10. Haven Field/Athletic Complex Offering MemorandumAGENDA ITEM 10 - HAVEN FIELD/YOUTH COMPLEX OFFERING MEMORANDUM
BACKGROUND/CONSIDERATION: I have enclosed the offering memorandum,
with the changes suggested by the Council/Mayor. Please review and
be certain that we have them correct.
RECOMMENDATION: Approval of the publication of the offering
memorandum is highly recommended.
ACTION REQUIRED: A MOTION to proceed with the publication and
process for the offering of the sale of Haven Field and Lion's Park
Street is required.
I N T E R
To: Clarence W. Krepps, City Manager
From: Lawrence Gallagher, PECDD Director
Subject: Haven Field Offering Document Change to Prohibit Billboards and
Off -Premises Business Advertising Signs
Date: October 4, 1996
As I reviewed the Haven Field Offering Document and the amendments and other
changes suggested by the City Council during the September 30, 1996, Work
Session, I realized that a redeveloper could submit a proposal to redevelop the site
with billboard and other advertising signs for businesses located off -site.
Additionally, after the land was sold, portions of it could be leased for billboards or
other off -site advertising. I don't believe the City Council, KDC, or citizens of
Kalispell would consider a billboard or several signs as enhancing the entrance to
the City. Therefore, I am suggesting the City Council consider the following
additional language to prohibit, by deed restriction, the display of billboards and/or
off -premise signs:
The City encourages an attractive, aesthetically pleasing signage plan
that shall advertise and promote businesses that are being conducted
on said property. The sign(s) shall meet all required setback and size
requirements as is set forth in the Kalispell Sign Ordinance. The
display of billboards and/or off -premise signs will be prohibited by deed
restriction on all of the land that is the subject of this offering.
I have visited with Glen Neier regarding his opinion of this suggested language and
he has advised me that the City can legally limit permitted uses by deed restriction.
This language has been inserted on page 5 under Zoning and also on page 9 under
Density & Height Considerations. However, if a majority of the City Council does
not approve of this language, it will be taken out of the document before it goes to
final printing.
HAVEN FIELD
Kalispell, Montana
2 Parcels
Up to 201,421 Square Feet Available
Zoned 132 - Highway Commercial
Located at Kalispell's South Entrance
U.S. Hwy 93 Frontage and
Signalized Controlled Access
For Information
Contact
City of Kalispell
Planning, Economic & Community Development Department
P. 0. Box 1997
Kalispell, MT 59903-1997
(406) 758-7740 FAX (406) 758-7739
or
Any Licensed Real Estate Broker you may wish to engage to represent
your interest in the transaction.'
REDEVELOPMENT PROPOSALS ARE DUE NOVEMBER 19, 1996, 11:00 a.m.
This Presentation Was Prepared October 4. 1996
This presentation is not an offer to sell the property described and is, instead, a
solicitation of offers to purchase. Any offer to purchase must be accepted and
approved by Resolution of the City of Kalispell and in accordance with disposition
procedures specified in the Montana Urban Renewal Law and by the City of Kalispell.
Information provided herein is a summary, subject to error and omission, and without
any warranty of accuracy. Prospective purchasers should independently verify any
information provided herein. No real estate listing or agency agreement is implied
directly or indirectly by reason of this presentation.
Property Identification: The property is commonly known as Haven Field and Lion
Park Street. The parcels are currently in public use as a
baseball field and park/street access; however, they have
been rezoned General Business, B-2, for sale and private
commercial redevelopment.
Location: Entering Kalispell, Montana, from the south, the parcels
are highly visible, located immediately adjacent to and
east of U.S. Hwy 93 South. Parcel 2 has over 650' of
highway frontage with Lion Park Street providing an
additional 85.51 ' of frontage. The 220 room Best
Western Outlaw Inn and Convention Center is located just
north of Parcel 2, across 18th Street, providing Signalized
Controlled Access and forming the 390.92' northerly
boundary of Parcel 2.
Lion Park Street, as does 18th Street, currently provides
direct linkage between U.S. Hwy 93 South and
Third Avenue East, an urban collector street providing
linkage to the Minor Arterial Third Avenue East and
Fourth Avenue East couplet providing north/south access
to Idaho Street (U.S. Hwy 2 East) on the east side of
Kalispell.
Neighborhood: The subject property and all of the airport property is
included within the boundaries of the "KALISPELL CITY"
AIRPORT/ATHLETIC COMPLEX REDEVELOPMENT PLAN
(the. "Plan"). The Plan is a comprehensive Urban Renewal
Plan adopted by the City Council, Ordinance No. 1242,
on July 1, 1996, to implement the Airport Neighborhood
Plan adopted in 1993. A map of the Urban Renewal Plan
area and adjacent neighborhoods is attached as Exhibit A.
The 220 room Outlaw Inn and Convention Center is
located north of the subject. Ace Home Hardware is
located at the NE intersection of 18th Street and
Third Avenue East, the subject's easterly boundary.
Lion's Park is south, forming an attractive landscaped
triangle at the intersection of Third Avenue East and
U.S. Hwy 93 South. The Montana Department of
CITY OF KALISPELL REAL ESTATE OFFERING October 4, 1996
Transportation (MDT) is currently designing a new
T-intersection for Third Avenue East and U.S. Hwy 93
South which can be signalized to provide controlled
access to Daley Fields, a 17 acre parcel scheduled to be
offered for private redevelopment in 1997 and located to
the west of U.S. Hwy 93 South. This new signalized
T-intersection at Third Avenue East and U.S. Hwy 93
South will provide yet another controlled highway/arterial
access for the subject.
Kalispell City Airport, Montana's busiest general aviation
airport, is located west of the subject and is the focus of
the City's plan to redevelop the area and the Airport into
an FAA approved general aviation field. The Plan calls for
extension of the runway to 4700', fencing, lighting, and
other safety improvements. The City intends to form an
Airport Authority to manage the facility and to attract.
users, provide more general aviation facilities and
hangers, and, in general, enhance its use as a publicly
owned general aviation filed.
Site Description,
Shape and Size: PARCEL 2: A 178,596 square foot rectangular parcel of
land (4.100 acres) beginning at the southeast corner of
the intersection of 18th Street East and Hwy 93 South;
thence along said northeasterly right-of-way line of
U.S. Hwy 93 South 33004' 19" East 650.27 feet to the
northwesterly right-of-way line of Lion Park Street; thence
along said northwesterly right-of-way line of said Lion
Park Street, North 63012'02" East 281.20 feet to the
southwesterly right-of-way line of Third Avenue East,
thence northwesterly along the curve and along the
southwesterly right-of-way line of Third Avenue East,
through a central angle of 19'24' 19", an arc distance of
471.62 feet to the southerly right-of-way line of
Eighteenth Street East; thence along said southerly line of
said Eighteenth Street East, North 89°52'30" West
390.92 feet to the Point of Beginning.
Lion Park Street: A 22,825 square foot rectangular
parcel of land (.524 acres) beginning at the southwest
corner of said Parcel 2, thence along said northeasterly
CITY OF KALISPELL REAL ESTATE OFFERING October 4, 1996
right-of-way line of U.S. Hwy 93 South 33004119" East
85.51 feet to the northwest corner of said Parcel 3,
South 63' 12'02" West 255.29 feet to. the northeast
corner of said Parcel 3, northwesterly along the curve
86.61 feet to the southeasterly corner of said Parcel 2,
thence along the southerly line of said Parcel 2 to the
point of beginning. A Parcel Map is attached as Exhibit B.
K11iTAI►rT_ WA&J -A
Parcel 2
Lion Park Street
178,596 Sq ft
22,825 Sq ft
201,421 Sa Ft
Record Owner: FEE SIMPLE ESTATE held by THE CITY OF KALISPELL,
MONTANA, a body politic.
Access and Streets: U.S. Hwy 93 South, 18th Street, Third Avenue East, and
Lion Park Street all abut the property. U.S. Hwy 93
South is scheduled for reconstruction in 1998/1999 along
with a new configuration of a signalized Third Avenue
East/U.S. Hwy 93 South T-intersection.
Visibility & Traffic: This site is highly visible from all access points. Recent
traffic counts from the MDT indicate approximately
16,000 ADTs along this stretch of U.S. Hwy 93 South.
MDT has estimated an approximate 27,000 ADTs per day
within 20 years.
Topography: All sites are level or gently sloping .and at street grade.
Soils: No subsoil information or investigation has been
conducted by the City other than a Phase I environmental
audit of the subject, a copy of which will be made
available to interested redevelopers.
Utilities: The site is served by a City of Kalispell 8" sanitary sewer
and a 12" water ,main. Pacific Power and Light furnishes
overhead electrical service to the site. Montana Power
Company has a 2" natural gas main on 3rd Avenue East
CITY OF KALISPELL REAL ESTATE OFFERING October 4, 1996
a
that meets U.S. Hwy 93 South and it has a 4" natural
gas main on 18th Street. PTI Communications provides
telephone service. TV cable service is provided by TCI
Cablevision of Montana, Inc.
Zoning: The site is governed by the CITY OF KALISPELL Zoning
Ordinance, with an effective date of March 19, 1992. A
complete copy of the Zoning Ordinance is available from
the City's Department of Planning, Economic and
Community Development Office.
Both of the parcels are zoned General Business, B-2.
According to CHAPTER 27.14. B-2 GENERAL BUSINESS,
Section 27.14.010 Intent, the B-2 designation is: "A
business district to provide areas for those retail sales
and service functions and businesses whose operations
are typically characterized by outdoor display, storage
and/or sale of merchandise, by major repair of motor
vehicles, and by outdoor commercial amusement and
recreational activities. This district would also serve the
general needs of the tourist and traveler."
For planning purposes, copies of the appropriate sections
of the Kalispell Zoning Ordinance are attached as
EXHIBIT C. These include:
Sections - 27.14.020: Permitted Uses; 27.14.030: Uses
Which May Be Permitted By Conditional Use Permit; and
27.14.040 Property Development Standards (pages 26,
27, and 28 of the Kalispell Zoning Ordinance).
Note: The City encourages an attractive, aesthetically
pleasing signage plan that shall advertise and promote
businesses that are being conducted on said property.
The sign(s) shall meet all required setback and size
requirements as is set forth in the Kalispell Sign
Ordinance. The display of billboards and/or off -premise
signs will be prohibited by deed restriction on all of the
land that is the subject of this offering.
Parking: Parking requirements are governed by Chapter 27.26 of
the Kalispell Zoning Ordinance.
CITY OF KALISPELL REAL ESTATE OFFERING October 4, 1996
lJ
Tax Information and Assessment
The real estate has been "tax exempt" because the City of Kalispell, its current
owner, is a public entity exempt from taxation. Now, it is the City's goal to
encourage the private redevelopment 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 and personal property will be classified and
taxed as:
Section 15-6-134, MCA, 1995:
Class four property - description - taxable percentage.
(1) Class four property 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, property
_ described in subsections (1)(a), (1)(b), and 1(e) is taxed at
3.86% of its market value.
Section 15-6-138, MCA, 1995:
Class eight property - description - taxable percentage.
(1) Class eight property includes:
(h) furniture, fixtures, and equipment, except that specifically
included in another class, used in commercial establishments as
defined in this section;
(3) "Commercial establishment" includes any hotel; motel; office;
petroleum marketing station; or service, wholesale, retail, or food -
handling business.
(4) Class eight property is taxed at:
(a) 9% of its market value for tax years ending on or before
December 31, 1995;
(b) 8% of its market value for tax year 1996;
(c) 7% of its market value for tax year 1997;
CITY OF KALISPELL REAL ESTATE OFFERING October 4, 1996
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(d) 6% of its market value for years beginning after December 31,
1997.
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 and
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 Montana Department of Revenue 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.
CITY OF KALISPELL REAL ESTATE OFFERING October 4, 1996
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 1995 Combined Mill
Levy for all taxing jurisdictions is: .498078
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
TAXABLE VALUE
Market Value of Personal
Property
Class Eight Classification
TAXABLE VALUE
TOTAL MARKET VALUE
Combined Mill Levy 1995
$ 800,000 (market approach)
$2,200,000 (cost approach)
$3,000,000
x .0386
$ 115,800
$ 200,000
x .08
$ 16,000
$ 131.800
x .498078
Ad Valorem TAX DUE 1995 $ 65.646
CITY OF KALISPELL REAL ESTATE OFFERING
October 4, 1996
DRAFT
9
In the example, a new development with a total land and improvement market
value of $3 million and $200,000 in market valued personal property would pay
$65,646 in total Ad Valorem Tax.
Density & Height Considerations:
The Kalispell City Council encourages redevelopment proposals that will take
maximum advantage of the parcel's potential for highest and best use and urban
density redevelopment. It wants to encourage construction of high quality and high
value building(s).
The subject real estate has not previously been available for redevelopment and has
in the past provided both open space and an attractive landscaped entrance to the
community; therefore, the City wants to encourage redevelopment that will
enhance the south entrance to Kalispell as well as meet other objectives of the
Plan.
The City does not encourage redevelopment proposals or offers to purchase from
developers desiring to purchase the land for speculation or for future unspecified
redevelopment phased over a long period of time or to construct only one or a few
single -story low density buildings. While the City does not have a minimum density
development standard or requirement, the Kalispell City Council will carefully
evaluate all proposals and how it impacts the site, the surrounding neighborhood,
and the City's tax base.
Note: The City encourages an attractive, aesthetically pleasing signage plan that
shall advertise and promote businesses that are being conducted on said property.
The sign(s) shall meet all required setback and size requirements as is set forth in
the Kalispell Sign Ordinance. The display of billboards and/or off -premise signs will
be prohibited by deed restriction on all of the land that is the subject of this
offering.
Proposals that represent architectural and site planning excellence will be given
preference in the selection process. Objectives and purpose for the evaluation
include:
(a) Originality, flexibility, and innovation in site planning and development,
including architecture, landscaping, and graphic design of the proposed
development.
(b) Protect and enhance the south entrance to the City and appeal to
residents and visitors and, thus, support and stimulate business and
CITY OF KALISPELL REAL ESTATE OFFERING October 4, 1996
10
industry and promote the desirability of investment and occupancy in
business, commercial, and industrial properties.
(c) Stabilize and improve property values and prevent blighted areas and,
thus, increase tax revenues.
Criteria for evaluation of the proposals will be based upon the documents submitted
in the proposal. All proposals shall include the following information:
(a) A site plan drawn to scale, showing the proposed layout of all structures
and other improvements including driveways, pedestrian walks,
landscaped areas, fences, walls, off-street parking, and loading areas.
The site plan shall indicate the location of entrances and exits and the
direction of traffic flow into and out of off-street parking and loading
areas, and indicate how exterior lighting, utility service, and drainage will
be provided.
(b) Architectural drawings or sketches, drawn to scale, including preliminary
floor plans, with sufficient detail to permit computation of all site
development criteria (i.e. setbacks, lot coverage, off-street parking
requirements, building heights). The drawings will show all elevations of
the proposed structures and other improvements as they will appear
upon completion, including all roof mounted equipment, trash storage
areas, and utility equipment.
(c) Specifications as to type, color, and texture of exterior surfaces of the
proposed structures, including signage, graphics, and illumination.
The Kalispell City Council and its advisory board, the Kalispell Development
Corporation, understands redevelopment incentives, the land write -down process,
return on investment, and the difficulty developers may have in securing firm
financial commitments and 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
assistance with off -site improvement(s), relocation(s), the closure, abandonment or
vacation of Lion Park Street, and the provision of off -site public improvements
necessary to facilitate the project.
CITY OF KALISPELL REAL ESTATE OFFERING October 4, 1996
11
Suggested Sales Price:
The City of Kalispell has determined, through the review of several real estate
appraisals and multiple market comparables, that the real estate offered has a range
of value from:
Parcel 2: $800,000 ($4.48/SF) to $892,980 ($5.00/SF)
Lion Park Street: $4.48 - $5.00 per square foot
Although the City is free to entertain a higher offer for the property, its objective is
to encourage highest and best use, excellence in design and siting, employment or
job creation, and the highest possible market valuation for ad valorem tax purposes.
Proposals may include all or part but only contiguous portions of Lion Park Street
required to enhance the redevelopment of Parcel 2, provide ingress, egress,
landscaping, or to increase density and value of the redevelopment project.
Additionally, proposals to purchase all or portions of Lion Park Street must
incorporate in the redevelopment plan, both public parking and pedestrian access to
encourage the passive recreation use of Lion's Park and indicate how the Park will
be incorporated into the comprehensive redevelopment plan of the area.
The seller, the City of Kalispell, is interested in receiving offers for ALL CASH ON
CLOSING.
Selection - Determination of Fair Value:
The City may select the redevelopment proposal and base its final determination of
the fair value for the land not only on the purchase price offered but also on criteria
discussed in this document, the Goals discussed in the KALISPELL CITY AIRPORT
NEIGHBORHOOD PLAN (Chapter 6, attached as EXHIBIT D), and the "KALISPELL
CITY" AIRPORT/ATHLETIC COMPLEX REDEVELOPMENT PLAN (Ordinance
No. 1242, attached as EXHIBIT E).
The Kalispell City Council may select the redevelopment proposal that offers the
minimum price and best addresses.the goals and objectives of the Plan and offering
criteria vs. a redevelopment proposal offering a higher purchase price yet failing to
or only minimially addressing offering criteria.
Actual sale of any property subject to this solicitation of offers to purchase real
estate may only be accomplished in accordance with Section 7-15-4263, Montana
Code Annotated. The City will begin legally advertising the property on
CITY OF KALISPELL REAL ESTATE OFFERING October 4, 1996
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October 27, 1996, and again on November 3, 1996, and November 10, 1996, so
that redevelopment proposals will be accepted at 11:00 a.m. Mountain Standard
Time, November 19. 1996, at Council Chambers, Kalispell City Hall. All proposals
will be considered for approval and passage of a resolution authorizing the sale of
the property on December 2, 1996, but in no event later than December 16, 1996.
The selected redeveloper must be willing to execute a Developers Agreement
demonstrating both financial and legal ability to complete the proposed
redevelopment within the agreed time and for the amount specified in the
redevelopment proposal.
Section 7-15-4263, MCA, 1995, states as follows:
Procedure to dispose of property to private persons.
(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 Section 7-15-4262 and
Section 7-15-4264, and deliver contracts, deeds, leases, and other
instruments of transfer.
E r. 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:
proposal's 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 the 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 City 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 prior to or after the purchase.
CITY OF KALISPELL REAL ESTATE OFFERING October 4, 1996
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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 sixty (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 sixty (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 Airport Neighborhood Plan area. Publication and mailing must be accomplished
in a window between not less than ten (10) nor more than thirty (30) days prior to
the hearing.
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
twelve (12) days apart, and the ordinance becomes effective thirty (30) days after
its final passage.
This synopsis of the requirements of the Urban Renewal Law is not intended to be
an indepth 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.
1. Representation by a Licensed Real Estate Broker: The City of Kalispell (seller) is
represented by its employees in any real estate offering, negotiation, or transaction.
In the event the buyer is interested. in making an offer to purchase the property, it
may employ its own agent to review the transaction, represent it, and the buyer
should pay its agent's fee. The basis of the fee is a matter between the buyer
(redeveloper) and its agent.
Buyers are encouraged to consider the advantages of engaging a Licensed Real
Estate Broker to act as their exclusive agent, providing professional representation
CITY OFKALISPELL REAL ESTATE OFFERING •
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and legally negotiating for their interests in areas of: price, special conditions, dates
of possession/project completion, participation in off site development costs, or
generally representing the interest and objectives of the Buyer.
Agency representation must be disclosed in writing by both the buyer and agent. If
the buyer's agent's fee is to be paid at the time of closing from proceeds placed in
escrow by the buyer, such information must be disclosed and included in the
buyer's Offer to Purchase.
THE BUYER MAY, OF COURSE, ELECT TO PROCEED WITHOUT REPRESENTATION.
CITY OF KALISPELL REAL ESTATE OFFERING October 4, 1996