personally appeared
known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that
he/she executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
Notarial Seal, the day and year first above written.
Notary Public, State of
SEAL Residing at
My Commission expires
-7-
r
0
ACCEPTANCE
The Offer to Sell and Assignment is hereby accepted by the
City of Kalispell, Montana on this day of January, 2001,
subject to ratification by Resolution of the City Council of
Kalispell.
CITY OF KALISPELL
City Manager
ATTEST:
Theresa White
City Clerk
STATE OF MONTANA )
ss
County of Flathead )
On this _ day of , 2001, before me, a Notary
Public in and for the State of Montana, personally appeared Chris
Kukulski and Theresa White, known to me to be the City Manager and
City Clerk of the City of Kalispell, a municipality, known to me to
be the persons whose names are subscribed to the foregoing
instrument, and acknowledged to me that they executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
Notarial Seal, the day and year first above written.
Notary Public, State of Montana
SEAL Residing at
My Commission expires
Michael T. McFarland
836 Third Avenue West
Kalispell, MT 59901
EXHIBIT "B"
and Mary L. McFarland
OFFER TO SELL
For and in consideration of the sum of
($ ), paid by the City of Kalispell, Montana,
hereinafter CITY, the receipt and sufficiency of which is hereby
acknowledged, we, Michael T. McFarland and Mary L. McFarland, the
legal owners with authority to enter into this Agreement,
hereinafter SELLER, hereby make the following Offer to Sell:
1. SELLER, the legal owner of certain real property located
in Kalispell, Flathead County, Montana, being more
particularly described as follows:
Tract 1:
Lots 16 and 17 of Block 54 of Kalispell, Montana,
according to the map or plat thereof on file and of
record in the office of the County Clerk and
Recorder of Flathead County, Montana.
EXCEPTING THEREFROM from said Lot 17 the following
described tract:
Beginning at the Northeast corner of said Lot 17;
thence Southerly along the Easterly line of said
Lot 17, a distance of 17 feet to a point; thence
Westerly parallel with the Northerly boundary of
said Lot 17, a distance of 25 feet to a point;
thence at right angles
Northerly a distance of 17 feet to the Northerly
boundary of said Lot 17; thence
Easterly along the Northerly boundary of said Lot
17 a distance of 25 feet to the Place of Beginning.
Tract 2:
The West Forty-seven feet Three inches (471311) of
Lot 18, Block 54 of Kalispell, Montana, according
to the map or plat thereof on file and of record in
-1-
the office of the County Clerk and Recorder of
Flathead County, Montana
does hereby agree and Offer to Sell to the City of
Kalispell, Montana, the above described real estate,
together with all improvements thereon, in and for the
consideration of the sum of Two Hundred and Eight
Thousand Five Hundred Dollars ($208,500.00).
2. Title to such property shall be conveyed by Grant Deed
upon full payment of the above consideration. SELLER
will furnish a preliminary commitment for SELLER's
Extended Coverage Title Policy at least thirty (30) days
prior to closing, the cost of which shall be paid by the
SELLER, subject to the following conditions:
a. On or before February 28, 2001, the CITY shall
deliver to SELLER, subject to the provisions of
paragraph # 3 the sum of One Hundred Forty-eight
Thousand Dollars ($148,000.00). The balance of the
purchase price, or the sum of Sixty Thousand Five
Hundred Dollars ($60,500.00) shall be deposited
with Escrow Services, P.O. Box 294, Kalispell MT
59903-1997 with instructions to release said sum
upon notice from the CITY that the property has
been vacated (Close Escrow).
b. On or before February 28, 2001, SELLER shall
deliver to Escrow Services a Grant Deed with
instructions to record said deed on the date the
balance of the purchase price is delivered to
SELLER (Close of Escrow).
C. In addition to other conditions to CITY 'S
obligations contained elsewhere in this Offer to
Sell, CITY shall not be obligated to Close Escrow
unless and until the apartment building located on
the above described real property is vacant of all
tenants.
3. In the event the City accepts this offer to sell, it
shall be authorized to withhold, at the time of delivery
of the initial funds on February 28, 2001, such sums as
are necessary to clear all encumbrances, including the
sum of Ten Thousand Dollars ($10,000.00) paid by
Hampstead Partners, Inc. under a Purchase and Sale
Agreement, herein assigned, charged to such property to
obtain clear title in the name of the CITY.
-2-
4. Cost of this transaction (Title Company Fees and Escrow
Fees) shall be shared equally between SELLER and BUYER.
5. Real estate taxes, existing city special improvement
district payments shall be prorated as of July 1, 2001.
6. Prior to Close of Escrow, SELLER shall obtain final
readings for all water, sewer, electricity, gas,
telephone and other utility charges at the property.
Seller shall pay for all such charges based on the final
invoices or final meter readings. The utility accounts
shall be transferred to CITY at the Close of Escrow.
7. SELLER shall keep all personal property associated with
the property. Said personal property shall be removed by
the SELLER prior to the Close of Escrow.
B. Prior to the Close of Escrow, SELLER shall be entitled to
retain all income from the Property and shall be
responsible for all expenses related to the Property.
9. SELLER shall maintain insurance coverage for fire and
other casualty losses through the Close of Escrow.
10. SELLER shall maintain liability insurance on the property
through the Close of Escrow. SELLER shall protect,
indemnify, defend and save CITY, its elected or appointed
officials, agents and employees, while acting within the
scope of their duties as such, harmless from and against
all claims, liabilities, demands, causes of action and
judgements (including costs and reasonable attorneys'
fees) arising in favor of or asserted by SELLER'S
employees or agents, or third parties on account of
personal injury or death or on account of damage to
property, which injury, death or damage is the result, in
whole or in part, of the negligent acts or omission of
the willful misconduct of the SELLER, his employees or
agents, through the Close of Escrow.
11. SELLER represents and warrants that to the best of
SELLER'S knowledge and belief, the subject property is
free from any environmental contamination and nothing is
present on the subject property which constitutes an
environmental hazard or pollutant as defined by state or
federal law. SELLER is not making or extending to the
-3-
CITY any other warranties or representations regarding
this Property.
12. A complete and detailed closing statement shall be
furnished by the Title Company to the SELLER and CITY
prior to February 28, 2001.
13. SELLER shall not, during the period of time between
February 28, 2001 and the Close of Escrow, enter into any
contract, lease with respect to or encumber said
property, which will survive the Close of Escrow or
otherwise affect the possession, use, operation or
enjoyment of the property after the Close of Escrow.
14. SELLER acknowledges and agrees that this Offer to Sell
replaces and supplants that certain "The Annex - Purchase
and Sale Agreement" dated November 9, 2000, between
Hampstead Partners, Inc. and SELLER, and that the CITY
has been assigned the Purchaser's interest created by
said Agreement, as set forth below.
15. SELLER shall be entitled to four (4) permanent parking
spaces in the new parking lot anticipated to be
constructed on the Property, together with ingress and
egress to such parking spaces. CITY understands and
agrees that such parking spaces shall be an easement
which is appurtenant to certain property which is
adjacent to the Property herein described, and which
SELLER intends to acquire. The property which SELLER
intends to acquire is described as Lot 6 of Block 54,
Kalispell Original Townsite, according to the map or plat
thereof on file and of record with the Flathead County
Clerk and Recorder, Flathead County, Montana. At closing,
CITY agrees to execute any documents reasonably necessary
to document and effectuate SELLER'S interest and right in
and to such parking spaces. In the event CITY is able to
designate four specific spaces as SELLER'S parking spots,
but is unable to designate parking spaces in the
southeast corner of Property, then in such event CITY
agrees to seek SELLER'S approval regarding the exact
location of such parking spaces, which approval SELLER
shall not unreasonably withhold.
16. No other reservations, exceptions or considerations have
been made and the fulfillment of the terms and conditions
of this offer to sell shall constitute the full
settlement offer herein set forth.
17. Should any litigation be commenced between the parties
hereto concerning this Offer to Sell or subject matter
hereof or the rights and duties of the Parties in
relation hereto or thereto, the party prevailing in such
litigation (whether at trial or on appeal) shall be
entitled, in addition to such other relief as may be
granted, to its costs and expenses of suit, including
without limitation a reasonable sum as and for its
attorney's fees in such litigation, which shall be
determined by the court in such litigation or in a
separate action brought for that purpose.
18. All notices, requests, demands, or other instruments
required or contemplated to be given or furnished under
this agreement to Seller or shall be directed to Seller
and SELLER as the case may be at the following addresses:
If to Seller: Michael and Mary McFarland
836 Third Avenue West
Kalispell, MT 59901
Phone: 406.752.3745
Kent Saxby, Esq.
Warden, Christiansen, Johnson & Berg, PLLP
221 First Avenue East
Kalispell, MT 59903-3038
Phone: 406.755.5535
Fax: 406.756.9436
If to CITY: City Manager
City of Kalispell
P.O. Box 1997
Kalispell, MT 59903-1997
Phone: 406.758.7703
Fax: 406.758.7758
19. If this agreement is terminated by the fault of either
SELLER or CITY, both SELLER and CITY shall have all
rights available to them to seek damages through law or
equity.
20. CITY understands and acknowledges that SELLER may wish to
dispose of the Property as part of a tax -deferred
exchange under Section 1031 of the Internal Revenue Code
of 1986. CITY agrees to cooperate fully with SELLER in
connection with any such tax -deferred exchange; provided
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that CITY shall not incur any additional cost, expense or
liability related to such tax -deferred exchange and that
such exchange shall not extend the closing dates herein
this Agreement. SELLER agrees to indemnify and hold CITY
harmless from any such costs, expense or liability
related to their tax -deferred exchange. In connection
with such tax -deferred exchange, CITY understands and
agrees that SELLER shall have the right to assign this
Agreement and the rights hereunder to an intermediary for
purposes of facilitating SELLER'S tax -deferred exchange.
21. This Offer, when accepted and following execution by
Hampstead Partners, Inc. of the Assignment which follows,
shall be binding upon and inure to the benefit of the
heirs, successors and assigns of the parties hereto.
SELLER shall have the right to withdraw their Offer to
CITY following CITY'S acceptance of such Offer if
Hampstead Partners fails or refuses to execute the
following Assignment.
DATED this day of January, 2001.
Michael T. McFarland
Owner
Mary L. McFarland
Owner
STATE OF MONTANA )
ss
County of Flathead )
On this _ day of , 2001, before me, a Notary
Public in and for the State of Montana, personally appeared Michael
and Mary McFarland known to me to be the persons whose names are
subscribed to the foregoing instrument, and acknowledged to me that
they executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
Notarial Seal, the day and year first above written.
Notary Public, State of Montana
SEAL Residing at
My Commission expires
ASSIGNMENT
For value received Hampstead Partnership, Inc., 1205 Prospect
Street, Suite 459, La Jolla, California, hereby assigns unto the
City of Kalispell all Purchaser's rights under that certain "The
Annex - Purchase and Sale Agreement" dated November 9, 2000, by and
between Hampstead Partners, Inc. and Michael and Mary McFarland.
Date
STATE OF
ss
County of
HAMPSTEAD PARTNERS, INC.
az
Principal
On this _ day of 2001, before me, a Notary
Public in and for the State of , personally appeared
known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged to me that
he/she executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
Notarial Seal, the day and year first above written.
SEAL
Notary Public, State of
Residing at
My Commission expires
-7-
ACCEPTANCE
The Offer to Sell and Assignment is hereby accepted by the
City of Kalispell, Montana on this day of January, 2001,
subject to ratification by Resolution of the City Council of
Kalispell.
CITY OF KALISPELL
City Manager
ATTEST:
Theresa White
City Clerk
STATE OF MONTANA
: ss
County of Flathead )
On this _ day of , 2001, before me, a Notary
Public in and for the State of Montana, personally appeared Chris
Kukulski and Theresa White, known to me to be the City Manager and
City Clerk of the City of Kalispell, a municipality, known to me to
be the persons whose names are subscribed to the foregoing
instrument, and acknowledged to me that they executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
Notarial Seal, the day and year first above written.
Notary Public, State of Montana
SEAL Residing at
My Commission expires