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03/28/98 SP City Council Minutes1142 1142 A SPECIAL MEETING OF THE KALISPELL CITY COUNCIL WAS HELD AT 7:00 P.M. WEDNESDAY, MARCH 25, 1998, IN THE COUNCIL CHAMBERS AT CITY HALL IN KALISPELL, MONTANA. MAYOR BILL BOHARSKI PRESIDED. COUNCIL MEMBERS JIM ATKINSON, NORBERT DONAHUE, JOHN GRAVES, DALE HAARR, DUANE LARSON, GARY NYSTUL, RON VAN NATTA, DOUG SCARFF AND CITY ATTORNEY GLEN NEIER AND CITY MANAGER CLARENCE KREPPS WERE PRESENT. Mayor Boharski called the meeting to order and led the Pledge of Allegiance. KALISPELL DOWNTOWN CENTER AND NATIONAL FLOOD SERVICES BUILDING PROPERTY OFFERINGS Larry Gallagher of the Planning, Economic and Community Development Department gave an overview of the status of the two properties. He explained the Irwin Davis proposal for the former Flathead Valley Community College property has been withdrawn, and after consulting with the City Attorney it has been determined the City is required to re -offer the parcels for sale. He said staff met with the Kalispell Development Corporation Advisory Board which has recommended that the Council re -offer the parcels singly or in chunks. Gallagher said the Council also has to decide what the permitted uses will be, since the B-4 zone covers a wide array of uses. Gallagher said in the past, the Council stated clearly it is looking for a high density, high value development, in other words multi -story. He asked if the Council would now consider a single - story building. He said the KDC Advisory Board recommends $6.65 a square foot as a low reasonable (price) for the property. He added the Board also recommends splitting the parcels and recommends a minimum of a 60-day offering period. Gallagher said what the staff needs now is a clear definition of how the land is to be offered, the length of the offering, the minimum price of the offering and the uses the Council is willing to entertain. David Irwin of Irwin Davis & Co., Redmond, Washington, told the Council that Irwin Davis & Co. really tried to adhere to the letter and spirit of what they wanted to see on the property. He said the Company, after a year of hard work, came to the conclusion there was a way to move forward on the project but not adhering to the Development Agreement they had executed. Irwin said the Company had no choice but to withdraw from the Agreement. He told the Council he made several observations over the past year. He said it is in the best interest to maximize density on a site and that any future development adhere to parking requirements. Irwin said it is also important the project has a high level of quality. Ken Yachechak, 43 Hillcrest Drive, Kalispell, told the Council he and his partners are prepared to write the City a check, tonight, for $100,000, as a non-refundable deposit, for the purchase FVCC site. He said the total would be $419,000 which translates into $6.65 per square foot. Yachechak said he and his partners; Jeff Ellingson, Greg Ellingson, Patty Pennington, Roger Jacobson and Jim Thompson all have a long-term commitment to Kalispell and want to "drag" Kalispell from the Historical Theme into the 21st Century. He said he thinks Kalispell needs to be progressive and modern. Yachechak says they are prepared to build a campus of buildings surrounded and including parking and open spaces, a mall -type situation. Ron Trippet, Fairway Boulevard, said he is a local property owner and would like to propose a property exchange. He said he owns some property near the airport which he would like to exchange for Lots 16 and 17, Block 36. Trippet said the City shouldn't be looking outside for developers when local people are willing to develop the area. Atkinson questioned Neier if the Council could entertain the proposal that was made tonight. Neier said since Irwin Davis has withdrawn its proposal the property has to be re -advertised. 1 1 1143 1 1 1 1143 Atkinson suggested the Council identify what areas would be changed in the offering, such as the parking, density, quality and design, and whether the property is going to be offered as part or whole. Haarr said he felt questions to the developers should come first and asked Neier to clarify why it wouldn't be possible to act on the offer that is before the Council tonight. Neier answered the advertisement was made months ago and any offer made after that would not be in conformance with the advertisement. He said the City must make a new offering. Haarr questioned Yachechak as to whether the proposal he and his partners made includes all the property that was accepted by Irwin Davis. Yachechak said it includes all the property except the National Flood Services building. Haarr told the Council that a "bird in the hand is worth a whole bunch in the bushes" and he feels Yachechak's offer is the first concrete one the Council has had. Neier said the property has to be offered three times in the newspaper for three succeeding weeks so the Council is looking at opening bids around mid -May. Haarr moved to re -advertise the property exactly as it was put forth before, as one piece, and that the acceptance date be at the earliest possible time. The motion was seconded. There was discussion. Donahue asked if the rights of Irwin Davis & Co. in the property is transferrable to Yachechak and his partners without having to advertise it. David Irwin said he doesn't think it can legally be done and would defer the question to the attorney. Neier agreed, saying the property has to be re -advertised. Krepps expressed concern that the Council is negotiating with Yachechak and asked the Council to focus on the actual process by getting proposals and making a decision the way it was intended. Nystul asked for a clarification of the motion as to what the time table is. Haarr answered the intent is the earliest time table possible, not later than 45 days from today. Nystul also asked what the motion intends as to permitted uses. Haarr said his intent is uses that are allowed under the existing zone. Gallagher said if the Council opens up the property to all permitted and conditional uses under the B-4 zone, it opens it up to a whole different group of developers. Haarr said, as clarification, the original offering should not be changed and a simple duplication would be in order. Gallagher said the original offering did not include the National Flood Services building. Boharski, yielding the chair to Nystul, moved to amend the motion to allow the property to be sold in any portions or parcels in any combination thereof. The motion was seconded by Larson. 114.4 1144 There was discussion. Larson, Haarr and Scarff all spoke in favor of offering the property as one total piece. The amended motion failed with Boharski, Donahue and Nystul voting in favor and Atkinson, Graves, Haarr, Larson, Scarff and Van Natta I voting against. Boharski resumed the chair. Haarr moved, if the second agrees, to clarify the main motion by stating the KDC property should be offered as one piece, which was originally done, and the National Flood Service Building and lots 15 and 16 being offered separately. Larson agreed. There was discussion. Atkinson moved to reconsider Boharskils amendment to the motion. The motion was seconded by Donahue. The motion failed with Atkinson, Donahue, Nystul and Boharski voting in favor and Graves, Haarr, Larson, Scarff and Van Natta voting against. Boharski, yielding the chair to Nystul, moved to amend the main motion by offering the NFS building and Lots 15 & 16, another offering, half of Block 36, lots 1, 2, 3, 4 and 13, 14, and a third offering, Lots 13, 14, 15, 16, Block 36. The motion was seconded by Atkinson. There was discussion. Van Natta expressed concern the latest amendment could mean the parking would be given up for the NFS building. Haarr stated the City can't allow the property to get all broken up. Boharski moved to clarify his motion, if the second agrees, by making two offerings, with Lots 13, 14, and Lots 1, 2, 3 and 4, Block 45 being one offering, the NFS Lots 15, 16 are offered as an option and half block of 36, Lots 13, 14, 15, 16, Lots 1, 2, 3 and 4 minus 1 & 2 and the NFS building be offered with 1 & 2. Atkinson agreed. There was discussion. Van Natta said he felt the Council should require that Lots 1 & 2 be converted to a parking lot at the purchaser's expense. Krepps said that kind of requirement can be discussed after proposals are received. The amendment passed unanimously. There was further discussion with Atkinson expressing concern about the offering being only 45 days, which he felt limited bidders. Yachechak requested the Council move as quickly as possible because the construction window is not that long. The original motion, as follows per Neier, passed unanimously: The City shall advertise the property as four separate offerings: 1) Lots 1 through 12, Block 36, Lots 13 and 14, Block 36, and Lots 1 through 4, Block 45 1145 1145 2) NFS and Lots 15 and 16, Block 36; 3) NFS and Lots 1 and 2, Block 36; 4) Lots 1 through 12 and Lots 13 through 16, Block 36 and Lots 1 through 4, Block 45 with bids being opened as quickly as the law allows. Boharski said to simplify the minutes for the record, the "meat" of the minutes should be what the motions were, which motions failed and which motions passed. DALEY FIRM PROPERTY OFFERING Gallagher explained to the Council that the City has been proceeding with the airport plan with the understanding that all three lots of Daley Field would be sold. He said the Council sold Lot 2 to Rosauers at a cost of $3.25 per square foot with the understanding that Lots 1 and 3 would be offered for sale this summer for private retail development. Gallagher said at this point the City has approximately 1.45 million dollars in the bank from the sale of the Haven Field property and the Rosauers property. He added this year's budget includes 1.5 to 1.6 million dollars for capitol improvements to the Kalispell airport which includes land acquisition, fencing and lighting to bring the airport up to minimum B-1 standards which would make it a safe, general aviation field. Gallagher said the City will need additional money to cover the costs and the only way the City can come up with the additional capitol is from the sale of the remaining lots of Daley Field. He said the City staff, the Airport Advisory Board and the KDC Board are all recommending the property be sold and not leased. Krepps said if the Council decides to lease the property, a financial consultant will have to be hired to set up the lease properly. Airport Advisory Board member Gib Bissell said some lease revenue is necessary for the survival of the Airport. He said the 20-year marketing plan for the Airport was based strictly on the soccer fields and Airport Road property, not the property fronting Highway 93. Bissell added the only way the Airport is going to work is to get a lump sum right now, whether or not the City receives some FAA funding. He said if it's possible to raise the 1.7 million dollars needed for the Airport and lease the remainder of Daley Field, than the City has the best of both worlds, but he added he doesn't think that can be done. Haarr said the Council needs a scenario, for example if the City gets the FAA funding what will that pay for, and what the City needs if it doesn't get the funding. He said the City may be acting prematurely if it sells the land. Gallagher said in the Urban Renewal Plan the City pledged to make the Airport a B-1 general aviation field. He said to do that several things are needed; fencing, lighting, extension of runway and acquisition of clear zones. Gallagher said even if the City receives FAA funding it cannot be used for land acquisition. He said the City needs all the cash the Council can raise. Atkinson moved to instruct City Staff to offer Daley Field Lots 1 and 3 for sale. The motion was seconded by van Natta. There was discussion Graves said if the City adds sewer and water to the lots than the estimated selling price of $3.25 a square foot should be considerably higher. Gallagher answered he believes $3.25 is the worst the City can do. 1146 1146 Boharski said he is concerned that if the Council offers the property for sale, and then the FAA comes in with the money and the Council changes it mind, how will that look to the public. Gallagher responded the offering could be made for a prolonged period of time and the Council would still retain the right to reject any and all proposals for any reason. Nystul said he would like to read the information presented tonight before making a decision. Haarr agreed, saying he wants to see an update and parallel scenario before making a decision. He said he feels the Council is dealing with outdated figures. Krepps said all those type of questions are in the Facilities Plan, for example land acquisition, towers, moving of towers, etc. He said at this point we don't know what those are going to be. Krepps suggested the Council offer the property and try to make the timing as close to receipt of the Phase I Airport Master Plan as possible. He said the City extend the offering five or six months and then, when the figures are available, make the decision. Airport Advisory Board member Art Thompson told the Council it is "time for action, not procrastination." Van Natta said he felt the Council should go ahead and offer the property for sale. Donahue said he hates to see the City sell the property when it may not be necessary. Donahue moved the matter be tabled until the April 6 meeting. The motion was seconded by Nystul. The motion carried with Donahue, Graves, Haarr, Nystul, Scarf and Boharski voting in favor, and Atkinson, Larson and Van Natta voting against. Atkinson moved to adjourn. The motion was seconded. ADJOURN The meeting was adjourned at 10:40 p.m. Wm.E .5Ohar5ki . Wm. E. Boharski, Mayor ATTEST: Theresa white Clerk of Council I 1