Council PKT 09-10-2009 Special
.~ Federal Way
AGENDA
FEDERAL WAY CITY COUNCIL
SPECIAL MEETING
HYLEBOS ROOM - City Hall
SEPTEMBER 10, 2009
6:00 PM
www.cityoffederalway.com
1. CALL MEETING TO ORDER
2. COUNCIL BUSINESS
A. Extending the Real Property Purchase and Sale Agreement with United Properties
for the Symphony Project. Action expected.
3. EXECUTIVE SESSION
A. Potential Litigation Pursuant to RCW 42.30.110(1 )(i)
4. ADJOURNMENT
COUNCIL MEETING DATE: September 10,2009
ITEM #:
CITY OF FEDERAL WAY
CITY COUNCIL
AGENDA BILL
SUBJECT: Extension of Real Property Purchase and Sale Agreement with United Properties for The
Symphony Project
POLICY QUESTION: Should the City of Federal Way extend the Real Property Purchase and Sale Agreement
with United Properties for the Symphony Project until10/30/09?
COMMITTEE: NI A
MEETING DATE: N/A
CATEGORY:
D Consent
[gI City Council Business
D Ordinance
D Resolution
D
D
Public Hearing
Other
STAFF REpORT By: PATRICK DOHERTY DEPT: CITY MANAGER
................................................................................................................................................m..................... ..........................~M......_ ....................................................... ....................mm.......................................mm................. . m.... .......... ....m.......................................... ..........................................._ ......................_.._......
Attachments: Letter from United Properties, dated 9/9/09.
Summary/Background:
The City and United Properties of Vancouver, BC, entered into a Real Property Purchase and Sale Agreement
("Agreement"), dated effective December 11, 2007, to purchase the approximately 4. I-acre, City-owned, former
AMC Theaters site and develop a highrise, mixed-use, approximately 900-unit development in several phases.
Per the Agreement, the closing date for the purchase of the property was set at 9/11/08.
On 9/9/08 the City extended the closing date for one year, till 9/11/09, due to the housing market downturn and
US and worldwide financial crisis. The extension was conditioned on United Properties' payment of up to
$150,000 to the City to cover up to a year of additional financial carrying costs associated with the City's
financing of its purchase of the site. A check in that amount has been deposited into escrow and is due on or
after 9/11/09.
On 9/9/09 United Properties submitted to the City a letter, signed by its Vice President David V. Setton,
requesting an extension of the closing date from 9/11/09 till 10/30/09 in order to finalize an agreement with
Lander Korus, Inc., of South Korea who have expressed an interest in purchasing the site and pursuing its
redevelopment.
Lander Korus is a property development and management firm, based in South Korea. Their financial partners
include the 20 largest companies in South Korea, principally investing as equity partners, not as lending partners.
Lander Korus projects include numerous mixed-use and highrise projects in South Korea, as well as current
projects in Montana and New York.
Section 13.13 of the Agreement provides for assignment of the development contract with the City and its
associated rights and responsibilities only upon City approval of such assignment. If the extension is granted,
City staff will conduct due diligence regarding the proposed assignee, Lander Korus, including review of
comparable projects, financial partners, any public-private partnerships, etc.
Options:
1. Authorize Interim City Manager to extend the closing date of the Agreement until 10/30/09 with the
condition that the $150,000 due to the City per the existing Agreement and currently in escrow be
immediately released, and that the City be reimbursed for any additional financial carrying costs
associated with the extension, at the rate of $410.96 per diem.
2. Authorize Interim City Manager to extend the closing date of the Agreement until 10/30/09 with no
further conditions.
3. Do not extend the Agreement.
STAFF RECOMMENDATION: NIA
CITY MANAGER ApPROVAL:
DIRECTOR ApPROVAL:
Committee
Council
Committee
Council
COMMITTEE RECOMMENDATION:
Committee Chair
Committee Member
Committee Member
PROPOSED COUNCIL MOTION: "I move to approve Option _" "
(BELOW TO BE COMPLETED BY CITY CLERKS OFFICE)
COUNCIL ACTION:
o APPROVED
o DENIED
o TABLED/DEFERRED/NO ACTION
o MOVED TO SECOND READING (ordinances only)
REVISED - 02/06/2006
COUNCIL BILL #
I ST reading
Enactment reading
ORDINANCE #
RESOLUTION #