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Home My WebLink AboutReg 2025-05-19 Item 5A / 6A - Public Hearing - Ordinance Extending Term of Tukwila South Development Agreement with Segale Properties (5 Months)COUNCIL AGENDA SYNOPSIS Initials Meeting Date Prepared by Mayor's review Council review 5/19/25 DCS 6/2/25 DCS ITEM INFORMATION ITEM NO. 5.A. & 6.A. STAFF SPONSOR: DEREK SPECK ORIGINAL AGENDA DATE: 5/19/25 AGENDA ITEM TITLE Tukwila South Development Agreement Fifth Amendment CATEGORY ® Discussion Mtn Date 5/19/25 ❑ Motion Mtg Date ❑ Resolution Mtg Date ® Ordinance Mtg Date 6/2/25 ❑ Bid Award Mtg Date ® Public Hearing Mtg Date 5/19/25 ❑ Other Altg Date SPONSOR ❑ Council ® Mayor ❑ Admin Svcs ® DCD ❑ Finance ❑ Fire ❑ P&R ❑ Police ❑ PTV SPONSOR'S SUMMARY The 2009 Development Agreement governing the Tukwila South subarea expires on June 23, 2025. Segale Properties has requested an extension through December 1, 2025. Council is being asked to hold a public hearing and approve an ordinance authorizing an amendment agreeing to the extension. REVIEWED BY ❑ Trans&Infrastructure Svcs ❑ Community Svcs/Safety ❑ Finance & Governance ❑ Planning & Community Dev. ❑ LTAC DATE: N/A ❑ Arts Comm. ❑ Parks Comm. ❑ Planning Comm. COMMITTEE CHAIR: N/A RECOMMENDATIONS: SPONSOR/ADMIN. Mayor's Office/Department of Community Development COMMITTEE COST IMPACT / FUND SOURCE EXPENDITURE REQUIRED $0 AMOUNT BUDGETED $o APPROPRIATION REQUIRED $0 Fund Source: N/A Comments: N/A MTG. DATE RECORD OF COUNCIL ACTION 5/19/25 MTG. DATE ATTACHMENTS 5/19/25 Informational Memorandum dated 5/13/25 Proposed Ordinance Proposed Fifth Amendment to Development Agreement 6/2/25 23 TO: City of Tukwila Thomas McLeod, Mayor INFORMATIONAL MEMORANDUM City Council FROM: Derek Speck, Economic Development Administrator Nora Gierloff, Community Development Director CC: Mayor McLeod DATE: May 13, 2025 SUBJECT: Tukwila South Development Agreement Fifth Amendment ISSUE The 2009 Development Agreement governing the Tukwila South subarea is due to expire on June 23, 2025. The purpose of this item is to extend the expiration date. BACKGROUND The 2009 Tukwila South Development Agreement was originally scheduled to expire on December 22, 2024. In early 2024, Segale Properties requested a fifteen -year extension of the current agreement. On July 1, 2024, staff briefed the City Council on that request and began negotiating with Segale on terms for a new development agreement. Segale Properties would like the new agreement to take effect before the current one expires. In December 2024 the Council approved the Fourth Amendment which extended the term through June 23, 2025 to allow more time for negotiations. The City and Segale Properties have now reached agreement on nearly all of the issues. The most significant outstanding issue is Segale Properties' request to vest to stormwater standards that were in effect in 1998/2005. To explore all options to reach an agreement on that issue, the parties need additional time. Segale Properties has requested the current agreement be extended to December 1, 2025. The parties believe this is more time than is necessary but want to ensure that the current agreement does not need to be extended again. DISCUSSION The Administration supports extending the current agreement through December 1, 2025. FINANCIAL IMPACT This item has no impact on the city's budget. RECOMMENDATION The Council is being asked to approve the ordinance and consider this item at the May 19, 2025 Regular Meeting and June 2, 2025 Regular Meeting. ATTACHMENTS Draft Ordinance Proposed Fifth Amendment to Development Agreement for the Tukwila South Development 24 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, EXTENDING THE TERM OF A DEVELOPMENT AGREEMENT BETWEEr SHE CITY OF TUKWILA AND SEGALE PROPERTIF , ' LC AND ITS SUCCESSORS FOR THE JKWIL ' SOUTH DEVELOPMENT FOR FIVE MO S; PROV, 'ING FOR SEVERABILITY; AND ESTAB • IN r AN Eh FECTIVE DATE. WHEREAS, the "Tukwila South Pr property, and Segale Properties LLC and i of those acres, which is known as the "Tuk WHEREAS, on June 8, adopted the Development Properties LLC (formerly Tukwila South project. approximately 512 acres of real wns or controls approximately 503 roperty;" and ukwila passed Ordinance No. 2233, which between the City of Tukwila and Segale Pianta LLC) (the "Original Agreement") regarding the WHEREAS, the iginal As -ement was revised six times, with the First, Third, and Fourth Amendments ord: at King County recording nos. 20100726001101, 20140624000980, and 09000508, and two Addenda recorded at King County recording nos. 201302280SI691, and 20130228000692, and the Second Amendment, dated November 20, 2012, which remains unrecorded; and WHEREAS, MAS TUKWILA LLC, a Washington limited liability company ("Mas Tukwila"), LIT INDUSTRIAL LIMITED PARTNERSHIP, a Delaware limited partnership ("LIT Industrial"), H&H ANDOVER PARK, LLC, a Washington limited liability company ("H&H Andover Park") and CONTINENTAL MILLS, INC., a Washington for profit corporation ("Continental Mills") (collectively, "Successors") have each acquired certain parcels subject to the Original Agreement; and WHEREAS, the City of Tukwila owns real property operated as Fire Station 51, located at 17951 Southcenter Parkway, Tukwila, Washington 98188 (King County parcel nos. 3523049008 & 3523049040 (shown as vacant)) within the Tukwila South project area, which Segale Properties dedicated to the City pursuant to a Fire Facilities Agreement (Contract No. 14-065); and 2025 Legislation: Extending Tukwila South Development Agreement Version: 05/01/2025 Staff: Nora Gierloff, Derek Speck Brandon Miles Page 1 of 3 25 WHEREAS, under Section 5.2.3 of the Development Agreement, the Tukwila South Project's vesting of development regulations applies for fifteen (15) years from the effective date of the annexation of the Tukwila South Property to the City of the Tukwila (the "Term" of the Development Agreement); and WHEREAS, the effective date of the annexation of the Tukwila South Property to the City of Tukwila was June 20, 2009, such that the Term of the Original Agreement, as revised, was to expire on December 22, 2024; and WHEREAS, on December 20, 2024, the City of Tukwila, Segale Properties LLC, and its successors executed the Fourth Amendment to the Development Agreement, which extended the Term by six months, such that the Term of the Original Agreement, as revised, expires on June 23, 2025; and WHEREAS, the City of Tukwila, Segale Properties agreed to an additional five -month extension of the Te revised, which extension also applies to Section 5.2.3 Vesting; and , and its successors have the Original Agreement, as inal Agreement, Scope of WHEREAS, pursuant to RCW 36.706.200 18.86.050, a public hearing was held for this ordinance on May 19, 2025; NOW, THEREFORE, THE CITY `y IL " THE CITY OF TUKWILA, WASHINGTON, HEREBY ORDAINS AS Section 1. Extension Development Agreement b successors, as approved by extended by five (5) Agreement Decem Development Agre hereto as "Exhibit A" nt Agreement Term. The Term of the Tukwila, Segale Properties LLC, and its 3 and as subsequently revised, shall be ing the new expiration date of the Development et forth in the attached "Fifth Amendment to ukwila South Development," a copy of which is attached eference fully incorporated herein. Section 2. Correctio •y City Clerk or Code Reviser Authorized. 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 (5) days after passage and publication as provided by law. 2025 Legislation: Extending Tukwila South Development Agreement Version: 05/01/2025 Staff: Nora Gierloff, Derek Speck Brandon Miles 26 Page 2 of 3 PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of 2025. ATTEST/AUTHENTICATED: Andy Youn-Barnett, City Clerk Thomas McLeod, Mayor APPROVED AS TO FORM BY: Filed with the City Clerk: Passed by the City Council: Published: Office of the City Attorney Effective Date: Ordinance N ber: Attachment: Exhibit A — Fifth Amendment to L elopt Agreement 2025 Legislation: Extending Tukwila South Development Agreement Version: 05/01/2025 Staff: Nora Gierloff, Derek Speck Brandon Miles Page 3 of 3 27 When Recorded Return to: Nancy Bainbridge Rogers Cairncross & Hempelmann, P.S. 524 Second Avenue, Suite 500 Seattle, WA 98104-2323 FIFTH AMENDMENT TO DEVELOPMENT , MENT FOR THE TUKWILA SOUTH DEVE ► ' M Reference Number(s) of Documents assigned or ased• 010072. • 01100; 20100726001101; 20130228000691; 20130228000 ' 0624000980; and 20250109000508 Grantor: Grantee: Abbreviated Legal: SEGALE PROPERTIES • Wash on limited liability company MAS TUKWILA LLC, a ed liability company LIT INDUSTRIA MIT : ' RT RSHIP, a Delaware limited partnership H&H AND • R P LL . Washington limited liability company CONTINEN ► , ., a Washington for profit corporation Tax Parcel Nos.: 870021-0050; 870021-0100; 870021-0130; 870040-0230; 870040-0180; 870040-0070; 870040-0120; 870040-0170; a non -charter, optional code Washington municipal 870021-0040; 870021-0090; 032204-9062; 870040-0240; 870040-0190; 870040-0082; 870040-0130; 870040-0010; 870021-0030; 870021-0080; 870040-0200; 870040-0250; 870040-0040; 870040-0090; 870040-0140; 870040-0020; 870021-0020; 870021-0110; 870040-0210; 870040-0260; 870040-0050; 870040-0100; 870040-0150; 870040-0030; 870021-0010; 870021-0120; 870040-0220; 870040-0270; 870040-0060; 870040-0110; 870040-0160; 352304-9109 28 1 FIFTH AMENDMENT TO DEVELOPMENT AGREEMENT FOR THE TUKWILA SOUTH DEVELOPMENT THIS FIFTH AMENDMENT TO THE DEVELOPMENT AGREEMENT (the "Fifth Amendment") is made and entered into this day of June, 2025, by and between the CITY OF TUKWILA, a non -charter, optional code Washington municipal corporation ("City"), SEGALE PROPERTIES LLC, a Washington limited liability company ("Segale"), MAS TUKWILA LLC, a Washington limited liability company ("Mas Tukwila"), LIT INDUSTRIAL LIMITED PARTNERSHIP, a Delaware limited partnership ("LIT Industrial"), H&H ANDOVER PARK, LLC, a Washington limited liability company ("H&H Andover Park") and CONTINENTAL MILLS, INC., a Washington for profit corporation ("Continental Mills") (together, the "Parties"). I. RECITALS WHEREAS, on June 10, 2009, the City and Segale (formerly known as La Pianta LLC) entered a Development Agreement (the "Original Agreement") regarding the Tukwila South project, then comprising approximately 512 acres of real property, and recorded the Original Agreement at King County recording no. 20100726001100, and the Original Agreement was revised six times, with the First, Third, and Fourth Amendments recorded at King County recording nos. 20100726001101, 20140624000980, and 20250109000508 and two Addenda recorded at King County recording nos. 20130228000691 and 20130228000692, and the Second Amendment, dated November 20, 2012, which remains unrecorded. WHEREAS, Mas Tukwila, LIT Industrial, H&H Andover Park, and Continental Mills have each acquired certain parcels subject to the Original Agreement. WHEREAS, the Original Agreement, as revised, is set to expire on June 23, 2025, and all Parties wish to enter a further extension. NOW, THEREFORE, in consideration of the mutual promises set forth herein and the long-term benefit to the Parties, the Parties hereby agree as follows: II. AGREEMENT 1. The first sentence of Section 9.13 of the Original Agreement is hereby amended to read: "The Term of this Agreement is extended to December 1, 2025." The Parties agree the December 1, 2025 expiration date also applies to Section 5.2.3, Scope of Vesting. [signature pages to follow] 2 29 CITY OF TUKWILA, a Washington municipal corporation By: Name: Thomas McLeod Its: Mayor Date: ATTEST: City Clerk APPROVED AS TO FORM: City Attorney STATE OF WASHINGTON ) ) ss. COUNTY OF KING ) On this day personally appeared before me , to me known to be the mayor of CITY OF TUKWILA, a Washington municipal corporation that executed the within and foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said Washington municipal corporation for the uses and purposes therein mentioned, and on oath stated that is authorized to execute said instrument. 2025. GIVEN under my hand and official seal this day of (Print name of notary) NOTARY PUBLIC in and for the State of Washington, residing at My commission expires 30 3 SEGALE PROPERTIES LLC, a Washington limited liability company By: Metro Land Developme Its: Manager By: Name: Mark A. S Its: President Date: STATE OF WASHINGTON ) ) ss. COUNTY OF KING ) On this day personally appeared before me Mark A. Segale, to me known to be the person who signed as President of Metro Land Development, Inc., the manager of SEGALE PROPERTIES LLC, a Washington limited liability company, that executed the within and foregoing instrument, and acknowledged the 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 said individual is authorized to execute said instrument. GIVEN under my hand and official seal this 'day of /la y Eric R. (ifs r• ,2025. (Print name of notary) NOTARY PUBLIC in and forteState of Washington, residing at igo 8/4 L4 My commission expires -3/) /) J 4 31 MAS TUKWILA LLC, a Was ngton li, liability company By: Brett Jacobs Manager Date: STATE OF WASHINGTON ) ss. COUNTY OF KING On this day personally appeared before me BRETT JACOBSEN, to me known to be a manager of the MAS TUKWILA Limited Liability Company, the limited liability company that executed the within and foregoing instrument, and acknowledged the 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 said individual is authorized to execute said instrument. GIVEN under my hand and official seal this t day of NAlc , 2025. • Angela Teano Notary Public State of Washington My Appointment Expires 8/21/2027 Cs,mis h Number 23028425 ng�IA Tza no --- (Print name of notary) NOTARY PUBLIC in and f r the State of Washington, residing at'A' My commission expires 4. 2.1. 2021 32 5 LIT INDUSTRIAL LIMITED PARTNERSHIP, a Delaware limited partnership By: LIT Holdings GP, LLC, a Delaware limited liability company Its: General Partner By: Name: Its: Managing Director Date: 5/8/2025 STATE OF TeX c COUNTY OF D c)J1 p� ss. On this day personally appeared before me on. CDTAC).to me known to be a Me4-1�n gAC o'of LIT Holdings GP, LLC, a Delay re limited liability company, the generallpparVier of LIT INDUSTRIAL LIMITED PARTNERSHIP, a Delaware limited partnership that executed the within and foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said limited partnership, for the uses and purposes therein mentioned, and on oath stated that said individual is authorized to execute said instrument. GIVEN under my hand and official seal this G`day of , 2025. +"74 BRITTANY MCCARTHY 4 ;i'S Notary Public, State of Texas '� +t Comm. Expires 10-07-2028 + '•.;aF;:+` Notary ID 135120198 i ? c4- "01 EX. Cs lmA (Print name of notary) NOTARY PUBLIC in and for the State of T2ua5 residing at 1 jaltccg) Cpi rh, My commission expires 1Cl - 7 - vas $ 6 33 H&H ANDOVER PARK, LLC, a Washington limited liability company By: Peter Hollomon Director Date: Ma/ 020.2.5- STATE OF WASHINGTON ) ) ss. COUNTY OF KING ) On this day personally appeared before me PETER IIOLLOMON, to me known to be a member of the H&H ANDOVER PARK Limited Liability Company, the limited liability company that executed the within and foregoing instrument, and acknowledged the 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 said individual is authorized to execute said instrument. -74 GIVEN under my nd and official seal this 2 day of 1,/W7 , 2025. 94 �`4, JQ$Q;;,ip.JUgrE;,,Ne°1,, '� E. 3 T. o U \oTAA 1,., %, . 0, C/Q.1t�°Q /11'I/ha �a r°4 4- (Print name of notary) pue��G ' _�` NOTARY PUBLIC in and for the State of 1:. .A ..F°i�13CP.-.. .. "" Washington, residing at //fig/- `Pa 24/ My commission expires 7 34 CONTINENTAL MILLS, INC., a Washington for profit corporation By: (s Robert Dilworth Dilworth CFO Date: May 8th, 2025 STATE OF WASHINGTON ) COUNTY OF KING ) ss. On this day personally appeared before me ROBERT DILWORTH, to me known to be CFO of CONTINENTAL MILLS, INC., the corporation that executed the within and foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that .12-1) is authorized to execute said instrument and that the seal affixed, if any, is the corporate seal of said corporation. 2025. GIVEN under my hand and official seal this VI" day of mad ASHLEY SUSANNA NYAL HENDERSON Notary Public State of Washington Commission # 20103646 My Comm. Expires Feb 25, 2028 2oIO1)b4.10 Ott f- ' IA OC-(LCbh (Print name df notary) NOTARY PUBLIC in and for the State of Washington, residing at My commission expires 8 35