05. Resolution 4339 - Haven FieldAgenda -June 16, 1997
AGENDA ITEM 5 - HAVEN FIELD SALE AGREEMENT
BACKGROUND/CONSIDERATION: I have enclosed a copy of the agreement
with Mr. Dasen for the purchase of the Haven Field property. This
is apparently the "best" agreement that the attorneys will agree
to.
This agreement guarantees the City a maximum payment of $124,000
per year for the next 10 years. This payment is in lieu of the
taxes that would be generated by the originally proposed
improvements for this site. When the bids were evaluated, the site
improvements were a major factor in the staff recommendation for
consideration of the Outlaw's proposal. This agreement, in my
opinion, does not meet the spirit or intent of the RFP that was
compiled by the staff and approved by the Council. It does give us
the "tax/revenue" anticipated but does not "guarantee" the
improvements and/or potential new jobs that were presented.
We have had several comments and questions from other potential
developers for the Daley Field outlining concerns about the outcome
of the Haven Field improvements. Those comments center around:
"Why are we shopping bids?"; "Can we depend upon any improvements
being done on Haven Field?"; "What are the improvements going on
Haven Field - can we guarantee them it won't be another
(specific type of business)?"
Agenda -June 16, 1997
I have received a letter from the other bidder for Haven Field
stating that they are disappointed in the outcome of our process,
concerns about the process, and a statement that they do not
anticipate any legal action concerning the "bid shopping".
The agreement does, by requiring the payment of $124,000 annually
(Section 5.5) for 10 years will give Mr. Dasen a great deal of
incentive to perform by constructing improvements that will reduce
this out-of-pocket expense.
RECOMMENDATION: I reluctantly recommend the approval of this
agreement and sale. The contract is not what was desired or
intended, but we are dependent upon this item as a key step in the
development and financing of the ballfield complex and more
indirectly the potential airport improvements. Without the sale of
the field, we cannot proceed to the sale of Daley Field. We are
currently on hold with the Engineers for the ballfield complex
until this item is approved. After approval of this, we will begin
review of the proposed engineering contract for the complex,
complete the lease agreement, and begin the Daley Field offering.
ACTION REQUIRED: RESOLUTION 4339 will need to be approved. This
resolution will approve the sale and the Development Agreement that
is enclosed in this report.
RESOLUTION NO. 4339
A RESOLUTION AUTHORIZING THE SALE OF PORTION OF THE NE'/ OF THE NW1/,
AND THE NW14 OF THE NW1/, SECTION 20, T28N, R21W, FLATHEAD COUNTY,
MONTANA (MORE PARTICULARLY DESCRIBED IN EXHIBIT "A") TO THE OUTLAW
INN, A MONTANA JOINT VENTURE AND AUTHORIZING THE CITY MANAGER TO
ENTER INTO A DEVELOPMENT AGREEMENT WITH THE OUTLAW INN, A MONTANA
JOINT VENTURE.
WHEREAS, the City of Kalispell, a municipal corporation, owns
certain real property described in Exhibit "A", attached
hereto and thereby made a part hereof, and
WHEREAS, by Ordinance No. 1242 the City Council created the
Kalispell City Airport/Athletic Complex Redevelopment
Plan and approved, as an urban renewal project, the sale
of said property to a developer and further authorized
the City to enter into a Development Agreement with a
developer upon terms and conditions consistent with said
Ordinance, and
WHEREAS, on September 9, 1996, the City Council established the
Y fair market value of said property to be in the range of
$4.48 to $5.00 per square foot and offered said property
for sale, and
WHEREAS, The Outlaw Inn, a Montana Joint Venture submitted a
proposal for the purchase of said property and
redevelopment of said property for purposes consistent
with Ordinance No. 1242, and
WHEREAS, the City and The Outlaw Inn have completed negotiations
on a Development Agreement which adequately addresses the
obligation of The Outlaw Inn to redevelop the property,
and
WHEREAS, the City Council desires to sell said property to The
Outlaw Inn for redevelopment as specified in the
Development Agreement, and
WHEREAS, said property is not held in trust for a specific purpose
and an election is not necessary to affect its sale, and
j:wplres\Haven
WHEREAS, the Development Agreement in all respects complies in all
respects with Ordinance No. 1242 and said sale will be in
the best interest of the City of Kalispell and its
inhabitants, and
NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
KALISPELL, AS FOLLOWS:
SECTION I. That the Mayor and Clerk of the Council are hereby
authorized to execute all legal documents necessary
to transfer, by Grant Deed, all the City's right,
title and interest in the property described in
Exhibit "A" to The Outlaw Inn, said sale being
contingent on receipt of the sum of $738,700.00
less any amounts previously received.
SECTION II. That the City Manager and Clerk of Council are
authorized to execute the Development Agreement
with The Outlaw Inn, as approved by the City
Council on date of this Resolution.
PASSED AND APPROVED BY THE CITY COUNCIL AND MAYOR OF THE CITY OF
KALISPELL, THIS DAY OF JUNE, 1997.
DOUGLAS D. RAUTHE - MAYOR
Attest:
Debbie Gifford, CMC
Clerk of Council
j:wplreMaven
EXHIBIT "A"
That portion of the Northeast :/. of the Northwest 1/ and the Northwest
:/ of the Northwest 1/ of Section 20, Township 28 North, Range 21
West, P.M..M., Flathead County, Montana, more particularly described
as follows:
Commencing at the Northeast corner of the Northeast :/ of the
Northwest 1/ of said Section 20; thence along the Northerly line of
said Section 20, North 890 52130" West 1556.90 feet to the
Northeasterly right-of-way of U.S. Highway No. 93; thence along said
Northeasterly right-of-way line, South 330 04119" East 71.70 feet to
the Point of Beginning of the parcel being described; thence
continuing along said Northeasterly right-of-way line, South 330
04119" East 650.27 feet to the Northwesterly right-of-way of Lion
Park Street; thence along said Northwesterly right-of-way line of
said Lion Park Street, North 63o 1210211 East, 281.20 feet to the
Southwesterly right-of-way line of Third Avenue East, said point
being on a 1392.50 foot radius curve concave Southwesterly, having
a radial bearing of South 720 27106" West; thence Northwesterly
along the curve and along the Southwesterly right-of-way line of
Third Avenue East, through a central angle of 190 2411911, 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 890 52130" West 390.92 feet to the
Point of Beginning, containing 4.100 Acres of land, all as shown on
Certificate of Survey No. 12140.
.11
That portion of the Northeast :/ of the Northwest :/a of Section 20,
Township 28 North, Range 21 West, P.M..M., Flathead County, Montana,
more particularly described as follows:
Commencing at the Northeast corner of the Northeast 1/ of the
Northwest 1/4 of said Section 20; thence along the Northerly line of
said Section 20, North 890 52130" West 1556.90 feet to the
Northeasterly right-of-way of U.S. Highway No. 93; thence along said
Northeasterly right-of-way line, South 330 04119" East 721.97 feet
to the Point of Beginning of the parcel being described; thence
continuing along said Northeasterly right-of-way line, South 330
04119" East 85.51 feet, thence North 630 12102" East 255.29 feet, to
the Southwesterly right-of-way line of Third Avenue East, said point
being on a 1392.50 foot radius curve concave Southwesterly, having
a radial bearing of South 760 00156" West, thence Northwesterly
along the curve and along the Southwesterly right-of-way line of
Third Avenue East, through a central angle of 30 33149" an arc
distance of 86.61 feet, thence South 630 12102" West 281.20 feet to
the Point of Beginning, containing 0.524 acres of land and shown as
Lion Park Street on Certificate of Survey No. 12140.
This Agreement made as of , 1997, by and between the City of
Kalispell, a municipal corporation, hereinafter CITY, and The Outlaw Inn, a Montana joint
venture comprised of Richard A. Dasen; Richard A. Dasen as Trustee for the Dasen
Children's Trust; and Southgate Mall Associates LLP, a Montana limited liability
partnership, with its principal place of business at 1701 Highway 93 South in Kalispell,
Montana, hereinafter DEVELOPER:
WITNESSETH:
Whereas, the CITY is a general powers city, existing and organized under the
constitution of the State of Montana; and
Whereas, the CITY has elected to exercise the powers of an urban renewal agency,
pursuant to Title 7, Chapter 15, Parts 42 and 43, Montana Code Annotated as amended (the
"Act") and Ordinance No. 1242, as amended adopted by the City Council on
, 1997; and
Whereas, Ordinance No. 1242 adopted the Kalispell City Airport/Athletic Complex
f-
Redevelopment Plan Analysis as the urban renewal plan (the Redevelopment Plan) for the
.__ urban renewal area known as the Kalispell City Airport/Athletic Complex Redevelopment
Area (the Redevelopment Area); and
Whereas, Ordinance No. 1242 states that in order to implement and effectuate the
Redevelopment Plan, it will be necessary for the CITY to take certain actions with reference
to minimizing hazards to navigation, developing the airport in accordance with an airport
layout plan, increasing development opportunities on nearby properties, promoting
compatible land use in and around the airport, establishing a funding mechanism for airport
properties, and establishing a priority schedule for plan implementation; and
Whereas, the Redevelopment Plan, as adopted and implemented, contains a tax
increment financing provision coextensive with the Redevelopment Area; and
Whereas, Ordinance No. 1242 approved as an urban renewal project the sale of
Haven Field, to be located within the Redevelopment Area (the Project), and authorized
entering into a development agreement with a developer in order to accomplish the
development of the Project, upon terms and conditions consistent with the Act, the
Redevelopment Plan, and Ordinance No. 1242; and
Whereas, DEVELOPER submitted a proposal to purchase said Haven Field and
develop said property in accordance with the Redevelopment Plan,
1Awplout1aw.wpd Page 1 of 17
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
obligations set forth in this Agreement, the parties hereto agree as follows:
ARTICLE 1
Definitions
In this Agreement, unless a different meaning clearly appears from the context:
"Act" means Montana Code Annotated Title 7, Chapter 15, Parts 42 and 43, as
amended.
"Agreement" means this Agreement, as the same may be from time to time modified,
amended or supplemented.
"Assessed Valuation" means the value of real property as determined by the
Department of Revenue in accordance with Montana Code Annotated against which real
property tax is imposed.
"City" means the City of Kalispell, Montana.
"Construction Plans" means the plans, specifications, drawings, and related
documents for the construction work to be performed by the DEVELOPER on the Project
Property, which (a) shall be at least as detailed as the plans, specifications, drawings and
related documents which are submitted to the building official of the CITY and (b) shall
include at least the following: (1) site plans; (2) foundation plans; (3) basement plans;
(4)elevations on all sides; (5) landscaping plan; (6) grading plan; and (7) utility plan.
"Developer" means The Outlaw Inn, a Montana joint venture comprised of Richard
A. Dasen; Richard A. Daseii -as Trustee for the Dasen Children's Trust; and Southgate Mall
Associates LLP, a Montana limited liability partnership.
"Project" means the Project described in Article 2.
"Project Area" means that tract of land bounded by 18t' Street West on the North, 3'
Avenue East on the East, Lions Park Street on the South and U.S. Highway 93 on the West.
"Project Property" means the real property in the Project Area on which the Project
will be constructed, the legal description of which is shown on Exhibit A.
"Redevelopment Area" means those areas of Kalispell which have been designated
by CITY as blighted and therefore desirable for rehabilitation.
IAwp\outtaw.wpd Page 2 of 17
"Redevelopment Plat means the CITY'S overall plan for promoting rehabilitation
of City areas found to be blighted.
"Section" means a Section of this Agreement, unless used in reference to Montana
Code Annotated.
"Site Plans" means the plans to be submitted by the DEVELOPER showing the
Project Area and the Project which will include all on -site improvements, off -site
improvements, and the infrastructure improvements.
"State" means the State of Montana.
"Tax Increment" means that portion of the real estate taxes paid with respect to the
Redevelopment Property which is remitted to the CITY as tax increment pursuant to the Tax
Increment Financing provisions of the Montana Urban Renewal Law.
"Tax Increment Financing Plan" means the Tax Increment Financing Plan for Tax
Increment Financing by the, City Council and dated
"Unavoidable Delay" means a failure or delay in a party's performance of its
obligations under this Agreement, or during any cure period specified in this Agreement
,. which does not entail the mere payment of money, not within the parry's reasonable control,
including but not limited to acts of God, governmental agencies, the other party, strikes,
labor disputes, fire or other casualty, or lack of materials, provided that within 10 days after
a parry impaired by the delay has knowledge of the delay it shall give the other party notice
of the delay and the estimated length of delay, and shall give the other party notice of the
actual delay within 10 days after the cause of the delay has ceased to exist. The parties shall
pursue with reasonable diligence the avoidance and removal of any such delay. Unavoidable
delay shall not extend performance of any obligation unless the notices required in this
definition are given as herein required.
ARTICLE 2
Representations and Warranties
Section 2.1. By Cl i Y. CITY makes the following representations to
DEVELOPER:
(a) The CITY, under the Act and Ordinance No. 1242 has the power and
authority to enter into this Agreement and carry out the obligations hereunder.
IAwp\outlaw.wpd Page 3 of 17
(b) The Project is an "urban renewal project" within the meaning of the
Act and has been approved by the City Council in accordance with the terms
of the Act and Ordinance No. 1242.
(c) The Urban Renewal Plan, as approved by Ordinance No. 1242,
contains a provision for tax increment financing for the Redevelopment Area
and the incrom- ental increase in taxes based on the value of ad valorem
property within the area after the 1996 base year shall be collected, segregated
by the County Treasurer, and transferred to the City for the benefit of the
Redevelopment Area.
(d) The CITY has determined that se,%ver and water utilities necessary to
serve the Project are available within the public rights -of -way adjacent to the
Project Area. The Project Area has adequate access from 18`f' Street West and
3' Avenue East and, subject to Montana Department of Transportation
approval, from U.S. Highway 93 South.
(e) The CITY advises that the Redevelopment Area is subject to building
and use restrictions imposed pursuant to the Kalispell Zoning Ordinance,
including, but not limited to, prohibitions on the display of billboards and/or
off -premises signs.
Section 2.2. By DEVELOPER. DEVELOPER represents and warrants that:
(a) DEVELOPER, a Montana joint venture comprised of Richard A.
Dasen; Richard A. Dasen as Trustee for the Dasen Children's Trust; and
Southgate Mall Associates LLP, a Montana limited liability partnership duly
organized under the laws of the State of Montana, licensed to conduct
business in the State of Montana, has the power to enter into this Agreement,
and has duly authorized the execution, delivery and performance of this
Agreement.
(b) DEVELOPER is ready, willing and able to acquire the Redevelopment
Property from the CITY.
(c) DEVELOPER will, subject to unavoidable delays, construct, operate
and maintain on the Project Property a retail and commercial development
described in the Site Plans, together with all related on -site improvements,
including, but not limited to, off-street parking, landscaping, on -site utilities
and any off -site infrastructure improvements necessary to properly serve the
Project Area (the Project). The parties agree that notwithstanding the Site
Plans, the Project is in the formative stages and may change in both timing
IAwp\outlaw.wpd Page 4 of 17
and occupancy during the development process; however, any and all changes
shall be subject to approval by the CITY.
(d) DEVELOPER estimates that the cost of constructing the Project as
described in (c) is $6,229,700.00 based on the following estimates:
Description of Project Estimated Cost
Land Acquisition $ 738,700.00
Site Improvements $ 560,000.00
Building Construction $4,590,140.00
Cost of Fixtures, Furniture, Equipment
and Inventory $ 340,860.00
TOTAL $6.229.700.00
(e) DEVELOPER estimates, based upon information available to it and the
projected cost of constructing the Project, that the Assessed Valuation of the
improved real property constituting the Project, inclusive of furniture, fixtures,
equipment, and other taxable personal property will be at least $6,229,700.00.
The parties understand that the actual Assessed Valuation of the
DEVELOPER'S portion of the Project as determined by the Montana
Department of Revenue may be greater or lesser than the estimate.
(f) DEVELOPER has obtained, or has available to it, sufficient funding
to complete the construction of the first phase (City Service Expansion) of the
Project and 'agrees to diligently pursue financing for construction of
subsequent phases of the Project.
ARTICLE 3
Infrastructure Improvements
CITY and DEVELOPER agree that there are no significant modifications or
upgrading of off -site improvements necessary for construction of the Project. However, if
any modifications or upgrade of off -site improvements are required, DEVELOPER agrees
to construct any such improvements as part of the Project.
IAwp\outlaw.wpd Page 5 of 17
ARTICLE 4
Lion Park Street
The CITY shall cause to have re -surveyed the Project Property so as to include the
undedicated and undeeded street commonly known as Lion Park Street. DEVELOPER shall
design appropriate access and parking arrangements to complement and encourage the
public use of Lions Park, and shall grant to the CITY an easement of ingress and egress for
the purpose of maintaining a sewer service to the Lion Park Visitor's Center.
Construction of Protect
Section S.l. Site Plans and Construction Plans. DEVELOPER shall submit
Site Plans and Construction Plans to the CITY prior to obtaining any building permits. Site
Plans shall depict the entire Project Area and shall show the location of the Project, the
Infrastructure Improvements and other items required by this Agreement to be shown
therein. The Construction Plans shall provide for the construction of the Project in
conformity with the Redevelopment Plan, the Site Plans, this Agreement, and all applicable
federal, state and local laws and regulations. The CITY shall approve the Construction
Plans in writing if, in the reasonable discretion of the CITY, the Construction Plans:
(a)substantially conform to the Plans and subsequent amendments approved by the CITY;
(b) conform to the terms and conditions of this Agreement; (c) conform to the terms and
conditions of the Redevelopment Plan; (d) conform to all applicable federal, state and local
laws, ordinances, rules and regulations; (e) are adequate to provide for construction of the
Project; and (f) no Event of Default has occurred.
No approval by the CITY of the Construction Plans shall relieve the DEVELOPER
of the obligation to comply with the terms of this Agreement, the terms of the
Redevelopment Plan, applicable federal, state and local laws, ordinances, rules and
regulations, or to properly construct the Project. No approval by the CITY shall constitute
a waiver of an Event of Default. Any disapproval of the Site Plans and Construction Plans
shall set forth the reasons therefore, and shall be made within 30 days after the date of their
receipt by the CITY. If CITY rejects the Site Plans or Construction Plans in whole or in
part, DEVELOPER shall su0 alit new or corrected Site Plans and Construction Plans within
30 days after written notification to DEVELOPER of the rejection. The provisions of this
Section relating to approval, rejection, and re -submission of corrected Site Plans and
Construction Plans shall continue to apply until the Site Plans and Construction Plans have
been approved by the CITY. If the CITY rejects the corrected Site Plans or Construction
Plans, then the DEVELOPER shall have the right to withdraw from this contract and to fully
terminate all of its duties and obligations under this Agreement.
I:\wp\outlaw.wpd Page 6 of 17
Section 5.2. Construction of the Project.
(a) Subject to unavoidable delays, DEVELOPER will construct the Project
without encroachment onto any other property all in accordance with the Site
Plans, the Construction Plans. DEVELOPER will be responsible for the
supervision of and completion of the on -site improvements. Neither party
shall exercise any control over the other regarding their respective areas of
work and division of responsibilities although the parties agree to coordinate
their activities to assure maximum efficiency of the construction process.
(b) All work with respect to the Project shall be in substantial conformity
with the Construction Plans approved by the CITY. DEVELOPER shall
promptly begin and diligently complete all on -site improvements.
DEVELOPER shall make reports, in such detail and at such times as may
reasonably be requested by the CITY, as to the actual progress of
DEVELOPER with respect to construction of the on -site improvements.
(c) DEVELOPER shall not interfere with, or construct any improvements
over, any public street or utility easement without the prior written consent of
- the CITY. All connections to public utility lines and facilities shall be subject
to approval of the CITY and any private utility company involved. All street
and utility installations, relocations, alterations and restorations shall be made
at DEVELOPER'S expense. DEVELOPER, at its own expense, shall replace
any public facilities or utilities damaged during construction of the Project.
Section 5.3. Certificate of Completion.
(a) Promptly after completion of the Project, in accordance with this
Agreement, DEVELOPER should apply for a Certificate of Completion. It
will be incumbent on DEVELOPER to provide the CITY with a certificate of
substantial completion from DEVELOPER' S architect, and the CITY shall
furnish DEVELOPER with an appropriate Certificate of Completion as
conclusive evidence of satisfaction and termination of the agreements and
covenants of this Agreement (excepting those covenants and restrictions
which expressly survive the filing of the Certificate of Completion, and except
those obligations of the DEVELOPER described in Section 2_2. hereof
which pertain to the obligations of DEVELOPER to construct the Project).
(b) If the CITY shall refuse or fail to provide a Certificate of Completion,
the CITY shall, within 15 days after the DEVELOPER provides the
architect's certificate referenced in Section 5.3.(a), provide the DEVELOPER
I:\wp\outlaw.wpd Page 7 of 17
with a written statement specifying in what respect DEVELOPER has failed
to complete the Project in accordance with this Agreement, or is otherwise in
default, and shall specify what measures or acts will be necessary, in the
opinion of the CITY, for DEVELOPER to obtain the Certificate of
Completion.
Section 5.4. Phasing of Completion. Notwithstanding any other term of this
Agreement, the parties specifically agree that the Project can be performed in phases. Thus,
upon completion of a discreet portion of the Project, DEVELOPER may proceed to obtain
a Certificate of Completion for that portion of the Project pursuant to Section 5.3.
Thereafter, the provisions and restrictions of Section 8.2 shall no longer apply to the
completed portion.
Section 5.5. CITY' S Remedy for Failure to Construct. DEVELOPER
recognizes that the CITY intends to utilize ad valorem tax revenue generated by the Project
to finance public improvements to the Kalispell City Airport and other infrastructure
improvements which will be of public benefit. It is contemplated that the Project property
will generate annual tax revenue to the City of Kalispell in the amount of $124,000.00 upon
completion of the Project, exclusive of city or county special assessments. DEVELOPER,
therefore, covenants to pay to the CITY any difference between the amount of tax actually
generated by the Project Property, including any portion of the Project transferred to another
owner, if permitted as hereafter set forth in Section 5.4 and Section 8, and the amount
contemplated by this Agreement for a period of ten years commencing January 1, 1998.
Payment under the provisions of this paragraph shall be made directly to the CITY, after
certifying the tax generated by The Project through the City Finance Department.
ARTICLE 6
Defense of Claims; Insurance; Developer's Risk
Section 6.1. Defens, of Claims. DEVELOPER shall indemnify and hold harmless
the CITY and their respective officers, employees and agents for any loss, damages and
expenses (including attorney's fees) in connection with any claim or proceeding arising from
damages or injuries received or sustained by any person or property by reason of any actions
or omissions of DEVELOPER or its contractors, agents officers or employees under this
Agreement, other than claims or proceedings arising from any negligent or unlawful acts or
omissions of the CITY or their contractors, agents, officers, or employees. Promptly after
receipt by the CITY of notice of the commencement of any action in respect of which
indemnity may be sought against the DEVELOPER under this Section 6.1., the CITY will
notify the DEVELOPER in writing of the commencement thereof, and, subject to the
-- provisions hereinafter stated, the DEVELOPER shall assume the defense of such action
(including the employment of counsel, who shall be counsel satisfactory to the CITY, and
I:\wp\outlaw.wpd Page 8 of 17
the payment of expenses) insofar as such action shall relate to any alleged liability in respect
of which indemnity may be sought against the DEVELOPER. The CITY shall have the
right to employ separate cou.isel in any such action and to participate in the defense thereof,
but the fees and expenses of such counsel shall not be at the expense of the DEVELOPER
unless the employment of such counsel has been specifically authorized by the
DEVELOPER. The omission to notify the DEVELOPER as herein provided will not relieve
it from any liability which it may have to any indemnified party pursuant hereto, otherwise
than under this section.
Section 6.2. Insurance.
(a) DEVELOPER will provide the following insurance at the time it
applies for the necessary building permits for the project and will maintain
such insurance at all times during the process of constructing the Project, and
at the request of the CITY will furnish the CITY with copies of and proof of
payment of premiums on the following insurance:
(i) Builder's risk insurance, written on the so-called "Builder's
Risk --Completed Value Basis", in an amount equal to 100% of the
replacement cost of the Project at the date of completion, naming the
CITY as an additional insured, with coverage on the so-called "all
risk", non -reporting form of policy;
(ii) Comprehensive general public liability insurance, including
personal injury liability (with employee exclusion deleted) and
automobile insurance, including owned, non -owned and hired
automobiles, against liability for injuries to persons and/or property
with respect to the Redevelopment Property, in the minimum amount
for each person of $750,000 and $1,500,000 for each occurrence,
endorsed to show the CITY as an additional insured; and
(iii) Worker's Compensation insurance in compliance with all
statutory requirements.
The policies of insurance required under clauses (i), (ii), and (iii) above shall be in form and
content satisfactory to the CITY and shall be placed with financially sound and reputable
insurers licensed to transact business in the State of Montana. The policies shall contain an
agreement of the insurer to 'give not less than 30 days advanced written notice to CITY in
the event of cancellation of such policy or change affecting the coverage.
(b) The provisions herein with respect to insurance of the Project shall
terminate at such time as DEVELOPER has received a Certificate of
Completion under Section 5.3.
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ARTICLE 7
Payment of Taxes
Section 7. L Taxes. DEVELOPER shall pay when due all real estate taxes and
installments of special assessments payable on the Project Property and any other property
the DEVELOPER owns within Flathead County. DEVELOPER further agrees not to
contest the assessed valuation of the Project Property, inclusive of furniture, fixtures,
equipment, and other taxable personal property up to $6,229,700.00 and further not to
protest the taxes on such property for the first 5 years after completion.
Section 7.2. In Lieu of Payment. DEVELOPER further agrees to make the payment
in lieu of taxes contemplated in Section 5.5.
ARTICLE 8
Prohibitions Against Assignment and Transfer
Section 8.1. Transfer of Ownership. The DEVELOPER recognizes that atransfer
of a controlling interest in the DEVELOPER or any other act of transaction resulting in a
significant change in the ownership are of particular concern to the CITY. Prior to
completion of the Project as certified by the CITY, except in the case of the death or
incompetency of the shareholders of DEVELOPER, (a) there shall be no transfer of any
interest of a shareholder in DEVELOPER, (b) nor shall any officer or shareholder suffer any
such transfer to be made, (c} nor shall there be or be suffered to be by DEVELOPER, any
other similarly significant change in the ownership of DEVELOPER or in the relative
distribution thereof, or with respect to the identity of the parties in control of DEVELOPER
or the degree thereof, by any other method or means.
Section 8.2. Transfer of Property and Assignment. Subject to Section 5.4 and the
leasing of space to tenants in completed portions of the Project, DEVELOPER has not
made and will not make, or suffer to be made, any total or partial sale, assignment,
conveyance, lease, or other transfer, with respect to this Agreement or the Project or
Property or any part thereof or any interest therein, or any contract or agreement to do any
of the same, without the prior written approval of the CITY, which approval shall not be
unreasonably withheld if DEVELOPER has completed the Project. The CITY shall be
entitled to require as conditions to any such approval that: (i) the proposed transferee have
the qualifications and financial responsibility, as reasonably determined by the CITY,
necessary and adequate to fulfill the obligations undertaken in this Agreement by
DEVELOPER, (ii) the proposed transferee, by recordable instrument satisfactory to the
CITY shall, for itself and its successors and assigns, assume all of the obligations of
IAwp\outlaw.wpd Page 10 of 17
DEVELOPER under this Agreement. No transfer of, or change with respect to, ownership
in the Project Property or any part thereof, or any interest therein, however consummated or
occurring and whether voluntary to involuntary, shall operate legally or practically, to
deprive or limit the CITY of or with respect to any rights or remedies or controls provided
in or resulting from this Agreement with respect to the Project Property and the construction
of the Project that the CITY would have had, had there been no such transfer or change.
There shall be submitted to the CITY for review of all legal documents relating to the
transfer.
In the absence of specific written agreement by the CITY to the contrary, no such
transfer or approval by the CITY thereof shall be deemed to relieve DEVELOPER, or any
other party bound in any way by this Agreement, or otherwise with respect to the
construction of the Project, from any of its obligations with respect thereto.
Section 8.3. Information as to Ownership of Developer. DEVELOPER will
promptly notify the CITY of any changes in the ownership of DEVELOPER, or with
respect to the identity of the parties in control of DEVELOPER or the degree thereof, of
which it has been notified or otherwise had knowledge. DEVELOPER shall, at such time
or times as the CITY may request, furnish the CITY with a complete statement, subscribed
and sworn to by an officer of the DEVELOPER, setting forth all of the owners of
DEVELOPER and the extent of their respective holdings.
Section 8.4. Termination of Limitations on Transfer. All provisions contained in
this Article 8 with respect to limitations on the ability of the DEVELOPER to transfer the
Project Property or the Project, or any portion thereof shall terminate with respect to the
Project at such time as a Certificate of Completion has been issued by the CITY under
Section 5.3 of this Agreement with respect to the Project. All provisions contained in this
Article 8 with respect to limitations on the DEVELOPER making changes in its ownership
structure shall terminate at such time as a Certificate of Completion has been issued pursuant
to Section 5.3 with respect to all the Project.
ARTICLE 9
Events of Default
Section 9.1. Events of Default. The following shall be "Events of Default" under
this Agreement and the term "Event of Default" shall mean, whenever it is used in this
Agreement (unless the context otherwise provides), any one or more of the following events
which occurs prior to the issuance of the Certificate of Completion by the CITY under
I:\wp\outlaw.wpd Page 11 of 17
Section 5.3 of this Agreement with respect to the Project and continues for more than 30
c, days after notice by the CITY to DEVELOPER of such default (and the term "default" shall
mean any event which would with the passage of time or giving of notice, or both, be an
"Event of Default" hereunder:
(a) Failure of DEVELOPER to construct phase one (City Service
Center)or to diligently pursue development of subsequent phases of the
Proj ect.
(b) Failure of DEVELOPER to furnish the Site Plans or Construction
Plans for phase one (City Service Center) or subsequent phases.
(c) Failure of DEVELOPER to pay real estate taxes or in lieu thereof, the
payment contemplated in Section 5..5.
(d) Failure of DEVELOPER to observe and perform any other covenant,
condition, obligation or agreement on its part to be observed or performed
hereunder.
(e) If DEVELOPER shall admit in writing its inability to pay its debts
generally as they become due, or shall file a petition in bankruptcy, or shall
make an assignment for the benefit of its creditors, or shall consent to the
appointment of a receiver of itself or of the whole or any substantial part of
the Redevelopment Parry.
(f) If DEVELOPER shall file a petition or answer seeking reorganization
or other arrangement under the federal bankruptcy laws.
(g) If DEVELOPER, on a petition in bankruptcy filed against it, be
adjudicated a bankrupt, or a court of competent jurisdiction shall enter an
order or decree appointing, without the consent of the DEVELOPER, a
receiver of all or substantially all of its property, or approve a petition seeking
reorganization or arrangement under the federal bankruptcy laws, and such
adjudication, order or decree shall not be vacated or set aside or stayed within
60 days from the date of entry thereof.
(h) If DEVELOPER is in default under any Mortgage and fails to cure any
such default within the time period provided for in the Mortgage.
Section 9.2. Remedies on Default. Whenever any Event of Default referred
to in Section 9.1 occurs, the CITY may take any one or more of the following actions:
IAwp\outlaw.wpd Page 12 of 17
(a) Suspend its performance under this Agreement until it receives
assurance from DEVELOPER, deemed adequate by the CITY, that
DEVELOPER will cure its default and continue its performance under this
Agreement.
(b) Terminate all rights of DEVELOPER under this Agreement.
(c) Withhold the Certificate of Completion.
(d) Take whatever action at law or in equity may appear necessary or
desirable to the CITY to enforce performance and observance of any
obligation, agreement, or covenant of the DEVELOPER under this
Agreement.
Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or
reserved to the CITY is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in addition to every other
remedy given under the Agreement or now or hereafter existing at law or in equity or by
statute. No delay or omission to exercise any right or power accruing upon any default shall
impair any such right or power or shall be construed to be a waiver hereof, but any such
right and power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the CITY or DEVELOPER to exercise any remedy reserved
to it, it shall not be necessary to give notice, other than such notice as may be required under
this Agreement.
Section 9.4. Waivers. All waivers by the CITY, shall be in writing. If any
provision of this Agreement is breached by either party and thereafter waived by the other
parry, such waiver shall be' -limited to the particular breach so waived and shall not be
deemed to waive any other concurrent, previous or subsequent breach hereunder.
ARTICLE 10
Additional Provisions
Section 10.1. Conflict of Interests; the City Representatives Not Individually Liable.
No member, official, employee, or consultant or employees of the consultants of the CITY
shall have any personal interest, direct or indirect, in this Agreement, nor shall any such
member, official, consultant or the consultant's employees or employee participate in any
decision relating to this Agreement which affects his or her personal interests or the interests
of any corporation, partnership, or association in which he or she is directly or indirectly
interested. No member, official, consultant or the consultant's employees, or employee of
the CITY shall be personally liable to DEVELOPER, or any successor in interest, in the
event of any default or breach by the CITY or for any amount which may become due to
I:\wp\outlaw.wpd Page 13 of 17
DEVELOPER or successor or on any obligations under the terms of this Agreement.
Section 10.2.Equal Employment Opportunity. DEVELOPER, for itself and its
successors and assigns, agrees that during the construction of the minimum improvements
it will comply with any applicable affirmative action and non-discrimination laws or
regulations.
Section 10.3. Restrictions on Use. DEVELOPER agrees for itself, and its successors
and assigns, and every successor in interest to the Project Property, or any part thereof, that
DEVELOPER, and such successors and assigns, shall devote the Project Property to, and
only to and in accordance with, the uses specified in the Redevelopment Plan and this
Agreement, and shall not discriminate upon the basis of race, color, creed, sex or national
origin in the sale, lease, or rental or in the use of occupancy of the Redevelopment Property
or any improvements erected or to be erected thereon, or any part thereof.
Section 10.4. Titles of Articles and Sections. Any titles of the several parts,
Articles, and Sections of this -Agreement are inserted for convenience of reference only and
shall be disregarded in construing or interpreting any of its provisions.
Section 10.5. Notices and Demands. Except as otherwise expressly provided in
this Agreement, a notice, demand, or other communication under this Agreement by either
party to the other shall be sufficiently given or delivered if it is dispatched by registered or
certified mail, postage prepaid, return receipt requested, or delivered personally; and
(a) in the case of the DEVELOPER, addressed to or delivered personally
to DEVELOPER, at 1701 Highway #93 South, Kalispell, MT 59901.
(b) in the case of the CITY, addressed or delivered personally to the City
Manager, City of Kalispell, PO Box 1997, Kalispell, Montana 59903-1997,
or at such other address with respect to either such party as that party may,
from time to time, designate in writing and forward to the other as provided
in this Section.
Section 10.6. Counterparts. This Agreement is executed in any number of
counterparts, each of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as the date first above written.
(END OF PAGE 14)
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CITY OF KALISPELL, a municipal corporation
By
City Manager
(SEAL)
Ulm
Clerk of Council
OUTLAW INN, a Montana Joint Venture
By: SOUTHGATE MALL ASSOCIATES, LLP,
a Montana limited liability partnership, a Joint
Venturer
By:
GEORGE P. LAMBROS, Authorized
Partnership Representative
RICHARD DASEN, a Joint Venturer
By:
RICHARD DASEN, as Trustee of the Dasen
Children's Trust, a Joint Venturer
"Company"
(END OF PAGE 15)
IAwp\outtaw.wpd Page 15 of 17
STATE OF MONTANA }
ss
County of Flathead )
On this day of , 1992, before me, a Notary Public in and
for the State of Montana, personally appeared Clarence Krepps, and Debbie Gifford, known
to me to be the City Manager and Clerk of Council of the City of Kalispell, a municipality,
that executed the within instrument, and acknowledged that such City Manager and Clerk
of Council subscribed, sealed and delivered said instrument as the free and voluntary act of
said municipality, for the us:,; and purposes therein set forth, and that he was duly authorized
to execute the same on behalf of said municipality.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my Notarial
Seal, the day and year first above written.
STATE OF MONTANA
: ss
County of
Notary Public, State of Montana
Residing at Kalispell, Montana
My Commission Expires
This instrument was acknowledged before me on June , 1997, by GEORGE
P. LAMBROS, the duly authorized partnership representation of SOUTHGATE MALL
ASSOCIATES, LLP, a Joint Venturer of OUTLAW INN, a Montana Joint Venture.
Notary Public, State of Montana
(SEAL) Residing at Kalispell, Montana
My Commission Expires:
(END OF PAGE 16)
IAwp\outlaw.wpd Page 16 of 17
STATE OF MONTANA )
ss
County of )
This instrument was acknowledged before me on June , 1997, by RICHARD
DASEN, a Joint Venturer of OUTLAW INN, a Montana Joint Venture.
(SEAL)
STATE OF MONTANA )
ss
County of )
Notary Public, State of Montana
Residing at
My Commission Expires:
This instrument was acknowledged before me on June , 1997, by RICHARD
DASEN, as the Trusteee of the DASEN CHILDREN'S TRUST, a Joint Venturer of the
OUTLAW INN, a Montana Joint Venture.
Notary Public, State of Montana
Residing at
My Commission Expires:
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