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