HomeMy WebLinkAboutCAG2025-052 - Original - SUT 565 LP - The Suton Multifamily Tax Exemption - 2/11/25 FOR CITY OF KENT OFFICIAL USE ONLY
Sup/Mgr:
Agreement Routing Form DirAsst:
• For Approvals,Signatures and Records Management Dir/Dep:
KENT This form combines&replaces the Request for Mayor's Signature and Contract Cover (Optional)
WASHINGTON Sheet forms. (Print on pink or cherry colored paper)
Originator: Department:
Sam Alcorn, Senior Planner ECD Q
Date Sent: Date Required:
> 02/10/2025 2/14/2025
0
y Mayor or Designee to Sign. Date of Council Approval:
fl.
a Interlocal Agreement Uploaded to Website 1/21/2025
Budqet Account Number: Grant? Yes NOD
Budget? Yes❑No Type: N/A
Vendor Name: Category:
SUT 565, LP Contract
Vendor Number: Sub-Category:
= Original
Project Name: The Suton Multifamily Tax Exemption
CProject Details: A contract with SUT 565, LP granting an 8-year Multifamily Tax Exemption for
w- The Suton 565 unit apartment complex to be constructed in the Midway area
= of Kent.
C
Agreement Amount:
Basis for Selection of Contractor:
E *Memo to Mayor must be attached
i Start Date: Termination Date:
C1
Q Local Business?❑Yes❑No*If meets requirements per KCC3.70.100,please complete"Vendor Purchase-Local Exceptions"form onCityspace.
Business License Verification: Yes❑In-Process❑Exempt(KCC 5.01.045) ❑Authorized Signer Verified
Notice required prior to disclosure? Contract Number:
❑Yes❑No CAG2025-052
Comments:
Mayor, please sign on electronic page 8 OK to sign, 2/10/25,TW.
please, and then have page 11
Im notarized.
0 f,.
0 Thank you. !
3 cc s
a,
a,
Date Received:City Attorney: Date Routed:Mayor's Office 2/11/25 City Clerk's Office Z 11 r
adccW22373_1_20 Visit Documents.KentWA.gov to obtain copies of all agreements
rev.20221201
MULTIFAMILY HOUSING PROPERTY TAX EXEMPTION AGREEMENT
(The Suton)
THIS MULTIFAMILY HOUSING PROPERTY TAX AGREEMENT (hereinafter
"Agreement") is entered into on the last date signed below, by and between SUT
565, LP (hereinafter "Applicant"), and the CITY OF KENT, a municipal corporation
(hereinafter "City"), and related to Applicant's development of The Suton, a
multifamily residential housing complex within a targeted residential area of the
City.
I. Recitals
1.1 Applicant has applied to the City for an eight year property tax
exemption as provided for in Chapter 84.14 of the Revised Code of Washington
("RCW") and Chapter 3.25 of the Kent City Code ("KCC") to construct multifamily
residential housing within the City's residential targeted area, as defined in KCC
3.25.020. Applicant's proposed project meets the requirements of state and local
law to qualify for the temporary property tax exemption and the Administrator of
the program, the City's Director of Economic and Community Development
(hereinafter "Administrator"), has approved the application as meeting those
eligibility requirements.
1.2 Applicant has submitted to the City an application and preliminary site
plans and floor plans to construct 565 new market-rate multifamily housing units as
part of a mixed-use project known as The Suton (hereinafter "Project") on
property owned by the Applicant and located at 3101 S 2401" Street in the City of
Kent, Washington, also referred to by King County Property Tax Parcel Numbers
7790000005 and 22220499113, and more fully described in Exhibit 1 attached and
incorporated by this reference (hereinafter"Property").
1.3 The City has determined that the Project will, if developed as
proposed, satisfy the requirements for issuance of a final certificate of tax
exemption, which provides a temporary exemption from property taxes consistent
with the program as provided for under Ch. 3.24 KCC for a period of eight years
beginning January 1 of the year immediately following the calendar year after
issuance of the final certificate of tax exemption.
1.4 Once developed, the Project will also contribute and assist Kent in
achieving its housing growth targets under the 2044 Comprehensive Plan adopted
by the City Council on December 10, 2024, and serving as a new property tax
revenue source after the temporary exemption expires.
Multifamily Housing Property Tax Page 1 of 10
Exemption Agreement
(The Suton)
NOW, THEREFORE, in consideration of the mutual promises herein, City and
Applicant do mutually agree as follows:
II. Agreement
2.1 Conditional Certificate of Acceptance of Tax Exemption. The 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 Agreement by the City Council, unless extended by the
Administrator or their designee, as provided in KCC 3.25.090.
2.2 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 comply with applicable codes and ordinances; provided, that in no
event shall such construction provide fewer than four (4) new multifamily housing
dwelling units designed for permanent residential occupancy and at least fifty
percent (50%) of the space within the Project shall be intended for permanent
residential occupancy.
b. Applicant agrees to comply with all applicable zoning
requirements, land use regulations, and building and housing code requirements,
including but not limited to the City's comprehensive plan, building, fire, housing,
and zoning codes, downtown design review guidelines, multifamily design review,
and Midway design review if applicable (hereinafter, collectively, "Development
Regulations"). The Project must 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 3.25.080
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 from the date of approval of this Agreement by the City Council, unless
extended by the Administrator for cause as provided in KCC 3.25.090.
2.3 Requirements for Final Certificate of Tax Exemption. Applicant may,
upon completion of the Project and upon issuance by City of a temporary or
Multifamily Housing Property Tax Page 2 of 10
Exemption Agreement
(The Suton)
permanent certificate of occupancy, request a final certificate of tax exemption
(hereinafter 'Final Certificate"). The request shall be filed with the Administrator,
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; and
b. A description of the completed work and a statement of
qualification for the multifamily housing property tax exemption; and
C. The total monthly rent, or total sale amount of each multifamily
housing unit rented or sold to date; and
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; and
e. Any further information that the Administrator deems necessary
or useful, pursuant to Chapter 84.14 RCW or Chapter 3.25 KCC, to evaluate the
Project's eligibility for the Final Certificate.
2.4 Agreement to Issue Final Certificate of Tax Exemption. The City agrees
to file a Final Certificate with the King County Assessor within forty (40) days of
submission by the Applicant of all materials required by paragraph 2.3 above, if
Applicant has:
a. Successfully completed the Project in accordance with the terms
of this Agreement and Chapter 3.25 KCC; and
b. Filed a request for a Final Certificate with the Administrator and
submitted the materials described in paragraph 2.3 above; and
C. Paid to the City a fee in the amount of one thousand dollars
($1,000); and
d. Met all other requirements provided in Chapter 3.25 KCC for
issuance of the Final Certificate.
2.5 Annual Certification and Report. Within thirty (30) days after the first
one-year anniversary of the date the City issued the Final Certificate and each year
thereafter for a total period of eight (8) years, Applicant agrees to file a notarized
declaration and annual report with the Administrator. The report shall contain such
Multifamily Housing Property Tax Page 3 of 10
Exemption Agreement
(The Suton)
information as required by Chapter 84.14 RCW and as the Administrator 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; and
b. A certification that the multifamily housing units, Project, and
Property have not changed use since the date the City issued the Final Certificate;
and
C. A statement that the multifamily housing units, Project, and
Property continue to be in compliance with this Agreement and the requirements of
Chapter 84.14 RCW and Chapter 3.25 KCC; and
d. A description of any improvements or changes to the Project
made after the City issued the Final Certificate; and
e. The total monthly rent of each multifamily 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; and
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 Administrator
pursuant to meeting any reporting requirements under Chapter 84.14 RCW.
2.6 No Violations for Duration of Exemption. For the duration of the
property tax exemption granted under Chapter 3.25 KCC, Applicant agrees that the
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 Chapter 1.04 KCC, 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
violation 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.
2.7 Notification of Transfer of Interest or Change in Use. Applicant agrees
to notify the Administrator 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 Administrator and the King County
Multifamily Housing Property Tax Page 4 of 10
Exemption Agreement
(The Suton)
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.
2.8 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 Administrator determines that the
multifamily housing units, the Project, or the Property no longer complies with the
terms of this Agreement or with the requirements of Chapter 3.25 KCC, 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 (20%) 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 84.14 RCW. Applicant acknowledges
that, pursuant to RCW 84.14.110, 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
Administrator shall notify the Applicant, along with any other owner of record, by
certified mail, return receipt requested. The Applicant may appeal the
determination in accordance with RCW 84.14.110 and KCC 3.25.130.B.
2.9 Amendments. 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 3.25.080.E, including but not limited to Applicant's payment of a
five hundred dollars ($500) contract amendment fee.
2.10 Binding Effect. The provisions, covenants, and conditions contained in
this Agreement are binding upon the parties hereto and their legal heirs,
Multifamily Housing Property Tax Page 5 of 10
Exemption Agreement
(The Suton)
Docusign Envelope ID: E9E8B9D5-OE6A-4E06-AEE1-ED9595117262
representatives, successors, assigns, and subsidiaries, and are intended to run with
the land.
2.11 Recording of Agreement. The Administrator 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
Administrator deems appropriate for recording.
2.12 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 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.
2.13 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 party may from time to time designate in writing.
APPLICANT:
Inrtia I Initial Initial SUT 565, LP
210 SW Wilson Ave., Suite 100
Bend, OR 97702
Phone:(503) 975-2250 Fax:
Attention: Kathryn Joseph
CITY:
City of Kent
Economic and Community Development
220 Fourth Avenue South
Kent, WA 98032
Phone: (253) 856-5454 Fax: (253) 856-6454
Attention: Planning Department
2.14 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
Multifamily Housing Property Tax Page 6 of 10
Exemption Agreement
(The Suton)
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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the dates indicated below.
CITY OF KENT APPLICANT:
By: D Ralph By:
Its: Ma or Its:
Date: Date:
APPROY D AS TO FORM:
Cif y At--ornE y
Ta y Whi e
Multifamily Housing Property Tax Page 7 of 10
Exemption Agreement
(The Suton)
CITY OF KENT APPLICANT:
SUT 565, LP
a Washington limited partnership
By: -"" -� "- By: SUT PC[, LLC,
Its: - - a Washington limited liability company,
Date: — --- -"-- Its: General Partner
By:
Corry Bittn , Manager
APPROVED AS TO FORM:
By: Cedar Coast General LLC,
a Delaware limited liability company,
City Attorney Its: General Partner
By: Mighty River Holdings, Inc.,
a Nevada corporation
Its: Member
By:
Ender I ay, President
By: Autumn Creek Ltd.,
a Nevada corporation
Its: Member
By:
William Fisher, President
Multifamily Housing Property Tax Page 7 of 12
Exemption Agreement
CITY OF KENT APPLICANT:
SUT 565, LP
a Washington limited partnership
By: -- - - By: SLIT PCI, LLC,
Its: _ -- - ---- a Washington limited liability company,
Date: _ _______ _-_ Its: General Partner
By:
Corry Bittn , Manager
APPROVED AS TO FORM:
By: Cedar Coast General LLC,
a Delaware limited liability company,
City Attorney Its: General Partner
By: Mighty River Holdings, Inc.,
a Nevada corporation
Its: Member
By:
Ender Ilkay, President
By: Autumn Creek Ltd.,
a Nevada corporation
Its: Member
By:
Willia er, President
r
Multifamily Housing Property Tax Page 7 of 12
Exemption Agreement
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that Dana Ralph 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: 1�t,k.� << < W15
-Notary Seal Must Appear Within This Box-
IN WITNESS WHEREOF, I have hereunto set my hand and official seal
the day and year first above written.
LEYq
��;`��ssioN�i,,� �iX
° 0o (Signature) .
120137 y= NOTARY PUBLIC, in and for Staite
i L\�+ = of Washington, residing at
<` '111*08-26. ;F�' My appointment expires
//,III VV\ NG!$S
Multifamily Housing Property Tax Page 8 of 10
Exemption Agreement
(The Suton)
Oc an
STATE OF iPo�,4s�D1al )
} ss.
COUNTY
I certify that I know or have satisfactory evidence that 0 1-"C-U
is the person who appeared before me, and said Pe Hon acknowledged
that ( /she) signed this instrument and acknowledged it to be (his/her) free and
voluntary act for the uses and purposes mentioned in the instrument.
Dated:
-Notary Seal Must Appear Within This Box-
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the
day and year first above written.
AMANDA ElIZABEYH NEINI.ES
NOTARY RUBuC-ORF-QON
COMMISSION NO,1053284 (Signature)
nature)
MY COMMISSION EXPIRES NOVEMBER 11,2M
NOTA Y PUBLIC, in and for the State
of "r` residing at
My appointment expires
Multifamily Housing Property Tax Page 9 of 12
Exemption Agreement
STATE OF WASHINGTON )
ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that ec =
is the person who appeared before me, and said person acknowledge
that (he/she) signed this instrument and acknowledged it to be (his/her) free and
voluntary act for the uses and purposes mentioned in the instrument.
Dated: q_, ---
-Notary Sea!Must Appear Within This Box-
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the
day and year first above written.
r
KlERAN MORRIS
um"r -�-
104.975 Water Street
VAncouver,BC V6B 5C6(Si g n a u re
i 778-819-8553 NOTARY PUBLIC, in and for the State
of Washington, residing at Vc,,Atinuyer
My appointment expires 01 A
Multifamily Housing Property Tax Pagel 1of 12
Exemption Agreement
h,Q,r tc,, rr
STATE OF WA-9 PIS )
) ss.
COUNTY OF��� )
I certify that I know or have satisfactory evidence that � 1 Fm
is the person who appeared before me, and said person acknowledged
that (he/she) signed this instrument and acknowledged it to be (his/her) free and
voluntary act for the uses and purposes mentioned in the instrument.
Dated:_
-Notary Seat Must Appear Within This Box-
IN WITNESS WHEREOF, I have hereunto set my hand and official seal the
day and year first above written.
BRADFQRD
HARTWELL
Pubic,State of Arizona
Notary County A
MaricoPa638028
mission#
Com Expire
My Commission 0
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2
NOTARY PUBLIC, in and for the State
4jU_2,onA of VV-ash, residing at 5'4a7DCNL �9
My appointment expires
Multifamily Housing Property Tax PagelOof 12
Exemption Agreement
MULTIFAMILY HOUSING PROPERTY
TAX EXEMPTION AGREEMENT
(THE SUTON)
EXHIBIT 1
LEGAL DESCRIPTION
SIERRA HOMES ADD # 3 VAC BLKS 1-2 & VAC STS & ALLEY
PORTION OF NW QTR NW QTR AND OF N QTR SW QTR NW QTR STR 22-22-
04 LYING WLY OF PRIMARY STATE HIGHWAY NO 1 AS CONDEMNED IN KING
CO SUPERIOR COURT CAUSE NO 535009 BY DECREE ENTERED 22 JULY
1959; EXC N 30 FT OF SAID NW QTR NW QTR FOR COUNTY ROAD (LESS
POR TO CPSRTA PER SCC #20- 2-04848-8 KNT DATED 5-29-20)
Multifamily Housing Property Tax Page 10 of 10
Exemption Agreement
(The Suton)