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$9000.00 t
11/01/2005 t
01/31/2006
02/15/2008
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$0.00
12/01/2005
HALVORSON BREMERTON CONDOS LLC
LEASE - 239 FOORTH STREET. - PORTION
ECON DEVEL
BDG
OF
Insurance
Type Amount
Amount
Begin Date
End Date
Review Date
Insurance Total
Insurance Review Date
Comments
VAULT 01/01/2008
+----------------------------------------~-----------------------------~---+
RENTAL AGREEMENT
} 1... -...rt? ~ '&"f!;.V(.
This Rental Agreement ("Agreement") is entered into this L day of Of.,J~~1' 2005,
by and between the CITY OF BREMERTON, a Washington municipal corporation
("Landlord"), and E KENT D~A...l. VOR.SQN, INC., a Washington cOrPoration, ("Tenant") as
fi 11 I ~v."'''''-o \4.$ QU <3> 'A.GM'C,lCt'ltIo.\-l Lo '"'~ oS ~. \.. . C. .
o ows: '="' '"'
1 PREMISES. Landlord rents to Tenant and Tenant rents from Landlord upon the
terms and conditions herein that certain space (the "Premises") containing approximately 1,000
square feet of floor area located on the NE comer of the main floor of Old City Hall as shown on
Exhibit A attached and incorporated by reference. The Premises constitute a portion of a
building (the "Building") located at 239 4th Street, Bremerton, Washington, and situated upon the
real property legally described on Exhibit B attached hereto and incorporated herein by this
reference (the "Land").
2. COMMON AREAS. The common area so identified in Exhibit C shall
constitute common areas available for Tenant's non-exclusive use.
3. TERM AND COMMENCEMENT DATE. This Agreement shall be on a
month to month basis but in no event to ex~:~ o~e..\lkYear from date of commencement. The
term of this agreement shall commence on O~t~et:: 1, 2005 (the" Commencement Date") and
shall end on September 30, 2006 (the "Termination Date"). Either party shall have the right to
terminate this Agreement at any time upon thirty (30) days prior written notice.
4. RENT; ADDITIONAL RENT.
4.1 Monthly Rent. Tenant agrees topay Landlord as Rent, without notice or
demand, the sum of seven hundred and fifty dollars ($750.00) per month ("Monthly Rent"), in
advance, on or before the first day of the first full calendar month of the term hereof and a 'like
sum on or before the first day of each and every successive calendar month thereafter during the
term hereof.
4.2 Additional Rent. In addition to the Monthly Rent called for in
subparagraph 5.1 above, Tenant shall pay an additional rent of fifty dollars ($50.00) per month in
advance for Tenant's share of utility expenses ("Additional Rent"). For purposes of this
subparagraph, utility expenses include any and all costs and expenses related to and incurred by
Landlord in connection with water, sewer, electricity and heat furnished by Landlord. In the
event of nonpayment of the Additional Rent, Landlord shall have the same rights with respect to
such nonpayment as it has with respect to any other nonpayment of Monthly Rent hereunder.
1
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5. USE OF PREMISES. Tenant's use and occupancy ofthe Premises shall
be for general office uses related to the construction management of the 400 Condominiums and
for no other business or purpose, without the prior written consent of Landlord.
5.1 Use. Tenant shall conduct and carry on in the Premises the business for
which the Premises are rented and shall not use the Premises for any illegal purpose. Tenant
shall not commit or allow to be committed any waste in or upon the Premises. Tenant shall not
do or permit anything to be done in or about the Premises which will in any way obstruct or
interfere with the rights of other tenants or occupants of the Building.
5.2 Compliance with Law. Tenant shall not use or permit the use ofthe
Premises in any way in conflict with any law or governmental rule. Tenant shall, at its sole cost,
promptly comply with all such laws and governmental rules and with the requirements of any
board of fire underwriters OR other similar bodies now or hereafter constituted relating to the
condition, use or occupancy of the Premises only. The judgment of any court of competent
jurisdiction or the admission of Tenant in any action against Tenant that Tenant has violated any
law or governmental rule, whether or not Landlord is a party, shall be conclusive ofthe fact as
between Landlord and Tenant.
6. ALTERATIONS AND ADDITIONS.
6.1 Generally. Tenant shall not make or allow to be made any alterations,
improvements, or changes to or of the Premises or any party thereof without the prior written
consent of Landlord, and all improvements, alterations, or changes so made shall become a part
of the Premises and shall belong to Landlord upon expiration or sooner termination of this
Agreement. With respect to such alterations, improvements or changes to the Premises requested
by Tenant, Landlord's consent shall not be unreasonably withheld. In the event Landlord
consents to the making of any alterations, additions, or improvements to the Premises by Tenant,
the same shall be made by Tenant at Tenant's sole cost and expense, the Premises and Tenant's
interest therein shall remain free from any lien of any kind whatsoever, and construction of such
alterations, additions or improvements shall be done in compliance with all laws and
governmental requirements.
6.2 Partition and Exterior Door. Tenant may partition the rented Premises
and install a door to the exterior of the building from the Premises upon prior approval of all
plans for such improvements. These improvements shall be at the sole cost and expense of
Tenant. Upon installation ofthe exterior door, Tenant shall not rely on any existing exterior
entrance on the building for ingress and egress to and from the Premises.
2
7. MAINTENANCE AND REPAIRS.
7.1 Tenant's Obligations. By taking possession of the Premises, Tenant shall
be deemed to have accepted the Premises as being clean and in good order, condition, and repair.
Tenant shall, at Tenant's expense, keep the Premises and every part thereof in good condition
and repair (except as hereinafter provided with respect to Landlord's obligations set forth in
paragraph 7.2 below). Tenant shall, upon the expiration or sooner termination ofthis Agreement,
surrender the Premises to Landlord in good condition, clean, excepting only ordinary wear and
tear and destruction or damage by such conditions over which Tenant has no control, or such
damage as may be due to the failure of Landlord to comply with any covenant herein contained
to be performed by Landlord. Damage caused by Tenant's use ofthe Premises shall be repaired
at the sole cost and expense of Ten ant.
7.2 Landlord's Obligations. Landlord shall, at Landlord's expense, repair
and maintain the structural portions of the Building, including the roof, foundation, bearing and
exterior beams and supports, flooring and subflooring, plumbing, pipes, electrical wiring and
conduits within and serving the premises. There shall be no abatement of Rent and no liability of
Landlord by reason of any injury to or interference with Tenant's business arising from the
making of any repairs, alterations, or improvements in or to any portion of the Building or the
Premises or in or to fixtures, appurtenances, and equipment if Landlord shall have taken every
reasonable measure to avoid any such injury and interference.
8. LIENS. Tenant shall keep the Premises, Tenant's interest therein and the
Building and Land on which the Premises are situated free from any liens arising out of any work
performed, materials furnished, or obligations incurred by Tenant.
9. INDEMNIFICATION AND HOLD HARMLESS.
9.1 Tenant. Tenant shall indemnify and hold harmless Landlord from and
against any and all claims arising from Tenant's use ofthe Premises or from the conduct of its
business or from any activity, work, or other things done, permitted, or suffered by Tenant in or
about the Premises or arising from any act or negligence of Tenant or any officer, agent,
employee, guest, or invitee of Ten ant, and from all costs, attorneys' fees, and liabilities incurred
in or about the defense of any such claim, and Tenant, upon notice from Landlord, shall defend
the same at Tenant's expense. Tenant hereby assumes all risk of damage to property or injury to
persons in, upon, or about the Premises from any cause other than the negligence of Landlord.
Landlord or its agent shall be not liable for any loss or damage to persons or property resulting
from fire, explosion, falling plaster, steam, gas, electricity, water, or rain which may leak from
any part of the Building or from the pipes, appliances, or plumbing works therein or from the
roof, street, or subsurface, or from any other place resulting from dampness, or from any other
cause whatsoever, unless caused by or due to the negligence of Landlord or its agents. Tenant
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shall give prompt notice to Landlord in case of casualty or accidents in the Premises.
9.2 Landlord. Landlord shall indemnify and hold harmless Tenant from and
against any and all claims arising from the negligence of Landlord or any officer, agent,
employee, guest or invitee of Landlord, and from all costs, attorneys' fees, and liabilities incurred
in or about the defense of any such claim or any action or proceeding brought thereon. In any
action or proceeding brought against Tenant by reason of such claim, Landlord, upon notice from
Tenant, shall defend the same at Landlord's expense.
10. SUBROGATION. As long as their respective insurers so permit, Landlord and
Tenant hereby release the other from any and all liability or responsibility to the other or anyone
claiming through or under them by way of subrogation or otherwise for any loss or damage to
property caused by fire or any of the extended coverage or supplementary contract casualties,
even if such fire or other casualty shall have been caused by the fault of negligence of the other
party, or anyone from whom such party may be responsible.
11. LIABILITY INSURANCE; HAZARD INSURANCE.
11.1 Liability Insurance. Tenant shall, at Tenant's expense, obtain and keep in
force during the term of this Agreement a policy of comprehensive public liability insurance
insuring Landlord and Tenant against any liability arising out ofthe Tenant's use, occupancy, or
maintenance ofthe Premises. Such insurance shall be in amount not less than $2,000,000
Combined Single Limit with respect to injuries to or death of persons, and/or destruction of or
damage to property; provided, however, that Landlord acknowledges and agrees that Tenant may
self-insure its liability up to $1,000,000. The limit of any such insurance shall not, however,
limit the liability of Tenant hereunder. Tenant may provide this insurance under a blanket policy
provided said insurance shall have a landlord's protective liability endorsement attached thereto.
If Tenant shall fail to procure and maintain said insurance, Landlord may, but shall not be
required to, procure and maintain the same at the expense of Ten ant. Tenant shall deliver to
Landlord, prior to right of entry, certificates evidencing the existence and amounts of such
insurance with loss payable clauses satisfactory to Landlord. All such policies shall be written as
primary policies not contributing with and not only in excess of coverage which Landlord may
carry .
11.2 Hazard Insurance. Throughout the term of this Agreement, Landlord
shall procure and maintain fire, hazard and extended coverage insurance. Should the property
become uninhabitable due to loss or become uninhabitable for any other reason the City shall
have the option of terminating this Agreement.
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12. PERSONAL PROPERTY. Where furnished by or at the expense of Ten ant, all
movable property, furniture, furnishings and trade fixtures, other than those affixed to the
Premises so that they cannot be removed without material damage, shall remain the property of
and be removable by Tenant, and in case of damage by reason of such removal, Tenant shall
restore the Premises, Building or common areas to good order and condition. Tenant shall payor
cause to be paid before delinquency any and all taxes levied or assessed and which become
payable during the term hereof upon all Tenant's Tenant Improvements, equipment, furniture,
fixtures, and other personal property located in the Premises.
13. ENTRY BY LANDLORD. At any and all reasonable times during regular
business hours, upon one (1) day's prior notice to Tenant, Landlord reserves and shall have the
right to enter the Premises to inspect the same a reasonable number of times, to submit the
Premises to prospective purchasers or tenants, to repair the Premises and any portion of the
Building that Landlord may deem necessary or desirable, without abatement of Rent, and may
for the purpose erect scaffolding and other necessary structures where reasonably required by the
character of the work to be performed, always providing that the entrance to the Premises shall
not be blocked thereby and further providing that the business of Ten ant shall not be interfered
with unreasonably. Tenant hereby waives any claim for damages or for any injury or
inconvenience to or interference with Tenant's business or any loss of occupancy or quiet
enjoyment of the Premises, and any other loss occasioned thereby, if Landlord shall have taken
every reasonable measure to avoid any such injury, inconvenience or interference. Landlord
shall have the right to use any and all means which Landlord may deem proper to open any doors
or otherwise obtain access to the Premises in an emergency, without liability to Tenant except for
any failure to exercise due care for Tenant's property, and any entry to the Premises obtained by
Landlord by any of said means or otherwise shall not under any circumstances be construed or
deemed to be forcible or unlawful entry into a detainer ofthe Premises or an eviction of Ten ant
from the Premises or any portion thereof.
14. ASSIGNMENT AND SUBLETTING. Tenant shall not either voluntarily or by
operation oflaw assign, transfer, mortgage, pledge hypothecate, or encumber this Agreement or
any interest therein and shall not sublet the Premises or any part thereof or any right or privilege
appurtenant thereto or allow any person (the employees, agents, servants, and invitees of Ten ant
excepted) to occupy or use the Premises or any portion thereof, without the prior written consent
of Landlord, which consent by Landlord shall not be unreasonably withheld. Any such
assignment or subletting without compliance with the terms of this paragraph shall be void and
shall, at the option of Landlord, constitute a default under the terms ofthis Agreement. If Tenant
is a corporation, any transfer of this Agreement from Tenant by merger, consolidation, or
liquidation or any change in the ownership or power to vote in the majority of the outstanding
voting stock of Tenant shall constitute an assignment for purposes of this paragraph. A consent
to one assignment, subletting, occupation, or use by any other person shall not be deemed to be a
consent to any subsequent assignment, subletting, occupation, or use by another person. Consent
5
to any such assignment or subletting shall in no way relieve Tenant of any liability under this
Agreement. Landlord may assign the Rent herein provided to any person, partnership,
corporation, or bank, and Tenant agrees when notified in writing by the assignee of such
assignment to make the Rent payments to assignee under the terms of said assignment.
15. HOLDING OVER. If Tenant remains in possession of the Premises or any part
thereof after the expiration of the term of this Agreement without the express written consent of
Landlord, such occupancy continue as a tenancy from month-to-month at a rental in the amount
of 120% ofthe last Monthly Rent under the Agreement, plus all other charges and Additional
Rent payable hereunder, and upon all the terms hereof applicable to a month-to-month tenancy.
16. TENANT'S DEFAULT. The occurrence of any one or more ofthe following
events shall constitute a default and breach ofthis Agreement by Tenant.
16.1 Abandonment. Tenant vacates or abandons the Premises;
16.2 Failure to Pay Rent. Tenant fails to make any payment of Rent or any
other payment required to be made by Tenant hereunder, as and when due;
16.3 Failure to Observe Other Covenants. Tenant fails to observe or perform
any of the covenants, conditions, or provisions of this Agreement to be observed or performed by
Tenant where such failure shall continue for a period of thirty (30) days after written notice
thereof by Landlord to Tenant; provided, however, that if the nature of Tenant's default is such
that more than thirty (30) days are reasonably required for such cure, then Tenant shall not be
deemed to be in default if Tenant commences such cure within said thirty (30) days and
thereafter, diligently prosecutes such cure to completion;
17. REMEDIES ON DEF AUL T. In the event of any default or breach by Tenant,
landlord may, at any time thereafter with or without notice or demand in the exercise of a right or
remedy which Landlord may have be reason of such default or breach, terminate this Agreement
by written notice to Tenant, reenter and take possession of the Premises without termination of
this Agreement, or pursue any remedy allowed by law. Tenant agrees to pay Landlord the cost of
recovering possession of the Premises, the expense of reletting, and any other costs or damages
arising out of Tenant's default including, without limitation, the costs of removing persons and
property from the Premises, the costs of repairing or altering the Premises for reletting, brokers'
commissions, and legal expenses and fees. Notwithstanding any termination, reentry, or
reletting, the liability of Ten ant for the Rent and Additional Rent due and owing to Landlord.
17.1 Remedies Cumulative. The remedies hereinafter described shall be
cumulative and Landlord shall be entitled to pursue any other remedy now or hereafter available
to landlord under the law or judicial decisions ofthe State of Washington.
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17.2 Removal of Personal Property. In the event of a retaking of possession
ofthe Premises by Landlord, Tenant shall remove all personal property located thereon and upon
failure to do so upon demand of Landlord, Landlord may remove and store the same in any place
selected by Landlord, including but not limited to a public warehouse, at the expense and risk of
Tenant. If Tenant shall fail to pay the cost of storing any such property after it has been stored
for a period of thirty (30) days or more, Landlord may sell any or all of such property at a public
or private sale and shall apply the proceeds of such sale first to the cost of such sale, secondly to
the payment of the charges for storage, if any, and thirdly to the payment of any other sums of
money which may be due from Tenant to Landlord under the terms of this Agreement, and the
balance, if any, to Tenant. Tenant hereby waives all claims for damages that may be caused by
Landlord's lawfully reentering and taking possession of the Premises or lawfully removing and
storing the property of Ten ant as herein provided and will save Landlord harmless from loss or
damages occasioned by Landlord thereby, whether such lawful reentry shall be considered or
construed to be a forcible entry.
18. HAZARDOUS SUBSTANCES. Tenant shall not generate, release, spill, store,
deposit, transport, or dispose of (collectively "Release") any hazardous substances, sewage,
petroleum products, hydrocarbons, radioactive substances, medicinal, bacteriological, or disease-
producing substances, hazardous materials, toxic substances or any pollutants or substances
defined as hazardous or toxic in accordance with applicable federal, state, and local laws and
regulations ("Hazardous Substances") in, on or about the Premises. Tenant shall indemnify, hold
harmless and defend Landlord from any and all claims, liabilities, losses, damages, cleanup costs,
response costs, and expenses (including reasonable attorneys' fees) arising out of or in any way
related to the Release by Tenant, or any of its agents, representatives, or employees, or the
presence of such Hazardous Substances in, on or about the Premises occurring at any time after
the Commencement Date and arising out ofthe activities of Ten ant, or any of its agents,
representatives or employees. The provisions of this paragraph shall survive termination or
expiration of this Agreement.
19. GENERAL PROVISIONS. Landlord and Tenant agree to the following general
proVISIOns:
19.1 Waiver. The waiver by Landlord of any term, covenant, or condition
herein contained shall not be deemed to be the waiver of such term, covenant, or condition upon
any subsequent breach of the same or of any other term, covenant, or condition herein contained.
The subsequent acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of
any preceding default by Tenant of any term, covenant, or condition ofthis Agreement other than
the failure of Tenant to pay the particular rental so accepted, regardless of Landlord's knowledge
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of such preceding default at the time of the acceptance of such Rent.
19.2 Time. Time is of the essence of this Agreement and each and all of its
provisions in which performance is a factor.
19.3 Successors and Assigns. The covenants and conditions herein contained,
subject to the provisions as to assignment, apply to bind the heirs, successors, executors,
administrators, and assigns of the parties hereto.
19.4 Quiet Possession. Upon Tenant paying the Rent hereunder and
performing all ofthe covenants, conditions, and provisions on Ttfnant's part to be observed and
performed hereunder, Tenant shall have quiet possession of the Premises for the entire term
hereof, subject to all the provisions ofthis Agreement. The Premises are rented subject to any
and all existing encumbrances, conditions, rights, covenants, easements, restrictions, rights-of-
way, and any matters of record, applicable zoning and building laws, and such matters as may be
disclosed by inspection or survey.
19.5 Overdue Rent. Unpaid installments of the Monthly Rent, Additional
Rent, or other sums due hereunder shall, if not timely paid, be subject to a later charge of Fifty
and Noll 00 Dollars ($50.00) to cover the excess costs of administration and shall bear interest
from the date due at the publicly announced prime rate for commercial borrowers of at twelve
percent (12%) until all rent and interest has been paid in full. Tenant hereby further agrees to pay
any attorneys' fees and expenses incurred by Landlord by reason of Tenant's failure to pay
Monthly Rent, Additional Rent, or other charges when due hereunder. Acceptance by Landlord
of partial payment of Rent and/or interest thereon shall not constitute a waiver of any remaining
unpaid Rent and/or interest.
19.6 Prior Agreements. This Agreement contains all of the agreements of the
parties hereto with respect to any matter covered or mentioned in this Agreement and no prior
agreements or understandings pertaining to any such matters shall be effective for any purpose.
No provision of this Agreement may be amended or added to except by agreement in writing
signed by the parties hereto or their respective successors in interest. This Agreement shall not
be effective or binding upon any party until fully executed by both parties hereto.
19.7 Inability to Perform. The time period within which any party is to fulfill
an obligation of such the party under this Agreement shall be extended by such time period that
any party is unable to fulfill any of its obligations hereunder or is delayed in doing so, if such
inability or delay is caused by reason of strike, labor troubles, acts of God, or any other cause
beyond the reasonable control of such party.
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19.8 Partial Invalidity. Any provisions of this Agreement which shall prove
to be invalid, void, or illegal shall in no way affect, impair, or invalidate any other provision
hereof and such other provision shall remain in full force and effect.
19.9 Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall whenever possible be cumulative with all other remedies at law or in equity.
19.10 Choice of Law. This Agreement shall be governed by the laws of the
State of Washington. The parties agree that venue for any action hereunder shall properly lie in
Kitsap County, Washington.
19.11 Real Estate Commission. Tenant warrants that no real estate broker or
agent has been employed by Tenant or is entitled to receive any commission or fee with respect
to this transaction other than the brokers or agents to whom Landlord has consented by written
agreement. Tenant and Landlord shall each indemnify and save harmless the other from the
claims of any real estate brokers or agents with whom either party may have dealt with respect to
this transaction, other than as so consented to by Landlord. Insofar as Landlord shall have
consented by written agreement to such brokers or agents, Landlord shall pay such commissions.
19.12 Execution. This Agreement may be executed in several counterparts,
each of which shall be deemed an original instrument.
19.13 Notices. All notices to be given hereunder shall be in writing and shall be
personally delivered and receipt acknowledged, sent by United States certified mail, return
receipt requested, sent by facsimile, with original delivered within three (3) days, or sent by
overnight delivery through public or private service, delivery charge prepaid, and addressed to
the party at the respective mailing address as herein set forth.
To Landlord at:
To Tenant at: \-\"'..." ...,s.... ~ ...!"'-ec\~\1 C.",,,,.S l.l c: '/
q '8 ~O \).) \" I.. C-.. <; Q~",~ l'\~., S...>> \"\e '2. 0
~ e. \C> 1M C) ~~ I \1.J iA "\ t6>"o '2.
It is understood that each party may change the address to which notice may be sent by giving a
written notice of such change to the other party hereto in the manner herein provided.
19.14 Tenant's Corporate Authority. Tenant is a Washington corporation, and
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each individual executing this Agreement on behalf of said corporation represents and warrants
that he or she is duly authorized to execute and deliver this Agreement on behalf of said
corporation, in accordance with a duly adopted resolution of the board of directors of said
corporation or in accordance with the bylaws of said corporation, and that this Agreement is
binding upon said corporation in accordance with its terms. Tenant further represents and
warrants that it is fully registered and qualified to do business in the State of Washington.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and
year first above written.
TENANT LANDLORD
By By ft~
STATE OF WASHINGTON)
) ss.
COUNTY OF KITSAP )
I certify that I know or have satisfactory evidence that
is the person who appeared before me, and said person acknowledged that
he/she signed this instrument, on oath stated that he/she was authorized to execute the
instrument, and acknowledged it as the of the City of Bremerton to be the free and
voluntary act of such City for the uses and purposes mentioned in the instrument.
DATED:
NOTARY PUBLIC in and for the State of
Washington, residing at
My commission expires / / .
10
1
I' .
\
\ .
STATE OF WASHINGTON)
) ss.
COUNTY OF KITSAP )
I certify that I know or have satisfactory evidence that
is the person who appeared before me, and said person acknowledged that
he/she signed this instrument, on oath stated that he/she was authorized to execute the
instrument, and acknowledged it as the ofthe
Partnership/Corporation to be the free and voluntary act of such Partnership/Corporation for the
uses and purposes mentioned in the instrument.
DATED:
NOTARY PUBLIC in
and for the State of Washington, residing at
My commission expires / / .
R:\LEGAL\Contracts\Old City Hallrental agreement-EKent Halvorson, Inc,doc
11
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February 23, 2004
Mr. Roger A, Lubovich
City Attorney
City of Bremerton
239 4th Street
Bremerton, Washington 98310
RE: UPDATED VALUATIONS FOR CITY HALL BUILDING- 239 FOURTH ST.
UNDERGROUND PARKING GARAGE - 4TH & WASIDNGTON
PARKING LOT- BEHIND CITY HALL OFF BURWELL ST.
Dear Mr, Lubovich:
At ~our request, on behalf of the City ofBremerton, I have completed an update of the appraisal of
the above referenced properties which was originally dated February 10, 1999. As you are aware,
the original report was completed under three separate covers. The fact that you now request that
all of the valuations be addressed under one cover does not take this assignment beyond the intent
of US PAP Advisory Opinion AO-3 as discussed further,
The new physical inspection of the property was not as in-depth as the original as the physical
characteristics have not changed since the date of the original inspection. A new sales analysis was
completed using those applicable sales comparables which now apply to the subject property..
The subject property's highest and best use is in transition. The building is old and in need of
updating, but still functions well as office space and will do so for several more years without the
need for significant updating, however~ the remaining economic life is very. short. Considering the
present and planned revitalization projects in and around the subject property, the subject will rapidly
lose it's ability to compete economically with other spaces which will come available. At that point,
there are two choices; update the present structure or demolish the stmcture and rebuild.
A thorough Highest and Best Use analysis was completed wherein the remaining economic life of the
building was estimated and income,was imputed to the building over that period oftime. The present
value of those projected income streams was determined utilizing a discounted cash flow analysis.
The results of the analysis where that the total property's value, based upon it's ability to generate
an income stream and the quality and . length of time that it can be expected, did not exceed the
estimated value of the "land only", less the estimated cost to remove the structures and make the site
.ready and available for redevelopment, The conclusion is, that the present improvements do not
constitute it's Highest and Best Use.
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P.O. Box 3241, Silverdale, Washington 98383 (360) 692-5081 Fax (360) 692-5126 email aceinc@Sillna.com
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The updated valuation analysis of the total property indicates that the'subject property has a marl~et
I value of $969,000, as indicated by the Sales Comparison Approach. The value is assuming norma]
I market conditions and typical financing, as ofthe date of the updated appraisal which is February 16,
2004,
The site value is based upon sales ofproperties in the immediate market area. The sales were broken
down into a $/square foot of site area for comparison purposes. The estimated cost of demolishing
the existing buildings is removed from the base value. Those demolition costs were based upon a
study completed by Bremerton Public Works and supplied to the appraiser. If those costs are found
I not to be consistent with the actual cost to remove the existing improvements, the overa]] value
would be impacted to the extent of the difference in cost.
This is an update of value and as such, contains onJy that information which differs from the original
reports and that which is necessary to present the updated valuation with a reasonable understanding
ofthe significant characteristics of the subject property. The undersigned appraiser has read and is
familiar with USP AP Advisory Opinion AO-3 which contains three. conditions by which an appraiser
may depart from appraisal content requirements and this assignment meets all three of the conditions
in that this update is being completed for the same client, the property has undergone no significant
physical change since the original appraisal was completed and the time period between the original
appraisal and the requested update is not unreasonably long.
This update can onJy be relied upon by a reader which is familiar with the original report, it's
contents, conclusions and exhibits. This update should be filed with the original appraisal report.
r questions regarding this analysis, feel free to contact me.
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TABLE OF CONTENTS
Letter ofTransrrrittal 1-2
'table of Contents 3
i Appraisal ,Summary 4-5
Subject Photographs 6-9
Identity of Subject j Definition of Market Value 10
Site Data 11.,12
I Highest and Best Use 13-14
Improvement DescriptiowDemolition Cost Estimate 15
Site Valuation;.. Sales Comparison Approach / Conclusion 16-18
Comparable Sales Location Map 19
Certificate of Appraisal . 20
Assumptions and Limiting Conditions 21-22
USP AP Disclosures/Certifications 23-27
I Appraiser's qualifications 28-30
3
SUMMARY OF APPRAISAL
Identit)r of the Propert:)r
The subject of this appraisal is a commercial building, parking garage and open parking lot, located between
Fourth Street and Burwell Street, Just West of Washington Avenue within the incorporated City limits of the
City of Bremerton. The situs address is 239 Fourth St.
Purpose of Appraisal & Property Rights Appraised
The purpose of this appraisal is to arrive at the fair market value of the subject's fee simple interest. This is
an appraisal of real property only and excludes the value of equipment and trade fixtures that may be present.
Assumptions
The subject property is of the age range which would be suspect of containing some form of asbestos
material. It appears that some asbestos abatement has already been completed within the building, however,
public works reports indicate that there is asbestos in areas of the building which are not readily accessible
or contained in ceiling tile or floor tiles. Some additional abatement is required which will be discussed further
within thereport.
Site
City Hall Building Site 135.23 x 103 x 115,15 x 103 MIL (12,895 square feet) I
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Underground Parking 60 x 100 ( 6,000 square feet) I
Open Parking Lot 82.42 x 103 x 62.34 x 103 MIL ( 7,455 square feet)
Total Site Area 26,350 square feet
Highest and best llse
The Highest and best use as improved is as commercial usage which is low intensity i.e. office/professional
with retail' on the main floor and sidewalk level, basement area would best be used for storage and parking.
The Highest arid Best Use as vacant is as a mixed use with retail or professional offices at sidewalk level and
apartments or condominiums on the upper levels taking advantage of the view amenity.
Zoning
(BC) Business Core
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Streets and Utilities
The total property fronts on three City streets, BurweIl Street, 4th Street, and Washington Avenue and has
additional access from a private alleyway along the South side ofthe subject building and along the East side
of the buildinK All necessary public utilities are at the site, including seweL
Building Size and Breakdown
12,875 s.f - Main Floor (Street Level)
9,798 s.f - 2nd Floor
12,875 s.f - Basement level
Results of Approaches to Value (Total Property)
Cost Approach NOT USED
Sales Comparison Approach $ 969,000
Income~Capitalization Approach NOT USED
Final Value Estimate $ 969,000
Date of Appraisal
February 16,2004
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SUBJECT PHOTOGRAPHS
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Subject ,'iewed from 4th St.
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Parking Lot Behind City Hall Building I
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Looking Westbound along 4th St.
2.
IDENTITY OF PROPERTY
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Legal Description
'Lots 14-15, Lots 22-27, Block 7, Plat ofBremerton
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I Function of Appraisal
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The function of this appraisal is for sale negotiation. -
Definition of Market Valoe
"The most probable price in terms of money which a property should bring in a competitive and ,open market
under all conditions requisite t6 a fair sale, the buyer and seller, each acting prudently, knowledgeable and
assuming the price is not affected by undue stimulus. "
Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from
seller to buyer under conditions whereby:
a. buyer and seller are typically motivated.
b. both parties are well informed or well advised and each acting in what they cqnsider their own best
interest.
c, a reasonable time is allowed for exposure in the open market, ,
d. payment is made in cash or its equivalent.
e. financing, if any, is on terms generally available in the community at the specified date and
typical for the property type in its locale.
f the price represents a normal consideration for the property sold unaffected by special
financing amounts and/or terms, services, fees, costs, or credits incurred in the transaction.
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SITE DATA
- -..- -Dirnensions-&-landArea ..._ __ "._._ ..,______~.____.. u__._"" ____..__.._
- ~ ---- ---- - - ---~--- -- --- -- - ---- - --- .---
..- ---, --..-....--.
The subject City Hall site is 135 feet in width MIL on the northerly side of the site and 115 feet MIL in width
on the southerly and is 103 feet in length totaling approximately 12,895 square feet and covered by building.,
The subject site behind the building is 82 feet in width MIL on the northerly side ofthe site and 62 feet
M/L in width on the southerly and is 103 feet in length totaling approximately 7,455 square feet
The subject site adjacent is 60 feet in width on the Westerly side ofthe site and 60 feet in width on the
I Easterly and is 100 feet in length totaling approximately 6,000 square feet. As previously stated, the
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I site is developed with a concrete parking garage with gazebo and park on the roof
Assessed Valuation & Real Estate Taxes
Parcel #3718-007-014-0006 (Includes all property)
Land' $ 223,000
Improvements $1,027,000
Total $1,250,000
i 1994 Taxes $ Tax Exempt
DESCRIPTION OF SUBJECT SITE
The topography of the City Hall Site is gently sloped from 4th Street to the North to the platted alleyway to
the South. The site has access dn three sides. There i~ a platted alleyway along the Southerly boundary and
along the Easterly boundary with travel in the Northerly direction only. The site also fronts 4th Street along
the Northerly boundary which has travel in the Westerly direction only. All public utilities are at the site, i. e,
water, sewer, power, phone and gas,
The topography of the site behind City Hall is level. No adverse conditions or easements were noted
on site and all public utilities are at the site. The site has access on three sides, There is a platted
allyway along the Northerly boundary and along the Easterly boundary with travel in the Northerly
direction only. The site also fronts Burwell Street along the Southerly boundary which has travel in
both the Easterly and \Nesterly direction.
The topography of the parking garage site is level. No adverse conditions or easements were noted on
site and all public utilities are at the site.
The site has access on three sides. There is a platted alleyway along the Westerly boundary and
provides access into the parking garage. The site also fronts two City Streets as it is a comer site, 4th
Street to the North and Washington A venue to the East. The site has no accesses off of either of these
two streets at the present tim~. The site was originally level to gentle slope but was excavated to build
the underground parking garage. All public utilities are available to the site, including City sewer.
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PLOT MAP ._
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HIGHEST AND BEST USE
-.. "As is the case in prudent appraisal practice, the concept of highest and best use is the pr~!IlisellPon whic;h
value is based. In the context of fair market value, highest and best use is defined as "the reasonable and--'.'-'-'"
probable use which will support the highest present value, as defined, as of the effective date of the appraisaL
AJternatively, it is that use from among the reasonable, probable and legal alternative uses found to be
physically feasible and which results in the highest land value, In the case of an improved property, it is that
use which after meeting certain tests, i,e. Physical use, Legal Use, Feasible Use, Most Probable Use and
Highest and Best Use which may be any ofthe afformentioned uses but it is that use which wilJ result in the
highest net return to the land over the longest period of time. ., -i
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AS VACANT . w.;
The subject site has the proper zoning for use as offices, retail, professional etc. Among the other possible
uses are low intensity type uses such as museum, theater, etc,
. . . .
With the newly remodeled Admiral Theater just a couple bloc1cs :North oft~e subject and the Amy Burnett
Gallery at the end of the block, it would seem that these uses may not be good choices at present
At present, there is a large amount of vacant commercial space in West.Br-emerton uihir.h W.llS not tm.e 6
mont~ earlier. With the 0](1 Rremp.r D~rtment store now v~r:~mt, the aI110unt of available office space in
- ----- --
West BremertDn ha~increased dramatically. There are numerous retail buildings which are also vacant,
h~as hacia I c;:,drgcnee-ef-l-ate:--Examining the ~ Gonstruct a multi-story retail! offi~
st~e in today's 'parket, the curr~t!:ates for large office/retail which are in the $6-$8 per square foot
range, will not support this type of develo
Par ang IS still a pre ill est Bremerton, especially within a reasonable distance to the Ferry. The
subject City Hall site would accommodate around 50 parking spaces, however, momentum is gathering
towards a Downtown redevelopment which includes 100,000 sq. feet of new office and conference space on
the waterfront, new City Government building, new parking garages and housinK Some of the older
buildings in the downtown area are being completely renovated or are in the planning stages thereof The
results are higher rent levels for new commercial office space and a need for additional housing in the
downtown area. The highest and best use ofth sub' ect site ifvacant is likel a combin f office or retail
anA multi-~reet evel fhis would provide a larger return to the land than open par . g.
AS IMPROVED
The subject property is a wel1 constructed public building which is mostly clear span al10wing placement of
interior partitions in the most efficient design. Maj or systems, while old and outdated, appear to be
functioning at this time.
Office space appears to be out performing retail use in the West Bremerton market at this time. It appears
that a mi:A'ture of uses would be the most feasible for this building with retail at sidewalk level and office use
on the second floor. The basement which had previously been used as a parking garage should again be used
for parking. The existing finished basement area would serve as storage area for the retail spaces as it is
serviced by elevator and can easily provide storage for stock items.
The investment required to convert the existing Municipal office use to the recommended office and retail
use is variable depending upon the level of income desired. The minimum investment to update the major
systems, interior finish and provide ADA compliance is estimated at $20 - $25 per square foot of GBA or
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around $500,000, It is likely that in order to attract the $12-$15 per square foot tenant, that it may be
necessary to spend much more. At present, the only building owners who are willing to make that kind of
.., ..... 'capitaJinvestment'arethose-whoown'good,quality.built.buildingsJocated,onJarge,sites."Iheco.th~Lp.rQbl~m.,. '... "..
with the subject property is the orientation ofthe building itself Thy_propert~s a good view of SinJilirir
inlet and Cascade Mountain Range, however, the building is devoid ofwindows on the "view" side of the
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The combination of existing improvement value and estimated updating costs is still less than the cost to
demolish the existing building and construct a comparable building, however, the longevity of the income
stream is clearly in question since the building still may not compete with other newer or newly remodeled
buildings. Therefore, the highest and best use is not as improved and is consistent with the highest and best
use as vacant '''- -- - ----------.
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DESCRIPTION OF IMPROVEMENTS
The descriptioii ofthesubjectimprovements'inc1udingthe City HallBuilding_and_theUndergr:ol1I1dP a,rkiIlg....
Garage and Park, are essentially the same as stated in the original 1999 report as viewed during the January
25, 1999 on-site inspection, No additionaJ description is added in this update as it is not important to the
,outcome of the analysis given the fact that the buildings no longer represent the highest and best use of the
property.
Estimated Demolition Costs
The following demolition cost estimate was provided by the Bremerton Public Works Department,
COST ESTIMATE
DEMOLITION OF CITY HALL
239 4TH STREET
-- --
BONDS & INSURANCE LS $1,200.00
PERMITS & NOTIFICATIONS LS $500.00
MOBILIZATION LS $3,500.00
ASBESTOS REMOVAL LS $3,500.00
PERMANENT FENCING LS $5,000.00
EROSION CONTROL MEASURES LS $3,050.00
BUILDING DEMOLITION INCLUDING SLAB & FOOTINGS LS $47,000.00
SUBTOT LS $63,750.00
TOTAL SALES TAX $5,419.00
TOTAL COST ESTIMATE ~.~
Cost ~.ma>e fa, ell me""els, "'b~. and equipment to demol . . .
and dispose of the entire building and associated slab and footings,
plumbing, mechanical, electrical, hazardous material abatement and
hauling of all demoliition debris; temporary and permanent capping of
all utilities; surface restoration and erosion/sediment protection
related work on and around the site.
The parking structure is 6,000 square feet in size and is all concrete construction ~astructure.
The cost to demolish this structure is estimated at $2.50 per square foot or ara n-E! $15,000, J
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SALES COMPARISON APPROACH
The West RremertondowntownhasvirtuallYJJ--9lJ11ilTlpr()ved lots rem~t~~g, In ~_~_,?~~!years, two typesof
transactions occur in the downtown area, sales to investors who plan to demolish the eX1.stlng01dbuiluing--
and build new, and those who purchased with the idea that the existing structure is functional enough to
spend the necessary amount to renovate it
There have been several sales of such buildings within the downtown J3remerton area in recent years. Due
to the current market conditions in West Bremerton, it is important to choose sales from this market to avoid
large adjustments.
The sales are analyzed on the basis of $/SP of site area due to the lack of value placed on the improvements,
In order to estimate the value of the raw land or Net site value, the cost to demolish the existing improvement
is removed from the sale price,
The following grid is a summary breakdown of the significant data and units of measurement used in the
analysis. In that this is an abbreviated report, the full description and sales profile is retained:ill the appraiser's
file.
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SUM.l\fARY OF COl\'lP ARABLES
ldentiflcati on \ Sale \ Sale Price \ Time Atlj \ Estimated \ Net Site \ Size Square \ Price Per \ Adj. Price \
Date Sale Price Demo Cost Value Ft. (Site) Square Ft. Per Sq Ft. \
. .
S1l1~ject Property \ \ \ \ \ \ 26,350 \ I
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1) 37180090250009 \ 12/11/02 \ $ 180,000 \ $ 193,500 \ $ 45,000 \ $ 148,500 . \ 3,049 \ $ 48,70 \ $38.96 '.
\ 2) 37180160200009 \ 10/03/03 \ $ 150,000 \ $ 150,000 \ $ 11,000 \ $ 139,000 I 3,48<1- \ $ 39,89 I $4L88,
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\ 3) 37180150180005 \ 05/15/02 \ $ 127,000 \ $ 140,300 \ $ 14,000 . \ $ 126,300 \ 3,049 \ $ 41.42 \ $43-49
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t41371&OOJOO101OO' \ 02/14/02 \ $3,600,000 \ $4,032,000 \ $ 0 \ $4,032,000 \125,453 \$32.14- \ $40.1 T \
5)37180~30030000 \ 02/14/03 \ $ 435,000 \ $ 461,000 \ $ 0 \ $ 461,000 \ 11,761 \ $ 3920 \ $37,24:
* Includes eight additional parcels
Sales have been adjusted upward for passage of time at 6% per year.
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Land Comparables Adjustment Chart
__. _... H_ .._
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w...___ _ "__ ._._m._ _.._......___,___
__"._._. . _._u___. .._______..
Price/ Adjusted
Compo # Sq. Ft. Size Location View Price/Sq. Ft.
1 $ 48 70 -20% 0% 0% $38.96
2 $ 39.89 -20% +10% +15% $41. 88
-.. $ 41.42 -20% +10% +15% $43.49
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I 4 $ 32.14 +25% 0% 0% $40.17
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5 $ 39.20 -05% 0% 0% $37.24
Mean $40.35
Median $40.17
Mid-point of Apparent Range $39.56
CONCLUSION
After adjustments, the :five comparables indicate a value range for the subject from $37.24 to $43.49 per
square foot, with an average of$40.35 and a median rate of$40.17 per square foot. The middle ofthe range
is $ 39.56. A rate of$ 40.00 per square foot of site area is felt to be supported. Applied to the square feet
of site area in the subject, produces the following total site valu~
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26,350 sq. ft @ $40.00 per sq. ft. = $:r,t}54,00~
Less estimate 85,000 "
The firulI estimate of value of th subject property. as of February 16, 2004, ')7"'
$ 969,000 _/
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COMPARABLE SALES LOCATJON MAl>
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