Jun 19, 2018 - ... day of June, 2018. James V. Evans, Mayor ... be treated as Buyer's earnest money for purposes hereof
City of Woodinville, WA
Report to the City Council
17301 133rd Avenue NE, Woodinville, WA 98072 www.ci.woodinville.wa.us
To:
Honorable City Council
From:
Brandon Buchanan, City Manager
Subject:
Approval of Resolution No. 522 – Woodinville Civic Campus Purchase and Sale Agreement and Development Agreement
Date: June 19, 2018
ISSUE: Shall the City Council approve Resolution No. 522, approving the Purchase and Sale Agreement and Development Agreement related to the Woodinville Civic Campus Development? STAFF RECOMMENDATION: Approve Resolution No. 522, approving the Purchase and Sale Agreement and Development Agreement related to the Woodinville Civic Campus Development. BACKGROUND: Following a lengthy public process, wherein the City Council established goals and a vision for redevelopment of the Civic Campus and solicited interest from private development partners, on February 20th, 2018, the City Council approved a Memorandum of Understanding (MOU) with Woodinville Civic Campus Partners, LLC (MainStreet/HAL). The intent of the MOU was to establish a conceptual, non-binding deal structure that would form the basis for a future Development Agreement. Following approval of the MOU, a draft Development Agreement, and closely intertwined Purchase and Sale Agreement, was prepared and introduced to the City Council on May 1st. In that same period, extensive additional work has continued on refining the design of the project, including April 17th and May 15th study sessions dedicated to ensuring the design elements of the project are consistent with the Downtown Vision and Illustrative Guide. Following the May 15th City Council Study Session, the Planning Commission conducted its required public hearing on May 16th. The Commission opened the hearing and reviewed the terms of the Development Agreement focusing on general site layout, City and WCCP obligations and design standards. There being no public testimony, the Commission closed the hearing and passed a motion by unanimous vote recommending approval and forwarded the Development Agreement on to the City Council for consideration. The City Council reviewed proposed Resolution No. 522, along with the PSA and DA at its June 5th meeting. NOTICE, SEPA AND CONCURRENCY REQUIREMENTS: A notice of application was issued on April 10, 2017 and a letter of completeness was issued on March 19, 2018. The Planning Commission public hearing was duly noticed on April 30, 2018 pursuant to RCW 36.70B.200 and WMC 21.84. A Determination of Non-Significance was also issued on April 30, 2018 and a finding of Concurrency with the City’s Transportation Improvement Plan was issued on May 3, 2018. In that finding the City’s on-call transportation consultant reviewed the project and concluded that the project will not decrease the City’s Level of Service standard. REQUIRED ENTITLEMENTS: In addition to the Purchase and Sale Agreement and Development Agreement, the project also required approval of a site-specific rezone and a code amendment to enable a multi-family tax exemption. The City’s Hearing Examiner conducted a public hearing on the rezone on April 26, 2018 and issued a decision recommending approval of the rezone to the City Council on May 9, 2018. On 1
May 15th, the City Council reviewed the hearing Examiner recommendation and passed on first and second reading Ordinance No. 645 approving the rezone from Public/Institutional to Central Business District. On May 1st, the Council reviewed the draft code amendment for the multi-family tax exemption and on May 15th, the Council passed first reading of Ordinance No. 664. On June 5th the Council passed second reading of Ordinance 664, enacting the MFTE. DEVELOPMENT AGREEMENT-GENERAL TERMS AND STANDARDS: Project Components: Redevelopment of the property is intended to transform the site’s current public buildings and spaces into a mixed use urban core development that will contain a combination of multi-family residential units, retail, recreation and office and public recreational and pedestrian open spaces connected to surrounding neighborhoods and public spaces. Basic urban design elements to be addressed in specific site and building design plans include the following: 1. A site plan composed of the renovated Old Woodinville Schoolhouse converted to retail/restaurant/commercial uses, approximately 8,000 square feet renovated recreation building, an additional approximately 6,000 square feet of recreation building, two mixed use multi-storied residential buildings containing 260-275 residential units with limited ground floor retail. 2. Building height limited to 57 feet per WMC 21.22. 3. The provision of approximately 32,000 square feet of public active and passive open space, including outdoor retail seating and gathering space. In addition, the project will include approximately 13,000 square feet of private open space related to the two residential buildings. 4. Two below grade parking levels, of which 50 stalls are dedicated to the Woodinville Recreation Center and shared with residential uses during off-peak hours. 5. Building massing, articulation, materials, and colors to be consistent with the Downtown Vision and Illustrative Guide. 6. Site and building landscaping to be consistent with the Downtown Vision and Illustrative Guide. Vested to Current Regulations: The development regulations and standards are in effect for 10 years. Regulations that are vested upon approval by the City Council resolution approving the Development Agreement include zoning, subdivision, impact fees, building and fire codes and design elements. Project Phasing: Both parties agree that the project can be phased within the 10-year term of the agreement. Specific phasing will be determined during review of the construction documents by the City. There are provisions within other controlling factors, including qualification for the MFTE program, that highly incentivize construction being completed within three years. Partnership Obligations: Development agreements have been successfully used in publicprivate partnerships to define the binding obligations of both parties related to the construction and operation of large and/or complex projects. The obligations typically apply to project financing, property transfer, infrastructure investment, construction and operation, and the use and maintenance of public spaces. The obligations of both parties described in the Development Agreement are summarized below: City Obligations: 1. City Services. The City will provide general services to the project including use of its roads, parks, stormwater system and police protection. 2
2. Easements/Licenses. The City agrees to provide at no cost to WCCP the easements and licenses necessary for the Project, including but not limited to construction easements, fire separation easements, utility easements, access easements, and fire access easements. 3. Off-Site Improvements. Off-site improvements such as road and signal improvements will be shared by both parties. 4. Designating the Woodinville Recreation Center (WRC) improvements on the CIP, allowing for WCCPs construction of those elements to qualify for Park Impact Fee credits. WCCP Obligations: 1. Renovation of the Old Woodinville Schoolhouse 2. Renovation and expansion of the Woodinville Recreation Center (WRC). 3. Construction of 50 parking spaces for the WRC to be shared with residential units during off-peak hours and the provision of electric vehicle charging stations. 4. Construction of 260-275 multi-family units and 5. Construction of approximately 20,000 square feet of restaurant, retail and commercial uses including the first and second floor of the Old Woodinville Schoolhouse building. 6. Construction of approximately 32,000 square feet of public open spaces. 7. Frontage improvements to 175th and 133rd streets 8. Payment of Traffic Impact Fees 9. Construction of child-friendly outdoor play space 10. Construction of Festival Street 11. Payment of all typical permit fees 12. Surety. Submission of performance bonds for the value of all public infrastructure improvements, landscaping and mitigation for each phase of construction. 13. Provision of all easements required for public use of the right of way improvements. PURCHASE AND SALE AGREEMENT- GENERAL TERMS The Purchase and Sale Agreement is the vehicle by which a portion of the property is conveyed to WCCP to further the goals described in the February 20, 2018 Memorandum of Understanding. The specific parcels to be transferred to WCCP and retained by the City will be detailed in a binding site plan (subdivision) that will be completed prior to closing (the attached legal description of the property is subject to change). Closing will occur within 30 days upon completion of the project requirements set forth in the PSA (e.g.; code amendments for a multi-family tax exemption and rezone, approval by King County Landmarks Heritage Commission of the Schoolhouse renovation, traffic concurrency, parking allocation, utility requirements, easements and issuance of permits). Those conditions must be satisfied within 1 year (which may be extended by 2 years at WCCP’s discretion). The current schedule contemplates satisfaction of all conditions by the end of 2018. Title to the property will be transferred to WCCP at closing and the City’s development contribution is capped at $4,000,000. The anticipated expenses to the City for those elements that the City is paying for will be paid out at pre-defined milestones. The City has the option to repurchase the entire property if WCCP has not commenced construction within a certain period for a value determined in the PSA. Currently, that period is after seven years for a price that reflects the increased value of the land between the time it is conveyed to WCCP and the time that the City repurchases the property.
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QUESTIONS/OUTSTANDING ISSUES FROM JUNE 5th COUNCIL MEETING There were several issues remaining in need of resolution along with several questions asked by Council at the June 5th meeting. Those issues/questions are addressed below: 1) Finalization of property repurchase terms- the terms under which the City may repurchase the property if WCCP fails to construct the project have been finalized. The City may repurchase the property beginning seven years from the close of the sale to WCCP. The repurchase value will be the increase the in the property’s value from when WCCP assumes ownership to when the City would have to repurchase. An appraisal will be conducted upon execution of the PSA to establish value for purposes of any future repurchase price calculation. 2) Reconciliation of TIA and updated project site plan- As previously discussed, the Transportation Impact Analysis that was conducted in April 2018 was based on the site plan for the project at that point. As the site plan evolved based on Council input, Staff wanted to ensure the TIA’s finding of no adverse impact was still valid based on modified project components. Transpo (authors of the TIA) prepared an addendum to the TIA and determined that the modifications to the project presented no change in the conclusion of no adverse impact. The June 19, 2018 SEPA Addendum has been affixed to Exhibit C of the Development Agreement. The changes will result in an increase of WCCPs contribution to 133rd/175th intersection improvements from 6% to at least 17%. It will also increase traffic impact fees to be paid by WCCP by approximately $900,000. 3) Revise term “festival street” because it will not be used like a typical street- label has been revised to read “Woodinville Festival Promenade.” 4) Concern about paid parking and impact on existing parking options- Councilmember Taylor raised concern that by charging for parking in the project, those seeking to avoid cost would utilize street parking or existing lots. While impossible to eliminate possibility without a comprehensive enforcement program, WCCP has offered some insights into the issue. Parking revenue is expected to be a significant piece of the revenue model for the project, and as such WCCP has every incentive to ensure that the project’s parking spots are filled as often as possible. Charging for parking at levels that deter use is counterproductive to generating revenues and WCCP thus expects to be flexible in setting those parking rates. This will reduce a significant portion of the disincentive to use the spaces and instead use other options. At the same time, users for the non-residential components like the YMCA would be able to validate parking and escape being charged for use of the parking spots, so those users would have no reason to seek other off-site options. Unavoidably, there will always be a small number of users who endeavor to escape any cost but minimizing that cost and inconvenience of off-site options will naturally limit those scofflaws. 5) Question about ability to also/alternatively repurchase public plaza space for possible future Rec Center expansion. Councilmember Boundy-Sanders suggested the City propose the ability to repurchase the plaza space south of the YMCA, similar to the repurchase provision included in the PSA for the playground space north of the YMCA. In discussions with WCCP, this proposal was deemed infeasible for a number of reasons. Those reasons include effect on desired “feel” of the project- the open space of the plaza is critical to creating the “public” feel desired by both WCCP and the City. Impact on subterranean parking would also be an issue in a way that the much smaller playground area would not be. As a hybrid to both of those, it would be difficult to replace the plaza element if the Rec Center were expanded to cover that area while a new playground space could be much more easily accommodated elsewhere within the project or in conjunction with a future Rec Center expansion. At this point, the playground site is the area the City has the option to repurchase for Rec Center expansion at future point within the next 50 years. 4
6) City’s contribution payment; interest. The City will deposit its obligated funds into an escrow account, to be paid as certain milestones in construction are met. That provision previously didn’t account for interest on those funds sitting in escrow, which could be substantial. The DA has been updated to require those funds in escrow be deposited into an interest-bearing account and that the City will be the recipient of that interest. 7) Valuation of land. Former Mayor Talmas raised a question about the valuation of the land the City is trading for numerous public benefits. Staff asked Brian Vanneman, Leland Consulting, to recap how that valuation was arrived at and why the valuation is different than the “Fowler property” comparable that Mr. Talmas offered. Brian has provided a memo responding to those questions, which is attached as Attachment 3 to this Staff Report. Following approval of Resolution No. 522, the PSA, and DA, numerous other related documents and agreements will be completed. Much of this is dependent on the design work and will be crafted as the design work is completed by the end of 2018. For example, the City will need to agree to a Joint Use, Maintenance, and Easement Agreement (JUMEA) that details rights to use the public areas for public spaces. An early draft of the JUMEA is attached to this Staff Report as Attachment 2. This JUMEA must be complete before the property transaction closes. Other agreements or documents that must be completed prior to closing the sale of the property include various leases, easements, repurchase rights agreement, etc. CONCLUSION: The public, City consultants, City Staff, Planning Commission, and Council together with the applicants’ development team have been fully engaged in reviewing, discussing, revising and refining the various components of the Civic Campus Project. Our collective intent and partnership has been focused on meeting the goals established by the City Council to: • • • • • •
Create a community gathering place; Retain and renovate the Old Woodinville Schoolhouse; Retain, integrate and renovate, if feasible, the WRC; Create a model for the City’s vision of Downtown as “an inviting place to work, shop, live and socialize” consistent with the Downtown Illustrative Guidelines; Be financially feasible for private developers; and Limit the City’s financial risk and investment to the extent feasible.
Approval of the Purchase and Sale Agreement and Development Agreement will create a binding partnership to attain the above City Council goals and thus create a vibrant, active and welldesigned addition to the City’s Civic Campus and Downtown. This project has undergone 17+ years of work and consideration and would finally realize a monumental step forward with the approval of Resolution No. 522. RECOMMENDED MOTION: I MOVE THAT THE CITY COUNCIL PASS RESOLUTION NO. 522, APPROVING AND AUTHORIZING THE EXECUTION OF A THE PURCHASE AND SALE AGREEMENT AND DEVELOPMENT AGREEMENT BETWEEN THE CITY OF WOODINVILLE AND WOODINVILLE CIVIC CAMPUS PARTNERS, LLC AUTHORIZING THE REDEVELOPMENT OF A PORTION OF THE CITY’S CIVIC CAMPUS, AND AUTHORIZING THE CITY MANAGER TO TAKE ADDITIONAL ACTIONS CONSISTENT WITH SUCH AGREEMENTS AS SET FORTH IN THE RESOLUTION.
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Attachments: 1) Resolution No. 522, Exhibit A: Purchase and Sale Agreement Exhibit B: Development Agreement 2) DRAFT Joint Use, Maintenance, and Easement Agreement **Not subject to approval this evening, will be negotiated prior to closing of property transaction*** 3) Memo: Deal Structure and Land Value Analysis by Brian Vanneman, Leland Consulting (dated June 14, 2018)
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Attachment 1 Resolution No. 522
RESOLUTION NO. 522 A RESOLUTION OF THE WOODINVILLE, WASHINGTON CITY COUNCIL APPROVING AND AUTHORIZING THE EXECUTION OF A PURCHASE AND SALE AGREEMENT AND A DEVELOPMENT AGREEMENT WITH WOODINVILLE CIVIC CAMPUS PARTNERS, LLC, FOR REDEVELOPMENT OF THE WOODINVILLE CIVIC CAMPUS, AND AUTHORIZING THE CITY MANAGER TO TAKE ADDITIONAL ACTIONS CONSISTENT WITH SUCH AGREEMENTS AND THIS RESOLUTION.
WHEREAS, the Washington State legislature authorizes development agreements in RCW 36.70B.170 through 36.70B.210; and WHEREAS, the City authorizes development agreements in Chapter 21.82 WMC; and WHEREAS, on February 20, 2018 the City Council and Woodinville Civic Campus Partners, LLC (“WCCP”) executed a Memorandum of Understanding for the Woodinville Civic Campus Project (“MOU”) as further described in the proposed Purchase and Sale Agreement attached hereto as Exhibit A and the proposed Development Agreement attached hereto as Exhibit B; and WHEREAS, upon review of the Woodinville Civic Campus Redevelopment Transportation Impact Analysis (April 2018, The Transpo Group), the City determined that the project proposed in the MOU and detailed in the Development Agreement and Purchase and Sale Agreement meets the City’s standards for transportation concurrency approval and mitigates any significant adverse impacts to the City’s transportation system; and WHEREAS, the Planning Commission took public testimony and reviewed the Development Agreement at a public hearing on May 16, 2018; and WHEREAS, the Woodinville Planning Commission voted on May 16, 2018, to recommend that the Council approve the Development Agreement; and WHEREAS, the Woodinville City Council has reviewed the Planning Commission’s recommendation and received additional public comment regarding the Development Agreement and regarding the Purchase and Sale Agreement at public meetings on June 5, 2018 and June 19, 2018; and WHEREAS, the Woodinville City Council has determined that the Development Agreement is in compliance with State law, City Code, and the City’s Comprehensive Plan; and WHEREAS, the requirements of the State Environmental Policy Act (SEPA) RCW 43.21C have been met; and WHEREAS, the City of Woodinville and Woodinville Civic Campus Partners, LLC are providing mutual benefits as described in the Development Agreement and Purchase and Sale Agreement; and WHEREAS, adoption of this resolution will promote the public health, safety, and general welfare within the City of Woodinville and is in the City’s best interest;
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Attachment 1 Resolution No. 522 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF WOODINVILLE, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Section 1. Approval of Purchase and Sale Agreement. The Woodinville City Council hereby approves the Purchase and Sale Agreement between the City of Woodinville and Woodinville Civic Campus Partners, LLC, as shown in Exhibit A attached hereto and incorporated herein by this reference, and authorizes the City Manager to execute the same in substantially the form as shown in Exhibit A. Section 2. Approval of Development Agreement. The Woodinville City Council hereby approves the Development Agreement between the City of Woodinville and Woodinville Civic Campus Partners, LLC, as shown in Exhibit B attached hereto and incorporated herein by this reference, and authorizes the City Manager to execute the same in substantially the form as shown in Exhibit B. Section 3. Other Actions Authorized. The Woodinville City Council hereby authorizes the City Manager to take all other actions, including without limitation execution of minor modifications to the agreements authorized herein and execution of additional instruments consistent with and as necessary and appropriate to effectuate the purposes of the agreements authorized herein.
RESOLVED this _____ day of June, 2018.
James V. Evans, Mayor ATTEST/AUTHENTICATED:
Jennifer Kuhn, City Clerk
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Attachment 1 Resolution No. 522 Exhibit A PSA PURCHASE AND SALE AGREEMENT This Purchase and Sale Agreement (this “Agreement”) is made this 19th day of June, 2018 (the “Effective Date”), by and between Woodinville Civic Campus Partners LLC, a Washington limited liability company and/or permitted assigns under Section 28 below (“Buyer” or “WCCP”), and the City of Woodinville, a Washington municipal corporation (“Seller” or “City”). Buyer and Seller are executing this Agreement in furtherance of the transactions and “Project” contemplated by that certain Memorandum of Understanding between Buyer and Seller dated February 20, 2018 (the “MOU”). Capitalized terms used but not otherwise defined in this Agreement have the meanings ascribed to them in the MOU. In the event of any inconsistency between the terms of this Agreement and the terms of the MOU, the terms of this Agreement shall control. 1. Purchase and Sale. Upon the terms and conditions set forth herein, Buyer agrees to buy from Seller and Seller agrees to sell to Buyer the real property in Woodinville, Washington, legally described on Exhibit A (Exhibit B) attached hereto (the “Property”). The Property will also include (i) all easements and rights appurtenant thereto; and (ii) all assignable permits, approvals, studies, surveys, warranties and other documents associated with the Property. The Property shall not include any service contracts or tenant leases, and Seller shall terminate all service contracts and existing leases prior to Closing and deliver the Property to Buyer free and clear of all such contracts, tenant leases or other parties in possession. No personal property is included in the sale, it being agreed by the parties that any personal property located on the Property is de minimus. 2. Consideration; Repurchase Option. As consideration for Seller’s agreement to convey the Property to Buyer, Buyer has agreed to enter into and carry out the obligations set forth in the Development Agreement attached hereto as Exhibit C. As security for Buyer’s commitment to fulfill its obligations under the Development Agreement, at Closing, Buyer and Seller shall enter into the Repurchase Rights Agreement contemplated in Section 7 below. 3. Earnest Money. As of the date hereof, Buyer has invested approximately $500,000 in connection with certain pre-development activities related to the Property, which amount shall be treated as Buyer’s earnest money for purposes hereof (the “Earnest Money”). The Earnest Money shall be non-refundable to Buyer. 4.
Title.
4.1 Title. Within ten (10) days of the Effective Date, Seller shall provide Buyer with a preliminary commitment for title insurance for the Property issued by Chicago Title Insurance Company (the “Title Company”), together with copies of all exceptions and encumbrances noted thereon (the “Preliminary Commitment”). 4.2 Survey. Seller has provided Buyer with an existing survey of the Property (the “Survey”). Buyer may, at Buyer’s sole option and expense, obtain a new survey of the Property or update any existing survey provided by Seller. 4.3 Title and Survey Review. Buyer shall have sixty (60) days from and after receipt of the Preliminary Commitment to advise Seller in writing of any encumbrances,
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Attachment 1 Resolution No. 522 Exhibit A PSA restrictions, easements or other matters contained in the Preliminary Commitment or on the Survey (the “Exceptions”) to which Buyer objects. All Exceptions to which Buyer does not object in writing within the sixty (60) day period shall be deemed accepted by Buyer. If Buyer objects to any Exceptions within the sixty (60) day period, Seller shall advise Buyer in writing within twenty (20) days after Seller’s receipt of Buyer’s objections (a) which Exceptions Seller will remove at Closing, (b) which Exceptions the Title Company has agreed to insure over in the title policy to be issued at Closing (together with the proposed form of endorsement) and (c) which Exceptions will not be removed or insured over. On or before expiration of the Review Period (as defined below), and assuming Seller has not agreed to remove all Exceptions to which Buyer objects, Buyer shall notify Seller in writing of Buyer’s election to either (a) terminate this Agreement, in which event the Earnest Money shall be returned to Buyer, or (b) waive its objections to the Exceptions the Title Company has not agreed to insure over and the Exceptions Seller will not remove or insure around, in which event such Exceptions shall be deemed accepted by Buyer. Seller shall cause the Title Company to provide to Buyer supplemental reports to the Preliminary Commitment (together with copies of any instruments constituting exceptions which are identified therein) covering any additions or deletions from the date of the Preliminary Commitment through the Closing Date. Buyer shall have five (5) business days following the receipt of a supplemental report to notify Seller in writing of its disapproval of any exception contained in that supplemental report; if Buyer’s disapproval of any supplemental report exception is not so communicated to Seller, the exception shall be considered an approved Exception. Following any written disapproval notice by Buyer, Buyer and Seller shall have the same rights and duties with respect to disapproved items as is provided in the preceding paragraph; except that (i) Seller shall have five (5) days to respond to Buyer’s notice, and (ii) in no event shall title review extend the Closing Date. Notwithstanding the foregoing, at or prior to Closing, Seller agrees to remove all financial encumbrances and liens and if Seller fails to do so, Buyer may cause any remaining financial encumbrances and liens to be satisfied in full at Closing from the purchase funds provided by Buyer. 4.4 Title Insurance. Seller shall deliver to Buyer at Closing an Owner’s ALTA Extended Coverage policy of title insurance (2006 Form) for the Property issued by Title Company in the face amount of the value of the property as of the date of the execution of this Agreement as determined in Section 7, dated the date of Closing, insuring Buyer’s title subject to no exceptions other than the standard printed exceptions and the Exceptions deemed accepted by Buyer pursuant to Section 4.3 above. The policy of title insurance shall also include such endorsements as Buyer may reasonably request at its expense. Seller agrees to provide whatever indemnities or affidavits the Title Company may require to remove from the policy of title insurance the standard preprinted exception for parties in possession and the standard preprinted exception for mechanics liens.
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Attachment 1 Resolution No. 522 Exhibit A PSA 5.
Review of Property.
5.1 Review Period. Within five (5) days of the date of this Agreement, Seller shall provide to Buyer, at Seller’s sole cost and expense, the following documents relating to the Property (the “Review Materials”): environmental, soils and inspection reports and other documents concerning the physical condition and title to the Property together with all plans, applications, permits, licenses, contracts, architectural drawings or other work product, studies, documents, records and other materials related to any proposed development by Seller with respect to the Property. Buyer shall have until 5:00 p.m. Pacific Time on the date that is one ninety (90) days following the Effective Date (the “Review Period”) to conduct a due diligence and feasibility review with respect to the Property and the Review Materials and to satisfy itself with respect to the condition of and other matters relating to the Property. Seller and its representatives and consultants shall cooperate with Buyer in connection with Buyer’s review of the Property and the Review Materials. In the event that on or prior to the end of the Review Period Buyer determines that the Property is acceptable (in Buyer’s sole and absolute discretion), Buyer shall give written notice thereof to Seller prior to the end of the Review Period, in which event this Agreement shall continue in full force and effect in accordance with the terms hereof. If Buyer does not provide Seller with written notice that the Property is acceptable to Buyer on or prior to the end of the Review Period, then (i) this Agreement shall terminate; and (ii) Buyer shall promptly return to Seller copies of all materials and documents provided by Seller to Buyer as part of Buyer’s review of the Property. 5.2 Access. During the term of this Agreement, Buyer shall be entitled to access to the Property to conduct such investigations, tests, surveys and other analyses as Buyer determines is necessary, provided (i) Buyer conducts such tests or investigations so as not to unreasonably interfere with current activities on the Property, (ii) Buyer restores the Property to its original condition following any such tests and investigations, and (iii) Buyer indemnifies, defends and holds Seller harmless from and against all claims, costs, expenses and liabilities arising out of Buyer’s entry upon the Property and/or the performance of the tests and investigations conducted by Buyer on the Property (and provided that Buyer shall not be liable in any respect for the mere discovery of pre-existing conditions). 6.
Parcel Configuration and Project Easements.
6.1. Binding Site Plan. Prior to Closing, and at Seller’s sole cost and expense, Seller shall complete a binding site plan pursuant to RCW 58.17.035 and WMC 21.61.070, effectuating: (a) incorporation of the approximately 21,000 square foot area to be known as “Woodinville’s Festival Promenade” (identified on Exhibit B to the DA) into the public park located immediately west of the Property (King County Tax Parcel No. 0926059099), (b) establishment of the approximately 8,000 square foot area identified as the “Renovated WRC space” in the MOU as a separate legal lot under state and local subdivision laws and as a separate tax lot for ad valorem tax purposes, (c) establishment of the approximately 2,500 square foot area identified as the “Playground Property” as a separate legal lot under state and local subdivision laws and as a separate tax lot for ad valorem tax purposes, and (d) any other necessary boundary line adjustments
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Attachment 1 Resolution No. 522 Exhibit A PSA or divisions of land necessary for the Project as determined by the Buyer (including, for example, but not by way of limitation, a separate legal lot for the apartments to be constructed by Buyer in connection with the Project) (collectively, the “Binding Site Plan”). Seller shall cause the application for the Binding Site Plan to be prepared and submitted to Buyer for Buyer’s review and reasonable approval prior to expiration of the Review Period, and following such approval by Buyer, Seller shall not change or amend such applications as they apply to the Property without Buyer’s prior written consent, not to be unreasonably withheld, conditioned, or delayed. Seller agrees to process the Binding Site Plan diligently and in good faith, and shall use all commercially reasonable efforts to complete the Binding Site Plan prior to expiration of the Feasibility Period, but in no event later than the Closing Date. 6.2. Boundary Line Adjustment / Easements. Prior to Closing, and at Seller’s sole cost and expense, Seller agrees to complete any boundary line adjustments for the Project and to grant the easements needed for the Project as determined by the Purchaser (e.g., no build easement, utility easements, etc.). 7. Repurchase Rights Agreement. If Buyer has not commenced construction of the Project in accordance with the Development Agreement by seven years from the Effective Date of this Agreement (subject to delays caused by force majeure or the acts or omissions of the City), Seller or Seller’s designee shall have the right (although not an obligation) to repurchase the Property from Buyer for a purchase price equal Buyer’s actual, out-of-pocket hard and soft costs incurred to date (the “Repurchase Price”) (increased at the rate of 3% per annum (compounded) from the Closing Date to the date of repurchase). Notwithstanding the foregoing, the Repurchase Price shall be capped at the “Delta Property Value” multiplied by a factor of 1.1. The Delta Property Value is the fair market value of the Property on the date the City or its designee executes the Repurchase Rights Agreement less the fair market value of the Property on date of execution of this Agreement. Within 60 days of execution, the parties shall determine the fair market value of the Property. If the parties cannot agree, the fair market value shall be determined pursuant to the appraisal process identified in Section 8.1. The Delta Property Value is intended to reflect how WCCP’s entitlements increased the value of the Property. The Delta Property Value shall be determined through the appraisal process identified in Section 8. For the purposes of this section, “commenced construction” shall mean that Buyer has begun site excavation. The rights of Seller set forth in this Section 7 shall be reflected in a Repurchase Rights Agreement in the form attached hereto as Exhibit C to be executed by Buyer and Seller at Closing (the “Repurchase Rights Agreement”). 8. Option to Repurchase the Property. City shall have a fifty (50) year option to repurchase the Playground Property from WCCP for a purchase price equal to Fair Market Value, exercisable by written notice to WCCP (the “Repurchase Option”). The City acknowledges that any repurchase of the Playground Property or subsequent use or improvement of the Playground Property may not impact WCCP’s improvements located below the Playground Property, including underground parking-related infrastructure. 8.1 Fair Market Value. The term "Fair Market Value" means the price, as of the date in question, which a seller, willing but not obligated to sell, would accept for the Property including the value of any improvements located thereon, in its then condition, and which a buyer,
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Attachment 1 Resolution No. 522 Exhibit A PSA willing but not obligated to buy, would pay therefor in any arm's length transaction. Fair Market Value shall be determined by the parties or, if the parties are unable to agree thereon after 30 days following notice, by the following procedure: - Each party, at its own cost, shall order an appraisal of the Playground Property. If the two appraisals are within five percent (5%) of each other, the Fair Market Value shall be the average of the two appraisals. - If the appraisals are more than five percent (5%) apart, the parties will negotiate Fair Market Value for an additional thirty (30) days. - If the parties cannot agree to Fair Market Value, the parties will order a third appraisal to be completed by an appraiser selected by the previous two appraisers. - The third appraisal shall constitute the Fair Market Value if the third appraisal is within ten percent (10%) of the average of the first two appraisals. - If the third appraisal is more than ten percent (10%) higher or lower than the average of the first two appraisals, then the parties shall fund a fourth appraisal. The Fair Market Value shall be the average of all four appraisals. - The parties will split the cost of the third appraisal and the fourth appraisal. 8.2 Additional Repurchase Terms. If City exercises the Repurchase Option, the Playground Property will be conveyed via a bargain and sale deed. The Property will be conveyed “AS IS, WITH ALL FAULTS”, with the exception that WCCP shall be responsible for obtaining the reconveyance of any mortgage or deed of trust, which shall not be a permitted encumbrance when title is conveyed to City. The parties split closing costs.
9.
Conditions Precedent to Closing.
Buyer’s obligations under this Agreement are expressly conditioned on, and subject to satisfaction of, the following conditions precedent: 9.1 Performance by Seller. Seller shall have performed all material obligations required by this Agreement to be performed by it. 9.2
Title Policy. Title Company shall be ready, willing and able to issue the
Title Policy. 9.3 Representations and Warranties True. The representations and warranties of Seller contained herein shall be true and correct in all material respects. The conditions set forth in Sections 9.1 through 9.3 above are intended solely for the benefit of Buyer. If any of the foregoing conditions are not satisfied as of the Closing Date, Buyer -5-
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Attachment 1 Resolution No. 522 Exhibit A PSA shall have the right at its sole election either to waive the condition in question and proceed with the purchase of the Property or, in the alternative, to terminate this Agreement, whereupon the parties shall have no further obligations hereunder other than those obligations which survive the termination of this Agreement by their express terms, except that if the cause of a foregoing condition not being satisfied is a default, breach or misrepresentation by Seller, Buyer retains its remedies under this Agreement. Seller’s obligations under this Agreement are expressly conditioned on, and subject to satisfaction of, the following conditions precedent: 9.4 Performance by Buyer. Buyer shall have performed all material obligations required by this Agreement to be performed by it. 9.5 Representations and Warranties True. The representations and warranties of Buyer contained herein shall be true and correct in all material respects. The conditions set forth in Sections 9.4 and 9.5 above are intended solely for the benefit of Seller. If any of the foregoing conditions are not satisfied as of the Closing Date, Seller shall have the right at its sole election either to waive the condition in question and proceed with the sale or, in the alternative, to terminate this Agreement. 10. City’s Development Contribution. The City agrees to contribute the amount of $3,328,800 towards the development of the Project (the “City Contribution Amount”); provided, that the City and WCCP may agree, via the Construction Agreement for Woodinville’s Festival Promenade and the WRC contemplated by sections 12.1(i) and 12.2(g) of this Agreement and subsections 4.1.b and 4.1.j of the Development Agreement, to an increase of the City Contribution Amount. At closing the City shall immediately release ten percent of the City Contribution Amount to WCCP and place the remainder of the funds into escrow. Escrowed funds shall be held in an interest-bearing account, with interest earned on such funds remitted to the City on a periodic basis and upon final disbursement of funds to WCCP. Escrow shall release the funds to WCCP as follows: 20% upon WCCP’s submittal for a site work permit 5% upon WCCP’s commencement of the School House renovation 40% upon WCCP commencing site work grading and utility work 20% upon foundation commencement 5% upon the City’s issuance of the certificate of occupancy for the residential portion of the project.
11.
Closing; Approval Condition.
11.1 Time and Place of Closing. Closing shall occur in the office of the Title Company within thirty (30) days following the Buyer’s satisfaction of the Approval Condition (as hereinafter defined) or Buyer may elect to extend closing for up to one year. In the event the Approval Condition has not been satisfied or waived by Buyer by the date that is twelve (12)
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14
Attachment 1 Resolution No. 522 Exhibit A PSA months following the Effective Date, Buyer may elect to terminate this Agreement or Buyer may also elect to extend this Agreement through two one-year extensions. Buyer and Seller shall deposit in escrow with Escrow Agent all instruments and documents necessary to complete the transaction in accordance with this Agreement. As used herein, “Closing”, “Closing Date” or “date of Closing” means the date on which all appropriate documents are recorded and the proceeds of sale are available for disbursement to Seller. For purposes herein, “Approval Condition” shall mean the execution of the Development Agreement by the City of Woodinville, satisfaction of all of the conditions set forth in Section 8 of the MOU, completion of the Binding Site Plan, design review approval, the issuance of a DNS or MDNS SEPA threshold determination, King County Certificate of Approval for the schoolhouse, and/or any and all other permits and approvals (the “Entitlements”) required for the development of the Project on terms and conditions satisfactory to Buyer, and with any appeal period having expired without an appeal having been filed, or if an appeal is filed, the final resolution of such appeal on terms acceptable to Buyer. Buyer shall be responsible for seeking issuance of the Entitlements and paying any applicable fees and costs of the City of Woodinville to issue such permits and approvals. 11.2
Closing Costs; Fees.
(a) Seller’s Closing Costs. At Closing, Seller shall pay (i) the premium for standard coverage policy of title insurance and the endorsements required to insure over the Exceptions the Title Company agreed to insure over in accordance with Section 4.3 above, and (ii) one-half of Escrow Agent’s escrow fees and charges, if any. (b) Buyer’s Closing Costs. At Closing Buyer shall pay (i) the costs of recording the Deed, (ii) the cost of the increased title premium for extended coverage (if Buyer elects to obtain extended coverage), (iii) the costs of any title insurance endorsements required by Buyer, (iv) one-half of Escrow Agent’s escrow fees and charges, if any, (v) the cost of any updates or recertification of the Survey, and (vi) all sales/use taxes on tangible personal property, if any. (c) Fees. Each party shall be responsible for its own legal, accounting and consultant fees. Any other expenses or costs in connection with this transaction shall be apportioned in the manner customary in King County, Washington. 11.3 Prorations. Real property taxes, assessments, surface water management charges, utilities and other expenses of the Property shall be prorated as of the date of Closing. Any revenue or expense amount which cannot be ascertained with certainty as of Closing shall be prorated based upon the parties’ reasonable estimation, and shall be reconciled within thirty (30) days of Closing or as soon thereafter as the precise amounts can be ascertained. Either party owing the other party money based upon the final reconciliation shall promptly pay it to the other party, which amount shall bear interest at the rate of 12% per annum from the date 10 days after written demand for such payment is made by the party entitled to such payment. 12.
Deliveries at Closing.
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Attachment 1 Resolution No. 522 Exhibit A PSA 12.1 Seller’s Delivery. At Closing, Seller shall deliver the following: (a)
Statutory Warranty Deed in the form attached hereto as Exhibit B conveying fee title to the Property to Buyer subject to no encumbrances, claims and defects other than the Exceptions deemed approved by Buyer pursuant to Section 4.3 above.
(b)
Real Estate Excise Tax Affidavit.
(c)
Such other assignments as Buyer may require to transfer all other Property to Buyer.
(d)
Joint Use, Maintenance, and Easement Agreement
(e)
Development Agreement, in the form attached hereto as Exhibit C.
(f)
Crane Swing Easement.
(g)
Shoring and Tieback Easement.
(h)
Staging Easement
(i)
Construction Agreement for Woodinville’s Festival Promenade and the WRC
(j)
The WRC Lease
(k)
The Repurchase Rights Agreement
(l)
FIRPTA Affidavit.
(m)
Cash in the amount of the City Contribution Amount.
(n)
A final closing statement, prepared by Escrow Agent (the “Closing Statement”).
12.2 Buyer’s Delivery. At Closing, Buyer shall deliver the following: (a)
A counterpart of the Real Estate Excise Tax Affidavit.
(b)
A counterpart of the Joint Use, Maintenance, and Easement Agreement
(c)
A counterpart of the Development Agreement
(d)
A counterpart of the Crane Swing Easement
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16
Attachment 1 Resolution No. 522 Exhibit A PSA (e)
A counterpart of the Shoring and Tieback Easement
(f)
A counterpart of the Staging Easement
(g)
A counterpart of the Construction Agreement for Woodinville’s Festival Promenade and the WRC
(h)
A counterpart of the WRC Lease.
(i)
A counterpart of the Repurchase Rights Agreement.
(j)
A counterpart of the Closing Statement.
12.3 Delivery Outside of Escrow. Seller shall deliver to Buyer at Closing outside of the Closing escrow the originals of the Review Materials and such other records and items as reasonably requested by Buyer. 13. Operations Pending Closing. From the date of this Agreement until Closing, Seller agrees to hold and maintain the Property free from waste and neglect and consistent with past management practices. Seller further agrees: (i) to maintain the Property in its current condition and repair; (ii) to maintain the existing property and casualty insurance on the Property; (iii) to perform all of its material obligations under any permits, contracts and mortgages applicable to the Property; (iv) not to lease, rent or otherwise permit any person or persons to occupy any portion of the Property with the exception continued operation and use of the YMCA; and (v) not to enter into any new contracts that would be binding on Buyer after Closing, without Buyer’s prior written approval. 14. Condemnation of Property. In the event that all or any material portion of the Property is the subject of a taking or condemnation under the provisions of eminent domain prior to the date of Closing, Buyer may terminate this Agreement upon written notice to Seller given within thirty (30) days of the condemnation and the Earnest Money shall be refunded to Buyer. If Buyer does not elect to terminate this Agreement, Seller shall assign to Buyer its rights to any condemnation proceeds resulting from such taking and shall not make any settlements without Buyer’s prior written approval. 15.
Representations and Warranties.
15.1 Seller’s Representations and Warranties. Seller, with respect to Seller and the Property only, represents and warrants to Buyer that, as of the date hereof and as of Closing: (a) Title. As of the date of Closing, Seller shall have good, marketable, indefeasible title to the Property free and clear of all liens, claims and encumbrances except for the Exceptions accepted by Buyer pursuant to Section 4.3 above. (b) Organization. Seller is a municipal corporation duly organized, validly existing and in good standing under the laws of the state of Washington and is fully -9-
17
Attachment 1 Resolution No. 522 Exhibit A PSA authorized to own and operate the Property in the manner in which the Property is currently operated. This Agreement has been duly authorized, executed and delivered by Seller and is a valid and binding obligation of Seller. No other authorizations or approvals, whether of governmental bodies or otherwise, will be necessary in order for Seller to enter into this Agreement. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will: (i) be in violation of Seller’s organizational documents; (ii) conflict with or result in a breach of any law, regulation, writ, injunction or decree of any court or governmental instrumentality applicable to Seller; (iii) constitute a breach of any evidence of indebtedness or agreement to which Seller is a party or by which Seller is bound. (c) No Defaults. Neither the execution or delivery of this Agreement, the consummation of the transactions contemplated hereby, nor the fulfillment of the terms hereof, will conflict with or result in a breach of any of the terms, conditions or provisions of, or constitute a default under, any agreement or instrument which affects the Property or to which the Property is subject or any applicable laws or regulations of any governmental body having jurisdiction over the Property. (d) Litigation. There is no claim, litigation, proceeding or governmental investigation pending, or, so far as known to Seller, threatened against or relating to Seller, Seller’s properties or business, the Property, or the transactions contemplated by this Agreement, or any dispute arising out of any contract or commitment entered into regarding the Property, nor is there any basis known to Seller for any such action or claim. (e) No Prior Options, Sales or Assignments. Seller has not granted any options nor obligated itself in any manner whatsoever to sell the Property or any portion thereof to any party other than Buyer. (f) Hazardous Substances. To the best of Seller’s knowledge, except as described in environmental reports provided to Buyer as part of the Review Materials, (i) the Property does not contain, no activity on the Property has produced, and the Property has not been used in any manner for the storage, discharge, deposit or dumping of hazardous or toxic wastes or substances, whether in the soil, ground water or otherwise; (ii) the Property does not contain underground tanks of any kind; (iii) the Property does not contain and does not produce polychlorinated biphenyls, urea formaldehyde, asbestos or radon gas; (iv) the Property does not contain toxic mold; and (v) there are no surface or subsurface conditions which constitute or with the passage of time may constitute a public or private nuisance. Seller has not undertaken any of the foregoing activities and has not caused or allowed any of the foregoing conditions to exist on the Property. Seller hereby agrees to defend, protect, indemnify and hold Buyer harmless from any and all loss, damage, liability or expense, including attorneys’ fees and costs, Buyer may suffer as a result of any breach of or any inaccuracy of the foregoing representations and warranties. These representations and warranties shall survive Closing for a period of 12 months, and Buyer must give Seller notice of any alleged breach of a representation or warranty within such 12 month period in order to pursue any claim for such breach.
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18
Attachment 1 Resolution No. 522 Exhibit A PSA BUYER IS PURCHASING THE PROPERTY “AS IS WHERE IS” IN ITS PRESENT CONDITION. BUYER HAS THE OPPORTUNITY TO INSPECT THE PROPERTY AND DOCUMENTATION IN SELLER’S POSSESSION AS PROVIDED HEREIN. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 15 ABOVE AND IN THE CONVEYANCE DOCUMENTS, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO: (A) THE CONDITION OF THE PROPERTY OR ANY BUILDINGS, STRUCTURE OR IMPROVEMENTS THEREON OR THE SUITABILITY OF THE PROPERTY FOR HABITATION OR FOR BUYER’S INTENDED USE; (B) ANY APPLICABLE BUILDING, ZONING OR FIRE LAWS OR REGULATIONS OR WITH RESPECT TO COMPLIANCE THEREWITH OR WITH RESPECT TO THE EXISTENCE OF OR COMPLIANCE WITH ANY REQUIRED PERMITS, IF ANY, OF ANY GOVERNMENTAL AGENCY; (C) THE AVAILABILITY OR EXISTENCE OF ANY WATER, SEWER OR UTILITIES, ANY RIGHTS THERETO, OR ANY WATER, SEWER OR UTILITY DISTRICTS; OR (D) ACCESS TO ANY PUBLIC OR PRIVATE SANITARY SEWER OR DRAINAGE SYSTEM. BUYER ACKNOWLEDGES THAT BUYER IS GIVEN THE OPPORTUNITY UNDER THIS AGREEMENT TO FULLY INSPECT THE PROPERTY AND BUYER ASSUMES THE RESPONSIBILITY AND RISKS OF ALL DEFECTS AND CONDITIONS, INCLUDING, WITHOUT LIMITATION, SUCH DEFECTS AND CONDITIONS, IF ANY, THAT CANNOT BE OBSERVED BY CASUAL INSPECTION. 15.2 Buyer’s Representations. Buyer represents and warrants to Seller as of the Closing Date as follows: (a) Status. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Washington. (b) Authority. This Agreement and all documents to be executed by Buyer at Closing have been duly authorized, executed and delivered by Buyer and are binding on and enforceable against Buyer in accordance with their terms. (c) OFAC. Neither Buyer nor, to Buyer’s current actual knowledge, any of its respective partners, members, shareholders or other equity owners is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of OFAC (including those named on OFAC’s Specially Designated and Blocked Persons List) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism). 16. Liabilities and Assumption of Obligations. Except as expressly provided herein, Buyer shall not assume or take subject to any liabilities or obligations of the Property or Seller existing or accrued as of the date of Closing, and Seller shall pay the same as they mature and shall hold Buyer harmless with respect to all such liabilities and obligations. Liabilities and obligations of the Property accruing after the date of Closing shall be the responsibility of Buyer. Each party agrees to indemnify, defend and hold the other party harmless with respect to the liability and responsibility of such party in accordance with this Section 16.
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19
Attachment 1 Resolution No. 522 Exhibit A PSA 17. Negotiation and Construction. This Agreement and each of the terms and provisions hereof are deemed to have been explicitly negotiated between the parties, and the language in all parts of this Agreement shall, in all cases, be construed according to its fair meaning and not strictly for or against either party. 18. Dispute Resolution. The City and WCCP agree that any and all unresolved disputes, claims or controversies arising out of or relating to this Agreement (including disagreement as to the repurchase option) shall be submitted to JAMS, or its successor, for mediation, and if the matter is not resolved through mediation, then it shall be submitted to JAMS, or its successor, for final and binding arbitration. The City or WCCP may commence mediation by providing to JAMS and to the other party to this Agreement a written request for mediation, setting forth the subject of the dispute and the relief requested. The City and WCCP will cooperate with JAMS and with each other in selecting a mediator from JAMS’ panel of neutral mediators, and in scheduling the mediation proceedings. The City and WCCP will participate in the mediation in good faith, and that they will share equally in its costs. All offers, promises, conduct and statements, whether oral or written, made in the course of the mediation by any of the City and WCCP, their agents, employees, experts and attorneys, and by the mediator or any JAMS employees, are confidential, privileged and inadmissible for any purpose, including impeachment, in any arbitration or other proceeding involving the City and WCCP, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the mediation. If the dispute is not resolved through Mediation within 20 days after submission to Mediation, then the Mediator shall resolve the dispute as an arbitrator. The Arbitrator shall not necessarily hear additional evidence, but shall have the authority to decide the dispute as between the City and WCCP. The provisions of this section may be enforced by any Court of competent jurisdiction, and the party seeking enforcement shall be entitled to an award of all costs, fees and expenses, including attorney’s fees, to be paid by the party against whom enforcement is ordered. 19. Brokers and Finders. Neither Buyer nor Seller was represented by a broker in this transaction. In the event of a claim for broker’s fee, finder’s fee, commission or other similar compensation in connection herewith, Buyer, if such claim is based upon any agreement alleged to have been made by Buyer, hereby agrees to indemnify Seller against and hold Seller harmless from any and all damages, liabilities, costs, expenses, and losses (including, without limitation, reasonable attorneys’ fees and costs) which Seller may sustain or incur by reason of such claim, and Seller, if such claim is based upon any agreement alleged to have been made by Seller, hereby agrees to indemnify Buyer against and hold Buyer harmless from any and all damages, liabilities, costs, expenses and losses (including, without limitation, reasonable attorneys’ fees and costs) which Buyer may sustain or incur by reason of such claim. The provisions of this section shall survive the termination of this Agreement or the Closing. 20. Closing.
Possession. Buyer shall be entitled to possession of the Property on the date of
21. Governing Law, Attorneys’ Fees. This Agreement shall be construed according to the laws of the state of Washington. If either Buyer or Seller should find it necessary to employ an attorney to enforce a provision of the Agreement or to recover damages for the breach hereof
- 12 -
20
Attachment 1 Resolution No. 522 Exhibit A PSA (including proceedings in bankruptcy), the prevailing party shall be entitled to be reimbursed for its court costs and attorneys’ fees, in addition to all damages, through all levels of appeal. 22. Default. Buyer’s Earnest Money is the funds expended by Buyer to design and develop plans for the Project. In the event Buyer fails without legal excuse to complete the purchase of the Property, the Buyer shall provide all nonproprietary Project plans and studies prepared to date to the City as the sole and exclusive remedy available to Seller for such failure. 23. Notices. All notices, demands, requests, consents and approvals which may, or are required to, be given by any party to any other party hereunder shall be in writing and shall be deemed to have been duly given if (a) delivered personally, (b) sent by a nationally recognized overnight delivery service, (c) electronically transmitted with confirmation sent by another method specified in this Section 23 or (d) if mailed or deposited in the United States mail and sent by registered or certified mail, return receipt requested, postage prepaid to: SELLER:
City of Woodinville 17301 133rd Avenue NE Woodinville, WA 98072 Attention: Brandon Buchanan Telephone: (425) 789-2700 Email:
[email protected]
With a copy to:
Porter Foster Rorick LLP 601 Union Street, Suite 800 Seattle, Washington 98101 Attention: Jeffrey Ganson Telephone: (206) 622-0203 Email:
[email protected]
BUYER:
Woodinville Civic Campus Partners LLC c/o Main Street Property Group LLC 12332 NE 115th Place Kirkland, Washington 98033 Attention: Kelly Price Telephone: (425) 829-6045 Email:
[email protected]
With a copy to:
Foster Pepper PLLC 1111 Third Avenue, Suite 3000 Seattle, Washington 98101 Attention: Jeremy Eckert Telephone: (206) 447-6284 Email:
[email protected]
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21
Attachment 1 Resolution No. 522 Exhibit A PSA Either party hereto may by proper notice made by the other party designate such other address for giving of notices. All notices shall be deemed given on the day such notice is delivered (or if refused, the date of such refusal) or transmitted by electronic mail transmission or telephone facsimile or on the third business day following the date such notice is mailed in accordance with this Section. 24. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, heirs, administrators and assigns. 25. Entire Agreement. This Agreement contains the entire understanding between the parties and supersedes any prior agreements between them respecting the subject matter hereof. 26. Further Assurances. As and to the extent otherwise contemplated by this Agreement, each party to this Agreement agrees that it will at any time and from time to time after the date hereof, at its sole cost and expense, immediately following the reasonable request of the other party, promptly execute, acknowledge (if necessary) and deliver or cause to be properly executed, acknowledged (if necessary) and delivered, such agreements, certificates, statements, instruments and documents and promptly take, or promptly cause to be taken, such other and further steps and actions, as may be required by law or as reasonably shall be deemed necessary by the other party in order to more fully effect, evidence or carry out the intent and purposes of this Agreement. 27. Counterparts. This Agreement may be executed in several counterparts, which shall be treated as originals for all purposes, and all counterparts so executed shall constitute one agreement, binding on all the parties hereto, notwithstanding that all the parties are not signatory to the original or to the same counterpart. Any such counterpart shall be admissible into evidence as an original hereof against the person who executed it. 28. Assignment. Buyer’s rights under this Agreement are not assignable without the prior written consent of Seller, which shall not unreasonably be withheld; provided, however, Buyer may assign this Agreement without the consent of Seller to any affiliate of Buyer, which shall include any limited liability company or general or limited partnership of which Buyer, its principal shareholders, or any entity or entities controlled by Buyer or its principal shareholders, is a general partner or member (collectively, the “Permitted Assignment”). From and after any Permitted Assignment, the assignee shall be substituted for Buyer herein and Buyer shall have no further liability hereunder (except, if such is the case, as a general partner of such assignee). Except as provided by Section 28, Seller’s rights under this Agreement are not assignable without the prior written consent of Buyer, which shall not unreasonably be withheld. From and after Closing, either Buyer or Seller may assign any of their rights under this Agreement in whole or part to any successor, lender or other party with an interest in the Property. 29. Tax Deferred Exchange. Either party may convey or receive a conveyance of the real property described herein as part of an IRC Section 1031 Tax Deferred Exchange. Either party may assign all contract rights and obligations hereunder to a qualified intermediary, as part of, and in furtherance of, such tax deferred exchange. In such event, the other party agrees to assist and cooperate in such exchange for the benefit of the exchanging party at no cost, expense or liability
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22
Attachment 1 Resolution No. 522 Exhibit A PSA to the other party, and further agrees to execute any and all documents (subject to the reasonable approval of the other party’s legal counsel) as are reasonably necessary in connection with such exchange at the exchanging party’s sole expense. Nothing contained in this Section 24 shall release the exchanging party of any of its obligations or liabilities under this Agreement, whether arising before, at or after Closing. 30. Time. Time is of the essence of this Agreement and each and every provision hereof. Any extension of time granted for the performance of any duty under this Agreement shall not be considered as an extension of time for the performance of any other duty under this Agreement. As used in this Agreement, “business day” refers to any day which is not a Saturday, Sunday or a holiday in the State of Washington. In the event the time for performance of any obligation hereunder shall fall on a Saturday, Sunday or a holiday, such time for performance shall be extended to the next business day. 31. Recording. This Agreement shall not be recorded, provided, however, that Buyer may record a memorandum of this Agreement. If this Agreement is legally terminated, Buyer agrees to execute, acknowledge, and deliver to Seller a termination of this Agreement, in such form as Seller shall reasonably request. [Remainder of page intentionally left blank; signatures follow.]
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23
Attachment 1 Resolution No. 522 Exhibit A PSA DATED as of the day and year first above written. SELLER:
THE CITY OF WOODINVILLE, a Washington municipal corporation By: Name: Title:
BUYER:
WOODINVILLE CIVIC CAMPUS PARTNERS LLC, a Washington limited liability company By: Name: Title:
Exhibits Exhibit A – Legal Description Exhibit B – Statutory Warranty Deed Exhibit C – Development Agreement
- 16 -
24
Attachment 1 Resolution No. 522 Exhibit A PSA EXHIBIT A TO PURCHASE AND SALE AGREEMENT Legal Description of the Property
A-1
25
Exhibit A to Purchase & Sale Agreement
EXHIBIT A EX ISTING DESCRIPTION PARCEL B, CITY OF WOODINVILLE BOUNDARY LINE ADJUSTMENT NO. BLA 2002-0071, RECORDED UNDER RECORDING NUMBER 20031014900005, RECORDS OF KING COUNTY, WASH INGTON;
NE 1/4, SE 1/4, SEC. 9 & NW 1/4, SW 1/4, SEC. 10, TWP. 26 N., RGE. 5 E., W.M. CITY OF WOODINVILLE, COUNTY OF KING, STATE OF WASHINGTON www.axismap.com
Axis
Survey & Mapping
JOB NO. 15241 NE 90TH ST REDMOND, WA 98052 TEL. 425.823-5700 FAX 425 .823-6700
26
18-035 DRAWN BY
JM
DATE
5/30/18 CHECKED BY
BEB
SCALE
SHEET
N/A
1 OF 3
Exhibit A to Purchase & Sale Agreement
EXHIBIT B PROPOSED BLA DESCRIPTION THAT PORTION OF PARCEL B, CITY OF WOODINVILLE BOUNDARY LINE ADJUSTMENT NO. BLA 2002-0071, RECORDED UN DER RECORDING NUMBER 20031014900005, LYING WESTERLY OF THE FOLLOWING DESCRIBED LINE: COMMENCING AT THE NORTHWEST CORNER OF SAID PARCEL B; THENCE SOUTH 01"34'02" EAST, ALONG THE WEST LINE THEREOF, A DISTANCE OF 99.24 FEET; THENCE NORTH 88'34'22" WEST, A DISTANCE OF 15.34 FEET TO THE POINT OF BEGINNING; THENCE SOUTH 01"34'02" WEST, A DISTANCE OF 19.82 FEET; THENCE SOUTH 88"21 '09" EAST, A DISTANCE OF 100.36 FEET; THENCE SOUTH 01"38'51" WEST, A DISTANCE OF 120.30 FEET; THENCE NORTH 88"21 '09" WEST, A DISTANCE OF 100. 19 FEET; THENCE SOUTH 01"34'02" WEST, A DISTANCE OF 21 .21 FEET TO AN ANGLE POINT ON THE WEST LINE OF SAID PARCEL B. CONTAINING AN AREA OF 15,307 SQ. FT. MORE OR LESS .
NE 1/4, SE 1/4, SEC. 9 & NW 1/4, SW 1/4, SEC. 10, TWP. 26 N., RGE. 5 E., W.M. CITY OF WOODINVILLE, COUNTY OF KING, STATE OF WASHINGTON www.axismap.com
Axis
Survey & Mapping
JOB NO. 152 41 NE 90TH ST REDMOND, WA 98052 TEL. 4 25.823- 5700 FAX 425.823 - 6700
27
18-035 WRITIEN BY
JM
DATE
5/30/18 CHECKED BY
BEB
SCALE
SHEET
N/A
2 OF 3
Exhibit A to Purchase & Sale Agreement
EXHIBIT C
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,---------------J THIS EXHIBIT HAS BEEN PREPARED TO ASSIST IN THE INTERPRETATION OF THE ACCOMPANYING LEGAL DESCRIPTION . IF THERE IS A CONFLICT BETWEEN THE WRITIEN LEGAL DESCRIPTION AND THIS SKETCH, THE LEGAL DESCRIPTION SHALL PREVAIL.
NE 1/4, SE 1/4, SEC. 9 & NW 1/4, SW 1/4, SEC. 10, TWP. 26 N., RGE. 5 E., W.M. CITY OF WOODINVILLE, COUNTY OF KING, STATE OF WASHINGTON www .axismap.com
Axis
Survey & Mapping
JOB NO. 15241 NE 90TH ST REDMOND, WA 98052 TEL. 425.823-5700 FAX 425 .823 - 6700
18-035 DRAWN BY
BEB/ZLN SCALE
1"=80'
28
DATE
5/30/18 CHECKED BY
BEB SHEET
3 OF 3
Attachment 1 Resolution No. 522 Exhibit A PSA EXHIBIT B TO PURCHASE AND SALE AGREEMENT Recording Requested by:
STATUTORY WARRANTY DEED City of Woodinville, a Washington municipal corporation
Grantor: Grantee: Abbrev. Legal Description:
_______________________________________ Complete legal description on Exhibit A.
Assessor’s Tax Parcel ID#: For the consideration of Ten and no/100 Dollars, and other valuable consideration, City of Woodinville, a Washington municipal corporation (“Grantor”), does hereby convey and warrant to (“Grantee”) the real property situate in King County, Washington, legally described on Exhibit A attached hereto and incorporated herein. SUBJECT TO: Items listed on Exhibit B attached hereto and incorporated herein. DATED: ___________________. GRANTOR:
THE CITY OF WOODINVILLE, a Washington municipal corporation By: Name: Title: [ADD ACKNOWLEDGEMENT]
Exhibits Exhibit A: Exhibit B:
Legal Description Permitted Exceptions
29
Attachment 1 Resolution No. 522 Exhibit A PSA EXHIBIT C TO PURCHASE AND SALE AGREEMENT Development Agreement (See Attached)
30
Attachment 1 Resolution No. 522 Exhibit B DA DEVELOPMENT AGREEMENT CITY OF WOODINVILLE AND WOODINVILLE CIVIC CAMPUS PARTNERS, LLC. This Development Agreement (“Agreement”) is made and entered into this 19th day of June, 2018, by and between the City of Woodinville, a Washington optional municipal code city (“City”), and Woodinville Civic Campus Partners, LLC, a Washington state limited liability corporation (“WCCP”). The City and WCCP are the “Parties” to this Agreement. The Parties agree as follows: BACKGROUND AND CONTEXT A. The City owns what is known as the Woodinville Civic Campus, which comprises of approximately 3.33 acres of the block generally located at the southwest corner of NE 175th Street and 133rd Avenue NE in Woodinville, Washington and as described in Exhibit A (Exhibit A) (the “Property”). B. This Agreement authorizes the redevelopment of the Property. The redevelopment includes multifamily residential, retail, parking, public plazas, the renovation of the historic onsite Woodinville Schoolhouse (the “Schoolhouse”), retaining portions of the Woodinville Recreation Center (“WRC”), adding new space for the WRC, and functional and activated pedestrian connections across the Property (the “Civic Campus Project” or “Project”). WCCP will construct the Project with high quality design and building materials on the Property as described in Section 1 of this Agreement. C. The Parties designed the Project in a manner that is consistent with the City’s Future Land Use Map, the Little Bear Creek Corridor Master Plan, the Civic/Gateway Design District, and the City’s Civic Campus Project Goals. D.
Project elements that are of central importance to the Parties include: i.
Create a community gathering place;
ii.
Retain and renovate the Old Woodinville Schoolhouse (the “Schoolhouse”);
iii.
Retain, integrate, and renovate, if feasible, the WRC;
iv.
Provide 260 to 275 units of new residential housing;
v.
Use the Project to create a model for the City’s vision of Downtown as “an inviting place to work, shop, live and socialize,” consistent with the Downtown Illustrative Design Guidelines; and
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Attachment 1 Resolution No. 522 Exhibit B DA vi.
E.
Limit the City’s financial risk and investment to the extent feasible, while planning a project that is economically feasible for WCCP.
The following events have occurred as of the date of this Agreement with respect to the processing of the Application: i.
Since 2001, the City has analyzed various iterations of designing and constructing a Woodinville Civic Campus.
ii.
In 2017, the City issued a Developer Request for Qualifications and, subsequently, Request for Proposals for the design and development of the Woodinville Civic Campus. The City selected WCCP through this process.
iii.
On February 20, 2018, the City and WCCP executed a Memorandum of Understanding for the Civic Campus Project.
iv.
On May 15, 2018, the City rezoned the Property from Public/Institution (P/I) to Central Business District (CBD).
v.
On June 19, 2018, the City and WCCP executed a Purchase and Sale Agreement (“PSA”) for the Property. The PSA authorizes WCCP to acquire the Property following the City’s execution of this Agreement, the City’s issuance of a SEPA threshold determination for the Project, and the City’s issuance of all permits for the Project. For the purposes of RCW 36.70B.170(1) and WMC 21.82.010, the PSA provides WCCP with “control” over the Property as of the execution of this Agreement.
vi.
On June 5, 2018, the City enacted a multifamily tax exemption ordinance (Ch. 3.43 of the Woodinville Municipal Code), which is applicable to the Project.
vii.
On May 24, 2018, WCCP began the Certificate of Appropriateness process with the King County Landmarks Commission for the planned improvements to the Schoolhouse. The Certificate of Appropriateness is pending.
viii.
On April 30, 2018, the City issued its SEPA threshold decision for the Project and the PSA. On [date], the City reanalyzed the Project and issued a SEPA Addendum.
ix.
On May 16, 2018, the Planning Commission held a public hearing on the Agreement, following which it voted to recommend approval of the Ordinance to the City Council.
x.
On June 19, 2018, by Resolution No. 522, the City Council authorized the City Manager to sign this Agreement with the WCCP.
32
Attachment 1 Resolution No. 522 Exhibit B DA
DEVELOPMENT AGREEMENT PROVISIONS 1. Project Description. The Project, to be constructed by WCCP, includes the following components: a. Development of the Project through the application of the City of Woodinville’s Multifamily Design Guidelines, high quality materials, and a farm/forest aesthetic including connectivity with surrounding public trails and parks through pedestrian connectors, bike trails, or plazas. b. Public plazas, open space, and pedestrian walkways. c. Approximately 20,000 – 22,000 square feet of retail, restaurant, and commercial uses, including the first and second floors of the Schoolhouse. d. 260 - 275 multifamily residential units with a goal of achieving the reasonable maximum density on the Property. The Project requires a minimum of 260 multifamily residential units. e. Parking stall count to support the residential and retail development and approximately shared 50 stalls to support the WRC and the residential units. f. Retaining and renovating a portion (approximately 8,000 square feet) of the on-site WRC and related amenities, which will close during construction. This is the “Renovated WRC space.” g. Addition of approximately 7,200 square feet of new WRC space on the ground floor of one of the residential buildings. This is the “New WRC space.” h. Woodinville’s Festival Promenade (the “Promenade”). A conceptual redevelopment plan that depicts the Project is attached as Exhibit B. The Parties will execute a Joint Use and Maintenance Agreement that includes additional provisions for the use and maintenance of the Property’s public areas, landscaping, and shared parking stalls. 2. Vested Development Regulations / Permit Approvals. 2.1 The provisions of the Woodinville Zoning Code and City development regulations, such as international building and fire codes, in effect on the date of this Agreement shall apply to the design and development of the Project for the full duration of this Agreement, except (1) by mutual consent of all Parties hereto; (2) to the extent required to address a serious threat to public health and safety; or (3) as to environmental regulations mandated by state or federal law.
33
Attachment 1 Resolution No. 522 Exhibit B DA Prior to commencement of construction, WCCP will obtain from the City all required permits and approvals in conformance with the Woodinville Municipal Code (WMC) in effect at the time this Agreement is executed. 2.2 Stormwater. The City will allow the direct discharge of surface water from the Project to the maximum extent permitted by controlling stormwater regulations. 3. Project Phasing. The Parties acknowledge that the Project can be developed in phases if desired by WCCP, subject to the term of this Agreement set forth in section 7.10. 4.
Parties’ Obligations Under this Agreement.
This Agreement establishes certain roles and responsibilities for the development of the Project. 4.1
WCCP Responsibilities. a.
Historic Woodinville Schoolhouse Renovation. WCCP agrees to renovate the Schoolhouse as generally depicted in Exhibit B.
b.
The Renovated WRC Space and the New WRC Space. WCCP agrees to construct the New WRC Space. WCCP also agrees to construct the Renovated WRC Space if the City and WCCP agree to the design and cost of Renovated WRC Space and the cost of the Renovated WRC Space is included in the PSA. WCCP is not obligated to construct the Renovated WRC Space if the Parties do not agree to design and cost.
c.
Parking Stalls. WCCP agrees to construct 50 parking stalls for WRC use during certain times of the day, including weekday mornings, middays, evenings, and weekend days. Stalls shall be available at night for residents of the residential units. The shared use of the parking stalls is further described in the Joint Use and Maintenance Agreement and generally depicted in Exhibit B.
d.
Residential Housing. WCCP agrees to construct 260-275 multifamily residential units with a LEED or equivalent designation as generally depicted in Exhibit B.
e.
Public Open Space. WCCP agrees to construct public open space as generally depicted in Exhibit B.
f.
Retail / Restaurant / Commercial Uses. WCCP agrees to construct approximately 20,000 square feet of space for retail, restaurant, and commercial uses, including the first and second floor of the
34
Attachment 1 Resolution No. 522 Exhibit B DA Schoolhouse. The retail, restaurant, and commercial uses are generally depicted in Exhibit B. g.
Frontages. WCCP agrees to construct frontage improvements on the Property required by the Pedestrian-Oriented Overlay and the Pedestrian-Oriented Street as generally depicted in Exhibit B.
h.
Electric Vehicles. WCCP agrees to construct electric vehicle charging stations, with the ability to add additional charging stations in the future based upon demand, as further described in Exhibit B.
i.
Play Space. WCCP agrees to construct a child-friendly outdoor play space as generally depicted in Exhibit B.
j.
Woodinville’s Festival Promenade. WCCP agrees to construct the Promenade if the City and WCCP agree to the design and cost of the Promenade and the cost of the Promenade is included in the PSA. WCCP is not obligated to construct the Promenade if the Parties do not agree to design and cost.
k.
Impact Fees. i.
Traffic Impact Fees. WCCP is responsible for traffic impact fees in the amount of $440 per ADT, payable to the City at building permit issuance. WCCP shall be vested to this fee for a period of ten (10) years.
i.
Park Impact Fees. Pursuant to WMC 3.36.110, WCCP shall be entitled to a credit against applicable park impact fees for development of system improvements included within the City’s Capital Improvement Plan.
ii.
Other Impact Fees. At the effective date of this agreement, the City does not assess a school, fire, or other impact fees. The City acknowledges that WCCP is not responsible for any school, fire, or other, impact fees if such a fee is enacted by the City before the City issues the final certificate of occupancy for this Project. WCCP acknowledges that this Agreement does not vest or otherwise address benefit or other charges that may be imposed by agencies other than the City.
l. Permit Fees. WCCP will obtain from the City all required permits and approvals in conformance with the Woodinville Municipal Code (WMC) and fee schedule in effect at the time this Agreement is executed.
35
Attachment 1 Resolution No. 522 Exhibit B DA m. Concurrency. The City has reviewed two Woodinville Civic Campus Redevelopment scenarios and determined that both scenarios meet the City’s standards for transportation concurrency approval and mitigate any significant adverse impacts to the City’s transportation system. Transportation concurrency approval is granted for scenario 1: a maximum of 300 residential units, 10,000 square feet of restaurant (high turn-over, sit-down), 10,000 square feet of office space, 9,000 square feet of retail commercial use, and a net increase of 6,000 square feet of recreation center use (YMCA) in accordance with the Woodinville Civic Campus Redevelopment Transportation Impact Analysis, dated April 2018, prepared by the Transpo Group. Transportation concurrency approval is also granted for scenario 2: a maximum of 270 residential units, 5,000 square feet of retail, 18,000 square feet of restaurant (fast food non-sit down, i.e. food hall), and a net increase of 7,200 square feet of recreation center use (YMCA) in accordance with the Supplemental Analysis, dated June 2018, prepared by the Transpo Group. Concurrency is granted by the City for the Project for either scenario. To provide flexibility for the Project, the City Manager has the authority to grant concurrency for development that falls in between scenario 1 and scenario 2 as a minor modification. n. Security. WCCP shall submit a performance and payment bond at the beginning of any phase for the value of all required public infrastructure improvements, landscaping and stream mitigation within that phase. o. Easements and Land Dedications. WCCP agrees to provide dedications and easements necessary for the construction and public use of the right of way improvements. p. Multi-Family Tax Exemption Contract. For the purposes of WMC 3.43.050.F and RCW 84.14.030(6), this Agreement constitutes the contract under which WCCP has agreed to the implementation of the development on terms and conditions satisfactory to the city council. 4.2
City Responsibilities a. City Services. City services including roads, parks, stormwater and police of which WCCP and its successors will benefit with the development of the project in the City, are described, implemented and budgeted for by ordinance, resolutions, plans and policies adopted through public processes. b. Easements / Licenses. The City agrees to provide at no cost to WCCP the easements and licenses necessary for the Project, including but not limited to construction easements, fire separation easements, utility easements, access easements, and fire access easements.
36
Attachment 1 Resolution No. 522 Exhibit B DA c. Off-Property Improvements. The Parties agree that intersection th improvements at 175 St. and 133rd Ave NE including signalization, is necessary. For the project identified in the SEPA Addendum, WCCP is responsible for seventeen percent (17%) of the improvement cost, currently estimated at $375,000. The percentage reflects WCCP’s proportional impact on the intersection as determined through the following formula: (peak trips generated by privately owned parcels on the Property / (all peak trips running through the intersection, including all relatively known peak trips in the City’s entitlement pipeline). The parties may modify the percentage to reflect the permitted project’s actual impact.
5. SEPA Compliance. a. DNS and Addendm. The City has conducted a Non-Project SEPA review of this Development Agreement in accordance with the requirements of the State Environmental Policy Act, RCW 43.21C, and applicable SEPA regulations, WAC 197-11. A determination of nonsignificance (“DNS”) was issued on April 30, 2018. On June 19, 2018, the City also prepared a SEPA Addendum to provide additional information and analysis that did not substantially change the analysis of impacts in the DNS. A copy of the DNS and the Addendum are attached as Exhibit C. All conditions of the DNS are incorporated into this document either specifically, or by this reference. b. Scope of SEPA Review and Mitigation. Pursuant to RCW 36.70B.170(3)(c), this Agreement addresses the “mitigation measures, development conditions, and other requirements under 43.21C RCW” that are applicable to the Project. For the purposes of clarity, the maximum build-out of the Project is 275 units and 35,000 square feet of retail, restaurant, recreation center, and commercial uses. The analyzed Project also includes associated parking, landscaping, and open space. c. Adequacy of Mitigation. Pursuant to RCW 43.21C.240(2) & (3), the City finds that the mitigation measures proposed in this Agreement and the analyses and mitigation required by other local, state, and federal laws and regulations provide adequate analysis of, and mitigation for, the specific adverse environmental impacts of the proposed Project. The City agrees that the impacts identified in the WCCP SEPA Checklist are adequately mitigated through the application of RCW 43.21C.240 and will not require further SEPA review, unless the Development exceeds the square-footage outlined herein. For any applicable land use application, the Applicant shall submit a completed SEPA checklist to confirm consistency with the impacts disclosed in the WCCP Checklist and/or other adopted environmental documents as applicable. Submission of the checklist is for informational purposes to confirm consistency with the previously issued DNS and shall not be a basis for additional SEPA process or mitigation so long as the
37
Attachment 1 Resolution No. 522 Exhibit B DA proposed development conforms to the terms of this Agreement and no greater adverse environmental impacts are identified in the entitlement application checklist that were not considered in the environmental documentation for the DNS or that could not be adequately mitigated through the application of RCW 43.21C.240. d. Additional SEPA Review. Except as provided above, no additional mitigation conditions or environmental analysis shall be imposed on the Project during the term of this Agreement unless required due to a serious threat to public health and safety pursuant to RCW 36.70B.170 and RCW 36.70B.180. If additional SEPA review is required for the Project, the City shall not exercise its substantive SEPA authority to impose conditions on Project approvals issued during the term of this Agreement in a manner that is inconsistent with this Agreement or applicable land use regulations. 6. Modifications to Agreement. This Agreement contains all terms, conditions and provisions agreed upon by the parties hereto, and shall not be modified except by written amendment executed by both parties. A major modification is an alteration that changes the original purpose or intent of the Project, increases the intensity of Project, or creates or increases any adverse impact. A minor modification is an alteration to the Project that does not change the original purpose or intent of the Project, does not increase the intensity of the Project, and does not create or increase any adverse impact. Major modifications must be approved by the City Council. Minor modifications may be approved by the City Manager, or designee. The City Manager or designee shall determine whether a proposed modification is major or minor under this section. 7.
General Provisions.
7.1 Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Washington and the City of Woodinville. 7.2 Recording. This Agreement or a memorandum thereof shall be recorded against the Property as a covenant running with the land. 7.3 Agreement Binding on Successors; Respective Obligations of WCCP. This Agreement shall be binding upon and shall inure to the benefit of the parties and their successors as provided by RCW 36.70B.190. 7.4
Interpretation; Severability.
7.4.1 Interpretation. The parties intend this Agreement to be interpreted to the full extent authorized by law as an exercise of the City’s authority to enter into development agreements pursuant to RCW 36.70B.170 et seq. 7.4.2 Severability. If any provision of this Agreement is determined to be unenforceable or invalid in a final decree or judgment by a court of law, then the remainder of this Agreement not decreed or adjudged unenforceable or invalid shall remain unaffected and in full force and effect.
38
Attachment 1 Resolution No. 522 Exhibit B DA 7.5 Authority. Each party respectively represents and warrants that it has the power and authority, and is duly authorized, to enter into this Agreement on the terms and conditions herein stated, and to deliver and perform its obligations under this Agreement. 7.6 Exhibits Incorporated. Exhibits A-C are incorporated herein by this reference as if fully set forth. 7.7 Headings. The headings in this Agreement are inserted for reference only and shall not be construed to expand, limit or otherwise modify the terms and conditions of this Agreement. 7.8 Entire Agreement. This Agreement represents the entire agreement of the parties with respect to the subject matter hereof. There are no other agreements, oral or written, except as expressly set forth herein and this Agreement supersedes all previous agreements, oral or written. 7.9 Default and Remedies. No party shall be in default under this Agreement unless it has failed to perform under this Agreement for a period of forty-five (45) days after receipt of written notice of default from the other party. Each notice of default shall specify the nature of the alleged default and the manner in which the default may be cured satisfactorily. If the nature of the alleged default is such that it cannot be reasonably cured within the forty-five (45) day period, then commencement of the cure within such time period and the diligent prosecution to completion of the cure shall be deemed a cure. Any party not in default under this Agreement shall have all rights and remedies provided by law including without limitation damages, specific performance or writs to compel performance or require action consistent with this Agreement. The prevailing party (or the substantially prevailing party if no one party prevails entirely) shall be entitled to reasonable attorneys' fees and costs. 7.10 Term. This Agreement shall commence on the Effective Date and shall continue in force for ten (10) years following the Effective Date. 7.11 No Third-Party Beneficiary. This Agreement is made and entered into for the sole protection and benefit of the parties hereto and their successors and assigns. No other person shall have any right of action based upon any provision of this Agreement. 7.12 Interpretation. This Agreement has been reviewed and revised by legal counsel for both parties, and no presumption or rule construing ambiguity against the drafter of the document shall apply to the interpretation or enforcement of this Agreement. 7.13 Notice. All communications, notices, and demands of any kind that a party under this Agreement requires or desires to give to any other party shall be in writing and either (i) delivered personally, (ii) sent by email with an additional copy mailed first class, or (iii) deposited in the U.S. mail, certified mail postage prepaid, return receipt requested, and addressed as follows: If to the City:
Brandon Buchanan, City Manager 17301 133rd Avenue NE Woodinville, WA 98072 Email:
[email protected]
39
Attachment 1 Resolution No. 522 Exhibit B DA If to WCCP:
Kelly Price 12332 NE 115th Place Kirkland, WA 98033 Email:
[email protected]
Notice by hand delivery or email shall be effective upon receipt, provided that notice by email shall be accompanied by mailed notice as set forth herein and shall be evidenced by a return email confirmation of successful transmission. If deposited in the mail, certified mail, return receipt requested, notice shall be deemed delivered forty-eight (48) hours after deposited. Any party at any time by notice to the other party may designate a different address or person to which such notice or communication shall be given. 7.14 Delays. If either party is delayed in the performance of its obligations under this Agreement due to Force Majeure, then performance of those obligations shall be excused for the period of delay.
In Witness Whereof, the parties have caused this Agreement to be executed, effective on the day and year set forth on the first page hereof. CITY OF WOODINVILLE, a Washington Municipal Corporation
By:______________________________________ Print Name: _______________________________ Its: ______________________
WOODINVILLE CIVIC CAMPUS PARTNERS, LLC., a Washington Limited Liability Corporation
By: _____________________________________ Print Name: _____________________ Its: _____________________
40
Attachment 1 Resolution No. 522 Exhibit B DA STATE OF WASHINGTON) COUNTY OF KING
) ss )
I certify that I know or have satisfactory evidence that ____________________________ is the person who appeared before me, and said person acknowledged that (s)he signed this instrument, on oath stated that (s)he was authorized to execute the instrument and acknowledged it as the ____________________ of the CITY OF WOODINVILLE to be the free and voluntary act of such party for the uses and purposes mentioned in this instrument. DATED: __________________, 2018.
Notary Public in and for the State of Washington residing at Print name: Commission expires:
STATE OF WASHINGTON) COUNTY OF KING
) ss )
I certify that I know or have satisfactory evidence that ____________________________ is the person who appeared before me, and said person acknowledged that (s)he signed this instrument, on oath stated that (s)he was authorized to execute the instrument and acknowledged it as the ____________________ of WOODINVILLE CIVIC CAMPUS PARTNERS, LLC to be the free and voluntary act of such party for the uses and purposes mentioned in this instrument. DATED: __________________, 2018.
Notary Public in and for the State of Washington residing at Print name: Commission expires:
41
Attachment 1 Resolution No. 522 Exhibit B DA EXHIBIT A LEGAL DESCRIPTION (See Attached)
42
Exhibit A to Development Agreement
EXHIBIT A EX ISTING DESCRIPTION PARCEL B, CITY OF WOODINVILLE BOUNDARY LINE ADJUSTMENT NO. BLA 2002-0071, RECORDED UNDER RECORDING NUMBER 20031014900005, RECORDS OF KING COUNTY, WASH INGTON;
NE 1/4, SE 1/4, SEC. 9 & NW 1/4, SW 1/4, SEC. 10, TWP. 26 N., RGE. 5 E., W.M. CITY OF WOODINVILLE, COUNTY OF KING, STATE OF WASHINGTON www.axismap.com
Axis
Survey & Mapping
JOB NO. 15241 NE 90TH ST REDMOND, WA 98052 TEL. 425.823-5700 FAX 425 .823-6700
43
18-035 DRAWN BY
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Exhibit A to Development Agreement
EXHIBIT B PROPOSED BLA DESCRIPTION THAT PORTION OF PARCEL B, CITY OF WOODINVILLE BOUNDARY LINE ADJUSTMENT NO. BLA 2002-0071, RECORDED UN DER RECORDING NUMBER 20031014900005, LYING WESTERLY OF THE FOLLOWING DESCRIBED LINE: COMMENCING AT THE NORTHWEST CORNER OF SAID PARCEL B; THENCE SOUTH 01"34'02" EAST, ALONG THE WEST LINE THEREOF, A DISTANCE OF 99.24 FEET; THENCE NORTH 88'34'22" WEST, A DISTANCE OF 15.34 FEET TO THE POINT OF BEGINNING; THENCE SOUTH 01"34'02" WEST, A DISTANCE OF 19.82 FEET; THENCE SOUTH 88"21 '09" EAST, A DISTANCE OF 100.36 FEET; THENCE SOUTH 01"38'51" WEST, A DISTANCE OF 120.30 FEET; THENCE NORTH 88"21 '09" WEST, A DISTANCE OF 100. 19 FEET; THENCE SOUTH 01"34'02" WEST, A DISTANCE OF 21 .21 FEET TO AN ANGLE POINT ON THE WEST LINE OF SAID PARCEL B. CONTAINING AN AREA OF 15,307 SQ. FT. MORE OR LESS .
NE 1/4, SE 1/4, SEC. 9 & NW 1/4, SW 1/4, SEC. 10, TWP. 26 N., RGE. 5 E., W.M. CITY OF WOODINVILLE, COUNTY OF KING, STATE OF WASHINGTON www.axismap.com
Axis
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44
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NE 1/4, SE 1/4, SEC. 9 & NW 1/4, SW 1/4, SEC. 10, TWP. 26 N., RGE. 5 E., W.M. CITY OF WOODINVILLE, COUNTY OF KING, STATE OF WASHINGTON www .axismap.com
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18-035 DRAWN BY
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DATE
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Attachment 1 Resolution No. 522 Exhibit B DA EXHIBIT B CONCEPTUAL REDEVELOPMENT PLAN
46
Attachment 1 Resolution No. 522 Exhibit B DA EXHIBIT C SEPA THRESHOLD DETERMINATION & SEPA ADDENDUM (See Attached)
47
~ ~
DETERMINATION OF NONSIGNIFICANCE City of Woodinville
Development Services Department 425-489-2754 • 17301 133rd Avenue NE• Woodinville, WA 98072 Desk Hours • Monday - Thursday 7:30am - 5:00pm • Friday 7:30am - 4:00pm
PROJECT NAME: Woodinville Civic Campus Development Agreement DESCRIPTION OF PROPOSAL: The proposal is a development agreement between the City of Woodinville and Woodinville Civic Campus Partners (WCCP) for the redevelopment of the Woodinville Civic Campus. The redevelopment includes the transfer of property from the City of Woodinville to WCCP, redevelopment of a - 3.3-acre project site, leases following redevelopment, and the use of the project site for residential, commercial, recreational, and civic activities. The proposal contains several elements, which are described in the non-binding rv'lemorandum of Understanding between the City and WCCP and a draft Development Agreement of which both are available and on file with the City of Woodinville. For the purposes of thorough SEPA review, the applicant's checklist identifies the following development proposal pursuant to WAC 197-11-080(3)(b) (adopted by reference in WMC 21.52.020). -
-
Retention and renovation of the Old Woodinville School House. The renovated structure will include a commercial use and will be approximately 15,000-20,000 SF Development of Festival Street At least 260-300 residential units and approximately 10,000-15,000 SF of new retail space in two new residential mixed-use buildings. New underground parking and shared use of existing parking that abuts City Hall during specified hours. Retention and renovation of 8,000 SF of the existing YMCNCarol Edwards Center, which will continue to be used as a YMCA. Approximately 6,000 SF of the Carol Edwards Center will be demolished. Creation of approximately 30,000 SF of public plazas and gathering spaces.
PROPONENT: City of Woodinville Phone: 425-877-2271 Email:
[email protected] LEAD AGENCY: City of Woodinville PROJECT NUMBER: DEC 18006/SEP18012 The lead agency for this proposal has determined that it does not have a probable significant adverse impact on the environment. An environmental impact statement (EIS) is not required under RCW 43.21 C.030 (2)(c). This decision was made after review of a completed environmental checklist and other information on file with the lead agency. This information is available to the public on request.
0 0
There is no comment period for this DNS. This DNS is issued after using the optional DNS process in WAC 197-11-355. There is no further comment period on the DNS.
48
DETERMINATION OF NONSIGNIFICANCE City of Woodinville
Development Services Department 425-489-2754 • 17301 133rd Avenue NE• Woodinville, WA 98072 Desk Hours • Monday - Thursday 7:30am - 5:00pm • Friday 7:30am - 4:00pm ~
This DNS is issued under WAC 197-11-340(2); the lead agency will not act on this proposal for 15 days from the date below. Comments must be submitted within 14 days of issuance, by 4:00 P.M. on May 16, 2018.
CHANGES TO PROPOSAL: If there is new information or changes to the proposal after issuance of the DNS and prior to issuance of any required permit or approval indicating that the proposal will have probable significant adverse impacts , a new threshold determination will be required.
This DNS is issued on the basis of compliance of this proposal with all applicable Woodinville Municipal Code (WMC) regulations and standards, and environmental policies, as adopted by WMC 21.52.230, Subsection (4). VOLUNTARY OFFERS AND APPLICABLE DOCUMENTS This threshold determination was reached on the basis of the plans, supporting documents, calculations and agreements contained in the voluntary submittals associated with the project and SEPA review, specifically:
1. 2. 3. 4. 5. 6. 7.
SEPA Checklist Draft Development Agreement Phase I Environmental Downstream Report Transportation Impact Analysis Water/Sewer Availability Certificates Conceptual Site Plan
The voluntary offers and applicable documents listed above were considered and evaluated as part of this threshold determination. The City has considered whether other local, State, or Federal mitigation measures applied to the proposal are sufficient to mitigate the identified impacts. DISCLAIMER The determination that an environmental impact statement does not have to be filed does not mean there will be no adverse environmental impacts. City of Woodinville codes governing traffic control, land-use performance standards, construction and improvement of streets and roads, drainage control, environmental protection, fire protection and building practices will provide substantial mitigation of the aforementioned impacts.
The issuance of this DNS should not be interpreted as acceptance or approval of this proposal as presented. The City of Woodinville reserves the right to deny or approve said proposal subject to conditions if it is determined to be in the best interests of the City and/or necessary for the general health, safety and welfare of the public to do so.
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DETERMINATION OF NONSIGNIFICANCE City of Woodinville
Development Services Department 425-489-2754 • 17301 133rd Avenue NE• Woodinville, WA 98072 Desk Hours • Monday - Thursday 7:30am - 5:00pm • Friday 7:30am - 4:00pm
APPEAL You may appeal this determination to the City of Woodinville Hearing Examiner at 17301 133rd Avenue NE, Woodinville, WA98072 no later than 14 days from the date the DNS becomes final. Based on the issuance date of this determination, the appeal period ends at 4:00 P.M. on May 30, 2018. If you choose to appeal or comment, you should be prepared to make specific factual objections. To receive additional information on appeals for this application, please contact the Project Manager listed below. Responsible Official: Brandon Buchanan, City Manager Contact Person: Brandon Buchanan, City Manager .Address: 17301 133rd Avenue NE, Woodinville, WA 98072 Phone Number: (425) 877-2271 Email .Address: brandonb ci.woodi ·
Date: April 30, 2018
Published: Posted: Faxed : Emailed : Mailed:
Woodin-.;lle Weekly April 30 & May 7, 2018 1) In-house, 2) City Hall Display Case, 3) Post Office, 4) Website & 5) On-site N/A SEPA Re-.;ew Agencies 1) Applicant, 2) Property Owners within 500' & 3) Parties of Record
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DETERMINATION OF NONSIGNIFICANCE ADDENDUM Development Services Department 425-489-2754 • 17301 133rd Avenue NE • Woodinville, WA 98072 Desk Hours • Monday – Thursday 7:30am – 5:00pm • Friday 7:30am – 4:00pm
PROJECT NAME: Woodinville Civic Campus Development Agreement DESCRIPTION OF PROPOSAL: This addendum is prepared to provide an updated description and analysis of refinements made to the original proposal. The original proposal is a non-project action to approve a development agreement between the City of Woodinville and Woodinville Civic Campus Partners (WCCP) for the redevelopment of the Woodinville Civic Campus site. (See Determination of Nonsignificance for a complete description of the project.) PURPOSE OF ADDENDUM: The Responsible Official issued a Determination of Nonsignificance for this proposal on April 30, 2018. Subsequently, the Civic Campus project has been further refined in response to comments from the Woodinville City Council and Planning Commission, including reducing the number of residential units, increasing the size of the Recreation Center (YMCA), and adjusting the retail/ commercial/ restaurant components of the project. An updated traffic study prepared by the Transpo Group was provided incorporating the refinements into the proposal. The traffic study concluded “with the current proposed land use, all off-site study intersections are anticipated to continue to meet the Level of Service standards during both the weekday AM and PM peak hours consistent with the result disclosed in the April 2018 Traffic Impact Analysis.” PROPONENT: City of Woodinville Phone: 425-877-2271 Email:
[email protected] LEAD AGENCY: City of Woodinville PROJECT NUMBER: DEC 18006/SEP18012 CONCLUSION: The Responsible Official has concluded that the refinements to the project will not result in any unmitigated adverse significant impacts. This addendum to the Determination of Nonsignificance is adopted pursuant to WAC 197-11-625. Responsible Official: Robert Grumbach, Director of Development Services Contact Person: Robert Grumbach, Director of Development Services Address: 17301 133rd Avenue NE, Woodinville, WA 98072 Phone Number: (425) 877-2271 Email Address:
[email protected]
Signature: _________________________________________ Robert J. Grumbach, Responsible Official
File
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Date: June 19, 2018
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Attachment 2 Draft JUMEA [NOTE – THIS AGREEMENT IS TO BE RECORDED IN ESCROW AFTER THE RELEVANT PROPERTY HAS TRANSFERRED TO WCCP] AFTER RECORDING RETURN TO: Foster Pepper PLLC 1111 Third Avenue, Suite 3000 Seattle, Washington 98101 Attention: Jeremy Eckert
JOINT USE AND MAINTENANCE, AND EASEMENT AGREEMENT Grantor / Grantee:
THE CITY OF WOODINVILLE, a Washington municipal corporation
Grantee / Grantor:
WOODINVILLE CIVIC CAMPUS PARTNERS LLC, a Washington limited liability company
Abbreviated Legal Description (City of Woodinville Property): [insert here] Abbreviated Legal Description (Woodinville Civic Campus Partners Property): [insert here] Full legal descriptions are in the recitals attached hereto. Assessor’s Property Tax Parcel Account Number(s) (City of Woodinville Property): [insert here] Assessor’s Property Tax Parcel Account Number(s) (WCCP LLC): [insert here]
RELATED DOCUMENTS: [reference Development Agreement]
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Attachment 2 Draft JUMEA JOINT USE AND MAINTENANCE, AND EASEMENT AGREEMENT THIS JOINT USE, MAINTENANCE, AND EASEMENT AGREEMENT (“Agreement”) is made as of __________________, 2018 (the “Effective Date”), by and between THE CITY OF WOODINVILLE, a Washington municipal corporation (the “City”) and WOODINVILLE CIVIC CAMPUS PARTNERS LLC, a Washington limited liability company and its successors and assigns (“WCCP”). The City and WCCP may be referred to herein individually as a “Party” or collectively as the “Parties.” RECITALS A. The City and WCCP are partners in a project (the “Project”) concerning the redevelopment of the real property commonly known as the Woodinville Civic Campus, which real property is legally described in Exhibit A attached hereto (the “Campus”). The Project consists of, among other things: (i) the renovation of the building located at 13203 NE 175th Street, Woodinville, WA commonly known as the Old Woodinville Schoolhouse, (ii) construction of a mixed use commercial, retail, restaurant and multifamily development, (iii) construction of a new Woodinville Recreation Center, (iv) renovation of the existing Woodinville Recreation Center, (v) incorporation of new parking throughout the Project site, and (vi) development of Woodinville’s Festival Promenade [if the city is completing these improvements, we can specify here or remove them from the Agreement.] and a series of activated open spaces. The terms and conditions for the development of the Project are set forth in more detail in a Memorandum of Undertanding, a Development Agreement, and a Purchase and Sale Agreement executed by and between the City and WCCP. B. A site plan depicting the contemplated redevelopment of the Campus is attached as Exhibit B hereto. C. WCCP is the fee owner of the Campus, with the exception of the parcels that will contain the Renovated Woodinville Recreation Center (“Renovated WRC”) and Festival Street Promenade (the “Promenade”). The portion of the Campus owned by WCCP is referred to herein as the “WCCP Property,” and is legally described in Exhibit C. The portion of the Campus owned by the City is referred to herein as the “City Property” and consists of the Renovated WRC and the Promendade, all as legally described in Exhibit D attached hereto. D. In order to facilitate the operation of the Campus, the City and WCCP now desire to enter into this Agreement in order to (i) impose certain shared use and maintenance easements related to the operation of the Campus as an integrated multi-use development, (ii) to provide for the public use of portions of the Campus, including for special events (e.g., farmers markets and movie nights), and (iii) establish standards for the long-term maintenance and stewardship of the Campus. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 2
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Attachment 2 Draft JUMEA 1. Open Space / Public Access Easement. WCCP hereby grants and conveys to the City a non-exclusive perpetual easement for public access (the “Public Access Easement”), limited to pedestrian travel on, across, and through the surface of the portion of the WCCP Property identified by cross-hatching on the map attached as Exhibit E (the “Public Access Easement Area”). Although the Public Access Easement is non-exclusive, the City retains a senior right to use the Public Access Easement Area. The Public Access Easement may be used by the general public for ingress, egress, and passive recreation purposes on the terms and conditions set forth below: a. Conditions of Public Use. The Parties adopt the Conditions of Public Use attached hereto and incorporated herein as Exhibit ____. The Conditions of Public Use shall serve as regulations governing public access and use of the Public Easement Area, including without limitation hours of public access; allowable and disallowed uses of the Public Easement Areas; use of the Public Easement Areas for expressive activity; and such other matters as the Parties may agree are appropriate. WCCP shall be authorized to enforce the Conditions of Public Use, and the City shall in good faith cooperate with WCCP’s enforcement of the Conditions of Public Use. The Parties may from time to time agree upon revisions to the Conditions of Public Use. If necessary, the Parties shall use the dispute resolution process set forth in Section 17 of this Agreement to resolve any disputes regarding proposes revisions to the Conditions of Public Use. b. Special Events. The term “Special Events” as used herein refers to public gatherings in the Public Access Easement Area, or a portion thereof, such as farmers markets and movie nights. In order to host a Special Event, the sponsor of a Special Event must receive approval from WCCP at least two weeks prior to hosting a Special Event. To receive approval, the sponsor of a Special Event must send the request in writing (email is acceptable) to the WCCP contact listed below in Section X. The request must identify the purpose of the event, the estimated number of attendees, hours of the event, including event set-up and break-down/clean-up. All event sponsors are responsible for event clean-up and returning the Public Access Easement Area to its state and condition prior to the event. WCCP may not unreasonably withhold approval for Special Event requests. c. Disturbances / Nuisances. WCCP may deny access to any persons creating a disturbance or using the Public Access Easement Area for an unintended purpose or causing a nuisance (e.g., panhandling, overnight sleeping, or harassing members of the public). d. Temporary Closures. Upon providing the City with five days notice, WCCP may close the Public Access Easement Area (or portions thereof) from time to time for purposes of routine maintenance and repair (including for purposes of maintaining and repairing any surface or subsurface improvements), for private special events, or as necessary to accommodate ongoing construction activities on the WCCP Property or adjacent properties. Advance notice to the City is not required for emergencies (e.g., leaking water pipes, etc.). Except in the event of an emergency, WCCP shall not prevent access to the New or Renovated WRC or public restrooms. WCCP shall use commercially reasonable efforts to minimize any interference with use of the Public Access Easement Area during maintenance and repair activities. WCCP also reserves the right to license or otherwise allow third parties to use portions of the WCCP 3
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Attachment 2 Draft JUMEA Property for private purposes, including, but not limited to, as outdoor seating for the restaurant to be constructed on the property; provided, that WCCP shall offer the City an opportunity to review and consult regarding each such contemplated license or authorization. Disputes as to such licenses or authorizations shall be resolved pursuant to Section 17 of this Agreement. 2.
Parking.
a. The Project includes XX parking stalls (“Campus Parking”). The City owns XX parking stalls located by City Hall and adjacent to the playfields (“City Parking”). b. Campus Parking. WCCP is responsible for managing all aspects of Campus Parking, including parking payments, signage, enforcement, and providing parking to the WRC, as described below. c. WRC Parking. 50 Campus Parking stalls will be exclusively available for WRC (new and renovated) from 8 a.m. to 8 p.m. Monday through Friday (with a portion of such parking available from 7 a.m.), but not on weekends. WCCP has no obligation to provide parking stalls on days that the WRC is closed or otherwise not operating. WCCP has the right to use the 50 Campus Parking stalls for other purposes when the WRC is not in operation. 3.
Landscaping / Maintenance.
a. WCCP is responsible for maintenance and repair of the landscaping, sidewalks, walkways through the Campus, stoops, and the eastern edge of the Campus buildings, subject to the City’s obligation to reimburse WCCP for a portion of such maintenance as set forth below. The parties acknowledge that WCCP may contract with a third party for these services. b. The City shall reimburse WCCP for XX% of the costs associated with maintenance and repair of the Public Access Area, including the cost of any landscaping therein. The City and WCCP have agreed upon the initial landscaping and maintenance budget. Commencing on the first June 30 of an even-numbered year following execution of this agreement, and every two years thereafter, no later than June 30 in each such year, WCCP will provide the City with the landscaping and maintenance budget for the City’s budgeting purposes for City review and input. WCCP will provide the City with invoices for services rendered, including a ten percent WCCP service charge. The City shall pay all invoices within sixty days of receipt. 4. Utilities. The City is responsible for the bills for all utilities serving the Public Access Easement Area. The utilities are to be on separate meters and paid for by the City. The parties agree to allocate the cost of the applicable utilities if separate meters cannot be installed. 5. No Merger. It is the intention of City and WCCP that the rights granted herein shall not extinguish or terminate by operation of the doctrine of merger or otherwise by reason of existing or future common ownership of the Property.
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Attachment 2 Draft JUMEA 6. No Dedication to the Public. Nothing contained herein shall be deemed to be a gift or dedication of any portion of the WCCP Property to the general public or for the general public or for any public uses whatsoever other than those specifically granted herein, it being the intention of parties that the rights shall be strictly limited to and for the purposes herein expressed. 7. Assignment; Binding Effect. The rights hereby granted and the conditions herein contained shall be covenants running with the land and shall inure to the benefit of and be binding upon City and WCCP, and their successors and assigns, including any subsequent owners of the City Property or WCCP Property. 8. Severability. The provisions of this Agreement shall be independent and severable. The unenforceability or invalidity of any one provision shall not affect the enforceability of any other provision. 9. Choice of Law; Venue. This Agreement shall be construed under and governed by the laws of the State of Washington. Venue and jurisdiction of any action arising out of or related to this Agreement shall be in King County Superior Court. 10. Entire Agreement. This Agreement constitutes the entire agreement with respect to any matter covered or mentioned in this Agreement, and no prior reservations, agreements or understandings, promises or representations, oral or otherwise, pertaining to any such matters shall be effective for any purpose whatsoever. 11. Headings. The headings in this Agreement are for convenience only, do not in any manner affect, limit or amplify the provisions hereof and the words contained in them shall not be held to expand, modify, amplify or aid in the interpretation, construction or meaning of this Agreement or any terms or provisions hereof. 12. Amendment. This Agreement shall not be modified except by written agreement of the owners of City Property and the WCCP Property duly recorded with the real property records of King County, Washington. 13. Notices. All notices required to be given hereunder shall be given in writing and shall be deemed delivered on the date of hand delivery of the notice or the date that is three days after mailing of the notice by certified or registered mail, return receipt, postage prepaid, to the parties at the addresses set forth below: If to City:
If to WCCP: The parties, by notice given, may designate any further or different address to which subsequent notices are to be sent.
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Attachment 2 Draft JUMEA 14. Indemnity. Each party (“Indemnitor”) does hereby release, indemnify and promise to defend and save the other party and its officers, directors, managers, members, and employees (“Indemnitee”) harmless from and against any and all liability, loss, damage, expense, actions and claims, including costs and reasonable attorneys’ fees incurred by the Indemnitee in defense thereof (collectively, “Indemnifiable Events”), asserted or arising directly or indirectly on account of injury to persons or damage to property occurring on the Indemnitee’s property in connection with the exercise of any rights created hereby by the Indemnitor or its employees, agents, contractors, visitors, invitees and licensees; provided, however, that this paragraph does not purport to indemnify the Indemnitee against liability for damages arising out of bodily injury to persons or damage to property to the extent caused by or resulting from the negligence or intentional misconduct of the Indemnitee and/or Indemnitee’s agents or employees. Further, the obligation to indemnify, defend and hold harmless as established by this paragraph shall only apply to an Indemnitor with respect to Indemnifiable Events proximately caused by the exercise of the rights created hereby by such Indemnitor or its employees, agents, contractors, visitors, invitees, or licensees during such time as said Indemnitor is the owner of the WCCP Property or the City Property, as the case may be, and a successor owner of the WCCP Property or the City Property shall have no liability for Indemnifiable Events occurring or accruing prior to the date such successor owner became the owner of such property. 15. Insurance. Both Parties shall maintain commercial general liability insurance policies with a per occurrence limit of [______________] ($[____________]) or more, and each Party shall be named as an additional insured on the other Party’s policy. 16. Counterparts. This Agreement may be signed in counterpart, each signed counterpart will be deemed an original, and all counterparts together will constitute one and the same agreement. Facsimile or electronic mail transmission of any signed original documents, and retransmission of any signed facsimile transmission, will be the same as delivery of an original. 17. Dispute Resolution. The Parties, through their designated contacts identified in Section 13 of this Agreement, shall use their best efforts, through good faith discussion and negotiation, to resolve any disputes pertaining to this Agreement that may arise between the Parties. In the event the designated contacts are unable to resolve the dispute, the matter shall be submitted to JAMS, or its successor, for mediation, and if the matter is not resolved through mediation, then it shall be submitted to JAMS, or its successor, for final and binding arbitration. Either Party may commence mediation by providing to JAMS and to the other Party to this Agreement a written request for mediation, setting forth the subject of the dispute and the relief requested. The Parties will cooperate with JAMS and with each other in selecting a mediator from JAMS’ panel of neutral mediators, and in scheduling the mediation proceedings. The Parties will participate in the mediation in good faith, and that they will share equally in its costs. All offers, promises, conduct and statements, whether oral or written, made in the course of the mediation by either of the Parties, their agents, employees, experts and attorneys, and by the mediator or any JAMS employees, are confidential, privileged and inadmissible for any purpose, including impeachment, in any arbitration or other proceeding involving the Parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the mediation. If the dispute is not resolved through 6
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Attachment 2 Draft JUMEA mediation within 20 days after submission to mediation, then the mediator shall resolve the dispute as an arbitrator. The arbitrator shall not necessarily hear additional evidence, but shall have the authority to decide the dispute as between the Parties. The provisions of this section may be enforced by any court of competent jurisdiction, and the substantially prevailing Party shall be entitled to an award of all costs, fees and expenses, including attorney’s fees, to be paid by the Party against whom enforcement is ordered. [Remainder of page intentionally left blank; signatures follow.]
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Attachment 2 Draft JUMEA IN WITNESS WHEREOF the undersigned have executed this Agreement as of the date first set forth above. CITY: CITY OF WOODINVILLE, a Washington municipal corporation By: Name: ________________________ Its:____________________________
WCCP: Washington Civic Campus Partners LLC, a Washington limited liability company By: Name: Title:
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Attachment 2 Draft JUMEA STATE OF WASHINGTON COUNTY OF KING
) ) ss )
I certify that I know or have satisfactory evidence that ____________________ is the person who appeared before me, and said person acknowledged that (s)he signed this instrument, on oath stated that (s)he was authorized to execute the instrument, and acknowledged it as the __________________________of the City of Woodinville, a Washington municipal corporation, to be the free and voluntary act of such entity for the uses and purposes mentioned in the instrument.
DATED:
NAME: (Print Name) Notary Public in and for the State of Washington Commission Expires:
STATE OF WASHINGTON COUNTY OF KING
) ) ss )
I certify that I know or have satisfactory evidence that ________________________________ is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he was authorized to execute the instrument and acknowledged it as the ____________________________, of the Woodinville Civic Campus Partners LLC, a Washington limited liability company, to be the free and voluntary act of such parties for the uses and purposes mentioned in the instrument.
DATED:
NAME: (Print Name) Notary Public in and for the State of Washington Commission Expires:
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Attachment 2 Draft JUMEA Exhibit A [Legal Description of entire Campus]
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Attachment 2 Draft JUMEA Exhibit B Site Plan of Campus
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Attachment 2 Draft JUMEA Exhibit C [Legal Description of WCCP Property (i.e., the portion of the Campus of which WCCP is the fee owner)]
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Attachment 2 Draft JUMEA Exhibit D [Legal description of City Property (i.e., the portion of the Campus of which the City is the fee owner).]
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Attachment 2 Draft JUMEA Exhibit E [Map depicting Public Access Easement Area]
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Attachment 3 Analysis
Woodinville Civic Campus Review of Land Value and Deal Structure Date
June 14, 2018
To
Brandon Buchanan, City Manager, City of Woodinville
From
Brian Vanneman, Principal, Leland Consulting Group (LCG)
Introduction Based on our recent conversations, I understand that you have received several questions about the Woodinville Civic Campus project relating to the project’s land value and deal structure. These questions include:
“Why is the City ‘giving away’ the Civic Campus property, whose value has been estimated at $7.15 million?”
“Given that the smaller Fowler property—located just east of the Civic Campus across 133rd Avenue—sold recently for more than $10.75 million, why is the City only receiving $7.15 million in value for the Civic Campus property?”
The purpose of this memorandum is to address the above questions.
The Civic Campus Deal Structure: Exchanging Land to Achieve Public Goals and Benefits Project Goals. Beginning in early 2017, I had the privilege to work with City Council to define a series of goals that the Council and City wanted to achieve at the Civic Campus. These goals were discussed at Council meetings on May 9, June 6, and October 2, 2017; approved by Council in the Civic Campus Developer Request for Qualifications (RFQ), released in August 2017; and appear in the Civic Campus Development Agreement. The first four reflect community desires; the fifth and sixth are financial goals. The goals are:
Create a community gathering place;
Retain and renovate the Old Woodinville Schoolhouse;
Retain the City of Woodinville’s Recreation Center function, through construction of new space and/or adaptive reuse of some existing space;
Make this project a model for the City’s vision of Downtown as set forth in the Downtown Illustrative Guidelines;
Be financially feasible for private developers; and,
Limit the City's financial investment and risk to the extent possible.
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Attachment 3 Analysis
Achieving the City’s Goals will Require some City Investment. Throughout 2017, we recognized there were costs associated with achieving the goals above, and that either the City, a developer, or some other party would likely need to make investments to achieve them. For example, the cost of retaining and renovating the schoolhouse alone was known to be several million dollars, based on Leland Consulting Group (LCG) estimates, and cost estimates of numerous past studies. There are also costs associated with creating a community gathering place (e.g. plaza), retaining/renovating the Woodinville Recreation Center, and making the site a model for the illustrative guidelines. For example, during the June 6, 2017 presentation, we estimated that the out of pocket cost “City investment” in order to realize “Option 2” was between $2.1 and $6.3 million. Option 2— “Mixed Use with Diagonal Through Block” Crossing—was selected as the preferred option by Council. It was also clear, based on past proposals for the Civic Campus property, that a City-led redevelopment of the property would require significant City funds. The City and its consultants completed a series of studies in 2001, 2004, 2013, two in 2015, and potentially other years. The City’s cost of implementing these plans was estimated at between $11.9 to $25 million. In most cases, the ongoing operations and maintenance costs were either not analyzed or not highlighted in final documents. The most cost effective past plan was presented in 2015 by Woodinville Starr Investment (Wilcox), which required a $2.9 to $3.4 million City investment for parking; however, this proposal did not provide for upgrades to the Rec Center, significantly improved community gathering spaces, or other design elements consistent with the Downtown Illustrative Guidelines. By contrast, the 2013 plans, which provided a “complete” redesign and redevelopment of the site, ranged in cost from about $13 to $25 million, depending on the alternative. All cost figures for past plans are shown here as reported in those years—they are not inflated to 2018 dollars. Another issue is that the risk associated with these proposals would remain with the City, as the primary project “developer,” and therefore a key risk is cost overruns and/or unanticipated geotechnical, structural, environmental, or design issues. Another cost, not accounted for above, is the cost of staff time to analyze, design, and manage the project(s). It is important to recognize that—just as the City would need to spend money to realize its goals—the construction of “public benefit” facilities will also cost developers money, if developers manage redevelopment of the Civic Campus. So, developers must be compensated in some way for the extra costs associated with the public benefits. We define a “public benefit” as a capital or ongoing operations investment that a) meets a defined public goal, and b) would not be provided in a typical private-sector development project, often because the investment produces no revenue for developers or is otherwise diseconomic. Renovation of the Existing Rec Center structure is one example: Developer would typically not undertake such improvements since they will not own or lease the building; it is a diseconomic investment with a cost but no revenue. Deal Structure: Exchanging Land Value for Public Benefits. Also beginning in early 2017, one of our “deal structure” premises has been that the City would trade the value of the property (and ownership of the property) in exchange for the selected developer’s commitment to achieve the above project goals. I want to underscore that, although we do expect the City to transfer the 3.3-acre Civic Campus property to the selected
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2
Attachment 3 Analysis
developer (Woodinville Civic Campus Partners or WCCP), the City is trading the property in exchange for WCCP’s commitment to invest in a series of public space sand benefits, not giving it away. This deal structure was documented in Leland Consulting Group’s (LCG) October 2, 2017 presentation to council (“Conceptual Deal Structure,” slide 19), and in the Developer RFQ, which was shared widely with developers, architects, and news media. Here are excerpts from the “Anticipated Development Process / Conceptual Deal Structures” section of the RFQ: “To date, the City has considered making the following investments, and providing the following development incentives, with regards to the project: … o
Holding the site until its transfer to private parties (the City currently assumes that some or all of the property will be conveyed to private parties in fee-simple ownership; however, land leases and other structures will be considered);
o
Transferring the Civic Campus properties at a value that reflects market values for comparable mixed-use projects, and the public benefits provided by the developer(s). Currently, the City’s view is that these public benefits (i.e., improvements that go beyond what would be provided in a private-sector-only development project) are likely to include construction of a recreation center facility, parking associated with the recreation center, and potentially other amenities. The cost of providing these public benefits may be counted as an offset against the land transfer value…”
Consistent with the goals and deal structure discussed in Council meetings and the Developer RFQ, the current, proposed Development Agreement calls for WCCP to construct the following public benefit components (edited lightly):
Development of the Project through the application of the City of Woodinville’s Multi-family Design Guidelines, high quality materials, and a farm/forest aesthetic including connectivity with surrounding public trails and parks through pedestrian connectors, bike trails, or plazas.
Public plazas, open space, and pedestrian walkways.
Approximately 20,000-22,000 square feet of retail/restaurant/commercial, including the first and second floors of the Schoolhouse.
260 - 275 multifamily residential units
Approximately shared 50 stalls to support the WRC and the residential units.
Retaining and renovating a portion (approximately 8,000 square feet) of the on-site WRC and related amenities.
Addition of approximately 7,200 square feet of new WRC space on the ground floor of one of the residential buildings.
Festival Promenade.
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Attachment 3 Analysis
This proposed deal structure was documented in the Memorandum of Understanding, Exhibit D, which was approved by Council on February 20, 2018. A summary of Exhibit D is shown below. This shows that WCCP is expected to make $8.1 million of direct investments (out of pocket) towards public benefits, including plazas, schoolhouse renovation, parking for the rec center, and off-site infrastructure. The City is expected to make $7.9 million in “in-kind/credit” investments (not out of pocket), including conveying a park impact fee credit (for construction of parking associated with the WRC) and land transfer. The City is also expected to make $3.1 million in direct investments, and up to $650,000 in optional investments. The difference between all City contributions to public benefits projects and WCCP contributions is between $3.3 and $4.0 million, depending on which optional investments are selected. The Purchase and Sale Agreement (PSA) caps the City’s contribution at $4 million, unless additional expenditures are approved by the City. Estimated Investments in Public Benefits (Civic Campus MOU, Exhibit D, February 2018) Estimated Investments
Description
Open Space
Public Plazas/Open Space (Estimate of SF and Cost Only)
WCCP, LLC
City
City Civic City Optional
Direct
In-Kind/
Direct
Investments
Credit
Investments
A
B
C
Optional
D
$2,062,500
City Hall Plaza
$150,000
Schoolhouse
Historic Building Renovation
Rec Center
Existing Rec Center Space: Retain/Upgrades
$520,000
New Recreation Center Space: Tenant Improvements
$465,000
New Recreation Center Space: Prepaid Lease
$500,000
$350,000
$3,686,800
Parking Stalls for Rec Center/Public Use
$2,000,000
Park impact fee credit
$825,500
Land
Land Value
$7,150,000
Infra-
Festival street/promenade improvement (132nd Lane)
structure
Off-site infrastructure upgrades at 175th and 133rd.
$700,000 $375,000
$375,000
Undergrounding of PSE Infrastructure at 175th/133rd
$320,000
Non standard footings on 1/3 of site (geopiers)
$150,000
Total
$8,124,300
$300,000
$7,975,500
$3,180,000
$650,000
Net City Estimated Contribution
$3,328,800
= A - (B + C)
Net City Estimated with Optional Contribution
$3,978,800
= A - (B + C + D)
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Attachment 3 Analysis
Land Value The intent of the deal structure summary above has been to address the question of whether the City is giving the Civic Campus property away or exchanging it to achieve public goals. This section addresses the question of whether the $7.15 million land value estimate included in the MOU is reasonable. When Land has Value. Before getting to specific estimates of land value, it is important to note that land is valued as a function of what a potential owner can do with it—it’s uses. If the proposed use for the Civic Campus were to build a City parking lot, the property might have a theoretical value, but no actual value to private buyers or developers, since they could not build any revenue-generating use on the property. In this scenario, the property would continue to be a cost center, since the City would need to pay to build and operate a parking lot. If the City keeps the land, it will not suddenly receive a check for $7 million, quite the opposite. Land Value per Door. When developers, buyers, and sellers value potential land purchases for mixed-use projects with housing above ground-floor commercial uses, the most common metric used is land value per door. This is the amount developers would be willing to pay for each unit of rental or for-sale housing they are able to build. Comparable Transactions. The land transaction that is most comparable to the Civic Campus – by virtue of its location in Downtown Woodinville, similar market conditions, and mix of uses – is Woodin Creek Village (Phases I -IV). This 20.7-acre property was purchased for $22 million. The developer secured the right to build 800 units on the property. $22m divided by 800 units equals a land value (purchase price) of $27,500 per door. A pdf record summarizing this transaction is attached. Leland Consulting Group (LCG) also reviewed other comparable land transactions in 2017 and 2018 in order to inform this process. A table summarizing the nine most-comparable transactions can be found at the end of this memorandum. Several comparable transactions were completed by the City of Kenmore. Kenmore sold a 4.75acre property for $3.39 million, which has been developed as the 139-unit Spencer 68 mixed use project ($24,400 per door). Kenmore also sold the property that is now the LINQ apartments, for $10,300 per door. Land for two projects in downtown Redmond (The Bond and the unnamed Lowe Enterprises Project) were purchased for $26,665 and $29,720, respectively. Land for another project being built in Everett was purchased for a similar price ($27,878 per door). Some properties achieved higher sale prices—particularly those in Redmond, were there is an established track-record of higher apartment rents, which will tend to translate into higher land values. The Civic Campus property also has some challenges that many other properties do not: required renovations of the Schoolhouse and Rec Center, multiple agreements with the City, demolition and clean-up associated with the existing buildings, etc. All these features can reduce land value. Of the nine mostcomparable transactions reviewed, the median transaction was $27,878 per door. The Fowler Property. I do not view the Fowler Property, located just east of the Civic Campus across 133rd Avenue, as a truly comparable transaction. This 3.5-acre property was purchased for $10.75 million in January 2017 by the developers of Woodin Creek Village and the City is evaluating a development agreement with WCV that would permit up to 275 units on the property.
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Attachment 3 Analysis
However, there are also three existing commercial buildings on the Fowler Property, largely tenanted by professional service, healthcare, and other office users. These buildings continue to generate rental income, and therefore confer significant additional value to the property, above and beyond its value as a future site for mixed-use/housing. A more detailed discounted cash flow analysis would need to be completed for this property (using estimates for current rents, operating expenses, timing for building operations and redevelopment, and other inputs) in order to determine a reasonable allocation of value to the land and buildings. (The King County assessor estimates that 57 percent of the property’s value is attributable to the buildings, and 43% to the land.) Negotiated Civic Campus land value. During December 2017 and January 2018, WCCP initially offered $23,500 per door for the Civic Campus property (or $6.11 million). While—as described above—we had access to some comparable sales at above $27,500, $27,500 per door was determined to be the most comparable land value estimate given the Woodin Creek Village transaction. Therefore, the land value agreed to by the City and WCCP via the February 2018 MOU is as follows: 260 “doors” (apartment units) x $27,500 land value per door = $7,150,000 This represents slightly more than a $1 million increase in the purchase/transfer value to WCCP. It is worth noting that the City did not have multiple competitive development proposals for the Civic Campus, or multiple competitive (or higher) purchase offers, despite the fact that City staff and Leland Consulting Group discussed the site with 18 developers, as well as architects and other professionals. Property transaction values are ultimately determined through the active interest of buyers and sellers “in the market,” not through purely abstract analysis. While reasonable buyers and sellers can (and often do) have differing opinions of value, we believe the $7.15 million is reasonable, based on the information summarized above.
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Attachment 3 Analysis
Summary of Comparable Land Purchases Property Name
Land Value
Location
Per Door
City
Subject Site: Civic Campus
Woodinville
1
Woodin Creek Village (Phases I - V)
$27,500
Woodinville
2
LINQ Lofts + Flats (MSP)
$10,326
Kenmore
3
Spencer 68
$24,388
Kenmore
4
The Bond (MSP)
$26,655
Redmond
5
Confidential Property
$27,878
Everett
6
Lowe Enterprises Project TBD
$29,720
Redmond
7
The Heron (MSP)
$38,105
Redmond
8
Pure Apartments
$44,762
Redmond
9
Avalon Bay Esterra Park Apts
$47,718
Redmond
Comparable Transaction Metrics
Land Val / Door
Woodin Creek Village (Phases I - V)
$27,500
Median
$27,878
Average
$31,000
40% Percentile
$27,500
Attachments and Links
Woodin Creek Village: Real Estate Excise Tax Affidavit and Sale Deed Record, 2014.
The LINQ project, Kenmore, Washington, sale record: http://blue.kingcounty.com/Assessor/eRealProperty/Detail.aspx?ParcelNbr=3820200020 $970,667 land transaction; 94-unit final project, $10,326 per door.
The Bond project, Redmond, Washington, sale record http://blue.kingcounty.com/Assessor/eRealProperty/Detail.aspx?ParcelNbr=1318300164 $3,705,000.00, 139 unit final project, $26,655 per door.
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Woodinville Civic Campus Review of Resolution No. 522 Development Agreement & Purchase and Sale Agreement
June 19, 2018 1
Woodinville Civic Campus Agenda • • •
Review of project process Completed steps Next steps • Resolution No. 522 • Purchase and Sale Agreement • Development Agreement
Woodinville Civic Campus
2001 Civic Center Master Plan
Woodinville Civic Campus
2004 Community Center Feasibility Study
Woodinville Civic Campus
2013 School House and Civic Campus Feasibility Study
Woodinville Civic Campus
2015 OTAK Parking Structure Estimates
Woodinville Civic Campus
2015 Woodinville Starr Investment
Woodinville Civic Campus- 2017 Iteration Project Goals •
Create a community gathering place
•
Retain and renovate the Old Woodinville Schoolhouse
•
Retain the City of Woodinville’s Recreation Center
•
Make this project a model for the City’s vision of Downtown as set forth in the Downtown Illustrative Guidelines
•
Be financially feasible for private developers
•
Limit the City's financial investment and risk
Woodinville Civic Campus
Woodinville Civic Campus Concept from MainStreet/HAL: •
Retain and renovate the Old Woodinville Schoolhouse
•
Retain/expand the City of Woodinville’s Recreation Center
•
Make this project a model for the City’s vision of Downtown
•
Limit City’s cost
Woodinville Civic Campus
Woodinville Civic CampusMemorandum of Understanding- Approved 2/20/18 •
Non-binding, high-level deal points
•
Project components: •
•
Required investments from both WCCP and City •
•
Historic Schoolhouse, Rec Center, public plazas, commercial, residential) Cap of $4,000,000 on City investment
Project Requirements: •
Multi-Family Tax Exemption
•
Rezone
Woodinville Civic Campus- Entitlement Steps 1. Complete rezoning and implement Multi-Family Tax Exemption Program 2. Complete revisions to project site plan 3. Council approve Purchase & Sale Agreement/Development Agreement 4. Complete Property Line Adjustments 5. WCCP secures the Certificate of Approval from King County Landmarks Commission 6. Application/issuance of Land Use/Building Permits 7. Purchase & Sale Agreement closes •
Subject to Joint Use, Maintenance, and Easement Agreement
8. WCCP begins construction (Spring 2019)
Woodinville Civic Campus- Completed Steps 1. Complete rezoning and implement Multi-Family Tax Exemption Program 2. Complete revisions to project site Council plan • Rezoning approved by City on 5/15/18 3. Council approve Purchase & Sale Agreement/Development Agreement • Council adopted MFTE on 6/5/18 4. Complete Property Line Adjustments 5. WCCP secures the Certificate of Approval from King County Landmarks Commission 6. Application/issuance of Land Use/Building Permits 7. Purchase & Sale Agreement closes •
Subject to Joint Use, Maintenance, and Easement Agreement
8. WCCP begins construction (Spring 2019)
Woodinville Civic Campus- Completed Steps 1. Complete rezoning and implement Multi-Family Tax Exemption Program 2. Complete revisions to project site plan • Study Session conducted 4/17/18 3. Council approve Purchase & Sale Agreement/Development Agreement • Study Property Session conducted 5/15/18 4. Complete Line Adjustments 5. WCCP secures the Certificate of Approval from King County Landmarks Commission 6. Application/issuance of Land Use/Building Permits 7. Purchase & Sale Agreement closes •
Subject to Joint Use, Maintenance, and Easement Agreement
8. WCCP begins construction (Spring 2019)
Woodinville Civic Campus Emphasis on making the Old Woodinville Schoolhouse amazing! •
Lincoln South Food HallBellevue
•
Rheinhaus- Capital Hill
•
Bastille- Ballard
•
Stoneburner- Ballard
Woodinville Civic Campus Working with the YMCA to bring new services to Woodinville!
“The Northshore YMCA is excited to be a part of the new Civic Campus project. The project will provide a great gathering place for the community and will allow the YMCA to expand its local services.” CYNTHIA KLEVER, Executive Director, Northshore YMCA
Woodinville Civic Campus Emphasis on creating great public spaces!
Woodinville Civic Campus
Woodinville Civic Campus
Woodinville Civic Campus- Steps 1. Complete rezoning and implement Multi-Family Tax Exemption Program 2. Complete revisions to project site plan 3. Council approve Purchase & Sale Agreement/Development Agreement Resolution No. 522 4. Complete Property Line Adjustments Purchase & Sale document establishing financial 5. WCCP secures the Agreement: Certificate ofLegal Approval from King County Landmarks responsibilities of each party and executing property transaction Commission Development Agreement: document establishing deal points of project 6. Application/issuance of LandLegal Use/Building Permits 7. Purchase & Sale Agreement closes •
Subject to Joint Use, Maintenance, and Easement Agreement
8. WCCP begins construction (Spring 2019)
Woodinville Civic Campus- Res. No. 522 Resolution No. 522: • Approves Purchase & Sale Agreement • Approves Development Agreement • Authorizes City Manager to take actions necessary to effectuate purposes of the agreements/ project
Resolution No. 522 Purchase & Sale Agreement • Joint Use, Maintenance, and Easement Agreement • Various easements (crane swing, shoring and tieback, staging, utility, etc.) • Construction agreement(s) • WRC lease • Repurchase rights agreement • Final legal description of area to be transferred
Development Agreement
Woodinville Civic Campus- PSA Purchase & Sale Agreement: Conveys the property to WCCP in exchange for various public benefits, including the investment of more than $8.1 million dollars for development of public space elements and amenities included in the project City agrees to: • Contribute no more than $4 million towards the public improvement elements stipulated in the approved MOU • See MOU ‘Exhibit D’ • Provide available due diligence materials such as completed surveys, environmental assessments, previous development plans, geotechnical surveys, etc. • Provide Title Insurance • Apply for necessary Boundary Line Adjustments/Short Plat/Binding Site Plan • Not materially alter the property prior to Closing • Includes other various legal provisions for the protection of both parties (repurchase option)
Woodinville Civic CampusDescription
Open Space
Unit Price
Quantity
Public Plazas/Open Space (Estimate of SF and Cost Only)
$65
31,900
City Hall Plaza
$50
10,000
$200
18,434
Estimated Investments WCCP, LLC
City
City Civic
City Optional
Direct
In-Kind/
Direct
Optional
Investments
Credit
Investments
A
B
C
$2,062,500 $150,000
Schoolhouse
Historic Building Renovation
Rec Center
Existing Rec Center Space: Retain/Upgrades
$65
8,000
$520,000
New Recreation Center Space: Tenant Improvements (Childcare etc.)
$75
6,200
$465,000
Park impact fee credit Land
Land Value
Infrastructure
Festival street/promenade improvement (132nd Lane)
$350,000
$3,686,800
New Recreation Center Space: Prepaid Lease Parking Stalls for Rec Center/Public Use
D
$500,000 $40,000
50
$2,000,000
$825,500
1
$825,500
$27,500
260
$7,150,000
$1,000,000
1
$700,000
Off-site infrastructure upgrades at 175th and 133rd.
$750,000
Undergrounding of PSE Infrastructure at 175th/133rd
$320,000
1
$320,000
Non standard footings on 1/3 of site (geopiers)
$150,000
1
$150,000
Total
$375,000
$8,124,300
Net City Estimated Contribution
$3,328,800
=A-B+C
Net City Estimated with Optional Contribution
$3,978,800
=A-B+C+D
$300,000
$375,000
$7,975,500
$3,180,000
$650,000
MOU ‘Exhibit D’
Woodinville Civic CampusChanges to PSA since June 5th meeting: • Finalization of repurchase terms • Draft of Joint Use, Maintenance, and Easement Agreement • Interest on funds held in escrow • Revised “festival street” to “festival promenade”
Woodinville Civic CampusJoint Use, Maintenance, and Easement Agreement: Provides for use of the public plazas/space once construction is complete and project is open to public • Future exhibit to PSA- PSA cannot close without this agreement in place • Legally enable and protect use of project by the public • Will detail specific rights of City to use space for full spectrum of uses: everyday to large events • Will provide for shared-use parking • Will set forth provisions for maintenance responsibilities of the plazas/open space
Woodinville Civic Campus- DA Development Agreement: More formal, legally binding evolution of the MOU. It contains much of the same substance included in the MOU including background, context, project elements, and responsibilities of each party. The DA adds substantial detail to these elements and includes other elements not found in the MOU. In comparison to the MOU, the DA: • • • • • • • • • •
Describes elements of project- including modeling of Downtown Illustrative Guidelines Lists legal/land use entitlements that have occurred to allow this project: MFTE, rezoning, SEPA review, etc. Includes provisions for vesting of development rights Includes provisions for phasing of the project Addresses legal requirements for all parties including which project elements each entity is required to contribute Addresses Impact Fees and Concurrency Speaks to required easements Provides for a 10-year (maximum term under City Code) term of the Agreement Includes other various legal provisions for the protection of both parties and typically found in Development Agreements to which the City is a party Stipulates to site plan
Woodinville Civic Campus- DA Changes to DA since June 5 meeting: • Reconciliation of Traffic Impact Analysis and current site plan • TIA was completed in April 2018- site plan has changed slightly since then (Rec Center has been enlarged to accommodate YMCA needs), # of units reduced, sit-down vs. quick-service food uses in OWS • TIA Addendum completed, no impact on conclusion of no adverse impact • Increased traffic impact fee estimate by ~$900k • Also related to traffic study, updated contribution to 133rd/175th is accurate • Increased contribution from 6% to 17% • Changed “festival street” to “festival promenade”
Woodinville Civic Campus- DA Traffic Concurrency: WCCP contracted with Transpo for Transportation Impact Analysis. TIA was reviewed by Michael Read, Principle at TenW (City’s traffic engineering contractor). “Based on my review of Woodinville Civic Campus Redevelopment Transportation Impact Analysis (April 2018, The Transpo Group)…I found the study used sound transportation engineering principles, practices, and evaluation methods in review of probable transportation impacts of the Project and agree the conclusion that no significant adverse traffic impacts would occur as a result of the project.” * June 2018 TIA Addendum provided same results
Woodinville Civic Campus- Misc. Questions Questions from June 5 Council Meeting: 1. Paid parking; impact on existing parking 2. Possibility of also having repurchase option on public plaza 3. Valuation of land 4. Ensuring quality uses in Old Woodinville Schoolhouse
Woodinville Civic Campus- Misc. Questions Questions from June 5 Council Meeting: Paid parking: • Parking a significant part of revenue model = need to fill spots 24/7 • Flexible rates to ensure spots are filled • Ability for some users (YMCA) to avoid paid parking via validation • Shared parking: YMCA spots overnight and residential spots during the day • Project, like any other, is required to provide parking per Code to serve its users, not others • Balancing cost vs. demand
Woodinville Civic Campus- Misc. Questions Questions from June 5 Council Meeting: Repurchase option on public plaza: • Public plaza/public space is critical to the “feel” of the project and would have major impact if that space were lost • That public space couldn’t be replaced like the playground space could if it were converted to alternative future use • Much more substantial impact on below grade (parking garage) uses
Woodinville Civic Campus- Misc. Questions Questions from June 5 Council Meeting: Valuation of land: Property Name
Per Door
Location
Linq Lofts & Flats (MSP) The (104) Slater 116 Spencer 68 The Bond (MSP) Woodin Creek Village (Phases I-V) Port of Everett Lowe Enterprises The Carter on the Park The Heron (MSP) Pure Apartments Avalon Bay Esterra Park
$10,326 $10,869 $16,666 $24,388 $26,665 $27,500 $26,315 $29,270 $31,666 $38,105 $44,762 $47,718
Kenmore Kenmore Kirkland Kenmore Redmond Woodinville Everett
Median Average 40% Percentile
$27,083 $27,854 $26,455
Redmond Redmond Redmond Redmond/Bellevue border
Considerations: • In-line with comps • Redmond has track record of higher rents • Civic Campus Challenges: • Historic Schoolhouse • Rec Center • Relationship with public entity • Demo & clean up of CEC
Woodinville Civic Campus- Misc. Questions Questions from June 5 Council Meeting: Valuation of land: Why “Fowler Property” is not a valid comp •
Property wasn’t listed for sale. Non-motivated seller = higher sales price
•
Property has existing buildings with existing tenants that continue to generate lease revenue prior to redevelopment
•
Not encumbered like Civic Campus (historic structure, public uses, etc.)
•
Buyers (perceived) desire to retain control of development adjacent to existing project • Economies of scale save construction cost, increase ability to pay for land
Woodinville Civic Campus- Misc. Questions Questions from June 5 Council Meeting: Valuation of land- Gift of Public Funds Concern: City Attorney Jeff Ganson will address
Gift of Public Funds? Washington State Constitution – Article VIII
Gift of Public Funds? CLEAN v. State of Washington, 130 Wn.2d 782 (1996): • NO Violation if:
• Public funds are used to carry out fundamental governmental purpose; or • Public agency lacks donative intent and the public receives adequate consideration
• In the absence of donative intent and grossly inadequate consideration, courts will not consider in detail the adequacy of consideration so long as it is “legally sufficient” – City of Tacoma v. Taxpayers of Tacoma, 108 Wn.2d 679 (1987) • Any act or forbearance which has been bargained for is legally sufficient. – Adams v. University of Washington, 106 Wn.2d 312 (1986)
Gift of Public Funds? Woodinville Civic Campus Deal: • RFP process was preceded by property value and market analysis, including professional consultation • Proposals were evaluated in light of that analysis • Agreements negotiated at arm’s length with continuous assessment of the comparative value of the City’s contributions of land and funds and the benefits to the City and community
Gift of Public Funds? Woodinville Civic Campus: • No donative intent: Transparent public process makes clear that City’s intent is to improve its downtown and create robust public amenities • Legally sufficient consideration - WCCP is required to deliver: • • • •
A restored and vibrant Old Woodinville Schoolhouse Renovated and expanded Woodinville Recreation Center Public plazas and amenities open to the public in perpetuity A project that serves as a model for the City’s vision for its downtown
Woodinville Civic Campus- Misc. Questions Ensuring quality uses in Old Woodinville Schoolhouse: Suggested edit to Section 4.1.a of Development Agreement: 4.1 WCCP Responsibilities. a. Historic Woodinville Schoolhouse Renovation. WCCP agrees to renovate the Schoolhouse as generally depicted in Exhibit B. i.
ii.
WCCP contemplates development of the Schoolhouse to include an upscale food hall concept consisting of common seating areas and multiple high-quality restaurants/food vendors. WCCP agrees to use commercially reasonable efforts to develop the Schoolhouse as contemplated, including avoiding national chain tenants. Inclusion of any national chain restaurant/food vendor shall require City Manager approval. Final interior finishes and appointments shall be consistent with the quality generally depicted in the City’s Downtown Vision and Illustrative Guide, and shall require City Manager approval.
Woodinville Civic Campus- DA Protection of City interests: Staff has worked to build significant protections of the City’s interests into the various documents: DA: • Performance and payment bond covering public infrastructure elements PSA: • Phased payment of City obligations (page 6 of PSA) • Option to repurchase property for increase in value between date PSA is executed to when property is repurchased- option begins in 7 years (page 4 of PSA) MFTE: • In order to receive exemption, residential and historic renovation portions of project must be completed within three (3) years of application approval
Woodinville Civic Campus- Next Steps 1. Complete rezoning and implement Multi-Family Tax Exemption Program 2. Complete revisions to project site plan 3. Council approve Development Agreement / Purchase & Sale Agreement 4. Complete Property Line adjustments 5. WCCP secures the Certificate of Approval from King County Landmarks Commission 6. Application/issuance of Land Use/Building Permits 7. Purchase & Sale Agreement closes •
Joint Use, Maintenance, and Easement Agreement
8. WCCP begins construction (Spring 2019)
Woodinville Civic Campus- Next Steps Upcoming Action Requests •
June 19th Council Meeting: •
•
Adoption of Resolution No. 522: Development Agreement & PSA
Prior to PSA transaction closing, approve JUMEA
Woodinville Civic Campus
Questions?
Woodinville Civic Campus- Ongoing Work
Woodinville Civic Campus- Ongoing Work Description
Open Space
Unit Price
Quantity
Public Plazas/Open Space (Estimate of SF and Cost Only)
$65
31,900
City Hall Plaza
$50
10,000
$200
18,434
Estimated Investments WCCP, LLC
City
City Civic
City Optional
Direct
In-Kind/
Direct
Optional
Investments
Credit
Investments
A
B
C
$2,062,500 $150,000
Schoolhouse
Historic Building Renovation
Rec Center
Existing Rec Center Space: Retain/Upgrades
$65
8,000
$520,000
New Recreation Center Space: Tenant Improvements (Childcare etc.)
$75
6,200
$465,000
Park impact fee credit Land
Land Value
Infrastructure
Festival street/promenade improvement (132nd Lane)
$350,000
$3,686,800
New Recreation Center Space: Prepaid Lease Parking Stalls for Rec Center/Public Use
D
$500,000 $40,000
50
$2,000,000
$825,500
1
$825,500
$27,500
260
$7,150,000
$1,000,000
1
$700,000
Off-site infrastructure upgrades at 175th and 133rd.
$750,000
Undergrounding of PSE Infrastructure at 175th/133rd
$320,000
1
$320,000
Non standard footings on 1/3 of site (geopiers)
$150,000
1
$150,000
Total
$375,000
$8,124,300
Net City Estimated Contribution
$3,328,800
=A-B+C
Net City Estimated with Optional Contribution
$3,978,800
=A-B+C+D
$300,000
$375,000
$7,975,500
$3,180,000
$650,000
Property Tax Revenue, Comparable Projects Project
Assessed Value Total
Per Unit
Project Size Acres
Units
Gross
Annual City Property Tax Rev. Retail
Retail %
Total
/Acre
Bldg. Area Six Oaks
$58,000,000
$285,714
1.9
203
177,000
9,128
The Carter On the Park
$41,736,000
$231,867
1.2
180
226,000
-
The Spencer 68
$35,633,000
$258,210
2.4
138
214,000
The (104)
$29,000,000
$252,174
1.3
115
Slater 116
$35,336,000
$327,185
1.9
108
$39,941,000
$271,030
1.7
149
Average
Source: City of Woodinville Finance Dept., King County Assessor. 47
5.2%
/Unit
/Unit
Total
Apt. & Land
$55,144
$28,754
$272
$258
-
$39,681
$33,652
$220
$220
-
-
$33,878
$14,415
$245
$245
100,000
-
-
$27,572
$20,686
$240
$240
81,000
7,626
9.4%
$33,596
$17,351
$311
$282
2.9%
$37,974
$22,972
$258
$249
City Property Tax Revenue Estimate For Civic Campus Component
Property Tax Rev.
Total
Per Unit
Total
/Unit
Multifamily
$70,850,000
$272,500
$58,811
$226
Commercial & New WRC
$12,000,000
$46,154
$7,546
$29
Taxed
$7,150,000
$27,500
$5,935
$23
Taxed
$90,000,000
$346,154
$72,292
$255
Land Total
48
Assessed Value
Eight-year tax exemption
Summary of City Revenue and Costs
49
50
Fiscal Impacts Summary
51
