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HomeMy WebLinkAbout5031Contract Number: Vendor: Sub�ect: Department: File Class: Begin Date: End Date: Review Date: Vault Date: 5031 KITSAP COUNTY & HOUSING KITSAP Settlement Agreement - City Contingent Loan of 8/30/2005 Admin LEG 12-1 5/25/2011 6/1/2011 6/1/2014 Comments: SETTLEMENT AGREEMENT AMONG KITSAP COUNTY, HOUSING KITSAP, AND CITY OF BREMERTON Recitals WHEREAS, Kitsap County ("the County"), Housing Kitsap and the City of Bremerton ("the City") are parties to a Crty Contmgent Loan Agreement ("Crty CLA") entered into on August 30, 2005, which is attached hereto as Exhibit A; WHEREAS, the County and Housing Kitsap claim that under the City CLA, the City was obligated in August 2009 to loan Housing Kitsap $2,000,000, and the City disputes the claim, WHEREAS, the parties sought to resolve the County and Housmg Kitsap's claim through mediation on May 9, 2011, with the Honorable Robert Alsdorf as mediator, and WHEREAS, through the mediation process on May 9, 2011, representatives of the parties reached a recommended settlement Agreement NOW THEREFORE, having considered the matter, the parties hereby agree to the following terms m full settlement of the County and Housing Kitsap's claim against the Crty under the Crty CLA 1 The recitals stated above are true and correct and by this reference are incorporated by reference as a matenal part of this Agreement 2 The City agrees to make a payment to Housing Kitsap in the amount of One Million, One Hundred Fifty Thousand Umted States Dollars ($1,150,000 00) no later than June 1, 2011 This payment is not a loan, and neither the County nor Housmg ICitsap has any obligation to repay the City's payment 3 For and m consideration of the payment descnbed m Section 2 herein, the parties agree to finally release and fully discharge each other and their officers, employees, attorneys, agents, representatives, and assigns, officers, whether past or presently employed, from any and all claims, demands, and causes of action of any type or kmd whatsoever, whether presently known or unknown in connection with the City CLA 4 Execution of this Agreement is not to be construed as an admission of liability or responsibility on the part of any party hereto The parties expressly deny liability for any claims made under the City CLA Regardless of the adequacy of the above consideration, the parties' mutual release of liability or any obligation under the City CLA shall not operate as an admission of liability on the part of any party hereto � Housmg Kitsap is formerly known as KitSap County Consolidated Housmg Authonty 5 'The County and Housmg Kitsap warrant that no other person or entity has or has had any mterest in their claims under the City CLA, includmg but not limited to, their claim that the Ctty is obligated to make a$2,000,000 loan to the County or Housing Kitsap, and that the County and Housing Kitsap have the sole nght and exclusive authonty to execute this release and receive any sums specified in it 6 The parties warrant that any liens or encumbrances placed on any of the party's claims related to the City CLA, or any entity with any interest in any such claim will be satisfied, or otherwise resolved, from the proceeds of this settlement Each party shall defend, indemnify and hold harmless every other party hereto for any claims of a third party resultmg from the parties' respective obligations under the Crty CLA 7 This Agreement contains the entire agreement among the parties and supersedes any other wntten or verbal agreement related to any claims associated wrth the City CLA and shall be binding upon and enure to the benefit of the successors in mterest and assigns of each party No party to this Agreement shall be bound by any terms, conditions, definitions, warranties, understandings, or representations with respect to the sub�ect matter of this Agreement other than as expressly provided herem, except as may hereafter be agreed in a wnting signed by the parties 8 If a court of competent �unsdiction holds any provision of this Agreement to be illegal, mvalid or unenforceable, in whole or in part, the validity of the remaimng provisions will not be affected, and the parties' nghts and obligations will be construed and enforced as if the Agreement did not contam the particular provision held to be invalid 9 The City thanks Housmg Kitsap and the County for their efforts in the redevelopment of downtown Bremerton 10 This Agreement may be executed in counterparts CITY OF BREMERTON By � Dated �— 2� " Patty Lent ayor 2 KITSAP COUNTY ay �� Charlotte Garrido Chair, Board of County Commissioners B G�.. - i Josh Brown, County Commissioner i: Attest Gelder, CpSunty Commissioner By � Dana Damels, Clerk o the Board HOUSING KITSAP B �I� �.��� Becky kson, Vice Chair I� Tony C.�C well Executive Director 3 Dated ��/' � � i � � • „ `\`, � . � i � • � 1� �, • �_� � .• 1�,V� , � � .� . t', �\�� � ' • -=� Dated ___� �_�5 I11 EXHIBIT A , . , � � CITY CONTINGENT LOAN AGREEMENT THIS CONfINGENT LOAN AGREEMENT (this "Agreement'� made this 30'� day of August, 2005, by and among CITY OF BREMERTON, WASHINGTON (the "City'�, KITSAP COUNTY, WASHINGTON (the "County"), and KITSAP COLINTY CONSOLIDA'TED HOUSINCi AUTHORITY (the "Authority'�, WITNESSETH: , �� WHEREAS, RCW 35.82 070(12) provides that a housing authority may, upon the request of a county or city, exercise any powers of an urban renewal agency (now known as a community renewal agency) under chapter 35.81 RCW; and WHE1tEAS, bY Ordinance No. 4830, the City Council of the City of Bremerton adopted a"Community Renewal Plan for the Project Area" (the "Community Reaewal Plan'� and authorized the Kitsap Couaty Consolidated Housing Authority (the "Authority'� to exercise the powers of a community renewal agency pursuant to chapter 35.81 RCW; and VV��REAS, RCW 35.81.070 (8) provides that such pov�rers include the power to `borrow money" and to "accept .., loans ... from any sources, public or private" for the piuposes of chapter 35.81 RCW; and WHEREAS, the Project (defined below) is located within the "blighted area" that is the subject of the Community Renewai plan; and WHEREAS, RCW 35.81.130 provides that, "for purposes of aidiag in the planning, undertaking, or carrying out of a community renewal project located within the area in which it is authorized to act, any pubGc body ... may, upon such terms, with or without consideration, .. lend, 8rant, or contribute funds, including without limitation any funds derived from bonds issued or other borrowings authorized in this chapter, to a municipality or other public body;" aad WHEREAS, the Authority, by its Resolution No. 2005-21 adopted June 21, 2005 (the "Authority Resolution'�, authorized the issuance of its Variable Rate Demand Revenue Bonds, 2005 (Hazborside Condominiums Project) (the "Bonds'�, in the priacipal amouat of up to $22,200,000, to finance the development of a 78-unit residential condominium complex to be known as the Harborside Condominiums (the "project'�, pending the receipt of pmceeds from the sale of such condominiums; and WHEREAS, Baak of America, N A. (the "Bank'�, has agreed to facilitate the financing of the Project by providing credit enhancement for the Boads pursuant to, and subject to the limitations of, an iaevocable letter of credit (the "Letter of CrediY'), which will provide for the timely payment of principal of and interest on the Bottds when due; and sas�i u s I VV��REAS, the Authority's reimbursement obligations to the Bank for advances made under the I,etter of Credit will be evidenced by a Reimbursement Agreement dated as of August 1, 2005 (the "Reimbursement Agreement'�, by and between the Authority and the Baalc; and � WHEREAS, the Bank has requested � additional assurances that the Authority's reimbursement obligations to the Bank for advances made under the Letter of Credit to pay priqcipal of or interest on the Bonds wiU be paid when due; and V�►�REAS, the County, by Resolution No. 114-2005 adopted June 27, 2005, declared its intent, if certain conditions are met, including, but not limited to, the condition that the City enter into this Agreement, to enter a contingent loan agreement (the "County CLA'� with the Authority to evidence the County's commitrnent to make loans to the Authority if and to the extent necessary to reimburse the Bank for advances made under the lLettec of Credit when due; and WHEREAS, the City, by motion made and approved at a meeting of the City Council on February 16, 2005, declared its intent, if certain conditions are met, to enter into a financing agreement with the County and the Authority, and a contingetrt loan agreement with the Authority and the County to evidence the City's commitment to make loans to the Authority if and to the extent ne,cessary to repay loaas made by the County uader the County CLA, and appmved the form and execution of tiris Agi�eement; NOW, TI�REFORE, in consideration of the mutual covenants hereinaft.er contained, the parties hereto covenaat and agree as follows. ARTICLE I Incorooration of Documents: Definidons Section 1.01. Incorporation of Docwnents. Copies of the County CLA and the Reimbursement Agreement are attached hereto as Exhibit A and Exhibit B, regpectively. The Authority and the County, as applicable, shall not amend the County CLA or the Reimbursement Agreement without the prior written consent of the City so long ae this Agreement is in effect. Section 1.02. Definitions. Unless the context clearly requir�s otherwise, capitalized terms used but not defined herein shall have the respective meanings assigned to them in the County CLA. ARTTCLE II Loans to the Authontv: Retiavment Terms: Interest Rate: Limitation of Liability , Secdon 2.01. Loans to the Counri. The City agrees to lend to the Authority the principal � amount equal to the amount sufficient, together with proceeds, if any, from the sale of ( condominium units and related parking spaces v�nthin the Project ("Sale Proceeds"), to repay -2- sa�i it� loans made by the County under the County CLA to reimburse the Bank for advances under the �, Letter of Credit to pay principal of and/or interest on the Bonde on behalf of the Authority; provided that the City shall not be required to make any such loans to the Authority until the County has made loans to the Authority under the County CLA in aa aggi�egate priacipal amount equal to $22,200,000 plus interest a�ccrued thereon (the "Threshold Amount'�. The Authority agrees to borrow the amounts described above from the City pursuant to this Agreement for the purpose of ineeting its obligations under the County CLA. The total amount of fiuids to be lent by the City pursuaut to this Agreement shall aot exceed $2,000,000 plus accrued interest thereon. S�tion 2.02. '�ime of Loan. The loan shall be ma,de at such time, if any, a�s the Authority is unable, because of lack of available Sale Pmcee�, if auy, and othe! ���� in the County CLA to repay Couaty Advances made by the Couaty thereunder (subject to the limitations set forth in Section 2.01 above). The loaa may be made in a series of principal advancea. Section 2.03. ReDavment T �. The loan shall be repaid by the Authority on terms established at such time ae fiuids are advanced, w}uch term�s shall onlY recluire the rep�Yment of principal of such advance and interest thereon &om (i) Sale Proceeds in excess of the amotmts needed to pay debt service on the Bonds, to pay amounts due undGC tha Reimburs�ment A,groement and to repay County Advances ma�de by the County undsr the CountY CL,A, an,d (a� fmm the � ather sourc�s spec'ified in the County CLA as sou�+ces for repayment of Couaty Advances thereunder. Section 2.04. . The rate of iatere.9t borne by each loan hereuader shaU ba the average monthly rate that the City receives fmm its invea�nents in the Vyashington State Treasurer's Local (3overrrment Investme�t Pool, but in no event shall the rate of interest on any loan hereunder exceed 8% per annum. 'Ihe City may in its discretion charge a low�er rate of interesk � $�. The Authority shall give written notice to the City, at least 30 days prior to eny date payment is due uader the Reimbursement Agreement to reimburse the Baak for any advance under the Letter of Credit to pay principal of or interest on the Bonds, of any aaticipated deficiency in the amounts available (other than amounts available under the County CLA) to make such payment and shall confirm not later thaa five days prior to the payment date the amount of such deficiency which will, when paid from proceeds of a loan under the County CLA, cause the aggregate amount of loans made by the County under the County CLA to exceed the Threshold Amoun� The City shall deliver the amount so specified to the Authority or the County on behalf of the Authority not later than the business day prior to the day payment is due under the Reimbursement Agreemen� The Authority or the County on behalf of the Authority shall apply such amount to the repayment of such amount due under the County CLA. sa�i it s Section 2.06. Nahue of Authoritv's Obli ation. The obligation of the Authority to make the loan payments from the sources identiSed herein and to perforin and observe the other obligations on its part contained herein shaU be absolute and unconditional, and shall not be subject to diminution by setoff, counterclaim, abatement or othervvise. Section 2.07. Natiue of Citv's ObLQat���. The obligation of the City to advance funds to the Authority in the amounts, at the times and in the manner described herein shall be absolute and unconditional, and shall not be subject to diminution by setoff, counterclaim, abatement or otherwise. ARTICLE III �tem�t�an Default ,� cti . Remedies of Citv on Defa�� If the Authority is in default in its repayment obligations with respect to any loans made to the Authority by the City hereunder (an "Authority Default'� the City may take one or mon of the foUowing steps: (a) If, and only i� the Bonds are no longer Outstanding, amounts are no longer due to the Bank uader the Reimbursement Agi�eement and amounts are no longer due to the Coimty under the County CLA, the City may declare the entire principal balance of the loans (if not then due and psyable) to ba due and payable immediately, and upon any such declaration the principal of the loan sbaU become and be innmediately due aad payable, together with all iaterest accrued thereon to t6e date of such accelera#ion, anything in this Agreement to the contrary notwithstanding; (b) The City may exercise any of it9 rights under any security document given by the Authority to the City to secure loans made hereunder, and (c) The City may proceed to pmtect and enforce its rights in equity or at law, either in mandamus or for the specific performaace of any covenant or agreement contained her�in, or for the enforcement of any other appropriate legal or equitable remedy, as the City may deem most ei�ectual to protect and enforce any of its rights or interests hereunder. The City may waive any Authority Default and may rescind and annul any declazation of acceleration of any advaace(s) aad its consequences; but no such waiver, rescission or annulment shall extend to or affect any subsequent Authority Default or impair any right incident thereto. Section 3.02. Remedies of Authoritv on Default. Upon the occun�ence of a default by the City in its obligations to malce loans to the Authority hereunder (a "City Default'� the Authority may proceed to protect and enforce its rights in equity or at law, either in maadamus or for the specific performance of any covenant or agreement contained herein, or for the enforcement of any other appmpriate legal or equitable remedy, as the Authority may deem most effectual to protect and eaforce aay of its rights or interests hereunder. sav�i i�.s -4- f` ' Section 3.03. No Remedv Exclusivg. No remedy confen�d upon or reserved to either party by this Agreement is intended to b� exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this pgreement or now or hereafter existing at law or in equity or by statute, and either party hereto shall be free to pw�ue, at the same time, each and every remedy� at law or �in equity, which it may have under this Agreement, or otherwise. Section 3.04. I�o Lnplied Waiver. No delay or omission to exercise any right or power accnung upon any default shall impair any such right or power or shall be conshued to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient For the exercise of any remedy, it shall not be necessary to give any notice, other than such notice as may be expressly r�quired herein. Section 3.05. Aereement to Pav Attornevs' Fees and Exne��-s. If a default arises under any of the pmvisions of this Agreement and either patty hereto should employ attorneys or incur other expenses for the collection of amounts due under this qgreement or the enforcement of performance or observance of any obligation or agc�eement on the part of the other party contained in this Agreemeat, on demand therefor, the nonprevailing pariy sha11 pay or reimburse the prevailing pazty for the reasonable fees of such attomeys and such other expenses so incurred. ARTICLE N Miscellaneous Section 4.01. �overniag Law• Venue. This Agi�eement is governed by aad shall be construed in accordance with the substantive laws of the State of Washington and shall be liberally construed so as to carry out the pu=poses hereof. Except as otherwise rcquired by applicable law, any action under this pgreement sh�U (�e bmught in the Superior Court of the State of Washington in end for Kitsap County and/or in the United States District Court for the Western District of Washingtoa Section 4.02. Notices. Except as otherwise provided herein, all notices, consents or other communications required hereunder s�hall be in writing and s�hall be sufficiendy given if addressed and mailed by first-class, certified or registered mail, postage PrePaid and return receipt requested, as follows: To the City: The City of Bremerton Bremerton City Hall, Norm Dicks Government Center 345 6�' Street, Suite 600 Bremerton, Washington 98337 Attn: Director of Finance sast � u s -5- , ' ( To the Authority: Kitsap County Consolidated Housing Authority 9307 Bayshore Drive NW Silverdale, Washington 98383 Attentioa: Executive Director To the County: Kitsap County 614 Division Street Port Orchard, Washington 98366 Attention: Budget and Purchasing Manager The City, the Authority or the County may, by notice given hereunder, designate a�y fiuther or different addresses to which subsequent notices, certificates� request� or other commuaications shall� be sen� Notices shaU be deemed served upon deposit of such notices in the United States mail in the manner provided above. �qon 4.03. Bindns� Effect. This Agreement sball inure to the benefit of and shall be binding upon the City, the Authority and the Couaty and their successors. This Agreement may not be assigced. Section 4.04, Se bi '. In the event any pmvision of this Agreement shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shail not invalidate or render unenforceable any other provision hereof. e' n 4. . Amendments, Tlus pgreement may not be effectively ameaded, changed, modified or altered, except by an instrument in writing duly executed by the City, the Authority and the County (or their successors in title), cti n.0 . Waiver of Breacl� No waiver of any breach of any covenant or agreement contained herein shaii operate as a wai�er af any subsequent breacb of the same covenaat or agi�eement or as a waiver of any breach of any other covenant or agreement, and in case of a breach by either party of any covenaat, agreement or uadertaking, the nondefaulting party may nevertheless accept from the other any payment or payments or performance hereunder without in atty way waiving its right to exercise any of its rights and remedies pmvided for herein or °therwise with resPect to any such default or defaults that we�ce in existence at the time such payment or payments or perforn�ance were accepted by it. Section 4.07. No Riahts Created in Thia� parties. The terms of this Agreement are not intended to establish nor to create aay rights ia any persons or enddes other than the City, the Authority and the County. Se 'o .08. Time of Essence. Time and all terms and conditions sha11 be of the essence of this Agreement. w,9.ii:� '6' Section 4.09. Termination o Agreement The Authority's obligations under this Agreement shall termiaate upon payment in full of all principal of and interest on the Bonds (or defeasance thereo�, payment in full of the Authority's repayment obligation to tlie Bank under the Reimbursement Agreement for advances under the Letter of Credit to pay principat of or interest on the Bonds, payment in full of the Authority's repayment obligation to the County under the County CLA and payment in full of the Authority's repayment obligation, if any, to the City, from t6e soun,es described hereia The obligations of the City hereunder st�aU terminate upon payment in full of the principal of and interest on the Bonds aad all amounts due from the Authority to the Couaty under the County CLA, or upon the making of a loan or loans to the Authority hereunder in the aggregate amount of a2,000,000. Section 4.10. Execution in Counteruarts. This Agi�eement may be executed in couateiparts. , ORAL AGREEMENTS OR ORAL CONA�IITMENTS TO LEND MONEY, EXTEND CREDTT� OR FORBEAR FROM ENFORCINa REPAYMENT OF A DEBT ARE NOT EIVFORCEABLE UNDER WASHINGTON LAW. sa9ti iis -7- � ' 1 � �� , IN WI'TNESS WHEREOF, the City, the Authority and the County have caused this Agreement to be execvted in their respective names by their duly authorized officers, and ha�e caused this Agreement to be dated as of date set forth on page 1 hereof. CIT' � � KTTSAP COUNTY, WASHIN(}TON By Tide: Chair, Board of County Commissioners KITSAP COUNTY CONSOLIDATED HOUSINC3 AUTHORITY By Executive Director sa9ti iz os -8- t � ' ' '� ' KITSAP COUNTY CONSOLIDATED HOUSIN(3 AUTHORITY �/ i i �.li i . � � � iN WtTNESS WHEREOF, the Ciry, the Authority and the County have caused this Agreement to be executed in their respective names by their duly authorized officers, and have caused this Agrcement to be dated as of date set forth on page 1 tiereof. C(TY OF BREMERTON, WASHIN(3TON By: Name• Title: KITSAP CO , HINGTON By Chris �ndresen� Chair, Board of County Commissioners Approved es to Form: By: Deputy Prosecuting Attorney, Kitsap Caunty� Weshington �ao�n:a -8- �. � . � • � � , . . EXHIBIT A County Condngent Loan Agreement (See Transcript, Tab No 7) sa9t� ii s �• . � ' � . . . 1 , J l� " EXHIBIT B � ; Reimbursement Agreement (See Transcr�pt, Tab No. 1 j) 0 r � SW9� 112.3