HomeMy WebLinkAboutCOW 2012-09-24 Item 4B - Tukwila Village - Disposition and Development AgreementCOUNCIL AGENDA SYNOPSIS
Initials ITEM NO.
Meeting Date Prepared by Ma�or�r review Cy{rncil review
09/10/12 DCS d
09/24/12 DCS T
ITEM INFORMATION
STAFF SPONSOR: DEREK SPECK ORIGINAL AGENDA DATE: 9/10/12
AGENDA ITEM TITLE Tukwila Village Proposed Disposition and Development Agreement (DDA)
CATEGORY Discussion Motion Resolution Ordinance Bid Award Public Hearing Other
Mt
g Date 9110110 Mt g Date Mtg Date Mtg Date Mtg Date Mtg Date Mtg Date
9/24/10
SPONSOR Council Mayor HR DCD Finance Fire IT P&R Police PW
SPONSOR'S City Administration and Tukwila Village Development Associates, LLC have agreed on deal
SUMMARY terms for TVDA to develop Tukwila Village. Final edits have been made to the proposed
Disposition and Development Agreement (DDA) and are included in the packet for review
and consideration by the Council. The agreement will be brought back to a future Regular
or Special meeting for Council approval.
REVIEWED BY COW Mtg. CA &P Crate F &S Cmte Transportation Cmte
Utilities Cmte Arts Comm. Parks Comm. Planning Comm.
DATE: COMMITTEE CHAIR:
RECOMMENDATIONS:
SPONSOR /ADMIN. City Administration
COMMITTEE
COST IMPACT FUND SOURCE
EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED
Fund Source:
Comments:
MTG. DATE
09/10/12
09/24/12
I MTG. DATE
09/10/12
09/24/12
RECORD OF COUNCIL ACTION
Forward to Committee of the Whole meeting of 9/24/12
ATTACHMENTS
Informational Memorandum dated 9/6/12, with attachments
Informational Memorandum dated 9/19/12, with attached DDA and preliminary site plan
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City of Tukwila
Jim Haggerton, Mayor
INFORMATIONAL MEMORANDUM
TO: Mayor Haggerton
City Council
FROM: Derek Speck, Economic Development Administrator
DATE: September 19, 2012
SUBJECT: Tukwila Village Proposed Disposition and Development Agreement
ISSUE
Staff seeks feedback from the City Council as to when it would like to discuss and vote on the
proposed Disposition and Development Agreement for Tukwila Village.
BACKGROUND
On September 10, 2012 City staff presented an overview of the key terms for a proposed
Disposition and Development Agreement (DDA) between the City and Tukwila Village
Development Associates, LLC (TVDA) in order to develop Tukwila Village. The proposed DDA
was not available at that time and is now attached with this report.
DISCUSSION
The key terms identified in the staff report for the Council meeting on September 10, 2012 still
apply to the attached DDA and so they are not repeated in this report. The staff, City Attorney's
Office, and developer are still making some minor modifications to the DDA and will be ready
with a final proposed version in early October. Staff does not anticipate those modifications
changing the intent of the agreement, just tightening up the language to achieve the intent.
We could bring the DDA for discussion and approval at the City Council meetings of October 15,
October 22, or in November. If the Council feels it has sufficient time to review the document in
time, then staff recommends the DDA be brought to the Council meeting on October 15 for
discussion and to October 22 for final discussion and a vote. Based on that schedule, it would
be helpful if Council expresses any significant questions or concerns to staff by October 8 so
that staff, the Attorney's Office, and developer have time to meet and prepare answers by
October 15.
RECOMMENDATION
This item is for discussion only. This item will return to Council at a future date.
ATTACHMENTS
Proposed Disposition and Development Agreement dated September 20, 2012
Preliminary Site Plan dated September 20, 2012
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DISPOSITION AND DEVELOPMENT AGREEMENT
by and between
THE CITY OF TUKWILA
and
TUKWILA VILLAGE DEVELOPMENT ASSOCIATES, LLC
Tukwila Village
Dated as of 2012
w
.s
DISPOSITION AND DEVELOPMENT AGREEMENT
FOR THE
TUKWILA VILLAGE DEVELOPMENT
THIS DISPOSITION AND DEVELOPMENT AGREEMENT (this "Agreement is
entered into and is effective as of the day of 2012 (the "Effective Date by
and between the City of Tukwila, a municipal corporation operating under the laws of the State
of Washington as a non charter code city (the "City and Tukwila Village Development
Associates, LLC, a Washington limited liability company (the "Developer The City and
Developer are sometimes collectively referred to in this Agreement as the "Parties," and
individually as a "Party." The Parties have entered into this Agreement with reference to the
following facts:
RECITALS
A. These Recitals refer to and utilize certain capitalized terms that are defined in
Section 1.1 of this Agreement. The Parties intend to refer to those definitions in connection with
their use in these Recitals. The Parties further intend that the meaning given terms in these
Recitals shall have the same meaning throughout this Agreement.
B. The City of Tukwila owns approximately 164,000 square feet of land plus
approximately 23,000 square feet of 41" Avenue right of way on the northeast corner of Tukwila
International Boulevard plus approximately 90,000 square feet of land on the southeast corner of
Tukwila International Boulevard, totaling approximately 6.4 acres. The City intends this
Property to be used for a Development it calls Tukwila Village.
C. In 2007 the Tukwila City Council adopted the following vision statement for
Tukwila Village:
Tukwila Village will be a welcoming place where all residents can
gather and connect with each other. This mixed -use development
will draw upon Tukwila's strengths and include a library, a
neighborhood police resource center, retail, restaurants, public
meeting space, and an outdoor plaza. The Village may also
include office, live /work, and residential space. This active, vibrant
place will set high standards for quality and foster additional
neighborhood revitalization and civic pride.
D. On March 30, 2011, the City issued a request for qualifications for a proposal to
develop the Property and on June 6, 2011 the City Council selected Developer as the most
qualified among the applicants to develop the Property.
E. The Parties' intent is for the City to sell all of the City -owned Tukwila Village
Property to Developer except for a portion on the northeast corner of the intersection of Tukwila
International Boulevard and South 144 Street intended for a branch of the King County Library
System (the "Library Parcel")
nI
F. Developer shall be allowed to transfer ownership of Development Parcels to
Affiliates of Developer for purposes of facilitating the financing and Development of the
Improvements for each of the Development Parcels.
G. Developer shall be allowed to transfer ownership of a Development Parcel to
another single asset entity owned or controlled by Developer to facilitate the development and
public use of an outdoor community plaza and indoor community commons (the "Plaza Parcel
subject to certain commitments described herein to grant possession and use of such Plaza Parcel
(and the improvements thereto) to a local community -based organization formed, facilitated or
selected by the City and Developer.
H. The boundaries of the Library Parcel, the Development Parcels and the Plaza
Parcel shall be confirmed pursuant to boundary line adjustments proposed by Developer and
approved by the City. Developer shall submit the boundary line adjustment application or
binding site improvement plan along with its initial design review application for City approval
and it shall be recorded prior to issuance of the building permits.
L As of the Effective Date, the City is the owner of the Property generally described
in Exhibit "A" and depicted in attached Exhibit "B and legally described in Exhibits "A 1
throutzh A- 22
J. The City and Developer propose to develop the Property generally in the manner
described in the foregoing Recitals, and more specifically in the manner described and depicted
in the Preliminary Site Plan attached hereto as Exhibit "G and as follows. The Parties' intent is
for the Development of the Property to consist of a mix of uses that serves the residents of the
development, the surrounding neighborhood, and the entire City by providing a place where
people can reside, gather and interact with each other. The Parties further intend that this
Agreement shall be recorded, in the form of the DDA Memorandum, upon Closing and shall
bind Developer and its successors and assigns and transferees and shall be a condition running
with the land until such time at the Estoppel Certificate of Completion is issued, as to each
Development Parcel, or the Agreement is otherwise terminated as to a particular Development
Parcel.
K. Upon satisfaction of certain specified preconditions, the City will convey the
Property (or individual Development Parcels thereof) to Developer and Developer will develop
the Property (or individual Parcels thereof), consisting generally of the following uses and
elements with the corresponding minimum areas or dwelling units:
1. Uses and Sizes:
a. Office Space 20,000 square feet
b. Police Resource Center 2,000 square feet
C. Retail 11,000 square feet
d. Indoor Community Commons 2,000 square feet
e. Outdoor Community Plaza 20,000 square feet
f Housing Units 380 units*
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At least seventy -five percent (75 of the housing units shall be age- restricted (elderly
housing) as defined under the applicable federal fair- housing laws.
Medical /Dental Office Space. Developer shall use its best efforts to
secure a medical and dental clinic consisting of approximately 20,000 square feet to occupy the
Office Space referenced above.
3. Library Space. The City shall use its best efforts to secure a 10,000 square
foot library branch of the King County Library System for the Library Parcel, as hereinafter
defined. Developer shall use its best efforts to coordinate development of the Property and the
Library Parcel in cooperation with the King County Library System in a fashion that creates
efficiencies for infrastructure improvements and such that the two properties function for
vehicles and pedestrians as one integrated development.
4. Income Limits on Non -A�_ Restricted Housing. The Parties intend for the
non -age restricted housing to meet the minimum income restrictions necessary to qualify for
federally tax exempt bond financing. Accordingly, with respect to the housing units that are not
age restricted, to the extent necessary to meet the minimum qualifications for tax exempt bond
financing, approximately 20% of such units may be restricted to households earnin 50% or less
than the area median gross income. The balance of such non -age restricted housing units shall
have no household income restrictions.
5. Income Limits on Aye- Restricted Housing. The Parties intend for the age
restricted (i.e., "senior housing units to be available to a range of household incomes while
enabling all of the housing units to qualify for a real property tax exemption and tax exempt
bond financing. The Parties also intend for a majority of the age restricted housing units to
qualify for federal low income housing tax credits. Accordingly, at least 20% of the age
restricted housing units shall have no household income restrictions and at least 30% of the age
restricted housing units shall either have no household income restrictions or be subject to
household income restrictions not less than 80% of area median gross income. The balance of
such age restricted housing units may have household income restrictions not less than 50% of
area median gross income. The housing units that are both age- and income restricted may also
have rent restrictions to the extent necessary to qualify for federal low income housing tax
credits.
6. Other Uses. Beyond the minimum required uses identified in K(1) of the
Recitals hereto, the Parties' intend the Development to be allowed to include any uses that are
allowed under the City's zoning code.
L. Developer shall be allowed to develop the Property in up to four (4) separate
phases, provided, however, the Plaza Parcel shall be developed in conjunction with the first
Development Phase.
M. The proposed Development is consistent with the City's Comprehensive Plan and
the Tukwila Village Vision statement and will promote the goals and objectives of the
Comprehensive Plan to revitalize the area in and around Tukwila Village.
!2
N. Developer has represented, and the City has determined, that Developer has the
necessary experience, skill, and ability to carry out the commitments contained in this
Agreement.
WITH REFERENCE TO THE FACTS RECITED ABOVE, the City and Developer
agree as follows:
ARTICLE 1
DEFINITIONS, EXHIBITS, SCHEDULE AND CC &Rs
Section 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement,
the following definitions shall apply:
"Affiliate" means, when used in connection with Developer, any Person who owns or
controls, is owned or controlled by, or is under common ownership or control with,
Developer, and "Affiliates" mean all such Persons.
"Agreement" means this Disposition and Development Agreement.
"Approved Constriction Plans" means all plans and specifications in connection with the
constriction of the Improvements associated with a Development Phase, including, but
not limited to, final architectural drawings and specifications, final structural engineering
plans, final civil engineering plans, final Landscaping plans and specifications, and
typical materials, finishes and colors for all residential, retail, commercial and Plaza
components, upon which the City is ready to issue all applicable site development,
engineering and building permits.
"Approved Development Loan" means, as to a Development Phase, any constriction or
permanent loan approved by the City as part of the Approved Financing Plan pursuant to
Section 2.14, and that requires all proceeds of such loan to be used exclusively for
acquisition of the Development Parcels, site development and /or the construction of
Improvements for the Development Phase.
"Approved Site Plan" means the site plan for the Development as approved by the City
through the Board of Architectural Review "BAR design review process.
"Boundary Line Adjustment" or "BLA" means any revision to the legal description of
one or more lots or parcels included in the Property through an approved legal process of
a boundary line adjustment, lot consolidation, binding site plan, or any combination
thereof.
"Business Day" means a day on which the offices of the City are open to the public for
business.
"Casualty" means any damage or destruction to the Developer Responsibility Area, not
authorized in this Agreement, in excess of Fifty Thousand Dollars ($50,000).
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"CC &Rs" means the covenants, conditions and restrictions recorded at the time of
conveyance of each Development Parcel relating to the rights, duties and obligations to
operate and maintain the Plaza Parcel, as more specifically set forth in Section hereof.
"City" means the City of Tukwila, a municipal corporation operating as a non charter
code city under the laws of the state of Washington. Those acting on behalf of the City
may include the Mayor, City employees and authorized consultants.
"City Council" means the Tukwila City Council.
"City Event of Default" has the meaning given in Section 9.3.
"Closing" means the closing of escrow through which the City will convey its fee estate
in a Development Parcel or Parcels to Developer or in the Library Parcel to the KCLS.
"Closing Date" means the date of Closing of escrow with respect to a Development
Parcel or the Library Parcel.
"Commons" means the building (or portion thereof) located within boundaries of the
Plaza Parcel that is leased, or intended to be leased, to the Community Organization, as
more specifically described in Section 2.8.
"Constriction Contract" means the fixed price or guaranteed maximum price
constriction contract between Developer and the General Contractor for constriction of
the Improvements associated with a Development Phase, as submitted by Developer and
approved by the City pursuant to Section hereof.
"Constriction Documents" means, collectively, all Approved Constriction Plans upon
which Developer, and Developer's several Contractors, shall rely in connection with the
constriction of the Improvements associated with a Development Phase, and the
Constriction Schedule.
"Constriction Schedule" means the schedule for constriction of all Improvements
associated with a particular Development Phase.
"Contaminant(s)" means all hazardous substances as defined under the Environmental
Standards.
"Contractors" means, collectively, the General Contractor and any other contractors or
subcontractors retained directly or indirectly by Developer, the General Contractor, or
any Tenant in connection with the constriction of the Improvements associated with the
Development, including the initial tenant improvements within the Development. The
term "Contractors" shall not include any contractor or subcontractor separately retained
by the owner of a Residential Unit following the sale of such Residential Unit by
Developer.
"DDA Memorandum" means the memorandum of this Agreement, substantially in the
form attached hereto as Exhibit 'W". to be recorded as provided in Section hereof.
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"Deed" means the statutory warranty deed by which the City will convey its fee estate in
a Development Parcel to Developer or the Library Parcel to the KCLS at the Closing
thereof. The form of such Deed is attached hereto as Exhibit "C
"Deposit" means the good faith deposit provided by Developer pursuant to Section 2.2 in
the amount of One Hundred Thousand Dollars ($100,000), and specifically does not
include interest that is earned on the Deposit.
"Design Guidelines" and "Design Standards" means collectively, the design criteria,
standards and specifications set forth in this Agreement, the Development Agreement, the
City of Tukwila Land Use Regulatory Code, the approved Phased Development Plan, the
CC &Rs and other legal requirements that affect the Development.
"Developer" means Tukwila Village Development Associates, LLC, a Washington
limited liability company, or any successor thereto as permitted pursuant to the terms of
this Agreement. With reference to any covenant set forth herein, "Developer" shall also
mean and include any subsequent purchaser or assi of an interest in all or part of the
Retained Improvements.
"Developer Event of Default" has the meaning given in Section 9.4.
"Developer- Performed Additional Site Work" shall mean and refer to the Developer
work described in Section 53 hereof.
"Developer Responsibility Area" means all portions of the Property owned or controlled
by Developer from time to time, including all portions occupied by, in the possession of,
or subject to control by Developer pursuant to the Temporary Access Easement described
in Section 2.10 hereof. For purposes of this Agreement, all portions of the Plaza Parcel
under the control of the Community Organization from time to time, including without
limitation, the Parking Improvements and the Street Improvements, shall be deemed to be
controlled by Developer and, consequently, shall be deemed to be a part of the Developer
Responsibility Area.
"Development" means and refers to the Tukwila Village development in its entirety
including all Improvements to be constricted and developed on or in connection with the
Property by Developer or its Contractors in accordance with this Agreement. The
proposed Development is generally described in Recital J, and is more specifically
described and depicted in the Preliminary Site Plan attached hereto as Exhibit "G" and
the Approved Site Plan attached hereto as Exhibit "G -1
"Development Impact Fees" means the development impact fees imposed by the City
pursuant to Chapter 82.02 RCW in connection with the development of the Property.
"Development Parcels" shall mean and refer to each parcel or lot comprising the Property
either as legally described in Exhibits "A -1 through A -22 or as may hereafter be altered
or adjusted or combined pursuant to a Boundary Line Adjustment.
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"Development Phase" shall mean and refer to the planned development of a separate
Development Parcel or Parcels comprising a portion of the Property wherein such
Development Parcel or Parcels will be permitted and developed by Developer, or an
Affiliate thereof, as a single project and pursuant to a common plan of financing and the
approved Phased Development Plan. A Development Phase may include related off -site
utility, transportation or similar improvements.
"Dispute" shall mean an issue or controversy that arises between the Parties concerning
the observance, performance, interpretation or implementation of any of the terms,
provisions, or conditions contained in this Agreement or the rights or obligations of either
Party under this Agreement.
"Effective Date" means the date set forth in the first paragraph of this Agreement.
"Environmental Standards" mean all federal, state and local environmental Laws and
ordinances and all riles and regulations promulgated thereunder, whether currently in
effect or enacted or amended from time to time in the future, including but not limited to
the Endangered Species Act "ESA the Resource Conservation and Recovery Act
"RCRA the Comprehensive Environmental Response, Compensation, and Liability
Act "CERCLA the Clean Air Act as amended (4? U.S.C. 1857, (c) -8), the Clean
Water Act, Section 308 of the Federal Water Pollution Control Act, as amended (33
U.S.C. 1318), the Toxic Substances Control Act, Hazardous Waste Management Act (Ch.
70.105 RCW) and state dangerous waste regulations (Ch. 173.303 WAC), and the Model
Toxic Substances Control Act "MTCA" RCW 70.105.13, et seq. and Ch. 173340 WAC),
and also including but not limited to any guidelines, levels and standards currently in
effect or enacted or amended from time to time in the future by the applicable federal,
state or local regulatory authority for addressing any contamination of any sort.
"Escrow Agent" means such title company or qualified escrow agent upon which the
Parties may subsequently agree, with which an escrow shall be established by the Parties
to accomplish the Closing as provided in this Agreement.
"Estoppel Certificate of Completion" means a certificate defined in Section 5.5 hereof.
"Financing Plan" means, as to each Development Phase, the following documents to be
submitted by Developer for City approval in accordance with Section ?.14 hereof:
A development budget (including all acquisition costs, direct or "hard" costs,
indirect or "soft" costs, and financing costs) for acquiring and developing the
Development Parcel or Parcels and constricting the Improvements associated
with a Development Phase. The development budget shall be based on the
Approved Constriction Plans. At City's request, the development budget shall
also include as supporting documentation the same development budget
information provided to lenders and investors for procuring the debt and equity
funds including (but not limited to) the Constriction Contract.
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A description of any joint ventures, partnerships, financing arrangements or
conveyances that Developer proposes to enter into in order to provide funds for
acquiring, developing and constructing the applicable Development Phase.
A copy of all commitments obtained by Developer to provide financing as
reflected in the development budget, including interim construction financing,
permanent financing, and other financing from external sources (including
proposed joint ventures or partnerships), certified by Developer to be true,
accurate and complete.
Evidence in form satisfactory to the City demonstrating that Developer and other
equity investors or partners and lenders for all sources of equity or loans
identified in the development budget have sufficient capital or funds available to
fulfill the commitments identified in the development budget.
"Force Majeure" means the occurrence of one or more of those events described in
Section 10.4 of this Agreement, permitting an extension of time for performance of
obligations under this Agreement.
"General Contractor" means a licensed, experienced and financially responsible general
contractor with whom Developer has entered into a Constriction Contract for
construction of the Improvements associated with a Development Phase.
"Improvements" means all buildings, strictures, improvements and fixtures now or
hereafter rehabilitated, placed or constricted in, under or upon the Property, including the
Landscaping, and all driveways, roadways, sidewalks, public amenities, fences, paved
areas, utility distribution facilities, lighting, signage and other infrastructure or frontage
improvements to be constricted or installed by Developer, or others, on the Property.
"Indemnified Parties" means, collectively, the City, and its officers (elected and
appointed), employees, attorneys, agents, and successors and assigns.
"King County Library System" or "KCLS" means the King County Rural Library
District.
"Known Contaminant" means any Contaminant, (i) that is discovered by Developer
during pre Closing site investigation, (ii) that is mentioned in any Review Materials as
actually or possibly present in, under or upon a Development Parcel, or any part of the
Developer Responsibility Area, and (iii) the presence of which may reasonably be
inferred from (1) the presence of a mentioned Contaminant (as, for example, the possible
presence of contaminated soil may be reasonably inferred from the presence of an
underground storage tank), or (2) the possible degradation of a mentioned Contaminant,
provided, however, that the term "Known Contaminant" shall not include any
Contaminant that is introduced in, under, upon or emanating from a Development Parcel
following the Closing.
"Landscape" shall mean the landscaping elements of all outdoor public or private
Improvements, including, without limitation, plants, trees and other vegetation,
48 9
"hardscape" surfaces, fences, lighting, planters, trellises, seating, furniture, fixtures and
artwork.
"Later Discovered Pre Conveyance Contaminants" shall mean any Contaminants that are
not Known Contaminants but that existed in, under, upon or emanating from a
Development Parcel prior to the Closing.
"Law(s)" shall mean all present and future applicable laws, ordinances, riles, regulations,
resolutions, authorizations, environmental standards, orders, decrees and requirements of
all federal, state, City and municipal governments, the departments, bureaus or
commissions thereof, authorities, boards or officers, any national or local board of fire
underwriters, or any other body or bodies exercising similar functions having or
acquiring jurisdiction over all or any portion of the Property, including the City acting in
its governmental capacity, or other legal requirements. References to "Laws" shall be
interpreted broadly to include government actions, however exercised, and shall include
laws, ordinances and regulations now in force or hereinafter enacted or amended.
"Library Parcel" means a portion of the Property located at the northeast corner of the
intersection of Tukwila International Boulevard and South 144 Street, as more
specifically defined in Section 2.9(A) hereof, which the City intends to be developed with
a branch of the King County Library System.
"Mayor" means the Mayor of the City of Tukwila, or his or her designee.
"Permitted Exceptions" means the following liens, encumbrances, easements,
encroachments, clouds, conditions, rights of occupancy or possession, as they may relate
to the condition of title to the Property or to an individual Development Parcel:
applicable building and zoning Laws and regulations,
the provisions of this Agreement as evidenced by the DDA Memorandum,
the provisions of the CC &Rs pursuant to Section of this Agreement,
the provisions of any easements granted by Developer and /or City to the KCLS
pursuant to Section hereof as a condition of the KCLS Development
Agreement between Developer and the KCLS,
the provisions of any easements granted by Developer and /or City pursuant to
Section hereof as a condition of the Street Vacation Agreement,
any lien for current taxes and assessments or taxes and assessments accruing
subsequent to recordation of the Statutory Warranty Deed,
liens, encumbrances, easements, encroachments, clouds, conditions, rights of
occupancy or possession shown as exceptions on the title report and which are
Permitted Exceptions allowed pursuant to Section 4.8 hereof, and
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any other matters permitted by Developer in accordance with Section 4.8 hereof.
"Person" means and includes any individual, corporation, partnership, association, joint
stock company, limited liability company, political subdivision, public corporation,
taxing districts, trust, or any other legal entity.
"Plaza" means the outdoor portion of the Plaza Parcel, excluding the Commons, as
shown on the Preliminary Site Plan or, if revised, as shown on the Approved Site Plan,
and as more specifically described in Section 2.8 hereof.
"Plaza Parcel" means the portion of the Property identified as the Plaza Parcel as shown
on the Preliminary Site Plan or, if revised, as shown on the Approved Site Plan. The
Plaza Parcel includes the Plaza and the Commons and is more specifically described in
Section 2.8 hereof.
"Preliminary Plans" means, as to each Development Phase, the architectural and /or
engineering plans, specifications, drawings, elevations, and related documents for the
construction or installation of the Improvements.
"Preliminary Site Plan" means the site plan attached hereto as Exhibit "G."
"Property" shall mean and include, collectively, those lots and parcels described in
Recitals E and I, and more particularly described and shown in the attached Exhibit A-
F through Exhibit "A -22" (Legal Description) and Exhibit "B" (Depiction of the
Property), and shall mean and include such lots and parcels as altered or combined
pursuant to a BLA pursuant to Section hereof. "Property" shall not include the
Library Parcel unless and until the Library Parcel is released by the City to Developer
pursuant to Section hereof.
"Proposed Site Plan" means the site plan submitted by Developer to the BAR in
connection with a design review application for a Development Phase and as revised by
successive iterations prior to building permit approval for the Development Phase by the
City.
"Purchase Price" shall mean the full dollar amount of the purchase price including the
allocable portion of the Deposit as determined in accordance with Section 22 hereof,
plus the amount of readily available funds in U.S. currency that Developer, pursuant to
Section 4.4 of this Agreement, shall be required to pay into escrow as the total amount of
the consideration to be paid to the City for the purchase of an individual Development
Parcel.
"Release" has the same meaning as that term is defined pursuant to the Model Toxic
Substances Control Act "MTCA" RCW 70.105D.020(25)) as now or hereafter amended.
"Remediation" or "Remedial Action" means any action or expenditure to identify,
eliminate, or minimize any threat posed to human health or the environment by
Contaminants or other environmental conditions in, under or upon the Property,
consistent with the applicable Laws and Environmental Standards in accordance with this
50 10
Agreement, including (if applicable) a Site Specific Clean -up Action Plan "SCAPS
filed with and approved by the Washington State Department of Ecology.
"Retained Improvements" means, all Improvements upon the Property, in whole or in
part, exclusive of those improvements that will be conveyed to the City or to the KCLS
and any utility system improvements constructed or installed by or on behalf of utility
providers (e.g., sanitary sewer, water, natural gas, electrical power, telecommunications,
internet and cable TV), and exclusive of Improvements upon the Library Parcel (if
conveyed to the KCLS).
"Site" means any physically separate and distinct Parcel or Parcels of the Property which
Parcel or group of Parcels is proposed as the location for development or for some other
activity which requires a permit or approval pursuant to TMC Titles 16, 17 or 18.
"Term" means the term of this Agreement, commencing on the Effective Date and ending
on the earlier of (1) the completion of the performance of all obligations of the Parties
pursuant to this Agreement, or (2) the date of any termination of this Agreement in
accordance with the provisions hereof.
"Transfer" has the meaning given in Section 7.1 hereof.
Section 1.2 Exhibits.
The following exhibits are attached to (or upon preparation and /or approval) will be
attached to) and incorporated into this Agreement as though fully set forth herein:
Exhibit A
General Description of the Property
Exhibit A -1
Legal Description of the Property
Exhibit A -2
Legal Description of the Property (coidimied)
Exhibit A -3
Legal Description of the Property (coidimied)
Exhibit A -4
Legal Description of the Property (coratiintecl)
Exhibit A -5
Legal Description of the Property (coidimied)
Exhibit A -6
Legal Description of the Property (coratiintecl)
Exhibit A -7
Legal Description of the Property (coratiintecl)
Exhibit A -8
Legal Description of the Property (coratiintecl)
Exhibit A -9
Legal Description of the Property (coratiintecl)
Exhibit A -10
Legal Description of the Property (coidimied)
Exhibit A -11
Legal Description of the Property (coidimied)
Exhibit A -12
Legal Description of the Property (coidimied)
Exhibit A -13
Legal Description of the Property (coidimied)
Exhibit A -14
Legal Description of the Property (corn hinecl)
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Exhibit A -15
Legal Description of the Property (coidimied)
Exhibit A -16
Legal Description of the Property (coidimied)
Exhibit A -17
Legal Description of the Property (coratiintecl)
Exhibit A -18
Legal Description of the Property (coratiintecl)
Exhibit A -19
Legal Description of the Property (coidimied)
Exhibit A -20
Legal Description of the Property (coidimied)
Exhibit A -21
Legal Description of the Property (coidimied)
Exhibit A -22
Legal Description of the Property (coidimied)
Exhibit B
Depiction of the Property
Exhibit C
Form of Statutory Warranty Deed
Exhibit D
Renumber
Exhibit E
Phased Development Plan approved pursuant to Section 2.4 (to be
hiserted)
Exhibit F
Street Vacation Agreement (to be hiserted)
Exhibit G
Preliminary Site Plan
Exhibit G -1
Approved Site Plan (to be hiserted)
Exhibit H
Approved Development Agreement in conformance with Section
2.7 of this Agreement (to be irlsel•ted)
Exhibit I
CC &Rs approved pursuant to Section 2.8(E) (to be irlsel•te(l)
Exhibit J
Temporary Construction Easement approved pursuant to Section
2.10 (to be hiserted)
Exhibit K
Construction Contracts approved pursuant to Section 2.11(A) (to
be hiserted)
Exhibit L
Financing Plan approved pursuant to Section 2.14 (to be hiserted)
Exhibit M
(renumber)
Exhibit N
renumber
Exhibit O
KCLS Development Agreement (,Section 2.9) (to be irlsel•te(l)
Exhibit P
(renumber)
Exhibit Q
Police Community Resource Agreement (Sectioli 2.12) (to be
hiserted)
Exhibit R
Statement of Purpose and Design for the Outdoor Plaza pursuant to
Section 2.8(B) (to be hiserted)
52 12
Exhibit S Statement of Purpose and Design for the Commons pursuant to
Section 2.8(C) (to be hiserted)
Exhibit T Personal Guarantee pursuant to Section 2.11(D) (to be irlsel•te(l)
Exhibit U Residual Land Value Analysis approved pursuant to Section 4.4 (to
be hisertecl
Exhibit V Form of DDA Memorandum (to be hiserted)
Exhibit W Legal Description of benefited property pursuant to Section 2.6 (to
be hiserteo
Exhibit X Parking Easement (to be irlsel•te()
Exhibit Y Legal Description of 41" Avenue to be vacated (to be hiserted)
ARTICLE 2
DEVELOPER PREDISPOSITION REQUIREMENTS
Section 2.1 Conditions Precedent.
As conditions precedent to the Closing, the conditions set forth in this Article 2 must first
be met by the times specified for such conditions, subject to Force Majeure. If a recognized
Force Majeure event results in a delay such that satisfaction of all conditions set forth in this
Article 2 will require more than fifteen (15) months from the Effective Date, then the Parties
shall confer in good faith to seek mutually acceptable actions to proceed with the development of
the Property under the circumstances of such delay, provided, however, that this Agreement may
not be terminated without the mutual consent of the Parties if the satisfaction of all conditions in
this Article is delayed beyond fifteen (15) months from the Effective Date as a result of a
recognized Force Majeure event.
Section 2.2 Deposit.
A. Delivery of Deoosit. No later than thirty (30) days following the Effective Date,
Developer shall deliver to the City, in the form of readily available funds, the sum total of One
Hundred Thousand ($100,000) Dollars (the "Deposit') as a good faith deposit to be held by
the City. The City shall promptly deposit the amount in a separate account, such as an account in
which the City typically invests funds on a short-term basis.
B. Refund of Deoosit. Upon notice of termination of this Agreement pursuant to
Section of this Agreement and upon demand made to the City in writing by Developer and
received within sixty (60) days following the Effective Date, the Deposit shall be refunded to
Developer in full. Thereafter, the portion of the Deposit available for refund shall decrease by
Ten Thousand Dollars ($10,000) for each additional consecutive thirty (30) day period until no
portion of the Deposit is available for refund. For example, the refundable portion of the Deposit
for a notice of termination and demand received by the City on the 75 day following the
i; 53
Effective Date would be NinetyThousand Dollars ($90,000) and on the 105 day following the
Effective Date would be Eighty Thousand Dollars ($80,000). At such time as the total Deposit
becomes non refundable, the City shall have no obligation to return any remaining balance of the
Deposit to Developer except in the case of a City Event of Default.
C. Aaalication of Deposit. The Deposit, unless refunded as set forth in subsection
(B) above, shall be held, maintained and reserved by the City for the term of this Agreement to
be applied to the Purchase Price of each of the Development Parcels as set forth herein. At the
time of Closing as to each Development Parcel, the City shall apply the allocable portion of the
Deposit to the Purchase Price of the Development Parcel. The allocable portion of the Deposit
shall be expressed as a percentage and shall be determined based upon the gross square footage
of the Development Parcel which is the subject of the conveyance (the "Subject Development
Parcel in proportion to the total combined gross square footage of all of the Development
Parcels (the "Combined Development Parcels The allocable percentage of the total
combined gross square footage of the Combined Development Parcels represented by the gross
square footage of the Subject Development Parcel shall be multiplied by the total Deposit
amount to determine the portion of the Deposit allocable to the Purchase Price of the Subject
Development Parcel. For example, if the total combined gross square footage of the Combined
Development Parcels equals 250,000 square feet and the gross square footage of the Subject
Development Parcel equals 50,000 square feet, the Subject Development Parcel represents 20%
of the total combined gross square footage of the Combined Development Parcels. The Deposit
amount of $100,000 would be multiplied by 20% to arrive at $20,000 as the allocable portion of
the Deposit to be applied to the Purchase Price of the Subject Development Parcel ($100,000 x
20% $20,000).
D. Termination /Revocation. In the event of termination, expiration or revocation of
this Agreement for any reason other than a City Event of Default, the City shall be entitled to
retain any remaining balance of the Deposit (including any interest earned thereon) to defray a
portion of the City's costs under this Agreement and to compensate the City for the lost
opportunity of making available the Development Parcels for an alternative development during
the Term of this Agreement.
Section 23 Site Plan and Desiizn Review Submittals.
A. Site Plan Submittal and Approval. Developer shall, on or before the 90 day
following the Effective Date, submit an application to the City for architectural design review
with respect to the first Development Phase in accordance with the requirements of TMC Ch.
18.60, including a Proposed Site Plan. The Proposed Site Plan submitted for review and approval
with the application shall substantially conform to the Preliminary Site Plan attached hereto as
Exhibit "G" and shall include, conform to and identify as to each proposed Development Parcel,
the information required pursuant to TMC Ch. 18.60 and the following elements:
1. Lines marking the boundaries of the existing lots(s) or parcel(s), provided
that any existing lot boundary to be eliminated or altered should be a dashed line and so noted.
2. Locations of existing and proposed public or private roads and easements,
including private access easements.
3. Location of proposed new property lines and numbering of each lot or
parcel.
54 14
4. Location, dimension and purpose of existing and proposed easements and
encumbrances, including but not limited to parking easements.
5. Location of any proposed dedications.
6. Description, location and size of existing and proposed utilities, storm
drainage facilities and roads to serve the Property.
7. Expected location and setbacks of proposed new buildings, parking areas
and driveways.
The Proposed Site Plan, if approved through the City's design review process, will become the
"Approved Site Plan provided that, the Proposed Site Plan may be modified by Developer
during design review pursuant to TMC Ch. 18.60 in response to issues raised by the Board of
Architectural Review. Upon approval pursuant to TMC Ch. 18.60, the Approved Site Plan shall
be incorporated in this Agreement as Exhibit "G -1". Development of the Property shall conform
to the Approved Site Plan, any conditions attached thereto, and any approved amendments
thereto.
B. Desitm Review Aaalication Submittal and Approval. Each application submitted
to the City for architectural design review for a proposed Development Parcel in accordance with
the requirements of TMC Ch. 18.60, shall include any modifications to the Proposed Site Plan,
the information required pursuant to TMC Ch. 18.60 and the following elements:
Conceptual floor plans, floor areas and elevations of proposed new
buildings and other structures.
Conceptual Landscaping plan.
3. A table of uses, elements, floor areas and housing units consistent with
Section "IL" of the Recitals.
4. Identification of facilities in conformance with Section 2.11
(Restaurant /Retail Space Covenant) of this Agreement.
5. Identification of facilities in conformance with Section 2.12 (Police
Resource Center) of this Agreement.
C. Proposed Site Plan Conformance. Prior to submittal of the Proposed Site Plan for
design review, Developer shall submit the Proposed Site Plan to the City for the Mayor's review
and approval of conformance with the Preliminary Site Plan. In the event that the Mayor
determines that the Proposed Site Plan does not substantially conform to the Preliminary Site
Plan, then at the request of Developer, the Proposed Site Plan shall be submitted to the City
Council for its review and approval of the Proposed Site Plan as an amendment to this
Agreement.
Section 2.4 Phasiniz: Development Parcels.
A. Developer shall have the right to develop the Property in multiple Development
Phases to facilitate financing and ownership, to aid in the timing of and sequencing of
construction, and to attain flexibility to adjust to market demand and other factors. In the event
that Developer intends to develop the Property in multiple Development Phases, Developer shall
submit its plan for phased development to the City (the "Phased Development Plan for its
review and approval prior to, or contemporaneous with, submittal of its proposed BLA
application to the City. The Development Parcels that are associated with each Development
i5 55
Phase, including the Plaza Parcel, may be owned, operated and managed separately, although
initially developed under the control of Developer or an Affiliate.
B. Citv Review and Approval. The City shall have the right to review and approve
the Phased Development Plan, including the development of the Plaza Parcel, for the purpose of
ensuring compliance with this Agreement and to ensure that the Additional Development Work
associated with each proposed Development Phase, as described at Section 5.2 of this
Agreement, will fully support the Improvements associated with each Development Phase in the
event that future Development Phases are delayed or not completed by Developer. The Phased
Development Plan shall include and identify:
1. A summary of the site plan and design review elements listed in Section
2.3 (Site Plan and Design Review Submittals) to be included within each Development Phase,
2. A proposed Construction Schedule and sequencing for the acquisition of
the affected Development Parcels and development of the Improvements for each Development
Phase, including Developer Additional Work associated with each Development Phase (e.g.,
infrastructure improvements, utilities, driveways and Landscaping).
C. Plaza Parcel: First Development Phase. Developer shall develop the Plaza Parcel
contemporaneously with, and as part of, the development of the first Development Phase.
D. Additional Approvals. The City shall have the right to require and approve
easements for utilities, vehicular access, pedestrian access, shared parking, and shared
maintenance for each Development Phase to ensure that the entire Development functions as an
integrated whole even if the Development Parcels and /or Development Phases come under
separate ownership and management.
E. Library Parcel: Timiniz. The City shall use its best efforts to require the KCLS to
submit a proposed site plan with respect to the Library Parcel and a conceptual architectural
design for the proposed library branch building by the time Developer submits a design review
application for the first Development Phase. This is to ensure the City and Developer have
information on how the site plan and the architectural design for the proposed library branch
building will be compatible with the overall Development, and in particular, the Improvements
on the Development Parcels adjacent to the Library Parcel.
Section 2.5 Boundary Line Adiustment.
A Boundary Line Adjustment "BLA will be required to alter and /or combine the
existing boundaries of certain Parcels comprising all or part of the Property to create and define
the Plaza Parcel and Library Parcel, and the Development Parcels to accommodate Developer's
proposed Development Phases as approved pursuant to Section 2.4 hereof. Developer shall, in
conformance with Section 2.9(D) hereof, as soon as practicable after the Effective Date, work
with the KCLS to establish the proposed boundaries of the Library Parcel, submit an application
to the City pursuant to TMC Ch. 17.08 for a proposed BLA. Prior to submittal of the application
for a BLA, Developer shall submit its proposed BLA application to the Mayor for review and
approval for consistency with this Agreement. Such approval shall be in writing and shall, for
purposes of TMC 18.06.045, constitute the City's designation of Developer as applicant seeking
56 16
approval of the BLA. Final approval of the BLA in accordance with TMC 18.06.045 shall not be
recorded until Closing on the sale of the Development Parcels for the first Development Phase.
Upon final approval of the BLA, Exhibits "A" and "B" shall be amended to conform to the
revised legal descriptions and depictions of the Development Parcels resulting from the BLA.
Developer shall be responsible for all costs associated with applying for and obtaining
approval of a BLA pursuant to TMC Ch. 17.08, although an allocable portion of such costs shall
be taken into account in the Residual Value Analysis for each Development Parcel.
Section 2.6 Street Vacation.
A. Leizislative Action. 41" Avenue is a public right of way thata portion of the
Property and is abutted by property owned by a third party and described in Exhibit "W"
attached hereto. The City and Developer acknowledge and agree that Developer's obligations as
set forth in Section 4.4 hereof to purchase the Property are contingent upon Final City Council
Approval of vacation of that portion of 41" Avenue as depicted and described on Exhibit "Y"
attached hereto "Street Vacation Upon Final City Council Approval of such vacation, that
vacated portion of 41` Avenue shall become available for development as part of the Property.
B. Final Approval: Meaniniz. "Final City Council Approval" shall mean thirty (30)
days following the effective date of the City Council ordinance granting the Street Vacation,
provided that, in the event that such Final City Council Approval is subject to challenge in a
court of competent jurisdiction, such challenge shall be considered an event of Force Majeure
and during that time period, such obligations of Developer shall remain contingent until such
time as a final non appealable decision is entered by a court of competent jurisdiction either
upholding the street vacation or otherwise dismissing the action. In the event that Final City
Council Approval of the Street Vacation is materially altered by a final non appealable decision
of a court of competent jurisdiction, such that the materials rights, duties and obligations of
either Party are altered, the Parties agree to meet in good faith to negotiate amendments to
reform this Agreement, upon such terms and conditions as are mutually agreeable by the Parties,
so as to carry out the Party's intent as expressed herein.
C. Street Vacation Agreements: Retained Easements. City and Developer
acknowledge that certain third parties with real property interests near or abutting that portion of
41` Avenue to be vacated, and utility providers with utility facilities located within that portion
of 41' Avenue to be vacated, may be impacted by vacation of 41' Avenue. The City and
Developer acknowledge and agree that certain third party agreements may be necessary to
accommodate such third parties as a condition of Final City Council Approval of the Street
Vacation (hereinafter "Street Vacation Agreement(s) The City and Developer further
acknowledge and agree that vacation of 41' Avenue will require a reservation of certain
temporary and permanent easements over, under and across the Development Parcels to
accommodate relocation of existing utilities and to provide access to and from the public
roadways. For example, it is anticipated that the Street Vacation must include a reservation of a
temporary non exclusive access easement over and across 41' Avenue for the benefit of the
property described in Exhibit "W It is further acknowledged and agreed, that such Street
Vacation Agreements may provide for (i) certain Improvements to accommodate both temporary
and permanent access over and across the Development Parcels, (ii) easements for conveyance
and connection to stormwater system improvements to facilitate the collection and conveyance
17 57
of storm and surface water from adjacent property, and (iii) other accommodations to facilitate
approval of such Street Vacation Agreements. Upon the Effective Date, the City and Developer
agree that they will begin to work cooperatively with each other to secure from the adjacent
property owners such Street Vacation Agreements as are reasonable and necessary to facilitate
and expedite the Street Vacation of 41" Avenue and will negotiate such reservation of rights and
easements upon the Property reasonably necessary to accommodate the terms and conditions of
such Street Vacation Agreements.
The City and Developer shall, in conjunction with the Street Vacation and the Street
Vacation Agreements, mutually agree upon the allocation of the costs associated with City
and /or Developer obligations under the Street Vacation Agreements.
Section 2.7 Entitlements and Vestin
A. Development Agreement. The Parties desire to enter into a development
agreement pursuant to RCW 36.70B.170 et. seq. (the "Development Agreement to set forth
the development standards and other provisions that shall apply to and govern and vest the
development, use and mitigation of the development of the Property for the duration specified in
such Development Agreement. The Parties intend that Developer's obligation to acquire and
develop the Property, in whole or in part, and the City's obligation to convey the Property, in
whole or in part, pursuant to the terms and conditions of this Agreement, shall be contingent
upon and subject to the Development Agreement providing for the following:
1. Additional Height. The maximum building heights for buildings A and B
as shown on the Preliminary Site Plan shall be seventy (70) feet.
2. Design Review. The Proposed Site Plan, the proposed design of the Plaza
and the Commons, and the proposed design of each building or other stricture on each
Development Parcel, shall be subject to approval by the BAR under the riles and regulations
forming the City's design review approval process and development standards "Design
Review The design standards and review criteria applicable to the Property shall, in addition
to the criteria set forth at TMC 18.60.050 and the City's design and permitting riles and
regulations, include criteria consistent with the following:
Village.
a. Vision Statement. The City's Vision Statement for Tukwila
b. Focal Point Design. The Preliminary Site Plan represents the
relationship of proposed new buildings to the Plaza and the neighborhood and, as such, focal
points, such as prominent building corners, must have a defined architectural expression and
visual interest. By way of example and not limitation, such defined architectural expression and
visual interest may include a rounded or chamfered wall, a tower, transparency, or architectural
lighting at night.
C. Buildinizs Aloniz Eastern Boundarv. If any portion of building C or
D as shown on the Preliminary and Proposed Site Plan is proposed to be located within 30 feet of
an adjacent property that is zoned LDR, MDR, or HDR, the City may require portions of the
building to have greater setbacks and /or lower height limits than allowed under the City's
58 19
existing zoning codes or development standards, provided that the average setbacks and /or
height limits allowable shall be consistent the City's existing zoning codes or development
standards. The City may encourage building facade modulation and /or height modulation in
order to reduce the visual impact on adjacent properties, but shall not be mandated solely to
reduce density that is otherwise allowable under the City's existing zoning codes or development
standards and that is consistent with the intent of the Parties under the Development Agreement.
d. Minimum Interior Height. Space designed for ground level retail
or commercial use shall have an average minimum interior height of 13 feet from floor to
finished ceiling.
e. Landscauiniz Standards. Normal landscaping standards and
requirements under the City's existing zoning codes and development standards shall apply to
the Property, provided that the specific Landscaping standards and requirements set forth in the
corresponding "Statement of Purpose and Design" for the Plaza and the Commons shall be
reflected in the design review submittals for the Plaza Parcel.
B. Condition Precedent. City Council approval of the contemplated Development
Agreement upon terms and conditions mutually agreed to by the Parties is a condition precedent
to any obligation of Developer herein to purchase any of the Development Parcels. The Parties
agree that, upon the Effective Date, representatives thereof shall meet in good faith to negotiate
mutually agreeable terms and conditions of the contemplated Development Agreement that, upon
approval by the City Council and execution by the City and Developer in accordance with the
applicable requirements and procedures set forth in the City's Municipal Code and consistent
with applicable state law, shall be attached hereto and incorporated herein as Exhibit "H In the
event that such Development Agreement is not approved and does not become binding upon the
Parties within sixty (60) days of the Effective Date, either Party may, until such time as the
Development Agreement is approved and binding upon the Parties, give notice of termination of
this Agreement in accordance with the provisions of Article 9.2.
C. Naming Rights. Upon Closing for the first Development Phase, Developer shall
have the right to name the Development.
D. Sitnat, Upon Closing for each Development Phase, Developer shall have the
right to control all signage upon the Development Parcels contained within the Development
Phase, subject to compliance with the City's signage code. Developer anticipates a monument
sign for the benefit of KCLS located on the Library Parcel, and also anticipates other
appropriately placed and scaled monument signs for the benefit of the other retail or commercial
tenants and the individual apartment communities.
Section ?.8 Community Plaza and Commons Ownershia and Manaizement.
A. Intent. The Parties intend that the Development shall include a separate
Development Parcel consisting of the Plaza and the Commons to be known and referred to as the
"Plaza Parcel The completed Improvements to the Plaza Parcel (the Plaza and the Commons
more specifically described below in subsections B and C hereof) are intended as a community
amenity that will serve a variety of users including residential, retail or commercial tenants,
customers, visitors and members of the public. The Plaza Parcel is intended to facilitate a diverse
iO 59
set of activities including those that are active or passive, formal or informal, group or
individually oriented, and planned or spontaneous. The Plaza Parcel may function as a pedestrian
destination, a place for public art, a setting for recreation and relaxation, and a place for public
and private gatherings, events and activities.
B. Development of Outdoor Plaza. Development of the Plaza Parcel shall include an
outdoor community plaza (the "Plaza consisting of a minimum of 20,000 square feet of Site
area and located generally as reflected in the Preliminary and Approved Site Plans attached
hereto as Exhibits "G" and "G -F. As soon as practical after the Effective Date, Developer and
the City shall enter into good faith negotiations to develop and mutually agree upon a
"Statement of Purpose and Design" for the Plaza to describe the intended use and design
guidelines for the Plaza, to include, by way of example and not limitation, design elements for
such things as surface materials, strictures, Landscaping, fencing, and gates. The Statement of
Purpose and Design for the Plaza shall, upon approval of the Parties, be attached hereto as
Exhibit "R The BAR shall consider the "Statement of Purpose and Design" as criteria when
approving the final Approved Site Plan and Plaza design elements. Developer shall be obligated
to commence and complete development and constriction of the Plaza (in accordance with the
Statement of Purpose and Design for the Plaza) in conjunction with the first Development Phase.
Developer shall bear all costs associated with development and constriction of the Plaza,
provided that, the allocable costs thereof shall be taken into account in the Residual Land Value
Analysis.
C. Development of Indoor Communitv Commons. Development of the Plaza Parcel
shall include a finished indoor community space (the "Commons consisting of a minimum of
2,000 square feet of usable floor area generally located as reflected in the Preliminary and
Approved Site Plans attached hereto as Exhibits "G" and "G -1". As soon as practical after the
Effective Date, Developer and the City shall enter into good faith negotiations to develop and
mutually agree upon a "Statement of Purpose and Design" for the Commons to describe the
intended use and design guidelines for the Commons. The Statement of Purpose and Design for
the Commons shall, upon approval of the Parties, be attached hereto as Exhibit "S The BAR
shall consider the "Statement of Purpose and Design" as criteria when approving the exterior
design elements of the Commons. Developer shall be obligated to commence and complete
development and constriction of the Commons (in accordance with the Statement of Purpose
and Design for the Commons) in conjunction with the first Development Phase. Developer shall
bear all costs associated with development and constriction of the Commons, provided that, the
allocable costs thereof shall be taken into account in the Residual Land Value Analysis.
D. Purchase of Communitv Plaza Parcel. As a condition precedent to the City's
obligation hereunder to convey, in whole or in part, the Development Parcel(s) to be developed
as part of the first Development Phase, Developer shall, contemporaneous with the purchase of
the initial Development Parcel(s), purchase the Plaza Parcel which shall be considered as part of
the first Development Phase for purposes of the Residual Land Value Analysis. The Plaza Parcel
shall be developed contemporaneous with and as part of the first Development Phase and the
costs associated with development and constriction of the Improvements thereon shall be
allocated as an Additional Deduction for purposes of the Residual Land Value Analysis.
E. Covenants. Conditions and Restrictions.
60 2u
I Intent and Pumose. The City and Developer shall, as soon as practical
after the Effective Date of this Agreement, develop mutually acceptable covenants, conditions
and restrictions (the "CC &Rs that, upon mutual approval by the Parties, shall be attached
hereto and incorporated into this Agreement as Exhibit "I". The Parties intend that the CC &Rs
will establish the terms and conditions upon which the Plaza Parcel shall be dedicated, managed,
maintained and operated exclusively as a community amenity and the reciprocal rights, duties
and obligations associated with the Development Parcels. The Parties intend that the Plaza
Parcel shall not be used or developed for uses inconsistent with the express and authorized uses
and purposes as set forth in the CC &Rs. In conformance herewith, the CC &Rs shall be drafted
to ensure that the Plaza Parcel remains a public amenity that will benefit not only the private
property owners within the Development but the community at large.
Recordiniz. As a condition of Closing on the conveyance of each
Development Parcel to Developer, Developer agrees to subject its interest in each such Parcel to
the CC &Rs thereafter encumbering the Development Parcels and the Community Plaza Parcel as
set forth herein. At Closing of each Development Parcel, Developer shall cause the CC &Rs to
be recorded against the Property in substantially the form attached as Exhibit "I", or with only
such changes as are approved in writing by the City.
3. Chanizes to CC &Rs. The City shall approve any revision to the CC &Rs,
and Developer agrees to subject its interests in each Development Parcel to amendments of the
CC &Rs, if such amendment is necessary to: (i) bring any provision into compliance with any
applicable government statute or regulation or judicial determination, (ii) enable any reputable
title insurance company to issue title insurance coverage on the Property or any other property
that is subject to such CC &Rs, (iii) otherwise satisfy the requirements of any government agency
or governmental regulations, and (iv) satisfy the purpose of the City to provide for the long -term
management, maintenance and operation of the Plaza Parcel, provided, however, that any
amendment proposed pursuant to the preceding clauses (i) through (iv) hereunder shall not be
permitted without the prior written consent of Developer, or successor, if it will have a material
adverse effect on any substantive right of Developer hereunder or adversely affect title to the
Development Parcels.
4. Amendment or Termination After Recordiniz. Notwithstanding any
provision of the CC &Rs or otherwise, following recordation of the CC &Rs against any
Development Parcel, and so long as Developer (as declarant under the CC &Rs) maintains sole
control of the Development Parcel(s) subject to the CC &Rs, Developer shall not amend or
terminate the CC &Rs without the prior written approval of the City.
5. Relationshia to This Agreement. The Parties acknowledge and agree that
this Agreement (including any documents executed pursuant to this Agreement) on the one hand,
and the CC &Rs on the other hand, may set forth similar or related duties and obligations of
Developer (as a Party to this Agreement, and as the declarant and the owner of Improvements
subject to the CC &Rs) with respect to the use, operation, and maintenance of the Development
or portions thereof, that in some instances, the scope, method, or manner for performance of such
duties and obligations may vary between this Agreement (including any documents executed
pursuant to this Agreement) on the one hand, and the CC &Rs on the other hand, and that
Developer is required to comply with and implement its respective duties and obligations under
this Agreement (including any documents executed pursuant to this Agreement), and the
?1 61
CC &Rs. Nothing in the CC &Rs shall modify, amend, supersede, impair, or otherwise affect the
duties and obligations of Developer to the City under this Agreement (including any documents
executed pursuant to this Agreement). Nothing in this Agreement (including any documents
executed pursuant to this Agreement) shall modify, amend, supersede, impair, or otherwise affect
the duties and obligations of Developer (as declarant or owner of Improvements within the
Development) under the terms of the CC &Rs. The terms of this Agreement (including any
documents executed pursuant to this Agreement) and the CC &Rs shall be interpreted
harmoniously to give effect to the terms of all such documents to the greatest extent possible. In
the event of any direct and irreconcilable inconsistency between the terms of this Agreement
(including any documents executed pursuant to this Agreement) on the one hand, and the terms
of the CC &Rs with respect to the Retained Improvements on the other hand, the terms of this
Agreement (including any documents executed pursuant to this Agreement) shall control to the
extent of any such direct and irreconcilable inconsistency.
6. Effect of CC &Rs. The CC &Rs shall, at the time of conveyance of each
Development Parcel, create mutual equitable servitudes upon the Plaza Parcel and each
Development Parcel in favor of every other Development Parcel and shall create reciprocal
rights and obligations in, between and among all persons and /or entities having any right, title or
interest in and to any Development Parcel and the Plaza Parcel, or any part thereof. In addition,
said CC &Rs shall min with such portions of the Property comprising the Development Parcels
and the Plaza Parcel and shall be binding upon all Parties having or acquiring any right, title or
interest in and to the Development Parcels and the Plaza Parcel, and shall inure to the benefit of
the City, each Development Parcel owner and each successor in interest of such Development
Parcel owner.
7. Term. It is the Party's intent that the obligations under the CC &Rs shall
be of definite duration to coincide with the forty (40) year term of the lease.
F. Manaizement and Operation. Developer shall, in cooperation with the City and no
later than the one hundred eighty (180) days after receiving building permits for the first
Development Phase, do all things reasonable and necessary to form an independent, community
based non profit organization (hereafter "Community Organization that will, through a lease
agreement, manage, operate, maintain and promote the use of the Plaza and the Commons, and
any facilities located thereon, in a manner consistent with the CC &Rs. The goal of the
Community Organization shall be to implement and carry out the purposes set forth in the
CC &Rs for the management, maintenance and operation of the Plaza Parcel, with the goal of
being financially self sufficient through the collection of rental and user fees and solicitation of
grants from outside agencies. Toward that end, Developer and the City shall agree upon a plan
for the formation of the independent, community -based non profit organization, including its
initial mission, articles of incorporation, bylaws, composition of board and officer positions, and
board member selection. The governing board of the Community Organization shall represent
both the interests of the community at large, and the private owners and tenants of the
Development.
G. Loniz-Term Lease. After the Community Organization is formed and governing
board established and seated, Developer and the Community Organization shall negotiate,
approve and execute a loner term lease agreement granting the Community Organization
possession and use of the Plaza Parcel for an initial term of forty (40) years from the date the
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City issues a certificate of occupancy for the first Development Phase for an annual lease
payment of One Dollar ($1.00) (the "Plaza Parcel Lease The terms of the Plaza Parcel Lease
shall substantially conform to the following:
1. Scheduliniz. The Community Organization shall have the right, duty and
obligation to manage and schedule, and may charge rental or user fees for, the use of the Plaza
and the Commons, and any related facilities, including setting usage policies (such as frequency
and hours of use), rental rates, user fees, and security deposits. It is intended by the Parties that
the Community Organization shall establish and revise from time to time, and implement, a
program (the "Public Activities Program for regular public activities on the Plaza for
community events and activities that make the Plaza and Development a focal point of
community involvement.
2. Plaza Maintenance. The owners of the Development Parcels, and their
successors in interest, shall jointly provide for the ongoing maintenance of the Plaza's
Landscaping, Improvements, and other infrastructure and pay for related utilities including
electricity, sanitary sewer, water, stormwater and solid waste. The Community Organization
shall reimburse the owners of the Development Parcels for 50% of the ongoing maintenance and
utility costs. The Community Organization shall reimburse the owners of the Development
Parcels for 100% of solid waste and cleanup costs related to renters or users scheduled by the
Community Organization.
3. Commons Maintenance. The owners of the Development Parcels, and
their successors in interest, shall be jointly responsible for maintaining the structural
components, mechanical systems (including HVAC, plumbing, and electrical), and exterior of
the Commons. The Community Organization shall be responsible for maintaining the interior
non structural components such as floor surfaces, wall surfaces, doors, and windows.
4. Plaza and Commons Reaair. The owners of the Development Parcels, and
their successors in interest, shall be jointly responsible for the costs of repairing any damage to
the Plaza and the Commons resulting from ordinary wear and tear and damage caused by users
not scheduled by the Community Organization, including damage to Landscaping, lighting,
Improvements, and other infrastructure. The Community Organization shall be responsible for
the costs of repairing any damage to the Plaza and the Commons caused by renters or users
scheduled by the Community Organization, including damage to Landscaping, lighting, all
improvements, and other infrastructure.
5. Commons Utilities. The Community Organization shall be responsible for
obtaining all utility service for the Commons and paying all related utility service fees, including
electricity, sanitary sewer, water, stormwater and solid waste.
6. Non -Fixed Assets. The Community Organization shall be responsible for
maintenance and capital replacement of all indoor and outdoor non -fixed assets, including
furniture and equipment.
7. Prooertv Taxes. Insurance. The Community Organization shall be
responsible for paying all property taxes and insurance attributable to the Plaza Parcel and
Improvements thereon.
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H. Dissolution. The formation documents of the Community Organization shall
provide that, in the event of the dissolution (voluntary or involuntary) of the Community
Organization, the net assets of the non- profit organization (including but not limited to the rights
and responsibilities granted under the Plaza Parcel Lease) shall be transferred to another local
community -based organization approved by the City and Developer. In the event the City and
Developer are unable to agree on another local community -based organization, at the City's
election, the Community Organization's net assets and the Plaza Parcel Lease shall be assigned
to the City.
L Developer Contribution. Developer shall make a one -time start -up donation of
not less than $50,000 to the Community Organization within ninety (90) days after the formation
of the Community Organization. Neither Developer nor the City shall have any responsibility to
pay for or contribute to the ongoing management and operating expenses of the Community
Organization or its successor, provided that, nothing herein shall modify any obligations of
Developer or the owners of the Development Parcels under the CC &Rs.
Section 2.9 Librarv.
A. Establishment of Library Parcel. The City has identified City -owned land
adjacent to the Property consisting of approximately 20,000 to 25,000 gross square feet located
in the northeast corner of the intersection of Tukwila International Boulevard and South 144
Street for future development of a branch of the King County Library System (the "Library
Parcel"). The approximate location and configuration of the Site area proposed for the Library
Parcel is generally depicted in the Preliminary Site Plan. It is intended that the boundaries of the
Library Parcel will be established through a Boundary Line Adjustment application submitted to
the City by Developer, which Boundary Line Adjustment shall be a condition precedent to the
sale of the Library Parcel to the KCLS. KCLS, the City and Developer shall mutually agree
upon the proposed boundaries for the Library Parcel. Developer hereby waives any right to
acquire or develop the Library Parcel except as provided herein.
B. Purchase and Sale Agreement with KCLS. The City shall use its best efforts to
secure a purchase and sale agreement "Library Purchase and Sale Agreement and
development agreement with KCLS for KCLS to acquire the Library Parcel and develop and
construct a new library branch on the Library Parcel generally in accordance with the terms and
conditions set forth in the Library Term Sheet attached hereto as Exhibit "M In the event that
the City and KCLS do not close on the conveyance of the Library Parcel to KCLS on or before
the closing date as set forth in the Library Purchase and Sale Agreement, then Developer shall
have the right to purchase, and the City agrees to convey to Developer, the Library Parcel on
substantially the same terms and conditions as provided for with respect to the remainder of the
Property, except as otherwise provided herein. The City agrees that, in the event that the Library
Purchase and Sale Agreement becomes effective after the Effective Date of this Agreement, the
closing date established for the conveyance of the Library Parcel to the Library shall be no later
than December 31, 2013; provided that, this time period shall be tolled for excusable delay in
accordance with Section 102 hereof (Force Majeure).
C. Infrastructure Improvements Benefiting Library Parcel: Reimbursement. Subject
to appropriate and satisfactory arrangements for reimbursement of Developer for an allocable
64 ,4
portion of the cost thereof, to be set forth in the KCLS Development Agreement, Developer shall
be responsible for the design, engineering, development, construction and maintenance of all
roads, parking, sidewalks, frontage improvements, drainage systems, utility systems, extensions
and connections (collectively, the "Library Off -Site Infrastructure on or adjacent to the
Property or adjacent right of way necessary to serve the Library Parcel. The owner of the Library
Parcel shall have responsibility for the design, engineering, development, construction and
maintenance of all Library on -site infrastructure located on or under the Library Parcel and
making utility service connections. Developer agrees to work cooperatively with KCLS to
design, develop and constrict the Library Off -Site Infrastructure improvements to be consistent
and compatible with the proposed development of the Library Parcel by KCLS. The Parties
intend that KCLS shall be responsible for reimbursement to Developer of the proportional
design, engineering, development, constriction and maintenance costs for Library Off -Site
Infrastructure.
The City shall include in the Library Purchase and Sale Agreement, an obligation for
KCLS to reimburse a reasonable and proportional share of Developer's costs for design,
engeering, development and constriction and maintenance of shared infrastructure, e.g. roads,
parking, sidewalks, frontage improvements, drainage systems, and other utility systems,
provided that, such obligation shall be contingent upon conveyance of the Library Parcel to
KCLS and mutual written agreement by and between Developer and KCLS regarding the
allocation of such shared infrastructure costs to KCLS.
D. KCLS Development Agreement: Easements: Parkin. It is anticipated that KCLS
and Developer will work cooperatively to reach an agreement between the KCLS and Developer
to determine the boundaries of the Library Parcel, to determine the allocable cost of Library Off
Site Infrastructure, for Developer to construct and install such Library Off -Site Infrastructure,
and to provide reciprocal easements for such Library Off -Site Infrastructure. It is father
anticipated that such an agreement will provide for a parking easement (or similar rights) for the
benefit of the Library Parcel to the extent necessary to meet parking requirements for the
development of the Library Parcel, and for Developer to make the necessary Improvements to
the Property such that sufficient parking is available for the Library Parcel to meet parking
requirements for the development of the Library Parcel under applicable City Municipal Code
and to allow a certificate of occupancy to be issued for KCLS to occupy and use the
Improvements to the Library Parcel. Upon the effective date of the agreement between the
KCLS and Developer (the "KCLS Development Agreement such agreement shall be
attached hereto and incorporated herein as Exhibit "O
Section 2.10 Temporary Construction Easement.
As soon as practical after the Effective Date of this Agreement, and prior to Closing with
respect to the first Development Phase, the Parties shall mutually agree upon the terms and
conditions of a temporary construction easement (the "Temporary Construction Easement
The purpose of the Temporary Construction Easement shall be, among other things, to:
A. Provide Developer and the Contractors access to and use of the Property for
construction staging and storage of equipment and materials to otherwise facilitate making
Improvements to the Property,
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B. Authorize installation and constriction of the Library Off -Site Infrastructure,
C. Authorize installation and construction of Improvements required for Developer
Infrastructure Work (as defined pursuant to Section 5.2),
D. Authorize demolition and removal of the roadway for that portion of 41" Avenue
upon Final Street Vacation Approval (as defined pursuant to Section 2.6);
E. Authorize the grant of temporary access required pursuant to the Street Vacation
Agreement(s
F. Address ownership of Library Off -Site Infrastructure improvements and
compensation to the City for use of City -owned property encumbered by the Temporary
Constriction Easement, and
G. Allocate liability for activities upon City -owned property and provide for
indemnification and liability insurance for the protection of the City for activities upon City
owned property.
The Temporary Constriction Easement, upon execution by the Parties, shall be attached
hereto and incorporated into this Agreement as Exhibit "J
Section 2.11 Restaurant /Retail Saace Covenant.
The City has a strong desire for the first Development Phase to include a coffee shop and at
least one non- franchise restaurant. As part of the Design Review process for the first
Development Phase, Developer and City shall mutually agree on the location and size of a retail
space intended for a coffee shop and a retail space intended for a non franchise restaurant.
Developer shall use its best efforts to lease the designated spaces for a coffee shop and for a non
franchise restaurant and covenants not to lease these spaces to users other than for a coffee shop
and for a non franchise restaurant for at least two (2) years from the date the City issues an
Estoppel Certificate of Completion for the residential component of the first Development Phase.
Section 2.12 Police Resource Center.
As soon as practicable after the Effective Date, Developer and the City shall meet and
negotiate in good faith the terms and conditions of an agreement (the "Police Resource Center
Agreement for the lease of a space (the "Lease within the Development for use by the City
as a neighborhood police resource center (the "Police Resource Center
It is intended by the Parties that the Police Resource Center Agreement shall include
substantially all material terms and conditions of the City's Lease of space for the Police
Resource Center, including, but not limited to, the following:
A. Lease of at least 2,000 square feet of office and administrative space to be used by
the City as a neighborhood Police Resource Center in a location satisfactory to Developer and
the City, which shall be identified in the Approved Site Plan,
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B. Such office and administrative space shall be in a finished condition ready for
move -in satisfactory to Developer and the City,
C. The Lease shall provide the City three (3) easily accessible, surface parking
spaces satisfactory to Developer and the City reserved exclusively for Police use only, including
one (1) parallel street parking space immediately adjacent to the Police Resource Center along
South 144 Street,
D. The City shall pay rent at the then fair market rental rate for like -kind office space
comparable to the Police Resource Center in the vicinity, taking into account the level of tenant
improvements and finishes requested by the City, and shall be subject to the good faith
negotiation of the Parties but at a starting rate not to exceed $12.00 per square foot per year plus
allocable triple -net expenses, and
E. The initial Lease term shall be for a minimum of five (5) years and the Lease shall
grant the City the option to renew its Lease for up to two (2) consecutive five (5) year terms at
substantially the same lease rate adjusted for inflation and /or market conditions.
Upon the effective date of the Police Resource Center Agreement, the same shall be
attached hereto as Exhibit
Section 2.13 Other Approvals.
A. On- Street Parkiniz Approval. Developer may request City approval to constrict
some limited on- street parking adjacent to certain Development Parcels as shown on the
Preliminary and Approved Site Plans attached hereto as Exhibit "G" and Exhibit "G -1". If
Developer's traffic consultant and the City's Traffic Engineer support this request, the City
Administration will support the request and agrees to process the request as soon as practical. It
is anticipated that the recommendations of Developer's traffic consultant will also include such
matters as right in, right out only turn lanes. Accordingly, such other traffic related
recommendations shall be subject to the approval of the City's Traffic Engineer.
B. Other Off -site Infrastructure Improvements. Certain other off -site infrastructure
improvements may be necessitated based on certain pending decisions by Developer, such as the
introduction of parallel parking within the City's right of way along a portion of Tukwila
International Boulevard separated from traffic by channelization, or the relocation of all or
portions of the existing crosswalk across Tukwila International Boulevard to better align the
crosswalk with a major pedestrian access point for the Development (the "Other Off -site
Infrastructure Improvements Accordingly, Developer shall be responsible for the costs of
such Other Off -site Infrastructure Improvements, but such costs shall be taken into account in
the Residual Land Value Analysis. Such Other Off -site Infrastructure Improvements shall be
subject to approval by the City pursuant to the Design Review process set forth in Section 2.7
hereof.
C. Other Approvals. Within the time frames set forth in the Phased Development
Plan, along with the reasonable and diligent assistance (if necessary) of the City, Developer shall
apply to all other government agencies and public utilities for any other permits, approvals, and
"service availability" letters (such as for water, sewer, and electricity) necessary for the
27 67
development of each Development Phase consistent with this Agreement, and shall diligently
pursue procurement of such other permits, approvals, and "service availability" letters.
D. Evidence of Auurovals. Within the time frames set forth in the Phased
Development Plan, Developer shall submit to the City evidence that all City permits and
approvals (including approval of the BLA), and all other permits, approvals, and "service
availability" letters necessary for development of each Development Phase in accordance with
this Agreement have been obtained or approved. Only upon delivery of such evidence in form
satisfactory to the City, the conditions of Section for conveyance of the Development Parcels
contained in such Development Phase shall be deemed to have been met. If such evidence is not
delivered within the applicable time frames specified in the Phased Development Plan, this
Agreement may be terminated by the City pursuant to Section 9 of this Agreement.
Constriction Contracts.
A. At least thirty (30) days prior to submission of a Constriction Contract to the City
pursuant to Section 4.4 hereof (Residual Land Value Analysis), Developer shall submit to the
City the proposed Constriction Contract with the General Contractor for the proposed
Development Phase, together with the Approved Constriction Plans. The City shall, for the sole
purpose of ensuring that the Constriction Contract accurately reflects the anticipated
Constriction Costs that will be utilized for purposes of the Residual Land Value Analysis as set
forth in Section 4.4 of this Agreement, review the Constriction Contract and Approved
Constriction Plans and either approve or disapprove the submitted Constriction Contract within
thirty (30) calendar days from the date the City receives the proposed Constriction Contract. If
the proposed Constriction Contract is not approved by the City, then the City shall notify
Developer in writing of the reasons for disapproval and the required revisions to the previously
submitted Constriction Contract. Developer shall thereafter submit a revised Constriction
Contract within thirty (30) days of the notification of disapproval. The City shall either approve
or disapprove the revised Constriction Contract within thirty (30) days of the date such revised
Constriction Contract is received by the City.
If the City disapproves the revised proposed Constriction Contract, this Agreement may
be terminated pursuant to Section 9. Only upon City approval of a Constriction Contract shall
the pre- disposition condition set forth in this Section 2.13 be deemed to have been met.
B. Following City approval of a Constriction Contract pursuant to this Section 2 13,
Developer may, without City approval, make changes to such Constriction Contract that are
consistent with, and do not cause the Constriction Contract to be out of compliance with, this
Agreement, provided, however, that Developer shall first provide the City with notice, clearly
indicating the nature of the proposed changes, not less than ten (10) days before Developer enters
into an agreement with the General Contractor to effectuate such changes. Developer shall not
make any changes to a Constriction Contract previously approved by the City pursuant to this
Section 2.13 that would cause the Constriction Contract to be out of compliance with this
Agreement without the prior written consent of the City. Notwithstanding the foregoing, changes
to the Constriction Contract involving changes to the Constriction Plans or related
specifications that are attached to or incorporated in the Constriction Contract shall be subject to
the provisions of Section 10.5(A) (City Actions) and 10.19 "Operating Memorandum and not
to the provisions of this paragraph B.
68 2x
C. Subject to the provisions of Section 2.13 (A) and the provisions of paragraph B
hereof, prior to, and as a further condition of the Closing, Developer and the General Contractor
shall execute the Constriction Contract substantially in the form approved by the City and
deliver a fully executed copy of the Constriction Contract to the City.
Section 2.15 Financing Plan.
After the City has notified Developer that all necessary building and engineering permits
for a Development Phase are ready to be approved, Developer shall submit to the City the
proposed Financing Plan for that Development Phase for its review and approval. The City shall
either approve or disapprove the proposed Financing Plan within thirty (30) days from the date
the City receives the proposed Financing Plan. If the proposed Financing Plan is not approved by
the City, then the City shall notify Developer in writing of the reasons for disapproval and the
required revisions to the previously submitted Financing Plan. Developer shall thereafter submit
a revised Financing Plan within thirty (30) days of the notification of disapproval. The City shall
either approve or disapprove the revised Financing Plan within thirty (30) days of the date such
revised Financing Plan is received by the City. The City shall approve the initial or revised
Financing Plan if it contains the elements described in the definition of the Financing Plan
contained in Section 1.1 hereof, and demonstrates the availability of sufficient funding to pay the
total development costs associated with the Development Phase and all other obligations of
Developer under this Agreement associated with the Development Phase, as reflected in the
approved Financing Plan and as evidenced by firm commitments for such funding that are
consistent with the terms of this Agreement and subject only to industry standard funding
conditions and a satisfactory budgetary outcome with respect to the Purchase Price of the
Development Parcel(s) involved in the Development Phase under the Residual Land Value
Analysis.
If the City disapproves the revised Financing Plan, this Agreement may be terminated
pursuant to Article 9. Only upon City approval of a Financing Plan shall the pre- disposition
condition of this Section 2.14 be deemed to have been met.
Developer shall submit any material revisions to an approved Financing Plan to the City
for its review and approval. Any revised proposed Financing Plan shall be considered and
approved or disapproved by the City in the same manner and according to the same timeframe
set forth above for the initial Financing Plan. Until a revised Financing Plan is approved by the
City, the previously approved Financing Plan shall govern the financing of the Development
Phase.
Evidence of Availabilitv of Funds.
Prior to Closing, Developer shall submit to the City evidence reasonably satisfactory to
the City that any conditions to the release or expenditure of funds described in the approved
Financing Plan have been met or will be met at the Closing and that such funds will be available
at the Closing for commencing constriction of the Development Phase. Only upon delivery of
such evidence in form satisfactory to the City shall the pre disposition condition of this Section
2.15 be deemed to have been met. If such evidence is not received within the time frames set
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forth in the Phased Development Plan, this Agreement may be terminated by the City pursuant to
Article 9.
Section ?.17 Performance and Payment Guarantee.
Prior to Closing with respect to each Development Parcel, Developer shall submit evidence
satisfactory to the City of the existence of an unconditional personal performance and payment
guarantee from Developer and /or the principals of Developer in favor of Developer's Lender
guaranteeing completion of constriction of the Improvements with respect to each applicable
Development Phase and guaranteeing against constriction cost overruns with respect to such
Development Phase (the "Performance and Payment Guarantee"). An executed copy of the
Performance and Payment Guarantee with respect to each Development Phase shall be attached
hereto as Exhibit "T."
ARTICLE 3
CITY RESPONSIBILITIES
Section 3.1 Permits and Approvals.
A. Citv Assistance. The City shall provide reasonable assistance to Developer in
obtaining any City issued permits and approvals, and all other permits, approvals, and "service
availability" letters necessary for constriction of the Improvements.
B. Citv Retains Discretion. Developer acknowledges that execution of this
Agreement in no way limits the discretion of the City or any other g overnment agency in
connection with the permit and approval process with respect to the Development. Any
approvals provided for herein are independent of, in addition to, and do not in any way obligate
the City with respect to usual and customary City permitting, code compliance and other
regulatory reviews, except that the City shall use its best efforts to expedite such reviews. The
outcome of any such regulatory review is independent of and is in no way biased, prejudiced or
predetermined in any way by this Agreement. Nothing in this Agreement is intended or shall be
construed to require that the City exercise its discretionary authority under its regulatory
ordinances to further the Development nor bind the City to do so. Except as otherwise expressly
stated herein or in the Development Agreement, the City will process applications for permits
and approvals associated herewith as if such applications were made without any City
participation in the Development, to the extent not preempted by federal laws, regulations or
other requirements.
ARTICLE 4
DISPOSITION OF PROPERTY
Section 4.1 In General. Developer has, pursuant to Section 2.4 herein, established
Development Phases for development of the Property and has, pursuant thereto, identified the
Development Parcels to be included in each Development Phase. The following provisions for
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disposition of the Development Parcels shall apply to the conveyance of each Development
Parcel associated with each Development Phase.
Section 4.2 Ooeniniz Escrow. To accomplish the Closing as to each Development
Parcel within a Development Phase, the Parties shall, as to each Development Phase, establish an
escrow with the Escrow Agent and shall execute and deliver to the Escrow Agent written
instructions that are consistent with this Agreement, provided that, escrow shall not open until
after all required pre disposition conditions precedent to Closing, as set forth in this Agreement,
have been met as to each such Development Phase, unless otherwise agreed to in writing by the
Parties.
Section 4.3 Develooment Parcel Purchase Price. As a condition of the Closing,
Developer and the City shall establish and agree upon the Purchase Price for each Development
Parcel associated with the Development Phase subject to Closing, based upon the Adjusted
Residual Land Value as determined in accordance with Section 4.4 of this Agreement.
Section 4.4 Residual Land Value Analvsis.
A. In General. The Parties intend to establish the Purchase Price for each
Development Parcel, including the Plaza Parcel, based upon the Adjusted Residual Land Value
determined through the residual land value analysis agreed upon pursuant to Section 4.4(D) of
this Agreement (the "Residual Land Value Analysis provided that, the Purchase Price shall
not be less than the Minimum Residential Unit Value amount as set forth in in Section 4.4(F)
below. The Residual Land Value Analysis estimates the value of land "Residual Land Value
by subtracting total development costs, including by way of example, direct constriction costs
(hard costs), architectural and engineering fees, Development Impact Fees, permit fees and other
soft costs, financing costs, and an agreed upon Developer profit and a return on Developer
equity, from an agreed upon total project value based on market supportable net operating
income based on projected stabilized rents, operating expenses and an agreed upon market
capitalization rate.
B. Adiusted Residual Land Value. The Parties intend that certain development costs
(collectively, the "Additional Deductions such as the development and constriction costs
associated with off -site Developer Additional Work (excluding the allocable costs of Library
Off -site Infrastructure for the Libarary Parcel to be paid for or reimbursed by KCLS),
infrastructure Improvements required pursuant to the Street Vacation Agreements, and
Improvements to the Plaza Parcel including the Commons, shall be allocated to each
Development Parcel on a pro -rated basis resulting in a downward adjustment of the Residual
Land Value (the "Adjusted Residual Land Value
C. Process for Determination of Residual Land Value Analvsis.
1. Submittal of Proposed Residual Land Value Analvsis. The Parties shall
mutually agree upon the Residual Land Value Analysis to be applied to determine the Purchase
Price of each Development Parcel. Toward that end, prior to opening escrow on the first
Development Phase, Developer shall submit a proposal to the City for the Residual Land Value
Analysis to be applied to each Development Parcel under this Agreement (the "Residual Land
Value Analysis Proposal'). The Residual Land Value Analysis Proposal shall be consistent
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with the Developer Obligations set forth in subsection E below, shall include all material factors,
methodology, adjustments (including Additional Deductions) and calculations to be used in
determining the Adjusted Residual Land Value, and shall identify the sources of the information,
data, and development costs that will be relied upon in conducting the Residual Land Value
Analysis. If certain development costs should be allocated among different Development Parcels,
Developer shall identify the methodology and basis for such cost allocations (for example, if
Improvements are made on two or more Development Parcels under a single Construction
Contract, the related development and constrictions costs must be allocated to each
Development Parcel).
2. Construction Costs. Construction costs for purposes of the Residual Land
Value Analysis shall be based upon the lump sum bids for constriction of the Improvements
upon each Development Phase as set forth in an approved Constriction Contract between
Developer and the Contractor. The Parties recognize, however, that such lump sum bid prices
within a Construction Contract may need to be segregated for different components of the
Improvements in order to determine the proper cost allocation for purposes of determination of
the Adjusted Residual Land Value (for example, the costs associated with Developer Additional
Work within a Construction Contract may be allocable among the Development Parcels in
multiple Development Phases, where the remainder of the costs within a Construction Contract
may be allocable among the Development Parcels in a single Development Phase, thus, the
allocation of costs associated with such Developer Additional Work must be determined
separately from the costs associated with Improvements within a single Development Phase.)
The Improvements shall be consistent with the Approved Construction Plans.
3. Citv Review. Upon receipt, the City shall review and evaluate the
Residual Land Value Analysis Proposal and may retain the services of a consultant for such
purposes, the cost of which shall be borne by the City. The City shall have twenty (20) business
days from receipt of the Residual Land Value Analysis Proposal to evaluate the Proposal and to
reject or approve the same, or request further information. In the event that the City does not give
notice of its rejection or request for additional information within twenty (20) business days of
receipt of the Proposal, then the Residual Land Value Analysis Proposal shall be deemed
approved by the City. In the event that the City rejects the Residual Land Value Analysis
Proposal, the City will give written notice of such rejection within twenty (20) business days of
receipt of the Proposal, together with a detailed explanation of the reasons for such rejection. If
the City requires additional information to evaluate the Residual Land Value Analysis Proposal,
the City will provide written notice to Developer of its request for additional information.
Developer shall have fifteen (15) business days from receipt of notice to provide the requested
information to the City. The City will then have an additional ten (10) business days to evaluate
and respond to the Residual Land Value Analysis Proposal. The Parties will continue with a like
process until such time as an agreed upon Purchase Price is determined, or the Parties elect to
exercise their remedies set forth below.
4. Remedies. In the event that the Parties, after using good faith efforts, are
unable to mutually agree upon a Residual Land Value Analysis Proposal, either Party may give
notice of termination of this Agreement pursuant to Section 9 hereof, or may, upon mutual
agreement, subject the Dispute to mediation or arbitration pursuant to Section hereof, or
mutually agree to negotiate amendments to the terms and conditions of this Agreement to
address the nature of the Dispute.
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D. Determination of Purchase Price.
1. Conditions Precedent. The Adjusted Residual Land Value for each
Development Parcel will not be determined and the Purchase Price agreed upon until:
a. the City has notified Developer that all permits are approved and
are ready to be issued,
b. all final permit fees and charges and Development Impact Fees are
known,
C. an approved Constriction Contract for the Development Phase has
been executed with a General Contractor,
d. the BLA is approved and ready to be recorded,
e. an approved Financing Plan has been established to the satisfaction
of the City pursuant to Section 2.14 hereof,
f Developer has submitted to the City satisfactory evidence of
availability of funds pursuant to Section 2.15 hereof,
g. the Final City Council Approval of the Street Vacation has been
given within the meaning of Section 2.6(B) of this Agreement and the Street Vacation
Agreements have been fully executed and are binding upon the Parties thereto, and
f Developer has submitted to the City satisfactory evidence of
insurance pursuant to Section 63(B) hereof.
2. Submission of Proaosal. Upon mutual agreement of the Parties that the
foregoing conditions have been satisfied, Developer will then apply the agreed upon Residual
Land Value Analysis to determine the proposed Adjusted Residual Land Value (the "Adjusted
Residual Land Value Proposal') for each Development Parcel using the agreed upon Residual
Land Value Analysis, and provide written notice to the City of the same. The Adjusted Residual
Land Value Proposal shall identify all material factors, data and information utilized in the
calculation and the source and reliability of such factors, data and information, and shall include,
explain and identify the following:
a. a comprehensive project proforma including a comprehensive
development and constriction budget, Developer profit and return on Developer equity,
financing costs, tax credits and grants, rate of return on equity, sources and uses of funds, net
operating income based on projected stabilized rents and operating expenses, and estimated
market capitalization rate,
b. documentation supporting the included factors, data and
information reasonably satisfactory to the City including, by way of example, copies of the
approved Constriction Contract for the constriction of the Improvements with respect to to each
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Development Parcel, a copy of the lender's appraisal, and a market study or appraisal upon
which rents are projected,
C. any cost of any Improvements which will be allocated among the
Development Parcel(s) as Additional Deductions,
d. binding contracts for environmental Remediation or abatement (if
applicable),
e. firm written commitments for all debt financing and equity
investment, subject only to industry standard funding conditions and a satisfactory budgetary
outcome with respect to the Purchase Price of the Development Parcel(s) involved in the
Development Phase under the Adjusted Residual Land Value Proposal, and
f. the nature and amount of each material item in the development
and constriction budget and the methodology for all cost allocations and Additional Deductions.
3. Citv Resaonse. The City shall have ten (10) business days from receipt of
Adjusted Residual Land Value Proposal for each Development Parcel to evaluate the Proposal
and to reject or approve the same, or request further information. In the event that the City does
not give notice of its rejection or request for additional information within ten (10) business days
of receipt of the Adjusted Residual Land Value Proposal, then the Proposal will be deemed
approved by the City and shall be deemed the agreed upon Purchase Price for the applicable
Development Parcel(s). In the event that the City rejects the Proposal, the City will give written
notice of such rejection within ten (10) business days of receipt of the Proposal, together with a
detailed explanation of the reasons for such rejection. If the City requires additional information
to evaluate the Adjusted Residual Land Value Proposal, the City will provide written notice to
Developer of its request for additional information. Developer shall have ten (10) business days
from receipt of notice to provide the requested information to the City. The City will then have
an additional ten (10) business days to evaluate and respond to the Adjusted Residual Land
Value Proposal. The Parties will continue with a like process until such time as an agreed upon
Purchase Price is determined.
4. Remedies. In the event that the Parties, after using good faith efforts, are
unable to mutually agree upon the Adjusted Residual Land Value, either Party may give notice
of termination of this Agreement pursuant to Section 9 hereof, or may, upon mutual agreement,
subject the Dispute to mediation or arbitration pursuant to Section hereof, or mutually agree
to negotiate amendments to the terms and conditions of this Agreement to address the nature of
the Dispute.
Developer may not request that the City issue approved permits for a particular
Development Phase until Developer has deposited the agreed upon Purchase Price into escrow in
accordance with the procedures set forth herein.
E. Purchase Price. The Purchase Price for each Development Parcel shall be the
Adjusted Residual Land Value for each such Development Parcel, provided, however, that the
Purchase Price may be determined in accordance with subsection 4.4(F) hereof in the event that
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the Adjusted Residual Land Value does not equal or exceed the applicable Minimum Residential
Unit Value.
F. Minimum Residential Unit Value.
1. For purposes of this Agreement, the minimum residential unit value shall
be $10,000 per housing unit (the "Minimum Residential Unit Value In the event that the
Adjusted Residual Land Value for the applicable Development Parcel(s) within a Development
Phase results in a Residential Unit Value (as defined below) that is less than the Minimum
Residential Unit Value, then the City may exercise its rights as set forth below in Section
4.4(1 below.
The residential unit value (the "Residential Unit Value shall be
determined as follows: All proposed retail, commercial or office space for the Development
Phase, as set forth in the Approved Construction Plans, shall be converted into an equivalent
number of residential dwelling units "Equivalent Residential Units based on the average
floor area of the proposed residential dwelling units in the affected Development Phase. The
Parties shall then determine the actual total number of actual residential dwelling units proposed
for the Development Phase as set forth in the Approved Construction Plans and add this number
to the total number of Equivalent Residential Units for the Development Phase to determine the
total deemed number of residential dwelling units for the Development Phase (the "Deemed
Number of Residential Dwelling Units The Parties shall then calculate the "Total Adjusted
Residual Land Value" by adding together the Adjusted Residual Land Value for each
Development Parcel in the Development Phase. The Total Adjusted Residual Land Value shall
then be divided by the Deemed Number of Residential Dwelling Units to determine the
Residential Unit Value.
3. In the event that the Residual Unit Value, as determined pursuant to
Section 4.4(1 above, does not equal or exceed the Minimum Residential Unit Value, the City
may request an upward adjustment of the Purchase Price such that a corresponding increase in
the Total Adjusted Residual Land Value would result in a Residual Unit Value at least equal to
the Minimum Residential Unit Value. In the event that Developer rejects the change in the
Purchase Price proposed by the City, and the City rejects any counter proposal by Developer,
then either Party may terminate the Agreement with respect to the purchase of any Development
Parcels that have not yet closed escrow. The Agreement shall remain in full force and effect with
respect to any Development Phase or Development Parcel that has closed escrow.
4.5. Escrow /Closing.
A. Selection of Escrow Aizent. Prior to and as a further condition of the Closing, the
City shall (i) select an Escrow Agent reasonably acceptable to Developer to conduct the Closing
for the purchase and sale of each Development Parcel, and (ii) Developer and the City shall
agree upon escrow instructions to be delivered to the Escrow Agent. The escrow instructions
shall be consistent with subsections B and C below.
B. Closing and Convevance. The Closing shall occur after (1) the Purchase Price for
each Development Parcel to be conveyed has been deposited into escrow in accordance with
Section 4.4 hereof, all pre disposition conditions in Article hereof have been satisfied by
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Developer or waived in writing by both Parties (it being agreed that such pre disposition
conditions are for the benefit of both Parties), (3) the Parties have deposited all documents
required to convey title, (4) all conditions set forth in subsection C below have been satisfied,
and (5) at the time of the Closing, there is no uncured City Event of Default or Developer Event
of Default.
C. Unless otherwise agreed to in writing by the Parties, the following are conditions
precedent to, and are simultaneous conditions of, the Closing:
1. Delivery by City. On or prior to the Closing Date, City shall deposit with
Escrow Agent, and shall deliver copies to Developer and its counsel (to the extent not previously
delivered) at least five (5) days prior to the Closing Date, any closing costs which are the
responsibility of City hereunder, and the following:
a. The Statutory Warranty Deed, substantially in the form attached
hereto as Exhibit "C duly executed and acknowledged by City, in recordable form, and ready for
recordation on the Closing Date, together with a duly executed real estate excise tax affidavit,
b. Any reconveyance documents required to eliminate of record any
existing deeds of trust, mortgages and other security documents which are a lien on the
Development Parcel(s), and any affidavit required to eliminate the Title Company's exception,
other than Permitted Exceptions,
C. Such resolutions, authorizations, certificates or other corporate
and /or partnership documents or agreements relating to the City, as shall be reasonably required by
Developer or Title Company in connection with this transaction,
d. The original of the final approved BLA, within the meaning of
Section 2.5 hereof, duly executed and acknowledged by the City, in recordable form, and ready for
recordation on the Closing Date,
e. A certified copy of the ordinance granting Final City Council
Approval of the Street Vacation, within the meaning of Section 2.6 hereof, duly executed and
acknowledged by the City, in recordable form, and ready for recordation on the Closing Date,
f The DDA Memorandum, substantially in the form attached hereto
as Exhibit "V in recordable form, duly executed and acknowledged by the City and Developer,
and ready for recordation on the Closing Date,
g. Any other documents, instruments, addenda, records,
correspondence or agreements called for hereunder which have not previously been delivered.
2. Delivery by Developer. On or before the Closing Date, Developer
shall deposit with Escrow Agent the Purchase Price and any closing costs which are the
responsibility of Developer hereunder, and the following:
a. The CC &Rs substantially in the form attached hereto as Exhibit
duly executed and acknowledged by Developer, in recordable form, and ready for
recordation on the Closing Date,
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b. The original of the parking easement benefiting the Library Parcel
in conformance with Section 2.9(D) hereof, substantially in the form attached hereto as Exhibit
"X duly executed and acknowledged by Developer, in recordable form, and ready for
recordation on the Closing Date, provided that, this condition shall not apply if the KCLS has not
timely entered into a purchase and sale agreement with the City in conformance with Section
2.9(B) hereof, and provided further that this condition shall only apply to those Development
Parcels that will be encumbered by such parking easement.
3. Other Instruments. City and Developer shall each deposit such other
instruments as are reasonably required by Escrow Agent or otherwise required to close the
escrow and consummate the purchase of the Development Parcel(s) in accordance with the terms
hereof.
Closing:
4. Other Conditions. The following are further conditions precedent to
a. Developer's delivery to the City of a copy of the KCLS
Development Agreement between Developer and the KCLS, in conformance with Section 2.9(D)
hereof, duly executed and acknowledged by Developer and KCLS, provided that, this condition
shall not apply if the KCLS has not timely entered into a purchase and sale agreement with the
City in conformance with Section 2.913 hereof.
b. Developer's delivery to the City of Certificates of Insurance in
form reasonably satisfactory to the City demonstrating compliance with the insurance
requirements of Section 63(B).
C. Developer's delivery to the City of its Construction Bonds
substantially in the form attached hereto as Exhibit "T
d. City notification that it is ready to issue the necessary grading,
demolition, engineering and building permit(s) for the Development Phase, subject to payment of
the required permit fees (if not already accomplished).
Section 4.6 Title.
A. Condition of Title. The City shall convey to Developer, marketable and insurable
fee simple title to the each of the Development Parcels comprised within each Development
Phase, by execution and delivery of a Statutory Warranty Deed substantially in the form attached
hereto as Exhibit "C subject to the Permitted Exceptions.
B. No Adverse Action. City hereby agrees from and after the date of execution of
this Agreement, until the Closing or the termination of this Agreement, that it (i) will take no
action not contemplated in this Agreement that will adversely affect title to the Property, (ii) will
not lease, rent, mortgage, encumber, or permit the encumbrance of all or any portion of the
Property without Developer's prior written consent, except as otherwise provided in this
Agreement, and (iii) will not, except as otherwise provided in this Agreement, enter into any
written or oral contracts or agreements with respect to the operation of the Property which cannot
be canceled on not more than thirty (30) days' notice without premium or penalty.
3 7 77
C. Title Insurance. Through the Closing, the City shall cause the Escrow Agent or
other Title Company reasonably acceptable to Developer to issue an ALTA Owner's Policy
(Form 1970) insuring Developer's interest in the Property subject only to the Permitted
Exceptions and such other exceptions as may be caused by Developer (the "Title Policy
Section 4.7 Condition of the Property.
A. Disclosure: Due Diligence Review Period. Developer, its employees, contractors
and agents shall have the right to enter upon each Development Parcel where necessary to
conduct activities necessary for preliminary testing for future development of the Property.
Developer understands that the City has assembled the Property for redevelopment, and thus,
with the exception of the dedicated public right of way, has not conducted activities upon or
occupied the Property. The City shall provide or make available to Developer for inspection and
copying to the extent available or within City's possession or control: any leases, all appraisals
of each Development Parcel, all soils reports or environmental surveys or audits of each
Development Parcel, all correspondence with any governmental authorities regarding each
Development Parcel, and any other documents and information in the possession or control of
City and pertaining to each Development Parcel, and all other items which Developer deems
reasonably necessary to conduct its due diligence review of each Development Parcel (the "Due
Diligence Review Materials City shall also instruct its consultants, agents, and
representatives to produce or make available to Developer at no cost to Developer the Due
Diligence Review Materials in the possession or control of such consultants, agents, and
representatives.
Developer shall have fifteen (15) days from the date that City delivers all of the Due
Diligence Review Materials to Developer (the "Due Diligence Review Period in which to
conduct its review of the Property and the Due Diligence Review Materials. Said review may
include, at Developer's election, a physical and engineering inspection of the Property and an
environmental assessment, all at Developer's cost and expense. Developer shall also have the
right to obtain surveys of the Property, at its cost and expense. The City agrees to cooperate with
and assist Developer in the physical inspection of the Property and obtaining the Due Diligence
Review Materials. Developer shall repair any damage to the Property caused by Developer, its
employees or agents during such physical inspection of the Property. During the Due Diligence
Review Period, Developer and its employees, agents and consultants shall have free access to the
Property and the books and records relating thereto for such purposes.
Developer shall provide the City copies of any environmental testing and site
assessments, any geotechnical testing and exploration, and any topographical and /or boundary
survey, as each step is completed. If, during such Due Diligence Review Period, Contaminants or
geotechnical hazards become evident that were not previously identified, Developer and the City
may renegotiate the terms and conditions of this Agreement, or otherwise terminate this
Agreement pursuant to Section 9 hereof.
At Developer's request, the City shall agree to allow Developer to perform any necessary
and appropriate environmental Remediation or abatement of any Known Contaminants in, on,
under and upon the Developer Responsibility Area, before or after the Closing on the purchase of
such affected portion of the Property, provided that the City approves the Remediation or
78 3 x
abatement plan and budget. As a condition of such agreement, the Parties agree to extend the
Due Diligence Review Period as necessary to complete the Remediation prior to Closing. The
costs associated with any necessary and appropriate environmental Remediation or abatement to
the Property, whether performed before or after the Closing on the purchase of such portion of
the Property, shall be included as a development cost in connection with the Residual Land
Valuation Analysis for purposes of the determination of the applicable Purchase Price of any
corresponding Development Parcel(s).
Developer shall deliver written notice to the City and Escrow Agent on or before the
close of business on the last day of the Due Diligence Review Period that it has either (1)
approved the Due Diligence Review Materials and the results of Developer's independent
investigation and intends to proceed with the purchase of the Property, or the purchase of
Development Parcels comprising a specific Development Phase, or (2) it has elected to terminate
this Agreement, whereupon this Agreement shall terminate and neither Party shall have any
further rights or obligations hereunder.
Failure of Developer to provide such notice on or before the close of business on the last
day of the Review Period shall be deemed an election by Developer not to terminate this
Agreement as provided in (2) of the above paragraph. In this respect, City acknowledges that
Developer may terminate this Agreement on or before the last day of the Review Period at
Developer's sole and absolute discretion if Developer is not satisfied for any reason with the
Property.
Section 4.8 Title Review.
A. Developer shall be entitled to review all title information regarding the
Development Parcels comprised within a Development Phase as follows:
1. Review Documents. As soon as reasonably possible following mutual
execution of this Agreement but, in any event, within fifteen (15) days of the Effective Date
hereof, the City shall provide Developer with the following documents and materials:
a. Current extended coverage preliminary commitments for title
insurance for the Development Parcels (collectively, the "Title Report issued by
(the "Title Company together with complete and legible copies of
all general or special exceptions noted therein,
b. Copies of all existing and proposed easements, covenants,
restrictions, agreements or other documents which affect the Development Parcels and which are
not disclosed by the Title Report, or, if, to the best of City's knowledge, no such documents
exist, a certification by the City to that effect,
C. Any surveys of the Property in the City's possession,
d. Statement of (and, if available, copies of) any other matters of any
nature of which City has knowledge and which affect title to any part of the Development
79
Parcels, whether or not of record and whether or not visible or ascertainable by inspection of the
Development Parcels, and whether or not otherwise known to Developer.
Developer's Title Notice to Citv. Developer shall advise the City in
writing within fifteen (15) business days after the date Developer has received the last of the
materials to be delivered by City to Developer, under this Section 4.8, what exceptions to title, if
any, will be acceptable to Developer. Only those exceptions set forth at Section 1.1 (definition
of Permitted Exceptions) and such additional exceptions approved in writing by Developer, or as
otherwise proved herein, shall be included as Permitted Exceptions. Any liens, encumbrances,
easements, restrictions, conditions, covenants, rights, right of way and other matters affecting
title to the Development Parcels which are created and which may appear of record or be
revealed by the survey or otherwise, after the date of the Title Report but before the Closing Date
(collectively "the Intervening Liens shall also be subject to Developer's approval and
Developer shall have fifteen (15) business days after notice in writing of any Intervening Lien,
together with a description thereof and a copy of the instrument creating or evidencing the
Intervening Lien, if any, to submit written objections thereto or to give City notice of acceptance
thereof in the manner set forth above. If Developer fails to notify City within said time period,
Developer shall be deemed to have disapproved the condition of title to the Development
Parcels.
3. Citv's Response. City shall have ten (10) business days after receipt of
Developer's objections to give Developer written notice: (i) that City will remove any
objectionable exceptions from title and provide Developer with evidence satisfactory to
Developer of such removal, or provide Developer with evidence satisfactory to Developer that
said exceptions will be removed on or before the Closing, or (ii) that the City elects not to
remove such exceptions. If City gives Developer notice under clause (ii), Developer shall have
ten (10) business days to elect to proceed with the purchase and take the Development Parcels
subject to such exceptions (which exceptions shall then constitute Permitted Exceptions), or to
terminate this Agreement. If Developer shall fail to give the City written notice of its election
within said ten (10) business days, Developer shall be deemed to have elected not to proceed
with the purchase. If the City shall give notice pursuant to clause (i) and shall thereafter fail to
remove any such objectionable exceptions from title prior to the Closing Date, and Developer is
unwilling to take title subject thereto, such failure shall be a City Event of Default hereunder and,
without limiting Developer's rights and remedies against the City, Developer may elect to
terminate this Agreement and the City shall be liable for Developer's costs and expenses
incurred hereunder (including title and escrow costs and reasonable attorney's fees) after the City
notifies Developer that it will remove objectionable exceptions. Notwithstanding the provisions
of this Section 4.8, the City agrees to eliminate all financial liens or encumbrances on the
Property at or prior to Closing, and if the City fails to do so, Developer may, at its option, cause
any remaining financial liens or encumbrances to be satisfied in full at Closing, in which event
the Purchase Price shall be reduced by the amount advanced by Developer to satisfy such
financial liens or encumbrances.
B. "As Is" Purchase. Developer specifically acknowledges and agrees that the City
is selling and Developer is buying each of the Development Parcels on an "as is, with all faults"
basis, and that Developer is not relying on any representations or warranties of any kind
whatsoever, express (except as expressly set forth in this Agreement) or implied, from the City
as to any matters concerning each of the Development Parcels, including without limitation: (1)
80 40
the quality, nature, adequacy and physical condition of the each of the Development Parcels
(including, without limitation, topography, climate, air, water rights, water, gas, electricity,
utility services, grading, drainage, sewers, access to public roads and related conditions), (2) the
quality, nature, adequacy, and physical condition of soils, geology and groundwater, (3) the
existence, quality, nature, adequacy and physical condition of utilities serving each of the
Development Parcels, (4) the development potential of each of the Development Parcels, and the
use, habitability, merchantability, or fitness, suitability, value or adequacy of each of the
Development Parcels for any particular purpose, (5) the zoning or other legal status of each of
the Development Parcels or any other public or private restrictions on the use of each of the
Development Parcels, (6) the compliance of each of the Development Parcels or its operation
with any applicable codes, Laws, regulations, statutes, ordinances, covenants, conditions and
restrictions of any governmental or quasi governmental entity or of any other person or entity,
(7) the presence or absence of Hazardous Materials on, under or about each of the Development
Parcels or the adjoining or neighboring property, and (8) the condition of title to each of the
Development Parcels (except as otherwise expressly provided in Section 4.6(A) (B)).
Developer affirms that Developer has not relied on the skill or judgement of the City or
any of its respective agents, employees or contractors to select or furnish each of the
Development Parcels for any particular purpose, and that the City makes no warranty that any of
the Development Parcels are fit for any particular purpose. Developer acknowledges and agrees
that it shall use its independent judgement and make its own determination as to the scope and
breadth of its due diligence investigation which it made relative to each of the Development
Parcels and shall rely upon its own investigation of the physical, environmental, economic and
legal condition of each of the Development Parcels (including, without limitation, whether the
Property is located in any area which is designated as a special flood hazard area, dam failure
inundation area, earthquake fault zone, seismic hazard zone, high fire severity area or wildland
fire area, by any federal, state or local government department). Developer undertakes and
assumes all risks associated with all matters pertaining to the location of each of the
Development Parcels in any area designated as a special flood hazard area, dam failure
inundation area, earthquake fault zone, seismic hazard zone, high fire severity area or wildland
fire area, by any federal, state or local government or City department.
Without limiting the generality of the foregoing provisions of this subsection (B),
Developer specifically acknowledges and agrees that: (1) the City shall have no responsibility for
the suitability of each of the Development Parcels for development, and if the conditions of each
of the Development Parcels are not entirely suitable for development, then Developer shall put
each of the Development Parcels in a condition suitable for Development at its cost, and (2) if
there is a discovery following the Closing of any Later Discovered Pre- Conveyance
Contaminants, Developer shall be solely responsible, at its cost, for any required Remediation of,
and any third -party damages related to, such Later Discovered Pre Conveyance Contaminants.
C. Survival. The terms and conditions of this Section 4.8 shall expressly survive the
Closing, shall not merge with the provisions of the Statutory Warranty Deed(s), or any other
closing documents and shall be deemed to be incorporated by reference into the Statutory
Warranty Deed. The City is not liable or bound in any manner by any oral or written statements,
representations or information pertaining to each of the Development Parcels furnished by any
contractor, agent, employee, servant or other person. Developer acknowledges that the Purchase
Price reflects the "As Is" nature of this purchase and sale transaction and any faults, liabilities,
41 81
defects or other adverse matters that may be associated with any of the Development Parcels.
Developer has fully reviewed the disclaimers and waivers set forth in this Agreement with
Developer's legal counsel and understands the significance and effect thereof.
D. Acknowledianent. Developer acknowledges and agrees that: (1) to the extent
required to be operative, the disclaimers of warranties contained in this Section 4.8 are
"conspicuous" disclaimers for purposes of all applicable Laws and other legal requirements, (2)
the disclaimers and other agreements set forth in this Section 4.8 are an integral part of this
Agreement, (3) the Purchase Price has been adjusted to reflect the same, and (4) the City would
not have agreed to sell any of the Development Parcels to Developer for the applicable Purchase
Price without the disclaimers and other agreements set forth in this Section 4.8.
E. Developer's Release of the Citv. Subject to City performance of the City
obligations under this Agreement, Developer, on behalf of itself and anyone claiming by,
through or under Developer hereby waives its right to recover from and fully and irrevocably
releases the City, the City Council and their respective council members, appointees, employees,
officers, directors, representatives, attorneys and agents (the "City Released Parties from any
and all claims, responsibility and /or liability that Developer may have or hereafter acquire
against any of the City Released Parties for any costs, loss, liability, damage, expenses, demand,
action or cause of action arising from or related to: (1) the condition (including any constriction
defects, errors, omissions or other conditions, latent or otherwise), valuation, salability or utility
of each of the Development Parcels, or suitability of any Development Parcel for any purpose
whatsoever, (2) the presence of any Hazardous Materials (other than Known Contaminants), and
(3) any information furnished by the City Released Parties under or in connection with this
Agreement.
F. Scone of Release. The release set forth in subsection (E) of this Section 4.8
includes claims of which Developer is presently unaware or which Developer does not presently
suspect to exist which, if known by Developer, would materially affect Developer's release of
the City Released Parties. Developer specifically waives the provision of any statute or principle
of law that provides otherwise. In this connection and to the extent permitted by law, Developer
agrees, represents and warrants that Developer understands and acknowledges that factual
matters now unknown to Developer may have given or may hereafter give rise to causes of
action, claims, demands, debts, controversies, damages, costs, losses and expenses which are
presently unknown, unanticipated and unsuspected, and Developer further agrees, represents and
warrants that the waivers and releases herein have been negotiated and agreed upon in light of
that realization and that Developer nevertheless hereby intends to release, discharge and acquit
the City Released Parties from any such unknown causes of action, claims, demands, debts,
controversies, damages, costs, losses and expenses. Accordingly, Developer, on behalf of itself
and anyone claiming by, through or under Developer, hereby assumes the above mentioned
risks.
Notwithstanding the foregoing, this release shall not apply to, nor shall the City be
released from, the City's actual fraud or misrepresentation or the City's obligation to perform the
City obligations under this Agreement.
G. Costs of Escrow and Closin
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I Prorations. All revenues and all expenses of each Development Parcel,
including but not limited to, water and utility charges, amounts payable under any leases, annual
permits and /or inspection fees (calculated on the basis of the respective periods covered
thereby), and other expenses normal to the ownership, use, operation and maintenance of the
Property shall be prorated as of 12:01 a.m. on the Closing Date. It is acknowledged that any
revenue or expense amount which cannot be ascertained with certainty as of Closing shall be
prorated on the basis of the Parties' reasonable estimate of such amount, and shall be the subject
of a final proration forty -five (45) days after Closing, or as soon thereafter as the precise
amounts can be ascertained. A statement setting forth such agreed -upon prorations signed by
City and Developer shall be delivered to Escrow Agent. Real property taxes shall be paid in
accordance with Ch. 84.60 RCW. Any outstanding LID or other assessments against any
Development Parcel shall be satisfied in full by the City at Closing. Any rents collected by
Developer after Closing shall be retained by Developer and the City shall not be entitled to any
credit for the same.
2. Title Insurance. City shall pay the premium for the standard coverage
component of the extended owner's policy of title insurance required under Section hereof.
Developer shall pay the costs of any new surveys, the premium for the extended coverage
component of the extended owner's policy of title insurance provided under Section hereof,
and all recording costs. The City shall complete and execute the real estate excise tax affidavit
and shall pay any excise tax due in connection with this transaction. Developer and the City shall
share equally the cost of escrow fees in connection with any Closing.
H. Recordation. Provided that Escrow Agent has not received prior written notice
from either Party that an agreement of either Party made hereunder has not been performed, or to
the effect that any condition set forth herein has not been fulfilled, or that Developer has elected to
terminate its rights and obligations hereunder pursuant to Section hereof, and further provided
that the Title Company has issued or is unconditionally prepared and committed to issue to
Developer the Title Policy, then Escrow Agent is authorized and instructed at 8:00 a.m. (or as soon
thereafter as possible) on the Closing Date, pursuant to joint escrow instructions to be executed by
Developer and City, to:
1. Record the Deed(s) in the official records of King County, Washington,
4.5(C) hereof.
2. Deliver the other documents described in Section 4.5(C) hereof,
3. Record any reconveyance documents delivered by City pursuant to Section
L Delivery of Documents. Upon Closing, all statements and documents to be
delivered to Developer shall be delivered to:
Tukwila Village Associates, LLC
c/o Pacific Northern Constriction Company, Inc., Manager
201 27th Avenue SE, Building A, Suite 300
Puyallup, WA 98374
to:
Upon the Closing, all statements and documents to be delivered to City shall be delivered
83
J. Real Estate Commissions. Except as set forth below, each Party represents and
warrants that it has not entered into any agreement, and has no obligation, to pay any real estate
commission in connection with the transaction contemplated by this Agreement. If a real estate
commission is claimed through either Party in connection with the transaction contemplated by
this Agreement, then the Party through whom the commission is claimed shall indemnify, defend
and hold the other Party harmless from any liability related to such commission. The Parties'
respective obligations to indemnify each other under this Section 4.8 shall survive termination of
this Agreement, and shall be interpreted broadly so as to apply to any legal or administrative
proceeding, arbitration, or enforcement action.
ARTICLE 5
CONSTRUCTION OF THE DEVELOPMENT
Section 5.1 Basic Obligations.
Developer shall cause constriction of the Improvements in accordance with the terms of
this Agreement. Subject to Force Majeure, Developer shall cause commencement and
completion of construction of the Improvements associated with each Development Phase within
the times set forth in Section 9. Developer shall perform the terms of this Agreement in
accordance with the following standards:
A. All construction hereunder shall comply with, and be performed in
accordance with, the Design Guidelines, the Approved Site Plan, this Agreement and all
applicable Environmental Standards, free and clear of all liens (other than in connection with
approved Financing Obligations).
B. Developer shall cause all work performed in connection with constriction
of the Development to be performed in compliance with: (1) all applicable Laws, ordinances,
rules and regulations of federal, state, county or municipal governments or agencies, and (2) all
rules and regulations of any fire marshal, health officer, building inspector, or other officer of
every governmental agency of the City now having or hereafter acquiring jurisdiction. The work
shall proceed only after procurement of each and every required permit, license, approval or
other authorization that may be required by any governmental agency having jurisdiction, and
Developer shall be responsible for the procurement and maintenance thereof, as may be required
of Developer and all Persons engaged in work on the Property.
C. Developer agrees to use its reasonable best efforts to seek and obtain all
permits and financing necessary to construct the Improvements with respect to each
Development Phase and shall thereafter diligently design, constrict and complete the
Improvements in a good and workmanlike manner and of good quality.
D. Developer agrees to use materials that are of high quality and
workmanship. Developer agrees to utilize high quality constriction materials consistent with
Class "A mixed -use development and market rate residential rental apartment properties,
84 44
notwithstanding that a portion of the rental apartments included in the development are intended
to be restricted and affordable to low- to moderate- income individuals and households.
Examples of the quality of such construction materials include Developer's Arrowhead Gardens
Apartments development in West Seattle and Victoria Park Apartments development in Lake
City. Materials such as synthetic stucco, plastic storefront window systems, cinder block,
aluminum /plastic /vinyl siding, or faux cladding shall not be used on any building facades.
Section 52 Developer- Performed Street. Utilities and Related Work.
Without limiting the generality of the obligations set forth in Section 5.1 hereof, as part
of the construction of the Improvements associated with the first Development Phase, Developer
shall cause performance of Developer- performed street, City utility (storm water) and non -City
utility (all other utlities), and work related to the Street Vacation Agreements as set forth at
Section 53 hereof (collectively, the "Developer Infrastructure Work The Parties
acknowledge and agree as follows with respect to the performance of such Developer
Infrastructure Work:
A. The performance of the Developer Infrastructure Work is an integral component
of the overall construction of the Development,
B. Close coordination is required between performance of the Developer
Infrastructure Work and the simultaneous construction of the first Development Phase and the
proposed future development of the Library Parcel,
C. Timely completion of the Developer Infrastructure Work contemporaneous with
development of the first and second Development Phases is essential to the successful
development of the Property, and
D. Performance of the Developer Infrastructure Work in accordance with the
requirements of the Street Vacation Agreements is essential to the successful development of the
Property.
Section 53 Description of Developer Infrastructure Work.
A. Street Improvements. Developer shall construct all street improvements depicted
in the Approved Site Plan in accordance with standard City requirements to constrict public
infrastructure and frontage improvements abutting the Development Parcels. Developer shall, in
addition, construct such street improvements as may be set forth in, and in accordance with, the
terms and conditions of the Street Vacation Agreements.
B. Storm Water Utilities. Developer shall constrict all storm water utility system
improvements depicted in the Approved Site Plan or Approved Final Constructions Plans in
accordance with standard City requirements, and, in addition, shall construct such improvements
as may be set forth in, and in accordance with, the terms and conditions of the Street Vacation
Agreements.
C. Other Utilities. Developer shall coordinate and cause relocation, adjustment,
installation, and constriction of all other utility system improvements (natural gas, electric,
45 85
telecommunications, cable, sanitary sewer and water) as depicted in the Approved Site Plan or
Approved Constrictions Plans so that such work is substantially performed and completed prior
to completion of constriction of the first and second Development Phases.
D. South 144 Street. The City's Capital Improvement Plan (CIP) includes a project
to rebuild South 144 Street between Tukwila International Boulevard and 42n Avenue South.
This project is currently unfunded, but the City agrees to commence a study to evaluate the
project and design the improvements. The City agrees to make this a high priority project and to
actively seek outside funding to design and constrict the improvements for the City's South
144 Street CIP project. If the City is successful in receiving funding to constrict the City's
South 144 Street CIP project, such that Developer does not have to constrict such frontage
improvements, such frontage improvement costs will not be taken into account in the Residual
Land Value Analysis.
E. Other Infrastructure Improvements. Certain other infrastructure costs may be
necessitated based on certain pending decisions by Developer such as the introduction of parallel
parking within the City right of way along a portion Tukwila International Boulevard separated
from traffic by channelization, or the relocation of all or portions of the existing crosswalk across
Tukwila International Boulevard to better align the crosswalk with a major pedestrian access
point serving the Development.
Section 5.4 Constriction Pursuant to Plans.
A. General Reauirement. Developer shall cause constriction of the Improvements
for each Development Phase in accordance with the Approved Site Plan (or modifications
thereto permitted by this section), the approved Phased Development Plan, and the terms and
conditions of the Development Agreement and all City and other governmental approvals and
this Agreement. Nothing in this section shall preclude or modify Developer's obligation to
obtain any required City approval of changes in the Approved Site Plan or Phased Development
Plan.
B. "As Built" Plans. Within forty -five (45) days after issuance of an Estoppel
Certificate of Completion for the Development, Developer shall submit to the City a complete
set of "as built" plans for any Improvements that will be dedicated or conveyed to the City.
Section 5.5 Estoaael Certificate of Completion.
For each Development Phase, when the obligations of Developer under this Agreement
as to each such Phase have been met, Developer may request issuance of, and upon such request
the City shall issue, a certificate to such effect (an "Estoppel Certificate of Completion in a
form recordable in the Official Records of the County of King, which the City shall do within
thirty (30) days of such a request that meets the above requirements.
Except as set forth in the following paragraph, an Estoppel Certificate of Completion
shall constitute a conclusive determination that the covenants in this Agreement with respect to
the obligations of Developer, as to such Development Phase, to constrict the Improvements and
to pay the Purchase Price, have been met and that such covenants no longer constitute covenants
that ran with and burden the Development Parcels subject to such Estoppel Certificate of
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Completion. Such certification shall not be deemed a notice of completion under the Tukwila
Municipal Code, nor shall it constitute evidence of compliance with or satisfaction of any
obligation of Developer to any holder of deed of trust securing money loaned to finance the
Development or any portion thereof, except as otherwise independently provided in such deed of
trust.
An Estoppel Certificate of Completion shall not constitute a conclusive determination of
the satisfaction of the requirements of the obligation and indemnification set forth in Section
which shall expressly survive issuance of an Estoppel Certificate of Completion. An Estoppel
Certificate of Completion shall not relieve Developer of its covenants pursuant to Section 6.2
(Operating Covenants) or Section 2.8(E) (CC &Rs) hereof, which covenants shall expressly
survive issuance of an Estoppel Certificate of Completion.
Upon issuance of an Estoppel Certificate of Completion, Developer shall cause the same
to be recorded upon the Development Parcels subject to the Estoppel Certificate of Completion.
Section 5.6 Entry by the Citv.
Developer shall permit the City, through its officers, agents, or employees, to enter the
Property at all reasonable times to inspect the constriction work with respect to the
Improvements in each Development Phase to determine that such work is in conformity with the
Approved Site Plan, the Phased Development Plan, the Development Agreement or to inspect
the Property for compliance with this Agreement. The City is under no obligation to (a)
supervise constriction, (b) inspect the Property, or (c) inform Developer of information obtained
by the City during any inspection, except that the City shall inform Developer of any information
it obtains or discovers during inspection that could reasonably or foreseeably affect the ri or
obligations of a Party under this Agreement. Developer shall not rely upon the City for any
supervision or inspection. The rights granted to the City pursuant to this Section 5.6 are in
addition to any rights of entry and inspection the City may have in exercising its municipal
regulatory authority, and such special or additional rights hereunder shall terminate with respect
to each Develpment Phase upon such time as Developer is entitled to issuance of an Estoppel
Certificate of Completion for such Develpment Phase.
ARTICLE 6
OBLIGATIONS DURING AND AFTER CONSTRUCTION
Section 6.1 Aaalicability. Developer shall comply with the provisions of this Article
6: (a) for the applicable time period specified in the various sections of this Article 6, or (b) if no
specified time period is set forth in a particular section, throughout the Term of this Agreement.
Section 62 Additional Oaeratin- Covenants for Retained Improvements.
A. Expansion. Reconstruction or Demolition. For a period of twenty (20) years
following issuance of an Estoppel Certificate of Completion, Developer shall not cause or permit
any material change in use of the Retained Improvements without the prior written approval of
the City, which approval shall not be unreasonably withheld, conditioned or delayed.
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Section 63 General Indemnity and Insurance.
A. General Indemnity. With the exception that neither this subsection nor any other
provisions of this Agreement shall be construed to require indemnification by Developer to a
greater extent than allowed under the Laws and policies of the State of Washington, Developer
shall indemnify, defend (with counsel reasonably acceptable to the City), and hold harmless the
Indemnified Parties against all suits, actions, claims, causes of action, costs, demands, judgments
and liens arising out of Developer's or the Contractors' performance or non performance under
this Agreement or arising in connection with entry onto, ownership of, occupancy in, or
constriction on the Property by Developer, the Contractors, or the Tenants. This indemnity
obligation shall not extend to any claim to the extent such claim is attributable to arising from the
applicable Indemnified Party's negligence or the City's failure to perform its obligations under
this Agreement. Developer's obligation to indemnify under this Section 63(A) shall survive
termination of this Agreement, and shall be interpreted broadly so as to apply to any legal or
administrative proceeding, arbitration, or enforcement action.
The indemnification, defense and hold harmless obligations of Developer under this
subsection and elsewhere in this Agreement or the Exhibits hereto (sometimes collectively, the
"Indemnification Obligations shall not be limited by the amounts or types of insurance (or
the deductibles or self insured retention amounts of such insurance) which Developer is required
to carry under this Agreement. In claims against any of the Indemnified Parties by an employee
of Developer, or anyone directly or indirectly employed by Developer or anyone for whose acts
Developer may be liable, the Indemnification Obligations shall not be limited by amounts or
types of damages, compensation or benefits payable by or for Developer or anyone directly or
indirectly employed by Developer or anyone for whose acts Developer may be liable. The
Indemnification Obligations of Developer shall be independent of and in addition to the
Indemnified Parties' rights under the insurance to be provided by Developer under this
Agreement. The duty to defend hereunder is wholly independent of and separate from the duty
to indemnify.
B. Reauired Insurance Coveratze. Developer shall cause to be maintained and kept
in force, at the sole cost and expense of Developer, the following insurance for the Developer
Responsibility Area:
1. Comprehensive General Liability Insurance with limits of not less than
$1,000,000 per occurrence and a combined single limit of $2,000,000 in the aggregate plus
Comprehensive Excess Liability Insurance of not less than $5,000,000 for Bodily Injury and
Property Damage, including premises operations, underground and collapse, completed
operations, contractual liability, independent contractor's liability, broad form property damage
and personal injury, and covering, without limitation, all liability to third parties arising out of or
related to Developer's performance of its obligations under this Agreement or other activities of
Developer at or about the Property and the Development.
2. Vehicle Liability Insurance with limits of not less than $1,000,000 per
occurrence and a combined single limit of $2,000,000 in the aggregate for Bodily Injury and
Property Damage, including any automobile or vehicle whether hired or owned by Developer.
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limits.
3. Worker's Compensation Insurance in an amount not less than the statutory
C. General Contractor's Insurance. Developer shall cause the General Contractor to
maintain insurance of the types and in at least the minimum amounts described in subsections
(1), (2) and (3) of Section 63(B) hereof, and shall require that such insurance shall meet all of
the general requirements of subsection (D) of this Section 6.3.
D. General Insurance Reauirements.
1. In General. The insurance required by this Section 63 shall be provided
under an occurrence form, and Developer shall maintain (or cause to be maintained) such
coverage continuously throughout the Term of this Agreement (except for the General
Contractor's insurance requirement set forth in subsection (C) of this Section 63, which shall be
maintained until Developer is entitled to issuance of an Estoppel Certificate of Completion).
Should any of the required insurance be provided under a form of coverage that includes an
annual aggregate limit or provides that claims investigation or legal defense costs be included in
such annual aggregate limit, such annual aggregate limit shall be twice the occurrence limits
specified above.
2. Additional Insureds. The insurance policies required pursuant to this
Section 6.3 (other than Worker's Compensation insurance) shall be endorsed to name as
additional insureds the City and their respective officials (appointed and elected), officers,
agents, attorneys and employees (collectively, the "Additional Insureds
3. Additional Reauirements. All insurance policies shall contain:
49 89
a. An agreement by the insurer to give the City at least thirty (30)
days' notice prior to cancellation (including, without limitation, for non payment of premium) or
any material change in said policies,
b. An agreement by the insurer that such policies are primary and
non contributing with any insurance that may be carried by the City,
C. A provision that no act or omission of Developer shall affect or
limit the obligation of the insurance carrier to pay the amount of any loss sustained,
d. A waiver by the insurer of all rights of subrogation against the
Additional Insureds in connection with any loss or damage thereby insured against,
e. Upon the City's request at any time during the Term of this
Agreement, Developer shall provide certificates of insurance, in form and with insurers
reasonably acceptable to the City, evidencing compliance with the requirements of this section,
and shall provide complete copies of such insurance policies, including a separate endorsement
naming the Additional Insureds as additional insureds.
Section 6.4 Hazardous Materials.
A. Basic Developer Oblitzations. Developer shall keep and maintain Developer
Responsibility Area in compliance with, and shall not cause or permit Developer Responsibility
Area to be in violation of, any Environmental Standards. Developer shall not use, generate,
manufacture, store or dispose of in, on, or under Developer Responsibility Area or transport to
the Developer Responsibility Area any Hazardous Materials, except such of the foregoing as
may be legally and customarily kept and used in and about the constriction and operation of like
kind mixed use retail and residential developments.
B. Notification To Citv: Citv Participation. Developer shall immediately notify and
advise the City in writing if at any time it receives written notice of: (1) any and all enforcement,
cleanup, removal or other governmental or regulatory actions instituted, completed or threatened
against Developer or the Developer Responsibility Area pursuant to any Environmental
Standards, (2) all claims made or threatened by any third party against Developer or the
Developer Responsibility Area relating to damage, contribution, cost recovery compensation,
loss or injury resulting from any Contaminants (the matters set forth in clauses (1) and (2) above
are referred to as "Hazardous Materials Claims and (3) the Developer's discovery of any
occurrence or condition on any real property adjoining or in the vicinity of the Developer
Responsibility Area that likely could cause part or all of the Developer Responsibility Area to be
classified as meeting or exceeding clean -up levels (contaminant levels requiring Remedial
Action) under Environmental Standards, or to be otherwise subject to any restrictions on the
ownership, occupancy, transferability or use of the Developer Responsibility Area under any
90 5 u
Environmental Standards. The City shall have the right to join and participate in, as a party if it
so elects, any legal proceedings or actions initiated in connection with any Hazardous Materials
Claims.
C. Developer Indemnification. Developer shall indemnify, defend (with counsel
reasonably acceptable to the City), and hold harmless the Indemnified Parties from and against
any loss, damage, cost, expense or liability the City may incur directly or indirectly arising out of
or attributable to the use, generation, storage, release, threatened release, discharge, or disposal
by Developer, its Contractors, or the Tenants of Contaminants in, on, under, or emanating from
the Developer Responsibility Area, including without limitation: (1) the costs of any required or
necessary Remediation of the Developer Responsibility Area, and the preparation and
implementation of any closure, Remedial or other required plans, and all reasonable costs and
expenses incurred by the City in connection with clause (1), including but not limited to
reasonable attorneys' fees. Developer's obligation to indemnify under this Section 6.4(C) shall
survive termination of this Agreement, and shall be interpreted broadly so as to apply to any
legal or administrative proceeding, arbitration, or enforcement action.
Section 6.5 Taxes.
Developer shall pay when due all real property taxes and assessments assessed and levied
on the Development Parcels acquired by Developer that are attributable to the period following
the Closing and shall remove any levy, lien or attachment made on any other portion of the
Developer Responsibility Area. Developer may, however, contest the validity or amount of any
tax, assessment, or lien on any portion of the Developer Responsibility Area.
Section 6.6 Damage or Destruction to Developer Responsibility Area.
Developer shall promptly notify the City of any Casualty with respect to the Developer
Responsibility Area, and shall diligently seek to procure all insurance proceeds that may be
available to compensate for such Casualty. To the extent economically feasible as a result of the
availability of insurance proceeds and any other funds Developer elects to provide for such
purpose, Developer shall promptly commence and diligently pursue restoration or replacement of
the portion of the Developer Responsibility Area that was damaged by such Casualty. To the
extent economically feasible as a result of the availability of insurance proceeds and any other
funds Developer elects to provide for such purpose, the restored or replaced property shall be
substantially equal in value, quality, and use to the value, quality, and use of such damaged
property immediately before the Casualty.
Section 6.7 CC &Rs Obligations.
Developer shall comply with and enforce the terms of the CC &Rs with respect to the
Developer Responsibility Area. In addition to any rights and remedies provided to the City
under this Agreement, the City and Developer shall have the right to enforce the terms of the
CC &Rs as fully provided in the CC &Rs.
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ARTICLE 7
ASSIGNMENT AND TRANSFERS
Section 7.1 Definition of Transfer. As used in this Article 7, the term "Transfer"
means:
A. Any total or partial sale, assignment or conveyance, or any tryst or power, or any
transfer in any other mode or form, of or with respect to this Agreement or of or with respect to a
Development Parcel or any part thereof or any interest therein or of the Improvements
constricted thereon, or any contract or agreement to do any of the same, or
B. Any total or partial sale, assignment or conveyance, or any trust or power, or any
transfer in any other mode or form, of or with respect to any legal or equitable ownership interest
in Developer or any partner, member or shareholder of Developer, or any contract or agreement
to do any of the same.
Section 72 Purt)ose of Restrictions on Transfer. This Agreement shall be exclusively
between the City and Developer. This Agreement is entered into solely for the purpose of the
development and subsequent use of the Property and the use and operation of the Plaza Parcel in
accordance with the terms of this Agreement. The qualifications and identity of Developer are of
particular concern to the City, in view of:
A. The importance of the redevelopment, use, operation and maintenance of the
Development to the general welfare of the community, and
B. The fact that a change in ownership or control of the owner of a Development
Parcel, or any other act resulting in a change in ownership of the Parties in control of Developer,
is for practical purposes a transfer or disposition of Development Parcel and the Development.
It is because of the qualifications and identity of Developer that the City is entering into
this Agreement with Developer and that Transfers are permitted only as provided in this
Agreement.
Section 73 Prohibited Transfers.
The limitations on Transfers set forth in this Section 7.3 shall apply to each Development
Parcel until the Developer is entitled to issuance of an Estoppel Certificate of Completion for the
Improvements upon said Development Parcel. Except as expressly permitted in this Agreement,
Developer represents and agrees that Developer has not made or created, and will not make or
create or suffer to be made or created, any Transfer, either voluntarily or by operation of law,
without the prior approval of the City. Any Transfer made in contravention of this Section 7.3
shall be void and shall be deemed to be a default under this Agreement, whether or not
Developer knew of or participated in such Transfer.
Section 7.4 Permitted Transfers.
Notwithstanding the provisions of Section 7.3, the following Transfers shall be permitted
(subject to satisfaction of all applicable conditions to such Transfer):
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A. Any Transfer creating a Security Financing Interest consistent with the Financing
Plan approved by the City pursuant to Section XX (as demonstrated to the City's reasonable
satisfaction), or otherwise consistent with the provisions of Section 8.1.
B. Any Transfer directly resulting from the foreclosure of a Security Financing
Interest or the granting of a deed in lieu of foreclosure of a Security Financing Interest.
C. Any Transfer to another Washington limited liability company in which
Developer is the sole manager or managing member with majority ownership interest (as
demonstrated to the City's reasonable satisfaction), so long as the City first reasonably
determines that such entity has and will maintain sufficient net worth to complete the
Development as contemplated by this Agreement.
D. Any Transfer of Development Parcels consisting of a single Development Phase
to a Washington limited partnership in which Developer, or another Washington limited liability
company in which Developer is the sole manager or managing member with majority ownership
interest (as demonstrated to the City's reasonable satisfaction), is the sole or managing general
partner, so long as the City first reasonably determines that the such entity has and will maintain
sufficient net worth to complete the Development Phase as contemplated by this Agreement..
E. Developer is currently owned by the Senior Housing Assistance Corporation
"SHAC and Pacific Northern Construction Company, Inc. "PNCC Any Transfer of any or
all of SHAC or PNCC ownership or management rights with respect to Developer to any
existing shareholders, key employees or new or existing wholly -owned subsidiaries or other
entities owned and controlled by SHAC or PNCC, such that SHAC, PNCC and their Affiliates
continue to own and control, directly or indirectly, 100% of Developer.
Section 7.5 Other Transfers in Citv's Sole Discretion.
Any Transfer not permitted pursuant to an express provision of Section 7.4 shall be
subject to prior City approval in accordance with this Section 7.5, which the City may grant or
deny in its sole discretion. In connection with such a proposed Transfer, Developer shall first
submit to the City information regarding such proposed Transfer, including the proposed
documents to effectuate the Transfer, a description of the type of the Transfer, and such other
information as would assist the City in considering the proposed Transfer, including where
applicable, the proposed transferee's financial strength and the proposed transferee's experience,
capacity and expertise with respect to the development, operation and management of mixed use
developments containing a Class "A" retail component similar to the Development. The City
shall approve or disapprove the proposed Transfer, in its sole discretion, within sixty (60) days of
the receipt from Developer of the information specified above. The City shall specify in writing
the basis for any disapproval. A failure by the City to act within such sixty (60) day period shall
constitute a disapproval of the proposed Transfer.
Section 7.6 Effectuation of Permitted or Otherwise Aaaroved Transfers.
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A. Not less than thirty (30) days prior to the intended effectiveness of a Transfer
described in Section 7.4, Developer, or the holder of a security interest requesting a Transfer
pursuant to Section 7.4 (B) (hereinafter "Secured Party shall deliver to the City a notice of
the date of effectiveness of the intended Transfer, a description of the intended Transfer, and
such information about the intended Transfer and the transferee as is necessary to enable the City
to determine that the intended Transfer meets the standards for a Transfer under Section 7.4 as
applicable. Unless the City notifies Developer prior to the specified date of the intended
Transfer that the intended Transfer does not meet the standards for a Transfer under Section 7.4,
as applicable, stating with reasonable specificity the reasons for such conclusion, the intended
Transfer shall be permitted.
B. Within five (5) Business Days after the completion of any Transfer permitted
pursuant to Section 7.4, or approved in the City's sole discretion pursuant to Section 7.5,
Developer shall provide the City with notice of such Transfer.
C. No Transfer otherwise permitted pursuant to Section 7.4, or approved in the
City's sole discretion pursuant to Section 7.5, shall be permitted unless, at the time of the
Transfer, the person or entity to which such Transfer is made, by an agreement reasonably
satisfactory to the City and in form recordable among the land records of the County of King,
expressly agrees to perform and observe, from and after the date of the Transfer, the obligations,
terms and conditions of Developer under this Agreement and any ancillary agreements entered
into by Developer pursuant to this Agreement with respect to the Development Parcels and the
Development being transferred, provided, however, that no such transferee shall be liable for the
failure of its predecessor to perform any such obligation. Anything to the contrary
notwithstanding, the holder of a Security Financing Interest whose interest in the Property is
acquired by, through or under a Security Financing Interest or is derived immediately from any
holder thereof shall not be required to give to the City such written agreement until such holder
or other person is in possession of the Property, or applicable portion thereof, or entitled to
possession thereof pursuant to enforcement of the Security Financing Interest
D. In the absence of specific written agreement by the City (which the City may
grant or withhold in its sole discretion), no Transfer permitted by this Agreement or approved by
the City shall be deemed to relieve the transferor from any obligations under this Agreement.
ARTICLE 8
SECURITY FINANCING AND RIGHTS OF HOLDERS
Section 8.1 Security Financing Interests: Permitted and Prohibited Encumbrances.
Mortgages, deeds of trust, and other real property security instruments are permitted to be
placed upon the Property only as authorized by this Section 8.1. Any security instrument and
related interest authorized by this Section 8.1 is referred to as a "Security Financing Interest."
Developer shall promptly notify the City of any Security Financing Interest that has been or will
be created or attached to a Development Parcel.
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Until Developer is entitled to issuance of an Estoppel Certificate of Completion,
Developer may place mortgages, deeds of tryst, or other reasonable methods of security on the
Property only for the purpose of securing any Approved Development Loan.
Following the time Developer is entitled to issuance of an Estoppel Certificate of
Completion, Developer may place any mortgages, deeds of tryst, and other real property security
interest it desires on the Property.
Section 82 Holder Not Oblitzated to Constrict.
The holder of any Security Financing Interest authorized by this Agreement is not
obligated to constrict or complete any Improvements or to guarantee such constriction or
completion, nor shall any covenant or any other provision in conveyances from the City to
Developer evidencing the realty comprising the Property or any part thereof be construed so to
obligate such holder. However, nothing in this Agreement shall be deemed to permit or authorize
any such holder to devote the Property or any portion thereof to any uses, or to constrict any
improvements thereon, other than those uses or Improvements provided for or authorized by this
Agreement.
Section 83 Notice of Default and Right to Cure.
Whenever the City, pursuant to its rights set forth in Article 9, delivers any notice or
demand to Developer with respect to the commencement, completion, or cessation of the
constriction of a Development Phase, the City shall at the same time deliver to each holder of
record of any Security Financing Interest creating a lien upon the Property or any portion thereof
a copy of such notice or demand. Each such holder shall (insofar as the rights of the City are
concerned) have the right, but not the obligation, at its option, within thirty (30) days after the
receipt of the notice, to cure or remedy or commence to cure or remedy any such default or
breach affecting the Development Phase and to add the cost thereof to the security interest debt
and the lien on its security interest. Nothing contained in this Agreement shall be deemed to
permit or authorize such holder to undertake or continue the constriction or completion of the
Development Phase (beyond the extent necessary to conserve or protect such Improvements or
constriction already made) without first having expressly assumed in writing Developer's
obligations to the City relating to the Development Phase under this Agreement. In such event,
the holder must agree to complete the Development Phase in the manner provided in this
Agreement and such holder shall assume all rights and obligations of Developer under this
Agreement with respect to such Development Phase and shall be entitled, upon written request
made to the City, to an Estoppel Certificate of Completion for the Development Phase from the
City.
Section 8.4 Failure of Holder to Complete Development.
In any case where six (6) months after default by Developer in completion of
constriction of a Development Phase under this Agreement, the holder of record of any Security
Financing Interest, having first exercised its option to constrict, has not proceeded diligently
with constriction, the City shall be afforded those rights against such holder it would otherwise
have against Developer under this Agreement.
95
Section 8.5 Right of Citv to Cure.
In the event of a default or breach by Developer of a Security Financing Interest prior to
the completion of a Development Phase, and if the holder has not exercised its option to
complete the Development Phase, the City may, upon prior written notice to Developer, cure the
default, prior to the completion of any foreclosure. In such event the City shall be entitled to
reimbursement from Developer of all costs and expenses incurred by the City in curing the
default. The City shall also be entitled to a lien upon the Development Phase to the extent of
such costs and disbursements. The City agrees that such lien shall be subordinate to any Security
Financing Interest, and the City shall execute from time to time any and all documentation
reasonably requested by Developer or holder to effect such subordination.
Section 8.6 Right of Citv to Satisfy Other Liens.
After the Closing and after Developer has had a reasonable time to challenge, cure, or
satisfy any liens or encumbrances on the Property or any portion thereof, and has failed to do so,
in whole or in part, the City shall, upon prior written notice to Developer, have the right to
satisfy any such liens or encumbrances, provided, however, that nothing in this Agreement shall
require Developer to pay or make provision for the payment of any tax, assessment, lien or
charge so long as Developer in good faith shall contest the validity or amount therein and so long
as such delay in payment shall not subject the Property or any portion thereof to forfeiture or
sale.
Section 8.7 Holder to be Notified.
Unless this requirement is waived in writing by the City, Developer shall insert each term
contained in this Article 8 into each Security Financing Interest or shall procure
acknowledgement of such terms contained in this Article 8 by each holder of a Security
Financing Interest prior to its coming into any security right or interest in the Property or portion
thereof.
Section 8.8 Modifications.
If a holder of a Security Financing Interest should, as a condition of providing financing
for development of all or a portion of the Development, request any modification of this
Agreement in order to protect its interests in the Development or this Agreement, the City shall
consider such request in good faith consistent with the purpose and intent of this Agreement and
the rights and obligations of the Parties under this Agreement.
ARTICLE 9
DEFAULT AND REMEDIES
Section 9.1 Aaalication of Remedies.
This Article 9 shall govern the Parties' rights to terminate this Agreement and the Parties'
remedies for breach or failure under this Agreement.
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Section 92 No Fault of Parties.
A. Bases For No Fault Termination. The following events constitute a basis for a
Party to terminate this Agreement without the fault of the other:
1. Street Vacation Agreement. Developer, the third parties and the City,
despite good faith efforts, are unable to reach mutual agreement upon a Street Vacation
Agreement in accordance with Section 2.6 of this Agreement.
Final Street Vacation Approval. The Final Street Vacation Approval,
despite good faith efforts, cannot be accomplished within the time period set forth in Section 2.6
of this Agreement.
3. Site Plan Approval. Developer, despite good faith efforts, is unable to
obtain an Approved Site Plan pursuant to Section 2.4 of this Agreement.
4. Boundary Line Adiustment. Developer, despite good faith efforts, is
unable to obtain preliminary or final approval of a Boundary Line Adjustment pursuant to
Section 2.5 of this Agreement that conforms to the Preliminary or Approved Site Plans.
5. Development Agreement. Developer, despite good faith efforts, is unable
to obtain City approval of a Development Agreement in conformance with Section 2.7 of this
Agreement.
6. CC &Rs. The Parties, despite good faith efforts, are unable to reach
agreement upon the CC &Rs pursuant to Section 2.8(E) of this Agreement.
7. Phased Development Plan. The Parties, despite good faith efforts, are
unable to reach agreement upon a Phased Development Plan pursuant to Section 2.4 of this
Agreement.
8. Temporary Constriction Easement. Developer, despite good faith efforts,
is unable to obtain City approval of a Temporary Constriction Easement pursuant to Section
of this Agreement.
9. Constriction Contract. Developer, despite good faith efforts, is unable to
obtain City approval of a Constriction Contract pursuant to Section 2.11(A) of this Agreement.
10 Financing Plan. The Parties, despite good faith efforts, are unable to reach
agreement upon a Financing Plan pursuant to Section- 14 of this Agreement.
11. Agreement with KCLS. Developer, despite good faith efforts, is unable to
agree on the terms of the KCLS Development Agreement with the KCLS for, among other
things, constriction of the Library Off -Site Infrastructure and reimbursement of an allocable
share of the cost thereof, provided, that the KCLS timely elects to enter into an agreement with
the City to acquire the Library Parcel in accordance with Section 2.9 of this Agreement.
12. Desiizn Document Approval. Developer, despite good faith efforts, is
unable to obtain Approved Constriction Plans pursuant to Section 2.7(A)(2) and of this
Agreement.
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13. Outdoor Plaza. The Parties, despite good faith efforts, are unable to reach
agreement upon a Statement of Purpose and Design for the Plaza pursuant to Section 2.8(B) of
this Agreement.
14. Commons. The Parties, despite good faith efforts, are unable to reach
agreement upon a Statement of Purpose and Design for the Commons pursuant to Section 2.8(C)
of this Agreement.
15. Performance and Pavment Bond. Developer, despite good faith efforts, is
unable to obtain City approval of its performance and payment bond pursuant to Section 2.11(D)
of this Agreement.
16. Residual Land Value Analvsis. The Parties, despite good faith efforts, are
unable to reach agreement upon the residual land value analysis pursuant to Section 4.4 of this
Agreement.
17. Purchase Price. The Parties, despite good faith efforts, are unable to reach
agreement upon a Purchase Price pursuant to Section 4.4 of this Agreement.
18. Mutual Agreement. Developer and City (and any third party) are unable,
despite good faith efforts, to come to mutual agreement upon any agreement or understanding
that is material to this Agreement and for which mutual agreement is required under this
Agreement.
B. Termination Notice: Effect of Termination. Upon the happening of an event
described in Section 92(A), and at the election of either Party, this Agreement may be
terminated by written notice to the other Party or the Parties may mutually agree to re- negotiate
the terms and conditions of this Agreement pursuant to Section XX herein. Upon a termination
pursuant to Section 92(A), any costs incurred by a Party in connection with this Agreement and
the Development shall be completely borne by such Party and neither Party shall have any rights
against or liability to the other, except with respect to: (1) disposition of the Deposit as set forth
in Section 22, as applicable, and, (2) the survival of certain terms of this Agreement as provided
in Section 9.8.
Section 93 Fault of Citv.
A. Citv Event of Default. Except as to events constituting a basis for termination
under Section 9.2, each of the following events, if uncured after expiration of the applicable cure
period, shall constitute a "City Event of Default
1. Except as provided in Section 9.2, the City without good cause fails to
convey the Property within the time and in the manner specified in Article 4 and Developer is
otherwise entitled to such conveyance.
2. The City breaches any other material provision of this Agreement.
B. Notice and Cure: Remedies. Upon the happening of an event described in Section
93(A), Developer shall first notify the City in writing of its purported breach or failure. The
City shall have sixty (60) days from receipt of such notice to cure such breach or failure,
98 5 x
provided, however, that if such breach or failure cannot reasonably be cured within such sixty
(60) day period and the City has commenced the cure within such sixty (60) day period and
thereafter is diligently working in good faith to complete such cure, the City shall have such
longer period of time as may reasonably be necessary to cure the breach or failure.
Notwithstanding anything to the contrary herein, if the City and Developer are in good faith
disputing whether the City has caused a breach or failure of performance of this Agreement, then
the City shall not be deemed to have caused such breach or failure of performance until the City
has been determined by a court of competent jurisdiction to have caused a breach or failure under
this Agreement. If the City does not cure within the applicable cure period set forth above, then
the event shall constitute a "City Event of Default," and Developer shall be entitled to the
following rights and remedies: (1) terminate in writing this entire Agreement, (2) prosecute an
action for damages against the City, (3) seek specific performance of this Agreement against the
City, (4) exercise any other remedy against the City permitted by Law or under this Agreement,
and /or (5) seek re- negotiation of the Agreement pursuant to Section 9.10 herein.
Section 9.4 Fault of Developer.
A. Developer Event of Default. Except as to events constituting a basis for
termination under Section 92, each of the following events, if uncured after expiration of the
applicable cure period, shall constitute a "Developer Event of Default
1. Developer does not attempt diligently and in good faith to cause
satisfaction of all pre conditions to Closing set forth in Article 2 and Article 4 with respect to
each Development Phase, or Developer does not diligently and in good faith close escrow on the
purchase of the affected Development Parcels, in accordance with the time frames set forth in the
approved Phased Development Plan.
2. Developer refuses for any reason (including, but not limited to, lack of
funds) to accept conveyance from the City of the Property within the time and in the manner
specified in Article 4, unless a condition set forth in this Agreement to Developer's obligations to
accept conveyance has not been satisfied or waived in writing by Developer.
3. Subject to Force Majeure, Developer fails to constrict a Development
Phase in the manner and within the timeframes set forth in the Phased Development Plan or
Article 5 hereof.
4. Subject to Force Majeure, Developer fails to comply with the following
deadlines for a given Development Phase:
a. Developer fails to obtain the issuance of grading, foundation,
building, structural, mechanical, electrical, or plumbing permits within thirty (30) days after
Closing, unless such permits are withheld by the City without justification,
b. Developer fails to begin grading within sixty (60) days of Closing,
unless the grading permit is withheld by the City without justification, or
C. Developer fails to begin foundation construction within ninety (90)
days from Closing or to complete constriction within eighteen (18) months of Closing.
a;O 99
5. Subject to Force Majeure, Developer fails to comply with the following
deadlines:
a. Developer does not submit the first Development Phase for Design
Review within ninety (90) days of the Effective Date,
b. Developer does not submit a completed application for the second
Development Phase for Design Review within eighteen (18) months of the Effective Date,
C. In the event that the Phased Development Plan provides for more
than two Development Phases, Developer does not submit a completed application for
Design Review for any subsequent Development Phase within the time period required in the
approved Phased Development Plan,
d. As to each Development Phase, Developer does not submit
building permit applications to the City within one hundred twenty (12 days of the Design
Review approval for such Development Phase, or
e. As to each Development Phase, Developer does not Close and
take ownership of the applicable Development Parcel(s) within sixty (60) days of Building
Permit approval for such Development Phase.
Article 7.
6. Developer attempts or completes a Transfer except as permitted under
7. Developer fails to pay the Purchase Price for the applicable Development
Parcel(s), at the time and in the amount required, pursuant to Section 4.4.
8. Developer breaches any material provision of Article 6 or any other
material provision of this Agreement.
9. Any representation or warranty of Developer contained in this Agreement
or in any application, financial statement, certificate or report submitted to the City in connection
with this Agreement proves to have been incorrect in any material and adverse respect when
made and continues to be materially adverse to the City.
10. A court having jurisdiction shall have made or entered any decree or order
(a) adjudging Developer to be bankrupt or insolvent, (b) approving as properly filed a petition
seeking reorganization of Developer, seeking any arrangement for Developer under the
bankruptcy law or any other applicable debtor's relief law or statute of the United States or any
state or other jurisdiction, (c) appointing a receiver, trustee, liquidator, or assignee of Developer
in bankruptcy or insolvency or for any of their properties, or (d) directing the winding up or
liquidation of Developer.
11. Developer shall have assigned its assets for the benefit of its creditors
(other than pursuant to a Security Financing Interest) or suffered a sequestration or attachment of
or execution on any substantial part of its property, unless the property so assigned, sequestered,
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attached or executed upon shall have been returned or released within ninety (90) days after such
event.
12. Developer shall have voluntarily suspended its business, or Developer
shall have been dissolved or terminated.
13. Developer fails to submit its Deposit within the time period set forth in
Section 2.2 herein.
B. Notice and Cure: Remedies. Upon the happening of any event described in
Section 9.4(A), the City shall first notify Developer in writing of its purported breach or failure.
Developer shall have sixty (60) days from receipt of such notice to cure such breach or failure,
provided, however, that if such breach or failure cannot reasonably be cured within such sixty
(60) day period and Developer has commenced the cure within such sixty (60) day period and
thereafter is diligently working in good faith to complete such cure, Developer shall have such
longer period of time as may reasonably be necessary to cure the breach or failure, and provided,
further, however, that a default described in Paragraph (9) of Section 9.4(A) shall constitute a
Developer Event of Default immediately upon its occurrence without need for notice and without
opportunity to cure. Notwithstanding anything to the contrary herein, if Developer and the City
are in good faith disputing whether Developer has caused a breach or failure of performance of
its obligations under this Agreement, then Developer shall not be deemed to have caused such
breach or failure of performance until Developer has been determined by a court of competent
jurisdiction to have caused a breach or failure of performance under this Agreement. If
Developer does not cure within the applicable cure period set forth above, then the event shall
constitute a Developer Event of Default and the City shall be afforded all of the following rights
and remedies:
1. Prior to Closiniz. With respect to a Developer Event of Default occurring
prior to the Closing, the City shall be entitled to: (a) terminate in writing this entire Agreement,
(b) retain the Deposit as set forth in Section 2.2(B), and (c) exercise the rights and remedies
described in Section 9.10. In the alternative, the City may seek to renegotiate the terms and
conditions of this Agreement pursuant to Section hereof. The above remedies shall constitute
the exclusive remedies of the City for a Developer Event of Default occurring prior to the
Closing.
2. Between Closiniz and Estoaael Certificate of Completion. With respect to
a Developer Event of Default occurring after the Closing but prior to the date Developer is
entitled to issuance of an Estoppel Certificate of Completion, the City shall be entitled to: (a)
terminate in writing this Agreement, (b) retain the Deposit to the extent set forth in Section
2.2(C), (c) prosecute an action for damages against Developer, (d) seek specific performance of
this Agreement against Developer, (e) exercise the rights and remedies described in Sections 9.5,
9.6, 9.9 and 9. 10, and /or (f) exercise any other remedy against Developer permitted by law or
under the terms of this Agreement.
3. After Estoppel Certificate of Completion. With respect to a Developer
Event of Default occurring after Developer is entitled to an Estoppel Certificate of Completion,
the City shall be entitled to: (a) prosecute an action for damages against Developer, (b) seek
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specific performance of this Agreement against Developer, and /or (c) exercise any other remedy
against Developer permitted by law or under the terms of this Agreement.
Section 9.5 Right of Reverter.
A. If this Agreement is terminated pursuant to Section 9.4(B)(2) following the
Closing and prior to the time when Developer is entitled to issuance of an Estoppel Certificate of
Completion, then the City may, in addition to other rights granted in this Agreement, re -enter and
take possession of the Development Parcel with all Improvements thereon, and revest in the City
the estate previously conveyed to Developer by the City with respect to the Development Parcel.
For each Devleopment Phase, the City's rights under this Section 9.5 shall terminate and be of no
further force and effect once Developer is entitled to an Estoppel Certificate of Completion for
that particular Development Phase.
B. Such right of reverter shall be subordinate and subject to and be limited by and
shall not defeat, render invalid, or limit:
1. Any Security Financing Instrument with respect to the Property,
2. Any rights or interests provided in this Agreement for the protection of the
holder of a Security Financing Interest with respect to the Property, or
3. The CC &Rs.
C. Upon revesting in the City of title to a Development Parcel as provided in this
Section 9.5, the City shall use its best efforts to resell the Development Parcel as soon as
possible, in a commercially reasonable manner and consistent with the Tukwila Village Vision
Statement, to a qualified and responsible party or parties (as determined by the City) who will
assume the obligation of making or completing the Development on the Development Parcel or
such other improvements acceptable to the City in accordance with the uses specified for the
Property in the Tukwila Village Vision Statement and in a manner satisfactory to the City. Upon
such resale of the Property, the proceeds thereof shall be applied as follows:
1. First, to reimburse the City on its own behalf for all costs and expenses
incurred by the City, including, but not limited to salaries of personnel and legal fees incurred in
connection with the recapture, management, and resale of the Development Parcel (but less any
income derived by the City from any part of the Development Parcel in connection with such
mana( all taxes, installments of assessments payable prior to resale, and water and sewer
charges with respect to the Development Parcel (or, in the event the Development Parcel is
exempt from taxation or assessment or such charges during the period of ownership by the City,
an amount equal to the taxes, assessments, or charges that would have been payable with respect
to the Development Parcel was not so exempt), any payments made or necessary to be made to
discharge any encumbrances or liens existing on the Property at the time of revesting of title in
the City or to discharge or prevent from attaching or being made any subsequent encumbrances
or liens due to obligations, defaults, or acts of Developer, its successors or transferees,
expenditures made or obligations incurred with respect to the making or completion of the
Improvements on the Development Parcel or any part thereof, and any amounts otherwise owing
the City by Developer and its successors or transferee.
102 62
2. Second, to reimburse the City for damages to which it is entitled under this
Agreement by reason of the Developer Event of Default.
3. Third, to reimburse Developer, its successor or transferee, up to the
amount equal to: the Purchase Price for the Development Parcel, plus the fair market value of the
improvements Developer has placed on the Development Parcel, less any gains or income
withdrawn or made by Developer from the Development Parcel or the Improvements thereon.
Notwithstanding the foregoing, the amount calculated pursuant to this paragraph (3) shall not
exceed the fair market value of the Development Parcel together with the Improvements thereon
as of the date of the Developer Event of Default which gave rise to the City's exercise of the
right of reverter.
4. Any balance remaining after such reimbursements shall be retained by the
City as its property.
D. The rights established in this Section 9.5 are to be interpreted in light of the fact
that the City will convey the Property to Developer for development and not for speculation.
Section 9.6 Oation to Reaurchase. Reenter and Reaossess.
A. The City shall have the additional right, at its option, to repurchase, reenter, and
take possession of a Development Parcel with all Improvements thereon, if this Agreement is
terminated pursuant to Section 9.4(13)(2) after the Closing and prior to the time when Developer
is entitled to issuance of an Estoppel Certificate of Completion. As to a particular Development
Phase, the City's rights under this Section 9.6 shall terminate and be of no further force and
effect once Developer is entitled to an Estoppel Certificate of Completion, as to such
Development Phase.
Such right to repurchase, reenter, and repossess, to the extent provided in this Agreement,
shall be subordinate and subject to and be limited by and shall not defeat, render invalid, or limit:
Parcel,
1. Any Security Financing Instrument with respect to the Development
Any rights or interests provided in this Agreement for the protection of the
holder of a Security Financing Interest with respect to the Development Parcel, or
3. The CC &Rs.
B. To exercise its right to repurchase, reenter and take possession with respect to the
Development Parcel, the City shall pay to Developer in cash an amount equal to: the Purchase
Price for the Development Parcel, plus the lesser of the (1) actual cost and the fair market
value of the improvements existing on the Development Parcel at the time of the repurchase,
reentry, and repossession, less any gains or income withdrawn or made by Developer from the
Development Parcel or the Improvements thereon, less the amount of any liens or encumbrances
63 103
on the Development Parcel which the City assumes or takes subject to, less any [damages] to
which the City is entitled under this Agreement by reason of the Developer Event of Default.
Section 9.7 Plans, Work Product and Studies.
If this Agreement is terminated pursuant to Section 9.4, then Developer shall promptly
deliver, and assign to the City, all of Developer's rights to its development work product related
to any affected Development Phase or Development Parcel, all environmental assessments or
documentation, market studies, architectural or engineering plans, drawings and specifications,
design and engineering studies, or the like, as of the date of termination. The City shall
indemnify, defend, and hold harmless Developer from and against any Developer loss arising out
of the City's use of the delivered items.
Section 9.8 Survival.
Upon termination of this Agreement under this Article 9, those provisions of this
Agreement that recite that they survive termination of this Agreement shall remain in effect and
be binding upon the Parties notwithstanding such termination.
Section 9.9 Rights and Remedies Cumulative.
Except as otherwise provided, the rights and remedies of the Parties are cumulative, and
the exercise or failure to exercise any right or remedy shall not preclude the exercise, at the same
time or different times, of any right or remedy for the same default or any other default, provided
that any damages or recovery shall be non duplicative.
Section 9.10 Renegotiation.
In the event that after this Agreement becomes effective one or more of the changes or
circumstances set forth below in subsections (A) (G) occurs, then the City and Developer agree
to enter into good faith negotiations to amend this Agreement so as to enable the City and
Developer to address, in a manner reasonably acceptable to the City and Developer, such change
or other development which formed the basis for the negotiations. The City and Developer
recognize that the purpose of the negotiations would be to preserve, to the maximum extent
consistent with the original scope, intent and purpose of the City and Developer, the benefits
bargained for by each Party.
A. An event of Force Majeure materially alters the ability of a Party to perform its
obligations under this Agreement,
B The State of Washington or any agency thereof or any agency of the federal
government require Developer or the City to act in a manner which is inconsistent with any
material provision of this Agreement,
C. Any tern, article, section, subsection, paragraph, provision, condition, clause,
sentence, or other portion of this Agreement, or its application to any person or circumstance,
shall be held to be illegal, invalid or unconstitutional for any reason by any court or agency of
competent jurisdiction,
104 6
D. Because of a change in circumstances, the City or Developer believe that
amendments to this Agreement are necessary or appropriate,
E. The Parties are unable to reach mutual agreement upon a submittal, agreement or
understanding under circumstances in which this Agreement requires mutual agreement of the
Parties,
F. A provision in this Agreement establishes the right of a Party to seek re-
negotiation of this Agreement; or
G. The City and Developer otherwise believe that amendments to this Agreement are
necessary or appropriate.
Section 9.11 Communication: Disaute Avoidance: Arbitration.
A. Communication and Discussion. The Parties are fully committed to working with
each other throughout the Term of this Agreement and agree to communicate regularly with each
other at all times so as to avoid or minimize Disputes. The Parties agree to act in good faith to
prevent and resolve potential sources of conflict before they escalate into a Dispute. The Parties
each commit to resolving a Dispute in an amicable, professional and expeditious manner and
agree that in the event a Dispute arises, they will attempt to resolve any such Disputes through
discussions between representatives of each Party.
B. Arbitration. If a Dispute cannot be resolved through discussions by each Party's
representative, the Dispute shall be submitted to binding arbitration in the City of Tukwila or
Seattle, Washington. The arbitration shall be administered by and subject to the arbitration rules
of JAMS, which shall appoint a single arbitrator for the purpose of determining all matters
submitted to arbitration. The arbitrator shall be a person who, by virtue of background, training,
or experience, is knowledgeable in matters of the type covered by the Agreement and the
selection of such arbitrator shall be subject to the consent of both Parties, which consent shall not
be unreasonably withheld, conditioned or delayed. Either Party may commence arbitration by
serving upon the other Party a written demand for arbitration in a manner consistent with the
notice requirements of this Agreement, with a copy of same to be delivered to the local JAMS
office in Tukwila or Seattle, Washington. To the maximum extent practicable, any arbitration
proceeding hereunder shall be concluded within ninety (90) days of the filing of the Dispute with
JAMS. No provision of, nor exercise of any rights under, this Section 9.11 shall limit the rights
of either Party and the submission of any matter to arbitration shall not suspend the performance
of either Party, including (but not limited to) the payment of the Deposit or other amounts due
from Developer under this Agreement. The decision of the arbitrator shall be conclusive, final
and binding upon the Parties. The arbitrator shall be entitled to award compensatory and
equitable relief only and may not award punitive damages. Each Party shall pay its own costs
and expenses, including attorneys' fees, except when the matter was submitted to arbitration by
the substantially non prevailing Party and is determined by the arbitrator to be frivolous in
nature, in which case, upon the request of the substantially prevailing Party, the arbitrator shall
be entitled to award costs and expenses, including reasonable attorneys' fees, with respect to
such frivolous matter to the substantially prevailing Party. Judgment upon any award obtained
from arbitration may be entered in a court of appropriate jurisdiction.
65 105
ARTICLE 10
GENERAL PROVISIONS
Section 10.1 Notices. Demands and Communications.
A. Method. Any notice or communication required hereunder to be given by the
City or Developer shall be in writing, and may be given either personally, by facsimile
transmission, by reputable overnight courier, or by registered or certified mail, return receipt
requested. If delivered by registered or certified mail, a notice shall be deemed to have been
given and received on the first to occur of: (1) actual receipt by any of the addressees designated
below as a party to whom notices are to be sent, or (2) five (5) days after the registered or
certified letter containing such notice, properly addressed, with postage prepaid, is deposited in
the United States mail. If delivered personally, by facsimile transmission or by overnight
courier, a notice shall be deemed to have been given when delivered to the party to whom it is
addressed. Either Party may at any time, by giving ten (10) days' written notice to the other
Party pursuant to this Section, designate any other address in substitution of the address to which
such notice or communication shall be given.
1. Addresses. Notices shall be given to the Parties at their addresses set forth
below:
If to the City to:
City of Tukwila
Attn: XX
6200 Southcenter Boulevard
Tukwila, Washington 98188
General: 2
Fax: 206- 433 -1833
With a copy to:
City Attorney
City of Tukwila
Kenyon Di send, PLLC
11 Front Street South
Issaquah, Washington 98027 -3820
General: 425-3 92-7090
Fax: 425 -392 -7071
If to Developer to:
Tukwila Village Development Associates, LLC
Attn: Bryan M. Park, Manager
c/o Pacific Northern Construction Company, Inc.
201 27th Avenue SE, Building A, Suite 300
Puyallup, WA 98374
106 66
General: (253) 231 -5001
Fax: (25'1)2'11-5010
With a copy to:
XX
Attorney at Law
Attn:
XX
XX
General: XX
Fax: XX
2. Saecial Reauirement. If failure to respond to a specified notice, request,
demand or other communication within a specified period would result in a deemed approval, a
conclusive presumption, a prohibition against further action or protest, or other adverse result
under this Agreement, the notice, request, demand or other communication shall state clearly and
unambiguously on the first page, with reference to the applicable provisions of this Agreement,
that failure to respond in a timely manner could have a specified adverse result.
Section 102 Excusable Delav (Force Maieure).
In addition to specific provisions of this Agreement, and notwithstanding anything to the
contrary in this Agreement, neither Party shall be in default in the performance or the failure of
performance of its obligations under this Agreement, or in the delay of its performance, where
such failure or delay is due to war, insurrection, strikes, lock -outs or other labor disturbances,
one or more acts of a public enemy, war, riot, sabotage, blockade, embargo, floods, earthquakes,
fires, quarantine restrictions, freight embargoes, lack of transportation, court order, delays or
failures of performance by any governmental authority or utility company (so long as the Party
seeking the extension has adequately complied with the applicable processing requirements of
such governmental authority or utility company), delays resulting from changes in any applicable
Laws, rules, regulations, ordinances or codes, or a change in the interpretation thereof by any
governing body with jurisdiction, delays resulting from the weather or soils conditions which
necessitate delay, delays resulting from litigation (including suits filed by third parties
concerning or arising out of this Agreement) or any other cause (lack of funds of Developer,
Developer's inability to finance the construction of the Development, and Developer's inability
to lease the Improvements, are not causes beyond the reasonable control or without the fault of
Developer) beyond the reasonable control or without the fault of the Party claiming an extension
of time to perform or an inability of performance. The extension of time for any cause shall be
from the time of the event that gave rise to such period of delay until the date that the cause for
the extension no longer exists or is no longer applicable, in each case as evidenced by a notice
from the Party claiming the extension. An extension of time for the duration of such event will
be deemed granted if notice by the Party claiming such extension is sent to the other as to any of
the above causes other than Permit Delays, within ten (10) days from the commencement of the
cause and such extension of time is not rejected in writing by the other Party within ten (10) days
of receipt of the notice (such extension of time is referred to herein as "Force Majeure Times
for performance under this Agreement may also be extended in writing by the City and
Developer.
67 107
Section 103 Insaection of Books and Records.
Until twelve (12) months following the issuance of the final Estoppel Certificate of
Completion of the last Development Phase of the Development, the City shall have the right at
all reasonable times and upon at least twenty -four (24) hours previous notice to inspect and copy
(at the City's own expense) the books, records and all other documentation of Developer directly
pertaining to its obligations under this Agreement. Developer shall have the right at all
reasonable times to inspect and copy the books, records and all other documentation of the City
pertaining to its obligations under this Agreement.
Section 10.4 Title of Parts and Sections.
Any titles of the sections or subsections of this Agreement are inserted for convenience of
reference only and shall be disregarded in interpreting any of its provisions.
Section 10.5 Non Liabilitv of Officials, Emolovees and Aizents.
No member, official, employee or agent of the City shall be personally liable to
Developer, or any successor in interest, in the event of a City Event of Default, provided that, the
City agrees that is shall indemnify the Developer from and against all suits, actions, claims,
causes of action, costs, demands, judgments and liens to the attributable to the intentional
misconduct of such member official, employee or agent of the City.
Section 10.6 Time of the Essence: Calulation of Time.
Time is of the essence in this Agreement. Except as otherwise expressly provided herein,
all periods of time referred to herein shall include Saturdays, Sundays, and legal holidays in the
State of Washington, except that if the last day of any period falls on any Saturday, Sunday, or
legal holiday in the State of Washington, the period shall be extended to include the next
Business Day.
Section 10.7 Aaalicable Law: Interaretation: Fair Constriction.
This Agreement shall be interpreted under the laws of the State of Washington. All
pronouns and any variations thereof shall be deemed to refer to the masculine, feminine or
neuter, singular or plural, as the context may require. The Parties hereby acknowledge and agree
that each was properly represented by counsel, that this Agreement has been reviewed and
revised by counsel for each Party, and was negotiated and drafted at arms' length so that the
judicial rule of construction to the effect that any ambiguities are to be construed against the
drafting Party shall be inapplicable in the interpretation of this Agreement. The provisions of
this Agreement shall be construed as a whole according to their common meaning and consistent
with the other provisions contained herein in order to achieve the objectives and purposes of this
Agreement, and not strictly for or against either Party.
Severabilitv. If any term, provision, covenant, clause, sentence or any other portion of
the terms and conditions of this Agreement or the application thereof to any person or
circumstances shall apply, to any extent, become invalid or unenforceable, the remainder of this
108 68
Agreement shall continue in full force and effect, unless rights and obligations of the Parties
have been materially altered or abridged by such invalidation or unenforceability.
Section 10.9 Leizal Actions: Venue. In the event any action is brought to enforce any of
the provisions of this Agreement, the Parties agree to be subject to the jurisdiction of the King
County Superior Court for the State of Washington or, when there is diversity jurisdiction, in the
United States District Court for the Western District of Washington. In the event any proceeding
is instituted to interpret or enforce any provision or resolve any Dispute under this Agreement,
including, without limitation, any action in which a declaration of rights is sought or an action
for rescission, and any subsequent action or proceeding to enforce any judgment entered
pursuant to an action on this Agreement, the prevailing Party shall be entitled to recover from the
losing Party its reasonable attorneys', paralegals', accountants', and other experts' fees and all
other fees, costs, and expenses, as determined by the judge or arbitrator at trial or arbitration, as
the case may be, or on any appeal or review, in addition to all other amounts provided by law.
This provision shall cover costs and attorneys' fees related to or with respect to proceedings in
Federal Bankruptcy courts, including those related to issues unique to bankruptcy law. In the
case of the attorneys' fees payable to the City when the City has been represented by legal
counsel employed within the City of Tukwila City Attorney's Office, the attorneys' fees shall be
measured by the reasonable attorneys' fees that would have been paid by the City had it instead
been represented by outside counsel in the matter.
Section 10.10 Binding Uoon Successors: Covenants to Run With Land. This
Agreement shall be binding upon and inure to the benefit of the heirs, administrators, executors,
successors in interest, and assigns of each of the Parties, and, except as provided in Section 5.5
herein (Estoppel Certificate of Completion), the terms of this Agreement shall constitute
covenants running with the land, provided, however, that that there shall be no Transfer of any
interest by any of the Parties hereto except pursuant to the express terms of this Agreement. Any
reference in this Agreement to a specifically named Party shall be deemed to apply to any
successor, heir, administrator, executor, successor, or assign of such Party who has acquired an
interest in compliance with the terms of this Agreement or under law.
Section 10.11 Parties Not Co- Venturers. Nothing contained in this Agreement shall
create any partnership, joint venture or other arrangement between City and Developer. The
Parties intend that the rights, obligations, and covenants in this Agreement and the collateral
instruments shall be exclusively enforceable by the City and Developer, their successors and
assigns. No term or provision of this Agreement shall be for the benefit of any person, firm,
organization or corporation not a Party hereto, and no such other person, firm, organization or
corporation shall have any right or cause of action hereunder, except as may be otherwise
expressly provided herein.
Section 10.12 Provisions Not Merized With Deed. None of the provisions of this
Agreement shall be merged by the deed or any other instrument transferring title to any portion
of the Property, and neither the deed nor any other instrument transferring title to any portion of
the Property shall affect this Agreement.
Section 10.13 Entire Understanding of the Parties. This Agreement, the recitals, the
exhibits referenced herein, and any subsequent agreements or instruments contemplated by this
Agreement to be entered into by the Parties, or made an exhibit hereto, constitute the entire
69 109
understanding and agreement of the Parties with respect to the conveyance of the Property and
Development of the same. All recitals and exhibits referenced herein are incorporated into and
made a part of this Agreement as though fully set forth herein.
Section 10.14 Aaarovals.
A. Citv Actions. Whenever any approval, notice, direction, consent, request,
extension of time, waiver of condition, termination, or other action by the City is required or
permitted under this Agreement, such action may be given, made, or taken by the Mayor,
without further approval by the City Council, and any such action shall be in writing. The City
hereby authorizes the Mayor to take the actions described above, as determined appropriate by
the Mayor, on behalf of the City, provided that, any amendment or modification of the
Agreement not specifically authorized in this Agreement, shall be approved by the City Council.
B. Standard of Aaaroval. Whenever this Agreement grants the City or Developer
the right to take action, exercise discretion or make allowances or other determinations, the City
or Developer shall act reasonably and in good faith, except where a sole discretion standard is
specifically provided.
Section 10.15 Authority of Developer. The persons executing this Agreement on behalf
of Developer do hereby covenant and warrant that:
A. Tukwila Village Development Associates, LLC is a duly authorized and existing
Washington corporation,
B. Tukwila Village Development Associates, LLC is and shall remain in good
standing and qualified to do business in the State of Washington,
C. Tukwila Village Development Associates, LLC has full right, power and authority
to enter into this Agreement and to carry out all actions on its part contemplated by this
Agreement;
D. The execution and delivery of this Agreement were duly authorized by proper
action of Tukwila Village Development Associates, LLC, and no consent, authorization or
approval of any person is necessary in connection with such execution and delivery or to carry
out all actions on Developer's part contemplated by this Agreement, except as have been
obtained and are in full force and effect,
E. The persons executing this Agreement on behalf of Tukwila Village Development
Associates, LLC have full authority to do so, and
F. This Agreement constitutes the valid, binding and enforceable obligation of
Tukwila Village Development Associates, LLC.
Section 10.16 Amendments. Except as may be otherwise provided herein, this
Agreement may not be amended or rescinded in any manner except by an instrument in writing
signed by a duly authorized representative of each Party hereto, and approved by the City
Council
110 70
Section 10. 17 Multiple Originals: Counterparts. This Agreement may be executed in
multiple originals, each of which is deemed to be an original, and may be signed in counterparts.
Section 10.18 Operatin iz Memoranda. The Parties acknowledge that the provisions of
this Agreement require a close degree of cooperation, and that new information and future events
may demonstrate that changes are appropriate with respect to the details of performance of the
Parties under this Agreement. The Parties desire, therefore, to retain a certain degree of
flexibility with respect to the details of performance of those items covered in general terms
under this Agreement. If and when, from time to time during the term of this Agreement, the
Parties find that refinements or adjustments regarding details of performance are necessary or
appropriate, they may effectuate such refinements or adjustments through a memorandum
(individually, an "Operating Memorandum and collectively, "Operating Memoranda")
approved by the Parties which, after execution, shall be attached to this Agreement as addenda
and become a part hereof. This Agreement describes some, but not all, of the circumstances in
which the preparation and execution of Operating Memoranda may be appropriate.
Operating Memoranda may be executed on the City's behalf by its Mayor. Operating
Memoranda shall not require prior notice or hearing, and shall not constitute an amendment to
this Agreement. Any substantive or significant modifications to the terms and conditions of
performance under this Agreement shall be processed as an amendment of this Agreement in
accordance with Section 10. 16, and must be approved by the City Council.
Section 10.19 Good Faith and Reasonableness. The Parties intend that the obligations of
good faith and fair dealing apply to this Agreement generally and that no negative inference be
drawn by the absence of an explicit obligation to be reasonable in any portion of this Agreement.
The obligation to be reasonable shall only be negated if arbitrariness is explicitly permitted, such
as in the case of a Party being allowed to make a decision in its "sole judgment" or "sole
discretion
Section 1020 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the heirs, administrators, executors, successors in interest and assigns of each of
the Parties hereto except that there shall be no Transfer of any interest by any of the Parties
hereto except pursuant to the express terms of this Agreement. Any reference in this Agreement
to a specifically named Party shall be deemed to apply to any successor, heir, administrator,
executor or assign of such Party who has acquired its interest in compliance with the terms of
this Agreement, or under law.
Section 1021 Estoppel Certificates. Except as otherwise provided at Sectoin 5.5 of this
Agreement, the City and Developer shall at any time and from time to time, within twenty (20)
days after written request by the other, execute, acknowledge and deliver, to the Party requesting
same or to any prospective mortgagee, assignee or subtenant designated by Developer, a
certificate stating that (i) this Agreement is in full force and effect and has not been modified,
supplemented or amended in any way, or if there have been modifications, identifying such
modifications, and if this Agreement is not in force and effect, the certificate shall so state, and
(ii) to its knowledge, all conditions under the Agreement have been satisfied by the City or
Developer, as the case may be, and that no defenses or offsets exist against the enforcement of
this Agreement by the other Party, or, to the extent untrue, the certificate shall so state. The
71 111
Party to whom any such certificate shall be issued may rely on the matters therein set forth and
thereafter the Party issuing the same shall be estopped from denying the veracity or accuracy of
the same.
Section 10.22 Waiver. No waiver by any Party of any provision of this Agreement or
any breach thereof shall be of any force or effect unless in writing by the Party granting the
wavier, and no such waiver shall be construed to be a continuing waiver. The waiver by one
Party of the performance of any covenant, condition, or promise shall not invalidate this
Agreement nor shall it be considered a waiver by such Party of any other covenant, condition, or
promise hereunder. The waiver by either or both Parties of the time for performing any act shall
not constitute a waiver of the time for performing any other act or an identical act required to be
performed at a later time.
Section 10.23 Rights and Remedies Cumulative. Except as otherwise expressly stated in
this Agreement, the rights and remedies of the Parties are cumulative, and the exercise or failure
to exercise one or more of such rights or remedies by either Party shall not preclude the exercise
by it, at the same time or different times, of any right or remedy for the same default or any other
default by the other Party.
Section 1024 Conflict of Interest. No member, official, or employee of the City shall
have any personal interest, direct or indirect, in this Agreement, nor shall any such member,
official, or employee participate in any decision relating to this Agreement which affects his
personal interests or the interest of any corporation, partnership, or association in which he is,
directly or indirectly, interested.
Section 1025 Discrimination. Developer, for itself and its successors and assigns,
agrees that during the development of the Property, Developer will not discriminate against any
employee or applicant for employment because of race, color, religion, age, sex, marital status,
sexual orientation, handicap or national origin.
Section 1026 Nonwaiver of Government Rights. The Parties understand that the City by
making and entering into this Agreement, is not obligating the City to give governmental
approvals or to take particular governmental action, except as otherwise expressly stated herein
or in the Development Agreement.
THIS SECTION INTENTIONALLY LEFT BLANK
112 72
AS OF THE DATE FIRST WRITTEN ABOVE, the Parties evidence their agreement to
the Terms of this Agreement by signing below:
Attest:
By:
Christy O'Flaherty, City Cleric
Approved As To Form:
IM
Shelley Kerslake
City Attorney
10 \>2\1'X209.7
CITY:
CITY OF TUKWILA, a municipal corporation
IM
Jim Haggerton
Mayor
DEVELOPER:
TUKWILA VILLAGE DEVELOPMENT
ASSOCIATES, LLC
0
Bryan M. Park
Manager
113
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