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Eastside Brick Response to City Non-Compliance LetterTo City Of Kalispell Council, Thank you for your concern in regards to our project known as `Courthouse East'. As you may know in August, we had to suspend most construction operations due to lack of financing from our previous investor. Since then, we have secured financing from First Interstate. We are very happy to have a local lender as was our intent from the onset of the project. Unfortunately, the loss of 2 %z months of prime construction season will affect our closing dates. Phase 1 & 2 will be completed concurrently March/April. May will be a buffer leading into Phase 3. Phase 4 should still be the fall/winter of ' 07. DEV has truly appreciated the support from the Council and Community. It is unfortunate that there are some that are unhappy about the situation and we understand and wish to address those as soon as possible. We have started weed control and yard maintenance and will address the remaining listed issues on the site immediately. Ninety percent of the windows are on site for the Main part of the building. 35% are installed and the remaining is being installed currently. Once we finalized the winter construction schedule, we will forward that on to you. It will outline all major tasks and construction related to Phase 1 & 2. That should be in the next two weeks. Thank you and if you have future concerns, feel free to contact Vince or myself. Thank you, Eric Berry DEV Properties LLC James Patrick From: Tom Jentz [tjentz@kalispell.com] Sent: Thursday, October 05, 2006 8:36 AM To: James Patrick Subject: Courthouse East Jim 406.756.8563 office 406.756.0032 fax Eastside Brick eric�,c!evproperfies.com DEV Properties LLC 206.214.5210 Eric.cell 723 sit, Ave East 406.270.6692 Vince.cell EB Response fo City NonCompliance (2).doc Kalispell, MT 59901 1 of 3 10/30/2006 9:44:16 PM 'M i KACISPELL Vince Padilla's phone numbers are 270-6692 or 756-8563. I toured the site and have the following comments concerning trash, weeds and unsightliness: South side - piles of used lumber, piles of broken asphalt, stacks of heaters, fans and a tank, weeds in the fence weeds along the curb line. Lumber to be moved inside, materials to be recycled/salvaged to be consolidated. Weeds have been cut. East side: Construction trailer parked on the city boulevard outside of the fence Trailer is Hammerquist & Casalegno (different project). It has since been moved. North side: Stacks of used brick, radiators and 2 fishing boats, 3 vehicles and a truck, sinks, doors and windows stacked against the building, a fuel tank Bricks are to be reused, will be consolidated once grading is finished this winter. Doors, windows, radiators, fuel tank and old equipment will be removed. Fishing season is over, so the boat will be moved, but may be back in spring. ( There is only one boat). All work related vehicles are and will remain on site parked in construction areas. West side: construction trailer at very NW corner almost in clear site triangle, tree branches strewn on the boulevard. Work trailer will be moved to interior of project site unless construction mandates its movement around site. Site has been mowed but generally contains tale weeds scattered throughout. Open foundation hole in middle of parking lot. Foundation to be addressed as weather permits this winter. Condition 5 of the PUD states, "A plan shall be in place that addresses the grading, re — vegetation, irrigation and maintenance of the undeveloped areas that creates a weed free, dust free area until such time as that phase is fully developed. Weeds have been cut. Dust has been minimal or non-existent. Condition 14 states, "Refuse areas are adequately screened from public view." I think this refers to long term operations, not construction but it fits. Refuse has been loaded and hauled. We have a permanent dump truck and trailer for debris. 406.756.8563 office 406,756.0032 fax Eastside Brick ericCdevproperties.com DEV Properties LLC 206.214.5210 Eric.cell 723 5tr, Ave East 406.270.6692 Vince.cell EB Response to City NonCompliance (2).doc Kalispell, MT 59901 2 of 3 10/30/2006 9:44:16 PM The project is to be substantially completed by July 1, 2008 and Phase 1 is to be done We are still on target for this. Phase 1 of the project is to be completed by December 2005 included replacement of all windows and exterior restorations. This is only 15% completed. Windows should be replaced by December 2006 except for the North end. We are still working on alternatives that are aesthetically pleasing and in line with Historical Society standards. Phase 2 is to be completed by December 2006 and includes parking lot prep and landscaping. This has not begun. We expect this to be substantially completed minus the asphalt (weather permitting). Recommendation: Call Vince, write Vince let him know he is in violation of his performance and phasing plan. Tell him to immediately clean up the site, get all material in middle of site or off site and stacked stored out of site. Now/trim/prune the site. Fix broken and bent fence areas, in next 45 days. Give us a new time frame in 45 days. If no compliance, face withdrawal of PUD. Take care — Tom We will do accordingly within 45 days. 406.756.8563 office 406.756.0032 fax Eastside Brick eric�a�devproperties. cam DEv Properties LLC 206.214.5210 Eric.cell 723 5th Ave East 406.270.6692 vince.cell EB Response to City NonCompliance (2).doc Kalispell, MT 59901 3 of 3 10/30/2006 9:44:16 PM October 11, 2006 DEV Properties, LLC C/O Vince Padilla; Eric Berry; Gerald Scott; and Dave Rickert 723 51h Ave. E. Kalispell, MT 59901 Dear Vince, Eric, Gerald and Dave: First Interstate Bank — Evergreen is pleased to extend the following credit to you with the terms and conditions summarized as follows: Amount $2,000,000 (Phase 1 — non -revolving construction line. Note: Gerald Scott's $500,000 would all go into Phase I or the coffeehouse/gas/electrical/water). Rate 9% The interest rate would be fixed. Term 18 months Fees $56,000 $38,000 First Interstate Bank; $18,000 Mann Mortgage Additional fees are appraisal, title insurance; recording; misc. Fees can be financed or paid in cash. Repayment Sale of residential condos or professional business units. Collateral lst DOT on 723 5th Ave. E., Kalispell, MT Purpose To provide construction funds to Phase I of the Eastside Brick Project. Agreement Monthly interest; annual personal financial statements; tax returns Insurance on business assets; possible architect/engineer inspections Guarantors Vince Padilla; Eric Berry; Gerald Scott; and Dave Rickert We may need to discuss the actual money necessary to complete Phase 1 but if my notes serve me correctly the total cost to finish Phase 1 is $2,500,000 counting the inflation buffer. Gerald Scott's $300,000 in cash will reduce bank financing to $2,200,000. Initially, the bank would not pay off the parking lot loan simply because the existing terms favor you greatly, however, depending on what type of value is issued from the new appraisal without the parking lot, the bank may need to pay it off. The bank's intent would be to look at financing on Phase II upon completion of Phase I. Then Phase III if necessary upon completion of Phase II. The new appraisal would be completed by Don McBurney. If you have any questions I can be reached at 758-7606. My plan would be to sit down with you in the next day or two to discuss the terms in person. Sincerely, Charles K. Eble Branch Manager/VP Page 1 of 2 September 29th, 2006 Mr. PJ Sorenson, Zoning Administrator City of Kalispell PO Box 1997 Kalispell MT 59901 Re: Ordinance #1538 / Old Hospital 700 block 5th Ave. East Dear Mr. Sorenson, Over a year and a half ago East Side residents were asked to accept a breathtakingly intense zone change and PUD in exchange for the immediate exterior improvements to city block #203. As neighbors to the proposed project we sincerely appreciated the Council Members and planning staff deliberately including conditions intended to provide our neighborhood with relief from it's blighted exterior appearance by December 2005. (The close of Phase One) Per condition #15 of the PUD agreement (Ordinance #1538) DEV Properties LLC was required to complete the Landscaping, Continuous Sidewalk System, Boulevard treatments, Exterior building treatments & restorations (pressure washing, painting, window restoration, etc; by December 2005 However, with the exception of incomplete window restoration and some partial spray painting, the property's exterior is still the blight it was a year and a half ago and continues to negatively impact our neighborhood and our community at large. • The buildings are a mayhem of broken glass and windows, some patched with scraps of mismatched materials. (Silver metallic insulation, wall paneling, etc,) creating a wholly chaotic look. • The original exterior cornice work remains in it's deteriorative state • The front entrance is a shambles... still boasting weeds, shattered plate glass doors disheveled & faded signage from previous owners, all of which is surrounded by the foreboding 6 foot chain link fence. • Little or no exterior work has been done to either the north or south wing. • Old toilets, sinks, fluorescent bulbs, doors, large rusted tanks, windows, radiators, etc. are piled next to the chain link fence for public viewing.. • Resembling a war -torn bombed out city block, the south side of the hospital leers down on our Hedges school playground creating a dismal and depressing scene for our school children, their families staff, adjacent homeowners and our many pedestrian and biking visitors. • The West wall of the north wing has an enormous concrete blemish where ornamentation was removed. • No sidewalks along 7th Street or 6th Avenue East and deteriorating sidewalks on 8th Street and 5th Ave. East remain amidst neglected boulevards and lawns all lending to it's dreadful appearance We are therefore respectfully requesting: 1. The completion schedule set forth in city ordinance #1538 be monitored for compliance, with focus on Conditions #5,6,8,10 and in particular #15. 2. Due to the significant impact on immediate neighbors, including our Hedges school children, we are asking that the Site Development Review Committee would avoid any requests for modifications of the PUD agreement without sufficient input from concerned neighbors and City Council Members. 3. Because'/ of the property is simply dust and brick rubble we are also anxious to learn the completion dates of the parking lot resurfacing. All signatures represent residents living in the immediate vicinity of the building and 80%0 of those signatures are residents who live within 150 - 200 feet of this distressingly blighted city block. Please know you and City Council have our collective appreciation for advocating on behalf of the City of Kalispell's Ordinance #1538 and we look forward to hearing back from you about our concerns. Sincerely yours, Kalispell East Side Neighbors C/O 444 7th Street East Kalispell, Montana 59901 CC: Kalispell City Council Members Kalispell City Attorney Kalispell Site Development Review Committee Members SIGNATURES OF EAST SIDE RESIDENTS t f`r � OWNS Page 2 of 2 SECTION II. The Planned Unit Development proposed by DEV Properties upon the real property described above is hereby approved, subject to the following conditions: 1. That the development of the site shall be in substantial compliance with the application submitted, the site plan and conditions for the PUD as approved by the city council. 2. The proposed development areas within the site shall be substantially the same as indicated on the preliminary site plan submitted with the application or as modified by these conditions. 3. That the plans and specifications for water, sewer, drainage and grading shall be designed and installed in accordance with the Kalispell Design and Construction Standards and shall be subject to review and approval by the Kalispell Public Works Department. 4. The fire access and suppression system shall be reviewed and approved by the Kalispell Fire Department for compliance with the International Fire Code, 5.) A plan shall be developed and in place that addresses the grading, revegetation, irrigation and maintenance of the undeveloped areas that creates a weed free, dust free area until such time as that phase is fully developed. C6_ A redesign of the parking lot be provided that includes a five foot perimeter landscape buffer, is dimensionally accurate and incorporates some landscaping within the parking lot design. 7. The number of dwellings shall be reduced by two to a maximum of 28 dwelling units in order to comply with the limits of the R-5 zoning being requested. The boulevard areas shall be landscaped in accordance with a plan that has been reviewed and approved by the Kalispell Parks and Recreation Department. 9. The overall landscape plan shall be coordinated with the Kalispell Parks and Recreation Director regarding the exact size and Iocation of the plantings and species lists. 10 That sidewalks be provided as indicated on the site plan that provide a continuous and connected system along the streets and avenues abutting this site. 11. That alighting plan be submitted which utilizes attractive lighting fixtures and a type and level of lighting not exceeding what is appropriate for its purpose. 12. That a comprehensive sign plan be submitted which indicates an integrated design of lettering and materials. All signs shall comply with the Kalispell Zoning Ordinance. 13. The use of the artist studios are recognized as live / work units and it is anticipated that some limited retail sales would be allowed on the premises. However, no sales of items which are not produced on -site would be allowed from the artists studios or other items that would be of a general retail nature. 14. That the refuse areas be adequately screened from public view. 15. The phasing and timing of the development shall occur as proposed with Phase 1 of the project including the completion of the exterior of the building, landscaping, sidewalks and boulevard treatment. Bonding or insurance for the full cost of the proposed infrastructure and improvements to ensure the improvements will be completed as proposed, shall be provided by the developer. 16. The project shall be substantially completed by July 1, 2008, or the developers must show that a continuous good faith effort has been made to bring the project to completion by that date, or the zoning shall revert back to the previous R-3, Urban Single Family Residential. 17. The developer and City of Kalispell shall execute a development agreement based on terms and conditions included in the planned unit development. SECTION III. The balance of Section 27.02.010, Official Zoning Map, City of Kalispell Zoning Ordinance not amended hereby shall remain in full force and effect. SECTION IV. This Ordinance shall take effect from and after 30 days of its passage by the City Council. PASSED AND APPROVED BY THE CITY COUNCILA.ND SIGNED BY THE MAYOR OF THE CITY OF KAUSPELL, MONTANA, THIS 20TH DAY OF JUNE, 2005. Pamela B. KenneAr Mayor ATTEST: Theresa White City Clerk PHASED TIMELINE for OLD HOSPITAL Per the Planned Unit Development Agreement with Dev Properties, LLC The City of Kalispell, Ordinance #1538 PHASE ONE Completed by JAN 2005 June - Oct 2005 -Exterior treatments (Pressure Washing ,Painting ,Window Resoration, Utilities, Grounds preparation) -Demolition of interior building Oct- Dec 2005 -Landscaping - Sidewalks - Boulevard Treatment (condition #15) -Continuation of window restoration/replacement -Continuation of exterior restorations -Installation of systems within the building -Electrical -Plumbing -HVAC PHASE TWO Completed by DEC 2006 -Build out new tenant spaces within interior of building according to specs TBD -Initial Landscaping and Ground work -Preliminary parking prep PHASE THREE Completed by DEC 2007 Finalizing of interior trim Finalizing of parking lot, outs in all spaces striping, landscaping and signage Tri-City Planning Office 17 Second St East, Suite 211 Kalispell, MT 59901 Phone: (406) 751-1850 Fax: (406) 751-1858 CITY OF KALISPELL APPLICATION FOR PLANNED UNIT DEVELOPMENT (PUD) PROJECT NAME: Courthouse East Project 1. NAME OF APPLICANT: DEV Properties 2. MAIL ADDRESS: 665 Sullivan X Road 3. CITY/STATE/ZIP:. Columbia Falls, Mt 59912 PHONE: 206-909-3398 NAME AND ADDRESS OF OWNER IF DIFFERENT THAN APPLICANT: 4. NAME: Gelinas Development LLC S. MAIL ADDRESS: 237 Lakeshore Dr 6. CITY/STATE/ZIP: 'Kalispell, Mt 59901 PHONE: 406-257-1569 7. TECHNICAL ASSISTANCE: DEV Properties — Eric Berry 8. MAIL ADDRESS: 665 Sullivan X Road 9. CITv/ TE/ZIP: Columbia Falls, Mt 59912 PHONE: 206-214-5210 If there' are others who should be notified during the review process, please list those. Check One: X Iiutiat PUD proposal Amendment to an 6,xistiria _PUD, A" Property Address. 723.5th Ave Kalispell, Mt 59901 B. `Total Area of Property: 2063.AC. C. Legal, description including section, township & ranges KAL ADD 3 LOTS'1-12 BLK 2Q3 TR A INSE4NW4 ABD ALLEY Sn 2 _ 1 T , Tn $ Rn 21 D The present zm ong'ofab 'e ove property R=3 is: , a. An overall,'descr ptian of thegoals .and obJect ves for the development of the P"PIP._. To restore'.the: property located at 728.$th East to -a viable and usable property and to make it an =.asset. to the community. The usage classifications :of the building will be comprised of Dwelling units, Professional space and, Retail space. Within these designations, there will be Artist Live/Work Apartments,, Designed. Apartments to meet Senior Resident needs, Standard Apartments, and Community and Common Space Space allocations will be made for'Public and Private ."rk'a.nd`8c-ulptures: Also, a build out to accommodate a retail Coffee Shop. be In cases ere, the development will be' executed "in increments; . a schedule showing the :time within phase will be :completed. PHASE I This is the primary phase of the project and it will_be comprised of the following and will be conducted within the -time frame of June -Jan 2005. Work planned,to be accomplished during June -Oct 2005: 1) Demolition of interior of building will be conducted. 2) Exterior treatments (pressure washing, painting, window restoration Utilities and grounds preparation) Work planned to be accomplished during Oct -Dec 2005 1) Installation of systems within the building (electrical, plumbing, HVAC) 2) Continuation of window restoration/replacement and exterior restorations PHASE II This is the work to be completed during Jan -Dec 2006 1) Build out new tenant spaces within interior of building according to specs TBD. 2) Initial Landscaping and Ground work 3) Preliminary parking prep PHASE III This work is to be completed during Jan -Dec 2007 1) Finalizing of interior trim outs in all spaces. 2) Finalizing of Parking lot, striping, landscaping -and signage s c. The extent to which the plan departs from zoning and subdivision regulations including but ' not limited to density, setbacks and use, and the reasons why such departures are or are not. deemed to be in the public interest; The nature of this building will add to the cohesiveness of the Historical. East Side neighborhood. Although it departs from the neighborhoods, architecture i physical size nature; .the .building is an integral part of the neighbo o'�od}ft Chas exmsted prior,.to ti majority of the neighboring houses and is an integral parE°of I�ahspel1's history The proposed usage of the building departs form. the historical usage;in that itwill be used as a mixed use of residential units; artist studios, professional space and retail space while allowing community events to take place. Tle restoration of the buildug would retain a historic building in a hisctorineighborhood. It would be restored to a useful nature. It would also serve as an,.asset to the neighborhood in many, aspects It would provide 'housing to seniors that would like _to remain I in the fie gliborh"ood. It` &ild`prov�de space for locaT'artists to produce their work for he people of the neighborhood and tourists of the city of Kalispell. It would 'provide space for local business's that would provide needed services to the neighborhood and city. With offices, residences; `shops send common areas"provYdirig services to the neighborhood, it would have a uniting 'effect.' . - d. The nature and extent of 'the common open space in the project and the n provisions` foi niainteszance and co"nservationof the common `open space; and"the adequ' acy of the amount and function of the open space in terms of the land use,,. densities and dwellii g_ types proposed in the plan; The following is the 'amount of green space provided withni "the property surrounding the Courthouse East Building: 11 Public green space11,896sq ft 2) Private green space 16,396sq ft � , M KALISPELL UPDATED: 8/10/2006 EASTSIDE BRICK INVESTMENT OPPORTUNITIES This document explains an overview of the financial prospectus. Please visit www.EastsideBrick.com for project vision and details. Please contact Vince Padilla @ 406.270.6692 or Eric Berry @ 406.756.8563 for more information. PROJECT OVERVIEW DEV Properties LLC purchased the former County Hospital, otherwise known as Courthouse East' from the previous owner, Gelinas Development. DEV has an approved Planned Unit Development of 28 Residential Condos and 20,000 SF of professional space and Coffeehouse. The project has been active since Summer of 2005. Currently it is approximately 20% complete. DEV needs to secure approximately $500,000 more to obtain conventional local financing. The partners of DEV wish to approach those familiar with the project with an investment opportunity. Those who understand and can see the vision of the project are the ones who should be rewarded. PUD: The Planned Unit Development involved the rezoning of an R3 residential to an R5. This allowed the following: CONDO UNITS: A total of 28 Residential Units. Currently 21 units are pre -sold. DEV Properties is retaining 5 of the Condo Units; they will be in DEV's portfolio of owned units. Condo Sales value of the pre -sales is $ 3,020,000. Sales commissions to be paid to the realtor (Properties NW) on these sales are $80,000.00. This will leave $2,940,000 remaining to be applied to the Phased funding of the renovation. PROFESSIONAL SPACE: DEV has recently listed the Professional Units with Properties NW. Current value of Professional space is $ 3,178,000. INVESTMENT OPTIONS • STRAIGHT LOAN WITH A RETURN OF 10-12% • EQUITY PARNTER • FULL PROJECT FINANCING W 1 6 k • STRAIGHT LOAN WITH A RETURN OF 10-12% A loan in the amount of $250,000 would return 10%. A loan in the amount of $500,000 would return 12%. Loans would be 1" position on the building and the 6 city lots which it sits on. Contingent upon financing, a 2"d position would be taken thru construction until payoff. V ii tc a l' dil'o ^'ail'.... 5o.1 .563 orffi:,.. 06.,75.vv,s2 ` X E'usl,-it em Brick c e §de,,,pro i« e, t'es.com v' ,'rc rti s ._L.{ Ave lL. '; M1 599011 1 of 3 ME- 1 KALISPELL OPTION 2: UPDATED: 8/10/2006 • EQUITY PARNTER An equity position can be obtained for an investment of $250,000 for 10% of the whole project. An investment of $500,000 would obtain a 20% investment in the project. Timeline for return is Summer of 2008. Return would be based on your percentage of 1.6 Million profit. An equity position can also be obtained via purchase of a residential or commercial units. This is a good option for a 1031 Tax Exchange. The amount of money Exchanged based on 3 M will equate to your equity percentage. Equity percentage of Profit (1.6 M) would equate to your Equity payoff which would be reflected in Purchase price of unit. OPTION 3: • FINANCE FULL PROJECT If the project seems attractive for an investment as a whole, terms could be defined on a per basis scenario. FINANCIAL SUMMARY Note Carried on Land Construction Money Borrowed to date Total Money owing TOTAL PROJECT COST (5% contingency and Total Owing) Personal Money invested Total Funding needed END OF PHASE REVENUES Phase I Condo's Prof Space Phase II Condo's Prof space Phase III Condo's Prof Space ($400,000) ($350,000) ($750,000) ($4,900,000) $500,000 $4,400,000 $1,172,086.00 $936,486.00 $1,759,356.00 $634,188.00 $164,030.00 $1,913291.00 Total Sales revenue after Closing costs $6,580,000 Value of Assets retained by DEV Properties $1,350,000 Tofa/Assets/Sa/es value 7.930.000 TOTAL PROJECT COST (50/o contingency included) ($4,900,000) DEV ASSETS $1,350,000 PROFIT MARGIN $1,680 000 A Loan amount of $2.4 Million would carry Phase I and Phase II. Phase III will be paid thru sales revenues. Vince, [:Iadilsa Cel 723 5 Ave CST EB Investment Pros.oectU,� 2 of 3 'Ea stside t rick ':,roperfies _LC c.ta 1 , BRICK KALI5PEL1 UPDATED:006 Senarios: OPTION 1: You would simply like to invest $250,000 cash with an interest return. You would receive 10% APR. At the end of the project or possibly the end of Phase II when the project is self funded, you would receive payoff. You would hold 1st position until total project Financing is secured. Then you would be a 2nd position to the bank. OPTION 2: You would like to be a 20% equity partner. An investment of $500,000 is made and an agreement is drafted with partner percentages outlined. Your 20% equity percentage of profit of $1.6 M^ would equate to your equity payoff of $320,000. At the completion of the project, DEV would pay back original investment of $500,000, plus the equity of $320,000. OPTION 2: You would like to do a 1031 Tax Exchange. You would like to be a 20% equity partner by purchasing residential and/or commercial units. You purchase Units 110C, 112C and 319S* for $500,000 under a contract agreement. Your 20% equity percentage of profit estimated at $1.6 MA, would equate to your equity payoff of $320,000. At the end of the project, you would own and retain the units valued at $500,000 and receive your equity profit of $320,000. OPTION 3: You would like to fund the whole project for 12% APR plus costs. An agreement would be made between you and DEV outlining the loan amount, payments, phases and payoff amounts. *For example only. A$1.6 Million estimated profit based on Total Value minus Project Costs THIS DOCUMENT IS CONFIDENTIAL. DO NOT DISTRIBUTE WITHOUT DEV'S CONSENT SIGNED: DATE: Vine Padillc 406-7!56,3563 office 406,1-56..? D32 `ov _asiside Brick Ce: `vr^t_,ef''ieS,CC7^1 y+� i t_i sue.. ZJ '�rooerties i_ cei, 40,6.27 ,6692 23 5 Ave no11" Pe 11, ,tMdl 5,99 ti Inve34imenf P''osoeCj,u 3of3 KALTSPELL EASTSIDE BRICK • D006 EASTSIDE BRICK CONSTRUCTION PLAN This document explains the construction and financial process that is required for the Project and each of its phases. DEV Properties will complete the Project renovation with minimal long term financing by its completion date. The following review of the financial plan will show how this will be accomplished. There are Three Phases to this project. At the completion of each phase, allocated units will be salable and ready to CLOSE. This includes existing Buy/Sell agreements in place. PROJECT COMPONENTS CONDO UNITS There are a total of 28 Residential Units. Currently 21 units are pre -sold. There are 2 remaining Live/Work units in the lower level that are not currently under contract. We are seeking Artist to purchase or lease these Units. DEV Properties is retaining 5 of the Condo Units; they will be in DEV's portfolio of owned units. Condo Sales value of the pre -sales is $ 3,019,056.00. Sales commissions to be paid to the realtor (Properties NW) on these sales are $80,530.00. This will leave $2,938,526 remaining to be applied to the Phased funding of the renovation. PROFESSIONAL SPACE DEV has recently listed the Professional Units with Properties NW. DEV will market enough space to pay the remainder of the construction cost. DEV's hope is to sell to Businesses that will be of service both to the community and to Kalispell. DEV intends to create an environment that will attract top quality Businesses and Artists from the region and from the Kalispell area. Currently DEV has a letter of intent to lease one professional space and are in negotiations on several other spaces. With the excitement about the building DEV feels confident that many of the spaces will be leased/sold before they are ready to be occupied. BOILER BUILDING The old Boiler Building is being rebuilt as the new Center' of the project. It will be comprised of the different aspects of the whole project. The units for sale in this building are the Coffeehouse and Glass Blowing Studio. COFFEEHOUSE: DEV has been meeting with entrepreneurs and negotiating business plans pertaining to the Coffeehouse. DEV will work with proprietor to direct the vision of the Coffeehouse and events and services offered. DEV will make a determination whether to sell or own the Coffeehouse space, whichever is more advantageous for both DEV and the proprietor. GLASS BLOWING STUDIO: DEV is meeting with local Glass Blowing artist to negotiate 406,1 '56.` 563 office- 406,756.0022 ax Ecsfside i pick, 1 i/ 'i'opeif(e5'_I...0 h i:. _c�€C:�ii-if �::; nE ; ; b-`V tr', 1 of 8 tx • i p EASTSIDE BRICK ����... UPDATED: 8/14/2006 business and operation plans. DEV FACILITIES AND OFFICE: DEV will have a maintenance facility in the lower level adjacent to the Glass Studio. On the main floor adjacent to the Coffeehouse, will be DEV main office. TAX CREDITS DEV is working very closely with the State Historic Preservation Society in Helena to secure Tax credits. The Tax credits could be as much as 20% of the renovation costs. These Tax credits would offset DEV's tax liability for the capital gains tax incurred in the sale of the Condo Units as well as several years of income tax. These proceeds are not included in DEV financials, but if approved, would add to the profitability of the project. PHASES OF CONSTRUCTION The following is a description of each of the phases involved in the renovation of the building. Phase I Exterior The exterior of the building and the surrounding property will be reconstructed and reminiscent of its old glory. This is very important to DEV, the community and the City of Kalispell. The following is a list of the major elements of phase I: 1) Sidewalks replaced, repaired or installed if none exist (in progress) 2) Parking lot graded and paved (in progress) 3) Windows replaced or repaired on entire main building (in progress) 4) Brick work repaired where needed on building (in progress) 5) Trim and dental work repaired on building 6) New paint on exterior of building (in progress) 7) Main entryways will be improved. (in progress) 8) Landscaping initiated and implemented per phase (in progress) Total Cost of Phase I (initial purchase included) $1,200,000.00 Money spent $450,000.00 Total remaining $750,000.00 Phase I Interior Condo units in the original 1911 section of the building (center portion of the building) will be built out. The professional space in the center section will be ready for Tenant Improvement and/or occupancy. Phase I: The following is a list of the major elements: (1) All Mechanical installed in Center Section and roughed in for entire building (2) Electrical Service installed to building and Electrical main service installed through -out building (3) Finish and trim out of all Condos and common areas 4ric e ': dilc 406 `568563 office 406.716.Ci')'32 - x Ecst5ide & i� J "Proper-lies y 2of8 KALISPELL (4) Plumbing in stalled in center section and roughed in for entire building (5) All condo units completed and ready for occupancy (6) All common areas and hallways in the center section finished (7) DEV to close on condo Buy/Sell agreements and apply to financing (8) DEV to close on Professional space sales Total Cost of Phase I (Includes payoff of loan) $1,500,000.00 Money spent $400,000.00 Total remaining $1,100,000.00 Phase I: Condos to be closed on at the completion: Unit# Purchaser B20C B30C Seierstad B32C Stone 210C DEV 211C Leanne 212C Goodman 213C M. Ness 310C DEV 311C DEV 312C Goodman 313C Cameron 214S Sturgill 314S Wakefield 315S DEV Total Condo proceeds PHASE I ; Total Residential proceeds to apply towards Financing After Closing Costs, approx 6%. UPDATED: 8/14/2006 Purchase price $99,500.00 $117,325.00 $129, 500.00 $0.00 $139,500.00 $182, 500.00 $104,025.00 $0.00 $0.00 $189, 500.00 $119, 500.00 $76,050.00 $89,500.00 $0.00 $1,246,900.00 $1,172,086.00 Phase I: The following professional spaces will become available upon completion: Unit# Purchaser Revenue B22C $53,250.00 B24C $13,100.00 B26C $22,500.00 B28C $26,000.00 110C $105,575.00 112C $108,650.00 114C $66,435.00 Vince i:: adilio: 90� 3 of 8 Bastsid-- Brick �P..v.i k•. EASTSIDE BRICK KALISP$LL UPDATED:00• 116C $47,945.00 118C $81,180.00 120C $72,455.00 122C $68,000.00 124C $36,000.00 B34S $73,780.00 B36S $53,700.00 126S $93,405.00 128S $95,940.00 Total revenue from Professional space Sales $1,017,915.00 PHASEI Total Commercial Space proceeds to apply towards Financing After Closing Costs, approx 8016. $M482,00 Phase II The South section of the building will be built -out in this Phase. The South Section is the 1948 addition of the building. The Professional space on the lower level and the main floor will be ready for build -out and occupancy. The following is a list of major elements of Phase II 1) Entryways and common areas finished 2) Mechanical completed (south end) 3) Electrical completed (south end) 4) Plumbing completed (south end) 5) Finish and trim out of all Condos and common areas 6) All condo units completed and ready for occupancy 7) DEV to close on condo Buy/Sell agreements and apply to financing 8) DEV to close on Professional space sales Total Cost of Phase II Money spent Total remaining Phase II Condos to be closed on at the completion: Unit# Purchaser B38S White B40S Normile B42S Haring B44S Geiger B46S Berry 215S Shilo 218S T. Ness 2195 Windauer ` 'Hne v . U ; 1 4of8 $1,200,000.00 $0.00 $1,200,000.00 Purchase price $189,635.00 $99,660.00 $89,500.00 $125, 706.00 $89,500.00 $279,775.00 $113,525.00 $149,500.00 r ,roperfies LLC t KALISPELL 220S C&S Properties 316S DEV 317S Larry 318S M. Robertson 319S Broyles Total Condo precedes PHASEH Total Residential proceeds to apply towards Financing After closing costs, Approx 6% Phase II Professional space that will become available upon completion: Unit# Purchaser 130S 132S 134S 136S 138S 140S Total revenue from Professional space lease PHASEH Total Commercial proceeds to apply towards Financing After closing costs, Approx 8% UPDATED: 8/14/2006 $253,330.00 $0.00 $158,500.00 $123,025.00 $289,500.00 $1,871,656.00 $1,759,356.00 Revenue $234,840.00 $74,400.00 $92,500.00 $75,240.00 $52,355.00 $160,000.00 $689,335.00 $634,188.00 Phase III The North section of the building will be built -out in this Phase. The North Section is the 1964 addition of the building. The Live/Work studio on the lower level will be completed. All Professional space on the lower level and the main floor will be built out and ready for Tenant Improvement and/or occupancy. The following is a list of major elements of Phase III 1) Entryways and common areas finished 2) Mechanical completed (North end) 3) Electrical completed (North end) 4) Plumbing completed (North end) 5) Finish and trim out of all Condos and common areas 6) Condo unit completed and ready for occupancy 7) DEV to close on condo Buy/Sell agreements and apply to financing 8) DEV to Close on Professional space sales Total Cost of Phase III (includes payoff of Note) Money already spent Total remaining ,sir l e F)adii 0 .. C' a <Id ev L?'c, S e '' i ° ,c J 72. Ave _a5` t� i r 5of8 $1,000,000.00 $0.00 $1,000,000.00 B stside Brick ►W1 1'0 KALISPELL Phase III Condos to be closed on at the completion: Unit# Purchaser B10N Total Condo proceeds PHASE III Total Residential proceeds to apply towards Financing After closing costs, Approx 6% Phase III Professional spaces that will become available upon completion: UPDATED: 8/14/2006 Purchase price $174,500.00 $174,500.00 $1"030,00 Unit# Purchaser Revenue B12N Padilla $62,530.00 B14N $54,600.00 B16N $71,000.00 B18N $84,510.00 10ON $520,050.00 101N $235,690.00 B50E $180,560.00 B52E DEV Shop $0.00 142E Coffeehouse $377,500.00 144E DEV Office $0.00 Total revenue from Professional space Sales $2,079,665.00 PHASE III Total Commercial proceeds to apply towards Financing After closing costs, Approx 8a/o FINANCIAL SUMMARY COST OF CONSTRUCTION .,'v per: p w,: r:e, ,CJ'"1 KalisC'e , i, F 599V 6of8 V,913,291.00 ct' Stsitde Phase I Exterior Phase I Interior Phase II Phase III Total Construction Cost's L/ i t KALISPELL (5% contingency included) Money spent to date Phase I Exterior Phase I Interior Phase II Phase III Total money spent Money Borrowed to date Lender Note 4% interest Total Money owing Total Funding needed END OF PHASE REVENUES Phase I Condo's Prof Space Phase II Condo's Prof space Phase III Condo's Prof Space Total Sales revenue after Closing costs Value of Assets retained by DEV Properties Total Assets/Sales value 406-,56,` 363 W `firs C'V dev Y p""?'W .C'{>M w 7 of 8 UPDATED: 8/14/2006 $1,200,000.00 $1,500,000.00 $1,200,000.00 $1,000,000.00 $4,900,000.00 $450,000.00 $400,000.00 $0.00 $0.00 $850,000.00 $350,000.00 $400,000.00 $750,000.00 $4,400,000.00 $1,172,086.00 $936,486.00 $1,759,356.00 $634,188.00 $164,030.00 $1,913291.00 $6,579,437.00 $1,352,825.00 $7 9 32 26Z00 !=.cS1S C7c i�. I;vk KALISPBLL FUNDING SCENARIO Phase Exterior Loan Sale's Phase I Interior Loan Sales Phase II Loan Sales Phase III Loan Sales LOAN SALES POSITIVE BALANCE UPDATED: 8/14/2006 -$700,000.00 $0.00 -$1,500,000.00 $2,108,572.00 -$1,200,000.00 $2,393,544.00 -$1,000,000.00 $2,077,321.00 -$4,400,000.00 $6,579,437.00 $2,179,437.00 Maximum amount needed to borrow $2,200,000.00 to the end of phase III Virce f:1cdi1'c 406,7� 1 56.8,563 odfice 406.7-56.C,10`32 �cx V: 'devprope,fles.com 406.2/*"06692 723 -5-; Ave E--St 0— SB inon�:cd -enraing Flan 7- 8-06 8 of 8 E-cstSide Brick, P-rfie., i Main Concern for Plannino Purposes: What Good for What People at What Cost, When 4 o co��/>eS co o ` .� N N MR T {i �ii@C r81©srj3ttEI?. x • Parks and Rec S Completion Sep 06 Maintain Open Spaces. • Develop master parks & recreation plan C Ensure Subdivision standards have open • Planning Being included in new .NN space subdivision standards O 0 • Continue Parks in lieu of in new • Planning Reviewed with each � c ¢ subdivisions subdivision o Update/Validate Transportation Parks expansion and improvements • Parks and Rec part of Master Plan Na CD o :Zi Plan. o Update Kalispell Area Transportation Plan • Engineer In process a) (l. m c m CZ Work with MDOT on Urban Roads funding • City Successful in 2005-06 legislation program Manager/Engineer Y, C Co p. N T N Update Growth Policies. Bike and pedestrian path Parks and Rec Part of master plan Received $67K .- a improvementstexpansions grant co for this year : 'N North Growth Policy amendment • Planning For Council action "= CZ c _r_ August 7 c C.) = c Growth Police amendment to the south • Planning Completed N •C: Growth Police amendment to the west • Planning Sept 06 start ci - o Modify Airport UDAG TIF • Community Dev. Completed a)• Review/Enhance Standards. Develop Industrial TIF •Community Dev. Completed 0 in c � r j Determine Urban Service Areas • Engineer In process O d. 0 U) o ' Develop & enforce better subdivision • Engineer/Policy In the process C15a: n Guide Standards p m E Growth • Dark Skies Ordinance • Policy/Planning Completed ca w a (J Architectural Ordinance • Policy/Planning Completed j > v • Landscape ordinance P • Policy/Planning /Pianni cy ng in planning sn oo m (0 Gateway enhancements • Planning/Parks Policy/Planning In planning CD— Sign Ordinance • Completed s, y rn a 2 Downtown Parking Standards •'Policy/Planning To Council Aug 7 N Downtown mixed Use • Policy/Planning In planning rn tr Signage: entrance, ordinances, directional, • Policy Start October 06 school zone woo a� — p .F5 .2 y o 2: infrastrpcture Master Plan. Implement comprehensive impact fees • Engineer/Policy Meeting July 26 c a rn Phase II of Facility Planning for Utilities • Engineer In process y Creativity in Design Encourage innovative subdivision design • Planning In process P m architectural review (n �' committee/site review o Update Annexation Policy . Policy on Unincorporated areas inside • Planning/Policy Council Fall 06 > pt ~ corporate limits ` y N Annexation Districts • Planning/Policy Developing 2 'c o F proposals v, Develop criteria for annexation with • Planning/Policy In process g emphasis on public safety p U o • Planning c, O O . Review and update zoning ordinances P g • Planning/Policy 9/ cY Work has started FDevelop a zoning/code compliance program • Planning Code enforcement O officer hired/program working City of Kalispell Strategic Plan cage 7 Main Concern for Plannina Purposes: What Good for What People at What Cost, When E U- . Air Quality • Review and implement County air pollution • Engineer Working with County control policy on new draft • Water Quality Develop additional supply and storage • Engineer Purchase in progress and design on going • Reduce vulnerability • Engineer Working • Open Space/Parks • Develop a maintenance & replacement plan • Parks & Rec Completed 13 for playgrounds/shelters playgrounds/ working • Recreational Opportunities on shelters — MP • Reinforce Families Update forestry maintenance plan • Parks & Rec School of Forestry to • Good Neighborhoods • Develop a community center • Parks & Rec/Policy assist CC Committee • User Friendly • Programs for all ages • Parks & Rec Reviewed annually • Support for parents of young children • Planning Family scholarships a after school program Quality of Subdivision design standards • CWPlanning Being reviewed Life (neotraditional, PUD, Mixed Use) • Community Oriented Plans • Planning Working into subdivision plan • Customer Service Classes • Planning/CM On -going training • Partner with citizen volunteer . On line services And Finance On line bill access am and civic organizations to meet paying city objectives. Additional Staff for growing work load • CM Added staff in key • Court Security •Judge/CM areas Survey in progress Change out street lights (dark skies) • Engineer/CM Architect hired Completed MADD chapter • Police VIP splace Eastside • Community involvementlawareness • Staff/Policy neighborhood group programs/promote volunteerism Ongoing Teen Court • Youth CM Ongoing • Youth Council • Ongoing • Leadership Flathead • CM • Proper Sizing (Enhance Police, Hire fire/EMS personnel • Fire 7 new, add 2 Fire, and EMS Department Hire additional Police Officers • Police 2 new, add 1 capabilities) Emphasis on training • Fire/Police Performance based a Maintain Capital Infrastructure Fire satellite station 62 _ • Fire/EMS completed EMS funding stability • Fire/EMS New rates in place • Apparatus replacement plan • Fire/EMS Developing plan • Upgrade the use of technology • Fire/EMS/Police Developing plan Address Police space needs • Police In process • Community Oriented Police Fix "Broken Windows" • Police/Planning Working with Strategies developers Neighborhood Watch • Police Business connection f Community Night Out • Police Site Review • Public Safety by design • Police/Planning Training on going • Interoperability • Police/Fire Up and running • Volunteers in Police Service • Police Public Safety � Community Oriented All Risk Community Concept •Fire In process Reduction Strafe g ies. At -Risk Elderly Connector • Fire/EMS In place/ on -going Response Times and action plans • Fire/EMS On -going ?' ISO regarding plan • Fire/EMS Upgrading ISO rating • Large Diameter hose modifications • Fire/EMS/Engineer Completed one more than planned/2 to go • Parking Lot safety County emergency preparedness plan • Fire/EMS/Police Working with County Upgrades to Skyline Parking Lot • Acquire additional downtown parking • Engineer/CM • CD/CM/Parking Completed Lighting In negotiations Commission Parking Policy (parking meters/fee • Parking Working with parking w, schedule) Commission/Policy commission • Improve City's emergency preparedness and homeland security efforts. • City emergency preparedness plan • CM/Fire/Police/staff Training, task list Updated and exercised E City o/ Kalispell Strategic Plan Page 2 Main Concern for What Good for What People at What Cost, When 11 • Redevelopment of the core area Review a housing/commercial survey • CD TIF tabled/working resulting in a viable downtown identifying stock, values, blight, and with developers targeted structures/blocks for redevelopment/infill. Acquired/survey • CDBG planning grant • CD completed • Expand employment • Identify and capture funding sources to be • CD/CM/Policy Ongoing (tax opportunities and create livable used as incentives to businesses abatement lo an to wages. expanding or relocating to the City. , program, incentives) DCC • Affordable Housing. Continue to apply for grants to assist in • CD the construction or acquisition of ongoing rentals/first time home buyers. • Schools Find ways to collaborate. • CM/Staff looking at facility needs/high school construction. • Business Support. Gap Financing loan program. • CD ongoing Strong Economy • Diverse Economy Expand tax base for commerciaUndustrial • CD/CM/Policy Old School Station • Progressive Thinking Old School Station Partnership and • CWCD/Policy public/private partnership. business recruitment • Economic/Community Business expansion and retention -CD Ongoing/5 IRP Loans Development program • CD Working with OSS/Chamber • Create jobs with livable wages • CD • Value added businesses -CD And Montana West Information technology • CD Hilton/convention • Tourism/Industrial Development Convention center • Support non-profit agencies Hockaday • CM/Policy Expansion Plan • Chamber -CM/CA Lease Extension • Head Start •CD CDBG Grant • Retirement Income City of Kalispell Strategic Plan Page 3 Main Concern for Planning Purposes: What Good for What People at What Cost, When • Viable Capital Improvement Road Maintenance and Upgrade • Engineer/Policy Plan, need funding Plan. • Bike and Pedestrian paths • Parks & Rec Part of master plan Playgrounds/shelters/forestry maintenance • Parks & Rec ongoing c plan N _ • Parks maintenance • Parks & Rec on -going _ o c o i7 N c U " Space needs for City Services . Collocate services • CM/CD Purchased Bank o — r ¢ Space needs for police • CM/Police Architect hired N $ Expand City Hall • CM/CD Planning on schedule y c Dealing with cost overruns O o • Railroad maintenance and Remove RR from downtown • CM/Planning ur development. Completed a `0 = • Phase I implementation • Airport Manager ramp/taxiways • Airports N a = Hanger lease marketing • Airport Manager All current sites Q a Airport hanger improvements • Airport Manager leased C a aN • Tower remediation • Airport RFP out c CcManager/CM a ° � 3 0 d W • Funding for infrastructure g Impact Fee analysis and implementation • Staff/Policy Water, Waste water, storm sewer Cr c C . � •� d m improvements and expansion (storm drainage, Meridian Rd., Northern Lights recommendation to � •— (Z CC Rd.) Council. Others on- m c o C _c d E going Local Option Sales •� s T o o oc = Develop Transportation study and plan • Engineer Tax needed In progress .) T c W Maintain/ necessary transportation infrastructure Construct new streets in grid pattern • Engineer Engineer in progress rn y m Develop City US 93 Bypass • 12007/08 construction Tm .n Infrastructure Airport Affected Area • Airport Manager Completed co o U Change airport funding to be an enterprise • Airport Manager Created in .a m a fund/ find ways to finance O/M and committee 2006budget. �rrr > C o ca Revenue tripled this Y a > y a) c U year. - (i1 m c a ro m • Pave Alleyways • PW Paved 15 blocks V O c O,chi .O N O75. vm Q N N O °1 d Enhance Public Employee Safe Environment • HR/CM New Safety Program, training & committee ry CL > d Environment Accident = <�'� m v m o • HR/CM reporting and investigation aa) '.5 °- • Training • CM/HR, Dept Monthly training cn F- - ° > v N Fire Union Contract • CM/HR/CA/FC New performance p measurements i j •y w Health Insurance and Workman's Comp • CM/HR/ Health programs/EAP/ 4` E d ._ o Department Heads Workman's comp 0 compliance/review m O Succession Planning • CM/Department Developing/implemen 7 F— Heads ting a plan 11 Clty of Kalispell Strategic Plan rage 4 Main Concern for Planning Purposes: What Good for What People at What Cost, When • Enhance communications and cooperation between • Staff/Policy Working on County Governments and relationship interagencies. • Same Voice • Communications with citizens Neighbor associations • Staff Eastside neighbors • Quarterly newspaper • CM On -going • `Town meetings" • Staff/Policy planning • Neighborhood picnics • Staff/Policy planning • Improved web site on -going • Good Marketing. . • Sell idea of community • Advantages of being City •Staff/Policy Every day effort • Interact with Citizens. Public Information on line • City Clerk On line/updated • Laserfiche • City Clerk Version 7 installed/on Build Image server �s City of Kalispell Strategic Plan Page 5