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08/17/2022 - PacketCity of Port Orchard Land Use Committee August 17, 2022 4:30 pm Remote access on Zoom Webinar Public Link (not to be used by LLI Committee): https://us02web.zoom.us/m/81259147601. Dial -in: 1 253 215 8782 Webinar ID: 896 8325 9979 R 1 P! 1. Discussion: Perry Ave N Parking 2. Discussion: McCormick Park Development Agreement DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF PORT ORCHARD AND McCORMICK COMMUNITIES, LLC FOR THE DEVELOPMENT AND FUNDING OF CERTAIN PARK IMPROVEMENTS AND PARK IMPACT FEE CREDITS THIS DEVELOPMENT AGREEMENT is made and entered into this day of , 2022, by and between the City of Port Orchard, a non -charter, optional code Washington municipal corporation, hereinafter the "City," and McCormick Communities, LLC, a Washington limited liability company ("McCormick"). City and McCormick are each a "Party" and together the "Parties" to this Amendment Agreement. The Parties hereby agree as follows: RECITALS: WHEREAS, the Washington State Legislature has authorized the execution of a development agreement between a local government and a person having ownership or control of real property within its jurisdiction (RCW 36.70B.170(l)); and WHEREAS, a development agreement must set forth the development standards and other provisions that shall apply to, govern, and vest the development, use and mitigation of the development of the real property for the duration specified in the agreement (RCW 36.70B.170(1)); and WHEREAS, a development agreement must be consistent with the applicable development regulations adopted by a local government planning under chapter 36.70A RCW (RCW 36.70B.170(1)); and WHEREAS, Port Orchard adopted Chapter 20.26 of the Port Orchard Municipal Code ("POMC" or "Code") which establishes the standards and procedures for Development Agreements in Port Orchard; and WHEREAS, Chapter 20.26 POMC is consistent with State law; and WHEREAS, McCormick has applied for a Development Agreement under Chapter 20.26 POMC on , 2022 and such Agreement has been processed consistently with the POMC and State law; and WHEREAS, this Development Agreement by and between the City of Port Orchard and McCormick (hereinafter the "Development Agreement" or "Agreement"), relates primarily to the development of property owned by McCormick, commonly known as "McCormick West", "McCormick Woods", and "McCormick North" which together comprise hundreds of acres of land owned by McCormick as depicted in Exhibits A and B (hereinafter, the "McCormick Property"); and Development Agreement for Funding Park Improvements McCormick Communities, LLC Page 1 of 19 1573235.8 - 366922 -0037 WHEREAS, many acres of the McCormick Property have received preliminary plat approval, and other acres have received final plat approval, and McCormick has sold some of the resulting lots to builders. This Agreement is applicable to lots which are currently held by McCormick as depicted on Exhibit B; and WHEREAS, McCormick along with its predecessor have been developing the McCormick Property primarily with residential uses, including installing infrastructure of all types (hereinafter "Development Project"); and WHEREAS, associated with the Development Project, during an earlier phase of the Project McCormick's predecessor donated land for a park known as the McCormick Village Park which was transferred to City ownership in approximately 2010. McCormick's McCormick North Property is adjacent to the McCormick Village Park which is located at 3201 SW Old Clifton Road (Kitsap County Tax Parcel # 042301-3-012-2004) (hereinafter, the "McCormick Village Park"). As part of its continued development of the McCormick Property, McCormick will undertake additional improvements at McCormick Village Park. These additional improvements are called McCormick Village Park Phase 3 and such improvements are included the City's Parks Recreation and Open Space (PROS) Plan. The Parties acknowledge that these improvements are eligible for park impact fee credit pursuant to RCW 82.02.060(4) and POMC 20.182.080; and WHEREAS, the portions of McCormick Village Park Phase 3 that McCormick proposes to complete are estimated in the PROS Plan to cost $750,000; and WHEREAS, the past contributions towards McCormick Village Park includes McCormick's payment of $643,743 towards park improvements and these funds should be credited toward payment of future parks impact fees consistent with the 2009 Interlocal Agreement between Kitsap County and Port Orchard (C002-10) relating to Parks, Open Space and Recreation within McCormick Urban Village and McCormick/ULID #6 Urban Growth Area; and WHEREAS, in addition to McCormick Village Park improvements, McCormick will be developing three (3) trail projects that will be dedicated to the public and which are part of the City's Parks Recreation and Open Space (PROS) Plan. These projects are: St. Andrew's Multi - Modal Trail, McCormick West Multi -Modal Trail Phase 1, and McCormick West Multi -Modal Trail Phase 2; and are: WHEREAS, the draft project estimates in the PROS Plan for the trail projects listed above St. Andrew's Multi -Modal Trail $ 979,012 McCormick West Multi -Modal Trail Phase 1 $1,468,518 McCormick West Multi -Modal Trail Phase 2 $ 979,012 WHEREAS, this Agreement governs McCormick's improvements to McCormick Village Development Agreement for Funding Park Improvements McCormick Communities, LLC Page 2 of 19 1573235.8 - 366922 -0037 Park, the three multi -modal trail projects, the prior parks payment, and the resulting park impact fee credits; and WHEREAS, except with regard to the park improvements and related park impact fee credits, this Agreement does not establish or modify the standards or conditions for the underlying development which is being undertaken in accordance with applicable code, regulations, and other development agreements, as applicable; and WHEREAS, in consideration of the benefits conferred by this new Agreement, which reflect the current plans of both the City and McCormick and include a parks impact fee credits, the Parties deem it in their best interests to enter into this Agreement; and WHEREAS, the City Council held a public hearing on July 26, 2022 regarding this Agreement; and WHEREAS, after a public hearing, by Ordinance No. XXX, the City Council authorized the Mayor to sign this Agreement with McCormick. AGREEMENT: Section 1. McCormick Property. The legal description of the McCormick Property is depicted on Exhibit A to this Agreement which is attached hereto and incorporated herein by this reference as if set forth in full. A map of the boundaries of the McCormick Property is shown on Exhibit B to this Agreement which is attached hereto and incorporated herein by this reference as if set forth in full. A map of the McCormick Village Park Property is shown Exhibit C to this Agreement on which is attached hereto and incorporated herein by this reference as if set forth in full. The concept drawing to McCormick Village Park which McCormick will undertake are shown on Exhibit D to this Agreement which is attached hereto and incorporated herein by this reference as if set forth in full. A map of the St. Andrew's Multi -Modal Trail is shown Exhibit E to this Agreement on which is attached hereto and incorporated herein by this reference as if set forth in full. The planned improvements described as the St. Andrew's Multi -Modal Trail which McCormick will undertake are shown on Exhibit F to this Agreement which is attached hereto and incorporated herein by this reference as if set forth in full. A map of the McCormick West Multi -Modal Trail Phase 1 is shown Exhibit G to this Agreement on which is attached hereto and incorporated herein by this reference as if set forth in full. The planned improvements described as the McCormick West Multi -Modal Trail Phase 1 which McCormick will undertake are shown on Exhibit H to this Agreement which is attached hereto and incorporated herein by this reference as if set forth in full. A map of the McCormick West Multi -Modal Trail Phase 2 is shown Exhibit I to this Agreement on which is attached hereto and incorporated herein by this reference as if set forth in full. The planned improvements described as the McCormick West Multi -Modal Trail Phase 2 which McCormick will undertake are shown on Exhibit J to this Agreement which is attached hereto and incorporated herein by this reference as if set forth in full. Section 2. Park Improvements. Pursuant to this Agreement, McCormick shall be responsible for the construction of the McCormick Village Park Phase 3 Improvement Project, the Development Agreement for Funding Park Improvements McCormick Communities, LLC Page 3 of 19 1573235.8 - 366922 -0037 St. Andrew's Multi -Modal Trail, and the McCormick West Multi -Modal Trail Phases I and 2, all as defined herein (hereinafter "Park Improvements"). The Park Improvements shall serve both the general public and the McCormick Property, amongst other properties within the vicinity. The Park Improvements shall be eligible for park impact fee credits as provided in Section I I of this Agreement. Section 3. Definitions. As used in this Agreement, the following terms, phrases, and words shall have the meanings and be interpreted as set forth in this Section. a) "Adopting Ordinance" means the Ordinance which approves this Agreement, as required by RCW 36.7013.200 and Chapter 20.26 POMC. b) "Commence construction" as to each of the Park Improvements means that the City has issued all required permit(s) and McCormick has deployed construction equipment and personnel to the site of the Park Improvement Project. c) "Completion" as to each of the Park Improvements means compliance with the tasks described in Section 9 of this Agreement. d) "Council" or "City Council" means the duly elected legislative body governing the City of Port Orchard. e) "Director" means the City's Public Works Director. f) "Effective Date" means the effective date of the Adopting Ordinance. g) "Maximum Park Impact Fee Credit" means the maximum amount of a credit towards park impact fees that is eligible for Park Improvements completed under this Agreement as well as for prior park improvements and contributions for which park impact fee credits will be provided by the City to McCormick. The Maximum Park Impact Fee Credit shall be limited to the total park impact fees due on the Project, the estimated cost for the Park Improvement Projects as set forth in the CIP/PROS Plan ($4,820,285), or the actual costs incurred by McCormick (as determined by the final certified costs), whichever amount is less. h) "Park Improvements", "Park Improvement" or "Park Improvement Project(s)" means the four Park Improvement Projects listed in Section 2 above. When used in plural, it refers to two or more of the individual projects, when used singular, it refers to one of the four specific projects. Park Improvements shall be as specified in Section 2, as provided for in all associated permits/approvals, whether now in place or to be issued in the future, and as described in all incorporated exhibits. i) "Parks, Recreation and Open Space Plan" or "PROS Plan" is the Parks, Recreation and Open Space Plan adopted by the Port Orchard City Council. Section 4. Exhibits. Exhibits to this Agreement are as follows: Development Agreement for Funding Park Improvements McCormick Communities, LLC Page 4 of 19 1573235.8 - 366922 -0037 a) Exhibit A — Legal Description of the McCormick Property. b) Exhibit B — Map of the McCormick Property which defines the area where park impact fee credits may be applied. c) Exhibit C — Map of McCormick Village Park Property. d) Exhibit D — McCormick Village Park Improvement Project Conceptual Drawing. e) Exhibit E — Map of St. Andrew's Multi -Modal Trail. f) Exhibit F — St. Andrew's Multi -Modal Trail Project, including components. g) Exhibit G — Map of McCormick West Multi -Modal Trail Phase 1 h) Exhibit H — McCormick West Multi -Modal Trail Phase 1 Project, including components. i) Exhibit I — Map of McCormick West Multi -Modal Trail Phase 2. j) Exhibit J — McCormick West Multi -Modal Trail Phase 2 Project, including components. Section 5. Parties to Development Agreement. The Parties to this Agreement are: a) The "City" is the City of Port Orchard, whose office is located at 216 Prospect Street, Port Orchard, WA 98366. b) "McCormick" or "McCormick Communities, LLC" is a private enterprise which owns the McCormick Property in fee, and whose principal office is located at 12332 NE 115th Place, Kirkland, WA 98033. Section 6. Park Improvements are a Private Undertaking. It is agreed among the Parties that the Park Improvements described in this Agreement are private improvements for which credits are required pursuant to RCW 82.02.060(4) and that the City has no interest in the improvements until such time as each of the Park Improvements are completed and dedicated to the City as provided in this Agreement. Section 7. Term of Agreement. This Agreement shall commence upon the effective date of the Adopting Ordinance approving this Agreement and shall continue in force for a period of ten (10) years unless extended or terminated as provided herein. Following the expiration of the term or extension thereof, or if sooner terminated, this Agreement shall have no force and effect except for such sections which are specifically intended to survive expiration or termination. Section 8. Project Schedule. Subject to the City's issuance of all necessary permits and approvals, McCormick will commence construction of each of the Park on the following schedule: a) McCormick Village Park Phase 3: i. The McCormick Village Park Improvement Project requires a minimum of two permits: (a) Land Disturbing Activity Permit ("LDAP"); and (b) Right of Way Permit ("ROW Permit") (collectively, the "McCormick Village Park Improvement Permits"). Prior to applying for the necessary permits, Development Agreement for Funding Park Improvements McCormick Communities, LLC Page 5 of 19 1573235.8 - 366922 -0037 McCormick shall obtain the Director's approval of a concept level plan for the McCormick Village Park Improvement Project. ii. Upon issuance of the McCormick Village Park Improvement Permits, McCormick shall commence construction of the McCormick Village Park Improvement Project within one hundred and eighty (180) days and proceed in a timely and workmanlike fashion through completion, provided however, McCormick shall be solely responsible for the means and methods for construction sequencing and phasing. iii. McCormick shall complete the McCormick Village Park Improvement Project no later than October 1, 2025. b) St. Andrew's Multi -Modal Trail: The St. Andrew's Multi -Modal Trail Park Improvement Project requires a minimum of two permits: (a) Land Disturbing Activity Permit ("LDAP"); and (b) Right of Way Permit ("ROW Permit") (collectively, the "St. Andrew's Trail Park Improvement Permits"). Prior to applying for the necessary permits, McCormick shall obtain the Director's approval of a concept level plan for the St. Andrew's Trail Park Improvement Project. ii. Upon issuance of the St. Andrew's Trail Park Improvement Permits, McCormick shall commence construction of the St. Andrew's Trail Park Improvement Project within one hundred and eighty (180) days and proceed in a timely and workmanlike fashion through completion, provided however, McCormick shall be solely responsible for the means and methods for construction sequencing and phasing. iii. McCormick shall complete the St. Andrew's Trail Park Improvement Project no later than DATE. c) McCormick Woods Multi -Modal Trail Phase 1: The McCormick Woods Multi -Modal Trail Phase 1 Park Improvement Project requires a minimum of two permits: (a) Land Disturbing Activity Permit ("LDAP"); and (b) Right of Way Permit ("ROW Permit") (collectively, the "McCormick Woods Phase 1 Trail Park Improvement Permits"). Prior to applying for the necessary permits, McCormick shall obtain the Director's approval of a concept level plan for the McCormick Woods Phase 1 Trail Park Improvement Project. ii. Upon issuance of the McCormick Woods Phase 1 Trail Park Improvement Permits, McCormick shall commence construction of the McCormick Woods Phase 1 Trail Park Improvement Project within one hundred and eighty (180) days and proceed in a timely and workmanlike fashion through completion, provided however, Development Agreement for Funding Park Improvements McCormick Communities, LLC Page 6 of 19 1573235.8 - 366922 -0037 McCormick shall be solely responsible for the means and methods for construction sequencing and phasing. iii. McCormick shall complete the McCormick Woods Phase 1 Trail Park Improvement Project no later than DATE. d) McCormick Woods Multi -Modal Trail Phase 2: The McCormick Woods Multi -Modal Trail Phase 2 Park Improvement Project requires a minimum of two permits: (a) Land Disturbing Activity Permit ("LDAP"); and (b) Right of Way Permit ("ROW Permit") (collectively, the "McCormick Woods Phase 2 Trail Park Improvement Permits"). Prior to applying for the necessary permits, McCormick shall obtain the Director's approval of a concept level plan for the McCormick Woods Phase 2 Trail Park Improvement Project. ii. Upon issuance of the McCormick Woods Phase 2 Trail Park Improvement Permits, McCormick shall commence construction of the McCormick Woods Phase 2 Trail Park Improvement Project within one hundred and eighty (180) days and proceed in a timely and workmanlike fashion through completion, provided however, McCormick shall be solely responsible for the means and methods for construction sequencing and phasing. iii. McCormick shall complete the McCormick Woods Phase 2 Trail Park Improvement Project no later than DATE. Section 9. Park Improvement Project standards applicable to all Park Improvements. a) General. McCormick will design and construct each of the Park Improvement Projects to comply with City standards, including obtaining all necessary permits, not to be unreasonably withheld or conditioned by the City. The City will approve the plans before construction begins; and the City will accept responsibility for the operation of each of the Park Improvement Projects once each is completed, the applicable Park Improvement Project has been accepted, and a two-year warranty and maintenance bond is in place. A Park Improvement Project will be deemed completed when all of the following occurs: 1. The City deems it substantially complete; 2. All punch list items are finished; 3. The City releases the performance bond; 4. McCormick has put a 2-year warranty and maintenance bond in place; 5. McCormick has completed all necessary property dedications; Development Agreement for Funding Park Improvements McCormick Communities, LLC Page 7 of 19 1573235.8 - 366922 -0037 6. The City has accepted the dedications, such approval not to be unreasonably withheld or conditioned; and 7. McCormick has provided the City with a Bill of Sale for the improvements containing the certified construction costs (stamped by licensed engineer) to the City for determination of the maximum credits available under this Agreement. The City will confirm completeness of each Park Improvement Project by issuing a Final Notice of Completeness to McCormick. b) Park Improvement Project. Each Park Improvement Project will include design, permitting, and construction at McCormick's sole cost and expense of the Park Improvement Project as identified in the PROS Plan 2022-2043 CIP. For the McCormick Village Park Phase 3 Improvement Project (Project PK9), McCormick will be constructing certain components of Project PK9, specifically the following components: trails, entry plaza, amphitheater, frontage improvements, and parking. For the three Multi -Modal Trails Projects JR-I I St. Andrews, TR12 McCormick West Trails Phases 1 and 2), McCormick will be constructing all of the components contained in the PROS Plan 2022-2043 CIP description. Each Improvement Project shall meet the City standards for park development and shall provide the amenities that are described in Exhibit applicable to each project, with such conditions as the City deems applicable and appropriate in the applicable approved Park Improvement Permits; provided, however, the City shall not add conditions to the Park Improvement Projects that are inconsistent with the exhibits describing the applicable Park Improvement Project unless agreed by both Parties. c) Each Park Improvement Project construction work shall be secured by a Performance Bond at 150% of the estimated construction cost, except as otherwise provided in Section 1 Lc below. The Performance Bond shall be in place prior to McCormick commencing work on each Park Improvement Project. Prior to City acceptance, the construction of the Park Improvement Project shall be inspected by the City, approval of which shall not be unreasonably withheld. In addition to the requirements in Section 9(a) above, the City's final approval of each Park Improvement Project shall be conditioned upon receipt from McCormick a two (2) year Maintenance Bond at 20% of the construction costs, which shall be effective upon the City's release of the Performance Bond. Upon acceptance of the Bill of Sale, the City shall release the Performance Bond and shall accept full responsibility for the Park Improvement Project, except for those maintenance obligations of McCormick secured by the two-year Maintenance Bond. Upon City's acceptance of the Park Improvement Project, McCormick shall not be responsible for any further costs, maintenance or liability for the Park Improvement Project. This provision survives the Termination of this Agreement. Section 10. Park Improvement Projects — Costs and Credits. Development Agreement for Funding Park Improvements McCormick Communities, LLC Page 8 of 19 1573235.8 - 366922 -0037 a) The Maximum Park Impact Fee Credit for the Park Improvement Projects to be built by McCormick under this Agreement shall be limited to the total park impact fees due on the Project, the estimated cost for the Park Improvement Projects as set forth in the CIP/PROS Plan ($4,820,285), or the actual costs incurred by McCormick ("certified costs"), whichever amount is less. The "actual costs" incurred by McCormick will be equal to the certified costs for such Park Improvement Project and may include the costs for bonding. The credits provided under Section 11 below are limited to this Maximum Park Impact Fee Credit. Once the Maximum Park Impact Fee Credit has been achieved through credits applied to McCormick for the Development Project, McCormick would be required to comply with the impact fee provisions of the Code for any further development of the McCormick Property that requires payment of park impact fees, including payment of any park impact fees incurred over and above the Maximum Park Impact Fee Credit. b) At the time of this Agreement, the Parties agree that estimated the Maximum Park Impact Fee Credit is: Project Name Maximum Project Amount Lump Sum Credit per KC/PO ILA $ 643,743.00 McCormick Village Park Phase 3 $ 750,000.00 St. Andrews Multi -Modal Trail $ 979,012.00 McCormick West Multi -Modal Trail Phase 1 $1,468,518.00 McCormick West Multi -Modal Trail Phase 2 $ 979,012.00 Subtotal Estimated Max Park Project Credit $4,820,285.00 c) At the time of this Agreement, the Parties Agree the estimated Maximum Park Impact Fee Credit per Dwelling Unit is $2,008.00. This is calculated by taking the Estimated Maximum Park Impact Fee Credit ($4,820,285) and dividing it by 2,400 dwelling units. If a future City Council adopts a park impact fee that is equal to or less than the Maximum Park Impact Fee Credit per Dwelling Unit amount, then the Maximum Park Impact Fee Credit per Dwelling Unit shall be reduced to equal no more than 90 percent of the then -park impact fee amount. In such case, park impact fee credits may extend beyond 2,400 units until the Maximum Park Impact Fee Credit is exhausted or this Agreement expires, whichever happens first. d) The per Dwelling Unit calculation of impact fees is based on housing types as set forth in the City's adopted park impact fee schedule, as it may be amended from time to time. However, McCormick has proposed to build some non-traditional housing types which do not currently have a fixed parks impact fee rate. These non-traditional housing types may include Paseo Homes (cluster cottage type housing) as well as Small House (small footprint single family homes) with accessory dwelling units (ADU). For the Paseo homes, the maximum square footage for purpose of this section for each unit is ####. For Small House with ADU, the maximum square footage for the purposes of this section is #### for the Small House and #### for the ADU. For purposes of calculating applicable parks impact fees, the Parties agree that if constructed as described herein, Development Agreement for Funding Park Improvements McCormick Communities, LLC Page 9 of 19 1573235.8 - 366922 -0037 the Paseo Homes will have impact fees calculated based on an assumed persons per household occupancy of 2.01 and the Small House with ADU will have impact fees calculated based on an assumed persons per household occupancy of 2.05 per unit (i.e., 2.05 for the house, 2.05 for the ADU) or 4.1 for both. Units that exceed the limitations of this section shall be treated as single family dwelling units or the most applicable similar dwelling unit type adopted by the City. Section 11. Park Impact Fee Credits. The City hereby grants McCormick a credit against park impact fees for its costs to design and construct the Park Improvement Projects. The credits will be calculated and applied as follows: a) Application of Park Impact Fee Credits. Park Impact Fee Credits will be applied up to the Maximum Park Impact Fee Credit value for the 10-year term described in Section 7, or until the Maximum Park Impact Fee Credit is fully exhausted, whichever occurs first. If there is not enough park impact fee credit remaining to provide the full $2,008.00 credit, then the City will only provide a partial (or no) credit depending on the Maximum Park Impact Fee Credit value remaining. The credits will be applied per dwelling unit in the McCormick Property boundaries as shown on Exhibit B. The Maximum Park Impact Fee Credit per Dwelling Unit will be $2,008.00 per dwelling unit, however, in no case shall the total of the park impact fee credits exceed the total of park impact fees due. The Maximum Park Impact Fee Credit hereunder is an estimate only based on the CIP/PROS Plan project cost estimates of the components constructed by McCormick. The Parties will determine the final Maximum Park Impact Fee Credit in accordance with the certification procedures set forth in Section 12. If the certified costs are less than $4,820,285, then the fixed credit in the amount of $2,008.00 per dwelling unit will still be applied but only to the extent needed to capture the Maximum Park Impact Fee Credit, i.e., the total credits provided will never exceed the certified project costs or the Maximum Park Impact Fee Credit, whichever is less. This means that some of the 2,400 estimated dwelling units may receive partial or no park impact fee credit so that the total credits provided will never exceed either the certified project costs or Maximum Park Impact Fee Credit, whichever is less. b) The City agrees that these credits are consistent with RCW 82.02.060(4) and that they are consistent with POMC 20.182.080. c) Given that McCormick already has a credit in the amount of $643,743, the issuance of the park impact fee credits may begin upon the effective date of this Agreement. Provided, however, that when the total park impact fee credits issued under this Agreement exceed $500,000 and/or are otherwise within $150,000 of the credits then - earned by McCormick (i.e., by completion of one or more Park Improvement Projects or posting of performance bonds), the City may suspend issuing credits until such time as McCormick either posts the required performance bond (to be approved by the City) or substantially completes one or more Park Improvement Projects thus increasing the Development Agreement for Funding Park Improvements McCormick Communities, LLC Page 10 of 19 1573235.8 - 366922 -0037 "credits earned" to more than $150,000 over the amount of the credits issued by the City. This right to suspend credits will terminate once all Park Improvement Projects set forth in this Agreement are completed. Section 12. Certification of Project Costs. Upon completion of each of the McCormick Park Improvement Projects as described in Section 9 above, McCormick shall submit certified project costs to the City for review and acceptance by the City Engineer. Once these costs and the executed Bill of Sale are reviewed and accepted by the City Engineer, not to be unreasonably withheld, conditioned, or delayed, the Maximum Park Impact Fee Credit due to McCormick for that Park Improvement Project will be established for the duration of this Agreement. When all Park Improvement Projects are completed and the costs have been certified, then the Maximum Park Impact Fee Credit will be full established under this Agreement. The Maximum Park Impact Fee Credit will equal the amount so certified, or a lessor amount in accordance with Section 10.a. If the Maximum Park Impact Fee Credit due is less than the certified project costs of the McCormick Village Park Project, then the City will continue to apply the $2,008.00 credit until the Maximum Park Impact Fee Credit is reached, or this Agreement expires, whichever occurs first. McCormick acknowledges that this may result in some of the 2,400 dwelling units within McCormick Property (Exhibit B) receiving no (or only a partial) park impact fee credit as the full reimbursement of the Maximum Impact Fee Credit is reached. Section 13. Dedication of Public Lands; Valuation. McCormick shall dedicate the land that it owns that is needed to construct each of the Park Improvement Projects as defined in Exhibits C — J, provided, however, McCormick shall be able to include the fair market value of such dedications into the project costs for certification as provided in this Agreement up to the maximum credit amount. Any dedications needed to construct the McCormick Park Improvement Projects shall be completed prior to the City's acceptance of the applicable Park Improvement Project. The Parties will determine the fair market value of any dedication of property as follows: McCormick will hire a certified property appraiser, pay for the appraisal, and provide a copy of that appraisal report to the City. The City shall use its best efforts to review the appraisal report and provide a response to McCormick on the valuation within 30 days of receipt. If both the City and McCormick agree that the appraisal is fair and reasonable, then the appraised value will be accepted as the fair market value for any property dedications hereunder. If the City disagrees with the appraisal, then the City may hire its own appraiser to perform a second appraisal at the McCormick's expense. The date for valuation purposes shall be the same as used in McCormick's appraisal. The City shall use its best efforts to obtain an appraisal report within 60 days of notice to McCormick of its disagreement with McCormick's appraisal. If that second City -initiated appraisal is within ten (10) percent of the value established by the first McCormick -initiated appraiser, then the Parties will take the mid -point between the two appraisals and use that as the fair market value. If the appraisals are more than 10 percent apart, the Parties have the option of agreeing to a value or establishing another method to set the fair market value of the property. Section 14. Default. Development Agreement for Funding Park Improvements McCormick Communities, LLC Page 11 of 19 1573235.8 - 366922 -0037 a) Subject to extensions of time by mutual consent in writing, failure, or delay by either Party to perform any term or provision of this Agreement shall constitute a default. In the event of alleged default or breach of any terms or conditions of this Agreement, the Party alleging such default or breach shall give the other Party not less than thirty (30) days' advance notice in writing, specifying the nature of the alleged default and the manner in which said default may be cured. During this thirty (30) day period, the Party charged shall not be considered in default for purposes of termination or institution of legal proceedings. b) After notice and expiration of the thirty (30) day period, if such default has not been cured or is not being 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. In addition, the City may decide to file an action to enforce the City's Codes, and to obtain penalties and costs as provided in the POMC for violations of this Agreement and the Code. Section 15. Termination. This Agreement shall terminate ten (10) years after effective date. At either Party's request upon termination of this Agreement, the City shall record a notice of such termination in a form satisfactory to the Parties that the Agreement has been terminated. Section 16. Extension and Modification. Any request for extension or modification, if allowed under the City's code, shall be subject to the provisions contained in POMC Chapter 20.26 POMC. Section 17. Effect upon Termination on McCormick. Termination of this Agreement as to McCormick shall not affect any of McCormick's respective obligations to comply with the City Comprehensive Plan and the terms and conditions or any applicable zoning code(s) or other land use entitlements approved with respect to the Property, or obligations to pay assessments, liens, fees, or taxes. Furthermore, if the Agreement expires without the Park Improvement Projects costs being fully recovered by impact fee credit, McCormick will no longer be eligible to receive such credits. Section 18. Effects upon Termination on City. Upon any termination of this Agreement as to the McCormick Property, or any portion thereof, the City will be under no obligation to provide any additional credits or reimbursement to McCormick even if the Park Improvement Projects costs have not been fully recovered at the time of expiration or termination. Section 19. Assignment and Assumption. McCormick shall have the right to sell, assign or transfer this Agreement with all rights, title, and interests therein to any person, firm, or corporation at any time during the term of this Agreement with a sale of the underlying property. McCormick shall provide the City with written notice of any intent to sell, assign, or transfer all or a portion of the Property, at least 30 calendar days in advance of such action; provided; however, failure to strictly comply with the 30 calendar day notice provision shall not be considered a breach of this Agreement. Section 20. Binding on Successors; Covenants Running with the Land. The conditions and covenants set forth in this Agreement and incorporated herein by the Exhibits shall run with the Development Agreement for Funding Park Improvements McCormick Communities, LLC Page 12 of 19 1573235.8 - 366922 -0037 land and the benefits and burdens shall bind and inure to the benefit of the Parties. McCormick and every purchaser, assignee, or transferee of an interest in the McCormick Property, or any portion thereof, shall be obligated and bound by the terms and conditions of this Agreement, and shall be the beneficiary thereof and a Party thereto, but only with respect to the McCormick Property, or such portion thereof, sold, assigned, or transferred to it. Any such purchaser, assignee or transferee shall observe and fully perform all of the duties and obligations of McCormick as contained in this Agreement, as such duties and obligations pertain to the portion of the McCormick Property sold, assigned, or transferred to it. Section 21. Amendment to Agreement; Effect of Agreement on Future Actions. No waiver, alteration, or modification to any of the provisions of this Agreement shall be binding unless in writing, signed by the duly authorized representatives of the Parties, be consistent with Chapter 20.26 POMC, and, where considered substantive as determined by the Director, follow the same procedures set forth in Chapter 20.26 POMC. However, nothing in this Agreement shall prevent the City Council from making any amendment to its Comprehensive Plan, Zoning Code, Official Zoning Map or development regulations, or to impacts fees that affect the McCormick Property in the same manner as other properties, after the Effective Date of this Agreement. Section 22. General release. McCormick may free itself from further obligations relating to the sold, assigned, or transferred property, provided that the buyer, assignee, or transferee expressly assumes the obligations under this Agreement as provided herein, including the obligation to construct the Park Improvement Projects. Section 23. Reimbursement for Agreement Expenses of the City. McCormick agrees to reimburse the City for actual expenses incurred over and above fees paid by McCormick as an applicant incurred by City directly relating to this Agreement, including recording fees, publishing fees, attorneys' fees, and reasonable staff and consultant costs not otherwise included within application fees. Upon payment of all expenses, McCormick may request written acknowledgement of all fees. Such payment of all fees shall be paid, at the latest, within thirty (30) days from the City's presentation of a written statement of charges to McCormick. Section 24. Applicable Law, Resolution of Disputes, and Attorneys' Fees. It is the Parties' intent to work cooperatively and to resolve disputes in an efficient and cost-effective manner. All disputes arising out of or relating to this Agreement shall be resolved as follows: a) Settlement Meeting. If any dispute arises between the parties relating to this Agreement, then the Parties shall meet and seek to resolve the dispute, in good faith, within ten (10) working days after a Party's request for such a meeting. The City shall send the Mayor, Community Development Director, Public Works Director, and/or the Mayor's designee and any persons with information relating to the dispute, and Owner shall send an owner's representative and any consultant or other person with technical information or expertise related to the dispute. b) Court. If the Parties cannot resolve the matter in a settlement meeting, then jurisdiction of any resulting litigation shall be filed in Kitsap County Superior Court, Kitsap County, Washington, or the U.S. District Court for Western Washington, as applicable. This Development Agreement for Funding Park Improvements McCormick Communities, LLC Page 13 of 19 1573235.8 - 366922 -0037 Agreement shall be governed by and construed in accordance with the laws of the State of Washington. The non -prevailing Party in any action brought to enforce this Agreement shall pay the other Parties' expenses and reasonable attorney's fees. Section 25. 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. Section 26. City's right to breach. The Parties agree that the City may, without incurring any liability, engage in action that would otherwise be a breach if the City makes a determination on the record that the action is necessary to avoid a serious threat to public health and safety, or if the action is required by federal or state law. Section 27. McCormick's Compliance. The City's duties under the Agreement are expressly conditioned upon McCormick's substantial compliance with each and every term, condition, provision, and/or covenant in this Agreement, including all applicable federal, state, and local laws and regulations and McCormick's obligations as identified in any approval or project permit for the property identified in this Agreement. Section 28. Limitation on City's Liability for Breach. Any breach of this Agreement by the City shall give right only to damages under state contract law and shall not give rise to any liability under Chapter 64.40 RCW, the Fifth and Fourteenth Amendments to the U.S. Constitution, or similar state constitutional provisions. Section 29. Third Party Legal Challenge. In the event any legal action or special proceeding is commenced by any person or entity other than a Party to challenge this Agreement or any provision herein, the City may elect to tender the defense of such lawsuit or individual claims in the lawsuit to McCormick. In such event, McCormick shall hold the City harmless from and defend the City from all costs and expenses incurred in the defense of such lawsuit or individual claims in the lawsuit, including but not limited to, attorneys' fees and expenses of litigation. McCormick shall not settle any lawsuit without the consent of the City. The City shall act in good faith and shall not unreasonably withhold consent to settle. Section 30. Specific Performance. The Parties specifically agree that damages are not an adequate remedy for breach of this Agreement, and that the parties are entitled to compel specific performance of all material terms of this Agreement by any Party in default hereof. Section 31. Recording. This Agreement shall be recorded against the Property with the real property records of the Kitsap County Auditor. During the term of the Agreement, it is binding upon the owners of the property and any successors in interest to such property. Development Agreement for Funding Park Improvements McCormick Communities, LLC Page 14 of 19 1573235.8 - 366922 -0037 Section 32. 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. Section 33. 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. Section 34. 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 McCormick (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 McCormick 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: McCORMICK COMMUNITIES, LLC: CITY: Eric Campbell 12332 NE 1151 Place Kirkland, WA 98033 eric knispgroupllc. com Nick Tosti 805 Kirkland Avenue, Suite 200 Kirkland, WA 98033 nicktostikgmail.com Mayor City of Port Orchard 216 Prospect Street Port Orchard WA 98366 rp2utaansuu(d),cityofportorchard.us Copies shall also be transmitted to the City Clerk and City Attorney at the above address. Section 35. 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. Section 36. 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 maybe necessary to provide a Party with a full and complete enjoyment of its rights and privileges under this Agreement. Development Agreement for Funding Park Improvements McCormick Communities, LLC Page 15 of 19 1573235.8 - 366922 -0037 Section 37. 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. Section 38. 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 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. Section 39. Entire Agreement. The written provisions and terms of this Agreement, together with the Exhibits attached hereto, shall supersede all prior verbal statements of any officer or other representative of the parties, and such statements shall not be effective or be construed as entering into or forming a part of or altering in any manner whatsoever, this Agreement. The entire agreement between the parties with respect to the subject matter hereunder is contained in this Agreement and exhibits thereto. IN WITNESS WHEREOF, the parties have executed this Agreement on this day of , 2022. McCORMICK COMMUNITIES, LLC CITY OF PORT ORCHARD By: By: Rob Putaansuu Its: APPROVED AS TO FORM: Patrick Schneider Attorney for McCormick Communities, LLC Development Agreement for Funding Park Improvements McCormick Communities, LLC Page 16 of 19 1573235.8 - 366922 -0037 Its: Mayor APPROVED AS TO FORM: Jennifer S. Robertson Attorney for Port Orchard ATTEST: Brandy Wallace, CMC Port Orchard City Clerk NOTARY BLOCK FOR PORT ORCHARD STATE OF WASHINGTON ) ) ss. COUNTY OF KITSAP ) I certify that I know or have satisfactory evidence that Mr. Rob 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 Party for the uses and purposes mentioned in the instrument. Dated: 20 (print or type name) NOTARY PUBLIC in and for the State of Washington, residing at: My Commission expires: Development Agreement for Funding Park Improvements McCormick Communities, LLC Page 17 of 19 1573235.8 - 366922 -0037 NOTARY BLOCK FOR McCORMICK COMMUNITIES, LLC STATE OF WASHINGTON ss. COUNTY OF I certify that I know or have satisfactory evidence that 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 of to be the free and voluntary act of such Party for the uses and purposes mentioned in the instrument. Dated: 20 (print or type name) NOTARY PUBLIC in and for the State of Washington, residing at:_ My Commission expires: Development Agreement for Funding Park Improvements McCormick Communities, LLC Page 18 of 19 1573235.8 - 366922 -0037 ATTACH EXHIBITS Exhibit A — Legal Description of the McCormick Property. Exhibit B — Map of the McCormick Property which defines the area where park impact fee credits may be applied. Exhibit C — Map of McCormick Village Park Property. Exhibit D — McCormick Village Park Improvement Project Conceptual Plan. Exhibit E — Map of St. Andrew's Multi -Modal Trail. Exhibit F — St. Andrew's Multi -Modal Trail Project, including components. Exhibit G — Map of McCormick West Multi -Modal Trail Phase 1 Exhibit H — McCormick West Multi -Modal Trail Phase 1 Project, including components. Exhibit I — Map of McCormick West Multi -Modal Trail Phase 2. Exhibit J — McCormick West Multi -Modal Trail Phase 2 Project, including components. Development Agreement for Funding Park Improvements McCormick Communities, LLC Page 19 of 19 1573235.8 - 366922 -0037