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6a. Resolution 4157 - Bid Award Recommendations - 3rd St & Main PropertyRESOLUTION NO. 4157 A RESOLUTION AUTHORIZING THE SALE OF LOTS 8, 9, 10, 11, AND 12 ; BLOCK 55, KALISPELL ORIGINAL, KALISPELL, FLATHEAD COUNTY MONTANA. WHEREAS, the City of Kalispell, a municipal corporation, owns certain real property, to -wit: Lots 8, 9, 10, 11, and 12; Block 55, Kalispell Original, Kalispell, Flathead County, Montana, and WHEREAS, Section 7-8-4201, MCA, authorizes the City Council to sell, dispose or lease any property belonging to the City upon proper passage of an Ordinance or Resolution passed by two-thirds vote of all members of the City Council, and WHEREAS, Section 7-15-4262, Montana Code Annotated, authorizes a municipality to sell, lease or otherwise transfer real property in an urban renewal area for urban renewal projects for residential, recreational, commercial, industrial or other uses or for public uses, and WHEREAS, the City of Kalispell did on the 10th day of September, 1979, adopt Ordinance No. 933 which created the Downtown Redevelopment Plan for the City of Kalispell, and WHEREAS, the City of Kalispell did on the 4th day of November, 1985, pass Ordinance No. 1065, designating certain projects within the Downtown Redevelopment Area, and WHEREAS, pursuant to Ordinance No. 1065, the City of Kalispell purchased the above described property for the purpose of providing off-street parking facilities in the Downtown Redevelopment Area, and WHEREAS, the City Council of the City of Kalispell desires to sell said property, so acquired, for the purpose of expanding commerce and business within the Downtown Redevelopment Area, and WHEREAS, the City Council passed Resolution No. 4154 on the 20th day of June, 1994, declaring an intention to sell said property, and duly published notice of said proposed sale in accordance with Section 7-15- 4262, MCA, and WHEREAS, on the 13th day of July, 1994, Valley Bank tendered to the City a proposal to purchase said property for the sum of $160,000, the established fair market value of the property, and WHEREAS, the proceeds generated by the sale of said property may be used for the purpose of acquiring additional off-street parking within the Downtown Redevelopment Area, and WHEREAS, the property is under-utilized in its current use as a parking lot, and WHEREAS, the property is not held in trust by the City for any specific purpose and therefore does not require an election in order to authorize its sale, and WHEREAS, the property is not necessary for the conduct of City business nor for the preservation of property owned by the City and it is in the best interest of the City and its inhabitants to sell said property, and WHEREAS, the Valley Bank offer to purchase said property complies in all respects to Resolution No. 4145, and said sale would be in the best interests of the City of Kalispell and its inhabitants. NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF KALISPELL, AS FOLLOWS: SECTION I. The City Council of the City of Kalispell hereby authorizes the Manager and the Finance Director to execute all legal documents necessary to transfer, by Special Warranty Deed, all the City's right, title and interest in Lots 8, 9, 10, 11, and 12, Block 55, Kalispell Original, Kalispell, Flathead County, Montana to Valley Bank, said transfer being contingent on receipt of the sum of $160,000, less those amounts previously received. PASSED AND APPROVED BY THE CITY COUNCIL AND MAYOR OF THE CITY OF KALISPELL, THIS DAY OF JULY, 1994. Douglas D. Rauthe - Mayor fW1��1M Amy H. Robertson Finance Director Planning, Economic & Community Development Department P.O. Box 1997 Kalispell, MT 59903-1997 TO: FROM: DATE: SUBJECT: Incorporated 1892 MEMORANDUM Bruce Williams, City Manager & City Council Lawrence Gallagher, PECDD, Director July 15, 1994 248 Third Avenue East (406) 752- 7491 (406) 755-8017 (office fax) (406) 752-6639 (City Hall fax) Recommendation to Sell Lots 8, 9, 10, 11 and 12, Block 55 to Valley Bank of Kalispell. Valley Bank of Kalispell was the only respondent to RESOLUTION NO. 4154 - A RESOLUTION OF INTENTION TO SELL CERTAIN REAL PROPERTY OWNED BY THE CITY OF KALISPELL. Valley Bank submitted it's offer to purchase Lots 8, 9, 10, 11, and 12, Block 55 for the full fair market value established by the City at ONE HUNDRED SIXTY THOUSAND DOLLARS ($160,000.00) and enclosed $8,000 as ernest money with their offer representing 5 percent of the purchase price. A copy of the Bank's offer is attached. Valley Bank's offer to purchase appears to generally comply with the Minimum Requirements of OFFERS TO PURCHASE detailed in a June 6, 1994, Memorandum To Prospective Purchasers, attached hereto. Valley Bank proposes "...to construct a building on the real estate having not less than two stories with a minimum of 20,000 square feet of floor space." The bank has agreed to satisfy parking requirements through demolition of the Ivy Center, a building it owns located on the NE corner of First Avenue West and Fourth Street East; or as an alternative, to meet parking requirements by included in ongoing efforts to provide adequate parking within the core area of kalispell. The Bank has requested that final transfer be completed by September 15, 1994; however, on July 15, 1994, in a telephone conversation with A. J. King, Chairman of Valley Bank, I asked if it would be possible to delay closing until later this fall --- not later than December 1, 1994. The delayed closing would enable the Kalispell Parking Commission to manage the lot for the Fall/Christmas Shopping Season, enjoy the income stream and still get the property on the tax rolls before January 1, 1995. Mr. King said he thought the bank would agree to the delayed closing but would reserve final judgment until next Monday afternoon or prior to the City Council Meeting. ■ Valley Bank Offer to Purchase Memorandum July 15, 1994 Page 2 Glen Neier has been asked to review the Bank's proposal to assure that it complies with the offering. Any concerns Glen or the City Council may have may be incorporated into the formal sale agreement for the property. The Kalispell Parking Commission was advised of the Offer to Purchase during their July 14, 1994, meeting and after discussion approved a motion recommending that the City accept Valley Bank's Offer to purchase. They will adjust their budget to reflect the impact of the sale on their revenues. Please schedule discussion of Valley Bank's Offer to Purchase as soon as possible. Jack King said he would be available to attend the July 18, 1994, City Council meeting to answer questions and to present site plans for the proposed development. I am recommending approval of Valley Bank's Offer and hereby request authorization to work with Glen Neier to negotiate and prepare a final sale agreement with an acceptable closing date not later than December 1, 1994. pp OF KALISPELL Q9 406-752-7123 BOX 48 FAX 406-758 9120 MEMBER F.D.I.0 KALISPELL, MONTANA 59903-0048 July 12, 1994 Mr. Lawrence Gallagher PECDD Director City of Kalispell Planning, Economic and Community Development Department P.O. Box 1997 Kalispell, MT 59903-1997 Dear Mr. Gallagher: Pursuant to your memorandum dated June 6, 1994, the Valley Bank, wishes to tender an offer of $160,000.00 for the purchase of Lots 8, 9, 10, 11 and 12, Block 55, Kalispell original townsite. A Valley Bank cashiers check is enclosed representing 5% ernest money in the amount of $8,000.00. It is the intent of the Valley Bank to construct a building on the real estate having not less than two stories with a minimum of 20,000 square feet of floor space. We are enclosing preliminary drawings and plans of the proposed property improvements along with preliminary architectural cost estimates. In conjunction with this proposal, we would ask, should we be successful bidders, the city provide for the closure of the alley way between the new building site and the existing Valley Bank structure. Closure of the alley will be expected to limit vehicle traffic only with provision for landscaping and pedestrian walkway between the buildings. We would further ask our parking commitment remain to the areas occupied by the Ivy Center or the current Valley Bank structure. Our figures indicate an additional parking requirement of 36 new spaces. As an example, this requirement can be filled through the demolition of the Ivy Center (20 spaces) utilizing the area to add 16 spaces totalling 36. Should parking needs continue to grow within the core area of Kalispell, the Valley Bank will, as in the past, wish to be included in ongoing efforts to provide adequate parking. As purchaser of this site we are assuming title will pass from the City of Kalispell by Warranty Deed and the City will be providing a purchasers a title insurance policy indicating the real estate to be free and clear of all encumbrances. Further, we are assuming final transfer arrangements can be completed by September 15, 1994. We would ask the city to participate in the off site improvements necessary to finalize construction. Improvements including, but not limited to, utilities. July 12, 1994 Mr. Lawrence Gallagher Page -2- In considering this bid, we would ask the council to include the increased tax base available and the retention within the Kalispell City center of the full payrolls of the Valley Bank and the Bankers Service Corporation. Bankers Service Corporation is the computer center supplying full accounting services to the Valley Bank, First Security of Kalispell and the First National Bank of Libby and our customers. We thank you for this consideration. Please advise if additional questions should arise. Sincerely, Enclosure AJK/JLH:dl L. H nsley Presid nt Narrative Size Stories Bank of Kalispell Description 20,000 to 30,000 Square Feet 2 to 3 with a possible basement Type of Construction Nonconbustible lhr rated, steel, masonry and concrete. Seismic Zone 3 Fire Sprinkler system Exterior - Brick and glass Special Features Building design will be compatible with existing Architecture of Up Town Kalispell. A theme will be utilized to express Kalispell's heritage, i.e.; Logging, Ranching, Lake Boats in over all interior design and possibly exterior design of the building. Elevator to upper and lower floors. Building will be designed to meet current ADA accessibility requirements Site Landscaping The existing alley between the new site and existing Bank building will be closed to vehicle and developed into a landscaped walk way. Existing alley service vehicle traffic will be diverted through the current parking lot. Street trees and extensive landscaping will be utilized on Main and 3rd. Streets. Historic street lights will be utilized where ever possible. Parking Building Area Spaces New Building 27184 67.96 Existing Bank 7500 18.75 Drive -up 4394 10.98 Ivy Center 8000 20.00 Total Required 47,087 1 1 8 Available 82 New spaces needed 3 6 Parking will be provide by one of the following methods and will be in place when the building is ready for occupancy. The Valley Bank would like time to study and select the best long term option. 1. 36 new spaces developed on additional property. 2. Demolish the Ivy Center reducing the parking demand by 2 0 and develop 16 additional parking spaces. This also allows for possible expansion of the Drive -up Bank. 3. Participate with the City of Kalispell in a Parking District to meet parking deficiency. Purchase Property Summer 1994 Project Design Oct. - Dec. 1994 Construction Drawings Jan. - April 1995 Bid Apr. - May 1995 Construction May - June 1996 Occupancy June 1996 Construction Cost $2,000,000 to $3,000,000 Conceptual Drawings Attached Design 'Team Architect Landscape Architect Structural Engineer Mechanical Engineer Electrical Engineer Architects Design Group Jim Thompson Mike Absalonson Sitescape Associates Bruce Lutz Engineers Northwest Richard Janke MW Consulting Engineers Jim Moore MW Consulting Engineers Bob Welt 110 Cl1y 01 Kalispell Incorporated 1892 Planning, Economic & 248 Third Avenue East Community Development Department (406) 752- 7491 P.O. Box 1997 (406) 755-8017 (office fax) Kalispell, MT 59903-1997 (406) 752-6639 (City Hall fax) MEMORANDUM TO: Prospective purchasers of City of Kalispell owned property located at the NW corner of Main Street and Third Street West. (Block 55 Lots 8-12) FROM: Lawrence Gallagher, PECDD, Director DATE: June 6, 1994 SUBJECT: Minimum Requirements of OFFERS TO PURCHASE This Memorandum is to further outline and discuss the Minimum Requirements of OFFERS TO PURCHASE Lots 8, 9, 10, 11 and 12, Block 55, Kalispell Original Townsite; and, to inform potential redevelopers of the criteria the City Council may consider in evaluating any offer to purchase. It is important to understand that it is not the City's intention to sell the parcel for continued use as a parking lot, but to encourage redevelopment of the parcel to its highest and best use as a multi -story commercial building site expanding downtown density, commerce, employment opportunities and ad valorem tax base. The City of Kalispell has approved RESOLUTION NO. 4154, A RESOLUTION OF INTENTION TO SELL CERTAIN REAL PROPERTY OWNED BY THE CITY OF KALISPELL. The Resolution establishes (i) a fair market value of the real property at $160,000; (ii) that it will receive sealed bid proposals, on the 13th day of July, 1994, at an open administrative session of the City Council; and, (iii) that prospective purchasers of said property should be prepared to show and demonstrate their obligation to devote said real property subject to transfer to the uses specified in the Downtown Redevelopment Plan. The prospective purchasers must detail their time schedule to begin and complete improvements and their ability to comply with the Downtown Redevelopment Plan and the financial ability to purchase the property. Minimum Requirements of OFFERS TO PURCHASE: Actual sale of any property subject to the Real Estate Offering may only be accomplished in accordance with Section 7-15-4263, Montana Code Annotated. Section 7-15-4263, MCA states as follows: Procedure to dispose of property to private persons. Block 55 Offering Memorandum June 6, 1994 Page 2 (1) A municipality may dispose of real property in an urban renewal area to private persons only under such reasonable procedures as it shall prescribe or as provided in this section. (2) (a) A municipality shall by public notice invite proposals from and make available all pertinent information to private redevelopers or any persons interested in undertaking to redevelop or rehabilitate any urban renewal area or any part thereof. (b) Such notice shall be by publication once each week for three consecutive weeks in a newspaper having general circulation in the community prior to the execution of any contract or deed to sell, lease, or otherwise transfer real property and prior to the delivery of any instrument of conveyance with respect thereto under the provisions of 7-15-4266. (c) Such notice shall identify the area or portion thereof and shall state that such further information as is available may be obtained at such office as shall be designated in said notice. (3) The municipality shall consider all redevelopment or rehabilitation proposals and the financial and legal ability of the persons making such proposals to carry them out. The Municipality may accept such proposals as it deems to be in the public interest and in furtherance of the purposes of this part and part 43. Thereafter, the municipality may execute, in accordance with the provisions of 7-15-4262 and 7-15-4264, and deliver contracts, deeds, leases, and other instruments of transfer. In the event reputable developer(s) respond to the Real Estate Offering, the City shall implement the following procedure to dispose of the property: (1) A Resolution of Intention to Sell Real Property shall be presented to the City Council for their consideration. (2) The Resolution shall contain the following: (a) Location and legal description of the property, (b) Fair market value of the property for uses in accordance with the urban renewal plan, giving consideration for the uses provided for in the plan, the restrictions upon and covenants, conditions, and obligations assumed by the purchaser, and objectives of the plan for the prevention of blight, Block 55 Offering Memorandum June 6, 1994 Page 3 (c) Invitation for sealed proposals from private developers or other persons interested in undertaking a redevelopment project, (d) Provision for notice of the Resolution to be published once each week for three consecutive weeks in the Daily Inter Lake, (e) Requirement for minimum amount of earnest money accompanying proposal, and (f) Designation of agency within the City from which information regarding particulars of offering should be obtained. The City in considering competing proposals received as result of the published notice shall consider the purchase price offered by the respective respondents. However, the purchase price shall not be the sole factor in disposing of the property to a successful purchaser. The City shall consider such other factors as: proposals potential to further the goals and objectives of the urban renewal plan, background of potential developers, financial ability of potential developers to perform under the proposal, benefit to the City in general and benefit to urban renewal area in particular. The decision on disposing of the property will ultimately be based upon a broad evaluation of the proposals submitted and how the proposals individually serve the public interest. After the proposals have been evaluated, the City Council shall be presented with a resolution authorizing the sale of the property and authorizing the manager to execute a deed to the property. The resolution when passed by the City Council takes effect immediately. Developers desiring to avail themselves of City participation in a proposed development should be aware that additional public hearings and action by the Council may be required after the initial purchase. Developer proposals involving sale of bonds (IDB's or Tax Increment) to finance a portion of the project or acquisition of additional land, or the entering into a Participation Agreement, under Section 7-15-4258, MCA, may require an amendment to the urban renewal plan. An urban renewal project involving an amendment to the plan requires, under Section 7-15- 4213, MCA, that the City submit, by resolution, a proposed urban renewal project plan to the City -County Planning Board for their review. The City -County Planning Board has 60 days in which to receive comment on the proposed plan and make a recommendation to the City. Once a recommendation is received, or after 60 days if no action has been taken, the City schedules a public hearing on the plan after public notice. The City notices the resolution by publication in the Daily Inter Lake and by mailing of notice to all property owners in the downtown Redevelopment Area. Publication and mailing must be accomplished in a window between not less than ten nor more than thirty days prior to the hearing. Block 55 Offering Memorandum June 6, 1994 Page 4 After the public hearing, the City Council shall be presented with an ordinance amending the urban renewal plan to accommodate the project and its particulars. Under normal procedure the Council has two readings of the ordinance, at least 12 days apart, and the ordinance becomes effective thirty days after its final passage. This synopsis of the requirements of the Urban Renewal Law requirements is not intended to be an in-depth analysis of the procedures, but an outline of the basic requirements. Any developer desiring to present a proposal should retain legal counsel to evaluate the developer's position in the process. Redevelopers should not be discouraged by what may appear to be a very cumbersome process. Actually, the process serves both buyer and seller because it clearly establishes what is expected and documents legal requirements and timing. Transactions with local government's frequently close in less time than do private transactions because buyer and seller requirements are so well documented and understood before entering into any agreements to sell or purchase. The City Council will consider how the proposed redevelopment will improve and add to the ad valorem tax base of the City and Downtown Kalispell Urban Renewal Project area. The amount of tax increment generated by the proposed redevelopment will be computed using the following assumptions. Tax Information and Assessment The real estate has been "tax exempt" because its current owner is a public entity exempt from taxation. Now, it is the City's goal to encourage the private development of the site to its highest and best use, thereby generating substantial ad valorem taxes for the tax increment district and eventually all taxing jurisdictions. In Montana and in Kalispell, both real and personal property are subject to property (ad valorem) taxation, except as provided otherwise. It is anticipated that the subject real estate and improvements will be classified and taxed as: (15-6-134, MCA, 1989) "(1) Class four property which includes: (a) all land except that specifically included in another class; (b) all improvements except those specifically included in another class. (2) Class four property is taxed as follows: (a) Except as provided in 15-24-1402 or 15-24-1501 (MCA, 1989), property described in subsections (1)(a) and (1)(b) is taxed at 3.86% of its market value"... (emphasis added) Block 55 Offering Memorandum June 6, 1994 Page 5 (3) After July 1, 1986, no adjustment may be made by the department to the taxable percentage rate for class four property until a revaluation has been made as provided in 15-7-111 ...." Tax liability for business property is determined in the following way: Market Value X Classification Rate = Taxable Value. Taxable Value X Mill Levy = Property Tax Liability The mill levy is an aggregate of state and local mill levies imposed annually for the purpose of funding city and county governments, schools, and the university system. The Property Assessment Division of the Montana Department of Revenue is responsible for ensuring that all property in the State is treated equitably. County appraisers (as employees of) and assessors (as agents of) the Montana Department of Revenue, are responsible for valuing property. Market Value is based on 1) replacement value, 2) depreciation factors, and 3) selling prices in Kalispell. Thus, to determine the value of commercial property, the appraiser uses two methods of appraisal: the market approach and the cost approach. The market approach compares fair market sales of similar properties (land & improvements) when sold on the open market. The cost approach estimates the cost of material and labor to replace the improvements, less depreciation, if any, for physical deterioration, age, and functional or economic obsolescence. The Revenue Department has been encouraged by courts, legislators, and property owners to consider income producing capacity when determining the market value of commercial real estate. The state has reappraised commercial properties for 1993 and is currently utilizing data on the income capacity of commercial buildings. It intends to utilize this data for future property reappraisals to aid in determining a commercial property's income approach to market value. City/County/School Mill Levies: The county taxable value is utilized to determine the mill levy level necessary to meet operating budgets for City, county and public school operations. Once the mill levies are established, the county assessor computes the property taxes, and the county treasurer becomes responsible for billing and collecting property taxes. Block 55 Offering Memorandum June 6, 1994 Page 6 One mill is 1/10th of a cent... computed as $1 tax on every $1,000 of taxable value. The rate is determined by comparing the local budget requirement against the taxable value for a particular taxing district. For example, if a school district needs $4 million from property taxes for its budget (and if the total taxable value in the county is $10 million), the mill levy would be determined as follows: $ 4,000,000 (money needed) $10,000,000 (taxable value) x 1,000 = 400 mills (Mills most often appear as a decimal. Thus, 400 mills would be expressed as .400) For Class 4 property located within the City of Kalispell, the 1993 Combined Mill Levy for all taxing jurisdictions is: 451.148 To estimate the ad valorem tax for a commercial building and land located within the City of Kalispell use the following example: Market Value Land Market Value Building TOTAL MARKET VALUE Class Four classification X TAXABLE VALUE Combined Mill Levy 1993 X Ad Valorem TAX DUE 1993 $ 160,000 (market approach) $2,000,000 (cost approach) $2,160,000 0386 $ 83,376 .451148 $37.614.92 For example, a new development with a Total Market Value of $3 million, would pay $52,242.91 in Total Ad Valorem Tax. Computed as follows: Block 55 Offering Memorandum June 6, 1994 Page 7 TOTAL MARKET VALUE $3,000,000 Classification Rate X .0386 TAXABLE VALUE Combined Mill Levy Ad Valorem Tax Due $ 115,800 X .451148 $52,242.94 Persons submitting proposals should include preliminary estimates of the minimum value or cost of improvements proposed and also an estimate of the Class 9 personal property which may become part of the ad valorem tax base to be considered by the City Council. The actual Market and Taxable values will be determined by the State of Montana Department of Revenue appraisal process and the actual Combined Mill Levy will be established each year after units of local government and school districts adopt their respective budgets. Any proposal for redevelopment of the site must address how parking will be provided and satisfy the parking requirements set forth in ORDINANCE NO. 1202. Prospective developers should also take into consideration the City's continued efforts to encourage a public/private partnership to develop additional parking to meet identified demands and to allow for increased density within the Special Parking Maintenance District No. 2. The City will ask prospective developers to agree not to protest the formation of a Parking Special Improvement District. A discussion of the current status of the Parking Special Improvement District formation follows: Parkins Program and Financing Considerations The initiative to create and fund a Parking Commission and/or parking special improvement district (SID) has come from the private sector. In Kalispell, the City has encouraged the initiative by creating the Kalispell Parking Commission and agreeing to utilize tax increment monies to provide "gap" financing to help fund start-up and administrative costs during its first year of operation. In addition to assisting with the administrative costs of the downtown parking program, the City has allowed the Parking Commission's use of public land and improved parking lots and all revenues generated by parking. During the next year the City will encourage the Parking Commission to develop a plan and capital budget to provide additional public parking. The City has the authority to issue tax exempt bonds to help finance the parking program recommended and adopted by the Parking Commission. Based on recommendations of the Parking Commission the City could consider creation of a Parking Special Improvement District as a method of generating the revenues necessary to pay for public parking. Any action by the City Council would require a public hearing which must be held to establish the boundaries and the formula for assessment. Block 55 Offering Memorandum June 6, 1994 Page 8 The formula for assessment would be based on five (5) factors, each mathematically weighted to determine the total assessment on each privately held parcel of land within the boundaries of the parking SID. The factors are: 1) land area - measured as the total square footage of the parcel; 2) demand - the total parking demand based on the use of improved square footage for each parcel as established by Zoning Ordinance 1175; 3) credit for the number of permanent parking stalls provided within the district; 4) proximity - the distance of each parcel measured from the centroid of the parking provided; and, 5) assessed valuation - the assessed valuation of each parcel for ad valorem tax purposes.. During this transition period, interested developers should consult with the Planning, Economic & Community Development Department staff to determine parking requirements and/or the probable cost of participating in the public parking special improvement district. Business Improvement District: In addition to the parking program, the downtown business community and property owners are currently considering the possible implementation of a Business Improvement District (BID). The BID enabling legislation authorizes the City Council to appoint a board of trustees to administer the BID. The board has all powers (7-12-1131 MCA) necessary to carry out the functions of the district contained in the ordinance creating it, including the power to: (1) sue and be sued, enter into contracts, and hire and terminate personnel needed for its purposes; (2) provide special police, maintenance, or cleaning personnel for the protection and enjoyment of the general public using the business district; (3) landscape and beautify public areas and to maintain those areas; (4) contract with the governing body to maintain, operate, or repair public parking facilities; (5) contract with the governing body to maintain streets, alleys, malls, bridges, ramps, tunnels, landscaping, and other public facilities mutually agreed upon; (6) promote private investment and business expansion in the district; (7) provide for the management and administration of the affairs of the district; (8) promote business activity by advertising, decorating, marketing, and promoting and managing events and other actions designed for the general promotion of business activities in the district; and (9) perform such other functions as are necessary to carry out the purposes of this part and to further the objectives of the district. The estimated cost of participating in the BID, if it is formed, will be determined in the summer of 1994. Block 55 Offering Memorandum June 6, 1994 Page 9 At the beginning of this Memorandum it was stated "...It is important to understand that it is not the City's intention to sell the parcel for continued use as a parking lot, but to encourage redevelopment of the parcel to its highest and best use as a multi -story commercial building site expanding downtown density, commerce, employment opportunities and ad valorem tax base." The following discussion is to explain the intent of the City Council based on many discussions of the objectives of the Urban Renewal Plan, their consideration of previous redevelopment proposals in general and discussions when considering passage of RESOLUTION NO. 4154, offering the subject land for sale. Density & Height Considerations: The Kalispell City Council encourages redevelopment proposals that will take maximum advantage of the Parcel(s) potential for urban density and mixed -use development. It wants to encourage construction of a multi -story building with a maximum floor area ratio (FAR's) creating approximately 20,000 square feet of building floor area. Also, it would like to encourage consideration of the provision of public/private structured parking utilizing privately held land in close proximity to the subject. The City has the ability to help finance the public portion of any public/private parking structure through the contribution of tax increment financing and sale of tax exempt bonds for public improvements. The subject real estate has been available for redevelopment since it was acquired by the City. During the past several years, the City has elected not to encourage redevelopment proposals or offers to purchase from developers desiring the land for parking or only single story low density construction. While the City does not have a minimum building height, FAR or density requirement, the Kalispell City Council has advised developers that 20,000 square feet of building floor area would meet its expectations for redevelopment. The City amended its zoning ordinance to increase the maximum building height permitted from 30' to 72' in order to encourage developer consideration of maximum rather than minimum density redevelopment. Another reason for the amendment was to remove restrictive building height limitations which would not permit redeveloper consideration of a mixed -use project combining retail, professional, and/or residential/hotel use of the site. Also, the City has advised interested developers and adjacent property owners it would entertain consideration of participating in financing a parking program to facilitate the highest and best use of the land and to encourage maximum rather than minimum floor area ratios. The City also wants to encourage excellence in building design and location. Additionally, persons considering redevelopment proposals should review and incorporate major goals and specific objectives and mission statements recently developed to help guide the City's redevelopment efforts. They are the product of the Kalispell Development Corporation (KDC), the Kalispell City Council's official advisory board. These "Theme & Density" recommendations, are currently being incorporated into a Urban Land Planning Study for the Block 55 Offering Memorandum June 6, 1994 Page 10 subject property and adjacent neighborhood. All of this information may be obtained by contacting the PECDD office. The Kalispell City Council and KDC, understands redevelopment incentives, the land write -down process, return on investment and the current difficulty developers may have in obtaining financing for significant commercial projects. Therefore, the City will carefully and promptly evaluate all reasonable developer requests for City participation, to the extent permitted by the Montana Urban Renewal Law, for alley vacation (First Alley West), financial participation in a public/private parking structure and the provision of off -site public improvements necessary to facilitate the project. Suggested Sales Price: The City of Kalispell has determined through the review of several real estate appraisals and multiple market comparable, that the real estate offered has a fair market value of: 160 000 Based on the total 17,500 square feet offered for purchase and redevelopment, this represents a minimum price of: 9.14/SF The seller, The City of Kalispell, is interested in receiving offers for ALL CASH ON CLOSING. Please contact Lawrence Gallagher, Director of the City of Kalispell Planning, Economic and Community Development Department for further information or any questions you may have.