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Home My WebLink About03/16/2022 CITY COUNCIL AGENDA PACKET______________________________________________________________ CITY COUNCIL 345 6th Street, Suite 100, Bremerton, WA 98337 - Phone (360) 473-5280 WEDNESDAY, MARCH 16, 2022 CITY COUNCIL Virtual/Live Stream MEETING AGENDA To help reduce the spread of COVID-19, the City Council is conducting a virtual meeting. The Chambers remains closed, and all Council Members and staff will be participating in the meeting remotely. The public is invited to view and/or participate in the Council Meeting through one of the following options:  To stream online only (via BKAT Feed, with no interaction possible): https://bremerton.vod.castus.tv/vod/?live=ch1&nav=live  Members of the public are invited to join the Zoom Meeting by clicking on the link below: https://us02web.zoom.us/j/82220081561?pwd=VUJDcnVxNnFtaXV3eldkTGRLVi90UT09  Or One tap mobile: US: +12532158782,,82220081561#,,,,*271192# or +16699006833,,82220081561#,,,,*271192#  Or Telephone: Dial (for higher quality, dial a number based on your current location): US: +1 253 215 8782 or +1 669 900 6833 or +1 346 248 7799 or +1 301 715 8592 Webinar ID: 822 2008 1561 Passcode: 271192 Public questions or comments may be submitted ahead of time to City.Council@ci.bremerton.wa.us 1. CALL TO ORDER: 5:30 P.M. 2. MAYOR'S REPORT 3. PUBLIC RECOGNITION 4. CONSENT AGENDA A. Claims & Check Register B. Meeting Minutes – March 2, 2022 C. Minutes of Study Session – March 9, 2022 D. Purchase of 2022 Replacement Vehicles (Order No. 2) E. City of Bremerton and the Suquamish Tribe for the Gorst Creek Hatchery Area F. Goods and Services Agreement with ADT Commercial for Fire/Security Alarm Systems, Fire Suppression Systems; and Alarm Monitoring, Maintenance and Testing G. Contract with Pape & Sons Construction, Inc. for Oyster Bay Avenue Force Main Replacement Project; and related Budget Amendment H. Public Works Agreement with Vet Industrial, Inc. for the 2022 Sewer Pipe Repairs – Various Locations Project Continued on next page… 5. PUBLIC HEARINGS A. Public Hearing (1st of 2) on the 2nd Amendment to the Concession Agreement with Olympic Soccer & Sports Center, LLC (To receive public comment only; No action by Council until the 2nd Public Hearing on April 6, 2022…) B. Public Hearing on Ordinance No. 5447 amending Chapter 3.78 of the Bremerton Municipal Code (BMC) entitled “Multifamily Property Tax Exemption” (To receive public comment only…) 6. COUNCIL MEMBER REPORTS 7. EXECUTIVE SESSION A. 15-Minutes to discuss Current/Potential Litigation as allowed under RCW 42.30.110(1)(i) No Council action is anticipated… 8. ADJOURNMENT OF CITY COUNCIL BUSINESS MEETING MAYOR’S REPORT March 16, 2022 Photo courtesy of Port of Bremerton Quincy Square Update •Quincy Square construction estimate is $4.5 million and is now fully funded o The City has committed $2 million of local funds o Congressman Kilmer and Senator Murray have secured a $2.5 million Community Funding Grant •In 2022 the project team will complete funding agreement, permitting, and will bid out the project in late fall •Construction will take place in 2023 •The City’s Arts Commission has convened a committee to select an artist for a largescale mural and a second committee that will select an artist for a sculpture. The art will be funded through the project and contracts with the artists for production of the art will come to Council for approval later this year. Learn more about Quincy Square at: www.BremertonWA.gov/QuincySquare Kitsap Lake Cleanup Efforts •City’s efforts to clean up Kitsap Lake highlighted in March 2022 newsletter of the Washington State Lake Protection Association (WALPA), a non-profit organization devoted to the protection of the state’s lakes. •The information focuses on steps taken and successes of the City’s efforts to clean up the lake of Harmful Algae Blooms (HABs) caused by cyanobacteria. •The City will be continuing algae control measures and monitoring of lake water quality in 2022. •Details and data on the cleanup of Kitsap Lake can be found at: https://www.walpa.org/waterline/march-2022/a-new-approach-to-managing- harmful-algae-blooms. CDBG/HOME Program Accomplishments and Progress •The 2021 CDBG/HOME report is now available. The report provides details on the accomplishments in the Community Development Block Grant and HOME program and the City’s progress towards meeting the goals outlined in the City’s Strategic Plan portion of the Consolidated Plan. •This plan is open for a public comment period which will run through March 30. To view the report, visit http://www.BremertonWA.gov/198/Federal-Grants---CDBG. •Comments can be submitted to the City’s CDBG administrator via email: sarah.achaoui@ci.bremerton.wa.us, or by phone: 360-473-5375. From: Alyson Rotter <alyson.rotter@yahoo.com> Sent: Tuesday, March 15, 2022 10:29 PM To: City Council <City.Council@ci.bremerton.wa.us> Subject: Public Comment for 3/16 meeting Thank you for taking the time to read this written public comment as I am unable to attend the meeting to share these comments during the meeting tomorrow. As a resident of the City of Bremerton, an elected School Board Director in the Bremerton School District, and as an employee within a community resilience initiative focused on collaboration, I'd like to thank Leslie Daugs for her service on the council and to the city. Her steadfast leadership and devotion to making Bremerton a better place over her 4 terms of service is admirable. I have always appreciated her approach to leadership by listening, learning, and seeking to understand- which often resulted in better policy making by finding common ground, frankly, something we need more of these days. Thank you for your dedication and your service to the city Ms. Daugs. With gratitude, Alyson Rotter From: Colo, Danni (TRE) <Danni.Colo@tre.wa.gov> On Behalf Of Pellicciotti, Mike (TRE) Sent: Wednesday, March 16, 2022 9:37 AM To: City Council <City.Council@ci.bremerton.wa.us> Subject: Public Comment for the March 16, 2022 City Council Meeting For public comment: Councilmember Daugs: The people of Bremerton and the state of Washington have benefited from your dedicated service for so many years, and I join in the chorus of those who appreciate your commitment to serving the people. Congratulations on your successful four terms on the Council. State Treasurer Mike Pellicciotti (pelly-chee-otty) Mike Pellicciotti | Treasurer STATE OF WASHINGTON 360-902-9001 www.tre.wa.gov | AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Study Session Date: N/A Claims & Check Register COUNCIL MEETING Date: March 16, 2022 Department: Legal Services Presenter: Angela Hoover Phone: (360) 473-5323 SUMMARY: Approval of the following checks and electronic fund transfers: 1. Check Numbers 397344-397532 and Electronic Fund Transfers V34760-V34866 in the grand total amount of $3,107,284.02 2. Regular Payroll for pay period ending February 28, 2022 in the amount of $872,984.25 ATTACHMENTS: FISCAL IMPACTS (Include Budgeted Amount): STUDY SESSION AGENDA: ☒ Limited Presentation ☐ Full Presentation STUDY SESSION ACTION: ☒ Consent Agenda ☐ General Business ☐ Public Hearing RECOMMENDED MOTION: Move to approve the consent agenda as presented. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 01/02/2018 4A AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Minutes of Meeting – March 2, 2022 Study Session Date: N/A COUNCIL MEETING Date: March 16, 2022 Department: City Council Presenter: Council President Phone: (360) 473-5280 SUMMARY: The Minutes of Meeting held on March 2, 2022 are attached. ATTACHMENTS: Meeting Minutes FISCAL IMPACTS (Include Budgeted Amount): None STUDY SESSION AGENDA: ☒ N/A STUDY SESSION ACTION: ☒ Consent Agenda ☐ General Business ☐ Public Hearing RECOMMENDED MOTION: Move to approve the March 2, 2022 Meeting Minutes as presented. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 11/3/17 4B 2 DIGITAL RECORDING CITY COUNCIL MEETING MINUTES Wednesday, March 2, 2022 A virtual meeting of the City Council of the City of Bremerton was called to order Wednesday, March 2, 2022, at 5:30 PM with Council President Michael Goodnow presiding. Council Members present were Eric Younger, Anna Mockler, Quinn Dennehy, Jeff Coughlin, Leslie Daugs, and Jennifer Chamberlin. Also present were City Attorney Kylie Finnell; City Clerk Angela Hoover; Legislative Office Manager Lori Smith; and IT Systems Administrator Kelly Wells. President Goodnow announced that the City Council is continuing to conduct meetings virtually, but now that the indoor mask mandates have been lifted, we will be working with the Administration and the NDGC to start a plan for transitioning from Zoom to in-person and/or hybrid meetings, likely beginning in April, and we thank you for your patience… MAYOR’S REPORT Mayor Wheeler…  Provided an update on Permit Activity;  Established the City will refocus on the City’s Multi-family Housing Tax Exemption (MFTE) Program to increase affordable housing;  Summarized that after receiving feedback on the Eastside Village Plan, the City hosted a Public Meeting to discuss the proposed changes to achieve the plan’s vision;  Discussed the recently approved Kitsap Transit Feasibility Study; and  Announced beginning on March 14, Departments will begin to provide counter service at City Hall with various hours of operation. PUBLIC RECOGNITION Questions and comments from the public were provided by Nick Wofford… CONSENT AGENDA 4A – Claims & Check Register: Check Numbers 397156 through 397343; and EFT-V34668 through EFT-V34759 in the grand total amount of $2,039,708.85; Regular Payroll for pay period ending February 15, 2022 in the amount of $964,518.14; Regular Payroll Payout for pay period ending February 15, 2022 in the amount of $5,335.99; and Retiree Payroll for pay period ending February 28, 2022 in the amount of $51,942.26 4B – Minutes of Meeting – February 16, 2022 4C – Minutes of Study Session – February 23, 2022 4D – 2021–2023 Biennial Water Quality Stormwater Capacity Grant Agreement with WA State Department of Ecology 4E – Professional Services Agreement with Aspect Consulting, LLC for Union River Supply Firm Yield Analysis 4F – Goods and Services Agreement with Petrocard, Inc. for the Purchase of Gasoline, Related Products, and Fuel Supply Services 4G – Public Works Emergency Response Assistance Mutual Aid Agreement (Emergency Proclamation) 4H – Public Works Emergency Response Assistance Mutual Aid Agreement (No Emergency Proclamation) 4I – Goods and Services Agreement with Centrisys-CNP for a Sole Source Purchase of a Complete Rotating Assembly for the Wastewater Treatment Plant Centrifuge City Council Reg. Mtg. Minutes Wednesday, March 2, 2022 Page 2 of 3 4J – Contract with Michels Corporation for the 2022 Sewer Rehabilitation Project 4K – Grant of Easement with United States of America for Water Mains under the Shelton- Bremerton-Bangor (US Navy) Railroad north of Gold Mountain Golf Course 4L – Contract Modification Agreement No. 1 with Materials Testing and Consulting for the Oyster Bay Beach Sewer Upgrades Project 4M – Contract Modification Agreement No. 1 with Parametrix, Inc. for the Gorst Sewer Water Hammer Analysis There were no questions and comments from the public… 5:48 M/S/C/U (Daugs/Coughlin) Move to approve the CONSENT AGENDA as presented. GENERAL BUSINESS 5A – ORDINANCE NO. 5446 ADDING SUBSECTION 7.15.010 (CC) TO THE BREMERTON MUNICIPAL CODE (BMC) ENTITLED “FAILURE TO PROVIDE ADEQUATE CARE”: City Attorney Kylie Finnell explained that Kitsap Humane Society (KHS) has requested that the City of Bremerton add “Failure to Provide Adequate Care” to the Bremerton Municipal Code to assist in KHS’ enforcement efforts pertaining to animal cruelty cases in the City of Bremerton. To provide additional input from the Kitsap Humane Society were Executive Director Lee Harper, and Chief Chase Connolly, Director of Animal Control. There were no questions or comments from the public… 5:52 Motion was made by Daugs; and seconded by Dennehy… Questions and comments were provided by Daugs, Dennehy, and Coughlin; with responses provided by Ms. Finnell, Ms. Harper, and Mr. Connolly… 6:11 M/S/C/U (Daugs/Dennehy) Move to pass Ordinance No. 5446 adding Subsection 7.15.010(cc) to the Bremerton Municipal Code entitled “Failure to Provide Adequate Care.” COUNCIL MEMBER REPORTS Jennifer Chamberlin encouraged people to explore trails at Stephenson Canyon. Leslie Daugs read a statement into the record to tender her resignation from the City Council effective March 18, 2022 Jeff Coughlin summarized several community meetings he’s attended in the past few weeks; was pleased to see the return of late-night ferry service; wasn’t able to attend due to a conflict, but was pleased the Downtown Bremerton Post Office was renamed in honor John Henry Turpin, one of the Navy’s first African-American Chief Petty Officers; and mentioned the opening of several new downtown Bremerton businesses. Quinn Dennehy announced the Race Equity Advisory Committee will be hosting a Virtual Community Conversation on “Getting to Race Equity” on March 8; and added that the late-night ferry service will return starting on March 10. Anna Mockler had looked forward to serving with Council Member Daugs and was saddened by her resignation; was pleased to be representing District 6; reported on several community issues; expressed her support for Ukraine; and encouraged fellow Council Members to reach out to constituents to keep democracy alive. Michael Goodnow announced that volunteers are welcome to join the Charleston Clean-Up on City Council Reg. Mtg. Minutes Wednesday, March 2, 2022 Page 3 of 3 Saturday, April 23; and was sad to hear the decision by Vice President Daugs to resign from the Council. President Goodnow provided a reminder that until further notice, meetings will continue to be held remotely, including the Study Session next Wednesday, on March 9 at 5:00 PM. With no further business, President Goodnow adjourned the Council Meeting at 6:30 PM. Prepared and Submitted by: ______________________________ LORI SMITH Legislative Office Manager APPROVED by the City Council on the 16th day of March, 2022. ________________________________________ MICHAEL GOODNOW , City Council President Attest: ________________________________________ ANGELA HOOVER, City Clerk MG:AH:ls:cg AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Minutes of Study Session – March 9, 2022 Study Session Date: N/A COUNCIL MEETING Date: March 16, 2022 Department: City Council Presenter: Council President Phone: (360) 473-5280 SUMMARY: The Minutes of Study Session held on March 9, 2022 are attached. ATTACHMENTS: Study Session Minutes FISCAL IMPACTS (Include Budgeted Amount): None STUDY SESSION AGENDA: ☒ N/A STUDY SESSION ACTION: ☒ Consent Agenda ☐ General Business ☐ Public Hearing RECOMMENDED MOTION: Move to approve the March 9, 2022 Study Session Minutes as presented. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 11/3/17 4C 2 CITY COUNCIL STUDY SESSION MINUTES Wednesday, March 9, 2022 A virtual Study Session of the City Council of the City of Bremerton was called to order on Wednesday, March 9, 2022 at 5:00 PM, with Council President Michael Goodnow presiding. Other Council Members present were Eric Younger, Anna Mockler, Quinn Dennehy, Jeff Coughlin, Leslie Daugs, and Jennifer Chamberlin. Also present were Legislative Office Manager Lori Smith and IT Network Engineer Hans Nilsson. President Goodnow established that to help reduce the spread of COVID-19, and until the Norm Dicks Government Center is open to the public, the City Council is conducting the Study Session via Zoom, and all Council Members and staff will be participating remotely… He further established that the Study Session is open for the public to listen-in, there will be no opportunities for input; no action is anticipated; and the content of these items is subject to change. If approved by the Council, these items will be placed on the March 16, 2022 City Council Virtual Meeting Agenda… A. BRIEFINGS on AGENDA BILL ITEMS 1. Purchase of 2022 Replacement Vehicles (Order No. 2) Consent Agenda 2. Lease Agreement with the Suquamish Tribe for the Gorst Creek Hatchery Area Consent Agenda 3. Goods and Services Agreement with ADT Commercial for Fire/Security Alarm Systems, Fire Suppression Systems; and Alarm Monitoring, Maintenance and Testing Consent Agenda 4. Contract with Pape & Sons Construction, Inc. for Oyster Bay Avenue Force Main Replacement Project; and related Budget Amendment Consent Agenda 5. Public Works Agreement with Vet Industrial, Inc. for the 2022 Sewer Pipe Repairs – Various Locations Project Consent Agenda 6. Proposed Public Hearing on the 2nd Amendment to the Concession Agreement with Olympic Soccer & Sports Center, LLC (1st of 2 to receive public comment only…) 7. Proposed Public Hearing (1st of 2) on Ordinance amending Chapter 3.78 of the Bremerton Municipal Code (BMC) entitled “Multifamily Property Tax Exemption” (1st of 2 to receive public comment only…) B. GENERAL COUNCIL BUSINESS o Audit Committee Monthly Briefing (Last Meeting 2/28/22) – Chair Jeff Coughlin o Public Safety Committee Monthly Briefing (Last Meeting 3/3/22) – Chair Jennifer Chamberlin o Race Equity Advisory Committee Community Conversation (Event 3/8/22) – Chair Quinn Dennehy o Other General Council Business was briefly discussed, including a reminder for Council Members who provided an RSVP, that the Gold Mountain Tour would be taking place this Saturday, March 12 beginning at 10:00 AM. President Goodnow reminded the public that all meetings will be held remotely until further notice, possibly in April, including the next Council Meeting on Wednesday, March 16, 2022, beginning at 5:30 PM. City Council Study Session Minutes Wednesday, March 9, 2022 Page 2 of 2 With no further business, the Study Session was adjourned at 7:35 PM. Prepared and submitted by: ______________________________ LORI SMITH Legislative Office Manager APPROVED by the City Council on the 16th day of March, 2022. MICHAEL GOODNOW , Council President ATTEST: ______________________________ ANGELA HOOVER, City Clerk MG:AH:ls:cg AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Study Session Date: March 9, 2022 Purchase of 2022 Replacement Vehicles (Order No. 2) COUNCIL MEETING Date: March 16, 2022 Department: PW & U Presenter: Chris Mottner Phone: (360) 473-2316 SUMMARY: The approved 2022 budget includes replacement and purchase of twenty-one vehicles. Order No. 1 included thirteen vehicles and was approved by Council on December 1, 2021. This Order No. 2 includes three vehicles - similar to Order No. 1 the vehicles will be purchased using the Washington State DES Procurement Contract #05916. At this time, only these three vehicles are available from the original 2022 Vehicle Replacement Listing. The remaining five vehicles will be purchased in late 2022 when those vehicles are available for purchase by the Washington State DES Procurement Contract. ATTACHMENTS: 1) Justification; 2) Vehicle Purchase Summary; 3) Quotes FISCAL IMPACTS (Include Budgeted Amount): All vehicles identified on the vehicle purchase list are budgeted in 2022. STUDY SESSION AGENDA: ☒ Limited Presentation ☐ Full Presentation STUDY SESSION ACTION: ☒ Consent Agenda ☐ General Business ☐ Public Hearing RECOMMENDED MOTION: Move to approve the 2022 vehicle purchase order as presented in the summary in the amount of $109,885.14, including Washington State Sales Tax. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 11/09/2021 4D AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Lease Agreement between the Study Session Date: March 9, 2022 City of Bremerton and the Suquamish Tribe for the Gorst Creek Hatchery Area COUNCIL MEETING Date: March 16, 2022 Department: PW & U Presenter: Chris Mottner Phone: (360) 473-2316 SUMMARY: Staff requests approval of the property Lease Agreement with the Suquamish Tribe for the Gorst Creek Fish Hatchery operations. This Lease Agreement is for a 10 – year term and provides provisions for property use, maintenance and operations and accurately defines Lease area boundaries and access to the property. ATTACHMENTS: Lease Agreement with the Suquamish Tribe FISCAL IMPACTS (Include Budgeted Amount): No fiscal impacts. STUDY SESSION AGENDA: ☒ Limited Presentation ☐ Full Presentation STUDY SESSION ACTION: ☒ Consent Agenda ☐ General Business ☐ Public Hearing RECOMMENDED MOTION: Move to approve the Lease Agreement between the City and the Suquamish Tribe for the Gorst Creek Hatchery Area; and authorize the Mayor to finalize and execute the agreement with substantially the same terms and conditions as presented. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 11/09/2021 4E AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Study Session Date: March 9, 2022 Goods and Services Agreement with ADT Commercial for Fire/Security Alarm Systems, Fire Suppression Systems; and Alarm Monitoring, Maintenance and Testing COUNCIL MEETING Date: March 16, 2022 Department: PW & U Presenter: Chris Mottner Phone: (360) 473-2316 SUMMARY: Requests for proposals were prepared, advertised, distributed and received, pursuant to Public Works Bid Laws and Procedures. The Low Bidder was ADT Commercial, of Bothell, WA. The Department requests approval of the bid award for the Goods and Services Agreement with ADT Commercial for a five-year term, as specified within the agreement. ATTACHMENTS: 1) Goods and Services Agreement; 2) Specifications / Bid Proposal; 3) Bid Tabulation Sheet FISCAL IMPACTS (Include Budgeted Amount): Annual Fire / Security Alarm services will be $26,824.90 and is included within the City’s approved Operations and Maintenance budgets. STUDY SESSION AGENDA: ☒ Limited Presentation ☐ Full Presentation STUDY SESSION ACTION: ☒ Consent Agenda ☐ General Business ☐ Public Hearing RECOMMENDED MOTION: Move to approve Goods and Services Agreement with ADT Commercial for Fire / Security Alarm Systems, Fire Suppression Systems, and Alarm Monitoring, Testing and Maintenance in the amount of $26,824.90 per year for a five (5) year term and authorize the Mayor to finalize and execute the agreement with substantially the same terms and conditions as presented. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 11/09/2021 4F GOODS AND SERVICES AGREEMENT THIS AGREEMENT, is entered into between the City of Bremerton, a Washington Municipal Corporation ("City"), and ADT Commercial ("Vendor"), whose mailing address is: 21312 -30th Drive S.E. # 103 Bothell, WA 98021. The parties agree as follows: I.VENDOR SERVICES. The Vendor shall provide the following goods and materials and/or perform the following services for the City: Fire I Security Alarm Systems, Fire Suppression Systems and Alarm Monitoring, Testing and Maintenance. The vendor agrees to perform the services more specifically described in the Specifications, including any attachments thereto, attached hereto as Exhibit A, which is incorporated by reference herein. The Specifications may be modified only pursuant to section "VI Changes" of this agreement. If the Specifications provides for unspecified additional services, such services shall only be performed upon the expressed written request of the City. Vendor further represents that the services furnished under this agreement will be performed in accordance with generally accepted professional practices in effect at the time such services are performed as outlined in the work Specifications. II.TIME OF COMPLETION/TERM. Vendor shall commence the work and provide all goods, materials and services on receiving of the City's official Notice to Proceed, after contract award and will terminate on March 15, 2027 unless terminated earlier pursuant to this agreement. This time period is the initial five (5) year "Term" of the Agreement. III.COMPENSATION. The City shall pay the Vendor in an amount not to exceed $ 26,824.90 per year, including applicable Washington State Sales Tax, for Fire / Security Alarm Testing. The City shall pay the Vendor for services at the specified rates, attached hereto as Exhibit A, which is incorporated by reference herein. Including all goods, materials and services contemplated in this Agreement. Vendor shall submit regular billing statements describing work performed and amount charged for Fire / Security Alarm Systems, Fire Suppression Systems and Alarm Monitoring, Testing and Maintenance service. The descriptions and work locations shall conform to and fall within the categories set out in the Scope of Work. Upon receipt of a conforming billing statement, the City shall promptly process the payment. A.Defective or Unauthorized Work. The City reserves its right to withhold payment from Vendor for any defective or unauthorized services. If vendor is unable for any reason, to complete any part of this Agreement, the City may obtain the goods, materials or services on its own or from a third party, and Vendor shall be liable to the City for any additional costs incurred by the City. "Additional costs" shall mean all reasonable costs, including legal costs and attorney fees, incurred by the City beyond the maximum Agreement price specified above. The City further reserves its right to deduct the cost to complete this Agreement, including any Additional Costs, from any and all amounts due or to become due the Vendor. IV.INDEPENDENT CONTRACTOR. Vendor is and shall be at all times acting as an independent contractor and not as an employee of the City. The Vendor shall secure at its expense, Page I of8 Goods and Services Agreement Rev. 06/2020 and shall be responsible for all payments of income tax, social security, state disability insurance compensation, unemployment compensation, and all other payroll deductions for the Vendor, officer, agents, employees and subcontractors. The Vendor shall also secure all applicable business licenses, if required, in connection with the contract services, including all required licenses for Vendor's officers, agents, employees and subcontractors. The vendor shall also adhere to all applicable Washington State prevailing wage rate provisions. V.TERMINATION A.The City may terminate this Agreement for good cause. "Good cause" shall include, without limitation, any one or more of the following events: 1.The Vendor's refusal or failure to supply a sufficient number of properly skilled workers or proper services for completion of this Agreement. Or failure to perform services as outlined in the work specifications. 2.The Vendor's failure to complete this Agreement within the time specified in this Agreement. 3.The Vendor's failure to make full and prompt payment to subcontractors or for material or labor. 4.The Vendor's failure to comply with federal, state or local laws, rules or regulations. 5.The Vendor's filing for bankruptcy or becoming adjudged bankrupt. If the City terminates this Agreement for good cause, the Vendor shall not receive any further monies due under this Agreement until the goods, materials, and services required by this Agreement are completed and fully performed by the City or a third party of the City's choosing. B.The City may terminate this Agreement without cause "For Convenience" 1.The City shall have the right upon ninety (90) days written notice to the other party to terminate this Agreement without cause. If this Agreement is so terminated, the parties shall be liable only for performance rendered or costs incurred in accordance with the terms of this Agreement prior to the effective date of termination VI.CHANGES. The City may issue a written change order for any change in the goods, materials or services to be provided during the performance of this Agreement. If the Vendor determines, for any reason, that a change order is necessary, Vendor must submit a written change order request to an authorized agent of the City within fourteen (14) calendar days of the date Vendor knew or should have known of the facts and events giving rise to the requested change. If the City determines that the change increases or decreases the Vendor's costs or time for Page 2 of8 Goods and Services Agreement Rev. 06/2020 performance, the City will make an equitable adjustment. The City will attempt, in good faith, to reach agreement with the Vendor on all equitable adjustments. However, if the parties are unable to agree, the City will determine the equitable adjustment as it deems appropriate. The Vendor shall proceed with the change order work upon receiving either a written change order from the City or an oral order from the City before actually receiving the written change order. If the Vendor fails to require a change order within the time allowed, the Vendor waives its right to make any claim or submit subsequent change order requests for that portion of the contract work. If the Vendor disagrees with the equitable adjustment the Vendor must complete the change order work; however, the Vendor may elect to protest the adjustment as provided below: A.Procedure and Protest by the Vendor. If the Vendor disagrees with anything required by a change order, another written order, or an oral order from the City, including any direction, instruction, interpretation, or determination by the City, the Vendor shall: 1.Immediately give a signed written notice of protest to the City; 2.Supplement the written protest within fourteen (14) calendar days with a written statement that provides the following information: a.The date of the Vendor's protest. b.The nature and circumstances that caused the protest. c.The provisions in this Agreement that support the protest. d.The estimated dollar cost, if any, of the protested work and how that estimate was determined. e.An analysis of the progress schedule showing the schedule change or disruption if the Vendor is asserting a schedule change or disruption. 3.The Vendor shall keep complete records of extra costs and time incurred as a result of the protested work. The City shall have access to any of the Vendor's records needed for evaluating the protest. The City will evaluate all protests, provided the procedures in this section are followed. If the City determines that a protest is valid, the City will adjust payment for work or time by an equitable adjustment. No adjustment will be made for an invalid protest. B.Vendor's Duty to Complete Protested Work. In spite of any protest, the Vendor shall proceed promptly to provide the goods, materials and services required by the City under this Agreement. C.Vendor's Acceptance of Changes. The Vendor accepts all requirements of a change order by: (1) endorsing it, (2) writing a separate acceptance, or (3) not protesting in the way this section provides. A change order that is accepted by Vendor as provided in this section shall constitute full payment and final settlement of all claims for contract time and for direct, indirect and consequential costs, including costs of delays related to any work, either covered or affected by the change. D.Failure to Protest Constitutes Waiver. By not protesting as this section provides, Page 3 of8 Goods and Services Agreement Rev. 06/2020 the Vendor also waives any additional entitlement and accepts from the City any written or oral order (including directions, instructions, interpretations, and determination). E.Failure to Follow Procedures Constitutes Waiver. By failing to follow the procedures of this section, the Vendor completely waives any claims for protested work and accepts from the City any written or oral order (including directions, instructions, interpretations, and determination). VII.CLAIMS. The Vendor shall give written notice to the City of all claims other than change orders within fourteen (14) calendar days of the occurrence of the events giving rise to the claims. Any claim for damages, additional payment for any reason, or extension of time, whether under this Agreement or otherwise, shall be conclusively deemed to have been waived by the Vendor unless a timely written claim is made in strict accordance with the applicable provisions of this Agreement; or, if (and only if) no such provision is applicable, unless that claim is set forth in detail in writing and received by the City within seven (7) calendar days from the date Vendor knew, or should have known, of the facts giving rise to the claim. At a minimum, a Vendor's written claim must include the information set forth regarding protests in Section VI(A)(2)(a)-(e). FAIL URE TO PROVIDE A COMPLETE, WRITTEN NOTIFICATION OF CLAIM WITHIN THE TIME ALLOWED SHALL BE AN ABSOLUTE WAIVER OF ANY CLAIMS ARISING IN ANY WAY FROM THE FACTS OR EVENTS SURROUNDING THAT CLAIM OR CAUSED BY THAT DELAY. Vendor must, in any event, file any claim or bring any suit arising from or connected with this Agreement within 120 calendar days from the date the contract work is complete. VIII.INDEMNIFICATION. Vendor shall defend, indemnify and hold the City, its officers, officials, employees, agents and volunteers harmless from any and all claims, injuries, damages, losses or suits, including all legal costs and attorney fees, arising out of or in connection with the performance of this Agreement. Vendor's obligation to indemnify shall not extend to that portion of damages caused by the City's sole negligence. The City's inspection or acceptance of any of Vendor's work when completed shall not be grounds to avoid any of these covenants of indemnification. Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the Vendor and the City, its officers, officials, employees, agents and volunteers, the Vendor's liability hereunder shall be only to the extent of the Vendor's negligence. IT IS FURTHER SPECIFICALLY AND EXPRESSLY UNDERSTOOD THAT THIS INDEMNIFICATION CONSTITUTES THE VENDOR'S WAIVER OF IMMUNITY UNDER INDUSTRIAL lN URANCE, TITLE 51 RCW, SOLELY FOR THE PURPOSES OF THIS INDEMNIFICATION. THE PARTIES ACKNOWLEDGE THAT THEY HAVE MUTUALLY NEGOTIATED THIS W AIYER. Page 4 of8 Goods and Services Agreement Rev. 06/2020 The provisions of this section shall survive the expiration or termination of this Agreement. IX.INSURANCE. The Vendor shall procure and maintain for the duration of this Agreement, insurance against claims for injuries to persons or damage to property that may arise from or in connection with the performance of the contract work by the Vendor, its agents, representatives, employees or subcontractors. Before beginning work on the project described in this Agreement, the Vendor shall provide a Certificate of Insurance evidencing: A.Automobile Liability insurance with limits no less than $1,000,000 combined single limit per accident for bodily injury and property damage; and B.Commercial General Liabilitv insurance written on an occurrence basis with limits no less than $1,000,000 combined single limit per occurrence and $2,000,000 aggregate for personal injury, bodily injury and property damage. Coverage shall include but not be limited to: blanket contractual; products/completed operations/broad form property damage; and employer's liability. C.Excess Liability insurance with limits not less than $1,000,000 limit per occurrence and aggregate. D.Professional Liabilitv insurance with limits no less than $1,000,000 limit per occurrence/ claim. E.Workers Compensation insurance as statutorily required by the Industrial Insurance Act of the State of Washington, Title 51, Revised Code of Washington and employer's liability with limits not less than $1,000,000. Any payment of deductible or self-insured retention shall be the sole responsibility of the Vendor. All required policies shall be provided on an "occurrence" basis except professional liability insurance (if required), which shall be provided on a "claims-made" basis. The City shall be named as an additional insured on the Commercial General Liability insurance policy, as respects work performed by or on behalf of the Vendor and a copy of the endorsement naming the City as additional insured shall be attached to the Certificate oflnsurance. The City reserves the right to receive a certified copy of all the required insurance policies. The Vendor's Commercial General Liability insurance shall contain a clause stating that coverage shall apply separately to each insured against whom claim is made or suit is brought, except with respects to the limits of the insurer's liability. Goods and Services Agreement Rev. 06/2020 Page 5 of8 The Vendor's insurance shall be primary and non-contributory insurance as respects the City and shall contain a waiver of subrogation against the City for claims arising out of any operations, liabilities and obligations to which coverage applies. It shall be an affirmative obligation upon Vendor to advise the City's Risk Manager by fax at (360) 473-5161, or by certified mail, return receipt requested to City of Bremerton, Attn: Risk Management, 345 6th Street, Suite 100, Bremerton, WA 98337 within two days of the cancellation, suspension or substantive change of any insurance policy required herein, and failure to do so shall be construed to be a breach of this Agreement. The City also reserves its unqualified right to require at any time and for any reason, proof of coverage in the form of a duplicate of the insurance policy with all endorsements as evidence of coverage. X.MISCELLANEOUS. A.Licenses and Taxes. Vendor shall possess a current Bremerton Business License and any regulatory license required to fulfill Vendor's obligations under this Agreement. B&O taxes shall be paid when due, and Vendor, by this Agreement, assigns any payments due under this Agreement to the City Clerk for payment of such taxes which have been declared delinquent. B.Conflict and Precedence. In the event of a conflict between the contract documents, the document which rates higher on the following list shall take precedence: 1.Amendments / Change Orders to Goods and Services Agreement 2.Goods and Services Agreement 3.Specifications and Bid Proposal (Exhibit A) C.Documents Incorporated by Reference. The following documents are incorporated by reference, including but not limited to: 1.Specifications and Bid Proposal (Exhibit A) 2.Non-Collusion Affidavit. D.Use of Photographs and Images. Vendor shall not use or distribute photographs or images depicting City officials, personnel, property, or equipment whether prepared by Vendor or provided by City without prior written consent of the City. The City will not unreasonably withhold its consent. E.Equal Employment Opportunity Statement. In the hiring of employees for the performance of work under this Agreement, the Vendor, its subcontractors, or any person acting on behalf of Vendor shal 1 not discriminate in any employment practice on the basis of age ( 40+ ), sex, race, creed, color, national origin, sexual orientation/gender identity, marital status, military status, or the presence of any physical, mental or sensory disability. F.ADA tatement. The City of Bremerton does not discriminate on the basis of disability in programs and activities, which it operates pursuant to the requirements of the Page 6 of8 Goods and Services Agreement Rev. 06/2020 Americans with Disabilities Act of 1990, and ADA Amendments Act. This policy extends to both employment and admission to participation in the programs, services and activities of the City of Bremerton. Reasonable accommodation for employees or applicants for employment will be provided. G.Compliance with Laws. Vendor shall comply with all federal, state and local laws, rules and regulations throughout every aspect in the performance of this Agreement. H.Prevailing Wage . Vendor shall file a "Statement of Intent to Pay Prevailing Wages" with the State of Washington Department of Labor & Industries prior to commencing the contract work. Vendor shall pay prevailing wages and comply with Chapter 39.12 of the Revised Code of Washington, as well as any other applicable prevailing wage rate provisions. Refer to the latest prevailing wage rate revision issued by the Department of Labor and Industries. I.Work Performed at Vendor's Risk. Vendor shall take all precautions necessary and shall be responsible for the safety of its employees, agents, and subcontractors in the performance of this Agreement. All work shall be done at Vendor's own risk, and Vendor shall be responsible for any loss of or damage to materials, tools, or other articles used or held for use in connection with the work. J.Governing: Law. This Agreement shall be governed and construed in accordance with the laws of the State of Washington. If any dispute arises between the City and Vendor under any of the provisions of this Agreement, resolution of that dispute shall be available exclusively under the jurisdiction, venue and rules of the Kitsap County Superior Court, Kitsap County, Washington. K.Attorney's Fee . In any claim or lawsuit for damages arising from the parties' performance of this Agreement, each party shall be responsible for payment of its own legal costs and attorney's fees incurred in defending or bringing such claim or lawsuit; however, nothing in this subsection shall limit the City's right to indemnification under Section IX of this Agreement. L.Written Notice. All communications regarding this Agreement shall be sent to the parties at the addresses listed below, unless otherwise notified. Any written notice shall become effective upon delivery, but in any event three (3) calendar days after the date of mailing by registered or certified mail, and shall be deemed sufficiently given if sent to the addressee at the address stated in this Agreement. Notices to be sent to: CITY: Attn: Chris Mottner City of Bremerton 345 6th Street, Suite 100 Bremerton, WA 983 3 7-1891 Goods and Services Agreement Rev. 06/2020 Page 7 of 8 Notices to be sent to: VENDOR: Attn: Keith Antipow ADT Commercial 21312 30th Drive S.E. #103 Bothell, WA 98021 M.Assignment. Any assignment of this Agreement by the Vendor without the written consent of the City shall be void. N.Modification. No waiver, alteration, or modification of any of the provisions of this Agreement shall be binding unless in writing and signed by a duly authorized representative of the City and Vendor. 0.Severability. If any one or more sections, subsections, or sentences of this Agreement are held to be unconstitutional or invalid, that decision shall not affect the validity of the remaining portion of this Agreement and the remainder shall remain in full force and effect. P.Entire Agreement. The written provisions and terms of this Agreement, together with any attached Exhibits, supersede all prior verbal statements by any representative of the City, and those statements shall not be construed as forming a part of or altering in any manner this Agreement. This Agreement and any attached Exhibits contain the entire Agreement between the parties. Should any language in any Exhibit to this Agreement conflict with any language contained in this Agreement, the terms of this Agreement shall prevail. IN WITNESS WHEREOF, the parties below have executed this Agreement. CITY: VENDOR: City of Bremerton ADT Commercial By:. ___________ _ By: _________ _ Print Name: __________ Print Name: _________ _ Its: Its: --------------------------Date: ___________ _ Date: ___________ _ APPROVED AS TO FORM: ATTEST: B y: _____________ _ By: _________ _ KYLIE FINNELL, Bremerton City Attorney ANGELA HOOVER, City Clerk R:\Legal\Legal\Forms\FORMS ON COBWEB\Goods and Services Agreement Rev 06 2020.docx Goods and Services Agreement Rev. 06/2020 Page 8 of8 AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Study Session Date: March 9, 2022 Contract with Pape & Sons Construction, Inc. for Oyster Bay Avenue Force Main Replacement Project; and related Budget Amendment COUNCIL MEETING Date: March 16, 2022 Department: PW&U Presenter: Bill Davis Phone: (360) 473-2312 SUMMARY: The project will install approximately 1900 linear feet of 12-inch PVC force main and approximately 330 linear feet of 15-inch PVC gravity sewer next to the existing force main. A portion of the existing main will remain online, providing some redundancy within the system. The remainder of the existing piping will be taken off-line and abandoned in-place. Three new air relief valves will also be installed. Ten (10) bids were submitted, which were opened on February 24, 2022. The lowest responsive and responsible bid was from Pape & Sons Construction, Inc. in the amount of $892,511.62, including sales tax. ATTACHMENTS: 1. Contract; 2. Location Map; and 3. Bid Tabulation FISCAL IMPACTS (Include Budgeted Amount): This is an emergent project which was not included in the 2022 Capital Improvement Plan. The project requires a budget of $1,100,000 to be allocated from the Wastewater Fund. STUDY SESSION AGENDA: ☒ Limited Presentation ☐ Full Presentation STUDY SESSION ACTION: ☒ Consent Agenda ☐ General Business ☐ Public Hearing RECOMMENDED MOTION: Move to amend the Wastewater Capital Budget to add $1,100,000 for the Oyster Bay Avenue Force Main Project and award the construction contract to Pape & Sons Construction, Inc. in the amount of $892,511.62, including sales tax, and authorize the Mayor to finalize and execute the agreement with substantially the same terms and conditions as presented. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 01/02/2018 4G BID FORMS RFB for OYSTER BAY AVENUE FORCE MAIN REPLACEMENT FEBRUARY 2022 Page 21 of 122 CONTRACT (Page 1 of 3) THIS AGREEMENT is dated the day of in the year 2022 by and between City of Bremerton (hereinafter called CITY) and ____________________________________ (hereinafter called CONTRACTOR). CITY and CONTRACTOR, in consideration of the mutual covenants hereinafter set forth, agree as follows: ARTICLE 1. WORK. CONTRACTOR shall complete the WORK as specified or indicated in the CITY's Contract Documents entitled Oyster Bay Avenue Force Main Replacement ARTICLE 2. CONTRACT TIMES. The WORK shall obtain Substantial Completion within 100 calendar days of Notice to Proceed. Time is of the essence as to each and every deadline set forth in this agreement. This provision has been specifically negotiated. ARTICLE 3. LIQUIDATED DAMAGES. CITY and the CONTRACTOR recognize that time is of the essence for this Agreement and that the CITY will suffer financial loss if the WORK is not completed within the time specified in Article 2 herein, plus any extensions thereof allowed in accordance with Section 1-08.8 of the Standard Specifications which may be modified by the Special Provisions. They also recognize the delays, expense, and difficulties involved in proving in a legal proceeding the actual loss suffered by the CITY if the WORK is not completed on time. Accordingly, instead of requiring any such proof, the CONTRACTOR shall pay the CITY liquidated damages in the amount of $1000 per day after the date of Substantial Completion. ARTICLE 4. CONTRACT PRICE. CITY shall pay CONTRACTOR for completion of the WORK in accordance with the Contract Documents in the amount set forth in the Bid Proposal, which shall include sales tax as provided in Section 1-07.2(2) of the Special Provisions. ARTICLE 5. PAYMENT PROCEDURES. CONTRACTOR shall submit Applications for Payment in accordance with Section 1-09.9 of the Standard Specifications which may be modified by the Special Provisions. Applications for Payment will be processed by ENGINEER as provided in the Special Provisions _____________________ Contractor Initials Pape & Sons Construction, Inc BID FORMS RFB for OYSTER BAY AVENUE FORCE MAIN REPLACEMENT FEBRUARY 2022 Page 22 of 122 CONTRACT (Page 2 of 3) ARTICLE 6. CONTRACT DOCUMENTS. The Contract Documents which comprise the entire agreement between CITY and CONTRACTOR concerning the WORK consist of this Contract and the following which are either attached or incorporated herein by reference: -Notice Inviting Bids, -Bidders Checklist, -Bid Proposal including the Proposal Forms, Information Required of Bidder, Bid Bond, and all required certificates and affidavits, -Performance Bond, -Payment Bond, -Standard Specifications, -Amendments to the Standard Specifications, -Appendices, -Special Provisions, -Contract Plans, -Addenda numbers _____ to _____, inclusive. -Change Orders which may be delivered or issued after Effective Date of the Agreement and are not attached hereto. There are no Contract Documents other than those listed in this Article 6. The Contract Documents may only be amended by Change Order as provided in Section 1-04.4 of the Standard Specifications which may be modified by the Special Provisions. ARTICLE 7. INDEMNIFICATION. The CONTRACTOR and CITY acknowledge and agree that they have negotiated the following in accordance with the requirements of RCW 4.24.115 and the CONTRACTOR specifically waives his immunity under industrial insurance under Title 51 RCW. To the fullest extent permitted by Laws and Regulations, the CONTRACTOR shall indemnify, defend, and hold harmless the CITY, ENGINEER, their consultants, sub consultants, and the officers, directors, employees, and agents of each and any of them, against and from any and all claims, injuries, damages, losses or suits, including all legal costs and attorney fees, all claims and liability arising under, by reason of, related, or incidental to the Contract Documents or any performance of the WORK, but not from the sole negligence or willful misconduct of the CITY and/or the ENGINEER as further defined in the Contract Documents. The provisions of this section shall survive the termination of the contract. _____________________ Contractor Initial 1 1 BID FORMS RFB for OYSTER BAY AVENUE FORCE MAIN REPLACEMENT FEBRUARY 2022 Page 23 of 122 CONTRACT (Page 3 of 3) ARTICLE 8. ASSIGNMENT No assignment by a party hereto of any rights under or interests in the Contract Documents will be binding on another party hereto without the written consent of the party sought to be bound; and specifically but without limitation monies that may become due and monies that are due may not be assigned without such consent (except to the extent that the effect of this restriction may be limited by law), and unless specifically stated to the contrary in any written consent to an assignment, no assignment will release or discharge the assignor from any duty or responsibility under the Contract Documents. The CITY, in its sole discretion, may refuse to allow the CONTRACTOR to assign any or all of its duties, rights and/or responsibilities under the Agreement, except with regards to an assignment of funds for security purposes. In the case of an assignment for security purposes the CITY may condition its approval to the extent it deems necessary to assure that there will be adequate funds to complete the WORK and to pay a subcontractors and suppliers. CITY and CONTRACTOR each binds itself, its partners, successors, assigns and legal representatives to the other party hereto, its partners, successors, assigns and legal representatives in respect of all covenants, agreements and obligations contained in the Contract Documents. IN WITNESS WHEREOF, CITY and CONTRACTOR have caused this Agreement to be executed the day and year first above written. CITY : City of Bremerton CONTRACTOR (Signature) (Signature) By Greg Wheeler, Mayor By (Printed name) (Printed name) [CORPORATE SEAL] Attest Attest Address for giving notices Address for giving notices License No. Approved as to Form: Agent for service of process: (Signature) City Attorney _______ (Title) Pape & Sons Construction, Inc PROJECT LOCATION Oyster Bay Ave Oyster Bay Ave Force Main Replacement Project (Project Number #5867) AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Study Session Date: March 9, 2022 Public Works Agreement with Vet Industrial, Inc. for the 2022 Sewer Pipe Repairs – Various Locations Project COUNCIL MEETING Date: March 16, 2022 Department: PW&U Presenter: Bill Davis Phone: (360) 473-2312 SUMMARY: The project will repair 2 pipe sections and install one manhole in preparation for upcoming cure-in-place-pipe (CIPP) lining projects. Three (3) bids were submitted, which were opened on February 24, 2022. The lowest responsive, responsible bidder was Vet Industrial, Inc., who submitted a bid in the amount of $185,776.33 including sales tax. ATTACHMENTS: 1. Contract; 2. Location Map; and 3. Bid Tabulation FISCAL IMPACTS (Include Budgeted Amount): The budget amount in the 2022 Wastewater Capital Budget for this project is $250,000. STUDY SESSION AGENDA: ☒ Limited Presentation ☐ Full Presentation STUDY SESSION ACTION: ☒ Consent Agenda ☐ General Business ☐ Public Hearing RECOMMENDED MOTION: Move to award the contract for the 2022 Sewer Pipe Repairs – Various Locations Project to Vet Industrial, Inc. in the amount of $185,776.33 (which includes sales tax); and authorize the Mayor to finalize and execute the agreement with substantially the same terms and conditions as presented. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 01/02/2018 4H PUBLIC WORKS AGREEMENT – Page 1 of 10 (between City of Bremerton and Vet Industrial, Inc.) Rev. 09/2021 PUBLIC WORKS AGREEMENT THIS AGREEMENT is entered into between the City of Bremerton, a Washington Municipal Corporation (“City”), and Vet Industrial, Inc. (“Contractor”), whose mailing address is 1234 Charleston Beach Road, Suite B, Bremerton, WA 98312. The parties agree as follows: 1.CONTRACTOR SERVICES. The Contractor shall perform the following services for the City described in the Bid Documents titled: 2022 Sewer Pipe Repairs – Various Locations. 2. TIME OF COMPLETION. Contractor shall complete the work within 90 calendar days from the date of issuance of the City’s Notice to Proceed. 3. COMPENSATION. The City shall pay the Contractor the total amount of $185,776.33, including applicable Washington State Sales Tax, for the work and services contemplated in this agreement. The Contractor shall invoice the City monthly. The City will pay for the portion of the work described in the invoice that has been completed by the Contractor and approved by the City. The City payment shall not constitute a waiver of the City’s right to final inspection and acceptance of the project. A.Performance Bond. Pursuant to Chapter 39.08 RCW, the Contractor shall provide the City a performance bond for the full contract amount to be in effect until thirty (30) days after the date of final acceptance, or until receipt of all necessary releases from the State Department of Revenue and the State Department of Labor and Industries and until settlement of any liens filed under Chapter 60.28 RCW, whichever is later. B.Retainage. The City shall hold back a retainage in the amount of five percent (5%) of any and all payments made to contractor for a period of thirty (30) days after the date of final acceptance, or until receipt of all necessary releases from the State Department of Revenue and the State Department of Labor & Industries and until settlement of any liens filed under Chapter 60.28 RCW, whichever is later. C.Defective or Unauthorized Work. The City reserves its right to withhold payment from Contractor for any defective or unauthorized work. Defective or unauthorized work includes, without limitation: work and materials that do not conform to the requirements of this agreement; and extra work and materials furnished without the City’s written approval. If Contractor is unable, for any reason, to satisfactorily complete any portion of the work, the City may complete the work by contract or otherwise, and Contractor shall be liable to the City for any additional costs incurred by the City. “Additional costs” shall mean all reasonable costs, including legal costs and attorney fees, incurred by the City beyond the maximum PUBLIC WORKS AGREEMENT – Page 2 of 10 (between City of Bremerton and Vet Industrial, Inc.) Rev. 09/2021 Contract price specified above. The City further reserves its right to deduct the cost to complete the Contract work, including any Additional Costs, from any and all amounts due or to become due the Contractor. D.Final Payment: Waiver of Claims. THE MAKING OF FINAL PAYMENT (EXCLUDING WITHHELD RETAINAGE) SHALL PRECLUDE ALL CLAIMS, EXCEPT THOSE PREVIOUSLY AND PROPERLY MADE AND IDENTIFIED BY CONTRACTOR AS UNSETTLED AT THE TIME REQUEST FOR FINAL PAYMENT IS MADE. 4.INDEPENDENT CONTRACTOR. Contractor is and shall be at all times acting as an independent contractor and not as an employee of the City. The Contractor shall secure at its expense, and shall be responsible for all payments of income tax, social security, state disability insurance compensation, unemployment compensation, and all other payroll deductions for the Contractor, officer, agents, employees and sub-contractors. The Contractor shall also secure all applicable business licenses, if required, in connection with the contract services, including all required licenses for Contractor's officers, agents, employees and sub- contractors. 5.TERMINATION. The City may terminate this agreement for good cause. “Good cause” shall include, without limitation, any one or more of the following events: A.The Contractor’s refusal or failure to supply a sufficient number of properly skilled workers or proper materials for completion of the Contract work. B.The Contractor’s failure to complete the work within the time specified in this agreement. C.The Contractor’s failure to make full and prompt payment to sub- contractors or for material or labor. D.The Contractor’s persistent disregard of federal, state or local laws, rules or regulations. E. The Contractor’s filing for bankruptcy or becoming adjudged bankrupt. If the City terminates this agreement for good cause, the Contractor shall not receive any further monies due under this agreement until the Contract work is completed. 6.PREVAILING WAGES. Contractor shall file a “Statement of Intent to Pay Prevailing Wages” with the State of Washington Department of Labor & Industries prior to commencing the Contract work. Contractor shall pay prevailing wages and comply with Chapter 39.12 of the Revised Code of Washington, as well as any other applicable prevailing wage rate PUBLIC WORKS AGREEMENT – Page 3 of 10 (between City of Bremerton and Vet Industrial, Inc.) Rev. 09/2021 provisions. The latest prevailing wage rate revision issued by the Department of Labor and Industries is attached. 7. CHANGES. The City may issue a written work change directive for any change in the Contract work during the performance of this agreement. If the Contractor determines, for any reason, that a change order is necessary, Contractor must submit a written change order request to the City’s project manager within two (2) business days of the date the Contractor knew or should have known of the facts and events giving rise to the requested change. If the City determines that the change increases or decreases the Contractor’s costs or time for performance, the City will make an equitable adjustment. The City will attempt, in good faith, to reach agreement with the Contractor on all equitable adjustments. However, if the parties are unable to agree, the City will determine the equitable adjustment as it deems appropriate. The Contractor shall proceed with the change order work upon receiving a written work change directive or change order from the City. If the Contractor fails to require a change order within the time allowed, the Contractor waives its right to make any claim or submit subsequent change order requests for that portion of the contract work. If the Contractor disagrees with the equitable adjustment the Contractor must complete the change order work; however, the Contractor may elect to protest the adjustment as provided below: A. Procedure and Protest by the Contractor. If the Contractor disagrees with anything required by a work change directive or change order, including any direction, instruction, interpretation, or determination by the City, the Contractor shall: 1. Immediately give a signed written notice of protest to the City; 2. Supplement the written protest within fourteen (14) calendar days with a written statement that provides the following information: a. The date of the Contract’s protest. b. The nature and circumstances that caused the protest. c. The provisions in this agreement that support the protest. d. The estimated dollar cost, if any, of the protested work and how that estimate was determined. e. An analysis of the progress schedule showing the schedule change or disruption if the Contractor is asserting a schedule change or disruption. The Contractor shall keep complete records of extra costs and time incurred as a result of the protested work. The City shall have access to any of the Contractor’s records needed for evaluating the protest. 3. The City will evaluate all protests, provided the procedures in this section are followed. If the City determines that a protest is valid, PUBLIC WORKS AGREEMENT – Page 4 of 10 (between City of Bremerton and Vet Industrial, Inc.) Rev. 09/2021 the City will adjust payment for work or time by an equitable adjustment. No adjustment will be made for an invalid protest. B. Contractor’s Duty to Complete Protested Work. In spite of any protest, the Contractor shall proceed promptly with the work as the City has ordered. C. Contractor’s Acceptance of Changes. The Contractor accepts all requirements of a change order by: (1) endorsing it, (2) writing a separate acceptance, or (3) not protesting in the way this section provides. A change order that is accepted by Contractor as provided in this section shall constitute full payment and final settlement of all claims for contract time and for direct, indirect and consequential costs, including costs of delays related to any work, either covered or affected by the change. D. Failure to Protest Constitutes Waiver. By not protesting as this section provides, the Contractor also waives any additional entitlement and accepts from the City any written order (including directions, instructions, interpretations, and determination). E. Failure to Follow Procedures Constitutes Waiver. By failing to follow the procedures of this section, the Contractor completely waives any claims for protested work and accepts form the City any written order (including directions, instructions, interpretations, and determination). 8. CLAIMS. The Contractor shall give written notice to the City of all claims other than change orders within fourteen (14) calendar days of the occurrence of the events giving rise to the claims. Any claim for damages, additional payment for any reason, or extension of time, whether under this agreement or otherwise, shall be conclusively deemed to have been waived by the Contractor unless a timely written claim is made in strict accordance with the applicable provisions of this agreement; or, if (and only if) no such provision is applicable, unless that claim is set forth in detail in writing and received by the City within seven (7) calendar days from the date Contractor knew, or should have known, of the facts giving rise to the claim. At a minimum, a Contractor’s written claim must include the information set forth regarding protests in Section 7.A.2.a.-e. FAILURE TO PROVIDE A COMPLETE, WRITTEN NOTIFICATION OF CLAIM WITHIN THE TIME ALLOWED SHALL BE AN ABSOLUTE WAIVER OF ANY CLAIMS ARISING IN ANY WAY FROM THE FACTS OR EVENTS SURROUNDING THAT CLAIM OR CAUSED BY THAT DELAY. Contractor must, in any event, file any claim or bring any suit arising from or connected with this agreement within 120 calendar days from the date the contract work is complete. 9. WARRANTY. The Contractor shall correct all defects in workmanship and materials within one year from the date of the City’s acceptance of the Contract work. When PUBLIC WORKS AGREEMENT – Page 5 of 10 (between City of Bremerton and Vet Industrial, Inc.) Rev. 09/2021 defects are corrected, the warranty for that portion of the work shall extend for one year form the date such correction is completed and accepted by the City. The Contractor shall begin to correct any defects within seven (7) calendar days of its receipt of notice from the City of the defect. If the Contractor does not accomplish the corrections within a reasonable time, the City may complete the corrections and the Contractor shall pay all costs incurred by the City in order to accomplish the correction. 10. INDEMNIFICATION. Contractor shall defend, indemnify and hold the City, its officer, officials, employees, agents and volunteers harmless from any and all claims, injuries, damages, losses or suits including all legal costs and attorney fees, arising out of or in connection with the performance of this agreement, except for injuries and damages caused by the City’s sole negligence. The City’s inspection or acceptance of any of Contractor’s work when completed shall not be grounds to avoid any of these covenants of indemnification. Should a court of competent jurisdiction determine that this agreement is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the Contractor and the City, its officials, employees, agents and volunteers, the Contractor’s liability hereunder shall be only to the extent of the Contractor’s negligence. IT IS FURTHER SPECIFICALLY AND EXPRESSLY UNDERSTOOD THAT THIS INDEMNIFICATION CONSTITUTES THE CONTRACTOR’S WAIVER OF IMMUNITY UNDER INDUSTRIAL INSURANCE, TITLE 51 RCW, SOLELY FOR THE PURPOSE OF THIS INDEMNIFICATION. THE PARTIES ACKNOWLEDGE THAT THEY HAVE MUTUALLY NEGOTIATED THIS WAIVER. The provisions of this section shall survive the expiration or termination of this agreement. 11. INSURANCE. The Contractor shall procure and maintain for the duration of this agreement insurance of the types and in the amounts described below against claims for injuries to persons or damage to property which may arise from or in connection with the performance of the work by the Contractor, its agents, representative, employees, sub-consultants or sub- contractors. Before beginning work on the project described in this agreement, the Contractor shall provide a Certificate of Insurance evidencing: A. Automobile Liability insurance with limits no less than $1,000,000 combined single limit per accident for bodily injury and property damage; and B. Commercial General Liability insurance written on an occurrence basis with limits no less than $1,000,000 combined single limit per occurrence PUBLIC WORKS AGREEMENT – Page 6 of 10 (between City of Bremerton and Vet Industrial, Inc.) Rev. 09/2021 and $2,000,000 general aggregate for personal injury, bodily injury and property damage. Coverage shall include but not be limited to: blanket contractual; products/completed operations/broad form property damage; explosion, collapse and underground (XCU); and C. Excess Liability insurance with limits not less than $1,000,000 per occurrence and aggregate; and D. Workers Compensation insurance as statutorily required by the Industrial Insurance Act of the State of Washington, Title 51, Revised Code of Washington and employer's liability with limits not less than $1,000,000. Any payment of deductible or self-insured retention shall be the sole responsibility of the Contractor. The City, its officials, employees, agents and volunteers shall be named as an additional insured on the insurance policy, as respects work performed by or on behalf of the Contractor and a copy of the endorsement naming the City as additional insured shall be attached to the Certificate of Insurance. The Contractor’s insurance shall contain a clause stating that coverage shall apply separately to each insured against whom claim is made or suit is brought, except with respects to the limits of the insurer’s liability. The Consultant's insurance shall be primary and non-contributory insurance as respects the City and shall contain a waiver of subrogation against the City for claims arising out of any operations, liabilities and obligations to which coverage applies. It shall be an affirmative obligation upon Consultant to advise the City’s Risk Manager by fax at (360) 473-5161, or by certified mail, return receipt requested to City of Bremerton, attn: Risk Management, 345 6th Street, Suite 100, Bremerton, WA 98337 within two days of the cancellation, suspension or substantive change of any insurance policy set out herein, and failure to do so shall be construed to be a breach of this Agreement. The City reserves the right to receive a certified copy of all the required insurance policies. 12. MISCELLANEOUS. A. Equal Employment Opportunity Statement. In the hiring of employees for the performance of work under this Agreement, the Contractor, its subcontractors, or any person acting on behalf of Contractor shall not discriminate in any employment practice on the basis of age (40+), sex, race, creed, color, national origin, sexual orientation/gender identity, marital status, military status, or the presence of any physical, mental or sensory disability. B. ADA Statement. The City of Bremerton does not discriminate on the basis of disability in programs and activities, which it operates pursuant to the requirements of the Americans with Disabilities Act of 1990, and ADA Amendments Act. This policy extends to PUBLIC WORKS AGREEMENT – Page 7 of 10 (between City of Bremerton and Vet Industrial, Inc.) Rev. 09/2021 both employment and admission to participation in the programs, services and activities of the City of Bremerton. Reasonable accommodation for employees or applicants for employment will be provided. C. Compliance with Laws. Contractor shall comply with all federal, state and local laws, rules and regulations throughout every aspect in the performance of this agreement. D. Work Performed at Contractor’s Risk. Contractor shall take all precautions necessary and shall be responsible for the safety of its employees, agents, and subcontractors in the performance of this agreement. All work shall be done at Contractor’s own risk, and Contractor shall be responsible for any loss of or damage to materials, tools, or other articles used or held for use in connection with the work. E. Nonwaiver of Breach. The failure of the City to insist upon strict performance of any of the terms and rights contained herein, or to exercise any option herein conferred in one or more instances, shall not be constructed to be a waiver or relinquishment of those terms and rights and they shall remain in full force and effect F. Governing Law. This agreement shall be governed and construed in accordance with the laws of the State of Washington. If any dispute arises between the City and Contractor under any of the provisions of this agreement, resolution of that dispute shall be available only through the jurisdiction, venue and rules of the Kitsap County Superior Court, Kitsap County, Washington. G. Attorney’s Fees. To the extent not inconsistent with RCW 39.04.240, in any claim or lawsuit for damages arising from the parties’ performance of this agreement, each party shall be responsible for payment of its own legal costs and attorney’s fees incurred in defending or bringing such claim or lawsuit; however, nothing in this subsection shall limit the City’s right to indemnification under Section 10 of this agreement. H. Written Notice. All communications regarding this agreement shall be sent to the parties at the addresses listed on the signature page of this agreement, unless otherwise notified. Any written notice shall become effective upon delivery, but in any event three (3) calendar days after the date of mailing by registered or certified mail, and shall be deemed sufficiently given if sent to the addressee at the address stated on this agreement. I. Assignment. Any assignment of this agreement by the Contractor without the written consent of the City shall be void. J. Modification. No waiver, alteration, or modification of any of the provisions of this agreement shall be binding unless in writing and signed by a duly authorized representative of the City and Contractor. K. Severability. If any one or more sections, sub-sections, or sentences of this agreement are held to be unconstitutional or invalid, that decision shall not affect the validity PUBLIC WORKS AGREEMENT – Page 8 of 10 (between City of Bremerton and Vet Industrial, Inc.) Rev. 09/2021 of the remaining portion of this agreement and the remainder shall remain in full force and effect. L. Entire Agreement. The written provisions and terms of this agreement, together with any attached Exhibits, supersede all prior verbal statements by any representative of the City, and those statements shall not be construed as forming a part of or altering in any manner this agreement. This agreement and any attached Exhibits contain the entire agreement between the parties. Should any language in any Exhibit to this agreement conflict with any language contained in this agreement, the terms of this agreement shall prevail. IN WITNESS WHEREOF, the parties below have executed this agreement. VET INDUSTRIAL, INC. THE CITY OF BREMERTON Print Name: Ike Holmes Print Name: Greg Wheeler________ Title: President ______ Title: Mayor___________________ DATE DATE Notices to be sent to: Notices to be sent to: VET INDUSTRIAL, INC.: CITY OF BREMERTON: Paula L. Sunkel Michele Filley 1234 Charleston Beach Rd. Suite B 345 6th Street, Suite 100 Bremerton, WA 98312 Bremerton, WA 98337 (360) 377-2955 (360) 473-2349 APPROVED AS TO FORM: Kylie J. Finnell Bremerton City Attorney ATTEST: Angela Hoover, City Clerk R:\Legal\Legal\Forms\FORMS ON COBWEB\Public Works Agreement (short form) Rev. 09 2021.doc 2/25/22 pg. 1 2022 Sewer Rehabilitation – Sewer Pipe Repairs – Various Locations (#5846.2) 6th ST NAVAL AVE (2) WARREN AVE (1) Legend: 1) New manhole installation 2) Replace pipe section ROBIN AVE (2) Naval Ave BID TITLE: SECOND LOW BIDDER Nova Contracting THIRD LOW BIDDER Active Construction, Inc DATE OPENED: RECORDED BY: $83,930 ENGINEER ESTIMATE (INC SALES TAX) APPARENT LOW BIDDER Vet Industrial, Inc. SUMMARY Active Construction, Inc √ $262,262.00 Vet Industrial, Inc.√ $185,776.33 Nova Contracting √ $246,340.00 CITY OF BREMERTON BID TABULATION BOND BASE BID + CONTINGENCY SALES TAX TOTALNAME OF BIDDER OPENED BY: 2/24/2022 TIME OPENED: 2022 Sewer Pipe Repairs - Various Locations 2:30 PM Noreen Bolo Michele Filley AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Study Session Date: March 9, 2022 Public Hearing (1st of 2) on the 2nd Amendment to the Concession Agreement with Olympic Soccer & Sports Center, LLC COUNCIL MEETING Date: March 16, 2022 Department: Parks & Recreation Presenter: Jeff Elevado Phone: (360) 473-5428 SUMMARY: On October 30, 2006, the City entered into the “First Amended Concession Agreement” with Olympic Soccer & Sports Center, LLC for the ground and use concession agreement for the privately owned indoor soccer and sports facility located at Pendergast Regional Park. The City was notified on February 1, 2022 that the current owners had entered into a Purchase and Sale Agreement with Evolution Soccer, LLC for the sale of the business and building. OSSC wishes to assign the concession agreement to Evolution Soccer, LLC and Evolution Soccer, LLC desires to increase the number of options to renew the agreement to meet requirements of their funding institution. This Amendment, if approved, will assign the Concession Agreement to Evolution Soccer, LLC and add an additional 10-year renewal option to the current agreement. The Bremerton Parks and Recreation Commission has reviewed the request and recommended approval by City Council at their February 22nd, 2022, public meeting. Ownership of the underlying property upon which the building and business is located will remain with the City. ATTACHMENTS: 1) Second Amendment to the Concession Agreement Between City of Bremerton and OSSC 2) Assignment of Concession Agreement 2022 3) First Amended “Concession Agreement Between City of Bremerton and OSSC” 4) 2/1/2022 Notification Letter from Dennis Michael of OSSC 5) 2/23/2022 Bremerton Parks & Recreation Commission Advisory Report FISCAL IMPACTS (Include Budgeted Amount): No fiscal impacts, consideration remains unchanged. STUDY SESSION AGENDA: ☒ Limited Presentation ☐ Full Presentation STUDY SESSION ACTION: ☐ Consent Agenda ☐ General Business ☒ Public Hearing (1 of 2) RECOMMENDED MOTION: Public Comment Only with No Action COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 11/09/2021 5A Public Comment Only Second Amendment to the Concession Agreement Between City of Bremerton and Olympic Soccer & Sports Center, LLC This Second Amendment to the “Concession Agreement Between City of Bremerton (CITY) and Olympic Soccer & Sports Center, LLC (OSSC)” specifically amends the “First Amended Concession Agreement (Agreement) entered into between the City of Bremerton and Olympic Soccer & Sports Center, LLC” on October 30, 2006. WHEREAS, OSSC is the current concessionaire and desires to assign its concession agreement to Evolution Soccer, LLC, and WHEREAS, the CITY has agreed to the assignment of the concession agreement to Evolution Soccer, LLC, and WHEREAS, Evolution Soccer, LLC desires to increase the number of options to renew the Agreement, and WHEREAS, the CITY has agreed to add an additional 10-year renewal option; NOW, THEREFORE, for valuable consideration and by mutual consent of the parties the Agreement is hereby amended as follows: Any and all references to Olympic Soccer & Sports Center, LLC and/or OSSC are replaced with Evolution Soccer, LLC. Section 2.2 Option to Renew is replaced in its entirety to read as follows: 2.2 Option to Renew. The CITY agrees to offer the CONCESSIONAIRE four (4) successive ten (10) year options to renew this Agreement, contingent upon: 1) CONCESSIONAIRE remaining in full compliance with the terms and conditions of this Agreement; and 2) the City accepting the level of insurance coverage required in Article 8.5.2 for each new ten (10) year term exercised by CONCESSIONAIRE, which acceptance will not be unreasonably denied. Each ten (10) year option to renew shall renew automatically unless CONCESSIONAIRE give CITY prior written notice of its desire not to renew or the CITY gives CONCESSIONAIRE prior written notice of CONCESSIONAIRE’s failure to be in full compliance with the terms and conditions of this Agreement in which case the CONCESSIONAIRE shall be given the opportunity to cure such default pursuant to Article 7.2. The CONCESSIONAIRE may terminate this Agreement at any time with prior written notice to the CITY. The CITY may request a review of insurance coverage required in Article 8.5.2 pursuant to Article 3.1.2. The CITY may request CONCESSIONAIRE to cure any default and come into full compliance with the terms and conditions of this Agreement at any time pursuant to Article 7.2. The FAILURE OF CONCESSIONAIRE to provide prior written notice not to renew or failure of the CITY to accept the level of insurance coverage or cure any default or request full compliance with the terms and conditions of this Agreement shall not constitute a waiver by either party. Section 3.1.1 Cash and Premises Use is replaced in its entirety to read as follows: 3.1.1 Cash and Premises Use. As consideration for the ground and use concession granted by the CITY to the CONCESSIONAIRE by Article 1 herein, the CONCESSIONAIRE shall provide fair and equitable compensation to the CITY in the form of cash payments and hours of use of the Premises, subject to Article 3.1.4 of this Agreement. Premises use by the CITY shall be governed by Article 3.3 herein. Consideration shall be established pursuant to a formula including the square footage value of the Concession Area parking use outdoor lighting costs and hours of use of the Premises by the City as set forth in Exhibit C. Based upon Exhibit C the CONCESSIONAIRE shall provide the CITY with an annual total of 150 hours of Premises use and further shall pay the CITY One Thousand Two Hundred Ninety-Five Dollars and Sixty-nine Cents ($1295.69) per month. The Premises use shall be per hour per field; said kinds of use to be determined at the sole discretion of the CITY. The monthly cash payment shall be adjusted every year during the term(s) of this Agreement based upon the prior year’s Consumer Price Index (CPI) for all urban consumers as published by the United States Department of Labor for Seattle Tacoma Bremerton all items (1982-84-100). For purposes of the CPI adjustment the base shall be the June 2021 CPI index June to June every year (i.e. June 2021- June 2022). The CPI adjustment shall occur on the following January 1st of each year during the term of this Agreement. No adjustment whether an increase or a decrease shall exceed two percent (2%) annually. CONCESSIONAIRE shall make this payment to the City by the fifteenth day of the month following the end of each month. CONCESSIONAIRE may prepay these monthly payments on a quarterly, semi-annual, or annual basis or as otherwise approved by the CITY. Section 8.2 Notices is replaced in its entirety to read as follows: 8.2 Notices. Except as provided in Article 6 herein, any notice required or permitted hereunder must be in writing and will be effective upon the earlier of personal delivery or three days after being mailed by certified mail, return receipt requested, addressed to CONCESSIONAIRE or to CITY at the address for that party designated herein. Either party may specify a different address for notice purposes by written notice to the other, except that CITY may in any event use the Premises as CONCESSIONAIRE’s address for notice purposes. All notices shall be delivered to the following addresses: CITY Address: CONCESSIONAIRE Address: City of Bremerton Evolution Soccer, LLC Attn: Director of Parks and Recreation Attn:_____________________ 680 Lebo Boulevard _________________________ Bremerton, WA 98310 _________________________ All other terms and conditions of the “First Amended Concession Agreement (Agreement) entered into between the City of Bremerton and Olympic Soccer & Sports Center, LLC’ on October 30, 2006 not specifically amended herein remain in full force and effect. [NOTARY ACKNOWLEDGEMENTS ON NEXT PAGE] STATE OF WASHINGTON ) ) COUNTY OF KITSAP ) I certify that I know or have satisfactory evidence that ______________________ is the person(s) who appeared before me, and said person(s) acknowledged that he/she/they signed this instrument and acknowledged it to be his/her/their free and voluntary act for the uses and purposes mentioned in the instrument. GIVEN under my hand and official seal this ______ day of ______________________, 20_____. _________________________________ Notary Public in and for the State of Washington, residing at________________ My appointment expires_______________ ACCEPTED this ______ day of ______________________, 20_____. EVOLUTION SOCCER, LLC By________________________ STATE OF WASHINGTON ) ) COUNTY OF KITSAP ) I certify that I know or have satisfactory evidence that________________________ is the person(s) who appeared before me, and said person(s) acknowledged that he/she/they signed this instrument and acknowledged it to be his/her/their free and voluntary act for the uses and purposes mentioned in the instrument. GIVEN under my hand and official seal this ______ day of ______________________, 20_____. _________________________________ Notary Public in and for the State of Washington, residing at________________ My appointment expires_______________ ACCEPTED this ______ day of ______________________, 20_____. CITY OF BREMERTON By__________________________ GREG WHEELER, Mayor DEPARTMENTAL APPROVAL APPROVED AS TO FORM _____________________________ _____________________________ JEFF ELEVADO, Director KYLIE J. FINNELL, City Attorney Parks & Recreation ATTEST: ANGELA HOOVER, City Clerk 1 ASSIGNMENT OF CONCESSION AGREEMENT THIS ASSIGNMENT OF CONCESSION AGREEMENT assigns the First Amended Concession Agreement between the City of Bremerton and Olympic Soccer & Sports Center, LLC (“Concession Agreement”) dated October 30, 2006, and is entered into by and between Olympic Soccer & Sports Center, LLC, a Washington limited liability company (“OSSC”), and Evolution Soccer, LLC, a Washington limited liability company ("EVOLUTION"). WHEREAS, by the Concession Agreement the City of Bremerton (the "City") granted a concession to OSSC for the premises legally described in Exhibit A, attached hereto and incorporated herein by this reference; and WHEREAS, OSSC desires to assign to EVOLUTION, and EVOLUTION desires to assume, all of OSSC's rights and obligations under the Concession Agreement with the consent of the City. NOW THEREFORE, in consideration of the mutual covenants contained herein and other valuable consideration received, and with the intent to be legally bound, the parties agree as follows: 1. OSSC hereby assigns the Concession Agreement and all of its rights, title and interest thereunder to EVOLUTION. EVOLUTION hereby accepts such assignment. EVOLUTION shall have all of the rights of OSSC under the Concession Agreement including, without limitation, any option to renew or extend the Concession Agreement, option to purchase the Premises and right to the security deposit now held by the City, should any of the foregoing exist. 2. EVOLUTION hereby assumes and agrees to be bound by all of OSSC's obligations under the Concession Agreement. EVOLUTION shall perform all the terms, covenants and conditions of the Concession Agreement, including the payment of rent and any other required amounts to the City, after the date hereof. 3. EVOLUTION shall indemnify and hold OSSC harmless from any and all claims, damages, expenses and liabilities of whatever nature, including attorney's fees, arising under the Concession Agreement or relating to the Premises after the date hereof. 4. EVOLUTION shall not assign the Concession Agreement any further or sublet all or any portion of the Premises without the prior written consent of the City, except as authorized pursuant to Section 8.7 of the Concession Agreement. 5. Except as specifically modified herein, the Concession Agreement will continue in full force and effect. 6. This Assignment shall be binding upon and shall inure to the benefit of the parties and their respective heirs, legal representatives, successors and assigns. 2 CONSENT OF CITY TO ASSIGNMENT The City hereby consents to the above Assignment of Concession Agreement from OSSC to EVOLUTION. By executing this Assignment of Concession Agreement, the City is only consenting to assignment of the Concession Agreement and does not assume any obligations of OSSC or EVOLUTION with respect to the Assignment. THIS AGREEMENT requires the signature of all parties and is executed as of the date of the last signature below. [NOTARY ACKNOWLEDGMENTS ON NEXT PAGE] 3 STATE OF WASHINGTON ) ) COUNTY OF KITSAP ) I certify that I know or have satisfactory evidence that _________________________ is the person(s) who appeared before me, and said person(s) acknowledged that he/she/they signed this instrument and acknowledged it to be his/her/their free and voluntary act for the uses and purposes mentioned in the instrument. GIVEN under my hand and official seal this ______ day of ______________________, 20_____. _________________________________ Notary Public in and for the State of Washington, residing at________________ My appointment expires_______________ ACCEPTED this ______ day of ______________________, 20_____. OLYMPIC SOCCER & SPORTS CENTER, LLC By: Its: 4 STATE OF WASHINGTON ) ) COUNTY OF KITSAP ) I certify that I know or have satisfactory evidence that _________________________ is the person(s) who appeared before me, and said person(s) acknowledged that he/she/they signed this instrument and acknowledged it to be his/her/their free and voluntary act for the uses and purposes mentioned in the instrument. GIVEN under my hand and official seal this ______ day of ______________________, 20_____. _________________________________ Notary Public in and for the State of Washington, residing at________________ My appointment expires_______________ ACCEPTED this ______ day of ______________________, 20_____. EVOLUTION SOCCER, LLC By: Its: 5 STATE OF WASHINGTON ) ) COUNTY OF KITSAP ) I certify that I know or have satisfactory evidence that _________________________ is the person(s) who appeared before me, and said person(s) acknowledged that he/she/they signed this instrument and acknowledged it to be his/her/their free and voluntary act for the uses and purposes mentioned in the instrument. GIVEN under my hand and official seal this ______ day of ______________________, 20_____. _________________________________ Notary Public in and for the State of Washington, residing at________________ My appointment expires_______________ ACCEPTED this ______ day of ______________________, 20_____. CITY OF BREMERTON By: Its: Mayor EXHIBIT "A" Legal Description for Soccer Concession at Pendergast Park A portion of the Northeast quarter of the Southwest quarter, Section 21, Township 24 North, Range 1 East, Williamette Meridian, which is more particularly described as follows: Beginning at the East quarter corner of said Section 21; thence along the East-West centerline of said Section 21, N 88°50'50" W 5316.00 feet to the West quarter corner of said Section 21; thence S 65°16'01" E 2125.47 feet to an existing corner of the building for Olympic Sports and Soccer Center, also being the True Point of Beginning; thence along said building, N 89'18'55" E 100.42 feet; thence S 0'48'13" E 44.56 feet; thence N 89011'47" E 54.86 feet; thence S 0°49'09" E 113.85 feet; thence S 89°17'18" W 54.89 feet; thence S 0'15'19"E 52.06 feet; thence leaving said building S 0015'19" E 14.62 feet; thence S 89°14'46" W 199.87 feet; thence N 0°46'54" W 200.00 feet; thence N 89°18'55" E 100.00 feet to the said building for Olympic Sports and Soccer Center; thence along said building, N 0°46'54" W 25.24 feet to the True Point of Beginning. Together with and subject to a 15 foot maintenance and access buffer adjacent to and abutting above described concession. Together with ingress and egress to and from the public right of way (Union Avenue) over and upon the City parks properties and roadway to the above described concession. Said ingress and egress shall terminate with said concession. Said concession area to constitute 48,829 square feet, and with said maintenance and access buffer, 64,157 square feet. FIRST AMENDED CONCESSION AGREEMENT BETWEEN THE CITY OF BREMERTON AND OLYMPIC SOCCER SPORTS CENTER LLC This First Amended Concession Agreement between the City of Bremerton CITY and Olympic Soccer Sports Center LLC CONCESSIONAIRE specifically amends the Concession Agreement entered into between the parties on June 20 2001 Concession Agreement collectively referred to hereinafter as Agreement WHEREAS CONCESSIONAIRE desires to construct an addition to the current structure to add a second indoor playing field to the facility and WHEREAS the CITY has agreed to amend the Concession Agreement to grant additional space to the concession for the second indoor playing field NOW THEREFORE for valuable consideration and by mutual consent of the parties the Concession Agreement is hereby amended and replaced in its entirety to read in full as follows ARTICLE 1 CONCESSION 1 1 Concession of Premises 1 1 1 Premises Described CITY hereby grants a ground and use concession to CONCESSIONAIRE for the Premises approximately fifty thousand square feet 50 000 sq ft ofland hereinafter referred to as Concession Area within the confines of the Pendergast Regional Park and legally described in Exhibit A attached hereto and incorporated by reference This concession is granted for the development construction maintenance and operation for profit of an indoor athletic facility consisting a permanent structure of approximately fifty thousand square feet 50 000 sq ft as well as for related fixtures appurtenances parking and exterior landscaping hereinafter referred to as Improvements and generally shown in the preliminary building and site plan in Exhibit B attached hereto and incorporated by reference Collectively referred to as Premises Premises does not include the fee ownership or leasehold interest of the real property upon which the Premises are located CONCESSIONAIRE hereby agrees to the terms and conditions of this Agreement The PARTIES agree that upon the date of execution of this First amended Concession Agreement the Premises consists of permanent structure of approximately thirty thousand square feet 30 000 sq ft and related improvements and that the CONCESSIONAIRE intends to construct an addition of approximately twenty thousand square feet 20 000 sq ft to the current structure to add a second indoor playing field to the Premises Second Field The PARTIES further agree that any and all current or future development and construction of Improvements on the Premises are owned by CONCESSIONAIRE subject to any security interest oflender if any and subject to the CITY s right title and interest at the expiration or termination of this Agreement pursuant to Article 24 I The common address of the Premises is 1199 Union Avenue Bremerton WA 98312 1 1 2 Right of Entry In addition to the Premises described above the CITY grants CONCESSIONAIRE 1 a Right of Entry for ingress and egress to and from the public right of way Union Avenue over and upon the City parks properties and roadway to access the Premises and 2 a 15 foot Right of Entry buffer adj acent to and abutting above described Concession Area for maintenance and repair of the Improvements as identified in Exhibit B Collectively Rights of Entry CONCESSIONAIRE s use of the Rights of Entry granted herein shall not be used in a manner inconsistent with or interfere with the CITY s use of the property CONCESSIONAIRE shall not install any structures or other improvements on the Rights of Entry without the CITY s prior written approval Such approval shall be at the CITY s sole discretion The Rights of Entry shall terminate upon the expiration or termination of this Agreement 1 2 Possession Quiet Enjoyment Covenants Except as provided in Articles 3 4 3 herein the CONCESSIONAIRE shall be entitled to exclusive possession of the Premises upon commencement of the development and construction of the Premises as defined by Article 54 herein Upon taking possession of the Premises and on performing all the covenants and conditions herein the CONCESSIONAIRE shall peaceably and quietly have hold and enjoy the Premises at all times during the full term of this Agreement Every covenant in this Agreement shall be deemed and treated to be a covenant running with the Premises during the full term of the Agreement and shall extend to the heirs legal representatives successors and assigns of the PARTIES No change in CITY s ownership of the Premises or rights to the payments hereunder however accomplished shall operate to enlarge the obligations or reduce the rights of CONCESSIONAIRE No change in CITY s ownership of the Premises shall be binding upon CONCESSIONAIRE for any purpose until CONCESSIONAIRE shall have been given notice thereof ARTICLE 2 TERM OF AGREEMENT 2 1 Term The term of this Agreement shall be fifteen 15 years commencing June 20 2001 the EFFECTNE DATE of this Agreement 2 2 Option to Renew The CITY agrees to offer the CONCESSIONAIRE three 3 successive ten 10 year options to renew this Agreement contingent upon 1 CONCESSIONAIRE remaining in full compliance with the terms and conditions of this Agreement and 2 the CITY accepting the level of insurance coverage required in Article 8 5 2 for each new ten 10 year term exercised by CONCESSIONAIRE which acceptance will not be unreasonably denied Each ten 10 year option to renew shall renew automatically unless CONCESSIONAIRE gives the CITY prior written notice of its desire not to renew or the CITY gives CONCESSIONAIRE prior written notice of CONCESSIONAIRE s failure to be in full compliance with the terms and conditions of this Agreement in which case the CONCESSIONAIRE shall be given the opportunity to cure such default pursuant to Article 7 2 The CONCESSIONAIRE may terminate this Agreement at any time with prior written notice to 2 the CITY The CITY may request a review of insurance coverage required in Article 8 52 pursuant to Article 3 12 The CITY may request CONCESSIONAIRE to cure any default and come into full compliance with the terms and conditions of this Agreement at any time pursuant to Article 7 2 The failure of CONCESSIONAIRE to provide prior written notice not to renew or failure of the CITY to accept the level of insurance coverage or cure any default or request full compliance with the terms and conditions of this Agreement shall not constitute a waiver by either party 2 3 Right of First Refusal Upon the expiration of all terms of this Agreement CONCESSIONAIRE shall have a Right of First Refusal for a new Concession but this right shall only extend to the right to operate a recreation facility similar in scope to the uses identified and authorized in Article 4 1 1 of this Agreement and only if the CITY requests such use in its solicitation for a concessionaire for the Premises If the City desires a different use for the Premises then CONCESSIONAIRE shall not have a Right of First Refusal 24 Improvements Expiration or Termination of Agreement Upon the expiration of the term s of this Agreement or upon the termination of this Agreement other than as a result of condemnation proceedings the then existing Improvements on the Premises will become the property of and owned by the CITY and the CITY shall have all right title and interest in the same ARTICLE 3 CONSIDERATION 3 1 Consideration for Concession 3 1 1 Cash and Premises Use As consideration for the ground and use concession granted by the CITY to the CONCESSIONAIRE by Article 1 herein the CONCESSIONAIRE shall provide fair and equitable compensation to the CITY in the form of cash payments and hours of use of the Premises subject to Article 3 14 of this Agreement Premises use by the CITY shall be governed by Article 3 3 herein Consideration shall be established pursuant to a formula including the square footage value of the Concession Area parking use outdoor lighting costs and hours of use of the Premises by the City as set forth in Exhibit C Based upon Exhibit C the CONCESSIONAIRE shall provide the CITY with an annual total of 150 hours of Premises use and further shall pay the CITY One Thousand Dollars and No Cents 1000 00 per month beginning on the first full month following the month a certificate of occupancy is issued to CONCESSIONAIRE for the Second Field The Premises use shall be per hour per field said kinds of use to be determined at the sole discretion of the CITY The monthly cash payment shall be adjusted every year during the term s of this Agreement based upon the prior years Consumer Price Index CPI for all urban consumers as published by the United States Department of Labor for Seattle Tacoma Bremerton all items 1982 84 100 For purposes of the CPI adjustment the base shall be the June 2006 CPI index June to June every year i e June 2006 June 2007 The CPI adjustment shall occur on the following January 1 st of each year during the term of this Agreement No adjustment whether an increase or a decrease shall exceed two percent 2 annually CONCESSIONAIRE shall make this payment to the City by 3 the fifteenth day of the month following the end of each month CONCESSIONAIRE may prepay these monthly payments on a quarterly semi annual or annual basis or as otherwise approved by the CITY 3 1 2 Re Opener of Compensation and Insurance Coverage At any time within 180 days prior to the beginning of each ten 10 year term or any time after the beginning of any ten 10 year term either party may request are opener of the consideration and leasehold tax set forth in Article 3 and the insurance coverage required in Article 8 5 2 The parties acknowledge that it is the intent to provide no more than one re opener for each ten 10 year term or remaining portion thereof if notice to re open is given after the beginning of the new term unless the parties mutually agree to additional re openers Upon such request the parties will in good faith review the consideration leasehold tax andor insurance coverage and further negotiate and make appropriate adjustments to reflect changes in market values and use of the Premises using as the basis the date and the consideration leasehold taxes insurance coverage use of Premises and other relevant factors which established the figures requested to be reviewed In the event the PARTIES cannot reach an agreement following review and negotiation the PARTIES agree to mediate the issues in dispute 3 1 3 Leasehold Excise Tax Pursuant to RCW 82 29A 020 1 concessions fall within the definition of leasehold interest therefore even though this Agreement is not for a lease it is still subject to the leasehold tax set forth in Chapter 82 29A RCW Accordingly CONCESSIONAIRE agrees to pay in addition to other taxes and fees pursuant to Article 84 2 the leasehold excise tax pursuant to Chapter 8229A RCW The tax will be based on the current value of use of the property through this Agreement concession rate value as set forth in Exhibit C in the amount of 21 000 00 per year Since partial consideration to the City for this property use consists of hours offield use at the Premises established through a formula based upon the current hourly value of field use no adjustments will be made for the property use or value of field use during the term s of this Agreement Therefore for purposes of assessment and payment of the leasehold tax only the value of the use of the property 21 000 00 will be adjusted every five years during the term s ofthis Agreement based upon the prior five years Consumer Price Index CPI for all urban consumers as published by the United States Department of Labor for Seattle Tacoma Bremerton all items 1982 84 100 For purposes of the CPI adjustment the base shall be the June 2002 CPI index June to June every five years ie June 2002 June 2007 The CPI adjustment shall occur on the following January 1 st of each year during the term of this Agreement No adjustment whether an increase or a decrease shall exceed two percent 2 annually In addition CONCESSIONAIRE agrees to pay when due the leasehold excise tax or any additional assessments thereto with respect to any payment or obligation hereunder which is deemed by the State of Washington to be taxable rent under said chapter and to indemnify and hold the City harmless from the same CONCESSIONAIRE shall pay quarterly to the City by the fifteenth day of the month following the end of each quarter or as otherwise required by the State of Washington the amount of the leasehold tax owing CONCESSIONAIRE may prepay these quarterly payments on a semi annual or annual basis or as otherwise approved by the CITY 4 3 1 4 Reversion of Second Field Concession Area and Compensation Unless otherwise agreed to in writing in the event the CONCESSIONAIRE is not issued a Certificate of Occupancy for the Second Field by December 31 2007 the Concession Area as defined in Article 1 1 1 shall automatically revert to the original 30 000 square foot Concession Area defined in the Concession Agreement entered into between the parties on June 20 2001 plus a 15 foot Right of Entry buffer adjacent to and abutting said 30 000 square feet Concession Area for maintenance and repair of the Improvements as identified in Article 1 1 2 of this Agreement In addition the consideration set forth in Article 3 1 1 of this Agreement shall revert to the original annual compensation of 182 hours of PREMISES use as identified in Article 3 3 of the June 20 2001 Concession Agreement and no cash payments 3 2 Athletic Equipment Personal Property Use Premises use by the CITY received as consideration for this Agreement does not include the use by the CITY of any of the CONCESSIONAIRE s athletic equipment or other personal property Use by the CITY of any of the CONCESSIONAIRE s athletic equipment or other personal property will be negotiated separately between the CITY and the CONCESSIONAIRE and is outside the scope of this Agreement 3 3 Timing of Premises Use by CITY The consideration paid by the CONCESSIONAIRE in the form of Premises use by the CITY shall commence accruing from the EFFECTIVE DATE of this Agreement It is mutually understood and agreed that the CITY can receive its full annual compensation of 150 hours of Premises use at any time during the 12 month period beginning with the EFFECTIVE DATE of this Agreement and every 12 month period thereafter 34 Premises Use by CITY 3 4 1 Types of Use The hours of Premises use provided by the CONCESSIONAIRE to the CITY in consideration for this Agreement are intended to provide recreational opportunities of a suitable and compatible nature for the residents of the CITY as part of the Parks and Recreation programs Such Premises use by the CITY shall be without cost to the CITY to the extent of the 150 hours annually pursuant to Article 32 herein 34 2 Maintenance Utility Costs Clean Up After Use The CONCESSIONAIRE shall be responsible for all overhead costs including the utilities and general maintenance of the Premises during the use of the Premises by the CITY The CITY agrees to clean up the Premises after each CITY use 34 3 Damage Claims Liability The CITY shall be responsible for all damage or claims that may arise out of the Premises use by any of the CITY s employees agents guests or invitees The CITY during such periods of use shall supervise or cause the CITY s employees agents guests or invitees to be supervised The provisions for mutual indemnity hold harmless and liability insurance pursuant to Articles 8 5 8 6 herein apply during Premises use by the CITY 5 3 5 Scheduling Premises Use by CITY The CITY and the CONCESSIONAIRE shall meet at times as necessary to determine how such Premises use hours shall be allocated to the CITY in the upcoming quarter in accordance with the following provisions 35 1 Spring and Summer Quarters The CITY shall have the full discretion to determine which hours of Premises use the CITY intends to use during the Spring quarter April May June and Summer quarter July August September of each year At the CITY s discretion the CITY has the right to schedule its full annual compensation of 150 hours of Premises USE during the Spring and Summer quarters 35 2 Fall and Winter Quarters The CONCESSIONAIRE shall have the full discretion to determine which hours of Premises use the CONCESSIONAIRE intends to use during the Fall quarter October November December and Winter quarter January February March of each year The CONCESSIONAIRE has the right to schedule the CITY s remaining compensation if any of Premises USE not previously scheduled by the CITY during the Spring and Summer quarters 3 6 CITY s Increased Premises Use The CITY shall have the full discretion to determine which hours ofthe CITY s Premises use will be accounted against the CITY s annual compensation of 150 hours The CITY may increase its hours of Premises use beyond its annual compensation by paying to the CONCESSIONAIRE an hourly rate then in effect by the CONCESSIONAIRE and with scheduling at the discretion of the CONCESSIONAIRE ARTICLE 4 USE OPERATION OF PREMISES 4 1 Use of Premises 4 1 1 Indoor Athletic and Recreational Uses The CONCESSIONAIRE will use and occupy the Premises throughout the full term of this Agreement for the purpose of providing indoor athletic educational entertainment community activities and recreational opportunities all related to the operation of an indoor recreation facility CONCESSIONAIRE shall take reasonable precautions in securing the Premises during the full term of this Agreement 4 1 2 Incidental Uses The CONCESSIONAIRE may provide concessions in the form of food and beverage and the sale of incidental items directly related to the use of the recreation facility including but not limited to gym equipment soap shampoo and similar shower supplies and clothing related to athletic pursuits 4 1 3 Security and Nuisance During Use The CONCESSIONAIRE shall take reasonable precautions in securing the Premises during the full term of this Agreement The CONCESSIONAIRE shall use the Premises for no unlawful purposes and shall not use or occupy the Premises in any manner which would constitute a public nuisance or violate State or CITY laws 6 4 2 Operating Hours The availability of recreational opportunities for CITY residents is a material consideration for this Agreement Accordingly and during the full term of this Agreement the CONCESSIONAIRE shall continuously conduct and carryon the CONCESSIONAIRE S permitted uses and shall keep the Premises open for business and cause the CONCESSIONAIRE S business to be conducted therein during the usual business hours of each and every business day as mutually agreed upon This provision shall not apply if the Premises should be closed and the business of CONCESSIONAIRE is temporarily suspended on account of labor strikes lockouts or similar causes beyond the reasonable control of CONCESSIONAIRE or for maintenance remodeling repair or renovation as approved by the CITY in writing including approvals of any construction schedules The CONCESSIONAIRE covenants and agrees to provide sufficient personnel and to keep the Premises adequately stocked with merchandise recreational equipment fixtures and facilities so as to conduct its business in accordance with sound business practice The CONCESSIONAIRE in order to keep its business commitments shall be in operation in accordance with sound business practice 4 3 Entry by CITY CITY may enter the Premises at all times to inspect provide services required hereunder post notices of CONCESSIONAIRE s noncompliance with the provisions of this concession all without being deemed a constructive eviction Any person or persons who may have an interest in the purpose of CITY s visit may accompany CITY CITY has the right to use any and all means that CITY deems proper to open doors and gates in an emergency in order to obtain entry to the Premises 44 Health Inspections CONCESSIONAIRE shall not knowingly commit or willfully permit to be committed any act or thing contrary to the rules and regulations prescribed by the local board of health or which shall be contrary to the laws rules or regulations of any federal state or municipal authority CONCESSIONAIRE shall allow the Bremerton Kitsap County Health Department to make regular and ordinary inspections of the Premises as said health department may deem proper 4 5 Maintenance Repair Improvements 4 5 1 Maintenance CONCESSIONAIRE shall at its sole cost and expense clean and maintain the Premises and make repairs restorations and replacements to the Premises including without limitation the heating ventilating air conditioning mechanical electrical and plumbing systems structural roof walls and foundations roof coverings sprinkling and irrigation systems playing surfaces and the fixtures and appurtenances to the Premises as and when needed to preserve them in first class condition and repair less normal wear from use throughout the full term CONCESSIONAIRE shall further keep in repair and maintain as necessary all machinery equipment and facilities necessary for the playing of sports and the comfort of players CONCESSIONAIRE shall paint the exterior of the buildings except the metal with such frequency as may be required to maintain their good clean appearance All such repairs restorations and replacements will be in quality and workmanship at least equal to the original work or installations If CONCESSIONAIRE fails to make such repairs restorations or replacements CITY may make them at the expense of CONCESSIONAIRE and such expense 7 willbepaidbyCONCESSIONAIREwithinfifteen15daysafterdeliveryofastatementforsuchexpense452SidewalksMaintenanceAtitssolecostandexpenseCONCESSIONAIREshallmaintainanysidewalksonthePremisesingoodandpresentableconditionduringthefulltermofthisAgreementshallberesponsibleforcorrectinganyunsafeconditionsandshallberesponsiblefortheremovaloficeandsnowfromthesidewalks453JanitorialServicesAtitssolecostandexpenseCONCESSIONAIREshallkeepthePremisescleanandshallprovidesufficientjanitorialserVicestomaintainatidyappearanceonandaboutthePremisesCONCESSIONAIREshallprovidelandscapingmaintenanceservicesasapplicablesuchthatlandscapingonthePremisesremainshealthyattractiveandwellmaintained454RepairofDamageIntheeventanydamageorinjuryshalloccurtothePremisesofanykindornaturewhatsoeverCONCESSIONAIREshallpromptlycausesaiddamageorinjurytobefullyrepairedatCONCESSIONAIRESowncostandexpenseIntheeventCONCESSIONAIREfailstoaccomplishsuchrepairswithinfifteen15daysofreceiptofwrittennoticebytheCITYtheninthateventCITYmaybutisnotrequiredtoenterthePremisesandaccomplishsuchrepairsandbillCONCESSIONAIREwhowillpaythebillwithinfifteen15daysafterdeliveryofastatementforsuchexpense456ImprovementsTheCONCESSIONAIREshallbesolelyresponsibleforprovidingadequatefundingforanyalterationsorimprovementsasprovidedinthisAgreementandsuchalterationsorimprovementsshallbemadewithoutcosttotheCITY457AlterationsofPremisesafterConstructionAftersuchtimeasthePremiseshavebeencompletedandacceptedasdefinedabovetheCONCESSIONAIREshallnotmakeanymaterialalterationtothePremisesincludinganychangestothelandscapingwithouttheCITYSpriorwrittenconsent46SignsCONCESSIONAIREmayplaceandmaintainsignsuponthePremisesinaccordancewithapplicablesignandzoningcodesoftheCITY47Utilities471UtilityServicesandExpenseTheCONCESSIONAIREwillpayforallwatergasgarbagesewageelectricitytelephoneandotherutilitiesandcommunicationsservicesusedbyCONCESSIONAIREonthePremiseswhetherornotsuchservicesarebilleddirectlytoCONCESSIONAIRECONCESSIONAIREwillalsoprocureorcausetobeprocuredwithoutcosttotheCITYanyandallnecessarypermitslicensesorotherauthorizationsrequiredforthelawfulandproperinstallationandmaintenanceuponthePremisesofutilityappurtenancesandappliancesforuseinsupplyingsuchutilitiesandservicestoanduponthePremisesTheCITYuponrequestofCONCESSIONAIREandatthesoleexpenseandliabilityofthe8 CONCESSIONAIREwilljoinwithCONCESSIONAIREinanyapplicationrequiredforobtainingorcontinuinganysuchservicesprovidedthatsuchservicesdonotviolateanyotherapplicableprovisionofthisAgreementTheCITYshallnotbeheldliableforanyinjurylossordamagecausedbyorresultingfromanyinterruptionorfailureofutilityservicesduetoanycausewhatsoeverexcepttheCITYssolenegligenceCONCESSIONAIREshallnotbeentitledtoanyoffsetreductionorreturnofconsiderationasaresultofanyinterruptionorfailureofservIces472TrashGarbageTheCONCESSIONAIREshallplacealltrashandgarbageintosuchareasandcontainersasaredesignedandintendedtoaccommodatethetrashandgarbagegeneratedwithinoronthePremisesTheCONCESSIONAIREshallnotallowtrashandorgarbagetoaccumulatesuchthatanuisanceorhealthhazardresults48ParkingTheCITYwillberesponsibletoprovideadequateparkingtosupportthePremisesanditsoperations49HazardousSubstances491DefinitionAsusedhereinthetermHazardousSubstancemeansanyhazardoustoxicordangeroussubstancewasteormaterialwhichisorbecomesregulatedunderanyfederalstateorlocalstatuteordinanceruleregulationorotherlawnoworhereafterinaffectpertainingtoenvironmentalprotectioncontaminationorcleanup492InformationCONCESSIONAIREshallkeepuponthePremisesinalocationaccessibletoCITYonrequestduringnormalbusinesshourscopiesofallreportsregardinghazardousortoxicmaterialsinthePremisesthatCONCESSIONAIREhasprovidedtoanygovernmentalagencyinthepreviousquarterCONCESSIONAIREshalluponrequestandatCONCESSIONAIRESexpenseprovideCITYwithacopyofanysuchreportastowhichCITYrequestacopyIntheeventofanyaccidentspillorotherincidentinvolvinghazardousortoxicmatterthatCONCESSIONAIREisrequiredtoreporttoanygovernmentalagencyCONCESSIONAIREshallimmediatelyreportthesametotheCITYandsupplyCITYwithallinformationandreportswithrespecttothesametogetherwithCONCESSIONAIREScleanuporremediationplanandscheduleIfsuchcleanuporremediationplanisnotacceptabletoCITYinCITYSsolediscretionCITYmaysonotifyCONCESSIONAIREandupon48hourspriorwrittennoticeorwithoutnoticeifsorequiredbyanemergencymayenteronthePremisestoconductthecleanuporremediationandchargeCONCESSIONAIREthecoststhereofAllinformationdescribedhereinshallbeprovidedtoCITYregardlessofanyclaimbyCONCESSIONAIREthatitisconfidentialorprivilegedprovidedthattheCITYshallnotpublishordisclosetheinformationtoanythirdpartyexceptaspursuanttoChapter4256RCW493IndemnificationCONCESSIONAIREagreestoholdharmlessprotectindemnifyanddefendCITYfromandagainstanydamagelossclaimorliabilityINCLUDINGAttorneysfeesandcostsresultingfromCONCESSIONAIRESusedisposaltransportationgenerationandorsaleofanyHazardousSubstancesTheCITYagreestohold9 harmless protect indemnify and defend CONCESSIONAIRE from and against any damage loss claim or liability including attorney s fees and costs resulting from a Hazardous Substances existing on the Premises as of the EFFECTIVE DATE ofthis Agreement or b Hazardous Substances thereafter used disposed of or generated on the Premises by the CITY These indemnities will survive the termination of this Agreement whether by expiration of the Term or otherwise 4 10 Risk of Loss All personal property of any kind or description whatsoever in the Premises shall be at the CONCESSIONAIRE s sole risk and CITY shall not be liable for any damage done to or loss of such personal property However CONCESSIONAIRE is not responsible for losses or claims of stolen property under the care and contol of the CITY during the CITY S use periods ARTICLE 5 DESIGN CONSTRUCTION OF PREMISES 5 1 Design The CONCESSIONAIRE shall retain a licensed architect or licensed professional engineer registered in the State of Washington hereinafter referred to as the DESIGN ENGINEER who shall design the indoor athletic facility the Second Field and other related Improvements The CITY shall have the right to approve the final design of the Improvements and shall have a continuing right to approve the exterior color of any structure on the Premises CONCESSIONAIRE shall comply with the Americans with Disabilities Act of 1990 ADA in the design construction and operation of the Premises 5 2 Building Site Plans The CONCESSIONAIRE shall retain a licensed architect or licensed professional engineer registered in the State of Washington to prepare building and site plans for the Premises which shall reference the structure the Second Field and other related Improvements utilities generally and landscape plan as applicable The CITY shall have the right to approve the final building and site plans 5 3 Construction Site Work Fencing The CONCESSIONAIRE shall be solely responsible for all development and construction of the Premises and hold the CITY harmless from any and all claims arising out of the development and construction ofthe Premises pursuant to Article 8 6 herein CONCESSIONAIRE shall be responsible for the site work all required permits and grading CONCESSIONAIRE shall properly barricade the work area and install signage directing unauthorized person from entering onto the building site during any phase of development or construction Unless otherwise agreed fencing shall be placed around the work area In addition the building site shall be kept in a clean and organized condition during development periods CONCESSIONAIRE shall be responsible for site security traffic and pedestrian warnings at the site during the development and construction phases 54 Construction Deadlines CONCESSIONAIRE shall be required to commence development and construction of the Second Field within six months of the EFFECTIVE DATE of this Agreement Commencement of development and construction of the Second Field is defined as that date upon which physical movement or grading of the soil in preparation for construction of 10 any structure on the Premises CONCESSIONAIRE shall be required to complete the development and construction of the Premises within one year of the EFFECTIVE DATE of this Agreement Completion of the development and construction of the Second Field is defined as that date upon which all final occupancy permits are obtained by the CONCESSIONAIRE 5 5 Failure to Meet Construction Deadlines Time of Essence Except as provided in Article 8 15 herein it is mutually understood and agreed that failure by the CONCESSIONAIRE to meet the development and construction deadlines shall constitute a material breach of this Agreement by the CONCESSIONAIRE and the CITY at its option can terminate this Agreement for cause pursuant to Article 7 Time is of the essence with this Agreement 5 6 Stormwater Drainage Sewer Water Lines The CONCESSIONAIRE will be responsible for relocating storm drains sewers and water lines to the Premises as required to complete any development and construction of the Premises 5 7 Development and Construction Fees Expenses The CONCESSIONAIRE shall be responsible for obtaining and paying for necessary permits fees and expenses associated with the development and construction of the Premises In addition CONCESSIONAIRE shall be responsible for any additional costs for inspections billed to the CITY by any government agency including but not limited to the City of Bremerton Kitsap County or the State of Washington 5 8 Escrow Requirements To Ensure Performance of Contractors It is mutually understood and agreed that the CONCESSIONAIRE will prior to the commencement of development and construction of the Premises pursuant to Article 54 herein place into escrow funds sufficient to ensure contractor performance through completion of construction and development of the Premises 5 9 Not a Public Works Project The development and construction of the Premises is not a public works project requiring the payment of prevailing wages CONCESSIONAIRE is the developer and the CITY is not an owner partner joint venturer nor maintains any other business relationship with the CONCESSIONAIRE regarding the Premises other than as grantor of a concession and user of the Premises The CITY is not involved with nor has any responsibilities for the biding contracting or operations ofthe Premises and will occupy no space in the Premises The CONCESSIONAIRE does not deem itself required to pay prevailing wages nor will the CONCESSIONAIRE be obligated to payor to contract for prevailing wages or any other standard of payment controls associated with this project This provision is a material part of the consideration for this Agreement The project signage and all literature advertising by either the CITY or CONCESSIONAIRE shall not indicate in any manner that this is a CITY project contract or other misleading statement indicating that this project is a public work project directly or indirectly 5 10 No Liens Except liens and encumbrances of any lender pursuant to Article 6 herein it is mutually understood and agreed that the CONCESSIONAIRE shall have no authority express or 11 111impliedtocreateorplaceortoallowtobecreatedorplacedanylienorencumbranceofanykindornaturewhatsoeveruponorinanymannertobindtheinterestoftheCITYinthePremisesortochargetherentalspayablehereunderforanyclaiminfavorofanypersondealingwithCONCESSIONAIREincludingthosewhomayfurnishmaterialsorperformlaborforanyconstructionorrepairsandeachsuchclaimshallaffectandeachsuchlienshallattachtoifatallonlytherightandinterestgrantedtoCONCESSIONAIREbythisAgreementIfanysuchliensarefiledCITYmaywithoutwaivingitsrightsandremediesforbreachandwithoutreleasingCONCESSIONAIREfromitsobligationshereunderrequireCONCESSIONAIREtopostsecurityinformandamountreasonablysatisfactorytoCITYorcausesuchlienstobereleasedbyanymeansCITYdeemsproperincludingpaymentinsatisfactionoftheclaimgivingrisetothelienCONCESSIONAIREshallpaytoCITYupondemandanysumpaidbyCITYtoremovetheliensFurtherCONCESSIONAIREagreesthatitwillsaveandholdtheCITYharmlessfromanyandalllosscostorexpensesbasedonorarisingoutoftheassertedclaimsorliensexceptthoseofthelenderagainstthisAgreementoragainsttherighttitleandinterestoftheCITYinthePremisesorunderthetermsofthisAgreementincludingreasonableattorneysfeesandcostsincurredbyCITYinremovingsuchliensandinenforcingthisparagraphAdditionallyitismutuallyunderstoodandagreedthatthisparagraphisintendedtobeacontinuingprovisionapplicabletofuturerepairsandimprovementsaftertheinitialconstructionphaseARTICLE6FINANCINGSECURITYINTERESTS61FinancingNoCITYObligationCONCESSIONAIREshallbesolelyresponsibleforallfinancingrequirementsforallconstructionmaintenancerepairsorsubsequentimprovementstothePremisesTheCITYshallbeundernoobligationdirectlyorindirectlytopayforanylabormaterialorimprovementassociatedwiththefacilityexceptasprovidedhereinormutuallyagreeduponTheCONCESSIONAIREshallinapplyingandobtainingfinancinginformanylenderthattheCITYhasnofinancialobligationsassociatedwiththeconstructionmaintenancerepairsorsubsequentimprovementstothePremises62SecurityInterestinPremisesAgreementConsentTheCITYconsentstothegranttransferpledgeandassignmentofanyandallrighttitleclaiminterestofCONCESSIONAIREinandtothisAgreementandinthePremisesandinanybuildingfacilitypersonalpropertyandfixturesinthePremisesCollateraltolenderforfinancingpurposesTheCITYshallrecognizelendersfirstprioritysecurityinterestintheCollateralandtheCITYherebysubordinatesanyandallinterestoftheCITYinsaidCollateraltolenderCONCESSIONAIREacknowledgesthattheCITYwillnotgrantanysecurityinteresttoanylenderinCITYrealpropertynorwilltheCITYallowanyencumbranceofanykindornaturewhatsoeveruponorinanymanneronitstitletoCITYrealpropertyIntheeventofdefaultbyCONCESSIONAIREtolenderinadditiontoallitsrightsandremediesavailableatlawandequitylendermayenforceandorforecloseitssecurityinterestinterestsintheCollateralCITYagreesthatinconnectionwithanysuchdefaultandallwithoutfurtherconsentofCITYlendermayaAcquireCONCESSIONAIRESinterestintheCollateraleitherbyadeedinlieuofforeclosureoractualforeclosure12 b Rent and or grant a ground and use concession of the Premises subject to this Agreement pending foreclosure of the Collateral by lender c Assign sell andor transfer the Collateral in whole or in part to any person or entity d Take possession of any or all of the Collateral obtain right of substitution for CONCESSIONAIRE and operate said Collateral andor e Appoint a receiver Any assignment or transfer under Article 62 is subject to Article 8 7 Lender shall have no interest in improvements located on the Premises at the time of expiration of the term or terms of this Agreement pursuant to Article 2 at which time all improvements shall become the property ofthe CITY 6 3 LENDER s Reliance on Term and Renewal Options The City acknowledges that the CONCESSIONAIRE in making application for financing may be required to have an assurance that the terms of this Agreement will extend beyond the term of the financing term By its signature to this Agreement the CITY confirms its authority to provide the ten year Agreement term with three options to extend the ten year Agreement for a total of forty years with the renewal options conditioned solely upon the CONCESSIONAIRE maintaining current payments and remaining in full compliance with the terms and conditions of this Agreement Lender may but is not obligated to exercise the right to renew and extend the terms of this Agreement as set forth herein Additionally the CITY acknowledges that after any original financing commitments by the CONCESSIONAIRE have been satisfied these financing provisions shall be applicable to all future advances or financing required by the CONCESSIONAIRE and used solely for the improvements and repairs of the Premises 64 Surrender of the Collateral No surrender of Collateral or the Premises subject to this Agreement or any other act of CONCESSIONAIRE shall be deemed to terminate this Agreement CITY will not terminate this Agreement voluntarily by agreement with CONCESSIONAIRE unless lender has been previously notified in writing and has consented to the termination in writing This Agreement shall not be amended or modified unless lender has been previously notified in writing and has consented to such amendment or modification in writing 65 Notice of Default and Lender s Rights 6 5 1 Notice of Default If CONCESSIONAIRE defaults under this Agreement or if any event occurs which would give CITY the right to terminate modify amend or shorten the term of this Agreement CITY shall take no steps to exercise any right it may have under this Agreement without first giving lender written notice of such default in accordance with Article 6 11 below A copy of each and every notice of default served or sent by CITY or its agent to or upon CONCESSIONAIRE pursuant to this Agreement shall be sent contemporaneously to lender in accordance with Article 6 11 below Such notice of default shall specify the event or events of default then outstanding and the time period at the end of which the indicated action would become effective 13 652TerminationforMonetaryDefaultIfthenoticeofdefaultgivenbyCITYtolenderrelatestoamonetarydefaultandCONCESSIONAIREhasnotcuredsuchmonetarydefaultwithin30daysafterlenderreceivesthenoticeandCONCESSIONAIRESfailuretocureresultsinCITYdesiringtoterminatethisAgreementCITYmayterminatethisAgreementpursuanttoArticle7ifsuchmonetarydefaultisnotcuredbyeitherCONCESSIONAIREorlenderwithinfortyfive45daysafterlenderreceivesthenoticeofdefault653TerminationforNonMonetaryDefaultIfthenoticeofdefaultgivenbyCITYtolenderrelatestoanonmonetarydefaultandCONCESSIONAIREhasnotcuredordiligentlypursuedcuringsuchnonmonetarydefaultwithinthirty30daysafterlenderreceivesthenoticeCITYshalltakenoactiontoterminatethisAgreementifaWithinsixty60daysafterCITYSnoticetolenderregardingCONCESSIONAIRESfailuretocureorfailuretodiligentlypursueacurelendernotifiesCITYofitsintenttorealizeuponitssecurityinterestandcommencesrealizationwithinsixty60daysthereafteranddiligentlypursuesrealizationandbLenderpaysCITYattimeofnotificationallmoniesorperformancesduethatmaybeindefaultuptothedaylendernotifiesCITYoflendersintentandfurtherpaysorperformsallconsiderationthataccruesduringtheperiodafterlendersonotifiesCITYandcompletessuchotherperformancesthatmayberequiredorcomedueunderthisAgreementCITYshallnotterminatethisAgreementbecauseofCONCESSIONAIRESbreachofanytermsofthisAgreementrelatingtothesolvencyofCONCESSIONAIREortheinstitutionofanybankruptcyinsolvencyreceivershiporrelatedactionbyoragainstCONCESSIONAIREaslongaslendercuresanydefaultunderthisAgreementbyCONCESSIONAIREasprovidedhereinexceptthatlendershallnotberequiredtocureanydefaultsrelatingtosolvencyofCONCESSIONAIRE66RighttoAssignLendershallhavetherighttoassignitsinterestintheCollateralUponthepurchasersassigneesortransfereesassumptionandagreementtoperformandbeboundbyallofthetermsofthisAgreementlendershallberelievedfromfurtherliabilityunderthisAgreementIfalenderfinancesthepurchaserassigneeortransfereesaidlendershallbesubjecttoallobligationsassetforthinthisAgreementAnysuccessorlendershallbeboundbythetermsandconditionsofthisAgreement67DispositionofInsuranceShouldtheCollateralsufferanylosswhichiscoveredbycasualtyinsuranceandtheinsuranceproceedsareusedtorestoreanyimprovementsmadebyCONCESSIONAIRECITYagreesthatCONCESSIONAIREandlendershallhavetherighttosuchproceedssolongasnoneofCITYSpropertyutilitiesorotherservicesthereinaredamagedorsuchdamagesarerepairedIntheeventtheCITYSlandissubstantiallydamagedandCONCESSIONAIRESimprovementshavebeenrepairedCITYshallonlyparticipateintheinsuranceproceedstotheextentnecessarytorepairandrestoreCITYSlandandanyofCITYSimprovementsonorinthegroundtothesameconditionthelandwasatthecommencementofthisAgreementorinthesameconditionatthetimeofthecasualtyOtherthanasdescribedhereinCITYshallhavenoclaimtoinsuranceproceedsthatareattributabletoCONCESSIONAIREsinterestintheCollateral14 6 7 Right to Participate in Litigation Lender shall have the right to participate in any litigation arbitration or dispute directly affecting the Collateral or interest of CONCESSIONAIRE or lender therein including without limitation any suit action arbitration proceeding condemnation proceeding or insurance claim CITY upon instituting or receiving notice of any such litigation arbitration or dispute will promptly notify lender of the same 6 8 Incorporation of Lender s Protection Provisions Lender shall be a beneficiary of all rights of CONCESSIONAIRE herein including but not limited to the warranty indemnity hold harmless choice of law and venue costs and attorney s fees as provided herein 6 9 Right to Remove Collateral In the event lender exercises its rights under its Collateral and realizes upon the Collateral CITY agrees that lender is entitled to remove the Collateral including but not limited to building facility furniture movable trade fixtures and equipment from the Premises at any reasonable time and that the Collateral shall remain personal property even though the trade fixtures may be affixed to or placed upon the Premises In the event lender so realizes on its Collateral CITY waives any right title claim lien or interest in the Collateral 6 10 Notices All notices copies of notices consents or other communications to lender given under this Agreement to lender must be in writing and shall be effective when received Such communications shall be given in person to an officer of lender addressed to lender at an address as provided by lender ARTICLE 7 TERMINATION 7 1 Failure to Perform 7 1 1 Obligation to Perform Nothing herein shall imply any duty upon CITY to do any work which under any provision of this concession CONCESSIONAIRE may be required to perform and the performance thereof by CITY shall not constitute a waiver of CONCESSIONAIRE s default CITY shall not in any event be liable for inconvenience annoyance and disturbance in its activities in the PARK however shall not permit a loss of business or other damage to CONCESSIONAIRE by reason of its actions pertaining to the PARK 7 1 2 Payments to Other Parties Except as otherwise expressly provided hereunder all obligations of the CONCESSIONAIRE under this Agreement will be performed by CONCESSIONAIRE at CONCESSIONAIRE s sole cost and expense If CONCESSIONAIRE fails to pay any sum of money owed to any party other than CITY for which CONCESSIONAIRE is liable hereunder or if CONCESSIONAIRE fails to perform any other act on its part to be performed hereunder and such failure continues for ten days after notice thereofby CITY CITY may without waiving or releasing CONCESSIONAIRE from its obligations make any such payment or perform any such other act to be made or performed by CONCESSIONAIRE CONCESSIONAIRE shall pay CITY on demand all sums so paid by 15 CITY and all necessary incidental costs together with interest thereon at the lesser of 112 percent per month or the maximum rate permissible by law from the date of such payment by CITY 7 2 Default This Agreement and the concession granted herein may be terminated for default as follows 7 2 1 CITY s Default CITY will not be in default unless CITY fails to perform an obligation within thirty 30 days after notice by CONCESSIONAIRE which notice must specify the alleged breach provided that if the nature of CITY s obligation is such that more than thirty 30 days are reasonably required for cure then CITY will not be in default if CITY commences to cure within thirty 30 days of CONCESSIONAIRE s notice and thereafter diligently pursues completion and completes performance within a reasonable time 7 2 2 CONCESSIONAIRE s Default The occurrence of anyone or more of the following events constitutes a default under this Agreement by CONCESSIONAIRE 1 CONCESSIONAIRE shall be in default of the performance of any covenants conditions or provisions of this Agreement other than the covenants for the payment of consideration required by this Agreement where such failure continues for a period of thirty 30 days after written notice is given by CITY provided that if the nature of CONCESSIONAIRE s obligations is such that more than thirty 30 days are reasonably required for cure CONCESSIONAIRE will not be in default if CONCESSIONAIRE commences to cure within thirty 30 days of CITY s notice and thereafter diligently pursues completion and completes performance within a reasonable time or 2 CONCESSIONAIRE shall be adjudged bankrupt make a general assignment for the benefit of creditors or take the benefit of any insolvency act or if a permanent receiver and trustee in bankruptcy shall be appointed for CONCESSIONAIRE s estate and such appointment is not vacated within thirty 30 days or 3 Premises become vacant or deserted for a period of thirty 30 days or 4 if this Agreement shall be assigned or the Premises concessioned by CONCESSIONAIRE other than in accordance with the terms of this AGREEMENT and such default is not cured within twenty 20 days after written notice to CONCESSIONAIRE or 5 CONCESSIONAIRE shall fail to make any payment when due or fail to make any other payment required hereunder when due when that failure is not cured within thirty 30 days after mailing of written notice thereof by CITY or 6 CONCESSIONAIRE shall fail to comply with the same concession term or covenant on three occasions during any 10 year term even if such breach is cured within the applicable cure period The CITY s right to terminate pursuant to this Article for failure of CONSCESSIONAIRE to cure a default is subject to the lender s right to cure pursuant to Articles 6 52 and 6 5 3 7 2 3 Default for Other Cause This Agreement may be immediately terminated for other cause by a party if the other party substantially fails to perform its obligations under this Agreement through no fault of the terminating party and the non performing party does not commence correction of the failure of performance within thirty 30 days of the terminating party s sending notice to the non performing party 16 7 3 Remedies Are Cumulative Remedies under this Agreement are cumulative the failure to exercise on any occasion any right shall not operate to forfeit such remedy 74 Destruction of Premises Use of Insurance Proceeds Unless otherwise mutually agreed by the PARTIES in the event the Premises are destroyed or injured by fire earthquake or other casualty then CONCESSIONAIRE shall proceed to rebuild and restore the Premises or such part thereof as may be injured as aforesaid In the event of any loss covered by the insurance policies described and required pursuant to Article 8 5 1 herein unless this Agreement shall be terminated as provided herein the proceeds of such insurance policies shall be used by CONCESSIONAIRE first to rebuild and restore the Premises and replace the improvements fixtures and equipment which may be damaged or destroyed by such casualty 7 5 Duties upon Termination Upon termination of this Agreement and unless otherwise arranged CONCESSIONAIRE shall remove from the PARK all its personal property goods and effects In the event that the CONCESSIONAIRE fails to perform this duty at termination the CITY may cause such removal to be made and said personal property goods and effects to be stored the cost and expense to be paid by the CONCESSIONAIRE It is mutually understood and agreed that the real property constituting the Premises of this Agreement is the real property of the CITY and that all improvements to said real property shall revert to the CITY at the termination of this Agreement 7 6 Eminent Domain The following rules shall govern the rights and duties of the PARTIES in the event of interference with the possession of the Premises by CONCESSIONAIRE by right of eminent domain or private purchase in lieu thereof 7 6 1 Rights of Termination If the whole of the Premises shall be taken for any public or quasi public use under any statute or by right of eminent domain or by private purchase in lieu thereof then this Agreement shall automatically terminate as of the date that title shall be taken Ifmore than twenty five percent 25 of the Premises shall be so taken and if the taking renders the remainder thereof unusable for the purposes for which the Premises were concessioned then CITY and CONCESSIONAIRE shall each have the right to terminate this Agreement on thirty 30 days notice to the other given within ninety 90 days after the date of such taking Provided however that if the CITY is exercising its rights of eminent domain a fair value shall be placed on this Agreement and the Premises with the compensation thereof awarded solely to CONCESSIONAIRE or lender pursuant to its security interest if any 7 6 2 Non Termination If any part of the Premises shall be so taken and this Agreement is not terminated then the CITY shall at its own cost and expense restore the remaining portion of the Premises to the extent necessary to render it reasonably suitable for the purposes for which it was concessioned 7 6 3 Compensation The compensation awarded or paid upon such a total or partial taking of the Premises and or this Agreement shall belong to and be apportioned between the CITY and CONCESSIONAIRE in accordance with their respective interests as determined by a 17 court of competent jurisdiction Additionally CONCESSIONAIRE may prosecute any claim directly against the condemning authority for the costs of removal of the goodwill stock trade fixtures furniture and other personal property belonging to CONCESSIONAIRE CITY shall have no claim to condemnation proceeds that are attributable to CONCESSIONAIRE s interest in the Collateral nor shall lender gave any interest in CITY s condemnation proceeds if any ARTICLE 8 GENERAL CONDITIONS 8 1 Relationship of PARTIES 8 1 1 CONCESSIONAIRE Independent Contractor Status The PARTIES intend that an independent relationship shall be created by this Agreement Nothing contained herein shall create the relationship of principal and agent or of partnership or of joint venture between the parties hereto and neither the method of computation of consideration nor any other provision contained herein shall be deemed to create any relationship between the parties hereto other than the relationship of CITY as granting a ground and use concession to the CONCESSIONAIRE CONCESSIONAIRE has the experience ability and resources to develop and operate an indoor athletic facility and is performing independent functions and responsibilities within its field of expertise CONCESSIONAIRE and its personnel are independent contractors and not employees of the CITY No agent employee servant or representative of the CONCESSIONAIRE shall be deemed to be an employee agent servant or representative of the CITY CONCESSIONAIRE and its personnel have no authority to bind the CITY or to control the CITY s employees As an independent contractor CONCESSIONAIRE is responsible for its own management The CITY s administration and enforcement of this Agreement shall not be deemed an exercise of managerial control over CONCESSIONAIRE or its personnel 8 1 2 No Third Party Rights Created It is mutually understood and agreed that this Agreement is solely for the benefit of the PARTIES hereto and gives no right to any other party except as provided by Article 6 herein 8 1 3 No Joint Venture Partnership It is mutually understood and agreed that no joint venture or partnership formed as a result of this Agreement 8 2 Notices Except as provided in Article 6 herein any notice required or permitted hereunder must be in writing and will be effective upon the earlier of personal delivery or three days after being mailed by certified mail return receipt requested addressed to CONCESSIONAIRE or to CITY at the address for that party designated herein Either party may specify a different address for notice purposes by written notice to the other except that CITY may in any event use the Premises as CONCESSIONAIRE s address for notice purposes All notices shall be delivered to the following addresses 18 CITY Address City of Bremerton Attn Director of Parks and Recreation 680 Lebo Boulevard Bremerton WA 98310 CONCESSIONAIRE Address Olympic Soccer Sports Center LLC Attn Mr Dennis Michael Manager P O Box 5047 Bremerton WA 98312 0466 8 3 Reports Information When requested by the CITY CONCESSIONAIRE shall furnish periodic reports and documents on matters covered by this Agreement The reports and documents shall be furnished in the time and form requested CONCESSIONAIRE shall maintain accounting records in accordance with Generally Accepted Accounting Principles GAAP 84 Permits Licenses Taxes Fees 84 1 Permits Licenses Other Documents The CONCESSIONAIRE shall possess a current Bremerton Business License and shall obtain all regulatory licenses and permits including all construction and building permits necessary to fulfill CONCESSIONAIRE s obligations under this Agreement at CONCESSIONAIRE s sole expense Each party agrees to execute such additional or other documents as may be required to fully implement the intent of this Agreement 84 2 Taxes Fees As an independent contractor the CONCESSIONAIRE shall be solely responsible for all taxes fees and charges incurred including but not limited to license fees business and occupation taxes workers compensation and unemployment benefits all federal state regional county and local taxes and fees including leasehold excise tax pursuant Chapter 8229A RCW ad valorem taxes taxes imposed on personal property all other assessments for improvements or benefits which are assessed on the Premises income taxes property taxes permit fees operating fees surcharges of any kind that apply to any and all persons facilities property income equipment materials supplies or activities related to the CONCESSIONAIRE s obligations under this Agreement The parties acknowledge that for the purpose of real estate taxes the use of the Premises is limited to those uses identified in Article 4 1 1 8 5 Insurance 8 5 1 Fire Earthquake Casualty Insurance The CONCESSIONAIRE agrees that at all times during the full term of this Agreement and at its own expense CONCESSIONAIRE shall at its sole cost and expense maintain in full force and effect adequate fire earthquake and other casualty coverage covering the Premises and its contents including all personal property fixtures improvements Such policy shall include a replacement cost endorsement CONCESSIONAIRE will shall obtain and file with the CITY s Risk Manager a Certificate of Insurance evidencing such coverage All such insurance coverage shall include a ten day cancellation notice to CONCESSIONAIRE and the CITY Adequacy of coverage is defined as insurance sufficient to restore the Premises to its pre casualty condition 19 8 5 2 Liability Insurance Prior to the commencement date of this Agreement CONCESSIONAIRE at its own expense shall obtain and file with the CITY s Risk Manager a Certificate of Insurance evidencing general comprehensive liability insurance coverage CGL providing coverage of at least 1 000 000 per occurrence for bodily injury and 500 000 per occurrence for property damage This Certificate of Insurance shall be subject to approval by the CITY s Risk Manager as to company terms and coverage and said approval shall not be unreasonably withheld The CGL shall name the CITY as an additional insured and must fully protect the CITY from any and all claims and risks and losses in connection with any activities or omissions by the CONCESSIONAIRE by virtue of this Agreement The CGL policy shall remain in full force and effect at the CONCESSIONAIRE s sole expense for liability for property damage or personal injury that may occur in connection with activities or omissions by the CONCESSIONAIRE and provide coverage for the full term of this Agreement CONCESSIONAIRE shall insure that the CITY s Risk Manager is given thirty calendar days prior written notice by certified mail of any cancellation lapse reduction or modification of such insurance 8 5 3 Release and Waiver of Subrogation Any policy of insurance carried by either CITY or CONCESSIONAIRE pursuant to any obligation under this Agreement shall to the extent available contain a waiver of subrogation clause on the part of the insurer Such waiver shall apply to damages to adjacent property Notwithstanding any other provision of this Agreement neither CITY nor CONCESSIONAIRE shall be liable to the other party or to any insurance company by subrogation or otherwise insuring the other party for any loss or damage to any building structure or tangible personal property of the other occurring in or about the Premises or PARK even though such loss or damage might have been occasioned by the negligence of such party its agents or employees if such loss or damage is covered by insurance issued by an insurance carrier authorized or licensed by the Insurance Commissioner of the State of Washington to issue lines of insurance benefiting the party suffering such loss or damage or was required under the terms of this Agreement to be covered by insurance by the party covering the loss 8 6 Hold Harmless Indemnification Industrial Insurance 8 6 1 Hold Harmless Indemnification Each party hereto agrees to be responsible and assumes liability for its own wrongful or negligent acts or omissions or those of its officers agents or employees to the fullest extent required by law Each party agrees to save indemnify defend or hold the other party harmless against all liability loss damages and expenses including costs and attorney s fees resulting from actions claims and lawsuits arising or alleged to have arisen in whole or in part out of or in consequence of the acts or failures to act of the other party its employees its subcontractors its agents or its assigns which arise in any way out of the performance of this Agreement In the case of negligence of both the CITY and the CONCESSIONAIRE any damages allowed shall be levied in proportion to the percentage of negligence attributable to each party and each party shall have the right to seek contribution from the other party in proportion to the percentage of negligence attributable to the other party 20 8 6 2 Industrial Insurance The PARTIES have specifically negotiated CONCESSIONAIRE s waiver of its immunity under Title 51 RCW which is hereby waived for purposes of CONCESSIONAIRE s indemnification and hold harmless of the CITY including the duty to defend This provision shall be inapplicable to the extent such action claim or lawsuit is judicially found to arise solely from the acts or failures to act of the CITY 8 7 Successors Assigns The CITY and CONCESSIONAIRE each agree to be bound to the other party in respect to all covenants agreements and obligations contained in this contract Except as provided in Article 6 herein neither party shall assign the contract in part or as a whole without the written consent of the other Except as provided in Article 6 herein the CONCESSIONAIRE shall not subcontract any of the Premises services facilities or equipment or delegate any of its duties under this Agreement without the prior written approval of the CITY The CITY acknowledges that the CONCESSIONAIRE shall be authorized to sub concession areas within the Premises to food and beverage purveyors equipment sales and similar supporting concessions When requested approval by the CITY of a subcontract or assignment shall not be unreasonably withheld In the event of an assignment subcontracting or delegation of duties the CONCESSIONAIRE shall remain responsible for the full and faithful performance of this Agreement and the assignee subcontractor or other obligor shall also become responsible to the CITY for the satisfactory performance of the services facilities or equipment assumed The CITY may condition approval upon the delivery by the assignee subcontractor or other obligor of its covenant to the CITY to fully and faithfully complete the requirements or responsibility undertaken under this Agreement Notwithstanding the foregoing provided CONCESSIONAIRE is not in default the CONCESSIONAIRE may assign its interest in this Agreement without seeking CITY s consent to a parent or subsidiary Except as otherwise provided herein all of the covenants conditions and provisions of this Agreement are binding upon and inure to the benefit of the PARTIES and their respective heirs personal representatives successors and assigns 8 8 Bankruptcy Except as provided in Article 6 herein PARTIES agree that if the CONCESSIONAIRE is adjudged bankrupt either voluntarily or involuntarily then this AGREEMENT at the option of the CITY may be terminated effective on the day and at the time the bankruptcy petition is filed 8 9 Compliance with Laws The CONCESSIONAIRE its officers employees and agents shall comply with applicable federal state county and local laws statutes rules regulations and ordinances in performing its obligations under this Agreement Such compliance shall include abiding by all applicable federal state and local policies to ensure equal employment opportunity based on ability and fitness to all persons regardless of race creed color national origin religion sex physical handicaps or age The CONCESSIONAIRE shall comply with applicable laws pertaining to employment practices and employee treatment Conditions of the Federal Occupational Safety and Health Act of 1970 OSHA the Washington Industrial Safety and Health Act of 1973 WISHA and standards and regulations issued under these Acts must be complied with The CONCESSIONAIRE agrees to indemnify and hold harmless the City from 21 all damages assessed for the CONCESSIONAIRE s failure to comply with the Acts and Standards issued thereunder The CONCESSIONAIRE is also responsible for meeting all pertinent local state and federal health and environmental regulations and standards applying to any operation in the performance of this Agreement 8 10 Nondiscrimination PARTIES shall not discriminate in employment or services to the public on the basis of race color national origin sex religion age marital status or disability except for employment actions based on bona fide occupational qualification 8 11 Choice of Law Venue This Agreement shall be interpreted according to the laws ofthe State of Washington Any judicial action to resolve disputes arising out of this Agreement shall be brought in Kitsap County Superior Court 8 12 Costs Attorneys Fees In any action brought to enforce any provision of this Agreement including actions to recover sums due or for the breach of any covenant or condition of this Agreement or for the restitution of the Premises to the CITY or eviction of the CONCESSIONAIRE during the term or after expiration thereof the substantially prevailing party shall be entitled to recover from the other party all reasonable costs and reasonable attorney s fees incurred including the fees of accountants appraisers and other professionals at trial or on appeal and without resort to suit 8 13 Modification This Agreement may only be modified by written instrument signed by both PARTIES 8 14 Change in LawlRenegotiation The PARTIES agree that changes in federal state or local laws or regulations that materially modify the terms and conditions of the Agreement and result in a detrimental change in circumstances or a material hardship for either party in performing this Agreement may be the subject of a request by a requesting party to renegotiate this Agreement or negotiate Agreement amendments and the responding party agrees to renegotiate fairly with the requesting party 8 15 Force Majeure Provided that all other requirements ofthis Agreement are met any party shall not be deemed to be in default and shall not be liable for failure to perform under this Agreement if that party s performance is prevented or delayed by acts of God including landslides lightning forest fires storms floods freezing and earthquakes civil disturbances acts of the public enemy wars blockades public riots breakage explosions accident to machinery equipment or materials unavailability of required materials governmental restraint or other causes whether ofthe kind enumerated or otherwise which are not reasonably within the control ofthat obligated party Force Majeure If as a result of a Force Majeure event an obligated party is unable wholly or partially to meet its obligations under this Agreement it shall give the other party promptly written notice of the Force Maj eure event describing it in reasonable detail The obligated party s obligations under this Agreement shall be suspended but only with respect to the particular component of obligations affected by the Force Majeure and only for the period during which the Force Majeure exists 22 8 16 Waiver Failure to enforce any provision of this Agreement shall not be deemed a waiver of that provision No waiver of any right or obligation of either party hereto shall be effective unless in writing specifying such waiver executed by the party against whom such waiver is sought to be enforced Waiver of any right or power arising out ofthis Agreement shall not be deemed waiver of any other right or power 8 17 Illegal Provisions Severability Should any part of this Agreement be found void illegal or unenforceable the balance of the Agreement shall remain in full force and effect 8 18 Article Headings Gender Number Article paragraph headings are not to be construed as binding provisions of this concession they are for the convenience of the PARTIES only The masculine feminine singular and plural of any word or words shall be deemed to include and refer to the gender and number appropriate in the context 8 19 Entire Agreement This Agreement and its Exhibits constitutes the entire agreement between the PARTIES and the PARTIES acknowledge that there are no other agreements written or oral that have not been set forth in the text of this Agreement 8 20 Counterparts This Agreement may be executed simultaneously in two or more counterparts each of which shall be deemed an original but all of which together shall constitute one and the same instrument 8 21 Recording Following execution of this Agreement the CITY will cause a Memorandum of Concession Agreement to be recorded with the land use records of Kit sap County Washington A copy of the Memorandum of Concession Agreement is attached hereto as Exhibit D IN WITNESS WHEREOF this Agreement has been entered into between the City of BGmerton and Olympic Soccer Sports Center LLC as ofthe day of l her 2006 OLYMPIC SOCCER SPORTS CENTER LLC a Washington limited liability company By DennIS Michael Manager 23 ST ATE OF WASHINGTON ss COUNTY OF KITSAP On thi day of CJek b r 2006 before me personally appeared V nIS M ll nf1e I to me known to be the MonaaQ Y of OLYMPIC SOCCER SPORTS CENTER LLC a Washington limited habIhty company that executed the within and foregoing instrument and acknowledged the said instrument to be the free and voluntary act and deed of said corporation for the uses and purposes therein mentioned and on oath stated that he was authorized to execute and in fact executed said instrument on behalf of the corporation bL DA4 Ur GIven U1d officIal seal thls0OI J day of 2006 SSION t I O TA TypelPrint Na1iWc tL Notary Public in and for the fl UBL i State of Washington residing at 4 j 2 7 J 0 My Commission expires 2 J JII0lOFWASl CITY OF BREMItRTON a Washington muniCiP CO BY Cary Bozeman Mayor APPROVED AS TO FORM Roger A Lubovich City Attorne ATTEST 24 STATE OF WASHINGTON ss COUNTY OF KlTSAP I certify that I know or have satisfactory evidence that CARY BOZEMAN is the person who appeared before me and acknowledged that he signed this instrument on oath stated that he was authorized to execute the instrument and acknowledged it as the Mayor of the CITY OF BREMERTON to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument Given under s official seal this n da i 2JJ @o 0 SSION 0 0 TypelP nnt Name v1J o o J o8 01 AI ioo Notary Public in and for the t State of Washington residing at wt Ai A fl 00 UB o My Commission expires 30 a l 003 27 o o 11 o 0 OF WASyI LIST OF EX if Exhibit A Legal Description of Premises Exhibit B Preliminary Building and Site Plans Exhibit C Appraisal and Compensation Information Exhibit D Memorandum of Concession Agreement R Legal LegalFiles Current Active Files Olympic SoccerAmendment No 1 Fina1 doc 25 EXHIBIT A Legal Description for Soccer Concession at Pendergast Park A portion ofthe Northeast quarter ofthe Southwest quarter Section 21 Township 24 North Range 1 East Williamette Meridian which is more particularly described as follows Beginning at the East quarter comer of said Section 21 thence along the East West centerline of said Section 21 N 88050 50 W 5316 00 feet to the West quarter comer of said Section 21 thence S 65016 01 E 212547 feet to an existing comer of the building for Olympic Sports and Soccer Center also being the True Point of Beginning thence along said building N 89018 55 E 10042 feet thence S 0048 13 E 44 56 feet thence N 89011 47 E 54 86 feet thence S 0049 09 E 113 85 feet thence S 89017 18 W 54 89 feet thence S 0015 19 E 52 06 feet thence leaving said building S 0015 19 E 14 62 feet thence S 89014 46 W 199 87 feet thence N 0046 54 W 200 00 feet thence N 89018 55 E 100 00 feet to the said building for Olympic Sports and Soccer Center thence along said building N 0046 54 W 2524 feet to the True Point of Beginning Together with and subject to a 15 foot maintenance and access buffer adjacent to and abutting above described concession Together with ingress and egress to and from the public right of way Union Avenue over and upon the City parks properties and roadway to the above described concession Said ingress and egress shall terminate with said concession Said concession area to constitute 48 829 square feet and with said maintenance and access buffer 64 157 square feet OLYMPIC SOCCER EXPANSION A PORTION OF SECTION 21 TOWNSHIP 24 NORTH RANGE 1 EAST W M BREMERTON WASHINGTON GRADING DRAINAGE AND SANITARY SEWER AND TESC PLAN r T J f I I J J f I C otty 6 I 11 EXHIBIT B m c bi 3 bi I i i i I II1 f I I I If OLYMPIC SOCCER EXPANSION A PORTION OF SECTION 21 TOWNSHIP 24 NORTH RANGE 1 EAST W M BREMERTON WASHINGTON COVER SHEET IAX AIlCEL NUMBER I N V1CINn MAE S I E 0 t 1 f r t SE D TA 1 P E r l V 0 3 i q S C S ST J Vi oJI SITE TO A LEqL QEscfllEI Q SHEETJNDEX W WestSound Engineering Inc at YMPIC SOCCER 211S W VlIltJsllrtllll Phane3l 6783rnJ Emat lDlI PortOrdard Wa 96J66 Fa 3130 61W39 hltp SHT 1 OF 5 SliTS Rfi j lRf I BY IIl TE Po 50U llREM IlTCJrl W al312 JOB 1333 EXHIBIT C Valoe and Compensation CESSIID SI June 2001 concession site area Addition to concession site area Total Concession Site Area 30 000 square feet 20 000 square feet 50 000 square feet June 2001 value for 30 000 square feet 0 138 per sq ft x 30 000 Determining new concession value 1 0 20 per sq ft for the June 2001 concession site area and proposed addition 50 000 sq ft 0 20 per sq ft x 50 000 10 000 00 2 Add 2 000 00 for outdoor lighting and parking 3 Add 9 000 for field use 150 hours x 60 Ihr Total Concession Valoe 21 000 00 1 qiERil I J jSW1jj 150 hours of field time valued at 60 per hour 9 000 Concession value 21 000 minus field time 9 000 12 000 per year monetary compensation Return Address Attn City Clerk City ofBremerton 345 6TH Street Suite 600 Bremerton WA 98337 I I 111111I11111 lllIlllil 111I1 J JQ 4 t3J IJ Kltsap Co IA AUDITORRECORDER S INDEXING FORM Document Title s 1 Mtmorandum of First Amended Concession Agreement Reference Number s of Documents assign ed or released Amends and Replaces 200108170289 Grantor s 1 City of Bremerton City D Additional names on page of document Grantee s 1 Olympic Soccer Sports Center LLC Concessionaire D Additional names on page of document Legal Description Ptn NE SW S21 T24N R1E W M Kitsap County W A abbreviated o Additional legal is on page Exhibit A of document Assessor s Property Tax ParcelAccount Number 212501 3 005 2001 MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT This Memorandum of First Amended Concession Agreement is entered into on the date fully executed below by and between the City ofBremerton a Washington municipal corporation hereinafter referred to as City and Olympic Soccer Sports Center LLC a Washington limited liability company hereinafter referred to as Concessionaire 1 Qity and Concessionaire entered into a First Amended Concession Agreement Between the City ofBremerton and Olympic Soccer Sports Center LLC the Agreement on th day of Jt 10 be V 2006 for the purpose of constructing operating and maintaining an indoor athletic facility and other improvements The First Amended Concession Agreement amends and replaces that certain Concession Agreement recorded on August 17 2001 in the records of Kitsap County under Auditor s File No 200108170289 and is for a term of fifteen 15 years commencing June 1 2001 with three 3 successive ten 10 year options to renew as specified in the Agreement All of the foregoing are set forth in the Agreement MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT 1 2 The property which is the subject ofthe Agreement is legally described in Exhibit A attached hereto and incorporated by reference IN WITNESS WHEREOF the parties have executed this Memorandum of First Amended Concession Agreement as of the day and year first above written BY Print Name Cary Bozeman Its Mayor DATE OCj36 I 2 1 a CONCESSIONAIRE OL YMPIC SOCCER SPORTS CENTER LLC CITY CITY OF BREMERTON By Lv Ik w9 Print Name Dennis Michael Its Manager DATE cc c be 3J j ZCofo STATE OF WASHINGTON ss COUNTY OF KITSAP I hereby certify that I know or have satisfactory evidence that Cary Bozeman is the person who appeared before me and said person acknowledged that he signed this instrument on oath stated that he is authorized to execute the instrument on behalf of the City of Bremerton as its Mayor and such execution to be the free and voluntary act of such party for the uses and purposes mentioned in the foregoing instrument Notary Seal Must Appear Within This Box CI I IN WITNESS WHEREOF I have hereunto set my hand and official seal thi day of L m iaJA 2006 t V S V yhh 01 0 0 0 0 0 Q o S5 ONEt oo f11pJ MIA V JWf rvf o t A b 0 SO NOTARY PUBLIC in and for the State ir G of Washington residing at 6VeflN rfnA 1A 00 UB S My appointment expires 003 21 00 O 1 0 0 0 0 00 0 OF W AS0 0 r MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT 2 ll nOll IIIJIIII 111lT11I1 BREMER TON CITY OF t 1A 200612130124 Pctge 2 of 4 12 13 2006 01 15P Kitsctp Co JA35OEl STATE OF WASHINGTON ss COUNTY OF KITSAP I hereby certify that I know or have satisfactory evidence that Dennis Michael is the person who appeared before me and said person acknowledged that he signed this instrument on oath stated that he is authorized to execute the instrument on behalf of the Olympic Soccer Sports Center LLC as its Manager and such execution to be the free and voluntary act of such party for the uses and purposes mentioned in the foregoing instrument Notary Seal Must Appear Within This Box IN WITNESS WHEREOF I have hereunto set my han d official seal this day of r 2006 f I J A V VJ Y o lSi J V 0 SSIONq Ire MQ 0v1PyV vo 0 T 4i 1 NOTARY PUBLIC in and for the St t WjofWashingtonresidingattflWYA c1 olJV8 S My appointment expires t rl 0 0 21 0 J I 00WAS0 1111111111 1111111111 II t1A 200612130124 F age 3 of 4 12 13 2006 01 15F U tsap Co flABREt1ERTONCITYOFf3500 MEMORANDUM OF FIRST AMENDED CONCESSION AGREEMENT 3 EXHIBIT A Legal Description for Soccer Concession at Pendergast Park A portion of the Northeast quarter ofthe Southwest quarter Section 21 Township 24 North Range 1 East Williamette Meridian which is more particularly described as follows Beginning at the East quarter comer of said Section 21 thence along the East West centerline of said Section 21 N 88050 50 W 5316 00 feet to the West quarter comer of said Section 21 thence S 65016 01 E 212547 feet to an existing comer of the building for Olympic Sports and Soccer Center also being the True Point of Beginning thence along said building N 89018 55 E 10042 feet thence S 0048 13 E 44 56 feet thence N 89on 4TE 54 86 feet thence S 0049 09 E 113 85 feet thence S 89017 18 W 54 89 feet thence S 0015 19 E 52 06 feet thence leaving said building S 0015 19 E 14 62 feet thence S 89014 46 W 199 87 feet thence N 0046 54 W 200 00 feet thence N 89018 55 E 100 00 feet to the said building for Olympic Sports and Soccer Center thence along said building N 0046 54 W 2524 feet to the True Point of Beginning Together with and subject to a 15 foot maintenance and access buffer adjacent to and abutting above described concession Together with ingress and egress to and from the public right of way Union Avenue over and upon the City parks properties and roadway to the above described concession Said ingress and egress shall terminate with said concession Said concession area to constitute 48 829 square feet and with said maintenance and access buffer 64 157 square feet Ar P 06 2130124 t j OJ j of 4100k i c 006 dtap OJ jp0IfiRJ February 23, 2022 To: Bremerton City Council and Mayor Greg Wheeler RE: Advisory Report on Request to Amend the Concession Agreement with Olympic Soccer & Sports Center, LLC Per the procedures contained within “The Ordinance Providing Protection for Bremerton’s Parks, Play Fields, Open Spaces and Recreation Facilities” (BMC 13.12), the Bremerton Parks and Recreation Commission is pleased to present this Advisory Report on the proposed assignment and renewal option extension to the Concession Agreement with Olympic Soccer and Sports Center, LLC. The Parks and Recreation Commission has reviewed the proposal and believe that it is in the best interest of the City and the Parks and Recreation Department to recommend approval of the request to assign the concession agreement to Bremerton Sports Center and add one 10-year renewal option to the current concession agreement. In its review, the Commission considered this proposal at its regularly scheduled Commission meeting:  February 22, 2022 Parks & Recreation Commission public meeting. A motion was made and approved unanimously to recommend City Council approve the Second Amendment to the Concession Agreement between City of Bremerton and Olympic Soccer & Sports Center, LLC adding an additional 10-year renewal option and assigning the concession agreement to Bremerton Sports Center. If you have any questions, the Commission is available. ____________________________ Benjamin Burnette, Chair 680 LEBO B OULEVARD • BREMERTON, WA 98310-5841 TEL: 360.473.5305, FAX: 360.473.5882 • www.ci.bremerton.wa.us BREMERTON PARKS AND RECREATION COMMISSION AGENDA BILL CITY OF BREMERTON CITY COUNCIL SUBJECT: Public Hearing on Ordinance No. 5447 amending Chapter 3.78 of the Bremerton Municipal Code (BMC) entitled “Multifamily Property Tax Exemption” Study Session Date: March 9, 2022 COUNCIL MEETING Date: March 16, 2022 Department: DCD Presenter: Garrett Jackson Phone: (360) 473-5289 SUMMARY: In order to prioritize the creation of affordable housing, Mayor Wheeler has directed staff to propose code revisions to the Multifamily Property Tax Exemption (MFTE) program authorized under BMC 3.78 for City Council’s consideration. In October 2006 the Bremerton City Council enacted the City’s implementation of the State’s Multi Family Tax Exemption (MFTE) tool to encourage housing growth. What is an MFTE? It allows certain development improvements to be exempt from ad valorem property taxes for a period of time (8 to 12 years depending on the type of housing units), and its often an important tool to make projects move forward from an investment standpoint. Why would the City adopt a program like this? It was originally established to encourage increased residential opportunities within designated target areas and it was intended to stimulate new construction and rehabilitation of existing buildings. At the time that this program was adopted the city’s growth and development was lacking, and it was believed that this was an important incentive to encourage housing growth. Now, nearly 16 years since the initial adoption of the MFTE program, the city is experiencing record breaking permit activity, and our housing prices are climbing. Given these indicators of increased growth and revitalization, it is important to take a look at the MFTE tool and ensure that the City’s implementation of this program is used to incentivize growth in areas where we are lacking. In order to shift the purpose of the program to a focus on affordable housing, the following revisions are proposed:  Discontinuing the 8 year “market rate” housing development option  Requiring the affordable units be affordable to low-income households  Ensuring that there are affordable units across all unit sizes in a project  Add provisions for tenant relocation assistance  Add new options for longer 20 year tax exemption pursuant to State law  Allow projects that are currently close to submittal adequate time to make complete applications – the proposed changes would begin on July 1, 2022. ATTACHMENTS: Ordinance No. 5447 that revises the MFTE program to focus on affordable housing. FISCAL IMPACTS (Include Budgeted Amount): The current MFTE program is in place and the city is not receiving property taxes on land improvements for projects utilizing the program. This would continue for projects that qualify under the program only if they include an affordable housing units. STUDY SESSION AGENDA: ☐ Limited Presentation ☒ Full Presentation STUDY SESSION ACTION: ☐ Consent Agenda ☐ General Business ☒ Public Hearing March 16 – Public Comment Only with No Action FUTURE POSSIBLE MOTION: Move to pass Ordinance No. 5447 amending Chapter 3.78 BMC by adopting revisions to the Multifamily Property Tax Exemption terms and definitions, as described in the ordinance. COUNCIL ACTION: Approve Deny Table Continue No Action Form Updated 01/02/2018 5B Public Comment Only 1 Multifamily Property Tax Exemption Amendments - 2022 ORDINANCE NO. 5447 AN ORDINANCE of the City Council of the City of Bremerton, Washington, amending certain provisions of Chapter 3.78 of the Bremerton Municipal Code related to the terms and eligibility requirements, eliminating the eight (8) year exemption, and changing the project eligibility requirements for the twelve (12) year exemption to provide housing affordable to low income households and relocation assistance, and adding a twenty (20) year exemption for permanent affordable housing, and adding process for exemption extensions. WHEREAS, exemptions from ad valorem property taxes for multifamily housing encourage increased residential opportunities within designated residential targeted areas, stimulate new construction and rehabilitation of existing buildings, assist in directing future population growth and helps to achieve development densities which are more conducive to transit use in designated residential targeted areas; and WHEREAS, on October 4, 2006, the City Council of the City of Bremerton, Washington, passed Ordinance No. 4968 adopting Chapter 3.78 of the Bremerton Municipal Code (“BMC”) establishing exemptions from ad valorem property taxation for new multifamily housing in designated residential targeted areas of the City and established a residential targeted area for the Multifamily Tax Exemption (MFTE) within the Downtown Regional Center; and WHEREAS, the City Council and State Legislature have frequently amended and updated the requirements and eligibility relating to multifamily tax exemptions and added additional target areas that align with the City’s Comprehensive Plan growth centers; and WHEREAS, on May 3, 2021, the State Legislature passed E2SSB 5287 amending Chapter 84.14 RCW relating to multifamily tax exemptions; and WHEREAS, the City Council desires the Multifamily Tax Exemption program to focus solely on affordable housing; and WHEREAS, the proposed revisions eliminate the eight (8) year exemption, remove the moderate income allowance for the twelve (12) year exemption, amend the definition of low-income housing, amend language relating to tenant displacement, add a twenty (20) year exemption, and make other related changes, in order to focus the Multifamily Tax Exemption program on the low income households; and WHEREAS, the proposed revisions to the requirements for the multifamily property tax exemption are allowed per Chapter 84.14 RCW; and 2 Multifamily Property Tax Exemption Amendments - 2022 WHEREAS, on March 3, 2022, the public was notified by a legal advertisement in the Kitsap Sun of the opportunity to make comment and participate in the public hearing by the City Council; and WHEREAS, in recent years the City has experienced growth and revitalization of market rate housing, however new affordable housing development has not followed the same growth trend; and WHEREAS, on March 16, 2022, the City Council conducted a public hearing and considered all testimony; NOW THEREFORE; THE CITY COUNCIL OF THE CITY OF BREMERTON, WASHINGTON, DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Recitals. The recitals set forth above are hereby adopted and incorporated as set forth herein in full. SECTION 2. BMC 3.78.010 Amended. Section 3.78.010 of the Bremerton Municipal Code entitled “Purpose" is hereby amended to read as follows: 3.78.010 PURPOSE As provided for in Chapter 84.14 RCW, the purpose of this chapter is to provide limited exemptions from ad valorem property taxation for multifamily housing in designated residential targeted areas to: (a) Encourage increased affordable residential opportunities, including affordable housing units, within areas of the City designated by the City Council as residential targeted areas; and/or (b) Stimulate new construction or rehabilitation of existing vacant and underutilized buildings for multifamily housing in designated residential targeted areas to increase and improve housing opportunities, including affordable housing; and (c) Assist in directing future population growth to designated residential targeted areas, thereby reducing development pressure on single-family residential neighborhoods; and (d) Achieve development densities which are more conducive to transit use in designated residential targeted areas. SECTION 3. BMC 3.78.020 Amended. Section 3.78.020 of the Bremerton Municipal Code entitled “Definitions" is hereby amended to read as follows: 3.78.020 DEFINITIONS. When used in this chapter, the following terms shall have the following meanings, unless the context indicates otherwise: (a) "Affordable housing" means residential housing that is rented by a person or household whose monthly housing costs, including utilities other than telephone, do not exceed thirty (30) percent of the household’s monthly income. For the purposes of housing intended for 3 Multifamily Property Tax Exemption Amendments - 2022 owner occupancy, "affordable housing" means residential housing that is within the means of low- or moderate-income households. (b) "Building codes" means the City and state building and fire codes as set forth in Chapters 17.04, 18.02 and 18.03 BMC. (c) "City" means the City of Bremerton. (d) "Department" means the City Department of Community Development. (e) "Director" means the Director of the Department of Community Development, or designee. (f) "High-cost area" means a county where the third quarter median house price for the previous year as reported by the Washington Center for Real Estate Research at Washington State University is equal to or greater than one hundred thirty (130) percent of the statewide median house price published during the same time period. (f) "Household" means a single person, family, or unrelated persons living together. (g) "Low-income household" means a single person, family, or unrelated persons living together whose adjusted income is at or below eighty (80) sixty (60) percent of the median family income adjusted for family size, for the county where the project is located, as reported by the United States Department of Housing and Urban Development. For cities located in high-cost areas, "low-income household" means a household that has an income at or below one hundred (100) percent of the median family income, adjusted for family size, for the county where the project is located. (i) "Moderate-income household" means a single person, family, or unrelated persons living together whose adjusted income is more than eighty (80) percent but is at or below one hundred fifteen (115) percent of the median family income adjusted for family size, for the county where the project is located, as reported by the United States Department of Housing and Urban Development. For cities located in high-cost areas, "moderate-income household" means a household that has an income that is more than one hundred (100) percent, but at or below one hundred fifty (150) percent, of the median family income adjusted for family size, for the county where the project is located. (h) "Multifamily housing" means a building having ten (10) or more dwelling units not designed or used as transient accommodations and not including hotels and motels. Multifamily units may result from new construction or rehabilitated or conversion of vacant, underutilized, or substandard buildings to multifamily housing. (i) "Multifamily property tax exemption" means an exemption from ad valorem property taxation for multifamily housing. (j) "Owner" means the property owner of record. (k) "Permanent residential occupancy" means multiunit housing that provides either rental or owner occupancy on a nontransient basis. This includes owner-occupied or rental accommodation that is leased for a period of at least one (1) month. This excludes hotels and motels that predominantly offer rental accommodation on a daily or weekly basis. (m) "Rehabilitation improvements" means modifications to existing structures that are vacant for twelve (12) months or longer that are made to achieve a condition of substantial compliance with existing building, fire, and zoning codes, or modification to existing occupied structures which increase the number of multifamily housing units. (n) "Residential targeted area," also "residential target area," means the geographic area located within the areas set forth in Figures 3.78(a) through 3.78(g). 4 Multifamily Property Tax Exemption Amendments - 2022 (o) "Substantial compliance" means compliance with all local building, fire and zoning code requirements, which are typically required for rehabilitation as opposed to new construction. SECTION 4. BMC 3.78.040 Amended. Section 3.78.040 of the Bremerton Municipal Code entitled “Terms of the Tax Exemption" is hereby amended to read as follows: 3.78.040 TERMS OF THE TAX EXEMPTION. (a) Duration of Exemption. The value of new housing construction, conversion, and rehabilitation improvements qualifying under this chapter is exempt from ad valorem property taxation, as follows: (1) For properties for which applications for certificates of tax exemption eligibility are submitted under this chapter before July 22, 2007, the value is exempt for ten (10) successive years beginning January 1st of the year immediately following the calendar year of issuance of the certificate; and (2) For properties for which applications for certificates of tax exemption eligibility are submitted under this chapter on or after July 22, 2007, the value is exempt: (i) For eight (8) successive years beginning January 1st of the year immediately following the calendar year of issuance of the certificate; or (ii) For twelve (12) successive years beginning January 1st of the year immediately following the calendar year of issuance of the certificate, if the property otherwise qualifies for the exemption under this chapter and meets the conditions in this subsection (a)(2)(ii). For the property to qualify for the twelve (12) year exemption under this subsection, the applicant must commit to renting or selling at least twenty (20) percent of the multifamily housing units as affordable housing units to low- and moderate-income households, and the property must satisfy that commitment and any additional affordability and income eligibility conditions adopted by the local government under this chapter. In the case of projects intended exclusively for owner occupancy, the minimum requirement of this subsection (a)(2)(ii) may be satisfied solely through housing affordable to moderate-income households. (1) For twelve (12) successive years beginning January 1st of the year immediately following the calendar year of issuance of the certificate, if the property otherwise qualifies for the exemption under this chapter and meets the conditions in this subsection (a)(1). For the property to qualify for the twelve (12) year exemption under this subsection, the applicant must commit to renting or selling at least twenty (20) percent of the multifamily housing units as affordable housing units to low-income households, and the property must satisfy that commitment and any additional affordability and income eligibility conditions adopted by the local government under this chapter. (i) Low-income household units shall be dispersed throughout the development and be apportioned among all unit types (ie. studio, single bedroom, double bedroom etc.) based on the number of each unit type to the extent feasible. (2) For twenty (20) successive years beginning January 1st of the year immediately following the calendar year of issuance of the certificate, if the property otherwise qualifies for the exemption under this chapter and meets the conditions in this subsection BMC 3.78.040(a)(2). To qualify for the exemption under this subsection, the applicant must commit to renting at least 20 percent of the dwelling units as affordable to low-income households for a 5 Multifamily Property Tax Exemption Amendments - 2022 term of at least 99 years, and the property must satisfy that commitment and all required affordability and income eligibility conditions adopted by the City under this chapter. The applicant shall record a covenant or deed restriction that ensures the continuing rental of units subject to these affordability requirements consistent with the conditions in this subsection 3.78.040(a)(2) for a period of no less than 99 years. The covenant or deed restriction must also address criteria and policies to maintain public benefit if the property is converted to a use other than which continues to provide for permanently affordable low-income housing consistent with this subsection 3.78.040(a)(2); (i) Low-income household units shall be dispersed throughout the development and be apportioned among all unit types (ie. studio, single bedroom, double bedroom etc.) based on the number of each unit type to the extent feasible. (b) Limits on Exemption. The exemption does not apply: (1) To the value of land or to the value of nonhousing-related improvements not qualifying under this chapter. (2) In the case of rehabilitation of existing buildings, to the value of improvements constructed prior to submission of the completed application required under this chapter. (3) To increases in assessed valuation made by the Kitsap County Assessor on non-qualifying portions of building or other improvements and value of land nor to increases made by lawful order of a County board of equalization, the Department of Revenue, or Kitsap County, to a class of property throughout the County or specific area of the County to achieve the uniformity of assessment or appraisal required by law. (c) Conclusion of Exemption. At the conclusion of the exemption period, the new or rehabilitated housing cost shall be considered as new construction for the purposes of Chapter 84.55 RCW. SECTION 5. BMC 3.78.050 Amended. Section 3.78.050 of the Bremerton Municipal Code entitled “Project Eligibility" is hereby amended to read as follows: 3.78.050 PROJECT ELIGIBILITY. A proposed multifamily housing project must meet the following requirements for consideration for a property tax exemption: (a) Location. The project must be located within a residential targeted area as defined in BMC 3.78.020 and as set forth in Figures 3.78(a) through 3.78(g). (b) Tenant Displacement Prohibited. The project must not displace existing residential tenants of structures that are proposed for redevelopment. If the property proposed to be rehabilitated is not vacant, an applicant shall provide each existing tenant housing of comparable size, quality, and price and a reasonable opportunity to relocate. (1) General Notification. The applicant shall provide each displaced household at least 12-month’s moving notice, unless mutually agreed otherwise by household and applicant. (2) Relocation Assistance. Low Income Households shall be provided the following: (i) Assistance in securing housing of comparable size, quality, and price which meets the Housing and Urban Development’s Uniform Physical Condition Standards or a similar standard acceptable to the City, and 6 Multifamily Property Tax Exemption Amendments - 2022 (ii) First and last month expenses at the new housing location as defined above, and moving and relocating expenses as defined by the Department of Transportation Fixed Residential Moving Costs Schedule. (c) Noncompliance with Building Codes. Existing dwelling units proposed for rehabilitation must fail to comply with one or more standards of the applicable State or City building codes. (d) Size of Project. The new, converted, or rehabilitated multiple-unit housing must provide for a minimum of fifty (50) percent of the space for permanent residential occupancy. The project, whether new, converted, or rehabilitated multiple-unit housing, must include at least ten (10) units of multifamily housing within a residential structure or as part of an urban development. In the case of existing multifamily housing that is occupied or which has not been vacant for twelve (12) months or more, the multifamily housing project must also provide for a minimum of four (4) additional multifamily units for a total project of at least ten (10) units including the four (4) additional units. Existing multifamily housing that has been vacant for twelve (12) months or more does not have to provide additional units. (e) Proposed Completion Date. New construction of multifamily housing and rehabilitation improvements must be completed within three (3) years from the date of approval of the application. (f) Compliance with Guidelines and Standards. The project must be designed to comply with the City’s Comprehensive Plan, building, housing, and zoning codes, and any other applicable regulations. The project must also comply with any other standards and guidelines adopted by the City Council for the residential targeted area. SECTION 6. BMC 3.78.070 Amended. Section 3.78.070 of the Bremerton Municipal Code entitled “Application for Conditional Certificate" is hereby amended to read as follows: 3.78.070 APPLICATION FOR CONDITIONAL CERTIFICATE. The Director may certify as eligible an application which is determined to comply with the requirements of this chapter. A decision to approve or deny an application shall be made within ninety (90) calendar days of receipt of a complete application. (a) Application. The Director may approve the application if he/she finds that: (1) A minimum of ten (10) new units are being constructed or in the case of occupied rehabilitation or conversion within twelve (12) months of occupancy, a minimum of four (4) additional multifamily units for a total project of at least ten (10) units including the four (4) additional multifamily units are being developed. (2) The proposed project is or will be, at the time of completion, in conformance with all applicable local plans and regulations. (3) The owner has complied with all standards and guidelines adopted by the City under this chapter. (4) The site is located in the residential targeted area. (5) If applicable, theThe proposed multiunit housing project meets the affordable housing requirements as described in BMC 3.78.040. (b) Approval of Application. If an application is approved, the applicant shall enter into a contract with the City, regarding the terms and conditions of implementation of the project, and 7 Multifamily Property Tax Exemption Amendments - 2022 the Director shall issue a conditional certificate of acceptance of tax exemption. The conditional certificate shall expire three (3) years from the date of approval unless an extension is granted as provided in this chapter. (c) Denial of Application. If an application is denied, the Director shall state in writing the reasons for denial and shall send notice to the applicant at the applicant’s last known address within ten (10) calendar days of the denial. (d) Appeal. Per RCW 84.14.070, an applicant may appeal a denial to the City Council within thirty (30) calendar days of receipt of the denial by filing a complete appeal application and fee with the Director. The appeal before the City Council will be based on the record made before the Director. The Director’s decision will be upheld unless the applicant can show that there is no substantial evidence on the record to support the Director’s decision. The City Council’s decision on appeal will be final. SECTION 7. BMC 3.78.110 Amended. Section 3.78.110 of the Bremerton Municipal Code entitled “Annual Compliance Review" is hereby amended to read as follows: 3.78.110 ANNUAL COMPLIANCE REVIEW. (a) Within thirty (30) calendar days after the first anniversary of the date of filing the final certificate of tax exemption and each year for the tax exemption period, the property owner shall be required to file a notarized declaration with the Director indicating the following: (1) A statement of occupancy and vacancy of the multifamily units during the previous twelve (12) months; (2) A certification by the owner that the property has not changed use and, if applicable, that the property has been in compliance with the affordable housing requirements as described in RCW84.14.020 since the date of the certificate approved by the City; (3) A description of changes or improvements constructed after issuance of the certificate of tax exemption; and (4) Any information needed by the City to file its report pursuant to subsection (b) of this section and any additional information requested by the City in regards to the units receiving a tax exemption. (b) The City shall report annually consistent with requirements as described in RCW 84.14.100 by December 31st of each year, beginning in 2007, to the Washington State Department of Commerce Community, Trade, and Economic Development. The report must include the following information, or as otherwise required per RCW 84.14: (1) The number of tax exemption certificates granted; (2) The total number and type of units produced or to be produced; (3) The number, size, and type of units produced or to be produced meeting affordable housing requirements; (4) The actual development cost of each unit produced; (5) The total monthly rent or total sale amount of each unit produced; (6) The annual household income and household size for each of the affordable units receiving a tax exemption and a summary of these figures for the City (7) The value of the tax exemption for each project receiving a tax exemption and the total value of tax exemptions granted. 8 Multifamily Property Tax Exemption Amendments - 2022 (c) City staff may also conduct on-site verification of the declaration. Failure to submit the annual declaration shall result in a review of the exemption per RCW 84.14.110. SECTION 8. BMC 3.78.140 Added. Section 3.78.140 of the Bremerton Municipal Code entitled “Extension of Tax Exemption" is hereby added to read as follows: 3.78.140 EXTENSION OF TAX EXEMPTION. Pursuant to RCW 84.14.020(6), the Administrator may approve an extended exemption of the project that qualified for, satisfied the conditions of, and utilized the exemption as provided in BMC 3.78.040(a)(1) from ad valorem property taxation for up to a total of twelve (12) successive years beginning January 1 of the year immediately following the calendar year that the original exemption expires. (a) The owner of property applying for extended exemption under this subsection shall submit an application to the Administrator on a form established by the Administrator. The owner shall verify the correctness of the information contained in the application by his/her signature and affirmation made under penalty of perjury under the laws of the State of Washington. The application shall contain such information as the Administrator may deem necessary or useful, which at a minimum shall include: (1) A statement from the owner acknowledging the potential tax liability when the property ceases to be eligible for exemption, equivalent to BMC 3.78.060, and (2) Information required for the Final Exemption Certificate pursuant to subsections BMC 3.78.100, and (3) Information required for the annual report pursuant to BMC 3.78.110. (b) Deadline: The extension application shall be submitted to the Administrator no later than August 31 of the year of the original exemption expires. SECTION 9. Figure 3.78(e) of Chapter 3.78 of the Bremerton Municipal Code entitled “Eastside Employment Center Target Area,” and shown in Exhibit A is hereby repealed and replaced with Exhibit B, entitled “Eastside Village Center Target Area.” SECTION 10. Severability. If any one or more sections, subsections, or sentences of this ordinance are held to be unconstitutional or invalid, such decision shall not affect the validity of the remaining portion of this ordinance and the same shall remain in full force and effect. SECTION 11. Effective Date. This ordinance shall take effect and be in force on July 1, 2022. PASSED by the City Council the___________ day of ____________________, 2022. _________________________________ MICHAEL GOODNOW, Council President 9 Multifamily Property Tax Exemption Amendments - 2022 Approved this ________ day of ________________________, 2022. _________________________________ GREG WHEELER, Mayor ATTEST: APPROVED AS TO FORM: __________________________________ ________________________________ City Clerk KYLIE J. FINNELL, City Attorney PUBLISHED the ________ day of ______________________, 2022. EFFECTIVE the ________ day of ______________________, 2022. ORDINANCE NO. ____________ R:\Legal\Legal\Ordinances\Community Development\2022.03.01 Ordinance - 3.78 MFTE.docx S C H LE Y LEBO WHEATONMAGNUSONSHERIDAN CHERRYCANEMORRIS J O H N CALLAHAN CHESTNUT LARCHJUNIPERWARREN AVHICKORYWALNUT HEMLOCKC L A R E ASHCAMPBELL HOMERRJONESEastside Employment Center Target AreaPlease See Details of the Zone for AllowedLocations of Multifamily Housing Figure 3.78(e) ¯ SCHLEY LEBO WHEATONMAGNUSONSHERIDAN CHERRYCANEMORRIS JOHN CALLA H A N CH E S T N U T LARCHJUNIPERWARREN AVHICKORYWA L N U T HEMLOCKC L A R E ASHCAM P B E L L HOMERRJONESFigure 3.78(e)Eastside Village Center Target AreaPlease See Details of the Zone for Allowed Locations of Multifamily Housing ¯ From: To: Cc: Subject: Date: Garrett Jackson City Council Andrea Spencer Staff Response to Council Questions - Multifamily Tax Exemption Thursday, March 10, 2022 5:33:01 PM At last nights Council session, there were some outstanding questions that the Council requested further information on regarding Agenda item #7 Multifamily Tax Exemption. Question: Is the City able to increase the required percentage of affordable units from the current 20%? Response: I have confirmed with the Department of Commerce that local jurisdiction may increase the percentage to suite their jurisdiction. Question: How many persons within the City of Bremerton currently make the HUD adjusted 60% of Area Median Income (AMI) or $39,540? Response: This specific data could not be located; the $39,540 amount is not currently a provided income strata level with the US Census. The table below ( https://data.census.gov/cedsci/table? g=1600000US5307695&tid=ACSST5Y2019.S1901 ) does indicate that 33.9% of all Bremerton households make less than $34,999 Garrett Jackson Planning Manager (360) 473 - 5289 Mailing Address: 345 6th Street, Suite 100 Physical Address: 345 6th Street, Suite 600 Bremerton, WA 98337 **If you would like to contact the Department of Community Development please email dcdpermits@ci.bremerton.wa.us, or individual staff members from our DCD Staff Directory , you may also call our main line 360-473-5275. For a complete list of all City staff please visit the City Staff Directory page. The initial information you provide will help determine how best to assist you, whether that is through a phone call, email, virtual meeting, or on-site visit. From: Jim McDonald <jimmc90@gmail.com> Sent: Friday, March 4, 2022 9:05 PM To: City Council <City.Council@ci.bremerton.wa.us>; Greg Wheeler <Greg.Wheeler@ci.bremerton.wa.us> Subject: MFTE CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. Dear Bremerton City Council members and Mayor Wheeler, I support the goal of increasing affordable housing and support some of the changes proposed for the MFTE. I do have some concerns that the proposed changes will not "pencil out" for developers. As a result, no new affordable units will be built. It would be valuable to have some input from the developers themselves to see if these incentives make financial sense for them. I also don't believe the 20 year MFTE will be effective because the apartment owners would typically sell their buildings after the benefits of the 20-year tax benefit have expired and the remaining 79 years of low income housing would be lost. And I would be interested in knowing the number of properties that have been developed using the current MTFE exemption. A few years ago, there were only two properties that had used the exemption. Finally, one of the best ways to reduce rental costs is to increase supply. The proposed changes to the Eastside Village (even without the MFTE) will help increase supply. I volunteered on the initial citizen's advisory committee regarding that Center. Even though the focus was on housing, the density was not high enough to support any new development and I applaud the City for revisiting the plan so quickly. If you do a quick count of the number of new apartment units that will be completed later this year in Bremerton and the rest of the County, you should see some reduction in rental pressure by year-end; Even without the MFTE. Thank you for your service! R, Jim McDonald From: jane Rebelowski <janerebelowski@yahoo.com> Sent: Wednesday, March 9, 2022 7:30 AM To: City Council <City.Council@ci.bremerton.wa.us> Cc: Greg Wheeler <Greg.Wheeler@ci.bremerton.wa.us> Subject: MFTE Dear Councilmembers, The Multi Family Tax Exemption as currently written is fundamentally unfair on multiple points. Why are we giving any incentives to luxury housing ? Ever? Just like the poorly conceived marketing plan of “Move to Bremerton “ these incentives have contributed to the escalation of housing costs in Bremerton. Why did the former mayor, and Councilmembers artificially set an affordability benchmark based on Kitsap County incomes instead of Bremerton incomes? This inequality has been pointed out to Council on multiple occasions with zero reaction. I am in full support of a tax exemption for affordability multi family housing that is based on Bremerton incomes. The lower the income threshold the longer the tax exemption. I consider paying taxes the price of living in a civilized society. While local developers continue to pay no taxes on improvements for luxury apartments, this retiree has a $500 tax increase on my primary residence. Please rescind any tax exemption for “market rate” housing. This discussion is long overdue. Sincerely, Jane Rebelowski 1445 17th Bremerton WA 98337 Sent from my iPhone From: City Council Sent: Tuesday, March 15, 2022 5:22 PM To: City Council <City.Council@ci.bremerton.wa.us> Subject: FW: Study Session Follow-Up - Multi-Family Tax Exemption Properties Bremerton (Jane Rebelowski) Attn: Council Members (FYI) The email string below includes responses from DCD Staff & Kitsap County to questions provided by Ms. Rebelowski regarding the Proposed Changes to the MFTE… From: Garrett Jackson <Garrett.Jackson@ci.bremerton.wa.us> Sent: Tuesday, March 15, 2022 4:21 PM To: jane Rebelowski <janerebelowski@yahoo.com> Cc: Kelli Lambert <Kelli.Lambert@ci.bremerton.wa.us>; City Council <City.Council@ci.bremerton.wa.us>; Greg Wheeler <Greg.Wheeler@ci.bremerton.wa.us>; Andrea Spencer <Andrea.Spencer@ci.bremerton.wa.us> Subject: RE: Multi-Family Tax Exemption Properties Bremerton Ms. Rebelowski, Currently the 606 Apartments (71 total units, 14 affordable) and Harborside Flat Apartments (56 total units, 12 affordable) receive the 12 year exemption. Please let me know if you have any additional questions. Garrett Jackson Planning Manager (360) 473 - 5289 Mailing Address: 345 6th Street, Suite 100 Physical Address: 345 6th Street, Suite 600 Bremerton, WA 98337 From: jane Rebelowski <janerebelowski@yahoo.com> Sent: Tuesday, March 15, 2022 11:22 AM To: Garrett Jackson <Garrett.Jackson@ci.bremerton.wa.us> Cc: Kelli Lambert <Kelli.Lambert@ci.bremerton.wa.us>; City Council <City.Council@ci.bremerton.wa.us>; Greg Wheeler <Greg.Wheeler@ci.bremerton.wa.us> Subject: Re: Multi-Family Tax Exemption Properties Bremerton CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. Hello, Can you please clarify which developments are currently receiving 12 year exemption. In addition it is unclear if the 127 units listed in revised table are total units or units with adjusted rents based on income. Thank you Sent from my iPhone On Mar 15, 2022, at 9:41 AM, Garrett Jackson <Garrett.Jackson@ci.bremerton.wa.us> wrote: Ms. Rebelowski, That is correct. I was going to point that out in my revised presentation tomorrow. Garrett From: jane Rebelowski <janerebelowski@yahoo.com> Sent: Tuesday, March 15, 2022 9:38 AM To: Garrett Jackson <Garrett.Jackson@ci.bremerton.wa.us>; Kelli Lambert <Kelli.Lambert@ci.bremerton.wa.us>; City Council <City.Council@ci.bremerton.wa.us>; Greg Wheeler <Greg.Wheeler@ci.bremerton.wa.us> Subject: Fwd: Multi-Family Tax Exemption Properties Bremerton CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. The presentation last week stated that there were four developments total currently receiving the tax exemption under the MFTE program. According to the County there are five. Can you please clarify if the listed properties are in this program? Construction of Bay Vista has been ongoing for many years and may fall under a different tax exemption program. I would hope that you can delay the public hearing a bit as most residents of Bremerton are still unaware of this important public discussion. Jane Rebelowski 1445 17th St Bremerton WA 98337 Sent from my iPhone Begin forwarded message: From: jane Rebelowski <janerebelowski@yahoo.com> Date: March 10, 2022 at 10:35:34 AM PST To: Anna Mockler <info@mockler4bremerton.com> Subject: Fwd: Multi-Family Tax Exemption Properties Bremerton Here you go Sent from my iPhone Begin forwarded message: From: Shannon Lewis <SLewis@co.kitsap.wa.us> Date: March 10, 2022 at 10:02:59 AM PST To: janerebelowski@yahoo.com Subject: Multi-Family Tax Exemption Properties Bremerton Good Morning Jane, Below is a list of properties that are currently under the Multi-Family Tax Exemption in the City of Bremerton. The numbers reflect the market value of the building only for tax collection in 2022. To obtain an estimate of what the property tax amount these properties would have been billed, I used the levy rate that was applied for their area for the 2022 tax collection. Using 606 Lorax as an example, this is how the calculation was done: 14,878,018 (market value) x 9.781337 (tax rate) / 1,000 = 145,526.91 estimated property taxes As we talked about on the phone, if the properties were taxable, the levy rate would have been lower. The actual tax amount would be lower as well but this should be a good estimate. Property Account Number Market Value Tax Rate Property Tax Estimate of Bldg. Only 2022 2022 If Taxable for 2022 606 Lorax 3718-014-001-0403 14,878,018 9.781337 145,526.91 Spyglass 3712-002-001-0107 16,947,390 9.781337 165,768.13 Sound Quincy 8219-000-001-0009 6,348,540 9.781337 62,097.21 Bay Vista 5597-000-012-0103 41,875,970 9.781337 409,602.97 Burwell Development 3718-007-009-0102 7,561,300 9.781337 73,959.62 If I can be of further assistance, please let me know. Shannon Lewis Administrative Supervisor Kitsap County Assessor’s Office (360) 337-7094 (360) 337-4874 fax Office hours: Monday - Thursday 9AM – 4:00 PM & Fridays 9AM – 12:00 PM From: jane Rebelowski <janerebelowski@yahoo.com> Sent: Wednesday, March 16, 2022 2:35 PM To: City Council <City.Council@ci.bremerton.wa.us>; Greg Wheeler <Greg.Wheeler@ci.bremerton.wa.us> Cc: Garrett Jackson <Garrett.Jackson@ci.bremerton.wa.us>; Andrea Spencer <Andrea.Spencer@ci.bremerton.wa.us> Subject: Fwd: MFTE CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. > > Dear Mayor Wheeler, City Council and staff, > > I have literally been waiting years for a public discussion on the merits of the existing MFTE program. I am proud that our mayor, with the assistance of Community Development staff has brought forward long needed revisions to this program. > > I am in full support of tax exemption programs if they have a minimum of 20% of units set aside for low income residents. If a developer chooses to increase the percentage of low income housing, they should have a bonus of additional years of exemption from taxes. Example, if a developer sets aside 25% of units for low income residents then the tax exemption would last for 25 years. > > As I wrote in my previous emails, which were copied to the Mayor, City Council, and staff we are currently exempting over $870K for the 2022 tax year with only 26 units set aside for moderate and low income based on the entire County incomes (not Bremerton specific). > > There has been a story retold by every developer and oft quoted by politians and municipal staff that needs to be questioned. That story is if you build more housing that the prices will decrease. Where has this happened? Can you name one community where this has happened? In addition to tax exemptions being reserved for development that sets aside a minimum of 20% for low income residents please consider gifting surplus community owned land to Bremerton Housing Authority or Kitsap Habitat for Humanity with the caveat that housing to be constructed on this donated land for low income Bremerton residents. The mayor and council should also strongly suggest to the U.S. Navy to construct additional housing for service members and their families. Every “market rate” housing unit rents out for more than local housing allowance ( which is also supposed to cover utilities). I hope that you make the decision that is fair to Bremerton residents and eliminate the tax exemption for “market rate” housing. Every single taxpayer in Bremerton is paying a higher levy due to the tax exemption program the former admistration, with the help of council and staff put in place. Sincerely, Jane Rebelowski 1445 17th St Bremerton WA 98337 > > > > > Sent from my iPhone From: Victoria Luke <victoria@soundwestgroup.com> Sent: Wednesday, March 9, 2022 10:03 AM To: City Council <City.Council@ci.bremerton.wa.us> Subject: COB City Council Study Session, Comments RE: MFTE Proposed Revisions RE: MFTE Proposed Revisions Submitted By: Victoria Luke, Bremerton Citizen Bremerton currently has an abundance of affordable housing compared to other areas, I learned this when I worked for the Bremerton Housing Authority. People were moving from all over the state and some, even from out of state to Bremerton and signing up on the list daily for affordable options, due to the high concentration of affordable programs. My past experience from development and planning in Seattle, brought me to Bremerton to grow this community and re-vitalize it. I sought out to work for local developers and assist every day in my current job to provide the needed housing to keep up with military demands and natural growth. Bremerton is a Navy town. Our service workers and DOD make up around 60-70% of the current tenant demographic in Bremerton and Silverdale. Due to the lack of market rate housing available that works with their BAH, they are currently commuting from Tacoma to PSNS and Bangor bases, since we do not have enough housing for them in the Kitsap area. BAH increased in 2021, 2.9%, allowing for current market rents to be “affordable” to the service workers. The 2022 rates range from $1,635 up to $2,793. The balance of 30-40% non-military and DOD are local with jobs looking for regular housing. We have very few Seattle commuters that are absorbing the new housing. Local analysts report a negative vacancy rate in Bremerton due to the housing shortage. A lack of supply will continue to drive rent prices upward. We need more supply to balance this. Harborside Flats was pre-leased months prior by locals and then the balance was filled up immediately before opening with Roosevelt sailors. They were completely full just days after receiving their temporary certificate of occupancy. There is such a shortage of overall housing there is a need for market rate and affordable. Other areas, like Seattle are solving this problem with a good balance and adopted the MFTE much earlier than Bremerton did and are having great success with it. Now is not the time to remove the 8-year MFTE program. It is successful and it is working to balance out enough housing for our military town needs and affordable options. If we only support the affordable sector we are leaving our hard working service members to continue to have long commutes from other areas where they can find housing. Victoria Luke Marketing Director | Development Associate Direct: (206) 321-4099 ‘Developing Community with Vision & Integrity’ Sound West Group 423 Pacific Avenue, Suite 402 Bremerton, WA 98337 office 360-813-3813 / fax 360-850-1054 www.soundwestgroup.com CONFIDENTIALITY NOTE: This e-mail contains information belonging to Sound West Group, which may be privileged, confidential and/or protected from disclosure. The information is intended only for the use of the individual entity named above. If you think that you have received this message in error, please e-mail the sender. If you are not the intended recipient, any dissemination, distribution or copying is strictly prohibited. IMPORTANT TAX INFORMATION: To insure compliance with U.S. Treasury Department regulations, we advise you that, unless otherwise expressly indicated, any federal tax advice contained in this correspondence was not intended or written to be used, and cannot be used, for the purpose of: (i) avoiding tax-related penalties under the Internal Revenue Code of 1986, as amended, or applicable state or local tax law provisions; or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein. The linked image cannot be displayed. The file may have been moved, renamed, or deleted. Verify that the link points to the correct file and location. From: Jeff <zjeffz@gmail.com> Sent: Sunday, March 13, 2022 2:47 PM To: City Council <City.Council@ci.bremerton.wa.us> Subject: MFTE Dear Mayor and City Council, I am writing to you in response to your upcoming decision regarding the MFTE Tax Breaks. I am asking you to stop using funds meant for low-income housing to provide kickbacks to developers. Please stop subverting the will of the legislature. The RCW is clear, these tax breaks should only be used for incentives that will directly create permanent affordable housing. Nobody is buying that whole invisible hand of the market nonsense anymore. You should focus on the needs of the people of Bremerton, not on increasing the profits of out of state developers. The Washington State Joint Legislative Audit and Review Committee (JLARC) was specific: JLARC did not find any statistical evidence that tax breaks given to market rate properties have any effect on the number of housing units that are built and have NO effect on the number of affordable housing units that are available in the community. You are just giving tax breaks to rich people and hoping for that trickle down thing to happen. Some of you on the Council seem woefully uninformed when it comes to basic science and that is disturbing. For example, more than one member stated something to the effect of, well, they haven’t proven that it doesn’t work. Is that some sort of lawyerly word play? Most educated people understand that you can’t prove a negative. Furthermore, when giving out tax breaks, it is extremely important to see the opposite, that is, a statistically significant indication that the expected result WAS achieved. In other words, in the world of science there should be overwhelming proof that something works, (contrary to the legal jargon that Mr. Dennehy was using). The truth is, that no scientific study has ever shown, anywhere, that creating more housing leads to the creation of affordable housing. (Look it up. I already sent you a couple of sources.) But there are other proven methods for creating permanent affordable housing in our community. I am asking the Mayor and City Council to please reach out and spend more time talking to low income/affordable housing experts along with the developers who seem to have your ears. I am not an expert either, but I know where to find them if you all would like some suggestions. The ultimate purpose of this program, and any other affordable housing initiative is to create permanent affordable housing in our community. Any tax incentives that do not require the creation of permanent affordable housing is an unnecessary corporate handout. It really is that simple. Sincerely, Jeff Campbell From: PJ Santos <pj@santos22.com> Sent: Monday, March 14, 2022 5:32 PM To: Garrett Jackson <Garrett.Jackson@ci.bremerton.wa.us> Cc: Brian Fyall <brian@loraxpartners.com> Subject: Comments to the changes to the MFTE program in Bremerton Garrett - Below are my comments to the proposed changes to the MFTE in Bremerton. PJ Santos Developer of Bremerton Harborside, Kitsap Credit Union, SeeFilm Cinema, 606 Apartments and 1010 Apartments Discontinuing the 8 year “market rate” housing development option Rents are going up because of a lack of supply in the City and the region. If the goal is to improve this issue, then keep this option open and it will help bring greater supply of units to the City. Add new option to extend existing MFTE site an additional 12 years Good idea, this will have a positive effect of increasing supply. Requiring the affordable units be affordable to low-income households If the definition of “low-income” drops from 80% to 60%, then I do not believe the program will be used, and I know it would not have worked for the 606 Apartments nor the 1010 Apartments. Ensuring that there are affordable units across all unit sizes in a project This is typically required in other Cities and was our expectation on our Bremerton projects. Add provisions for tenant relocation assistance If a developer buys a site with a duplex rented to tenants, for example, with the plan to redevelop the site into a denser apartment project, this should be the goal for the City. These tenants have rights included in their lease. The developer will have to respect the existing terms, but to require the developer to then give them relocation assistance increases the risk for the developer and reduces the likelihood of the property being redeveloped. If the City allows this type of requirement, it will send a negative signal to the building community – what if the tenant doesn’t want to leave once the lease has expired? The developer would worry the City would side with the tenant once the lease is over. Not good. Add new options for longer 20 year tax exemption pursuant to State law This is a good idea and will only increase supply and help the housing shortage. From: Gregory Bradford <outlook_0B59A50CEFF1C7E4@outlook.com> Sent: Tuesday, March 15, 2022 3:46 PM To: City Council <City.Council@ci.bremerton.wa.us> Cc: aroupe@envisionnorthwest.com Subject: Multifamily Tax Exemption Program City Council, We have reviewed you new MFTE Program changes. We are currently under design using the existing guidelines for our 374 Multi-family units located within Kitsap Landing as well we were aware of the program when we originally bought the property. All of our proformas and financing has been predicated upon existing guidelines. Removing the current 8 year exemption would have detrimental impact on the proposed financing and viability of the project. We are in favor of adding new incentives to promote more low income units but opposed to removing the current 8 year exemption. Sincerely, Gregory D. Bradford Kitsap Landing Inc. 10829 NE 68th St., Suite B Kirkland, Wa 98033 209-606-5721 From: James Clough <james@kitsaprealtor.org> Sent: Wednesday, March 16, 2022 11:32 AM To: City Council <City.Council@ci.bremerton.wa.us> Subject: Correction: Public Comment for Tonight's Public Hearing Hi, I wanted to send in my planned comments for tonight’s public hearing regarding the multifamily property tax exemption. I plan to speak via Zoom during the hearing. Thank you. JAMES CLOUGH, AHWD, C2EX GOVERNMENT AFFAIRS DIRECTOR KITSAP COUNTY ASSOCIATION OF REALTORS® P: 425-941-5345 E: james@kitsaprealtor.org W: kitsaprealtors.org A: 3689 Munson Street, Silverdale WA 98383 James Clough, KCAR, Public Comment of Ordinance No.5447 (Multifamily Property Tax Exemption) Good evening, Bremerton City Council, my name is James Clough, and I am representing Kitsap County Association of REALTORS® as their Government Affairs Director. I am speaking in support of amending the municipal code regarding the multifamily property tax exemption. Kitsap county is struggling to provide affordable housing, a root cause of the lack of housing inventory. We must incentivize the construction of more affordable and dense housing units to accommodate for the incredible growth Bremerton is experiencing. This tax exemption will aid with constructing multi-family housing, open doors for more development and help address the rising cost of housing. I welcome these changes and believe that they will have a positive impact for Bremerton Thank you for allowing public comment on this issue. I ask that you pass this amendment to the municipal code. Let’s help make living in Bremerton an obtainable goal again, thank you! From: Wes Larson <wes@soundwestgroup.com> Sent: Wednesday, March 16, 2022 3:01 PM To: Lisa Maxwell <LisaM@soundwestgroup.com>; City Council <City.Council@ci.bremerton.wa.us>; Marianne Weber <Marianne@soundwestgroup.com> Subject: Re: Exhibits for Agenda Item 5B Public Hearing on Ordinance No. 5447 CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. Please also forward the executive summary written by OCG as well, not just our summary of it. Brian O'Connor ok'd sending it. Thanks Wes Get Outlook for Android From: Lisa Maxwell <LisaM@soundwestgroup.com> Sent: Wednesday, March 16, 2022 2:54:19 PM To: City.Council@ci.bremerton.wa.us <City.Council@ci.bremerton.wa.us>; Wes Larson <wes@soundwestgroup.com>; Marianne Weber <Marianne@soundwestgroup.com> Subject: Exhibits for Agenda Item 5B Public Hearing on Ordinance No. 5447 Please accept the attached documents as items for discussion for Agenda item 5B Public Hearing on Ordinance No. 5447 amending Chapter 3.78 of the Bremerton Municipal Code (BMC) entitled “Multifamily Property Tax Exemption” – Wes Larson Kindest regards, Lisa Maxwell on behalf of Wes Larson Office Manager SOUND WEST GROUP 423 Pacific Ave, Ste 402, Bremerton, WA 98337 (360) 850-4398 | lisam@soundwestgroup.com | soundwestgroup.com | linkedIn ‘Developing Community with Vision & Integrity’ Sound West Group 423 Pacific Avenue, Suite 402 Bremerton, WA 98337 office 360-813-3813 / fax 360-850-1054 www.soundwestgroup.com CONFIDENTIALITY NOTE: This e-mail contains information belonging to Sound West Holdings LLC, its principals, affiliates or subsidiaries, which may be privileged, confidential and/or protected from disclosure. The information is intended only for the use of the individuals or enti named above. If you think that you have received this message in error, please e-mail the sender. If you are not the intended recipient, any dissemination, distribution or copying is strictly prohibited. IMPORTANT TAX INFORMATION: To insure compliance with U.S. Treasury Department regulations, we advise you that, unless otherwise expressly indicated, any federal tax advice contained in this correspondence was not intended or written to be used, and cannot be used, for the purpose of: (i) avoiding tax-related penalties under the Internal Revenue Code of 1986, as amended, or applicable state or local tax law provisions; or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein. Sent from Mail for Windows From: Lisa Maxwell <LisaM@soundwestgroup.com> Sent: Wednesday, March 16, 2022 3:46 PM To: City Council <City.Council@ci.bremerton.wa.us> Cc: Wes Larson <wes@soundwestgroup.com>; Marianne Weber <Marianne@soundwestgroup.com> Subject: Addition to Exhibits for Agenda Item 5B Public Hearing on Ordinance No. 5447 Please accept the attached document in addition to our original submittal of items for discussion for Agenda item 5B Public Hearing on Ordinance No. 5447 amending Chapter 3.78 of the Bremerton Municipal Code (BMC) entitled “Multifamily Property Tax Exemption” – Wes Larson Kindest regards, Lisa Maxwell on behalf of Wes Larson Office Manager SOUND WEST GROUP 423 Pacific Ave, Ste 402, Bremerton, WA 98337 (360) 850-4398 | lisam@soundwestgroup.com | soundwestgroup.com | linkedIn ‘Developing Community with Vision & Integrity’ Sound West Group 423 Pacific Avenue, Suite 402 Bremerton, WA 98337 office 360-813-3813 / fax 360-850-1054 www.soundwestgroup.com CONFIDENTIALITY NOTE: This e-mail contains information belonging to Sound West Holdings LLC, its principals, affiliates or subsidiaries, which may be privileged, confidential and/or protected from disclosure. The information is intended only for the use of the individuals or enti named above. If you think that you have received this message in error, please e-mail the sender. If you are not the intended recipient, any dissemination, distribution or copying is strictly prohibited. IMPORTANT TAX INFORMATION: To insure compliance with U.S. Treasury Department regulations, we advise you that, unless otherwise expressly indicated, any federal tax advice contained in this correspondence was not intended or written to be used, and cannot be used, for the purpose of: (i) avoiding tax-related penalties under the Internal Revenue Code of 1986, as amended, or applicable state or local tax law provisions; or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein. Larson 12345 LAKE CITY WAY NE #214, SEATTLE, WA 98125 • TEL: 206-622-5100 • EMAIL: BRIANO@OCGP.COM January 25, 2022 OCG Ref No. 21-237 Wes Larson Sound West Group 423 Pacific Avenue #402 Bremerton, WA 98337 Dear Mr. Larson, In accordance with your request, we have performed a consulting assignment and written a report regarding the Kitsap County apartment market with a focus on the city of Bremerton. This assignment is a study that focuses on the potential apartment supply and demand, the relating vacancy rates, and other criterion pertinent to understanding the future conditions of the given markets. Our most recent vacancy survey as of October 2021 indicates vacancy levels in Kitsap County decreasing dramatically from a December 2020 rate of 3.00% to an October 2021 rate of 1.50%. Considering forecasted effective demand levels of between 365 and 400 units per year, (from 2022 to 2026) and average supply of 396 new units per year, the Kitsap County market area will likely see vacancy rates remain close to 1.5% through 2023. We then expect to see vacancy rates increase moderately to around 2.10 % between 2024 to 2026. Additionally, we saw average rent growth increase considerably from 2020 through 2021. The average apartment rent for product in Kitsap County during 2020 was $1,451, compared to the average rent in 2021 which was $1,586. This change in rental rates signifies an annual rental growth rate of 9.3%. The important conclusion of this study is that the apartment market throughout Kitsap County is under supplied. Due to the lower levels of supply, it was necessary to limit the amount of apartment demand because projected vacancy rates would have been driven to negative levels. We concluded to a potential demand levels that was above the likely supply of new units. This is what drove the vacancy rate to an impossible -2.0%. Therefore, we were required to limit the demand to what could be effectively accommodated by the supply. Thus we incorporated an “effective demand” figure to more realistically estimate future vacancy rates. From 2022 through 2026, we anticipate that a total of about 1,980 new units will be delivered to the Kitsap County apartment market. Of the total amount of new units added, about 1,300 or 66% will likely occur in the Bremerton market area. We anticipate as many as 2,464 units of potential demand will enter the Kitsap County market over our five-year forecast period. We estimate that the Bremerton sub-market will capture the largest share of overall Kitsap County demand from 2022 through 2026. 12345 LAKE CITY WAY NE #214, SEATTLE, WA 98125 • TEL: 206-622-5100 • EMAIL: BRIANO@OCGP.COM The following Executive Summary highlights the employment & population growth market forecast based upon our apartment market study. Thank you for the opportunity to work with you on this assignment. Sincerely, O'CONNOR CONSULTING GROUP, LLC Brian R. O’Connor, MAI, CRE Bremerton Market Study Summary Developing Community with Vision & Integrity Source: O’Connor Consulting Group, LLC. February 2022 Supply ▪Kitsap apartment market is under supplied ▪Pent-up demand currently is 1,100 units ▪Potential demand is estimated at 2,464 over the 5 year forecast, equating to 500 units/year ▪2022-2026: Forecasted effective demand is between 366-400 units per year ▪2022-2026: 2,119 new units scheduled to be delivered to Kitsap market ▪Bremerton will have the largest share of new supply at 1,325 (62%) ▪2022: 368 units forecasted to deliver ▪2023: 487 units forecasted to deliver ▪2024: 500 units forecasted to deliver ▪2025: 403 units forecasted to deliver ▪2026: 362 units forecasted to deliver Note: Potential demand is the traditional analysis of new households per year with an estimate for rental housing needs. Effective demand, represents the undersupply of the demand with the limited amount of housing coming online. Net Implied Demand, (pent- up demand), highlights the potential supply the market can accommodate. Rent Growth ▪Annual rent growth 2015-2019, 31% or 6.2% per year ▪Annual rent growth from 2020 to 2021 is 9.3% overall ▪Annual rent growth in 2021 from market rate, A and B class properties in Bremerton was 25% and Silverdale was 39% (Source: CoStar & SWG Market Study) ▪Strong rent growth forecasted due to abnormally low vacancy levels, driven by lack of supply ▪Rent growth forecasted to be above 7% and may soar up to 9% per year Vacancy ▪Vacancy rates were driven to negative levels due to lack of supply, so an effective demand figure was created, to show realistic vacancy rates ▪Vacancy rates decreased from 3% (Dec 2020) to 1.5% (Oct 2021) ▪With the average supply of 424 new units per year, forecasted to keep vacancy rates at 1.5% with a slight increase starting in 2023 to 2.10% and 2.7% between 2024-2026 Job Growth ▪2011-2021: Job increase of 6,504, average of 650/year ▪2011-2019 Pre-pandemic: Job increase of 18,488, average of 1,848/year ▪2011-2021 Summary: Job increase is 28,309, average of 2,830 new residents per year ▪Employment growth projected to return significantly in 2022 and through 2024 ▪Public sector employment (excluding active-duty data) consistent at 1,000 jobs per year (1.1%) ▪Federal government growth averaged at 2.9% (last 7 year period) ▪2022: Puget Sound Economic Forecast (PSEF) expects year over year growth of 3,516 jobs (3.9%) ▪2023: PSEF employment growth of 1,970 jobs (2.1%) ▪2024: PSEF forecast of 1,711 jobs (1.7%) Defense ▪Naval Base Kitsap (NBK) largest single direct source of jobs in Kitsap County ▪Naval Base Kitsap includes Bremerton Naval Station, Bangor Submarine Base, Puget Sound Naval Shipyard and Keyport Undersea Warfare Center. ▪NBK and defense spending account for 54% of all economic activity in Kitsap County Navy Expansion ▪20 year Shipyard Modernization Plan with an estimated cost of $21 billion has been proposed due to the GAO report and is in process, PSNS likely to have $5 billion of improvements ▪2016: Completion of $448 million 2nd explosives handling wharf & $47 million in improvement to Bangor’s land-water interface, construction of 20,000 square foot ship maintenance ▪April 2018: Pier extension to accommodate Seawolf-class submarines ▪September 2017: Government Accounting Office Report (GAO) outlined recommended improvements including drydock renovations, efficiency design improvements to yards, upgrade of capital equipment, inserting new technologies to increase productivity and modernization ▪Estimates for backlogged maintenance is estimated at $4.86 billion and will be ongoing through 2026 ▪Three of PSNS drydocks need repairs due to rust and seawater corrosion as a result of having to use super-flooding to service the submarines due to lack of needed improvements ▪Seismic upgrades are needed to keep the only naval dock that handles nuclear powered ships on the west coast protected ▪Capital equipment aging resulting in a loss of operational days for nuclear powered carriers and submarines BMC 3.78 MULTIFAMILY TAX EXEMPTION (MFTE) PROPOSED AMENDMENTS WHAT IS A MFTE? RCW 84.14: Exemption from Ad Valorem (according to value) property tax; continue to be taxed on value of land, retail space, and existing improvements. Current Program: purpose is to create multifamily housing in Targeted Residential Areas (Downtown and Centers) 8-year MFTE, “market rate” 12-year MFTE, 20% units affordable Complete Application Construct Units Annual Reporting PROCESS https://app.leg.wa.gov/rcw/default.aspx?cite=84.14 PROJECT DEVELOPMENT UNDER MFTE Type Status Projects Units 8 Year Conditional Cert. 8 561 Active 3 323 12 Year Conditional Cert. 2 55 Active 2 127 NOTE: All eligible residential projects within a MFTE target area have utilized the program PROJECTS OUTSIDE MFTE TARGET AREAS Blueberry View Apartments: 22 Units Insignia Apartments: 162 Units Harbor Pointe (East Park): 20 Units East Park-In progress:14 Units PROPOSED ORDINANCE Incorporates changes to State Law Codifies current MFTE administrative practices that aren’t in the municipal code Modifies income requirements Transitions the purpose of MFTE from stimulating new construction to focusing on affordable housing Set the effective date of the ordinance to July 1st, 2022 https://lawfilesext.leg.wa.gov/biennium/2021-22/Pdf/Bills/Session%20Laws/Senate/5287-S2.SL.pdf?q=20210709163351 INCORPORATE NEW STATE LAW & ADMIN PROCEDURES E2SSB 5287 – July 2021 Created a new 20-year property tax exemption for the creation of permanently affordable homes Created Extension for existing MFTEs for an additional 12 years if they meet affordability requirements Codify current MFTE administrative practices Displacement: first/last month rent, moving expenses, 12 months notice. Unit mix: represent a fair, even distribution of the unit types https://lawfilesext.leg.wa.gov/biennium/2021-22/Pdf/Bills/Session%20Laws/Senate/5287-S2.SL.pdf?q=20210709163351 CODIFY PRACTICES: TENANT DISPLACEMENT & UNIT MIX RCW prohibits displacement; requires ‘housing of comparable size, quality, and price and a reasonable opportunity to relocate.’ Codify:Require first/last month rent, moving expenses, 12 months notice. RCW requires twenty percent of the multifamily housing units are affordable housing units and the property must satisfy that commitment and any additional affordability and income eligibility conditions adopted by the local government Codify: Units offered as affordable must represent a fair, even distribution of the unit types offered STIMULATE NEW CONSTRUCTION OR FOCUSING ON AFFORDABLE HOUSING? MFTE PURPOSE FOR BREMERTON COMMON TERMS Affordable Housing: housing costs, including utilities, that do not exceed thirty percent of the household's monthly income. RCW 84.14.010(1) Median Family Income (MFI): the midpoint of a region's income distribution; half of the families in a region earn more than the median and half earn less than the median (also referred to as Area Median Income or AMI) MSA means Metropolitan Statistical Area; for Bremerton this means the Bremerton-Silverdale MSA United States Department of Housing and Urban Development, Income Limits Documentation System (HUD MSA Tool): A tool used to calculate housing program income limits nationwide using methodology in accordance with Section 3(b)(2) of the U.S. Housing Act. The tool sets maximum rental charges based on family income levels Low Income Household: a single person (or family) whose adjusted income is at or below 80% of the median family income adjusted for the metropolitan statistical area as reported by the United States Department of Housing and Urban Development. RCW 84.14.010(8) –Per RCW 84.14 Bremerton can alter this qualifying percentage Moderate Income: a single person (or family) whose adjusted income is more than 80% but is at or below 115% of the median family income adjusted the metropolitan statistical area as reported by the United States Department of Housing and Urban Development. RCW 84.14.010(9) - Per RCW 84.14 Bremerton proposing to remove this option INCOME DATA SETS US CENSUSHUD MSA TOOL •Bremerton specific numbers •5-year average •Not adjusted for family size •Smaller sample size/greater margin of error •Observation: Bremerton $52,716 AMI Kitsap County $75,411 AMI Bremerton incomes 70% Kitsap average •Countywide numbers •Updated annually •Adjustable to family size •Standard used in RCW 84.14 •Reliable data source for housing programs nationwide •Confirmed as defensible by WA Dept Commerce https://www.census.gov/quickfacts HOUSING URBAN DEVELOPMENT “MSA TOOL” 2021 Bremerton-Silverdale MSA Number of Persons 1 2 3 4 115% AMI (Mod.) $75,808 $86,585 $97,437 $108,215 Rent Maximum $1,895 $2,165 $2,436 $2,705 80% AMI (Low) $52,750 $60,250 $67,800 $75,300 Rent Maximum $1,319 $1,506 $1,695 $1,883 CURRENT PROGRAM https://www.huduser.gov/portal/datasets/il/il2021/2021MedCalc.odn REFERENCE 100% AMI $65,920 $75,292 $84,727 $94,100 HOUSING URBAN DEVELOPMENT “MSA TOOL” 2021 Bremerton-Silverdale MSA Number of Persons 1 2 3 4 115% AMI (Mod.) $75,808 $86,585 $97,437 $108,215 Rent Maximum $1,895 $2,165 $2,436 $2,705 80% AMI (Low) $52,750 $60,250 $67,800 $75,300 Rent Maximum $1,319 $1,506 $1,695 $1,883 CURRENT PROGRAM REFERENCE 100% AMI $65,920 $75,292 $84,727 $94,100 HOUSING URBAN DEVELOPMENT “MSA TOOL” 2021 Bremerton-Silverdale MSA Number of Persons 1 2 3 4 115% AMI (Mod.) $75,808 $86,585 $97,437 $108,215 Rent Maximum $1,895 $2,165 $2,436 $2,705 80% AMI (Low) $52,750 $60,250 $67,800 $75,300 Rent Maximum $1,319 $1,506 $1,695 $1,883 CURRENT PROGRAM REFERENCE 100% AMI $65,920 $75,292 $84,727 $94,100 TAILORING MFTE CODE TO BREMERTON RCW 84.14 permits local jurisdictions to alter affordability requirements: Eligible AMI “Moderate Income” currently >80%-115% AMI “Low Income” currently 80% or less AMI Percentage of affordable units (currently 20%) PROPOSED AFFORDABLE RENT LIMITS 2021 Bremerton-Silverdale MSA Number of Persons 1 2 3 4 115% AMI (Mod.) $75,808 $86,585 $97,437 $108,215 Rent Maximum $1,895 $2,165 $2,436 $2,705 80% AMI (Low) $52,750 $60,250 $67,800 $75,300 Rent Maximum $1,319 $1,506 $1,695 $1,883 60% AMI (Low) $39,540 $45,180 $50,820 $56,460 Rent Maximum $989 $1,130 $1,271 $1,412 PROPOSED PROGRAM CURRENT PROGRAM PROPOSED AFFORDABLE RENT LIMITS 2021 Bremerton-Silverdale MSA Number of Persons 1 2 3 4 115% AMI (Mod.) $75,808 $86,585 $97,437 $108,215 Rent Maximum $1,895 $2,165 $2,436 $2,705 80% AMI (Low) $52,750 $60,250 $67,800 $75,300 Rent Maximum $1,319 $1,506 $1,695 $1,883 60% AMI (Low) $39,540 $45,180 $50,820 $56,460 Rent Maximum $989 $1,130 $1,271 $1,412 PROPOSED PROGRAM CURRENT PROGRAM PROPOSED AFFORDABLE RENT LIMITS 2021 Bremerton-Silverdale MSA Number of Persons 1 2 3 4 115% AMI (Mod.) $75,808 $86,585 $97,437 $108,215 Rent Maximum $1,895 $2,165 $2,436 $2,705 80% AMI (Low) $52,750 $60,250 $67,800 $75,300 Rent Maximum $1,319 $1,506 $1,695 $1,883 60% AMI (Low) $39,540 $45,180 $50,820 $56,460 Rent Maximum $989 $1,130 $1,271 $1,412 PROPOSED PROGRAM CURRENT PROGRAM AFFORDABLE HOUSING FOR BREMERTON Existing Ord. for 12-year eligibility HUD AMI Adjusted Single Person Household (115%) = $75,808 HUD AMI Adjusted Single Person Household (80%) = $52,750 Proposed Ord. for MFTE eligibility HUD AMI Adjusted Single Person Household (60%) = $39,540 DATA COMPARISION HUD AMI TOOL VS CENSUS Proposed Ord. for MFTE eligibility HUD AMI Adjusted Single Person Household (60%) = $39,540 DATA COMPARISION HUD AMI TOOL VS CENSUS Proposed Ord. for MFTE eligibility HUD AMI Adjusted Single Person Household (60%) = $39,540 CENSUS COMPARISION (65,920 x .7) x .8 = $36,915.20 $65,920, Single Person Household 100% AMI .7 or 70% Reduction based on Bremerton/Kitsap Census ratio .8 or 80% Reduction per low income definition BREMERTON HOUSEHOLD INCOME Proposed Ord. for MFTE eligibility HUD AMI Adjusted Single Person Household (60%) = $39,540 About 40% of all Bremerton households make less than $34,999 https://data.census.gov/cedsci/table?g=1600000US5307695&tid=ACSST5Y2019.S1901 8 YEAR “MARKET RATE” MFTE REMOVE 8 YEAR MFTE “MARKET RATE” OPTION Washington State Joint Legislative Audit & Review Committee (JLARC) 2019 Report Unclear how often MFTE incentivizes projects that would not otherwise be built Inconclusive whether tax liability is shifted https://leg.wa.gov/jlarc/taxReports/2019/MFTE/f_ii/default.html CURRENT RENTAL – ONE BEDROOM UNIT, PARKING, LAUNDRY PROPOSED PROGRAM EXEMPTION PROJECT MONTHLY RENT None Blueberry View $1,975 Insignia Apartments $1,740 Harbor Pointe Apartments $1,550 8 Year Spyglass Apartments $1,775 Ambrose Apartments $1,855 B-flat Apartments $2,070 12 Year 606 Apartments $1,800 QUESTIONS FOR PUBLIC HEARING & NEXT STEPS QUESTIONS: Should the code be updated to include changes to State Law? Should current MFTE administrative practices be added to the municipal code? Should modification to current code income requirements be made to the 12-year program? Should the purpose of the MFTE program transition from stimulating new construction to focusing on affordable housing? Is it the right time to eliminate the 8-year “market rate” MFTE? NEXT STEPS: Council will be considering testimony and directing Staff to prepare an amending ordinance at the March 23rd Study Session, and future public hearing. COUNCIL DISTRICT 2 LESLIE DAUGS COUNCIL DISTRICT 5 MICHAEL GOODNOW EXECUTIVE SESSION The City Council is currently meeting in an Executive Session and will return shortly… Jennifer Chamberlin Leslie Daugs Jeff Coughlin District #1 District #2 District #3 (2022 – 2025) (2020 – 2023) (2022 – 2025) Council Vice President Quinn Dennehy Michael Goodnow Anna Mockler Eric Younger District #4 District #5 District #6 District #7 (2021 – 2023) (2022 – 2025) (2022 – 2023) (2022 – 2025) Council President For additional information, please visit the City of Bremerton website at www.BremertonWA.gov