Executed Developer's Agmt/Parking GarageCONTRACT FOR DEVELOPMENT
between
CITY OF KALISPELL, MONTANA
and
MONTANA HOTEL DEVELOPMENT PARTNERS, LLC
Dated as of January 12, 2022
CONTRACT FOR DEVELOPMENT
THIS CONTRACT FOR DEVELOPMENT (this "Agreement") is made as of the 12 day of January,
2022, by and between the CITY OF KALISPELL, MONTANA, a Montana municipal corporation (the
"City"), with offices at 201 1` Ave E, Kalispell, MT 59901, and Montana Hotel Development Partners,
LLC, (the "Developer") of 208 1" Ave. E., Kalispell, MT 59901.
RECITALS
WHEREAS, on July 3, 2017, and pursuant to MCA 76-1-604, the Kalispell City Council passed
Resolution No. 5821 amending the Kalispell Growth Policy which, among other things, called for the
development of a Downtown Plan as a key project to have a tangible positive impact on the citizens of
Kalispell; and
WHEREAS, on December 4, 2017, and pursuant to MCA 76-1-604, the Kalispell City Council
passed Resolution No. 5846A, thereby amending the Kalispell Growth Policy with the adoption of a
Downtown Plan; and
WHEREAS, on December 18, 2018, and pursuant to the Montana Urban Renewal Act, MCA Title
7, Chapter 15, Part 42, the Kalispell City Council, after making all necessary investigation and establishing
the appropriate findings of fact, passed Ordinance No 1816 thereby creating the Downtown Kalispell Urban
Renewal District; and
WHEREAS, on February 4, 2019, and pursuant to Montana Code Annotated, Title 7, Chapter 15,
Part 42, as amended (the "TIF Act'), the Kalispell City Council passed Ordinance No. 1820 establishing
a tax increment financing district as an overlay to the Downtown Kalispell Urban Renewal District, naming
it the Downtown Kalispell Urban Renewal Tax Increment Financing District (hereinafter referred to as the
"District") and set January 1, 2020, as the base taxable year for the District; and
WHEREAS, the City is entering into this Contract for Development with Developer for the
purposes of privately funding and constructing an off-street public parking structure within the District and
to be located on unimproved City owned real property currently used for surface parking situated in Section
18 Township 28 North, Range 21 West, P.M.M. Flathead County, Montana and located at the corner of Is`
Street West and V Avenue West and more particularly described as Lots 17, 18, 19, 20, 21, 22, 23, and 24
of Block 46 of Kalispell Original Townsite Map of record in the Office of Clerk and Recorder for Flathead
County; and
WHEREAS, pursuant to Section 7-15-4288 of the TIF Act, eligible costs to be paid by the City
include the acquisition, construction, and improvement of public improvements or infrastructure, publicly
owned buildings, and any public improvements authorized by Title 7, chapter 12, parts 41 through 45; Title
7, chapter 13, parts 42 and 43; and Title 7, chapter 14, part 47 as well as use of tax increment derived from
the District for reimbursement of the costs for public improvements authorized to be made pursuant to the
TIF Act; and
WHEREAS, it is the purpose of this Contract for Development to set forth the respective
commitments, rights, and obligations of the City and the Developer in which the Developer privately
finances, designs, and constructs a parking structure with street level storefront spaces upon the City owned
real property, described above, for which the City shall give to Developer a Note secured by a pledge of
Available Tax Increment derived from the District; and
WHEREAS, the City has determined that the application of Available Tax Increment contemplated
herein and the fulfillment generally of this Agreement, are in the vital and best interests of the City and the
health, safety, morals, and welfare of its residents, and in accord with the public purposes and provisions
of applicable State of Montana laws and local laws and requirements.
NOW, THEREFORE, in consideration of the mutual obligations contained in this Agreement, the
parties agree as follows:
ARTICLE I
Definitions; Exhibits; Interpretation
Section 1.1. Definitions. The following terms shall have the meanings given in this Agreement,
unless a different meaning clearly appears from the context:
"Affiliate" means with respect to the Developer (a) any corporation, partnership, limited liability
company or other business entity or person controlling, controlled by or under common control with the
Developer, and (b) any successor to such party by merger, acquisition, reorganization, or similar transaction
involving all or substantially all the assets of such party (or such Affiliate). For the purpose hereof the
words "controlling", "controlled by" and "under common control with" shall mean, with respect to any
corporation, partnership, limited liability company or other business entity, the ownership of fifty percent
(50%) or more of the voting interests in such entity possession, directly or indirectly, of the power to direct
or cause the direction of management policies of such entity, whether ownership of voting securities or by
contract or otherwise.
"Agreement" means this Contract for Development, as the same may be from time to time
modified, amended, or supplemented.
"City" means the City of Kalispell, Montana.
"City Representative" means the City Manager or other City official, or staff so designated in
writing by the City Manager.
"Construction Plans" means the plans, specifications, drawings and related documents on the
construction work to be performed by the Developer on the Development Property, including the Minimum
Improvements and the related site improvements, which (a) shall be as detailed as the plans, specifications,
drawings and related documents which are submitted to the appropriate building officials of the City, and
(b) shall include at least the following: (1) site plan; (2) foundation plan; (3) floor plan for each floor; (4)
cross sections of each (length and width); (5) elevations (all sides); (6) landscape plan; and (7) such other
plans or supplements to the foregoing plans as the City may reasonably request to allow it to ascertain the
nature and quality of the proposed construction work.
assigns.
"County" means the County of Flathead, Montana, its successors and assigns.
"Developer" means Montana Hotel Development Partners, LLC, or its permitted successors and
"Development Property" means the real property described in Exhibit A of this Agreement.
"District' means the Downtown Kalispell Urban Development Tax Increment Financing District,
established by the City Council of the City pursuant to the TIF Ordinance.
"Environmental Laws and Regulations" means and includes the Federal Comprehensive
Environmental Compensation Response and Liability Act ("CERCLA" or the "Federal Superfund Act") as
amended by the Superfund Amendments and Reauthorization Act of 1986 ("SARA"), 42 U.S.C. §§ 9601
et seq.; the Federal Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. §§ 6901 et
seq.; the Clean Water Act, 33 U.S.C. § 1321 et seq.; and the Clean Air Act, 42 U.S.C. §§ 7401 et seq., all
as the same may be from time to time amended, and any other federal, state, county, municipal, local or
other statute, code, law, ordinance, regulation, requirement or rule which may relate to or deal with human
health or the environment including without limitation all land use, zoning, and stormwater control
regulations as well as all regulations promulgated by a regulatory body pursuant to any statute, code, law,
ordinance, regulation, requirement or rule.
"Event of Default" means an action by the Developer listed in Article VIII of this Agreement.
"Maturity Date" shall be the date of the issuance of a Certificate of Completion for the Minimum
Improvements defined in the Development Agreement for the public off-street parking structure at 1 S' Street
West and I" Avenue West described above in the Recitals.
"Minimum Improvements" means the construction on the Development Property on Lots 17, 18,
19, 20, 21, 22, 23, and 24 of Block 46 of Kalispell Original Townsite Map of record in the Office of Clerk
and Recorder for Flathead County, including related site improvements, according to the set of plans
approved by the City, all in compliance with the requirements pertaining thereto as set forth in this
Agreement.
"Prevailing Wage Rates" means the Montana Prevailing Wage Rate for public works projects as
published from time to time by and available from the Montana Department of Labor and Industry,
Research and Analysis Bureau, P.O. Box 1728, Helena, Montana 59624, telephone number (800) 541-3904.
"Project" means the Development Property as improved by the Minimum Improvements.
"State" means the State of Montana.
"TIF Act" means Montana Code Annotated, Title 7, Chapter 15, Part 42, as amended.
"TIF Ordinance" means Ordinance No. 1820, adopted by the City Council on February 4, 2019.
"Unavoidable Delays" means delays beyond the reasonable control of the party seeking to be
excused as a result thereof which are the direct result of strikes, other labor troubles, prolonged adverse
weather or acts of God, fire or other casualty to the Minimum Improvements, litigation commenced by third
parties which, by injunction or other similar judicial action, directly results in delays, or acts of any federal,
State or local governmental unit (other than the City in exercising its rights under this Agreement) which
directly result in delays. Unavoidable Delays shall not include delays (except those attributable to
government -imposed moratoria) in the obtaining of permits or governmental approvals necessary to enable
construction of the Minimum Improvements by the dates such construction is required under Section 4.4
of this Agreement.
Section 1.2. Exhibits. The following exhibits are attached to and by reference made a part of this
Agreement:
Exhibit A Legal Description of Development Property
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the City. The City makes the following representations and
warranties as the basis for its covenants herein:
(a) The City is a municipal corporation duly organized and existing under the laws of the State.
Under the provisions of the TIF Act, the City has the power to enter into this Agreement and carry out its
obligations hereunder.
(b) The City owns an unencumbered fee interest in the Development Property.
(c) There is no litigation pending or, to the actual knowledge of the City, threatened against
the City questioning the validity or enforceability of this Agreement or the due execution and delivery of
this Agreement by the City.
(d) To the actual knowledge of the undersigned officials of the City, the execution and delivery
of this Agreement does not materially violate any agreement or any court order or judgment in any litigation
to which the City is a party or by which it is bound.
Section 2.2. Representations and Warranties by the Developer. The Developer makes the
following representations and warranties as the basis for its covenants herein:
(a) The Developer is (i) a Limited Liability Company, duly organized and in good standing
under the laws of the State, (ii) not in violation of any provisions of its articles of organization or
membership agreement, and (iii) duly authorized to transact business within the State.
(b) The Developer has the power to enter into this Agreement and has duly authorized the
execution, delivery, and performance of this Agreement by proper action of its members.
(c) The Developer has received no notice or communication from any local, State or federal
official that the activities of the Developer may be or will be in violation of any environmental law or
regulation (other than those notices or communications of which the City is aware, if any). The Developer
is not aware of any facts the existence of which would cause it to be in violation of or give any person a
valid claim under any local, State, or federal environmental law, regulation or review procedure.
(d) Neither the execution and delivery of this Agreement, the consummation of the transactions
contemplated hereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement
is prevented, limited by or conflicts with or results in a breach of, the terms, conditions or provisions of any
corporate restriction or any evidences of indebtedness, agreement or instrument of whatever nature to which
the Developer is now a party or by which it is bound, or constitutes a default under any of the foregoing,
which default or breach might prevent the Developer from performing its obligations under this Agreement.
(e) The Developer will secure adequate financing for construction of the Minimum
Improvements and will provide adequate evidence to the City of said financing for the construction of the
Minimum Improvements.
(0 The Developer will construct and maintain the Minimum Improvements while it is under
its control in accordance with the terms of this Agreement and all local, State, and federal laws and
regulations including, but not limited to, environmental, zoning, building code and public health laws and
regulations.
(g) The Developer will construct the Minimum Improvements as provided herein in
accordance with all local, State, and federal energy -conservation laws and regulations.
(h) The Developer will obtain, in a timely manner, all required permits, licenses and approvals,
and will meet, in a timely manner, all requirements of all applicable local, State, and federal laws and
regulations which must be obtained or met before the Minimum Improvements may be lawfully
constructed.
ARTICLE III
Financing of Minimum Improvements; Available Tax Increment
Section 3.1. Status of the Development Property. The City currently owns the fee interest title to
the Development Property upon which it proposes improvements to be constructed consisting of a multi -
deck parking structure and storefronts on the street level. The Developer shall develop plans for the
Minimum Improvements according to the City's direction and present them to the City for its approval.
Section 3.2. Construction Financing Note and Application of Available Tax Increment. The
Developer shall privately finance the construction of the Minimum Improvements. In an addendum to this
Agreement, the parties shall agree upon 1) the construction plans for the Minimum Improvements, 2) the
costs and cost breakdowns for the construction of the Minimum Improvements, 3) the form of the security
agreement in which the City shall pledge Available Tax Increment to secure the City's payments on the
Note, and any other guarantee that may be required of the City for the financing and construction of the
Minimum Improvements
(a) 100 % of the tax increment generated by the Hotel project at 31 and Main will be available to
reimburse the Developer for costs of the Minimum Improvements of the parking structure that
are required for the Hotel development at 31 and Main (including displaced parking) on an
annual basis.
(b) Tax increment generated by other properties in the Downtown Tax Increment district will be
used to reimburse the Developer for costs associated with additional parking in the structure as
requested by the City of Kalispell.
(b)(i) Reimbursement payments will be made over a 12-year period as tax increment
becomes available beginning January 1, of the I` year after completion. The City, at its
discretion may pay a portion, or all, of this obligation in advance.
a. Example 202 spaces are required for the project, under 3.2.(a). 48 parking spaces are
being added to the structure under 3.2.(b). Thus 81% of the minimum improvements
will be reimbursed by tax increment developed by the Hotel, and 19% of the minimum
improvements will be funded through additional available tax increment generated by
properties in the district.
Section 3.3. Records. The City and its representatives shall have the right at all reasonable times
after reasonable notice to inspect, examine all books and records of the Developer relating to the Project.
Such records shall be kept and maintained by the Developer until the Maturity Date. The Developer shall
also use its best efforts to cause its contractor or contractors, all sub -contractors and their agents and lenders
to make their books and records relating to the Project available to the City, upon reasonable notice, for
inspection, examination and audit.
Section 3.4. Financing Contingency. This agreement shall be contingent upon Developer's ability
to obtain financing for the Minimum Improvements, and if Developer is unable to obtain financing by
March 31, 2022, this Agreement shall be terminated, of no further force and effect, and the parties shall
have no further obligation to each other. The Parties, by mutual agreement, may extend this date.
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Minimum Improvements. The Developer agrees that it will construct
the Minimum Improvements on the Development Property in substantial accordance with this Agreement
and its Addendums and, at all times prior to the issuance of the Certificate of Occupancy, will preserve and
keep the Minimum Improvements or cause such improvements to be preserved and kept with the
appurtenances and every part and parcel thereof, in good repair and condition.
Section 4.2. Contractor's Bonds. Developer's Construction Agreement with the general contractor
shall include the following requirement: "The General Contractor shall purchase and maintain performance
and payment bonds each in an amount at least equal to the total Contractor's Compensation as security for
the faithful performance and payment of all of Contractor's obligations under this Agreement. All bonds
shall be obtained from a surety that is duly licensed and authorized to transact business within the state of
Montana and to issue bonds for the limits so required. All bonds shall remain in effect throughout the life
of this Agreement and for a minimum of one (1) year following the date of expiration of Contractor's
warranties. A certified copy of the agent's authority to act must accompany all bonds signed by an agent.
If the surety on any bond furnished by Contractor is declared bankrupt or becomes insolvent or its right to
do business within the state of Montana is terminated, Contractor shall promptly notify City and shall within
twenty (20) days after the event giving rise to such notification, provide another bond and surety, both of
which shall comply with all requirements set forth herein."
Section 4.3. Construction Plans. (a) Generally. Before commencing construction of the Minimum
Improvements, the Developer shall submit the Construction Plans to the City. The City will approve the
Construction Plans in writing if. (i) the Construction Plans conform to the terms and conditions of this
Agreement; (ii) the Construction Plans conform to all applicable federal, State and local laws, ordinances,
rules and regulations; (iii) the Construction Plans are adequate to provide for construction of the Minimum
Improvements; (iv) the Construction Plans do not provide for expenditures in excess of the funds available
to the Developer from all sources for construction of the Minimum Improvements; and (v) no Event of
Default has occurred under this Agreement.
(b) Changes to the Construction Plans. If the Developer desires to make significant changes
in the Construction Plans, in the discretion of the City Representative, after their approval by the City, the
Developer shall submit the proposed changes to the City's building officials for their approval.
Section 4.4. Prevailing Waae Rates: Competitive Bidding. The Developer understands that the
City is obligated to follow certain laws with respect to the expenditure of public funds, which includes
Tax Increment. The Developer agrees to comply with laws that govern City contracting obligations,
including public procurement laws relating to all the Minimum Improvements, such as, without
limitation, laws and rules regarding prevailing wage and solicitation of work on a competitive basis.
Without limitation of the foregoing, the Developer agrees that in the awarding of contracts for the Public
Parking Unit (i) it will, and it will cause its contractor to, publicly bid competitively contracts for each
component of the Public Parking Unit, and (ii) through its contract with its contractor, it will, require its
contractor to pay the Prevailing Wage Rates on all such contracts related to the Minimum Improvements.
The Developer will provide to the City all documentation requested to verify the compliance of the
Developer and its contractor with the foregoing requirements. Failure of the Developer or its contractor to
bid competitively contracts for each component of the Minimum Improvements or to require contracts
entered into directly with contractors or sub -contractors to include provisions requiring the contractor or
sub -contractor to pay the Prevailing Wage Rates on the work related to the Minimum Improvements will
be considered a breach of this Agreement and the City will be entitled, at its discretion and without
obligation, to exercise any and all measures to assure compliance and retroactive compensation plus interest
to workers not paid in accordance with this Agreement, and recovery of any penalty or fine assessed by the
State attributed to any failure to pay the Prevailing Wage Rates
Section 4.5. Commencement and Completion of Construction. Subject to Unavoidable Delays, the
Developer shall commence construction of the Minimum Improvements no later than March 1, 2023 . Subject
to Unavoidable Delays, the Developer shall have substantially completed the construction of the Minimum
Improvements no later than March 31, 2024. The signatories by mutual agreement, may extend these dates.
All work with respect to the Minimum Improvements to be constructed or provided by the Developer on the
Development Property shall be in conformity with the Construction Plans. The Developer shall make such
reports to the City regarding construction of the Minimum Improvements as the City deems necessary or
helpful in order to monitor progress on construction of the Minimum Improvements.
Section 4.6. Utilities. The Developer shall not interfere with, or construct any improvements over, any
public street or utility easement without the prior written approval 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. The
Developer at its own expense shall replace any public facilities or utilities damaged during construction of the
Projects or the Public Parking Unit by the Developer or its agents or by others acting on behalf of or under their
direction or control of the Developer.
Section 4.7. Permits and Compliance With Laws. The Developer will obtain, in a timely manner, all
required permits, licenses and approvals, and will meet all requirements of all local, state and federal laws, rules
and regulations which must be obtained or met in connection with the acquisition and construction of the
Minimum Improvements. Without limiting the foregoing, the Developer will request and seek to obtain from
the City or other appropriate governmental authority all necessary land use, zoning, and building permits. The
Developer will comply in all material respects with all Environmental Laws and Regulations applicable to the
construction, acquisition, and operation of the Minimum Improvements, will obtain any and all necessary
environmental reviews, licenses or clearances under, and will comply in all material respects with,
Environmental Laws and Regulations. In addition, the Developer shall comply fully with all applicable state
and federal laws, regulations, and municipal ordinances related to worker safety including but not limited to
the Occupational Safety and Health Act (OSHA), the safety rules, codes, and provisions of the Montana Safety
Act in Title 50, Chapter 71, MCA, all applicable City, County, and State building and electrical codes, and the
Americans with Disabilities Act.
Section 4.8. Non -Discrimination and Equal Pay Affirmation. The Developer agrees to require its
contractor(s) to be in compliance with Title 49 Human Rights, Montana Code Annotated, regarding activities
related to the Minimum Improvements. The Developer agrees that in its contracts with its contractors the
Developer's contractor will be required to require its subcontractors to comply with Title 49 Human Rights,
Montana Code Annotated, regarding activities related to the Minimum Improvements. The Developer agrees
to provide copies of all such contracts upon request by the City.
Section 4.9. Worker's Compensation Insurance. The Developer shall provide in its construction
contracts related to the Minimum Improvements with all of its respective contractors that such contractors are
to be covered by a Worker's Compensation insurance program with the State, a private insurance carrier, or an
approved self-insurance plan in accordance with State law.
Section 4.10. Certificate of Completion. (a) After completion of the Minimum Improvements in
accordance with the Construction Plans and all terms of this Agreement, the City will furnish the Developer
with a Certificate of Completion, a form of which is attached hereto as Exhibit B.
(b) The Certificate of Completion will be in recordable form in the proper County office for
the recordation of instruments pertaining to the Development Property. If the City refuses or fails to provide
the Certificate in accordance with the provisions of this Section 4.10, the City shall, within 30 days after
written request by the Developer, provide the Developer with a written statement, indicating in adequate
detail in what respects the Developer has failed to complete the Minimum Improvements in accordance
with the provisions of the Agreement, or is otherwise in default, and what measures or acts will be
necessary, in the opinion of the City, for the Developer to take or perform in order to obtain such Certificate.
(c) The construction of the Minimum Improvements shall be deemed to be complete at such
time as the Developer is legally entitled to the issuance of a certificate of occupancy by the City with respect
thereto.
ARTICLE V
Insurance
Section 5.1. Insurance. (a) The Developer agrees to provide and maintain at all times during the
process of constructing the Minimum Improvements and, from time to time at the request of the City,
furnish the City with proof of payment of premiums on:
(i) Builder's risk insurance, written on the so-called "Builder's Risk -- Completed
Value Basis," in an amount equal to one hundred percent (100%) of the insurable value of the
Minimum Improvements at the date of completion, and with coverage available in nonreporting
form on the so called "all risk" form of policy;
(ii) Comprehensive general liability insurance (including operations, contingent
liability, operations of subcontractors, completed operations and contractual liability insurance)
together with an Owner's Contractor's Policy with limits against bodily injury and property damage
of not less than $1,000,000 for each occurrence (to accomplish the above required limits, an
umbrella excess liability policy may be used); and
(iii) Workers' compensation insurance, with statutory coverage.
The policies of insurance required pursuant to clauses (i) and (ii) above shall be placed with financially
sound and reputable insurers licensed to transact business in the State. The policy of insurance delivered
pursuant to clause (i) above shall contain an agreement of the insurer to give not less than thirty (30) days'
advance written notice to the City in the event of cancellation of such policy or change affecting the
coverage thereunder. The City shall be named as an additional insured under the policies of insurance
referred to in (i) and (ii) above.
(b) Prior to the Maturity Date, the Developer shall maintain, or cause to be maintained, at its
cost and expense, and from time to time at the request of the City shall furnish proof of the payment of
premiums on, insurance as follows:
(i) Insurance against loss and/or damage to the Minimum Improvements under a
policy or policies covering such risks as are ordinarily insured against by similar businesses,
including (without limiting the generality of the foregoing) fire, extended coverage, vandalism and
malicious mischief, heating system explosion, water damage, demolition cost, debris removal,
collapse and flood, in an amount not less than the full insurable replacement value of the Minimum
Improvements. No policy of insurance shall be so written that the proceeds thereof will produce
less than the minimum coverage required by the preceding sentence, by reason of coinsurance
provisions or otherwise, without the prior consent thereto in writing by the City. The term "full
insurable replacement value" shall mean the actual replacement cost of the Minimum
Improvements and shall be determined from time to time at the request of the City, but not more
frequently than once every three years, by an insurance consultant or insurer, selected and paid for
by the Developer and approved by the City; and
(ii) Such other insurance, including worker's compensation insurance respecting all
employees of the Developer, in such amount as is customarily carried by like organizations engaged
in like activities of comparable size and liability exposure.
In lieu of any of the foregoing, the Developer may provide evidence to the City that the Developer has self -
insured for the amounts and terms satisfying this Section.
(c) The parties agree that all the provisions set forth in this Article shall terminate upon the
Maturity Date.
Section 5.2. Notification,• Repair Reconstruction and Restoration. Until the Maturity Date the
Developer agrees to notify the City immediately in the case of damage exceeding $50,000 in amount to, or
destruction of, the Minimum Improvements, or any portion thereof resulting from fire or other casualty.
Subject to the rights of lenders, in such event the Developer shall forthwith repair, reconstruct, and restore
the Minimum Improvements to substantially the same or an improved condition or value as it existed prior
to the event causing such damage and, to the extent necessary to accomplish such repair, reconstruction,
and restoration, the Developer will apply the net proceeds of any insurance relating to such damage received
by the Developer to the payment or reimbursement of the costs thereof.
The Developer shall complete the repair, reconstruction, and restoration of the Minimum
Improvements, whether or not the net proceeds of insurance received by the Developer for such purposes
are sufficient to pay for the same. Any net proceeds remaining after completion of such repairs,
construction and restoration shall be the property of the Developer.
ARTICLE VI
Financing
Section 6.1. Generally. (a) Before commencement of construction of the Minimum Improvements,
the Developer shall submit to the City Representative evidence of one or more commitments for financing
which, together with committed equity for such construction, is sufficient for payment of costs of
construction of the Minimum Improvements
(b) If the City Representative finds that the financing is sufficiently committed and adequate
in amount to pay the costs specified in paragraph (a) then the City shall notify the Developer in writing of
its approval. Such approval shall not be unreasonably withheld and either approval or rejection shall be
given within thirty (30) days from the date when the City is provided the evidence of financing. A failure
10
by the City to respond to such evidence of financing shall be deemed to constitute an approval hereunder.
If the City rejects the evidence of financing as inadequate, it shall do so in writing specifying the basis for
the rejection. In any event the Developer shall submit adequate evidence of financing to the City within
ten (10) days after such rejection.
Section 6.2. Limitation Upon Encumbrance of Development Property. The Developer agrees not
to engage in any financing creating any mortgage or other encumbrance or lien upon the Development
Property or the Minimum Improvements, whether by express agreement or operation of law, or suffer any
encumbrance or lien to be made on or attached to the Development Property or the Minimum
Improvements.
ARTICLE VII
Prohibitions Against Assignment; Indemnification
Section 7.1. Representation as to Development. The Developer represents and agrees that its
undertakings pursuant to this Agreement are and will be for the purpose of development of the Development
Property for the use and ownership of the City.
Section 7.2. Prohibition Against Developer's Assignment of Agreement. The Developer
represents and agrees that except for the purpose of obtaining financing necessary to enable the Developer
to perform its obligations with respect to constructing the Minimum Improvements under this Agreement,
and any other purpose authorized by this Agreement, the Developer has not made or created and will not
make or create or suffer to be made or created any total or partial assignment or transfer in any other mode
or form of or with respect to this Agreement or any part thereof or any interest therein, or any contract or
agreement to do any of the same (collectively, a "Transfer"), without the prior written approval of the City,
unless the Developer remains liable and bound by this Agreement, in which event the City's approval is
not required. In the absence of a specific written agreement by the City to the contrary, no such transfer or
approval by the City thereof shall be deemed to relieve the Developer or any other party bound in any way
by this Agreement or otherwise with respect to the construction of the Minimum Improvements from any
of its obligations with respect thereto. The provisions of this Section 7.2(a) shall not limit transfers to
Affiliates of the Developer.
Section 7.3. Release and Indemnification Covenants. (a) The City and the governing body
members, officers, agents, servants and employees thereof (the "Indemnified City Parties"), except for any
willful misrepresentation or any willful or wanton misconduct or negligence of the Indemnified Parties,
shall not be liable for and the Developer shall indemnify and hold harmless the Indemnified City Parties
against any loss or damage to property or any injury to or death of any person occurring at or about or
resulting from any defect in the Development Property or any improvements constructed thereon, but only
to the extent that such defects were caused or committed during the periods that the Developer controlled
the Development Property prior to and up to the issuance of the Certificate of Completion.
(b) Except for any willful misrepresentation or any willful or wanton misconduct or negligence
of the Indemnified City Parties, and except for any breach by any of the Indemnified City Parties of their
obligations under this Agreement, the Developer agrees to protect and defend the Indemnified City Parties,
now and forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or
other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from this
Agreement, or the transactions contemplated hereby or any improvements constructed upon the
Development Property.
A
(c) Except for any willful misrepresentation or any willful or wanton misconduct or negligence
of the Indemnified City Parties, the Indemnified City Parties shall not be liable for any damage or injury to
the persons or property of the Developer or its Affiliates, officers, agents, servants or employees or any
other person who may be about the Development Property or any improvements constructed thereon.
(d) All covenants, stipulations, promises, agreements, and obligations of the City contained
herein shall be deemed to be the covenants, stipulations, promises, agreements, and obligations of such
entities and not of any governing body member, officer, agent, servant, or employee of such entities in the
individual capacity thereof.
ARTICLE VIII
Events of Default
Section 8.1. Events of Default Defined. 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, any one or
more of the following events:
(a) failure by the Developer or an Affiliate to observe or perform any covenant, condition,
obligation or agreement on its part to be observed or performed under this Agreement;
(b) if the Developer or an Affiliate shall:
(i) file any petition in bankruptcy or for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under the United
States Bankruptcy Act or under any similar federal or State law; or
(ii) make an assignment for benefit of its creditors; or
(iii) admit in writing its inability to pay its debts generally as they become due; or
(iv) be adjudicated a bankrupt or insolvent
(c) failure by the City to observe or perform any material covenant, condition, obligation or
agreement or its part to be observed or performed under this Agreement.
Section 8.2. Remedies on Default. Whenever any Event of Default referred to in Section 8.1 of
this Agreement occurs, the non -defaulting party may exercise any of the following rights under this Section
after providing thirty (30) days written notice to the other of the Event of Default, but only if the Event of
Default has not been cured within said thirty (30) days or, if the Event of Default is by its nature incurable
within thirty (30) days, the defaulting party does not, within such thirty (30) day period, provide assurances
reasonably satisfactory to the party providing notice of default that the Event of Default will be cured and
will be cured as soon as reasonably possible:
(a) suspend its performance under this Agreement until it receives reasonably satisfactory
assurances that the defaulting party will cure its default and continue its performance under this Agreement;
(b) cancel and rescind or terminate its obligations under this Agreement or any portion thereof,
(c) if the default occurs prior to completion of any portion of the Minimum Improvements, the
City may withhold the Certificate of Completion with regard to the uncompleted portion; or
12
(d) take whatever action, including legal, equitable or administrative action, which may appear
necessary or desirable to collect any payments due under this Agreement, or to enforce performance and
observance of any obligation, agreement, or covenant of the defaulting party under this Agreement.
Section 8.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to any party in
this Agreement 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 this 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
thereof, 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 to exercise any remedy reserved to it, it shall not be necessary to give
notice, other than such notice as may be required in this Article.
Section 8.4. No Additional Waiver Implied by One Waiver. In the event any agreement contained
in this Agreement should be breached by any party and thereafter waived by another party, 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.
Section 8.5. City's Attorney Fees. Whenever any Event of Default occurs by the Developer and
if the City shall employ attorneys or incur other expenses for the collection of payments due or to become
due or for the enforcement of performance or observance of any obligation or agreement on the part of the
Developer under this Agreement, the Developer shall, within twenty (20) days of written demand by the
City, pay to the City the reasonable fees of such attorneys and such other expenses so incurred by the City.
ARTICLE IX
Additional Provisions
Section 9. L Conflicts of Interest: Representatives Not Individually Liable. The City and the
Developer, to the best of their knowledge, represent and agree that no member, official, or employee of the
City shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member,
official, 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, or employee of the City shall be personally liable to the
Developer, any Affiliate, 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 the Developer or successor or on any obligations under the terms
of the Agreement.
Section 9.2. Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon
the City, the Developer, any Affiliates, and their respective successors and assigns.
Section 9.3. Severability. In the event any provision of this Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
Section 9.4. Equal Employment Opportunity. The Developer agrees, for itself and any Affiliate,
successors, and assigns, that during the term of this Agreement it will comply with all applicable federal,
State and local equal employment and non-discrimination laws, regulations, and ordinances as they relate
to the development of the Project.
13
Section 9.5. 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 9.6. 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 to the following addresses:
To the Developer: MONTANA HOTEL DEVELOPMENT PARTNERS, LLC
208 1" Ave. E.
Kalispell, MT 59901
Attention: Robert Watson
To the City: City of Kalispell
201 1 st Ave. E.
PO Box 1997
Kalispell, Montana 59903-1997
Attention: City Manager
The City or the Developer may, by notice given hereunder, designate any further or different addresses to
which subsequent notices, requests, or other communications shall be sent.
Section 9.7. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall constitute one and the same instrument.
Section 9.8. Applicable Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Montana.
Section 9.9. Recording. The City may record this Agreement and any amendments thereto with
the County Recorder. The Developer shall pay all costs for recording this Agreement.
Section 9.10. Gender, Etc. Words of any gender include the correlative words of the other gender.
The terms "hereof," "hereby," "herein," "hereto," "hereunder," "hereinafter," and similar terms refer to this
Agreement; and the term "hereafter" means after, and the term "heretofore" means before, the date on which
this Agreement was fully executed.
Section 9.11. Entire Agreement. This Agreement constitutes the entire agreement between the
parties pertaining to its subject matter and it supersedes all prior contemporaneous agreements,
representations, and understandings of the parties pertaining to the subject matter of this Agreement. This
Agreement may be modified, amended, terminated, or waived, in whole or in part, only by a writing signed
by all the parties.
14
IN WITNESS WHEREOF, the City and the Developer have caused this Agreement to be duly
executed by their duly authorized representatives as of the date first above written.
CITY OF KALISPELL, MONTANA
By
Dou uss ,City Manager
STATE OF MONTANA )
) ss.
County of Flathead )
On this (9 day of J aster , 2022, before me, a Notary Public for the State of
Montana, personally appeared Doug Rus ell, proved to me to be the person whose name is
subscribed to the within instrument, and acknowledged to me that he executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year hereinabove first written.
NOT RY PUBLIC for the State of Montana
Printed Name:
SEAL Residing at:
My Commission expires:
AIMEE BRUNCKHORST
NOTARY PUBLIC for the
State of Montana
-* NOTARIAL *_
SEAL
Residing at
Lakeside, Montana
'9TF0FMOP�
/
My Commission Expires
//1111\
December 04, 2024
15
MONTANA HOTEL DEVELOPMENT
PARTNERS, LLC
By Alchemy Development Group, LLC
Member of-Montv6 HotADeWbpment Pater tiers, LLC
I0
STATE OF MONTANA )
) ss.
County of Flathead )
,P. Costa
of Alchemy Development Group, LLC
On this e day of , 2022, before me, a Notary Public for the State of
Montana, personally appeared John P. C sta, as Member of Alchemy Development Group,
LLC, which is a Member of Montana Hotel Development Partners, LLC, proved to me to be
the person whose name is subscribed to the within instrument, and acknowledged to me that
he/she executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year hereinabove first written.
4RY PUBLIC for the State of Montana
Printed Name: L.; S A ,e> 61-ey
SEAL Residing at: l LL T
USA K POOLER
"POp NOTARY PUBLIC for the
N°_'"R` 4 State of Montana
9 SEAL Residing at Kalispell, MT
My Commission Expires
May 05, 2025.
My Commission expires: 05IQ5 (&2�
16
EXHIBIT A
LEGAL DESCRIPTION OF THE DEVELOPMENT PROPERTY
Real property being situated in Section 18 Township 28 North, Range 21 West,
P.M.M. Flathead County, Montana and described more particularly as Lots 17,
18,19, 20, 21, 22, 23, and 24 of Block 46 of Kalispell Original Townsite Map of
record in the Office of Clerk and Recorder for Flathead County Montana.
fts
B-2