HomeMy WebLinkAboutCAG2021-054 - Original - Avenue 55, LLC - North Naden MOU - 02/22/2021ApprovalOriginator:Department:
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rev. 200821
FOR CITY OF KENT OFFICIAL USE ONLY
(Optional)
* Memo to Mayor must be attached
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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
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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
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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
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