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Letter to Barbieri (Not on Agenda)t t Incorporated 1892 Telephone (406) 758-7700 FAX (406) 758-7758 Post Office Box 1997 Kalispell, Montana Zip 59903-1997 March 1, 1996 Mr. Thomas M. Barbieri Vice President Goodale & Barbieri Companies W. 201 North River Drive Spokane, WA 99201 Dear Mr. Barbieri: 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 Gram -no Ward III Pamela B. Kennedy Ward IV M. Duane Larson Ward IV This letter is in response to your February 23, 1996, letter requesting a "Commitment in Principle" to use Tax Increment Financing for the expansion of the Kalispell Center Mall (the "Center"). The City Council of the City of Kalispell is prepared to commit in principle to the use of tax increment for the expansion of the Center. The decision to make this commitment was preceded by a lengthy discussion during which Council members voiced several concerns and caveats your company must take into consideration and address before continuing beyond this "Commitment in Principle." Issues of concern to members of the Council all relate to the need for your company to furnish the City a thorough and detailed description of the entire project proposed to be developed so that the City may fully evaluate and analyze all of the financial impacts. Also, the City reserves the option to explore all available methods of financing which may be used singularly or in combination with any commitment of Tax Increment Financing. Council members generally agreed that at this stage of negotiations you should be advised they would prefer that you consider a request that the City become involved Mr. Thomas M. Barbieri Page Two March 1, 1996 in acquisition of land and improvements located north of the Center rather than a request for public financing and/or construction of a parking structure located on the south side of the Center. The City Council wants to emphasize that they will not favorably consider any request from your company which may reduce or jeopardize the present value of the City's subordinate financing of the Center or any request by you to release your family from its personal guarantees that the subordinated debt will be repaid in full. The City acknowledges that it will be necessary to restructure the debt on the Center and also calls your attention to the provisions of the Secondary Loan Agreement dealing with the City's participation in sale or refinancing proceeds. This. letter is provided at this stage so that you may proceed as soon as possible with the preparation of a more detailed plan for our further review along with the refinancing complexities so that we may evaluate it and determine if it is in the best interest of the City of Kalispell to proceed further with our public/private partnership. We look forward to working with you. Sincerely, o 1� Douglas Rauthe Mayor of the City of Kalispell