022-22 - Ordinance - Amendment to Annexation Agreement with GEM1ORDINANCE NO.022-22
AN ORDINANCE OF THE CITY OF PORT ORCHARD, WASHINGTON, AUTHORIZING THE
MAYOR TO EXECUTE AN AMENDED DEVELOPMENT AGREEMENT WITH MCCORMICK
COMMUNITIES, LLC FOR THE MCCORMICK WEST DEVELOPMENT; PROVIDING FOR
SEVERABILITY AND CORRECTIONS; AND ESTABLISHING AN EFFECTIVE DATE.
WHEREAS, pursuant to RCW 36.706.170, the City Council has the authority to review and
enter into development agreements that govern the development and use of real property within
the City; and
WHEREAS, the City Council has adopted standards and procedures governing the City's
use of development agreements, codified at Chapter 20.26 of the Port Orchard Municipal Code
(POMQ and
WHEREAS, McCormick Communities, LLC's predecessor, GEM 1 LLC entered into a pre -
annexation Development Agreement with Port Orchard for the Development known as
"McCormick West" which was titled "Annexation Agreement No. 085-11 for McCormick West"
(hereinafter "Development Agreement"); and
WHEREAS, Port Orchard annexed McCormick West on November 22, 2011 by passage of
Ordinance No. 018-11; and
WHEREAS, the City and McCormick Communities, LLC have prepared an Amendment to
that Development Agreement, for the purposes of extending the term of the Development
Agreement, waiving certain vesting to prior development standards, establishing new applicable
standards, addressing minor modifications, updating applicable roadway standards, and
establishing the sewer capacity reservation for the completion of the McCormick West
Development; and
WHEREAS, the Amendment of the Development Agreement is attached to this Ordinance
as "Exhibit A"; and
WHEREAS, on April 18, 2022, the City's SEPA official issued a determination of non -
significance for the proposed Amendment of the Development Agreement and there have been
no appeals; and
WHEREAS, on May 10, 2022, the City Council held a public hearing on the proposed
Amendment of the Development Agreement, and did not receive comments related to the
Development Agreement, and
WHEREAS, the City Council, after careful consideration of the Amendment of the
Ordinance No. 022-22
Page 2 of 3
Development Agreement and all public comments and testimony, finds that the Amendment
of the Development Agreement is consistent with the City's Comprehensive Plan and
development regulations, the Growth Management Act, Chapter 36.70A RCW, and that the
amendments herein are in the best interests of the residents of the City; now, therefore,
THE CITY COUNCIL OF THE CITY OF PORT ORCHARD, WASHINGTON, DO ORDAIN AS
FOLLOWS:
SECTION 1. Findings. The City Council adopts all of the "Whereas" sections of this
ordinance and all "Whereas" sections of the Amendment of the Development Agreement as
findings in support of this ordinance.
SECTION 2. Authorization. The City Council approves of and authorizes the Mayor to
execute an Amendment of the with McCormick Communities, LLC as provided in "Exhibit A"
of this Ordinance.
SECTION 3. Severability. If any section, sentence, clause or phrase of this Ordinance
should be held to be invalid or unconstitutional by a court of competent jurisdiction, such
invalidity or unconstitutionality shall not affect the validity of constitutionality of any other
section, sentence, clause or phrase of this Ordinance.
SECTION 4. Corrections. Upon the approval of the city attorney, the city clerk and/or
code publisher is authorized to make any necessary technical corrections to this Ordinance,
including but not limited to the correction of scrivener's/clerical errors, references,
Ordinance numbering, section/subsection numbers, and any reference thereto.
SECTION 5. Effective Date. This Ordinance shall be published in the official
newspaper of the city and shall take full force and effect five (5) days after posting and
publication as required by law. A summary of this Ordinance may be published in lieu of
publishing the entire Ordinance, as authorized by state law.
PASSED by the City Council of the City of Port Orchard, APPROVED by the Mayor and
attested by the City Clerk in authentication of such passage this 28th day of June 2022.
►�unui��++qr
PORT
Cs .•GQ A�.'.
_. SEAL"
Robert Putaansuu, Mayor
Ordinance No. 022-22
Page 3 of 3
ATTEST:
Bran y �allac�eMMC, City Clerk
APPROVED AS TO FORM:
t
(;�m
01ni-fer Ro I
rtson, City Attorney's Office
PUBLISHED: July 1, 2022
EFFECTIVE DATE: July 6, 2022
SPONSOR:
Mark Trenary, Council
EXHIBIT A: MCCORMICK COMMUNITIES, LLC AMENDMENT TO DEVELOPMENT
AGREEMENT FOR MCCORMICK WEST
MCCORMICK COMMUNITIES 202208100091
Amended Agreement Rec Fee: $214.50
08/10/2022 11:50:40 AM Page 1 of 12
Paul Andrews, Kitsap County Auditor
Name and Mailing Address
��c�Z� lG� Cat►-� �-2-�� t ��s
The Recorder is required to use only the information
you provide on this cover sheet to index the document.
Type or print legibly.
Document Title(s):
Auditor's File Number of Document (s) Referenced:
Grantor(s) person(s) that conveys, sells or graritt�rlterest in property:
GV-1-1
Grantee(s) person that buys,
Y�� C�`56
of property is made:
Abbreviated Leal D i 'orl�_�
• Quarter; -Quarter eot ownship, Range (and Government lot # if applicable); OR
• Plat/Condo Na , t or u number, building or block number; OR
• Short Plat, Large L n ber, lot number and auditor file number
Tax Parcel Number:
04/25/14
202208100091 08/10/2022 11:50:40 AM Page 2 of 12
AMENDMENT OF ANNEXATION AGREEMENT No. 085-11
McCormick West
This AMENDMENT OF ANNEXATION AGREEMENT No. 085-11 ("Amendment
Agreement") is entered into between the City of Port Orchard, a Washingt municipal
corporation ("City" or "Port Orchard") and McCormick Communities, LLC, a Washin limited
liability company ("McCormick"). City and McCormick are each a "Party" d to e er the
"Parties" to this Amendment Agreement.
RECITALS
A. In 2011 the City and McCormick's predecessor in interest, G 1 red into the
"ANNEXATION AGREEMENT No. 085-11 for Mc o We "Annexation
Agreement"). McCormick West comprises the McC ick s Ma Plan and
Preliminary Plat. The Annexation Agreement, a in it Recit 1 , is a development
agreement authorized by RCW 36.70B.17 at applies area subject to the
McCormick West Master Plan and Prelimin Plat tha:te ity was preparing to annex
to the City.
B. On November 22"d, 2011 the City approved ordi c annexing McCormick West
subject to the Annexation Agree t. McCormick West is a portion of the larger
McCormick Property that is describ i the CREDIT AGREEMENT FOR CAPITAL
FACILITY CHARGES ("Credit Agree"that the Parties are executing in sequence
with this Amendment Agreement. Co i k West portion of the larger McCormick
Property is depicted on Exhibit o t dment Agreement.
O
C. As set forth in the Credit eem Cormick is financing and constructing five
projects on the City's cu. t 1 rovement Plan (hereafter the Five CIP Projects)
that the City is unable ce nstruct itself. By doing so, McCormick is creating
water infrastructure th t will en b e the City to supply water to the McCormick Property
as the City agr�jd tq d i he 1 9 PSA between the City and McCormick's predecessor,
the McCormick to Co a
D. By con tSnae
ive C� Projects, McCormick also is constructing water infrastructure
that will i to provide water to areas of the City outside of the McCormick
Propertyck s construction will increase the City's total water storage capacity
by "�Ils
e zones and create infrastructure to serve the entire City in the event
of sater supply or storage in other areas of the City.
E.
of
2JP--stimAtes the total cost of the Five CIP Projects to be $11,840,625. McCormick
ce1 partial reimbursement for this investment in the Five CIP Projects by means
ter CFC Credit described in the Credit Agreement. As stated in Section 3 of the
it greement, McCormick and the City anticipate that McCormick will construct the
CIP Projects within the next five years. (although drilling of Well 12 may take longer
.ise the City needs to first secure water rights under the Foster program), but
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McCormick will receive the anticipated credit per ERU over the next 20 years, and may
never receive full credit, depending on the market for lots within the McCormick Property.
F. When the $11,840,625 invested by McCormick in the Five CIP Projects is adjusted for the
time value of money over 20 years, the additional financing cost to McCormi 's between
$1,933,991 and $2,544,900, depending on the rate at which new ERUs are deve d. This
financing cost is not reimbursable under the CFC Credit Agreeme t i esents
significant public benefit to the City and constitutes consideration for the 1 to 'n into
this Amendment Agreement to extend the term of the Annexation e t to co 'de
with the term of the Credit Agreement, so that sufficient ERUs ar otentia avail 1 to
provide the credits needed to defray a meaningful portion of c is of i ancing and
building the Five CIP Projects.
G. In addition, Section 3 of the Annexation Agreement vest cCorm'c to er Section
16.30 of the Port Orchard Municipal Code, we do , and McCormick is
willing to forgo its vested rights and instead ' to the Ci ' r lations in its current
Unified Development Code, subject to one m ification se f h below in Section 3. This
agreement by McCormick to waive its veste ight to Sect o 16.30 of the former Code
constitutes additional consideration to the Ci o ter int t is Amendment Agreement.
H. On March 14, 2022 the City and ormick executed the Credit Agreement, and the
Parties are now executing this A n nent Agreement while also amending the
Development Agreement for McCormic ods Phases III, IV, and V. These three
agreements are intended to be con loget r s part of a larger agreement between the
Parties, with each agreement c stit t' of the consideration for the other two
agreements. 0 0
I. On April 17, 2018 the C' n e in an Agreement with Winward McCormick, LLC
which is related to rmi mmunities, LLC for the purpose of Winward
McCormick, L C co s ructing S wer Lift Station #1. The construction of Sewer Lift
Station #1 nes.ad 'ti al c ideration for this Amendment.
J. In i
the
1.
ises and undertakings described above together with those in
ty and McCormick agree as follows:
AGREEMENT
ation reement affirmed. The Annexation Agreement, together with the vested
that M ormick obtained pursuant to RCW 58.17.033(1) when it submitted a
;t 'cation for the preliminary plat of McCormick West and when the Kitsap
oard of County Commissioners approved this Preliminary Plat, are affirmed
*modified by this Amendment Agreement.
;ion of term: The term of the Annexation Agreement and of the associated vested
are hereby extended to coincide with the term of the Credit Agreement, which shall
of Annexation Agreement No. 085-11 (McCormick West)
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be 20 years from execution of this Amendment Agreement or until McCormick receives
the Maximum Water CFC Credit as described in Sections 6 and 11 of the Credit
Agreement. However, in no case shall this Agreement extend beyond the twenty-year
extension term.
3. Section 3.c Vesting Waived. McCormick waives its Section 3.c vesting\t�q former
stormwater control standards and to former drainage regulations. l� \
4. Section Id Vesting Waived; Updated Roadway Cross Sections. o ick wai e its
Section 3.d vesting to the Road Cross Sections that were attache a Appe x D. ew
Appendix D with applicable Road Cross Sections is attac d o this mendment
Agreement and will replace the Appendix D to the Annexatio re e ese updated
Road Cross Sections will apply to future phases of the dev m t. es currently
under LDAP/SDP permit application review that have u it zed the oad ss Sections
from Appendix D of the Annexation Agreement nee t use t e pdated Road Cross
Sections contained in this Amendment.
5. Section 3.e Vesting Waived. McCormick w i es its Section.e vesting to former POMC
16.30 and agrees that development of reside is structu s and lots within McCormick
West shall be consistent with Title 20 as it ex' s as o the date of execution of this
Agreement, provided that POM 20.32.020(6)(c) shall not apply and POMC
§20.34.030(5)(d) and (6)(d) are modi o that rear yard setbacks from alleys for both
principal and accessory structures shall b inimum four (4) feet; and provided further
that in the event of conflict b n pe ' 1 regulations within Title 20 and the
development depicted and appr ed e ce of the Preliminary Plat, including any
approved amendments tort Pre ' i P , the Preliminary Plat shall control. However,
if major modifications are to t e ' inary Plat, then those modifications would be
based on the then-curren a e ulations and that plat would not be vested to an
earlier vesting date un i er t e e elopment Agreement, or this Amendment. Further,
provided, that uture wner(s) any of the parcels of the Property to which this
Amendment ie�m t the' ption, waive this or subsequent vesting.
6. Section 1.1 A qi eikde&�&ction If is hereby amended to read as follows:
3
Final Pla nor fiwdifications. The preliminary plat of McCormick West was designed
and appro e a ed on kitsap County's system for approval of minor modifications to the
pre*iat Ong the final plat review and approval process. The Parties recognize
thatandards for distinguishing between minor modification, which may be
apstaff, and major modifications, which require re -review by the Hearing
an more stringent than the County's. During the final plat process for
st, the City staff is authorized to permit minor modifications without the
nece it of further review by the Hearing Examiner so long as the modification is
ons. tent with the Department of Ecology's Stormwater Management Manual in effect at
e ime of the modification and also does not (1) increase or decrease the number of
aut orized homes by more than 30 dwelling units; (2) increase the number of lots by more
of Annexation Agreement No. 085-11 (McCormick West)
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than 30 lots (however, modifying single-family dwelling units to attached (zero lot line)
housing units would qualify for a minor modification); (3) increase traffic volumes above
the volume contemplated by the 2021 Development Agreement for Transportation; (4)
require modification or alteration of a critical area or buffer that was not contemplated by
the preliminary plat approval or as described in Section 8 of this Amendment; o (5) reduce
the amount of open space or recreational facilities contemplated by the preli ary plat
approval. ,
7. Section 4.a Extension. The Term of this Agreement is addresse tion 2 his
Amendment, therefore, the option for afive-year extension addre d in S ti n 4.a f he
Annexation Agreement is no longer appropriate and McCormick ai es its r g t to request
such an extension under this Amendment.
8. Critical Areas Vesting and Updating. Critical are s were Otblisfied? under the
preliminary plat approval process, including e an er s a dards. McCormick
remains vested to these critical area pe mane sta r . The prior wetland
categorization will also remain in place. Ho e er, since et ands do migrate and change
over time, updated wetland delineations will required at h time of submittal of a land
disturbing activity permit so that the locations o e buff s and wetland boundaries will
be consistent with the then -present site condition .
Sewer Capacity Reservation. App v of this Agreement by the City Council is
equivalent to issuance of a sewer ca ac' servation certificate (CRC) under POMC
Chapter 20.180 for 1,575 dwellin he r capacity reservation shall expire if this
Agreement is not subsequently ecu e e Mayor, and once executed, the capacity
reservation will expire v it this r e111 e
10. Default. Failure or della i r�P-,�fty to perform any term or provision of this
Amendment Agreeme a co s u a default. In the event of alleged default or breach
of any terms o condit o s oft Amendment Agreement, the Party alleging such default
or breach s g' e t e ther rty not less than thirty (30) days' notice in writing,
specifying h t ed default and the manner in which said default may be
cured. in s thi 0) day period, the Party charged shall not be considered in
default o e f to ination or institution of legal proceedings.
After notice piral"ion of the thirty (30) day period, if such default has not been cured
or isjio el diligently cured in the manner set forth in the notice, the other Party to this
A dment reement may, at its option, institute legal proceedings pursuant to this
Am ment reement.
11. - a of Breach. The failure of a Party to insist upon strict performance of any of
the c e nts and agreements contained herein, or to exercise any option herein conferred
one or more instances shall not be construed to be a waiver or relinquishment of said
ants, agreements, or options, and the same shall be and remain in full force and effect.
of Annexation Agreement No. 085-11 (McCormick West)
ig& 4
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12. Conflict. In the event of any conflict between this Amendment Agreement and the Port
Orchard Municipal Code, this Agreement shall control.
13. Resolution of Disputes and Governing Law. If any dispute arises between the City and
McCormick under any of the provisions of this Amendment Agreement, juris on of any
resulting litigation shall be filed in Kitsap County Superior Court, Kits County,
Washington. This Amendment Agreement shall be governed by con t ed in
accordance with the laws of the State of Washington. The non-prevai 1 i any
action brought to enforce this Amendment Agreement shall pay the es' ex ses
and reasonable attorney's fees.
14. Written Notice. All written communications regarding enfo en r alie ed breach of
this Amendment Agreement shall be sent to the parties at t s li elow, unless
notified to the contrary. Unless otherwise specified, an ritten o .ce h under shall
become effective upon the date of both emailing ilin b regi e ed or certified mail,
and shall be deemed sufficiently given if sent e a dresse t address stated below:
McCORMICK:
Eric Campbell Rob lut ayor
12332 NE 115th ansuPlace City of Port Orchard
Kirkland, WA 98033 16 Prospect Street
eric@mspgroupllc.com o Orchard WA 98366
a suu@cilyofportorchard.us
Nick Tosti
805 Kirkland Avenue,*ite 2 opy shall also be transmitted to the City
Kirkland, WA 98033 lerk at the above address.
nicktosti@gmail.com
15. Assignment. I the e e t that Cormick assigns the Credit Agreement in accordance
with Sectio f e r it A ement, this Amendment Agreement shall be deemed to
be simultan use s e e same assignee.
16. Modifi a 'o aivef,./alteration, or modification of any of the provisions of this
Amendm nt n hall be binding unless in writing and signed by a duly authorized
representa iv re e Ci and McCormick.
17. Sev abili . e provisions of this Amendment Agreement are declared to be severable.
If rovisi of this Amendment Agreement is for any reasons held to be invalid or
��o ti by a court of competent jurisdiction, such invalidity or unconstitutionality
t a ect the validity or constitutionality of any other provision.
aith and Due Diligence. The Parties agree to perform all obligations under this
rent Agreement in good faith and with due diligence.
of Annexation Agreement No. 085-11 (McCormick West)
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19. Binding on Successors. The rights, obligations, conditions, and interests set forth in this
Amendment Agreement shall run with the land and shall inure to the benefit of and be
binding upon McCormick, and its heirs, personal representatives, successors. and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement on this day of _
, 2022.
MCCORMICK COMMUNITIES, LLC
By:
Its: _ + c he
OVED AS TO FORM:
Patrick Schneider
Attorney for McCormick Communities
E
CITY OF PORT O
By:_�
Its: Mayor
Port Orchard
Brandy Wallace -
Port Orchard ,q ,ty„gjerk
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✓ ��i
o
_ SEAL
/N. cry ^qco.
OFLVA
ent No. 085-11 (McCormick West)
202208100091 08/10/2022 11:50:40 AM Page 8 of 12
STATE OF WASHINGTON )
) ss.
COUNTY OF KITSAP )
I certify that I know or have satisfactory evidence that Robert Putaansuu is th rson who
appeared before me, and said person acknowledged that he signed this instrument, on h stated
that he was authorized to execute the instrument and acknowledged it as the Ma Po chard
to be the free and voluntary act of such party for the uses and purposes mentioned in the �'—sifument.
Dated:I)IV 20_D0
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aexation Agreement No. 085-11 (McCormick West)
-366922-0037
202208100091 08/10/2022 11:50:40 AM Page 9 of 12
STATE OF WASHINGTON )
ss.
COUNTY OF �� )
I certify that I know or have satisfactory evidence that n(,_ Ct-NA
who appeared before me, and said person acknowledged that (he/she) signed this ins
oath stated that (he/she) was authorized to execute the instrument and acknowledgpdji
�^ of McCormick Communities, LLC to be the free and voluntary act of suc
uses and purposes mentioned in the instrument.
L
Dated: ��i`1 Z1� 20 2l-
NOTARY PUBUC
STATE OF WASHINGTON
ANDREW 0 MARSHALL
MY COMMISSION EXPIRES
FEBRUARY 26, 2025
COMMISSION NO.164918
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or
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of Washi g on, residing at:
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My Commission expires: O 7 7-Sr
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