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HomeMy WebLinkAboutCAG2021-054 - Original - Avenue 55, LLC - North Naden MOU - 02/22/2021ApprovalOriginator:Department: Date Sent:Date Required: Authorized to Sign: Director or Designee Mayor Date of Council Approval: Grant? Yes No Type:Review/Signatures/RoutingDate Received by City Attorney: Comments: Date Routed to the Mayor’s Office: Date Routed to the City Clerk’s Office:Agreement InformationVendor Name:Category: Vendor Number:Sub-Category: Project Name: Project Details: Agreement Amount: Start Date: Basis for Selection of Contractor: Termination Date: Local Business? Yes No* Business License Verification: Yes In-Process Exempt (KCC 5.01.045) If meets requirements per KCC 3.70.100, please complete “Vendor Purchase-Local Exceptions” form on Cityspace. Notice required prior to disclosure? Yes No Contract Number: Agreement Routing Form 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 cherry colored paper) Visit Documents.KentWA.gov to obtain copies of all agreementsadccW22373_1_20 Budget Account Number: Budget? Yes No Dir Asst: Sup/Mgr: Dir/Dep: rev. 200821 FOR CITY OF KENT OFFICIAL USE ONLY (Optional) * Memo to Mayor must be attached LdA mil,•, ! e This Memorandum of Understanding ("MOU") is between the City of Kent, Washington, a municipal corporation, and Avenue 55, LLC, a limited liability corporation ("Avenue 55"). REC%TALS A. The City owns certain real property located to the north of Willis Street, the south of West Meeker Street and to the east of State Route (SR) 167 and the west of the Interurban Trail within the City of Kent, King County, Washington, depicted and described in Exhibit A ("Naden Property"). The Naden Property is currently accessed through Naden Avenue South and an old access easement from West Meeker Street, B. The Naden Property is highly visible and located midway between the Ports of Tacoma and Seattle and just a few miles east of SeaTac International Airport. The Naden Property is also adjacent to the Interurban Trail, SR-167, and SR- 516, and is within walking distance to the amenities and commuter rail of Kent Station and Meeker Street —the historic Main Street of the City of Kent. Meeker Street is undergoing a transformation into a promenade, connecting the historic downtown to the Green River with more than 2,000 rental bedrooms currently being added. After decades of public -private partnership in developments related to "play" (e.g., Kent Station) and "live" (e.g., Ethos), the City now seeks to bring "work" to the Downtown Subarea Plan's vision of a "live play work" commercial center. C. The City is authorized to dispose of real property pursuant to RCW 35A.11.010. D. The City's Economic Development Plan, adopted in 2014, calls for "surplus city property be developed for housing & commercial" uses. Since 2014, the City has sold more than two dozen acres of surplus property for housing (excepting 11,000 square feet of ground floor retail in two apartment buildings on the former Par 3 Riverbend Golf Course in the development now known as Ethos), and comparatively little to none for commercial development. E. Strategic action 5.4.1 of the Economic Development Plan calls for the City to consider a dedicated master planning process for the Kent Industrial Valley (where the Naden Property lays within this real estate submarket) focusing on opportunities for industrial campus development in order to remain a competitive economic place for advanced manufacturing. F. Strategic action 6.1.4 of the plan calls for the City to "develop a maker space" in the Kent Industrial Valley in support of workforce development collaboration. It is understood that the development of maker spaces often requires public - private partnerships. MOU -CITY OF KENT AND AVENUE 55 Page � 1 G. Pursuant to Resolution 1935, passed on October 14, 2016, the Naden Property is formally listed as surplus to the City's needs in accordance with the requirements of chapter 3.12 KCC. Section 2 of the resolution provides, "Public's Best Interest. It is in the public's best interest that this surplus property shall be marketed and sold in one or more sections for reinvestment and redevelopment to enhance city revenue and stimulate economic development in the city's downtown core." H. The City ran a competitive Request for Qualifications process, with published advertisements and disclosures to local media, to select a developer to negotiate an option on the Naden Property with the City, subject to City Council approval, in order to partner with the City to realize a shared vision on the site. I. The City sought an experienced, proven, conceptually innovative and qualified development team to partner with its Economic and Community Development department staff to: (1) help achieve the City's objective to sell or lease the property on the condition the property be utilized as an urban manufacturing or flex tech campus at this site; and/or (2) help the City recruit a build -to -suit, owner -operator manufacturing employer (or a combination thereof) to bring more employment to Kent's historic downtown. J. The City Council President appointed a panel to select a development team for Council consideration. After the panel's review of four submissions and an interview with the panel's preferred development team on November 1, 2020, the panel chose Avenue 55, K. Avenue 55 will work in partnership with the City's Economic and Community Development department staff. L. There is mutual understanding that the partnership with Avenue 55 will include: joint marketing efforts for business recruitment including development of materials and media; basic conceptual site planning and SEPA entitlement performed by Avenue 55 with input from City staff to assist in providing confidence to potential end users of the Naden Property; cooperation to reach a mutually acceptable development proposal that achieves the public objective of this MOU. M. The parties understand this partnership constitutes the parties' agreement to explore development options for the Naden Property. There is mutual understanding that the City will not offer capital to improve site development conditions, and that Avenue 55 is not committing to building within a specified timeline. N. In exchange for providing Avenue 55 with the exclusive right to negotiate and finalize an agreement regarding the sale or long-term lease of the Naden Property, Avenue 55 will, at its sole cost, market the property and engage with potential tenants on site and building designs that fulfill the purpose of this MOU. Additionally, Avenue 55 will provide preliminary design for build -out for MOU -CITY OF KENT AND AVENUE 55 Page � 2 any proposal, as well as preliminary site studies and preliminary architectural and engineering design work. Therefore, the parties agree as follows: 1. Purpose. 1.1 This MOU gives Avenue 55 the exclusive right to negotiate and finalize agreements with the City regarding the sale or long-term lease, construction, and development of the Naden Property or portions of it for the term of the MOU. 1.2 The intent and purpose of this MOU is to clarify the expectations of the parties and to provide a framework for the solicitation and review of proposals for development of the Naden Property or portions of it. The parties will cooperate in an attempt, subject to City Council approval, to reach a mutually acceptable development proposal and development agreement that will help achieve the City's public objective of conditioning the disposition of the property on developing and constructing an urban manufacturing or flex tech campus and/or helping the City recruit a build -to -suit, owner -operator manufacturing/ flex tech employer, workforce and/or business development facilities (or a combination thereof) to bring more employment to the City's historic downtown. 2. Term of the MOU. Z.1. The term of the MOU is 12 months from the effective date, unless terminated or extended prior to that date. The effective date is the date the last party signs the MOU. 2.2. The MOU may be extended or terminated by mutual written agreement of the parties. 3. Property. The Naden Property consists of 23 tax parcels, for a total of approximately 7.8 acres, to the south of West Meeker Street, the north of Willis Street and to the east of SR 167 and the west of the Interurban Trail, depicted and described in Exhibit A. MOU -CITY OF KENT AND AVENUE 55 Page � 3 4. Marketing and Proposal Solicitation. 4.1. During the term of the MOU, Avenue 55 will market the Naden Property and engage with potential tenants regarding site and building designs that fulfill the purpose of this MOU. Avenue 55 will coordinate its marketing efforts with the City. Avenue 55 will solely be responsible for any costs associated with its marketing and solicitation. 4.2. The City may also solicit proposals and engage with potential tenants. The City will present any proposals or potential tenants to Avenue 55 for input; provided, the City shall have final authority to approve or disapprove any proposal. 5. Proposal Review. Economic and Community Development department staff ("City staff") will first evaluate any development proposal submitted by Avenue 55. Such proposal shall include all relevant details known at the time of submission for the future project including but not limited to design, prospective uses of the property, potential/initial tenants, etc. If City staff determines that a proposal fulfills the purpose of this MOU, City staff will recommend the proposal for consideration by the City Council. The City Council may, in its sole discretion, reject any proposal. The City Council's acceptance of a proposal shall not constitute the agreement to transfer the Naden Property, nor shall such acceptance be interpreted in any manner to create liability on the part of either party in the event the transfer of property does not occur. Rather, such acceptance shall constitute a good faith commitment to negotiate the terms of a development agreement in accordance with Section 6 of this MOU. 6. Development and Disposition of the Naden Property. If the City Council accepts a proposal for development of the Naden Property or any portion of it in accordance with Section 5 of this MOU, the parties will make a good faith effort to negotiate a development agreement recorded against the property that will be subject to City Council approval after a public hearing. Any transfer of any portion of the Naden property will be at a value agreed to by City Council, This MOU shall in no way bind the City Council to the terms of a development agreement or the transfer of any property. MOU -CITY OF KENT AND AVENUE 55 Page � 4 7. Access to Naden Property. During the term of this MOU, Avenue 55 and its designees will have the right to enter upon and perform inspections and tests of the Naden Property, as reasonably determined by Avenue 55 to be necessary, including performing environmental testing, land surveys, and geo-technical testing. Avenue 55's inspection and testing of the Naden Property shall be at its sole risk, and Avenue 55 indemnifies, defends and holds the City harmless from any and all claims, damages, liability, causes of action, judgments and expenses (including reasonable attorney's fees) arising out of Avenue 55's exercise of the rights granted in this Section 7. Any alteration of the Naden Property shall be preapproved by Economic and Community Development staff in writing. 8. Process for Submitting and Considering Proposals. 8.1. General Expectations. When submitting proposals, Avenue 55 will provide City staff with preliminary site studies as well as preliminary architectural and engineering design work for build -out. 8.2. Pre -Application Conference Process. Avenue 55 will engage with City staff early and often through the City's pre -application conference process and other means to ensure a mutual understanding of the requirements and expectations regarding stormwater management, street construction and improvements, utility -related issues and improvements, the King County trail, off -site improvement requirements, and other development challenges, expectations, and requirements. 8.3. Phase I Environmental Site Assessment. Avenue 55 will complete a Phase I Environmental Site Assessment on the Naden Property. 8.4. SEPA. The parties acknowledge that it is in the best interest of the City and Avenue 55 to ensure that the SEPA process is broad in scope and conducted in such a manner as to allow for multiple development scenarios on the site. 8.5. Change to Process. The process outlined in Sections 8.1-8.4 shall serve as a guide and may be changed by mutual agreement of Avenue 55 and City staff. MOU -CITY OF KENT AND AVENUE 55 Page ( 5 8.6. Costs and Avenue 55 Solely Responsible, Avenue 55 will be responsible for the costs of preliminary site studies as well as preliminary architectural and engineering design work. It shall be Avenue 55's responsibility to fully understand the condition of the Naden Property, as well as the development conditions and expectations with regards to any development proposal, and nothing herein shall be interpreted to shift any responsibility to the City. 8.7. Information Sharing. Avenue 55 will provide copies to the City of all nonconfidential studies, test results, surveys, plans, designs, drafts, and all other documents or information pertaining to the condition or development of the Naden Property, 9. Miscellaneous. 9.1. This MOU is subject to the approval of the Kent City Council, and shall not be valid or enforceable until approved by the Kent City Council and signed by the City. 9.2. The City will not make any contributions to, nor incur any liabilities associated with the development of the Naden Property other than as outlined in this MOU. 9.3. Any portion of the Naden Property purchased or otherwise transferred pursuant to this MOU will be purchased or transferred in its then current condition and state of repair, "As Is." Avenue 55 will be required to satisfy itself prior to any closing for any portion of the Naden Property that the Naden Property is suitable for the intended development. 9.4. Contingent upon City of Kent's approval, which shall not unreasonably be withheld, Avenue 55's interest under this MOU may be assigned or otherwise transferred to an entity sharing common ownership with Avenue 55, 9.5. This MOU may be amended only by mutual written agreement of the parties. No waiver, alteration, or modification of any of the provisions of this MOU shall be binding unless in writing and signed by a duly authorized representative of each party. MOU -CITY OF KENT AND AVENUE 55 Page ( 6 9.6 The written provisions and terms of this MOU shall supersede all prior verbal statements of any officer or other representative of the parties, and such statements shall not be effective or be construed as entering into or forming a part of or altering in any manner this MOU. 9.7 The legal presumption that an ambiguous term of this MOU should be interpreted against the party who prepared the MOU shall not apply as this MOU was jointly prepared by the parties. 9.8 This MOU may be signed in any number of counterparts and electronically and be valid as if each authorized representative had signed the original document. AGREED AND ACCEPTED this 22nd day of Feh , 2021. CETY OF KENT: By: iJQXIW&MMOO (signature) Print Name: Dana Ralph Its Mayor (title) DATE: 02/22/2021 APPROVED AS TO FORM: LtY Kent Law Department AVENUE 55, LLC: (signature) Print Name: ,jo5€ Irt 9_ Its D ew title) DATE: o2we2.&6 t MOU -CITY OF KENT AND AVENUE 55 Page � 7