Leistiko to Garner/Red Eagle AviationJames Patrick, City Manager
Fred A. Leistiko, Airport Manager
Post Office Box 1997 - Kalispell, Montana 59903-1997 - Telephone (406) 250-3065
Fax - (406) 758-7758
TO: ✓City Manager, Frank Garner (Interim)
City Attorney, Charles Harball
Community Development Director, Susan Moyer
.5
FM: City Airport Manager Fred A. Leistik
RE: Proposed Purchase and negotiations on Red Eagle Aviation
l . I first met with Dave Hoerner in July, 2004, to discuss removal of his easement across the
City's property that was proposed to be sold to Whitefish Credit Union. At that meeting Mr.
Hoerner agreed to remove his easement across City property provided the City acquire an
alternate easement to his business through the National Guard property which lies between his
business and Highway 93.
2. Subsequent to this meeting I negotiated a memorandum of understanding with the
National Guard headquarters in Helena. The National Guard agreed to allow transportation
across their property since the property would be turned over to the City of Kalispell within the
next 18 months anyway. City Attorney was given the documentation for preparation of the
MOU.
3. The MOU information was reported to Mr. Hoerner. His response was to ask about the
City's interest in acquiring his entire property given the fact that it was scheduled for purchase
under the current redevelopment plans. Mr. Hoerner and I started negotiations for the purchase
of his property with the understanding that the City would not be in a position to pay a cash
settlement until after the FAA agreed to fund the redevelopment of the airport.
4. When the City purchased the Torgenson property, Mr. Hoerner asked me to sit down with
him and discuss seriously the purchase of his property.
A. Mr. Hoerner wanted to be an FBO on the new renovated airport and he wanted
the make that clear to the City.
B. Mr. Hoerner was convinced that the City was ready to move forward with the
redevelopment of the airport.
C. Mr. Hoerner realized that his business was a through -the -fence operation that
would be frowned upon by the FAA after the redevelopment took place.
D. Mr. Hoerner wished to maintain his business, and it was not for sale.
However, he would be willing to sell the property and improvements to the City at
a fair appraised price.
5. The appraised price came in at $551,000 and the review confirmed that price. Mr. Hoerner
agreed to a purchase price of $600,000 for the property including the improvements.
6. After reviewing the price and discussing the proposal with the Airport Advisory Council, I
believe that the City should seriously consider closing this deal for the following reasons:
A. This will allow the Whitefish Credit Union buy -sell to go forward.
B. This will eliminate a problem with a through -the -fence operation. The
Hoerner property abuts the current taxiway and jurisdiction/liability becomes a serious
problems if not eliminated.
C. The City will own the property all the way to Highway 93 once the National
Guard property is turned over to the City.
D. When the redevelopment occurs, this operation, now owned by the City, would
be moved to a new location on the airport. The FAA will participate in this move.
E. Once the move is made, a portion of this property could be considered with
the National Guard property making it a more valuable piece of property with
Highway 93 frontage.
7. The purchase is structured without any immediate cash outlay. Mr. Hoerner will agree to
take the purchase price in a lump sum when the FAA agrees to go forward with the
redevelopment. In the meantime the city will take possession of the Red Eagle property and Mr.
Hoerner will lease it back from the City. No lease money will change hands. Instead, Mr Hoerner
will take a debit towards the original purchase price until the redevelopment takes place. Mr.
Hoerner will be responsible for upkeep on the property the same as he is now and Mr. Hoerner
will sign one of our current leases.
8. I fully support this acquisition under the conditions outlined herein and as soon as the legal
documentation can be completed.
October 25, 2004
AN EQUAL EMPLOYMENT OPPORTUNITY EMPLOYER