HomeMy WebLinkAboutAD05-332 - Other - Springboard Holdings, LLC - Parking Replacement Agreement - 05/17/2006 Springboard Holdings, LLC Second Avenue Real Estate LLC
1627 East Sammamish Place SE 1301 Fifth Avenue, Suite 2600
Sammamish, Washington 98075 Seattle,Washington 98101
Attn Ben Errez Alin Ben Porter
Re Replacement Parking Agreement dated as of October 12, 2005 by and among Springboard
Holdings, L L C , a Washington limited liability company ("Developer"), Second Avenue Real
Estate LLC, a Washington limited liability company ("Second Avenue") and the City of Kent, a
Washington municipal corporation("City") (the"Replacement Parking Agreement")
Gentlemen:
Pursuant to the provisions of Section 12 5 and Section 15 of the Replacement Parking Agreement,
Developer was required to commence construction of the Parking Garage on or before March 31, 2006
Developer was unable to commence construction of the Parking Garage because it had not yet obtained
all permits necessary to construct the Parking Garage nor had Developer obtained the equity and debt
financing necessary to pay for the cost of the Parking Garage. Developer has requested that City forbear
declaring an Event of Default under the Replacement Parking Agreement and the City Deed of Trust as a
result of such default and extend the date by which Developer must obtain all equity and debt financing
necessary to pay for the cost of the Parking Garage, obtain all permits necessary to commence
construction of the Parking Garage and commence construction of the Parking Garage.
City is willing to forbear declaring an Event of Default under the Replacement Parking
Agreement and the City Deed of Trust until June 16, 2006, provided each of the conditions set forth
below has been met to the reasonable satisfaction of City or waived by City in its sole discretion on or
before May 30, 2006
(1) Evidence reasonably acceptable to City that the cash equity not funded through the
construction loan that is needed to build the entire parking garage structure (which must include at least
350 parking spaces) has either been deposited with the construction lender or other closing escrow or is
available without additional conditions or requirements, to pay for the initial construction costs of the
parking garage
(2) Developer's construction lender has advised City that all conditions to its commitment
letter which are required to be met prior to closing of its construction loan have been met and it is in a
position to close its construction loan for Phase I of Project Springboard Phase I shall mean construction
of the Parking Garage (and associated sidewalks, driveways and private streets connecting Smith and
Harrison Streets, and retail space)
(3) City has reviewed the final project budget for Phase I certificated as to accuracy and
completeness by Developer showing all hard and soft costs associated with construction of Phase I, which
has been approved by the proposed construction lender and any equity participants in Developer
(4) City has reviewed the final guaranteed maximum price construction contract for Phase I
of the Project Springboard improvements executed by the general contractor in an amount not in excess of
the amount set forth in the final project budget which has been approved by the construction lender, any
equity participants in Developer and Developer.
(5) City has reviewed final construction loan documents for Phase I of the Project
Springboard improvements which are consistent with the requirements of the consent and subordination
agreement described in(6) below
(6) Consent and subordination agreement executed by the construction lender in substantially
the form attached to this agreement as exhibit A
(7) Developer has obtained all permits necessary to commence construction of Phase I of the
Project Springboard improvements including, but not limited to, a building permit for construction of the
Parking Garage
(8) Developer has provided City with executed assignments of the construction contract and
architectural agreements for Phase I of the Project Springboard improvements in substantially the forms
attached hereto as Exhibits B and C, executed by the general contractor and architect respectively in favor
of the City, as additional security for the performance of Developer's obligations under the Replacement
Parking Agreement as required under Section 15 10 thereof
(9) Developer has recorded an easement in favor of City, and in form and substance
satisfactory to City, for the mechanical chase room and public restrooms (the"Ancillary improvements")
and has deposited funds with City, provided a bond in a form acceptable to the City, provided a set-aside
letter from a financial institution acceptable to City, or otherwise reserved funds in a manner and form
acceptable to the City in an amount equal to 150% of the estimated construction cost for the Ancillary
Improvements If the Ancillary Improvements are complete and the mechanical chase room is available
for full use in accordance with the requirements of the Replacement Parking Agreement on or before
March 31, 2007, City will release the reserved funds to Developer, and if required, the Developer will
adjust the legal description of the actual on site location of the easement In the event that the
construction of the Ancillary Improvements has not been completed by March 31, 2007, City shall have
the right to use the reserved funds to construct the Ancillary Improvements at Developer's cost.
Upon fulfillment of the foregoing conditions to the reasonable satisfaction of the City and only
upon the fulfillment of the foregoing conditions, City shall deliver to Developer written notice confirming
that all such conditions have been met Developer shall thereafter commence construction of utility work
on or before the close of business on June 16, 2006 and shall commence construction of the Parking
Garage on or before the close of business on July 14, 2006 For purposes of this forbearance agreement,
Developer will have commenced construction of the utility work when its general contractor has
commenced excavation of the Project Springboard property to remove and/or relocate utility lines
installed within the vacated alley, and will have commenced construction of the Parking Garage when its
general contractor has commenced installation of foundations for the parking garage Once construction
commences Developer shall diligently and continuously prosecute construction of the Parking Garage
improvements to completion
In the event each of the foregoing conditions is met to the reasonable satisfaction of City on or
before May 27, 2006 and Developer commences construction of the utility work and the construction of
the Parking Garage on or before the dates set forth in the immediately preceding paragraph, City will
extend the date for Substantial Completion of the Parking Garage to December 15, 2006, and the Outside
Completion Date for the Parking Garage to June 30, 2007 Time is of the essence of each provisions of
this forbearance agreement.
Nothing contained herein shall constitute a waiver of any provision of the Replacement Parking
Agreement Nothing contained herein shall be deemed to or shall constitute a continuing waiver of any of
the provisions of the Replacement Parking Agreement except to the extent expressly set forth above.
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Nothing contained herein shall directly or indirectly (a) create any obligation to consent to any further
extension of time for commencement or completion of construction of the Parking Garage, (b) constitute
consent to, or waiver of, any other present Event of Default or other violation of any other provision of
the Replacement Parking Agreement, or(c)constitute a course or dealing or other basis for altering any of
Developer's obligations to City under the Replacement Parking Agreement All capitalized terms not
otherwise defined herein shall have the same meaning as in the Replacement Parking Agreement This
letter agreement shall be governed by Washington law
Notice re Oral Commitments. Oral agreements or oral commitments to loan money, extend
credit or to forbear from enforcing replacement of a debt are not enforceable under Washington
law.
Very truly yours,
CITY OF KE
By '\ze,221L 1��&
Name L
Its12 O/L
ACCEPTED AND AGREED this_17th day of May, 2006
SPRINGBOARD HOLDINGS,L L C,
A Washington limited liability company
By
Name Ben Errez
Its President
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