HomeMy WebLinkAboutReg 2014-05-19 Item 7.1 - Ordinance - Third Amendment to Tukwila South Development Agreement with Segale PropertiesRAFT
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
TUKWILA, WASHINGTON, RELATING TO DEVELOPMENT
AGREEMENTS AUTHORIZED PURSUANT TO CHAPTER
18.86 OF THE TUKWILA MUNICIPAL CODE; APPROVING
AND AUTHORIZING THE THIRD AMENDMENT TO THE
TUKWILA SOUTH DEVELOPMENT AGREEMENT WITH
SEGALE PROPERTIES, LLC, A WASHINGTON LIMITED
LIABILITY COMPANY; PROVIDING FOR SEVERABILITY;
AND ESTABLISHING AN EFFECTIVE DATE.
WHEREAS, RCW 36.70B.170, et seq. and Tukwila Municipal Code (TMC) Chapter
18.86 authorize development agreements between the City and persons having
ownership or control of real property in order to establish development standards to
govern and vest the development use and mitigation of real properties; and
WHEREAS, the City and Segale entered into that certain Development Agreement
relating to the Tukwila South development, dated June 10, 2009 (the "Development
Agreement "), approved by Ordinance No. 2233, and as amended pursuant to that
certain First Amendment to Development Agreement dated May 18, 2010 (the "First
Amendment ") and that certain Second Amendment to Development Agreement dated
November 20, 2012 (the "Second Amendment "); and
WHEREAS, the City of Tukwila and Segale Properties, LLC, wish to enter into a
Third Amendment to the Tukwila South Development Agreement, a copy of which is
attached hereto as Exhibit A; and
WHEREAS, as required pursuant to TMC Section 18.86.050, a public hearing was
conducted on the 27th day of May 2014 to take public testimony regarding this Third
Amendment to the Development Agreement as proposed;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY ORDAINS AS FOLLOWS:
W: Word Processing \Ordinances \Third amendment to DA- Tukwila South 5 -14 -14
RBT:bjs
Page 1 of 2
67
Section 1. The Third Amendment to the Tukwila South Development Agreement
by and between the City of Tukwila and Segale Properties, LLC, a copy of which is
attached hereto as Exhibit A, is hereby approved and the Mayor is authorized and
directed to execute said Third Amendment to Development Agreement on behalf of the
City of Tukwila.
Section 2. Corrections by City Clerk or Code Reviser. Upon approval of the
City Attorney, the City Clerk and the code reviser are authorized to make necessary
corrections to this ordinance, including the correction of clerical errors; references to
other local, state or federal laws, codes, rules, or regulations; or ordinance numbering
and section /subsection numbering.
Section 3. Severability. If any section, subsection, paragraph, sentence, clause
or phrase of this ordinance or its application to any person or situation should be held to
be invalid or unconstitutional for any reason by a court of competent jurisdiction, such
invalidity or unconstitutionality shall not affect the validity or constitutionality of the
remaining portions of this ordinance or its application to any other person or situation.
Section 4. Effective Date. This ordinance or a summary thereof shall be
published in the official newspaper of the City, and shall take effect and be in full force
five days after passage and publication as provided by law.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at
a Regular Meeting thereof this day of , 2014.
ATTEST /AUTHENTICATED:
Christy O'Flaherty, MMC, City Clerk
APPROVED AS TO FORM BY:
Shelley M. Kerslake, City Attorney
Jim Haggerton, Mayor
Filed with the City Clerk:
Passed by the City Council:
Published:
Effective Date:
Ordinance Number:
Exhibit A: Third Amendment to Development Agreement by and between the
City of Tukwila and Segale Properties, LLC, for the Tukwila South
Development
W: Word Processing \Ordinances \Third amendment to DA- Tukwila South 5 -14 -14
RBT:bjs
68
Page 2 of 2
THIRD AMENDMENT TO
DEVELOPMENT AGREEMENT BY AND
BETWEEN THE CITY OF TUKWILA
AND SEGALE PROPERTIES LLC, FOR THE
TUKWILA SOUTH DEVELOPMENT
THIS THIRD AMENDMENT TO DEVELOPMENT AGREEMENT (the
"Third Amendment ") is made and entered into this day of June, 2014, by and
between the CITY OF TUKWILA ( "City "), a non - charter, optional code
Washington municipal corporation, and SEGALE PROPERTIES LLC, a
Washington limited liability company ( "Segale ").
I. RECITALS
WHEREAS, the City and Segale entered into that certain Development
Agreement relating to the Tukwila South development, dated June 10, 2009 (the
"Development Agreement ") as amended pursuant to that certain First
Amendment to Development Agreement dated May 18, 2010 (the "First
Amendment ") and that certain Second Amendment to Development Agreement
dated November 20, 2012 (the "Second Amendment ").
WHEREAS, Sections 4.8.1 and 4.8.3 of the Development Agreement
require Segale to pay the City an O &M Guarantee for Tukwila South Project
O &M Expenses and for the City and Segale to establish accounting protocols for
the tracking of O &M Revenue and O &M Expenses; and
WHEREAS, the Parties previously agreed to extend the deadline for
executing a memorandum of understanding documenting the accounting
protocols such that the effective deadline for executing such memorandum is
June 16, 2014. The Parties have held many meetings and hired a consultant to
assist with the development of accounting protocols, but agree that accurately
tracking O &M Revenues and O &M Expenses is not feasible; and
WHEREAS, the reimbursement provisions of Section 4.8.1 of the
Development Agreement were based upon an aggressive build -out schedule for
the Tukwila South Project, a schedule which, due to many factors including the
economic downturn, has not proved viable. Given the lack of development
activity to date, and the remaining site preparation work to be performed, the risk
assumptions that led to the provisions set forth in Section 4.8.1 of the
Development Agreement are no longer applicable; and
WHEREAS, the Parties have negotiated an alternative to the O &M
Guarantee, and as such desire to amend the Development Agreement; and
[1]
69
NOW, THEREFORE, in consideration of the mutual promises set forth
herein and the long -term benefit to both the City and Segale, the parties hereby
agree as follows:
11. AGREEMENT
1. The Development Agreement is hereby reinstated and shall be in full -force
and effect. Defined terms used herein shall have the meanings set forth in the
Development Agreement.
2. Segale shall be relieved of the O &M Guarantee obligation set forth in
Section 4.8.1, and Sections 4.8.1, 4.8.3, and 4.8.4.1 are hereby deleted in their
entirety. Segale shall be relieved of the Bridge funding obligations set forth in
Section 4.5.2, and Section 4.5.2 is hereby deleted in its entirety. For purposes of
clarity, the Parties acknowledge and agree that although sewer connection
charges may still apply to the Tukwila South Project, as a result of the elimination
of the O &M Guarantee, the provisions of Section 4.4 concerning credit toward
O &M Revenue for sewer connection charges are no longer applicable.
2.1. Pursuant to Sections 4.8.4 and 4.5.2, Segale has provided the City
with the O &M LC, the O &M Deed of Trust and the Bridge LC, all of which are
unnecessary as a result of this Third Amendment. Therefore, within five (5)
business days of the effective date of this Third Amendment, the City shall
submit to the Escrow Agent a request for release and reconveyance of the O &M
LC, the O &M Deed of Trust and the Bridge LC.
3. The provisions set forth in this Third Amendment are expressly contingent
on the Parties entering into the Fire Facilities Agreement attached hereto as
Exhibit A. The effective date of this Third Amendment shall be the date of mutual
execution of the Fire Facilities Agreement.
4. This Third Amendment shall be recorded against the Tukwila South
property as a covenant running with the land.
5. Notice address for Segale shall be as follows:
If to Segale:
If to the City:
70
Segale Properties LLC
P.O. Box 88028
Tukwila, Washington 98138 -2028
Attn: Mr. Mark A. Segale
City of Tukwila
6200 Southcenter Blvd.
Tukwila, WA 98188
[2]
Attn: City Clerk
6. Except as amended herein, the terms and provisions of the Development
Agreement remain in full force and effect. Any provisions of the Development
Agreement which refer to a section or obligation deleted by this Third
Amendment shall be interpreted as to give full effect to such provision, but for
reference to the deleted section or obligation.
In Witness Whereof, the parties have caused this Third Amendment to be
executed, effective on the day and year set forth on the first page hereof.
CITY OF TUKWILA, a Washington municipal corporation
By:
Jim Haggerton, Its Mayor
Date:
Segale Properties LLC, a Washington limited liability company
By: Metro Land Development, Inc.,
Its: Manager
By:
Date:
M. A. Segale, President
[3]
71
STATE OF WASHINGTON )
) ss.
COUNTY OF )
On this day of , 20_, before me, the
undersigned, a Notary Public in and for the State of Washington, duly
commissioned and sworn, personally appeared M. A. Segale, to me known to be
the person who signed as President of Metro Land Development, Inc., Manager
of SEGALE PROPERTIES LLC, the limited liability company that executed the
within and foregoing instrument, and acknowledged said instrument to be the
free and voluntary act and deed of said limited liability company for the uses and
purposes therein mentioned, and on oath stated that Mario A. Segale was
authorized to execute said instrument on behalf of the limited liability company.
IN WITNESS WHEREOF I have hereunto set my hand and official seal
the day and year first above written.
(Signature of Notary)
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State
of Washington, residing at
My appointment expires:
[4]
72
STATE OF WASHINGTON )
) ss.
COUNTY OF )
On this day of , 20_, before me, the
undersigned, a Notary Public in and for the State of Washington, duly
commissioned and sworn, personally appeared , to me
known to be the person who signed as of the City of Tukwila, the
municipal corporation that executed the within and foregoing instrument, and
acknowledged said instrument to be the free and voluntary act and deed of said
limited liability company for the uses and purposes therein mentioned, and on
oath stated that was authorized to execute said instrument on behalf of
the limited liability company.
IN WITNESS WHEREOF I have hereunto set my hand and official seal
the day and year first above written.
(Signature of Notary)
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State
of Washington, residing at
My appointment expires:
[5]
73
EXHIBIT A
FIRE FACILITIES AGREEMENT
[6]
74