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01-26-89 Development Comm Minutese CITY DEVELOPMENT COMMITTEE/COUNCIL WORKSHOP JANUARY 26, 1989 5:00 PM PUBLIC WORKS CONFERENCE ROOM ATTENDING: Councilmembers Roger Hopkins, Jim Atkinson, Wayne Saverud, Noel Furlong, Gary Nystul, Mayor Ed Kennedy, City Attorney Glen Neier, CD Director Ed Gallagher, Jim Lex, John Hammett and Jim Hadwin of Flathead Association of Senior Housing, Inc. CD Chairman Saverud opened the meeting by stating the City received a letter, a check and an expression of interest from the Flathead Association of Senior Housing, Inc. They are requesting the city's consideration of their purchase of lots 1-12 of Block 23, Kalispell Original (Griffin Field). They are asking the city to give them one year to complete their financing package and construction plans. The Association's $500 check is for a one year option on Griffin Field. Jim Lex, Executive Director, passed around a hand-out of perspectives (attached) to read. He then explained the need for senior housing/independent living in this area. Rand McNally featured Kalispell and the Flathead Valley as one of the top 25 most desirable retirement areas in the country. Jim stated there are a number of factors to look at in anticipating a facility, some of which are: tax exempt status, elimination of debt service by going through all phases of the community, and though they don't want to be funded by the federal government, they will take any grants they could possibly receive. They have been studying foundations for months and have contacted quite a number of them. Wayne Saverud asked if there are any other sites within the redevelopment area where the concept of elimination of blight could be used as a driving force behind this project. There was discussion of the area near St. Matthew's which was originally thought to be •, ideal, however the cost of buying the housing would take away too much cash just for the real estate and then the tax exempt status would have an effect on the city. The 5th Avenue W. area was looked at also, it is limited space and would mean the facility being five stories high. The Courthouse East land could possibly be vacated within two years, but the county is less then enthusiastic about discussing anything at this time. The Association feels Griffin Field is the best choice as far as location with easy assessability to the B&B complex for shopping, etc. Also, Glacier Park Co. has indicated they would be willing to add on to the 90,000 square foot lot which would make it possible to build a three story facility instead of a five story one. Jim Atkinson stated that this is a felt need and the Association has put alot of thought into it as seen in the conversation and noting the Executive Board and others involved and responsible. He feels this lends some merit to their ability to pull it off, and he would like to see what can be done to make this work. He stated that he had contemplated that particular area utilized as light business, retail, extending the mall, or something in that line as opposed to housing. Also, the sources of funding bother him a little as there is so much that must be pulled together at the right time and in the right amount to make something like this work. Ed Gallagher stated for the record that the City of Kalispell had run a legal ad for Request for Proposals on Griffin Field which were due in City Hall by June 20, 1988. There were no proposals that met the criteria so they were turned down, now the city can consider offers. Ed has a copy of a Buy/Sell agreement, though speculative, from Remax representing a client for Griffin Field. He received it on Oct. 13, 1988 and responded the following day, with carbon copies to the Mayor and City Attorney. Remax wanted to know what they had to submit as a proposal. Ed wrote stating the information needed on Oct. 14, 1988 and tried to phone, he followed it up on Oct. 27, • 1988 with another letter, and to date has not gotten anything from them that would be considered a proposal. Ed just wanted to bring to councils attention that the private sector has shown interest but did not follow it up with anything. City Attorney Neier stated that it has been advertised for sale, but there hasn't been a presentation and amount of money by anyone, this presentation is the closest anyone has come. The council, if they decide to pursue the offer, would have to pass a resolution of Intention to Sell the property and then hold a public hearing on the matter to decide if it would be in the best interest of the City and its inhabitants to make the sale. If the proper findings are met and carried through with proper procedure, then council would pass an ordinance or resolution authorizing the Mayor to execute a deed to the property. There was short discussion on where the monies from the sale of Griffin Field would go. Roger Hopkins stated that in listening to tapes and going through minutes of the meetings at the time of relocation of Griffin Field, there were no formal motions passed saying any proceeds should to to tax increment. This needs to be checked into further, just to clear things up. Gary Nystul stated his feeling about the tax exempt status of this proposed project is that monies are tight at city hall and they are not going to get any better. Whether its a tax exempt project or not, the city is still going to have to provide police and fire protection to the project as well as the usual other services that spin off. A $5.8 million project scales down to $30,000 in tax revenue a year to the city and county school district, and over the period of the project, that adds up to quite a few dollars. Gary would feel better if they were looking at using UDAG or TIF at a site who's potential return on square footage for tax purposes was less. He feels its a worthwhile project and the only way its going to succeed is if its tax exempt, he doesn't disagree with that, but this particular location stands a chance to generate more tax dollars for the city if it had a higher use, thus, the city could afford to grant tax exempt status at another site. •_ Wayne asked about the one year time limit to put the package together. Jim Lex stated that was done on purpose because it would spur them into action to run through the foundations very quickly, and that will prove whether they can do the project or not. If not, as the offer states, they will vacate that option at any time it doesn't look like this can be accomplished. Noel Furlong stated the tax exempt status bothers him greatly. He feels that it doesn't just effect the functions of city government, but also functions of the school systems. He is concerned about the effect on the whole infrastructure in the City of Kalispell, and feels there could be a better use dollar -wise. Gary Nystul stated that he felt the councilmembers need a little time to study this and look at some numbers. If everyone chooses not to go with the Griffin Field site, he feels there is strong enough interest to do this worthwhile project that collectively thinking, possibly they could come up with another site. He doesn't see needing more than one block a problem, the city has closed off streets before. Wayne stated he is in favor of this type of project, he feels there is not a better, cleaner industry for this community then housing, and especially for our seniors. It's all labor intensive, it uses local product, and they deserve a break. If a good usable site could be found that falls into the criteria of elimination of blight, that would be an absolute plus. If not, he feels selling this property at a reasonable price okay if it generates economy in that area, and this project would stimulate higher and better use out of the rest of the eleven acres. Ed stated that Glacier Park Co. has kept abreast of Griffin Field and whatever may occur on the eleven acres, they feel a housing complex would be a very good neighbor. 2 Wayne explained that the option would have to be designed on the property for the project as opposed to just an open ended option, because if the project got scaled down or something of that nature, it wouldn't have the same impact. The Association members agreed. There was more discussion among those present of tax exempt status, loss of taxes and the impact on city and school systems. Also, the market approach the Association used, the estimated cost of rent for the apartments, etc. The councilmembers agreed to take time to look into this and meet again to make decisions. This will be put on the agenda for the next City Development meeting. The Subordination Agreement with the Barbieri's for Herberger's expansion was explained by City Attorney Neier. Glen wrote to the Barbieri's stating it met with his approval and he was recommending its acceptance by the council. Tied to that was some easements on the mall property that were never received. Mayor Kennedy stated he'd told Mr. Barbieri that he was not interested in passing the Subordination Agreement on the the council until the easements were signed, they were immediately signed and are now on file. There was discussion of the Agreement and City Attorney Neier explained, for those present who were not familiar with them, the specific areas that were involved in the easements and why. Roger Hopkins stated there was concern expressed by public works over the lack of sidewalks in the parking lot mall and asked Glen if there is concern for the city's liability because of this problem. Glen stated there could possibly be cause for concern at some point. Roger said that maybe this would be the time to address the problem as there would probably not be another opportunity later. Mayor Kennedy made a motion to go ahead with the Subordination Agreement as soon • as possible, Jim Atkinson seconded, motion carried. Meeting adjourned at 6:55 PM. 0 3