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8. State Lands LetterIncorporated 1892 Telephone (406) 758-7700 FAX (406) 758-7758 Post Office Box 1997 Kalispell, Montana Zip 59903-1997 February 20, 1996 Mr. Jeff Hagener Land Division Administrator Department of State Lands State of Montana Post Office Box 201601 Helena, MT 59620-1601 Re.: Formal Request to Enter Into a Lease Agreement for the SE1/4, Sec. 36, T29N, R22W, Flathead County, Montana, Current Lease: Renewal Lease No. 2252, dated 2-28-87 Lessee: Clinton Grosswiler Dear Mr. Hagener: The Kalispell City Council hereby notifies you of the City's desire to enter into a formal lease agreement with the -- Montana Department of State Lands for the Southeast Quarter, Section 36, Township 29 North, Range 22 West, Flathead County, Montana, and reclassify the quarter section from its current Class 1 and Class 3 designations to Class 4 lands whose principal value is for uses other than grazing, crop production, timber production, or watershed protection. We propose that the lease be for the maximum permitted period of time, which we understand to be 40 years under the requested classification. BACKGROUND The Department of State Lands has leased the East Half of Section 36 (subject to 9.086 acre right-of-way issued to the Montana State Forester) to Mr. Clinton Grosswiler, 1975 West Valley Drive, Kalispell, Montana, pursuant to the terms of an Agreement dated February 28, 1987. The land is presently used for agricultural crop production. The City requests permission to develop the quarter section in order to fulfill a public demand to accommodate approximately 223,000 annual hours of youth athletic activities (non -school related) presently conducted elsewhere throughout the community. Youth baseball, softball, and soccer activities continue to grow, reflecting the overall population patterns in Flathead County. Most of these activities presently occur on land surrounding the Kalispell City Airport which is designated for alternative development. Douglas Rauthe Mayor Bruce Williams City Manager City Council Members: Gary W. Nystul Ward I Cliff Collins Ward I Norbert F. Donahue Ward II Dale Haarr Ward II Jim Atkinson Ward III Lauren Granmo Ward III Pamela B. Kennedy Ward IV M. Duane Larson Ward IV Mr. Jeff Hagener February 20, 1996 Page 2 Some of the existing fields fail 1 standards. The 160 acre youth athlet Southeast Quarter of Section 36 will and foreseeable, anticipated increases this development could not be better, youth athletic fields are destined for near future. o meet minimum safety design is complex proposed for the accommodate present demands in those demands. Timing of since many of the existing other uses in the relatively The City Council adopted a Kalispell City Airport Master Plan in 1995 and is presently in the process of developing options to implement it. The Plan calls for the redevelopment of the Kalispell City Airport to assure a safe and secure,general aviation airport, one consequence of which will be the displacement of many youth athletic fields. The airport project enjoys the support of local pilots, fixed base operators, adjacent property owners, local businesses and representatives of the Montana Aeronautics Division of the Montana Department of Transportation. PROPOSAL Reclassification of the Southeast Quarter of Section 36 to a Class 4 designation will allow commitment of the substantial financial resources necessary to develop the youth athletic complex. It is anticipated that development will occur in phases, although completing demands for property surrounding the Kalispell City Airport may require the prompt development of a significant portion of the 160 acres. That portion of the 160 acres not converted to youth athletic activities will continue to be used for agricultural purposes by the present lessee, or any other approved lessee, in the event Mr. Grosswiler elects to discontinue farming activities on Section 36. Due to the strategic location of the site and its importance to providing youth athletic facilities on a long term basis, this proposal appears to satisfy the Multiple Use Management concept defined in Section 71-1-203, MCA. Positive attributes for the site include its accessability, proximity to municipal services and utilities, and suitable soils and topography. It is located immediately west of Flathead Valley Community College and adjacent to U.S. Highway 93 North, which is scheduled to be reconstructed and widened this year. Adjacent to the site, the Highway will consist of five traffic lanes, including four travel lanes and a center turn lane. A stop light is presently located at the southeast corner of the site, where Four Mile Drive intersects with Highway 93. City water is also available at this intersection, and Kalispell's current budget includes funds to extend a sanitary sewer line parallel to Highway 93 North to Reserve Drive, which borders Section 36 on the north. Mr. Jeff Hagener February 20, 1996 Page 3 The topography of the 160 acres is generally flat to gently rolling, and lends itself well to the intended use. The irregular topography would promote creative site design, allowing effective separation of uses. The soils appear to be suitable, as the site has been productively farmed since the early 1900s. There are no known environmental constraints on the property. We have reviewed the information package you forwarded to us, including surface management rules, and find nothing to prohibit your Department's favorable consideration of this request. We acknowledge the powers and duties of the Board of Land Commissioners and the guiding rule that it exercise its powers to assure that "...lands and funds are held in trust for the support of education and for the attainment of other worthy objects helpful to the well-being of the people of this state." We believe this proposal has merit and will satisfy the missions of the Board. ECONOMIC FEASIBILITY Funds for development of the youth athletic complex will be derived from several sources. First, the Kalispell City Airport Master Plan includes within its boundaries property located east of U.S. Highway 93 South which consists of approximately four acres and is presently used and known as the Haven baseball fields. As part of the City's Airport Master Plan, these fields are intended for sale and the funds derived from said sale will be used for development of the youth athletic complex. Additionally, a public/private partnership is being created between the City of Kalispell and the four youth athletic programs which are being displaced as a result of airport development and will be relocated to the new site. These organizations will contribute cash or in kind toward the project's design and development in an amount yet to be determined by the City and these organizations. The Haven's ballfield site was appraised in 1995 at $790,000.00 and, although the exact sales price is unknown, it will be the net realized dollars from the sale which will be committed by the City of Kalispell to the project. The four youth organizations, namely: Kalispell Pee Wee Baseball, Kalispell Babe Ruth League, Greater Kalispell Youth Soccer Association, and the Kalispell Youth Softball Association enjoy favorable reputations throughout the community and provide youth athletic activities for approximately 4,000 youngsters. The City is confident of their ability to generate cash and in kind contributions toward development of the site which will satisfy their partnership commitment to assist in development of the complex. Mr. Jeff Hagener February 20,1996 Page 4 ECONOMIC PROPOSAL Presently, the leased land provides revenue to the Montana Department of State Lands through a crop -sharing arrangement. Our best estimate is that this site generates approximately $50,000.00 annually for the benefit of this State's public schools. In consideration for entering into the Master Lease Agreement with the City of Kalispell for the Southeast Quarter of Section 36, the City of Kalispell proposes for the first five years of the lease to compensate the Department at the average compensation realized by it from this quarter section over the past five calendar years, plus ten percent (10%). This will allow allocation of available funds toward development over the near term; thereafter we anticipate adjustment to the annual lease rental consistent with adjustment factors customarily used by the Department in similar situations. We believe that this economic package fulfills the mandate of the Board of Land Commissioners, recognizes the interest of the people of the State of Montana, and perpetuates the beneficial public use to which the land will be put. This package is not submitted as a take it or leave it proposal, and the City of Kalispell remains available to discuss alternatives and refine this package. Development of the complex may also be an appropriate opportunity to use available Resource Development Account funds for construction of infrastructure. We anticipate exploring this, possibility with you further as development plans begin taking shape. CURRENT LESSEE The current lessee, Clinton Grosswiler, has been apprised of the City of Kalispell's objectives and he fully supports the proposed development of the Southeast Quarter as a youth athletic complex, plus the continued availability of the land for agricultural purposes until such time as it is developed by the city. He concurs with the removal of the Southeast Quarter of Section 36 from his existing lease and has separately provided notice of his consent, which accompanies this proposal. Mr. Jeff Hagener February 20, 1996 Page 5 CONCLUSION The City of Kalispell is in rather a unique position. It is not often that public entities are presented opportunities that include a "win -win" outcome. Specifically, the Kalispell City Airport Master Plan will permit the development of a modern, efficient, and economically desirable general aviation airport on the City's southern border. At the same time, the sale of land in the vicinity of the Kalispell City Airport will generate revenue. which, together with the cash and in kind contributions of affected youth organizations, will permit development of a state-of-the-art youth athletic complex at the City's northern boundary, which will provide facilities for conducting youth athletic activities that will benefit the entire Flathead Valley. It is our goal to be favorably positioned to permit design and the beginning of on -site development activities this spring. Therefore, your prompt consideration of this request will be greatly appreciated, and we remain available to work both diligently and earnestly with the Department of State Lands to accomplish these worthwhile objectives. Very truly yours, Douglas D. Rauthe Mayor City of Kalispell DDR/ksk