HomeMy WebLinkAbout4268 Ordinance o . 4268
1
(Appealing or Repealing Ordinances)
Passed - 12/12/2017
Approve and authorize the execution of all conveyance and project
agreements for the Kent YMCA project
ORDINANCE NO.
AN ORDINANCE of the City of Kent,
Washington, providing for the design and
construction of a YMCA community center in the
City's Morrill Meadows/East Hill Park; approving
the conveyance of a parcel within the park and
the lease and lease-back of a portion of the
park; approving a development agreement for
the design and construction of a multi-purpose
community facility and related park
improvements; approving an agreement for the
operation and maintenance of the constructed
improvements; delegating authority to approve
the final terms of the project agreements,
including a lease with principal payments over
the term of the lease not to exceed $8,500,000;
and authorizing other matters related thereto.
RECITALS
A. The City and the YMCA of Greater Seattle ("YMCA")
previously entered into a Memorandum of Understanding to explore how
best to achieve their mutual goal to construct and operate a community
center within the Morrill Meadows/East Hill Park.
B. Under its home rule authority, other statutory authority, and
in accordance with the procedures in Chapter 35.42 of the Revised Code of
Washington, the City published a Request for Proposals ("RFP") soliciting
applications for the design, construction, and financing of a community
center and related park improvements (the "Project").
1 Approve &Authorize the Execution
of All Conveyance and Project
Agreements for the Kent YMCA Project
C. The YMCA was the only party to respond to the RFP, agreeing
to finance Project construction, take all risk of cost overruns or delay,
design and construct the Project, and provide specific community benefits.
D. To accomplish the Project and in consideration of the
community benefits to be provided, the City now desires to deed a portion
of park property in fee to the YMCA to construct the community center,
subject to a reversionary interest in favor of the City; to lease and lease-
back a portion of the park to construct adjoining park improvements; and
to enter into related project documents.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF KENT,
WASHINGTON, DOES HEREBY ORDAIN AS FOLLOWS:
SECTION 1. - Findings Reaardina Project.
A. Project Description. The City Council finds that it is in the
best interests of the residents of the City to proceed with the Project,
which will provide a multi-purpose community facility including, among
other things, a gymnasium, community meeting rooms, and a six-lane,
twenty-five yard swimming pool (the "Kent YMCA"), as well as parking for
250 vehicles, a storm drainage system, outdoor multi-use sport courts,
lawn and dog park areas, and other park and site improvements, including
frontage improvements (the "Ground Lease Improvements").
B. Project Agreements. The Project will require the following
2 Approve & Authorize the Execution
of Ali Conveyance and Project
Agreements for the Kent YMCA Project
agreements and related and ancillary documents:
1. A Quit Claim Deed with Grantee Covenants, Releases
and Indemnity (the "Conveyance Agreement"), conveying a parcel in the
Morrill Meadows and East Hill Parks, which parcel will be formed through
the pending lot line adjustment process, to the YMCA in consideration for
the YMCA's obligations under the Project documents, including the YMCA's
obligation to design, construct, and finance the Project and provide
specified community benefits. The City will retain a reversionary interest
under the Conveyance Agreement so that, if the YMCA ceases to provide
the Kent YMCA, the parcel will revert to the City.
2. A lease ("Ground Lease") and lease-back ("Project
Lease") of a portion of the Morrill Meadows and East Hill Parks to allow for
construction of the Ground Lease Improvements. Under the Project
Lease, the City will pay Monthly Rent as defined in the Project Lease. The
principal component of Monthly Rent payable over the term of the lease
will not exceed $8,500,000.
3. A development agreement ("Development Agreement")
requiring the YMCA to finance, design, and construct the Kent YMCA and
the Ground Lease Improvements.
4. An operating agreement ("Operating Agreement") to
establish the parties' operational and maintenance expectations and
provide for specified community benefits.
5. Collectively, the Ground Lease, the Development
3 Approve & Authorize the Execution
of All Conveyance and project
Agreements for the Kent YMCA project
Agreement, the Project Lease, the Operating Agreement, and all
documents and exhibits incorporated in those agreements, constitute the
"Project Agreements."
C. Community Benefits. Under Section 2(b) of the Development
Agreement, the YMCA agrees to provide specified Community Benefits as
defined in the Development Agreement, including completing the Kent
YMCA, at a cost of approximately $24,000,000, and all Ground Lease
Improvements, at a cost of approximately $8,500,000, at the YMCA's sole
cost and risk of liability, except for Significant Unexpected Underground
Conditions and Costs Resulting From City-Caused Delay, each as defined
in the Development Agreement. In addition, the YMCA will agree to
construct a larger aquatics center than the YMCA normally would build in a
facility of the size of the Project so that the Kent YMCA can absorb the
uses of the aging Kent-Meridian Pool. The YMCA will agree to operate the
Kent YMCA for a term of fifty years, providing increased health and
recreation services in the community and providing an indoor, year-round
aquatics facility to meet the community's aquatics needs, including water
safety, aquatic fitness activities, therapeutic aquatics programs, high
school swim teams, recreational swimming, and job training in aquatics-
related careers. The YMCA will agree to provide specified financial
assistance, free passes, and free or reduced fee memberships, including at
least $1,000,000 annually in financial assistance to low- and moderate-
income Kent residents, to ensure membership access to the Kent YMCA
4 Approve & Authorize the ExecutioJ
of Ali Conveyance and Project,
Agreements for the Kent YMCA Project'
regardless of household income level. This financial assistance will include
access to swim lessons, certain annual free passes to encourage Kent
residents to find new ways to exercise and engage in healthy lifestyle
behaviors, access to the Kent YMCA through City of Kent Parks and
Recreation Department programs, community swims, City access to
community meeting rooms, indoor restrooms that will be available to park
users for no charge during Kent YMCA operating hours, and no-cost or
highly subsidized social services to Kent residents. The City Council
hereby finds that these Community Benefits provide sufficient
consideration for the City's obligations under the Project Agreements.
SECTION 2. - Monthly Rent a General Obligation. The obligation of
the City to pay Monthly Rent under the Project Lease is a general
obligation of the City. The City irrevocably covenants and agrees that
each year it will include in its budget and levy an ad valorem tax upon all
the property within the City subject to taxation in an amount that will be
sufficient, together with other revenues and money of the City legally
available for such purposes, to pay Monthly Rent when due.
The City pledges that the annual tax to be levied for the payment of
Monthly Rent shall be within and as a part of the regular property tax levy
permitted to cities without a vote of the people, and that a sufficient
portion of each annual levy to be levied and collected by the City prior to
the full payment of the Monthly Rent will be and is set aside, pledged, and
5 Approve &Authorize the Execution
of AH Conveyance and Project
Agreements for the Kent YMCA Project
appropriated for the payment of Monthly Rent. The full faith, credit, and
resources of the City are pledged for the annual levy and collection of said
taxes and for the prompt payment of the Monthly Rent when due.
The City reserves the right to prepay Monthly Rent in full or in part,
at any time, without penalty or premium. Upon full payment of all
outstanding Monthly Rent, the Ground Lease and the Project Lease shall
terminate, and unencumbered fee simple title to the premises and Ground
Lease Improvements will revert to the City.
SECTION 3. - Authorization of Project Agreements. The
Conveyance Agreement and Project Agreements are approved in
substantially the forms submitted to the City Clerk and attached as
Exhibits to this Ordinance. The City Council has determined that it would
be in the best interest of the City to delegate to the Mayor, or his or her
designee (the "Designated Representative"), the authority to approve the
final Conveyance Agreement and Project Agreements.
The Designated Representative is hereby authorized to approve the
Conveyance Agreement and Project Agreements in substantially the forms
attached, subject to those changes, not inconsistent with the material
terms of this ordinance, that are approved by the City Attorney, but only
if:
(i) The term of the Ground Lease commences no earlier
than the effective date of this ordinance and expires approximately
6 Approve & Authorize the Execution
of All Conveyance and project
Agreements for the Kent YMCA project
twenty-two years from the date the Ground Lease is signed, unless earlier
terminated pursuant to its terms;
(ii) The term of the Project Lease commences no earlier
than the effective date of this ordinance and expires approximately twenty
years from the date of the final acceptance of Project Improvements,
unless earlier terminated pursuant to its terms;
(iii) The principal component of Monthly Rent paid over the
term of the lease does not exceed $8,500,000, and the interest
component of Monthly Rent reflects an interest rate that does not exceed
five percent, and
(iv) the Conveyance Agreement and Project Agreements
conform to all other terms of this ordinance.
Based on these parameters, the Council finds that Monthly Rent
payable under the Project Lease will not exceed prevailing rental rates for
space comparable to the Ground Improvements.
Subject to the terms and conditions set forth in this section, the
Designated Representative is authorized to execute the Conveyance
Agreement and Project Agreements. Following the execution of the
Conveyance Agreement and Project Agreements, the Parks, Recreation
and Community Services Director shall provide a report to the Council
describing the final terms of the Conveyance Agreement and Project
Agreements, including Monthly Rent, approved pursuant to the authority
delegated in this section.
7 Approve &Authorize the Execution
of All Conveyance and project
Agreements for the Kent YMCA project
SECTION 4. - General Authorization• Ratification. The Designated
Representative; the Parks, Recreation and Community Services Director;
the Finance Director; the Chief Administrative Officer; the City Clerk; and
other appropriate officers of the City are authorized to take any actions
and to execute documents as in their judgment may be necessary or
desirable in order to carry out the terms of, and complete the transactions
contemplated by, this ordinance. All acts taken pursuant to the authority
of this ordinance but prior to its effective date are hereby ratified.
SECTION 5. - Certain Amendments. Upon approval of the City
Attorney and without further action of the City Council, the City Clerk and
the Code Reviser are authorized to make necessary corrections to this
ordinance, including the correction of clerical errors; ordinance, section or
subsection numbers; or references to other local, state or federal laws,
codes, rules, or regulations.
SECTION 6. - Severabilitv. If any one or more section, subsection,
or sentence of this ordinance is 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 7. - Effective Date of Ordinance. This ordinance shall take
effect thirty (30) days after ' pass Age as provided by law.
E T 'OOKE, MAYOR Date Appr ved
8 Approve & Authorize the Execution
of AH Conveyance and Project
Agreements for the Kent YMCA Project
ATTEST:
4wk) 12-1 12 1-7
KIMBERLEY A OMOTO, CITY CLERK Date Adopted
Date Published
APPROVED AS TO FORM:
,rW,k- 1'�-�(A JA,,�
T014 BRUBAKER, TY ATTORNEY
9 Approve & Authorize the Execution
of All Conveyance and Project
Agreements for the Kent YMCA Project
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