During their Aug. 6 meeting, City Commissioners will be asked to approve the sale of land to Pasta Montana.

Commissioners approved a 20-year lease to Pasta Montana in July 1996, allowing the company to build a food manufacturing plant in Great Falls.

The lease included the option for Pasta Montana to purchase the property, if exercised before the lease ended.

Annual lease payments were $18,000 for the initial 20-year lease term.

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The Park and Recreation Advisory Board approved the lease and Pasta Montana was the only bid.

There was no appraisal done at that time since under the lease terms, the fair market value would only be established if Pasta Montana exercised its option to buy, according to the city.

Rather than extend the original lease agreement in 2016, city staff reviewed the lease and updated its terms with a five-year term with $27,000 annual lease payments and the option to purchase the property for its appraised value at the time the option was exercised, according to staff.

City Commissioners approved the new lease in 2016.

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In 2021, Pasta Montana notified the city that it was exercising the option to purchase the leased property.

An appraisal was completed at that time with a fair market value of $375,000.

In preparing for the transfer of property, city staff found concerns with their ability to deliver a clean title to the leased area, plus surrounding city property.

Staff determined there was no legally recognized parcel corresponding to the leased parcel and was instead comprised of portions of three recorded parcels, none of which had been property subdivided, according to city staff.

In 2022, the city commissioned Babb Land Surveying, Inc. to retrace the boundaries of the three parcels of record underlying lease parcel and to relocate existing common boundaries to create a separate parcel to transfer to Pasta Montana, according to city staff.

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To resolve the title issues, the city filed a quiet title action in District Court in May 2023.

In April, NorthWestern Energy conveyed any interest in the leased property and surrounding parcels in a quit claim deed recorded with the county.

The city received an order in November 2023, declaring that the city is the owner of the subject parcels, according to the staff report.

Since it was clear that the sale would be delayed, the city and Pasta Montana agreed that 2022, 2023 and 2024 lease payments would be applied to the purchase price.

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Once the quiet title was complete, city staff worked with Babb to complete the survey, draft and locate easements.

In June, the commission approved the survey describing the Pasta Montana parcel and the dedication of public rights of way. The survey was sent to the county for recording and now both parties are ready to complete the property sale, according to city staff.

Commissioners could reject the final sale, but staff cautions that would likely subject the city to litigation since had previously approved the sale through its approval of the purchase options in two separate leases.