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021-22 - Ordinance - Amendment to DA with MCCormick Communities, LLCORDINANCE NO.021-22 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 WOODS DEVELOPMENT, PHASES III, IV, AND V PRELIMINARY PLATS; PROVIDING FOR SEVERABILITY AND CORRECTIONS; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, pursuant to RCW 36.7013.170, 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 (POMC); and WHEREAS, McCormick Communities, LLC's predecessor, GEM 1 LLC entered into a Development Agreement with Port Orchard for the Development known as "McCormick Woods", Phases III, IV, and V Preliminary Plats and such Development Agreement was recorded on September 16, 2013; 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 timing and scope of the development of the St. Andrew's Park to be located within the 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 public comment related to the proposed Development Agreement; and WHEREAS, the City Council, after careful consideration of the Amendment of the 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 Ordinance No. 021-22 Page 2 of 3 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. ST: Brandy Wallace, MIVIC, City Clerk S44 ,� Robert Putaansuu, Mayor Vim••.` G �9�,a��S� -SE • Ordinance No. 021-22 APPROVED AS TO FORM: e ifer RoIrtson, City Attorney's Office PUBLISHED: July 1, 2022 EFFECTIVE DATE: July 6, 2022 SPONSOR: 1 Mark Trenary, Councilmember Page 3 of 3 EXHIBIT A: MCCORMICK COMMUNITIES, LLC AMENDMENT TO DEVELOPMENT AGREEMENT FOR MCCORMICK WOODS, PHASES III, IV, and V PRELIMINARY PLATS MCCORMICK COMMUNITIES 202208100090 Amended Agreement Rec Fee: $217.50 08/10/2022 11:50:40 AM Page 1 of 15 Paul Andrews, Kitsap County Auditor Name and Mailing Address mr_% 4-uraL r-C7�)8-t 0-L01-:01L 6 5 Grantor(s) person(s) that conveys, sells or grathterest in property: Grantee(s) person that buys, receives",orjo of property is made: Abbreviated Leg I e 'sri 'ot�=� • Quarter u ection, ownship, Range (and Government lot # if applicable); OR • Plat/C n o t or urn mbar, building or block number; OR • Short lat, ge bar, lot number and auditor file number Tax Parcel Number: 04/25/14 202208100090 08/10/2022 11:50:40 AM Page 2 of 15 AMENDMENT OF DEVELOPMENT AGREEMENT McCormick Woods Phases III, IV, and V Preliminary Plats This AMENDMENT OF DEVELOPMENT AGREEMENT for McC Phases III, IV, and V Preliminary Plats ("Amendment Agreement") is entered into City of Port Orchard, a Washington municipal corporation ("City" or "Po McCormick Communities, LLC, a Washington limited liability company ("Mc -Con and McCormick are each a "Party" and together the "Parties" to this Amen 0 i'? C. E. RECITALS Woods een the ") and ). City In 2013 the City and McCormick's predecessor in interes 1 L e ered into the "DEVELOPMENT AGREEMENT for McCormick oods Ph s s II , V, and V Preliminary Plat" recorded on September 16, "D v me t Agreement"). The Development Agreement, as stated in its Reci , is a devel e agreement authorized by RCW 36.70C.170. McCormick Woods is a portion of the larger McCormick r perty that is described in the CREDIT AGREEMENT FOR CAPITAL FAC RGES ("Credit Agreemeni") that the Parties are executing si eously with this Amendment Agreement. The McCormick Woods portion of the lar cCormick Property is depicted on Exhibit A to this Amendment Agreement. As set forth in the Credit Agr e rmick is financing and constructing five projects on the City's cur nt Ca ' a pr ment Plan (hereafter the Five CIP Projects) that the City is unable to fin and c r ct itself. By doing so, McCormidk is creating water infrastructure that e b t ity to supply water to the McCormick Property as the City agreed to d ' e 19 A between the City and McCormick's predecessor, the McCormick�Wate ompan . By constru ti g i CIP-Prefects, McCormick also is constructing water infrastructure that wile a e e provide water to areas of the City outside of the McCormick Propert k's struction will increase the City's total water storage capacity by appro im ely 0 o ' all pressure zones and create infrastructure to serve the entire City in the e f shortfalls in water supply or storage in other areas of the City. Th P estl tes the total cost of the Five CIP Projects to be $11,840,625. McCormick will r ceive p ial reimbursement for this investment in the Five CIP Projects by means th C Credit described in the Credit Agreement. As stated in Section 3 of the Ag ement, McCormick and the City anticipate that McCormick will construct the Five roiects within the next five years (although drilling of Well 12 may take longer use the City needs to first secure water rights under the Foster program), but prmick will receive the anticipated credit per ERU over the next 20 years, and may r receive full credit, depending on the market for lots within the McCormick Property. of Development Agreement, McCormick Woods (Phases III, IV, and V) 1526807.13 - 366922 -0037 FG:74422323.6 202208100090 08/10/2022 11:50:40 AM Page 3 of 15 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 McCormick is between $1,933,991 and $2,544,900, depending on the rate at which new ERUs are developed. This financing cost is not reimbursable under the CFC Credit Agreement, bu t presents significant public benefit to the City and constitutes consideration for the City e t ing into this Amendment Agreement to extend the term of the Annexation Agre t to c incide with the term of the Credit Agreement, so that sufficient ERUs are potentia va a le to provide the credits needed to defray a meaningful portion of the o o mancin d building the Five CIP Projects. l G. In addition, Section 3 of the Development Agreement vests c o evelopment Standards as defined in section La(5) of the Developme gr nt er with the "changes" to these Development Standards identified i ction f the evelopment Agreement. McCormick is willing to forgo ' vested 'g s to a "changes" to the Development Standards set forth in subsect' 3.a, 3.b, of the Development Agreement. H. On March 14, 2022 the City and McCon-nick, e, cuted Credit Agreement, and the Parties are now executing this Amendment ree t while also amending the Annexation Agreement for McCom, i West. These three agreements are intended to be construed together as part of a larger a e ent between the Parties, with each agreement constituting part of the consideration or t o er two agreements. I. In consideration of the promises a d gs described above together with those in the Credit Agreement, Wity o ick agree as follows: 1. Development gW6.nt�afflrled. The Development Agreement, together with the vested right ined pursuant to RCW 58.17.033(1) when it submitted complete a p isminary plats of McCormick Woods Phases III, IV, and V, are ai m by this agreement. 2. Extensio o erm:�term of the Development Agreement and of the associated vested rights, arehe bxtended to coincide with the term of the Credit Agreement, which shall be 2 y s omcution of this Amendment Agreement or until McCormick receives the axim Water CFC Credit as described in Sections 6 and 11 of the Credit Ag ent. o ever, in no case shall this Agreement extend beyond the twenty-year 3 Development Standards. Section 3 of the Development Agreement vests )rmick to Development Standards as defined in Section La(5) of the Development ;ment together with "changes" to these Development Standards identified in Section the Development Agreement. McCormick hereby waives its vested rights under t of Development Agreement, McCormick Woods (Phases III, IV, and V) 1526807.13 - 366922 -0037 FG:74422323.6 202208100090 08/10/2022 11:50:40 AM Page 4 of 15 rd 5. subsections 3.a, 3.b, 3.e, and 3.h, and agrees to modify its vested rights under subsections 3.d and 3.f as set forth below in sections 4 and 5 of this Amendment Agreement (there is no subsection 3.g in the Development Agreement). McCormick otherwise agrees that development of residential lots and structures within McCormick Woods will be consistent with Title 20 of the City Code as it exists of the date of execution of this agree nt, except as provided in subsection 3.c (landscaping), provided that in the event of confl t etween specific regulations within Title 20 and the development depicted and ap d o t e face of the Preliminary Plats for Phases III, IV, and V of McCormick Woods, ' n any amendments to these Preliminary Plats, the Preliminary Plats s n ol. Pro ' d, however, if major modifications are made to a plat, then those difica 'o s wo d be based on the then -current applicable regulations and that plat w 1 not b ested to an earlier vesting date under either the Development Agreementorths ent. Further, provided, that future owner(s) of any of the parcels 9f, ea which this Amendment applies may, at their option, waive this or su s quent v s ing. Section 3.d Minor Modifications. Section 3.4 }thereby amended t6 read as follows: Final Plat —Minor modifications. The prelims plats of 4cormick Woods (Phases III, IV, and V) were designed and approved based n itsap yo4hty's system for approval of minor modifications to the preliminary plat duing t e nal plat review and approval process. The Parties recognize that t� City's standards for distinguishing between minor modification, which may be approved e staff, and major modifications, which require re -review by the Hearing Examiner, e in ringent than the County's. During the final plat process for McCormick Woo s a s , and V), the City staff is authorized to permit minor modifications wi out t n ssity of further review by the Hearing Examiner so long as thconodi t' is c nsistent with the Department of Ecology's Stormwater Management n 1 in e at the time of the modification and also does not (1) increase or decre h of authorized homes by more than 30 dwelling units, (2) increase the r o s y more than 30 lots (however, modifying single- family dwellinx,,units o attache zero lot line) housing units would qualify for a minor modificatio , ' cr s tra c volumes above the volume contemplated by the 2021 Developme t A t ansportation; (4) require modification or alteration of a critical er a was not contemplated by the preliminary plat approval or as describ d ' e '0 7 o e Amendment; or (5) reduce the amount of open space or 1 by the preliminary plat approval. N sti"aived; Updated Roadway Cross Sections. McCormick waives its 3.f v t'ng to the Road Cross Sections that were attached as Appendix D-1. Anew ix D- with applicable Road Cross Sections is attached to this Amendment will replace the Appendix D-1 to the Development Agreement. These oad Cross Sections will apply to future phases of the development. Any phases "nder review that have utilized the Road Cross Sections from Appendix D-1 the >ment Agreement do not need to use the updated Road Cross Sections contained in of Development Agreement, McCormick Woods (Phases III, IV, and V) 1526807.13 - 366922 -0037 FG:74422323.6 202208100090 08/10/2022 11:50:40 AM Page 5 of 15 6. A new section 3A is being added to the Development Agreement to read as follows: 3A. McCormick Woods, Phase V Park Development. The Preliminary Plat approval for McCormick Woods, Phase V required the development of a park of approximately three acres in size (Condition 10). McCormick will develop the Park at the locati n hown on Exhibit B to this Amendment, and the current Park Master Plan is attached as ibit C. The current "working name" of the Park is St. Andrew's Park. McCor ' ill o plete the construction of the St. Andrew's Park no later than five (5) years from t o this Amendment, or upon the recording of the next 150 lots withi onick ds, whichever occurs first. St. Andrew's Park will be developed n impr v d wi he following amenities: playground equipment which has been oved b the U.S. Consumer Product Safety Commission (CPSC) in accordan 1487, active recreation facilities, open space, and landscaping with nati eg n. h City accepts and approves the Park Master Plan (Exhibit Q. McCormi will ap 1 for obtain the City's review and approval for the necessary mrts to n ruct . Andrew's Park as generally described herein and shown on ibit C. T e will be owned and maintained in perpetuity by McCormick or y the subseq Homeowner's Association who will own the Park and be responsible for it maintenan e 7. Section 4.a Extension. The Term of this Agrees nt ii ddressed in Section 2 of this Amendment, therefore, the option f 4i1e-year extension addressed in Section 4.a of the Annexation Agreement is no longeriapp oate and McCormick waives its right to request such an extension under this Amen \ 8. Critical Areas Vesting and preliminary plat approv�Pros remains vested to these lcrr categorization will alfer�e., n over time, updated wl disturbing acts peh be consistenl%� the 9. Default Amend . of any to or breach spec' cur d. Dui def u for 0�r �. %tb ic t F )d ticalareaswere established under the 5T1 buffersandother standards. McCormick aormance standards. The prior wetland ce.-However, since wetlands do migrate and change 'o will be required at the time of submittal of a land �e locations of the buffers and wetland boundaries will site conditions. r dela)�by either Party to perform any term or provision of this nt shall constitute a default. In the event of alleged default or breach io s of this Amendment Agreement, the Party alleging such default ,e the other Party not less than thirty (30) days' notice in writing, of the alleged default and the manner in which said default may be thirty (30) day period, the Party charged shall not be considered in of termination or institution of legal proceedings. and expiration of the thirty (30) day period, if such default has not been cured ig diligently cured in the manner set forth in the notice, the other Party to this Agreement may, at its option, institute legal proceedings pursuant to this Agreement. of Development Agreement, McCormick Woods (Phases III, IV, and V) 1526807.13 - 366922 -0037 FG:74422323.6 202208100090 08/10/2022 11:50:40 AM Page 6 of 15 10. Non -Waiver of Breach. The failure of a Party to insist upon strict performance of any of the covenants and agreements contained herein, or to exercise any option herein conferred in one or more instances shall not be construed to be a waiver or relinquishment of said covenants, agreements, or options, and the same shall be and remain in full force and effect. 11. Conflict. In the event of any conflict between this Amendment Agreement a the Port Orchard Municipal Code, this Agreement shall control. 12. Resolution of Disputes and Governing Law. If any dispute arise e the Ci nd McCormick under any of the provisions of this Amendment Agre nt, jur' ction f y resulting litigation shall be filed in Kitsap County Superior C rt, K' s p County, Washington. This Amendment Agreement shall be gov onstrued in accordance with the laws of the State of Washington. T no vai ' arty in any action brought to enforce this Amendment Agreement sha 1 ay the t er pa ' s' expenses and reasonable attorney's fees. 13. Written Notice. All written communication r garding en o cement or alleged breach of this Amendment Agreement shall be sent to t e arties at the a dresses listed below, unless notified to the contrary. Unless otherwise sp ci ed, any itten notice hereunder shall become effective upon the date of both emailing a mai 1 by registered or certified mail, and shall be deemed sufficiently gi e f sent to the addressee at the address stated below: McCORMICK: Y: Eric Campbell Putaansuu, Mayor 12332 NE 115"' Placeo 1 of Port Orchard Kirkland, WA 98033 16 Prospect Street eric ms rou llc.co Port Orchard WA 98366 rputaansuu.@cityofportorchard.us Nick Tosti 805 Kirkl nu ite A copy shall also be transmitted to the City Kirkland Clerk at the above address. nickt t' in 'l.coi 14. Assignm nt. n the v t that McCormick assigns the Credit Agreement in accordance with Secti n the redit Agreement, this Amendment Agreement shall be deemed to be si u�t�n us a igned to the same assignee. 15. Modification] No waiver, alteration, or modification of any of the provisions of this e reement shall be binding unless in writing and signed by a duly authorized �repre nta ive of the City and McCormick. i6ility. The provisions of this Amendment Agreement are declared to be severable. provision of this Amendment Agreement is for any reasons held to be invalid or of Development Agreement, McCormick Woods (Phases I11, IV, and V) 1526807.13 - 366922 -0037 FG:74422323.6 202208100090 08/10/2022 11:50:40 AM Page 7 of 15 unconstitutional by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of any other provision. 17. Good Faith and Due Diligence. The Parties agree to perform all obligations under this Amendment Agreement in good faith and with due diligence. 18. Binding on Successors. The rights, obligations, conditions, and interes et fo in this Amendment Agreement shall run with the land and shall inure to the 1 d be binding upon McCormick, and its heirs, personal representatives, s cess an a ins. IN WITNESS WHEREOF, the parties have executed this Agreement o hi G I da f _ , 2022. MCCORMICK COMMUNITIES, LLC CITY OF PORT O 1526807.13 - 366922 -0037 FG:74422323.6 202208100090 08/10/2022 11:50:40 AM Page 8 of 15 STATE OF WASHINGTON ) ) ss. COUNTY OF KITSAP ) I certify that I know or have satisfactory evidence that Mr. Rob Putaansuu ' e person who appeared before me, and said person acknowledged that he signed this insl me t, on oath stated that he was authorized to execute the instrument and acknowledged it as a f Port Orchard to be the free and voluntary act of such party for the uses and purposes me ' e the instrument. Dated: 20�9& A N \�� missio • �0 ..� �egRy� N:O 7, C9 ��'� O'ember �51�'•0����� Si H 0 1526807.13 - 366922 -0037 FG:74422323.6 'ARY of W or tyame IC in and for the phi g on, residin at: on expires: ` nent, McCormick Woods (Phases III, IV, and V) 202208100090 08/10/2022 11:50:40 AM Page 9 of 15 STATE OF WASHINGTON ss. COUNTY OF ) ^^66 I certify that I know or have satisfactory evidence that Mrl� - �.e-vA lul i he person who appeared before me, and said person acknowledged that (he/she) signed this ins ent, on oath stated that (he/she) was authorized to execute the instrument and acknowl it e _ :,Nz"�yfof McCormick Communities, LLC to be the free and voluntary act of su r the uses and purposes mentioned in the instrument. Dated: 20 7!L- NOTARY PUBLIC STATE OF WASHINGTON ANDREW D MARSHALL MY COMMISSION EXPIRES FEBRUARY 26, 2025 COMMISSION NO,164916 0 1526807.13 - 366922 -0037 FG:74422323.6 L1, or ARY PLIC in and for the of Washi ton, residing at: My Commission expires- 0 r�' ment, McCormick Woods (Phases III, IV, and V) 202208100090 08/10/2022 11:50:40 AM Page 10 of 15 202208100090 08/10/2022 11:50:40 AM Page 11 of 15 202208100090 08/10/2022 11:50:40 AM Page 12 of 15 w 1, r . II II c I 1\ I i \ / I \ I _ I I I 11 II II II .r s �y4 1 ' 'I 202208100090 08/10/2022 11:50:40 AM Page 13 of 15 0 O 0 ei_ 90 cl)CD O .= CL O Cl) � v CD n CD -a o 0 -0 CD �CD x' v cQ CD CD CD rt CIO O O7 zm (n U) rn 3 N � N m 0-01 CD C7 CD C1 CO CD O• N W ;— m m z O m n 0 co 0 m =i mo �� ma CL 0� c z CD v0 En ;mu z P m c CID a m v U) -,m C po C A0 0 Cv CL ,Om a 0 z CO T, m CID E0 D0 p mz pm Om W 2-'0 pm �_ O ;0 Z m O Ln CD 0 x m WX CD CD CD C•�. 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