104-21 - Cedar Cove LLC - ContractWHEN RECORDED RETURN TO:
Cedar Cove Commercial, LLC
5706 Bethel Rd. SE, Suite 100
Port Orchard, WA 98367
DISNEY AND ASSOCIATES, INC. 202203010004
Covenants Rec Fee: $212.50
03/01/2022 09:27:10 AM Page 1 of 10
Paul Andrews, Kitsap County Auditor
Covenant
Grantor: Robert Disney of Cedar Cove Commercial, LLC
Grantee:
Kitsap County Tax Parcel No: 252401-3-042-2002
TAX DESCRIPTION:
PARCEL A THAT PORTION OF THE SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER,
SECTION 25, TOWNSHIP 24 NORTH, RANGE 1 EAST, IN KITSAP COUNTY, DESCRIBED AS
FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF THE WEST HALF OF SAID SOUTHEAST
QUARTER OF THE SOUTHWEST QUARTER; THENCE NORTH 360 FEET; THENCE WEST 305 FEET
THENCE SOUTH 360 FEET; THENCE EAST 305 FEET TO THE POINT OF BEGINNING; EXCEPT STATE
HIGHWAY NO. 16 (FORMERLY STATE HIGHWAY NO. 14); AND EXCEPT PLISKO LANE; TOGETHER
WITH THAT PORTION OF VACATED COUNTY ROAD WHICH ATTACHES BY OPERATION OF LAW.
EXCEPT THAT PORTION CONVEYED UNDER AUDITOR'S FILE NO. 9402180200, DESCRIBED AS
FOLLOWS: THAT PORTION OF THE SOUTHWEST QUARTER OF THE SOUTHEAST QUARTER OF THE
SOUTHWEST QUARTER, SECTION 25, TOWNSHIP 24 NORTH, RANGE 1 EAST, W.M., IN KITSAP
COUNTY, WASHINGTON, LYING SOUTHERLY AND WESTERLY OF PLISKO LANE; EASTERLY OF
MITCHELL AVENUE AND NORTHERLY OF STATE HIGHWAY 160.
The following executed and attached Multifamily Housing Limited Property Tax Exemption
Agreement consisting of nine (9) pages shall be a covenant running with the land and shall be
binding on the assigns, heirs, and successors of the Grantor.
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CITY OF PORT ORCHARD
MULTIFAMILY HOUSING LIMITED PROPERTYTAX.EXEMPTION AGREEMENT
THIS AGREEMENT is entered into this �k day of 0,4e W , 201� by and between
Cedar Cove, LLC. A Washington Limited Liability Company (hereinafter referred to as the "Owner"),
and the City of Port Orchard, a municipal corporation of the State of Washington (hereinafter
referred to as the "City").
WITNESSETH:
WHEREAS, the City has an interest in stimulating new construction or rehabilitation of multi-
family housing in Residential Target Areas in order to reduce development pressure on single-family
residential neighborhoods, to increase and improve housing opportunities, and to encourage
development densities supportive of transit use; and
WHEREAS, the City has, pursuant to the authority granted to it by Chapter 84.14 RCW,
designated various Residential Target Areas for the provision of a limited property tax exemption
for new multi -family residential housing; and
WHEREAS the City has, through Chapter 3.48 Port Orchard Municipal code (POMC), enacted
a program whereby property owners may qualify for a Final Certificate of Tax Exemption which
certifies to the Kitsap County Assessor that the owner is eligible to receive a limited property tax
exemption; and
WHEREAS, the Owner is interested in receiving the multiple family property tax exemption
for new multifamily residential housing units in a residential targeted area; and
WHEREAS, the Owner has submitted to the City a complete application form for no fewer
than ten (10) units of new multifamily housing within a residential structure or as part of an urban
development; and
WHEREAS, the Owner has submitted to the City preliminary site plans and floor plans for
multi -family residential housing more particularly described in Exhibit A which is attached hereto
and incorporated by reference herein (the "Project") to be constructed on said property (the "Site")
legally described as:
PARCEL A THAT PORTION OF THE SOUTHEAST QUARTER OF THE SOUTHWEST
QUARTER, SECTION 25, TOWNSHIP 24 NORTH, RANGE 1 EAST, IN KITSAP COUNTY,
DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHEAST CORNER OF THE WEST
HALF OF SAID SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER; THENCE
NORTH 360 FEET; THENCE WEST 305 FEET THENCE SOUTH 360 FEET; THENCE
EAST 305 FEET TO THE POINT OF BEGINNING; EXCEPT STATE HIGHWAY NO. 16
(FORMERLY STATE HIGHWAY NO. 14); AND EXCEPT PLISKO LANE; TOGETHER WITH
THAT PORTION OF VACATED COUNTY ROAD WHICH ATTACHES BY OPERATION OF
LAW. EXCEPT THAT PORTION CONVEYED UNDER AUDITOR'S FILE NO. 9402180200,
DESCRIBED AS FOLLOWS: THAT PORTION OF THE SOUTHWEST QUARTER OF THE
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SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER, SECTION 25, TOWNSHIP 24
NORTH, RANGE 1 EAST, W.M., IN KITSAP COUNTY, WASHINGTON.
K.
•Pieree-County Tax Assessor Parcel No. 252401-3-042-2002 located at
1601 Plisko Lane in the City of Port Orchard
WHEREAS, the City has determined that the improvements will, if completed as proposed,
satisfy the requirements of for a Final Certificate of Tax Exemption;
NOW, THEREFORE, the City and the Owner do mutually agree as follows:
1. The City agrees to issue the Owner a Conditional Certificate of Acceptance of Tax
Exemption.
2. The Owner agrees to construct on the Site multi -family residential housing
substantially as described in the most recent site plans, floor plans, and elevations on file with the
City as of the date of administrative approval of this Agreement.
3. The Project must comply with all applicable zoning requirements, land use
requirements, design review requirements and all building, fire, and housing code requirements
contained in the Port Orchard municipal Code (herein referred to as the "POMC") at the time a
complete application for a building permit is received.
4. The new multiple -unit housing must provide for a minimum of fifty (50) percent of
the space for permanent residential occupancy. The Project must include at least ten (10) units of
multifamily housing within a residential structure or as part of an urban development.
5. The Owner agrees to complete construction of the agreed upon improvements
within three years from the date the City issues the Conditional Certificate of Acceptance of Tax
Exemption, or within any extension thereof granted by the City.
6. The Owner is requesting a twelve-year limited property tax exemption. Therefore, ,
the Owner by this Agreement commits to renting or selling at least twenty percent (20%) of the
multifamily housing units constructed on the site as housing units affordable for low or moderate -
income households as defined by Section 3.48.040 (1) (c) POMC as follows:
A. A minimum of 20 percent of all residential units in the development shall be rented
for at least 10 percent below fair market rent for 12 years, to tenants whose household
annual income is:
i. At or below 40 percent of median family income, for housing units in
congregate residences or small efficiency dwelling units;
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ii. At or below 65 percent of median family income for one -bedroom units;
iii. At or below 75 percent of median family income for two -bedroom units; and
iv. At or below 80 percent of median family income for three -bedroom and larger
units.
B. If calculations for the minimum 20 percent of the residential units required under this
section result in a fraction, then the minimum number of residential units required to
meet the affordable housing requirement shall be rounded up to the next whole
number.
C. At the time of this Agreement, the Owner is proposing the following unit mix for this
57-unit project:
Building
Total
Units
20% of Units and Mix
Median Family Income
South Building
23
5
1 BR
17
3
At or below 65 percent AMI
2 BR
3
1
At or below 75 percent AMI
3 BR
3
1
At or below 80 percent AMI
West Building
34
7
1 BR
25
5
At or below 65 percent AMI
2 BR
9
2
At or below 75 percent AMI
Grand Total
57
12
7. This unit count and mix may change, but will still be required to comply with
Chapter 3.48 POMC with regard to the percentage and affordability of units.The Owner agrees,
upon completion of the improvements and upon issuance by the City of a temporary or permanent
certificate of occupancy, to file with the City's Department of Community Development the
following:
a. A statement of expenditures made with respect to each multi -family housing
unit and the total expenditures made with request to the entire site;
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b. A description of the completed work and a statement of qualification for the
exemption; and
C. A statement that the work was completed within the required three (3) year
period or any authorized extension.
d. If applicable, that the project meets the affordable housing requirements as
described in RCW 84.14.020.
8. The City agrees, conditioned on the Owner's successful completion of the
improvements in accordance with the terms of this Agreement and on the Owner's filing of the
materials described in the preceding paragraph, to file an eight or twelve year (as applicable) Final
Certificate of Tax Exemption with the Kitsap County Assessor.
9. The Owner agrees, within thirty (30) days following the first anniversary of the City's
filing of the Final Certificate of Tax Exemption and each year thereafter for a period of twelve years
to file a notarized and sworn declaration with the City's Department of Community Development
stating all of the following:
a. A statement of occupancy and vacancy of the multi -family units during the
previous twelve (12) months;
b. A certification that the property has not changed use and continues to be in
compliance with this Agreement and with Chapter 3.48 POMC; and
A description of changes or improvements constructed after issuance of the
certificate of tax exemption;
d. The total monthly rent of each multifamily housing unit rented or the
total sale amount of each unit sold during the 12 months ending with the anniversary date;
e. A breakdown of the number, type, and specific multifamily housing units
rented or sold during the 12 months ending with the anniversary date;
f. Information demonstrating the owner's compliance with the affordability
requirements of this chapter, including, but not limited to, the income of each renter household
at the time of initial occupancy or the income of each purchaser of owner -occupied units at the
time of purchase;
g. The value of the tax exemption for the project;
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h. A statement of the income of each renter household at the time of initial
occupancy and the income of each initial purchaser of owner -occupied units at the time of purchase
for each of the units receiving a tax exemption and a summary of these figures;
i. Any information needed by the City to file its annual report pursuant to Port
Orchard Municipal Code (POMC) 3.48.120 and any additional information requested by the City in
regards to the units receiving a tax exemption.; and
j. Any additional information requested by the city pursuant to meeting any
reporting requirements under Chapter 84.14 RCW.
10. The Parties acknowledge that the units are to be used an occupied for multifamily
residential use. The parties further acknowledge that the certificate of occupancy issued by the City
is for multi -family residential units. The Owner acknowledges and agrees that the units shall be used
primarily for residential occupancy and any business activities shall only be incidental and ancillary
to the residential occupancy.
11. If the Owner converts to another use any of the new multi -family residential housing
units constructed under this Agreement, the Owner shall notify the Kitsap County Assessor and the
City's Department of Community Development within sixty (60) days of such change in use.
12. The Owner agrees to notify the City promptly of any transfer of Owner's ownership
interest in the Site or in the improvements made to the Site under this Agreement.
13. For purposes of this Agreement, "Owner" shall mean the Property Owner if the
development is comprised of rental units or shall mean the Owners Association of a condominium
complex (if the development contains any ownership units) once such association is established.
The Owner shall be responsible for all reporting requirements required herein on behalf of the
owners of individual condominium units, if applicable.
14. If the Project includes any owner -occupied units, the Owner is required to form an
Owner's Association to be organized under RCW 64.34.300 for all owner -occupied units within the
development. Such organization shall remain operational and in effect until at least the length of
the exemption period has expired and the final report is filed with the City. This Owner's Association
shall assume the responsibility for collecting from all individual unit owners the information and
documents required to complete the annual reporting requirements and for filing the required
annual report with the city pursuant to Section 9 of this Agreement and Chapter 3.48 POMC.
15. The City reserves the right to cancel the Final Certificate of Tax Exemption should the
Owner, its successors and assigns, fail to comply with any of the terms and conditions of this
Agreement. If the exemption is cancelled for non-compliance, Owner acknowledges that state law
requires that an additional real property tax is imposed in the amount of (1) the difference between
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the tax paid and the tax that would have been paid if it had included the value of the non -qualifying
improvements, dated back to the date that the improvements became non -qualifying; (2) a penalty
of 20% of the difference calculated under paragraph (a) of this paragraph; and (3) interest at the
statutory rate on delinquent property taxes and penalties, calculated from the date the tax would
have been due without penalty if the improvements had been assessed without regard to the
exemptions provided by Chapter 84.14 RCW and POMC Chapter 3.48 POMC. Applicant
acknowledges that, pursuant to RCW 84.14.110, any additional tax owed, together with interest and
penalty, becomes a lien on that portion of the Property on which the Project is constructed and
attaches at the time the portion of the Property is removed from multifamily use or the amenities
no longer meet applicable requirements, and that the lien has priority to and must be fully paid and
satisfied before a recognizance, mortgage, judgment, debt, obligation, or responsibility to or with
which the Property may become charged or liable. Applicant further acknowledges that RCW
84.14.110 provides that any such lien may be foreclosed in the manner provided by law for
foreclosure of liens for delinquent real property taxes.
16. Nothing in this Agreement shall permit or be interpreted to permit either party to
violate any provision of Chapter 84.14 RCW or POMC Chapter 3.48.
17. No modifications of this Agreement shall be made unless mutually agreed upon by
the parties in writing.
18. The Owner acknowledges its awareness of the potential tax liability involved if and
when the property ceases to be eligible for the incentive provided pursuant to this Agreement. Such
liability may include additional real property tax, penalties and interest imposed pursuant to RCW
84.14.110. The Owner further acknowledges its awareness and understanding of the process
implemented by the Kitsap County Assessor's Office for the appraisal and assessment of property
taxes. The Owner agrees that the City is not responsible for the property value assessment imposed
by Kitsap County at any time during the exemption period.
19. The Owner acknowledges and agrees that the City has the right to audit or review
appropriate records to assure compliance with this Agreement and POMC Chapter 3.48 and to
perform evaluations of the effectiveness of the Multifamily Tax Exemption program. The Owner
agrees to make appropriate records available for review or audit upon seven days' written notice by
the City.
20. All notices to be given pursuant to this Agreement shall be in writing and shall be
deemed given when hand -delivered within normal business hours, when actually received by
facsimile transmission, or two business days after having been mailed, postage prepaid, to the
parties hereto at the addresses set forth below, or to such other place as a party may from time to
time designate in writing.
CITY: Department of Community Development
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Page 8 of 10
City of Port Orchard
216 Prospect Street
Port Orchard, WA 98366
Attn: Director
OWNER: Ceadar Cove, LLC
Attn: Robert Disney
5706 Bethel Road SE, #100
Port Orchard WA 98367
21. In the event that any term or clause of this Agreement conflicts with applicable law,
such conflict shall not affect other terms of this Agreement which can be given effect without the
conflicting term or clause, and to this end, the terms of this Agreement are declared to be severable.
22. This Agreement shall be recorded at the Owner's expense and shall be a covenant
running with the land and shall be binding on the assigns, heirs, and successors of the Owner.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and
year first above written.
CITY OF PORT ORCHARD
Robert Putaansuu, Mayor
Nick Bond, Director
Dept. of Community Development
Noah Crocker
Finance Director
Attest:
Brandy 6inearson, CIVIC, City Clerk
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PROPERTY OWNERS
By:G"D"`J
i
Its:
By:
Its:
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Brandy Rinearson, CIVIC, City Clerk
Approved as to Form:
Charlotte A. Archer, City Attorney
NOTARY BLOCK FOR CEDAR COVE, LLC
STATE OF WASHINGTON )
ss.
COUNTY OF )
I certify that I know or have satisfactory evidence that'V)*1,er V A yap, i }�yY,t>-1 is the person
who appeared before me, and said person acknowledged that (he/she) . gned this instrument,
on oath stated that (he/she) was authorized to execute the instrument and acknowledged it as
the _()ywcNe ,,S of Cedar Cove, LLC to be the free and voluntary act of such party for the
uses and purposes mentioned in the instrument.
Dated: W \\ /'1.\ 209-1
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or type name)
NOTARY PUBLIC in and for the
State of Washington, residing at:_
My Commission expires:
NOTARY BLOCK FOR CITY DFPORT ORCHARD
STATE OFVVASH|NGTON )
/ ss.
COUNTY OF KITSAP
| certify that | know Orhave satisfactory evidence that Robert Putaansuu is the person
who appeared before me, and said person acknowledged that 0ns/she\signed this instrument,
on oath stated that Ule/she\was authorized to execute the instrument and acknowledged it as
the to be the free and voluntary act of such party for the uses and
purposes mentioned inthe instrument.
Dated
(prinf or type' nam6)
'''�
NOTARY PUBLIC inand for the
S, t of Washingtq�,,. residing at:
aat
My Commission expires:
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