5. Kalispell Downtown Center Request/IrwinAgenda -August 18, 1997
AGENDA ITEM 5 - KALISPELL DOWNTOWN CENTER REQUEST-IRWIN REQUEST
BACKGROUND/CONSIDERATION: Enclosed is a memorandum I received from
David Irwin, the developer interested in the KDC site. This is the
group that has been in discussion with the development staff and me
over the past few months. This is a very general outline of the
proposal to purchase and develop the downtown site. They
(developers) intend to present the concept to you at this meeting.
Larry Gallagher and I believe we should not go further with this
project until you see the concept and give us further direction.
F To answer a question that I am sure will be brought up - the City
staff did not initiate the City lease portion of the proposal nor
have we encouraged this approach. We do believe we need to analyze
their proposal based upon the full presentation they now have. We
have not seen this current rendition of the project nor have we
received a proposal for this site. You will see the formal offer
to purchase the property at the same time the staff sees it.
RECOMMENDATION: Without knowing the development proposal, economic
and actual improvements, we have not been able to analyze the
value, pay backs, strengths, or shortcomings of the proposed
project. Although the KDC Board will begin review of the proposal
Agenda -August 18, 1997
on the morning of August 18", we will not be ready to make any
recommendations at this meeting. As an opportunity to work with a
development team for improvements for this site (that has been
sitting for a length of time), I would recommend we formally
receive the offer to purchase the property, direct the staff to
analyze the proposal, negotiate with the developer, and allow staff
sufficient time to respond with a full review of the proposal. I
suggest no later than the September 15ei Council Meeting for review
and poziUble approval of the offer (depending upon our analysis).
ACTION REQUIRED: A NOTION directing staff to review the proposal
with a recommendation to the Council no later than September 15rh.
Any comments you may have at this meeting will be helpful in our
analysis of the proposal.
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TO: CLARENCE W. KREPPS AUGUST 10, 1997
FM: DAVID IRWIN
RE: KALISPEi _ DOYMTOWN CENTER
Per Larry Gallagher's request, I have provided a brief description of the project for
inclusion in your City Council agenda package. On Monday, August 18th, we will present the
project in greater detail and submit a formal offer to purchase the property.
Since April of this year, a group of real estate professionals and investors has been
evaluating the potential of developing the property currently owned by the City, known as
Kalispell Downtown Center. The result . of their efforts is Kalispell Center, a master plan to
develop the property for approximately 63,000 square feet of office and retail space. Kalispell
Center will be developed in three phases. The first phase will involve renovation of the existing
National Flood Building and construction of a 13,000-square foot building at the northwest
corner of East First Street and let Avenue East. The second phase will include another new
13,000-square foot building at the southwest corner of Center Street and 1st Avenue East. The
final phase will consist of a 30,000-square foot building to be built at the northeast corner of
Main Street and East First Street.
On -grade parking for the project will be provided between the buildings and at the
exissting parking lot at the southwest corner of East First Street and 1st Avenue East. A parking
variance will be required to allow the inclusion of existing on -street parking adjoining the
property into the project's parking count. The project will not require the vacation of any
public right-of-way or the acquisition of any additional property beyond what the City has
already purchased.
Given the size of the project, and the tenant commitment necessary to ensure its success,
the developers will be requesting a commitment from the City to lease approximately 6,000.
7,500 square feet as part of the first phase of the project. to addition to "kicking off" this
project, we believe the leasing of space by the City will also solve some of its many problems
involving space needs.
Closing on the entire property and construction commencement of the first phase will
occur in approximately March of 1998, with occupancy of the first phase coming later that
year. Subsequent phases would be developed based on market demand, although we believe the
entire project would be completed in the next 3-4 years.
At this point, the project team consists of the following:
David Irwin and Mark Davis of Redmond, WA. will serve as development managers and point of
contact for the project.
David Thornquist of Woods & Water Really will serve as local broker/representative.
Klemie & Hagood Company of Spokane, WA will market the project outside of the Kalispell area
and may also provkje for the property management of the project upon completion. indlvidu21S
at Kiemie & Hagood working on this project include Tom Oulgly, Mac Whiteford, and Tom
Aug 11 97 08:20a
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Carstarphen.
Bernardo Wills, Architects of Spokane, WA will be the project architect. Gary Bemardo is the
principal Involved.
Kiemle & Hagood Company is also working with investment clients who would be passive
investors and not involved in the day-to-day operations of the project. Some of those noted above
would also be equity participants in the project.
The project team believes that they have gone as far as they can with the deve oprnent of
the project Concept without more formal feedback and input from the City. To that and, we wHl
be presenting the results of our efforts next week and lock forward to the involvement of the
City Council in seeing the project to its conclusion.