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080-23 - He Development, LLC - ContractPAYMENT IN LIEU OF SPECIFIC PERFORMANCE OF THE CONSTRUCTION OF FRONTAGE AND SIDEWALK IMPROVEMENTS ON SOUTH-EAST SALMONBERRY ROAD THIS AGREEMENT ("Agreement") is made this p_�_ day of ` evm�,ey/ 2023 between the City of Port Orchard, a municipal corporation ("City'), and He Development, LLC, a Washington limited liability company ("He Development"), organized under the laws of the State of Washington and doing business at 4631 SE Bakken Ct., Port Orchard, Washington 98366-9504, for the purposes set forth herein. RECITALS 1.1 He Development applied for, and the City issued a Land Disturbing Activity Permit (LDAP) for the Hidden Hills Apartment Project (PW21-040); and 1.2 In conjunction with the LDAP, the City issued a Mitigated Determination of Non -Significance (MDNS) on August 19, 2022 which was not appealed; and 1.3 That MDNS required the following mitigation: Construction of a modified three-quarter street section from the northwest corner of the project site along SE Salmonberry Road heading east to the western property line of parcel number 012301-3-032-2003. The modified three-quarter street section shall at a minimum consist of: a. 14-foot of pavement on the non -project (northern) half of SE Salmonberry Road; b. 11-foot drive lane on the project (southern) half of SE Salmonberry Road; c. 5-foot bike lane on the project (southern) half of SE Salmonberry Road exclusive of gutter; d. Curb and gutter per City of Port Orchard Standards on the project (southern) half of SE Salmonberry Road; e. 6-foot sidewalk on the project (southern) half of SE Salmonberry Road; and 1.4 The mitigation project is shown on Exhibit A which is attached hereto and incorporated by this reference as if set forth in full. 1.5 As part of the Bethel Road Project, the City previously identified a need for a roundabout on Bethel Road at Salmonberry Road. The development of this roundabout will be included in Phase 1 of the Bethel Road Project. This roundabout will be very close to the mitigation project that He Development is required to complete under the MDNS for the Hidden Hills project; and 1.6 After the MDNS issued, the City and He Development discussed the phasing of the improvements required by the MDNS and how those would correspond Agreement for Payment in Lieu of Mitigation Work Page 1 1698610.7 - 366922 -0021 1698610.8 - 366922 - 0021 with and may be integrated with the City's work on Phase 1 of the Bethel Road Project; and 1.7 In order to better integrate the projects in both timing and scope, He Development has offered to pay for the City to do the required Hidden Hills mitigation work so that it can be made part of the Phase 1 work on the Bethel Road Project. This will ensure that the public is only inconvenienced once, as the projects will be done together. This will also ensure better matching of materials and connections; and 1.8 Accordingly, in lieu of He Development constructing the mitigation set forth in Section 1.3 above, He Development desires to transfer the necessary funds to the City in the amount of the City's Engineer's Estimate for the Hidden Hills mitigation work in the amount of $326,015.00 and He Development desires to authorize the City to utilize those funds to do the mitigation work as part of the Phase 1 work on the Bethel Road Project; and 1.9 The City agrees that this payment in lieu of construction will satisfy the mitigation required under the August 19, 2022 MDNS; and 1.10 The mitigation project listed in Section 1.3 above does not include the frontage improvements which are required to be constructed adjacent to the Hidden Hills apartment project site. He Development is responsible for constructing those frontage improvements and nothing in this Agreement impacts that responsibility; NOW, THEREFORE, in consideration of the mutual covenants and conditions herein contained, the parties hereto agree as set forth above and as follows: 11. PERFORMANCE OBLIGATIONS 11.1 He Development shall deposit cash funds in the amount of Three Hundred Twenty Six Thousand and Fifteen Dollars ($326,015.00) ("Funds") to be paid as follows: $96,231.00 will be due to the City of Port Orchard within sixty (60) days of execution of this Agreement, with the balance of $229,784.00 due at issuance of the building permit for the Hidden Hills Apartment Project. 11.2 He Development authorizes and directs the City to utilize the Funds towards planning, design, permitting and/or construction of the Hidden Hills mitigation project components listed in Section 1.3 above, at the City's sole direction regarding timing, as referenced above. 11.3 The City agrees to accept the Funds as financial security in lieu of construction of the Hidden Hills mitigation project components listed in Section 1.3 above. Upon receipt of the Funds, the mitigation set forth in the MDNS is deemed fulfilled. He Development shall remain obligated to perform and comply with any and all other obligations and conditions required by the City for the Hidden Hills project and this Agreement shall not relieve He Development of those obligations and/or conditions. Agreement for Payment in Lieu of Mitigation Work Page 2 1698610.7 - 366922 -0021 1698610.8 - 366922 - 0021 11.4 He Development acknowledges and accepts that the City may utilize the Funds for the purposes described herein at any time after the Funds are deposited with the City, at the City's sole discretion, and He Development affirmatively disclaims any interest in the Funds. 11.5 To the extent the City determines that planning, design, permitting and/or construction of the mitigation project listed in Section 1.3 requires additional cooperation from He Development, including but not limited to a temporary construction easement, He Development shall reasonably provide the City with the cooperation sought, provided the City is not entitled to further payment for the mitigation work beyond what is required in this Agreement. 11.6 If He Development dedicates real property to the City for a portion of the City's Phase 1 work on the Bethel Road Project ("Dedicated Property"), then the Parties shall agree on the area of such Dedicated Property and a fair market value for the same, using the methods set forth in Section 2.7 below. The value may be used by He Development as a credit towards all or a portion of the obligation set forth in Section 2.1 above, provided, however, that the use of the Dedicated Property value as a credit is limited such that the dedication and valuation of the Dedicated Property must be completed prior to the time of either the first or the second payment of the funds described in Section 2.1 above are due. If credit towards the obligation in Section 2.1 is not claimed prior to payments being made, then He Development may either apply the value of the Dedicated Property towards its obligation for payment of transportation impact fees for its project (if timely requested) or may receive payment from the City for such dedication. He Development will pay any Real Estate Excise Tax due on the transfer. 11.7 The area and valuation for Dedicated Property shall be determined as follows: (1) The Parties will agree as to the extent of the land needed by the City from He Development for the Phase I Bethel Road Project. If the Parties disagree, then the City shall determine the extent of the property to be dedicated. The City's determination shall be final. (2) Once the Dedicated Property area has been established, He Development will hire a certified property appraiser, pay for the appraisal, and provide a copy of that appraisal report to the City for the Dedicated Property. (3) The City shall use its best efforts to review the appraisal report and provide a response to He Development on the valuation within 30 days of receipt. (4) If both the City and the He Development agree that the appraisal is fair and reasonable, then the appraised value will be accepted as the value of the Dedicated Property. (5) If the City disagrees with the appraisal, then the City may hire its own appraiser to perform a second appraisal at He Development's expense. The date for valuation purposes shall be the same as used in He Development's appraisal. The City shall use its best efforts to obtain an appraisal report within 60 days of notice to He Development of its disagreement with He Development's appraisal. (6) The Parties will take the mid -point between the two appraisals and use that as the fair market value for the Dedicated Property. Agreement for Payment in Lieu of Mitigation Work Page 3 1698610.7 - 366922 -0021 1698610.8 - 366922 - 0021 III. GENERAL PROVISIONS 111.1 Applicable Law; Attorneys' Fees. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. Venue for any action arising out of or relating to this Agreement shall lie in Kitsap County Superior Court. The non -prevailing Party in any action brought to enforce this Agreement shall pay the other Parties' expenses and reasonable attorney's fees. 111.2 Effective Date. This Agreement shall be deemed effective upon mutual execution and approval by the Port Orchard City Council, which approval shall be attached hereto and adopted herein by this reference. This Agreement shall remain in full force and effect until such time as the underlying building permits for the Hidden Hills apartment projects have issued and any appeals thereof have been completed. 111.3 Entire Agreement. This Agreement embodies and constitutes the entire understanding between the Parties hereto with respect to the transactions contemplated herein, and all prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged into this Agreement. 111.4 No Third -Party Beneficiaries. Except as otherwise provided herein, this Agreement shall not create any rights enforceable by any party who is not a Party to this Agreement. 111.5 Binding on Successors. If He Development assigns or transfers the Hidden Hills property as a whole to a new developer, such assignee or transferee shall be obligated and bound by the terms and conditions of this Agreement, and shall be the beneficiary thereof and a Party thereto. Such purchaser, assignee or transferee shall observe and fully perform all of the duties and obligations of He Development as contained in this Agreement. 111.6 Severability. This Agreement does not violate any federal or state statute, rule, regulation or common law known; but any provision which is found to be invalid or in violation of any statute, rule, regulation or common law shall be considered null and void, with the remaining provisions in the Agreement remaining viable and in effect. 111.7 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. 111.8 Written Notice. All written communications regarding enforcement or alleged breach of this Agreement shall be sent to the Parties in accordance with this Section. Notices, demands, correspondence to the City and/or He Development (as applicable) shall be sufficiently given if dispatched by pre -paid first-class mail to the addresses of the Parties as designated below. Notice to the City shall be to the attention of both the City Clerk and the City Attorney. Notices to successors -in -interest of He Agreement for Payment in Lieu of Mitigation Work Page 4 1698610.7 - 366922 -0021 1698610.8 - 366922 - 0021 Development shall be required to be given by the City only for those successors -in - interest who have given the City written notice of their address for such notice. The Parties hereto may, from time to time, advise the other of new addresses for such notices, demands or correspondence. Unless otherwise specified, any written notice hereunder shall become effective upon the date of both emailing and mailing by registered or certified mail, and shall be deemed sufficiently given if sent to the addressee at the address stated below: HE DEVELOPMENT, LLC: Attn: He Zhi Lin He Development, LLC 4631 SE Bakken Ct. Port Orchard, WA 98366-9504 Email: zhilheOmrnail,com CITY: Mayor City of Port Orchard 216 Prospect Street Port Orchard WA 98366 rputaansuu(Dcityofportorchard.us Copies shall also be transmitted to the City Clerk and City Attorney at the above address. 111.9 Time is of the essence. All time limits set forth herein are of the essence. The Parties agree to perform all obligations under this Agreement with due diligence. 111.10 Covenant of Good Faith and Cooperation. The Parties agree to take further actions and execute further documents, either jointly or within their respective power and authority, to implement the intent of this Agreement. Each Party covenants to use its best efforts and work cooperatively in order to secure the benefits and rights under this Agreement. The Parties shall not unreasonably withhold approvals or consents provided for in this Agreement. Each Party shall execute and deliver to the other all further documents as are reasonably necessary to carry out this Agreement as may be necessary to provide a Party with a full and complete enjoyment of its rights and privileges under this Agreement. 111.11 Interpretation. This Agreement has been reviewed and revised by legal counsel for both Parties, and no presumption or rule construing ambiguity against the drafter of the document shall apply to the interpretation or enforcement of this Agreement. 111.12 Counterparts. The Agreement may be signed in two or more counterpart copies with the same effect as if the signature of each counterpart copy were on a Agreement for Payment in Lieu of Mitigation Work Page 5 1698610.7 - 366922 -0021 1698610.8 - 366922 - 0021 single instrument. Each counterparty shall be deemed as an original as to the Party whose signature it bears, and all such counterparts shall constitute one document. IN WITNESS WHEREOF, the Parties have executed this Agreement on the dates set forth below. CITY OF PORT ORCHARD ("City") By Q-A��� Its Dated:�1 HE DEVELOPMENT, LLC ("He Development") ts &woeY Dated: a//OS- Agreement for Payment in Lieu of Mitigation Work Page 6 1698610.7 - 366922 -0021 1698610.8 - 366922 - 0021 CITY NOTARY BLOCK STATE OF WASHINGTON ) ss: COUNTY OF KITSAP ) I certify that I know or have satisfactory evidence that Robert Putaansuu is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he was authorized to execute the instrument, and acknowledged it as the Mayor of Port Orchard to be the free and voluntary act of such entity for the uses and purposes mentioned in the instrument. DATED: �y Y P C wiszion Humber 151224 l ,lenine Fioyd z_ ME: �"11Y1 ICl/� My Appointment Expires O_ (Print Name) k 1111512026 ~' Notary Public in and for the State of Washingto�c/ 'F111N111110 Commission Expires: (X(J HE DEVELOPMENT NOTARY BLOCK STATE OF WASHINGTON ) } ss: COUNTY OF } I certify that I know or have satisfactory evidence that fin;, •,-\ oe is the person who appeared before me, and said person acknowledged that he/she signed this instrument, on oath stated that he/she was authorized to execute the instrument, and acknowledged it as the vJV� of He Development, LLC to be the free and voluntary act of n 0 fve uses and purposes mentioned in the instrument. �. C� ••......, y � ". - -DATED: NOTARY W u, PUBLIC �:= z :0 AJ.,►- '.��` •.'� W0 �••' C? NAME: Zo�110`11 .••.••��`tirint Name) Im �' Notary Public in and for t tate of Washington. Agreement for Payment in Lieu of Mitigation Work Page 7 1698610.7 - 366922 -0021 1698610.8 - 366922 - 0021 2Qa-'� Commission Expires: "1 Agreement for Payment in Lieu of Mitigation Work Page 8 1698610.7 - 366922 -0021 1698610.8 - 366922 - 0021 � I - SJ . - - :AwaN�+eTAD . •� EaD a;.T.. „ _ - t -, n� � -..D Ro. i �� � I I � eli� : � ' B � I BTRPxSc ^E r•�-a- _ A. s:•E ��ryevTB_iD DBr 1E . . T. ) - fifr �Nlln ' I HIDDEN HILLS OFFSITE ROAD IMPROVEMENTS KEYNOTES: AOPROPOSED - TE ROAD IUPRpeEU— DO NOT AUGN OSED FROUTACE INPROVENENTS ALONG HIDDEN HILLS PROECT .7. AN ANTH PROPPPROY.TE 5' OFSET BETIVEEN PROPOSED ROAD CENTERLINES AND BIKE LANE UNES IX T1 BO PROPOSEL OFi91E ROAD NNNROVENENTS DO NOT A YnN PROPOSED FRONTAGE INPROVENENIS ALONG THIu9iBEARY PROJECT 9TL PROPOSED BIKE LANE ALONG MINBLEBERRY FRONTAGE NLL ENEROACH ABOUT 6'INTO THE PROPOSED IT' DPVE LANE. A 6' DETAINED 9DENALK VATH PLANTER ARE PROPOSED ALONG THINBIEBERRY PROJECT THAT DOES NOT I THE REWIREO UMTE ROAD SECTOI © PROPOSED OFF9TE ROAD INPROVENENTS 00 NOT PLO! VnTH EDSTNG SE SLLYOHBERRY ROAD ...ENT. THE —1. 40' RIGHT -OF -NAY. TO THE WEST OF THE PR SEO OFF9TE ROAD aovmtwA-s s sHa+Fa wiRmlr. �. laf -WH. DO ROAD -RUNE OF PROPOSD OFFSTE ROAD W OVEYENTS APPEARS TO BE THE CENTERWE OF THE EDSTNG SY RIOR-OF-NAY. DTY to VERPY/CONPRN INTENTOI EO -TIC SIRFACE INPROVEUENTS, STOW CONVET M AND UTUTES (ABOVE AND BELON GROUND) M BE INPAOTED BY THE PROPOSED OFF9TE ROAD IUPROVENENTS. STORNNATER NITO.ITON IN PARTCULAR YLL BE R RENFLT NALLENGPIG AND KOBILNATIC GNEN REUTVE D£VATOIS OF THE RION-OF-wAY CW ED TO THE DONNSTREAY AREA j NOTE ARE Anr tK T *Nr m E.nTND uHH Tnn..L N.x�. Scale: 1" 20'TH A` O ro Eul NT BE OCusoxEu Nv6ixE cONm=SG1'LURE (ECg71) TE. PRES x AND PNOTEn u ERceauuD ununES Saa1a in Fact CALL 46 HOURS BEFORE YOU DIG 611 A='A N.L.Olson & Associates, Inc. Engineering, Planning and Surveying (36D) 876-326A N.N wN. aAi � f1'- tir'p�ew•V. wfATDN Y xWw(iR• . AI,D •fgEN "E NUB S% �O.nAC{ IIIPROV{Ip FS '. d �'_' r=• I.eGEuc. <•SfAPPBaRr�>1Hac.AnaN a ' q q sB su tatBYeFRxv kjA[ - 3,Nt c OFF;' �SROP O I+FY]V ALaS E[ .If 'tea =+. .7r.: SF w,FNEv — — — -e- rA T enx- HIDDEN HILLS SITE FRONTAGE IMPROVEMENTS 5a.•c i•N OFFSITE ROAD IMPROVEMENT EXHIBIT FOR: HE DEVELOPMENT, LLC ®DEN HH.LS APARTMENTS Attn: lames He LAND DEVELOPMENT ACTIVITY PERMir 4631 SE BakkcD Corot Portion of tha NDtlh% ea Qn of th, Sowhaa t Qmd., See[Ion 1. Port Orchard, WA 98366 Township 23, Raek 1 FOL WA Nn Kaspp Cne:lg, Washinylon Phone: (360) 874-9966 19-10959