13. Valley Bank Development Agreement Extension1heC11y0fKalivll
Incorporated 1892
Manning, Economic &
Community Development Department
P.O. Box 1997
Kalispell, MT 59903-1997
To: Al Thelen - Interim City Manager
From: Lawrence Gallagher
Subject: Valley Bank - Request to Extend Start of Construction
Date: July 25, 1996
248 Third Avenue East
(406) 758-7740
(406) 758-7739 (office fax)
(406) 758-7758 (City Hall fax)
Attached is a formal request from Valley Bank for a one year extension to its
agreement to begin construction of a new bank facility on land purchased from the
- City of Kalispell. The extension date would be December 16, 1997. The reasons
for the Bank's request are clearly stated in Mr. A.J. King's July 1, 1996, letter.
I recommend that the City Council favorably consider and grant the extension and,
at this time, I also recommend against any consideration to repurchase the land
even if Valley Bank elects not to proceed with their construction plans.
Mr. King's letter and request was prompted, in part, by my inquiry for information
needed to respond to questions raised during the City Council review of the
FY 1997 Tax Increment and UDAG Budgets on June 8, 1996. During the meeting,
I was asked why the City had not "taken back" the land the City sold to Valley
Bank, located on the NW corner of Main and 3rd Street West.
The closing on this property took place on December 16, 1994. The sale consisted
of Lots 8, 9, 10, 11, and 12, Block 55, Kalispell Original Townsite. Valley Bank
purchased the 17,500 square foot parcel of land for $160,000, representing $9.14
per square foot, with plans to "construct a new building on the real estate having
not less than two stories with a minimum of 20,000 square feet of floor space."
The offer to purchase was submitted pursuant to the City's Offering Memorandum,
dated June 6, 1994. There were no other offers to purchase the property.
The sale to Valley Bank was authorized by RESOLUTION NO. 4157, dated July 18,
1994. The actual closing and recording of the deed took place on
December 16, 1994, and the property was on the tax rolls as a taxable property as
EWA: kalsilKi
WORTUh1TY
Al Thelen - Interim City Manager
Page 2
July 25, 1996
of the January 1, 1995, assessment date. It pays taxes and also allows the
Kalispell Parking Commission to manage and enjoy the income from the lot. 1 have
attached a "Usage of Revenues" summary furnished by the Parking Commission
showing a gross revenue for FY96 of $1 1,993.83 with the comment that the
43 stall lot is the third most productive lot managed by the Kalispell Parking
Commission.
If the bank development is delayed, the Parking Commission and the parking public
continue to enjoy the usage and income from the lot and it also contributes to the
tax base of the City. At this time, I cannot recommend that the City of Kalispell
could benefit from taking action to deny the request or to repurchase the land from
Valley Bank.
VALLEY BANK OF KA LISPELL
ll3
July 1, 1996
The Honorable Doug Rauthe, Mayor
Members of the Kalispell City Council
City of Kalispell
Honorable Doug Rauthe, Ladies and Gentlemen:
Some time ago the Valley Bank arranged to acquire from the city the
real estate located at the corner of Main and 3rd Avenue West. At
the time, the intent of the Valley Bank was to provide for the
timely construction of a new banking house which would accommodate
our past and future growth.
We have been involved with the architects from Architects Design
Group for approximately one year. During this time, we have arrived
at a floor plan, however, the architectural firm actually has
experienced some upheaval with the exit of the firms leading
architect in this transaction. We understand Mr. Jim Thompson left
Architects Design Group effective January 1, 1996. We were not
apprised for approximately 60 days at which time we were contacted
by members of the firm continuing employment with the firm. A
regular contact was not established until mid -May when we again
commenced working with the firm weekly in hopes of incorporating a
number of needed changes.
We would also wish to point out that effective September 30, 1995,
states rights have again been abridged, by the Congress of the
United States in providing a mechanism to create full "Interstate
Banking".,Through their legislation, a bank or bank holding company
chartered in any state in the Union can purchase the assets of a
commercial bank located within the boundaries of the State of
Montana. To date the banking industry as a whole has witnessed a
major consolidation with the main emphasis developing out of the
nation's money centers. In addition, Montana banks could generate
increased competition arising from the establishment of a branch
system created by the Montana Legislature in the spring of 1997.
Many bankers feel this is the way to expand even though local
directorships, local ownership and local management could be
casualties. Obviously, we are interested in seeing if the Montana
Legislature will find there are benefits in following Idaho, a state
which has allowed full Interstate Branch Banking for years. Idaho
now has only six or eight banks which are headquartered within that
state's boundaries.
Should the worst political situation occur for locally owned
community banks, the best business move for the Valley Bank may be
to entirely forego the construction of a new banking house. Under
these circumstances, by December 16, 1997 the City of Kalispell
would certainly be free to exercise it's right of first refusal,
considering the repurchase of the property at Main and 3rd.
July 1, 1996
The Honorable
Members of the
,Page -2-
Doug Rauthe
Kalispell City Council
In connection with this request, we hope the council is aware, the
Valley Bank has permitted the city parking commission to continue to
manage the lot as a parking lot, to retain all rents accruing while
the property was returned to the tax rolls and the city has been
able to reinvest the purchase price from December 16, 1994 forward.
We hope an agreement will be forthcoming from you as the Kalispell
City authority to permit the Valley Bank to continue ownership of
the real estate in question for the period from December 16, 1996
through December 16, 1997 at which time the city's option to
exercise it's "right of first refusal" may be reinstated.
Sincerely,
A. J. King
President
Enclosure
AJK:dc
943501550,60
P
WARRANTY DEED
CITY OF KALISPELL, a municipal corporation, hereinafter
Grantor, in consideration of One Dollar and other valuable
consideration ($1.00 and OVC), the receipt and sufficiency of which
is hereby acknowledged, hereby grants, bargains, sells, and conveys
unto VALLEY BANK OF KALISPELL, hereinafter Grantee, the following
described real property in the County of Flathead, State of
Montana:
Lots 8, 9, 10, 11, 12, Block 55, Kalispell Original Townsite,
(_ according to the map or plat thereof on file and of record in
�) the office of the Clerk and Recorder of Flathead County,
Montana.
SUBJECT TO terms and conditions contained in Party Wall
Agreement dated May 11, 1901 executed by and between Edward C.
Knight and Carrie C. Knight, Walmsley R..Twining and Emma C.
Twining, Charles D. Conrad and Alicia D. Conrad, recorded
October 4, 1922 in Book 165, Page 339, records of Flathead
County, Montana.
SUBJECT TO building encroachment of 0.6' as shown on
Certificate of Survey No. 3790.
TO HAVE AND TO HOLD the said premises, with their
appurtenances unto the said Grantee, its heirs and assigns forever.
And the said Grantor does hereby covenant to and with the Grantee,
that it is owner in fee simple of said premises; that said premises
are free from all encumbrances and that it will defend the same
from all lawful claims whatsoever.
Covenants and Restrictions: The Valley Bank shall use the
property conveyed hereby only for the purpose of constructing a
banking facility of not less than two stories with a minimum of
20,000 square feet of floor space. Within twenty four months of
closing, Valley Bank shall construct a banking facility upon the
subject property with a value of between $2,000,000 and $3,000,000.
In the event the Valley Bank proposes to use, sell, trade, lease.,
transfer title, or allow the subject property to be used, without
improvements as specified above, for any other purpose than as a
banking facility, Valley Bank hereby grants to the City the right -
of -first -refusal to purchase said property for the sum of $160,000.
IN WITNESS WHEREOF, Grantor has caused this deed to be
executed this %G. day of �.� 01 �,,� �c1.ti. 1994.
Page 1 of 2
3St1,5-64 L
CITY OF KALISPELL,
a municipal corporation
(;�
�p /"� C —
By
f��`
Its 4ayor
ATTEST:
Finance Director
STATE OF MONTANA }
ss
County of Flathead )
r1 /_,,
On this / � day of himL, 1994, before me, the
undersigned, a Notary Public for the State of Montana, personally
appeared Douglas D. Rauthe and Amy H. Robertson, the Mayor and
Finance Director respectively, of the City of Kalispell, a
municipal corporation, the corporation that executed the foregoing
instrument, and the persons who executed said instrument on behalf
of said corporation, and acknowledged to me that such corporation
executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed ny
Notarial Seal the day and year in this certificate first above
written.
,� _•fir %p4'`• `G-
-1C-
STATE OF MONTANA,
ss
County of Flathead
Notary Public, State of Montana
Residing at Kalispell, Montana
My Commission expires
Recorded • of
i
this
day of •at 3.'0 o'clock P M and recorded in
the records of • County,of • ,
Flathead • i ,' • r
RF,CEMON NO •
A w,w��r
• J �-x _
KALISPELL PARKING COMMISSION
424 1 ST AVE. EAST
KALISPELL, MT
AUGUST 2, 1996
MAYOR DOUG RAUTHE AND THE CITY COUNCIL
KALISPELL, MT
DEAR MAYOR AND COUNCIL:
THE KALISPELL PARKING COMMISSION HAS NO OBJECTION TO THE CITY GRANTING
THE VALLEY BANK AN EXTENTION FOR THE PURPOSE OF BUILDING A NEW BANK ON
THE LOT AT 3RD ST. WEST AND MAIN.
FOR BETTER THAN A YEAR THE KPC HAS BEEN AUTHORIZED BY THE VALLEY BANK TO
MANAGE THE LOT FOR PUBLIC PARKING WITHOUT FINANCIAL OBLIGATION. IN
ADDITION, WE HAVE REPLACEMENT PARKING FOR THE CURRENT PERMIT HOLDERS
OF THAT LOT AS WE ARE AT APPROXIMATELY 58% OCCUPANCY IN OUR PERMIT LOTS
(235-255 permits sold each month -of 426 available in 12 lots).
SINCERELY,
BILL EPPERLY
DIRECTOR