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Council PKT 05-16-2017 RegularThe City Council may add items and take action on items not listed on the agenda. City Council Meetings are wheelchair accessible; and assisted listening devices for use in the Council Chambers are available upon request to the City Clerk. Regular Meetings are recorded and televised live on Government Access Channel 21. To view Council Meetings online please visit www.cityoffederalway.com. CITY COUNCIL REGULAR MEETING AGENDA Council Chambers – City Hall May 16, 2017 – 7:00 p.m. 1. CALL MEETING TO ORDER 2. PLEDGE OF ALLEGIANCE 3. PRESENTATION a. Federal Way Municipal Court and Arts Commission present Student Art Contest Winners with Judge David Larson, Judge Rebecca Robertson and Art s Commission Chair Dan Hershman b. Certificates of Appointment  Lodging Tax Advisory Committee  Parks and Recreation Commission c. Proclamation: Relay for Life of Federal Way - June 3 at Saghalie Middle School (Deborah Davidek, Federal Way Team Lead) d. Mayoral Proclamation: Police Week - May 14-20 e. Briefing regarding Airport Noise & Environmental Impacts  Larry Cripe, Quiet Skies Coalition, Inc.  Steve Edmiston, Quiet Skies Puget Sound; and  John Resing, Federal Way Mayor’s Quiet and Healthy Skies Task Force f. Mayor’s Emerging Issues and Report  South King County Regional Leadership Meeting on Gang Violence and Violent Crime held at City Hall (05/09)  Spring Neighborhood Connection Meeting: June 14 at Decatur High School  Touch-a-Truck Event (5/20) – Parks Director John Hutton  Town Center Park Splash Park Opening (5/27) – Parks Director John Hutton  Community Events: Federal Way Farmers Market Opening (5/13); Korean Cultural Month Appreciation Luncheon at City Hall (5/19); FWCAT Break the Chains 5K (5/20); Blue Poppy Day (5/20) 4. CITIZEN COMMENT PLEASE COMPLETE A PINK SLIP AND TURN IT IN TO THE CITY CLERK PRIOR TO SPEAKING. When recognized by the Mayor, come forward to the podium and state your name for the record. Please limit your comments to three minutes. The Mayor may interrupt comments that exceed three minutes, relate negatively to other individuals, or are otherwise inappropriate. The City Council may add items and take action on items not listed on the agenda. City Council Meetings are wheelchair accessible; and assisted listening devices for use in the Council Chambers are available upon request to the City Clerk. Regular Meetings are recorded and televised live on Government Access Channel 21. To view Council Meetings online please visit www.cityoffederalway.com. 5. CONSENT AGENDA Items listed below have been previously reviewed in their entirety by a Council Committee of three members and brought before full Council for approval; all items are enacted by one motion. Individual items may be removed by a Councilmember for separate discussion and subsequent motion. a. Minutes: May 2, 2017 Regular and Special Meeting …page 10 b. 21st Ave S (S 320th St to S 316th St) Pedestrian Improvements – Bid Award …page 19 c. Resolution: Setting Public Hearing Date for 2018 -23 Transportation Improvement Plan …page 22 d. Submittal of Transportation Grant Application …page 26 e. New Cingular Wireless PCS, LLC Site Lease Agreement - Saghalie Park Location ...page 28 f. Grant Agreement between FWPD and the Washington Auto Theft Protection Authority (WATPA) for Automatic License Plate Recognition (ALPR) Replacement …page 51 6. PUBLIC HEARING a. 2017 Program Year Community Development Block Grant (CDBG) Annual Action Plan …page 55  Staff Presentation: Sarah Bridgeford, Human Services Coordinator  Citizen Comment  Council Discussion/Question 7. COUNCIL BUSINESS a. Resolution: Accept New Markets Tax Credit …page 87 b. Diversity Commission Appointments …page 252 c. Rescheduling of August 1, 2017 Regular Council Meeting …page 253 d. Cancellation of August 15, 2017 Regular Council Meeting …page 254 8. ORDINANCES First Reading a. Council Bill #724/Amendment and Adoption of NFPA 130 Standard for Fixed Guideway Transit and Passenger Rail Systems Current Addition …page 255 AN ORDINANCE OF THE CITY OF FEDERAL WAY, WASHINGTON RELATING TO CONSTRUCTION STANDARDS FOR FIXED GUIDEWAY TRANSIT AND PASSENGER RAIL SYSTEMS AND AD DING NEW SECTIONS TO CHAPTER 13.31 FWRC. Second Reading b. Council Bill #723/ Adopt Text Amendments to Federal Way Revised Code Title 19 “Zoning and Development Code” Related to Multifamily Housing …page 262 AN ORDINANCE OF THE CITY OF FEDERAL WAY, WASHINGTON, ADOPTING CODE AMENDMENTS RELATED TO MULTIFAMILY DWELLING UNITS, SENIOR HOUSING, AND SPECIAL NEEDS HOUSING; AMENDING FWRC 19.05.040, 19.05.120, 19.115.030, 19.115.060, 19.115.115, 19.125.150, 19.200.100, 19.205.040, 19.205.070, 19.215.050, 19.220.050, 19.220.080, 19.225.070, 19.230.060; REPEALING FWRC 19.240.150; AND ADDING NEW SECTIONS TO CHAPTERS 19.115 AND 19.215 FWRC. (AMENDING ORDINANCE NOS. 90-43, 93-170, 94-233, 96-270, 97-291, 99-333, 00-375, 01-385, 01-399, 02-424, 03-450, 05-506, 06-515, 06-542, 07-545, 07-554, 07-559, 10-678, 12- 727, AND 12-735) 9. COUNCIL REPORTS 10. ADJOURNMENT Federal Way PROCLAMATION "Relay for Life" WHEREAS, the disease known as cancer kills millions of victims every year including family, friends, neighbors, loved ones, spouses, parents, and children; and we all have been affected by this killer and know someone who is battling cancer; and WHEREAS, the American Cancer Society "Relay for Life" cancer walk fundraiser is a life- changing event that gives everyone in communities across the globe a chance to celebrate the lives of people who have battled cancer, to remember loved ones lost, and to fight back against this dreaded disease; and WHEREAS, every year over 3.5 million people in over 5,000 communities in the United States as well as 20 other countries gather to take part in this phenomenal event, to raise awareness and funds to save lives from cancer; and WHEREAS, the American Cancer Society is leading the fight to create a world with less cancer and many more survivors; and WHEREAS, our Federal Way community is conducting the annual "Relay for Life" cancer walk fundraiser to help find a cure for cancer; and WHEREAS, 30 teams and over 150 participants are expected to take part in the Relay For Life event on Saturday, June 3rd at Saghalie Middle School in Federal Way. NOW, THEREFORE, we, the undersigned Mayor and City Council of the City of Federal Way, do hereby proclaim June 3, 2017 as Relay for Life Day in the City of Federal Way. SIGNED this 16th day of May, 2017. FEDERAL WAY MAYOR AND CITY COUNCIL Jim Ferrell, Mayor Jeanne Burbidge, Deputy Mayor Lydia Assefa- Dawson, Councilmember Robert J Celski, Councilmember Susan Honda, Councilmember Mark Koppang, Councilmember Martin Moore, Councilmember Dini Duclos, Councilmember 147141107111111,1111.41.111#.14110elilikef111314111113111011t11.11111111.1,11..1.11■111,1111111,11111J111,,11.111.11,11.61-111,1, 11111.11.111,.,■111111-11111114111r111111 r 1■11,11 iirirriii,tri>etriht,111•7414194,,,*■11.ri4f101441t,r,1 W<Nit Wee/ wi wt,-401 V144"t", le:f Itorl 1041 • ;(4. **. to: e4 tA—ift irr* 06. Ai*. Wik. 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MK N y�( .w* v* �i.m. f'. r.. *V & b', s it *w* *ii* frvt is % . +ah �+ fr * *ill b� kw* bv*�. rat * t 1111111111111 111111111141111111111111111111111111 1111 111111111111111111111 111111111 ..11111111■■11,,.1111111 11111111111111 111 1 111 111 1411 11/1141111111: 1 1111 _ 3 too a) u.mt7 c V Jeanne Burbidge, Deputy Mayor Jim Ferrell, Mayor Robert J. Celski Councilmember Lydia Assefa- Dawson, Councilmember Mark Koppang, Councilmember Susan Honda, Councilmember Dini Duc %s, Councilmember Martin Moore, Councilmember Dated this 16th day of May, 2017 ila i a, E 0 0. 0. Q 4... 0 au 4.• as u 4= *4.7i ,_ w V In Accordance with Federal Way Revised Code 2.85, o - J N Plt 'N lam+ t Cl. Jeanne Burbidge, Deputy Mayor Jim Ferrell, Mayor Robert J. Celski Councilmember Lydia Assefa- Dawson, Councilmember Mark Koppang, Councilmember Susan Honda, Councilmember Dini Duc %s, Councilmember Martin Moore, Councilmember Dated this 16th day of May, 2017 CITY OF Federal Way PROCLAMATION "Police Week" WHEREAS, Police Officers of the Federal Way Police Department stand watch over our citizens, selflessly risking their lives to protect individuals, families, neighborhoods, and property against crime; and WHEREAS, it is important that all citizens recognize the duties, responsibilities, hazards, and sacrifices of local law enforcement agencies; and WHEREAS, the City of Federal Way appreciates the commitment of our award winning Police Department and honors all of those law enforcement officers who, through their courageous deeds, have made the ultimate sacrifice in service to their community, state, and country, or have become disabled in the performance of duty; and WHEREAS, the Federal Way Police Department, past and present, who, by their faithful and loyal devotion to their responsibilities, have rendered dedicated service to our community since their inception in 1996. NOW, THEREFORE, I, the undersigned Mayor of the City of Federal Way, do hereby proclaim May 14-20, 2017 as Police Week in the City of Federal Way and hereby publicly salute the service of law enforcement officers in our community and encourage residents and businesses to say a simple thank you when they see one of our outstanding Police Officers. SIGNED this 16th day of May 2017 City of Federal Way Mayor Jim Ferrell, Mayor COUNCIL MEETING DATE: May 16, 2017 CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL ITEM #: 5a SUBJECT: CITY COUNCIL MEETING MINUTES POLICY QUESTION: Should the City Council approve the draft minutes for the May 2, 2017 Regular and Special City Council Meetings. COMMITTEE: N/A MEETING DATE: N/A CATEGORY: Consent Ordinance City Council Business n Resolution Public Hearing Other STAFF REPORT BY Stephanie Courtney, City Clerk Attachments: DEPT: Mayor's Office Draft minutes for the May 2, 2017 Regular and Special City Council Meetings Options Considered: 1. Approve the minutes as presented. 2. Amend the minutes as necessary. MAYOR'S RECOMMENDATION: N/A MAYOR APPROVAL: N/A Committee Initial/Date N/A Council Initial/Date CITY CLERK APPROVAL: COMMITTEE RECOMMENDATION: N/A N/A Committee Chair N/A N/A Committee Member Committee Member PROPOSED COUNCIL MOTION: "I move approval of the minutes as presented." (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: ❑ APPROVED ❑ DENIED ❑ TABLED/DEFERRED/NO ACTION ❑ MOVED TO SECOND READING (ordinances only) REVISED - 12/2016 COUNCIL BILL # 1ST reading Enactment reading ORDINANCE # RESOLUTION # CITY OF Federal Way CITY COUNCIL SPECIAL MEETING MINUTES Council Chambers - City Hall May 2, 2017 — 5:30 p.m. 1. CALL MEETING TO ORDER Mayor Ferrell called the meeting to order at 5:30 p.m. DRAFT City officials in attendance: Deputy Mayor Jeanne Burbidge, Councilmember Lydia Assefa- Dawson, Councilmember Bob Celski, Councilmember Susan Honda, Councilmember Mark Koppang, Councilmember Martin Moore and Councilmember Dini Duclos. City staff in attendance: City Attorney Ryan Call and City Clerk Stephanie Courtney. 2. COMMISSION INTERVIEWS Council interviewed four individuals for the Parks & Recreation Commission and one individual for the Lodging Tax Advisory Committee. a. Parks & Recreation Commission b. Lodging Tax Advisory Committee 3. EXECUTIVE SESSION At 6:20 p.m. Deputy Mayor Burbidge announced the Council would be recessing into Executive Session for the purpose of discussing Sale or Lease of Property pursuant to RCW 42.30.110(1)(c) for approximately thirty (30) minutes. a. Sale or Lease of Property Pursuant to RCW 42.30.110(1)(c) 4. ADJOURNMENT Council returned to Chambers at 6:42 p.m. There being nothing further on the agenda; the meeting was adjourned at 6:42 p.m. Attest: Stephanie Courtney City Clerk Approved by Council: Federal Way City Council Special Minutes Page 1 of I May 2, 2017 Alibi CITY OF Federal Way CITY COUNCIL REGULAR MEETING MINTUES Council Chambers - City Hall May 2, 2017 — 7:00 p.m. 1. CALL MEETING TO ORDER Mayor Ferrell called the meeting to order at 7:09 p.m. City officials in attendance: Mayor Jim Ferrell, Deputy Mayor Jeanne Burbidge, Councilmember Lydia Assefa- Dawson, Councilmember Bob Celski, Councilmember Susan Honda, Councilmember Mark Koppang, Councilmember Martin Moore and Councilmember Dini Duclos. City staff in attendance: City Attorney Ryan Call and City Clerk Stephanie Courtney. 2. PLEDGE OF ALLEGIANCE Mayor Ferrell led the flag salute. 3. PRESENTATIONS a. Ceremonial Swearing -In of New Police Officers Police Chief Andy Hwang introduced and gave histories of the three new police officers being sworn in. He noted two officers are returning to the Federal Way Police Department and one officer is an entry-level officer. Mayor Ferrell administered the oaths of office to Officer Dock White; Officer Maddie Morikawa, and Officer Eric Olson. He congratulated the officers and welcomed them to the city. b. Proclamation: National Day of Prayer Deputy Mayor Burbidge read and presented the National Day of Prayer Proclamation to Family Life Church Pastor Dan Larson; community members Coach Roach, Joan Roach, and Betty Taylor. Each thanked the Council for recognizing the need for prayer over our community and emphasized the importance of this Proclamation. c. Briefing by Community Development Director Brian Davis regarding Transit Oriented Development (TOD) Community Development Director Brian Davis provided an overview of the components of Transit Oriented Development and explained how Sound Transit has been implementing it during previous light rail construction. He showed examples of ongoing TOD in other cities and a conceptual design for Federal Way; as well as a sample timeline which will include strategic planning, public input, and design before any implementation. Council asked questions to staff and representatives from Sound Transit (Brooke Belman, Land Use Planning and Development Director and Slone Dawson, Senior Planner) relating to loss of tax Federal Way City Council Regular Minutes Page 1 of 7 May 2, 2017 revenue, relocation assistance for businesses, and requirements placed on surplus property once the station is complete. Councilmembers thanked staff and Sound Transit for the information and look forward to ongoing collaboration. d. Mayor's Emerging Issues and Report • New Performing Arts & Event Center Staff Introduction Performing Arts and Event Center Director Theresa Yvonne introduced new staff members filling the positions of Patron Services Coordinator (Roland Carette- Meyers) and the Marketing Coordinator (Scott Abts). • Parks Appreciation Day Report & Touch -a -Truck Event Parks Director John Hutton reported on the successful Parks Appreciation Event held at various parks throughout the city. He reported 55 volunteers at Alderbrook Park; 84 volunteers at Celebration Park; 34 volunteers at Saghalie Park (Middle School); and 82 volunteers at Steel Lake Park. He thanked the over 255 people who volunteered over the day to beautify the parks. He also thanked Mr. Jack Walsh of SubZero Ice Cream for donating treats for the volunteers, and the LDS Church and Shelly Pauls for helping recruit volunteers. He also thanked the hard working Parks and Recreation Commission Mr. Hutton was pleased to announce the widely popular Touch -a -Truck event will be Saturday, May 20 from 11:00 a.m. to 2:00 p.m. in the former Target parking lot. There will be a sensory sensitive hour from 10:00 to 11:00 a.m. for children with sensory issues. Many agencies are bring trucks for this event such as Waste Management Truck, Fire Engine, Army Humvee, Cement Truck, Lakehaven, Lloyds, School Bus, Tow Trucks, Ambulance, Police vehicles, and a Crane. The event is family friendly and free. • University Initiative Progress /Update Mayor Ferrell reported on the Memo of Understanding between the School District, Highline College and University of Washington Tacoma for a branch campus in Federal Way. Currently discussions are taking place regarding programs (class options) and possible location of the campus. The current goal is to have classes available in a little over a year from now. • Report on Regional and Community Meetings Mayor Ferrell reported on attending Sound Cities Association Board meeting on April 19; WE Day at Seattle Center on April 21; and opening day of Federal Way National Little League Jamboree on Saturday, April 22. He also participated in the "Save Weyerhaeuser Campus" walk on April 22 and thanked the citizens who are passionate and have created a great grassroots organization which is a model for community activism. He also attended the SCORE Board Meeting on April 26; PRSC Regional Meeting on April 27; and the Communities in Schools Breakfast at the Federal Way Community Center on April 28. • Upcoming Meetings and Events Mayor Ferrell announced Governor Jay Inslee will be at Federal Way City Hall on Friday, May 5 to sign important legislation into law. The signing will begin at 2:30 p.m. and is open to the public. He Federal Way City Council Regular Minutes Page 2 of 7 May 2, 2017 also reminded citizens of the opening day of the Federal Way Farmers Market and the Federal Way Coalition Against Human Trafficking "Break the Chains" 5K on May 20. 4. CITIZEN COMMENT Jack Dovey provided an update on the Federal Way Community Caregivers Network. He highlighted their accomplishments and outlined challenges they encounter. He shared the majority of those who receive help from this network are those needing a little extra help to keep their homes and feed their families. Wanda Vargas spoke on the Violence Prevention Coalition Steering Committee (VPCSC) recommendation for an additional staff member and outlined her experience would indicate three individuals would be needed to effectively accomplish what is needed to truly help the youth. Mayor Ferrell announced Representative Reeves was in attendance and that she along with Representative Pellicciotti were prime sponsors of the bills that will be signed on May 5. Sue Petersen attended the Quiet Skies Forum at Mount Rainier High School. She shared that this is a national grassroots organization intent on keeping the skies free from noise and pollution. She asked the city to publically share the risks and what the city plans to do in response. Lori Sechrist stressed the importance of the former Weyerhaeuser campus to the city and region. She shared that the Save Weyerhaeuser Campus group drafted a letter for individuals to electronically sign and send to the state; over 169 signatures and comments were collected in the first 24 hours. Roger Flygare attended the Land Use Transportation Council Committee (LUTC) meeting last night and appreciated the discussion regarding multi - family development in the city core. He provided suggestions which he believes would lead to increased support of the school system during development. Janna Stewart works with a non - profit concerned with the proposed Liquefied Natural Gas (LNG); she indicated that it is potentially very dangerous. Nanette Reetz provided additional information (including flyers) regarding LNG and the potential dangers. She requested a meeting and support similar to that provided in response to the Methanol Plant. Councilmember Duclos requested a Study Session regarding LNG and Council consensus occurred. Mayor Ferrell indicated a Study Session will be scheduled. Steven Storms shared his support of saving the former Weyerhaeuser Campus. He outlined the LNG proposal and the potential dangers. He shared numbers to highlight the significance of the proposal. Jamarcus Springfield, Thomas Jefferson High School teacher and Black Student Union representative, announced the Save Our Streets, Support Our Struggle Event which will take place May 20 (11:00 a.m. to 2:00 p.m.) on 288th Street. There will be a march followed by a roundtable and resource fair. The Mayor, Council, and all citizens are invited to attend. Betty Taylor encouraged individuals to get behind solutions rather than just complaining. She commended the Save Weyerhaeuser Campus group for not only identifying the problem but also working towards solutions. Federal Way City Council Regular Minutes Page 3 of 7 May 2, 2017 Allison Fine agreed with Ms. Taylor and shared that action is needed. She highlighted the work done by the VPCSC and requested that their work move forward. She also shared that action needs to continue with the Homeless Mothers and Children Initiative. She emphasized action, not just talk. Suzanne Vargo requested the word "industrial" be removed from and "corporate" put back into the concomitant agreement. She also requested a continued search for a qualified forester. Letter read into the record from TaShawna Nash thanked those who attended the Save Weyerhaeuser Campus Earth Day Walk on April 22. Letter read into the record from Richard Pierson regarding the potential use of the former Weyerhaeuser Property and requesting it be preserved. 5. CONSENT AGENDA Items listed below have been previously reviewed in their entirety by a Council Committee of three members and brought before full Council for approval; all items are enacted by one motion. Individual items may be removed by a Councilmember for separate discussion and subsequent motion. a. Minutes: April 18, 2017 Regular and Special Meeting b. Monthly Financial Report — March 2017 c. Vouchers — March 2017 d. Authorize Food and Beverage Management Agreement with SMG Food and Beverage for Performing Arts and Event Center e. Performing Arts and Event Center Authorization to Bid: Platform and Riser Equipment f. Performing Arts and Event Center Authorization to Bid: Stage Draperies g. Performing Arts and Event Center Authorization to Bid: Audio Video and Communications Equipment h. Performing Arts and Event Center Authorization to Bid: Production Lighting Equipment i. Performing Arts and Event Center Authorization to Bid: Facility Signage Package 1. Performing Arts and Event Center Authorization to Bid: Orchestra Chairs, Music Stands, and Equipment. k. Performing Arts and Event Center Authorization to Bid: Furniture I. Performing Arts and Event Center Authorization to Bid: Small Tools and Equipment m. Authorization to apply for the King County Flood Control District Reduction Grant n. Submittal of Transportation Grant Application o. Citywide Flashing Yellow Arrow Retrofits Project - Final Acceptance DEPUTY MAYOR BURBIDGE MOVED APPROVAL OF CONSENT AGENDA ITEMS A THROUGH 0 AS PRESENTED; COUNCILMEMBER MOORE SECOND. The motion passed unanimously as follows: Deputy Mayor Burbidge yes Councilmember Koppang yes Councilmember Assefa- Dawson yes Councilmember Moore yes Councilmember Celski yes Councilmember Duclos yes Councilmember Honda yes Federal Way City Council Regular Minutes Page 4 of 7 May 2, 2017 6. COUNCIL BUSINESS a. Parks and Recreation Commission Appointments COUNCILMEMBER KOPPANG MOVED TO APPOINT THE FOLLOWING INDIVIDUALS TO THE PARKS AND RECREATION COMMISSION: DAVID WILSON TO A VOTING TERM THROUGH APRIL 30, 2020; MICHAEL CAMPSMITH TO A VOTING TERM THROUGH APRIL 30, 2020; ANTHONY MURRIETTA TO A VOTING TERM THROUGH APRIL 30, 2020; AND STEVE PAYNE TO A VOTING TERM THROUGH APRIL 30, 2020; COUNCILMEMBER MOORE SECOND. The motion passed unanimously as follows: Deputy Mayor Burbidge yes Councilmember Koppang yes Councilmember Assefa- Dawson yes Councilmember Moore yes Councilmember Celski yes Councilmember Duclos yes Councilmember Honda yes b. Lodging Tax Advisory Committee Appointment DEPUTY MAYOR BURBIDGE MOVED TO APPOINT RYAN MILLER TO THE LODGING TAX ADVISORY COMMITTEE; COUNCILMEMBER ASSEFA - DAWSON SECOND. The motion passed unanimously as follows: Deputy Mayor Burbidge yes Councilmember Koppang yes Councilmember Assefa- Dawson yes Councilmember Moore yes Councilmember Celski yes Councilmember Duclos yes Councilmember Honda yes 7. ORDINANCES First Reading a. Council Bill #723/ Adopt Text Amendments to Federal Way Revised Code Title 19 "Zoning and Development Code" Related to Multifamily Housing AN ORDINANCE OF THE CITY OF FEDERAL WAY, WASHINGTON, ADOPTING CODE AMENDMENTS RELATED TO MULTIFAMILY DWELLING UNITS, SENIOR HOUSING, AND SPECIAL NEEDS HOUSING; AMENDING FWRC 19.05.040, 19.05.120, 19.115.030, 19.115.060, 19.115.115, 19.125.150, 19.200.100, 19.205.040, 19.205.070, 19.215.050, 19.220.050, 19.220.080, 19.225.070, 19.230.060; REPEALING FWRC 19.240.150; AND ADDING NEW SECTIONS TO CHAPTERS 19.115 AND 19.215 FWRC. (AMENDING ORDINANCE NOS. 90 -43, 93 -170, 94 -233, 96 -270, 97 -291, 99 -333, 00 -375, 01 -385, 01 -399, 02 -424, 03 -450, 05 -506, 06 -515, 06 -542, 07 -545, 07 -554, 07- 559, 10 -678, 12 -727, AND 12 -735) Community Development Director Brian Davis presented the proposed text amendments for the FWRC Title 19 related to Multifamily Housing. He overviewed the timeline, process, and presented changes as were requested at the May 1 LUTC Meeting. Council discussed the elements presented and questioned altering the language to include business as an option in addition to retail on the ground floors. Staff recommendation was to move forward as is and make alterations at a future date if the retail vacancies occur. At 9:58 P.M. DEPUTY MAYOR BURBIDGE MOVED TO SUSPEND COUNCIL RULES OF PROCEDURE TO ALLOW THE MEETING TO CONTINUE PAST 10:00 P.M.; COUNCILMEMBER MOORE SECOND. The motion passed unanimously as follows: Federal Way City Council Regular Minutes Page 5 o/ 7 May 2, 2017 Deputy Mayor Burbidge yes Councilmember Koppang yes Councilmember Assefa- Dawson yes Councilmember Moore yes Councilmember Celski yes Councilmember Duclos yes Councilmember Honda yes Councilmembers thanked the many staff members who have contributed the process and doubling up on the LUTC meetings in order to make the deadline prior to the moratorium expiring in June. They also thanked the individuals who have attended meetings or sent emails with concerns, questions and suggestions. City Clerk Stephanie Courtney read the ordinance title into the record. COUNCILMEMBER CELSKI MOVED TO FORWARD COUNCIL BILL #723 TO SECOND READING AND ENACTMENT AT THE NEXT REGULAR COUNCIL MEETING; COUNCILMEMBER ASSEFA- DAWSON SECOND. The motion passed unanimously as follows: Deputy Mayor Burbidge yes Councilmember Koppang yes Councilmember Assefa- Dawson yes Councilmember Moore yes Councilmember Celski yes Councilmember Duclos yes Councilmember Honda yes 8. COUNCIL REPORTS Councilmember Duclos indicated the she and Finance Director Ade Ariwoola have had ongoing meetings and conversations regarding the 2019 -20 Biennial Budget. She indicated that Council has been supportive of the Weyerhaeuser situation and assisted as they have been able. She requested a report or presentation regarding the noise issue from the airport. Councilmember Moore agreed with Councilmember Duclos regarding Council involvement in the conservation efforts on and around Weyerhaeuser. He expressed gratitude for work of citizens on behalf of preserving and protecting this land. He reported he was able to attend Parks Appreciation Day as well as the Communities in Schools Breakfast. Councilmember Koppang was able to visit the parks on Parks Appreciation Day as well as the Little League Jamboree. He expressed his excitement in regards to the volunteerism within the community. He also indicated that the VPCSC report has been well received and he is eager to work towards implementation. Councilmember Honda thanked the Police Department for their responsiveness when an emergency call was made from her neighborhood. She shared that the Positive Outcomes group had given exceptional on television which reflected well on Federal Way. She attended the Quiet Skies Puget Sound Meeting and gave a reminder regarding the Farmers Market opening. Councilmember Celski was able attend National Little League Opening Event and was impressed with the adult leadership. He attended the retirement ceremony for Officer Wilcox and was glad to see such a great send off. He will be attending the Chamber Luncheon during which Sound Transit will be presenting. Councilmember Assefa- Dawson attended the Advancing Youth Leadership graduation and is excited by what the youth are able to accomplish. She also shared that a student from Thomas Jefferson High School was a speaker at WE Day in Seattle. Federal Way City Council Regular Minutes Page 6 of 7 May 2, 2017 Deputy Mayor Burbidge announced the Lodging Tax Advisory Committee (LTAC) meeting to take place on May 10 as well as the upcoming South King County Area Transportation Board Meeting. She also attended the Communities in Schools Breakfast, Quiet Skies meeting at Mt. Rainier High School, and a meeting of Port of Seattle Commissioners with FAA representatives. 9. EXECUTIVE SESSION 10. ADJOURNMENT not needed. There being nothing further on the agenda; Mayor Ferrell adjourned the Regular Meeting at 10:23 P.m- Attest: Stephanie Courtney City Clerk Approved by Council: Federal Way City Council Regular Minutes Page 7 of 7 May 2, 2017 COUNCIL MEETING DATE: May 16, 2017 CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL ITEM #: 5b SUBJECT: 21ST AVE S (S 320TH ST TO S 316TH ST) PEDESTRIAN IMPROVEMENTS— BID AWARD POLICY QUESTION: Should City Council award the 21st Ave S (S 320th St to S 316th St) Pedestrian Improvements to the lowest responsive, responsible bidder? COMMITTEE: Land Use and Transportation Committee MEETING DATE: May 1, 2017 CATEGORY: ® Consent Ordinance ❑ Public Hearing n City Council Business n Resolution ❑ Other STAFF REPORT BY: Christine Mullen, P.E. Street Systems Project Engin ee DEPT: Public Works Attachments: Land Use and Transportation Committee Memorandum dated May 1, 2017. Options Considered: 1. Award the 21st Ave S (S 320th St to S 316th St) Pedestrian Improvements to Active Construction, Inc. (ACI), the lowest responsive, responsible bidder, in the amount of $685,685.00, and approve a 10% contingency of $68,568.00, for a total amount of $754,253.00, and authorize the transfer of $175,000 of LIFT Funding to the 21st Ave S (S 320th St to S 316th St) Pedestrian Improvements (Project #193) and authorize the Mayor to execute the contract. 2. Reject all bids for the 21st Ave S (S 320th St to S 316th St) Pedestrian Improvements and direct staff to rebid the project and return to Committee for further action. MAYOR'S RECOMMENDATION: The Mayor recommends forwarding option 1 to the May 16, 20 City Council consent agenda for approval. MAYOR APPROVAL:, ��/ DIRECTOR APPROVAL: L{ 12.4 )1 C uncil nitial /Date Initial /Date ommit e Initial/Date COMMITTEE RECOMMENDATION: I move to forward Option 1 to the May 16, 2017 City Council consent agenda for a..ro al. Bob Celski, Chair L, d a Assefa -D. so , Member Mark . pang, Member PROPOSED COUNCIL MOTION: "I move to authorize staff to Award the 21st Ave S (S 320th St to S 316th St) Pedestrian Improvements to Active Construction, Inc., the lowest responsive, responsible bidder, in the amount of $685,685.00, and approve a 10% contingency of $68,568.00, for a total amount of $754,253.00, and authorize the transfer of $175,000 of LIFT Funding to the 21st Ave S (S 320th St to S 316th St) Pedestrian Improvements (Project #193)and authorize the Mayor to execute the contract." (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: ❑ APPROVED ❑ DENIED ❑ TABLED /DEFERRED/NO ACTION ❑ MOVED TO SECOND READING (ordinances only) REVISED— 1/2015 COUNCIL BILL # 1ST reading Enactment reading ORDINANCE # RESOLUTION# CITY OF FEDERAL WAY MEMORANDUM DATE: May 1, 2017 TO: Land Use and Transportation Committee VIA: Jim Ferrell, Mayor a•----. FROM: Marwan Salloum, P.E., Public Works Director Christine Mullen, P.E., Street Systems Project Engineer(` SUBJECT: 21st Ave S (S 320th St to S 316th St) Pedestrian Improvements — Bid Award BACKGROUND Five bids were received and opened on April 19, 2017 for the 21st Ave S (S 320th St to S 316th St) Pedestrian Improvements. Please see attached Bid Tabulation Summary. The lowest responsive, responsible bidder is Active Construction, Inc. (ACI) with total bid of $685,685.00. PROJECT ESTIMATED EXPENDITURES Design $150,000 Right of Way $552,000 Construction Cost (low bid) $685,685 10% Construction Contingency $68,568 Construction Management $85,710 TOTAL PROJECT COSTS $1,541,963 PROJECT AVAILABLE FUNDING Budgeted City Funds PSRC Grant (Countywide — PE & ROW) PSRC Grant (Countywide Non - Motorized — CN) $205,000 $397,350 $765,525 TOTAL AVAILABLE BUDGET Project funding shortfall $1,367,875 $174,088 The project budget has a funding shortfall of $175,000. Staff is requesting the Council to authorize the transfer of $175,000 of LIFT Funding to the 21st Ave S (S 320th St to S 316th St) Pedestrian Improvements (Project #193) and authorize the Mayor to execute the contract. 0 0 c0 0 O to N N 6 N Engineers Estimate UNIT PRICE TOTAL 855 S O .- S 5 g 0, $2,000.00! $56.000.00 88. 88. O V N 0a N W 8. 8. g O W N rpm. 8. r O g W 8. . O 5 N o N S. �(pJ QOQ N LA o N N g W N 00'000'88 00'000'66$ $2,000.00! $1.080.00 8888888885 i 0 SO 8 t0 O y N • tpp I� S N W 8 S O N H S fS0 N N O 69 $56,000.001 $7.500.00 . S. N O W S a o 8 8 S N N . 8. 8 O W N 8. O N C N 8 . 8 8 r 6. N N $2,000.00 $56,000.00 $20,000.00 8 8 . N N 8 8 8. O N O 8 8 . 8. O O N N 8 8 O 8 8 oo. . W ONO 8 8 oo. N 8 8 . N O M N 8 8 p. . H O N N 8 8 po. pp. N t0 N N 00'6$ 00'OL$ 00'8$ 00'4£$ 5 8 8. O O rO rO N o 8 8 t9 Yi 8 8 S. i S. 8 8 pp. p. g M N N 8 8 8. . O O 88 N 8 8 p. . g N N 8 8. pp. O O O N N N BID 85 Road Construction Northwest, Inc. Renton, WA UNIT PRICE TOTAL 88 8. O c:98$ 8p 0 8. pp rIJ W W N OS W N $900.00; $900.00 $70.000.00; $70,000.00 85.000.00; 85.000.00 8. �°O Q CO NN N $ 8- oo N N 8- 8 8. F. t0 W O $ S o8 W W 00'0007LS 0009$ 00'090'ZZ$ 100'06$ 00'009'Z$ :NZ$ 00'0OL'9£$ 00'00L'9£$ 00 000'9$ 00'000'4$ 00'004'0$ ;00'004'0$ S S S. , O O W m L 69 0888 N N S S o. 4D e ON O V m a N $100.00; $1,200.001 68.250.00! 68.25000 .8808 8 p. O 4') L M w N 8-SW CO CO 8- o n O S O W LOW W N N N VS $5,000.00 $5,000.00 820,000.001 820,000.00 $12.75. $6,502.50 $57.00: $9.120.00 8 5 Q. �. N p Np L N co N N O O 6,b W 8 8 S. 8. O 0. w o N O 8 O W W 8 8 8. 8. O§ o 0 NN N O O 8 S < 8. N W N 8 0 8. 8 A§ N N S O S N N 88 8. 8. O O C N N - 8 p 8 N N $ N BID #4 Sound Pacific Construction Gig Harbor, WA UNIT PRICE TOTAL 88O . 5888885 SS La N 888885 W 60 N N 000000 888888 6 ( N N N S N O N N $70,000.00; $70,000.00 815,000.00; $15,000.00 $60.00; $45,600.00 563.00; $2,520.00 8 8 O pp88CO N t+) N N 88-88 O C O W N 00'000'9$ 100'9$ 00'000'40$ 100'000'90$ 00'000'4$ 00'000'48 00.000'01$ ;00'000'01$ 8 5 r- t: N N 88 N.- so N 100'009'Ell$ 100'9£$ 00'000'0$ 100'00'$ $38.00: $7,600.001 $1,800.00! _$1,800.00 00' 'ZZ$ ;00' Z Z $ 00'000'1$ ; 00'001$ 100 100'OOLS 00'OOL'8L$ ; 00'OOL'1.$ $36.00; $1,512.00 $13.00; $2,860.00 $55.00; $1,650.00 $30.00; $1,200.00 $5,000.00{ 55,000.00 $31,000.00: $31,000.00 $12.00: $6,120.00 $80.00: $12,800.00 $40.00! $26.000.00 O SO LO ' „, L9 N N QO 8. N Lh N N 88p O$ W f9 § §§ N W co $1,000.00; $1,000.00 $6.00; $1200.00 510,000.00' $10,000.00 $15,000.00! $15,000.00 . BID #3 Pivetta Brothers Construction, Inc. Sumner, WA UNIT PRICE TOTAL 58- 82,655.001 $2,655.00 810,620.00; 810,620.00 $1,770.00; $1,770.00 $3,480.00; $3,480.00 875,195.65; $75,195.65 821,083.86; $21,083.86 $62.00; $47,120.00 866.00; $2,640.00 $16,000.00; 816,000.00 L 835.00! $5,250.00 511,387.81; $11,387.81 $5,000.001 $5,000.00 $52,579.20! $52.579.20 $1.48! $1,480.00 $112.09 $27,462.05 $32.80; $4,920.00 8 8 O r m N O 49 CO 88i `0i .-co 0, 8 p m M N N rnA W $91.38; $1,096.56 $8,846.97; $8,846.97 81,450.00; $15,950.00 $660.80! $7,268.80 $40.12; $1,685.04 $14.16! $3,115.20 $61.36; $1,840.80 $33.04; $1,321.60 55,000.00 55,000.00 I 828,526.501 $28,526.50 $9.15: $4,666.50 $70.86 $11,337.60 $41.78; $27,157.00 $30.68: $42,952.00 82,183.001 $6,549.00 $82.25; $10,692.50 $137,747.00; $137,747.00 $39.941.80; $39,941.80 00000'S LS ;00000'SL$ 00'000'018 '0000003 00 999'3 ; 066$ 00'046'08 ; 00'096'05 OA p l __ - - -- -BID 02 Tunista Construction. LLC Federal Way, WA UNIT PRICE TOTAL $5,567.161 $5,567.16 $5,567.16; $5,567.16 $392.97: $392.97 $408.63; $408.63 860,934.501 $60,934.50 $29,013.36; $29,013.36 $73.91; $56,171.60 $73.91; $2,956.40 $20,320.14; $20,320.14 $18.14; $2,721.00 O 5 O O O p L� . V N N 'en pp 8 Oi O O LO . ^ W N $2.17 $2,170.00 $52.55: $12,874.75 $105.40; $15,810.00 $$58271:50461 $2,907.30 $60,500.00 $15.77; $3,154.00 8' 8 _a_D_ 871A8 aD O IH 38 F2a a ___ ___ t6 e- N O N $606.20; $6,668.20 $55.67; $2,338.14 $22.27; $4,899.40 $98.97; $2,969.10 $32.17! 51,286.80 55,000.00 55,000.00 818,309.761 $18,309.76 $9.591 $4,890.90 $72.32: $11,571.20 $43.81; $28,476.50 $28.98: $40,572.00 81,983.861 55,951.58 $79.35; $10,315.50 $179,386.23; 5179,386.23 $47,011.56; $47,011.56 0 5 5 i i8- 8 _ O tri 69 t+9 88° o Vp W N O N O . to 0 0 7 _ N BID #1 Active Construction, Inc. Puyallup, WA UNIT PRICE TOTAL 55 S. p. rn O N LO 58 C N 8 N LO N $1,250.00: $1,250.00 $100.00; $100.00 $65,053.00; $65,053.00 $1.001 $1.00 $61.00! $46 360.00 861.00: $2 440.00 80 8. o O r� . N N So 82 N $4,250.00; $4,250.00 85,000.001 55,000.00 825,000.00 825,000.00 $3.00! $3,000.00 88 O. ry S N m N M °O O O H $250.001 $1,250.00 $40.001 $88,000.00 $33.001 $6,600.00 80_8080 8. . Of N N 55_58'8 N N 8. . N O co CO N W 8 rO N N 92,100.00 $20.00; $4,400.00 $90.00; $2,700.00 528.501 $1,140.00 $5,000.00 $5,000.00 817,000.001 $17,000.00 $9.00: $4,590.00 $100.00: $16,000.00 $40.00; $26,000.00 $38.00: $53,200.00 $2,500.00: $7,500.00 $80.00; $10,400.00 8. . O 5 N O V V, � °8-8 0 O O O O V V N 44 00'000'91$ ;00000'91$ 00'00001$ 100'00001$ 00'008'1$ ;00'68 00'000 L$ 100'000 L$ to a0 N xa� a d IL) ob-�e�g,o. -.-$ it rn �vc°�L°.� N °vim ° $Ln a�i__cs, N TOTAL SCHEDULE A (bid items include sales tax) ~ Z D FA V) J y J K C == V) LL J fn L/) Q L7 LL J LL J J Z r - Q W Q LL i W J U Y Q CO W N LL J Y Q LO W LL 0 N J J J N LL Q Q J CO LL LL Vendor Name - - -> Location > 41 W W Z t. !Structure Surveying Roadway Surveying Record Drawings (Min. bid $500) SPCC Plan Mobilization Traffic Control Supervisor Flaggers Other Traffic Control Labor Other Temporary Traffic Control Construction Signs Class A Clearing and Grubbing Roadside Cleanup Removal of Structures and Obstructions Sawcutting Roadway Excavation Incl. Haul Crushed Surfacing Top Course Commercial HMA Modular Block Wall Drain Pipe 6 In. Diam. Catch Basin Type 1 Inlet Protection Erosion/Water Pollution Control Tree Grates PSIPE, Pyrus Calleryana var.'Capital' or 'Redspire', 2 -1/2" cal. PSIPE Prunus Laurocerasus (Otto Luyken Laurel) 5 Gal Containers Root Barrier Bark Mulch Automatic Irrigation System Complete Extruded Curb Cement Conc. Driveway Black Vinyl Coated Chain Link Fence Cement Conc. Sidewalk Cement Conc. Curb Ramp Thickened Edge Sidewalk Decorative Illumination System, Complete Festival Outlet System, Complete Permanent Signing Plastic Crosswalk Line Potholing Resolution of Utility Conflicts N M V O <0 r" 0 0 •- N M V rn tp t• m° N N c`:18 N 88 N N N O A M M V 88 L7 8 2 e V V S 0 0 c0 0 O to N N 6 N COUNCIL MEETING DATE: May 16, 2017 ITEM #: CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: RESOLUTION: SETTING A PUBLIC HEARING DATE FOR THE 2018 -23 TRANSPORTATION IMPROVEMENT PLAN POLICY QUESTION: Should Council set a public hearing date for adoption of the 2018 -23 Transportation Improvement Plan on June 20, 2017? COMMITTEE: Land Use / Transportation MEETING DATE: May 1, 2017 CATEGORY: ® Consent n Ordinance ❑ Public Hearing ❑ City Council Business ® Resolution ❑ Other STAFF REPORT BY: Rick Perez, P.E., City Traffic Engineer DEPT: Public Works Attachments: Land Use and Transportation Committee memorandum dated May 1, 2017. Options Considered: 1. Authorize staff to proceed setting the Public Hearing date for the 2018 -23 Transportation Improvement Plan on June 20, 2017. 2. Set Public Hearing on an alternative date recommended by the committee. MAYOR'S RECOMMENDATION: The Mayor recommends forwarding Option 1 to the May 16, 2017 City Council Consent Agenda for approval. MAYOR APPROVAL: 7 DIRECTOR APPROVAL: ee Initial /Date C uncil Initial /Date Initial/Date COMMITTEE RECOMMENDATION: I move to forward Option 1 to the May 16, 2017 consent agenda for approval. Committee Chair Co ittee Member PROPOSED COUNCIL MOTION: "I move approval of the resolution setting the date of a Public Hearing for the 2018 -23 Transportation Improvement Plan on June 20, 2017." (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: ❑ APPROVED ❑ DENIED ❑ TABLED/DEFERRED/NO ACTION ❑ MOVED TO SECOND READING (ordinances only) REVISED — 1/2015 COUNCIL BILL # 1ST reading Enactment reading ORDINANCE # RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: May 1, 2017 TO: Land Use and Transportation Committee VIA: Jim Ferrell, Mayor FROM: Marwan Salloum, P.E., Public Works Dirt Rick Perez, P.E., City Traffic Engineer Er SUBJECT: Setting Public Hearing for 2018 -2023 Transportation Improvement Plan BACKGROUND: In accordance with the requirements of Chapters 35.77 and 47.26 of the Revised Code of Washington (RCW), the City of Federal Way adopted its original Transportation Improvement Plan (TIP) and Arterial Street Improvement Plan (ASIP) on July 23, 1991. The City is also required to adopt a revised TIP and ASIP on an annual basis to reflect the City's current and future street and arterial needs. The City is required to hold a minimum of one public hearing on the revised plans. Staff proposes that this occur at the June 20, 2017, City Council meeting. Once the revised plans have been adopted by Resolution, a copy of the respective plans must be filed with the Washington State Secretary of Transportation and the Washington State Transportation Improvement Board. The attached Resolution sets the public hearing date for the June 20, 2017 City Council meeting. The TIP will also be presented to the Land Use and Transportation Committee on June 5, 2017. K: \LUTC\2017 \May 2017 \05 -01 -16 Setting Six Year TIP Hearing Date.doc RESOLUTION NO. A RESOLUTION of the City Council of the City of Federal Way, Washington, setting a Public Hearing date of Tuesday, June 20, 2017 for adoption of a revised Six -Year Transportation Improvement Program and Arterial Street Improvement Plan. WHEREAS, pursuant to the requirements of Chapters 35.77 and 47.26 RCW, the City Council of the City of Federal Way must adopt a revised and extended Six -year Transportation Improvement Program ( "TIP ") and Arterial Street Improvement Plan ( "ASIP ") annually; and WHEREAS, a public hearing must be held prior to the adoption of the revised and extended Six -year Transportation Improvement Program and Arterial Street Improvement Plan; NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, RESOLVES AS FOLLOWS: Section 1. Public Hearing. A public hearing shall be held on the 2018 -2023 Federal Way Transportation Improvement Plan and Arterial Street Improvement Plan at 7:00 p.m. on Tuesday, June 20, 2017, at the Federal Way City Hall Council Chambers. Section 2. Severability. If any section, sentence, clause or phrase of this resolution should be held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of any other section, sentence, clause or phrase of this resolution. Section 3. Corrections. The City Clerk and the codifiers of this resolution are authorized to make necessary corrections to this resolution including, but not limited to, the correction of scrivener /clerical errors, references, resolution numbering, section/subsection numbers and any references thereto. Resolution No. 17- Page 1 of 2 Section 4. Ratification. Any act consistent with the authority and prior to the effective date of this resolution is hereby ratified and affirmed. Section 5. Effective Date. This resolution shall be effective immediately upon passage by the Federal Way City Council. RESOLVED BY THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON this day of , 2017. CITY OF FEDERAL WAY JIM FERRELL, MAYOR ATTEST: STEPHANIE D. COURTNEY, CMC, CITY CLERK APPROVED AS TO FORM: J. RYAN CALL, CITY ATTORNEY FILED WITH THE CITY CLERK: PASSED BY THE CITY COUNCIL: RESOLUTION NO.: Resolution No. 17- Page 2 of 2 COUNCIL MEETING DATE: May 16, 2017 CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL ITEM #: 5d SUBJECT: SUBMITTAL OF TRANSPORTATION GRANT APPLICATION POLICY QUESTION: Should City Council authorize staff to submit grant applications for transportation improvement projects? COMMITTEE: Land Use / Transportation MEETING DATE: May 1, 2017 CATEGORY: ® Consent ❑ City Council Business ❑ Ordinance ❑ Public Hearing n Resolution ❑ Other STAFF REPORT BY: Desiree Winkle', .E., Deputy Public Works Director DEPT: Public Works Attachments: Memo to LUTC dated May 1, 2017 Options Considered: 1. Authorize Staff to submit grant funding applications under the 2017 National Highway System (NHS) Asset Management Grant program. 2. Do not authorize staff to submit grant funding applications under the 2017 National Highway System (NHS) Asset Management Grant program and provide direction to staff. MAYOR'S RECOMMENDATION: The Mayor recommends forwarding Option 1 to the May 16, 2017 City Council Consent Agenda for approval. MAYOR APPROVAL: Co Initial /Date Council Initial /Date DIRECTOR APPROVAL: Initial /Date ZQlr? COMMITTEE RECOMMENDATION: I move to forward Option 1 to the May 16, 2017 consent agenda for approval. PROPOSED COUNCIL MOTION: "I move approval of Option 1 to authorize staff to submit grant funding applications under the 2017 National Highway System (NHS) Asset Management Grant program" (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: ❑ APPROVED ❑ DENIED ❑ TABLED /DEFERRED /NO ACTION ❑ MOVED TO SECOND READING (ordinances only) REVISED— 1 /2015 COUNCIL BILL # 1ST reading Enactment reading ORDINANCE # RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: May 1, 2017 TO: Land Use / Transportation Committee VIA: Jim Ferrell, Mayor FROM: Marwan Salloum, P.E., Director of Public Works Cesiree Winkler, P.E., Deputy Public Works Director /Street System Manager SUBJECT: Submittal of Transportation Grant Applications BACKGROUND: This memorandum provides the Council with the current status of new grant funding program for street preservation projects. Staff has evaluated the list of eligible projects and their associated pavement ratings and determined that the following projects have the best chance of being funded. Project (Funding Phase) Estimated Project Possible Grant Proposed Grant Cost Fund City Match Street Asphalt Overlay Program — SW Campus Dr. (19th Ave SW to 1st Ave S) (Design and Construction) 2017 National Highway System (NHS) Asset Management (Federal Funds) $1,400,000 $952,000 $448,000* Street Asphalt Overlay Program — 16th Ave S (SR 18 / S 348th to SR99 / Pacific Hwy) (Design and Construction) 2017 National Highway System (NHS) Asset Management (Federal Funds) $800,000 $692,000 $108,000* * The required City match for this grant will be provided from the asphalt overlay budget. These projects will be added to the upcoming Six -Year Transportation Improvement Program update as required for all grant funded projects. cc: Project File Day File COUNCIL MEETING DATE: May 16, 2017 CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL ITEM #: 5e SUBJECT: NEW CINGULAR WIRELESS PCS, LLC SITE LEASE AGREEMENT — SAGHALIE PARK LOCATION POLICY QUESTION: Should the City approve the execution of a site lease agreement with New Cingular Wireless PCS, LLC to allow installation and operation of certain equipment for use in connection with its wireless communications services? COMMITTEE: PRHSPS MEETING DATE: May 9, 2017 CATEGORY: ® Consent ❑ City Council Business ❑ Ordinance ❑ Resolution ❑ Public Hearing ❑ Other STAFF REPORT BY: J. Ryan Call, City Attorney Attachments: 1. Staff Memo 2. Proposed Site Lease Agreement Options Considered: 1. Approve the Site Lease Agreement and authorize the Mayor to execute the Site Lease Agreement. 2. Take no action and provide direction to staff. DEPT: Law MAYOR'S RECOMMENDA ON: Option 1 MAYOR APPROVAL: om ee ouncil Initial late Initial/Date IRECTOR APPROVAL: '1/2S 1 / 7 Initial/Date COMMITTEE RECOMMENDATION: I move to forward the proposed Lease Agreement to the May 16, 2017 consent agenda for approval. Committee Member • LO 21 _ Committe,P,-mb PROPOSED COUNCIL MOTION: "I move approval of the New Cingular Wireless PCS, LL Site Lease Agreement, effective upon mutual execution and authorize the Mayor to sign said agreement." (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: ❑ APPROVED ❑ DENIED ❑ TABLED /DEFERRED/NO ACTION ❑ MOVED TO SECOND READING (ordinances only) REVISED— 11/2016 COUNCIL BILL # 1ST reading Enactment reading ORDINANCE # RESOLUTION # CITY OF FEDERAL WAY MEMORANDUM DATE: May 9, 2017 TO: City Council Members VIA: Jim Ferrell, Mayor FROM: J. Ryan Call, City Attorney SUBJECT: New Cingular Wireless PCS, LLC Site Lease Agreement — Saghalie Location Background Information: New Cingular Wireless PCS, LLC seeks to contract with the City through a site lease agreement for a portion of property located at Saghalie Park to allow installation and operation of certain equipment for use in connection with its wireless communication services. Exhibits A and B of the site lease agreement indicates the exact location of the leased space. The site lease agreement is a 5 year term that includes (3) 5 year extensions. New Cingular Wireless PCS, LLC is agreeing to pay the City $2,893.76 each month with an increase of 3% on January 1st of each calendar year during the term and renewal terms of the lease. An agreement for this specific site has been in place since 2002 under the name of Cingular Wireless LLC on behalf of Pacific Bell Wireless Northwest, LLC. Since the 2002 agreement has been in place, the contractor has changed ownership and is currently operating under the name New Cingular Wireless PCS, LLC. This agreement expires in September of 2017 and is the reason they are requesting a new site lease agreement. This agreement is substantially similar to other site lease agreements currently in effect for other companies. CITY QF '1,. e dera l Way SITE LEASE AGREEMENT CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -6325 (253) 835 -7000 www cYrydffederolway corn This Site Lease Agreement ( "Lease ") is made between the City of Federal Way, a Washington municipal corporation ( "City "), and New Cingular Wireless PCS, LLC, a Delaware limited liability company ( "Tenant "). The City and Tenant are located and do business at the below addresses which shall be valid for any notice required under this Agreement: NEW CINGULAR WIRELESS PCS, LLC: New Cingular Wireless PCS, LLC 575 Morosgo Drive Atlanta, GA 30324 1- 866 - 921 -6959 (telephone) CITY OF FEDERAL WAY: City Attorney's Office 33325 8th Ave. S. Federal Way, WA 98003 -6325 (253) 835 -7000 (telephone) (253) 835 -2569 (facsimile) City is the owner in fee simple of a parcel of land located in the City legally described on the attached Exhibit A (the "Property "). Tenant desires to lease space on and air space above the Property as described below for the installation and operation of certain equipment which includes requisite antennas, and connecting cables and appurtenances (collectively, "Equipment ") for use in connection with its wireless telephone communications service ( "Service "). As of the Commencement Date, as defined below, this Lease replaces the Site Lease Agreement dated May 28, 2002, and amendments thereto, between the City of Federal Way, Washington, a Municipal Corporation and Cingular Wireless, LLC, a Delaware limited liability company, predecessor to Tenant ( "Prior Lease "). In consideration of their mutual covenants, the parties agree as follows: 1. Leased Premises. City leases to Tenant and Tenant leases from City, on a non - exclusive basis, a portion of the Property as legally described in attached Exhibit A, together with necessary space and rights for access and utilities, described and depicted in attached Exhibit B (collectively, the "Premises "). Tenant may locate its Equipment on the Premises in the manner as described specifically in the attached Exhibit C. Tenant may not add Equipment in addition to that shown on Exhibit C other than as may be approved in writing by the City, which approval may be withheld in the City's sole and absolute discretion. 2. Term. This Lease shall be five (5) years and shall commence January 1St, 2017 (the "Commencement Date ") and shall end at 12:00 a.m. (midnight) on the fifth (5th) anniversary of the Commencement Date. This Lease will automatically renew for three (3) additional five (5) year terms (each five (5) year term shall be defined as an "Extension Term "), upon the same terms and conditions unless Tenant notifies Landlord in writing of Tenant's intention not to renew this Agreement at least six (6) months prior to the expiration of the Initial Term or then - existing Extension Term. The City may refuse to renew (i) in the event of breach of the Lease during the preceding term, or (ii) any other reason determined by the City in its SITE LEASE AGREEMENT 1 7/2015 CITY '- Federal OF Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -6325 (253) 835 -7000 www cityaffeder lway cam reasonable discretion. Any such refusal shall be in writing and shall be sent to Tenant at least six (6) months prior to expiration of the then current five (5) year term. 3. Rent. a. Commencing on January 1St, 2017 and on the first day of each month thereafter, Tenant shall pay to City as rent Two Thousand Eight Hundred Ninety -Three and 76/100 DOLLARS ($2,893.76) ( "Rent ") per month. Rent for any fractional month at the beginning or at the end of the initial term or Extension Term, if any, shall be prorated. Rent shall be payable to the City at 33325 8th Ave S, Federal Way, Washington 98003; Attention: Finance Department. Tenant shall pay the City a late payment charge equal to five percent (5 %) of the amount due for any payment not paid when due. Any amounts not paid when due shall also bear interest until paid at the lesser of the rate of two percent (2 %) per month or the highest rate permitted by law. b. The Rent shall be increased by three percent (3 %) per year throughout the Term of this Lease and Renewal Terms (if any). Each three percent (3 %) increase shall become effective January 1st of each calendar year. c. Pursuant to the Prior Lease, Landlord and Tenant acknowledge that Tenant paid to Landlord a security deposit in the amount of Five Thousand and 00 /100 Dollars ($5,000.00) ( "Security Deposit "). Such Security Deposit shall be refunded at the termination of this Lease if Tenant is not in default of the Lease. In the event Tenant fails to pay Rent or other charges when due, cure periods considered, the City shall deduct such amount from the Security Deposit, and Tenant agrees to immediately refund to the City any such deduction from the Security Deposit. The Security Deposit shall be held by the City without liability for interest. d. Additional Consideration. As additional consideration for this Lease, within thirty (30) days after the full execution of this Lease, Tenant shall reimburse the City for all of the City's costs and expenses to negotiate and execute this Lease, including attorneys' and consultants' fees and the time expended by the City staff and City Attorney's office, provided that in no event shall such reimbursement amount exceed Five Thousand and No /100 Dollars ($5,000.00); and provided further that, as a condition precedent to Tenant's obligation to reimburse the City herein, City shall provide to Tenant documentation of such costs and expenses. 4. Permitted Use of Premises. a. Tenant shall use the Premises for the installation, operation, and maintenance of its Equipment to provide Service. The Equipment and Premises may not be used for cable television services. Upon installation of Equipment, Tenant shall replace all lamps within fixtures mounted to replacement pole. b. Tenant shall, at its expense, comply with all applicable present and future federal, state, and local laws, ordinances, rules and regulations (including laws and ordinances relating to zoning, aesthetics, landscaping, fencing, permits, removal and abandonment, screening, health, radio frequency emissions, other radiation and safety) in connection with the provision of Service and the use, operation, maintenance, construction and /or installation of Equipment on the Premises. Tenant shall obtain all required governmental approvals, SITE LEASE AGREEMENT 2 7/2015 CITY OF Federal Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -6325 (253) 835 -7000 wiwx cityoffederMvay com authorizations, licenses and permits at Tenant's expense. City agrees to reasonably cooperate with Tenant in obtaining, at Tenant's expense, including reimbursement of City's reasonable attorney, administrative and other related fees, any licenses and permits required by Tenant's use of the Premises. Said cooperation shall in no way infer any special consideration or deviation from the land use and building construction permit approval process of the City that is applicable to the intended use of the Premises by Tenant. c. Tenant shall remove the Equipment from the Premises upon termination of the Lease. Upon removal of the Equipment, Tenant shall restore the Premises to the reasonable satisfaction of the City. All costs and expenses for the removal and restoration to be performed by Tenant shall be borne by Tenant. If however, Tenant requests permission not to remove all or a portion of the improvements, and City consents to such nonremoval, title to the affected improvements shall thereupon transfer to City and the same thereafter shall be the sole and entire property of City, and Tenant shall be relieved of its duty to otherwise remove same. d. The City reserves the right to use the Property for such purposes as it shall desire including, but not limited to, constructing or installing structures and facilities on the property, or developing, improving, repairing or altering the Property. In furtherance of such rights, the Tenant will, upon the City's demand and at the Tenant's sole cost and expense, remove, repair, relocate, change, or reconstruct the Equipment pursuant to the City's instructions and within the reasonable time period prescribed by the City. e. Should Tenant expand the Premises, with written approval of City, Tenant will pay and City will accept as additional Rent under the Lease an amount equal to the then current Rent calculated on a per square foot basis as multiplied by each additional square foot added to the Premises. Upon approval of City, a description and /or depiction of the modified Premises will become part of the Lease. 5. Relocation. In the event City desires to redevelop, modify, remodel or in any way alter the Property and/or any improvements located thereon ( "Redevelopment "), City shall in good faith use its best efforts to fully accommodate Tenant's continuing use of the Premises. Should any proposed Redevelopment necessitate the relocation of the Tenant's Equipment, Tenant and City shall use best efforts to find a mutually acceptable alternate location for the Tenant's Equipment. Tenant shall relocate or make the necessary alterations, at Tenant's sole cost, expense and risk; provided, however, that City has provided Tenant with no less than ninety (90) days prior written notice of City's proposed Redevelopment. In the event that Tenant and City cannot agree on an alternate location for Tenant's Equipment on the Property using best efforts, either party may terminate this Lease, the effective termination date being ninety (90) days after Tenant's receipt of City's notice of the proposed Redevelopment. If the parties agree on an acceptable alternate location for Tenant's Equipment, Tenant and City agree to use their best efforts to amend this Lease to document the new, alternate Equipment location, and from and after the date Tenant begins installation of its Equipment at such new location, such new location shall be deemed the Premises (or part thereof, as applicable) herein. 6. Restoration. In the event that Tenant causes damage of any kind during the course of installing, operating or maintaining the Equipment, including damage to the Premises caused by cutting, boring, jack hammering, excavation or other work, and including latent SITE LEASE AGREEMENT 3 7/2015 CITY OF �.�.. Federal Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -6325 (253) 835-7000 www cityoffederalway com damage not immediately apparent at the time of the work, Tenant shall repair the damage and /or restore the right -of -way at its sole cost and expense, without delay or interruption and within the reasonable time period prescribed by the City. Restoration of the Premises shall be to a condition, which is equivalent to or better than the condition of the Premises prior to commencing the installation, operation or maintenance of the Equipment and to a condition satisfactory to the City. Restoration of the right -of -way surface shall either include six inches (6 ") of crushed surfacing top course and three inches (3") of asphalt, class "AB ", or be replaced to the original condition, at the City's sole discretion. Whenever part of a square or slab or existing concrete sidewalk or driveway is cut or damaged, the entire square or slab shall be removed and replaced. All materials and compacting shall be in accordance with the "Standards and Specifications for Road, Bridge, and Municipal Construction," as amended. 7. Improvements. Tenant may update or replace the Equipment from time to time provided that the replacement facilities are not greater in number or size or different in type, color or shape or height than the existing facilities and that any change in their location on the Premises is approved in writing by City. Subject to the foregoing, Tenant may change the Equipment configuration specified in attached Exhibit C with the prior written approval of City, such approval shall not be unreasonably withheld. Tenant shall submit to City a written request for any such change and any supplemental materials as may be requested, for City's evaluation and approval. City shall have thirty (30) days after receipt of all requested materials in which to respond to such request and unless City so notifies Tenant to the contrary such approval shall be deemed granted. Except as may be required by FAA or FCC requirements, no lights or signs may be installed on the Premises or as part of the Equipment. Tenant further agrees to monitor the Equipment for fire, smoke, intrusion, and A/C power failure by Tenant's 24 -hour electronic surveillance system. In connection therewith, Tenant has the right to do all work necessary to prepare and maintain the Premises for Tenant's business operations and to install transmission lines connecting the antennas to the transmitters and receivers, after reasonable notice to the City. All of Tenant's construction and installation work shall be performed at Tenant's sole cost and expense and in a good and workmanlike manner, in the reasonable determination of the City. Tenant shall also submit a construction schedule to the City for the City's approval, which approval shall not be unreasonably delayed or withheld. 8. Premises Access. Tenant shall have reasonable 24- hours -a -day, 7- days -a -week. City retains and reserves the right to times. 9. Utilities. Tenant shall, at its expense, separately consumption of electricity and other utilities associated with its use timely pay all costs associated therewith. access to the Premises access the Premises at all meter charges for the of the Premises and shall 10. Maintenance. Tenant shall, at its own expense, maintain the Premises and Equipment on or attached to the Premises in a safe condition, in good repair and in a manner suitable to City. Additionally, Tenant shall keep the Premises free of debris, graffiti and anything of a dangerous, noxious or offensive nature or which would create a hazard or undue vibration, heat, noise or any interference with City services. Tenant shall have sole responsibility for the maintenance, repair, and security of its Equipment and leasehold improvements, and shall keep the same in good repair and condition during the Lease term. SITE LEASE AGREEMENT 4 7/2015 CITY OF Federal Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -6325 (253) 835 -7000 www cityoffederafway corn 11. Compliance with Laws. Tenant's use of the Premises is subject to its obtaining all certificates, permits, zoning, and other approvals that may be required by any federal, state or local authority. Tenant shall erect, maintain and operate its Equipment in accordance with applicable site standards, statutes, ordinances, rules and regulations now or hereinafter in effect as may be issued by the Federal Communications Commission, the City, or any other federal, state or other governing bodies. Tenant specifically waives any right to claim that any aspect of this Lease is contrary to any provision of any local, state or federal law (including the Telecommunications Act of 1996) in effect as of the date of this Agreement. In addition, Tenant specifically acknowledges that all or a portion of the Property located within a right -of -way subject to City's regulatory authority. Nothing herein shall be deemed to limit, impair or affect City's authority to franchise or otherwise permit usage of rights -of -way pursuant to its regulatory authority. 12. Lease Subject to Future Ordinances. Tenant acknowledges that the City may develop rules, regulations, ordinances and specifications for the use of the right -of -way and City property which shall govern Tenant's Equipment and activities hereunder as if they were in effect at the time this Lease was executed by the City and Tenant covenants and agrees to be bound by same. 13. Interference. Tenant shall not use the Premises in any way, which interferes with the use of the Property by City, lessees, licensees, or other entities authorized by the City with rights to the Property prior in time to Tenant's and in compliance with the requirements of FWRC 19.255.060 as it now exists or is hereafter amended. City shall have the right pursuant to FWRC 19.255.060 to grant rights for co- location of other telecommunications facilities on the Property. In addition, with regard to lessees or licensees whose operations commence after installation of the Equipment hereunder, Tenant shall not make any change in its operations that causes or is intended to cause material interference with such lessees or licensees. All operations by Tenant shall be in compliance with all FCC requirements. 14. Termination. a. Except as otherwise provided herein, this Lease may be terminated, without penalty to City or further liability of City, as follows: i. Upon thirty (30) days written notice by either party for failure to cure a default or breach, including non - payment of amounts due under this Lease, within that thirty (30) day period; or such longer period as may be required to diligently complete a cure commenced within the thirty (30) day period; ii. by Tenant upon sixty (60) days' prior written notice to Landlord for any reason or no reason, so long as Tenant pays Landlord a termination fee equal to six (6) months' Rent, at the then - current rate; iii. Upon thirty (30) days written notice by City if Tenant abandons, SITE LEASE AGREEMENT 5 7/2015 CITY OF '._. Federal Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -6325 (253) 835 -7000 www cityoffederatway corn vacates or ceases using the Premises or Equipment; or if Tenant becomes the subject of a bankruptcy proceeding and the bankruptcy proceeding is not vacated within 120 days; iv. Upon thirty (30) days notice written notice by City, for any reason as determined by the City in its reasonable discretion, including reasons involving public health, safety or welfare; v. Upon thirty (30) days written notice by City if Tenant fails to comply with all applicable federal, state, and local laws, including, without limitation, all governmental codes, ordinances, resolutions, standards and polices as now existing or hereafter adopted or amended, including, without limitation, all requirements of the FCC and the Federal Aviation Administration (FAA). vi. Upon thirty (30) days written notice by Tenant of a court decision described in Section 26(g) of this Lease below, and Tenant elects to terminate this Lease as a consequence of such court decision. If Tenant elects to terminate pursuant to this subsection, Tenant agrees that neither it, its successors, heirs or assigns will seek to enter into another Site Lease Agreement with the City of Federal Way for the Premises for a period of three (3) years from the date termination is effective, and Tenant waives any claim against the City arising out of any refusal to enter into a new lease should Tenant terminate under this subsection. vii. For any other reason set forth in this Agreement. b. In the event of any termination under this Section, Tenant shall pay City all monies due as rent and /or penalties, including attorney and collection fees and any other damages incurred by City as a result of such termination. In addition Tenant shall, at its sole expense, return the Premises to the same condition as prior to this Lease (normal wear and tear excepted), and shall remove all Equipment. c. No re -entry and taking of possession of the Premises by City shall be construed as an election on City's part to terminate this Lease, regardless of the extent of renovations and alterations by City, unless a written notice of such intention is given to Tenant by City. Notwithstanding any reletting without termination, City may at any time thereafter elect to terminate this Lease for such previous breach. 15. Indemnity and Insurance. a. Disclaimer of Liability: City shall not, at any time, be liable for injury or damage occurring to any person or property from any cause whatsoever arising out of Tenant's construction, installation, maintenance, repair, use, operation, condition or dismantling of the Premises or Tenant's Equipment and Tenant expressly assumes all such risk. b. Indemnification and Hold Harmless: Tenant shall, at its sole cost and expense, indemnify and hold harmless City and its officers, boards, commissions, employees, SITE LEASE AGREEMENT 6 7/2015 CITY ..... FeOF deral Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -6325 (253) 835 -7000 a+na w cltyoffederafway com agents, attorneys, and contractors from and against any and all liability, damages, and claims, (including, without limitation, reasonable fees and expenses of attorneys, expert witnesses and consultants), which may be asserted by reason of any act or omission of Tenant, its employees, agents, or contractors or which may be in any way connected with the construction, installation, operation, maintenance, repair, use, condition or dismantling of the Premises or Tenant's Equipment except for claims arising from the sole negligence of City and its officers, boards, commissions, employees, agents, attorneys and contractors. c. Insurance: During the term of this Lease, Tenant shall maintain in full force and effect and at its sole cost and expense, and including City, its officers, boards, commissions, employees and agents as additional insureds on required commercial general and auto liability coverage, the following types and limits of insurance: i. Commercial general liability insurance with limits of Two Million Dollars ($2,000,000) per occurrence and Five Million Dollars ($5,000,000) in the annual aggregate. ii. Commercial automobile liability insurance with combined single limits of Two Million Dollars ($2,000,000) per occurrence and Five Million Dollars ($5,000,000) in the annual aggregate. iii. Worker's compensation insurance or qualified self - insurance and such other insurance as may be required by law. d. Evidence of Insurance: Certificates of insurance for each insurance policy required by this Lease, shall be filed and maintained with City prior to commencement of the term of this Lease and thereafter. e. Cancellation of Policies of Insurance: Tenant shall provide at least thirty (30) days' prior written notice to City of cancellation or non - renewal of any required coverage that is not replaced. f. Deductibles: Any insurance policies may be written with commercially reasonable deductibles. g. License: All insurance policies shall be with insurers eligible to do business in the State of Washington and with a rating of A -IV unless waived by the City. h. Self Insurance: Notwithstanding the forgoing, Tenant may, in its sole discretion, self - insure any of the required insurance under the same terms as required by this Lease. In the event Tenant elects to self - insure its obligation under this Lease to include City as an additional insured, the following conditions apply: (i) City shall promptly and no later than thirty (30) days after notice thereof provide Tenant with written notice of any claim, demand, lawsuit, or the like for which it seeks coverage pursuant to this Section and provide Tenant with copies of any demands, notices, summonses, or legal papers received in connection with such claim, demand, lawsuit, or the like; (ii) City shall not settle any such claim, demand, lawsuit, or the like without the prior written consent of Tenant; and (iii) City shall fully cooperate with SITE LEASE AGREEMENT 7 7/2015 ► Pecferal Way Tenant in the defense of the claim, demand, lawsuit, or the like. CITY HALL 33325 8th Avenue South Federal Way, WA 98003-6325 (253) 835 -7000 www cityoffederalway cam i. Defense of City: In the event any action or proceeding shall be brought against the City resulting from Tenant's operations hereunder, Tenant shall, at Tenant's sole cost and expense, resist and defend the same provided, however, that Tenant shall not admit liability in any such matter on behalf of the City without the written consent of City. Nothing herein shall be deemed to prevent City from cooperating with Tenant and participating in the defense of any litigation with City's own counsel. Tenant shall pay all expenses incurred by City in response to any such actions, suits or proceedings. These expenses shall include all out -of- pocket expenses such as attorney fees and shall also include the reasonable value of any services rendered by the City's attorney, and the actual expenses of City's agents, employees, consultants and expert witnesses, and disbursements and liabilities assumed by City in connection with such suits, actions or proceedings. 16. Holding Over. Any holding over after the expiration of the term hereof, with the consent of the City, shall be construed to be a tenancy from month to month and shall otherwise be on the terms, covenants and conditions herein specified. 17. Acceptance of Premises. Tenant accepts the Premises in the condition existing as of the Commencement Date. City makes no representation or warranty with respect to the condition of the Premises and City shall not be liable for any latent or patent defect in the Premises. 18. Notices. All notices, requests, demands and communications hereunder will be given by first class certified or registered mail, return receipt requested, or by a nationally recognized overnight courier, postage prepaid, to be effective when properly sent and received, refused or returned undelivered. Notices will be addressed to the parties as follows: If to City: If to Tenant: With a copy to: City of Federal Way, City Attorney 33325 8th Avenue South Federal Way, WA 98003 New Cingular Wireless PCS, LLC Attn: Network Real Estate Administration Re: Cell Site No. WA6696; Cell Site Name: NE Tacoma (WA) Fixed Asset No. 10032282 575 Morosgo Drive Atlanta, GA 30324 New Cingular Wireless PCS, LLC AT &T Legal Department- Network Counsel Re: Cell Site No. WA6696; Cell Site Name: NE Tacoma (WA) Fixed Asset No. 10032282 208 South Akard Street Dallas, TX 75202 -4206 SITE LEASE AGREEMENT 8 7/2015 CITY OF &kb. Federal Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -6325 (253) 835 -7000 wtivw. cityoffederMMway com 18. Subleasing or Assignment. Tenant may not assign this Lease or sublet the Premises or Equipment, in whole or in part, without the prior written consent of City, which may not be unreasonably withheld. City may inquire into the qualifications and financial stability of a potential assignee or sublessee and reasonably request any information related to such inquiry and may also condition such approval upon the financial, legal and technical expertise of a proposed assignee or sublessee and upon the resolution of any compliance obligation under the Lease. If the City has not responded to a request to assign or sublet with a decision within forty five (45) days, City approval shall be deemed given. Tenant may, however, upon notice to City and without City approval, mortgage or grant a security interest in this Lease and the Equipment. 19. Successors and Assigns. Subject to Section 18, this Lease shall be binding upon and inure to the benefit of the parties, and their respective permitted successors and assigns. 20. Non - Waiver. Failure of City to insist on strict performance of any of the conditions, covenants, terms or provisions of this Lease or to exercise any of its rights hereunder shall not waive such rights, but City shall have the right to specifically enforce such rights at any time and take such action as might be lawful or authorized, either in law or equity. Damages are not an adequate remedy for breach. The receipt of any sum paid by Tenant to City after a breach of this Lease shall not be deemed a waiver of such breach unless expressly set forth in writing by the City. 21. Taxes. Tenant shall pay all personal property taxes (or payments in lieu of taxes) and assessments for the Premises, if any, which become due and payable during the term of this Lease attributable to the Equipment or Tenant's use of the Premises. 22. Quiet Enjoyment, Title and Authority. City represents to Tenant that: a. City has authority to execute this Lease; b. City has title to the Premises free and clear of any encumbrances, liens or mortgages, except those encumbrances, liens and mortgages and matters of record, and these and any other matters disclosed and /or otherwise apparent to Tenant; c. There is legal ingress and egress to the Premises from a right -of -way; and d. Execution and performance of this Lease will not violate any laws or agreements binding on City; e. City covenants and agrees with Tenant that upon Tenant paying the Rent and observing and performing all the terms, covenants and conditions on Tenant's part to be observed and performed, Tenant may peacefully and quietly enjoy the Premises. 23. Condemnation. In the event the Premises are taken in whole or in part by any entity by eminent domain, this Lease shall terminate as of the date title to the Premises vests in the condemning authority. Tenant shall not be entitled to any portion of the award paid and the City shall receive the full amount of such award. Tenant hereby expressly waives any right or claim to any portion thereof. However, Tenant shall have the right to claim and recover from the SITE LEASE AGREEMENT 9 7/2015 Pr ecleral Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -6325 (253) 835 -7000 www cityoffederatway corn condemning authority, other than the City, such other compensation as may be separately awarded or recoverable by Tenant. If this Lease terminates due to condemnation, Tenant shall promptly remove all of its Equipment from the Premises. 24. Alteration, Damage or Destruction. If the Premises or any portion thereof is altered, destroyed or damaged so as to materially hinder effective use of the Equipment through no fault or negligence of Tenant, Tenant may elect to terminate this Lease upon thirty (30) days written notice to City. In such event, Tenant shall promptly remove the Equipment from the Premises and shall restore the Premises to the same condition as existed prior to this Lease. This Lease (and Tenant's obligation to pay rent) shall terminate upon Tenant's fulfillment of the obligations set forth in the preceding sentence and its other obligations hereunder, at which termination Tenant shall be entitled to the reimbursement of any Rent prepaid by Tenant. City shall have no obligation to repair any damage to any portion of the Premises. 25. Rental Stream Offer. If at any time after the date of this Lease, City receives a bona fide written offer from a third party seeking an assignment or transfer of the Rent payments associated with this Lease ( "Rental Stream Offer "), City shall immediately furnish Tenant with a copy of the Rental Stream Offer. Tenant shall have the right within ninety (90) days after it receives such copy to match the Rental Stream Offer and agree in writing to match the terms of the Rental Stream Offer. Such writing shall be in the form of a contract substantially similar to the Rental Stream Offer. If Tenant chooses not to exercise this right or fails to provide written notice to City within the ninety (90) day period, City may assign the right to receive Rent payments pursuant to the Rental Stream Offer, subject to the terms of this Lease. If City attempts to assign or transfer Rent payments without complying with this Section, the assignment or transfer shall be void. Tenant shall not be responsible for any failure to make payments under this Lease and reserves the right to hold payments due under this Lease until City complies with this Section. 26. Miscellaneous. a. City and Tenant respectively represent that their signatory is duly authorized and has full right, power, and authority to execute this Lease. b. With the exception of applicable and future laws, ordinances, rules, and regulations this Lease constitutes the entire agreement and understanding of the parties and supersedes all offers, negotiations, and other agreements of any kind. Except as previously set forth, there are no representations or understandings of any kind not set forth herein. Any modification of or amendment to this Lease must be in writing and executed by both parties. c. This Lease shall be construed in accordance with the laws of the State of Washington. d. Section captions and headings are intended solely to facilitate the reading thereof. Such captions and headings shall not affect the meaning or interpretation of the text herein. e. If the methods of taxation in effect at the Commencement Date of the SITE LEASE AGREEMENT - 10 - 7/2015 Federal Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -6325 (253) 835 -7000 www cityoffederalway corn Lease are altered so that in lieu of or as a substitute for or in addition to any portion of the property taxes and special assessments, if any, now imposed on Equipment, there is imposed a tax upon or against the rentals payable by Tenant to City, Tenant shall also pay those amounts. f. Tenant shall be responsible for obtaining all necessary approvals, authorizations and agreements from any party or entity and it is acknowledged and agreed that the City is making no representation, warranty or covenant whether any of the foregoing approvals, authorizations or agreements are required or have been obtained by Tenant from any person or entity. g. If any term of this Lease is found to be void or invalid, such invalidity shall not affect the remaining terms of this Lease, which shall continue in full force and effect. In the event that a court of competent jurisdiction determines void or invalid any term of any other Lease, where such term is substantially equivalent to a term of this Lease, the City may, at its sole option and within 30 days of notice thereof by Tenant: (i) determine that such judicial determination shall not affect the terms of this Lease, which shall continue in full force and effect; (ii) determine that a term of this Lease is invalid, but severable, and that such invalidity shall not affect the remaining terms of this Lease, which shall continue in full force and effect; or (iii) terminate this Lease pursuant to Section 14. vii above. h. This Agreement may be enforced at both law and equity. Damages are not an adequate remedy for breach. i. Either party will, at any time upon fifteen (15) days prior written notice from the other, execute, acknowledge and deliver to the other a recordable Memorandum of Agreement substantially in the form of the Attachment 1. Either party may record this memorandum at any time, in its absolute discretion. 27. Legislative Changes. In the event that any federal, state or local governmental entity adopts a law, ordinance, or regulation, or amends existing laws, ordinances, or regulations, and the new or amended law, ordinance, or regulation would limit, impair, or affect any of the parties' rights or obligations under this Agreement, Tenant agrees that (except for changes authorized under Section 12 above) the provisions of this Lease contract shall remain lawful and binding and enforceable on the parties, and Tenant waives any rights to claim otherwise. DATED the effective date set forth above. SITE LEASE AGREEMENT [Signature page to follow] - 11 - 7/2015 Fecleral Way ATTEST: CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -6325 (253) 835-7000 www cityoffederatway corn CITY OF FEDERAL WAY: By: Jim Ferrell, Mayor 33325 8th Ave South Federal Way, WA 98003 APPROVED AS TO FORM: Stephanie Courtney, CMC, City Clerk J. Ryan Call, City Attorney TENANT: New Cingular Wireless PCS, LLC, a Delaware limited liability company By: STATE OF WASHINGTON ) ) ss. COUNTY OF Name Title Address On this day personally appeared before me , to me known to be the , of New Cingular Wireless PCS, a Delaware limited liability company, that executed the foregoing instrument, and acknowledged the said instrument to be the free and voluntary act and deed of said corporation, for the uses and purposes therein mentioned, and on oath stated that he /she was authorized to execute said instrument and that the seal affixed, if any, is the corporate seal of said corporation. GIVEN my hand and official seal this day of , 2017. SITE LEASE AGREEMENT (typed /printed name of notary) Notary Public in and for the State of My commission expires - 12 - 7/2015 CITY OF a. Federal Way EXHIBIT A LEGAL DESCRIPTION CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -6325 (253) 835 -7000 www cityaffederahway cans That portion of Government Lot 1, Section 19, Township 21 North, Range 4 East W.M., records of King County, Washington, said portion being more particularly described as follows: Commencing at the Northwest corner of said Section 19; THENCE along the North line thereof South 89 °00' 18" East 335.78 feet; THENCE South 01°35'16" West 42.00 feet to the Southerly margin of the lands described in deed recorded under Recording No. 8501170665, records of King County, Washington, and the true point of beginning; THENCE along said Southerly margin South 89°00'18" East 18.07 feet to the beginning of a curve concave to the Southwest having a radius of 658.00 feet; THENCE Easterly and Southeasterly 700.54 feet along said curve through a central angle of 60°59'59"; THENCE South 28°00'19" East 422.43 feet to the beginning of a non - tangent curve concave to the Southeast having a radius of 897.03 feet (a radial line through said beginning bears North 28 °00' 19" West); THENCE Southwesterly and Southerly 732.77 feet along said curve through a central angle of 46°48'15" to a radial line of said curve which bears North 74 °48'34" West and South line of said Government Lot 1; THENCE along said South line North 88 °59'20" West 376.79 feet to a line parallel with and distant 335.76 feet Easterly, when measured at right angles, from the West line of said Government lot; THENCE along said parallel line North 01°35'16" East 1,273.00 feet to the true point of beginning. Situate in the County of King, State of Washington. SITE LEASE AGREEMENT - 13 - 7/2015 CITY OF Feteral Way EXHIBIT B CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -6325 (253) 835 -7000 wwwv cityoffederahvay. com SITE LOCATION WITHIN THE PREMISES SITE LEASE AGREEMENT (See Attached) - 14 - 7/2015 KING COUNTY DEPT. OF ASSESSMENTS Al. or • 11 1266.05 01;$.4. - sw`S -2ti-- 0-10W— `r GL tl" T %. e NE 24 -2t -3 0 0 3ssna of 1 H.Lr.JIL 0-4.ai O+ 0 b� gL, It ef 11'02'7 OP. e? 1274.50 .10.1. EXHIBIT 6 SITE LOCATION WITHIN THE PREMISES CITY OF '.... Federal Way EXHIBIT C SITE PLAN [Including Location of Equipment Box/Shed] SITE LEASE AGREEMENT (See Attached) CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -6325 (253) 835 -7000 www cityoffederaIway. corn - 15 - 7/2015 I I i III til ii g . --,- --1-- CITY OF Federal Way ATTACHMENT 1 MEMORANDUM OF LEASE Return to: New Cingular Wireless PCS, LLC 575 Morosgo Drive Atlanta, GA 30324 Attn: Network Real Estate Administration MEMORANDUM OF LEASE CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -6325 (253) 835 -7000 wwwolyoffeder lway.corn Grantor Name: City of Federal Way, a Washington municipal corporation Grantee Name: New Cingular Wireless PCS, LLC, a Delaware limited Legal Description: Official legal description attached as Exhibit 1 Assessor's Tax Parcel ID #: Reference Numbers of Prior Recorded Documents: Does not apply Tax Mailing Address: Does not apply True consideration paid: Does not apply Cell Site #: WA6696 Fixed Asset #: 10032282 Cell Site Name: NE Tacoma County: King State: Washington SITE LEASE AGREEMENT - 16 - 7/2015 � Federal Way Prepared by and After Recording Return to: New Cingular Wireless PCS, LLC 575 Morosgo Drive Atlanta, GA 30324 Attn: Network Real Estate Administration MEMORANDUM OF LEASE CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -6325 (253) 835 -7000 www crtyoffederahvaycom Grantor Name: City of Federal Way, a Washington municipal corporation Grantee Name: New Cingular Wireless PCS, LLC, a Delaware limited Legal Description: Official legal description attached as Exhibit 1 Cell Site # and Name: WA6696 Fixed Asset #: 10032282 NE Tacoma State: Washington County: King This Memorandum of Lease ( "Memorandum of Lease ") is entered into on this day of , 2017, by and between the City of Federal Way, a Washington municipal corporation, having a mailing address of 33325 8th Ave. S. Federal Way, WA 98003 -6325 ( "Landlord ") and New Cingular Wireless PCS, LLC, a Delaware limited liability company, having a mailing address of 575 Morosgo Drive, Atlanta, GA 30324 ( "Tenant "). 1. Landlord and Tenant entered into a Site Lease Agreement (the "Lease ") for the purpose of installing, operating and maintaining a communications facility and other improvements. All of the foregoing is set forth in the Lease. 2. The initial term of five (5) years ( "Initial Term ") commenced on January 1, 2017, with three (3) successive five (5) year options to renew. 3 . The Landlord leased to Tenant a certain a portion (the "Premises ") of the property located at 33914 19th Ave. SW, Federal Way, Washington ( "Property ") as described in Exhibit 1 attached and incorporated herein. 4. This Memorandum of Lease is not intended to amend or modify, and shall not be deemed or construed as amending or modifying, any of the terms, conditions or provisions of the Lease, all of which are hereby ratified and affirmed. In the event of SITE LEASE AGREEMENT - 17 - 7/2015 CITY OF Federal Way CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -6325 (253) 835 -7000 www cityoffederalway.com a conflict between the provisions of this Memorandum of Lease and the provisions of the Lease, the provisions of the Lease shall control. The Lease shall be binding upon and inure to the benefit of the parties and their respective heirs, successors, and assigns, subject to the provisions of the Lease. IN WITNESS WHEREOF, the parties have caused this Memorandum of Lease to be effective as of the last date written below. LANDLORD: TENANT: City of Federal Way, a Washington New Cingular Wireless PCS, LLC, municipal corporation a Delaware limited liability company By: AT &T Mobility Corporation Its: Manager By: By: Print Name: Print Name: Its: Its: Date: Date: SITE LEASE AGREEMENT - 18 - 7/2015 CITY OF 44'44‘ Federal Way EXHIBIT 1 DESCRIPTION OF THE PREMISES The Premises are described and /or depicted as follows: Property Legal Description: Assessor's parcel number: CITY HALL 33325 8th Avenue South Federal Way, WA 98003 -6325 (253) 835 -7000 wvww cityoffederalway com That portion of Government Lot 1, Section 19, Township 21 North, Range 4 East W.M., records of King County, Washington, said portion being more particularly described as follows: Commencing at the Northwest corner of said Section 19; THENCE along the North line thereof South 89 °00' 18" East 335.78 feet; THENCE South 01°35'16" West 42.00 feet to the Southerly margin of the lands described in deed recorded under Recording No. 8501170665, records of King County, Washington, and the true point of beginning; THENCE along said Southerly margin South 89°00'18" East 18.07 feet to the beginning of a curve concave to the Southwest having a radius of 658.00 feet; THENCE Easterly and Southeasterly 700.54 feet along said curve through a central angle of 60 °59'59 "; THENCE South 28 °00' 19" East 422.43 feet to the beginning of a non - tangent curve concave to the Southeast having a radius of 897.03 feet (a radial line through said beginning bears North 28 °00' 19" West); THENCE Southwesterly and Southerly 732.77 feet along said curve through a central angle of 46 °48' 15" to a radial line of said curve which bears North 74 °48'34" West and South line of said Government Lot 1; THENCE along said South line North 88 °59'20" West 376.79 feet to a line parallel with and distant 335.76 feet Easterly, when measured at right angles, from the West line of said Government lot; THENCE along said parallel line North 01°35'16" East 1,273.00 feet to the true point of beginning. Situate in the County of King, State of Washington. SITE LEASE AGREEMENT - 19 - 7/2015 COUNCIL MEETING DATE: May 16, 2017 CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL ITEM #: 5f SUBJECT: GRANT AGREEMENT BETWEEN FEDERAL WAY POLICE DEPARTMENT AND THE WASHINGTON AUTO THEFT PREVENTION AUTHORITY ( WATPA) FOR ALPR REPLACEMENT PROJECT POLICY QUESTION: Should the City of Federal Way / Federal Way Police Department accept a $22,220.00 Grant from the Washington Auto Theft Prevention Authority (WATPA) for the ALPR Replacement Project? COMMITTEE: PARKS, RECREATION, HUMAN SERVICES & PUBLIC MEETING DATE: May 9, 2017 SAFETY COUNCIL COMMITTEE (PRHS &PS) CATEGORY: ® Consent n Ordinance ❑ City Council Business n Resolution Public Hearing Other STAFF REPORT BY: CHIEF ANDY HWANG Attachments: 1. PRHS &PSC Memo 2. Grant Agreement between Federal Way Police and WATPA Options Considered: 1. Accept Proposal 2. Reject Proposal MAYOR'S RECOMMENDATION: 1— Accept WATPA Grant MAYOR APPROVAL: Cot6mt a // Cif(incil Initial/Date (/ Initial/Date DEPT: Police ,DIRECTOR APPROVAL: //% Initial/Date S *7 COMMITTEE RECOMMENDATION: "I move to forward Grant Agreement between the Federal Way Police Department and WATPA for the ALPR Replacemept Project to the May 16, 2017, Consent Agenda for approval" PROPOSED COUNCIL MOTION: "I move approval of the Grant Agreement between the Federa ' Way Police Department and WATPA for the ALPR Replacement Project and authorize Chief of Police Andy Hwang to sign said Agreement." (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: ❑ APPROVED ❑ DENIED ❑ TABLED/DEFERRED/NO ACTION ❑ MOVED TO SECOND READING (ordinances only) REVISED— 11/2016 COUNCIL BILL # 1ST reading Enactment reading ORDINANCE # RESOLUTION # CITY OF FEDERAL WAY CITY COUNCIL COMMITTEE STAFF REPORT DATE: May 9, 2017 TO: Parks, Recreation, Human Services and Public Safety Council Committee VIA: Jim Ferrell, Mayor FROM: Andy Hwang, Chief of Police SUBJECT: Grant Agreement between Federal Way Police Department and The Washington Auto Theft Prevention Authority for ALPR Replacement Project The ALPR Program is in need of replacing an ALPR System in one of the Federal Way Police Department Patrol Cars which is outdated and no longer working. The Washington Auto Theft Prevention Authority (WATPA) Board of Directors approved the Federal Way Police Department's mini grant application to fund the ALPR Replacement project. The Federal Way Police Department will be reimbursed for actual expenses not to exceed $22,220.00. The funding period is May 1, 2017 — June 30, 2017. All funds must be expended and products or services received no later than June 30, 2017. 1 AGREEMENT BETWEEN FEDERAL WAY POLICE DEPARTMENT AND THE WASHINGTON AUTO THEFT PREVENTION AUTHORITY AUTO THEFT PREVENTION 2017 MINI GRANT PROGRAM AWARD SHEET 1. Award Recipient Name and Address: Federal Way Police Department 33325 8th Ave S Federal Way, WA 98003 3. Project Title ALPR Replacement 5. Grant No: 17 MINI WATPA 013 7. Amount Approved: $22,220.00 2. Contact: Andy Hwang Title: Chief Telephone: (253) 835 -6701 4. Award Period: 05/01/2017 — 06/30/2017 6. Funding Authority: WASHINGTON AUTO THEFT PREVENTION AUTHORITY 8. Service Area: King County 9. Requests for reimbursement under this agreement are subject to the following Budget: Des cription Requested Funding WATPA Approved 1) Equipment ALPR Replacement 22,220.00 22,220.00 TOTAL FUNDING', 22,220.00 IN WITNESS WHEREOF, the WATPA and RECIPIENT acknowledge and accept the terms of this AGREEMENT and attachments hereto, and in witness whereof have executed this AGREEMENT as of the date and year last written below. The rights and obligations of both parties to this AGREEMENT are governed by the information on this Award Sheet and other documents incorporated herein by reference: Agreement Specific Terms and Conditions, and Agreement General Terms and Conditions. WATPA Name/ Michael Painter Title WATPA, Executive Director RECIPIENT Name/ Title Date: 05/01/2017 Date: Washington Auto Theft Prevention Authority Grant Award Expenditure Reimbursement Request Agency Seeking Reimbursement: Address: Grant Number: Billing for the Month/Year of: Description Total Budget Total Prior Billings Current Billing Total Billing YTD Award Balance A. Public Outreach 0.00 0.00 0.00 0.00 0.00 B. Innovative Programs 0.00 0.00 0.00 0.00 0.00 C. Equipment 0.00 0.00 0.00 0.00 0.00 Totals 0.00 0.00 0.00 0.00 0.00 I hereby certify that the items and totals listed herein are proper charges for materials, merchandise or services furnished under the contract with the Washington Auto Theft Prevention Authority. Signature Date Printed Name /Title Phone Number WATPA APPROVAL Signature Michael Painter, WATPA Executive Director Date Printed Name /Title Submit reimbursment requests to: WATPA 3060 Willamette Dr NE Lacey, WA 98516 COUNCIL MEETING DATE: May 16, 2017 ITEM #: 6a CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: 2017 PROGRAM YEAR COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) ANNUAL ACTION PLAN POLICY QUESTION: Should the City Council approve the 2017 Program Year Community Development Block Grant (CDBG) Annual Action Plan? COMMITTEE: Parks, Recreation, Human Services, & Public Safety MEETING DATE: May 9, 2017 CATEGORY: ❑ Consent ❑ City Council Business ❑ Ordinance ® Public Hearing ❑ Resolution ❑ Other STAFF REPORT BY: Jeffrey Watson, Community Services Manager Attachments: Memo to Mayor and City Council 2017 CDBG Annual Action Plan DEPT: CD In 2011, the City of Federal Way became a CDBG entitlement community and adopted its first Consolidated Plan for the 2012 -2016 program year period. In program year 2015, the City, as a member of the HOME Consortium with King County, began participation in the County's Consolidated Plan, resulting in the adoption of a new Consolidated Plan for the 2015 -2019 program year period. The Annual Action Plan is the annual work and spending plan for the City of Federal Way's CDBG funds from HUD. An Action Plan is required for each year of the Consolidated Plan program period. The 2017 PY Action Plan is for the third year of the Consolidated Plan program period. The Human Services Commission considered the 2017 Annual Action Plan at its regular meeting on Monday, April 17, 2017, and voted 9 -0 to "recommend the City Council approve the 2017 Annual Action Plan as presented and that, in the event the annual grant amount from the U.S Department of Housing Urban Development is either less than or more than anticipated, staff is authorized to make appropriate pro rata adjustments to the categories of Public Services, Planning and Administration, and Community Economic Revitalization Funding (CERF)." Options Considered: 1. Approve the 2017 CDBG Annual Action Plan. 2. Do not approve the 2017 CDBG Annual Action Plan and give staff direction. MAYOR'S RECOMMENDATION: Option 1 MAYOR APPROVAL: Co f ttee Initial /Date ounc Initial /Date IIRECTOR APPROVA Initial/aate COMMITTEE RECOMMENDATION: I move to forward the 2017 CDBG Annual Action Plan to the May 16, 2017 City Council agenda for public hearing. Co ittee Chair > Committee ember /1 Committee PROPOSED COUNCIL MOTION: "I move approval of the 2017 CDBG Annual Action Plan with the Human Services Commission recommendations and authorize the Mayor to execute all documents associated with the Plan and corresponding funding agreements with the U.S. Department of Housing and Urban Development." (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED 1ST reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) REVISED— 11/2016 ORDINANCE # RESOLUTION # MEMORANDUM April 27, 2017 TO: Mayor Ferrell and City Council Members FM: Jeffrey Watson Community Services Manager RE: 2017 Program Year Community Development Block Grant (CDBG) Annual Action Plan Due to the Continuing Resolution by Congress that expired on April 28, 2017, the U.S. Department of Housing and Urban Development does not have 2017FY budget numbers as of the date of this memo. This in turn means that Community Development Block Grant (CDBG) communities throughout the nation, including Federal Way, have not received the amount of the 2017 allocation for the CDBG Program. As a result, the 2017 Program Year CDBG Annual Action Plan is based upon the 2015 allocation of $620,000. On April 17, 2017, the Human Services Commission voted 9 -0 to "recommend that the City Council approve the 2017 Annual Action Plan as presented and that, in the event the annual grant amount from the U.S. Department of Housing and Urban Development is either less than or more than anticipated, staff is authorized to make appropriate pro rata adjustments to the categories of Public Services, Planning and Administration, and Community Economic Revitalization Funding (CERF)." Public Services and Planning and Administration are subject to a cap determined by a percentage of the annual allocation, 15% and 20% respectively. Community Economic Revitalization Funding (CERF) is not subject to a cap, but typically represents the remaining 65% plus any prior year remaining funds being allocated. CERF includes the planned repayment of the Section 108 loan. The Commission recommendation ensures that in the event of an increase or decrease to the annual award amount, full payment of the Section 108 loan principal and interest would be budgeted with the pro rata adjustment made to the remaining CERF projects. Pro rata adjustments would be made to all allocations in Public Services and Planning and Administration. Thank you. CITY OF 4.1114, Federal Way The City of Federal Way ANNUAL ACTION KLAN ?41i April 207 Executive Summary AP -05 Executive Summary - 91.200(c), 91.220(b) 1. Introduction The City of Federal Way presents this One Year Action Plan for the 2017 Program Year Community Development Block Grant program funds. The City developed these funding decisions based upon Mayoral and City Council priorities, Human Services Commission recommendations, Community Services Division (CSD) staff analysis, public hearing comments, program performance information, and consultation with various service agencies and other stakeholders. 2. Summarize the objectives and outcomes identified in the Plan This Action Plan allocates a total of approximately $725,000 dollars in anticipated 2017 Community Development Block Grant Entitlement funds, Section 108 Loan funds, and CDBG program income to support the Community Development Block Grant program. The overall goals for the Action Plan are: • Improve and expand affordable housing options; • Expand businesses to create jobs and assist with the development of microenterprises; • Strengthen neighborhoods through the planning of strategic neighborhood revitalization efforts; and • Administer the Community Development Block Grant program to meet the community needs and HUD requirements. 3. Evaluation of past performance The City has been able to meet the needs of many low- and moderate - income households through its involvement as a member of the King County HOME Consortium. Activities implemented under that arrangement have succeeded in: 1) meeting the needs of homeowners through the City's housing repair program; 2) providing much needed services to help households to regain stability; 3) providing facilities and improvements to improve the quality of life; and 4) supporting economic development efforts for small businesses and microenterprise. During the period of the City's original 2012 -2016 Consolidated Plan, and the first two years of the 2015 -2019 HOME Consortium Consolidated Plan, the City of Federal Way worked closely with the community, nonprofit agencies, the private sector, the State of Washington, HUD, the faith -based community, and the philanthropic community to make solid progress towards goals. In 2016, the City of Federal Way reported in the Consolidated Annual Performance Evaluation Report (CAPER): • 8 households received support for housing repair and rehabilitation • 364 persons received assistance with public services • 84 persons received economic development - related assistance 4. Summary of Citizen Participation Process and consultation process The City had an established public participation process, as outlined below: • Notice of Funds Available for PY2017 CDBG Community Economic Revitalization Funds was published in the Federal Way Mirror on August 12, 2016. Federal Way Annual Action Plan 1 2017 • A public hearing was held on November 21, 2016, before the Human Services Commission to receive input on the preliminary 2017 -18 CDBG Public Services grant recommendations. • Request for public comments and input was emailed to stakeholders and service agencies on April 6, 2017 seeking input through May 16, 2017. • An opportunity for public comment will be provided on April 17, 2017, before the Human Services Commission to receive input on the 2017 Annual Action Plan. • A Notice of Public Hearing was published in the Federal Way Mirror on April 7, 2017, notifying the public of a public hearing to be held on May 16, 2017, and to announce the comment period on the 2017 Annual Action Plan. • A public hearing will be held on May 16, 2017, before the Federal Way City Council to receive input on the 2017 Annual Action Plan. 5. Summary of public comments To be included following the public comment period. 6. Summary of comments or views not accepted and the reasons for not accepting them To be included following the public comment period. 7. Summary To be included following the public comment period. The remainder of this report will provide details on how the City proposes to prioritize its investment. Federal Way Annual Action Plan 2 2017 PR -05 Lead & Responsible Agencies - 91.200(b) 1. Agency /entity responsible for preparing /administering the Consolidated Plan The City of Federal Way is responsible for preparing the Annual Action Plan and for the administration of the CDBG grant program and funding. Responsible Agency • Agency Role: CDBG Administrator • Name: Jeffrey Watson • Department /Agency: Community Development /Community Services Division The City of Federal Way, Community Services Division, is the lead agency for the CDBG Program. Jeffrey Watson, Community Services Manager, is the program administrator. Sarah Bridgeford, CDBG Coordinator, is the primary staff responsible for the day -to -day implementation of the program. Additionally, numerous non - profit agencies are responsible for administering programs funded by CDBG. These agencies and others were consulted during the development of the Annual Action Plan and are listed in the Consultation section of this document. Annual Action Plan Contact Information Sarah Bridgeford CDBG Coordinator 33325 8th Ave. S. Federal Way, WA 98003 -6325 (253) 835 -2651 (telephone) (253) 835 -2609 (facsimile) Sarah.Bridgeford @cityoffederalway.com Federal Way Annual Action Plan 3 2017 AP -10 Consultation - 91.100, 91.200(b), 91.215(1) 1. Introduction Consultation and citizen participation are important elements of the plan and its implementation. As part of its first Consolidated Plan, for 2012 -2016, the City created the Citizen Participation Plan for the City of Federal Way Consolidated Plan to guide the process, provide opportunities for citizen involvement throughout the development of the Plan, and provide input for the implementation and program evaluation phases in future years. During the process of developing the Plan, organizations (both public and private) were consulted and local groups participated in providing input on needs and proposed strategies. The City of Federal Way is an active partner and participant in local and regional community development and human services efforts. The City engages in ongoing coordination between other cities in South King County with common interests and needs for community development, as well as public policy organizations, housing providers, health providers, service agencies, and faith -based organizations that are extensively involved in providing support to low- and moderate - income persons and households, as well as the homeless. The City also works with members of the King County Consortium (Consortium) to conduct and participate in ongoing meetings with each other. The consortium includes stakeholders and public housing authorities (PHA's) including the King County Housing Authority and the Renton Housing Authority. In addition to the Consortium, the Continuum of Care is comprised of nonprofit housing and service providers, members of the Housing Development Consortium of Seattle -King County, the Public Health Department of Seattle and King County, Puget Sound Regional Council, South King County Human Services Planners, and the Washington State Department of Social and Health Services. This coordination and public meetings held as part of the planning and funding processes for federal formula grants and local funds take place regularly throughout the year and inform recommendations for decision making bodies such as the City's Human Services Commission. Provide a concise summary of the jurisdiction's activities to enhance coordination between public and assisted housing providers and private and governmental health, mental health and service agencies (91.215(1)). The City of Federal Way coordinates with All Home, which has been designated by the King County Council as the local homeless housing task force for King County. All Home was created to work with service providers and advise local government on the creation of a local homeless housing plan and to participate in a local homeless housing program. Federal Way works with King County and other communities in the Consortium to provide input and advice to All Home on local and sub - regional issues and needs regarding homelessness as well as housing and services for the homeless. Federal Way is a member of a committee that focuses on collaboration between service providers and housing providers. The City provides both CDBG and local funds to agencies that serve chronically homeless individuals and families, families with children, veterans, and unaccompanied youth. In addition, Federal Way is fortunate to have numerous churches and other faith -based groups that provide regular services and support to the homeless in our community. This includes meals, overnight shelter during the cold months, and shower and laundry services. The City also uses general fund dollars to fund the Reach Out Federal Way Annual Action Plan 4 2017 winter shelters for homeless men and women. Catholic Community Services provides case management for these shelters. Describe coordination with the Continuum of Care and efforts to address the needs of homeless persons (particularly chronically homeless individuals and families, families with children, veterans, and unaccompanied youth) and persons at risk of homelessness. Coordinating with King County's Continuum of Care (CoC) is critical to our region's implementation of the All Home Homelessness Strategic Plan, which is focused on making homelessness rare, brief, and one -time. The CoC has a continued prioritization of permanent housing while addressing a full continuum of housing from transitional housing with support services to permanent supportive housing for persons with disabilities. The City of Federal Way supports the continuum of housing including prevention, emergency housing, transitional, and permanent. The City's provides financial support of these efforts with both City general funds and CDBG funds and also commits staff time to the ongoing development and implementation of the system to address the needs of homeless persons. Efforts by the City and our many human services partners are targeted to help homeless persons meet three goals: • achieve residential stability; • increase their skill levels and /or incomes; and • strengthen their ability to influence decisions that affect their lives. The City participates and supports numerous coalitions and committees, such as the South King County Forum on Homelessness and All Home, the King County agency focused on ending homelessness. These valuable partnerships support Federal Way and the surrounding region's efforts to make homelessness rare, brief, and one -time. Describe consultation with the Continuum(s) of Care that serves the jurisdiction's area in determining how to allocate ESG funds, develop performance standards for and evaluate outcomes of projects and activities assisted by ESG funds, and develop funding, policies and procedures for the operation and administration of HMIS All projects receiving McKinney funding are required by HUD to apply for support through a local Continuum of Care. For King County, the Continuum of Care encompasses programs and activities within the borders of King County. The King County CoC priorities are set by All Home in King County. Federal Way staff contributes to the CoC by working collaboratively with All Home and with other communities, especially those in South King County, to provide input and cooperation with All Home and King County. Federal Way Annual Action Plan 5 2017 2. Agencies, groups, organizations and others who participated in the process and consultations • Birth to Three Family Development Center • All Home • ANEW • Boys and Girls Clubs of King County • Catholic Community Services of Western Washington • CHI Franciscan • Communities In Schools of Federal Way • Crisis Clinic • Courage360 • Domestic Abuse Women's Network (Dawn) • Dynamic Partners • Emergency Feeding Program • Federal Way Senior Center • Federal Way Community Caregiving Network • Fusion • HealthPoint • Hospitality House • Institute for Family Development • King County Sexual Assault Resource Center • Kent Youth & Family Services • King County Bar Foundation • Multi- Service Center • Nexus Youth and Family Services (formerly AYR) • Pediatric Interim Care Center • Puget Sound Training Center • Public Health of Seattle -King County • Sound Generations • Sound Mental Health • St. Vincent De Paul Society • Valley Cities Counseling & Consultation • Washington Engage • YWCA • City Of Federal Way Identify any Agency Types not consulted and provide rationale for not consulting To be included following the public comment period. Other local /regional /state /federal planning efforts considered when preparing the Plan The Continuum of Care (CoC), which is overseen by All Home King County. The City of Federal Way is working with All Home and other communities in South King County to implement the new Strategic Plan that replaces the Ten -Year Plan to end Homelessness. Federal Way Annual Action Plan 6 2017 AP -12 Participation - 91.401, 91.105, 91.200(c) 1. Summary of citizen participation process /Efforts made to broaden citizen participation Consultation and citizen participation are critical elements of the plan. The value of citizen participation includes: 1) hear the community's recommendations on how the City should invest its CDBG dollars; 2) consult with individuals who may not initiate contact with the City because of language /cultural differences or who do not come from experiences where government sought their opinions; and 3) convene public hearings and meetings to increase opportunities for housing providers, service agencies, and healthcare organizations to come together and discuss how they can coordinate services and pool funding to achieve the greatest impact. Such consultation and citizen participation are ongoing aspects of the City's administration of its CDBG program. The City regularly engages service providers and citizens in discussions regarding community development and human services needs. The City continuously seeks input by meeting with individuals and organizations on an ongoing basis. Organizations that receive funding are monitored throughout the year and discuss trends and emerging needs with City staff. The City also has planning and citizen participation specifically to address homelessness and community development by meeting regularly with human service providers, other local cities, and other funders to seek solutions to local and regional community development problems. Federal Way Annual Action Plan 7 2017 Expected Resources AP -15 Expected Resources — 91.420(b), 91.220(c) (1, 2) Introduction The City of Federal Way anticipates having the following funding sources available during the 2016 Program Year: • CDBG • Program Income • City General Fund (targeted to human services /public services) • Section 108 Loan Anticipated Resources Table 1- Expected Resources — Priority Table Program Source of Funds Uses of Funds Expected Amount Available Year 1 Expected Amount Available Remainder of Con. Plan $ Narrative Description Annual Allocation: $ Program Income: $ Prior Year Resources: $ Total: $ CDBG public - federal Acquisition, Admin and Planning, Economic Development, Housing, Public Improvements, Public Services $620,000 54,800 $1,021,404 $1,646,204 $1,240,000 CDBG funds leverage additional federal and state funds. Agencies are able to combine funding sources in order to provide a wider range of services to the community. Federal Way Annual Action Plan 8 2017 Program Source of Funds Uses of Funds Expected Amount Available Year 1 Expected Amount Available Remainder of Con. Plan $ Narrative Description Annual Allocation: $ Program Income: $ Prior Year Resources: $ Total: $ General Fund public - local Public Services $516,000 $0 $0 $516,000 $1,032,000 The City provides general fund grants annually to agencies and organizations that deliver services in support of low - and moderate - income persons and households, those with special needs, and the homeless. These funds are used in cooperation with CDBG public services dollars. Federal Way Annual Action Plan 9 2017 Program Source of Funds Uses of Funds Expected Amount Available Year 1 Expected Amount Available Remainder of Con. Plan $ Narrative Description Annual Allocation: $ Program Income: $ Prior Year Resources: $ Total: $ Section 108 public - federal Economic Development, Public Improvements $105,000 $0 $0 $105,000 $0 The City is using a Section 108 Loan as part of the funding to develop the PAEC. The loan is based upon the Section 108 Loan Fund in the amount of $3,030,000 established by the City and approved by HUD in 2014. The loan for the PAEC will take advantage of the full amount of the loan fund in 2016 and 2017. The debt service for the loan will be covered by a portion of the CDBG annual grant over the 20 -year term of the loan. The annual debt service is expected to be approximately $200,000. Explain how federal funds will leverage those additional resources (private, state, and local funds), including a description of how matching requirements will be satisfied CDBG funds do not require a match. CDBG funding for public services and public facility projects is only a portion of the total funding required. The City encourages applicants to secure other funding for projects in order to leverage resources to the extent possible. Federal Way Annual Action Plan 10 2017 If appropriate, describe publically owned land or property located within the jurisdiction that may be used to address the needs identified in the plan The City of Federal Way owns the property upon which the proposed Performing Arts and Entertainment Center (PAEC) is being built. As described previously in this plan, the PAEC will generate jobs both directly and via acting as a catalyst for redevelopment of the City Center area in Federal Way, resulting in additional jobs. Because the City will be using Section 108 Loan funds in support of the PAEC development, jobs created through the facility and as a result of related development will be available for low- and moderate - income persons. Discussion CDBG and Section 108 Loan funds will be used to support eligible- activities in accordance with CDBG regulations. Federal Way Annual Action Plan 11 2017 Annual Goals and Objectives AP -20 Annual Goals and Objectives - 91.420, 91.220(c)(3) &(e) Goals Summary Information Table 2 - Goals Summary Sort Order Goal Name Start Year End Year Category Needs Addressed 1 EXPAND ECONOMIC OPPORTUNITIES 2016 2019 Non - Housing Community Development Economic Development and Job Growth Funding Goal Outcome Indicator CDBG: $342,000 Section 108: $105,000 Jobs created /retained: 13 Jobs Businesses assisted: 4 Businesses Assisted People Assisted: 168 People Goal Name Start Year End Year Category Needs Addressed 2 PROVIDE DECENT, AFFORDABLE HOUSING 2016 2019 Affordable Housing Affordable Housing Preservation Funding Goal Outcome Indicator CDBG: $240,000 Homeowner Housing Added: 1 Household Housing Unit Goal Name Start Year End Year Category Needs Addressed 3 ESTABLISH SUITABLE LIVING ENVIRONMENTS 2016 2016 Non - Housing Community Development Ensure a Suitable Living Environment Funding Goal Outcome Indicator CDBG: $440,500 Public Service activities other than Low -and Moderate - Income Housing Benefit: 288 Persons Assisted Families assisted with Housing Repair: 16 Federal Way Annual Action Plan 12 2017 AP -35 Projects - 91.420, 91.220(d) Introduction Federal Way's Annual Action Plan provides descriptions of proposals of how funds will be prioritized to achieve goals identified in the Consolidated Plan. Projects funded by the City will address the priority needs of providing assistance to prevent homelessness, ensure affordable housing, expand economic opportunity, and provide a suitable living environment. Projects and programs are selected through a competitive application process to ensure optimal quality services are provided to the community in use of the funds. Table 3 — Project Information # Project Name 1 Program Administration 2 Housing Repair Program 3 Debt Service on Federal Way PAEC Section 108 Loan 4 Code Compliance 5 Federal Way Community Center Inclusion Program 6 Hospitality House 7 MSC Rental Assistance 8 MSC YES Program 9 Orion Employment Services 10 Pediatric Interim Care Center 11 Apprenticeship & Non - traditional Employment for Women (ANEW) 12 Microenterprise Business Technical Assistance (SBDC) 13 Microenterprise Technical Assistance (StartZone) 14 Low- and Moderate - Income Community Development Needs Assessment 15 Multi- Service Center Villa Capri 16 Habitat for Humanity Acquisition 17 Habitat for Humanity Home Repair 18 King County Housing Authority Economic Revitalization Program Describe the reasons for allocation priorities and any obstacles to addressing underserved needs In establishing the priorities for activities to meet the needs of the City, activities are being considered which are likely to be of high impact. The City looked to its own initiatives and goals to determine how to best to build on efforts already underway which could impact the economic problems affecting low - and moderate - income persons. This has led the City to develop strategies with a focus on economic revitalization activities and job creation, safety net /self- sufficiency services, and protecting /enhancing housing owned or rented by low- and moderate - income households. In order to continue services helping populations who are risk, the City allocated the maximum possible to services that have proven to be effective in the past. The City placed a significant amount of the Federal Way Annual Action Plan 2017 13 resources into the economic development activities for job creation and allocated funding for microenterprise technical assistance; and, in order to begin working on affordable housing needs, identified funds to maintain owner - occupied housing. The City has chosen to place 100% of program funds toward activities which primarily benefit low- and moderate- income households and will assure that a minimum of 70% of program resources will benefit low- and moderate - income households. Federal Way Annual Action Plan 14 2017 AP -38 Project Summary Project Summary Information Federal Way Annual Action Plan 2017 . 15 Project Name Program Administration Target Area Goals Supported EXPAND ECONOMIC OPPORTUNITIES PROVIDE DECENT AFFORDABLE HOUSING ESTABLISH SUITABLE LIVING ENVIRONMENTS Needs Addressed Economic Development and Job Growth Affordable Housing Preservation Ensure a Suitable Living Environment Funding CDBG: $92,520 Description CDBG Program Planning & Administration for PY2015 Target Date 12/31/2017 Estimate the number and type of families that will benefit from the proposed activities Location Description 33325 8th Avenue S, Federal Way, WA 98003 Planned Activities CDBG Administration 2 Project Name Housing Repair Program Target Area Goals Supported ESTABLISH SUITABLE LIVING ENVIRONMENTS Needs Addressed Ensure a Suitable Living Environment Funding CDBG: $175,000 Description Housing repair program helping low /low mod income homeowners repair their homes to a safe condition. Target Date 12/31/2017 Estimate the number and type of families that will benefit from the proposed activities 9 Families (20 individuals) will benefit from this program. Location Description Recipients must be homeowners living in the City of Federal Way. Planned Activities Housing repair for extremely low -, low -, and moderate - income homeowners. Work is primarily focused on interior health and safety issues, though roofs and ADA accessibility improvements are also considered on a case -by -case basis. Federal Way Annual Action Plan 2017 . 15 3 Project Name Debt Service on Federal Way PAEC Section 108 Loan Target Area Goals Supported EXPAND ECONOMIC OPPORTUNITIES Needs Addressed Economic Development and Job Growth Funding CDBG: $179,000 Description Annual Debt Service on Federal Way PAEC Section 108 Loan including quarterly Interest payments until the loan is permanent and one anticipated principal payment in 2017 should the loan become permanent. Target Date 12/31/2017 Estimate the number and type of families that will benefit from the proposed activities 7 jobs will be created. Location Description 31510 20th Avenue South, Federal Way, WA 98003 Census Tract #53033030006 Planned Activities Debt service on the expected Section 108 Loan for the PAEC. A portion of the annual grant will be directed to debt service for the Section 108 Loan for the full term of the loan, which will be 20 years. The annual amount for a full year of debt service is expected to be approximately $200,000 per year over the 20 -year term. 4 Project Name Code Compliance Target Area Goals Supported ESTABLISH SUITABLE LIVING ENVIRONMENTS Needs Addressed Ensure a Suitable Living Environment Funding CDBG: $76,000 Description Support for staff to engage in code compliance related to City Zoning and related codes. Target Date 12/31/2017 Estimate the number and type of families that will benefit from the proposed activities Location Description Census tracts and /or block groups at or above 51% low- and moderate - income and either with signs of deterioration or in a deteriorated condition. Planned Activities Code Compliance Federal Way Annual Action Plan 2017 16 5 Project Name Federal Way Community Center Inclusion Program Target Area Goals Supported ESTABLISH SUITABLE LIVING ENVIRONMENTS Needs Addressed Ensure a Suitable Living Environment Funding CDBG: $30,500 Description The Inclusion Program provides social activities and classes for developmentally disabled adults. Target Date 12/31/2017 Estimate the number and type of families that will benefit from the proposed activities 207 disabled individuals will benefit from this activity. Location Description The majority of activities will be provided at the Federal Way Community Center (876 S. 333rd Street, Federal Way, WA 98003). Some activities, such as camping trips, will be provided off -site. Planned Activities Social activities, such as recreational classes, life skills training, trips, and others will be provided. 6 Project Name Hospitality House Target Area Goals Supported ESTABLISH SUITABLE LIVING ENVIRONMENTS Needs Addressed Ensure a Suitable Living Environment Funding CDBG: $13,500 Description Homeless Women's Shelter Target Date 12/31/2017 Estimate the number and type of families that will benefit from the proposed activities 5 individuals will benefit from this activity. Location Description Shelter services will be provided at 1419 SW 150th Street, Burien, WA 98166. Planned Activities Provide shelter and case management services to homeless women. Federal Way Annual Action Plan 17 2017 7 Project Name MSC Rental Assistance Target Area Goals Supported ESTABLISH SUITABLE LIVING ENVIRONMENTS Needs Addressed Ensure a Suitable Living Environment Funding CDBG: $20,000 Description Multi- Service Center will provide rental assistance to eligible Federal Way residents in crisis. Target Date 12/31/2017 Estimate the number and type of families that will benefit from the proposed activities 46 individuals will benefit from rental assistance. Location Description Services will be provided at the Multi- Service Center (1200 S. 336th Street, Federal Way, WA 98003). Planned Activities Individuals will receive short -term rental assistance to prevent eviction. 8 Project Name MSC YES Program Target Area Goals Supported EXPAND ECONOMIC OPPORTUNITIES Needs Addressed Economic Development and Job Growth Funding CDBG: $9,000 Description YES helps youth ages 16 - 24 to obtain their GED, secure employment and continue post- secondary schooling, as appropriate, while helping them to establish and work toward careers and living wage employment. Target Date 12/31/2017 Estimate the number and type of families that will benefit from the proposed activities 15 individuals between the ages of 16 and 24 will benefit. Location Description Training for the program will occur at the Multi- Service Center (1200 S. 336th Street, Federal Way, WA 98003). Planned Activities Classes and training to help youth obtain their GED, secure employment, continue post- secondary schooling. Federal Way Annual Action Plan 18 2017 9 Project Name Orion Employment Services Target Area Goals Supported ESTABLISH SUITABLE LIVING ENVIRONMENTS Needs Addressed Ensure a Suitable Living Environment Funding CDBG: $9,000 Description Employment Services for disabled adults. Target Date 12/31/2017 Estimate the number and type of families that will benefit from the proposed activities 2 individuals will benefit from this activity. Location Description Job training will be provided at 1590 A Street NE, Auburn, WA 98002. Planned Activities Vocational counseling and skills training to obtain employment. 10 Project Name Pediatric Interim Care Center Target Area Goals Supported ESTABLISH SUITABLE LIVING ENVIRONMENTS Needs Addressed Ensure a Suitable Living Environment Funding CDBG: $6,000 Description Interim care of drug- exposed infants. Target Date 12/31/2017 Estimate the number and type of families that will benefit from the proposed activities 1 infant will benefit from this activity. Location Description Services will be provided at 328 4th Avenue S, Kent, WA 98032. Planned Activities PICC's services include infant transportation, 24 -hour medical monitoring, nursing care, physician visits, narcotic assisted withdrawal, nutritional support for feeding difficulties, and other interim -level medical support (oxygen, PIC lines, etc.) as needed. PICC's social work staff facilitates family visitation, liaises with DSHS, and follows infants for six months after discharge to assure that they continue to thrive. PICC also provides educational and outreach services to the community on the recognition and care of drug- affected infants. Federal Way Annual Action Plan 2017 19 11 Project Name Apprenticeship & Non - traditional Employment for Women (ANEW) Target Area Goals Supported EXPAND ECONOMIC OPPORTUNITIES Needs Addressed Economic Development and Job Growth Funding CDBG: $5,000 Description Pre - apprenticeship training and employment services Target Date 12/31/2017 Estimate the number and type of families that will benefit from the proposed activities 3 individuals will receive job training and employment services /case management. Location Description Activities will be provided at Apprenticeship & Non - traditional Employment for Women (ANEW) (550 SW 7th Street, Renton, WA 98057) Planned Activities Individuals participate in one of two tracks: 1) Trades Rotation Program, a 12 week pre- apprenticeship training program with job placement and retention services for women in manufacturing and construction trades and 2) the Career Connection Program, wrap- around employment services focusing on job placement and retention. 12 Project Name Microenterprise Business Technical Assistance (SBDC) Target Area Goals Supported EXPAND ECONOMIC OPPORTUNITIES Needs Addressed Economic Development and Job Growth Funding CDBG: $25,000 Description Technical Assistance to microenterprise business owners. Target Date 12/31/2017 Estimate the number and type of families that will benefit from the proposed activities 30 individuals will receive technical assistance. Location Description Activities will be provided at Highline College (2400 S. 240th Street, Des Moines, WA 98198) Planned Activities Small Business Development Center business advisors will provide one -to- one technical assistance and advising to business owners looking to start or grow their businesses. Federal Way Annual Action Plan 20 2017 13 Project Name Microenterprise Technical Assistance (StartZone) Target Area Goals Supported EXPAND ECONOMIC OPPORTUNITIES Needs Addressed Economic Development and Job Growth Funding CDBG: $62,000 Description Microenterprise Technical Assistance to entrepreneurs and start -up businesses Target Date 12/31/2017 Estimate the number and type of families that will benefit from the proposed activities 60 individuals will benefit from technical assistance activities. Location Description Activities will be provided at Highline College (2400 S. 240th Street, Des Moines, WA 98198) Planned Activities Activities improve the self- sufficiency of Federal Way residents /business owners by providing educational interventions that are aimed at enhancing small business, self - employment, and micro - enterprise in Federal Way. 14 Project Name Low- and Moderate - Income Community Development Needs Assessment Target Area Goals Supported EXPAND ECONOMIC OPPORTUNITIES PROVIDE DECENT AFFORDABLE HOUSING ESTABLISH SUITABLE LIVING ENVIRONMENTS Needs Addressed Economic Development and Job Growth Affordable Housing Preservation Ensure a Suitable Living Environment Funding CDBG: $31,480 Description This project will assess the entire community for community development and public service needs. Target Date 12/31/2017 Estimate the number and type of families that will benefit from the proposed activities This activity is intended to assess community development and human services needs in the City of Federal Way. As such, it will not directly benefit persons and families; rather, the Assessment will be used to develop new funding strategies for programs that address needs across the community, and serve as a guide for allocation of both Federal and City funding in the years to come, which will directly benefit low- and moderate - income persons and families. Location Description This activity will assess conditions throughout the City. Planned Activities Engage a consultant to work with City of Federal Way staff to identify and assess the community development and human services needs for the City, as well as make recommendations regarding prioritizing funding to support programs that will address the needs identified in the assessment. Federal Way Annual Action Plan 2017 21 15 Project Name Multi- Service Center Villa Capri Target Area Goals Supported PROVIDE DECENT AFFORDABLE HOUSING ESTABLISH SUITABLE LIVING ENVIRONMENTS Needs Addressed Affordable Housing Preservation Ensure a Suitable Living Environment Funding CDBG: $30,500 Description Renovate and expand the playground. Target Date 12/31/2017 Estimate the number and type of families that will benefit from the proposed activities Location Description This activity will take place at 28621 25th Place S, Federal Way, WA 98003. Planned Activities Renovate and expand the common area playground to be suitable and safe for use by families and children. 16 Project Name Habitat for Humanity Home Acquisition Target Area Goals Supported PROVIDE DECENT AFFORDABLE HOUSING Needs Addressed Affordable Housing Preservation Funding CDBG: $240,000 Description Habitat for Humanity will purchase an existing home for a new homeowner. Target Date 12/31/2017 Estimate the number and type of families that will benefit from the proposed activities One family will benefit. The selected family will: • earn 60% or less of the Area Median Income; • have a demonstrated need for affordable housing; • have an adequate income to pay a mortgage; and • have willingness to partner with Habitat while investing sweat equity and completing homebuyer education classes. Location Description Home will be located in Federal Way. Specific address to be determined. Planned Activities Habitat for Humanity will purchase one single - family home in Federal Way. Federal Way Annual Action Plan 22 2017 17 Project Name Habitat for Humanity Home Repair Target Area Goals Supported ESTABLISH SUITABLE LIVING ENVIRONMENTS Needs Addressed Ensure a Suitable Living Environment Funding CDBG: $80,000 Description Habitat for Humanity will provide home repair on exterior of LMI homes. Target Date 12/31/2017 Estimate the number and type of families that will benefit from the proposed activities 8 homes /8 families will benefit from the Habitat housing repair project. Families will be at or below 80% of the area median income. Location Description Homes will be located in Federal Way Specific addresses to be determined. Planned Activities The critical repair work will focus on exterior repairs that address safety concerns or physical structure deterioration. Roof repairs, stairs, port railings, access ramps, and siding are examples of projects that would be undertaken. 18 Project Name King County Housing Authority Economic Revitalization Project Target Area Goals Supported EXPAND ECONOMIC OPPORTUNITIES Needs Addressed Economic development and job growth Funding CDBG: $62,000 Description Provide an employment training program. Target Date 12/31/2017 Estimate the number and type of families that will benefit from the proposed activities 60 low- to moderate- income families will be served. Location Description 2217 South 333rd Street, Federal Way, WA 98003 29505 215t Avenue South, Federal Way, WA 98003 Planned Activities Training will be provided to low- income residents and will be for specific jobs with the potential of employment with specific employers. Federal Way Annual Action Plan 23 2017 AP -50 Geographic Distribution - 91.420, 91.220(f) Description of the geographic areas of the entitlement (including areas of low- income and minority concentration) where assistance will be directed The City of Federal Way will direct assistance throughout the community as needed. Rationale for the priorities for allocating investments geographically Persons and households in need exist throughout the City and resources are to be allocated as needed. Federal Way Annual Action Plan 24 2017 AP -85 Other Actions - 91.420, 91.220(k) Introduction The City of Federal Way has been and will remain involved in collaborative efforts that serve the needs of low- and moderate - income persons and households, the homeless, and those with special needs. The City participates on numerous committees, boards, and the like and works directly with agencies and organizations that provide services in order to enhance the level and quality of services in Federal Way and throughout South King County. Actions planned to address obstacles to meeting underserved needs The City is working with other communities in South King County to establish and enhance strong networks for community development and human services delivery. This includes working with service providers, stakeholders, the faith -based community, other government agencies, and those we serve directly to identify and overcome or mitigate barriers to meeting underserved needs. There are both on -going discussions among the parties to share information about current issues, as well as longer term planning to develop strategies, build public awareness, and enhance the support of elected officials for increased resources for the underserved. Actions planned to foster and maintain affordable housing The City operates the Home Repair Program, which is funded by CDBG and serves low- and moderate - income homeowners in Federal Way. The program provides emergency and standard repair and renovation services that help families remain in their homes. The program is a means of retaining and enhancing affordable housing and serves to support aging in place, as well as strengthening the neighborhoods in which the homes are located. Actions planned to reduce lead -based paint hazards No actions are planned. Actions planned to reduce the number of poverty -level families Actions to reduce the number of poverty level families include funding small business and micro - enterprise training and technical assistance. Additionally, actions include maintaining and enhancing relationships with school -based mentoring programs that lead to increased graduation and college acceptance, working with businesses in the Town Center area adjacent to the PAEC to hire low- income residents consistent with the public benefit standards for the proposed Section 108 Loan, and outreach to increase opportunities for low- income residents to obtain livable wage jobs. Actions planned to develop institutional structure No actions are planned. Federal Way Annual Action Plan 25 2017 Actions planned to enhance coordination between public and private housing and social service agencies The City of Federal Way has regularly fostered relationships between these entities and will continue to develop and participate in these collaborations, including the South King Council of Human Services, South King County Housing Development Group, the King County Housing Development Consortium, South King Housing and Homelessness Partnership (SKHHP). As part of the SKHHP work group, the City of Federal Way and other local cities work with agencies to develop the system and advocate for coordination between housing and social service agencies. Discussion The expressed goal of the CDBG Program is to reduce the number of people living in poverty. The City gives funding priority to programs that, in addition to complying with Federal regulations, address a priority outlined in the Consolidated Plan, and are consistent with all of the goals and objectives identified. Federal Way Annual Action Plan 26 2017 Program Specific Requirements AP -90 Program Specific Requirements - 91.420, 91.220(1)(1,2,4) Introduction As a member of the King County HOME Consortium, the City of Federal Way will engage in housing activities, collaborations, and partnerships to enhance opportunities for equitable development and the creation /preservation of affordable housing. The Consortium will plan for and support fair housing strategies and initiatives designed to affirmatively further fair housing choice and to increase access to housing and housing programs. We value working together collectively to continue the work to develop a cohesive and coordinated homeless system that is grounded in the principle of Housing First and fosters shared outcomes. We are not a one size fits all system and as such, we invest in projects that ensure that homeless households from all sub - populations: • are treated with dignity and respect; • are returned to permanent housing as quickly as possible; • receive strength -based services that emphasize recovery, as needed; • are supported to graduate from temporary homeless housing as rapidly as possible and from permanent supportive housing as soon as they are ready; • receive only what they need to return to housing quickly and to be as self - reliant as possible. To establish and maintain a suitable living environment and expand economic opportunities for low- and moderate - income people, our investments across the Consortium in low- income communities, and for the benefit of low- income people, help to ensure equitable opportunities for good health, happiness, safety, self - reliance, and connection to community. Specific strategies include: 1) improve the ability of health and human services agencies to serve our low -and moderate - income residents safely and effectively; 2) improve the living environment in low -and moderate - income neighborhoods and communities; and 3) expand economic opportunities for low- to moderate - income residents of the Consortium. Community Development Block Grant Program (CDBG) — Reference 24 CFR 91.220(1)(1) Projects planned with all CDBG funds expected to be available during the year are identified in the Projects Table. The following identifies program income that is available for use that is included in projects to be carried out. 1. The total amount of program income that will have been received before the start of the next program year and that has not yet been reprogrammed: 2. The amount of proceeds from Section 108 Loan guarantees that will be used during the year to address the priority needs and specific objectives identified in the grantee's strategic plan: so so 3. The amount of surplus funds from urban renewal settlements: $0 4. The amount of any grant funds returned to the line of credit for which the planned use has not been included in a prior statement or plan: $0 5. The amount of income from float- funded activities: $0 Federal Way Annual Action Plan 27 2017 Other CDBG Requirements 1. The amount of urgent need activities: 2. The estimated percentage of CDBG funds that will be used for activities that benefit persons of low- and moderate - income. Overall Benefit - A consecutive period of one, two, or three years may be used to determine that a minimum overall benefit of 70% of CDBG funds is used to benefit persons of low- and moderate - income. For PY2016, the percentage in this Annual Action Plan: so 100.0% Federal Way Annual Action Plan 28 2017 COUNCIL MEETING DATE: May 16, 2017 CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL ITEM #: 7a SUBJECT: RESOLUTION: AUTHORIZATION OF NEW MARKETS TAX CREDITS FINANCING TRANSACTION POLICY QUESTION: Should the Council authorize the funding of a New Markets Tax Credits financing transaction to provide funds for the completion of construction of the City of Federal Way Performing Arts and Event Center? COMMITTEE: MEETING DATE: May 16, 2017 CATEGORY: ❑ Consent • City Council Business ❑ Ordinance ❑ Public Hearing ® Resolution ❑ Other STAFF REPORT BY: Ade Ariwoola Attachments: • Resolution • Exhibit A DEPT: Finance Options Considered: 1. Authorize the funding of a New Markets Tax Credits financing transaction to provide funds for the completion of construction of the City of Federal Way Performing Arts and Event Center. 2. Do not authorize the funding of a New Markets Tax Credits financing transaction to provide funds for the completion of construction of the City of Federal Way Performing Arts and Event Center and provide direction to staff. MAYOR'S RECOMMENDATION: Authorize the funding of a New Markets Tax Credits financing transaction to provide funds for the completion of construction of the City of Federal Way Performing Arts and Event Center. MAYOR APPROVAL: Co mittee Cou 11 Initial/Date / Initial/Date DIRECTOR APPROVAL: /7 Initial/Date COMMITTEE RECOMMENDATION: 1 move to forward the Resolution: Authorization of New Markets Tax Credits financing transaction to the May 16, 2017 consent agenda for approval. Committee Chair Committee Member Committee Member PROPOSED COUNCIL MOTION: "1 move approval of the Resolution: New Markets Tax Credits financing transaction (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) ' COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED 1ST reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED— 11/2016 RESOLUTION # RESOLUTION NO. A RESOLUTION of the City of Federal Way, Washington, authorizing the funding of a New Markets Tax Credits financing transaction to provide funds for the completion of construction of the City of Federal Way Performing Arts and Event Center. WHEREAS, the City of Federal Way, a Washington municipal corporation (the "City ") has been engaged in the development of the property located at 31510 Pete von Reichbauer Way South, Federal Way, WA 98063 (the "Property ") for use as a performing arts and event facility (collectively, the "Project "); WHEREAS, FW PAEC QALICB, a Washington nonprofit corporation (the "Corporation "), has been organized to facilitate financing a portion of the costs of developing the Project using federal New Markets Tax Credits (the "NMTCs ") and is intended to operate as a "qualified active low income community business" pursuant to Section 45D of the Internal Revenue Code of 1986, as amended (the "Code "); WHEREAS, in connection with the NMTC financing of the Project, the City will make a loan in the aggregate principal amount of $6,239,600 (the "Leverage Loan ") to COCRF Investor 77, LLC, a Delaware limited liability company ( "Investment Fund"), and an in -kind contribution in the currently estimated amount of $8,736,831 to the Corporation; WHEREAS, Investment Fund will use the proceeds of the Leverage Loan and the proceeds of the equity investment of the sole member of the Investment Fund, Capital One, National Association, a national banking association ( "Investor "), in the Investment Fund to make a qualified equity investment (the "QEI") in Clearinghouse NMTC (Sub 46), LLC, a California limited liability company ( "Lender "); WHEREAS, Lender will make certain loans of a portion of the proceeds of the QEI in the aggregate principal amount of $9,310,000 (the "QLICI Loan ") to the Corporation; WHEREAS, on the date of the closing of the Project financing (the "Closing Date "), the City will lease the Property to the Corporation pursuant to that certain Ground Lease by and between the City and the Corporation (the "Ground Lease "); WHEREAS, the Corporation's obligations under the QLICI Loan will be secured by that certain Leasehold Deed of Trust, Security Agreement and Fixture Filing on the Property, dated as of the Closing Date, executed by the Corporation, as grantor, in favor of the Lender, as beneficiary (together with all modifications, amendments, restatements and replacements thereof, the "Leasehold Deed of Trust "), encumbering the Project; WHEREAS, on the Closing Date, the Corporation shall sublease the Property back to the City pursuant to that certain Sublease Agreement by and between the Corporation and the City Resolution No. 36254039v2 (the "Sublease"); WHEREAS, on the Closing Date, the Corporation shall reimburse the City for costs expended in connection with the Project pursuant to that certain Reimbursement, Assignment, and Assumption Agreement by and between the Corporation and the City (the "Reimbursement Agreement "), and shall certify as to such incurred costs pursuant to that certain Reimbursement Certification and Compliance Agreement by and between the Corporation and the City (the "Reimbursement Certification and Compliance Agreement"); WHEREAS, in connection with the borrowing of the QLICI Loan, legal counsel for the Corporation is required to issue certain legal opinions (the "Opinions "), and the Corporation and the City shall make certain certifications for purposes of reliance thereon in the form of one or more Opinion Certificates (the "Opinion Certificates "); and WHEREAS, drafts of the documents listed in Exhibit A attached to this Resolution to be executed in connection with foregoing, along with certain other ancillary memoranda, documents and certificates related thereto, including, but not limited to, the Reimbursement Agreement, the Reimbursement Certification and Compliance Agreement, and that certain QALICB Indemnification Agreement, by and among the Corporation, the City, and Investor (herein collectively referred to as the "Financing Documents ") have been presented to, considered and approved by the City Council of the City of Federal Way (the "Council "). NOW, THEREFORE, BE IT RESOLVED, as follows: 1. Resolved, that the Council does hereby approve, authorize, ratify and confirm (a) the execution and delivery by the City of the Financing Documents to which the City is a party, substantially in the form presented to the Council with such changes as the Authorized Representative (defined below) may deem necessary or appropriate, and (b) the consummation of all the transactions described in the recitals to this resolution and contemplated by the Financing Documents. 2. Resolved, that the City shall be, and hereby is, authorized to undertake and perform all of its obligations under the Financing Documents to which it is a party, and all such other agreements, documents, instruments and authorizations, as may be necessary or appropriate for the Corporation to obtain the QLICI Loan. 3. Resolved, that the City shall be, and hereby is, authorized to take any and all other actions, and to enter into, execute and deliver any such documents, as may be necessary or appropriate in connection with the Project, and to perform its obligations under such documents. 4. Resolved, that the Mayor of the City, in his capacity as the authorized representative of the City (the "Authorized Representative "), acting alone, is hereby authorized and directed to execute and deliver the Financing Documents to which the City will be a party in substantially the form presented to the City Council, with such changes or additions thereto, or 2 Resolution No. 36254039v2 deletions therefrom, as such Authorized Representative shall approve, which shall be conclusively evidenced by his execution of such instruments. 5. Resolved, that the Mayor of the City, acting alone, is hereby authorized to enter into such other agreements and to take all such other actions as may be necessary or required of the City in connection with the QLICI Loan and the other agreements described in the foregoing resolutions and any and all such other documents on the terms and conditions set forth in the forms thereof provided to the City Council or upon such other or additional terms as the City Council shall deem appropriate. 6. Resolved, that the Mayor of the City is hereby authorized to enter into such other agreements and to take all such other actions as may be necessary or required of the City in connection with the Financing Documents and to consummate the transactions contemplated by the Financing Documents. 7. Severability. If any section, sentence, clause or phrase of this resolution should be held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of any other section, sentence, clause or phrase of this resolution. 8. Corrections. The City Clerk and the codifiers of this resolution are authorized to make necessary corrections to this resolution including, but not limited to, the correction of scrivener /clerical errors, references, resolution numbering, section/subsection numbers and any references thereto. 9. Ratification. Any act consistent with the authority and prior to the effective date of this resolution is hereby ratified and affirmed. 10. Effective Date. This resolution shall be effective immediately upon passage by the Federal Way City Council. [Remainder of Page Intentionally Left Blank] 3 Resolution No. 36254039v2 RESOLVED BY THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON this day of , 2017. ATTEST: Name: Stephanie Courtney Title: CMC, City Clerk APPROVED AS TO FORM: Name: J. Ryan Call Title: City Attorney FILED WITH THE CITY CLERK: PASSED BY THE CITY COUNCIL: RESOLUTION NO.: Resolution No. CITY OF FEDERAL WAY: MAYOR, JIM FERRELL EXHIBIT A FINANCING DOCUMENTS 1. Fund Loan Agreement by and between City and Investment Fund; 2. Fund Pledge Agreement by and between City and Investment Fund; 3. Environmental and Hazardous Substances Indemnity Agreement executed by Corporation and City in favor of Lender; 4. Completion and Repayment Guaranty by City in favor of Lender; 5. QALICB Indemnification Agreement by Corporation and City in favor of Investor; 6. Reimbursement Certification and Compliance Agreement; 7. Ground Lease; 8. Memorandum of Ground Lease by and between Corporation and City; 9. Sublease; 10. Memorandum of Sublease by and between Corporation and City; 11. Reimbursement Agreement; 12. Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion — Lower Tier Covered Transactions executed by City; 13. Flow of Funds Closing Memorandum; and 14. Opinion Certificates. Resolution No. 36254039v2 FINANCING DOCUMENTS 1. Fund Loan Agreement by and between City and Investment Fund JD Draft 5/1/17 FUND LOAN AGREEMENT THIS FUND LOAN AGREEMENT (this "Agreement "), dated as of [ ], 2017 (the "Effective Date "), is entered into by and between CITY OF FEDERAL WAY, a Washington municipal corporation ( "Lender "), and COCRF INVESTOR 77, LLC, a Delaware limited liability company ( "Borrower "). RECITALS 4 A. Borrower has requested that Lender provide a loan (the "Loan ") in the original principal amount of $[6,239,600]. B. Concurrently with the execution of this Agreement, Borrower is executing and delivering to Lender that certain Fund Promissory Note for the original principal amount of the Loan (as the same may be amended, assigned, restated, modified, or supplemented from time to time, the "Note "). The Note evidences the Loan. C. Concurrently with the execution of this Agreement, Lender and Borrowe are entering into that certain Fund Pledge Agreement (as the same may be amended, assigned, restated, modified, or supplemented from time to time, the "Pledge = .eement "). Tii&J3ledge The Agreement secures the payment and performance of Borrower's obligation reement.' D. On the Effective Date, Ca pi ne; ational Association, anational banking association (together with its successors and assigns, "Investor ") is making a capital contribution in the amount of $[3,260,400] in Borrower pursuant to the terms and conditions set forth in the Borrower OA (as such term is defined below). E. On the Effective Date, Borrower will use the proceeds of the Loan and Investor's equity investment solely for the purposes set forth in Article IX of the Borrower OA. F. Clearinghouse NMTC (Sub 46), LLC, a California limited liability company ( "CDE "), is a "qualified community development entity" formed for the purpose of serving or providing investment capital for low- income communities or low- income persons (as such terms are defined for the purposes of Section 45D of the Internal Revenue Code of 1986 (as amended from time to time, the "Code ")). G. On the Effective Date, CDE will use substantially all of the proceeds of the CDE Investment (as such terns is defined in the Borrower OA) to make loans to FW PAEC QALICB, Inc., a Washington nonprofit corporation ( "Project Borrower "), in the aggregate original principal amount of $[9,310,000] (collectively, the "Project Loans "). The Project Loans will be evidenced by certain QLICI loan promissory notes dated as of the Effective Date (collectively, as the same may be amended, assigned, restated, modified, or supplemented from time to time, the "Project Notes "). H. Project Borrower will use the proceeds of the Project Loans in accordance with the terms of the Project Loan Agreement (as such term is defined below). I. Lender has agreed to make the Loan to Borrower upon and subject to all of the terms, conditions, covenants and agreements of this Agreement. NAM 502609375v3 NOW, THEREFORE, in consideration of the mutual promises and agreements hereinafter contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Section 1. LOAN TERMS. Section 1.1 Definitions. All capitalized terms listed in the introductory paragraph and Recitals to this Agreement have the meanings assigned to them therein, and all capitalized terms not otherwise expressly defined herein have the meanings assigned to them in the Borrower OA. In addition, the following terms have the following meanings in this Agreement: 4 (a) "Anti- Terrorism Laws" means all laws relating to terrorism or money laundering, including, without limitation, the Executive Order and the Bank Secrecy Act, as amended by the USA Patriot Act. 44, ._ (b) "Borrower OA" means that certain First Amended and Restated Operating Statement of Borrower, dated as of the Effective Date, by Investor as the sole member, as the same may be amended, assigned, restated, modified, or supplemented from time to time in accordance therewith and with this Agreement. (c) "Borrower Organizational Documents" means any and all articles and/or certificates of formation, the Borrower OA, written consents, resolutions, and any other documents, including any amendments thereto, that govern the actions of Borrower and any of its me o , managers, or principals, as the same may be amended, modified, extended, or restated from time e in accordance therewith and with this Agreement. (d) "Business Day" has the meaning set forth in the Note. (e) "CDE Interest" has the meaning set forth in the Pledge Agreement. (f) "CDE OA" means that certain Amended and Restated Operating Agreement of CDE, dated as of the Effective Date, by and between Borrower, as investor and Class A member, Clearinghouse Community Development Financial Institution; a California corporation, as manager, and Clearinghouse NMTC,LLC, a Delaware' limited liability company, as Class B Member, and together with Class A Member the "Members'', as the same may be amended, assigned, restated, modified, or supplemented from time to time in accordance therewith and with this Agreement. (g) "Event of Default" means any of those events set forth in Section 5.1. (h) "Executive Order" means Executive Order No. 13224 on Terrorist Financing, effective September 23, 2001, including the Annex thereto, as amended from time to time. (i) "Financial Projections" means the financial projections dated on or about the Effective Date, compiled and certified by Novogradac & Company LLP in connection with the transactions contemplated by the Borrower OA and the CDE OA, including, without limitation, the Project Loans. (j) "Forbearance Termination Date" has the meaning set forth in Section 5.3(a). (k) "GAAP" means generally accepted accounting principles in the United States of America applied on a basis consistent with the accounting practices applied in the financial statements of Borrower, except for any change in accounting practices to the extent that, due to a promulgation of the 2 NAI -I 502609375v3 Financial Accounting Standards Board changing or implementing any new accounting standard, Borrower either (i) is required to implement such change, or (ii) for future periods will be required to and for the current period may in accordance with generally accepted accounting principles implement such change, for its financial statements to be in conformity with generally accepted accounting principles (any such change is hereinafter referred to as a "Required GAAP Change "); provided, that Borrower will fully disclose in such financial statements any such Required GAAP Change and the effects of the Required GAAP Change on Borrower's income, retained earnings or other accounts, as applicable. (I) "Governmental Authority" means any, federal, state, local, municipal, or other governmental or quasi governmental authority or self regulatory organizatio :+ any nature (including any agency, authority, branch, department, board, commission, court, tribuna + . r entity, instrumentality or body politic exercising governmental or quasi governmental po • ` xercising, or entitled or purporting to exercise, any administrative, executive, judicial, le ® %` ' forcement, regulatory or taxing authority or power. (m) "Laws" means, collectively, all federal, state a q_ -' al laws, orders, rules and regulations, including judicial opinions or `® ecedential auth jurisdiction. des, ordinances, he applicable (n) "Lien Enforcement Action" means (i) any action to foreclose on, take possession of, sell or otherwise realize (judicially or non judicially) upon the Pledged Collateral or any rights or privileges attendant thereto (including, without limitation, by set -off), (ii) any action to assert ownership rights with respect to the Pledged Collateral or any rights or, privileges attendant to the dged Collateral or arising under the CDE OA, including without limitation, voting, consent or management rights, (iii) any action (judicially or non judicially) to dissolve or liquidate Borrower, and /or (iv) the commencement of any legal proceedings to facilitate any of the actions described in clauses), (ii) or (iii) herein. (o) "Loan Documents" means, collectively, the Note, Pledge Agreement, this Agreement, and all other documents, ` °evidence, secure, and govern the Loan, as the same may be amended, assigned, restated, modi fie , "Or' supplemented from time to time. (P) "Maturity Date" has the meaning set forth in the Note. (q) "NMTC Program Requirements" means, collectively, the provisions of Section 45D of the Code, the Treasury Regulations and Guidance, and the Allocation Agreement (as such term is defined in the CDE OA). (r) "OFAC" means the Office of Foreign Asset Control of the U.S. Treasury Department and shall be deemed to include any successor agency thereof. (s) "Pledged Collateral" has the meaning set forth in the Pledge Agreement. (t) "Prohibited Person" means any of the following: (i) a Person that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order; (ii) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order; 3 NAI- 1502609375v3 (iii) a Person whom Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti - Terrorism Law; (iv) a Person who or that commits, threatens, or conspires to commit or supports "terrorism," as defined in the Executive Order; or (v) a Person that is named as a "specially designated national and blocked person" on the most current list published by OFAC at its official web site or any replacement website or other replacement official publication of such list. (u) "Project Loan Agreement" means that certain Loan Agreeme .,, ated as of the Effective Date, by and between CDE, as lender, and Project Borrower, as borro ,r, as the same may be amended, assigned, restated, modified, or supplemented from time to time. (v) "Project Loan Documents" means, collectivel} = the Project Notes, the Project Loan Agreement, mortgages or deeds of trust, security agreements, pledge agreements, guaranties, and other instruments, documents, and agreements between Project Borrower and CDE that evidence, govern, and secure the Project Loans, as the same may be amended, assigned, restated, modified, or supplemented from time to time (w) "Put/Call Agreement" means that Investment Fund Put/Call Agreement, dated as . of the Effective Date, by and between Investor and Lender, as the same may be amended, assigned, restated, modified, or supplemented from time to tine. (x) "Put" has the meaning set forth in the Put /Ca a °eement. (y) "Put Option Iod "has the meaning set forthin thPut/Call Agreement. (z) "Put Price" has the meaning set forth in.,the Put/Call Agreement. (aa) " QALICB NMTC Indemnity means that certain QALICB Indemnification Agreement, dated as of the Effective Date, by and among Project Borrower and Lender (as the "Indemnitors" thereunder) and Investor, as the same may be amended, assigned, restated, modified, or supplemented from time to time. (bb) "Recapture Event" means a recapture, loss, or disallowance of any new markets tax credits (as provided in Section 45D of the Code) attributable to the applicable "qualified equity investment" (within the meaning of Section 45D(c) of the Code) made by Borrower in CDE. (cc) "Treasury Regulations and Guidance" means and includes any Treasury Regulations and any guidance, rule, or procedure published by the CDFI Fund, as amended from time to time, including without limitation the Community Development Entity Certification Application for CDE and the New Markets Tax Credit Allocation Application pursuant to which the Allocation was awarded. (dd) "USA Patriot Act" means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107 -56, 115 Stat. 272 (2001), as amended from time to time. (ee) " $" means the lawful currency of the United States. 4 NAM 502609375v3 Section 1.2 Accounting Terms. All accounting terms not specifically defined herein will be construed in accordance with GAAP. Section 1.3 Computation of Time. In this Agreement, in the computation of a period of time from a specified date to a later specified date, the word "from" means "from and including" and the word "to" means "to but excluding." Section 1.4 Loan Amount. On the basis of the representations, warranties, and covenants of Borrower contained herein and subject to the terms and conditions set forth herein and in the other Loan Documents, on the Effective Date, Lender agrees to lend to Borrower, and. Borrower agrees to borrow from Lender, the Loan, which will be disbursed in full on the Effective Date. Section 1.5 Loan Disbursement. Following the satisfaction of all applicable conditions precedent set forth in Section 3, Lender will fully disburse the Loan as set forth in Section 1.4 to Borrower. The Loan is evidenced by the Note and the other Loan Documents andsecured by the Pledged Collateral. Section 1.6 Interest Rate. Section 4 of the Note is incorporated herein by reference and made a part hereof. Section 1.7 Payment Terms. (a) The outstanding principal amount and accrued interest of the Note shall be due and payable in accordance with Section 5(a) of the Note. which is incorporated herein by reference and made a part hereof. (b) Until the Forbearance Termination Date, Borror shall only be obligated to pay amounts due and payable from time to time under the Loan from funds received by Borrower from operations in the priori set forth in Section 6.2 of the.Borrower OA; provided, to the extent Borrower is unable to make any parment hereunder, such amoun be added to the outstanding principal amount and will accrue (with interest) until such time as su, ient funds are available (at which time such payments shall be due) (provided such accrual shall not result in any extension of the Maturity Date). (c) All sums payable by Borrower hereunder or pursuant to the Note or the other Loan Documents will be paid in full without setoff or counterclaim by reason of any claim Borrower may have against Lender; provided, any amounts owed by Lender to Investor pursuant to the QALICB NMTC Indemnity will be, unless otherwise paid by Indemnitors thereunder in accordance with the terms thereof, (i) set off against amounts payable hereunder or pursuant to the Note or the other Loan Documents, (ii) retained by Borrower (for distribution to Investor as a member of Borrower), and (iii) treated as paid to Lender in satisfaction of an equivalent amount due and payable under the Loan Documents. Borrower shall notify Lender promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application. Investor is an intended third party beneficiary of this Section 1.7(c). Section 1.8 Maturity. The entire outstanding principal balance under the Note plus all accrued and unpaid interest thereon will be due and payable on the Maturity Date of the Note. Section 1.9 Non - Recourse Loan. In the event of any breach by Borrower hereunder or under any other Loan Document, the liability of Borrower will be limited to the Pledged Collateral, and Borrower will have no personal liability for any obligation hereunder. Notwithstanding anything to the contrary in this Agreement or any other Loan Document, no member or manager of Borrower or its 5 NAI- 1502609375v3 shareholders, affiliates, members, managers, partners, officers, directors, employees, or any successors, transferees or assigns thereof, will have any personal liability for any obligation hereunder. Section 1.10 Loan as Indebtedness. Lender and Borrower shall treat the Loan as indebtedness for all purposes, and shall not take any positions contrary to such treatment. Section 2. REPRESENTATION AND WARRANTIES OF BORROWER. To induce Lender to enter into this Agreement, and to make the Loan to Borrower, Borrower represents and warrants to Lender, as of the Effective Date, as follows: Section 2.1 Organizational Status; Authorizations. Borrower is duly formed, validly existing and in good standing as a limited liability company under the laws of the State of Delaware, with full power and authority to consummate the transactions contemplated hereby. Borrower has full power and authority to execute, deliver and perform all of the Loan Documents, and such execution, delivery and performance have been duly authorized by all requisite action on the part of Borrower. Borrower is duly authorized to (a) acquire and own the CDE Interest, (b) enter into the transactions contemplated by the Loan Documents, Borrower OA, and CDE OA, and (c) pledge and assign and grant liens and security interests as contemplated by the Loan Documents. This Agreement and the other Loan Documents and the provisions contained herein and therein are and will be the valid and legally enforceable obligations of Borrower in accordance with their terms. Section 2.2 No Actions. There are no actions, suits or proceedings pending or, to the knowledge of Borrower, threatened against or affecting Borrower, before or by a Governmental Authority, and, to Borrower's knowledge, it is not in default with respect to any order, writ, injunction, decree or demand of any court or any Governmental Authority, which could have a material adverse impact on Borrower or involving the validity or enforceability of the Loan Documents. Section 2.3 No Breach. The consummation of the transactions hereby contemplated and performance of this Agreement will not result in any breach of, or constitute a default under, any deed to secure debt, mortgage, deed of trust, indenture, security agreement, lease, bank loan or credit agreement, contract, articles of organization, operating agreement. joint venture agreement, partnership agreement or other instruments to which Borrower is a party or by which Borrower may be bound. Section 2.4 (a) Borrower is not in violation of any Anti - Terrorism Law; Anti - Terrorism Laws. Borrower represents and warrants to Lender that: (b) No action, proceeding, investigation, charge, claim, report, or notice has been filed, commenced, or threatened against Borrower alleging any violation of any Anti - Terrorism Law; and (c) Borrower has no knowledge or notice of any fact, event, circumstance, situation, or condition which could reasonably be expected to result in: (i) any action, proceeding, investigation, charge, claim, report, or notice being filed, commenced, or threatened against it alleging any violation of, or failure to comply with, any Anti - Terrorism Law; or (ii) the imposition of any civil or criminal penalty against Borrower for any failure to so comply. 6 NA► -I 502609375v3 Section 2.5 Prohibited Person. Borrower is not a Prohibited Person, and has provided Lender with sufficient information (including names, addresses and, where applicable, jurisdiction of formation or organization) to reasonably permit Lender to verify the foregoing representation. Borrower does not: (a) conduct any business or engage in making or receiving any contribution of funds, goods, or services to or for the benefit of any Prohibited Person; (b) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked under the Executive Order; or (c) engage in or conspire to engage in any transaction purpose of evading or avoiding, or attempts to violate, any of th Terrorism Law. es or avoids, or has the ns set forth in any Anti- Section 2.6 Ownership of Property; No Liens. Bo ," er owns and clear of all liens, claims, charges and encumbrances of every type or nature, security interests created by the Loan Documents. ed Collateral, free r the liens and Section 2.7 Conditions Precedent. As of the Effective Date, each o the conditions precedent set forth in Section 3 has been eithe •. satisfied by Borrower or (b) hereby waived by Lender. approval, consent or license of any party, d is r d for the valid and lawful um is or the assumption of the Section 2.8 No Approvals. governmental regulatory body or authori execution and delivery of this Agreement obligations of Borrower represented hereby an Section 2.9 Investor. Investor is a member of Borrower. Investor's current principal 29th Floor, New Orleans; 'liana 70170. anking association and is currently the sole business is located at 201 St. Charles Avenue, Section 2.10 Compliance with Laws. Borrower, to the best of its knowledge, has complied in all material respects with all Laws that are applicable to Borrower, such compliance to include, without limitation, paying, before the same become delinquent, all taxes, assessments and governmental charges imposed upon it or upon its property (other than those the amount or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been provided in accordance with GAA1 ). Section 3. CONDITIONS PRECEDENT TO LENDER'S OBLIGATION TO MAKE THE LOAN. Lender will not be obligated to make the Loan hereunder unless the following conditions precedent have been satisfied (and the funding of the Loan by Lender will constitute Lender's acknowledgement of the satisfaction of all such conditions precedent): Section 3.1 Loan Documents. Lender has received each of the Loan Documents executed by Borrower. Section 3.2 Governing Instruments. Lender has received from Borrower a copy of each of the Borrower Organizational Documents, including the certificate of formation of Borrower, the Borrower OA, and such other documents, instruments, agreements and certificates as Lender reasonably requested with respect to Borrower. 7 NAI -I 502609375v3 Section 3.3 Financial Projections. Lender has received and approved the Financial Projections based upon income and expense numbers acceptable to Lender. Section 3.4 No Default or Event of Default. There is (a) no default or Event of Default under this Agreement or any of the other Loan Documents and (b) no event which with notice or the passage of time, or both, would constitute a default or Event of Default under this Agreement or any of the other Loan Documents has occurred or is in existence. Section 3.5 Project Loan Documents. CDE and Project Borrower have executed and delivered all of the Project Loan Documents, and all conditions to the ceding of the Project Loans thereunder have been satisfied (or waived in writing by CDE). Section 4. COVENANTS OF BORROWER. Borrower (in addition t"® and not in derogation of its covenants contained in any of the other Loan Documents) covenants and agrees, from the Effective Date and for so long as the Loan or any portion thereof is outstanding: Section 4.1 Prohibition of Transfers. Borrower will not convey or further encumber the CDE Interest or any portion thereof in any way. Borrower will keep the CDE Interes ee and clear of all security interests and encumbrances other than those created by the Loan Documents and will not sell, assign, convey, contribute, pledge, hypothecate, encumber, or otherwise transfer in any manner, whether voluntarily or involuntarily, all or any portion of the CDE Intere nor take any action (or fail to take any action) that may result in any charge, lien, or impairment of the CDE Interest, whether pursuant to the CDE OA, by agreement with any Person. " by operapn of law. Notwithstanding the foregoing or anything else to the contrary in this Agreemen.or any other Loan Document, Borrower shall be entitled to exercise any right it may have to redeem the CDE Interest or to elect to dissolve or terminate CDE in accordance with the CDE OA provided that, as a result thereof, Borrower will hold the Project Loans and Project Loan Documents. Section 4.2 Conduct of Business. Borrower will maintain in full force and effect (a) its organizational existence, and (b) all licenses, bonds, franchises, leases, patents, contracts and other rights necessary to the conduct of its business. Borrower willecercise good faith in all activities relating to the conduct of the business of Borrower, and Borrower will take no action with respect to the business and property of Borrower which is not reasonably related to the achievement of the purpose of Borrower as set forth in the Borrower OA. Section 4.3 Amendment of CDE OA. Borrower will not cause or permit any material modification, amendment, waiver or termination of the CDE OA to occur without the prior written consent of Lender, if such modification, amendment, waiver or termination would (a) impair Borrower's authority to grant a security interest in the Pledged Collateral to secure the Loan, (b) unilaterally cause the redemption of the CDE Interest after the Forbearance Termination Date (provided, this Section 4.3(b) shall nbt impair the rights of Borrower to cause a redemption of Borrower's membership interest in CDE or to liquidate CDE in accordance with the CDE OA provided that Borrower will hold the Project Loans and Project Loan Documents as a result thereof), (c) preclude or otherwise limit CDE from distributing proceeds of the Project Loans to Borrower, (d) modify in any way Borrower's right of redemption, (e) impair Lender's security interest in the Pledged Collateral securing the Loan, (f) modify in any way any provision of the CDE OA governing the timing of any payments or distributions to be made to Borrower, or (g) otherwise impair Borrower's ability to satisfy its payment obligations hereunder; provided, however, that in no event will Lender's consent be required if Borrower believes in good faith that any such modification, amendment, waiver or termination is necessary to maintain compliance with NMTC Program Requirements or to avoid a Recapture Event. 8 NAI- 1502609375v3 Section 4.4 Amendment of Borrower Organizational Documents. Borrower will not cause or permit any material modification, amendment, waiver or termination of any Borrower Organizational Documents to occur without the prior written consent of Lender, if such modification, amendment, waiver or termination would (a) preclude Borrower from using payoff proceeds of the Project Loans to pay amounts due and owing under the Loan, except if an Event of Default (as such term is defined in the Project Loan Agreement) has occurred and is continuing, (b) impair Lender's security interest in the Pledged Collateral securing the Loan, (c) impair Lender's rights and remedies under the Loan Documents, or (d) otherwise impair Borrower's ability to satisfy its payment obligations hereunder; provided, however, that in no event will Lender's consent be required if Borrower believes in good faith that any such modification, amendment, waiver or termination is necessary to maintain compliance with NMTC Program Requirements or to avoid a Recapture Event. Section 4.5 Other Indebtedness. Borrower will not incur any indebtedness other than the Loan to be made pursuant to this Agreement as evidenced by the Note, loans made by any member of Borrower pursuant to the terms of the Borrower OA, and trade payables and administrative costs incurred by Borrower in the ordinary course of business. Section 4.6 Inspection. Lender, or any Person designated by Lender, will have the right, from time to time hereafter upon 5 Business Days prior written notice to Borrower, to call at Borrower's place or places of business (or any other place where the Pledged Collateral or any information relating thereto is kept or located) during reasonable Mess hours andwithout hindrance or delay by Borrower, so that Lender may, at Lender's own exp w� a) inspect, audit, check and make copies of and extracts from Borrower's books, records, journals, N. receipts, correspondence and other data relating to Borrower's business or to any transactions etween the parties hereto and regardless of whether such items or data are maintained in accordance with Borrower's standard operating procedures or pursuant to this Agreement; (b) verify such matters concerning the Pledged Collateral as Lender may consider reasonable under the circumstances- • (c) discuss the affairs, finances and business of Borrower with any officers, employees or directors � ower. Withi 10 Business Days of request therefor, Borrower will deliver to Lender, at Lender's pense, a ocuments necessary to obtain records from any Person maintaining the same. Section 4.7 Anti - Terrorism Laws. (a) Borrower covenants and agrees with Lender that Borrower will not: (i) conduct any business or engage in making or receiving any contribution of funds, goods, or services to or for the benefit of any Prohibited Person; (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to the Executive Order or any other Anti- Terrorism Law; or (iii) engage in, or conspire to engage in, any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti - Terrorism Law. (b) Before any changes in the direct or indirect ownership of Borrower to a Person other than Investor or an Affiliate thereof, Borrower will give a written notice to Lender: (1) advising Lender in reasonable detail as to the proposed ownership change and (ii) reaffirming that the representations and warranties herein contained will remain true and correct notwithstanding such change in ownership. (c) Borrower agrees to deliver to Lender promptly (but in any event within 10 Business Days of Lender's written request) any certification or other evidence requested from time to time by Lender in its reasonable discretion, confirming Borrower's compliance with the foregoing covenants. Section 4.8 Single Purpose Entity Provisions. 9 NAI- 1502609375v3 (a) Borrower's sole business purposes are those listed in Section 3.1 of the Borrower OA, including but not limited to: (i) acquiring and holding the CDE Interest, (ii) exercising its rights and powers and perform its duties and obligations under the CDE OA, (iii) entering into and performing its duties and obligations under the Loan Documents and the CDE OA, and (iv) undertaking activities incidental to the foregoing. (b) Borrower (i) will conduct business only in its own name, (ii) will not engage in any business or have any assets unrelated to the foregoing purpose, (iii) will not have any indebtedness other than as permitted by this Agreement, (iv) will have its own separate accounts (with no commingling of assets), (v) will hold itself out as being an entity separate and apart from any other Person, (vi) will observe limited liability company formalities independent of any other Person, and (vii) will not change its name, or form of entity, unless Borrower has obtained the prior Mitten consent of Lender to such change, and has taken all actions necessary or requested by Lender to file or amend any financing statement or continuation statement to assure perfection and continuation of perfection of security interests under the Loan Documents. Section 4.9 Use of Loan Proceeds. The seeds of the oan wit < solely for the purposes set forth in Article IX of the Borrower OA, w 1ch is incorpoY 4 ® herein e and made a part hereof. Section 4.10 Records. Borrower will keep and maintain satisfactory and complete records of the Pledged Collateral, including but not limited to the record of all distributions received. Section 4.11 No Default or Eve st of Default. No default ors= "vent of Default under this Agreement or any of the other Loan Documents, and no event which •th notice or the passage of time, or both, would constitute a defa It or Event of Default under this, A" Bement or any of the other Loan Documents has occurred or i ,� �`- ce at the time �' ion of his Agreement. Section 4.12 Notice. If Borrower shall receive any of the following: notice of any actions, suits or proceedings brought against it prior to full payment of the Note (other than actions, suits, or proceedings that are covered by Borrower's commercial ; general liability insurance and which the insurer has agreed to defend), then Borrower shall provide Lender with a copy of such notice within 10 calendar days of Borrower s receipt thereof. Section 5. EVENTS OF DEFAULT AND REMEDIES. Section 5.1 Events of Default. Each of the following will constitute an Event of Default hereunder: (a) If Borrower fails to make payment when due of any principal, interest or other payment obligation under the Note, this Agreement or any of the other Loan Documents and such failure remains more than 5 Business Days after notice of non - payment is given by Lender to Borrower; provided, however, notwithstanding the foregoing or anything else to the contrary in the Note, this Agreement or the other Loan Documents, it shall be an immediate Event of Default, without any prior notice, if either (i) a scheduled interest or principal payment on the Note is not made within 5 calendar days after the date due or (ii) the payment due on the Maturity Date under the Note is not made within 5 calendar days after the date due; (b) If Borrower fails to comply in any material respect with any non - monetary covenant made by it hereunder or under the Pledge Agreement, or any of the other Loan Documents (other than a failure which would be an Event of Default under another subparagraph of this Section 5.1) to Lender's 10 NAI- 1502609375v3 satisfaction within 30 calendar days after receipt of written notice of such default from Lender; provided, however, that if such default is of a type that is susceptible to cure but cannot reasonably be cured within such 30 calendar day period, such failure will not be an Event of Default if Borrower commences to cure such default within such 30 calendar day period and thereafter diligently prosecutes such cure to completion; (c) If any representation or warranty of Borrower in this Agreement or in any of the other Loan Documents is established to have been incorrect in any material respect when made; provided, that if Borrower did not have actual knowledge that the representation or warranty was incorrect when made and if the circumstances resulting in the inaccuracy of such representation or warranty are reasonably susceptible to being corrected so as to make such representation or warranty correct within the cure period applicable to covenant defaults under Section 5.1(b), Borrower will be entitled to cure the violation of such representation or warranty within the cure period applicable under Section 5.1(b); (d) If any material default or event of default exists under any of the Loan Documents other than this Agreement, and such default or event of default contin eyond any; applicable grace, cure or notice periods thereunder; (e) If Borrower assigns this Agreement or any'` interest herein, in any way other than as herein permitted, or if the CDE Interest is conveyed, assigned, pledged or encumbered in any way other than as herein permitted, without the prior written consent of Lender, or Borrower engages in or causes or permits any transfer prohibited under Section 4.1; provided, however, th �"'t will in no event be an Event of Default if Investor assigns or transfers all r any portion of its Interest (asch term is defined in the Put/Call Agreement) in Borrower in accordaee with the Put/Call Agreement; or (f) If Borrower makes a general assignment for the benefit of creditors; or if any proceeding is instituted by Borrower seeking to judicate it as bankrupt or insolent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or similar official for it or for any substantial part of its property; or if any proceeding, is instituted against Borrower seeking to adjudicate it bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or similar official for it or for any substantial part of its property and any such proceeding is not dismissed within 90 calendar days after the commencement of such proceeding; or if Borrower takes any action to authorize any of the actions set forth in this Section 5.1(f). Section 5.2 Remedies. (a) Subject in all instances to Section 5.3, upon the occurrence of any Event of Default, Lender, in addition to all remedies conferred upon Lender by law and by the terms of the Loan Documents or any other documents serving as security for Borrower's indebtedness, may accelerate maturity of the Note, and demand payment of the principal sums due thereunder with interest, advances and costs, and in default of said payment or any part thereof, may exercise the power of sale, if given and available, and pursue any or all of its other rights and remedies under the Pledge Agreement and the other Loan Documents. (b) Subject in all instances to Section 5.3, upon the occurrence of any Event of Default, Lender may seek to enforce the terms of the Note and this Agreement by declaratory judgment, specific performance, or by way of injunction or equitable remedies. 11 NAI -► 502609375v3 (c) The remedies and rights of Lender hereunder are cumulative and not exclusive of any other remedies of Lender under any other provision of this Agreement or under any other instrument or at law or in equity. Lender is privileged and has the absolute right, subject in all instances to Section 5.3, to resort to any one or more or all of said remedies, none to the exclusion of the others, concurrently or successively, in such order as Lender may select. Any additional funds advanced in connection with Lender's exercises of its remedies will be secured by the lien of the Pledge Agreement and will be considered a part of the Loan as though initially included therein. Section 5.3 Forbearance. (a) Notwithstanding any provision of this Agreement, the,Borrower OA, the CDE OA or any other Loan Documents to the contrary, and regardless of the existence or occurrence of any circumstance or event that would otherwise constitute a default or Event of Default by Borrower, Lender shall not be entitled to (i) take any Lien Enforcement Action, (ii) exercise any other rights or remedies it may have under the Pledge Agreement or other Loan Documents, including, but not limited to, accelerating the Loan, collecting rents or distributions, appointing (or seeking the appointment of) a receiver or exercising any other rights or remedies thereunder, or (iii) c• "ence, or join with `pan other creditor in Y g (...) .1,�. Y commencing, any bankruptcy, reorganization, arrange t, insolvency or liquidation proceedings with respect to Borrower, from the date hereof until the termination of the Put Option Period (the "Forbearance Termination Date "), provided, however, if the Put is exercised in accordance with the Put/Call Agreement, the Forbearance Termination Date Datethall be the date the Put Price is paid in full to Investor in accordance with the Put/Call Agreement. The provisions of this Section 5.3(a) shall be construed as, and shall operate as, a bar to any action, proceeding, or remedy (judicial or "otherwise) that would violate the provisions of this Section 5.3(a). In the event that Lender shall threaten, initiate, or pursue any Lien Enforcement Action or other action, proceeding, or remedy in violation of the provisions of this Section 5.3(a), Lender agrees that damages would constitute an inadequate remedy to Borrower on account of such violation a thaBorrower shall be entitled to seek and obtain injunctive relief prohibiting the same. (b) On and after the Forbearance Terminatio Date, to the extent permitted under the Loan Documents, Lender shall be free, in its sole and absolute discretion, after an Event of Default (or the continuance of an Event of Default on and after the"Forbearance Termination Date) to accelerate the payment in full of all of Borrower's obligations to Lender under the Loan Documents and to institute proceedings to enforce its rights and remedies under the Loan Documents and /or as provided by applicable law. All of Borrower's obligations and liabilities to Lender hereunder (including, without limitation, Borrower's payment obligations) and any documents, instruments or agreements pursuant to which Borrower may, from time to time, grant to Lender as collateral security for Borrower's obligations to Lender, shall survive the Forbearance Termination Date. Section 5.4 Lender Assignment or Transfer. Lender may not assign or otherwise transfer all or a portion of its rights and /or obligations under the Loan Agreement or any other Loan Documents (including, without limitation, all or any portion of the Loan) to any Person without the prior written consent of Borrower (such consent in Borrower's sole and absolute discretion). Section 6. MISCELLANEOUS. The following conditions shall be applicable throughout the term of this Agreement: Section 6.1 No Waiver. No course of dealing on the part of Lender or its officers, employees, consultants or agents, nor any failure or delay by Lender with respect to exercising any of its rights, powers or privileges under the Loan Documents will operate as a waiver thereof. 12 NAI -1 502609375v3 Section 6.2 Notices. Any notice, request, demand, consent, approval, direction, agreement, or other communication required or permitted hereunder shall be in writing and shall be validly given if (a) sent by a nationally- recognized courier that obtains receipts, (b) delivered personally by a courier that obtains receipts, (c) mailed by United States certified mail (with return receipt requested and postage prepaid), or (d) sent by email (with a copy of such email and proof of transmission thereof sent via one of the methods of delivery set forth in clauses (a), (b) or (c) hereof), addressed to the applicable party at the address set forth on Schedule A. Each notice shall be effective upon being so sent, delivered, or mailed, but the time period for response or action shall run from the date of receipt as shown on the delivery receipt, or the date the facsimile or email was sent, as applicable. Refusal to accept delivery or the inability to deliver because of a changed address for which no notice was given shall be deemed receipt. Any party may periodically change its address for notice (including different or additional addresses for copies) by giving the other party at least 10 calendar days' prior notic s accordance with the foregoing provisions. Section 6.3 Entire Agreement; No Oral Amendments. This Agreement (including without limitation the Recitals and Schedule A, which are incorporated herein by reference and made a part hereof), together with the other Loan Documents, constitutes the entire agreement between Lender and Borrower (and any affiliates of Borrower) and superse all agrceme , reviously made between the parties relating to its subject matter. There are no other' understanding° or agreements between them relating to such subject matter. Neither this Agreement nor any provision hereof (or of any of the other Loan Documents) may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against whom enforcement of such change, waiver, discharge or termination is sought. Section 6.4 Additional Remedies. The remedies herein provided shall be in addition to and not in substitution for the right .d remedies which would otherwise be vested in Lender in any Loan Document or at law or in e f which rights and remedies are specifically reserved by Lender, subject in all instances to Sector 3. The remedies herein provided or otherwise available to Lender shall be cumulative and may be exercised Concurrently, subject in all instances to Section 5.3. The failure to exercise any of the remedies herein provided shall not constitute a waiver thereof, nor shall use of any of the remedies hereby provided prevent the subsequent or concurrent resort to any other remedy or remedies. It is intended that, subject in all instanceso Section 5.3, all remedies herein provided for or otherwise available to Lender shall continue and be available to Lender until all sums due it by reason of this Agreement or any of the other Loan Documents have been paid to it in full. Section 6.5 No Partnership. The relationship between Lender, on the one hand, and Borrower, on the other, will be solely that of lender and borrower, and such relationship will not, under any circumstances whatsoever, be construed to be a joint venture, joint adventure, or partnership. Section 6.6 Usury Savings. Section 12 of the Note is incorporated herein by reference and made a part hereof. Section 6.7 Additional Documents. Borrower agrees upon demand to do any act or execute any additional documents as may be reasonably required by Lender to secure the Note with the Pledged Collateral or to confirm the liens of the Pledge Agreement. All of said documents shall be in form and substance prepared by or acceptable to Lender. Section 6.8 Binding Effect; Continuing Agreement. The terms, conditions, covenants, agreement, powers, privileges, notices and authorizations herein contained shall extend to, be binding upon and available to the heirs, executors, administrators, successors and, to the extent permitted hereunder, the assigns of each of the respective parties hereto. Notwithstanding the foregoing, Borrower 13 NAI- 1502609375v3 shall not, without the prior written consent of Lender, assign or transfer this Agreement, whether voluntarily or by operation of law. An assignment or transfer in violation of this provision shall be invalid, of no force or effect and an Event of Default hereunder. Section 6.9 Headings. The titles and headings of the Sections of this Agreement have been inserted for convenience of reference only and are not intended to summarize or otherwise describe, or limit, modify or expound upon the subject matter of such Sections. Section 6.10 CHOICE OF LAW; WAIVER OF JURY TRIAL AND CERTAIN OTHER RIGHTS; SUBMISSION TO JURISDICTION; SERVICE OF PROCESS. (a) THE VALIDITY OF THE LOAN, THIS AGREEMENT, OR ANY OF THE OTHER LOAN DOCUMENTS, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING I HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETE' �' " UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAW THE STATE OF 1SHINGTON WITHOUT GIVING EFFECT TO CONFLICT OR CHOICE OP LAW PRINCIPLES. (b) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH OF BORROWER AND LENDER (i) AGRE S THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREE SHALL BE TRIED ANA ITIGATED ONLY IN THE STATE AND FEDERAL COURTS L CATED IN THE COUNTY' OF KING, STATE OF WASHINGTON, AND (ii) WAIVES ANY GHT IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 6.10. (c) T Ti ;E FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH OF BORROWER AND' ` NDER WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL, CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. EACH PARTY (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.10. (d) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH OF BORROWER AND LENDER AGREES THAT ANY PROCESS OR NOTICE OF MOTION OR OTHER APPLICATION TO ANY SUCH COURT IN CONNECTION WITH ANY ACTION OR PROCEEDING MAY BE SERVED UPON SUCH PARTY BY REGISTERED OR CERTIFIED MAIL TO OR BY PERSONAL SERVICE AT THE LAST KNOWN ADDRESS OF BORROWER OR LENDER, AS APPLICABLE, WHETHER SUCH ADDRESS BE WITHIN OR OUTSIDE THE JURISDICTION OF ANY SUCH COURT. 14 NAI- I502609375v3 (e) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, LENDER SHALL NOT ASSERT, AND HEREBY WAIVES, ANY CLAIM AGAINST BORROWER, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR ANY OTHER AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY AND /OR THE TRANSACTIONS CONTEMPLATED HEREBY. Section 6.11 Jlntentionally Omitted] 4 Section 6.12 Enforcement Costs. In the event of any action at law or in equity to enforce the provisions of this Agreement or the other Loan Documents or to secure relief or damages for the breach of this Agreement or the other Loan Documents, the prevailing party shall be entitled to payment or reimbursement, as applicable, of its costs, expenses and fees (including without limitation reasonable attorneys', accountants', experts', and consultants' costs, expenses and fees, court costs and investigative expenses prior to trial, at trial and on appeal) incurred in su roceedings from the non- prevailing party. Section 6.13 Duration of Agreement. Borrower's agreements, obligations covenants, representations and warranties hereunder shall remain in effect after the Loan is fully disbursed so long as any amounts under the Note are outstanding. Section 6.14 Interpretation of Agreement. Whenever the singular number is used in this Agreement and when required by the context, the same shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa. The words "hereof', "herein ", and "hereunder ", and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The words "including" or "include" shall mean including a deb way of example and not limitation (regardless of whether g ,N by Y 1? ' ( g the words "without limitation word of similar import are used in conjunction therewith), unless otherwise expressly stated. Each party to this Agreement has been represented by counsel and has participated in the drafting of this Agreement and the other Loan Documents; accordingly, any rule of construction to the effect that the document is to be construed against a party that prepared or drafted a document shall be inapplicable. Section 6.15" " Severability. If any provision of this Agreement or the application thereof to any Person or circumstance shall be invalid, illegal or unenforceable to any extent, that provision shall, if possible, be construed as though more narrowly drawn, if a narrower construction would avoid such invalidity, illegality, or unenforceability or, if that is not possible, such provision shall, to the extent of such invalidity, illegality, or unenforceability, be severed, and the remainder of this Agreement and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by law. Notwithstanding the foregoing, the provisions of Section 5.3 shall be deemed integral to this Agreement and shall not be severable from the remainder of this Agreement. Section 6.16 Time of the Essence. Subject in all instances to Section 5.3, time shall be of the essence with respect to all of Borrower's obligations under this Agreement and the other Loan Documents. Section 6.17 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by telecopier, facsimile machine, portable document format ( "PDF ") or other electronic means shall be as effective as delivery of a manually executed counterpart of this Agreement. The 15 NAI -I 502609375v3 effectiveness of any such documents and signatures shall, subject to applicable laws, have the same force and effect as manually signed originals and shall be binding on the parties. No party may raise the use of a telecopier, facsimile machine, PDF or other electronic means, or the fact that any signature was transmitted through the use of a telecopier, facsimile machine, PDF or other electronic means, as a defense to the enforcement of this Agreement. [REMAINDER OF PAGE BLANK; SIGNATURE PAGES TO FOLLOW.] 16 NA1- I502609375v3 IN WITNESS WHEREOF, Borrower and Lender have caused this Fund Loan Agreement to be duly executed as of the Effective Date. BORROWER: COCRF INVESTOR 77, LLC, a Delaware limited liability company By: Capital One, National Association, a national banking association:ts sole member By: Name: Douglas J. Fields Title: Senior Vice President SIGNATURE PAGE 1 OF 2 FUND LOAN AGREEMENT (CONA/CLEARINGHOUSE /FEDERAL WAY PAEC) NAI- 1502609375v3 LENDER: [COUNTERPART SIGNATURE PAGE TO FUND LOAN AGREEMENT] CITY OF FEDERAL WAY, a Washington municipal corporation By: Name: Title: SIGNATURE PAGE 2 OF 2 FUND LOAN AGREEMENT (CONA/CLEARINGHOUSE /FEDERAL WAY PAEC) NAI- 1502609375v3 SCHEDULE A Notice Addresses of Parties (1) If to Borrower: COCRF Investor 77, LLC c/o Capital One, National Association Debt Capital Markets Place St. Charles, Suite 2900 201 St. Charles Ave. New Orleans, LA 70170 Attention: Spencer Gagnet Email: spencer.gagnet @ca With a copy to: Jones Day 100 High Street, 21st Floor Boston, MA 02110 Attention: Jeffrey D. Gaulin, Esq,_y Email: jgaulin @jonesday.com (2) If to Lender: City of Federal Way CtBall 33325 8th Ave. South Federal Way. WA 98003 Attention: Ade Ariwoola, Finance Director Email: ade.ariwoola @cityoffederalway.com With a copy to: tier Snow LL1 1801 California Street, Suite 5100 Denver, CO 80202 Attention: Alan Pasternack, Esq. Email: alan.pasternack @butlersnow.com [REMAINDER OF PAGE BLANK] SCHEDULE A FUND LOAN AGREEMENT (CONA/CLEARINGHOUSE /FEDERAL WAY PAEC) NAM 502609375v3 FINANCING DOCUMENTS 2. Fund Pledge Agreement by and between City and Investment Fund JD Draft 5/1/17 FUND PLEDGE AGREEMENT THIS FUND PLEDGE AGREEMENT (this "Agreement "), dated as of [ ], 2017, is entered into by and between CITY OF FEDERAL WAY, a Washington municipal corporation ( "Lender "), and COCRF INVESTOR 77, LLC, a Delaware limited liability company ( "Borrower "). RECITALS A. Borrower has requested that Lender provide a loan (the "Loan ") in the original principal amount of $[6,239,600]. B. Concurrently with the execution of this Agreement, Lender and Borrower are entering into that certain Fund Loan Agreement (as the same may be amended, assigned, restated, modified, or supplemented from time to time, the "Loan Agreement "), pursuant to which Lender agreed to make the Loan. C. Concurrently with the execution of this Agreement, Borrower is executing and delivering to Lender that certain Fund Promissory Note for the original principal amount of the Loan (as the same may be amended, assigned, restated, modified, or supplemented from time to time, the "Note "). The Note evidences the Loan. D. The proceeds of the Loan will be used solely for the purposes set forth in Article IX of the Borrower OA, which is incorporated herein by reference and made a part hereof. E. below). Borrower is the record and beneficial owner of the CDE Interest (as such term is defined F. As security for the payment and performance of the Obligations (as such term is defined below) of Borrower, Lender is requiring that Borrower execute and deliver this Agreement and grant the security interests contemplated hereby. NOW, THEREFORE, in consideration of the promises and the covenants hereinafter contained, and to induce Lender to make the Loan under the Loan Agreement, it is agreed as follows: 1. Definitions. All capitalized terms listed in the introductory paragraph and Recitals to this Agreement have the meanings assigned to them therein, and all capitalized terms not otherwise expressly defined herein have the meanings assigned to them in the Loan Agreement. In addition, the following terms have the following meanings in this Agreement: (a) "CDE" means Clearinghouse NMTC (Sub 46), LLC, a California limited liability company. (b) "CDE Interest" means Borrower's entire interest in CDE, including Borrower's share of any dividends and distributions of the assets of CDE pursuant to the CDE OA and the Entity Act, and the right to vote on, consent to, or otherwise participate in any decision or action of or by CDE granted to Borrower pursuant to the CDE OA and the Entity Act. (c) "CDE OA" means that certain Amended and Restated Operating Agreement of CDE, dated as of the Effective Date, by and between Borrower, as investor member and Class A member, Clearinghouse Community Development Financial Institution, a California corporation, as manager, and NA1- 1502609640v3 Clearinghouse NMTC, LLC, a Delaware limited liability company, as Class B Member, and together with Class A Member, the "Members ", as the same may be amended, assigned, restated, modified, or supplemented in accordance therewith and with the Loan Agreement. (d) "Entity Act" means the California Revised Uniform Limited Liability Company Act, as may be amended or restated from time to time. (e) "Investor" means Capital One, National Association, a national banking association. (f) "Obligations" means all of the indebtedness and all other obligations of Borrower under the Note and the other Loan Documents. (g) "Pledged Collateral" has the meaning set forth in Section 2. (h) "Securities Act" means the Securities Act of 1933, as amended from time to time. (i) "UCC" has the meaning set forth in Section 3(a). 2. Pledge. Subject to the provisions of Sections 6 and 7, Borrower hereby pledges Lender and grants to Lender, a first priority security interest in all of the following (collectively, the "Pledged Collateral "): (a) the CDE Interest and the certificates and other instruments or agreements representing or evidencing the CDE Interest, and all dividends, distributions, cash, instruments, tax benefits, allocations of taxable income and loss, and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the CDE Interest; (b) all rights and privileges of Borrower with respect to the securities and other property referred to in Section 2(a); and (c) all distributions, profits, products. and proceeds, whether cash or noncash, of or from any of the foregoing. 3. Collateral. (a) Security for the Obligation.. This Agreement secures, and the Pledged Collateral is security f ,� the prompt payment and performance of the Obligations. The security interest granted by this Agreement is a continuing one and is irrevocable so long as any of the Obligations are outstanding or Borrower shall have any obligations under the Note and shall terminate only in accordance with Section 11. The parties 'agree that this Agreement shall constitute a "security agreement" under the Uniform Commercial Code of Washington (as amended from time to time, the "UCC "), and as such, in addition to the remedies provided herein, Lender shall have all remedies granted to it as a secured party under the UCC, except to the extent such remedies are excluded, limited or otherwise restricted hereunder or in the Loan Agreement, including, without limitation, Section 5.3 of the Loan Agreement. (b) Delivery of Pledged Collateral. All certificates or other instruments representing or evidencing the Pledged Collateral, if any, shall be delivered to Lender at such time as Lender shall reasonably request, shall be accompanied by duly executed instruments of transfer or assignment in blank, including a duly executed assignment in blank, substantially in the form attached hereto as Exhibit A, all in form and substance reasonably satisfactory to Lender. Subject to Section 5.3 of the Loan Agreement, Lender shall have the right, at any time after the occurrence and during the continuance of an Event of NAI- 1502609640v3 2 Default, in its discretion and without notice to Borrower, to transfer to or to register in the name of Lender, any or all of the Pledged Collateral. 4. Representations and Warranties. Borrower represents and warrants to Lender that as of the Effective Date: (a) Borrower is duly organized or formed, validly existing and in good standing under the laws of the State of Delaware, has the legal power and authority to own its assets and to carry on its business as now being and hereafter proposed to be conducted. Borrower is duly qualified and authorized to do business in each jurisdiction in which it is legally required to do so. (b) Borrower is the sole holder of record and the sole beneficial owner of the Pledged Collateral, free and clear of any lien, charge or encumbrance thereon or affecting the title thereto, except for any liens created by this Agreement. (c) The CDE Interest consists of a 99.99% interest in all of the issued and outstanding equity interests of CDE. The CDE Interest has been duly authorized and validly issued. (d) Borrower has delivered to Lender a true and complete copy of the CDE OA and such agreement is currently in full force and effect and has not ben amended or modified except as disclosed to Lender in writing. (e) To the best of Borrower's owledge, information or belief, (i) the CDE Interest has not been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject and (ii) its execution, delivery and performance of this Agreement and the pledge of the Pledged Collateral hereunder do not, directly or indirectly, violate in any material respect or result in a violation of any such laws. (f) Borro e right and requisite authority to pledge the Pledged Collateral to Lender, as provided herein. e ecltion, delivery, and performance of this Agreement will not (i) result in any violation of, be in conflict with, or constitute a default under (x) the CDE OA or (y) any agreement or instrument or any judgment, decree, order, statute, rule, or governmental regulation applicable to Borrower o f ' the creation of any mortgage, lien, charge, or encumbrance on any of the properti ©wer, except pursuant to this Agreement. (g) None o � Pledged Collateral is, as of the Effective Date, margin stock, and Borrower shall, promptly after learning thereof, notify CDE and Lender of any Pledged Collateral which is or becomes margin stock and execute and deliver in favor of Lender any and all instruments, documents and agreements (including, but not limited to Forms U -1) necessary to cause the pledge of such margin stock to comply with all applicable laws, rules and regulations. (h) Excep vhave already been obtained as of the Effective Date, no consent, approval, authorization or other order of any Person and no consent, authorization, approval, or other action by, and no notice to or filing with, any governmental departments, commissions, boards, bureaus, agencies or other instrumentalities, domestic or foreign, is required to be made or obtained by Borrower either (i) for the pledge of the Pledged Collateral pursuant to this Agreement or for the execution, delivery or performance of this Agreement by Borrower or (ii) for the exercise by Lender of the voting or other rights provided for in this Agreement or the remedies in respect of the Pledged Collateral pursuant to this Agreement. NA1- 1502609640v3 3 (i) The pledge of the Pledged Collateral to Lender pursuant to this Agreement will create a valid lien on and a first priority security interest in the Pledged Collateral, and the proceeds thereof, securing the payment of the Obligations. (j) The Pledged Collateral is not certificated. (k) This Agreement has been duly authorized, executed, and delivered by Borrower and constitutes the legal, valid and binding obligation of Borrower enforceable in accordance with its terms. (1) The only assets of Borrower are the Pledged Collateral and o, er assets incidental thereto. (m) Borrower has no indebtedness other than the Loan, an® ' . additionally be provided for in Section 4.5 of the Loan Agreement. (n) Investor, the sole member of Borrower as of the ` Effe investor" as such term is defined in Rule 501(a) of the Regulation D promulga and any additional member of Borrower and /or transferee of Investor, as m Borrower OA, shall each be an "accredited investor" as such term is ` defined Regulation D promulgated under the Securities Act. e, is an "accredited he Securities Act itted in the 1(a) of the (o) The representations and warranties set forth in this Section 4 shall and delivery of this Agreement. survive the execution 5. Covenants. Borrower covenants and agrees that until the satisfaction in full of the Obligations: (a) Borrower will not sell, assign, transfer, pledge, or otherwise encumber any of its rights in or to any of the Pledged Collateral or any dividends or other distributions or payments with respect thereto or grant a lien, charge, encumbrance or security interest on any thereof. (b) Borrower will, n its expense, promptly execute, acknowledge and deliver all such instruments and take all such action as Lender from time to time may reasonably request in order to ensure to Lender the benefits of the liens and security interests in and to the Pledged Collateral intended to be created by this Agreement, including the delivery of all certificates and other documentation, evidence an of the Pledged Collateral and the filing of any necessary Uniform Commercial Code financ 9 ®? , which enay be filed by Lender without the signature of Borrower. Borrower will defend the title to the Pledged Collateral and the liens of Lender, for the benefit o gainst the claim of any Person and will maintain and preserve such liens until the payment in u 1 of - Obligations. (d) Borrower will not allow the Pledged Collateral to become certificated without the prior written consent of Lender. (e) Borrower shall have no indebtedness other than the Loan, loans to CDE as contemplated by the CDE OA, and trade payables incurred by Borrower in the ordinary course of business, and as may additionally be provided for in Section 4.5 of the Loan Agreement. (f) Subject to Section 5.3 of the Loan Agreement, at any time an uncured Event of Default remains outstanding, Borrower hereby consents to Lender's or its designee's right to become and be admitted as a member or partner, as applicable, of CDE and to receive distributions and allocations from CDE, and to exercise voting, consent, waiver or ratification rights with respect to the CDE Interest NAI- I 502609640v3 (subject to the terms of the CDE OA), upon the exercise of Lender's rights hereunder without further action, approval or consent. (g) Borrower shall not waive any right to, or consent to any failure by any managing member or general partner, as applicable, of CDE to make, periodic distributions permitted under the CDE OA. (h) Borrower will not consent to CDE opting into Article 8 of the Uniform Commercial Code of CDE's state of organization without the prior written consent of Lender. (1) Borrower will not consent to any amendment or restatement of the CDE OA unless such amendment or restatement is permitted by Section 4.3 of the Loan Agreement. 6. Borrower's Rights. Until the later to occur of: (a) the date that notice of the occurrence and continuance of an Event of Default is given by Lender to Borrower in accordance with Section 18(b) and (b) the date on which Lender is entitled to exercise remedies under the Loan Documents in accordance with Section 5.3 of the Loan Agreement: (i) Borrower shall have the right, from time to time, to vote on, consent to, or otherwise participate in any decision or action of or by CDE granted to Borrower pursuant to the CDE OA or the Entity Act for all purposes not inconsistent with the provisions of this Agreement and the other Loan Documents, provi owever, that no vote shall be cast, and no consent shall be given or action taken, which wo _ the effect of (A) impairing in any material respect the validity of Lender's security interest in the Pledged VIlateral or Lender's rights under the Loan Documents, (B) any change in the authorized number`' of shares or interests in CDE, the stated capital or the authorized share capital of CDE or the issuance of any additional interests in CDE, or (C) the alteration of the voting rights with respect to Borrower's interests in CDE; and (ii) E wept as othe': 'se set forth in Section 4.3 of the Loan Agreement, Lender shall have no right to _exercise any rigfi to vote on consent to, or otherwise participate in any decision or action of or by CDE granted to Borrower pursuant to the CDE OA or the Entity Act. 7. Defaults and Remedies. Subject to Section 5.3 of the Loan Agreement, upon the occurrence and continuance of an Event of Default, following written notice to Borrower, Lender is hereby authorized and empowered to do any and all of the following in a commercially reasonable manner: (a) transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Collateral; (b) exchange certificates or instruments representing or evidencing any or all of the CDE Interest for certificates or instruments of smaller or larger denominations; (c) exercise the voting rights with respect to any or all of the CDE Interest; (d) collect and receive all cash dividends and other distributions made with respect to any or all of the CDE Interest; and (e) sell in one or more sales after 10 calendar days' written notice is sent by Lender of the time and place of any public sale or of the time after which a private sale is to take place (which notice Borrower agrees is commercially reasonable), but without any previous notice or advertisement, the whole or any part of the Pledged Collateral and to otherwise act with respect to the Pledged Collateral as though Lender were the outright owner thereof; provided, however, Lender shall not have any duty to NAI- 1502609640v3 5 exercise any such right of sale or to preserve the same and shall not be liable for any failure to do so or for any delay in doing so. 8. Sale of Pledged Collateral. (a) Any sale of the whole or any part of the Pledged Collateral in accordance with Section 7(e) shall be made at a public or private sale at Lender's place of business, or at any public building to be named in the notice of sale, either for cash or upon credit or for future delivery at such price as Lender may deem fair and reasonable, and Lender may be the purchaser of the whole or any part of the Pledged Collateral so sold and hold the same thereafter in its own right free from any claim of Borrower or any right of redemption. Each sale shall be made to the highest bidder, but Lender reserves the right to reject any and all bids at such sale which, in its discretion, it shall deem inadequate. Demands of performance, notices of sale, advertisements and the presence of property at sale are hereby waived and any sale hereunder may be conducted by an auctioneer or any officer or agent of Lender. (b) If, at the original time or times appointed for the sale of the whole or any part of the Pledged Collateral, the highest bid, if there be but one sale, shall he inadequate to discharge in full all the Obligations, or if the Pledged Collateral be offered for sale in lots, ittiu. of such sales, the highest bid for the lot offered for sale would indicate to Lender, in its discretion; t ,eEr likelihood of the proceeds of the sales of the whole of the Pledged Collateral being sufficient to discharge all the Obligations, Lender may, on one or more occasions and in its discretion, postpone any of said sales by public announcement at the time of sale, and no other notice of such postponement or postponements of sale need be given, any other notice being hereby waived; provided, however, that any sale or sales made after such postponement shall be after 10 calendar days' notice to Borrower. (c) In the event of any sale of the whole or any part of; the Pledged Collateral, Lender shall, after deducting all reasonable costs or expenses of every kind (inc ding reasonable attorneys' fees and disbursements) for care, safekeeping, collection, sale, delivery or otherwise, apply the residue of the proceeds of the sales to the payment or reduction, either in whole or in part, of the Obligations. (d) In the event that it becomes necessary to comply with any federal or state law or regulation or to make or file any registration thereunder in order for Lender to exercise any of its rights hereunder, Borrower expressly agrees to do or cause to be done all acts and prepare and execute all documents necessary to effect such compliance or registration, and to bear all reasonable costs in connection therewith. Borrower agrees to indemnify and to hold Lender harmless from and against any claim or liability caused by (i) any omission or alleged omission to state a material fact required to be stated, or necessary to make the statements, in light of the circumstances in which they are made, not misleading (as required in any registration or prospectus) or (ii) a failure to register or comply with any such law or regulation, unless such failure is caused by Lender. (e) lf, at any time when Lender shall determine to exercise its right to sell the whole or any part of the Pledged Collateral, and such Pledged Collateral or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act, then Lender may, in its discretion (subject only to the requirements of applicable law), sell such Pledged Collateral or part thereof by private sale in such manner and under such circumstances as is commercially reasonable and shall not be required to effect such registration or to cause the same to be effected; provided, however, that Lender agrees and shall cause any purchaser of Pledged Collateral to agree that Borrower shall (x) not be liable to any purchaser of Pledged Collateral for any action taken or omitted to be taken by Lender in connection with the sale of Pledged Collateral, and (y) not be responsible in any manner to any purchaser of Pledged Collateral for any statement, representation or warranty made by Lender in connection with the sale of NAI -I 502609640v3 6 Pledged Collateral. Without limiting the generality of the foregoing, in any such event Lender in its discretion may: (i). in accordance with applicable securities laws, proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Pledged Collateral or part thereof could be or shall have been filed under said Securities Act (or similar statute); (ii) approach and negotiate with a single possible purchaser to effect such sale; and (iii) restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment and not with a view to the distribution or sale of such Pledged Collateral or part thereof. (f) In addition to a private sale as provided in Section 7(e) and this Section 8, if any of the Pledged Collateral shall not be freely distributable to the public without registration under the Securities Act (or similar statute) at the time of any proposed sale pursuant to Section 7(e) and t ' ection 8, then Lender shall not be required to effect such registration or ca se j= A me to be effec but, in its discretion (subject only to applicable requirements of law), may ny sale her") er (including a sale at auction) be conducted subject to restrictions: (1) as to the financial sophistication and abil of any Person permitted to bid or purchase at any such sale; (ii) as to the content of legends to be placed a Son any certificates representing the Pledged Collateral sold in such sale, including restrictions on future transfer thereof; (iii) as to the representations required to be made by each Person bidding or purchasing at such sale relating to that Person's access to financial information about any issuer of the Pledged Collateral and such Person's intentions as to the holding of the Pledged Collateral so sold for investmen its own acco t and not with a view to the distribution thereof; and (iv) as to such other matters as Lender may, in its discretion, deem necessary or appropriate in order that such sale (notwithstanding any failure so to register) may be effected in compliance with the Uniform Commercial Code and other laws affecting the enforcement of creditors' rights and the Securities Act and all applicable state securities laws. (g) Borrower recognizes that Lender may be unable to effect a public sale of the whole or any part of the Pledged Collateral and may be compelled to resort to one or more private sales thereof. Borrower also acknowledges that any such private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale. Borrower agrees that such sale shall not be deemed to have been made in a commercially unreasonable manner because it was conducted as a private sale. Lender shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit the registrant to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if Borrower would agree to do so. (h) Borrower agrees, to the maximum extent permitted by applicable law, that following the occurrence and during the continuance of an Event of Default, it will not at any time plead, claim or take the benefit of any appraisal, valuation, stay, extension, moratorium or redemption law now or hereafter in force in order to prevent or delay the enforcement of this Agreement, or the absolute sale of the whole or any part of the Pledged Collateral or the possession thereof by any purchaser at any sale hereunder, and NAI -I 502609640v3 7 Borrower waives the benefit of all such laws to the extent it lawfully may do so. No failure or delay or forbearance under Section 5.3 of the Loan Agreement or otherwise on the part of Lender to exercise any such right, power or remedy and no notice or demand which may be given to or made upon Lender with respect to any such remedies shall operate as a waiver thereof, or limit or impair Lender's right to take any action or to exercise any power or remedy hereunder, without notice or demand, or prejudice its rights as against Borrower in any respect. (i) Borrower further agrees that a breach of any of the covenants contained in this Section 8 will cause irreparable injury to Lender, that Lender has no adequate remedy at law in respect of such breach and, as a consequence, agrees that each and every covenant contained in this Section 8 shall be specifically enforceable against Borrower, and Borrower hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that Lender's rights are subject to Section 5.3 of the Loan Agreement or that the Obligations are not then due and payable in accordance with the agreements and instruments governing and evidencing the Obligations. (j) The rights and remedies of Lender under this Agreement shall be cumulative and not exclusive of any rights or remedies which it would otherwise have. In exercising such rights and remedies, Lender may be selective, and no failure or delay or forbearance under Section 5.3 of the Loan Agreement or otherwise by Lender in exercising any right shall operate_ as a waiver of it nor shall any single or partial exercise of any power or right preclude its other or further exercise or the exercise of any other power or right. (k) Following the Forbearance Termination Date, upon the occurrence of an Event of Default and during the continuation of such Event of Default, Borrower hereby irrevocably constitutes and appoints Lender and any officer or agent thereof with hill power of substitution as Borrower's true and lawful attorney -in -fact and as such, Lender is hereby authorized and permitted to take, in its own name or in the name of Borrower for itself and as a member of CDE (to the extent of the interests in the Pledged Collateral), any action specified in this Agreement to be taken by Lender. 9. Forbearance. Notwithstanding any provision in his Agreement to the contrary, the rights and remedies of Lender are subject in all respects to the provisions of Section 5.3 of the Loan Agreement (incorporated herein by reference and made a part hereof), and nothing in this Agreement shall be deemed to authorize or empower Lender to take any action or exercise any right or remedy that is inconsistent with such provisions. 10. `` Waiver. No delay or forbearance under Section 5.3 of the Loan Agreement or otherwise on Lender's part in exercising any power of sale, lien, option or other right hereunder, and no notice or demand which may be given to or made upon Borrower by Lender with respect to any power of sale, lien, option or other right hereunder, shall constitute a waiver thereof, or limit or impair Lender's right to take any action or to exercise any power of sale, lien, option, or any other right hereunder, without notice or demand, or prejudice Lender's rights as against Borrower in any respect. 11. Termination. Subject to Section 14, this Agreement shall terminate and be of no further force or effect at such time as the Obligations shall have been irrevocably paid and performed in full. Upon such payment and performance in full of the Obligations, Lender shall deliver to Borrower the Pledged Collateral (or any Project Loan Documents or other instruments received in connection with the redemption of any or all of the CDE Interest or dissolution or termination of any or all of CDE, as applicable) at the time subject to this Agreement and then in Lender's possession or control and all instruments of assignment executed in connection therewith, free and clear of the liens hereof and, except as otherwise provided herein, all of Borrower's obligations hereunder shall at such time terminate. NAI -I 502609640v3 8 12. Lien Absolute. All rights of Lender hereunder, and the Obligations of Borrower hereunder, shall be absolute and unconditional without regard to: (a) any lack of validity or enforceability of the Loan Agreement, the Note, any other Loan Document or any other agreement or instrument governing or evidencing any Obligations; (b) any change in the time, manner or place of payment of, or in any other term of, all or any part of the Obligations, or any other amendment or waiver of or any consent to any departure from the Loan Agreement, the Note, any other Loan Document or any other agreement or instrument governing or evidencing the Obligations; any exchange, release or non - perfection of any other collateral, or any release or amendment or waiver of or consent to departure from any guaranty, for all or any of the Obligations; or (d) any other circumstance which might otherwise constitute a defense available to, or a discharge of, Borrower. 13. Release. Except as specifically provided for in any other Loan Document, Bo wer hereby waives notice of acceptance of this Agreement, and also presentment, demand, protest and notice of dishonor of all or any of the Obligations, and promptness in commencing suit against any party hereto or liable hereon, and in giving any notice to or of making any claim or demand hereunder upon Borrower. Borrower consents and agrees that Lender may at any time, or from time to time, in its discretion exchange, release and /or surrender all or any of the Pledged Collateral and /or any other collateral for the Loan, or any part thereof, by whomsoever deposited, which is now or may hereafter be held by Lender in connection with all or any of the Obligations; all in such manner and upon such terms as Lender may deem proper, and without notice to or further assent from Borrower, it being hereby agreed that Borrower shall be and remain bound upon this Agreement, without regard to the value or condition of any of the Pledged Collateral or other collateral for the Loan, and notwithstanding any such change, exchange, settlement, compromises surrender, release, renewal or extension, and notwithstanding also that the Obligations may, at any time, exceed the aggregate principal amount thereof set forth in the Loan Agreement, or any other agreement governing any Obligations. No act or omission of any kind on Lender's part shall in any event affect or impair this Agreement. 14. Reinstatement. This Agreement shall remain in full force and effect and continue to be effective or be jeinstated, as the case may be, if at any time payment and performance of the Obligations, or any part thereof, is pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Obligations, whether as a "voidable preference," "fraudulent conveyance," or otherwise, all as though such payment or performance had not been made. 15. Non - Recourse. The provisions of this Agreement are expressly made subject to the limitations on recourse set forth in Section 1.9 of the Loan Agreement, which are incorporated herein by reference. 16. Lender Liability. Neither Lender, nor any of its respective officers, members, managers, directors, employees, agents or counsel shall be liable for any action lawfully taken or omitted to be taken by it or them hereunder or in connection herewith, except for its or their own fraud, gross negligence, or willful misconduct. 17. Lender Assignment or Transfer. Section 5.4 of the Loan Agreement is incorporated herein by reference. NAI -1 502609640v3 9 18. Miscellaneous. The following conditions shall be applicable throughout the term of this Agreement: (a) No Waiver. Section 6.1 of the Loan Agreement is incorporated herein by reference. (b) Notices. Section 6.2 and Schedule A of the Loan Agreement are incorporated herein by reference. (c) Entire Agreement; No Oral Amendments. This Agreement and the exhibit attached hereto, together with the other Loan Documents, constitutes the entire agreement by and between Lender and Borrower (and any Affiliates of Borrower) and supersedes all agreements, previously made between the parties relating to its subject matter. There are no other understandings or agreements between them relating to such subject matter. Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing sib, ed by the party against whom enforcement of such change, waiver, discharge or termination is sought (d) No Partnership. Section 6.5 of the Loan Agreement is incorporate® herein by reference. (e) Binding Effect; Continuing Agreement. Section 6.8 of the Loan Agreement is incorporated herein by reference (f) Headings. Section 6.9 of the Loan 'Agreement is incorporated herein by reference. (g) CHOICE OF LAW; WAIVER OF JURY TRIAL AND CERTAIN OTHER RIGHTS; SUBMISSION TO JURISDICTION; SERVICE OF PROCESS. Section 6.10 of the Loan Agreement is incorporated herein by reference. (h) Enforcem Section 6.12 of the Loan Agreement is incorporated herein by reference. (i) Duration of Agreement. Section 6.13 of the Loan Agreement is incorporated herein by reference. etation by re f eretde (k) r.Severability. If any provision of this Agreement or the application thereof to any Person or circumstance shall be invalid, illegal or unenforceable to any extent, that provision shall, if possible, be construed as though more narrowly drawn, if a narrower construction would avoid such invalidity, illegality, or unenforceability or, if that is not possible, such provision shall, to the extent of such invalidity, illegality, or unenforceability, be severed, and the remainder of this Agreement and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by law. Notwithstanding the foregoing, to the extent (1) Section 5.3 of the Loan Agreement is incorporated herein by reference or (ii) any provision hereof is made subject to Section 5.3 of the Loan Agreement, such provisions shall be deemed integral to this Agreement and shall not be severable from the remainder of this Agreement. Section 6.14 of the Loan Agreement is incorporated herein (1) Time of the Essence. Subject to Section 5.3 of the Loan Agreement, time shall be of the essence with respect to all or any of the Obligations. (m) Counterparts. Section 6.17 of the Loan Agreement is incorporated herein by reference. NAI- 1502609640v3 10 [REMAINDER OF PAGE BLANK; SIGNATURE PAGES TO FOLLOW.] NA1- 1502609640v3 11 IN WITNESS WHEREOF, Borrower and Lender have caused this Fund Pledge Agreement to be duly executed as of the Effective Date. BORROWER: COCRF INVESTOR 77, LLC, a Delaware limited liability company By: Capital One, National Association, a national banking association, its sole member By: Name: Douglas J. Fields Title: Senior Vice President SIGNATURE PAGE 1 OF 2 FUND PLEDGE AGREEMENT (CONA/CLEARINGHOUSE /FEDERAL WAY PAEC) NAI- l502609640v3 LENDER: [COUNTERPART SIGNATURE PAGE TO FUND PLEDGE AGREEMENT] CITY OF FEDERAL WAY, a Washington municipal corporation By: Name: Title: SIGNATURE PAGE 2 OF 2 FUND PLEDGE AGREEMENT (CONA/CLEARINGHOUSE /FEDERAL WAY PAEC) NAI- 1502609640v3 EXHIBIT A FORM OF ASSIGNMENT COCRF INVESTOR 77, LLC, a Delaware limited liability company ( "Assignor "), hereby assigns to CITY OF FEDERAL WAY, a Washington municipal corporation ( "Assignee "), all of Assignor's rights, title and interest in and to the investor member limited liability company interest in Clearinghouse NMTC (Sub 46), LLC, a California limited liability company, and directs that all future distributions and allocations of income or loss on account of such interest be paid or allocated to Assignee. Assignee hereby accepts said interest subject to all terms, covenants and conditions of (i) that certain Fund Loan Agreement, dated as of [ ], 2017, by and between Assignor and Assignee (as the same may be amended, assigned, restated, modified, or supplemented from time to time, the "Loan Agreement "), including but not limited to Section 5.3 thereof incorporated herein by reference and made a part hereof, and (ii) the CDE OA (as such term is defined in the Loan Agreement). Dated: , 20 ASSIGNOR: OCRF INVES company 7, LLC, a Delaware limited apital °'ne, Natio a. • sociation, a national banking association, its sole member EXHIBIT A FUND PLEDGE AGREEMENT (CONA/CLEARINGHOUSE /FEDERAL WAY PAEC) NAI- 1502609640v3 Name: Title: (Authorized Signatory) CITY OF FEDERAL WAY, a Washington municipal corporation By: Name: Title: (Authorized Signatory) FINANCING DOCUMENTS 3. Environmental and Hazardous Substances Indemnity Agreement executed by Corporation and City in favor of Lender ENVIRONMENTAL AND HAZARDOUS SUBSTANCES INDEMNITY AGREEMENT This Environmental and Hazardous Substances Indemnity Agreement (this "Indemnity Agreement ") is executed and delivered as of June _, 2017, by FW PAEC QALICB, INC., a Washington nonprofit corporation ( "Borrower "), and CITY OF FEDERAL WAY, a Washington municipal corporation ( "City ") (each of Borrower and City, an "Indemnitor ", and together, "Indemnitors "), to and for the benefit of CLEARINGHOUSE NMTC (SUB 46), LLC, a California limited liability company, together with its s ssors and assigns (the "Lender "). RECITALS: A. Pursuant to that certain Ground Lease, executed as of the date hereof, by and between City, as lessor, and Borrower, as lessee, Borrower is the holder of a long -term leasehold interest in the real property (the "Land ") located at 31510 Pete vonReichbauer South, Federal Way, Washington 98003, where Borrower intends to construct, develop, and lease certain improvements (the "Improvements" and, together with the Land, the "Property "), as more particularly described in the Borrower's Plans and Specifications. B. In furtherance of the above, on or about the date hereof, Borrower and Lender entered into that certain Loan Agreement (as amended, restated or otherwise modified from time to time, "Loan Agreement ") whereby Lender agreed to make certain loans in the aggregate principal amount of $9,310,000 (collectively, the "Loan "). C. In connection with the Loan, Borrower has executed and delivered (i) that certain Promissory Note (Loan A) to Lender, dated of even date herewith in the principal amount of [$6,239,600] ( "Note .A "), and (ii) that certain Promissory Note (Loan B) to Lender of even date herewith in the principal amount of [$3,070,400] ( "Note B ") and, together with Note A, the "Notes "). D. As a condition to making the Loan, Lender requires that Indemnitors indemnify and hold harmless Lender (and certain other parties as described below) upon the occurrence of certain ents. E. Lender has relied on the statements and agreements contained herein in agreeing to make the Loan. AGREEMENTS: In consideration of the Recitals set forth above and hereby incorporated herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Indemnitors hereby agree as follows: 1. Definitions. Initially capitalized terms used and not otherwise defined herein shall have the meanings respectively ascribed to them in the Loan Agreement. - 1 - Federal Way QI.ICI Environmental Indemnity v.2 Loan #17W.1 -1228 2. Representations and Warranties. Indemnitors hereby represents and warrants to Lender, to the best of Indemnitors' actual and current knowledge after reasonably diligent search and inquiry: (i) except as set forth in any environmental assessment delivered to Lender by or on behalf of Indemnitors and described in Exhibit A attached hereto (the "Documents ") (a) the Project has been and is free from contamination by Hazardous Material in violation of Environmental Laws, and (b) no release of any Hazardous Material has occurred on, onto or about the Project in violation of Environmental Laws (or to the extent such release has occurred to Indemnitors' actual, current knowledge, such release has been addressed in accordance with applicable Environmental Laws; (ii) that, except as specifically disclosed in the Documents, the Project currently complies, and will comply based on its anticipated use, with all Environmental Laws; (iii) that in connection with the ownership, operation, and use of the Project, all necessary notices have been filed and all required permits, licenses and other authorizations have been obtained, including those relating to the generation, treatment, storage, disposal or use of Hazardous Material; (iv) that there is no present investigation, written inquiry or pending proceeding relating to the environmental condition of, or to events on or about, the Project ( "Environmental Proceedings "); and (v) it has not released, waived the liability of any previous owner, lessee or operator of the Project or any par who may be potentially responsible for the presence of or removal of Hazardous Material from the Project. 3. Covenants. Indemnitors shall: (a) comply, and cause' all other persons on or occupying the Project to comply, with all Environmental Laws; (b) not install, use, generate, manufacture, store, treat, release or dispose of, nor permit the installation, use, generation, storage, treatment, release or disposal of, Hazardous teriar on under or about the Project except for Hazardous Material used in the construction, operation or use of the Project in compliance with all Environmental Laws; (c) within five (5) Business Days after becoming aware of the same, advise Lender in writing of (i) any and all Environmental Proceedings; (ii) the presence of any Hazardous Material on, under or about the Project of which Lender has not previously been advised in writing and which is not otherwise permitted under Section 3(b) above; (iii) any remedial action taken by, or on behalf of, Indemnitors in response to any Hazardous Material on, under or about the Project or to any Environmental Proceedings of which Lender has not previously been advised in writing; (iv) the discovery by either Indemnitor of the presence of any Hazardous Material on, under or about any real property adjoining or in the - 2 - l cderal Way QLICI Environmental Indemnity v.2 Loan #17W.\ -1228 vicinity of the Project of which Lender has not previously been advised in writing; and (v) the discovery by either Indemnitor of any occurrence or condition on any real property adjoining or in the vicinity of the Project that could cause the Project or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or use of the Project under any Environmental Laws; (d) provide Lender with copies of all reports, lyses, notices, licenses, approvals, orders, correspondences or other written material �,t possession or control relating to the environmental condition of the Project or real property adjoining or in the vicinity of the Project or Environmental Proceedings promptly following receipt, completion or delivery of such materials by or to either - denip tor; (e) except for the Deed of Trust and Permitted Liens, not create or permit to continue in existence any lien (whether or not such lien has riority over the lien created by the Deed of Trust) upon the Project imposed pursuant any Environmental Laws; and (f) not change or alter the intended residential d commercial use of the Project in a manner that will result in the presence of I- Lazar. o- Material on the Project in question in such a level that would materially ;increase the potential liability for Environmental Proceedings. 4. Right of Entry and Disclosure of Environmental Reports. Indemnitors hereby grants to Lender, its agents, employees, consultants and contractors, an irrevocable license and authortzton to enter upon and inspect the Project at reasonable times and, prior to an Event of Default upon reasonable advance written notice, to conduct such environmental audits and tests, including, without limitation, subsurface testing, soils and groundwater testing, and other tests svhicllmay physically invade the Project, as Lender, in its reasonable discretion, determine is necessary or desirable. With respect to any and all audits, tests, or other investigations, Lender shall consult with Indemnitors in advance of such tests. Lender agrees, however, that it shall not conduct any such audits, unless (a) an Event of Default exists under the Loan Documents, (b) Lender has reason to believe that such audit may disclose the presence or release of Hazardous Material or (c) an environmental audit conducted by or on behalf of Lender deems further testing necessary. Lender's notice shall include, in reasonable detail, a description of (x) the factual basis for Lender's belief that such audit may disclose the presence or release of Hazardous Material, and (y) the nature and scope of any audits or tests to be performed; provided, however that no such notice is required if an Event of Default has occurred. Indemnitors and their respective agents shall have the right to be present at all times during such audit, test or other inspections, except after an Event of Default. Without limiting the generality of the foregoing, Indemnitors agree that Lender shall have the right to appoint a receiver to enforce this right to enter and inspect the Project to the extent such authority is provided under applicable law. All reasonable out -of- pocket costs and expenses incurred by Lender in connection with any inspection, audit or testing conducted in accordance with this Section 4 shall be paid by Indemnitors. The results of all investigations and reports prepared by -3- Federal Way QLICI Environmental Indemnity v.2 Loan #17W;\ -1228 Lender shall be and at all times remain the property of Lender and Lender shall make available to Indemnitors upon request copies of all Environmental Reports (as defined below). Lender hereby reserves the right, and Indemnitors hereby expressly authorize Lender to make available to any party in connection with a sale of the Property by Lender if Lender has succeeded to the ownership thereof (whether through foreclosure, conveyance in lieu thereof or otherwise) any and all reports, whether prepared by Lender or prepared by Indemnitors and provided to Lender (collectively, the "Environmental Reports ") which Lender may have with respect to the Project. Indemnitors consent to Lender notifying any party under such circumstances of the availability of any or all of the Environmental Reports and the information con d therein. Indemnitors further agree that Lender may disclose such Environmental Reports `E °z. governmental agency or authority if Lender reasonably believes it is required to disclose any ° atter contained therein to such agency or authority; provided that Lender shall give .Indemnitors at least forty -eight (48) hours prior written notice before so doing unless disclosure to such agency or authority is required earlier. Indemnitors acknowledge that Lender cannot control or otherwise assure the truthfulness or accuracy of the Environmental Reports, a �d that the `release of the Environmental Reports, or any information contained therein ;. rospective bidders at any foreclosure sale of the Property may have a material and adverse ct upon the amount which a party may bid at such sale. Indemnitors agree that. Lend shall not have any liability whatsoever as a result of delivering any or all of the Environme 1 eports or any information contained therein to any third party,' and Indemnitors hereby se and forever discharge Lender from any and all claims, damages, or causes of action arising out of connected with or incidental to the Environmental Reports or the delivery thereof other than those arising from Lender's gross negligence or willful misconduct. 5. Indemnitors' Remedial Work. Indemnitors shall promptly perform or with respect to the corrective actions described in the Documents, if any, cause to be performed any and all remedial work required by Environmental Laws ( "Remedial Work ") in response to any Environmental Proceedings or the presence, storage, use, disposal, transportation, discharge or release of any Hazardous Material under or about any of the Project in accordance with Environmental Laws; provided, however, that Indemnitors shall perform or cause to be performed such Remedial Work so as to minimize any impairment to Lender's security under the Loan Documents. All Remedial Work shall be conducted: (a) in a diligent and timely fashion by licensed contractors acting under the supervision of a consulting environmental engineer; (b) pursuant to a detailed written plan for the Remedial Work approved by any public or private agencies or persons with a legal or contractual right to such approval; (c) with such insurance coverage pertaining to liabilities arising out of the Remedial Work as is then customarily and reasonably maintained with respect to such activities; and -4- Federal Way Q],1CI Environmental Indemnity v.2 Loan #17W,1 -1228 (d) only following receipt of any required permits, licenses or approvals. The selection of the Remedial Work contractors and consulting environmental engineer, the contracts entered into with such parties, any disclosures to or agreements with any public or private agencies or parties relating to Remedial Work and the written plan for the Remedial Work (and any changes thereto) shall each be subject to Lender's prior written approval, which shall not be unreasonably withheld or delayed. In addition, Indemnitors shall submit to Lender, promptly upon receipt or preparation, copies of any and all reports, studies, analyses, correspondence, governmental comments or approvals, proposed removal or other Remedial Work contracts and similar information prepared or received by Indemnitors in connection with any Remedial Work, or Hazardous Material relating to the Project. All reasonable costs and expenses of such Remedial Work shall be paid by Indemnitors, including, without limitation, the charges of the contractors conducting the Remedial Work, the charges of the environmental engineer consulting on such Remedial Work, any taxes or penalties assessed in connection with the Remedial Work and Lender's reasonable out-of-pocket costs incurred in connection with monitoring or review of such Remedial Work. Lender shall h -e the right but not the obligation to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Environmental Proceedings. 6. Indemnity. (a) Indemnitors shall protect, indemnify defend and hold harmless Indemnified Parties (as defined below) and any nominee 91 designee of any Indemnified Party that acquires > City's or Borrower's interest in the Property pursuant to any foreclosure, decd -in -lieu of foreclosure, or other enforcement of Lender's remedies under the Loan Documents, and all members, directors, officers, employees and agents of all of the aforementioned indemnified parties, from and against any and all actual or potential claims, liabilities, damages (direct or indirect), losses, fines, penalties, judgments, awards, and reasonable `costs and expenses (including, without limitation, reasonable attorneys' fees and costs and expenses of investigation) (collectively, "Expenses ") which arise out of or relate in any way to any breach of any representation, warranty or covenant contained herein, or any Environmental Proceedings, or any use, handling, production, transportation, disposal, release or storage of any Hazardous Material in, under or on the Project, whether by either Indemnitor or any other person, including, without limitation: (i) all foreseeable and all unforeseeable Expenses arising out of: a) Environmental Proceedings or the use, generation, storage, discharge or disposal of Hazardous Material by either Indemnitor, any prior owner or operator of the Project, or any person on or about the Project; b) any residual contamination affecting any natural resource or the environment; or - 5 - Federal Way Q1.1C1 Environmental Indemnity v.2 Loan #17W.\ -1228 c) any exercise by any Indemnified Party of any of its rights and remedies hereunder; and (ii) the costs of any required or necessary investigation, assessment, testing, remediation, repair, cleanup, or detoxification of the Project and the preparation of any closure or other required plans; subject, however, to the limitation set forth at the end of Section 6(b) hereof. (b) Indemnitors' liability to the aforementioned indenified parties shall arise upon the earlier to occur of (1) the discovery of any Hazardous Material on, under or about the Project, or (2) the institution of any Environmental Proceedings, and not upon the realization of loss or damage, and Indemnitors shall pay to any applicable Indemnified Party from time to time, immediately upon request, an amount equal to such Expenses, as reasonably determined by such Indemnified Party. In addition, in the event any Hazardous Material is removed, or caused to be removed from the Project by either Indemnitor, any Indemnified Party or any other person, the number assigned by the U.S. Environmental Protection Agency to such Environmental Proceedings or any similar identification shall in no event be in the name of such Indemnified Party or identify such Indemnified Party as a generator, arranger or other designation. The foregoing indemnity shall not include Expenses arising solely from Hazardous Material which first exist on the Project following the date on which any Indemnified Party or any nominee or designee of such Indemnified Party, shall take title to or possession of the Property, whether by enforcement "� + �.-.ed 'of, Trust, deed -in -lieu thereof or otherwise, or a receiver is appointed, o .;'.r possession of the Property is otherwise transferred pursuant to the exercise of � s under the Loan Documents, as a result of which Indemnitors cease to have p • e " " "on or control of the Property, and the indemnification hereunder shall not cover Expenses resulting from the gross negligence or willful misconduct of any such indemnified party. (c) For purposes of this Agreement, "Indemnified Parties" shall mean Lender, the successors and assigns of each Lender, and each of Lender's direct and indirect members (including, without limitation, Clearinghouse Community Development Financial Institution, a California corporation, and COCRF Investor 77, LLC, a Delaware limited liability company), subsidiaries, and affiliates, and each of their respective partners, members, shareholders, directors, officers, employees, and agents, and any financial institution that is the successor or assign of Lender. "Indemnified Party" shall mean any one of the Indemnified Parties. 7. Remedies Upon Default. In addition to any other rights or remedies Indemnified Parties may have under this Indemnity Agreement, at law or in equity, in the event that either Indemnitor shall fail to timely comply with any of the provisions hereof, or in the event that any representation or warranty made herein proves to be false or misleading in any material respect, then Lender may declare an Event of Default under the Loan Documents and exercise any and all remedies provided for therein, and /or do or cause to be done whatever is reasonably necessary to cause the Project to comply with all Environmental Laws and other - 6 - Federal Way Q1.1C1 Environmental Indemnity v.2 Loan #17W,\ -1228 applicable laws, rules, regulations or orders and the cost thereof shall constitute an Expense hereunder and shall become immediately due and payable without notice and with interest thereon at the Default Rate until paid; provided that (i) Lender first deliver written notice to Indemnitors, which notice specifically states that Indemnitors have failed to comply with the provisions of this Indemnity Agreement; and (ii) Indemnitors have until the later of thirty (30) days after receipt of such notice or the lapse of the cure period, if any, permitted under any applicable law, rule, regulation or order with which Indemnitors shall have failed to comply; provided, however, that if any such failure is susceptible to cure and cannot be reasonably cured within said thirty (30) day period, then Indemnitors shall have an additional sixty (60) day period to cure such failure so long as Indemnitors commence such cure within the initial thirty (30) day period and diligently and in good faith pursues such cure to completion within such resulting ninety (90) day period from the date of such notice to Indemnitors. Lender agrees that the foregoing notice and cure rights shall control over any lesser cure rights as to such matters set forth in the Loan Agreement or other Loan Documents. Indemnitors shall give to Lender and its agents and employees access to the Project for the purpose of effecting such compliance and hereby specifically grant to Lender a license, effective upon expir of the applicable period as described above, if any, to do whatever is necessary to cause the ect to so comply, including, without limitation, to enter the Project 4nd remove therefrom any Hazardous Material or otherwise comply with any Environmen 8. Obligations. The obligations set forth herein, including, without limitation, Indemnitor's obligation to pay Expenses hereunder, are collectively referred to as, the "Environmental Obligations ". Notwithstanding any term or provision contained herein or in the Loan Documents, the Environmental Obligations are unconditional. Each Indemnitor shall be fully and personally liable for ; Environmental Obligations hereunder, on a joint and several basis, and such liability shall; ;: be limited to the original principal amount of the Loan. The Environmental Obligations sha survive the repayment of the Loan and any foreclosure, deed -in -lieu of foreclosure or similar proceedings by or through which Lender or any of its affiliates, nominees, successors or assigns or any other person bidding at a foreclosure sale may obtain title to the Project or any portion thereof. 9. Waiver. No waiver of any provision of this Indemnity Agreement nor consen o any departure by Indemnitors therefrom shall in any event be effective unless the same shall be in writing and signed by Lender and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No notice to or demand on Indemnitors, on its own, shall in any case entitle Indemnitors to any other or further notice or demand in similar or other circumstances. 10. Exercise of Remedies. No failure on the part of Indemnified Parties' to exercise and no delay in exercising any right or remedy hereunder, at law or in equity, shall operate as a waiver thereof. Indemnified Parties shall not be estopped to exercise any such right or remedy at any future time because of any such failure or delay; nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise of such right or remedy or the exercise of any other right or remedy. -7- Federal Way QL1C1 Environmental Indemnity v.2 Loan #17WA -1228 11. Assignment. Lender may assign its interest under this Indemnity Agreement to any successor to its interests in the Property or the Loan Documents. This Indemnity Agreement may not be assigned or transferred, in whole or in part, by Indemnitors and any purported assignment by Indemnitors of this Indemnity Agreement shall be void ab initio and of no force or effect. 12. Counterparts. This Indemnity Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of such countearts taken together shall constitute but one and the same instrument. 13. Governing Law. This Indemnity Agreement shall be governed by, and shall be construed in accordance with, the laws of the State of Washington without regard to any conflicts of laws principles. 14. Modifications. This Indemnity,. Agreement may be amended or modified only by an instrument in writing which by its express terms refers to this Indemnity Agreement and which is duly executed by Indemnitors and consented to in writing by Lender. 15. Attorneys' Fees. If Lender commences litigation for the interpretation, enforcement, termination, cancellation or rescission of this Indemnity Agreement, or for damages for the breach of this Indemnity Agreement, Lender shall be entitled to its reasonable attorneys' fees (including, but not limited to, in -house counsel fees) and court and other costs incurred in connection therewith. 16. Interpretation. This Indemnity Agreement has been negotiated by parties knowledgeable in the matters contained herein, with the advice of counsel, is to be construed and interpreted in absolute parity, and shall not lac construed or interpreted against any party by reason of such party's preparation of the initial or any subsequent draft of the Loan Documents or this Indemnity Agreement. 17. Severability. I f any term or provision of this Indemnity Agreement shall be determined to be illegal or unenforceable, all other terms and provisions in this Indemnity Agreement shall nevertheless; remain effective and shall be enforced to the fullest extent permitted by law. 18. Other Laws. Nothing in this Indemnity Agreement, and no exercise by Lender of its rights or remedies under this Indemnity Agreement, shall impair, constitute a waiver of, or in any way affect Lender's rights and remedies with respect to Indemnitors under any Environmental Laws, including without limitation, contribution provisions or private right of action provisions under such Environmental Laws. 19. [Intentionally Deleted] . 20. Notices. Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and shall be deemed -8- Federal Way QLICI Environmental Indemnity v.2 Loan #17W;6 -1228 to have been properly given (a) if hand delivered, when delivered; (b) if mailed by United States Certified Mail (postage prepaid, return receipt requested), three (3) Business Days after mailing (c) if by Federal Express or other reliable overnight courier service, on the next Business Day after delivered to such courier service or (d) if by facsimile or email to the applicable party at its respective email address or facsimile number set forth below or at such other address or facsimile number as such party hereafter may designate as its address for communications hereunder by notice so given. Such notices and communications shall be deemed delivered upon receipt (or refusal to accept delivery). If to either Indemnitor: with copy to: If to Lender: City of Federal Way 33325 8th Ave. South Federal Way, WA 98003 Attn: Ryan Call Phone: (253) 835 -2412 Fax: Email: Ryan: Call @citvoffederahv -av-.coin Butler Snow LLP 201 St. Charles Avenue Suit70. - . New Orleans, 1;A 70170 Attn Alan Pasternack Phone (504) 299 -7757 ax: (5()4) 299 -7701 mail: Alan.Pasternack@butlersnow.com Clearinghouse NMTC (SUB 46), LLC 23861 El Toro Road Suite 401'' e Forest, CA 92630 Attn: Kristy 011endorff Phone: (949) 525 -4980 Fax: (949) 859 -8534 Email: KristyO @clearinghousecdfi.com Federal Way QLJCI Environmental Indemnity v.2 Loan #17W,\ -1228 -9- with copy to: and a copy to: Bergman and Allderdice 1200 Wilshire Blvd. Suite 610 Los Angeles, CA 90017 Attn: Beth S. Bergman Phone: (213) 736 -5101 Fax: (213) 947 -4371 Email: bbergman @b - alaw.com COCRF Investor 77, LLC c/o Capital One Bank 201 St. Charles Avenue, 29th Floor New Orleans, I,A 70170 Attn: Douglas Fields Phone: (504)'533 -2035 Email: douglas.fields @capitalone.com Jones Day 100 High Street, 21st Floor Boston, MA 02110 -1781 Attn: Jeff Gaulin Phone: (617) 449 -6932 Email: jgaul n @joncsday.com or at such other ad. ° s the p to he served with notice may have furnished in writing to the party seeking or des � g to serve notice as a place for the service of notice. 21. Captions. 'I'he` headings of each section herein are for convenience only and do not limit or construe the contents of any provisions of this Indemnity Agreement. 22. Waiver of Jury Trial. EACH IND I ? MNITOR HEREBY WAIVES, TO THE FULLEST EY1ENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS INDEMNITY AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH INDEMNITOR (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS INDEMNITY - 10 - Federal Way L].IC1 1:nvironmental Indemnity v.2 Loan #17W.\ -1228 AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS IN THIS SECTION. [SIGNATURES BEGIN ON THE FOLLOWING PAGE] Federal Way QI,ICI Environmental Indemnity v.2 Loan #17W1\ -1228 IN WITNESS WHEREOF, Borrower and City have caused this Indemnity Agreement to be executed as of the day and year first above written. BORROWER and INDEMNITOR: FW PAEC QALICB, INC., a Washington nonprofit corporation By: Name: Title: CITY and INDEMNITOR: CITY OF FEDERAL WAY, a Washington municipal corporation By: Name: Title: Signature Page Federal Way QLICI Environmental Indemnity EXHIBIT A Documents EXHIBIT A FINANCING DOCUMENTS 4. Completion and Repayment Guaranty by City in favor of Lender COMPLETION AND REPAYMENT GUARANTY THIS COMPLETION AND PAYMENT GUARANTY (this "Guaranty ") made as of June _, 2017, by the City of Federal Way, a municipal corporation of the State of Washington (the "Guarantor "), to and for the benefit of Clearinghouse NMTC (SUB 46), LLC, a California limited liability company (together with its successors and assigns, the "Lender "). WITNESSETH: A. On or about the date hereof, FW PAEC QALICI3, Inc. a Washington nonprofit corporation ( "Borrower "), and Lender entered into that certain Loan Agreement (as amended, restated or otherwise modified from time to time, "Loan Agreement ") whereby Lender agreed to make certain loans to Borrower in the aggregate principal amount of [$9,310,000] (collectively, the "Loan "). Capitalized terms used but not defined herein shall have the meaning given to them under the Loan Agreement. B. Borrower is the owner of a long-term - easehold interest in the Improvements and the Land located at 31510 Pete vonReichbauer South, Federal Way, Washington 98003, where Borrower has ` commenced construction and development of an approximately 43,471 square foot community facility and performing arts center and related facilities, known as the Federal Way Performing Arts and Event Center (PAEC) (the "Improvements "), as more particularly described in the Borrower's Plans and Specifications (the "Project "). C. In connection with the Loan, Borrower has executed and delivered (i) that certain Promissory ote (Loan A) to Lender, dated of even date herewith in the principal amount of E$6,239,6 ( "Note A "), and (ii) that certain Promissory Note (Loan B) to Lender of even date herewith in the principal amount of x$3,070,400] ( "Note B" and, together with Note A and Note B, the "Notes "). NOW, THE FORE, as an inducement to the Lender to make the Loan to the Borrower, and for other g d and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties do hereby agree as follows: ARTICLE I p NATURE AND SCOPE OF GUARANTY 1.1 °Guaranty of Obligation The Guarantor hereby irrevocably and unconditionally guarantees to the Lender and its successors and assigns the payment and performance of the Guaranteed Obligations (as defined below) as and when the same shall be due and payable, whether by lapse of time, by acceleration of maturity or otherwise. The Guarantor hereby irrevocably and unconditionally covenants and agrees that it is liable for the Guaranteed Obligations as a primary obligor. Federal Way Q1.1C1 Completion & Repayment Guaranty v.2 1 1.2 Definition of Guaranteed Obligations As used herein, the term "Guaranteed Obligations" means, collectively, the following: (a) the payment of all sums due and owing under the Notes and all extensions, renewals, replacements and amendments thereof, if any, prior to the completion of a foreclosure sale under the Deed of Trust or the acceptance of a deed -in- lieu thereof (the "Payment Obligations "); (b) construction and completion of the Project (as such term is defined in the Loan Agreement) within the time periods required in, and in accordance with the terms and conditions of, the Loan Agreement and this Guaranty (the "Construction Obligations "); and (c) any loss, damage, cost, expense, liability, claim or other obligation incurred by the Lender (including reasonable attorneys' fees and costs reasonably incurred) arising out of or in connection with the following: (i) fraud or material misrepresentation by the Borrower or any of the principals, officers or members of Borrower or any Guarantor in connection with the Loan Documents; (ii) the gross negligence or willful misconduct with respect to the Project of tire Borrower or any Guarantor or any of its members, officers or shareholders, or any of any of the Borrower's employees; (iii) physical waste on the Property or Project by the Borrower or any Guarantor or any of Its members, officers or shareholders or by any of the Borrower's (i material breach of any representation, warranty, covenant or indem i.n provision in (A) that certain Environmental and Hazardous Substances ndemnity Agreement of even date herewith given by any Guarantor and Borrower to the Lender (the "Environmental Indemnity ") or (13) in the Deed of Trust concerning environmental laws, hazardous substances or asbestos; requirements of the Loan Documents to maintain its status as a single purpose entity; (v) the failure of the Borrower to comply with the (vi) the removal or disposal of any portion of the Project after an Event of Default (as defined in the Deed of Trust) by the Borrower or any Guarantor or any of its employees, members, officers or shareholders. (vii) failure by the Borrower to maintain insurance to pay or bond any valid taxes, assessments, mechanic's liens, materialmen's liens, Federal Way QLICI Completion & Repayment Guaranty v.2 2 brokerage fees and commissions or other obligations which could create liens on any portion of the Project which would be superior to the lien or security interest of the Deed of Trust or the Loan Documents; (viii) the distribution to any Guarantor or the Borrower or any affiliated entity of any sales proceeds or rental income prior to repayment in full of all sums owing to the Lender under the Loan Agreement; (ix) the misapplication or conversion by the Borrower or any Guarantor or any of its members, officers or shareholders or of any of the Borrower's employees of (i) any insurance proceeds paid by reason of any loss, damage or destruction to the Project, (ii) any awards or other amounts received in connection with the condemnation of all or `'a portion of the Project, (iii) any Rents (as defined in the Deed of Trust) following an Event of Default, (iv) any Rents paid more than one month in advance, and (vi) any Loan proceeds; (x) any books and records, or security deposits and /or down payments collected with respect to the Project which are not delivered to the Lender upon a foreclosure of the Project or action in lieu thereof, except to the extent any such security deposits and /or down payments were applied in accordance with the terms and conditions of any of the Leases (as defined in the Deed of Trust) or purchase contracts, or Option (as defined in the Loan Agreement) if applicable, prior to the occurrence of the Event of Default that gave rise to su oreclosure or action in lieu thereof; and Notwithstan g to the contrary in any of the Loan Documents, (i) the Lender shall not be deemed to have waived any right which the Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the United States Bankruptcy Code to file a claim for any and all sums due under the Loan Agreement (collectively, the "Debt ") or to require that all collateral shall continue to secure all of the Debt owing to the Lender in accordance with the Loan Documents, and the Guarantor shall be liable for the full amount of the Debt (with no limits on liability for any individual Guarantor) in the event that (A) the Borrower fails to obtain the Lender's prior written consent to any subordinate financing encumbering the Property; (13) the Borrower fails to obtain the Lender's prior written consent to any assignment, transfer, or conveyance of the Property or the Project or any interest therein as required by the Deed of Trust; (C) if any petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar federal or state law, shall be filed by, consented to, or acquiesced in by, the Borrower or if any proceeding for the dissolution or liquidation of the Borrower shall be instituted by the Borrower or any Guarantor; or (D) the Borrower or any party having a direct or indirect ownership interest in the Borrower or any party acting through, under or on behalf of any of the foregoing has acted in a manner so as to impede or delay, for a period in excess of ten (10) days in the aggregate, the Lender's rights to exercise remedies under the Deed of Trust, this Guaranty or any of the other Loan Documents (including, without limitation, raising defenses, offsets or counterclaims with respect to the Lender exercising such remedies, which defenses, offsets and /or counterclaims are not adjudicated to be correct by final order of a court of competent jurisdiction). Notwithstanding the foregoing, no Guarantor shall have liability under the preceding subclause (D) as the result Federal Way Q1.1CI Completion & Repayment Guaranty .2 3 of acts taken by another Guarantor (i.e., in the case of the Borrower impedance or delay, Guarantor will become liable for the full amount of the Loan, but in the case of any Guarantor impedance or delay only that Guarantor who is impeding or delaying will become liable for the full amount of the Debt). 1.3 Completion of Project by Guarantor. Guarantor irrevocably and unconditionally agrees that if for any reason (a) Borrower fails to diligently proceed with or complete construction of the Project in the manner and within the time limits set forth in the Loan Agreement, (b) Borrower fails to pay all costs of construction of the Project in the manner and within the time, limits set forth in the Loan Agreement, (c) Borrower's right to receive further disbursemen s "or advances under the Loan Agreement terminates prior to the completion of the Project, or (d) Lender takes possession of the Property and the Project prior to the completion of the Project as the result of any Event of Default under the Loan Agreement, then, in any such event, and upon demand by Lender, Guarantor shall diligently complete the Project in accordance with the terms of the Loan Agreement at Guarantor's sole cost and expense, subject to the right to use Loan proceeds as provided in paragraph 1.4 below. In addition, Guarantor •'" "`defend, indemnify and hold Lender harmless from and against all claims, demands, causes of action, liabilities, losses, costs and expenses (including, without limitation, costs of suit and reasonable attorneys' fees) arising from or in connection with any such event; provided, however, that nothing in this guaranty, with the exception only of (i) Guarantor's obligations under Paragraph 1.2(a) above, (ii) Guarantor's obligation to deposit additional funds with Lender under Paragraph 1.4 below and, and (iii) Guarantor's obligation to reimburse Lender under Paragraph 1.5 below, shall be construed to constitute a guaranty of repayment of any-proceeds of the Loan or of payment of interest on the Loan. This Guaranty is not secured by the Deed of Trust (as defined in the Loan Agreement) and shall not be deemed to be secured; by any security instrument unless such security instrument expressly recites that it secures this Guaranty. 1.4 Disbursement of Loan Proceeds. f an Event of Default occurs, and Lender makes demand upon Guarantor pursuant to paragraph 1.3 above to complete the construction of the Project, then Lender shall, upon written request by Guarantor and the written consent of Borrower, disburse to Guarantor, for the account of Borrower, in accordance with the Loan Agreement the balance of the Loan allocated to constniction costs and other expenses reasonably necessary to complete construction of the Project in accordance with the Budget, provided that: (a) Guarantor has cured or to the satisfaction of the Lender in the Lender's sole discretion commenced the cure of all defaults in the performance or discharge of Borrower's obligations or liabilities which are guaranteed under this Guaranty (other than Borrower's cessation of construction which gave rise to the demand upon Guarantor under this Guaranty), including without limitation payment to Lender of any Payment Obligations that are owing but not paid; (b) Guarantor satisfies the requirements set forth in the Loan Agreement for the disbursement of such proceeds of the Loan (including the curing of any defaults or Events of Default, which cure Lender shall accept from Guarantor); (c) Lender has obtained the proper title insurance endorsement (including, if required by Lender, monthly policy date - downs) confirming its continuing first -lien priority as to all such advances to Guarantor as more fully set forth in the Loan Agreement; (d) such funds Federal Way QI.ICI Completion & Repayment Guaranty v.2 4 have not been set -aside in connection with any completion assurance or set -aside letter; and (e) such funds are not subject to any stop notice or other legal impairment. In addition, Lender will, so long as Guarantor is performing its obligations under this Guaranty, upon written request by Guarantor and the written consent of Borrower, continue to disburse to or for the account of Borrower, interest accruing under the Loan from any remaining undisbursed sums (if any) in the Reserve Account established per the Loan Agreement, provided that all conditions to such disbursement under the Loan Agreement shall have been satisfied. Guarantor shall also be obligated to deposit with Lender such additional funds in the manner contemplated by the Loan Agreement in the event that Lender shall have determined, in its reasonable judgment, that the undisbursed Loan proceeds allocated to actual construction costs are not sufficient to pay, through completion, all costs related to the design and construction of the Project in accordance with the Loan Agreement. Such funds shall be deposited by Guarantor with Lender within the time period provided in the Loan Agreement. 1.5 Remedies of Lender If Guarantor fails to perform its obligations hereunder within fifteen (15) days of notice of such failure by Lender, then Lender may, in its sole and absolute discretion and without any obligation to do so, (a) elect to complete construction of the Project (with such changes to the General Construction Contract and the Plans and Specifications as Lender reasonably deems necessary), or (b) from time to time and without first requiring performance on the part of Borrower or being required to exhaust or proceed against any or all security held by Lender or any Lender, enforce performance by Guarantor of any obligation on the part of Guarantor to be performed hereunder, by action at law or in equity or both; and in the event of either (a) or (b) above, Lender shall immediately be entitled to recover from Guarantor all losses, costs, damages, liabilities and expenses (including all expenditures made by Lender to complete construction of the oject, and attorneys' fees and costs) sustained or incurred by Lender as a result of Guarantor's allure to perform its obligations hereunder, together with interest thereon at Lender's option at either the Interest Rate or the Default Rate. 1.6 Guaranteed Obligations Not Reduced by Offset The Guaranteed Obligations and the liabilities and obligations of the Guarantor to the Lender hereunder, shall not be reduced, discharged or released because or by reason of any existing or future offset,' claim or defense of the Borrower or any other party, against the Lender or against payment of the Guaranteed Obligations, whether such offset, claim or defense arises in connection with the Guaranteed Obligations (or the transactions creating the Guaranteed Obligations) or otherwise. To the fullest extent permitted by law, Guarantor waives any defenses or benefits that may be derived from or afforded by law which limit the liability of any Guarantor or exonerate guarantors or sureties. 1.7 Payment by the Guarantor If all or any part of the Guaranteed Obligations shall not be punctually paid when due, whether at demand, maturity, acceleration or otherwise and following notice and expiration of any applicable cure period as provided in the Loan Agreement, the Guarantor shall, immediately upon demand by the Lender, and without presentment, protest, notice of protest, Federal Way QJ lCI Completion & Repayment Guaranty v.2 5 notice of non - payment, notice of intention to accelerate the maturity, notice of acceleration of the maturity, or any other notice whatsoever, pay in lawful money of the United States of America, the amount due on the Guaranteed Obligations to the Lender at the Lender's address as set forth herein. Such demand(s) may be made at any time coincident with or after the time for payment of all or part of the Guaranteed Obligations, and may be made from time to time with respect to the same or different items of Guaranteed Obligations. Such demand shall be deemed made, given and received in accordance with the notice provisions hereof. 1.8 No Duty To Pursue Others It shall not be necessary for the Lender (and the Guarantor hereby waives any rights which the Guarantor may have to require the Lender), in order to enforce the obligations of the Guarantor hereunder, first to (i) institute suit or exhaust its remedies against the Borrower or others liable on the Loan or the Guaranteed Obligations or any other person, (ii) enforce the Lender's rights against any collateral which shall ever have been given to secure the Loan, (iii) enforce the Lender's rights against any other guarantors of the Guaranteed Obligations, (iv) join the Borrower or any others liable on the Guaranteed Obligations in any action seeking to enforce this Guaranty, (v) exhaust any remedies available to the Lender against any collateral which shall ever have been given to secure the Loan, or (vi) resort to any other means of obtaining payment of the Guaranteed Obligations. The Lender shall not be required to mitigate damages or take any other action to reduce, collect or enforce the Guaranteed Obligations. 1.9 Waivers The Guarantor agrees to the provision° "` of the Loan Documents, and hereby waive notice of (i) any loans or advances made by the Lender to the Borrower, (ii) acceptance of this Guaranty, (iii) any amendment or extension of the Notes, the Deed of Trust or of any other Loan Documents, (iv) the execution and delivery by the Borrower and the Lender of any other loan or loan agreement or of the Borrower's execution and delivery of any promissory notes or other documents arising under the Loan Documents or in connection with the Property or the Project, (v) the occurrence of any breach by the Borrower or an Event of Default, (vi) the Lender's transfer or disposition of the Guaranteed Obligations, or any part thereof, (vu) sale or foreclosure (or posting or advertising for sale or foreclosure) of any collateral for the Guaranteed Obligations, (viii) protest, proof of non - payment or default by the Borrower, or (ix) any other action at any time taken or omitted by the Lender, and, generally, all demands and notices of every kind in connection with this Guaranty, the Loan Documents, any documents or agreements evidencing, securing or relating to any of the Guaranteed Obligations and the obligations hereby guaranteed. 1.10 Payment of Expenses Notwithstanding anything to the contrary contained herein, including, but not limited to Section 1.2(a) hereof, in the event that any Guarantor should breach or fail to timely perform any provisions of this Guaranty, the Guarantor shall, immediately upon demand by the Lender, pay the Lender all costs and expenses (including court costs and reasonable attorneys' fees) incurred by the Lender in the enforcement hereof or the preservation of the Lender's Federal Way QLICI Completion & Repayment Guaranty v.2 6 rights hereunder. The covenant contained in this Section shall survive the payment and performance of the Guaranteed Obligations. 1.11 Effect of Bankruptcy In the event that, pursuant to any insolvency, bankruptcy, reorganization, receivership or other debtor relief law, or any judgment, order or decision thereunder, the Lender must rescind or restore any payment, or any part thereof, received by the Lender in satisfaction of the Guaranteed Obligations, as set forth herein, any prior release or discharge from the terms of this Guaranty given to any Guarantor by the Lender shall be without effect, and this Guaranty shall remain in full force and effect. It is the intention of the Borrower and the Guarantor that Guarantor's obligations hereunder shall not be discharged except by the Guarantor's performance of such obligations and then only to the extent of such performance. 1.12 Waiver of Subrogation, Reimbursement and Contribution Notwithstanding anything to the contrary contained in this Guaranty, until such time as the Guaranteed Obligations are satisfied, the Guarantor =hereby unconditionally and irrevocably waives, releases and abrogates any and all rights they may now or hereafter have under any agreement, at law or in equity (including, without limitation, any law subrogating any Guarantor to the rights of the Lender), to assert any claim against or seek contribution, indemnification or any other form of reimbursement from the Borrower or any other party liable for payment of any or all of the Guaranteed Obligations for any payment made by the Guarantor under or in connection with this Guaranty or otherwise. Until such time as the Guaranteed Obligations have been satisfied, Guarantor agrees it will not exercise (a) any rights which Guarantor either may acquire by way of subrogation under this Guaranty or any other guaranty, by any payment made hereunder or otherwise, (b) any right of contribution any Guarantor may have against any other Guarantor of the Guaranteed Obligations, (c) any right to enforce any remedy which Guarantor now has or may hereafter have against the Borrower or (d) any benefit of, and-any right to participate in, any security now or hereafter held by the Lender. Guarantor further agrees that, to the extent the waiver of its rights of subrogation and contribution as set forth herein' found by a court of competent jurisdiction to be void or voidable for any reason, any rights of subrogation the Guarantor may have against the Borrower or against any collateral or security, and any rights of contribution the Guarantor may have against any other guarantor, shall be junior and subordinate to any rights the Lender may have in any such collateral or security, and to any right the Lender may have against such other guarantor. The Lender may use, sell or dispose of any item of collateral or security as it sees fit without regard to any subrogation rights the Guarantor may have, and upon any such disposition or sale any rights of subrogation the Guarantor may have shall terminate. If any amount shall be paid to a Guarantor on account of such subrogation rights any time when all the Debt shall not have been paid in full, such amount shall be held in trust for and shall forthwith be paid over to the Lender to be credited and applied against the Debt, whether matured or unmatured, in accordance with the terms of the Loan Agreement or any applicable Loan Document. 1.13 Borrower Federal Way QLICI Completion & Repayment Guaranty v.2 7 The term "Borrower" as used herein shall include any new or successor corporation, association, partnership (general or limited), joint venture, trust or other individual or organization formed as a result of any merger, reorganization, sale, transfer, devise, gift or bequest of the Borrower or any interest in the Borrower. ARTICLE II EVENTS AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING GUARANTOR'S OBLIGATIONS The Guarantor hereby consents and agrees to each of the following, and agree that the Guarantor's obligations under this Guaranty shall not be released, diminished, impaired, reduced or adversely affected by any of the following, and waives any common law, equitable, statutory or other rights (including without limitation rights to notice) which the Guarantor might otherwise have as a result of or in connection with any of the following: 2.1 Modifications Any renewal, extension, increase, modification, alteration or rearrangement of all or any part of the Guaranteed Obligations, the Loan Agreement, th Notes, the Deed of Trust, the other Loan Documents, or any other document, instrument, ontract or understanding between the Borrower and the Lender, or any other parties, pertaining to the Guaranteed Obligations or any failure of the Lender to notify any Guarantor of aiy such action. 2.2 Adjustment Any adjustment, indulgence, forbearance or compromise that might be granted or given by the Lender to the Borrower or any Guarantor. 2.3 Condition of the Borrower or the Guarantor The insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of power of the Borrower, any Guarantor or any other party at any time liable for the payment of all or part of the Guaranteed Obligations; or any dissolution of the Borrower or any Guarantor, or any sale, lease or transfer of any or all of the assets of the Borrower or any Guarantor, or any changes in the shareholders, partners or members of the Borrower or any Guarantor; or any reorganization of the Borrower or any Guarantor. 2.4 Invalidity of Guaranteed Obligations The invalidity, illegality or unenforceability of all or any part of the Guaranteed Obligations, or any document or agreement executed in connection with the Guaranteed Obligations, for any reason whatsoever, including without limitation the fact that (i) the Guaranteed Obligations, or any part thereof, exceeds the amount permitted by law, (ii) the act of creating the Guaranteed Obligations or any part thereof is ultra vires, (iii) the officers or representatives executing the Notes, the Deed of Trust, the Loan Agreement or the other Loan Documents or otherwise creating the Guaranteed Obligations acted in excess of its authority, (iv) the Guaranteed Obligations violate applicable usury laws, (v) the Borrower has valid Federal Way QJ.1C1 Completion & Repayment Guaranty v.2 8 defenses, claims or offsets (whether at law, in equity or by agreement) which render the Guaranteed Obligations wholly or partially uncollectible from the Borrower, (vi) the creation, performance or repayment of the Guaranteed Obligations (or the execution, delivery and performance of any document or instrument representing part of the Guaranteed Obligations or executed in connection with the Guaranteed Obligations, or given to secure the repayment of the Guaranteed Obligations) is illegal, uncollectible or unenforceable, or (vii) the Notes, the Deed of Trust, the Loan Agreement or any of the other Loan Documents have been forged or otherwise are irregular or not genuine or authentic, it being agreed that the Guarantor shall remain liable hereon regardless of whether the Borrower or any other w erson be found not liable on the Guaranteed Obligations or any part thereof for any reason. 2.5 Release of Obligors Any full or partial release of the liability of the Borrower on the Guaranteed Obligations, or any part thereof, or of any co- guarantors, or any other person or entity now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations, or any part thereof, it being recognized, acknowledged and agreed by Guarantor that the Guarantor may be required to pay the Guaranteed Obligations in full without assistance or support of any other party, and Guarantor has not been induced to enter intos Guaranty on the basis of a contemplation, belief, understanding or agreement that other parties will be liable to pay or perform the Guaranteed Obligations, or that the Lender will look to other parties to pay or perform the Guaranteed Obligations. 2.6 Other Collateral The taking or accepting of any other security, collateral or guaranty, or other assurance of payment, for all or any part of the Guaranteed Obligations. 2.7 Release of Collateral Any release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including without limitation negligent, willful, unreasonable or unjustifiable impairment) of any collateral, property or security at any time existing in connection with, or assuring or securing payment of, all or any part of the Guaranteed Obligations. 2.8 Care and Diligence The failure of the Lender or any other party to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of such collateral, property or security, including but not limited to any neglect, delay, omission, failure or refusal of the Lender (other than in the instance of intentional misconduct or gross negligence) (i) to take or prosecute any action for the collection of any of the Guaranteed Obligations or (ii) to foreclose, or initiate any action to foreclose, or, once commenced, prosecute to completion any action to foreclose upon any security therefor, or (iii) to take or prosecute any action in connection with any instrument or agreement evidencing or securing all or any part of the Guaranteed Obligations. Federal Way Q1.1(1 Completion & Repayment Guaranty v.2 9 2.9 Unenforceability The fact that any collateral, security, security interest or lien contemplated or intended to be given, created or granted as security for the repayment of the Guaranteed Obligations, or any part thereof, shall not be properly perfected or created, or shall prove to be unenforceable or subordinate to any other security interest or lien, it being recognized and agreed by the Guarantor that the Guarantor is not entering into this Guaranty in reliance on, or in contemplation of the benefits of, the validity, enforceability, collectibility or value of any of the collateral for the Guaranteed Obligations. 2.10 Offset The Loan, the Guaranteed Obligations and the liabilities and obligations of the Guarantor to the Lender hereunder shall not be reduced, discharged or released because of or by reason of any existing or future right of offset, claim or defense of the Borrower against the Lender, or any other party, or against payment of the Guaranteed Obligations, whether such right of offset, claim or defense arises in connection with the Guaranteed Obligations (or the transactions creating the Guaranteed Obligations) or otherwise. 2.11 Merger The reorganization, merger or consolidation of- the 1orrower into or with any other corporation or entity. 2.12 Preference Any payment by the Borrower under bankruptcy laws, or for any= reason the Le such amount to the Borrower or someone else. Lender is held to constitute a preference required to refund such payment or pay 2.13 Tax Benefits", Notwithstanding anything else contained in this Guaranty, the Loan Agreement, or in any other Loan Document, any claims against Borrower or Guarantors related to tax benefits derived, by Capital One in connection with the Property shall be governed by the Indemnification Agreement (QALICB), executed and delivered by Borrower for the benefit of Capital One, and dated the date hereof. 2.14 Other Actions Taken or Omitted Any other action taken or omitted to be taken with respect to the Loan Documents, the Guaranteed Obligations, or the security and collateral therefor, whether or not such action or omission prejudices Guarantor or increases the likelihood that Guarantor will be required to pay the Guaranteed Obligations pursuant to the terms hereof, it is the unambiguous and unequivocal intention of the Guarantor that the Guarantor shall be obligated to pay the Guaranteed Obligations when due, notwithstanding any occurrence, circumstance, event, action, or omission whatsoever, whether contemplated or uncontemplated, and whether or not Federal Way Q].1C] Completion & Repayment Guaranty v.2 10 otherwise or particularly described herein, which obligation shall be deemed satisfied only upon the full and final payment and satisfaction of the Guaranteed Obligations. ARTICLE III REPRESENTATIONS AND WARRANTIES To induce the Lender to enter into the Loan Documents and provide the Loan to the Borrower, Guarantor represents and warrants to the Lender as to himself as follows: 3.1 Benefit The Guarantor is an affiliate of the Borrower, i.;the owner of a direct or indirect interest in the Borrower, and has received, or will receive, direct or indirect benefit from the making of this Guaranty with respect to the Guaranteed Obligations. 3.2 Familiarity and Reliance The Guarantor is familiar with, and has independently reviewed books and records regarding, the financial condition of the Borrower and is familiar with the value of any and all collateral intended to be created as security for the payment of the Letter of Credit or Guaranteed Obligations; however, the Guarantor is not relying; on such financial condition or the collateral as an inducement to enter into this Guaranty. 3.3 No Representation By the Lender Neither the Lender nor any other party has made any representation, warranty or statement to the Guarantor in order to induce the Guarantor to execute this Guaranty. 3.4 Guarantor's Financial Condition As of the date hereof, and after giving effect to this Guaranty and the contingent obligation evidenced hereby, the Guarantor is, and will be, solvent, and has and will have assets which, fairly valued, exceed its obligations, liabilities (including contingent liabilities) and debts, and has and will have property and assets sufficient to satisfy and repay its obligations and liabilities. 3.5 Financial Statements The most recent financial statements heretofore delivered by the Guarantor to the Lender are true and correct in all material respects and have been prepared in accordance with generally accepted accounting practice and fairly present the respective financial conditions of the Guarantor as of the respective date thereof; and no material adverse change has occurred in the financial conditions reflected therein since the respective dates thereof. 3.6 Legality Federal Way QLICI Completion & Repayment Guaranty v.2 11 The execution, delivery and performance by the Guarantor of this Guaranty and the consummation of the transactions contemplated hereunder do not, and will not, contravene or conflict with any law, statute or regulation whatsoever to which the Guarantor is subject or constitute a default (or an event which with notice or lapse of time or both would constitute a default) under, or result in the breach of, any indenture, First Mortgage, charge, lien, or any contract, agreement or other instrument to which the Guarantor is a party or which may be applicable to the Guarantor. This Guaranty is a legal and binding obligation of the Guarantor and is enforceable in accordance with its terms, except as limited by bankruptcy, insolvency or other laws of general application relating to the enforcement of credito s' rights. 3.7 Survival All representations and warranties made by th rein shall survive the execution hereof. ARTICLE IV OF CERTAIN INDEBTEDNESS 4.1 Subordination of All Guarantor Claims As used herein, the term "Guarantor Claims" shall mean all debts and liabilities of the Borrower to any Guarantor, whether such debts and liabilities now exist or are hereafter incurred or arise, or whether the obligations of the Borrower thereon be direct, contingent, primary, secondary, several, joint and several, or otherwise, and irrespective of whether such debts or liabilities be evidenced by note, contract, open account, or otherwise, and irrespective of the person or persons in whose favor such debts or liabilities may, at their inception, have been, or may hereafter be created, or the manner in which they have been or may hereafter be acquired by any Guarantor. The Guarantor Claims shall include without limitation all rights and claims of any Guarantor against the Borrower (arising as a result of subrogation or otherwise) as a result of such Guarantor's payment of all or a portion of the Guaranteed Obligations. Upon the occurrence of an Event of Default or the occurrence of an event which would, with the giving of notice or the passage of time, or both, constitute an Event of Default, the Guarantor shall not receive or collect, directly or indirectly, from the Borrower or any other party any amount upon the Guarantor Claims. 4.2 Claims in Bankruptcy In the event of receivership, bankruptcy, reorganization, arrangement, debtor's relief, or other insolvency proceedings involving Guarantor as debtor, the Lender shall have the right to prove its claim in any such proceeding so as to establish its rights hereunder and receive directly from the receiver, trustee or other court custodian dividends and payments which would otherwise be payable upon Guarantor Claims. Guarantor hereby assigns such dividends and payments to the Lender. Should the Lender receive, for application upon the Guaranteed Obligations, any such dividend or payment which is otherwise payable to Guarantor, and which, as between the Borrower and any Guarantor, shall constitute a credit upon the Guarantor Claims, then upon payment to the Lender in full of the Guaranteed Obligations, the Guarantor Federal Way QJJCI Completion & Repayment Guaranty v.2 12 shall become subrogated to the rights of the Lender to the extent that such payments to the Lender on the Guarantor Claims have contributed toward the liquidation of the Guaranteed Obligations, and such subrogation shall be with respect to that proportion of the Guaranteed Obligations which would have been unpaid if the Lender had not received dividends or payments upon the Guarantor Claims. 4.3 Payments Held in Trust In the event that, notwithstanding anything to the contrary in this Guaranty, any Guarantor should receive any funds, payment, claim or distribution which is prohibited by this Guaranty, the Guarantor agree to hold in trust for the Lender an amount equal to the amount of all funds, payments, claims or distributions so received, and agrees that it shall have absolutely no dominion over the amount of such funds, payments, claims or distributions so received except to pay them promptly to the Lender, and the Guarantor covenants promptly to pay the same to the Lender. 4.4 Liens Subordinate The Guarantor agrees that any liens, security interests, judgment liens, charges or other encumbrances upon the Borrower's: as securing payment of the Guarantor Claims shall be and remain inferior and subordinate e , security interests, judgment liens, charges or other encumbrances upon the Borrower 's . assets securing payment of the Guaranteed Obligations, regardless of whether such encu rances in favor of any Guarantor or the Lender presently exist or are hereafter created or attach. Without the prior written consent of the Lender, the Guarantor shall not O exercise or enforce any creditor's right it may have against the Borrower, or (u) foreclose, repossess, sequester or otherwise take steps or institute any action or proceedings (judicial or otherwise, including without limitation the commencement of, or joinder in, any liquidation, bankruptcy, rearrangement, debtor's relief or insolvency proceeding) to enforce any liens, deeds of trust, security interests, collateral rights, judgments or other encumbrances on assets of the Borrower held by any Guarantor. ARTICLE V MISCELLANEOUS No failure to exercise, and no delay in exercising, on the part of the Lender, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right. The rights of the Lender hereunder shall be in addition to all other rights provided by law. No modification or waiver, of any provision of this Guaranty, nor consent to departure therefrom, shall be effective unless in writing and no such consent or waiver shall extend beyond the particular case and purpose involved. No notice or demand given in any case shall constitute a waiver of the right to take other action in the same, similar or other instances without such notice or demand. 5.2 Notices Federal Way Q1.1C7 Completion & Repayment Guaranty v.2 13 Any notice, demand, statement, request or consent made hereunder shall be in writing and shall be deemed to be received by the addressee on the third day following the day such notice is deposited with the United States Postal Service first class certified mail, return receipt requested, addressed to the address, as set forth below, of the party to whom such notice is to be given, or to such other addressee as either party shall in like manner designate in writing. The addresses of the parties hereto are as follows: If to Guarantor: If to Lender: with a copy to: and a copy to: 5.3 Governing Law Federal Way QLIC1 Completion & Repayment Guaranty v.2 City of Federal Way 33325 8th Ave. South Federal Way, WA 98003 Attn: Ryan Call Phone: (253) 835 -2412 Fax: Email: Ryan .Call @citvoffcderalway.com Clearinghouse NMTC (SUB 46), LLC 23861 El Toro Road, Suite 401 Lake Forest, CA 92630 Attn: Kristy 011endorff hone: (949) 525 -4980 ax: (949) 859 -8534 Email: 1 <risty0@cleaiingh ousecd fi.com Bergman and Allderdice 1200 Wilshire Blvd, Suite 610 Los Angeles, CA 90017 attention: Beth S. Bergman, Esq. Phone: (213) 736 -5101 Fax: (213) 947 -4371 Email: bbergman @b - alaw.com COCRF Investor 77, LLC c/o Capital One, National Association 201 St. Charles Ave., 29th Floor New Orleans, LA 70170 Attention: Spencer Gagnet Email: spencer.gagnet @capitalone.com Jones Day 100 High Street, 21st Floor Boston, MA 02110 Attention: Jeffrey D. Gaulin, Esq. Email: jgaulin @jonesday.com 14 This Guaranty shall be governed by and construed in accordance with the laws of the State of Washington and the applicable laws of the United States of America. 5.4 Invalid Provisions If any provision of this Guaranty is held to be illegal, invalid, or unenforceable under present or future laws effective during the term of this Guaranty, such provision shall be fully severable and this Guaranty shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Guaranty, and the remaining provisions of this Guaranty shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Guaranty, unless such continued effectiveness of this Guaranty, as modified, would be contrary to the basic understandings and intentions of the parties as expressed herein. 5.5 Amendments This Guaranty may be amended only by an instrument in writing executed by the party or an authorized representative of the party against whom such amendment is sought to be enforced, and in any event, not without the prior written consent of the Lender. 5.6 Parties Bound; Assignment This Guaranty shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns and legal representatives; provided, however, that the Guarantor may not, withouttlie' prior written consent of the Lender, assign any of its rights, powers, duties or obligations hereunder. 5.7 "'' Headings Section headings are for convenience of reference only and shall in no way affect the interpretation of this Guaranty. 5.8 Recitals The recital and introductory paragraphs hereof are a part hereof, form a basis for this Guaranty and shall be considered prima facie evidence of the facts and documents referred to therein. 5.9 Counterparts To facilitate execution, this Guaranty may be executed in as many counterparts as may be convenient or required. It shall not be necessary that the signature of, or on behalf of, each party, or that the signature of all persons required to bind any party, appear on each counterpart. All counterparts shall collectively constitute a single instrument. It shall not be necessary in making proof of this Guaranty to produce or account for more than a single counterpart containing the respective signatures of, or on behalf of, each of the parties hereto. Any signature page to any counterpart may be detached from such counterpart without Federal \Vac Q1.1C1 Completion & Repayment Guaranty y.2 15 impairing the legal effect of the signatures thereon and thereafter attached to another counterpart identical thereto except having attached to it additional signature pages. 5.10 Rights and Remedies If any Guarantor becomes liable for any indebtedness owing by the Borrower to the Lender, by endorsement or otherwise, other than under this Guaranty, such liability shall not be in any manner impaired or affected hereby and the rights of the Lender hereunder shall be cumulative of any and all other rights that the Lender may ever have against the Guarantor. The Lender may proceed against one or more Guarantor at one time or from time to time as the Lender determines in its sole discretion. The exercise by the Lender of any right or remedy hereunder or under any other instrument, or at law or in equity, shall not preclude the concurrent or subsequent exercise of any other right or remedy. 5.11 Other Defined Terms Any capitalized term utilized herein- shall have themeaning a . eified in the erein. Loan Agreement, unless such term is otherwise specificall 5.12 Entirety THIS GUARANTY EMBODIES THE FINAL, ENTIRE AGREEMENT OF THE GUARANTOR AND THEE LENDER WITH RESPECT TO GUARANTOR'S GUARANTY OF THE GU,AARAN,TEED OBLIGATIONS AND, EXCEPT WITH RESPECT TO GUARANTORS OBLIGATIONS UNDER THE ENVIRONMENTAL INDEMNITY, SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, GREEMENTS,; REPRESENTATIONS, AND UNDERSTANDINGS WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF. THIS GUARANTY IS INTENDED BY THE GUARANTOR AND THE LENDER AS A FINAL AND COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY, AND NO COURSE OF DEALING BETWEEN THE GUARANTOR AND THE LENDER, NO COURSE OF PERFORMANCE, NO TRADE PRACTICES, AND NO EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE USED TO CONTRADICT, VARY, SUPPLEMENT OR MODIFY ANY TERM OF THIS GUARANTY AGREEMENT. THERE ARE NO ORAL AGREEMENTS BETWEEN THE GUARANTOR AND THE LENDER. 5.13 Waiver of Right To Trial By Jury THE GUARANTOR HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS GUARANTY, THE LOAN AGREEMENT, THE NOTES, THE DEED OF TRUST, OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION Federal \X/ac 01.101 Completion & Repayment Guaranty v.2 16 ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY THE GUARANTOR, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. THE LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY THE GUARANTOR. 5.14 Future Financial Statements Guarantor covenants and agrees to provide to the Lender (i) within 120 days of the end of the calendar year their audited financial statements and tax returns each prepared by a certified public accountant in accordance with generally accepted accounting practice and (ii) such other financial information as the Lender shall reasonably request within twenty (20) days of any such request. 5.15 Reinstatement in Certain Circumstances All of Lender's rights pursuant to this Guaranty continue with respect to amounts previously paid to Lender on account of any obligations of Borrower under the Loan Agreement and /or other Loan Documents which are thereafter restored or returned by Lender, whether in a bankruptcy, reorganization, insolvency, receivership or similar proceeding of Borrower or for any other reason, all as though such amounts had not been paid to Lender , and Guarantor's liability under this Guaranty (and all its terms and provisions) shall be reinstated and revived, notwithstanding any surrender or cancellation of this Guaranty. Lender, in its sole discretion, may determine whether any amount paid to it must be restored or returned. 5.16 Termination This Guaranty shall automatically terminate without any further act of the undersigned or Lender of any nature whatsoever being required upon the satisfaction and payment in hill of the Loan and the Guaranteed Obligations. (SIGNATURE PAGE FOLLOWS] Federal Way QLICI Completion & Repayment Guaranty v.2 17 EXECUTED as of the day and year first above written. GUARANTOR: CITY OF FEDERAL WAY, a municipal corporation of the State of Washington Federal Way Q1.,10 Completion & Repayment Guaranty Signature Page FINANCING DOCUMENTS 5. QALICB Indemnification Agreement by Corporation and City in favor of Investor JD Draft 4 /3/17 QALICB INDEMNIFICATION AGREEMENT THIS QALICB INDEMNIFICATION AGREEMENT (this "Agreement ") is entered into as of [ ], 2017 (the "Effective Date "), by and among [ ], a Washington nonprofit corporation ( "Project Borrower "), CITY OF FEDERAL WAY, a Washington municipal corporation ( "Sponsor ") (each of Sponsor and Project Borrower an "Indemnitor" and collectively, "Indemnitors "), and CAPITAL ONE, NATIONAL ASSOCIATION, a national banking association ( "Investor "). Recitals A. Investor is the sole member of COCRF Investor 77, LLC, a Delaware limited liability company ( "Fund "), pursuant to the terms of that certain First Amended and Restated Operating Statement of Fund dated as of the Effective Date (as the same may be amended, assigned, restated, modified, or supplemented from time to time the "Fund OA ") B. On the Effective Date, and in accordance with the Fund OA, Investor agreed to make a $[3,260,400] equity contribution to Fund (the "Capital Contribution "), to be paid upon Investor's execution of the Fund OA. C. On the Effective Date, Fund has obtained a loan from Sponsor in the original principal amount of $[6,239,600] (the "Fund Loan "). D. On the Effective Date, Fund will use a portion of the proceeds of the Capital Contribution and the Fund Loan to make an equity contribution in the amount of $9,500,000 (the "Clearinghouse QEI") in Clearinghouse NMTC (Sub 46), LLC, a California limited liability company ( "CDE "). E. The Clearinghouse QEI is intended to be a "qualified equity investment" (a "QEI "), as sup= t�. is defined in Section 45D of the Internal Revenue Code of 1986 (as amended fro me' o time, the "Code''), and the Treasury Regulations (as such term is as such term is defined below).' F. On the Effective Date, and in accordance with that certain Amended and Restated Operating Agreement of CDE, dated as of the Effective Date (as the same may be amended, assigned, restated, modified, or supplemented from time to time, the "CDE OA "), CDE will use substantially all of the Clearinghouse QEI proceeds to make loans to Project Borrower in the aggregate original principal amount of $[9,310,000] (collectively, the "Project Loans "). G. Each of the Project Loans is intended to constitute a "qualified low - income community investment" as such term is used in Section 45D of the Code (a "QLICI "). H. The proceeds of the Project Loans will be used to finance the new construction and development of a community facility and performing arts center located on certain property at 31510 20th Avenue South, Federal Way, WA 98063 (the "Project "), as more fully described in (i) that certain [Loan Agreement] [Loan and Security Agreement], dated as of the Effective Date (as the same may be amended, assigned, restated, modified, or supplemented from time to time, NAI- I 502607240v2 the "Loan Agreement "), by and between Project Borrower, as borrower, and CDE, as lender, and (ii) the other [Loan Documents] (as such term is defined in the Loan Agreement). I. Investor made the Capital Contribution, and caused Fund to make the Clearinghouse QEI in CDE based on the assumption that Investor will obtain New Markets Tax Credits under Section 45D of the Code ( "Tax Credits ") in an aggregate amount equal to not less than $[3,705,000] (i.e., 39% of the Designated QEI Amount (as such term is defined below)), as more specifically set forth in the NMTC Assumption (as such term is defined below), beginning on the date the Clearinghouse QEI was made in CDE. J. Investor's assumption as set forth in the immediately preceding Recital is based in part on the representations, warranties and covenants of Project Borrower in the Loan Agreement, pursuant to which the Project Loans were made. K. As a condition to Investor making the Capital Contribution, and Investor causing Fund to make the Clearinghouse QEI, and as a condition to CDE making the Project Loans to Project Borrower, Investor is requiring that Indemnitors execute and deliver this Agreement to provide assurances with respect to the matters described herein, including, without limitation, the qualification of each of the Project Loans as a QLICI and the qualification of Project Borrower as a "qualified active low- income community business," as such term is used in Section 45D of the Code (a "QALICB"). L. Project Borrower and Sponsor will benefit directly and indirectly from CDE making the Project Loans to Project Borrower. NOW, THEREFO ® in consideration of the mutual promises of the parties hereto, and other good an va ua]le consideration, the receipt and sufficiency of which are hereby acknowledged, Indemnitors hereby covenant and agree as follows: 1. Defined Terms. All capitalized terms listed in the introductory paragraph and Recitals to this Agreement have the meanings assigned to them therein, and all capitalized terms not otherwise expressly defined herein shall have the meanings assigned to them in the Loan AgrCement. In addition, the following terms shall have the following meanings in this Agreement: (a) "Affiliate" means (i) with respect to a corporation, (A) any officer or director thereof and any Person which is, directly or indirectly, the beneficial owner of more than 10% of any class of shares or other equity security of such corporation or (B) any Person or Persons (individually or in the aggregate) which, directly or indirectly, controls or are controlled by or is under common control with such corporation and (ii) with respect to a partnership, venture or limited liability company, any (A) general partner or managing member of such partnership, venture or limited liability company, (B) general partner or managing member of a general partner or managing member of such partnership, venture or limited liability company, (C) partnership with a common general partner or managing member of such partnership, venture or limited liability company, or (D) coventurer thereof, and if any general partner, managing member or coventurer is a corporation, any Person which is an Affiliate of such corporation. For purposes of this definition, "controls" (which includes the correlative meanings NA1- 1502607240v2 2 of "controlled by" and "under common control with ") means effective power, directly or indirectly, to direct or cause the direction of the management and policies of such Person. Further, for purposes of this definition, Fund shall not be deemed to be an Affiliate of the CDE. (b) "After -Tax Basis" means, with respect to any NMTC Recapture Amount, the amount of such NMTC Recapture Amount supplemented by a further payment or payments (the "Supplemented NMTC Recapture Amount ") so that, after deducting from such Supplemented NMTC Recapture Amount the amount of all Taxes (net of any current credits, deductions or other tax benefits arising from the payment by Investor of any amount, including Taxes, for which the payment to be received is made) imposed on Investor by any Governmental Authority or other taxing authority with respect to such NMTC Recapture Amount, the balance of such payments shall be equal to the NMTC Recapture Amount; provided, however, for the purposes of this definition, and for purposes of any payment to be made ak Fund or Investor on an After -Tax Basis, it shall be assumed that taxes are payable by En vesto the Applicable Tax Rate. (c) "Applicable Tax Rate" means the combined effective ffd , state, and local corporate income tax rate (assuming in each ca ' e maximum applicable corporate rate) in the jurisdiction(s) in which Investor is required to recognize the payments to be made by Indemnitors pursuant to this Agreement. (d) "Change in Law" means any amendment to the Code or Treasury Regulations after the Effective Date. (e) "Co4pliance Period- means, with res`l t to a QEI, the seven -year credit period applicable to such QEI commencing on the first Credit Allowance Date with respect to such QEI and ending on the last day prior to the seventh anniversary of said first Credit Allowance Date. (f) "Credit Allowance Date" means any "credit allowance date" (as such term is defined in Section 45D(a)(3) of the Code) with respect to a QEI made in a CDE. (g) "Designated QEI Amount" means $[9,500,000]. (h) "Fntity" means any general partnership, limited partnership, limited liability limited partnership, limited liability company, corporation, joint venture, trust, business trust, cooperative. association. or public agency. (i) "Event of Default" has the meaning assigned to such term in the Loan Agreement. (j) "Financial Projections" means the financial projections, dated as of the Effective Date and certified by Novogradac & Company LLP, issued in connection with the investments and loan transactions described in the Recitals. (k) "Governmental Authority" means any, federal, state, local, municipal, or other governmental or quasi governmental authority or self regulatory organization of any nature (including any agency, authority, branch, department, board, commission, court, tribunal or other NAI- 1502607240v2 3 entity, instrumentality or body politic exercising governmental or quasi governmental powers) exercising, or entitled or purporting to exercise, any administrative, executive, judicial, legislative, enforcement, regulatory or taxing authority or power. (1) "Investment Fund Put /Call Agreement" means that certain Investment Fund Put/Call Agreement, dated as of the Effective Date, by and between Sponsor and Investor, as the same may be amended, modified, extended, or restated from time to time. thereof. (m) "IRS" means the Internal Revenue Service or any successor agency (n) "NMTC Assumption" has the meaning s �' Section 2. (o) "NMTC Payment Date" means the earnest • the following: (i) the date of issuance of a Schedule K -1 to or Investor for the a pp licable taxable year or yeti's evidencing, indicati fleeting the occurrence of a Specified NMTC Recapture Event; (ii) the fiscal year end of the year following the applicable taxable year or years for which a tax return evidencing, indicati •r reflecting the occurrence of a Specified NMTC Recapture Event- filed; (iii) the date o;,, which Fund . Investor provides notice to Indemnitors of its receipt of notice o :-termination by the IRS that a Specified NMTC Recapture Event has '' curre', or (B) the intention of the IRS to assess a deficiency based on a Specified NMTC Recapture Event; or (iv) the date on which Fund and /or Investor provides notice to Indemnitors of its determination, made by Fund and /or Investor based upon written advice from its tax counsel and /or its accountants, that a Specified NMTC Recapture Event has occurred. (p) "NMTC Recaptre Amount" means an amount, on an After -Tax Basis, equal to the sum of (i) the ``credit recapture amount," as defined in Section 45D(g)(2) of the Code, or the amount of Tax Credits recaptured, disallowed or lost, as the case may be, as the result of a Specified NMTC Recapture Event, plus (ii) the amount of Tax Credits that would have been allowed to Investor in the year in which any such recapture or disallowance or loss occurs and in each subsequent year thereafter, plus (iii) any other interest or penalties assessed by the IRS or any other Governmental Authority in connection therewith, plus (iv) Recapture Costs. (q) "Person" means any individual or Entity, and the heirs, executors, administrators, legal representatives, successors, and assigns of such Person where the context so requires; and, unless the context otherwise requires, the singular shall include the plural, and the masculine gender shall include the feminine and the neuter and vice versa. NAI- 1502607240v2 4 (r) "Prime Rate" means the reference rate for corporate loans announced from time to time by large, money center banks and reported as the "Prime Rate" in The Wall Street Journal, New York Edition, as such rate may change from time to time, or in the event such rate ceases to be determined and reported in such publication, any comparable rate determined in good faith by Investor. (s) "Recapture Costs" means all fees and costs (including without limitation reasonable attorneys', accountants', experts', and consultants' fees and expenses, court costs and investigative expenses), damages or liability actually incurred by Fund and /or Investor in connection with the occurrence of a Specified NMTC Recapture ent including, without limitation, in connection with any tax audit, litigation or other procee challenging Investor's entitlement to the Tax Credits as a result of any Specified NMTC Reca ture Event. (t) "Specified NMTC Recapture Event" means any recapture, loss or disallowance of any Tax Credits to the extent attributable to the Clearinghouse EI: (i) arising, directly or indirectly. in whole or in part, from Project Borrower failing to qualify as a QALICa (ii) arising, directly or indirectly, in who a or in part, from the Project Loans failing to qualify' as QLICIs (including, wit` limitation, the failure of Project Borrower or any tenant of the Project to consti_ e a "qualified business" within the meaning of Section 1.45D-1 (d)(5) of the Treasury Regulations); (iii) aril g, directly or indi � whole or in part, from fraud, material misrepresentation, gross neg igence, or willful misconduct of any Indemnitor or any Affiliate thereof; or (iv) arising, directly or indirectly, in whole or in part, from an Event of Default or any other action or inaction within the control of any Indemnitor or any Affiliate thereof. (u) "Tax' or " "Taxes" means any and all liabilities, losses, expenses and costs that are, or are in the nature of taxes, fees or other governmental charges, including interest, penalties, fines, and additions to tax imposed by any Governmental Authority. (v) "Treasury Regulations" means any temporary or final regulations promulgated under the Code. 2. Tax Assumptions. Indemnitors acknowledge that, by virtue of the fact that Fund's Clearinghouse QEI is intended to constitute a QEI, and assuming no recapture or disallowance of the Tax Credits occurs, Investor (through its ownership of Fund) expects to claim or be entitled to claim Tax Credits in an amount equal to (a) 5% of the Designated QEI Amount on the first Credit Allowance Date and on each of the next two anniversary dates of the Credit Allowance Date, and (b) 6% of the Designated QEI Amount on each of the next four anniversary dates of the Credit Allowance Date (the "NMTC Assumption "), in an aggregate amount over such period equal to not less than $[3,705,000] (i.e., 39% of the Designated QEI Amount). NA I- 1502607240v2 5 3. Indemnification for Specified NMTC Recapture Events. (a) Indemnitors, jointly and severally, shall be obligated to pay the NMTC Recapture Amount to Investor within 20 calendar days of receipt of notice from Investor of a NMTC Payment Date. Investor shall provide Indemnitors along with such notice a written calculation of the NMTC Recapture Amount together with a description of the Specified NMTC Recapture Event. (b) Investor shall use commercially reasonable efforts to provide Indemnitors with prompt notice of any written inquiry from, investigation by, or dispute with the IRS or the CDFI Fund in which such party has asserted that it is expressly challenging or disallowing any or all Tax Credits claimed or claimable by Investor, such that the adverse resolution of such inquiry from, investigation by, or dispute (or portion thereof) with any such party would result in a Specified NMTC Recapture Event; provided that no failure by Investor to give any such notice shall relieve any Indemnitor from liability under this Agreement, be a defense of any Indemnitor to this Indemnity, or result in any liability to Investor. Investor shall use commercially reasonable efforts to keep Indemnitors reasonably infoliued of the progress ` of any related proceedings which, if resolved adversely, would result in a Specified NMTC Recapture Event (collectively, a "Recapture Dispute "), during the pendency of suc Recapture Dispute, and keep Indemnitors reasonably informed as to the progress of any proposed settlement of a Recapture Dispute; provided that nothing contained herein shall preclude Investor from taking any action or inaction in connection with such Recapture Dispute as Investor may deem necessary or advisable in its sole discretion. (c) In the event that any amounts owed under this Section 3 are paid when due, Indemnitors shall have no liability to Investor after the date of such payment for any interest or penalties assessed by the IRS or any other Governmental Authority with respect to such amounts on account of any delay by Investor, Fund or any Affiliate of any of the foregoing in advancing Indemnitors' payment to the IRS or other applicable Governmental Authority. (d) During the Compliance Period, if Project Borrower prepays or attempts to prepay any portion of any Project Loan before such Project Loan is due, it will constitute a breach of the terms of the Loan Agreement, and Indemnitors will be required to escrow, with Investor, an amount equal to the NMTC Recapture Amount that could result from the breach by Project Borrower as calculated by Investor consistent with the terms of this Agreement. If any Tax Credits are actually recaptured, lost or disallowed, the escrowed funds will be paid to Investor, plus, on an After -Tax Basis, any additional interest or penalties assessed by the IRS or any other Governmental Authority in connection therewith or Recapture Costs that result from such recapture, loss or disallowance. If no Tax Credits are recaptured, lost or disallowed, 100% of the escrowed funds, minus any fees and costs (including without limitation attorneys', accountants', experts', and consultants' fees and expenses, court costs and investigative expenses) incurred by Fund and /or Investor will be returned to Indemnitors promptly following the reasonable determination by Investor that no Tax Credits remain subject to being recaptured, lost or disallowed. NAI- 1502607240v2 6 (e) Any amounts owed under this Section 3 that are not paid when due shall bear interest at a rate equal to 2% over the Prime Rate in effect at the end of the preceding calendar month, until paid in full'. 4. Exculpation from Liability. Notwithstanding Section 3, Indemnitors shall have no liability to Investor with respect to a Specified NMTC Recapture Event in the event that such Specified NMTC Recapture Event occurred solely from (i) fraud, material misrepresentation, gross negligence, or willful misconduct of Investor or Fund, or (ii) a Change in Law that Indemnitors could not comply with after commercially reasonable effo s. 5. General. (a) Indemnitors shall have the ability ; to request reasonable additional documentation regarding any Specified NMTC Recapture Event, NMTC Recapture Amount, or any other claim for indemnity under this Agreement; provided, however, (i) none of Investor, Fund or any Affiliate of any of the foregoing shall be obligated to make available any confidential information relating to their respective federal or state income tax returns or any issues relating thereto nor any computer program employed to calculate any such amount and (ii) any dispute as to the reasonableness of the documentation requested and /or provided shall not limit or extinguish any Indemnitor's liability under this Agrees ent. (b) All payments made hereunder shall be made in U.S. dollars in immediately available funds (unless the paying party is otherwise instructed by the recipient of such payment) to the account of the recipient. (c) This Agreement shall be binding upon and shall inure to the benefit of, and shall be enforceable by. the parties hereto and their respective successors and permissible assigns whether or not an express assignment to any such holder of rights under this Agreement has been made. The term "Investor" shall include any subsequent holder of the interest of Investor as the sole member of Fund, and the term "Fund" shall include any subsequent holder of the interest of Fund as the investor member of CDE. Each of Investor and Fund may assign such interests, in whole or in part, without notice and without affecting any liability or obligation of Indemnitors under this Agreement. Each of Investor and Fund may make available to any assignee all credit and financial data with respect to any Indemnitor as may be lawfully in the possession of or Fund. Notwithstanding anything to the contrary herein, this Agreement shall not inure to the benefit of any purchaser of Investor's interest as the sole member of Fund pursuant to the Investment Fund Put /Call Agreement. (d) To the fullest extent permitted by applicable law, Indemnitors waive (i) notice of the acceptance of this Agreement, the CDE OA, the Fund OA or any part thereof and (ii) presentment, protest, notice, demand or action on delinquency in respect of this Agreement, the CDE OA, the Fund OA or any part thereof, including any right to require Investor, Fund or any Affiliate of any of the foregoing to sue any other Person obligated with respect to this Agreement, the CDE OA, the Fund OA or any part thereof, or otherwise to enforce payment thereof against any collateral securing Indemnitors' obligations or to collect against any other Person who may be liable on account of any Specified NMTC Recapture Event. NAI- I 502607240v2 7 (e) No amendment or modification of this Agreement, and no approvals, consents or waivers hereunder, shall be valid or binding unless in writing and executed by the party to be bound. (f) This Agreement constitutes the entire agreement among the parties pertaining to the subject matter hereof, and supersedes in their entirety any and all written or oral agreements previously existing between the parties with respect to such subject matter. (g) Should any one or more provisions of this Agreement be determined to be illegal or unenforceable, all other provisions nevertheless shall be effect aye. (h) Indemnitors hereby agree that this Agreement, the indemnified amounts as described in Section 3, and all other obligations indemnified hereby, shall remain in full force and effect at all times hereinafter until paid and/or performed in full notwithstanding any action or undertakings by or against any Indemnitor and /or any member of any Indemnitor or in any proceeding in the United States Bankruptcy Court, including, without limitation, any proceeding relating to valuation of collateral, election or imposition of secured or unsecured claim status upon claims by Investor pursuant to any Chapter o the Bankruptcy Code or the Rules of Bankruptcy Procedure as same may be applicable from time to time. (i) Each Indemnitor covenants, represents, and warrants to and for the benefit of Investor as follows: (i) the execution, delivery and performance by it of this Agreement does not contravene or conflict with any' law, order, rule, regulation, writ, injunction or decree: now in effect of any Governmental Authority over it, or any contractual restriction binding on or affecting it; (ii) it has all necessary power and authority to enter into and perform this Agreement, and there are no facts or circumstances of which it is aware that could in any way impair or prevent it from performing its obligations under this Agreement; (iii) any and all financial information with respect to it given by it or any other Indemnitor to Investor fairly and accurately present its financial condition and results of its operations as of the respective dates thereof and for the respective dates indicated therein, and, since the respective dates thereof, there has been no material adverse change in its financial condition or the results of its operations; and (iv) with the assistance of counsel of its choice, it has read and reviewed this Agreement and such other documents as it and its counsel deemed necessary or desirable to read. (j) Project Borrower further covenants and agrees (i) to provide Investor, within [180] calendar days of the end of each of its fiscal years, copies of audited financial statements regarding its previous fiscal year, including a balance sheet, a statement of operations, and a statement of cash flows and (ii) to promptly notify Investor of any change in its financial NAI- 1502607240v2 condition that adversely and materially affects its ability to perform its obligations under this Agreement. (k) Sponsor further covenants and agrees (i) to provide Investor, within [120] calendar days of the end of each of its fiscal years, copies of audited financial statements regarding its previous fiscal year, including a balance sheet, a statement of operations, and a statement of cash flows and (ii) to promptly notify Investor of any change in its financial condition that adversely and materially affects its ability to perform its obligations under this Agreement. (1) Any notice, request, demand, consent, approval, direction, agreement, or other communication required or permitted hereunder shall be in writing and shall be validly given if (i) sent by a nationally- recognized courier that obtains receipts, (ii) delivered personally by a courier that obtains receipts, (iii) mailed by United States certified mail (with return receipt requested and postage prepaid), or (iv) sent by email ; (with a copy of such email and proof of transmission thereof sent via one of the methods o tdeliver y set forth in clauses (i), (ii) or (iii) hereof), addressed to the applicable party at the ddress set forth on Schedule A to this Agreement. Each notice shall be effective upon being so sent, delivered, or mailed, but the time period for response or action shall run from the date of receipt as shown on the delivery receipt, or the date the email was sent, as applicable. Refusal to accept delivery or, to the fullest extent permitted by applicable law, the inabili to deliver because of a changed address for which no notice was given shall be deemed receipt. Any party°"may periodically change its address for notice (including different or additional addresses for copies) by giving the other party at least 10 calendar days' prior notice in a cordance with the foregoing provisions. I ... (m) The liability of Indemnitors Ander this Agreement shall be joint and several and shall be an absolute, direct, immediate and unconditional indemnity of payment and not of collectability. The obligations of Indemnitors hereunder are independent of the obligations of any Affiliate or any other party which may be initially or otherwise responsible for performance or payment of the obligations hereunder guaranteed, and, in the event of any default hereunder, a separate action or actions may be brought and prosecuted against Indemnitors, whether or not any Affiliate is joined therein or a separate action or actions are brought against any Affiliate. (n) References in this Agreement to Sections are intended to refer to Sections of this Agreement, unless otherwise specifically stated. (o) The Recitals and Schedule identified in this Agreement are incorporated herein by reference and made a part hereof. (p) This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by telecopier, facsimile machine, portable document format ( "PDF ") or other electronic means shall be as effective as delivery of a manually executed counterpart of this Agreement. The effectiveness of any such documents and signatures shall, subject to applicable laws, have the same force and effect as manually signed originals and shall be binding on the NAI- 1502607240v2 9 parties. No party may raise the use of a telecopier, facsimile machine, PDF or other electronic means, or the fact that any signature was transmitted through the use of a telecopier, facsimile machine, PDF or other electronic means, as a defense to the enforcement of this Agreement. 6. CHOICE OF LAW; WAIVER OF JURY TRIAL AND CERTAIN OTHER RIGHTS; SUBMISSION TO JURISDICTION; SERVICE OF PROCESS. (a) THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF WASHINGTON WITHOUT GIVING EFFECT TO CONFLICT OR CHOICE OF LAW PRINCIPLES, AND TO THE EXTENT RELEVANT IN APPLYING THE PROVISIONS OF, SECTION 45D OF THE CODE, THE CODE AND THE TREASURY REGULATIONS THEREUNDER. (b) TO THE FULLEST EXTENT _PERMITTEDk,BY APPLICABLE LAW, EACH PARTY (i) AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE VIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF KING, STATE OF WASHINGTON AND (ii) WAIVES ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE ITH THIS SECTION 6. (c) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY WAIVES ANY RIGHT IT MAY ITAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). IT IS AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT. EACH PARTY (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6. (d) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY AGREES THAT ANY PROCESS OR NOTICE OF MOTION OR OTHER APPLICATION TO ANY SUCH COURT IN CONNECTION WITH ANY ACTION OR PROCEEDING MAY BE SERVED UPON SUCH PARTY BY REGISTERED OR CERTIFIED MAIL TO OR BY PERSONAL SERVICE AT THE LAST KNOWN ADDRESS OF SUCH PARTY, WHETHER SUCH ADDRESS BE WITHIN OR OUTSIDE THE JURISDICTION OF ANY SUCH COURT. NAI -I 502607240v2 10 (e) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, INDEMNITORS SHALL NOT ASSERT, AND HEREBY WAIVE, ANY CLAIM AGAINST INVESTOR AND INVESTOR'S AFFILIATES, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS AGREEMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY AND /OR THE TRANSACTIONS CONTEMPLATED HEREBY. 7. Enforcement Costs. In the event of any action at law or in equity to enforce the provisions of this Agreement or to secure relief or damages for the breach of this Agreement, the prevailing party shall be entitled to payment or reimbursement, as applicable, of its costs, expenses and fees (including without limitation reasonable attorneys', accountants', experts', and consultants' costs, expenses and fees, court costs and investigative expenses ,p or to trial, at trial and on appeal) incurred in such proceedings from the non- prevailing part 8. Termination of Indemnitors' Obligations. Notwithstanding an ' alp rein to the contrary, the obligations of Indemnitors set forth herein shall terminate 3 ` alendar days following the last day on which Investor could be subject to liability for any loss, disallowance, or recapture with respect to the Tax Credits that have been claimed with respect to the Clearinghouse QEI, taking into account any extensions of the statute of imitations applicable to Investor. [REMAINDER OF PAGE BLANK; SIGNATURE PAGES TO FOLLOW.] NAI- l502607240v2 11 IN WITNESS WHEREOF, each party has caused this QALICB Indemnification Agreement to be executed by its duly authorized officer as of the Effective Date. PROJECT BORROWER: nonprofit corporation ], a Washington SIGNATURE PAGE 1 OF 3 QALICB INDEMNIFICATION AGREEMENT (CONA/CLEARINGHOUSE /FEDERAL WAY PAEC) [COUNTERPART SIGNATURE PAGE TO QALICB INDEMNIFICATION AGREEMENT] SPONSOR: CITY OF FEDERAL WAY, a Washington municipal corporation SIGNATURE PAGE 2 OF 3 QALICB INDEMNIFICATION AGREEMENT (CONA/CLEARINGHOUSE /FEDERAL WAY PAEC) [COUNTERPART SIGNATURE PAGE TO QALICB INDEMNIFICATION AGREEMENT] INVESTOR: CAPITAL ONE, NATIONAL ASSOCIATION, a national banking association SIGNATURE PAGE 3 OF 3 QALICB INDEMNIFICATION AGREEMENT (CONA/CLEARINGHOUSE /FEDERAL WAY PAEC) (1) If to Project Borrower: With a copy to: SCHEDULE A Notice Addresses of Parties [ 1 33325 8th Ave. South Federal Way, WA 98003 Attention: [ Email: [ 1 1 Butler Snow, LLP 1801 California Street, Suite 5100 Denver, CO 80202 Attention: Alan 'ek, Esq. Email: alan.p ' % butersnow.com (2) If to Sponsor: City of Federal 33325 8th Ave. Sout Federal Way, WA 98003 Attention: [ Email: [ With a copy to: With a copy to: Butler Snow. LLP 1801 California Street, Suite 5100 Denver, CO 80202 Attention: Alan Pasternack, Esq. Email: alan.pasternack @butlersnow.com Capital One, National Association Debt Capital Markets Place St. Charles, Suite 2900 201 St. Charles Ave. New Orleans, LA 70170 Attention: Spencer Gagnet Email: spencer.gagnet @capitalone.com Jones Day 100 High Street, 21st Floor Boston, MA 02110 Attention: Jeffrey D. Gaulin, Esq. Email: jgaulin @jonesday.com [REMAINDER OF PAGE BLANK] SCHEDULE A QALICB INDEMNIFICATION AGREEMENT (CONA/CLEARINGHOUSE /FEDERAL WAY PAEC) FINANCING DOCUMENTS 6. Reimbursement Certification and Compliance Agreement JD Draft 5/2/17 REIMBURSEMENT CERTIFICATION AND COMPLIANCE AGREEMENT THIS REIMBURSEMENT CERTIFICATION AND COMPLIANCE AGREEMENT (this "Agreement ") is made as of [ _J, 2017 (the "Effective Date "), by and between FW PAEC QALICB, INC., a Washington nonprofit corporation ( "FW PAEC "), and CITY OF FEDERAL WAY, a Washington municipal corporation ( "Fund Lender "). WHEREAS, on the Effective Date, Capital One, National Association, a national banking association ( "Investor "), will make a capital contribution in COCRF Investor 77, LLC, a Delaware limited liability company ( "Fund "), in exchange for 100% of Fund's membership interests; WHEREAS, on the Effective Date, Fund will obtain one or more loans from Fund Lender in the aggregate amount of $[6,239,600] (the "Fund Loan "); WHEREAS, on the Effective Date, Fund will use the proceeds of Investor's capital contribution and the Fund Loan to make a "qualified equity investment ", as such term is defined in Section 45D of the Internal Revenue Code of 1986 (as amended from time to time, the "Code'..' d related treasury regulations thereunder (a "QEI "), in an amount equal to $9,500,000 in Clearinghouse, TC (Sub 46), LLC, a California limited liability company ( "Sub - CDE "); WHEREAS, FW PAEC was formed for the purpose of developing and leasing certain improvements for use as a community facility and performing arts center located on certain property at 31510 Pete vonReichbauer Way South, Federal Way, WA 98063 (the "Project "); WHEREAS, prior to the Effective Date, Fund Lender incurred various costs and expenses relating to the Project in the aggregate amount of $[6;239,600], all as further detailed on Exhibit A attached hereto (the "Reimbursed Costs "), and as evidenced by the invoices and other documentation attached hereto as Exhibit B; WHEREAS, Fund Lender desires to be reimbursed for the Reimbursed Costs and FW PAEC has agreed to reimburse Fund Lender for the ReimbursedCosts; WHEREAS, on the Effective Date, Sub -CDE is making certain loans to FW PAEC in the aggregate original principal amount of $[9,310,000] (collectively, the " QLICI Loan "), each of which is intended to constitute a "qualified low - income community investment ", as such term is used in Section 45D of the Code and related treasury regulations thereunder (a "QLICI "), a portion of the proceeds of which FW PAEC intends to use, directly or indirectly, to reimburse Fund Lender for the Reimbursed Costs; WHEREAS, the Allocation Agreement to which Sub -CDE is a party, the Compliance and Monitoring Frequently Asked Questions issued by the CDFI Fund in January 2017 (the "January 2017 FAQ "), and related guidance issued by the CDFI Fund, impose certain restrictions on the use of QLICIs to repay or refinance a debt or equity provider whose capital is used directly or indirectly to fund a QEI, or to repay or refinance any Affiliate (as defined below) of such debt or equity provider, and provide guidance regarding the collection of information in order to monitor such restrictions; and WHEREAS, as a condition precedent to advancing the QLICI Loan, Sub -CDE requires that FW PAEC and Fund Lender make certain representations and covenants regarding, among other things, the direct and indirect sources of funds used to fund the QEI, the relationships among FW PAEC, Fund Lender and certain of their Affiliates, and the Reimbursed Costs, to Sub -CDE and its direct and indirect members NAI- 1502636565v2 (including, Clearinghouse Community Development Financial Institution, a California corporation ( "Allocatee "), Fund, and Investor). NOW, THEREFORE, in consideration of the foregoing, of the mutual promises of the parties hereto and of other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, FW PAEC and Fund Lender certify to Sub -CDE, Allocatee, Fund, and Investor (collectively, the "Reliance Parties ") as follows: 1. DEFINITIONS. All capitalized terms listed in the introductory paragraph and Recitals to this Agreement have the meanings assigned to them therein, and all capitalized terms not otherwise expressly defined herein have the meanings assigned to them in the Loan Agreement (as defined below). In addition, the following terms have the following meanings in this Agreement: (a) "Affiliate" means, as to any Person, any other Person that Controls, is Controlled by, or is under common Control with the first Person. (b) "CDFI Fund" means the Community United States Department of Treasury, or any successor age the new markets tax credit program. uncial Institutions Fund of the with oversight responsibility for �z (c) "Control," "Controlled" a � ,� � � ®mss ;means: (i) ownership, control, + power o votes more than 54% percent of the outstanding shares of any class of Voting Securities (as such term is defined in to Allocation Agreement) of any entity, directly or indirectly or acting through one or more other persons, (ii) control in any manner over the election of a majority of the directors, trustees, general partners, managing ambers, managers (or indiv als exercising similar functions) of any other entity; or (iii) power to exercise, directly or indirectly, a controlling influence over the management policies or investme decisions of another entity, as determined by the CDFI Fund. (d) "Flow of Funds- means that certain [ ], dated as of the Effective Date, by and among Investor, Fund Lender, Fund, Sub -CDE, FW PAEC, and certain other parties thereto, outlining the wire transfers necessary, among other things, to fund Investor's capital contribution to Fund, the Fund Loan, t e,, QEI, t1 ICI Loan and the reimbursement to Fund Lender for the Reimbursed Costs. (e) Agreement. "Fund Loan Financing Sources" has the meaning set forth in Section 2(a) of this (f) "Loan Agreement" means that certain Loan Agreement, dated as of the Effective Date, by and between Sub -CDE and FW PAEC with respect to the QLICI Loan, as the same may be amended, assigned, restated, modified, or supplemented from time to time. (g) "Person" means any individual, any general partnership, limited partnership, limited liability limited partnership, limited liability company, corporation, joint venture, trust, business trust, cooperative, association, or public agency, and the heirs, executors, administrators, legal representatives, successors, and assigns of such Person where the context so requires; and, unless the context otherwise 2 NAI- 1502636565v2 requires, the singular shall include the plural, and the masculine gender shall include the feminine and the neuter and vice versa. (h) "QEI Capital Source" has the meaning set forth in Section 3(a) of this Agreement. 2. REPRESENTATIONS AND WARRANTIES. To induce Sub -CDE to advance the proceeds of the QLICI Loan and to permit such proceeds to be used by FW PAEC to reimburse Fund Lender for the Reimbursed Costs, FW PAEC and Fund Lender represent and warrant as follows: (a) All direct and indirect sources of financing for the Fund Loan (each such direct and indirect source, the "Fund Loan Financing Sources ") have been fully and accurately disclosed and described to the Reliance Parties, and all agreements, arrangements and other relationships between FW PAEC, Fund Lender, and all Fund Loan Financing Sources have been fully and accurately disclosed and described to the Reliance Parties. (b) The Reimbursed Costs (i) were incurred no more than twenty -four (24) 'months prior to the Effective Date, (ii) are actual documented expenditures for legitimate business purposes that occurred during the normal course of operation, (iii) are similar in amount and scope when compared to expenditures by a similar entity for a similar project under similar circumstances, (iv) are directly attributable to the "qualified business" (as such term is defined in Section 45D(d)(3) of the Code) of FW PAEC, (v) are in amounts not greater than the amounts that would have been charged between arms' - length parties, (vi) do not constitute "incurred operating costs" (as such term is used in the January 2017 FAQ) of FW PAEC or Fund Lender, and (vii) arc reimbursements for the actual original cost incurred (and not any accreted value) which are capitalizable in the basis of FW PAEC's property. (c) The schedule attached hereto as Exhibit A Tully and accurately identifies all Reimbursed Costs, including (i) the party that incurred each such cost, (ii) the party to whom the payment was made and whether such party is an Affiliate of FW PAEC or Fund Lender, (iii) the date such cost was incurred, (iv) the nature of the payment, (v) the amount paid, and (vi) the date such cost was paid. (d) The materials attached hereto as Exhibit B, represent evidence that is true, accurate, and complete in all respects of all Reimbursed Costs that will be repaid or refinanced on the Effective Date. (e) The manner in which amounts are being paid or reimbursed at closing is fully and accurately reflected on the Flow of Funds. There are no agreements between or among FW PAEC, Fund Lender, or any other Fund Loan Financing Sources regarding the use or application of any proceeds of the QLICI Loan, other than those agreements which have been provided to the Reliance Parties as of the Effective Date. 3. COVENANTS. FW PAEC and Fund Lender covenant and agree, from the Effective Date and for so long as the QLICI Loan is outstanding, as follows: (a) Following the Effective Date, none of FW PAEC, Fund Lender, or any person that is related to or an Affiliate of FW PAEC or Fund Lender, will cause or permit any portion of the QLICI Loan proceeds to be used, in whole or in part, or directly or indirectly, to repay or refinance expenditures incurred by, or to pay any fees or other compensation to, any debt or equity provider whose capital was used to fund a QEI (each such debt or equity provider, a "OE! Capital Source "), or to repay or refinance expenditures incurred by any Affiliate of a QEI Capital Source without the prior written consent of Sub -CDE. Without limiting the foregoing, FW PAEC shall not enter into any agreement with any QEI Capital Source regarding the use or application of any proceeds of the QLICI Loans (other than those agreements provided to Reliance Parties as of the Effective Date) without the prior, written consent of Sub -CDE. 3 NAI- 1502636565v2 (b) FW PAEC shall maintain records of its use of QLICI Loan proceeds sufficient to establish and demonstrate that QLICI Loan proceeds have not been used in violation of Section 3(a) of this Agreement, shall make such records available for inspection and copying by the Reliance Parties and/or the CDFI Fund promptly upon request, and shall, pursuant to Exhibit C of the Loan Agreement certify annually on or before 1 1 of each year that FW PAEC is in full compliance with this Agreement. 4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on the parties hereto, and their heirs, successors, and assigns. 5. THIRD PARTY BENEFICIARIES. Allocatee, Investor and Fund shall each be a third party beneficiary with respect to the representations, warranties and covenants of this Agreement and, therefore, shall be entitled to enforce each such provision as if it were a direct party to this Agreement. 6. SEVERABILITY. If any provision of this Agreement of the application thereof to any Person or circumstance shall be invalid, illegal or unenforceable to any extent, that provision shall, if possible, be construed as though more narrowly drawn, if a narrower construction would avoid such invalidity, illegality, or unenforceability or, if that is not possible, such provision provisiAtiall, to the extent of such invaliditillegality, or unenforceability, be severed, and the remainder of this Agreement and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by law.”, 7. NO CONTINUING WAIVER. The waiver by any party of any breach of this Agreement shall not operate or be construed to be a waiver of any subsequent breach: provided, no waiver by any party of any breach of this Agreement shall be effective wit h`," ,thc prior, written consent of Sub -CDE. 8. APPLICABLE LAW. I VALIDI° OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AN MENT HEREOF, AND THE RIGHTS OF THE PARTIES HERETO WITH RESPECT Tu TIERS ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED" UNDER, TGOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STA "I'E OF STATE OF WASHINGTON WITHOUT GIVING EFFECT TO CONFLICT OR CHOICE OF LAW PRINCIPLES. 9. HEADINGS. The titles and headings of the Sections of this Agreement have been inserted for convenience of reference only and are not intended to summarize or otherwise describe, or limit, modify or expound upon the subject matter of such Sections. 10. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by telecopier, facsimile machine, portable document format ( "PDF ") or other electronic means shall be as effective as delivery of a manually executed counterpart of this Agreement. The effectiveness of any such documents and signatures shall, subject to applicable laws, have the same force and effect as manually signed originals and shall be binding on the parties. No party may raise the use of a telecopier, facsimile machine, PDF or other electronic means, or the fact that any signature was transmitted through the use of a telecopier, facsimile machine, PDF or other electronic means, as a defense to the enforcement of this Agreement. 11. ENTIRE AGREEMENT; NO ORAL AMENDMENTS. This Agreement (including without limitation the Recitals and the Exhibits attached hereto, which are incorporated herein by reference and made a part hereof), constitutes the entire agreement between the parties and supersedes all agreements previously made between the parties relating to its subject matter. There are no other understandings or agreements among them relating to such subject matter. Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by 4 NAI- 1502636565v2 each of the parties hereto; provided, no such instrument shall be effective without the prior, written consent of Sub -CDE. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 5 NAI- 1502636565v2 IN WITNESS WHEREOF, the parties have caused this Reimbursement Certification and Compliance Agreement to be duly executed as of the Effective Date. COMPANY: FW PAEC QALICB, INC., a Washington nonprofit corporation SIGNATURE PAGE 1 OF 2 REIMBURSEMENT CERTIFICATION AND COMPLIANCE AGREEMENT (CONA/CLEARINGHOUSE /FEDERAL WAY PAEC) [COUNTERPART SIGNATURE PAGE TO REIMBURSEMENT CERTIFICATION AND COMPLIANCE AGREEMENT] LEVERAGE LENDER: CITY OF FEDERAL WAY, a Washington municipal corporation SIGNATURE PAGE 2 OF 2 REIMBURSEMENT CERTIFICATION AND COMPLIANCE AGREEMENT (CONA/CLEARINGHOUSE /FEDERAL WAY PAEC) Exhibit B INVOICES FOR REIMBURSED COSTS [SEE ATTACHED] EXHIBIT B REIMBURSEMENT CERTIFICATION AND COMPLIANCE AGREEMENT (CONA/CLEARINGHOUSE /FEDERAL WAY PAEC) FINANCING DOCUMENTS 7. Ground Lease GROUND LEASE THIS GROUND LEASE (this "Lease ") is entered into as of the ( ,.1 day of [ 1, 2017 (the "Effective Date "), by and between CITY OF FEDERAL WAY, a municipal corporation of the State of Washington ( "Lessor "), and FW PAEC QALICB, INC., a Washington nonprofit corporation ( "Lessee "). BACKGROUND Lessor owns that certain real property located at 31510 Pete vonReichbauer Way South, Federal Way, Washington 98003, legally described on Exhibit A attached to this Lease (the "Real Property "). The Real Property together with any improvements now or hereafter constructed or existing upon the Real Property (the "Improvements ") is collectively referred to in this Lease as the "Property." AGREEMENT For and in consideration of the mutual promises, covenants and conditions set forth herein, the parties agree as follows: 1. Lease. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Property. 2. Term. This Lease all be effective on the Effective Date and shall expire at midnight on that date which is nine nine (99) years from the Effective Date (the "Expiration Date "), unless the Lease is sooner terminated in accordance with the terms of this Lease (the "Term "). 3. Rent. On the Effective Date, Lessee shal'ay Lessor a payment in the amount of and No /100 Dollars ($ .00), a de minimis amount of which constitutes one -time capital rent and the remainder of which constitutes reimbursement for certain predevelopment expenses incurred prior to the date of this Lease by Lessor. Lessor hereby acknowledges the receipt of such rent payment on the date of this Lease. No other rent shall be due under this Lease. 4. Operating Expenses. Lessee shall be responsible for the payment of all Operating Expenses of the Property, commencing on the Effective Date. To the extent feasible, all Operating Expenses shall be billed directly to and paid by Lessee. If Lessee fails to timely pay any Operating Expense when it becomes due and payable, Lessor shall have the right, at its option, to make such payment at the expense of Lessee as reasonably required. Any amount so expended by Lessor shall be paid by Lessee promptly upon demand. With respect to those Operating Expenses billed to or otherwise paid by Lessor, Lessee's payment of Operating Expenses shall be due on the later of fifteen (15) days after receipt of an itemized statement thereof from Lessor or thirty (30) days after the end of the calendar month. Lessor shall provide Lessee with a written statement of the actual Operating Expenses billed to Lessor for each calendar month, within fifteen (15) days after the end of the month. Lessor shall maintain separate detailed records of the Operating Expenses billed to Lessor, and shall make these available on a reasonable basis for examination by Lessee. Within sixty (60) days of the end of Ground Lease Page 1 each calendar year, Lessor shall provide to Lessee an annual itemized statement of Operating Expenses billed to Lessor, with an explanation of any corrections to the quarterly statements for the prior year, and the next payment to Lessor shall be adjusted to the extent necessary to take into account any such corrections. "Operating Expenses" as used in this Lease means: (i) All ordinary and special assessments and other governmental charges, that are assessed upon all or any part of the Property, including any tax or other levy on or measured by any rent collected by Lessor with respect to the Property, and any expenses incurred by Lessor in contesting any of the foregoing or the assessed valuation of all or any part of the Property. (ii) All costs of utilities, including without limitation, eater sewer, power, garbage removal and recycling services. (iii) All premiums on policies of public liability, casualty, and property damage insurance maintained by Lessor with respect to the Property. (iv) All property taxes, if any, on the Prop rty. (v) All other expensesin connection with theperation, management, maintenance, subleasing and upkeep of the Property. 5. Use. (A) Permitted Use. The Property may be used and occupied by Lessee for any lawful purpose, except that Lessee agrees that it will not use or permit the use of the Property, or any part thereof, in any way which would violate any of the terms of this Lease, or the certificate of occupancy for the Property, or the laws of the State of Washington, or any directions, rules or regulations of the Health Officer, Fire Marshall, Building Inspector, Lessor or officers of any public authority having jurisdiction over the Property. (B) Use Restrictions. In no event shall Lessee's use of the Property consist of operation of any of the following prohibited activities or businesses: (i) any trade or business consisting predominantly of the development or holding of intangibles for sale or license; (ii) any trade or business the principal activity of which is farming within the meaning of Section 2032A(e)(5)(A) of the Internal Revenue Code of 1986 or corresponding provisions of subsequent superceding federal law (the "Code "); (iii) any other trade, business or activity, prohibited by any amendment to Section 45D of the Code and any temporary, proposed or final regulations promulgated by the U.S. Treasury pursuant to the Code, and any other guidance published by the Internal Revenue Service; or (iv) any trade or business consisting of the operation of any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, racetrack or other facility used for gambling, or any store the principal business of which is the sale of alcoholic beverages for consumption off premises or any trade or business consisting of the operation of residential rental property, as defined in Section 168(e)(2)(A) of the Code. Ground Lease Page 2 Furthermore, in no event shall Lessee use the Property to provide dwelling units, or other areas with sleeping accommodations, on other than a transitory basis. (C) Hazardous Substances. Lessee shall not, without Lessor's prior written consent, keep on or around the Property for use, disposal, transportation, treatment, storage or sale, any substance designated as, or containing components designated as, hazardous, dangerous, toxic or harmful (collectively, "Hazardous Substances ") and /or subject to regulation by any federal, state or local law, regulation, statute or ordinance, except those which are normally used day -to -day for standard residential, o ice, retail, commercial or medical purposes and which shall be used in compliance 1 applicable laws and regulations. (D) Nuisance. Lessee shall not cause, maintain or ance on or about the Property, nor commit or suffer any waste in or ab 6. Lessee's Maintenance and Repair. (A) Maintenance and Repairs. Lessee shall op and occupy the Property in a good, neat, clean, sanitary condition, and in c • with all applicable laws and regulations. Lessee shall be obligate& to maintain . ® vements in good condition, ordinary wear and tear except essor acknowled t the expiration of this Lease, the Improvements may b H.`pected, through ordi � gip, ear and tear, to be at or near the end of their useful lives. Lessor shall not be obligat °e to perform any repairs or maintenance on the Property except as expressly stated herein. Lessee shall promptly perform or cause to be performed: (i) any required structural or exterior repairs and maintenance; (ii) any repair or restoration to#15e performed under the terms hereof with insurance proceeds; %and (iii) o epairs of any damage to the Property caused by Lessee. (B) No Waste. Lessee will permit rt waste, damage or injury to the Property. (C)Garbage. Lessee shall cause a ,garbage, recyclables and other debris emanating from the Property to be removed to such reasonable locations and spaces as may be specified by " Lessor from time to time during hours and subject to such reasonable controls as may be established by Lessor from time to time. (D) Lessee's Failure. In the event Lessee fails to maintain or repair the Property as required herein, Lessor shall give Lessee notice of such failure. If Lessee fails to commence the required maintenance or repair within ten (10) days of notice, or as soon thereafter as any necessary permits and approvals can be obtained with reasonable diligence, or fails to diligently prosecute the same to completion, then Lessor shall have the right, at its option, to do such acts and expend such funds at the expense of Lessee as reasonably required to perform such work. Any amount so expended by Lessor shall be paid by Lessee promptly after demand. Lessor shall have no liability to Lessee for any damage, inconvenience or interference with the use of the Property by Lessee as a result of performing any such work. (E) Systems. In addition to the above, Lessee shall perform and pay for any maintenance of any systems or equipment serving the Property. Ground Lease Page 3 7. Alterations, Additions and Improvements. (A) Upon completion of the Project, Lessee may construct additional Improvements and make alterations to any of the Improvements, without the prior written approval of Lessor. All Improvements undertaken by Lessee shall be at Lessee's sole expense, except as otherwise expressly provided in this Lease, but shall become the property of Lessor, remaining in and surrendered with the Property as a part thereof as of the Expiration Date or earlier termination of this Lease. All work performed shall be done in a workmanlike manner and in compliance with all applicable laws and ordinances. Lessee shall indemnify and hold Lessor harmless from and against all damages, loss, liens or expenses arising out of such work. (B) Notwithstanding anything to the contrary set forth herein, it is the intent of Lessor and Lessee that Lessee shall be the owner of the Improvements, as the same are constructed, for Federal income tax purposes, and that Lessee shall have the benefits and burdens of ownership of such Improvements. Lessor and Lessee shall treat Lessee as the owner of the Improvements for Federal income tax purposes, and will not take any positions contrary to such treatment or inconsistent with Lessee's ownership of the Improvements for Federal income t . urposes. 8. Indemnification; Insurance. (A) Waiver. Lessor shall not be liable to Lessee and Lessee, as a material part of the consideration to Lessor, hereby waives all claims against Lessor and assumes all risk of damages for loss to any property or ,',.° an ''erson occurring on the Property from any cause whatsoever. (B) Lessee's Indemnification. Lessee steal indemnify and save Lessor, its officers, agents, employees, contractors, licensees and invitees harmless from all loss, damage, liability or expense (including attorney's fees and other costs incurred in connection with litigation or the defense of claims; m er claims involved litigation) resulting from any actual or alleged injury to any person, or from any actual or alleged loss of or damage to any property (including any and all contamination by any Hazardous Substances in, on or under the Property whether or not caused by Lessee), arising out of Lessee's operation or occupation of the Property or caused by or resulting from any act or omission of Lessee or any licensee. assignee, sublessee or concessionaire, or of any officer, agent, employee, guest, invitee or visitors of any such person or about the Property or from Lessee's breach of its other obligations hereunder.The indemnification provided for in this Section 8(B) shall survive any termination or expiration of this Lease. Lessee shall promptly notify Lessor of casualties or accidents occurring in or about the Property. (C) Lessor's Responsibility. The exculpation, release and indemnity provisions of Sections 8(A) and 8(B) shall not apply to the extent the claims thereunder were caused by Lessor's gross negligence or willful misconduct. However, in no event shall Lessor be liable to Lessee for consequential damages. Ground Lease Page 4 (D) Liability Insurance. Lessee shall, at its own expense, maintain comprehensive general liability insurance, with broad form endorsement, in effect with respect to the Property with minimum limits of $1,000,000 per occurrence, $2,000,000 in the aggregate, $5,000,000 umbrella, and a maximum deductible of $25,000. The insurance carrier must have an AM Best's Rating of A -VII or better. Lessor shall be named as an additional insured and shall, if requested by Lessor, be furnished with a copy of such policy or policies of insurance which shall bear an endorsement that the same shall not be canceled without thirty (30) days' prior notice to Lessor. If Lessee fails to maintain such insurance, Lessor may do so at its discretion, and Lessee shaleimburse Lessor for the full expense incurred upon demand. (E) Fire and Extended Coverage Insurance. Lessee shall obtain and keep in force at all times during the term of this Lease, "special form" insurance covering all risks of physical loss or damage to the Property, with liability limits of not less than one hundred percent (100 %) of the full replacement value thereof•••.`uch policy shall name Lessor as an additional insured and each mortgagee as a loss payee under a standard mortgagee endorsement. Such policy shall include, but shall not be limited to, cover ge for fire, extended coverage, vandalism, malicious mischief and storm. Lessee shall also maintain insurance covering its furniture, fixtures, equipment and inventory in any amount equal to the full insurable value thereof; insuring against fire and risk covered by a standard extended coverage endorsement on the Property. (F) Mortagee's Insurance Requirements. Notwithstanding the foregoing, Lessee shall satisfy all insurance requirements of any Approved Mortgagee which has a deed of trust secured by this Lease. 9. Damage to the Property. (A) Notice of Casualty. Lessee shall give prompt written notice to Lessor after the occurrence of any fire, earthquake, act of God or other casualty to or in connection with the Property, or any Improvements or any portion thereof (a "Casualty "). Upon the occurrence of any Casualty, Lessee, promptly and with all due diligence, shall apply for all applicable insurance proceeds recoverable with respect to such Casualty, for the benefit of Lessor, Lessee, and their respective mortgagees, as their interests appear; provided, that Lessee shall be entitled to all of the proceeds of insurance payable with respect to a Casualty affecting the Improvements. If the Improvements shall be damaged by Casualty, then Lessee shall have the option, to be exercised within one hundred twenty (120) days after such Casualty, to: (i) repair or restore the Improvements as provided in this Section 9, or (ii) with the written consent of each mortgagee of the Property, to terminate this Lease by notice to Lessor, which termination shall be deemed to be effective as of a date not less than thirty (30) days after the date such notice is received by Lessor. If Lessee terminates this Lease pursuant to this Section, Lessee shall, subject to the prior rights of any Approved Mortgagee therein, apply the necessary portion of Lessee's insurance Ground Lease Page 5 proceeds to remove all debris from the Property and shall be entitled to keep any remaining insurance proceeds. (B) Restoration. In the event the Improvements can be restored, Lessor and Lessee shall cooperate with one another to enable Lessee to restore or cause to be restored the Improvements as expeditiously as possible. (C) Termination. In the event Lessee shall determine that it is not economically practical to restore the Improvements and /or the Property to substantially the same condition in which they existed prior to the occurrence of such Casualty, then with the express written consent of any mortgagee of the Property, Lessee may terminate this Lease as of a date that is not less than thirty (30) days after Lessee provides notice to Lessor. 10. Real and Personal Property Taxes. Lessee shall pay, prior to delinquency, all real property taxes payable with respect to the Property (if any). Lessee shall pay prior to delinquency all personal property taxes payable, if any, with respect to all property of Lessee's`' located on the Property. Lessee shall promptly upon request of Lessor provide satisfactory evidence of such payment. "Personal property taxes" under this Section 10 includes all propertyttaxes assessed against the property of Lessee, whether ass sed as real or personal property. 11. Assignment or Lease. Lessee may assign or sublet the whole or any part of the Property without the prior written consent of Lessor, but shall promptly give notice to Lessor of such assignment or sublease; provided, however, that Lessor hereby consents to that certain Sublease dated on or about the date hereof between. Lessee, as sublessor, and Lessor, as sublessee. If Lessee elects to so assign its interest in this Lease, the parties shall execute assignment and consent documents reasonably acceptable to Lessor. In any event, Lessee shall remain liable hereunder and shall not be released from its obligations hereunder. 12. Sale. In the event of any sale of the Property, or any assignment of this Lease by Lessor, Lessor shall be relieved of all liability under this Lease arising out of any act, occurrence, or omission occurring after sale or assignment, and the purchaser or assignee at such sale or assignment or any subsequent sale or assignment of this Lease shall be deemed without any further agreement to have assumed all of the obligations of Lessor under this Lease accruing after the date of such sale or assignment. 13. Access. Lessee will allow Lessor access to the Property at all reasonable times for the purpose of inspections and making repairs, additions or alterations to the Property as Lessor elects to make, but this access shall not be construed as an agreement on the part of Lessor to make any repairs, additions or alterations. 14. Eminent Domain. (A) Condemnation. In the event that title to the entire Property shall be lawfully condemned or taken in any manner for any public or quasi - public use or conveyed in lieu of condemnation, this Lease shall automatically terminate as of the date possession is required to be delivered to the condemnor. In the event that only a portion of the Property is taken and the Property is thereby rendered unsuitable for the conduct of Lessee's Ground Lease Page 6 business, either party may terminate this Lease as of the date when possession of the portion of the Property so taken is delivered to the condemning authority. (B) Award. Any award for the taking of all or part of the Property under the power of eminent domain, including payment made under threat of the exercise of such power, shall be the property of (i) Lessor to the extent such award constitutes compensation for diminution in value of this Lease or for the taking of the fee simple interest in the Real Property, and (ii) Lessee to the extent such award constitutes compensation for the loss of or damage to the Improvements, Lessee's trade fixtures and removable personal property and for Lessee's relocation or moving expenses. Lessor shall not be liable to Lessee for the loss of the use of all or any part of the Property taken by condemnation. (C) Lessor Authority. Lessor shall have the exclusive authority to, grant possession and use to the condemning authority and to negotiate and settle all issues of just compensation or, in the alternative, to conduct litigation concerning such issues, except that Lessor shall not enter into any settlement of any separate award that ma be made to Lessee without Lessee's prior approval of such settlement;` which app , r hall not be unreasonably withheld. 15. Default. (A) Definition of Default. The occ shall constitute a material default and breac one or more of the following events "Default "): (i) vacation or abandonment b or any portion of the Property; (ii) failure ^ °by Lessee to make an .ayment required as and when due, where such failure shall continue afte =n (10) days' written notice from Lessor; (iii) failure by Lessor or Lessee to materially observe or perform any of the covenants, conditions, or provisions of this Lease, other than the making of any payment due hereunder, where such failure shall continue after ninety (90) days' written notice from Lessor or Lessee, as applicable, except that, if the nature of such obligation is such that more than ninety (90) days are required to cure such failure, Lessor or Lessee, as applicable shall not be in default if such party commences such cure within ninety (90) days after notice and thereafter completes such cure diligently and within a reasonable time; and (iv) any assignment, transfer, mortgage, encumbrance or other sublet of the Property not otherwise permitted by this Lease without the prior written consent from Lessor. In no event shall a default by Lessor under this Lease give rise to any right of Lessee to terminate this Lease. Ground Lease Page 7 (B) Lessee Notification. Lessee shall notify Lessor promptly of any Default by Lessee (or event or occurrence which, with the passage of time, the giving of notice, or both, would become a Default) that by its nature is not necessarily known to Lessor. 16. Remedies In Default. (A) Lessor Remedies. Subject to Section 18 of this Lease, in the event of any Default by Lessee, Lessor may, at any time without waiving or limiting any other right or remedy, do any one or more of the following: (a) re -enter and take possession of the Property without terminating this Lease, or (b) terminate this Lease, and (c) pursue any remedy allowed by law or equity. (B) Termination. In the event Lessor elects to terminate this Lease, Lessor shall be additionally entitled to recover from Lessee the award by a court having jurisdiction thereof of the amount by which the unpaid rent and other charges and adjustments called for herein for the balance of the term after the time of such award exceeds, the amount of such loss for the same period that Lessee proves could be reasonably avoided. (C) No Termination. No re -entry or taking possession of the Property by Lessor pursuant to this Section 16, or acceptance of Lessee's keys to or surrender of the Property shall be construed as an election to terminate this Lease unless a written notice of such intention is given to Lessee. Notwithstanding any reentry or termination,;, the liability of Lessee for the rent shall continue for the balance of the Term until the Expiration Date, and Lessee shall make good to Lessor any deficiency arising from reletting the Property at a lesser rent than the Rent pr s for in this Lease. Lessee shall pay such deficiency each month as the amount t "ascertained by Lessor. (D) Lessee Remedies. In the event of Lessor default, Lessee shall be entitled to pursue any remedy available to it under the law, provided however that Lessee shall look only to Lessor's , property in the Property for the satisfaction of Lessee's remedies for the collection of a judgment or other judicial process requiring the payment of money by Lessor in the event of any default by Lessor hereunder, and no other property or assets of Lessor or any member of Lessor shall be subject to such enforcement procedure for the satisfaction of Lessee's remedies under this Lease. 17. Surrender of Possession. Upon the Expiration Date, or other termination of the term, Lessee shall promptly and peacefully surrender the Property to Lessor, in good condition and repair, except for ordinary wear and tear. Trade fixtures, furnishings, and equipment installed by Lessee shall be the property of Lessee, which Lessee shall remove from the Property if requested by Lessor. Any damage caused by such removal shall be repaired by Lessee at its expense. Any of Lessee's property not removed by Lessee on or prior to the Expiration Date shall be deemed abandoned and may be removed and disposed of by Lessor without accountability to Lessee at the sole cost and expense of Lessee (except if Lessor did not request such property to be removed),If Lessor sells any of Lessee's property after the Expiration Date, Lessor may receive and retain the proceeds of such sale as the property of Lessor. Ground Lease Page 8 18. Leasehold Financing (A) Right to Encumber. Lessee shall have the right during the Term to encumber, all of Lessee's right, title, and interest in the Property subject to the provisions of this Lease, pursuant to that certain Leasehold Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing of even date herewith (the "Initial Approved Mortgage ") entered into by Lessee for the benefit of Clearinghouse NMTC (Sub 46), LLC, a California limited liability company, and its successors, participants and assigns (the "Initial Approved Mortgagee "), and joined by Lessor for the purpose of subjecting its interest in the Property to the hen thereof and (ii) any sub ee uent deeds of trust or mortgages granted by Lessee to subsequent lenders thereto (oath such lender and the Initial Approved Mortgagee being an "Approved Mortgagee ") t - , secure any refinancing or replacement of all or a portion of the Initial Approved Mortgage or other financing of Lessee (collectively with such Initial Approved Mortgage, "Approved Mortgages "). (B) Leasehold Mortgages. Lessor acknowledges and agrees that Lessee may enter into the Approved Mortgages. The documentation evidencing the Initial Approved Mortgages and the loans secured thereby are in a form reasonably acceptable to Lessor and Lessee. As used in this Section, the follow' g defined terms us erein shall have the meanings specified below: (i) "Leasehold Interesf means' Lessee's interest in „' the Property pursuant to this Lease. (ii) "Leasehold Mortgage” means any mortgage or deed of trust granted by Lessee and secured in whole or in part by the Leasehold Interest. (C) Leasehold Mortgage Not an Assignment. The making of a Leasehold Mortgage shall not be deemed to constitute an, assignment or transfer of this Lease or of the Leasehold Interest, nor shall the Approved Mortgagee be deemed to be an assignee or transferee of this Lease or of the Leasehold Interest so as to require the Approved Mortgagee to assume the performance of any of the terms, covenants or conditions on the part of Lessee to be performed hereunder, but the purchaser at any foreclosure of any Leasehold Mortgage, or the assignee or transferee under any assignment or transfer in lieu of the foreclosure. or purchaser or transferee following exercise of a power of sale shall be deemed to be an assignee or transferee within the meaning of this Section, and shall be deemed to have agreed to perform all of the terms, covenants and conditions on the part of Lessee to be performed hereunder from and after the date of such purchase and assignment or transferee, but only for so long as such purchaser or assignee or transferee is the owner of the Leasehold Interest. (D) Rights of Approved Mortgagee. In connection with each Leasehold Mortgage, Lessor agrees with and for the benefit of each Approved Mortgagee as follows: (i) When delivering any notice, demand, election or other communication (any of the same being referred below in this Section as a "notice ") to Lessee with respect to this Lease or any exercise of any right to terminate Ground Lease Page 9 this Lease, Lessor will also deliver a copy of any such notice by registered or certified mail to the Approved Mortgagee. Lessor acknowledges that it has notice of the Initial Approved Mortgagee and that its address for notices is set forth in Section 19(E) below. (ii) Should Lessee default in respect of any of the provisions of this Lease, the Approved Mortgagee shall have the right, but not the obligation, to cure such default, and Lessor shall accept performance by or on behalf of the Approved Mortgagee as though, and with the same effect as if, it had been done or performed by Lessee. For such purpose,; Lessor and Lessee hereby authorize the Approved Mortgagee to enter upon the Property and to exercise any of Lessee's rights and powers under this Lease, and subject to the provisions of this Lease, under its Approved Mortgages. Upon compliance with the foregoing, any notice of Lessor advising of any such cured default shall be deemed rescinded and this Lease shall continue in full force and effect (iii) If Lessor shall notify Lessee in writing that a default has occurred under this Lease (hereinafter referred to as '`a "Default Notice "), a copy of such written notice sent to Lessee to that effect shall be sent by Lessor to the Initial Approved Mortgagees and to any other approved Mortgagees of which Lessor has been provided the notice, and Lessor shall, subject to the other applicable terms of this Section, take no action with respect to such default or Event of Default (but as between Lessor and Lessee only, Lessor shall be permitted to exercise all other remedies permitted under this Lease other than termination of this Lease) provided that a) If such default shall be a default in observing or performing any covenant or condition to be observed or performed by Lessee hereunder, the Approved Mortgagee shall remedy such default not later than sixty (60) days after the receipt of such notice, provided that in a case of default which. although curable, cannot through the exercise of good faith efforts be remedied by the Approved Mortgagee, or the remedy of which cannot be commenced, within such period of sixty (60) days by the Approved Mortgagee, then the Approved Mortgagee shall have such additional period/4,4s reasonably may be necessary to remedy such default with the exercise of good faith efforts; or Ground Lease b) If such default shall be a default which can only be remedied by the Approved Mortgagee upon obtaining possession of the Property and access to the Property (and payment of rent, real property taxes or any other sum of money due from Lessee or otherwise payable under this Lease shall not fall into this category of default), the Approved Mortgagee shall exercise good faith efforts to obtain possession through a receiver or otherwise and shall remedy such default within forty -five (45) days after obtaining such possession, provided that in the case of a default which, although curable, cannot through the exercise of good faith efforts be Page 10 remedied by the Approved Mortgagee, or the remedy of which cannot be commenced by the Approved Mortgagee within such period of forty -five (45) days, then the Approved Mortgagee shall have such additional period as reasonably may be necessary to remedy such default with the exercise of good faith efforts; or c) If a default (excluding defaults which may be cured by the payment of money) is of such a nature that it is impossible for the Approved Mortgagee to remedy it even with the exercise of good faith efforts, and regardless of the amount of time provided for such purpose, then any such default shall be deemed waived by Lessor solely for the benefit of the Approved Mortgagee; or d) The Approved Mortgagee is proceeding to foreclose the lien of its Leasehold Mortgage or otherwise obtain title to the Leasehold Interest or the Property. (iv) Lessor's Consent shall not be required for the Approved Mortgagee or any nominee, assignee or other party designate by the Approved Mortgagee to become the owner of the interest of Lessee hereunder upon the exercise of any remedy provided for in an Approved Mortgage. If an Approved Mortgagee or any party designated by an Approved Mortgagee shall either become the owner of the interest of Lessee hereunder upon the exercise of any remedy provided for in an Approved Mortgage, then the Approved Mortgagee or such person or other entity shall have the right to assign, without Lessor's consent, to any other person such interest in this Lease without Lessor's consent at any time thereafter, provided such assignee expressly assumes the obligations of Lessee hereunder. (v) Lessor shall not, in the event of any action, whether voluntary or otherwise, pending against Lessee or Lessor under the bankruptcy laws of the United States or any state thereof, (x) surrender its estate, or any portion thereof, nor terminate, cancel or acquiesce in the rejection of this Lease; or (y) modify, change, supplement, alter or amend this Lease in any respect, either orally or in writing. Notwithstanding the foregoing, Lessor agrees that in the event of the rejection of this Lease by Lessor's trustee in bankruptcy or otherwise pursuant to the Federal Bankruptcy Code or other similar laws, Lessee's right to remain in possession of the Property pursuant to Section 365 of the Federal Bankruptcy Code (or similar provisions of such other similar laws) shall be fully transferable pursuant to the terms of any Leasehold Mortgage. (vi) No surrender (except a surrender upon the expiration of the term of this Lease) by Lessee to Lessor of this Lease, or of the Property or any part thereof, or of any interest therein, and no termination or cancellation of this Lease, may occur except as expressly provided herein. Ground Lease Page 11 (vii) In the event that an Approved Mortgagee or its nominee succeeds to Lessee's interest in this Lease, Lessor agrees to look solely to such interest in the Lease and to the improvements upon the Property and to the profits and proceeds thereof for the performance of the obligations of Lessee hereunder, and shall never seek to recover against any other assets of the Approved Mortgagee. (viii) For the avoidance of doubt, each Approved Mortgagee is an express third party beneficiary of this Section 18 and shall be entitled to enforce the provisions hereof against Lessee and Lessor and their respective successors and assigns. (E) Requirements for Notice. Any notice or other communication which Lessor shall desire or is required to give to or serve upon an Approved Mortgagee shall be in writing and shall be served by registered or certified mail, addressed to an Approved Mortgagee at its address as referenced in Section 19(E) below. or at such other address as shall be designated from time to time by the Approved Mortgagee by notice in writing given to Lessor by registered or certified mail. Any notice or other communication which the Approved Mortgagee shall desire or is required to give to or serve upon Lessor shall be deemed to have been given or served if sent by registered or certified mail addressed to Lessor at Lessor's address as set forth in Section 19(E) below, oat such other address as shall be designated from time to time by Les ors by notice fin in writing given to the Approved Mortgagee by registered or certified mail. Any such notice or communication shall be effective on t -date such notice or communication is delivered to the party to whom it is given. (F) No Modification without Approved Mortgagee's Consent. Except as otherwise provided herein, Lessor will not modify or amend or, except upon an Event of Default (after affording the Approved Mortgagee the notice of and opportunity to cure such Event of Default as provided in this Section 18), cancel, surrender or terminate this Lease without the consent of the Approved Mortgagees. Any such modification, amendment, cancellation. surrender. or termination without the consent of the Approved Mortgagees (if such consent shall be required) shall be void and of no force or effect. 19. General Provisions. (A) Attorneys' Fees. In the event Lessor reasonably requires the services of any attorney in connection with any Default or violation by Lessee of the terms of this Lease or the exercise by Lessor of its remedies for any Default by Lessee under this Lease, or a request by Lessee for Lessor's waiver of any terms of this Lease or extension of time to perform or pay any obligation of Lessee under this Lease; Lessee shall promptly on demand reimburse Lessor for its reasonable attorneys' fees incurred in such instance. In the event of any litigation, arbitration or other proceeding (including proceedings in bankruptcy and probate and on appeal) brought to enforce or interpret or otherwise arising under this Lease, the substantially prevailing party therein shall be entitled to the award of its reasonable attorneys' fees, witness fees, and court costs incurred therein and in preparation therefor. Ground Lease Page 12 (B) Waiver of Subrogation. Lessee and Lessor each releases the other, and its employees, agents, and representatives, from liability, and waives its entire right of recovery against the other for loss or damage occurring in or about the Property to the extent such loss or damages is covered under fire, casualty and all risk insurance policies, including extended coverage endorsements, carried by the parties. Each party agrees that each such insurance policy obtained by it with respect to the Property shall include a waiver by the insurer of its subrogation rights for such losses and damages. The foregoing mutual waivers shall be effective only so long as such waivers are available in the State of Washington and do not invalidate the insurance coverage. (C) Waiver. Neither the acceptance of rent nor any other act or omission of Lessor at any time or times under the happening of any breach or default by Lessee hereunder, shall operate as a waiver of any past or future violation, breach or failure to keep or perform any covenant, agreement, term or condition hereof, or to deprive Lessor of its right to cancel or forfeit this Lease, or be construed so as to at any future time estop Lessor from promptly exercising any option, right or remedy that it may have under any term or provision of this Lease. (D) Quiet Enjoyment. Upon fully omplying with and, promptly performing all other terms, covenants and conditions required of it under the terms of this Lease, Lessee shall have and quietly enjoy the Property during the term of this Lease (E) Notices. All notices required or permitted hereunder shall be in writing and may be either delivered personally or mailed. If mailed, they shall be sent by postage prepaid or certified or registered mail, return receipt requated, or overnight mail to Lessor at its address, or at Lessee at the Property, or to such other respective addresses as either party hereto may h4eafter from time to time designate in writing. Notices sent by mail shall be deemed to have been given when properly mailed, and the postmark affixed (or other evidence provided by overnight mail) shall be conclusive evidence of the date of mailing. Either party may change its address for notices by notice to the other party. If to Lessor: If to Lessee: City of Federal Way 33325 8th Ave. South Federal Way, WA 98003 -6325 Attn: Ryan Call, City Attorney Ryan.Call@cityoffederalway.com FW PAEC QALICB, LLC 33325 8th Ave. South Federal Way, WA 98003 -6325 Attn: Ryan Call, City Attorney Ryan.Call@cityoffederalway.com Ground Lease Page 13 With copies to: The Initial Approved Mortgagees at the addresses set forth in the Initial Approved Mortgage (F) Successors and Assigns. Subject to the provisions hereof pertaining to assignment and subletting, the covenants and agreements of this Lease shall be binding on the successors and assigns of the parties hereto. (G) Subordination, Estoppel Certificates; Attornment. At a party's request, the other party agrees to promptly execute and deliver such certificates as may be reasonably required by an Approved Mortgagee or purchaser. Such certificates shall reflect that the Lease is in full force and effect, the dates to which the rent and charges have been paid and other Lease - related matters. Upon any foreclosure (or conveyance in lieu thereof) and a demand by Lessor's successor, Lessee shall attorn to and recognize such successor as Lessor under this Lease, such attomment shall be in a form as Lender may approve and shall provide that Lessee shall not have the right of set off or defense to paynient of rents for any event or act that occurred prior to such successor- obtaining title to Lessor's interest except to the extent such event or act is continuing at the time such successor obtains such title. Lessee also agrees to execute such further evidences of attomment as a lender may from time to time request. The provisions of this Section 19(3 sha11 be self - operative and no further agreement of Lessor, Lessee or lender shall be necessary. This Lease shall be subordinate to any mortgage or deed of trust for the benefit of a mortgagee of Lessor. (H) Force Majeure. If either party shall be prevented or delayed from punctually performing any obligation or satisfying any condition under this Lease, other than the payment of rent or other sums due hereunder, by any strike, lockout, labor dispute, inability to obtain labor or materials or reasonable substitutes therefor, acts of God, governmental restriction, regulation or control, enemy or hostile governmental action, civil commotion. insurrection, sabotage, fire or other casualty, or any other condition beyond the reasonable control of such party, then the time to perform such obligation or satisfy such condition shall be extended by the delay cause by, such event. If either party shall, as a result of any such event, be unable to exercise any right or option within any time limit provided therefor in this Lease, such time limit shall be deemed extended for a period equal to the duration of the delay caused by such event. (I) Severability. The invalidity, unenforceability, or waiver of any provision of this Lease shall not affect or impair any other provision. (J)Full Agreement. No provision of this Lease may be amended or added except as set forth by an agreement in writing signed by the parties hereto or their respective successors in interest, and having the written consent of each mortgagee of the Property. [Signatures on following page. Ground Lease Page 14 SIGNATURE PAGE TO GROUND LEASE IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year first above set forth. LESSOR: CITY OF FEDERAL WAY, a municipal corporation of the State of Washington By: Name: Title: STATE OF WASHINGTON COUNTY OF KING On this _day of . 2017 me, the undersigned Notary Public, duly commissioned and s personally appeared to me known to .� " the individual(s) named herein, and who executed the within and foregoing in instrument, and acknowledged execution of the said instrument to be the free and voluntary act and deed of said individual(s), for the uses and purposes therein mentioned. WITNESS my hand and official seal hereto affixed the day and year first above written. Ground Lease NOTARY PUBLIC in and for Washington State, residing at My Commission Expires: Signatures continue on following page.] Signature Page SIGNATURE PAGE TO GROUND LEASE IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year first above set forth. LESSEE: FW PAEC QALICB, INC., a Washington nonprofit corporation By: Name: Title: STATE OF WASHINGTON COUNTY OF KINGQ On this _day of me, the undersigned Notary Public, duly commissioned and 1 personally appeared to me kno ' '' to . "'� the individual(s) named herein, and who executed the within and foregoing in instrument, and acknowledged execution of the said instrument to be the free and voluntary act and deed of said individual(s), for the uses and purposes therein mentioned. WITNESS my hand and official seal hereto affixed the day and year first above written. Ground Lease NOTARY PUBLIC in and for Washington State, residing at My Commission Expires: [End of signature pages.] Signature Page Exhibit A Legal Description Ground Lease Exhibit A FINANCING DOCUMENTS 8. Memorandum of Ground Lease by and between Corporation and City WHEN RECORDED, MAIL TO: Butler Snow LLP 1801 California Street Suite 5100 Denver, CO 80202 Attn: Alan Pasternack Lessor Lessee Abbreviated Legal Description MEMORAN �;, GROUN Cit a Wa W PAEC QALI B, Washington nonprofit corporation oration Assessor's Tax Parcel I.D. #: See Exhibit A for complete Legal Description 092104 -9166 Related Documents N/A Memorandum of Ground Lease Page 1 MEMORANDUM OF GROUND LEASE THIS MEMORANDUM OF GROUND LEASE (this "Memorandum ") is executed as of this [ 1 day of f s], 2017, by and between CITY OF FEDERAL WAY, a Washington municipal corporation ( "Lessor "), and FW PAEC QALICB, a Washington nonprofit corporation ( "Lessee "). 1. Lease. Lessor has leased the real property described in Exhibit A attached to this Memorandum and by this reference incorporated herein (the "Premises ") on the terms and conditions set forth in that certain Ground Lease effective as of the date hereof (the "Effective Date "), by and between Lessor and Lessee (the "Ground Lease "). The Ground Lease shall expire at midnight on that date which is ninety -nine (99) years from the Effective Date, unless sooner terminated pursuant to the terms of the Ground Lease. 2. Definition of Terms. All capitalized terms not otherwise defin herein shall have the same meaning as set forth in the Ground Lease. 3. Purpose of Memorandum. This Memorandum is prepared for purposes of recordation only and does not set forth all of the terms and conditions set forth in the Ground Lease. In the event there is any conflict between the terms and conditions of the Ground Lease and this Memorandum, the Ground Lease shall control. [Signature pages follow Memorandum of Ground Lease Page 2 IN WITNESS WHEREOF, the parties hereto have executed this Memorandum of Ground Lease as of the day and year first above set forth. LESSOR: CITY OF FEDERAL WAY, a Washington municipal corporation By: Name: Jim Ferrell Its: Mayor STATE OF WASHINGTON COUNTY OF KING On this _day of 2017, before e undersigned Notary Public, duly commissioned and sworn, personally appeared Jim Fe ell, to me known to be the individual(s) named herein, and who executed the within and foregoing in instrument, and acknowledged execution •� � instrument to be the free and voluntary act and deed of said individual(s), for the us therein mentioned. WITNESS m seal hereto affixed the day and year first above written. TAR PUBLIC in and for hington State, residing at Memorandum of Ground Lease My Commission Expires: gnature pages continue on following page] Signature Page IN WITNESS WHEREOF, the parties hereto have executed this Memorandum of Ground Lease as of the day and year first above set forth. LESSEE: FW PAEC QALICB, a Washington nonprofit corporation By: Name: Ade Ariwoola Its: President STATE OF WASHINGTON COUNTY OF KING On this day of Public, duly commissioned and the individual(s) named herein acknowledged execution individual(s), for the u , 2017, before me, the undersigned Notary sworn, personally appeared Ade Ariwoola, to me known to be and who executed the within and foregoing in instrument, and instrument to be the free and voluntary act and deed of said therein mentioned. seal hereto affixed the day and year first above written. Memorandum of Ground Lease TARY PUBLIC in and for ington State, residing at My Commission Expires: [End of signature pages] Signature Page EXHIBIT A Legal Description Memorandum of Ground Lease Exhibit A FINANCING DOCUMENTS 9. Sublease SUBLEASE THIS SUBLEASE (this "Sublease ") is entered into as of the [ day of [ ], 2017 (the "Effective Date "), by and between FW PAEC QALICB, INC., a Washington nonprofit corporation ( "Lessor "), and CITY OF FEDERAL WAY, a municipal corporation of the State of Washington ( "Lessee "). BACKGROUND Lessor holds a leasehold interest in that certain real property located at 31510 Pete vonReichbauer Way South, Federal Way, Washington 98003, legally described on Exhibit A attached to this Sublease (the "Real Property "). The Real Property together with any improvements now or hereafter constructed or exis g u Bork the Real Property (the "Improvements ") is collectively referred to in this Sublease "Property." For and in consideration of the mutual promises, covenants and conditions set forth herein, the parties agree as follows: 1. Sublease. Lessor hereby subleases to Lessee, a Lessee hereby, subleases from Lessor. the Property. 2. Term. This Sublease shall be effective on the Effective Date and shall expire at midnight on that date which is thirty (30) year from the Effective Date (the "Expiration Date "), unless the Sublease is sooner terminated in accance with the terms of this Sublease (the "Term "). z,. 3. Rent. Lessee agrees to pay base rent according to the table attached as Exhibit B to this Sublease, which sets forth the annual amounts payable hereunder. Lessee shall pay rent in advance on a quarterly basis equal to twenty -five percent (25 %) of the annual rent, on the first (1st) day of each calendar quarter (i.e.. each March 1, June 1, September 1, and December ]) commencing, on [ ], witlout setoff, except that Operating Expenses shall be paid pursuant to Section 4 of this Subleas 4. Operating Expenses. Lessee shall be responsible for the payment of all Operating Expenses of the Property, commencing on the Effective Date. To the extent feasible, all Operating Expenses shall be billed directly to and paid by Lessee. If Lessee fails to timely pay any Operating Expense when it becomes due and payable, Lessor shall have the right, at its option, to make such payment at the expense of Lessee as reasonably required. Any amount so expended by Lessor shall be paid by Lessee promptly upon demand. With respect to those Operating Expenses billed to or otherwise paid by Lessor, Lessee's payment of Operating Expenses shall be due on the later of fifteen (15) days after receipt of an itemized statement thereof from Lessor or thirty (30) days after the end of the calendar month. Lessor shall provide Lessee with a written statement of the actual Operating Expenses billed to Lessor for each calendar month within fifteen (15) days after the end of the month. Lessor shall maintain separate detailed records of the Operating Expenses billed to Lessor and shall make these available on a reasonable basis for examination by Lessee. Within sixty (60) days of the end of Sublease Page 1 each calendar year, Lessor shall provide to Lessee an annual itemized statement of Operating Expenses billed to Lessor, with an explanation of any corrections to the quarterly statements for the prior year, and the next payment to Lessor shall be adjusted' to the extent necessary to take into account any such corrections. "Operating Expenses" as used in this Sublease means: 5. Use. (i) All ordinary and special assessments and other governmental charges, that are assessed upon all or any part of the Property, including any tax or other levy on or measured by any rent collected by Lessor with respect to the Property, and any expenses incurred by Lessor= in contesting any of the foregoing or the assessed valuation of all or any part of the Property. (ii) All costs of utilities, including, without limitation, water, sewer, power, garbage removal, and recycling services. (iii) All premiums on policies of public liability, casualty, and property damage insurance maintained by Lessor with respect to the Property. (iv) All property taxes on the Prop rty. (v) All other expen ction with the operation, management, maintenance, subleasing and upkeep of the Property. (A) Permitted Use e, Pro rty may be used and occupied by Lessee for any lawful purpose, exc`tha Lessee agrees that it will not use or permit the use of the Property, or any part thereof, in any way which would violate any of the terms of this Sublease, or the certificate of occupancy for the Property, or the laws of the State of Washington, or any directions, rules or regulations of the Health Officer, Fire Marshall, Building Inspector, Lessor, or officers of any public authority having jurisdiction over the Property. (B) Use Restrictions. In no event shall Lessee's use of the Property consist of operation of any of the following prohibited activities or businesses: (i) any trade or business consisting predominantly of the development or holding of intangibles for sale or license; (ii) any trade or business the principal activity of which is farming within the meaning of Section 2032A(e)(5)(A) of the Internal Revenue Code of 1986 or corresponding provisions of subsequent superceding federal law (the "Code "); (iii) any other trade, business or activity, prohibited by any amendment to Section 45D of the Code and any temporary, proposed or final regulations promulgated by the U.S. Treasury pursuant to the Code, and any other guidance published by the Internal Revenue Service; or (iv) any trade or business consisting of the operation of any private or commercial golf course, country club, massage parlor, hot tub facility, suntan facility, racetrack or other facility used for gambling, or any store the principal business of which is the sale of alcoholic beverages for consumption off premises or any trade or business consisting of the operation of residential rental property, as defined in Section 168(e)(2)(A) of the Code. Sublease Page 2 Furthermore, in no event shall Lessee use the Property to provide dwelling units, or other areas with sleeping accommodations, on other than a transitory basis. (C) Hazardous Substances. Lessee shall not, without Lessor's prior written consent, keep on or around the Property for use, disposal, transportation, treatment, storage, or sale, any substance designated as, or containing components designated as, hazardous, dangerous, toxic or harmful (collectively, "Hazardous Substances ") and/or subject to regulation by any federal, state or local law, regulation, statute, or ordinance, except those which are normally used day -to -day for standard residential, office, retail, commercial or medical purposes and which shall be used in compliance with all applicable laws and regulations. (D) Nuisance. Lessee shall not cause, maintain, or permit any nuisance on or about the Property, nor commit or suffer any waste in or about the Property. 6. Lessee's Maintenance and Repair. (A) Maintenance and Repairs. Lessee shall operate, maintaind,and occupy the Property in a good, neat, clean, sanitary condition, and in compliance with all applicable laws and regulations. Lessee shall be obligated to maintain all Improvements in good condition, ordinary wear and tear excepted. " es or shall not be obligated to perform any repairs or maintenance on the Property except as expressly stated herein. Lessee shall promptly perform or cause to be performed: (i) any required structural or exterior repairs and maintenance; (ii) any repair or restoration to be performed under the terms hereof with insurance proceeds; and (iii) or repa of any damage to the Property caused by Lessee. (B) No Waste. Lessee will p it no waste, damage, or injury to the Property. (C) Garbage. Lessee shall cause all garbage, recyclables, and other debris emanating from the Property, to be removed to such" reasonable locations and spaces as may be specified by Lessor from time to time during hours and subject to such reasonable controls as may be established by Lessor from time to time (D) Lessee's Failure. In the event Lessee fails to maintain or repair the Property as required herein, Lessor shall :give Lessee notice of such failure. If Lessee fails to commence the required maintenance or repair within ten (10) days of notice, or as soon thereafter as any necessary permits and approvals can be obtained with reasonable diligence, or fails to diligently prosecute the same to completion, then Lessor shall have the right, at its option, to do such acts and expend such funds at the expense of Lessee as reasonably required to perform such work. Any amount so expended by Lessor shall be paid by Lessee promptly after demand. Lessor shall have no liability to Lessee for any damage, inconvenience or interference with the use of the Property by Lessee as a result of performing any such work. (E) Systems. In addition to the above, Lessee shall perform and pay for any maintenance of any systems or equipment serving the Property. 7. Alterations, Additions and Improvements. Upon completion of the Project, Lessee shall make no alterations to the exterior of the building, any structural element of the Property, or Sublease Page 3 any mechanical system serving the building, without the prior written approval of Lessor. Any such improvements undertaken by Lessee with Lessor's consent following the completion of the Project shall be at Lessee's sole expense, except as otherwise expressly provided in this Sublease, and shall become the property of Lessor, remaining in and surrendered with the Property as a part thereof as of the Expiration Date or earlier termination of this Sublease. All work performed shall be done in a workmanlike manner and in compliance with all applicable laws and ordinances. Lessee shall indemnify and hold Lessor harmless from and against all damages, loss, liens, or expenses arising out of such work. 8. Indemnification; Insurance. (A) Waiver. Lessor shall not be liable to Lessee, and Lessee, as a material part of the consideration to Lessor, hereby waives all claims against Lessor and assumes all risk of damages for loss to any property or any injury to any person occurring on the Property from any cause whatsoever. (B) Lessee's Indemnification. Lessee shall indemnify and save Lessor, its officers, agents, employees, contractors, licensees, and invitees harmless from allloss, damage, liability, or expense (including attorney's fees and other costs incurred in connection with litigation or the defense of claims, whether claims involved litigation) resulting from any actual or alleged injury to any person, or 'ram any actual or alleged loss of or damage to any property (including any and all contamination by any Hazardous Substances in, on or under the Property whether or not caused by Lessee), arising out of Lessee's operation or occupation of the Property or caused by or resulting from any act or omission of Lessee or any licensee, assignee, sublessee, or concessionaire, or of any officer, agent, employee, guest, invitee. or visitors of any such person or about the Property or from Lessee's breach of its other obligations hereunder. The indemnification provided for in this Section 8(B) shall survive any termination or expiration of this Sublease. Lessee shall promptly notify Lessor of casualties or accidents occurring in or about the Property. (C) Lessor's Responsibility. The exculpation, release, and indemnity provisions of Sections 8(A) and (B) shall not apply to the extent the claims thereunder were caused by Lessor's gross negligence or willful misconduct. However, in no event shall Lessor be liable to Lessee for consequential damages. (D) Liability Insurance. Lessee shall, at its own expense, maintain comprehensive general liability insurance, with broad form endorsement, in effect with respect to the Property with minimum limits of $1,000,000 per occurrence, $2,000,000 in the aggregate, $5,000,000 umbrella, and a maximum deductible of $25,000. The insurance carrier must have an AM Best's Rating of A -VII or better. Lessor shall be named as an additional insured and shall, if requested by Lessor, be furnished with a copy of such policy or policies of insurance which shall bear an endorsement that the same shall not be canceled without thirty (30) days' prior notice to Lessor. If Lessee fails to maintain such insurance, Lessor may do so at its discretion, and Lessee shall reimburse Lessor for the full expense incurred upon demand. Sublease Page 4 (E) Fire and Extended Coverage Insurance. Lessee shall obtain and keep in force at all times during the term of this Sublease "special form" insurance covering all risks of physical loss or damage to the Property, with liability limits of not less than one hundred percent (100 %) of the full replacement value thereof. Such policy shall name Lessor as an additional insured and each mortgagee as a loss payee under a standard mortgagee endorsement. Such policy shall include, but shall not be limited to, coverage for fire, extended coverage, vandalism, malicious mischief and storm. Lessee shall also maintain insurance covering its furniture, fixtures, equipment and inventory in any amount equal to the full insurable value thereof, insuring against fire and risk covered by a standard extended coverage endorsement on the Property. (F) Mortagee's Insurance Requirements. Notwithstanding the foregoing, Lessee shall obtain and keep in force at all times during the term of this Sublease, all insurance coverages required by the Loan Documents (as defined in Section 19 below). 9. Damage to the Property. (A) Notice of Casualty. Lessee shall give prompt written notice to Lessor after the occurrence of any fire, earthquake, act of God, or other casualty to or in connection with the Property, or any Improvements" "or any portion, thereof (a "Casualty "). Upon the occurrence of any Casualty, Lessor and Lessee, promptly and with all due diligence, shall apply for all applicable insurance proceeds recoverable with respect to such Casualty, for the benefit of Lessor, Lessee, and any mortgagee, except tha Lessor shall be entitled to all of the proceeds of insurance payable with respect to a Casualty affecting the Improvements. (B) Restoration. In the event the Improvements can be restored, Lessor and Lessee shall cooperate with one another to permit Lessor to restore the Property as expeditiously as possible. If the Improvements shall be damaged by Casualty, and this Sublease is not terminated - pursuant to this Section 9, then Lessor shall repair or restore the Improvements as provided in this Section 9, and Lessee shall continue to pay rent to Lessor without abatement. (C) Termination. In the event Lessor shall determine that it is not economically practical to restore the Improvements and /or the Property to substantially the same condition in which they existed prior to the occurrence of such Casualty, then with the express written consent of any mortgagee of the Property pursuant to the Loan Documents, Lessor may terminate this Sublease as of a date that is not less than thirty (30) days after Lessor provides notice to Lessee. In the event that this Sublease is terminated pursuant to this Section 9, the insurance proceeds received as the result of such Casualty shall be distributed to Lessor, subject to the rights of any mortgagee pursuant to the Loan Documents. (D) Subject to Loan Documents. The provisions of this Section 9 shall be subject to the terms and conditions of the Loan Documents, including, without limitation, all provisions governing the payment of insurance proceeds, the determination to repair or restore the Property, and the release of funds for repair and restoration costs. Sublease Page 5 10. Real and Personal Property Taxes. Lessee shall pay, prior to delinquency, all real property taxes payable with respect to the Property (if any). Lessee shall pay prior to delinquency all personal property taxes payable, if any, with respect to all property of Lessee located.on the Property. Lessee shall promptly upon request of Lessor provide satisfactory evidence of such payment. "Personal property taxes" under this Section 10 includes all property taxes assessed against the property of Lessee, whether assessed as real or personal property. 11. Encumbrances by Lessee. Lessee shall not have any right, authority, or power to bind Lessor, Lessor's assets, or any interest of Lessor in the Property, f• any claim for labor or material or for any other charge or expense, lien, or security interes ed in connection with the development, construction, or operation of the Property an ments or any change, alteration or addition thereto. 12. Assignment or Sublease. Lessee shall not assign, encumber, mortgage, pledge, further sublet or transfer, directly or indirectly, voluntarily or by option of law, the whole or any part of the Property (a "Transfer ") to any person or entity other than to Lender (as defined below) without the prior written consent of Lessor, which Lessor may withhold in its sole discretion. If Lessee elects to so assign its interest in this Sublease with Lessor's consent, the parties shall execute assignment and consent documents acceptable to Lessor. Lessor's consent to such assignment shall not be construed to permit : any further '`assignment without Lessor's prior written consent. Without limiting any other restrictions on assignment or subletting, Lessee shall not in any event assign or sublet (or permit the assignment or subletting of) all or any portion of the premises to any party engaged in a use prohibited by Section 5(b) above. Any attempted Transfer without Lessor's prior written consent shall be void. 13. Sale. In the event of an r of the Property, or any assignment of this Sublease by Lessor, Lessor shal#e relieved of all liability under this Sublease arising out of any act, occurrence, or omission occurring after sale or assignment, and the purchaser or assignee at such sale or assignment or any subsequent sale or assignment of this Sublease shall be deemed without any further agreement to have assumed all of the obligations of Lessor under this Sublease: accruing after the date of such sale or assignment. 14. Access. Lessee will allow Lessor access to the Property at all reasonable times for the purpose of inspections and making repairs, additions, or alterations to the Property as Lessor elects to 'make, but this access shall not be construed as an agreement on the part of Lessor to make any repairs, additions or alterations. 15. Eminent Domain. (A) Condemnation. In the event that title to the entire Property shall be lawfully condemned or taken in any manner for any public or quasi - public use or conveyed in lieu of condemnation, this Sublease shall automatically terminate as of the date possession is required to be delivered to the condemnor. In the event that only a portion of the Property is taken and the Property is thereby rendered unsuitable for the conduct of Lessee's business, either party may terminate this Sublease as of the date when possession of the portion of the Property so taken is delivered to the condemning authority. Sublease Page 6 (B) Award. Any award for the taking of all or part of the Property under the power of eminent domain, including payment made under threat of the exercise of such power, shall be the property of Lessor, subject to the terms of the Ground Lease (as defined below), as the case may be, whether made as compensation for diminution in value of the leasehold or for the taking of the fee or as severance damages. Lessee shall only be entitled to such compensation as may be separately awarded or recoverable by Lessee in Lessee's own right for the loss of or damage to Improvements to the Property installed by Lessee, for Lessee's trade fixtures and removable personal property and for Lessee's relocation or moving expenses, but only so long as such award o Lessee does not reduce Lessor's award. Lessor shall not be liable to Lessee for the ,W, �, the use of all or any part of the Property taken by condemnation. (C) Lessor Authority. As between Lessor and Lessee, Lessor shall have the exclusive authority to grant possession and use to the condemning' authority and to negotiate and settle all issues of just compensation or, in the alternative, to conduct litigation concerning such issues, except that Lessor shall not enter into any settle,. ent of any separate award that may be made to Lessee without Lessce's prior apps, al of such settlement, which approval shall not be unreasonably withheld. (D) Subject to Loan Documents. The pro;.. isions of this Section 15 shall be subject to the terms and conditions of the Loan Documents including,' withoutimitation, all provisions governing the payment of condemnation proceeds, the determination to repair or restore the Property, and the release of funds for repair and restoration costs. 16. Default. (A) Definrtis ault. The occurrence of any one or more of the following events shall constitu e a material default and breach of the Sublease by Lessee ( "Default "): (i) vacation or abandonment of all or any portion of the Property; (ii) failure by Lessee to make any payment required as and when due, where such failure shall continue after ten (10) days' written notice from Lessor; (iii) failure by Lessee to materially observe or perform any of the covenants, conditions, or provisions of this Sublease, other than the making of any payment, where such failure shall continue after thirty (30) days' written notice from Lessor, except that, if the nature of Lessee's obligation is such that more than thirty (30) days are required to cure such failure, Lessee shall not be in default if Lessee commences to cure such failure within thirty (30) days after Lessor's notice and thereafter completes such cure diligently and within sixty (60) days after Lessor's notice; provided, however, that any failure or breach with respect to Section 5(B) of this Sublease or any other breach of a covenant or obligation under this Sublease that results or could result in a NMTC Recapture Event (as defined in that certain Loan Agreement between Lessor and Lender dated on or about the date hereof) shall constitute an Event of Default immediately upon the occurrence thereof; Sublease Page 7 (iv) the making by Lessee of any general assignment or general arrangement for the benefit of creditors; (v) the filing by or against Lessee of a petition in bankruptcy, including reorganization or arrangement, unless, in the case of a petition filed against Lessee, the same is dismissed within one hundred twenty (120) days; (vi) the appointment of a trustee or receiver to take possession of substantially all of Lessee's assets located at the Property or of Lessee's interest in this Sublease (vii) the seizure by any department of any government or any officer thereof of the business or property of Lessee; (viii) adjudication that Lessee is bankrupt; o (ix) any prohibited assignment, transfer, mortgage, encum. e =`"g other further sublet of the Property without the prior 'tten conse mom Less (B) Notification. Lessee shall notify Lessor promptly o an Default by Lessee (or event or occurrence which, with the passage of time, the giving of notice, or both, would become a Default) that, by its nature, is not necessarily known to Lessor. (C) Lessor Default. Lessor shall be in default if it fails to observe or perform any of the covenants, conditions, or provisions of this Sublease, where such failure shall continue after thirty (30) da 'z. en notice from Lessee, except that, if the nature of Lessor's obligation is such t than thirty ( 30 )Ud a s are required for performance, Lessor shall not be i ; default essor commences performance within thirty (30) days after Lessee's no e and thereafter completes such performance diligently and within a reasonable time. In no event shall a default by Lessor under this Sublease give rise to any right of Lessee to terminate this Sublease or withhold or offset the payment of rent. The obligations of Lessee to pay rent shall continue unaffected in all events unless suspended or terminated pursuant to an express provision of this Sublease. Lessor shall notify of any default by Lessor under the Ground Lease or hereunder that by its nature is essarily known to Lessee. 17. Rem + icT ;In Default. (A) Less' o ' e ® ies. In the event of any Default by Lessee, Lessor may, at any time without waiving or limiting any other right or remedy, do any one or more of the following: re -enter and take possession of the Property without terminating this g (�. P p Y g Sublease, or (b) terminate this Sublease, and (c) pursue any remedy allowed by law or equity. Sublease (i) Termination. In the event Lessor elects to terminate this Sublease, Lessor shall be additionally entitled to recover from Lessee the award by a court having jurisdiction thereof of the amount by which the unpaid rent and other charges and adjustments called for herein for the balance of the term after the time of such award Page 8 exceeds the amount of such loss for the same period that Lessee proves could be reasonably avoided. (ii) No Termination. No re -entry or taking possession of the Property by Lessor pursuant to this Section 17(A), or acceptance of Lessee's keys to or surrender of the Property shall be construed as an election to terminate this Sublease unless a written notice of such intention is given to Lessee. Notwithstanding any re -entry or termination, the liability of Lessee for the rent shall continue for the balance of the Term until the Expiration Date, and Lessee shall make good to Lessor any deficiency arising from reletting the Property at a lesser rent than the Rent provided for in this Sublease. Lessee shall pay such deficiency each month as the amount thereof is ascertained by Lessor. (B) Lessee Remedies. In the event of Lessor default, Lessee shall be entitled to pursue any remedy available to it under the law, provided however that Lessee shall look only to Lessor's property in the Property for the satisfaction of Lessee's remedies for the collection of a judgment or other judicial process requiring the payment of money by Lessor in the event of any default by Lessor hereunder, and no other property or assets of Lessor or any member of Lessor shall be subject to such enforcement procedure for the satisfaction of Lessee's remedies under this Sublease. (C) Holder of Encumbrance's Right to Cure Default. Lessee, agrees to give any holder of any Encumbrance (as defined below) a copy of any notice of default by certified mail, served upon Lessor. If Lessor shall have failed to cure, such default within thirty (30) days from the effective date of such notice of dault, then the holder of such Encumbrance shall have such additional time as may be necessary to cure such default (including the time necessary to foreclose or otherwise terminate its Encumbrance, if necessary to effect such cure), and the Sublease shall not be terminated so long as such remedies are being diligently pursued. 18. Surrender of Possession. Upon the Expiration Date or other termination of the term, Lessee shall promptly and peacefully surrender the Property to Lessor, in good condition and repair, except for ordinary wear and tear. Trade fixtures, furnishings, and equipment installed by Lessee shall be the property of Lessee, which Lessee shall remove from the Property. Any damage caused by such removal shall be repaired by Lessee at its expense. Any of Lessee's property not removed by Lessee on or prior to the Expiration Date shall be deemed abandoned and may be removed and disposed of by Lessor without accountability to Lessee at the sole cost and expense of Lessee. If Lessor sells any of Lessee's property, Lessor may receive and retain the proceeds of such sale as the property of Lessor. 19. Lessor Financing. Lessee acknowledges that Lessor is obtaining certain financing from Clearinghouse NMTC (Sub 46), LLC, a California limited liability company ( "Lender "), which is secured by a leasehold deed of trust made by Lessor for the benefit of Lender, and that Lessor has entered into certain other loan documents evidencing, governing, and securing such financing dated as of the date hereof (as the same may be amended from time to time, collectively, the "Loan Documents "). The proceeds of such financing will be used to finance the Improvements on the Property to be used by Lessee, and that, accordingly, Lessee will benefit Sublease Page 9 from such financing. Lessee further acknowledges that the terms of the Loan Documents impose covenants and obligations upon Lessor, the performance and observance of which will (in whole or in part) be dependent on Lessee's actions and inactions as sublessee of the Property. Lessor has provided to Lessee copies of such Loan Documents, and Lessee has reviewed and is familiar with the provisions of such Loan Documents. Lessee hereby covenants and agrees that Lessee shall not violate or cause a violation of any of the Loan Documents, and that Lessee shall perform its obligations hereunder on a prompt and timely basis to enable Lessor to comply with such Loan Documents. Any failure by Lessee to observe or comply with the foregoing provisions that is not cured by (i) the end of any applicable cure period.set forth in this Sublease, or (ii) the applicable cure period afforded to Lessor under the provisions of the Loan Documents (whichever is the shorter period) shall constitute a breach and default under this Sublease. 20. General Provisions. (A) Attorneys' Fees. In the event Lessor reasonably requires the servicesxof any attorney in connection with any Default or violation by Lessee of the terms of this Sublease or the exercise by Lessor of its remedies for any Default by Lessee under this Sublease or a request by Lessee for Lessor's waiver of any terms of this Sublease or extension of time to perform or pay any obligation of Lessee under this Sublease, then Lessee shall promptly on demand reimburse Lessor for its reasonable attorneys' fees incurred in such instance. In the event of any litigation, ` arbitration, or other proceeding (including proceedings in bankruptcy and probate and on appeal) brought to enforce or interpret or otherwise arising under this Sublease, the substantially p vailing party therein shall be entitled to the award of its reasonable attorneys' fees, witness fees, and court costs incurred therein and in preparation therefor. (B) Waiver of Subrogation. Lessee and Lessor each hereby releases the other, and its employees, agents, and representatives, from liability, and waives its entire right of recovery against the other for loss or damage occurring in or about the Property to the extent such loss or damages is covered under fire, casualty and all risk insurance policies, including extended coverage endorsements, carried by the parties. Each party agrees that each such insurance policy obtained by it with respect to the Property shall include a waiver by the insurer of its subrogation rights for such losses and damages. The foregoing mutual waivers shall be effective only so long as such waivers are available in the State of Washington and do not invalidate the insurance coverage. (C) Waiver. Neither the acceptance of rent nor any other act or omission of Lessor at any time or times under the happening of any breach or default by Lessee hereunder shall operate as a waiver of any past or future violation, breach or failure to keep or perform any covenant, agreement, term or condition hereof, or to deprive Lessor of its right to cancel or forfeit this Sublease, or be construed so as to at any future time estop Lessor from promptly exercising any option, right, or remedy that it may have under any term or provision of this Sublease. (D) Quiet Enjoyment. Upon fully complying with and promptly performing all other terms, covenants and conditions required of it under the terms of this Sublease, Lessee shall have and quietly enjoy the Property during the term of this Sublease. Sublease Page 10 (E) Notices. All notices required or permitted hereunder shall be in writing and may be either delivered personally or mailed. If mailed, they shall be sent by postage prepaid or certified or registered mail, return receipt requested, or overnight mail to Lessor at its address, or at Lessee at the Property, or to such other respective addresses as either party hereto may hereafter from time to time designate in writing. Notices sent by mail shall be deemed to have been given when properly mailed, and the postmark affixed (or other evidence provided by overnight mail) shall be conclusive evidence of the date of mailing. Either party may change its address for notices by notice to the other party. If to Lessor: FW PAEC QALICB, INC. 33325 8th Ave. South Federal Way, WA 98003 -6325 Attn: Ryan Call, City Attorney Ryan.Call @cityoffederalway.com If to Lessee: City of Federal Way 33325 8th Ave. South Federal Way, WA 98003 -6325 Attn: Ryan Call, City Attorney Ryan.Call@cityoffecleralway.com (F) Encumbrance. Except as otherwise provided in writing, the Sublease is expressly made subject and subordinate to any mortgage, deed of trust, ground lease, underlying lease or like encumbrance affecting any part it he Property or any interest of Lessor therein which is now existing or her fter executed or recorded (each, an "Encumbrance "), including, without limitation, the leasehold deed of trust granted by Lessor to Lender and any other Encumbrance executed and delivered in connection with the Loan Documents. (G) Successors and Assigns. Subject to the provisions hereof pertaining to assignment and subletting, the covenants and agreements of this Sublease shall be binding on the successors and assigns of the parties hereto. (H) Subordination, Estoppel Certificates; Attornment. It is understood and agreed that Lessor may mortgage or grant deeds of trust with respect to the Property. Upon Lessor's request, Lessee agrees to promptly execute and deliver such certificates as may be reasonably required by Lessor or any mortgagee, trust deed beneficiary, or purchaser. Such certificates shall reflect that the Sublease is in full force and effect, the dates to which the rent and charges have been paid and other Sublease - related matters. Upon any foreclosure (or conveyance in lieu thereof) and a demand by Lessor's successor, Lessee shall attorn to and recognize such successor as Lessor under this Sublease, such attornment shall be in a form as lender, Lessor may approve and shall provide that Lessee shall not have the right of set off or defense to payment of rents for any event or act that occurred prior to such successor obtaining title to Lessor, as the case may be, interest except to the extent such event or act is continuing at the time such successor obtains such title. Lessee also agrees to execute such further evidences of attornment as lender may from time Sublease Page 11 to time request. The provisions of this Section 20(H) shall be self - operative and no further agreement of Lessor, Lessee, or Lender shall be necessary. (I) Force Majeure. If either party shall be prevented or delayed from punctually performing any obligation or satisfying any condition under this Sublease, other than the payment of rent or other sums due hereunder, by any strike, lockout, labor dispute, inability to obtain labor or materials or reasonable substitutes therefor, acts of God, governmental restriction, regulation or control, enemy or hostile governmental action, civil commotion, insurrection, sabotage, fire or other casualty, or any other condition beyond the reasonable control of such party, then the time to perform such obligation or satisfy such condition shall be extended by the delay cause by, such event. If either party shall, as a result of any such event, be unable to exercise any right or option within any time limit provided therefor in this Sublease, such time limit shall be deemed extended for a period equal to the duration of the delay caused by such event. (J)Severability. The invalidity, unenforceability, or waiver of any provision of this Sublease shall not affect or impair any other provision. (K) Ground Lease, Conditions and Restrictions. Lessee's rights under this Sublease are subject to that certain Ground Lease dated as of the date hereof by and between Lessee, as the ground lessor, and Lessor, as the ground lessee (the "Ground Lease ") and any covenants, conditions, or restrictions now or hereafter recorded against the Property and /or the real property on which the Property is located. (L) Full Agreement. No provision of this Sublease m be amended or added except by an agreement in writing signed by the parties hereto or their respective successors in interest, and having the written consent of each mortgagee of the Property. [Signatures on following page.] Sublease Page 12 SIGNATURE PAGE TO OPERATING LEASE IN WITNESS WHEREOF, the parties hereto have executed this Sublease as of the day and year first above set forth. LESSOR: FW PAEC QALICB, INC., a Washington nonprofit corporation By: Name: Title: STATE OF WASHINGTON COUNTY OF KING On this _day of e me, the undersigned Notary Public, duly commissioned ®' personally appeared to to the individual(s) named herein, and who executed the within and foregoing in ins ent, and acknowledged execution of the said instrument to be the free and voluntary act an • -ed of said individual(s), for the uses and purposes therein mentioned. WITNESS my hand and official seal hereto affixed the day and year first above written. Sublease NOTARY PUBLIC in and for Washington State, residing at My Commission Expires: Signatures continue on following page.] Signature Page SIGNATURE PAGE TO OPERATING LEASE IN WITNESS WHEREOF, the parties hereto have executed this Sublease as of the day and year first above set forth. LESSEE: CITY OF FEDERAL WAY, a municipal corporation of the State of Washington By: Name: Title: STATE OF WASHINGTON COUNTY OF KING On this _day of . 2017, before me, the undersigned Notary Public, duly commissioned and sworn, personally appeared to' me known to be the individual(s) named herein, and who executed the within and foregoing in instrument, and acknowledged execution of the said instrument to be the free and voluntary act and deed of said individual(s), for the uses and purposes therein mentioned. WITNESS my hand and official seal hereto affixed the day and year first above written. Sublease NOTARY PUBLIC in and for Washington State, residing at My Commission Expires: [End of signature pages.] Signature Page Exhibit A Legal Description Sublease Exhibit A Exhibit B Annual Base Rent Sublease Exhibit B FINANCING DOCUMENTS 10. Memorandum of Sublease by and between Corporation and City WHEN RECORDED, MAIL TO: Butler Snow LLP 1801 California Street Suite 5100 Denver, CO 80202 Attn: Alan Pasternack MEMORANDUM OF SUBLEASE Lessor Lessee Abbreviated Legal Description FW a Was ington nonprofit corporation CITY OF FEDERAL WAY, a Washington municipal corporation Assessor's Tax Parcel I.D. #: See. Exhibit A for complete Legal Description 092104 -9166 Related Documents N/A Memorandum of Sublease Page 1 MEMORANDUM OF SUBLEASE CHC- TACOMA 7.17.12 V2 MEMORANDUM OF SUBLEASE THIS MEMORANDUM OF SUBLEASE (this "Memorandum ") is executed as of this [ 1 day of [ 1, 2017, by and between FW PAEC QALICB, a Washington nonprofit corporation ( "Lessor "), and CITY OF FEDERAL WAY, a Washington municipal corporation ( "Lessee "). 1. Lease. Lessor has leased the real property described in Exhibit A attached to this Memorandum and by this reference incorporated herein (the "Premises ") on the terms and conditions set forth in that certain Sublease Agreement effective as of the date hereof (the "Effective Date "), by and between Lessor and Lessee (the "Sublease "). The Sublease shall expire at midnight on that date which is thirty (30) years from the Effective Date, unless sooner terminated pursuant to the terms of the Sublease. 2. Definition of Terms. All capitalized terms not otherwise defined herein shall have the same meaning as set forth in the Sublease. 3. Purpose of Memorandum. This Memorandum is prepared for purposes of recordation only and does not set forth all of the terms and conditions set forth in the Sublease. In the event there is any conflict between the terms and conditions of the Sublease and this Memorandum, the Sublease control. nature pages follow 1 Memorandum of Sublease Page 3 IN WITNESS WHEREOF, the parties hereto have executed this Memorandum of Sublease as of the day and year first above set forth. LESSOR: FW PAEC QALICB, a Washington nonprofit corporation By: Name: Ade Ariwoola Its: President STATE OF WASHINGTON ss. COUNTY OF KING On this _day of 2017, before me, the undersigned Notary Public, duly commissioned and sworn, personally appeared Ade Ariwoola, to me known to be the individual(s) named herein, and who executed the within and foregoing in instrument, and acknowledged execution of the said instrument to be the free and voluntary act and deed of said individual(s), for the uses and purposes therein mentioned. WITNESS my hand and official seal hereto affixed the day and year first above written. Memorandum of Sublease NOTARY PUBLIC in and for Washington State, residing at My Commission Expires: [Signature pages continue on following page] Signature Page IN WITNESS WHEREOF, the parties hereto have executed this Memorandum of Sublease as of the day and year first above set forth. LESSEE: CITY OF FEDERAL WAY, a Washington municipal corporation By: Name: Jim Ferrell Its: Mayor STATE OF WASHINGTON ss. COUNTY OF KING On this _day of , 2017, before me,he undersigned Notary Public, duly commissioned and sworn, personally appeared Jim Ferrell, to me known to be the individual(s) named herein, and who executed the within and foregoing in instrument, and acknowledged execution instrument to be the free and voluntary act and deed of said individual(s), for the u therein mentioned. WITNESS m seal hereto affixed the day and year first above written. Memorandum of Sublease NOTARY PUBLIC in and for Washington State, residing at My Commission Expires: [End of signature pages] Signature Page EXHIBIT A Legal Description Memorandum of Sublease Exhibit A FINANCING DOCUMENTS 11. Reimbursement Agreement REIMBURSEMENT, ASSIGNMENT AND ASSUMPTION AGREEMENT THIS REIMBURSEMENT, ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement ") is by and between CITY OF FEDERAL WAY, a municipal corporation of the State of Washington (the "Assignor "), and FW PAEC QALICB, INC., a Washington nonprofit corporation (the "Assignee "), dated as of the _ day of , 2017. RECITALS: WHEREAS, Assignee has been formed to lease, construct, develop, and maintain certain property located in Federal Way, Washington (the "Project "); and WHEREAS, prior to formation of the Assignee, the Assignor entered into various contracts and agreements, including without limitation those contracts and agreements described on Exhibit A attached hereto, and incurred various liabilities, obligations, expenses and costs (collectively, the "Contracts and Obligations ") relating to the development and construction of the Project; and WHEREAS, the Assignor desires t n to the Assignee the Contracts and Obligations and all liabilities incurred or to be incurred �� tion therewith; and WHEREAS, the Assignee desires to assume'' the Contracts and Obligations and all liabilities incurred or to be incurred in connection therewith. NOW, THEREFORE, in consideration for the mutual promises contained herein and for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows: AGREEMENT: e Assignor hereby assigns to the Assignee all of its right, title and interest in e'Contracts and Obligations. To the extent required by each of the Contracts and Obligations, Assignor shall obtain the consent of the other party or parties of uch Contracts and Obligations, a form of which is attached hereto as Exhibit C. The Assignor hereby represents and warrants to the Assignee that Assignor has expended the sums set forth in Exhibit B with respect to the Contracts and Obligations transferred and assigned hereunder on or prior to the date hereof (the "Transfer Date "), and such sums in the amount of $ shall be reimbursed by Assignee to Assignor on or about the date hereof; provided that, the Assignor has provided the Assignee with satisfactory documentation that such expenditures have accrued and been paid by Assignor under the applicable contracts. Additionally, Assignor has incurred unpaid obligations under the Contracts and Obligations in the amounts set forth in Exhibit B, which amounts will be paid by Assignee directly to the applicable contractor or vendor as and when such obligations become due under the Contracts and Obligations. 3. The Assignee hereby assumes and shall hereafter pay, perform and discharge as and when due all liabilities, obligations and covenants with respect to or under the Contracts and Obligations. 4. Assignor represents and warrants for the benefit of the Assignee that, to the knowledge of the Assignor, as of the Transfer Date: (i) no default by any party exists under any of the Contracts and Obligations; (ii) all Contracts and Obligations are in full force and effect; (iii) Assignor is the sole owner of each of the Contracts and Obligations; (iv) Assignor has not previously assigned, encumbered or otherwise transferred its rights under any of the Contracts and Obligations; and (v) that it has provided accurate and complete copies of all Contracts and Obligations, including all amendments or modifications thereto to Assignee. 5. Assignor agrees to indemnify, hold harmless and defend Assignee from and against all debts, liabilities and obligations arising from business done, transactions entered into or other events occurring prior to the Transfi' Date with respect to, and in accordance with, the Contracts and Obligations. Assignee agrees to indemnify, hold lwmless and defend *signor from and against all debts, liabilities and obligations arising from business done, transactions entered into or other events occurring after the Transfer Date with respect to and in accordance with the Contracts and Obligations. 6. This Agreement shall bind trre parties hereto and their respective representatives, successors s, and shall inure to the benefit of Assignee, Assignor and their resp� +rs and assigns. 7. This Agreement shall be governed by and construes in accordance with the laws of the State of Washington, except to the extent preempted by the federal laws of the United States of America. This is the entire agreement of the parties with respect to the subject matter hereof. 18455022_1 [Signatures appear on next page] 2 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date written above. ASSIGNOR: CITY OF FEDERAL WAY, a municipal corporation of the State of Washington By: Name: Its: ASSIGNEE: FW PAEC QALICB, INC., a Washington nonprofit corporation By: Name: Its: [Federal Way - Assignment of Contracts Signature Page] EXHIBIT A CONTRACTS AND OBLIGATIONS EXHIBIT B SCHEDULE OF COSTS EXPENDED EXHIBIT C FORM OF CONSENT TO ASSIGNMENT [INSERT CONSENTING ENTITY]'S CONSENT: The undersigned hereby consents to the terms of the Assignment and Assumption Agreement (the "Agreement ") between CITY OF FEDERAL WAY, a municipal corporation of the State of Washington (the "Assignor "), and FW PAEC QALICB, INC., a Washington nonprofit corporation (the "Assignee "), and agrees that it will perform all of its obligations, covenants, conditions and arrangements under the Agreement for the benefit of Assignee and its successors and assigns, so long as Assignee performs the duties and obligations assumed by it under the Agreement. For purposes of the Agreement, all notices, demands or documents which are required or permitted to be given or served upon the undersigned or Assignee shall be deemed to have been properly given when hand delivered or, if mailed by United States registered or ce ified mail, postage prepaid, return receipt requested (effective three (3) days after mailing), addressed as follows: If to the undersigned: If to Assignee: City of Federal Way 33325, 8th Ave. South Federal Way, WA 98003 -6325 Attn: Ryan Call, City Attorney IN WITNESS WIIEREOF, the undersigned has executed this consent as of the day and year first -above written. 36130963v1 By: Name: Title: FINANCING DOCUMENTS 12. Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion — Lower Tier Covered Transactions executed by City JD Draft 5/10/17 CERTIFICATION REGARDING DEBARMENT, SUSPENSION, INELIGIBILITY AND VOLUNTARY EXCLUSION LOWER TIER COVERED TRANSACTIONS Date: 1 1, 2017 Instructions for Certification A. By signing and submitting this proposal, the prospective lower tier participant is providing the certification set out below. B. The certification in this clause is a material representation of fact upon which reliance was placed when this transaction was entered into If it is later determined that the prospective lower tier participant knowingly rendered an erroneous certification, in addition to other remedies available to the Federal Government, the department or agency with which this transaction originated may pursue available remedies, including suspension and /or debarment. C. The prospective lower tier participant shall provide immediate written notice to the person to whom this proposal is submitted if a time the prospective lower tier participant learns that its certification was erroneous when submi ` Chas become erroneous by reason of changed circumstances. D. The terms covered transaction, debarred, suspended, ineligible, lower tier covered transactions, participant, person, primary covered transaction, principal, proposal, and voluntarily excluded, as used in this clause, have the meaning set out in the Definitions and Coverage sections of rules implementing Executive Order 12549. The prospective lower tier participant may contact the person to which this proposal is submitted for assistance in obtaining a copy of those regulations. E. The prospective lower tier participant agrees by submitting this proposal that, should the proposed covered transaction be entered into, it shall not knowingly enter into any lower tier covered transaction with a person who is proposed for debarment under 48 C.F.R. part 9, subpart 9.4, debarred, suspended, declared ineligible, or voluntarily excluded from participation in this covered transaction, unless authorized' by the department or agency with which this transaction originated. F. The prospective lower tier participant further agrees by submitting this proposal that it will include this clause titled "Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion Lower Tier Covered Transactions," without modification, in all lower tier covered transactions and in all solicitations for lower tier covered transactions. G. A participant in a covered transaction may rely upon a certification of a prospective participant in a lower tier covered transaction that it is not proposed for debarment under 48 C.F.R. part 9, subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded from covered transactions, unless it knows that the certification is erroneous. A participant may decide the method and frequency by which it determines the eligibility of its principals. Each participant may, but is not required to, check the List of Parties excluded from Federal Procurement and Nonprocurement Programs. H. Nothing contained in the foregoing shall be construed to require establishment of a system of records in order to render in good faith the certification required by this clause. The knowledge NAI -I 502700057v1 and information of a participant is not required to exceed that which is normally possessed by a prudent person in the ordinary course of business dealings. I. Except for transactions authorized under Paragraph E of these instructions, if a participant in a covered transaction knowingly enters into a lower tier covered transaction with a person who is proposed for debarment under 48 C.F.R. part 9, subpart 9.4, suspended, debarred, ineligible, or voluntarily excluded from participation in this transaction, in addition to other remedies available to the Federal Government, the department or agency with which this transaction originated may pursue available remedies, including suspension and /or debarment. CERTIFICATION REGARDING DEBARMENT, SUSPENSION, INELIGIBILITY AND VOLUNTARY EXCLUSION LOWER TIER COVERED TRANSACTIONS 1. The prospective lower tier participant certifies, by submission of this proposal, that neither it nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency. 2. Where the prospective lower tier participant is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this proposal. [REMAINDER OF PAGE BLANK; SIGNATURE PAGE TO FOLLOW.] 2 NAI- I502700057v1 IN WITNESS WHEREOF, the undersigned has caused this Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion to be duly executed as of the date first written above. COCRF INVESTOR 77, LLC, a Delaware limited liability company By: Capital One, National Association, a national banking association, its sole member By: Name: Douglas J. Fields Title: Senior Vice President CAPITAL ONE, NATIONAL ASSOCIATION, a national banking association Name: Douglas J. Fields Title: . "Senior Vice President SIGNATURE PAGE - CAPITAL ONE, NATIONAL ASSOCIATION AND AFFILIATE CERTIFICATION REGARDING DEBARMENT. SUSPENSION, INELIGIBILITY AND VOLUNTARY EXCLUSION (CAPITAL ONE /CLEARINGHOUSE /FEDERAL WAY PAEC) IN WITNESS WHEREOF, the undersigned has caused this Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion to be duly executed as of the date first written above. CITY OF FEDERAL WAY, a Washington municipal corporation By: Name: Jim Ferrell Title: Mayor SIGNATURE PAGE - LEVERAGE LENDER CERTIFICATION REGARDING DEBARMENT. SUSPENSION. INELIGIBILITY AND VOLUNTARY EXCLUSION (CAPITAL ONE /CLEARINGHOUSE /FEDERAL WAY PAEC) IN WITNESS WHEREOF, the undersigned has caused this Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion to be duly executed as of the date first written above. FW PAEC QALICB, a Washington nonprofit corporation By: Name: Ade Ariwoola Title: President SIGNATURE PAGE - QALICB CERTIFICATION REGARDING DEBARMENT, SUSPENSION. INELIGIBILITY AND VOLUNTARY EXCLUSION (CAPITAL ONE /CLEARINGHOUSE /FEDERAL WAY PAEC) IN WITNESS WHEREOF, the undersigned has caused this Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion to be duly executed as of the date first written above. CLEARINGHOUSE COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION, a California corporation By: Name: Douglas J. Bystry Title: President and CEO CLEARINGHOUSE NMI (SUB 46), LLC, a California Limited liability company' By Clearinghouse Community Development Financial Institution, a California corporation, its manager By: Name: Douglas J. Bystry sident and CEO SIGNATURE PAGE - ALLOCATEE AND CDE CERTIFICATION REGARDING DEBARMENT, SUSPENSION, INELIGIBILITY AND VOLUNTARY EXCLUSION (CAPITAL ONE /CLEARINGHOUSE /FEDERAL WAY PAEC) FINANCING DOCUMENTS 13. Flow of Funds Closing Memorandum FINANCING DOCUMENTS 14. Opinion Certificates COUNCIL MEETING DATE: May 16, 2017 CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL ITEM #: SUBJECT: DIVERSITY COMMISSION APPOINTMENT POLICY QUESTION: Should the City Council appoint members to the Diversity Commission? COMMITTEE: N/A MEETING DATE: N/A CATEGORY: ❑ Consent 1 Ordinance City Council Business ❑ Resolution n 11 Public Hearing Other STAFF REPORT BY: Stephanie Courtney, City Clerk DEPT: Mayor's Office BACKGROUND: The Diversity Commission is comprised of nine (9) voting members and one (1) alternate who are appointed by the City Council to serve three -year terms (per FWRC 2.65.030). There are currently three (3) vacant voting positions due to term expirations, one (1) vacant voting term due to resignation, and one (1) alternate term. At their May 16, 2017 Special Meeting the City Council interviewed OI1Z (:j.) current commissioner requesting re- appointment (Gregory Baruso) as well as three new applicants (Sela Kennedy, Nichelle Shelley, and Thomas Leonard). // OPTIONS CONSIDERED: 1. Make appointments to the Diversity Commission as follows: 2. Direct the City Clerk to advertise for additional applicants for the Diversity Commission. MAYOR'S RECOMMENDATION: N/A MAYOR APPROVAL: N/A N/A Committee Council Initial/Date Initial/Date CITY CLERK APPROVAL: 1io 1 Initial/Date COMMITTEE RECOMMENDATION: N/A PROPOSED COUNCIL MOTION: "I move the following appointments to the Diversity Commission..." (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED 1ST reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED— 1/2015 RESOLUTION # Current Type Position Term Expired Voting 05/31/2020 Expired Voting 05/31/2020 Expired Voting 05/31/2020 Vacant Voting 05/31/2019 Vacant Alternate 05/31/2019 2. Direct the City Clerk to advertise for additional applicants for the Diversity Commission. MAYOR'S RECOMMENDATION: N/A MAYOR APPROVAL: N/A N/A Committee Council Initial/Date Initial/Date CITY CLERK APPROVAL: 1io 1 Initial/Date COMMITTEE RECOMMENDATION: N/A PROPOSED COUNCIL MOTION: "I move the following appointments to the Diversity Commission..." (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED 1ST reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED— 1/2015 RESOLUTION # COUNCIL MEETING DATE: May 16, 2017 CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL ITEM #: 7c SUBJECT: RESCHEDULING OF THE AUGUST 1, 2017 REGULAR COUNCIL MEETING POLICY QUESTION: Should the City Council suspend the Council Rules of Procedure and reschedule their August 1, 2017 Regular Meeting to August 8, 2017? COMMITTEE: N/A MEETING DATE: N/A CATEGORY: Consent — Ordinance 0 City Council Business ❑ Resolution n II Public Hearing Other STAFF REPORT BY: Stephanie Courtney, City_Clerk DEPT: EPT• : Mayor' s Office Background: Section 2.1(1) of the Council Rules of Procedure states the City Council will conduct Regular Meetings the first and third Tuesday of each month. Section 23.1 of the Council Rules of Procedure states any provision of the rules not governed by state law or ordinance, may be temporarily suspended by a two- thirds (2/3) majority vote of the Council. The National Night Out Against Crime Event is scheduled for August 1, 2017, the same date of a City Council Regular Meeting. In an effort to allow the Council to participate in the National Night Out Event, the Council may suspend the Rules of Procedure to reschedule their August 1, 2017 Regular Meeting to August 8, 2017. Options Considered: 1. Suspend the Council Rules of Procedure and reschedule the August 1, 2017 Regular Meeting to August 8, 2017. 2. Conduct the August 1, 2017 Regular Meeting. MAYOR'S RECOMMENDATION: N/A MAYOR APPROVAL: N/A S $~ -7 CITY CLERK APPROVAL: �/ \ ► /� /' /��J��5 Committee ou cil ImtlaiF� ate 1' Initial/Date Initial /Date COMMITTEE RECOMMENDATION: N/A N/A N/A N/A Committee Chair Committee Member Committee Member PROPOSED COUNCIL MOTION: "1 move to suspend the Council Rule 2.1(1) for the purpose of rescheduling the August 1, 2017 City Council Regular Meeting to August 8, 2017." (BELOW TO BE COMPLETED BY CITY CLERKS OFF /CE) COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED 1ST reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED — 11/2016 RESOLUTION # COUNCIL MEETING DATE: May 16, 2017 ITEM #: 7d CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL SUBJECT: CANCELLATION OF AUGUST 15, 2017 REGULAR COUNCIL MEETING POLICY QUESTION: Should the City Council suspend the Council Rules of Procedure and cancel their August 15, 2017 Regular Meeting? COMMITTEE: N/A MEETING DATE: N/A CATEGORY: ❑ Consent City Council Business Ordinance Resolution n Public Hearing Other STAFF REPORT BY: Stephanie Courtney, City Clerk DEPT: Mayor's Office Background: Historically, the City Council has canceled the second Regular Meeting in August to allow for summer vacations for Councilmembers and staff. Section 2.1(1) of the Council Rules of Procedure states the City Council will conduct Regular Meetings the first and third Tuesday of each month. Section 23.1 of the Council Rules of Procedure states any provision of the rules not governed by state law or ordinance, may be temporarily suspended by a two- thirds (2/3) majority vote of the Council. Options Considered: 1. Suspend the Council Rules of Procedure and cancel the August 15, 2017 Regular Meeting. 2. Conduct the August 15, 2017 Regular Meeting. MAYOR'S RECOMMENDATION: N/A MAYOR APPROVAL: N/A Li /t 7 CITY CLERK APPROVAL •a!J 6 7 Committee Coun tl nal /Date Initial/Date Initial/Date COMMITTEE RECOMMENDATION: N/A N/A N/A N/A Committee Chair Committee Member Committee Member PROPOSED COUNCIL MOTION: "I move to suspend the Council Rule 2.1(1) for the purpose of canceling the August 16, 2016 City Council Regular Meeting" (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: ❑ APPROVED COUNCIL BILL # ❑ DENIED 1ST reading ❑ TABLED/DEFERRED/NO ACTION Enactment reading ❑ MOVED TO SECOND READING (ordinances only) ORDINANCE # REVISED - 11/2016 RESOLUTION # COUNCIL MEETING DATE: May 16, 2017 CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL ITEM #: SUBJECT: ORDINANCE: Amendment and adoption of NFPA 130 Standard for Fixed Guideway Transit and Passenger Rail Systems current addition. POLICY QUESTION: Should the City amend and adopt the NFPA 130 Standard for Fixed Guideway Transit and Passenger Rail Systems current addition? COMMITTEE: LUTC MEETING DATE: May 1, 2017 CATEGORY: [ Consent ❑ City Council Business STAFF REPORT BY: Scott Sproul ® Ordinance ❑ Resolution n Public Hearing ❑ Other DEPT: Community Development Background: The proposed ordinance is needed in order to allow the City to amend and adopt the NFPA 130 Standard for Fixed Guideway Transit and Passenger Rail Systems current addition. Adopting this ordinance will allow Sound Transit to construct the guideway and passenger station by determining occupant loads and exiting requirements at the light rail station using the NFPA 130 Standard, instead of the provisions in the International Building Code (IBC). The use of NFPA 130 Standard is more appropriate for determination of exiting requirements than the IBC. Attachment: Ordinance Options Considered: 1) Adopt the proposed ordinance. 2) Revise the proposed ordinance and adopt it as revised. 3) Do not adopt the proposed ordinance. MAYOR'S RECOMMENDATION: Option 1, adopt the proposed ordinance. MAYOR APPROVALS, ommrt - -e Initial /Date Lodncil Initial/Date DIRECTOR APPROVAL: Initial /'gate COMMITTEE RECOMMENDATION: I move to forward the proposed ordinance to First Reading on May 16 2017. Bob Celski, Chair Mark '•• pang, Member2 PROPOSED COUNCIL MOTION(S): 1ST READING OF ORDINANCE (May 16, 2017): "I move to forward approval of the ordinance to the June 6, 2017, Council Meeting for enactment." 2ND READING OF ORDINANCE (June 6 2017): "I move approval of the proposed ordinance." (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: ❑ APPROVED ❑ DENIED ❑ TABLED /DEFERRED/NO ACTION ❑ MOVED TO SECOND READING (ordinances only) REVISED— 11/2016 COUNCIL BILL # 1ST reading Enactment reading ORDINANCE # RESOLUTION# CITY OF FEDERAL WAY MEMORANDUM DATE: TO: Land Use and Transportation Committee VIA: Jim Ferrell, Ma er FROM: Scott Sproul SUBJECT: Adoption offsliPA 130 Standard for Fixed Guideway Transit and Passenger Rail Systems BACKGROUND: The proposed ordinance is needed in order to allow the City to amend and adopt the NFPA 130 Standard for Fixed Guideway Transit and Passenger Rail Systems current addition. Adopting this ordinance will allow Sound Transit to construct the guideway and passenger station by determining occupant Toads and exiting requirements at the Tight rail station using the NFPA 130 Standard, instead of the provisions in the International Building Code (IBC). The use of NFPA 130 Standard is more appropriate for determination of exiting requirements than the IBC. cc: Project File Day File ORDINANCE NO. AN ORDINANCE of the City of Federal Way, Washington, relating to construction standards for fixed guideway transit and passenger rail systems and adding new sections to Chapter 13.31 FWRC. WHEREAS, the International Fire and Building Codes do not specifically address the design or construction of light rail facilities; and WHEREAS, the City has been working in conjunction with Sound Transit to develop common design standards for the fixed guideway transit and passenger rail system for the Federal Way Link Extension; WHEREAS, the City finds that a common national standard should be used to address design and safety standards; and WHEREAS, the National Fire Protection Association 130 Standard for Fixed Guideway Transit and Passenger Rail Systems ( "NFPA 130 ") was developed specifically to address the life safety for passenger rail systems and stations; and WHEREAS, the NFPA 130 specifies fire protection and life safety requirements for underground, surface, and elevated fixed guideway transit and passenger rail systems; and WHEREAS, the NFPA 130 has been used throughout the Untied States for the design and construction of passenger rail systems; and WHEREAS, the City Council finds that it is in the best interest of the public health, safety, and welfare to establish comprehensive, uniform, and current high capacity transit design standards and improved fire safety standards in the Federal Way Revised Code by adopting the NFPA 130 with amendments. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, Ordinance No. 17- Page 1 of 5 WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. Chapter 13.31 of the Federal Way Revised Code is hereby amended to add a new section 13.31.060 to read as follows: 13.31.060 NFPA 130 Standard for Fixed Guideway Transit and Passenger Rail Systems adopted. The city adopts the NFPA 130 Standard for Fixed Guideway and Passenger Rail Systems (NFPA 130) as published by the National Fire Protection Association as now existing or amended by reference. Section 2. Chapter 13.31 of the Federal Way Revised Code is hereby amended to add a new section 13.31.070 to read as follows: 13.31.070 NFPA 130 Standard for Fixed Guideway Transit and Passenger Rail Systems amended. The NFPA 130, adopted by reference in FWRC 13.31.060, is amended as follows: (1) NFPA 130 Standard Section 1.1.1 is hereby amended as follows: 1.1.1 This standard shall cover life safety from fire and fire protection requirements for fixed guideway transit and passenger rail systems, including, but not limited to, stations, trainways, emergency ventilation systems, vehicles, emergency procedures, communications, and control systems. NFPA 130 as adopted and amended by the City of Federal Way is the primary applicable code, and other codes apply only as referenced herein, except that the fire marshal and building official shall have the authority to require design to other adopted codes where deemed appropriate. Wherever there are practical difficulties involved in carryingout the provisions of this code, the fire marshal and building official shall have the authority to grant modifications for individual cases, upon application of the owner or owner's representative, provided the fire marshal and building official shall first find that special individual reason makes the strict letter of this code impractical and the modification is in compliance with the intent and purpose of this code and that such modification does not lessen health, accessibility, life and fire safety, or structural requirements. The details of action granting modifications shall be recorded and entered in the appropriate permit files. (2) NFPA 130 Standard Section 1.1.3 is hereby amended as follows: 1.1.3 This standard shall not cover requirements for the following: Ordinance No. 17- Page 2 of 5 (1) Conventional freight systems (2) Buses and trolley coaches (3) Circus trains (4) Tourist, scenic, historic, or excursion operations (5) Any other system of transportation not included in the definition of fixed guideway transit (see NFPA 130 Section 3.3.52.1) or passenger rail system (see NFPA 130 Section 3.3.52.2) (6) Shelter stops (7) Ancillary facilities such as parking structures or vehicle maintenance facilities (8) Occupied building or structure areas not directly related to fixed guideway transit andpassenger rail systems, as determined by the Fire Marshal and Building Official. (3) NFPA 130 Standard Section 1.4 is hereby amended as follows: 1.4 Equivalency. The building official and the fire marshal shall have the authority to evaluate and approve or reject alternative materials, design, and methods of construction and equipment. The provisions of this code are not intended to prevent the installation of any material or to prohibit any design or method of construction not specifically_prescribed by this code; provided, that any such alternative has been approved. An alternative material, design or method of construction may be approved where the building official and fire marshal find that the proposed design is satisfactory and complies with the intent of the provisions of this code, and that the material, method or work offered is, for the purpose intended, at least the equivalent of that prescribed in the NFPA 130 in quality, strength, effectiveness, fire resistance, durability, and life safety. (4) NFPA 130 Standard Section 2.1 is hereby amended as follows: 2.1 General. The documents or portions thereof listed in this chapter are referenced within this standard and shall be considered part of the requirements of this document. Initial construction shall comply with the specific edition of each standard as listed herein. The applicable codes for future additions, alterations, or repairs shall be determined by the building official and fire marshal. (5) NFPA 130 Standard Section 4.9 is added as follows: 4.9 General Precautions. International Fire Code Chapter 3 shall govern the occupancy and maintenance for precautions against fire and spread of fire and general requirements for fire safety. Section3. Severability. Should any section, subsection, paragraph, sentence, clause, or phrase of this chapter, or its application to any person or situation, be declared unconstitutional or invalid for any reason, such decision shall not affect the validity of the remaining portions of Ordinance No. 17- Page 3 of 5 this chapter or its application to any other person or situation. The City Council of the City of Federal Way hereby declares that it would have adopted this chapter and each section, subsection, sentence, clauses, phrase, or portion thereof, irrespective of the fact that any one or more sections, subsections, sentences, clauses, phrases, or portions be declared invalid or unconstitutional. Section 4. Corrections. The City Clerk and the codifiers of this ordinance are authorized to make necessary corrections to this ordinance including, but not limited to, the correction of scrivener /clerical errors, references, ordinance numbering, section/subsection numbers and any references thereto. Section 5. Ratification. Any act consistent with the authority and prior to the effective date of this ordinance is hereby ratified and affirmed. Section 6. Effective Date. This ordinance shall take effect and be in force thirty (30) days from and after its passage and publication, as provided by law. PASSED by the City Council of the City of Federal Way this day of , 20 . ATTEST: CITY OF FEDERAL WAY: MAYOR, JIM FERRELL Ordinance No. 17- Page 4 of 5 STEPHANIE COURTNEY, CMC, CITY CLERK APPROVED AS TO FORM: J. RYAN CALL, CITY ATTORNEY FILED WITH THE CITY CLERK: PASSED BY THE CITY COUNCIL: PUBLISHED: EFFECTIVE DATE: ORDINANCE NO.: Ordinance No. 17- Page 5 of 5 COUNCIL MEETING DATE: May 2, 2017 CITY OF FEDERAL WAY CITY COUNCIL AGENDA BILL ITEM #: 8b SUBJECT — ORDINANCE: Adopt code amendments related to multi - family dwelling units, senior housing, and special needs housing. POLICY QUESTION: Should the City adopt the proposed amendments to Federal Way Revised Code Title 19, "Zoning and Development Code," related to multifamily dwelling units, senior housing, and special needs housing? COMMITTEE: Land Use and Transportation Committee MEETING DATE: April 17, 2017 ana CATEGORY: ❑ Consent ❑ City Council Business f f ri 12i}-, 2017 AA) ma-4 1/1-V17 ® Ordinance ❑ Public Hearing ❑ Resolution ❑ Other STAFF REPORT BY: Principal Planner Margaret Clark DEPT: Community Development Attachments: 1) Draft Adoption Ordinance; 2) April 12, 2017, Land Use and Transportation Committee Staff Report; 3) March 29, 2017, Planning Commission Staff Report with Exhibits A -O; 4) Written comments from: MerloneGeier Partners (Exhibit P with Attachments A and B); Housing Development Consortium (Exhibit Q); Randall Smith (Exhibit R); and Bumgardner (Exhibit S); and 5) April 5, 2017 Planning Commission minutes. Background: The City of Federal Way adopted a six -month moratorium on the expansion or creation of multi - family housing per Ordinance No. 16 -821 on June 7, 2016. The moratorium was renewed for six months per Ordinance 16 -825 on December 6, 2016, and is set to expire on June 6, 2017. The moratorium covers all multifamily, senior housing, and special needs housing, except for duplexes, triplexes, and townhouses. The Planning Commission held a public hearing on March 15, 2017, which was continued to April 5, 2017, at the close of which it forwarded the amendments to the City Council without a recommendation. Options Considered: 1) Adopt the Mayor's recommendation as contained in the draft adoption ordinance; 2) Adopt the Mayor's recommendation as modified by the LUTC; 3) Do not adopt the Mayor's recommendation; or (4) Refer the amendments back to the Planning Commission for further proceedings. MAYOR'S RECOMMENDATION: The Mayor recommends adoption of the proposed amendments as written in the draft ordinance. MAYOR APPROVAL: i DIRECTOR APPROVAL: *awn offif Co mi ee Cou it Initial /Date Initial /Date +:11Tr�r I Initial/ bate COMMITTEE RECOMMENDATION: I move to forward the proposed ordinance to First Reading on May 2, 2017. Committee Chair Committee Member Committee Member PROPOSED COUNCIL MOTION(S): 1sT READING OF ORDINANCE (May 2, 2017): "1 move to forward approval of the ordinance to the May 16, 2017, Council Meeting for enactment." 2ND READING OF ORDINANCE (May 16, 2017): "I move approval of the proposed ordinance." (BELOW TO BE COMPLETED BY CITY CLERKS OFFICE) COUNCIL ACTION: ❑ APPROVED ❑ DENIED ❑ TABLED/DEFERRED /NO ACTION ❑ MOVED TO SECOND READING (ordinances only) REVISED - 11/2016 25 COUNCIL BILL # 1ST reading Enactment reading ORDINANCE # RESOLUTION # CITY OF Federal Way LAND USE AND TRANSPORTATION COMMITTEE STAFF REPORT DATE: To: VIA FROM: SUBJECT: April 26, 2017 Land Use and Transportation Committee Marwan Salloum, Public Works Director Brian Davis, Community Development Director Robert Hansen, Planning Manager 2\14711 Margaret Clark, Principal Planner Proposed Text Amendments to Federal Way Revised Code Title 19, "Zoning and Development Code," Related to Multifamily Housing (File No's. 17- 100504 -00 -UP and 17- 100505- 00 -SE) I. Background The City of Federal Way adopted a six -month moratorium on the expansion or creation of multi- family housing on June 7, 2016. The moratorium was extended for another six months on December 6, 2016. Staff received suggestions from the City Council on how to make code changes in order to improve multifamily development standards. Suggested code changes centered on improving the quality of multifamily construction, enhancing the safety of residents, and having better compatibility with neighbors (e.g., setbacks, open space, parking). Staff drafted code changes and has briefed the City Council and Planning Commission on multiple occasions, as outlined in the timeline below in Section II. A summary of the proposed code changes are on the following page in Section ?II. At their April 5th meeting, the Planning Commission forwarded the matter to the City Council without a recommendation. The staff report provided to them, which includes the text amendments, was previously provided to the Committee. The LUTC considered the suggested code changes during a meeting on April 17, 2017, and continued the meeting to April 24, 2017, and May 1, 2017, in order to allow time to review and understand the suggested code changes. Comments and questions received from the LUTC, along with staff responses, are in Section III of this Staff Report. Schedule of Commission, Committee, and Council Meetings to Consider Code Changes City Council Briefing, Moratorium Extended 12/6/16 City Council Briefing 1/3/17 Planning Commission Briefing 1/18/17 City Council Briefing (Retreat) 2/4/17 Planning Commission Briefing 2/15/17 Planning Commission Public Hearing 4/5/17 1 LUTC Meeting 4/17/17 LUTC Meeting 4/24/17 City Council Briefing 4/18/17 LUTC Meeting 5/1//17 City Council 1st Reading 5/2/17 City Council 2nd Reading 5/16/17 Ordinance Effective 5/23/17 Moratorium Ends 6/6/17 II. Summary of Staff Recommended Code Changes Suggestion 1. Improve parking 2. Mix of first -floor commercial use 3. Mix of bedroom units in same complex 4. Shared living areas 5. Social gathering areas 6. Private open space 7. Mandatory recycling 8. Space requirements for solid waste 9. Location requirements for solid waste 10. Reduce bulk and mass 11. Compatibility with surrounding uses 12. Safety plan 13. Security cameras 14. Maintenance plan and inspection program 15. Police impact fees 16. Enforce parking and critical areas 17. Increase parking Staff Recommendation For 100+ unit developments, 25% parking must be underground or first floor; core zone parking may be in multi -level garage For 25+ unit developments, 50% of first floor to be commercial if building fronts on arterial No recommended changes No recommended changes No recommended changes 48 square feet minimum per unit (patio, porch, balcony, yard, etc.) Yes, part of new solid waste requirements Yes, part of new solid waste requirements Yes, part of new solid waste requirements Vary architectural elements in design guidelines Increase setbacks for buildings on property adjacent to non - multifamily zones Incorporate various measures into design guidelines Incorporate into design guidelines No recommended changes Defer to later date as significant data analysis is required for equitable proposal Increase parking requirements for higher starting point when reductions are considered (see #17) Studio units: 1.25 /unit One bedroom: 1.5 /unit Two+ bedroom: 2.0 /unit (Example result: Uptown Square would need 47 more spaces under proposed changes) 2 III. Responses to LUTC's Comments and Questions The following addresses the questions and comments discussed during the April 24th LUTC meeting" 1. The requirement for 48 square feet of private open space for each unit would make development cost prohibitive. There were also concerns about this requirement related to senior citizen and special needs housing. Staff Response This requirement has been removed from each Use Zone Chart and Section 8 (FWRC 19.115.115[2], ' page 13 of 33 [page numbers refer to the ordinance]) has been amended as follows: "Private open space. space, private open space must-be a A minimum of 48 square feet anfl-have with a minimum dimension of six feet will be credited to usable open space." This means that there is no requirement to provide private open space; however, if open space meeting the above requirement is provided, credit will be given towards the requirement of total usable open space. Other amendments are proposed in each Use Zone Chart to allow the developer to choose from a menu of open space amenities. In addition, the Use Zone Charts were not consistent in the requirement for the percentage of common open space. There was a 25 percent requirement in the CC -F and CC -C Use Zone Charts only. The following language is proposed for the provision of open space for multi- family dwelling units in the RM zone (FWRC 19.205.040[2], page 21 of 33): "The subject property must contain at least 400 sq. ft. per dwelling unit of ° reational usable open space usable for many activities and may include common open spaces such as plazas, recreation rooms, rooftop terraces, p- patches, pools, active lobbies, and atriums. A minimum of 25 percent of the usable open space provided must be common open space. Private open space such as a patio, porch, balcony, or yard may be credited toward total residential usable open space, if such private open space is a minimum of 48 square feet and has a minimum dimension of six feet. At least 10% percent of this required open space must be developed and maintained with children's play equipment. If the subject property contains four or more units, this required open space must be in one or more pieces each having a length and width of at least 25 ft. In addition, if the subject property contains 20 or more units, at least 50% percent of this required open space must be in one or more pieces each having a length and width of at least 40 ft." Similar language was amended in or added to the following charts for multi - family dwelling units: FWRC19.215.050 (13) - BN Zone (page 19of 33) FWRC 19.220.050(10) - BC Zone (page 26 of 23) FWRC 19.225.070(6) — CC -C Zone (page 28 of 33) FWRC 19.230.060(6) — CC -F Zone (page 30 of 33) 1 Per FWRC 19.115.115, the design criteria for residential usable open space and fee -in -lieu option applies presently only to open space requirements in the CC -F and CC -C. Language is proposed that it shall also apply to senior citizen and special needs housing. 3 2. There were concerns about requiring parking underground or on the first floor within the building footprint in the RM zone, as this may be cost prohibitive for developers. Staff Response Staff concurs, given that the maximum building height in the RM 1.8 zone is 35 feet and 30 feet in the RM 2.4 and RM 3.6 zones, allowing only a maximum of three stories. Therefore, this requirement has been deleted (FWRC 19.205.040, page 21 of 33 and FWRC 19.205.070, page 22 of 23). Since the maximum allowable height of senior housing in the RS zone is 30 feet and the maximum allowable height of multifamily dwellings, senior citizen housing, and special needs housing in the BN zone is 35 feet, staff recommends that any requirement that parking be underground or on the first floor also be deleted in these Use Zone Charts (FWRC 19.200.100, page 19 of 33, FWRC 19.215.050, page 23 of 33, and FWRC 19.215.150, page 25 of 33). 3. There was also a concern that the requirement for 25 percent of parking be underground or on the first floor of a building in the CC -C and CC -F is far too loose if we are trying to increase density in these zones. There was a request to research what other cities require. Staff Response Staff reviewed the parking requirements of SeaTac, Redmond, Renton, Kirkland, and Tacoma, and none of these cities have requirements for underground parking. Staff recommends future study of parking requirements in conjunction with research on Community Design Guidelines for the City Center. 4. There was discussion about whether the recommended parking requirements in the City Center were too burdensome in light of future Transit Oriented Development (TOD). Staff Response Staff proposes the following requirements for parking for multifamily dwelling units in the CC -C and CC -F zones, until we research it as part of the Downtown Design Guidelines (FWRC 19.225.070[19], page 29 of 33). "Parking may be provided underground or above ground in structured parking or may be permitted as surface parking." The following language has been added to the Required Parking Spaces column in the Use Zone Charts: " ` It thou Multifamily dwelling units: 1 per unit if underground or in structured parking or 1.7 per unit if surface parking." 5. There was a question as to whether there should be a requirement for commercial uses in multifamily housing along arterials /collectors. The following concerns were expressed: • Businesses may not gain critical mass resulting in empty commercial spaces. • Introducing more competition for existing commercial businesses outside of this zone. • Introducing the residents to inconvenience, noise, parking issues that could result from the presence of these businesses. 4 Staff Response Staff recommends retaining this as an option, but not a requirement and leaving it up to individual developers. The following language is proposed (FWRC 19.205.040[3], page 21 of 33): "If located along an arterial or collector and is visible from the right -of -way, up to 50 percent of the total length of the ground floor facade of all buildings facing a right -of -way may be developed with commercial uses allowed by office /retail use zone chart, FWRC 19.215.010, or entertainment use zone chart, FWRC 19.215.020. The commercial ground floor uses may occupy up to a maximum depth of 15 ft. and a minimum interior height of 13 ft. of commercial space for any single tenant." 6. A developer was concerned about the proposed requirement to limit height in the BC zone to 30 feet for a distance of 100 feet from an adjacent residential zone. Staff Response Based on comments received, and an analysis of how many parcels would be affected with the 100 foot requirement, staff recommends having this provision apply only when the BC zoned parcels are adjacent to single- family zoned areas. This would affect 91 fewer parcels. The following change was made for multifamily dwelling units in the BC zone (FWRC 19.220.050[2], page 26 of 33). "Building height may not exceed 30 ft. above ABE for the portion of the building located within 20 100 ft. from a single - family residential zone." The following change was made for senior citizen housing and special needs housing in the BC zone (FWRC 19.220.080[2], page 27 of 33). "If any portion of a structure on the subject property is within 100 ft. of a single - family residential zone, then that portion of the structure shall not exceed 30 ft. above average building elevation, and the structure shall be set back a minimum of 20 ft. from the pronerty line of the single - family residential zone." 7. A question arose as to why the language, "Roof lines are designed to avoid a predominantly flat and featureless appearance through variations in roof height, forms, angles, and materials" was only in FWRC 19.220.050(3) (page 26 of 33) and in no other zones. Should it be included in all other zones for consistency? Staff Response Staff recommends deleting it from this section as it is already adequately addressed as follows in the Community Design Guidelines (FWRC 19.115.090[q]): "Buildings should be designed to have a distinct base, middle and top. The base (typically the first floor) should contain the greatest number of architectural elements such as windows, materials, details, overhangs, cornice lines, and masonry belt courses. The midsection, by comparison, may be simple. (Note: single -story buildings have no middle.) The top should avoid the appearance of a flat roof and include distinctive roof shapes including but not limited to pitched, vaulted or terraced, etc." 5 IV. Other Proposed Changes 1. FWRC 19.200.100 is proposed to be further amended by adding the following language as Note 2: "If any portion of a structure is adjacent to a single- family residential zone, then the structure shall be set back a minimum of 20 ft. from the property line of the residential zone." This is intended to clarify that a 20 foot setback is required for senior housing in a single - family zone only if the parcel is adjacent to other single - family zones. 2. One of the reasons for the multifamily moratorium was to ensure compatibility of uses between more intensive and less intensive zones. After listening to comments from citizens and Council members, staff recommends the following change for the CC -F zone (FWRC 19.230.060[5], page30 of 33): "Structures on property that adjoins a single - family - residential zone shall be set back a minimum of 20 ft. from the property line adjacent to the single- family residential zone. The height of structures shall not exceed 30 100 ft. above average building elevation when located between 20 ft. and 40 ft. from the . - I such property line." V. Mayor's Recommendation within100 ft. from It is the mayor's recommendation to forward the proposed code changes as modified by the LUTC, to the May 2 "d City Council meeting. K:\2016 Code Amendments \Multifamily Code Amendments \LUTC \042617 LUTC Multi - family code amendments.docx 6 ORDINANCE NO. 17- AN ORDINANCE of the City of Federal Way, Washington, adopting code amendments related to multifamily dwelling units, senior housing, and special needs housing; amending FWRC 19.05.040, 19.05.120, 19.115.030, 19.115.060, 19.115.115, 19.125.150, 19.200.100, 19.205.040, 19.205.070, 19.215.050, 19.220.050, 19.220.080, 19.225.070, 19.230.060; repealing FWRC 19.240.150; and adding new sections to Chapters 19.115 and 19.215 FWRC. (Amending Ordinance Nos. 90 -43, 93 -170, 94 -233, 96 -270, 97 -291, 99 -333, 00 -375, 01 -385, 01 -399, 02 -424, 03 -450, 05 -506, 06 -515, 06 -542, 07 -545, 07- 554, 07 -559, 10- 678,12 -727, and 12 -735) WHEREAS, the Multifamily Residential ( "RM "), Neighborhood Business ( "BN "), Community Business ( "BC "), Commercial Enterprise ( "CE "), City Center Core ( "CC -C "), and City Center Frame ( "CC -F ") zoning districts allow multifamily housing (also referred to as "detached or stacked dwelling units," "stacked dwelling units," "multiple -unit housing," and "multi -unit housing" in the use zone charts for the above - listed zoning districts either as a stand -alone use or as a mixed -use component of a project; and WHEREAS, the City Council desired to review multifamily housing zoning and development regulations to determine whether such zoning and development regulations are appropriate for the type of multifamily development the City envisions for the RM, BN, BC, CE, CC -C, and CC -F zoning districts; and WHEREAS, on June 7, 2016, the City of Federal Way City Council passed Ordinance No. 16 -821 imposing a six -month moratorium on the creation or expansion of multifamily development within the City; and WHEREAS, on December 6, 2016, the City Council passed Ordinance No. 16 -825 renewing the six - month moratorium on the creation or expansion of multifamily development within the City; and WHEREAS, City staff has been researching regulations for multifamily development to achieve the vision of the City Council; and Ordinance No 17- Page 1 of 36 Rev 3/17 LU WHEREAS, City staff briefed the Planning Commission on October 5, 2016, January 18, 2017, and February 15, 2017; and WHEREAS, City staff briefed the City Council on October 18, 2016 and February 4, 2017; and WHEREAS, on February 3, 2017, the City's SEPA Responsible Official issued a Determination of Nonsignificance on the code amendments related to multifamily dwelling units, senior housing, and special needs housing; and WHEREAS, the City's Planning Commission held a public hearing on March 15, 2017, which was continued to April 5, 2017, at the close of which it forwarded the amendments to the City Council without a recommendation; and WHEREAS, the Land Use and Transportation Committee of the Federal Way City Council considered the amendments on April 17, 2017, April 24, 2017, and May 1, 2017, and recommended approval of the amendments with further modifications; and WHEREAS, the City Council, through its staff, Planning Commission, and Land Use and Transportation Committee, received, discussed, and considered the testimony, written comments, and material from the public, and considered the matter at its City Council meetings on May 2, 2017 and May 16, 2017; and WHEREAS, the City Council desires to approve the code amendments related to multifamily dwelling units, senior housing, and special needs housing. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF FEDERAL WAY, WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. Findings. The City Council of the City of Federal Way makes the following findings of fact: (a) The proposed amendments related to multifamily dwelling units, senior housing, and special needs housing, are consistent with the Council's vision for the City of Federal Way, will allow development which is compatible with the surrounding neighborhoods, including adjacent single- family uses, and will reduce the impacts of large scale multifamily, senior, and special needs housing on Ordinance No 17- Page 2 of 36 Rev 3/17 LU adjoining zoning districts that permit less intensive residential or commercial uses; (b) The proposed amendments will allow for growth and development consistent with the Federal Way Comprehensive Plan's overall vision and with the Federal Way Comprehensive Plan's land use element and household projections, and will allow reasonable use of property; (c) The proposed amendments will allow for adequate amenities such as open space and parking for residents, and will decrease the need for on- street parking; (d) The proposed amendments will encourage the adoption of a security program intended to promote resident safety and improve quality of life for residents; (e) The proposed amendments will benefit the City as a whole as it will improve the aesthetics of the built environment and result in more architecturally diverse developments throughout the City; (f) The proposed amendments will lessen environmental impacts by requiring recycling and composting of materials; (g) The proposed amendments have complied with the appropriate process under state law and the FWRC; and (h) The proposed amendments bear a substantial relationship to the public health, safety and welfare; are in the best interest of the residents of the City; and are consistent with the goals and policies of the Federal Way Comprehensive Plan. Section 2. Conclusions. Pursuant to Chapter 19.80 FWRC and Chapter 19.35 FWRC, and based upon the recitals and the findings set forth in Section 1, the Federal Way City Council makes the following Conclusions of Law with respect to the decisional criteria necessary for the adoption of the proposed amendments: (a) The proposed amendments are consistent with, and substantially implement the following Federal Way Comprehensive Plan goals and policies: Goals: Ordinance No 17- Page 3 of 36 Rev 3/17 LU LUG 1 Create an attractive, welcoming and functional built environment. LUG3 Preserve and protect Federal Way's single- family neighborhoods. HG 1 Preserve and protect the quality of existing residential neighborhoods and require new development to be of a scale and design that is compatible with existing neighborhood character. PUG22 Promote the recycling of solid waste materials by providing opportunities for convenient recycling and by developing educational materials on recycling, composting, and other waste reduction methods. Waste reduction and source separation are the City's preferred strategies for managing solid waste. Materials remaining after effective waste reduction and source separation should be managed in accordance with the KC- CSWMP. PUG23 Encourage and actively seek an effective regional approach to solid waste management, to leverage economies of scale and move toward similarities in services and parallel educational messaging. PUG27 Develop and implement Preferred Building Code Elements, including space allocation for several waste streams (garbage, compostables, recyclables, hazardous materials, and other process wastes). Incorporate design elements that enable access to services, both for tenants and collection service vehicle. Consider development of a preference for covered solid waste enclosures or facilities that are tied to sanitary sewer to help reduce potential surface water management issues, and perform a comprehensive analysis to determine which elements should be grandfathered versus required improvements. Policies: LUP1 Use development standards and design guidelines to maintain neighborhood character and ensure compatibility with surrounding uses. LUP3 Use design guidelines and performance standards to create attractive and desirable commercial, office and commercial/residential mixed -use developments. LUP6 Conduct regular reviews of development regulations to determine how to improve upon the permit review process. LUP 13 Maintain and protect the character of existing single- family neighborhoods through strict enforcement of the City's land use regulations. LUP14 Protect residential areas from impacts of adjacent non- residential uses. LUP22 Multifamily residential development should be designed to provide privacy and common open space. Variations in facades and rooflines should be Ordinance No 17- Page 4 of 36 Rev 3/17 LU used to add character and interest to multiple- family developments. LUP27 Use design and performance standards to integrate multifamily development into commercial developments as commercial /residential mixed -use development. Performance standards should focus on scale, appearance, and compatibility. LUP29 Ensure compatibility between non- residential developments and residential zones by regulating height, scale, setbacks, and buffers. HP1 High - density housing projects, with the exception of senior housing, will not be permitted in existing single- family residential neighborhoods. More moderate densities such as cottage housing are permitted. HP13 Continue to use design guidelines to ensure that new and infill developments have aesthetic appeal and minimize impacts on surrounding development. HP 14 Review zoning, subdivision, and development regulations to ensure that they further housing policies, facilitate infill development and don't create unintended barriers. HP17 Continue to permit commercial/residential mixed -use development in designated commercial areas throughout the City. Develop incentive programs to ensure an adequate amount of housing is developed in these areas. (b) The proposed amendments bear a substantial relationship to the public health, safety, and welfare because they will result in a higher quality of multifamily development, while ensuring that adequate amenities such as open space and parking are provided for residents. Amendments to the Community Design Guidelines also encourage the adoption of a security program intended to promote resident safety and improve quality of life for residents. Other proposed amendments to the Community Design Guidelines are intended to reduce the impacts of large scale multifamily and senior housing development on adjoining zoning districts that permit less intensive residential or commercial uses by reducing building massing. (c) The proposed amendments are in the best interest of the residents of the City as they will improve the aesthetics of the built environment and create compatibility between different zoning districts. Additionally, the proposed text amendments would lead to more architecturally diverse developments throughout the City. Section 3. FWRC 19.05.040 is hereby amended to read as follows: "Day care facility, commercial" means the temporary, nonresidential care of persons on a recurring basis. See FWRC Title 19, Division VI, Zoning Regulations. "Dedication" means the deliberate appropriation of land by its owner for public use or purpose, reserving no other rights than those that are compatible with the full exercise and enjoyment of the public uses or purposes to which the property has been devoted. Ordinance No 17- Page 5 of 36 Rev 3/17 LU "Deleterious substance" includes, but is not limited to, chemical and microbial substances that are classified as hazardous materials under this section, "hazardous materials," whether the substances are in usable or waste condition, that have the potential to pose a significant groundwater hazard, or for which monitoring requirements of treatment -based standards are enforced under Chapter 246 -290 WAC. "Development" means any human activity consisting of any construction, expansion, reduction, demolition, or exterior alteration of a building or structure; any use, or change in use, of a building or structure; any human - caused change to land whether at, above, or below ground or water level; and any use, or change in use, of land whether at, above, or below ground or water level. Development includes, but is not limited to, any activity that requires a permit or approval under zoning ordinances, subdivision ordinances, building code ordinances, critical areas ordinances, all portions of a shoreline master program, surface water ordinances, planned unit development ordinances, binding site plan ordinances, and development agreements; including but not limited to any activity that requires a building permit, grading permit, shoreline substantial development permit, conditional use permit, special use permit, zoning variance or reclassification, subdivision, short subdivision, urban planned development, binding site plan, site development, or right -of -way use permit. Development also includes, but is not limited to, filling, grading, paving, dredging, excavation, mining, drilling, bulkheading; driving of piling; placing of obstructions to any right of public use, and the storage of equipment or materials. "Development regulation" means controls placed on development or land use, but does not include decisions to approve a project permit application even though they may be expressed in a resolution or ordinance. "Diameter at breast height (dbh) " means the diameter of a tree trunk as measured at four and one -half feet above the ground surface. "Director" means the director of the department of community development, also known as the department of community development services, unless the context indicates otherwise. "Domestic animal" means an animal which can be and is customarily kept or raised in a home or on a farm. "Dredging" means removal of earth and other materials from a body of water, a watercourse, or a wetland. "Dredging spoils" means the earth and other materials removed from a body of water, a watercourse, or a wetland by dredging. "Driveway" means an area of the subject property designed to provide vehicular access to a parking area or structure located on the subject property. "Dry land" means the area of the subject property landward of the high water line. "Dwelling unit" means one or more rooms in a structure or structures, excluding mobile homes and outdoor storage containers and similar structures used or designed to be used as living facilities, providing complete, independent living facilities exclusively for one family, including permanent provisions for living, sleeping, cooking and sanitation. A factory-built home or manufactured home is considered a dwelling unit under this title only if it meets the standards and criteria of a designated manufactured home established in RCW 35A.63.145. There are the following eight ten types of dwelling units: Ordinance No /7- Page 6 of 36 Rev 3/17 LU (1) "Dwelling unit, attached, -" means a dwelling unit that has one or more vertical walls in common with or attached to one or more other dwelling units or other uses and does not have other dwelling units or other uses above or below it. (2) "Dwelling unit, detached,-" means a dwelling unit that is not attached or physically connected to any other dwelling unit or other use. (3) "Dwelling unit, efficiency," means a small one room unit, which includes all living and cooking areas with a separate bathroom. (3) (4) "Dwelling unit, stacked,-" means a dwelling unit that has one or more horizontal walls in common with or attached to one or more other dwelling units or other uses and may have one or more vertical walls in common with or adjacent to one or more other dwelling units or other uses. (4) (5) "Dwelling unit, multifamily,-" means a building containing two or more dwelling units, which are either attached or stacked. See definition of "dwelling unit, townhouse." • - (6) "Dwelling unit, senior citizen housing" means housing available for the exclusive occupancy of persons over 55 years of age. (6) (7) "Dwelling unit, small lot detachedr" means detached residential dwelling units developed on multifamily -zoned property. Each unit is located on its own fee - simple lot. One of the dwelling unit's sides may rest on a lot line (zero lot line) when certain site development conditions are met. (8) "Dwelling unit, studio" means a one room unit, which includes all living and cooking areas with a separate bathroom. Studios may have a wide open living space, and are typically larger than an "efficiency apartment." Studio apartments can contain a loft. (7) (9) "Dwelling unit, townhouse," means a type of attached multifamily dwelling in a row of at least two such units in which each unit has its own front and rear access to the outside, no unit is located over another unit, and each unit is separated from any other unit by one or more vertical common fire - resistant walls. (S) (10) "Dwelling unit, zero lot line townhouse," means attached residential dwelling units with common (or "party") walls. Each unit is located on a lot in such a manner that one or more of the dwelling's sides rests on a lot line. Each unit has its own entrance opening to the outdoors (to the' street, alley, or private tract) and, typically, each house is a complete entity with its own utility connections. Although most townhouses have no side yards, they have front and rear yards. The land on which the townhouse is built, and any yard, is owned in fee simple. Section 4. FWRC 19.05.120 is hereby amended to read as follows: "Land division" means any process by which individual lots, parcels, or tracts are created for the purpose of sale, lease, or transfer. Land divisions include, but are not limited to, conventional subdivisions (both short and long plats), binding site plans, cluster subdivisions, cottage housing, zero lot line townhouse development, and small lot detached development. "Landscaping" means the planting, removal and maintenance of vegetation along with the movement and displacement of earth, topsoil, rock, bark and similar substances done in conjunction with the planting, removal and maintenance of vegetation. "Landward" means toward dry land. Ordinance No 17- Page 7 of 36 Rev 3/17 LU "Legal nonconformance" means those uses, developments, or lots that complied with the zoning regulations at the time the use, development, or lot was created or established, but do not conform with current zoning regulations. This definition shall be applied to legal nonconforming lots, uses, and developments as defined in this chapter. "Linear frontage of subject property" means the frontage of the subject property adjacent to all open, improved rights -of -way other than Interstate 5. If the subject property is not adjacent to an open, improved right -of -way, "linear frontage" means the frontage of the subject property on any public access easements or tracts which serve the subject property and adjacent unopened and/or unimproved rights -of- way. "Lobby" means a central hall, foyer, or waiting room at the entrance to a building. "Lot" means a parcel of land, of sufficient area to meet minimum zoning requirements, having fixed boundaries described by reference to a recorded plat, to a recorded binding site plan, to metes and bounds, or to section, township and range. "Lot area" means the minimum lot area per dwelling unit based on the underlying zone. For single - family lots, the area of a vehicular access easement, private tract, flagpole, or access panhandle shall not be credited in calculation of minimum lot area. "Low density use" means a detached dwelling unit on a subject property that contains at least five acres. "Low density zone" means the following zones: SE and comparable zones in other jurisdictions. "Low impact development (LID) " means a stormwater management strategy that emphasizes conservation and use of existing features integrated with distributed, small -scale stormwater controls to more closely mimic natural hydrologic patterns in residential, commercial, and industrial settings. Section 5. FWRC 19.05.160 is hereby amended to read as follows: "Panhandle lot" means flag lot. "Parking area" means any area designed or used for parking vehicles. "Parking space" means an area which is improved, maintained and used for the sole purpose of temporarily accommodating a motor vehicle that is not in use. "Parking structure" means a building or structure consisting of more than one level, above and /or below ground, and used for temporary storage of motor vehicles. Pea Patch Garden. See the definition for "community gardens." "Pedestrian oriented" means a street that is designed to encourage pedestrian movement and pedestrian orientation in relationship to buildings. "Personal wireless service facility (PWSF) " means a wireless communication facility, including a microcell, that is a facility for the transmission and /or reception of radio frequency signals, and which may include antennas, equipment shelter or cabinet, transmission cables, a support structure to achieve the necessary elevation, and reception and transmission devices and antennas. "Personal wireless services" means commercial mobile services, unlicensed wireless services, and common carrier wireless exchange access services, as defined by federal laws and regulations. "Plaza" means a pedestrian space that is available for public use and is situated near a main entrance to a building or is clearly visible and accessible from the adjacent right -of -way. Typical features and Ordinance No 17- Page 8 of 36 Rev 3/17 LU furnishings include special paving, landscaping, pedestrian -scale lighting, seating areas, weather protection, water features, art, trash receptacles, and bicycle racks. "Portable moving containers" means new or used prefabricated units that can be rented by residential or business customers for temporary accessory moving and storage activities, including, but not limited to, such products trademarked as "PODS" (Personal on Demand Storage), "SAM" (Store and Move), and "Door to Door." Such containers are typically delivered to a site by truck, left on site for a temporary loading period, then retrieved by truck and delivered to another location, which may include a storage facility. See FWRC 19.275.020. "Preapplication conference" means a meeting, between an applicant and members of the development review committee, which is held prior to formal application, during which the project is discussed relative to pertinent codes and regulations. "Primary vehicular access" means the street, vehicular access easement, or private tract from which the majority of vehicles enter the subject property. "Principal use" means the primary or predominant use of any lot or parcel. "Private club" means an association of persons organized for some common purpose, but not including groups organized primarily to sell merchandise or render a service which is customarily carried on as a business. "Property line" means those lines enclosing the subject property and those lines defining a recorded vehicular access easement or tract. The following are categories of property lines: (1) The front property line is any property line that is adjacent to a primary vehicular access. If the subject property is adjacent to more than one primary vehicular access, the applicant shall designate which of the adjacent property lines is the front property line and the remainder of such adjacent property lines will be considered as either a rear property line or side property line, based on the definition in this section, except the property line adjacent to an arterial or primary collector shall not be designated as a primary vehicular access. (2) For flag lots, the yard setbacks shall be applied per the following graphic: Ordinance No 17- Page 9 of 36 Rev 3/17 LU Flag Lot Setbacks Dnvewey ter Lot L Access Easement 101 lot 1 Driveway Notan arterial for Lot 2 or principal collector Driveway fa Lot 2 Arterial or and Access Easemom - principal collector for Lo: 1 Driveway for Lot 3 ane Access Easement to, Lot 2 Not an arterial or principal collector F = Front Yard S = Side Yard R = Rear Yard (3) The rear property line is any property line that is farthest from, and essentially parallel to, the front property line. (4) The side property line is any property line other than a front property line or a rear property line. "Public park" means a natural or landscaped area, provided by a unit of government, to meet the active or passive recreational needs of people. "Public space" means a passive or active recreational area designed specifically for use by the general public as opposed to serving merely as a setting for the building. Such areas may include parks, gardens, plazas, entrance lobbies, arboretums, solariums, and bandstands, or an approved combination thereof, and may contain exterior or interior spaces. Such areas shall be easily accessible from adjacent public areas and available to the public at least 12 hours each weekday. Public on -site open space may be privately owned, but must be permanently set aside and maintained for the use and benefit of the public. "Public utility" means the facilities of a private business organization such as a public service corporation, or a governmental agency performing some public service and subject to special governmental regulations, the services which are paid for directly by the recipients thereof. Such services shall include but are not limited to: water supply, electric power, telephone, cablevision, natural gas and transportation for persons and freight. The term also includes broadcast towers, antennas and related facilities operated on a commercial basis. Ordinance No 17- Page 10 of 36 Rev 3/17 LU "Public works director" means the director of the department of public works of the city. Section 6. FWRC 19.115.030 is hereby amended to read as follows: This chapter shall apply to all development applications except single- family residential, or those uses exempted in specific sections, subject to FWRC Title 19, Zoning and Development Code. Project proponents shall demonstrate how each CPTED principle is met by the proposal, or why it is not relevant by either a written explanation or by responding to a checklist prepared by the city. Subject applications for remodeling or expansion of existing developments shall meet only those provisions of this chapter that are determined by the director to be reasonably related and applicable to the area of expansion or remodeling. This chapter in no way should be construed to supersede or modify any other city codes, ordinances, or policies that apply to the proposal. Section 7. Chapter 19.115 FWRC is hereby amended to add a new section 19.115.040 to read as follows: 19.115.040 Security program. The following is a list of general strategies that are encouraged to be addressed in a security program for new stacked multifamily dwelling units, senior housing, or special needs housing: (1) Develop written security policies and an emergency management plan, including evacuation procedures. (2) Provide illumination in all areas of the building, including parking facilities and entryways to buildings, according to requirements of the Illuminating Engineering Society (IES) Lighting Handbook. (3) Ensure that the lobby and the area immediately outside its doors are free of places of concealment for persons. (4) Install large glass panels in lobby doors. (5) Design buildings so that the elevator area is fully visible throughout the lobby. On levels other than the lobby floor, elevators should open directly to hallways, without recesses or blind corners that restrict two -way visibility. (6) Locate laundry rooms in a more active area of the building, adjacent to common space or the main lobby, and install large glass windows in the laundry room. (7) Keep laundry rooms and exercise rooms secure and accessible by residents. (8) Locate mailboxes and mail rooms adjacent to the main lobby of the building, (9) Store keys in a secure location and control their distribution. (10) Control access into the building by locking all exterior entrances, including accessible roof openings, doors to accessible balconies and terraces, and parking garage entrances. Provide automatic door closures, as needed. (11) Provide deadbolt locks, peepholes, and safety chains (night latches) on resident doors. (12) Install a functioning high quality video monitoring system with cameras located in the lobby, elevator, playground, and parking lot. (13) Keep plants and shrubs trimmed to provide for visibility of the building and surrounding property. (14) Trim tree branches up from the ground in order to discourage the possibility of a person hiding, (15) Make sure fences can be seen through. Ordinance No 17- Page 11 of 36 Rev 3/17 LU (16) Post the site and building addresses clearly. Section 8. FWRC 19.115.060 is hereby amended to read as follows: (1) General criteria. (a) Emphasize, rather than obscure, natural topography. Buildings should be designed to "step up" or "step down" hillsides to accommodate significant changes in elevation, unless this provision is precluded by other site elements such as stormwater design, optimal traffic circulation, or the proposed function or use of the site. See FWRC 19.120.110 for related standards for development on sites with slopes of 15 percent or greater. !iiiiuIlII1. llIIIIIIlNII 1111111111 E.anaavinp ns4wa11Weg,>VM Figure 5 — FWRC 19.115.060(1) (b) Building siting or massing shall preserve public viewpoints as designated by the comprehensive plan or other adopted plans or policies. (c) Materials and design features of fences and walls should reflect that of the primary building(s) and shall also meet the applicable requirements of FWRC 19.120.120, Rockeries and retaining walls. (2) Building facade modulation and screening options, defined. Except for zero lot line townhouse development and attached dwelling units, all building facades that are both longer than 60 feet and are visible from either a right -of -way or residential use or zone shall incorporate facade treatment according to this section. Subject facades shall incorporate at least two of the four options described herein; except, however, facades that are solidly screened by Type I landscaping, pursuant to Chapter 19.125 FWRC, Outdoors, Yards, and Landscaping, may use facade modulation as the sole option under this section. Options used under this section shall be incorporated along the entire length of the facade, in any approved combination. Options used must meet the dimensional standards as specified herein; except, however, if more than two are used, dimensional requirements for each option will be determined on a case -by -case basis; provided, that the gross area of a pedestrian plaza may not be less than the specified minimum of 200 square feet. See FWRC 19.115.090(3) for guidelines pertaining to city center core and city center frame. (a) Facade modulation. Minimum depth: two feet; minimum width: six feet; maximum width: 60 feet. Alternative methods to shape a building, such as angled or curved facade elements, off -set planes, wing walls and terracing, will be considered; provided, that the intent of this section is met. Ordinance No 17- Page 12 of 36 Rev 3/17 LU Incorporating modulations Figure 6 — FWRC 19.115.060(2) (b) Landscape screening. Eight- foot -wide Type II landscape screening along the base of the facade, except Type IV may be used in place of Type II for facades that are comprised of 50 percent or more window area, and around building entrance(s). For building facades that are located adjacent to a property line, some or all of the underlying buffer width required by Chapter 19.125 FWRC, Outdoors, Yards, and Landscaping, may be considered in meeting the landscape width requirement of this section. ncorporating landscaped bunett Figure 7 — FWRC 19.115.060(2) (c) Canopy or arcade. As a modulation option, canopies or arcades may be used only along facades that are visible from a right -of -way. Minimum length: 50 percent of the length of the facade using this option. ,a. ,1..rzon.,rW.ec,x Figure 8 — FWRC 19.115.060(2) (d) Pedestrian plaza. Size of plaza: Plaza square footage is equal to one percent of the gross floor area of the building, but it must be a minimum of 200 square feet. The plaza should be clearly visible Ordinance No 17- Page 13 of 36 Rev 3/17 LU and accessible from the adjacent right -of -way. mweponiq Peawwe Wxa Figure 9 — FWRC 19.115.060(2) (3) Building articulation and scale. (a) Except for zero lot line townhouse development and attached dwelling units, building facades visible from rights -of -way and other public areas should incorporate methods of articulation and accessory elements in the overall architectural design, as described in subsection (3)(b) of this section. Figure 10 — FWRC 19.115.060(3) Figure 11 — FWRC 19.115.060(3) (b) Methods to articulate blank walls: Following is a nonexclusive list of methods to articulate blank walls, pursuant to FWRC 19.125.040(21) and subsection (3)(a) of this section: (i) Showcase, display, recessed windows; (ii) Window openings with visible trim material, or painted detailing that resembles resemble trim; (iii) Vertical trellis(es) in front of the wall with climbing vines or similar planting; (iv) Set the wall back and provide a landscaped or raised planter bed in front of the wall, with plant material that will obscure or screen the wall's surface; (v) Artwork such as mosaics, murals, decorative masonry or metal patterns or grillwork, sculptures, relief, etc., over a substantial portion of the blank wall surface. (The Federal Way arts commission may be used as an advisory body at the discretion of the planning staff); (vi) Architectural features such as setbacks, indentations, overhangs, projections, articulated cornices, bays, reveals, canopies, and awnings; (vii) Material variations such as colors, brick or metal banding, or textural changes; and (viii) Landscaped public plaza(s) with space for vendor carts, concerts and other pedestrian activities. (c) See FWRC 19.115.090(3) for supplemental guidelines. Ordinance No 17- Page 14 of 36 Rev 3/17 LU Showcase windows i Q d� grain • srm�ir ad gigitki Vertical trellis landscaping Figure 12 — FWRC 19.1 15.060(3) ArhwrK -Mural AtchittdlOal lealwas Mat.ual variations Lantlstapetl pubYC plazas Figure 13 — FWRC 19.115.060(3) (4) Methods to reduce building massing: The following is a non- exclusive list of methods to be utilized in construction of buildings in order to reduce their impacts on development located in an adjoining zoning district that permits less intensive residential or commercial uses: (a) Reduce the apparent bulk of a building by breaking it into several smaller masses and varying the roof line with architectural elements. (b) Consider options such as upper level setbacks in order to minimize bulk and shadow impacts on adjacent development. Section 9. FWRC 19.1 15.115 is hereby amended to read as follows: The following guidelines apply to residential usable open space that is developed pursuant to FWRC 19.200.100, 19.205.070, 19.215.150, 19.220.080, 19.225.070 and 19.230.060: (1) Common open space. All common open space proposed under this section shall meet the definition of "open space, common" as set forth in this title and all of the following criteria: (a) In order to be credited toward total residential usable open space, common open space must be a minimum of 225 square feet and have a minimum dimension of 15 feet. The inclusion of additional contiguous open space areas that have smaller dimensions, but enhance the use and enjoyment of the overall larger space, may be credited toward the overall minimum usable open space requirement subject to director approval. (b) Indoor common areas such as recreation/workout rooms, swimming pools, and gathering spaces that meet the criteria of this section may be counted as common open space subject to the criteria in this section. (c) The common open space shall be readily visible and accessible from structure(s) with entries to residential units. (d) The common open space shall not be located on asphalt or gravel pavement, or be adjacent to Ordinance No 17- Page 15 of 36 Rev 3/17 LU unscreened parking lots, chain -link fences, or blank walls, and may not be used for parking, loading, or vehicular access. (e) Pedestrian access ways shall only be counted as common open space when the pedestrian path or walkway traverses a common open space that is 15 feet or wider. (f) The common open space shall be sufficiently designed and appointed to serve as a major focal point and gathering place. Common open spaces shall include a significant number of pedestrian - oriented features, furnishings, and amenities typically found in plazas and recreational open space, such as seating or sitting walls, lighting, weather protection, special paving, landscaping, and trash receptacles. In addition, the common open space(s) should provide one or more significant visual or functional amenities such as a water feature, fireplace, and /or artwork, and should allow for active uses such as physical exercise, children's play area, gathering area for group social events, and p -patch or other gardening activity. (2) Private open space. a A minimum of 48 square feet and have with a minimum dimension of six feet will be credited to usable open space. (3) Publicly accessible open space. Publicly accessible open spaces provided on site may be credited toward the minimum residential usable open space requirement, as long as the open space is directly accessible to and available to residents for their use. Only the portion of the public open space directly accessible to and available to residents for their use may be credited toward the residential usable open space requirement. (4) Fee -in -lieu option. A fee -in -lieu payment may be made to satisfy up to 50 percent of the residential usable open space requirement for the development of public parks and recreation improvements. Fee -in- lieu acceptance shall be at the discretion of the parks director after consideration of the city's overall park plan, and the quality, location, and usability of the open space that would otherwise be provided on the project site. If the city determines that a fee -in -Lieu is appropriate, a payment of an equivalent fee in lieu of the required open space shall be made. The fee in lieu of open space shall be calculated based on the most recent assessed value of the subject property, or an appraisal conducted by a state- certified real estate appraiser. If the applicant offers to pay fee in lieu of open space, and if the city accepts the offer, the amount shall be determined based upon the square footage of open space that otherwise would have been required to be provided, multiplied by the then - current market value per square foot of the property. By choosing the fee -in -lieu option, the applicant agrees that the city will not be restricted to using the fees in the park comprehensive planning area that the subject property falls within, and that they may be used for park and recreation improvements in any of the park comprehensive planning areas that serve the city center core and city center frame zoned areas. See also FWRC 19.100.070. Section 10. FWRC 19.125.150 is hereby amended to read as follows: Solid waste receptacles — Placement and screening. (1) Storage area. Storage areas for garbage, and recycling and compostables receptacles for managing solid waste materials generated on site shall be required to be incorporated into the designs for Ordinance No 17- Page 16 of 36 Rev 3/17 LU multifamily, commercial and institutional buildings constructed after January 1, 1993. Common solid waste materials include generic recyclables (paper, metal, plastics, and other materials); garbage; non - compostable rubbish and trash; compostables and yard debris; properly- stored medical or moderate risk wastes; bulky items such as mattresses and appliances; and recyclable semi- liquid wastes (such as used cooking oil). (2) Exemptions. The following structures are exempt from the requirements of this section: (b a) Storage receptacles for parks or construction sites. (e b) Structural alterations or increases in gross floor area to existing nonconforming structures which do not meet the threshold levels described in Chapter 19.30 FWRC. (3) Storage area defined. Storage areas shall include the areas containing receptacles served by collection equipment and may also include interim on -site storage areas used to aggregate material prior to delivering it to the collection storage area. (4) Location. receptacles, including underground facilities: (a) May not be located in required yards; (b) May not be located in landscape buffer areas required by or under this Code; and (c) Must be screened according to FWRC 19.125.010 et al. (5) Security and accessibility. The following provision shall apply to all solid waste and recyclable storage areas which contain receptacles served by commercial collection equipment. (a) The storage area for recycling receptacles shall be located adjacent to the garbage solid waste storage area. The enclosures shall be easily accessible to users occupying the site. If the space is located within a structure, cCollection equipment must have an adequate vertical clearance and an adequate turning radius to ensure access and ease of ingress and egress to the storage area, whether located either inside or outside a structure. (b) Storage areas shall not interfere with the primary use of the site. The area shall be located so that collection of materials by trucks shall not interfere with pedestrian or vehicular movement to the minimum extent possible. The storage area shall not be located in areas incompatible with noise, odor, and increased frequent pedestrian and vehicle traffic. (6) Design guidelines; general. The following provisions shall apply to all storage area designs: (a) Design and architectural compatibility. The design of tho Solid waste and recycling storage area sbeuld design shall be consistent with the architectural design of the primary structure(s) on the site. at the same Solid Wwaste garbage and recycling Storage areas shall be built on a flat and level area grade as the truck access area. (b) Enclosure and landscaping. All outdoor trash enclosures for garbage solid waste and recycling receptacles shall be screened according to FWRC 19.125.040(4) and (5). In all cases, gates shall be of sufficient width to allow direct, in -line access by solid waste and recycling collectors and equipment. uses where two or more separate detachable containers (commonly referred to as dumpsters) are Ordinance No 17- Page 17 of 36 Rev 3/17 LU situated side -by -side within an enclosure, there must be a minimum of 18 feet of unobstructed access when gates are fully opened (hardware, hinges, and walls will add to total enclosure width, based on design and materials used). Gate openings must be at least 12 feet wide when an enclosure houses a single drop box or compactor unit. Enclosure gates shall not include center posts that would obstruct service access. The Al! landscaping shall be designed so as not to impede access to the storage-area enclosure. (c) Signage. Exterior signage on (enclosures signs should be in shall conformance with Chapter 19.140 FWRC and shall not exceed twe four square feet per sign face. The containers for recycling, and garbage, and other source- separated solid waste materials should shall be identified using clearly visible signs. (d) Weather protection. All solid waste storage areas (enclosures) require a spill prevention plan for management of liquids generated on or discharged from the storage area. The storage area spill prevention plan must detail how all liquids either precipitated, sprayed, washed, spilled, leaked, dripped, or blown onto the storage area will be collected and managed in compliance with city surface water protection standards. The storage area spill prevention plan shall be provided to the city's surface water management program, to be kept on file in order to inform periodic site monitoring_ (1) All storage areas without a roof require a functioning oil water separator to be installed and maintained. The oil water separator must be sized and designed to accommodate all liquids exiting the storage area, as well as all surrounding impervious surface that drains to the oil water separator's location. The storage area pad shall be sloped at the minimum grade required to channel all such liquids to the oil water separator. (ii) Storage areas larger than 175 square feet in size must have a roof covering the storage area. This roof shall provide adequate overhang surface to prevent the direct entry of precipitation to the enclosure area. Storage areas with a roof require adequate floor drainage connected and conveyed to sanitary sewer. Precipitation runoff from the roof shall not be discharged to the sanitary sewer. Roofed or covered storage areas must provide adequate clearances to allow access by haulers and collection equipment. (7) Space and access requirements. The following minimum space and access requirements for solid waste and recycling storage areas shall be incorporated into the design of all buildings: (a) Except as provided in subsection (7)(a)(i) of this Section, for all uses, storage space for solid waste and recyclable materials containers shall be provided as shown in Table A for all new structures and Ordinance No /7- Page 18 of 36 Rev 3/17 LU for existing structures to which two or more dwelling units are added. (i) Residential uses proposed to be located on separate lots, for which each dwelling unit will be billed individually for utilities, shall provide one storage area per dwelling unit that has minimum dimensions of two feet by six feet. (ii) In addition to the requirement in subsection (7)(g) below, plans for stacked multifamily dwelling units shall require designated interior solid waste accumulation or storage areas on each level, including details on how solid waste is conveyed to shared storage space(s). (iii) Residential development for which a home owner's association, or other single entity exists or will exist, as a sole source for utility billing may meet the requirement in subsection (7Xa)(i), or the requirement in Table A. Residential and nonresidential development shall meet the respective requirements in Table A. Table A: Shared Storage Space for Solid Waste Containers Residential Development 2 -8 dwelling units 9 -15 dwelling units 16-25 dwelling units 126-50 dwelling units 51 -100 dwelling units More than 100 dwelling units Nonresidential Development (Based on gross floor area of all structures on the lot) 0 -5,000 square feet 5,001- 15,000 square feet 15,001 - 50,000 square feet 50,001- 100,000 square feet 100,001- 200,000 square feet 200,001 plus square feet Mixed use development that contains both residential subsection FWRC 19.125.150(7)(b) Minimum Area for Shared Storage Space 84 square feet 150 square feet 225 square feet 375 square feet 375 square feet plus 4 square feet for each additional unit above 50 575 square feet plus 4 square feet for each additional unit above 100, except as permitted in subsection 7(c) Minimum Area for Shared Storage Space 82 square feet 125 square feet 175 square feet 225 square feet 275 square feet 500 square feet and nonresidential uses, shall meet the requirements of (b) Mixed use development that contains both residential and nonresidential uses shall meet the storage space requirements shown in Table A for residential development, plus 50 percent of the requirement for nonresidential development. In mixed use developments, storage space for solid waste may be shared between residential and nonresidential uses, and designated storage space for Ordinance No 17- Page 19 of 36 Rev 3/17 LU recycling services shall also be provided. (c) The storage space required by Table A shall meet the following requirements: (i) The storage space must have adequate dimensions to enclose solid waste containers and also allow users to access these containers. For multifamily developments with eight or fewer dwelling units, and for nonresidential development with gross floor area of 5,000 square feet or less, the storage space must have a minimum dimension from the front gates to the back wall of at least seven feet. For all other uses, the storage space must have a minimum dimension from the front gates to the back wall of at least ten feet. Storage space for trash compactor units and for larger developments will generally exceed this ten foot dimension from front gates to back wall. (ii) The floor of the storage space shall be level and hard- surfaced, and the floor beneath garbage or recycling compactors shall be made of high - strength concrete. (d) The location of all storage spaces shall meet the following requirements: (i) The storage space shall be located on the lot of the structure(s) it serves; (ii) The storage space shall not be located in any required driveways, parking aisles, or parking spaces; (iii) The storage space shall not block or impede any fire exits, any public rights -of -way, or any pedestrian or vehicular access; (iv) The storage space shall be located to minimize noise, odor, and visual impacts to building occupants and neighboring lots; (v) The storage space shall not be used for purposes other than solid waste materials storage and access; and (vi) The storage space(s) shall be no more than 150 feet from the common entrance(s) to residences and /or service entrances to non - residential buildings located on the site. (e) Access for service providers to the storage space from the collection location shall meet the following requirements: (i) For containers two cubic yards or smaller: (1) Containers to be manually pulled for service and emptying shall be placed no more than 50 feet from a curb cut or collection location; (2) Access ramps to the storage space shall not exceed a grade of six percent; and (3) Site - access routes and entries for use by collection trucks shall be a minimum of 11.5 feet wide. (ii) For containers larger than two cubic yards and all compacted refuse containers: (1) Direct access shall be provided from the alley or street to the containers; (2) Site access routes and entries for trucks shall be a minimum of 11.5 feet wide; and (3) If accessed directly by a collection vehicle, whether inside or outside a structure, a 21 foot overhead clearance shall be provided. (f) Access for occupants to the storage space shall meet the following requirements: (i) Direct access shall be provided from the alley or street to the containers; (ii) A pick -up location within 50 feet of a curb cut or collection location shall be designated that Ordinance No 17- Page 20 of 36 Rev 3/17 LU minimizes any blockage of pedestrian movement along a sidewalk, pedestrian path, or other right -of -way; (iii) If a planting strip is designated as a pick -up location, any required landscaping shall be designed to accommodate the solid waste and recyclable containers temporarily placed within this area; and (iv) All storage space openings and access points for pedestrians shall be a minimum of five feet wide. (g) The solid waste and recyclable materials storage space access and pick -up /service specifications required in this Section, including the number and sizes of containers, shall be included on the plans submitted with the land use or building permit application for any development subject to the requirements of this Section. (h) Multifamily and non - residential mandatory recycling requirements. Multifamily, non- residential, and mixed -use development occupants shall participate in separation for recycling of the following materials that will include, at a minimum: newspapers; mixed papers; recyclable bottles, cans, and plastic containers; and compostable materials where collection services are available. All recyclable materials shall be placed in properly- labeled containers or carts as distributed by the city's solid waste collection contractor. All compostables separated for collection shall be placed in properly - labeled containers or carts. All multifamily property owners shall provide residents with a minimum total weekly volume of recycling container capacity equal to or greater than the total weekly volume of garbage capacity. To the greatest extent possible, receptacles for garbage, recycling, and compostable materials shall be co- located in one storage space. (i) The Public Works Director or designee may modify the requirements of this subsection at his or her discretion, or upon the request of the property owner, if, in the opinion of the Director, the exception is necessary. The modification must be granted in writing and may be revoked by the Director at any time if the necessity for the modification ceases to exist as determined by the Director, or designee, which determination shall not be made unreasonably. Any such revocation will be effective on a date selected by the Director, but no less than three business days from the date of notice. (8) Compliance with other applicable codes. All enclosures installed or altered under this chapter must comply with all applicable federal, state, and local regulations, including without limitation the provisions of the International Building Code and the National Electric Code as adopted in Title 13 FWRC. If any provision of this Chapter is found to be in conflict with any provision of any zoning, building, fire, safety., or health ordinance, or code of the city, the provision that establishes the higher standard shall prevail. Ordinance No 17- Page 21 of36 Rev 3/17 LU Section 11. FWRC 19.200.100 is hereby amended to read as follows: 19.200.100 Senior citizen or special needs housing. Ordinance No 17- saoedS Supped P annba ZI y d r �. •C c R c vs O. 0 ° z I)vis °e o 0.) H c R =prigs 3o iy$►a}I C & 0 c .� o u 'o > o a� '- d u v�11N 32eJ0AOD io] o0 u o v)2O.1 molt 11 s 0 c V] 2I Novo) aP!S N iupld a; N aziS iO] t y • - cn v o0 c " C t .G L .0 l IS c a 0 'o Q N O N ^C (n F3 ssaoad mamas pa1mbali N o a. SNOI.Ivi15J311 o _ 0 p a ti .0 1 VI QU U a. c t vv, N •C y 7 Ordinance No 17- 19.200.100 Senior citizen or special needs housing. (Continued) find use ... THEN, across for REGULATIONS ZONE RS SPECIAL REGULATIONS AND NOTES 8..Chapter 19.270 FWRC contains regulations regarding home occupations. 8-9. Maximum lot coverage is as follows: a. In RS 35.0 = 50% percent. For details of what may exceed this height limit. see FWRC 19.110.050 et sea. sands 5ui )Iied pannba 1 0 •8 X A anion %S Jo v.i !ay aReJano3 101 E 0 .E 2 Required Yards lean — Naga) ap!S Chapter 19.60 FWRC, Chapter 19.65 FWRC, Chapter 19.70 FWRC respectively. Way az!S 10] ssaooJd mamas paimbaj S1%101.1,1(11193 11 w Ordinance No /7- Section 12. FWRC 19.205.040 is hereby amended to read as follows: 0 U N V) 0 C 0 *CI) •0 0 0 0 0 • U 0 0 ti O N 7 a „ • 0 E ca w �r7 g (4- 0 Y 0 0 :ONE CHART LIONS: FIRST, read down to find use ... THEN, across for REGULATIONS SPECIAL REGULATIONS AND NOTES minimum interior height of 13 ft. of commercial space for any single tenant. 5. If an .onion ofa structure on the sub'ect .ror - rt is within 100 ft. ofa sin ,le- family residential zone, then that.portion of the structure shall ror Omer inrormation aoout parsmg ants parsing areas, see l.napter 19. i su rwKL. For details of what may exceed this height limit. see FWRC 19.110.050 et sea. N sands 2u!Nnd pailnba� M c 41 1:3 aximums aJnPnJls > — > C » � > C N W 2 N.0 N N N (A i If I 22eianOD pal d ,D 4- v M N g N E E JEaa 00 uired 1 a) N in Chantal 19.55 FWRC, Chapter 19.60 FWRC, Chapter 19.65 FWRC, Chapter 19.70 FWRC respectively. luOJd N , ms j07 b0 '- 0 R C C y `g' ._ > .0 G 0 c .3 A r v v r .0 N '= L E V) SSaaOJd Ma!Aa11 pailnbaj y o a❑ SNOIId1n9Tan W j� > E ,r . 1-c = .= w-,3 00 ,c Y .E N VC) Ordinance No 17- 19.205.070 Senior citizen or special needs housing. USE ZONE CHART DIRECTIONS: FIRST, read down to find use ... THEN, across for REGULATIONS SPECIAL REGULATIONS AND NOTES 2. The city will determine the number of dwelling units or occupancy rooms or suites in the proposed development and may permit or require modification of the required yard, lot coverage, height, landscaping, and other similar dimensional and site design requirements based on the following criteria: a. The specific nature of the occupancy and the persons that will be housed in the proposed development. b. The size of the dwelling units or occupancy rooms, or suites and the specific configuration of and facilities within these units, rooms or suites. c. The impacts on nearby residential uses of the proposed development. c.._ ae...a_ ,.c...t,... ... _.. ...___a .t.:., on . in nen W c) N muds 2UI ),iEd pa inbali `o ` _ ch 5 cif .E .0 . _ c c w 0 V1 H y G o °- 7 Lt for each unit 1 — N Co N co V] ' G 2lnpnllS -. 3o l4 H C C' N M OM by p ^° M y CO k3 :2 ; > c9 >� ; > .' Co .o C o ct • v c o -• — > d .C. cc N Ct CCI 5 S N at RI N V] e e RI — aBEJaAO310] c tol ..+ N Cr) N E c =II ,n ro C1 v y 0 1-I tired Yt N 0.) Process 1, 11, 11I and IV are described in Chapter 19.55 FWRC, Chapter 19.60 FWRC, Chapter 19.65 FWRC, Chapter 19.70 FWRC respectively. Ii o N V; aziS 101 N oo ^ „ °' N Q v o 1-- (n V] C SSaO01d Ma!Aa2I pannbaa 0 o as SNOI1V1n9Tan CA o1 on _ C .N 7 a N V) 5 .0 . C N i t U 5 `- g 'G .n .g" C Ordinance No 17- 19.205.070 Senior citizen or special needs housing. (Continued) USE ZONE CHART DIRECTIONS: FIRST, read down to find use ... THEN, across for REGULATIONS SPECIAL REGULATIONS AND NOTES shall not exceed 30 ft. above.averane building elevation and the structure shall be set back a minimum of 20 ft. from the property line of the residential zone. . ... a....a...uava.uaa.a... aa.v a Fa.n ..b 4311,1 ya.n ..b at,aa, JGG c.aatnc. a 7.. _.v a v. as,,. N saondS Ou! )Iied pai nball Maximums ain onils jo 1q$'ay a2ulaA0D 101 Minimums MMON aired Y 5, N in Process I, 11, 1I1 and IV are described in Chapter 19.55 FWRC, Chapter 19.60 FWRC, Chapter 19.65 FWRC, Chapter 19.70 FWRC respectively. luau az'S 10] ssaocud Ma!nam pannbaN SNOI.LV11193ufF cA Ordinance No 17- Section 14. FWRC 19.215.050 is hereby amended to read as follows: tri Ordinance No /7- W C) W MM N saaeds Sui )JJgd pannba . „I _ ^i anion-US 3o xyB�aH o = d g „ .i 5D g A . °o , max 00 -0 I v Y O a — (Naga) apis lu0 ki azis 101 0 z ssaaoJd mainaTi pannbaj 8 SNOI1V1ni3xn W ti Y :fi C N �p Cll y.c Y N : Ordinance No /7- Section 15. Chapter 19.215 FWRC is hereby amended to add a new section 19.215.150 to read as follows: needs housin 9.215.150 Senior citizen or s 0 U d) y i_ t' h cn cat O' cn c cat 0 0 cn U N N z 0 w L Ordinance No 17- TIONS AND NOTES floor-to-ceiling height of 13 ft. 3. If any portion of a structure on the subject property is within 100 ft. of a.single- family residential zone. then that portion of the structure shall not 8. Refer to Chapter 19.125 FWRC, Outdoors, Yards, and Landscaping, for appropriate requirements. 9. For sign requirements that apply to the project, see Chapter 19.140 FWRC. r VI VIutCI IULUIIlIAIIVII dUULLI pill King allu um Klllg Leeds, see 4napter 1. %.1JV. rwKl.. Fnr dntalc of what may PvrPP.i this hP6.ht limit CPP PUTQC 10 tin ncn W zz o as N REGULAT REGULATIONS SPECIAL G .° °3 C .= .F..-,I= of s C U .N Q 7 42 a 5 N 3I V cu C 4o N g G L ._ z �° .. c) y' co O N �: 0 V) ^' ;I sands wupind pannba� Minimums cn 2 Vl 0 M v7 ajnlonIls — Jo 142!aH mall housing: same as these requirements Stand - alone senior citizen or.soecial � ca o N oo 3 cac n cn o c i v) uired (q u3) apes Chaster 19.60. FW RG, Chaster 19.65 FWRC_ 1uoJd o z 07!S 101 .. 3 a ` i 0 a ssao0)d mainaJ pannbaa S OI1V1f 91Un J J �I p v) o .� T,', U . c Y t :_d-c, y Ordinance No 17- Section 16. FWRC 19.220.050 is hereby amended to read as follows: \ 0 k6 © USE ZONE CHART DIRECTIONS: FIRST, read down to find use ... THEN, across for REGULATIONS SPECIAL REGULATIONS AND NOTES parking, which can be surface parking. 6. Parking spaces shall be provided as follows: a minimum.of 48 square feet and has a minimum dimension of six.feet. 8 .12. No maximum lot coverage is established. Instead, the buildable area will be determined by other site development requirements, e.g., required buffers, parking lot landscaping, surface water facilities, among others. 9 13. For community design guidelines that apply to the project, see Chapter 19.115 FWRC. }A 14. Refer to Chapter 19.125 FWRC, Outdoors, Yards, and Landscaping, for appropriate requirements. -14 15. For sign requirements that apply to the project, see Chapter 19.140 FWRC. 16. For affordable housing requirements, see FWRC 19.110.010. For details of what may exceed this height limit, see FWRC 19.110.050 et seq. 0 CO sands 2u d AI q trl 3 k $ 2 1 7 1 t mAS J°1' 7q a d\ \2/2 @ m 2 —\ /w _ Minimums Required Yards , k a3 =a —c 8i ®al -c } / \ \ \/k a ] ) A4 �o)�S. Process 1, II, 111 and IV are described in Chapter 19.55 FWRC, Chapter 19.60 FWRC, Chapter 19.65 FWRC, Chapter 19.70 FWRC respectively. S G z O aM am pmbw § a § /t)t /_ - =;z�= SNOLLY1119311-11. / & E \ ƒ\ \\ -0 - \ \\ Ordinance No 17- Section 17. FWRC 19.220.080 is hereby amended to read as follows: 19.220.080 Senior citizen —or Sspecial needs housing 0 O U a) 0 b 0 on a) 0 • U .fly 0 N U a) c F O a) a) .�i ai bA 0 w USE ZONE CHART DIRECTIONS: FIRST, read down to find use ... THEN, across for REGULATIONS SPECIAL REGULATIONS AND NOTES 7. Chapter 19.270 FWRC contains regulations regarding home occupations. 8. The subiect property must provide usable open space in a total amount equal to at least 100 so..ft. per dwelling unit and may include common.00en ror otner intormation about parking and parking areas, see Chapter 19.13U FWRC. Fnr details of what may exceed this heinht limit see. FWRC 10 110 ()in et een W zL) o as N saouds 2UPPEd pannba�l . I `o d..o'- I' bi ° = pro, .c A 8 ou. id. oN cnsc° y� , oc =I ,X g y £ G aJn njls oupaH N IU c .o 2 a o „:o > m c — Jna� housing: same as 1 Stand -alone senior riti,en nr cnerial oo mi 0 o c C.:1-.I tired Yi its u in ,n I'rocess I, 11, 111 and IV are described in Chapter 19.55 FWRC, Chapter 19.60 FWRC, Chapter 19.65 FWRC, Chapter 19.70 FWRC respectively. 1Ua/ oI CI) arVD azis lot o z ssaaad Ma!AM pannbaN y • H c .3 a c a `o ti a SNOI1V1n9 I ' o p C E a d = y 8 . U d y. 8 a cn "U (n C L Z1 -a Ordinance No 17- Section 18. FWRC 19.225.070 is hereby amended to read as follows: 0 \ 7 f cn 0 \ 0 / k ) q ƒ 0 e 0) ( ƒ k \ ± 3 \ % / G / \ \ { \ _ / k � � k [ § 2 ecial needs hou senior citizen, or s \ es1 cn § / \ \ USE ZONE CHART DIRECTIONS: FIRST, read down to find use, .. THEN, across for REGULATIONS ZONE CC -C SPECIAL REGULATIONS AND NOTES ......................... .... ..,,... ... ,.............,...., .,.,,... �. —.,,,.,.,..., 4. Retail uses allowed in this zone may.be.permitted_on the eround_floor of stacked senior citizen or special needs housine with a minimum floor -to- study documents that less common open space will be adequate to serve the needs of the residents. (Continued) Chapter 19.55 FWRC, - ror Omer fluorination arrow parKing anu paring areas, see t,napter rv. flu r wto—. Chapter 19.60 FWRC, Chapter 19.65 FWRC, _. _ _.. Fnr details of what mav exceed this height limit see FWRC 19 110 050 et cen somas s pd » \ _ �! q« ;} e] 2 /\ ] \{�2 �\ } o c ac.®f \a \\ /\ k_§ En = _ \/k /jjp. }/\ \_ r \ & E - �'� ®a }\ 2,2�� • / 9 § E $ — Required Yards ,t � \C \\ Et§5= \o `` §;§� - \0 \\)\( Stand -alone Ssenior citizen or special needs housing: & a ,.-." _2y \u§ . �� S2 i 7S) / z s a © >J iA ƒ 82 § 2a. § /- s mV Sa93I > ro ) LII j \ ] 9 §© • u) ©]2 ^ j • § ]= \ / \\ $0!2£ /\ Ordinance No /7- senior citizen USE ZONE CHART DIRECTIONS: FIRST, read down to find use ... THEN, across for REGULATIONS ZONE CC -C SPECIAL REGULATIONS AND NOTES 16. For affordable housing requirements, see FWRC 19.110.010. -1-2 17. For provisions that relate to the keeping of animals, see Chapter 19.260 FWRC. 4.3 18. Single -story buildings may not exceed a total ground floor area of 16,000 gross sq. ft., unless approved under the provisions of FWRC .19.110.080, or approved by the director for minor additions such as entry structures, lobbies, seating or dining areas, bay windows, and similar features; provided that such addition(s) shall not exceed 1,000 sq. ft. per building in any one consecutive 12 -month period. 44 19. No more than 16,000 sq. ft. of new single -story construction may occur on a subject property, excluding increases approved under the provisions of FWRC 19.110.080 and minor additions approved by the director under note -13 17. 4-5-20. Multiple -story buildings are not subject to notes 4-3 18 and 4-4 19; provided that each floor contains at least 75% percent of the gross sq. determined by the Community Development Director or designee that such requirement is not feasible, surface Parking may be screened from public view by a compact evergreen hedge. a solid wall or fence, or in a manner approved by the Community Development Director or designee. ... ....■••• ....... "a..m........ . t.a.....g aa.. ya■ n.41115 a.., , .. ,114:471,1 . 7.1Jv ... For details of what may exceed this heivht limit see FWRC 19 110 090 et sen sands 2uplied pannbali E E c 2 aInpnuls JO l4$!aH i - I Process 1, 11,111 and IV are described in Chapter 19.55 FWRC, Chapter 19.60 FWRC, Chapter 19.65 FWRC, Required Yards Jua21 (IMO ap's zuoi.1 aZ!S lo] ssaaoJd mainab paiinball snIOI1v'1193M W rn Ordinance No 17- CD. Section 19. FWRC 19.230.060 is hereby amended to read as follows: 0 w N USE ZONE CHART DIRECTIONS: FIRST, read down to find use... THEN, across for REGULATIONS ZONE CC -F SPECIAL REGULATIONS AND NOTES minimum floor -to- ceiling height of 13 ft. 4 5. Building height may be increased from the permitted outright height of 70 ft. to 85 ft. in exchange for providing publicly visible streetscape amenities, as defined in FWRC 19.05.190, along the right -of -way; the siting and design of which shall be approved by the director. S 6. Structures on property that adjoins a single- family - residential zone shall be set back a minimum of 20 ft. from the property line For other information about parking and parking areas, Chapter 19.130 FWRC. Fnr details of What may exceed this height limit cm. FWRC 10 1111 nin et cPn sands 2UPJgd paJmbal 2 .E a t ea F. .. 3 'c v 3- c ° 0;2 c o o ` ` E y Y1 v v ay c ct a °N N cncv g "- o 'c : '-' _ ou'c 5U o.5 c . .5 t 5 U a mo 8 rn .2 o°_ 7 E c aJnpru)s 30 3Lj I H V) °' ,c, v1i _ Required Yards JEa11 units, senior housing, or special needs Stand -alone Ssenior citizen or special needs housing: . y °l .0 1 w = NI c 3 N O .4 R (yoga) apis Process 1, 11, 111 and IV are described in Chapter 19.55 FWRC, Chapter 19.60 FWRC, Chapter 19.65 FWRC, Chapter 19.70 FWRC respectively. )UOJM az!sl01 c 0 z ssaaoJd mamas pannbag r, 1, 2 o ti c Z o a L ,n ° A-. a. SA[OI LV IfI93N W > E y .E E g .y5 to Y3 E OD On ' y- O 9 OA .c ° _ j s c �Y— O °iy Y� 6 � 'c s °3 H n o , cZ.2,v Ordinance No 17- 0 0 a) 0 0 'C vii cn • N C i+ O U � cn 0 U a) a> 0 O 7 0 cn 0 senior citizen or s 7 N USE ZONE CHART DIRECTIONS: FIRST, read down to find use ... THEN, across for REGULATIONS ZONE CC -F SPECIAL REGULATIONS AND NOTES 4-3 17. For provisions that relate to the keeping of animals, see FWRC 19.260.010 et seq. 4-4 18. Single -story buildings may not exceed a total ground floor area of 16,000 gross sq. ft., unless approved under the provisions of FWRC 19.1 10.080, or approved by the director for minor additions such as entry structures, lobbies, seating or dining areas, bay windows, and similar features; provided that such addition(s) shall not exceed 1,000 sq. ft. per building in any one consecutive 12 -month period. 1-3 19. No more than 16,000 sq. ft. of new single -story construction may occur on a subject property, excluding increases approved under the ....... ................a.,.....,.,.,., rw.....b mm Fal nu.b a. vaa, 7. t ✓v ... ANA,. For r1Pthilc of what may PYrPM this heiuht limit- caP FWRC 10 110 n50 Pt cPn sands SuiI>ed pannba1 Minimums a>npnmS Jo ;g0pH uired Yards >ea'd — (g0ea)ap!S s,napter t7.» rwrti„ Chapter 19.60 FWRC, Chapter 19.65 FWRC, Chapter 19.70 FWRC respectively. 1U01: 3ZIS NY] ssa0o1d Mainaa pannbaI SNOI1V1n9DN y Ordinance No 17- • 10 LL Z U suds-Outtled paJtabott Jo 145!a1-1- h OteRYai3 I S f). s zooid ma!AaN pa)! n bat SN-011VT-I9INft Ordinance No 17- Section 21. Severability. The provisions of this ordinance are declared separate and severable. The invalidity of any clause, sentence, paragraph, subdivision, section, or portion of this ordinance, or the invalidity of the application thereof to any person or circumstance, shall not affect the validity of the remainder of the ordinance, or the validity of its application to any other persons or circumstances. Section 22. Corrections. The City Clerk and the codifiers of this ordinance are authorized to make necessary corrections to this ordinance including, but not limited to, the correction of scrivener /clerical errors, references, ordinance numbering, section /subsection numbers, and any references thereto. Section 23. Ratification. Any act consistent with the authority and prior to the effective date of this ordinance is hereby ratified and affirmed. Section 24. Effective Date. This ordinance shall be effective (5) days after passage and publication, as provided by law. PASSED by the City Council of the City of Federal Way this 16'h' day of May 2017. CITY OF FEDERAL WAY: JIM FERRELL, MAYOR ATTEST: STEPHANIE COURTNEY, CMC, CITY CLERK APPROVED AS TO FORM: J. RYAN CALL, CITY ATTORNEY FILED WITH THE CITY CLERK: PASSED BY THE CITY COUNCIL: PUBLISHED: EFFECTIVE DATE: ORDINANCE NO.: Ordinance No 17- Page 36 of 36 Rev 3/17 LU