HomeMy WebLinkAboutReg 2005-08-15 Item 6 - Public Hearing - Acquisition of Property West of Southcenter Parkway (South 180th Street) COUNCIL A GENDA SYNOPSIS
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ITEM INFORMATION
CAS NUMBER. 05-114 I ORIGIITAL AGENDA DATE: 8/15/05
AGENDA ITEM TII'LE Decision on options, including condemnation, for acquisition of property west of
Southcenter Parkway between S 180 St and southern city limits
CATEGORY Discussion Motion Resolution Ordinarue Bul Award x Public Hearing Other
Mtg Date Mtg Date Mtg Date Mtg Date Mtg Date Mtg Date 8 -15 -05 Mtg Date
SPONSOR Council x Mayor
Adm Stu x DCD Finance Fire Legal P &R Police PW
SPONSOR'S ROW is needed for Southcenter Parkway, S 178 St and the north detention pond in
SIM4ARY order to construct the projects. Condemnation has been suggested as an option to
obtain the ROW. Council needs to review the alternatives and make a decision on the
appropriate alternative.
REVIEWED BY COW Mtg. CA &P Cmte El F&S Cmte Transportation Cmte
Utilities Cmte Arts Comm Parks Comm Plamung Comm.
DAZE:
RECOMMENDATIONS:
SPONSOR/ADMIN. Direct staff to prepare a resolution based on public hearing input
COMMITTEE
COST IMPACT FUND SOURCE
EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED
Fund Source:
Comments
MTG. DATE 1 RECORD OF COUNCIL ACTION
MTG. DATE ATTACHMENTS
8/15 Memo from TVS Executive Team on alternatives and 2 maps
Letter to Pam Linder from Art McKean, Esq, on behalf of Herman Schoenbachler
TO:
FROM:
DATE:
RE:
ISSUE
City oj Tukwila
Steven M. Mullet} Mayor
Department of Community Development
Steve Lancaste1; Director
MEMORANDUM
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City Council I) ,J;
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Mayor Mullet .7Ytvv
TVS ExecutIve Tea4i1 'i)
Rhonda Berry
Kevin Fuhrer
Shelley Kerslake
Ryan Larson
Steve Lancaster
Jim Morrow
Nick Olivas
Derek Speck
Lisa Vemer
August 15,2005
ACQUISITION OF ROvV FOR SOUTHCENTER P ARKW A Y, S 178 TH STREET,
AND STORMWATER FACILITIES
Should the CIty consIder condemmng property owned by Schoenbachler, LLC for the following
purposes?
o Realignment of Southcenter Parkway
o RealIgnment of South 178th Street.
o Construction of stonnwater facilItIes.
BACKGROUND
Tukwila's CapItal Improvement Program mcludes I) wIdemng of Southcenter Parkway m a revIsed
alIgnment between South 180th Street and the south CIty lImIts (Project No. 84-RvV37) and 2)
realignment of South 178th Street to mtersect wIth Segale Park Dnve C (Project No. 04-RW05).
Segale PropertIes has mdlcated It wIll dedIcate portIOns of necessary nght-of-way that It owns
Schoenbachler, LLC, whIch has not mdIcated a wIllmgness to dedIcate, owns the remamder of the
nght-of-way that would be needed to complete these projects as currently planned.
6300 Southcenter Boulevard, Suite #100 0 Tukwila, Washington 98]88 · Phone: 206-43]-3670 · Fax: 206-43]-3665
Segale and Schoenbachler have executed a purchase and sale agreement covenng the subject
property. The agreement provIdes that the sale wIll not close untll one year after Hennan
Schoenbachler's death or as otherwIse agreed by Schoenbachler, LLC
Design ofthe two road projects is cunently under way (approxImately 60% completed). ~When
desIgn work commenced, It was the CIty'S understandmg that Segale PropertIes would provIde all
of the needed right-of-way. The CIty has recently learned that Segale PropertIes IS not able to
provIde all of the nght-of-way prior to closmg of the property sale described above
Future development of the general area WIll also reqUIre approxImately 7.25 acres of land for
constructIOn of stonnwater management facIlItIes. The proposed locatIOn of these facIlItles IS also
on land owned by Schoenbachler, LLC Attached to thIs memo are maps showmg two optIons for
locatIOn of the stonnwater facilItIes.
Until recently, the CIty believed that these stonnwater facIlitIes would be bUIlt and owned by Segale
PropertIes, and would be located (hidden) behmd future development fronting the relocated
Southcenter Parkway. It now appears that if the stonnwater facilItIes are to be built pnor to the
closmg of the Segale/Schoenbachler property sale, the CIty may have to acquire property adjacent
to Southcenter Parkway for this purpose.
A letter from Schoenbachler LLC attorney Arthur H. McKean asking the CIty not to condemn the
ROW, together wIth copIes of the referenced Real Estate Purchase and Sale Agreement and a
related Ground Lease, are attached to thIS memo.
ANALYSIS
Segale PropertIes has mdicated that the extensIOn and realIgnment of Southcenter Parkway and
South 178th Street, and the "up-ftont" constructIOn of stonnwater management facIlItIes are cntIcal
to the Tukwila South project. TukwIla South is a proposed long-tenn, master-planned, mIxed-use
development of up to approximately 500 acres lymg south of South I 80th Street and north of South
204th Street, between the Green River and OnllIa Road S.
Delay or inabIlIty to acquIre property needed for the proposed street and stonnwater facIlItIes may
result in the Tukwila South project being delayed mdefmltely or, alternatIvely, would requIre
changes to the development concept, phasmg or both. It is possible that significant delay may cause
Segale Properties to re-think its plans for annexatIOn and development.
The Mayor has indIcated that a signed Development Agreement between the CIty and Segale
Properties and completIOn ofthe Tukwila South annexatIOn should occur before any property
acqUIsItion or condemnatIOn procedures begm.
Page 2 of2
P'\Steve and Lisa's Segale Folder\ROW Condemnation\Memo to CC for Public Hearing 8-15-05,doc
AL TERL'iA TIVES
Staff needs polIcy directIOn from the CIty CouncIl so that we may proceed m project planmng and
desIgn. The followmg alternatIves are offered for CouncIl consIderatIon.
I. Put decIsIOns regarding Southcenter Parkway and South l78th Street realignment "on hold"
untIl nght-of-way can be obtamed with owners' cooperatIOn or completIOn of the sale.
Stonnwater facIlItIes remam a pnvate development responsibility.
2. ConsIder condemning nght-of-way needed for relocated and widened Southcenter Parkway,
but not for South 178th Street or for stonnwater facIlItIes Identify stonnwater facilItIes and
South 178th Street constructIOn as pnvate development responsibIlItIes.
3. ConsIder condemning nght-of-way for relocated and wIdened Southcenter Parkway and
South 178th Street realIgnment, but identify stonnwater facIlities as a pnvate development
responsibIlity
4. Consider condemning nght-of-way for Southcenter Parkway, South 178th Street and
stonnwater facIlIties. Under this alternative, it may be necessary to bmld the stonnwater
facIlities adjacent to the realIgned Southcenter Parkway to mmimlze the amount ofland
acquired through condemnatIOn.
RECOlVIMENDATION
That the City CouncIl:
1. open the publIc heanng on August 15 and take public testimony
2. contmue the publIc heanng to August 22
3. take any remaining testImony on August 22, close the heanng, and provIde duectIOn to staff
concerning acquisItion of property for Southcenter Parkway, South 178th Street and proposed
stormwater facilitIes
Page 3 of3
P.\Steve and Lisa's SegaJe Folder\ROW Condemnationilvlemo to CC for Public Hearing 8-15-05.doc
ATTORNEYS AT LAW
RECEIVED
1-'
'AUG 0 8 2005:
COMMUNITY
DfNELOPI'\fI:NT
AIKEN. ST. LOUIS & SIL..JEG. P S
ARTHUR H MCKEAN
'200 NORTON BUILDING
801 SECOND AVENUE
SEATTLE, 'NASHINGTON 98104
DIRECT LINE, (206) 654-1682
E-MAIL. MCKEAi\J@AIKEN COM
FACSIMILE. 206-623-5764
TELEPHONE. 206-624-2650
August 5, 2005
Ms. Pamela Lmder
CouncIl PresIdent
CIty of Tuhvila
6300 Southcenter Blvd.
TuhvIla, WA 98188
Re: Proposed Re-Ahgnment ofS 178th St at Southcenter Parkway
Dear CIty CouncIl:
Our office represents Mr. Herman Schoenbachler who resides ill Tukwila at 18115
Southcenter Parkway. In my dIScussions with CIty representatIves, I have heard thIs property
referred to as the "Llama Farm". I am wnting to provide you wIth some background and a
descriptIon of Mr. Schoenbachler's posItion regarding the proposed relocation of Southcenter
Parkway and South 178th Street through Mr. S cho en bachler' s resIdential property.
1. BACKGROUND
A. History
Mr. Schoenbachler first resided in what is now Tuhvila in 1926 and hIS famIly purchased
their first parcel of real property there in 1932. Mr. Schoenbachler and his family operated a daIry
[ann and lived in a residence located near where the multI-screen movie theater now exists, Just
north of south 178th Street. Mr. Schoenbach1er has many pictures of his origma1 resIdence and his
dairy farm, which he can show you, If you are mterested.
Mr. Schoenbachler eventually acquired the property where he now resides, whIch also
mcludes the golf dnving range south of the residentIal property and a total of approximately 39
acres. I have attached a diagram showing thIS 39 acre property and I wIll refer to the entire property
as the "Schoenbachler Property". (The attached diagram was an exhibIt attached to the 2003 Lease
discussed below.) In 1965, Herman Schoenbachler and rus wIfe, Ruth, completed the existing
residence on the Schoenbachler Property and moved into theIr then new home. Mrs. Schoenbachler
eventually began raising llamas, a hobby she enjoyed very much and she pastured the llamas near
their home.
In a lease dated September 24, 1994, Mr Schoenbachler leased the south portIOn of the
Schoenbach1er Property (In the attached diagram the part of the property NOT designated as Parcel
I, IIA or IIB is the property subject to thIs lease) to Southcenter Golf, Inc., whIch developed the
dnvmg range now located on the property. The 1994 lease did not apply to the north portion of the
(C(())fP'1[
Ms Pamela Lmder
August 5, 2005
Page 2
property where the Schoenbachlers had constructed theIr resIdence and where Mrs. Schoenbachler
pastured her pet llamas. In January 2000, Southcenter Golf, Inc. assigned ItS lease with
Mr. Schoenbachler to La Pianta LLC, a .Washington lImIted lIabilIty company owned and/or
controlled by Mr. M.A. Segale.
In 1995, Mr. Schoenbachler conveyed the Schoenbachler Property to Schoenbachler
Enterpnses, LLC, a Washington limited liabilIty company created by Mr. Schoenbachler to retam
tltle in some of hIS assets and to assist Mr. Schoenbachler wIth hIs estate planning. The lImited
lIabilIty company is owned by Mr. Schoenbachler and other members of his immedIate family.
Following the conveyance of the property to the limIted lIability company, Mr. and Mrs.
Schoenbachler retained control of the company and further retamed the nght to reside in the
residence on the Schoenbachler Property for as long as they wIshed to remam there.
B. 2003 Lease to La Pianta
In 2002, Mark Segale, M.A. Segale and one or more other representatIves of La Planta and
the Segale family, began negotiatmg with Robert Schoenbachler, the son of Hennan, to create a
new lease which would cover not only the south portion of the Sch,oenbachler Property, but also the
north portIOn of the property which included the Schoenbachler resIdence. When these negotiations
began, Robert Schoenbachler infonned the representatIves of the Segale family that there could be
no lease of the north portion of the property without an agreement that first, Mr. and Mrs, Hennan
Schoenbachler could reside in theIr residence for the rest of theIr lives and, second, that for a lImited
penod of time Mr. and Mrs. Hennan Schoenbachler could retam the pasture area for the pet llamas.
In August 2003, following extensIve negotIations, the parties executed a ground lease (the
"2003 Lease") applicable to all 39 acres of the Schoenbachler Property. Mr M.A. Segale signed
the 2003 Lease on behalf of La Planta. As a result of the reqUIrements by the Schoenbachlers
related to continued use of the pasture area and the resIdence area, the first sectIon of the 2003
Lease entitled "DESCRIPTION OF PROPERTY; LESSORS' RESERVED RIGHTS" contains a
descnptIon of a "Pasture License" in Section l(d)(i) and a descriptIOn of a "House License" in
Section l(d)(ii). A copy of pages 1,2, a portion of page 3, and the sIgnature page from the 2003
Lease are attached.
I. The Pasture License in the 2003 Lease
Under the language in subsection (i), the lessor, the Schoenbachlers, retamed until January
I, 2010, a "Pasture License" m the area desIgnated as "Parcel I Pasture Area" in the attached
dIagram. Under this Pasture License, La Planta could not interfere with the Schoenbachlers' use of
the Pasture License area dunng the time of the license, whIch will expIre on December 31,2009.
(Note, the last sentence of this subsectIOn did allow La Pianta to relocate the eastern boundary of
the pasture license area, 85 feet to the west, as long as La Pianta satisfied certam reqUIrements, but
other than this small portion of the Pasture License property, La Pianta was not allowed, under the
2003 Lease, to mterfere with use of the Pasture License property).
Ms. Pamela Lmder
August 5, 2005
Page 3
2. The House License m the 2003 Lease
Subsection (iI) of the 2003 Lease created an area shown on the attached dIagram as Parcels
lIA and lIB, that would be subject to the House License. Parcel II B contamed the residence and
the property nnmedlately surroundmg the resIdence. Parcel II A contained a garage and other
buildings and property adjacent to Parcel II B. The language in Subsection (Ii) refemng to the
House License states:
The House License shall terminate automatically at such time as Herman
Schoenbachler and Ruth Schoenbachler have both ceased to use Lessor's
Buildings as their primary personal resIdence, except that if the House LIcense
has not previously expIred, it shall expIre WIth respect to Parcel II A (but not
with respect to Parcel II B) at II-59 p.m. on December 31,2009. . .
This language provided the protection for the senior Schoenbachlers to use the resIdence for
the rest of their lives, which Robert Schoenbachler insIsted upon at the commencement of the
negotiatIOns leading to the lease. The House License, as it applies to Parcel II B and the
Schoenbachlers' right to occupy the residence on that property, continues as long as eIther Herman
Schoenbachler or Ruth Schoenbachler use the property as their primary residence.
Under Section l(d)(ili) of the 2003 Lease, during the term of the lIcenses created by the
2003 Lease for the benefit of Mr. and Mrs. Schoenbachler, La Pianta may not make any
Improvements on the property covered by the lIcenses, If those Improvements "unreasonably
interfere with the lIcense rights reserved to the lessor. . .". The same paragraph further prohibits
construction on any of the property subject to the lIcense nghts of ". . . any above-ground building
structures on any area then affected by such a license." In short, under the licenses created by the
2003 Lease signed by M.A. Segale, La PIanta may not undertake any improvement to the area
covered by the Pasture License until 2010 and may not make any improvement on the
Schoenbachler Property covered by the House License so long as either Herman or Ruth
Schoenbachler reside in the home.
C. 2003 Purchase Agreement wIth La PIanta
At the same time Robert Schoenbachler and the Segale/La Pianta representatIves negotiated
the 2003 Lease, they also negotiated a real estate purchase and sale agreement for the
Schoenbachler Property. Mr. M.A. Segale signed this purchase agreement for the purchaser,
La Pianta. To protect the right of the senior Schoenbachlers to occupy theIr residence, paragraph
5.1 of the purchase agreement states:
The parties intend that unless otherwise elected by Seller, closmg wIll not occur
until after both Herman Schoenbachler and Ruth Schoenbachler, ., have passed
away.
Ms. Pamela Lmder
August 5, 2005
Page 4
Under this language the sellers, the Schoenbachlers, may elect to close sale of the
Schoenbachler Property early. However, if the Schoenbachlers do not so elect, sale of the
Schoenbachler Property \-vill not close and La Planta may not acqUIre ownershIp In the property
until after both Ruth and Hennan Schoenbachler have passed away. ThIS language preserves the
nght of Ruth and Hennan Schoenbachler to stay in their resIdence and occupy the area covered by
the Pasture License and the House License as provided in the 2003 Lease. The lease agreement and
the purchase agreement sIgned by M.A. Segale for La Planta granted to Mr. and Mrs.
Schoenbachler the absolute right to remain in their home for the rest of theIr lIves.
II. SCHOENBACHLER'S POSITION REGARDING
SOUTHCENTER P ARKW A Y AND SOUTH 178 TH STREET
Hennan Schoenbachler has lived in the Tukwila area, either m or very near his present
resIdence since 1926. Mr. Schoenbachler wishes to remain in his residence for the rest of his life
and the language contained in the purchase agreement and the lease agreement executed by M.A.
Segale for La Pianta, assured hIm that he would be able to remain m hIS residence. Ruth
Schoenbachler passed away in 2004. Out of his deep respect for hIS wIfe's wIshes, Hennan still
continues to pasture Ruth's llamas in the area around their home and he wants to contmue pasturing
the llamas on his propeIiy through the tenn of the Pasture License.
La Planta has now submitted a development proposal to the CIty of Tukwila related to the
property owned by La Pianta on the east side of Southcenter Parkway and La Pianta or Mr. Segale,
of course, have every right to develop the property they own. They do not, however, own the
Schoenbachler Property on the west side of Southcenter Parkway in its present locatIOn. That
property belongs to the Schoenbachlers and although La Pianta has a lease and a pending purchase
agreement related to the property, La PIanta has agreed in those documents that Hennan
Schoenbachler may retam his rights under the Pasture License and under the House LIcense, until
2010 with respect to the Pasture LIcense and for the rest ofMr. Schoenbachler's lIfe wIth respect to
the House License.
La Pianta and Mr. Segale, who signed for La Pianta, have apparently forgotten the promIse
to Mr. Schoenbachler related to the House License and the Pasture LIcense because they have
submitted to the City a proposal to relocate Southcenter Parkway to the west by several hundred
feet and then to add two detention ponds to the west side of Southcenter Parkway in Its relocated
position. If allowed to move forward, relocation of the street and construction of the detention
ponds would eliminate at least 75% of the area covered by the Pasture License. La Planta also
proposes to relocate South 178th Street to a locatIon immediately behind Mr. Schoenbachler's
residence and actually running through a portion of the property covered by the House License.
Construction of this new street behmd Mr. Schoenbachler's home would result in a wall conslstmg
of fill material or a retaining wall nsing an estimated 10 to 20 feet behind Mr Schoenbachler's
house and within only a few feet of his existing residence, The road Itself would cut off a portion of
Ms Pamela Lmder
August 5, 2005
Page 5
the property covered by Mr. Schoenbachler's House License ConstructIOn of the road would make
It impossible for Mr. Schoenbachler to continue resldmg III his home, as agreed in the 2003 Lease.
La PIanta, through Mr. Segale, m the 2003 Lease, promised that untll the year 2010, for the
Pasture License, and as long as Mr. Schoenbachler lived, for the House License, La PIanta would
make no improvements to the area covered by the Licenses that would unreasonably mterfere with
the lIcense rights reserved to Mr. Schoenbachler. The 2003 Lease and the purchase agreement
signed by Mr. Segale for La Pianta prohibit making the improvements now proposed by La Planta
before the City of Tukwila.
La PIanta, in effect, is asking the City of Tukwila to break the promises made to Mr.
Schoenbachler. The Schoenbachler family respectfully requests that the CIty not participate in or
assist La Pianta in breaking those promises.
Very truly yours,
- "
Arthur H. McKean
AHM:bjd
Enclosures
cc: Mr. Steve Mullet, Mayor (w/enc!osures)
Ms. Lisa Vemer (w/enclosures)
Mr. Robert Schoenbachler (w/enc!osures)
L. \SCHOBO\segale\I\0805 linder.doc
schobo.004 (4962-J-E)
EXHIBIT 8
Site Plan of Premises
SCALE 1"= 300'
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Tukwila South Development Excavation Quantities
North Area Excavation and Pond Plan
Vicinity Map
Segale Business Park
GROUND LEASE
~ ~
This lease IS executed as of the~ day of '6u ,.(/ , 2003, by and between
SCHOENBACHLER ENTERPRISES, L.L.C., a \Vas mgton limited liability company,
referred to as "Lessor" and LA PIANTA LLC, a Washmgton limIted liability company
,referred to as "Lessee." Lessor hereby leases to Lessee, and Lessee leases from Lessor that
parcel of real property described herein. Lessee may use the property for all lawful purposes,
subject to the tenns and conditions which are set forth herein.
1. DESCRIPTION OF PROPERTY; LESSOR'S RESERVED RIGHTS
(a) The real property that is the subject of this lease consists of approximately
39.19 acres ofland and all appurtenances thereto situated at approximately 183 rd Avenue and
Southcenter Parkway within the City of Tukwila, County of King, State of Washington, more
particularly described in Exhibit A which is attached hereto and incorporated herein by
reference as though fully set forth herein. The property subject to this lease shall hereinafter
be referred to as the "Premises," and any and all improvements now located on or to be
placed on or about the Premises, including but not limited to buildings and fixtures, shall
hereinafter be referred to as the "Improvements." A site plan of the Premises is attached as
Exhibit B and incorporated herein by reference as though fully set forth herein.
(b) The Premises shall be subject only to those matters of record disclosed by
Transnation Title Insurance Company title insurance commitment No. 800-10051617 dated
July 30, 2002. The Premises also shall be subject to King County property taxes, a lien not
yet payable. Such property taxes, when payable, shall be paid by Lessee.
(c) It is acknowledged by Lessee that Lessee has examined and inspected the
Premises and is satisfied with regard to the size, conditions, zoning and feasibility for
Lessee's intended use and development of the Premises, and said Lessee leases the Premises
with full knowledge based upon its own independent investigation and inspection and not in
reliance on any representation made or allegedly made by Lessor or Lessor's agents. Without
limiting the generality of the foregoing, Lessor specifically disclaims any representation or
warranty whatsoever concerning the size of the 'Premises. In the event it becomes necessary
to install or relocate any water or utility lines or other services in connection with the use or
development of the Premises during the Term hereof, it is agreed that the cost thereof shall be
at the exclusive expense of Lessee and that Lessor shall have no obligation with regard to the
payment of any amounts that may be required to be paid in connection therewith.
(d) Notwithstanding anything to the contrary in this lease, Lessor reserves to itself
the rights set forth in this subparagraph (d).
(i) Lessor reserves to itself a license until January 1,2010 to use as
pasture land the portion of the Premises shown as Parcel I on Exhibit B (the property reserved
for this license being referred to as the "Parcel I Pasture Area," and the license reserved by
GROUND LEASE
[/S80323I 00 I 5l.Doq
PAGEl
8/25/03
Lessor being referred to as the "Pasture License") The Pasture License shall expire at 11'59
p.m on December 31, 2009 unless this license is terminated earlier In accordance with this
subparagraph (d)(i). Lessor shall have the right to tenninate the Pasture License at any time
by written notice to Lessee given no less than six (6) months prior to the date specified in that
notice for termination of the license. The Pasture LIcense shall terminate in any event at the
time the House License described in subparagraph (d)(ii) terminates with respect to all or any
part of Parcel II. The Pasture License is personal to Lessor and is not assignable.
Notwithstanding the foregoing, Lessee shall have the right, upon thirty (30) days'
advance written notice, to modify the boundaries of the Parcel I Pasture Area (and of the
Pasture License) by moving the easterly boundary of the Parcel I Pasture Area eighty-five feet
(85') to the west ("Pasture Modification"). Upon the exercise of its Pasture Modification
right, Lessee shall move the existing fence that runs more or less along the easterly boundary
of the Parcel I Pasture Area to a location that runs more or less along the easterly boundary of
the Parcel I Pasture Area as modified.
(ii) Lessor reserves to itself a license to use the portion of the Premises shown as
Parcels IIA and IIB on Exhibit B (sometimes referred to col1ectively as Parcel II), including
the eXIsting house, garage, barn, shop and al1 other improvements to Parcel II ("Lessor's
Buildings"), as a primary personal residence for Lessor's licensees, Hennan Schoenbachler
and Ruth Schoenbachler (the "House License"). The House License shall terminate
automatically at such time as Hennan Schoenbachler and Ruth Schoenbachler have both
ceased to use Lessor's Buildings as their primary personal residence, except that if the House
License has not previously expired it shall expire with respect to Parcel IIA (but not with
respect to Parcel lIB) at 11 :59 p.m. on December 31,2009, and except that Lessor shall have
the right at any time to terminate the House License with respect to all of Parcel n, or only
with respect to Parcel IIA, by written notice given to Lessee no less than six (6) months prior
to the date specified in that notice for tennination. Lessor shall have no right to tenninate the
House License with respect to Parcel lIB only. During the term of the House License, Lessee
shall have the right to relocate access to the house ITom time to time so long as access
remains reasonable, and provided that any access drive shall be no less than twelve feet (12')
in width and shall be paved. The parties acknowledge that Herman Schoenbachler's and Ruth
Schoenbachler's license to occupy Lessor's Buildings has been granted by Lessor, and that the
leasehold estate created by this lease is subject to that license. The House License is personal
to Lessor, is for the exclusive use of Herman Schoenbachler and Ruth Schoenbachler, and is
not assignable; provided, however, that during the term and to the extent of the House
License, the guests and invitees of Herman Schoenbachler and Ruth Schoenbachler shall
have the right to enter onto and use Lessor's Buildings, and any caretaker for Berman
Schoenbachler and/or Ruth Schoenbachler shall have the right to enter onto and reside in
Lessor's Buildings in connection with his or her duties.
(iii) During the term of each license, Lessee shall have the right to make
such Improvements as Lessee may deem desirable to the portion of the Premises designated
on Exhibit B as license areas provided that those Improvements do not unreasonably interfere
with the license rights reserved to Lessor in thIS Paragraph 1 (d), and provided, further, that
GROUND LEASE
[/SB0323 100 I 5 I .DOC}
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8/25/03
during the term (and to the extent) of any license reserved by Grantor m this subparagraph
1 (d), Lessee shall not build or construct any above-ground buddmg structures on an area
then-affected by such a license.
2. TER1'VI
The term of this lease (the "Term ") shall commence on September 1, 2003 and shall
terminate at midmght on December 3 I, 2052 unless sooner terminated as provided in this
lease
GROUND LEASE
[/SB0323 1001 5I.DOC]
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8/25/03
31. NEGATION OF PARTNERSHIP
Nothing in thiS lease shall be construed to render Lessor in any way or for any
purpose a partner, joint venturer or associate in any relationship WIth Lessee other than that of
landlord and tenant, nor shall this lease be construed to authorIze either to act as agent for the
other.
LESSOR:
SCHOENBACHLER ENTERPRISES, L.L.C.
~
/
LESSEE:
La Pianta LLC,
a Washington limited liability company
By Metro Land Development, Inc., a
Washington corporation, its Manager
/e".---- /.':& ~
M. A. Segale, Presi nt
GROUND LEASE
[/S803231 00 151.DOCj
PAGE 23
snS/03
@@[P)w
REAL EST A TE PURCHASE AND SALE AGREEMENT
Between
Schoenbachler Enterprises, L.L.C., a \Vashington limited liability
company, as Seller
and
La Pianta LLC, a Washington Jimited liability company,
as Buyer
Da ted
46e1'(1 ~ ,2003
[/SB022 1 401 934.DOC)
8/25/03
REAL ESTATE PURCHASE AND SALE AGREEMENT
This REAL ESTATE PURC~E AND SALE AGREEMENT (this
"Agreement") is entered into as of ~h7 ~ ,2003 (the "Effective
Date") between SCHOENBACHLER ENTERPRISES, L.L.C., a Washington limited
liability company ("Seller"), and LA PIANTA LLC, a Washington limited liability
company ("Buyer").
In consideration of the respective agreements set forth below, and for other
good and valuable consideration, the receipt and sufficiency of which are
acknowledged, Seller and Buyer agree as follows:
1. Purchase and Sale of Property; Participation in Section 1031 Tax-
Deferred Exchange
1.1 Sale of Property
Seller agrees to sell and convey to Buyer and Buyer agrees to purchase from
Seller, subject to the terms and conditions set forth in this Agreement, the real
property located in King County, Washington, more particularly described in
EXHIBIT A attached to this Agreement, together with all of Seller's right, title and
interest in and to any rights, licenses, privileges, reversions and easements appurtenant
to the real property, and together with all improvements that are now or at any time
hereafter made a part of the real property (collectively, the "Property").
1.2 Buyer's Tax Deferred Exchange
Seller acknowledges that Buyer may elect to acquire the Property in a manner
that will qualify as a tax deferred exchange under Section 1031 of the Internal
Revenue Code of 1986 (as amended) (the "Code") and the regulations issued under
the Code. Seller agrees to cooperate with Buyer in effecting the purchase of the
Property as a tax deferred exchange under Section 1031 of the Code ("Section 1031
Exchange"). Buyer shall indemnify, defend and hold hannless Seller from and against
any and all losses, obligations, costs, expenses (including, without limitation,
reasonable attorneys' fees), damages, claims or liabilities in connection with Seller's
participation in an exchange under this Agreement, other than liability arising from
Seller's failure to perform its obligations.
Buyer's rights under this Agreement with respect to the purchase of the
Property, including, but not limited to, the right to receive title to the Property, may be
REAL ESTATE PURCHASE AND SALE AGREEMENT
flSB022 140 1934 .DOCl
PAGEl
R/J~lOl
,
. 4.3 Right to Conduct Studies; Removal of Underground Storage
Tanks
Buyer shall have the right at any time prior to closing, upon reasonable notice
to Seller, to take soil and groundwater samples and conduct such testing of the
physical condition of the Property as Buyer shall elect. The parties acknowledge that
there are two underground storage tanks located on the Property. One is a 50D-gallon
gasoline tank located next to the barn, and the other is a 600-gallon heating oil tank
located next to the house. Seller shall have no obligation to remove the underground
storage tanks, and Buyer assumes all responsibilities in connection with the
underground storage tanks. Seller agrees not to install any additional underground
storage tanks on the Property without Buyer's prior written consent.
5. Closing
5.1 Closing Agent and Date
The sale contemplated by this Agreement will be closed in escrow by the Title
Company, or such other escrow agent as Buyer may designate ("Escrow Agent"). The
closing will be held at the offices of Escrow Agent in Seattle, Washington. The
parties intend that, unless otherwise elected by Seller, closing will not occur until after
both Herman Schoenbachler and Ruth Schoenbachler, who are members of Seller,
have passed away. Accordingly, closing shall take place on the first to occur of the
following (lithe Closing Date"): (a) the business day specified by Seller by written
notice to Buyer given not less than one year prior to the date so specified, or (b) the
first business day after the date that is one year after Herman Schoenbachler or Ruth
Schoenbachler passes away, whichever occurs later.
5.2 Closing Deposits
Seller and Buyer shall, on demand, deposit in escrow with Escrow Agent all
instruments and monies necessary to complete the closing of the sale in accordance
with this Agreement.
5.3 Closing Costs
5.3.1 Seller's Costs
Seller shall pay that portion of the premium for the Title Policy attributable to a
standard coverage policy, plus sales tax, state of Washington real estate excise taxes
and any other transfer tax that is applicable to the sale, and one-half (1/2) of the
Escrow Agent's escrow fee.
REAL EST ATE PURCHASE AND SALE AGREEMENT
[/580221401 934.DOC]
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8/25/03
~.:;::~
/
.
13.11 Exhibits
The following exhibits are attached to and made a part of this Agreement by
this reference.
EXHIBIT A - Legal Descriptions of the Property
EXHIBIT B - Memorandum of Agreement
IN WITNESS WHEREqF, the parties have executed this Agreement as of the
date first written above.
Seller:
SCHOENBACHLER ENTERPRISES, L.L.C.
a Washington limited liability company
~2E@il~
Buyer:
La Pianta LLC,
a Washington limited liability company
By Metro Land Development, Inc., a
Washington corporation, its Manager
a-~"'-~
M. A. Segale, Pre Ident
REAL ESTATE PURCHASE AND SALE AGREEMENT
[/58022 I 40 I 934.DOC]
PAGE II
O/"),/fi'1