HomeMy WebLinkAboutCAG2020-397 - Original - The Back Nine at Ethos LLC - Multifamily Housing Property Tax Exemption - 12/10/2020FOR CITY OF KENT OFFICIAL USE ONLY
Sup/Mgr:
Dir Asst:
Dir/Dep:
Agreement Routing Form
KENT For Approvals, Signatures and Records Management
This form combines & replaces the Request for Mayor's Signature and Contract Cover Sheet forms.
(Print on pink or cheny colored paper)WASHtNGToN
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Originator:
Jason Garnham
Department:
Parks, Recreation & Community Services
Date Sent:
L2/07 /2020
Date Required:
Authorized to Sign:
! Director or Deslgnee I Mayor
Date of Council Approval:
7r/L7 /2O2O
Budget Account Number:
Budoet? l-lYes lTlNo
Grant? EYes E No
Type: N/A
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Vendor Name:
Back Nine at Ethos LLC
Category:
Contract
Vendor Number Sub-Category:
Original
projectName: Phase II of Marquee on Meeker/ Ethos mixed-use
development Multifamily Tax Exemption contract
projectDetaits:Ad valorem tax exemption for construction of 210 apartment
units and 6,000 SF retail space at 22OO W Meeker St
Agreement Amount:
Start Date:
Basis for Selection of Contractor: Othef
Termination Date: N/A
Local Businessz D Yes L No*
*lf meets requirements per KCC 3.70.100, please complete "Vendor Purchase-Local Exceptions" form on Cityspace
Notice required prior to disclosure?
nYes n ruo
Contract Number:
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Comments:
Mayor's signature authorized by Committee of the Whole on 11/10/2020
and on the Council consent calendar II/L7/2O2O
Date Received by City Attorney: L2/7 /20
Date Routed to the Mayor's Office:
Date Routed to the City Clerks Office
adc.W2237l_l_20 Visit Documents.KentwA.gov to obtain copies of all agreements
rev.200821
CAG2020-397
CORRECTION - THIS IS AN
ECD CONTRACT
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MULTIFAMILY HOUSING PROPERTY TAX EXEMPTION
AGREEMENT
THIS MULTIFAMILY HOUSING PROPERry TAX AGREEMENT (hereinafter
"Agreement") is entered into on the last date signed below, by and between The
Back Nine at Ethos LLC (hereinafter "Applicant"), and the CITY OF KENT, a
municipal corporation (hereinafter "City").
Recitals.
Applicant has applied to City for a limited property tax exemption as provided
for in Chapter 84.L4 RCW and Chapter 3.25, Kent City Code ("KCC") for
multifamily residential housing located in the residential targeted area, as
defined in KCC Section 3.25.020, and the Director of Economic and
Community Development (hereinafter "Director") has approved the
application; and
Applicant has submitted to City preliminary site plans and floor plans for new
multifamily housing units to be constructed as part of a mixed-use project
known as Ethos -Phase II aka Marquee on Meeker(hereinafter "Project") on
property located at 22O0 West Meeker Street, Kent, Washington, and more
fully described in Exhibit 1 attached hereto, (hereinafter "Property"); and
Applicant is the owner of the Property; and
city has determined that the Project will, if developed as proposed, satisfy
the requirements for a final certificate of tax exemption.
NOW, THEREFORE, in consideration of the mutual promises herein, City and
Applicant do mutually agree as follows:
1. Conditional Certificate of Acceptance of Tax Exemption
City agrees/ upon execution of this Agreement, and subject to approval by
the City Council, to issue a conditional certificate of acceptance of tax exemption
(hereinafter "Conditional Certificate"), which shall expire three (3) years from the
date of approval of this Agreernent by the City Council, unless extended by the
Director, or his or her designee, as provided in KCC Section 3.25.070.
2. Agreement to Construct Multifamily Housing.
a. Applicant agrees to construct the Project on the Property substantially
as described in the site plans and floor plans on file with the City's Economic and
Community Development Department as of the date of the City Council's approval
of this Agreement, subject to such modifications thereto as may be required to
Multifamily Housing Property Tax
Exemption Agreement
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comply with applicable codes and ordinances; provided, that in no event shall such
construction provide fewer than thirty (30) new multifamily housing dwelling units
designed for permanent residential occupancy and at least fifty percent (50o/o) of
the space within the Project shall be intended for permanent residential occupancy
. b. Applicant agrees to comply with all applicable zoning requirements,
ly'nd use regulations, and building and housing code requirements, including but not
Iimited to the city's comprehensive plan, building, fire, housing, and zoning codes,
downtown design review guidelines, multifamily design review, and mixed use
design review if applicable (hereinafter, collectively, "Development Regulations").
The project must be LEED@ certifiable as confirmed by a LEED@ certified
independent third party reviewer or must be Built Greent' certified, and must also
comply with any other standards and guidelines adopted by the City Council for the
residential targeted area. Applicant further agrees that approval of this Agreement
by the City Council, its execution by the Mayor, or issuance of a Conditional
Certificate by the City pursuant to KCC Section 3,25.060.C in no way constitutes
approval of proposed improvements on the Property with respect to applicable
provisions of the City's Development Regulations or obligates the City to approve
proposed improvements to the Property.
c, Applicant agrees that the Project will be completed within three (3)
years frorn the date of approval of this Agreement by the Council, unless extended
by the Director for cause as provided in KCC Section 3.25.070.
3. Requirements for Final Certificate of Tax Exemption.
Applicant may, upon completion of the Project and upon issuance by City of a
temporary or permanent certificate of occupancy, request a final certificate of tax
exemption (hereinafter"Final Certificate"). The request shall be made in writing to
the Director, and be accompanied by the following:
a. A statement of expenditures made with respect to each multifamily
housing unit and the total expenditures made with respect to the entire Project and
Property;
b. A description of the completed work and a statement of qualification
for the multifamily housing property tax exemption;
c. The total monthly rent, or total sale amount of each multifamily
housing unit rented or sold to date;
Multifarnily Housing Property Tax
Exemption Agreement
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d. A statement that the Project was completed within the required three-
(3) year period or any authorized extension, and documentation that the Project
was completed in compliance with the terms of this Agreement;
e. Any further information that the Director deems necessary or useful,
pursuant to Chapter 84.L4 RCW or KCC Chapter 3.25, to evaluate the Project's
eligibility for the Final Certificate.
4. Agreement to Issue Final Certificate of Tax Exemptis0.
City agrees to file a Final Certificate with the King County Assessor within
fofty (a0) days of submission by the Applicant of all rnaterials required by
paragraph 3 above, if Applicant has:
a. Successfully completed the Project in accordance with the terms of this
Agreement and KCC Chapter 3,25;
b. Filed a request for a Final Certificate with the Director and submitted
the materials described in paragraph 3 above;
c Paid to City a fee in the amount of one thousand dollars (91,000); and
d. Met all other requirements provided in KCC Chapter 3.25 for issuance
of the Final Certificate.
5. Annual Certification and Report.
Within thirty (30) days after the first anniversary of the date City issued the
Final Certificate and each year thereafter for a period of eight (8) years, Applicant
agrees to file a notarized declaration and annual report with the Director. The
report shall contain such information as required by RCW 84.14 and as the Director
may deem necessary or useful, and shall at a minimum include the following:
a. A statement of the occupancy and vacancy of the multifamily housing
units during the twelve (12) months ending with the anniversary date;
b. A certification that the multifamily housing units, Project, and Property
have not changed use since the date the City issued the Final Certificate'
c. A statement that the multifamily housing units, Project, and Property
continue to be in compliance with this Agreement and the requirements of RCW
84.14 and KCC Chapter 3.25;
Multifamily Housing Property Tax
Exemption Agreement
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d. A description of any improvements or changes to the Project made
after the City issued the Final Certificate;
e. The total monthly rent of each multifarnily housing unit rented or the
total sale amount of each multifamily housing unit sold to an initial purchaser
during the twelve (12) months ending with the anniversary date;
f. A breakdown of the number, type, and specific multifamily housing
units rented or sold during the twelve (12) months ending with the anniversary
date; and
g. Any additional information requested by the Director pursuant to
meeting any reporting requirements under RCW 84.14.
6. No Violations for Duration of Exemption,
For the duration of the property tax exemption granted under KCC Chapter
3.52, Applicant agrees thatthe Project and the Property will have no violations of
applicable zoning requirements, land use regulations, building code requirements or
fire code requirements, for which the applicable code enforcement officer, pursuant
to KCC Chapter L.04, shall have issued a correction notice, a notice of violation, or
other notification that is not resolved by a voluntary correction agreement,
certificate of compliance, certificate of release, withdrawal or other method that
proves either compliance or that no violatlon existed, within the time period for
compliance, if any, provided in such notice of violation, citation or other notification
or any extension of the time period for compliance granted by the code
enforcement officer.
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Applicant agrees to notify the Director within thirty (30) days of any transfer
of Applicant's ownership interest in the Project, the Property or any improvements
made to the Property. Applicant further agrees to notify the Director and the King
County Assessor in writing within sixty (60) days of any change of use of any or all
of the multifamily housing units on the Property to another use. Applicant
acknowledges that such a change in use may result in cancellation of the property
tax exemption and imposition of additional taxes, interest, and penalty pursuant to
state law.
8. Cancellation of Exemption - Appeal.
a, The City reserves the right to cancel the tax exemption and revoke the
Final Certificate if at any time the Director determines that the multifamily housing
units, the Project, or the Property no longer complies with the terms of this
Multifamily Housing Property Tax
Exemption Agreement
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Agreement or with the requirements of KCC Chapter 3.52, or for any other reason
no longer qualifies for a property tax exemption.
b. If the property tax exemption is canceled for non-compliance,
Applicant acknowledges that state law requires that an additional real property tax
is to be imposed in the amount of: [1] the difference between the property tax paid
and the property tax that would have been paid if it had included the value of the
nonqualifying improvements, dated back to the date that the improvements
became nonqualifying; [2] a penalty of twenty percent (2A%{ of the difference
calculated under (1) of this subsection b; and [3] interest at the statutory rate
charged on delinquent property taxes, calculated from the last date the tax could
have been paid without penalty if the improvements had been assessed without
regard to the exemptions provided by Chapter 84.L4 RCW and KCC Chapter 3.52.
Applicant acknowledges that, pursuant to RCW 84.t4.110, any additional tax owed,
together with interest and penalty, shall become a lien on the Property and attach
at the time the Property or portion of the Property is removed from multifamily
housing use, and that the lien has priority to and must be fully paid and satisfied
before a recognizance, mortgage, judgment, debt, obligation, or responsibility to or
with which the Property may become charged or liable. Applicant further
acknowledges that RCW 84.14.110 provides that any such lien may be foreclosed in
the manner provided by law for foreclosure of liens for delinquent real property
taxes.
c. Upon determining that the tax exemption is to be canceled, the
Director shall notify the Applicant, along with any other owner of record, by
ceftified mail, return receipt requested. The Applicant may appeal the
determination in accordance with RCW 84.14,110 and KCC Section 3.25.110.8.
9. Amendrnents..
No modification of this Agreement shall be made unless mutually agreed
upon by the parties in writing and unless in compliance with the provisions of KCC
section 3.25.060.E, including but not limited to Applicant's payment of a five
hundred dollars ($500) contract amendment fee.
10. Bindinq Effect.
The provisions, covenants, and conditions contained in this Agreement are
binding upon the parties hereto and their legal heirs, representatives, successors,
assigns, and subsidiaries, and are intended to run with the land.
11. Recordi0o of Agreem.ent.
Multifamily Housing Property Tax
Exemption Agreement
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The Director shall cause this Agreement to be recorded, at Applicant's
expense, in the real property records of the King County Department of Records
and Elections, along with any other documents as will identify such terms and
conditions of eligibility for exemption as the Director deerns appropriate for
recording.
L2. Audits and Inspection of Records.
Applicant understands and agrees that City has the right to audit or review
appropriate records to assure compliance with this Agreement and KCC Chapter
3.52 and to perform evaluations of the effectiveness of the multifamily housing
property tax exemption program. Applicant agrees to make appropriate records
available for review or audit upon seven (7) days'written notice by city.
13. Notices.
All notices to be given pursuant to this Agreement shall be in writing and shall
be deemed given when hand-delivered within normal business hours, when actually
received by facsimile transmission, or two business days after having been mailed,
postage prepaid, to the parties hereto at the addresses set forth below, or to such
other place as a pafty may from time to time designate in writing,
APPLICANT:
Brett Jacobsen
The Back Nine at Ethos LLC
2711 West Valley Highway N, #200
Auburn, WA 98001
Phone: 253.333.7007 Fax: 253.333.7707
CITY: City of Kent
Economic and Community Development
220 Fourth Avenue South
Kent, WA 98032
Phone: (253) 856-5454 Fax: (253) 856-6454
Attention: Director
74. Severability.
In the event that any term or clause of this Agreement conflicts with
applicable law, such conflict shall not affect other terms of this Agreement that can
be given effect without the conflicting terms or clause, and to this end, the terms of
the Agreement are declared to be severable.
Multifamily Housing Property Tax
Exemption Agreement
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
dates indicated below.
CITY OF KENT
By:By
Its
acobsenIts: Mayor r
Date: 1211012020
APPROVED AS TO FORM:
City Attorne
Multifamily Housing Property Tax
Exemption Agreement
Date
Page 7 ol 10
STATE OF WASHINGTON )
)ss
couNw oF KrNG )
I certify that i know or have satisfactory evidence that Dana Ralphs is the
person who appeared before me, and said person acknowledged that she signed this
instrument, on oath stated that she was authorized to execute the instrument and
acknowledged it as the Mayor of the City of Kent to be the free and voluntary act of
such party for the uses and purposes mentioned in the instrument.
Dated: DTetmD,bv- l0 , 2oL0
Multifamily Housing Property Tax
Exemption Agreement
IN WITNESS WHEREOF, I have hereunto set my hand and official seal
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the day and r first above written
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NOTARY PUBLIC, in and for the State
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Page B of 10
STATE OF WASHINGTON
COUNTY OF KING
I ceftify that I know or have satisfactory evidence that Brett Jacobsen is the
person who appeared before me, and said person acknowledged that (he/she) signed
this instrument and acknowledged it to be (hislher) free and voluntary act for the
uses and purposes mentioned in the instrument.
Dated:
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Multifamily Housing Property Tax
Exemption Agreement
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IN WITNESS WHEREOF, I have hereunto set my hand and official seal the
day and year first above written,
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-Notary Seal Must Appear Within This Box-
of Washington, residing
My appointment exp
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MULTIFAMILY HOUSING PROPERTY
TAX EXEMPTION AGREEMENT
EXHIBIT 1
LEGAL DESCRIPTION
LOTS 3, 4 AND 5 OF CITY OF KENT SHORT PLAT NO. Sp-2017-1, RECORDED UNDER
RECORDING NO. 20180321900004, IN KING COUNTY, WASHINGTON.
Multifamily Housing Property Tax
Exemption Agreement
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